I explained the other day how the mythical moderate from Maine, Senator Susan Collins, is being played by the Trump White House on her wholly insufficient “Obamacare” reinsurance fund bill in order to gain her vote on the Senate GOP tax bill. In major policy reversal, Trump now backs bipartisan fixes to ‘Obamacare’ to get Sen. Susan Collin’s vote on GOP tax bill.
The Congressional Budget Office (CBO) has now scored the bill negotiated by Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA) to stabilize the “Obamacare” market, and it also comes up woefully short. The CBO just released a report that should worry Sens. Susan Collins and Lisa Murkowski:
A new report from the Congressional Budget Office dealt what should be a crushing blow to the tax bill: The deal that was crafted to win key senators who objected to the bill’s provision that would leave millions uninsured won’t actually stanch the loss in coverage.
With moderates expressing concern over a provision that would repeal Obamacare’s individual mandate — leaving an estimated 13 million more uninsured by 2027 — Republican leadership hatched a plan to simultaneously pass a bill to stabilize the Obamacare marketplaces, a proposal negotiated by Sens. Lamar Alexander (R-TN) and Patty Murray (D-WA).
But this proposal hit a major snag Wednesday when a new CBO report found passing the Alexander-Murray proposal — the centerpiece of which is funding Obamacare’s cost-sharing reduction subsidies that Trump has threatened to pull — would not in fact help mitigate the coverage losses and premium hikes triggered by repealing the individual mandate.
Previous estimates from the CBO found that repealing the individual mandate, the Obamacare policy that penalizes people who opt out of buying health insurance, would leave 13 million fewer insured by 2027 and increase premiums by an average of 10 percent over the next decade.
“If legislation were enacted that incorporated both the provisions of the Bipartisan Health Care Stabilization Act and a repeal of the individual mandate … the effects on the premiums and the number of people with health insurance coverage would be similar,” Keith Hall, the CBO’s director, wrote in a letter to Murray.
This will prove to be a major test for senators like Lisa Murkowski (R-AK) and Susan Collins (R-ME), who have previously expressed concern about repealing the individual mandate but signaled that the addition of Obamacare stabilization packages could be enough to win their votes.
On Tuesday, Collins told reporters that she would like to see more than just the Alexander-Murray proposal passed to support repealing the individual mandate. She has another bipartisan proposal with Sen. Bill Nelson (D-FL) that gives $4.5 billion in federal funding to health insurers to offset any premium increases after repealing the individual mandate.
Collin’s proposal is also woefully inadequate.
The president and Republican leadership have shown interest in passing both those proposals in order to win her vote on tax reform.
The question is the timing of her support.
Sarah Kliff at Vox.com explains why Sens. Collins and Murkowski should be a no vote on the Senate GOP tax bill if they are intellectually and morally consistent with their no vote on “Obamacare” repeal. The Senate’s tax bill is a sweeping change to every part of federal health care:
The Senate tax bill is really a health care bill with major implications for more than 100 million Americans who rely on the federal government for their health insurance.
The bill reaches into every major American health care program: Medicaid, Medicare, and the Obamacare marketplaces.
These are expected outcomes based on two significant policy changes in the bill. First, the bill repeals the individual mandate, a key piece of Obamacare that requires most Americans get covered. Economists expect its elimination to reduce enrollment in both the Affordable Care Act’s private marketplaces and Medicaid by millions. The money saved will be pumped into tax cuts for the very wealthy.
The bill also includes tax cuts so large that they would trigger across-the-board spending cuts — including billions for Medicare. The last time Medicare was hit with cuts like this, patients lost access to critical services like chemotherapy treatment.
This tax bill deserves a broader name. Its policies will cause millions of vulnerable Americans to lose coverage, disrupt care for the elderly, and potentially change the health care system in other ways we can’t fully predict.
Repealing the individual mandate would cause premiums to spike, millions to lose coverage
The Senate bill includes a provision to repeal the Affordable Care Act’s requirement that nearly all Americans carry insurance coverage, known as “the individual mandate.”
Republicans see it as a winning move. The individual mandate is very unpopular. And repealing it will save more than $300 billion — which can pay for big tax cuts for corporations and the very wealthy.
The best economic evidence we have shows that if the individual mandate disappears, premiums go up and millions of Americans lose coverage. The Congressional Budget Office pegs the decline in the number of insured at 13 million.
