Oh Avik Roy, you devil you. Once upon a time, you were the guy who my reasonable conservative friends would point to as somebody offering real, conservative solutions to our problems. And sometimes, you in fact were. You were on my list of people who, though I might disagree with, I was interested to hear what you thought. Occasionally, you would say something that changed the way I thought about things, or had an idea for a policy change I thought insightful or valuable.
Then, you decided to jump on Senate Trumpcare. First a little tweet, then articles in the New York Times and Forbes. Filled with misleading figures and half truths. And the big reveal: it is “theoretically possible” that this bill is good for healthcare. His words. I guess it’s theoretically possible that I am taken 3rd overall in next year’s NBA draft. Or that I discover a diamond mine in my backyard.
Why did you choose this hill to die on? It’s not an improvement for healthcare – not even Mitch McConnell or Tom Price is really trying to sell it that way. It was developed in secret – no hearings, no working groups, no amendment process. Again, I still haven’t seen a statement from the Administration of what the policy goals are that this bill hopes to achieve. Most stunningly: instead of getting out there and selling it on the merits, President Trump is selling it as a possibility for him to “win.” He has called it “mean” – and it’s his bill, although I doubt he knows what’s in it. When all else fails, you work the refs. While Paul Ryan is out there saying that eliminating the individual mandate will let people be free to go without insurance, you say that the CBO is wrong to consider the mandate as having any effect. It can’t be both ways!
This is all so easy to debunk, I almost skipped it – if you visit here often I trust you can do it yourself.
Avik says this bill is “secretly bipartisan” in nature – should be pretty easy to figure out. Let’s take the easy part: the process. The ACA was written in a public way – over a year in the public eye, key provisions debated in Congress and the press. Remember the month spent on the efficacy of having a public option or not? In the end, the bill didn’t get any Republican votes (if it had, they wouldn’t have been able to scream “Death Panels!” as easily), but Republican views were heavily included in the process of writing the bill. With a nod to Oregon Senator Jeff Merkley, let’s compare the ACA process with Trumpcare’s:
Which of these better fits the description “secretly bipartisan”?
Moving on to the policy, I can grant Avik Roy precisely one point: he notes that Bill Clinton did made a proposal to cap Medicaid spending that is not dissimilar to what is currently in Senate Trumpcare. But some caveats: this was in 1995, when health insurance markets were in a different place than today. Also, this proposal didn’t go one inch forward – proposal is too strong of a word, the Clinton White House launched a trial balloon. Which popped immediately, because it wasn’t a good idea. It’s still not a good idea (or at least not a workable idea).
Perhaps Roy is most dissembling when he says:
“The Senate bill replaces the ACA’s Medicaid expansion with a robust system of tax credits for which everyone under the poverty line is eligible. Under Obamacare, you could enroll in private insurance only if your income exceeded the poverty line.”
The idea of Obamacare was that everybody from 0% to 133% of the poverty line would be enrolled in Medicaid via expansion; from 133% to 400% would receive subsidies to buy insurance via the exchanges; above 400% the subsidies would go away. Because this was a new federal mandate, the extension of Medicaid would be paid for 100% by the Federal Government initially, decreasing to a minimum of 90% over time; of course, 19 Republican-governed states turned down the free money. This left their citizens below the poverty line, but above existing Medicaid eligibility in a bad place: the Medicaid Gap. But the ACA didn’t cause this: GOP legislatures and Governors, trying to harm the ACA caused this.
The idea of Trumpcare is to move the Medicaid expansion population to private insurance. They would be eligible for subsidies to pay the premiums. But, these subsidies would be linked to plans that cover only 58% of expected health costs – Medicaid covers virtually everything. Under the ACA, families receiving subsidies also have subsidized deductibles; in Senate Trumpcare, they don’t. Deductibles on these plans would be more than half of the total annual income for a family around the poverty line. No wonder the CBO says “despite being eligible for premium tax credits, few low-income people would purchase any plan.” Would you?
Roy also notes that younger people will have lower after-subsidy premiums under Senate Trumpcare. This is true, on average: premiums for older people go higher, for younger people go lower. If, for every person aged 50-64 who can’t afford coverage, a person aged 26-40 buys coverage, this will indeed lower “average premiums” because younger people are less expensive to cover. But I don’t think anybody would say that a system covering more younger and healthy people, but fewer older and sick people is a “better” system. It certainly isn’t “bipartisan.”
Roy goes on to imaging a theoretical “bipartisan Obamacare” created in 2009. He describes it as basically Obamacare, without the individual or employer mandate and with a big tax cut for top earners. Roy believes that insurance systems with pre-existing condition protection but without mandates can be stable. Actual evidence offers no evidence of this, and much to the contrary – such as New York state, whose non-group health insurance market decreased by 99% once such regulations were put in place. It isn’t hard to see why: healthy people won’t buy into an insurance pool that includes unhealthy people unless there is an inducement. Without the “stick” of the mandate, the “carrot” of subsidies would need to be big – much bigger than in the ACA.
