The second Monday in March was full of dire warnings. The National Weather Service, part of the National Oceanic and Atmospheric Administration (NOAA) branch of the Department of Commerce – a science-based service not yet eliminated by the new Trump administration – said there was a blizzard coming. It would hit Washington and Baltimore first, and then move up to Philadelphia, and then it would bury New York City, and then Boston, and then slam Maine, and then Newfoundland – and then it would be gone. Inland, this storm would bury most of Pennsylvania, and most of New York, and all of inland New England. This is the big one, just like in the Wolfgang Petersen movie – without George Clooney and Mark Wahlberg. A storm barrels in from the Great Plains and meets up with a storm barreling up from the Gulf of Mexico. These things happen now and then. The results are predictable, the “perfect storm” – although someone at the National Weather Service decided to name this storm “Stella” – the name of the woman who finally drives Marlon Brando totally crazy in that Streetcar Named Desire thing. That’s a nice touch. Brando ends of standing there, ripped in his ripped t-shirt, shouting her name, alone, as the stage lights dim and everything is over. There will be a lot of that going around.
That may not be so. The National Weather Service could be wrong. Maybe nothing much will happen, other than a few dismal days. Nothing is ever as bad as it seems. People like to scare themselves, and experts sometimes are not expert in their predictions. That happens too – although the National Weather Service did get Katrina and Sandy right. The folks in New Orleans and New Jersey will tell you that – but others will tell you to calm down. Sure, this looks bad, but it really isn’t.
That seems to be a Republican thing, at least when they’re in charge of things. Dire predictions are stupid. Dire predictions of a perfect storm are even stupider. The repeal of Obamacare and its replacement with something or other may produce a few dismal days, but everything will be fine, and then wonderful. Just as the National Weather Service could be wrong, the Congressional Budget Office could be wrong. That was the word as the new blizzard was (or wasn’t) forming. Ignore the storm warnings, but the Congressional Budget Office was predicting the perfect storm:
House Republicans’ proposal to rewrite federal health-care law would more than reverse the gains the Affordable Care Act has made in the number of Americans with health insurance, while curbing the federal deficit, according to a widely anticipated forecast by congressional analysts.
The analysis, released late Monday afternoon by the Congressional Budget Office, predicts that 24 million fewer people would have coverage a decade from now than if the Affordable Care Act remains intact, nearly doubling the share of Americans who are uninsured from 10 percent to 19 percent. The office projects the number of uninsured people would jump 14 million after the first year.
Damn! Trump said that everyone would be covered, and the coverage would be far cheaper for them, and for us all, and it would be wonderful, but there is that silver lining:
The GOP legislation, which has been speeding through House committees since it was introduced a week ago, would lower the deficit by $337 billion during that time, primarily by lessening spending on Medicaid and government aid for people buying health plans on their own.
Lowering the deficit is always good,if you’re a Republican, but there are costs involved:
The report predicted that premiums would be 15 percent to 20 percent higher in the first year compared with those under the Affordable Care Act but 10 percent lower on average after 2026. By and large, older Americans would pay “substantially” more and younger Americans less.
That may be a way for the Republicans to recapture the vote of everyone under thirty who now thinks these guys are anti-gay anti-black anti-Hispanic anti-women anti-science anti-everything fools, with tiny hearts to match Donald Trump’s tiny hands, but probably not. It doesn’t take a weatherman to know which way the wind is blowing – as Bob Dylan sang back in the sixties. This is still not a party for young people, so it was time for damage control. It was time to say the weather report was wrong:
The report’s arrival produced starkly different tacks from the White House and Capitol Hill – with top aides to the president immediately seeking to discredit it while the House’s Republican leaders praised the report for reinforcing their argument that the plan curbs federal spending and gives Americans the freedom to be insured or not – their choice.
“Just absurd,” was the way Mick Mulvaney, director of the White House’s Office of Management and Budget, responded to the forecast, while Health and Human Services Secretary Tom Price said, “The CBO report’s coverage numbers defy logic.”
