The Congressional Budget Office announced Monday that the American Health Care Act, the GOP leadership's plan to repeal and replace the Affordable Care Act, would lead to as many as 24 million more people to be uninsured by over the next decade.
And what could be to blame is a major provision in the bill that Republicans say is designed to encourage more people to sign up for insurance.
The AHCA includes a provision that says anyone who does not have health insurance coverage for a period of 63 days or more in the previous year is subject to a 30% increase in premiums for up to the next year as a penalty. The GOP says that the penalty would discourage people from waiting until they are sick to access coverage.
The CBO, however, found otherwise. According to the report, the "continuous coverage" provision would lead more people to sign up for insurance coverage in 2018 (the first year of the law), but reduce that number in the years after.
"By the agencies’ estimates, roughly 1 million people would be induced to purchase insurance in 2018 to avoid possibly having to pay the surcharge in the future. In most years after 2018, however, roughly 2 million fewer people would purchase insurance," the report reads.
Further, the CBO suggested that the people deterred from buying coverage would tend to be healthier than those who did buy coverage.
Richard Frank, a professor of health economics at Harvard Medical School, told Business Insider that the "continuous coverage" provision will come down harshly on both young people and lower-income people. Both groups, according to Frank, tend to have incomes that fluctuate heavily from month-to-month and make financial decisions with the view on the immediate future, often because they have to.
If a person is fairly healthy and doesn't think they can afford insurance to begin with, the possibility of a 30% rate hike if they lose their job, or suffer some other financial misfortune, is a further disincentive to buy insurance, he added.
"It’s a fairly harsh penalty," Frank said. "That doesn’t incentivize people to sign up."
Yuval Levin, a former policy adviser to George W. Bush and a conservative commentator, wrote in the National Review that the provision could actually keep people out of the healthcare market until they get sick.
"It would create a disincentive for everyone who hasn’t been continuously covered to get coverage, by making insurance more expensive for them,"Levin wrote. "But that disincentive would do more to drive away healthy people than sick people, since the added premium is more likely to be worth it to someone who otherwise would have higher costs than to someone just looking to get insurance for a rainy day. It would, in other words, exacerbate the problem it is trying to mitigate."
One of the biggest problems for the ACA has been that the risk pools in the individual market — in other words, the demographics of the people signing up through Obamacare's exchanges — are tilted toward older, sicker people. This has led to large losses for some insurance companies, because the pool is more expensive to cover than was expected.
The worry, based on Levin's analysis, is that without any incentive to stay in the pools, more young people will pull out of the plans and wait until they get sick to sign up. Eating the 30% premium increase might be viewed as small potatoes compared to paying expensive medical bills if a person falls ill.
Another potential issue for Republicans hoping to pass the legislation into law is that the 30% penalty is not paid to the federal government. Since the GOP is using the budget reconciliation process to move the AHCA to avoid a Democratic filibuster, all measures in the bill have to be pertinent to the federal budget.
It appears Republicans may be considering getting rid of the 30% penalty. Axios' Caitlin Owens reported Wednesday that GOP leaders, worried about blowback and the impact of the provision, could drop the penalty to make the bill more palatable.
One of the few numbers from the Congressional Budget Office analysis of their healthcare plan that Republicans have been eager to trumpet is this: Under their plan, individual market health-insurance premiums will be 10% lower on average than they would be under Obamacare by 2026.
This is a finding from the CBO report on the American Health Care Act, but it's misleading.
The more relevant fact for consumers is this: For a given customer, buying a plan that provides a given level of benefits, premiums are expected to be on average 13% higher under the AHCA than under Obamacare, using the CBO's assumptions about premiums overall.
That's according to a new analysis from Brookings Institution scholars Matt Fielder and Loren Adler.
How can it be true that premiums would go down overall but up for a given plan for a typical person? It's because the AHCA will change the health insurance market so the average person buying a plan in the individual market is younger, and is buying a stingier plan.
This chart from their report breaks it down:
The AHCA would allow insurers to sell less generous plans, paying for a smaller fraction of your actual healthcare expenses than the plans on the market today. As a result, the average plan sold under the AHCA would provide fewer benefits than if the law weren't enacted.
It would also relax the limit on "age rating"— which is to say, it would allow insurers to charge the oldest customers five times more than the youngest customers, instead of the current three times.
And it would change the subsidies available for buying insurance. As a result, some young customers would be able to get a bare-bones insurance policy for free or close to it, while some older customers would face premiums of more than half their income.
