GOP: ObamaCare today, ObamaCare tomorrow, ObamaCare forever.

As the Senate continues working on on ObamaCare retention  bill — details of which should be released by the close of business today — some Republican Senators are actually pushing for retention of some of ObamaCare’s tax increases.

Meanwhile, Republican leadership is using the “savings” from their health care bill to cut deals with reluctant Senators … didn’t the Democrats do that in 2010 to pass ObamaCare, and didn’t the Republicans criticize them for it? My memory is playing tricks on me.

One provision of the Senate bill, that was also included in the House bill, that is not getting nearly the attention it deserves, creates a new federal “Patient and State Stability Fund,” which throws federal money at states to “stabilize” the health insurance markets..and people wonder why I say Republicans either don’t believe in or don’t understand how markets work.

The Senate bill is not all bad, is does repeal most of Obamacare;s tax hikes. However, that does not make up for the increased spending and retain of most of ObamaCare mandates. It even continues ObamaCare subsidies for three years — the same subsidies the House GOP sued Obama over!

Peter Suderman at Reason Magazine explains how the GOP bill represents the GOP’s embrace of ObamaCare:

To understand the Senate plan, it helps to recall Obamacare’s underlying framework. The centerpiece of the law was a reform of the individual market, intended to give those who do not get coverage through work or a federal program access to subsidized, regulated coverage. The law created a new federal subsidy, based on income, for lower- and middle-income households to purchase health insurance. It set up federal rules requiring insurers to sell to all comers while limiting their ability to charge based on health history. It mandated that all individuals obtain health coverage or pay a tax penalty. And it erected a system of government-run health insurance exchanges on which consumers could purchase subsidized, regulated individual market coverage.

Those exchanges have never been fully stable as either business or policy propositions. Premiums have marched steadily upwards; last year, the price of a typical plan rose by 22 percent, and early reports show large spikes coming this year as well. The non-profit health insurance organizations that Obamacare funded have mostly shut down. Large, for-profit health insurers, meanwhile, have lost money and either scaled back their participation or dropped out entirely.

Republicans have repeatedly criticized these marketplaces for being expensive and unstable. As Senate Majority Leader Mitch McConnell, who spearheaded the drafting of this bill, likes to say, “Obamacare is collapsing around us.” Yet even more than the House plan, the Senate plan retains the essential structure of Obamacare’s individual market reforms. It would likely result in fewer people being covered, and it would not stop the destabilization of the market. Like the House plan, the Senate plan retains Obamacare’s major insurance regulations, including the requirement to cover pre-existing conditions, at the federal level. Unlike the House plan, it does not allow states to apply for a waiver to opt out of those rules. It also eliminates Obamacare’s health insurance mandate.

Every state that has attempted this combination of coverage regulations without a mandate has seen a swift meltdown in the individual market. There is every reason to expect that the same would happen under the Senate plan, especially since Obamacare’s exchanges were struggling with a too-small, too-sick enrollee pool even with the mandate in place. The Senate bill attempts to manage this instability by buying off health insurance companies with payments that Republicans previously argued were illegal and should be stopped.

The way it does this is by authorizing additional payments known as cost-sharing reduction (CSR) subsidies to insurers through 2019. It also authorizes the back payment of any CSR subsidies that insurers have not recieved. On this front, it is actually an expansion of Obamacare, and it is a revealing sign of the shallowness of Republican thinking on health care policy. The Obama administration initially requested congressional authorization to make the CSR payments, which are called for in Obamacare, but not explicitly appropriated. The House did not provide it. The administration then paid them anyway, believing that the exchanges would collapse without them. In response, House Republicans sued, arguing that only Congress has the power to appropriate funds. A federal judge agreed that the Obama administration was violating the constitutional separation of powers. The Trump administration has continued making the payments while threatening to withhold them, adding to the uncertainty for insurers operating in the exchanges. Now Senate Republicans are proposing to explicitly authorize those payments for the first time. That means they are proposing to explicitly authorize and continue the very policy their House colleagues took the previous administration to court for pursuing.

It amounts to an expansion of Obamacare, and while it may reduce uncertainty in some markets, it is unlikely to halt premium increases or fully stabilize the exchanges, which were degrading even before Trump threatened to withhold the payments. Moreover, it is an admission that Republicans do not believe they can meaningfully improve on the Obama administration’s implementation of the law.