House Speaker Paul D. Ryan (R-Wis.) meanwhile said in a Fox News interview that the report “exceeded” his expectations, and he jumped on its prediction of a smaller deficit to try to assuage the chamber’s most conservative members, many of whom oppose the idea of new tax credits to help some Americans buy coverage on their own.
Declaring that the plans would usher in “the most fundamental entitlement reform in a generation,” Ryan said the legislation “is about giving people more choices and better access to a plan they want and can afford. When people have more choices, costs go down. That’s what this report shows.”
Ryan even issued an official statement about that:
I recognize and appreciate concerns about making sure people have access to coverage. Under Obamacare, we have seen how government-mandated coverage does not equal access to care, and now the law is collapsing. Our plan is not about forcing people to buy expensive, one-size-fits-all coverage. It is about giving people more choices and better access to a plan they want and can afford. When people have more choices, costs go down. That’s what this report shows. And, as we have long said, there will be a stable transition so that no one has the rug pulled out from under them.
Ed Kilgore countered with this:
The one thing Ryan got right is that the CBO estimates the $935 billion in spending reductions via smaller tax credits and Medicaid cuts – all mostly affecting the working poor – will exceed the $599 billion in tax cuts, mostly targeted to the wealthy. That’s not an argument that will fare very well once it is understood.
The argument that people losing coverage have the freedom to decide they don’t want it anyway isn’t a big winner, either. I would expect some reactions to Ryan to quote songwriter Kris Kristofferson to the effect that “freedom’s just another word for nothing left to lose.”
Everyone remembers different songs from long ago, but the storm is here:
Early signs emerged Monday night that the Congressional Budget Office report was not helping to solidify GOP support. Rep. Rob Wittman (R-Va.) announced he would oppose the bill.
“I do believe that we can enact meaningful health care reforms that put the patient and health care provider back at the center of our health care system, but this bill is not the right answer,” he said in a Facebook post.
Wittman’s stance could represent a new front of dissent among House Republicans. A six-term member who leads a House Armed Services subcommittee and represents a district that favored Trump by 12 percentage points, Wittman is neither a hard-right firebrand nor a wary moderate from a Medicaid expansion state. Rather, he is the sort of mainstream conservative that Ryan is counting on to toe the party line and pass the bill.
This was just too much for him:
The analysis predicts that the number of people without health coverage would rise to 52 million by 2026, compared with 28 million if the Affordable Care Act remains intact. That erosion would mean that about 1 in 5 U.S. residents would be uninsured by 2026 – compared to 1 in 10 uninsured now and 1 in 6 who were uninsured before the Affordable Care Act was enacted.
The reduction in the number of insured people would result from three factors. A provision rescinding the penalty imposed on the uninsured could prompt many Americans to drop their health plans. After that, tax credits that are less generous than current subsidies could make insurance unaffordable to more people. Finally, some states may undo the expansion of their Medicaid programs.
Medicaid covers the very poor and the disabled and the majority of those in nursing homes, waiting for the end. It will come sooner now:
In its current form, the House GOP proposal would administer Medicaid by giving each state a fixed amount of funding per person in the program rather than covering a fixed percentage of its Medicaid costs, no matter how high. The plan would also replace the Affordable Care Act’s federal insurance subsidies with age- and income-based tax credits, which would involve considerably less spending, the report shows.
While the deficit would be lower, the legislation also would reduce federal revenue by $592 billion by 2026 by repealing several taxes that the Affordable Care Act created to help pay for more people to get insurance – notably taxes on high-income Americans, hospitals and health insurers.
“They are implementing the biggest transfer of wealth in our history,” House Minority Leader Nancy Pelosi (D-Calif.) told reporters Monday. “In terms of insurance coverage, it’s immoral. In terms of giving money to the rich at the expense of working families, it is indecent and wrong.”
That’s the plan:
The estimates projected a significant drop in Medicaid enrollment. Next year, the forecast says, about 5 million fewer people would be on Medicaid. By 2026, the program’s rolls would shrink by nearly 15 million – almost 1 in 4 of the 68 million currently in the program.
And there’s the detail of that “young folks” thing:
The Congressional Budget Office also predicted substantial disparities in the effect the legislation would have on insurance premiums for younger versus older consumers.
If the GOP plan is enacted, a 21-year-old making $68,200 would pay an average of $1,450 for a year’s worth of insurance premiums after the new tax credits, compared with $5,100 under the current law.
On the other hand, the cost of a year’s worth of premiums would stay about the same for a 64-year-old at the same income level. For a 64-year-old making $26,500, the cost would rise sharply, from $1,700 to $14,600.
That’s an 859 percent increase, from 6 percent of that person’s income to 55 percent, so health insurance becomes a clear impossibility for that 64-year-old, and there’s this:
The analysis also forecast a reduction in the number of Americans who get insurance through their employers, in part because the new tax credits would be available to people with higher incomes than with the Affordable Care Act’s subsidies. Some employers would also drop coverage, the Congressional Budget Office projected.
Everyone gets screwed – that’s the forecast for this storm – and Dylan Matthews suggests why:
The Congressional Budget Office’s assessment of Republicans’ plan to replace Obamacare is a description of one of the largest, most significant income redistribution programs the US government has ever considered – from the poor to the wealthy rather than the other way around.
The plan, the CBO concludes, would take more than $1 trillion away from programs targeting poor and middle-class families, to fund an $883 billion tax cut targeted at the wealthy. It is upward income redistribution of a truly massive scale.
“No legislation enacted in recent decades cut low-income programs this much – or even comes close,” Robert Greenstein, the founder and president of the Center on Budget and Policy Priorities and Washington’s leading advocate for poor and low-income Americans, says.
This seems to be class warfare by the rich against the poor, given that tax credits are redirected to the rich:
There are the cuts to the insurance subsidies established under Obamacare, which helped people making up to four times the poverty rate ($98,400 for a family of four) pay their premiums for private individual insurance. The Republican plan would replace the sliding-scale subsidies of Obamacare, which help lower-income people more, with lower, flat credits that vary only by age, and which only begin phasing out for couples making $150,000 or more.
In other words, the Republican credits will be smaller, and they will be more targeted toward the rich. The result is a $312 billion net spending cut, and the $361 billion in tax credit spending that remains would be redirected to richer people.
And the biggest tax cuts help the rich:
The Republican plan would reduce federal revenues by $883 billion over 10 years. About $210 billion of that comes from eliminating the employer and individual mandates; the former is paid by companies that don’t insure their employees, and the latter is progressive, as it’s levied as a percentage of income.
But the bulk of the tax cuts would come from eliminating specific provisions meant to raise money for the Medicaid expansion and insurance subsidies in Obamacare, rather than to make sure the insurance market functions properly. The biggest of those is the 3.8 percent tax the Affordable Care Act applied to capital gains, dividend, and interest income for families with $250,000 or more in income ($125,000 for singles). The CBO finds that getting rid of this tax costs $157.6 billion over 10 years.
Repealing that tax is a change that, by definition, only helps the rich, or at least the affluent. If you’re part of a married couple and, like the vast majority of Americans, make less than $250,000 a year, or earn more than that but have little investment income, it doesn’t affect you at all. The Tax Policy Center finds that repealing the tax would amount to an average tax cut of $0 for households in the bottom 90 percent – those making $208,500 or below. A handful of people in the 80th to 95th percentiles would see cuts, but the vast majority wouldn’t.
By contrast, members of the top 0.1 percent, who each on average make more than $3.75 million annually, would get an average tax cut of $165,090.
That’s redistribution upwards, and a reversal:
The Affordable Care Act was one of the single largest downward redistributions of income in American history, made more so when considered in the context of the Obama administration’s increases in taxes on the rich and expansions of tax credits for the poor. This was a point that Jason Furman, Obama’s chief economist, made well in a speech last October.
“In concert with the effects of the ACA coverage provisions, changes in tax policy since 2009 will by 2017 boost incomes for families in the bottom quintile by 18 percent, or $2,200 (the equivalent to about a decade of income gains), and in the second quintile by about 6 percent, or $1,500, relative to what they would have been under the continuation of 2008 policies,” Furman noted. “Under President Obama, the Federal investment in inequality has increased by about 0.8 percent of potential GDP, more than any previous president since the Great Society.”
You don’t have to take Furman’s word for it. A simple glance at the funding mechanisms of the ACA – things like the surtaxes on income above $250,000 – and what it spent money on (namely health insurance for the poor) makes it clear that it takes money from the rich and gives it to the poor, in the form of health insurance.
And now we go the other way:
The American Health Care Act, the Republican health care legislation backed by President Trump and Speaker Paul Ryan, undoes basically all of those components. And then it goes a step further, by slashing Medicaid to below its pre–Affordable Care Act levels using a per capita cap.
The AHCA would reverse one of the greatest actions against inequality ever taken by the federal government, and then increase inequality yet further. It is an act of class warfare against low-income Americans, waged for the benefit of the handful of rich taxpayers affected by Obamacare’s surtaxes.
And there are the minor details:
A congressional plan to make Planned Parenthood ineligible for federal funding would leave many women without services to help them avoid pregnancy, resulting in thousands of additional births, according to a new federal budget analysis…
The analysts estimated that excluding the women’s health organization from the Medicaid program for one year, as congressional Republicans have proposed, would particularly affect low-income areas and communities without many health care options, leaving 15 percent of those people “without services that help women avert pregnancy.”
Planned Parenthood provides reproductive and other services, including abortion, to 2.5 million men and women nationally.
Those folks are out of luck. It’s the abortion thing. Abortion may be legal – that’s settled law – but that doesn’t matter. Those tiny hearts that match Donald Trump’s tiny hands will have their way.
There’s a storm coming, and Paul Krugman offers one assertion and asks two questions:
The assertion is that something like this was to be expected. The CBO came in even worse on coverage than most predicted, but it was obvious that the news would be terrible because that’s what the logic of the situation told us. Obamacare imposes a mandate to induce healthy people to sign up, offers means-tested subsidies to make insurance affordable and expands Medicaid to take care of people with really low incomes. Trumpcare eliminates the mandate, slashes subsidies overall and redirects them to those who don’t need them and sharply cuts Medicaid. Of course that leads to a huge drop in coverage.
Or to put it differently, Obamacare is actually an intelligently designed system, and Republican claims that they could do much better even while slashing funding so they could cut taxes on the rich were always obvious nonsense. Trumpcare is a slapdash, incompetent piece of legislation; but even a much more competent set of people couldn’t have done better given the constraints of Republican Party ideology.
Given that, there are the questions:
First, can this legislation still go through? I have learned never to underestimate the cravenness of Republican “moderates,” who may posture to the center but almost always cave to the hard right when it matters. But even so, it’s hard to imagine this act of cruelty getting 50 senators. And if it can’t pass the Senate, won’t right-wing purists in the House decide to advertise their purity by voting against a bill that still falls short of free-market ideals rather than vote for Obamacare 0.5?
Second, what were Republican leaders thinking? Something like this CBO score was a foregone conclusion; would it really have mattered much if it were 15 million losing insurance, not 24 million? How was this supposed to work out politically?
This was the expected perfect storm, and late in the day, Politico revealed how expected it was:
The White House’s own internal analysis of the GOP plan to repeal and replace Obamacare show even steeper coverage losses than the projections by the Congressional Budget Office, according to a document viewed by POLITICO on Monday.
The executive branch analysis forecast that 26 million people would lose coverage over the next decade, versus the 24 million CBO estimate – a finding that undermines White House efforts to discredit the forecasts from the nonpartisan CBO.
The analysis found that under the American Health Care Act the coverage losses would include 17 million for Medicaid, six million in the individual market and three million in employer-based plans.
A total of 54 million individuals would be uninsured in 2026 under the GOP plan, according to the White House analysis. That’s nearly double the number projected under current law.
They knew all along this storm was coming, and it was going to be worse than anyone imagined. This is the perfect storm, but perfect for what? Everyone is now appalled at them. At least they’ll have a quiet snow day to think about that. Washington is shut down. The National Weather Service was right too.