How the CBO projects market failure

The Congressional Budget Office projects that the AHCA will lead to 15 % of the population living in destablized insurance markets because of the MacArthur/Upton amendments.

he agencies estimate that about one-sixth of the population resides in areas inwhich the nongroup market would start to become unstable beginning in 2020. That instability would result from market responses to decisions by some states to waive two provisions of federal law, as would be permitted under H.R. 1628. One type of waiver would allow states to modify the requirements governing essential health benefits (EHBs), which set minimum standards for the benefits that insurance in the nongroup and small-group markets must cover. A second type of waiver would allow insurers to set premiums on the basis of an individual’s health status if the person had not demonstrated continuous coverage; that is, the waiver would eliminate the requirement for what is termed community rating for premiums charged to such people. CBO and JCT anticipate that most healthy people applying for insurance in the nongroup market in those states would be able to choose between premiums based on their own expected health care costs (medically underwritten premiums) and premiums based on the average health care costs for people who share the same age and smoking status and who reside in the same geographic area (community-rated premiums)

What does that mean and how does that happen? Let’s work through an simple model of a state with 1,000 people in its individual market.
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Newsworthy Items That Have Slipped Through the Cracks: We’re Doomed

I don’t mean to panic anyone, but the US breached the debt ceiling on March 16th and the current extension on the Fiscal Year 2017 continuing budget resolution runs out on April 28th. Given the dysfunction within the majority caucuses in the House and the Senate, the fact that the new Administration’s skinny budget has been declared DOA upon its arrival in Congress, and the fact that NO ONE ANYWHERE – INCLUDING THE WHITE HOUSE, CONGRESS, MOST OF THE NEWS MEDIA, AND APPARENTLY MOST AMERICANS!!!!!!! – seems to be paying any attention or talking about this, perhaps we should be just a wee bit concerned.

Have a nice evening!



The Two Kellys

May the NYT burn in hell for all eternity for their election coverage. That said, they published a good editorial yesterday on Secretary Kelly of DHS, asking where the sensible man who gave sane and occasionally compassionate answers during his cabinet confirmation has gone now that he’s making policy.

I think we know what happened to Kelly; it’s the Trump Effect. Whoever comes into contact with the vile shitgibbon comes away diminished, which is why all the talk about the moderating influence of [Insert Beltway Favorite Appointee Here] rings hollow in the context of Trump. An excerpt from the editorial:

The Homeland Security Department is considering separating Central American children from their mothers at the border, a shocking abuse of traumatized families who — as Mr. Kelly himself admits — are fleeing for their lives. He defended the policy as a way of deterring migrants from the dangerous trip. That is cruelty disguised as compassion.

His plan to create an office to publicize crimes by unauthorized immigrants — shaming and demonizing the entire population — is more nakedly vicious, guilt by association, a reflection of the old strain of American intolerance that brought us internment camps and miscegenation laws.

Is Mr. Kelly — a tough, sensible general — being silenced? If he can’t get the message to Mr. Trump directly, why doesn’t he get booked on “Fox & Friends,” the morning talk show that doubles as the president’s daily intelligence briefing? If he won’t speak the truth, he’s misusing his power.

The policy of separating mothers and children is worse than cruel; it is monstrous. The plan to publicize crimes by undocumented people — who have a lower crime rate as a group than native-born Americans, BTW — amounts to a blood libel, and Trump already has innocent blood on his hands on that score.

Whether the association with Trump leeched Kelly’s virtue away or whether he had none to begin with is immaterial at this point. But kudos to the NYT for calling him out.

PS: Regarding that jibe in the editorial about “Fox & Friends” doubling as Trump’s daily intelligence briefing, did any of y’all see Chris Hayes’ piece about TrumpCare, in which Hayes noted that a weirdly specific and lengthy provision in the bill addressed combating fraud committed by lottery winners who continue to accept subsidies?

Hayes noted that analysts wondered where that came from and found that it was a trope flogged on Fox News as a criticism of the ACA. And that Fox trope made its way into the GOP’s famously SHORT bill, likely on orders from Trump himself. Those of us who have ever idly wondered what it would be like if our idiot Fox-watching elders ran the country are now discovering that it’s every bit as stupid as we thought.



LEP and the Duck test?

Update #1: From a former clerk for Chief Justice Roberts:

Original Post

Does the Late Enrollment Penalty (LEP) in the AHCA pass the duck test for taxation?

