Affordable Care Act

The Latest Version of the House Health Care Bill is Even Worse Than the Last One

President Trump is demanding a vote on a sloppily rewritten bill that could blow up the insurance market.


Olivier Douliery/SIPA/Newscom

Donald Trump is forcing a vote on a hastily and sloppily rewritten health care bill that was already a mess—and was just made even worse.

Here's how things stand: Yesterday afternoon, GOP leadership announced that the full House vote on the bill that had been scheduled would be postponed for at least a day. The delay was a sign that despite days of intense negotiation with multiple factions opposed to the bill, leadership still didn't have enough votes to cross the finish line.

Late last night, President Trump, through his staff, delivered the message that he was through negotiating and would demand a vote on Friday, with no more changes. House leadership released the final amendment to the bill, which contained some changes that were, at least in theory, designed to win over members of the Freedom Caucus, the conservative faction that has been the locus of opposition to bill. A vote is expected sometime today.

The final update to the bill is a mess that wouldn't accomplish the Freedom Caucus' goals—but would likely cause confusion and quickly throw insurance markets into chaos.

The main thing the update would supposedly do is shift authority over Obamacare's essential health benefits (EHBs) to the states. In theory, this is designed to reduce federal mandates and give states more flexibility. But as Nicholas Bagley of the University of Michigan Law School points out, the updated rule might not actually give states any additional authority to set their own rules. The federal government would still be required to define essential health benefits under the major categories already included in Obamacare. And the way the new language is written, it could plausibly be interpreted to require states to write benefit requirements that comply with the federal government's EHB rules.

There's another big problem with the EHB rules: They would be susceptible to charges the federal government is strong-arming states. The new rules would encourage states to write their own rules by denying them access to premium subsidies if they don't. This might open the provision to legal challenge, along the lines of King v. Burwell, which challenged the decision under Obamacare to dole out premium subsidies to states that had not set up their own exchanges as called for by the law.

And states wouldn't have a lot of time to write the rules—which could create its own set of problems. The new rules would go into effect on January 1 of 2018, leaving states with just a few months to draft their benefit requirements. Drafting rules like this takes time, and is often contentious, more in some states than others, and it's possible that even states that moved swiftly would not have settled on rules until near the end of 2017.

The problem with that timeline is that health insurers are putting together their plans and rates for 2018 right now, and most will be finalized by the summer. But they can't put together plans and rates if they don't know what they would have to include in their plans. As Bagley notes, it is at least within the realm of possibility that insurers, many of whom are already losing money in Obamacare's exchanges already, could simply refuse to offer plans of any kind at all. "They don't know which services their states will say are essential and they don't have time to wait around while their states bicker about it. Insurers are likely to walk. All of them. The individual market in 2018 will be a ghost town."

In other words, rather than reducing health insurance premiums and increasing access to care, as Freedom Caucus members say they hope, the new rule could lead to the complete and immediate meltdown of the entire individual market. These are the sorts of problems that emerge when passing legislation becomes a purely political goal, rather than a policy objective, and when the effort is led in part by someone, in this case President Trump, who appears to have no idea what is in the bill or how it works.

The new essential health benefits rules aren't the only changes in last night's update. The new version of the Republican health care plan also adds $15 billion in new spending to a state-based fund to cover provisions that the EHB rule is designed to eliminate—a roundabout way of putting the cost of that coverage on taxpayers, while trying to eliminate it from plans.

The updated version of the bill also delays the elimination of Obamacare's Additional Medicare Tax, a surtax on high earners, until 2022. So relative to previous iterations, would result in higher taxes.

The initial bill was awkwardly constructed on its own, a hodgepodge of disconnected policy ideas that relied on a system of tax-based subsidies and regulations that mirrored the essential structure of Obamacare in ways that, if anything, made even less sense than the health law the AHCA was supposed to replace. Health policy experts and high profile activist groups on the right loudly opposed it, and Republicans in Congress, especially those in the Freedom Caucus, expressed reservations as well.

Since then, the bill has been altered in hopes of winning over dissenters. But the subsequent changes have done nothing to alter the underlying structure of the bill. The first update reduced its positive impact on the deficit. And the latest round of changes includes more taxes, the earmarking of spending designated to cover specific benefits, and a poorly drafted provision that may not actually reduce insurance mandates, but would probably blow up the individual market within a year. (In this context, it is hardly surprising GOP leadership has sought to rush the bill through to passage and avoided defending its merits.)

In any case, this is the legislative vehicle they have decided to stick with. It's President Trump's final offer, and what the House will be voting on today: a poorly constructed bill that has only been made more dysfunctional over time.

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  1. Anyone tired of all the winning yet?

    1. Ya no offense but is a bit hard to take ya seriously seeing how you slobbered all over the awful aca

      1. In my opinion, this law is so bad that it may actually be good.

        Peter, take your current train of thought and carry on.

        As the individual market blows up, there will be more healthy people deciding to not have insurance.
        Insurance premium and deductible will keep rising for people with insurance: sick people and company-sponsored plans.

        When the cost reaches too high a level, even the companies will drop their plans since the employer mandate would be gone. This means more healthy people will leave the insurance market.

        Only in that environment, people will find their own solutions for healthCARE, which may or may not involve INSURANCE.

        I don’t know about the rest of you, but I already found myself cash-only practices near me. I am hoping my company will drop insurance coverage for everyone (of course I’d expect a larger paycheck in that event).

        1. Except we know that’s not how it will work. Both NY and NJ ran their individual markets into the ground, but that never resulted in employer sponsored insurance going away or some free market cash-only paradise appearing.

          1. Please elaborate on how the individual markets got run into the ground.

            My understanding (and experience) is that some mid-sized employers in NJ were contemplating giving employers a large sum of money (but fixed) so that employees can determine what plans they want to buy.

            With the ACA’s employer mandate, I believe that motion was stopped.

            1. There are plenty of articles describing this. Just google. Both states enacted versions of guaranteed issue/community rating for their individual health insurance markets in the 1990s. The result was skyrocketing premiums and fewer and fewer people covered in the individual market each year. NJ lightened up its regulations a bit in the 2000s, which stopped the spiral somewhat, but the market never recovered.

              Kentucky and Washington actually tried this too, and nearly all of the insurance companies just bailed from those states. Those states had scrap those rules when that happened.

        2. I am hoping my company will drop insurance coverage for everyone (of course I’d expect a larger paycheck in that event).

          That’s not how it will work. Employers themselves game the system by cherry-picking employees – hiring younger and firing older. And have no doubt – benefits costs are the biggest reason older employees cost more and cost is the reason older (with 40 being the rough cutoff) workers tend to get laid off first and hired last. Larger employers at least are not actually ‘insured’. They are self-insured with the various benefits providers providing solely claims processing and acting as bad cop.

          The only reason employers will stop offering benefits is when those benefits have almost literally no value at all to employees. And that will only happen with some sort of govt program that can totally delink ‘healthcare access’ from ’employment’.

    2. Also can you help me with your bills

        1. I told you I don’t give charity to losers. Are you refusing to go read up on what a social contract is just so you can continue annoying me?

  2. 1: Insurance market is around blowing up….does it make it blow up faster?…is that a bad thing?

    I just want the free market to come back…like form 60 years ago.

    You know how to work in preexisting? anyone who doesn’t maintain premiums and gets insurance again is required to pay 2x premiums for every month of no coverage. Don’t have the money? Too bad…go die.

    2x premiums should cover added costs of people trying to game and its enough penalty to keep people from gaming.

    Allow any level of policy but going to a higher level of policy requires a similar type of penalty to cover preexisting if they exist.

    Set a minimum policy to be what i said earlier. That policy shouldn’t cost more than 50-100 bucks a month. and shoudl have only 20% coinsurance and a small deductible like 2 or 3 grand.

    You just need to remove mental health, acupuncture, and all the life extension bullshit. That makes insurance super cheap.

    Someone wants life extension? Be ready for real premium rates of 1-5 grand a month. Thats how the free market would work and almost no one would get life extension shit because its hainessly expensive and not realistic unless you are filthy rich.

    There whole insurance program solved.

    1. only reason a 14K deductible with 40% coinsurance costs 330 bucks a month for a PPO is because of all the added mandates and life extension garbage that most Americans don’t give a shit about.

    2. “Too bad…go die.”

      Good job recognizing that trying to cram healthcare into free-market dogma results in absurdities. Except you’re serious. Better for people to die from preventable causes than disobey the free market god, because you’re totally rational people who think logically about things.

      1. You are a walking absurdity

      2. Let’s face it, you can cram free-market down in Washington. Politicians won’t vote for that, so we might as well get that idea out of our heads.

        Think about it. We want free-market for our healthcare, right?

        People are not able to dissociate health INSURANCE from healthCARE. It just won’t happen.

        So the only way we can achieve free-market in healthCARE is to allow the insurance market to implode. It will happen sooner or later, and I think it is better to happen sooner rather than later.

        Please feel free to correct my logic.

        1. I think the danger of my route to free-market healthcare is that during the insurance market-implosion, lawmakers could jump in to nationalize the healthcare system.

          Given how unpopular Trumpcare is, there is a decent probability that Republicans won’t be in power to prevent that scenario.

        2. A free market in healthcare is an absurdity. Only extremely rich people can actually afford the treatments they might need. That’s why it’s run on an insurance model, whether private or public. A large pool pays in and the costs get spread around. The simple math of this model suggests that a universal (meaning government-administered) program is the most efficient simply because it has the biggest pool of participants.

          What truly baffles me is not that you guys can’t figure out that a free market in goods and services that are both very expensive and largely unpredictable can’t possibly work as promised. It’s that you don’t even seem to understand how insurance works and why we have it.

          1. “Only extremely rich people can actually afford the treatments they might need”

            And which treatments are you referring to? Laser eye surgery? Cosmetic surgery? Gastric band procedures?

            The last time I checked, prices have been falling FAST and that the general public CAN afford it.

            And what about cancer treatments in a free-market environment? Surely some people would not be able to afford the most basic of cancer treatments. Perhaps the government can be part of the solution; even in that event, why keep the other 98% of healthcare services so expensive by having government intervention?!

          2. It’s that you don’t even seem to understand how insurance works and why we have it.

            Now that’s funny.

      3. The free-market god is the only god that always punishes when it is disobeyed in this world.

        However, the free-market god often does not strongly discriminate regarding who gets punished for disobedience. A politician’s success is largely determined by how well the government is used to divert the free-market god’s just punishment from his supporters to some other faction.

      4. Not really…thats how life works…you can;t afford something? You die? That is how life has always worked and always will. You can’t get a job and survive? You die.

    3. I just want the free market to come back…like form 60 years ago

      There were a lot of things that worked well then – most people (including rural areas) had family doctors who knew them well and could price differentially. Hospitals were plentiful and pretty cheap so they could actually be used for recovery to take the burden off income-earners in their family. OTOH – like everything ‘free market’ back then Southerners always test the limits of repugnance with Jim Crow – and there’s no real reason to believe that won’t return. And there were very few specialists back then either and not just because of technology changes. Without specialists, there is little need for insurance and no market for it. And most specialists deal mainly with diseases that are age-related which is the demographic that has the most time to prepare for it themselves either financially or via lifestyle. Maybe it can work despite the absence of evidence that it can.

      1. You think that LAWS requiring discrimination could come back in todays world? Can I have some of what you are smoking?

        1. Don’t need laws to discriminate. Pricing signals discriminate and discrimination is the reason they work.

          We let blacks die just because they’re black.

          We let poor people die just because they’re poor. We can’t help it that people round here are free to perceive that blacks are just not smart enough to earn an income that goes above poor.

          Not much meaningful difference here.

          1. When I say that pricing signals discriminate I don’t mean that pricing signals discriminate on the basis of race. They discriminate on the basis of money. And ultimately that is where a society itself has to decide whether markets themselves are everything. Not trying to make a value judgment here. It just is.

  3. Please, Rand Paul, tell Trump to “Fuck off, Slaver”.

  4. [popping popcorn right now]

    This is great.

  5. The Grand Old Stupid Party indeed. I developed somewhat of a liking for Paul Ryan when he talked about entitlement reform and also was cold about initially supporting Trump. Now I couldn’t care if he drowned in a sewage pit.

  6. Donald Trump is forcing a vote

    The president can’t force a vote, as you know. Since people already have a screwed-up enough understanding of how the govt works, don’t make it worse.

    1. Aw, Drumpfista upset that this loss will taint Drumpf!

  7. More than demanding a vote, Drumpf is 100% behind this bill whatever it may be.

    Don’t leave that out, Republicans!

  8. What’s wrong w strong-arming states, if it’s into doing something good?

  9. The political version of Rule 34:

    If there is a bad idea, there is law made of it.

    The political version of Rule 35:

    The opposition party, having gained power, will want to tweak the bad law, not repeal it. This is a bad idea, to which Rule 34 applies.

  10. The Latest Version of the House Health Care Bill is Even Worse Than the Last One
    President Trump is demanding a vote on a sloppily rewritten bill that could blow up the insurance market.

    Why is this so hard?
    Its simple.
    Repeal Obamacare and deregulate the healthcare industry.
    Oh, wait.
    I forgot there are only two political parties in the USA.
    The socialist party and the socialist lite party.
    My bad.

    1. What gives you the idea that anything to do with healthcare is “simple”?

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