As a result, the average insurance customer under the AHCA would be younger than under the ACA. And they would be buying less comprehensive insurance. Given that, it's no surprise the average premium would be lower: Insurers would be paying out a lot less in claims per participant.
But when Fielder and Adler adjust the CBO estimates to get an apples-to-apples comparison — stripping out the effects of age and plan changes, and calculating the effect on premiums if participant pools and plan generosity were unchanged from under the ACA — they find the CBO model has premiums rising substantially as a result of the AHCA.
That 13% rise would be what matters to the average consumer: how much they'll have to pay for a plan that provides a given set of benefits. It would be expected mostly because the AHCA would repeal the individual mandate and make other changes that give healthy people less of an incentive to buy insurance, Adler said.
As a result, the average insurance buyer of any given age would be sicker than under the ACA, and would tend to be more expensive to cover, requiring higher premiums.
That said, premiums for a given plan wouldn't go up for every customer.
Adler and Fielder estimate that premiums for plans that cover 70% of healthcare costs (known as "silver plans" under Obamacare) would tend to fall a little bit under the AHCA for customers under age 39, because of the relaxed restrictions on age rating.
But many older customers would pay a lot more, leading to the overall average increase of 13%.
President Donald Trump said Friday he is "100% behind" the GOP's healthcare bill, asserting that the media has not reported fairly on the bill or its support among Republican lawmakers.
Trump's comments came after a meeting with members of the Republican Study Committee, a caucus made up of about 170 more conservative lawmakers. Trump said they are now "all yeses" on the bill after previously being "noes or potential noes."
"The press has not been speaking properly about how great this is going to be," Trump said. "It's fake news. This is going to be great for people."
Republicans have been divided over the American Health Care Act, the GOP's bid to repeal and replace Obamacare. But Rep. Steve Scalise, the House majority whip, who was seated next to Trump when he addressed media on Friday, expressed confidence the bill will ultimately collect enough "yes" votes.
The House Freedom Caucus, a smaller group of conservative House members, balked at Trump's claim, tweeting that it still opposes the legislation in its current form.
Trump said several changes have been made to the bill, but did not provide details.
He also slammed the Affordable Care Act, better known as Obamacare, calling it a "dead healthcare plan" that wouldn't survive the next year without "massive subsidies."
"Only because everyone knows it's on its last dying feet, the fake news is trying to say good things about it," Trump said.
The bill passed the House Budget Committee on Thursday and will move next to the House Rules Committee. House Speaker Paul Ryan is aiming for a full House vote later next week on the legislation.
In many ways, we are a typical American family. My husband and I have two children. We own a home. We have no consumer debt. We paid back every dime on our student loans. We are fiscally responsible people.
Where we are unusual is that my husband and I have spent our careers as freelancers. I write music. My husband is a playwright, a novelist, and a medical writer. We appreciate the flexibility of being our own bosses and take seriously the extra burdens that come with being self-employed, including making our own Social Security and Medicare and tax payments. Bigger tradeoffs include foregoing benefits that people who work for companies take for granted: paid vacations, matching funds for our retirement accounts, and health insurance. Despite the enormous price tag, we have purchased insurance—insurance we have never let lapse—for our family on the individual market our entire adult lives.
When we moved our family out of Brooklyn to western Massachusetts, we were shocked to discover health care in Massachusetts was financially out of our reach. Before the passage of the Affordable Care Act, we didn’t qualify for assistance toward our premiums, and a new Massachusetts-based plan would have tripled our costs. For a time, we kept our insurance in New York and drove to Brooklyn every time we needed to see a doctor.
The Affordable Care Act increased the income caps to qualify for direct premium support enough so that we were able to purchase a heavily subsidized plan on Massachusetts’ Health Connector exchange. But in the bumpy rollout, Massachusetts’ state health insurance exchange website had communication problems with the federal site (healthcare.gov). When it became clear Massachusetts couldn’t solve the problem right away, the state temporarily put everyone with a pending application on MassHealth (Massachusetts’ version of Medicaid).
MassHealth’s coverage was the most comprehensive health care we had ever had. For two working artists who had regularly shelled out $10,000 a year in premiums alone, it was a miracle. There were no deductibles or co-insurance. We paid $3.65 for prescriptions. Care for our two children was completely free, as was dental care at our local community health center.
Which was a great thing, because in 2014, just as our new policy kicked in, I was diagnosed with whooping cough. My husband lost the top of his finger in a hockey accident. My son suffered through a bad case of pneumonia. And then my husband got Lyme disease. Any of these things would have set us back thousands of dollars under our old plan. Under MassHealth, we didn’t pay a dime.
Then, that September, the worst happened: I was diagnosed with widespread DCIS, an early form of breast cancer. I endured four surgeries, including a unilateral mastectomy and reconstruction.
We had no idea how complicated my medical journey would become. The day I got my diagnosis, I was working with our navigator, a local public health official trained to help with the application process, to complete our application on Massachusetts’ now-functioning health care exchange. He told me about Massachusetts’ Breast and Cervical Cancer Treatment Program, a Medicaid initiative designed to cover middle and low-income women through their treatments. We were relieved to discover I qualified. My husband landed on a subsidized exchange plan for $123 a month. Our two children maintained their enrollment in MassHealth and their care continued to be covered as well. The options he helped us find saved our family from financial ruin.
Almost immediately after my mastectomy, I developed chronic complications. Since then, I have come to learn I was in the early stage of a complex autoimmune condition unleashed by my silicone implant. Despite having the implant removed more than a year ago, the most serious symptoms persist: near-constant joint pain and exhaustion as well as the severe cognitive impairments that are a hallmark of this disorder. Frequently it feels as though someone has reorganized my brain but forgotten to leave me the instructions. It’s frustrating; it’s terrifying. The battery of medications I take permit me to drive my son to school or shop for groceries, but at this point, my team of devoted doctors is increasingly unsure whether I will ever be well again.
Only one thing has made it possible for me to survive this at all: the coverage I received through MassHealth.
Now, all that stands to change. Although the pre-existing condition clause survives in the current GOP bill (so I will in theory be able to buy coverage), for us everything rests on how the Republicans end up dealing with the Medicaid and the federal subsidies that bolstered our health care (and that of 20 million other Americans) in the first place. Even as universal coverage has strong bipartisan support in Massachusetts, the reality is that we don’t have the state-level funds to provide those subsidies and bankroll expanded Medicaid coverage without help from the federal government.
The passage of the ACA did more to shore up and secure our little family than any other piece of legislation in my lifetime. It has enabled me to face my grave illness without worrying whether cost would be a factor in my treatment or whether I could try the next medication my doctors prescribed to relieve my pain. Even with the plan, we still accrued $15,000 in out-of-pocket medical expenses in both 2015 and 2016. We are on track to spend about that much this year as well. Where we will find double or triple that amount to throw at our family’s medical care, if and when we lose our governmental support, is budget math I can’t even begin to calculate.
The Republican plan leaves us with more questions than answers. Will we have to spend down our savings to afford the premiums and deductibles? How will I come off the $1,000 worth of drugs I take every month when we can no longer afford to pay for them? What happens when my immunologist says I need more infusion therapy—at $90K a dose? In my darkest hours, I have contemplated suicide to spare my family.
It took months of careful, gentle prodding by my doctors to get me to understand that I am now disabled. Having accepted that mantle, it’s hard not to feel like the new health care bill is designed to destroy me. Although it’s impossible to know where the machinations of Congress will eventually lead the bill, assuming the new health care law returns us to the days before the protections of the ACA, and the Medicaid expansion at some point goes away, we are anticipating a premium price tag of $2,400 a month or more, based on what a similar plan would have cost in Massachusetts before the ACA. That’s twice our mortgage payment and 30 percent of our income. And that’s before the additional price of care: substantially higher co-pays and deductibles, plus five figures of uncovered costs. When Republicans in Congress talk about forcing insured patients to have “skin in the game,” I wonder if they understand just how much skin they’re talking about.
I understand there are problems with the Affordable Care Act: It doesn’t go far enough in the assistance it provides. For families like us, subsidies and tax credits end at 400 percent above the federal poverty level. And here in Massachusetts, the least expensive bronze plan is now about $10,000 but has a $5,500 annual deductible. We know how fortunate we are to have landed three of us on Medicaid-based plans, which offer benefits that do not exist on the open market. In an ideal world, all Americans would have access to this sort of comprehensive coverage.
Instead, Medicaid is on the chopping block—and not because it’s failing, but because the people who benefit from it too often fail to speak up on their own behalf. Their silence has nothing to do with a lack of will or words. They are simply too busy struggling to survive.
Medicaid benefits our poorest, yet it is also now assisting those higher up the income ladder—people like me, who would vastly prefer to be thriving without it. Many more people than you suspect have turned to it in time of need. They are your friends and neighbors. They are families whose lives have been upended by illness.
This is what happened to my family. And with a single diagnosis, it could be your family, too.
President Trump listed several ideas in his speech to Congress last week. Among them was this:
The time has come to give Americans the freedom to purchase health insurance across state lines—which will create a truly competitive national marketplace that will bring costs way down and provide far better care.
To find out what the problem is, look no further than a deal Citibank made with South Dakota 37 years ago.
Credit Card Loophole
When you read the fine print on one of your credit cards, you’ll likely see the issuer is a bank in South Dakota. It might be Delaware or Nevada, but probably South Dakota.
Why are the big banks issuing credit cards through South Dakota subsidiaries?
Back in 1980, with both inflation and interest rates at double-digit levels, banks were getting squeezed on credit card loans. State usury laws capped the interest rates they could charge borrowers, but not the banks’ own cost of funds.
Legendary Citibank Chairman Walter Wriston found a loophole.
A 1978 Supreme Court ruling said banks could set consumer loan interest rates based on the state in which the bank was located, instead of the borrower’s state.
Wriston had been asking New York legislators to raise the usury limit so New York-based Citi could charge higher rates nationwide.
When they refused, he looked for friendlier politicians… and found them in South Dakota.
That’s why your credit cards come from South Dakota. Citibank literally picked its own regulator and wrote its own law. Delaware and Nevada later made similar moves, but South Dakota was first.
The result wasn’t all bad. Today, credit cards are widely available in every state. Your interest rate may be higher and your spending limit lower if you have poor credit, but you can probably get a card.
If you think enabling more Americans to take on more debt is a good idea, we have the perfect system to do it. But what we don’t have is competition between states.
In theory, banks in any state can issue credit cards. But good luck getting one that isn’t from South Dakota, Delaware, or Nevada. Those are the choices the banks give us.
Separate Risk Pools
A state-based national market for credit cards isn’t exactly the same as one for health insurance, but it’s similar in some ways.
Instead of usury limits, insurance companies face state laws mandating certain benefits that raise costs and reduce profits. It’s one reason health insurance premiums are higher in some states.
So if we let insurers sell health coverage across state lines, people can bypass all that and buy in a state whose insurers best suit their needs. Sounds great, right?
The problem is that health insurers will likely do what the banks do with credit cards: congregate in whichever state lets them do what they want—which is to insure only healthy people.
The result, within a couple of years, will be separated risk pools. Young, healthy consumers will buy stripped-down, low-priced policies from states that allow them, while older, sicker people all cluster in the few states willing to cover them at a reasonable cost—if any will.
This is where the credit card analogy breaks down. No one has to have a credit card. You won’t die without one. But everyone will get sick or have an accident sooner or later.
There’s another problem: Providing health insurance isn’t as simple as just mailing someone a card and billing them every month. The insurer has to deliver care locally, wherever the customer lives. Building hospital and doctor networks are expensive.
Five states—Georgia, Kentucky, Maine, Rhode Island, and Wyoming—already did what President Trump suggests. They’ve opened their borders to insurers from other states.
Has it worked? Have insurers from other states rushed into these wide-open markets?
No, they haven’t. So erasing the state lines may not be as helpful as proponents think.
Insurance ≠ Care
Politicians choose their words carefully when they talk about this. They’ll often say everyone should have “access to health insurance.” Sounds nice, but it misses a few things.
Access to health insurance is not the same as access to health care. People are learning that the hard way right now.
Median household income in the US is only around $56,000. Median means half of all household incomes are below that amount, and few people have an extra $5,000 sitting around. They’re insured, yes, but they can’t afford to use their insurance even if tax credits cover the premiums.
So, Obamacare isn’t the solution because it’s not working either.
But interstate insurance is no cure. At best, it will leave us with the same problems Obamacare hasn’t solved. It might even make them worse.
I wrote last year how our healthcare system suppresses job creation and undermines economic growth. We need a better solution.
WASHINGTON (Reuters) - U.S. House Republicans are working on changes to their healthcare overhaul bill to provide more generous tax credits for older Americans and to add a work requirement for the Medicaid program for the poor, U.S. House Speaker Paul Ryan said on Sunday.
Ryan said Republican leaders still plan to bring the healthcare bill to a vote on the House of Representatives floor on Thursday. Speaking on the "Fox News Sunday" television program, he added that leaders were working to address concerns that had been raised by rank-and-file Republicans to the legislation.
"We think we should be offering even more assistance than the bill currently does," for lower-income people age 50 to 64, Ryan said of the tax credits for health insurance that are proposed in the legislation.
Ryan also said Republicans are working on changes that would allow federal block grants to states for Medicaid.
Even as Ryan said he felt "very good" about the health bill's prospects in the House, a leading conservative lawmaker told the C-Span "Newsmakers" program that there were currently 40 Republican "no" votes in the House. Republicans hold a majority in the chamber but cannot afford to have over 21 defections for the measure to pass.
Representative Mark Meadows, the chairman of the hardline conservative House Freedom Caucus, said the bill would “absolutely not” pass the way it is now.
Meadows, a North Carolina Republican, also said the changes being considered for the Medicaid program would not go far enough, if they left it up to states to decide whether to put in place a work requirement.
An optional work requirement for Medicaid would be “a step backwards, not a step forwards," Meadows said in an appearance on C-Span's "Newsmakers."
If the healthcare bill were to pass the House, it also would face significant challenges in the Senate.
Senator Tom Cotton, a conservative Arkansas Republican who has been a critic of the legislation, said that the problem with the legislation was that it would not reduce premiums for people on the private insurance market. Lawmakers need to slow down and solve this problem, he said.
“It’s fixable, but it’s going to take a lot of work,” Cotton said on CNN’s “State of the Union.”
Moderate Republicans have also expressed concerns about the bill.
Speaking on NBC's Meet the Press, Republican Senator Susan Collins of Maine said she was concerned about a report from the Congressional Budget Office that said 14 million people would lose health coverage under the House bill over the next year and 24 million over the next decade.
President Donald Trump's approval rating is at a new low since he assumed office in January, hitting 37%, according to Gallup.
His disapproval rating, at 58%, is at a high point since he became president.
These latest approval ratings come on the heels of a tumultuous week for the Trump administration and congressional Republican leadership, who are working to drum up support for their Affordable Care Act replacement bill.
The bill has prompted backlash from the American public, as well as resistance from those within the Republican party who believe it does not go far enough to repeal Obamacare.
The proposal, as it currently stands, would most negatively impact senior citizens, rural Americans, and low-income Americans. It would also leave an additional 24 million people uninsured by 2026, according to estimates from the nonpartisan Congressional Budget Office
The White House has also been playing defense on Trump's unfounded claim that former president Barack Obama had Trump Tower wiretapped during the 2016 campaign. There has been no evidence to support that theory, according to bipartisan consensus in Congress and in the intelligence community.
The Trump administration also recently prompted outrage from immigrants rights groups and protesters when it rolled out a revised executive order aimed at regulating immigration from a number of majority-Muslim countries.
Though it was narrower in scope than the original order, Trump implied that it was written with the same intent, calling it a "watered down version" of the original ban. The executive order was struck down by two federal judges.
The last time Trump's approval rating hit a low point was in mid-February. At the time, the White House was embroiled in several controversies, including the resignation of national security adviser Michael Flynn, the president's repeated attacks on the judiciary after his original travel ban was struck down, and his perceived lack of response towards rising anti-Semitism across the nation.
This is the lowest approval rating of any president's first 60 days as tracked by Gallup:
Trump approval drops to 37% - the worst Gallup poll any president has ever had this early in their term. pic.twitter.com/399k8tLFmx
Wall Street has been eagerly looking forward to corporate tax reform since President Donald Trump's election
Trump and congressional Republicans, however, have chosen to work on overhauling the US healthcare system first, an effort that has run into some stumbling blocks
Delays in healthcare reform could lead to delays in tax reform, which could threaten recent gains in the stock market
Tax cuts have been at the top of Wall Street's wish list of policies to come out of President Donald Trump's administration.
While administration officials have been promising that cuts to corporate and personal taxes are coming soon, investors have had relatively little to grab onto in terms of details of a plan.
And the recent fight over healthcare reform has added to these concerns.
The Republican bill to repeal and replace the Affordable Care Act, the healthcare law better known as Obamacare, has taken the front seat in the legislative agenda for Trump and the GOP, sidelining hopes for a major tax-reform initiative until after the plan has been passed.
While few companies actually pay the full statutory rate — JPMorgan has estimated that US corporations pay an effective rate of about 20% after tax credits — a cut could certainly reduce a significant expense and lead to larger profits for corporations.
While Republicans have been advocates of lower corporate rates for decades, Trump's election and the timeline set out by the president have encouraged investors that the tax cut could be coming soon.