In 2012’s NFIB vs. Sebelius decision, Chief Justice Roberts, writing the controlling opinion for the majority upheld the Affordable Care Act’s individual mandate.  Justices Ginsberg and Sotomayer argued that the mandate was constitutional for both the logic used by Roberts and more fundamentally as a just exercise of Congress’s power under the Commerce Clause.  Chief Justice Roberts had a much narrower ruling.  He found that the individual mandate penalty was effectively a tax and Congress has the power to tax.

He found that the individual mandate passed the duck test to be considered a tax.

It was collected by the IRS, it was administered by the IRS, enforcement was through a limited set of tools normally used for tax enforcement and it was not punitive or overly coercive in nature.  Therefore it was an allowable tax.  More fundamentally, it quacked, waddled, swam and tasted like a duck so it was a duck.

The LEP is different.
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Nightmare Open Thread: Overgrown Toddlers with Weapons of Mass Destruction

A-B-C! One spoilt princeling with Chemical weapons, trumped by another with Atomic fantasies…

Thanks for breaking the world, Repubs!



Method agnosticism and funding

I’m fairly agnostic about what method the United States uses to provide healthcare and health insurance to our population as long as the objectives of providing decent care at affordable prices in an equitable manner are either met or worked towards.

If that means Medicaid expansion, great. If it is Medicare for All, fine.

If that means Exchange subsidy exploitation, wonderful.

If that means Medicare Advantage proliferation, I’m fine with that.

If it means it means segregating the risk pool into a general insurance market and a high cost/high risk chronic condition management market via a high cost risk pool that is adequately funded, I’m on-board with that.

Once a method is chosen, we should seek ways to use that method efficiently and wisely. There are lots of ways that coverage can be configured that if they are adequately funded AND constantly tweaked to avoid perverse and negative incentives, they would accomplish my objectives as a means to an end in and of themselves. I’m effectively method agnostic if the end is accomplished. And this method agnosticism means I’m okay with spending a bit more money to achieve the goal as most of my writing on Silver Gap subsidy manipulations will lead to higher federal expenditures than Silver Spam strategies.

TPM has a good piece on a problem that the Republicans have right now on trying to come up with a Repeal and Replace bill. They don’t share an end as worthy in and of itself of trying to get people reasonably covered. Instead their end is minimizing federal taxation which is constrained by electoral consequences. So their policy writing space is limited:

“On paper, high-risk pools could work to lower premiums for healthier people and provide adequate coverage to those with pre-existing conditions, it really comes down to the money,” Levitt said.

A number of states operated them before the ACA, but because they were so expensive, most states offered coverage on them to a very small portion of people on the individual market, much smaller than the percentage estimated to be barred from insurance without the ACA’s pre-existing conditions coverage requirements.

“The issue, of course, is the people in the high-risk pool are going to be very expensive, so you’re going to have to have some sort of funding mechanism to subsidize or otherwise pay for the coverage that they get,” said Yevgeniy Feyman, a health care policy expert at the right-leaning Manhattan Institute.

Estimates for the average annual cost for the federal government range from $15 billion to $178 billion, while Ryan’s “Better Way” heath care reform white paper reserved an average $2.5 billion per year to subsidize state risk pools.

The big problem is funding. A lot of different systems could work if funded reasonably well. It won’t be funded reasonably well.

“Money is so central to all of this. If a replacement spent comparable amounts to the ACA you could come up with all kinds approaches that could probably get the same level of coverage in a different way,” Levitt said. “But Republicans have generally been very clear that they want the federal government to spend less than what the ACA called for.”

There could be a bunch of designs that could work towards a liberal end if they were funded. That won’t be the case so agnosticism is useless on mechanism design.



Two great philosophers for the next four years

Okay, now it’s real so let us rely on two great philospophers for the next four years:

And it looks like America agrees with Ron Burgundy


CBS News:

It has been 10 weeks since Donald Trump was elected president, and more Americans disapprove (48 percent) than approve (37 percent) of the way he has handled his presidential transition. They are split on his cabinet picks. Views divide heavily along party lines.

Just days before his inauguration, Donald Trump’s favorable rating (32 percent) is the lowest of any president-elect in CBS News polling going back to Ronald Reagan in 1981, when CBS News began taking this measure.

Well we’ll have to survive being “governed” by the Brietbart comment section so we can either laugh or cry while we bang our heads into our desks today.