To Avik Roy: No Longer On My List of Reasonable Conservatives
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