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That same inability to move beyond the core structure of Obamacare is also apparent in the design of the Senate plan’s insurance subsidies. The House version of the AHCA provided subsidies based on age. But the Senate version relies on income-based subsidies, just like Obamacare—but a little less generous. Currently, Obamacare provides subsidies for individual up to 400 percent of the poverty line, or about $98,000 a year for a family of four. Starting in 2020, the Senate bill would ratchet that back to 350 percent of the poverty line, or about $86,000 for the same family.

In addition, reports indicate that the subsidies are pegged to lower-cost plans, which means the subsidies will be smaller, and will likely lead to more plans with high deductibles. Taken on its own terms, this scheme undercuts the GOP’s complaints that Obamacare hurts the middle class. In addition to the higher deductibles, it creates a subsidy cliff for middle-class families purchasing health insurance on the individual market.

Those who earn slightly too much to qualify for a subsidy would have to pay full price for health coverage that is increasingly expensive. More generally, it represents a failure to think beyond the confines of the law that is already in place. At a fundamental level, the Senate plan accepts Obamacare’s premises about the nature of health insurance and the individual market. It works from the assumption that the only way to make expensive health insurance cheaper is to subsidize it through the federal government. It is a plan that subsidizes, and therefore disguises, unaffordability, rather than attempting to bring down costs directly.

Read the whole piece here.

Michael Cannon of CATO had five questions for any Obamacare repeal bill. He finds the answer to those questions is that the GOP is expanding and preserving Obamacare:

1. Would it repeal the parts of ObamaCare—specifically, community rating—that preclude secure access to health care by causing coverage to become worse for the sick and the Exchanges to collapse? No. The Senate bill would preserve ObamaCare’s community-rating price controls. To be fair, it would modify them. ObamaCare forbids premiums for 64-year-olds to be more than three times premiums for 18-year-olds. The Senate bill would allow premiums for the older cohort to be up to five times those for the younger cohort. But these “age rating” restrictions are the least binding part of ObamaCare’s community-rating price controls. Those price controls would therefore continue to wreak havoc in the individual market. The Senate bill would also preserve nearly all of ObamaCare’s other insurance regulations.

2. Would it make health care more affordable, or just throw subsidies at unaffordable care? The Senate bill, like ObamaCare, would simply throw taxpayer dollars at unaffordable care, rather than make health care more affordable. Making health care more affordable means driving down health care prices. Recent experiments have shown that cost-conscious consumers do indeed push providers to cut prices. (See below graph. Source.)

If you want to see that level of price reductions, you need something along the lines of “large” health savings accounts. The Senate bill would make only minor adjustments to tax-free HSAs that would not deliver lower prices.

3. Would it actually sunset the Medicaid expansion, or keep the expansion alive long enough for a future Democratic Congress to rescue it? The bill would keep it alive so ObamaCare supporters can rescind the repeal. To be fair, the Senate bill would forbid the 19 states that haven’t implemented ObamaCare’s Medicaid expansion from doing so. As explained below, however, the bill would expand a different entitlement–ObamaCare’s Exchange subsidies–to that population. The bill would also repeal the Medicaid expansion in 2024. Yet three new Congresses would take their seats between passage of the bill and when it would repeal the Medicaid expansion. We may even get a new president by then. It is almost guaranteed that one of those Congresses (if not all three) will be more supportive of the Medicaid expansion than the current Congress. Such a Congress could rescind that before it ever happens, as if it never happened. Senate Republicans rigged this Medicaid-expansion repeal never to take effect.

4. Tax cuts are almost irrelevant—how much of ObamaCare’s spending would it repeal? This one is hard to answer without an official score from the Congressional Budget Office–or even with one. Senate Republicans played budget games that hide how much of ObamaCare’s spending they are keeping. Senate Republicans required the CBO to compare the cost of the bill to projections of Exchange enrollment and spending that everyone agrees are inflated. So the forthcoming CBO score will make it look like the Senate bill increases the uninsured more than it actually does.

Put differently, the CBO score will count some people as losing coverage under the Senate bill even though they weren’t going to have coverage anyway. By the same token, this gimmick will make the Senate bill look like it cuts ObamaCare spending more than it does. It requires the CBO to score the Senate bill as eliminating ObamaCare outlays that were never going to happen. The sneaky part is that this budget gimmick then allows Senate Republicans to apply those phantom cuts either to new spending or deficit reduction.

One way the Senate bill applies those phantom cuts to new spending is by expanding ObamaCare to an additional 2.6 million Americans. Thirty-one states and D.C. have implemented ObamaCare’s Medicaid expansion. The Kaiser Family Foundation estimates that in the 19 states that have not expanded Medicaid, there are 2.6 million able-bodied adults who earn too much to qualify for Medicaid but less than 100 percent of the federal poverty level, and thus not enough to receive a “premium assistance tax credit” toward the purchase of an Exchange plan. (We call them tax credits, but they are mostly outlays.)