And that’s the problem. The ACA’s subsidies (and Medicaid expansion) are funded mostly by increased taxes on top earners. Roy is, of course, against these. Instead it will be “paid for through reforms of the Medicare program.” Really? There is so much fat in Medicare that it can create much-larger-than-ACA subsides in Roy’s unicorn health plan? It goes without saying, Roy offers no evidence that such savings are possible without massive cuts to benefits in Medicare; we know this, because we know that government insurance programs are more efficient that private.
Having offered this pittance of evidence of the bipartisan nature of Senate Trumpcare, he moves on to sing its virtues. Did you know that the CBO is off by 26 million in its estimates, and that actually Senate Trumpcare will cover more people than projected under current law? Again, no evidence. But, the CBO is wrong, he says:
“The Congressional Budget Office believes that solely because Republicans would repeal the individual mandate, by 2026, more than 15 million fewer people will buy health insurance, regardless of what Senators do to direct more financial assistance to the poor and vulnerable”
Apparently, unlikely Mr. Roy, I’ve actually read the CBO report. It does not say that 15 million fewer people will buy health insurance by 2026; it predicts that 7 million fewer will be covered in the private market. It doesn’t say this loss is due solely to the repeal of the mandate, it’s their best prediction of all the effects of Senate Trumpcare. Oh, and Senate Trumpcare has a mandate, of sorts: rather than paying a penalty, the uninsured will literally be banned from health coverage for a period of six months! The ACA’s mandate penalty is waived if a person is not able to get affordable insurance; doesn’t seem to be the case with Trumpcare. I hope you enjoy half your income going to the deductible!
Let’s beat up on this quote some more. The CBO has scored the bill as written. Obviously, if they pass another bill that, say, “directs more financial assistance,” that would be different and the predicted effect on coverage would be different. This isn’t rocket science people.
We can dispense with Roy’s Forbes article without much more effort. It is written under Forbes’s “The Apothecary” vertical – so I’m supposed to be quite impressed.
First up, he has a chart, comparing repeal of the ACA, House Trumpcare and Senate Trumpcare. The CBO projection for each has almost the same loss of coverage after 10 years: 22-23 million people. But, according to him, House Trumpcare replaces $375 billion of lost funding and Senate Trumpcare $616 billion. How is the government spending all these billions and not covering anybody? The CBO analysis must be flawed.
What we’ve learned here is that Roy has not only not read the CBO report, he also hasn’t read Trumpcare or even any of the coverage of Trumpcare (either version). Anybody paying attention knows that both versions cut Medicaid much further than a “simple” repeal of the Affordable Care Act. Now, some claim that cutting Medicaid would reduce the number of people on Medicaid or quality of care. This is ridiculous argument, given – again – Medicaid’s already high efficiency, but ok, fine. Roy presents those $375 billion and $616 billion of new healthcare “spending” without subtracting the new Medicaid “cuts.” Either he really doesn’t know what he’s talking about, or he’s intentionally trying to deceive his readers.
We close with our most conclusive example of Roy’s ignorance/misrepresentation. Recall that his big thesis is about faults in the CBO’s analysis by comparing the three scores in question. He says:
“The only way to explain these three results from the CBO model…is to remember that the CBO’s model is heavily tied to the idea that the individual mandate is forcing all sorts of people to buy coverage that otherwise would not.”
The point here is a bit tricky, but demonstrative. We can have a debate over whether the CBO inflates the effects of an individual mandate. They might, it’s really hard to test. Roy’s point is that the CBO’s treatment of the mandate is leading to inconsistent scores for the three alternate scenarios. According to him, the CBO says that mandates are stronger than in reality. He thinks the CBO to overestimating total insured population in healthcare systems having a mandate. He also thinks that Senate Trumpcare should show a larger insured population than House Trumpcare, itself a larger insured population than “clean” repeal – due to the replacement money, as defined by him.
Full repeal would mean no mandate at all. House Trumpcare had continuous coverage, akin to a weak mandate. Senate Trumpcare has the six-month-illegal-to-get-insurance thing, which would be somewhat stronger. If Roy is right and the CBO overestimates the effect of the mandate, this means the CBO would have scored Senate Trumpcare better than House, which would in turn be better than repeal.
But, as you know, it didn’t. Roy has it backwards, self-refuting much of his core argument.
This isn’t a serious analysis of health policy. This is partisan talking points, dressed up with a few figures and published in fancy publications. It does nothing to advance our understanding of the issues.