Sooner or later, Nit Twit Trump is going to have to come clean about his blatant Healthcare lying over replacing the Affordable Healthcare Act with something better. I guess “better ” in Trump-speak means massive tax cuts for the rich that demonstrably will hurt the less wealthy. This isn’t healthcare – it’s highway robbery from the “liar in chief. ”
Look at an analysis by the independent and widely respected Congressional Budget Office that was released this week, and promptly dismissed by Republicans as bogus. In the analysis, the highly respected, independent CBO says that 24 million people – mostly poor – will lose health service while giant, unimaginable tax cuts will go to the super rich.
The Concurrent Resolution on the Budget for Fiscal Year 2017 directed the Right Wing Republican-dominated House Committees on Ways and Means, and Energy and Commerce to develop legislation to reduce the deficit. (by giving tax cuts to the rich and screwing the blue collar people who voted for him?), which they don’t talk about much except in dubious, prevaricating sound bites.
The Congressional Budget Office and the staff of the Joint Committee on Taxation (JCT) have an estimate of the budgetary effects of Trumps (anti-)American Health Care Act, which combines the pieces of legislation approved by the two committees to support that resolution. In consultation with the budget committees, CBO used a March 2016 baseline with adjustments for subsequently enacted legislation, which underlies the resolution, as the benchmark to measure the cost of the legislation.
Effects on the Federal Budget
CBO and JCT estimate that enacting the legislation would reduce federal deficits by $337 billion over the 2017-2026 period.
That total consists of $323 billion in on-budget savings and $13 billion in off-budget savings.
Outlays would be reduced by $1.2 trillion over the period, and revenues would be reduced by $0.9 trillion. This seems a trivial trade off for the trouble it would cause our less fortunate citizens by breaking their backs to fatten the already fat wallets of the the super-rich.
- The largest savings would come from reductions in outlays for Medicaid and from the elimination of the Affordable Care Act’s (ACA’s) subsidies for non-group health insurance. Small businesses, including those in the auto industry will get hurt here.
- The largest costs would come from repealing many of the changes the ACA made to the Internal Revenue Code—including an increase in the Hospital Insurance payroll tax rate for high-income taxpayers, a surtax on those taxpayers’ net investment income, and annual fees imposed on health insurers—and from the establishment of a new tax credit for health insurance.
Effects on Health Insurance Coverage
CBO and the Joint Committee on Taxation projected how the legislation would change the number of people who obtain federally subsidized health insurance through Medicaid, the non-group market, and the employment-based market, as well as many other factors.
They estimate that, in 2018, 14 million more people would be uninsured under the legislation than under current law. Most of that increase would stem from repealing the penalties associated with the individual mandate. Some of those people would choose not to have insurance because they chose to be covered by insurance under current law only to avoid paying the penalties, and some people would forgo insurance in response to higher premiums. The whole idea of insurance is to have the largest pool possible to spread the risks and costs.
Later, following additional changes to subsidies for insurance purchased in the non-group market and to the Medicaid program, the increase in the number of uninsured people relative to the number under current law would rise to 21 million in 2020, then to 24 million in 2026. The reductions in insurance coverage between 2018 and 2026 would in large part from changes in Medicaid enrollment—because some states would discontinue their expansion of eligibility, some states that would have expanded eligibility in the future would choose not to do so, and per-enrollee spending in the program would be capped. In 2026, an estimated 52 million people would be uninsured, compared with 28 million who would lack insurance that year under current law.
Health Insurance Market Stability
Decisions about offering and purchasing health insurance depend on the stability of the health insurance market—that is, on having insurers participating in most areas of the country and on the likelihood of premiums not rising in an unsustainable spiral. The market for insurance purchased individually (that is, non-group coverage) would be unstable, if the people who wanted to buy coverage at any offered price would have average health care expenditures so high that offering the insurance would be unprofitable. In CBO and JCT’s assessment, however, the non-group market would probably be stable in most areas under either current law or the legislation. This is a big wager with unknown odds.
Under current law, most subsidized enrollees purchasing health insurance coverage in the non-group market (self employed and small businesses) are largely insulated from increases in premiums because their out-of-pocket payments for premiums are based on a percentage of their income; the government pays the difference. The subsidies to purchase coverage combined with the penalties paid by uninsured people stemming from the individual mandate are anticipated to cause sufficient demand for insurance by people with low health care expenditures for the market to be stable.
Under the legislation, in the agencies’ view, factors bringing about market stability include subsidies to purchase insurance, which would maintain sufficient demand for insurance by people with low health care expenditures, and grants to states from the Patient and State Stability Fund, which would reduce the costs to insurers of people with high health care expenditures.
Even though the new tax credits would be structured differently from the current subsidies and would generally be less generous for those receiving subsidies under current law, the other changes would, in the agencies’ view, lower average premiums enough to attract enough relatively healthy people to stabilize the market. This key assumption is a big bet.
Effects on Premiums
The legislation would tend to increase average premiums in the non-group market prior to 2020 and lower average premiums thereafter, relative to projections under current law. In 2018 and 2019, per CBO and JCT’s estimates, average premiums for single policyholders in the non-group market would be 15% to 20% higher than under current law, mainly because the individual mandate penalties would be eliminated, inducing fewer comparatively healthy people to sign up.
Starting in 2020, the increase in average premiums from repealing the individual mandate penalties would be more than offset by the combination of several factors that would decrease those premiums: grants to states from the Patient and State Stability Fund (which CBO and JCT expect to largely be used by states to limit the costs to insurers of enrollees with very high claims); the elimination of the requirement for insurers to offer plans covering certain percentages of the cost of covered benefits; and a younger mix of enrollees. By 2026, average premiums for single policyholders in the non-group market under the legislation would be roughly 10% lower than under current law, CBO and JCT estimate.
Although average premiums would increase prior to 2020 and decrease starting in 2020, CBO and JCT estimate that changes in premiums relative to those under current law would differ significantly for people of different ages because of a change in age-rating rules. Under the legislation, insurers would be allowed to generally charge five times more for older enrollees than younger ones rather than three times more as under current law, substantially reducing premiums for young adults and substantially raising premiums for older people.
Uncertainty Surrounding the Estimates
The ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals, and other affected parties would respond to the changes made by the legislation are all difficult to predict, so the estimates in this report are uncertain. But CBO and JCT have developed estimates that are in the middle of potential outcomes.
Because of the magnitude of its budgetary effects, this legislation is “major legislation,” as defined in the rules of the House of Representatives. Hence, it triggers the requirement that the cost estimate, to the greatest extent practicable, include the budgetary impact of its macroeconomic effects. However, because of the very short time available to prepare this cost estimate, quantifying and incorporating those macroeconomic effects have not been practicable.
Intergovernmental and Private-Sector Mandates
JCT and CBO have reviewed the provisions of the legislation and determined that they would impose no intergovernmental mandates as defined in the Unfunded Mandates Reform Act (UMRA).
JCT and CBO have determined that the legislation would impose private-sector mandates as defined in UMRA. Based on information from JCT, CBO estimates the aggregate cost of the mandates would exceed the annual threshold established in UMRA for private-sector mandates ($156 million in 2017, adjusted annually for inflation).