Some economists I spoke with thought the CBO might be on the high end with its estimate. Others thought the number sounded right. But all agreed that the fundamental outcome isn’t up for debate: Millions of Americans would lose coverage. It’s not a question of if; it’s a question of how many millions.
Economists generally expect that premiums would rise without the individual mandate in place, leaving many people who would like to purchase insurance unable to afford the monthly premiums.
* * *
The CBO estimates that repealing Obamacare would reduce enrollment in the marketplaces by 8 million and in Medicaid by 5 million. That last finding can be a bit puzzling: Why would a mandate have any bearing on whether people enroll in a free health insurance program like Medicaid?
But it turns out, economists who study these issues have decent reason to expect that Medicaid enrollment would decline without a mandate.
One of the things they’ve observed with the Affordable Care Act is a “welcome mat” effect for Medicaid: people who were previously eligible for the program suddenly signing up when the Affordable Care Act took effect. They think some of that is due to the increased advertising for Obamacare, and some of it due to the fact that people heard it was now required by law to get coverage.
“If the main effect is that people collectively have the sense that ‘I have to sign up for coverage,’ that can have a big impact,” says Sommers. “It’s reasonable that CBO is projecting some people in Medicaid might not stay, or new people who might be eligible might not go to the trouble of applying.”
We’re not talking about Medicare in tax reform. But we should be.
The Senate tax bill is expected to trigger a $25 billion annual cut to Medicare, the CBO estimated earlier this month.
The Medicare cuts aren’t part of the tax bill itself. Instead, they are mandatory spending cuts that would occur because of the tax bill’s $1.5 trillion increase to the deficit. These spending cuts are known as a sequester — and we know what happens to Medicare in a sequester, because it happened just a few years ago.
The last sequester in 2013 unexpectedly caused cancer clinics to turn away thousands of Medicare patients. I wrote about it at the time, when I worked for the Washington Post:
Oncologists say the reduced funding, which took effect for Medicare on April 1, makes it impossible to administer expensive chemotherapy drugs while staying afloat financially.
Patients at these clinics would need to seek treatment elsewhere, such as at hospitals that might not have the capacity to accommodate them.
In that particular case, Congress had actually tried to shield Medicare from some of the deepest cuts. But because of some quirks in how Medicare pays for cancer drugs, it didn’t work — and clinics were left with incredibly difficult choices.
I talked to one Long Island oncologist who said he and his staff held an emergency meeting earlier this week and decided they would no longer see one-third of their 16,000 Medicare patients. “It’s a choice between seeing these patients and staying in business,” Jeff Vacirca, chief executive of North Shore Hematology Oncology Associates, told me.
The Senate could pass separate legislation to skirt these rules that would require the automatic budget cuts — but as my colleague Tara Golshan notes, the politics of Republicans voting to undermine a deficit-management law won’t be easy.
And if they don’t, the fears of cancer clinics turning patients away could become real again. The tax bill could, for some seniors, become a bill that sharply limits their access to health care.
The Senate tax bill is also a health care bill
As the tax bill slides to a vote (with the expectation that it will clear the Senate), we should also be talking about health care. When Obamacare faced repeal this spring, many groups mobilized to demand clarity on what the bill would really do. We need those answers now too.
Because the tax bill isn’t just a tax bill. It is a bill that has sweeping consequences for the American health care system — that could stand to affect the health care of vulnerable and elderly citizens.
Finally, seniors should pay attention to this report. AARP: 5.2 million seniors could see taxes increased by GOP bill:
Millions of senior citizens could see tax increases under the Senate version of the GOP’s tax-reform plan, according to an analysis from the AARP.
In an article published Wednesday on the group’s website, the AARP’s vice president and policy director argue that 1 in 5 seniors, about 6.3 million taxpayers, will see either no change or a tax increase in 2019 under the plan passed by the Senate Budget Committee. Of those individuals, 1.2 million people would get a tax hike.
The authors argue that number will jump “more than four times” by 2027 to 5.2 million seniors “as a result of sunsetting the middle-class tax cuts.”
Another issue of concern for older Americans, the AARP says, is the automatic cuts to Medicare and other services under the GOP plan.
“The bottom line is that even today’s 65+ as well as those who turn 65 by 2027 who benefit initially may end up paying higher and ever increasing taxes soon thereafter,” the authors write.
“Further, as the result of growing deficits, they may receive reduced value from Medicare or other programs that are central to older Americans’ wellbeing.”
Call senators John McCain and Jeff Flake now and demand that they vote against this terrible GOP tax bill.