It’s not easy to evaluate each new Obamacare repeal bill as it comes down the pike, for two simple reasons.
The first is that these sorts of bills are inherently complex, and unless we’re in the health care insurance policy business we don’t have the time to read them or the math skills to analyze what their real effects might be. So we (that includes me) tend to leave the evaluation to the “experts.”
The second is, of course, that the “experts” (that is, pundits and politicians and even people in the health care insurance policy field who write about or lecture about such things) are mostly not objective about the topic. Politics and bias is huge here.
So when I read that there’s a new Obamacare repeal effort, I feel a sense of weary deja vu and here-we-go-again. When I look at a page such as today’s memeorandum, my weariness increases.
In the past I’ve spent many an hour trying to sort through all the hype and propaganda, and in the past I’ve found Avik Roy to be the most reliable and objective guide. So I turn to him once again, and I suggest you do so as well.
Roy’s article describes the provisions of the bill and their possible/probable effects, and my take-away from it is that the Graham-Cassidy bill is a case of leaving it to the states rather than the feds to decide what to do with the money the federal government will give it.
First, a little bit about Cassidy, from the article:
Sen. Cassidy is relatively new to Washington, but his star has been rising for some time. Cassidy, an M.D. who specializes in liver diseases like hepatitis, was first elected to Congress in 2008. I first got to know him in 2011, when he emerged as Congress’ leading critic of Medicaid’s poor health outcomes, and as one of the first Republicans to embrace Bill Clinton’s approach to Medicaid reform, called “per-capita caps.”
In 2014, Cassidy ran for the U.S. Senate against incumbent Mary Landrieu, and won in large part because of her vote in favor of Obamacare. Today, Cassidy serves on both of the key health care committees in the Senate…
Now we have what the bill is basically about:
The [previous GOP bill] replaced Obamacare with a system of means-tested tax credits that individuals could use to shop for private coverage that fit their needs. By contrast, Graham-Cassidy gives block grants to states, which states could then use to design the health care system of their choice: left, right, or center.
That sounds very federalist: leave it to the states. If a place like Vermont wants to experiment with single-payer, that’s fine with me.
More:
Given the renewed enthusiasm on the left for the abolition of private health insurance through single-payer systems, there can be little doubt that this is the direction that blue states will take under Graham-Cassidy.
On the other hand, states could also use their block grant funds to create liberalized, lower-cost insurance markets for subsidy-eligible enrollees. Section 106 of the bill specifies that states would have the ability to seek waivers from many of Obamacare’s insurance regulations, including those that force insurers to overcharge the young and the healthy, and those forcing insurers to cover services that enrollees don’t want…
The bill would institute a per-capita allotment for the legacy Medicaid program that is quite similar to the one in the BCRA. This per-capita approach is essential to ensuring that Medicaid is fiscally sustainable in the future. Both bills allow states to institute work requirements for Medicaid.
Please read the whole thing.
It all seems to come down to how much federal regulation you want in terms of requirements, and how much freedom the states ought to have.
Roy’s article doesn’t talk about pre-existing conditions or high-risk pools. But plenty of other writers do, and those on the Democratic side frame the bill as likely to deprive those with pre-existing conditions of coverage or make their coverage unaffordable. Vox offers one of the fairer treatments of the subject:
The new bill has been championed by its sponsors, Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC), as giving states more flexibility in how they run their health care systems. One of those flexibilities includes a waiver system that would let states opt out of many key Obamacare regulations.
Those waivers do have some guardrails. The bill says states cannot tether an individual’s premiums to “sex or membership in a protected class under the Constitution of the United States.”
Anything else ”” a cancer diagnosis, a history of breast cancer, a mild case of asthma ”” is fair game. In states that did pursue and receive these waivers, health plans would have full authority to charge sicker patients higher premiums to offset their costs.
Cassidy argues that his plan would still protect people with preexisting conditions. It requires that any waiver application must include a description of “how the state intends to maintain adequate and affordable health insurance coverage for individuals with preexisting conditions.”
“Knowing that states may want to experiment, we specify that in the waiver request they must have adequate and affordable coverage for those with preexisting conditions,” Cassidy said in a briefing I attended last Friday.
Outside experts, however, question how strong these protections actually are. For one thing, there is no definition in the bill of what counts as “affordable” coverage. This would largely be left up to future bureaucrats in Washington to decide.
So, there are built-in protections, but do we trust them? The conundrum with pre-existing conditions is that once you prohibit insurance companies from charging more for those who have them when they sign up, then you have to charge the rest of the population more. The money has to come from somewhere. What’s more, blanket coverage for pre-existing conditions with no penalty means that the well will tend to wait till they become sick to sign up, and that will tend to increase premiums in the entire system in order to sustain it.
Articles that discuss pre-existing conditions commonly ignore or distort a great many things about insurance and pre-existing conditions. One thing that’s usually ignored is that, even before Obamacare, there was quite a bit of coverage at the state level for pre-existing conditions (I have documented the situation in some depth in this post as well as this one, and I suggest you read them both). In general, there’s a lot of ignorance about health care insurance—including a lack of understanding of the fact that if you have had continuous coverage when you get sick, the issue of pre-existing conditions is moot unless you’ve committed fraud or drop your coverage and have to pick it up again after your illness.
I’m not at all sure this most recent bill will pass. But the rush to do so is connected with the process of reconciliation and the widely-reported September 30 deadline for passing the bill that way (see this for a critique of whether that deadline actually exists or not).
[NOTE: By the way, Jimmy Kimmel (I’m only mentioning him in this context because he’s been speaking out on the pre-existing condition situation re Obamacare and replacement bills) is one of the many people who has no idea how pre-existing conditions used to work in the insurance business.]