No’s are piling up

The BCRA draft v2 was released just as I was heading out to lunch with a colleague so I have not read the bill yet although I did look through Health Wonk Twitter as I waited for my colleague to get back to the table with a drink. Most are bewildered at the mechanical changes.

However something quite important has happened in the past couple of minutes:

I am reading Portman as a time holding “No.” If there are no other Senators declaring “No” on the motion to proceed, I think he can be arm twisted to say he read the bill over the weekend and it is good to go. However it only took two hours to get a temporary blocking coalition in place.

So you know what to do:


Call Portman and reward good behavior!
Call Collins and reward good behabior!

Call Moran, Capito, Murkowski and ask for good behavior.
Call Heller and remind him that this is a chain saw attacking Medicaid.

Call Paul and ask him to laugh at Ted Cruz for us.

If you are a resident of a state of any of those Senators, call

Everyone keep on calling anyways!

Stabilization bills and timing

Timing matters for for any potential stabilization bill.  Let’s go into the details first and then the mechanics.

The function of this bill would theoretically be to create certainty by explicitly funding and appropriating CSR subsidies and creating a source of money independent of premiums that will take on some of the extreme tail risk. Funding CSR makes the market structure more coherent as insurers are pricing in a 20% rate increase to compensate for the projected non-funding of CSR due to the House v. Price lawsuit. Creating a national reinsurance pool funded by non-premium dollars addresses the Iowa $12 million dollar man distortion. It would take off some of the extreme right hand tail risk from the books of individual carriers and nationalize the risk.

That reinsurance can be called reinsurance, it can be called invisible high cost risk pooling, it can be called Bob. As long as the money is not coming from premium revenue, it will lower premiums as premiums are no longer responsible to cover 100% of claims.

If this bill was to pass, timing is critical. The Center for Medicare and Medicaid Services (CMS) has a filing schedule in place. Final pricing offers have to be submitted to CMS by insurers by August 16th. CMS will review and technical corrections will go back and forth. By September 27th, insurers commit to the Exchange or pull out.

If the bill was to be passed and signed into law by early August, insurers would work their actuaries into the ground and refile much lower rates as they would have certainty and they would see catastrophic claims exposure limited.  The timeline would not change significantly for 2018 plan processes.  If the bill was passed and signed by late August, CMS might be able to issue an emergency interim final rule changing the timeline.  There would be some wiggle room in the schedule as insurers scramble to recalculate and refile.

If the bill was not passed until October or November, there would be no effect on 2018 premiums.  Locally monopolistic insurers would be swan diving into their vaults full of gold coins.  They would have accepted rates based on no CSR and no additional external to premium reinsurance.

There is a chance that insurers in competitive markets would resubmit as the new, lower rates late as the subsidy attachment structure would strongly encourage at least one insurer to refile to capture the benchmark Silver and thus most of the membership and thus everyone would need to refile or withdraw.

If the bill was to pass late it is primarily a play for the 2018 midterms as insurers would be pricing with certainty and with additional funds outside of premiums.  In a late bill scenario, it produces a 15% to 20% premium decrease a week before the 2018 midterms.


So call your Senators and tell them to work together on a smart bill now!




And You Get a Lawyer and You Get a Lawyer…


Open thread!

Keep on Calling, just keep on calling

The Senate is back in town.

You know what that means.

Time to keep on calling the DC offices and the local offices and tell the interns answering the phones your strong, polite and coherently worded opinions on the AHCA/BCRA tax cut bills.

Andy Slavitt lays out the contours of the next two week:

The fundamental assumption in that tweet is that no Republican wants to by the decisive vote. The two allowable “No’s” have been taken by Heller and Collins. If there is a single vote left on the floor and the count is 49 Yes-50 No, the pressure will be immense to not be the person blamed for killing the bill. The bill will probably go to the floor if McConnell can count on 47 or 48 solid Aye votes. He figures he can arm twist and allow a political pressure cooker to squeeze the last few people whose personal political preference is “Vote No, hope yes but is there if needed.”

So that means the hard No’s need to be locked down. So people from West Virginia, call Senator Moore Capito; people from Kansas call Sen. Moran. Keep on calling.

Plus 20, minus 20 means nothing for midterms

This article is highlighting a potential Republican political concern. The Congresisonal Budget Office (CBO) projects that if the Senate’s Better Care Reconciliation Act (BCRA) or the House’s American Health Care Act (AHCA) was to pass and get signed into law this afternoon, rates for the individual market would increase by 20% in 2018. This is because the CBO believes that the lack of a strong individual mandate will lead to many healthy people leaving the risk pool. Almost the same number and value of claims will be borne by a much smaller payment pool.

The Republican political fear is that rates are proposed in the late spring, negotiated over the summer, and then announced as final in early fall. This year, rates and plan participation are to be finalized by the end of September. And then open enrollment starts on November 1st. And given the subsidy structure, likely voters are highly likely to be facing 20% higher premiums in addition to normal trend increases. And those voters will be pissed off and take out their anger on Republican incumbents.

This is a reasonable theory of change. I think it is wrong because I think it misreads a key CBO assumption.

The CBO evaluates proposals against current law as a baseline. Current law and current practice includes payment of Cost Sharing Reduction (CSR) subsidies. CBO therefore assumes in their rate structure calculation that CSR will be paid and more importantly, will be assumed by the carriers to be paid. However the combination of the House vs. Price lawsuit plus strategic ambiguity by the Trump Administration has led to insurers to price as if CSR will not be paid. In Pennsylvania, this is a 20% bump.

This is a powerful political wedge. If the BCRA was to be passed, it funds 2018 and 2019 CSR through normal appropriations. If that was the case, almost every plan in the country would be 20% overpriced for 2018. That means insurers would be faced with a 20% premium reduction because they are no longer pricing in uncertainty over the payment of CSR. At the same time they would be faced with a 20% increase on the baseline because of a sicker population due to the lack of a mandate.

That leads to a net wash. 20% less due to CSR funding becoming certain while a 20% increase because of a sicker risk pool.

There will be premium increases just because of trend but this is not a political or policy bludgeon.

What’s next

First thing, tonight, enjoy it.

If you like to partake in a recreational, legal intoxicant, enjoy one in moderation.

And then tomorrow get back on the phone and get back to pressuring the Senate.

The current Republican plan is to see what Senate Majority Leader can do to make the bill worse while giving non-Tea Party Republican hold-outs visible media wins with carve out cash and plus-ups for visible priorities. The plan is for him to release $20 billion dollars to opioid treatment so Senators Moore and Portman can claim a victory. He’ll authorize a plus-up for Medicaid reimbursement for Alaska and Montana and Idaho for $5 billion dollars. It will be the saddest show of an old man making it rain to buy attention for himself.

And then they’ll try to jam the bill through once they get back from the 4th of July recess.

So keep on calling tomorrow.

No one said it was gonna be easy

If you get a chance, try to call your Senator today and ask that Senator to oppose the Senate’s health care bill. You can try district offices if they DC number is busy. Even if you’ve got a Democratic Senator, this can help in terms of keeping tallies of calls for and against.

Whatever happens with the bill, we’re likely to be in great shape to make some gains in the House. If you want to give some money that gets spread among all 238 districts currently held by Republicans, you can do so here:

Goal Thermometer

Update. Please use the comments to discuss any protests that you are hearing about against Trumpcare and anything else that we can do to stop it.