In 2020, the Senate bill would open eligibility for the tax credits to everyone below 100 percent of the federal poverty level in states that do not implement the expansion. This would expand ObamaCare to another 2.6 million people. In effect, it is Medicaid expansion by another means–and it effectively snubs GOP officials in the 19 states that did the right thing (reduced federal deficits, etc.) by not expanding Medicaid.

The Senate bill would also fund ObamaCare’s “cost-sharing” subsidies, something the law’s Democratic authors never did. That, too, would expand ObamaCare beyond what a Democratic Congress created. So even if the bill’s spending cuts were real (they’re not; see above), we still wouldn’t really know how much the Senate bill reduces actual federal outlays. All we know for sure is that Senate Republicans want to hide how much ObamaCare spending they are preserving, and that the CBO score will likely overstate the bill’s deficit reduction.

5. If it leaves major elements of ObamaCare in place, would it lead voters to blame the ongoing failure of those provisions on (supposed) free-market reforms? Yes. Supporters of the Senate bill are calling it a huge win for conservative governance.

Finished reading the Senate HC bill. Put simply: If it passes, it’ll be the greatest policy achievement by a GOP Congress in my lifetime.
— Avik Roy (@Avik) June 22, 2017

Yet the bill does almost nothing to address the fundamental flaws and instability in ObamaCare’s architecture. Community rating and other provisions of the law will continue to increase premiums, degrade the quality of coverage, and destabilize insurance markets.

ObamaCare supporters, including those who also support a single-payer system, will be quick to blame ObamaCare’s failures on the conservative, free-market ideology that supposedly animates the Senate bill. Such claims will be nonsense. But the narrative will be difficult to combat. The Senate bill could therefore set back the cause of free-market health care reform by decades–yet another feature it shares with ObamaCare.

Read the whole piece here  and see his piece “Health Care Bill Would Rescue ObamaCare and Take Democrats off the Hook.”

Phil Klein of the Washington Examiner calls the GOP bill an ObamaCare rescue proposal:

Now, granted, it’s easy to see how a casual observer of federal politics and policy might have viewed the reactions to the healthcare bill and come away a bit confused. Those on the right who accused Republicans of selling out and enshrining Obamacare’s spending and liberals who warned that the bill would destroy Obamacare and make steep cuts to Medicaid seem to have been describing two different bills. And in a sense, they were. That is, the Senate bill can be thought of as almost as one bill that helps keep much of Obamacare intact in the coming years, and another bill that would institute increasingly significant changes to federal healthcare spending in the longer run.

The bill would also keep funding Obamacare’s Medicaid expansion as is until 2021 and Obama’s subsidies toward the purchase of insurance until 2020.

States would only have limited ability to opt out of some Obamacare regulations, but not most of them, including the regulation that forces healthier individuals to pay the same for health insurance plans as those with higher medical costs. Most, but not all, of the law’s taxes would be eventually eliminated.

Though Obamacare’s insurance subsidies would be made less generous after 2020 (for instance, they would phase out at 350 percent of the federal poverty level rather than 400 percent), they would be structurally similar. Rather than a “tax credit” that reduces an individual’s tax burden, these Republican tax credits, like Obamacare, would be subsidies paid directly to insurers to help qualifying individuals with their premiums at the point of purchase.

Also, starting in 2020, states would be able to obtain more flexibility over their Medicaid programs by applying for block grants that would provide them more leeway over covering their Medicaid populations, rather than the current system in which the federal government funding comes with a lot of strings attached. Starting in 2021, the federal government would start phasing out the financing for Obamacare’s Medicaid expansion over three years. Then, in what would be a big victory for fiscal conservatives if it ever got implemented, starting in 2025 Medicaid growth would only grow at the standard rate of inflation, which is typically slower than the rate of medical inflation. In the long-run, this would represent significant savings and is what Republicans are referencing when they describe their bill as entitlement reform.

So, for opponents of Obamacare evaluating the proposal, the question boils down to whether to place more emphasis on the spending in the coming years or in the promised reforms in the next decade. Based on history and common sense, conservatives have every reason to place much more weight on the idea that the short-term spending is going to come through, and the promised spending cuts and reforms are very unlikely to ever be implemented.

Read the whole piece here.

Tim Carney, also of The Examiner, theorizes that what the GOP bill is really about is protecting the insurance companies: