Trumpcare Plan and CBO Score Released

Healthcare in America feels like an eternal struggle, both in terms of settling on a policy goal and in terms of actually getting healthcare when you’re sick. I’m a small business owner and so, in terms of healthcare, not much better than being self-employed. My options prior to the ACA were not great. I’ve never been in love with the ACA as it came through, but it seemed better overall than the pre-Obamacare options. I was paying more and didn’t have great coverage. But, as a matter of broader policy, more people were covered and, I got the sense that, personally, if I or a member of my family got really sick, we’d have a lot stronger of a safety net with the ACA than without.

Detractors oppose Obamacare for a variety of reasons and with different levels of ferocity. There are free-market purists. There are those who get indignant when they see benefits going to the “undeserving poor.” And, there are folks who can’t see anything but the insurance mandate. I’m sure there are other reasons, but those are the three broad categories.

I think the market purists are misguided, primarily because health care isn’t a widget and doesn’t respond well to market forces. Procedures that are relatively straight forward and mostly optional are the exception — things like cosmetic surgery and lasik eye surgery are probably examples where the market works well. But, for a lot of health care, procedures aren’t optional — so, it’s not an arm’s length transaction where the customer can reasonably just go without if he or she doesn’t have the money. The necessity of various tests and procedures aren’t something a layman can reasonably evaluate without the help of a professional. And the pricing is beyond opaque. Try getting a price quote on a hip replacement, let alone a weird murmur that’s making you feel dizzy. The ability to walk away from a bad deal, knowledge of the value of the product to one’s self, and a good idea of the price are all pretty critical in creating efficient market transactions. On the subject of markets, I’ve said before that I don’t think the “selling across state lines” approach is going to generate competition and better value. Rather, it’s going to result in a regulatory race to the bottom where, like credit card companies, health insurers are all going to locate in whichever state will try to land those insurance company jobs by offering the most pro-industry, anti-consumer laws.

Not liking Obamacare is one thing, but the fact is that it was passed to address a problem. Health care was becoming more out of reach for more and more people by the year. Other countries with a socialized approach to providing care have (broadly speaking) been able to generate better health outcomes while spending less overall money. (I’m willing to concede that, for the very wealthy, the U.S. probably offers the best health care.) Now we have the Trumpcare “replacement” offered by the Republicans in Congress. (Trump apparently doesn’t want his name attached to this — which is remarkable given the number of substandard products to which he’s eager to attach his name.) The Congressional Budget Office score is out, and it’s not pretty.

The Congressional Budget Office on Monday projected that the House leadership’s American Health Care Act would result in 24 million Americans losing their health insurance while raising premiums for those covered on the individual market. Their bill would lower federal deficits by $337 billion over 10 years, largely as a result of cuts to Medicaid that would reduce its enrollment by 14 million, according to the estimate. Average premiums would rise by as much as 20 percent in 2018 and 2019 before falling in later years.

The premiums would generally fall for young, healthier people and rise for older people who tend to have more health problems.

Democrats have focused on the fact that the proposed legislation would result in a tax cut for those making more than $250,000 per year and a significant tax cut for the very wealthy. It repeals certain Obamacare taxes for “couples making more than $250,000, like a 3.8 percent surtax on investment income and a 0.9 percent surtax on wages. . . . Repealing them would cost about $275 billion over the next decade; which is to say, it would transfer $275 billion from public-health spending to the richest 1 or 2 percent.”

Other provisions, like health savings accounts, are nice if you have a lot of extra cash and don’t have significant health problems. But, for most Americans, those are going to do little or nothing in terms of paying your serious medical bills.

I know I’ve barely scratched the surface here, and — in any event — I’m not your best resource for health care policy discussions. (For that, I’d recommend The Incidental Economist.) But, I’ve noticed over the years that memories fade and hyperlinks rot. So, it’s been useful to hit the highlights on my own blog where I can generally find it again as the years pass.