Selling Cruddy Health Care is Harder than You Think

Republicans said they wanted to repeal and replace Obamacare because the exchanges were “broken.” By that they meant deductibles and premiums were too high and insurers were pulling out, leaving fewer choices and less price containment via competition.

The Senate bill makes those things worse - taken the minimum actuarial value of the plans from 70 to 58 percent (i.e., the insurer has to pick up less and you have to pick up more of the cost), phasing out subsidies at a lower income point (350 percent vs. 400 percent of the poverty line) and removing the individual mandate, which will increase the adverse selection problem.

Obamacare needs fixing, alright, but the Senate takes the exchanges in the wrong direction. Sure, without the list of minimum benefits you could get “cheaper” plans - but that means higher deductibles and out-of-pocket costs.

Meanwhile, what the Senate bill really focuses on is cutting Medicaid. (But wasn’t the problem the exchanges, not Medicaid? Shhh!) Again, the plan needs reforms, but simply lopping off the amount the federal government pays isn’t reform; it’s cost shifting to states that will either have to shift money from other programs (e.g., education) or curtail benefits to their neediest people. No wonder governors are among the loudest critics.

We’d favor some reforms that liberals might not like (e.g., work or school requirements for able-bodied adults without children) and would be willing to encourage experimentation (e.g., pay for private insurance premiums for Medicaid recipients instead of subsidizing fee for service medicine). But it’s not intellectually honest to say massive cuts are themselves reforms. (In the end, such reforms might save money, but the purpose is getting people into the work world and shifting to managed care).

So what do we have here? Coverage in the exchanges gets worse and Medicaid gets cut back, significantly (which among other things hits anti-opioid abuse programs). But never fear, big tax cuts go to the rich. Huh?!? Yup, taking all that money out of support for the exchanges and for Medicaid allows Republicans to undo the taxes on the wealthy among us.

We would have more respect for Republicans who said “We don’t want the feds to make insurance more accessible for middle- and working-class people because tax cuts for wealthy folks are more important to us.” But of course they don’t have the nerve to say that.

The shell game isn’t fooling that many Americans. The Kaiser Family Foundation’s June poll finds that the GOP replacement plan now gets a thumbs down from 55 percent of Americans.

It’s President Donald Trump’s base that has figured out the Republican scheme is rotten. The poll finds that “support for the replacement plan has decreased among Republicans (from 67 percent in May to 56 percent currently) and among supporters of President Trump (from 69 percent to 55 percent).” Perhaps they are learning what is in the bill, and learning what’s not to like. Meanwhile, Obamacare is viewed positively by a majority of Americans, the first time that has happened since 2010. According to the poll, what voters really like is Medicaid, which happens to be what the Senate is hitting the hardest:

“- The majority of the public - regardless of partisanship - hold favorable views of Medicaid, the government health insurance and long-term care program for low-income adults and children. Three-fourths (74 percent) of the public say they have a favorable view of the program, including four in ten (37 percent) who have a “very favorable” view. In addition, six in ten say the program is working well for most low-income people nationally (61 percent) and seven in ten say the program is working well for most low-income people in their state (67 percent).

“- When asked about proposed changes to the Medicaid program, a majority of the public support allowing states to impose work requirements on non-disabled adults (70 percent) or drug testing as a condition of enrollment (64 percent). However, fewer support changes that would cut funding or alter the funding structure. For example, about one-third support reducing funding for Medicaid expansion or limiting how much money each state gets from the federal government each year. The Affordable Care Act is much more popular (51 percent) than the GOP alternative (38 percent).”

Voters also don’t like dumping the minimum essential benefits:

“The poll finds support for the status quo with two-thirds of the public saying they want the federal government to continue to require health insurance companies to cover a certain set of benefits while about three in ten (31 percent) say states should be able to decide whether insurers can sell plans that cover fewer benefits than currently required. There are party differences with a large majority of Democrats supporting the status quo (81 percent) compared to fewer, but still a majority, of independents (65 percent) and Republicans (52 percent).”

This, by the way, is a back door way of getting out of coverage for expensive procedures for those with pre-existing conditions. That’s because insurers can “offer skinny plans with less coverage that falls far short of the needs of those with serious health conditions.” As a result, “Young and healthy people will opt for those plans, leaving those with pre-existing conditions in their own, much more costly, market. In the end, the effect is the same as if companies could just outright discriminate against those with serious health problems.”

I doubt Trump understands what is in the bill (someone should ask him the justification for slashing Medicaid), but senators sure do. They’ve been posting images of themselves studying the bill intently. There will be no excuses. If they support the bill, they’re speeding up the demise of the exchanges, slashing Medicaid and giving back millions to the super-rich.

That’s what Senate staff came up with in secret. I’d have kept it secret too.