The timeline for the tax proposal has been ambitious. During a meeting with manufacturing CEOs on February 9, Trump said he was "going to be announcing something over the next, I would say, two or three weeks that will be phenomenal in terms of tax."
Five weeks later, a full plan has not been released.
Other Trump administration officials have also promised that the reform is on the way. Treasury Secretary Steven Mnuchin told CNBC that he wanted new tax policy to be signed by Trump in time for Congress' August recess.
Given the strong words, investors have been getting more bullish on stocks' and companies' prospects, but the healthcare overhaul could dampen those hopes.
Checking the calendar
The hang-up for tax policy seems to be coming from the GOP's desire to redo the Affordable Care Act first.
"But, but before I can do that — I would've loved to have put it first I'll be honest — there's one more very important thing that we have to do,"Trump said."And we are going to repeal and replace horrible disastrous Obamacare."
Republicans are using a process known as budget reconciliation to pass the AHCA. This means they need only 50 votes in the Senate to pass the bill and avoid a Democratic filibuster. It also means they can change only parts of Obamacare directly dealing with the federal budget, and since they are amending the fiscal-year 2017 budget, they have to get the process done in the next several months.
A vote on the bill by the House is expected later in the week, and there's a real danger of the act not passing unless substantial changes are made to appease conservative members of the House Freedom Caucus. The head of the Freedom Caucus, Rep. Mark Meadows, told reporters he had 40 to 50 votes against the current form of the AHCA, which would be enough to block the bill.
That would push back the tax-reform changes Wall Street so desperately wants, according to Compass Point analyst Isaac Boltansky.
"Assuming no Democratic support, GOP leadership can only lose 21 of its 237 seats and still pass the AHCA," Boltansky wrote in a note to clients on Monday.
Boltansky also wrote: "Notably, during an interview that aired on Sunday, House Freedom Caucus Chair Meadows (R-NC) estimated that ~40 House Republicans were still opposed to the measure. If AHCA fails, or continues to dominate the agenda well into 2Q17, the market will likely be forced to begin discounting the prospects of tax reform and other fiscal policy changes."
JPMorgan's Adam Crisafulli said the AHCA vote could not only delay tax reform but also signal to investors just how likely it is that the tax overhaul will get passed. From Crisafulli's Monday note to clients (emphasis added):
"The biggest event by far for equities will be the House floor vote on Ryan’s HC bill (scheduled for Thurs 3/23) – failure to advance this legislation would likely materially undermine market confidence in the GOP tax reform agenda. The fact Ryan even scheduled a vote suggests some confidence on his part in being able to secure passage although this is by no means guaranteed. Even if Ryan manages to get his bill out of the House, passage in the Senate appears very unlikely which raises the larger issue of how much time and political capital Republicans wind up devoting to this issue at the expense of more market-friendly initiatives (namely tax reform)."
One of the drivers of the recent stock rally, according to analysts, is the baked-in expectation that lower tax rates will increase corporate profitability.
So for investors, the failure of Trump and the GOP to pass the AHCA could signal a longer and possibly nonexistent road to tax reform.
To be fair, healthcare and taxes are two different beasts, and support within the Republican Party will probably not line up similarly on both issues. A major delay on tax reform, however, could seriously wound the recent surge in investor confidence.
Experts in health policy have been digesting what the law could change for Americans on average, including the estimated impact on the cost of health insurance by the AHCA, which has also been referred to as "Trumpcare" by lawmakers and outlets on both sides of the aisle, despite the White House's pushback on the name.
As part of the AHCA, Americans who do not get coverage through their employer or a government program like Medicaid or Medicare would receive a tax credit to buy insurance through the individual insurance market.
The AHCA does not adjust subsidies based on income or cost of living, unlike the Affordable Care Act, the healthcare law better known as Obamacare, instead giving a flat total to people based on their age.
A $75 billion fund to finance larger tax credits for Americans between 50 and 64 years old. The current flat tax credit structure of the AHCA gives 50 to 59 year olds $3,500 annually to help pay for insurance and people 60 years old and above $4,000 annually. Analysis by health policy experts have shown this would lead to a signifcant increase in premiums costs compared to the ACA's current tax credits. The changes would give seniors more support to pay for insurance.
Importantly, the amendment does not explicitly set out how this fund would work, but instead directs the Senate to hash out those details. This means the House leaders are asking Republicans to vote on a bill providing a large increase in funding without knowing the details of how that funding will be distributed.
Move up the date of the Obamacare taxes repeal. Taxes that help fund the credits — on everything to healthcare executives making over $500,000 to tanning beds — would be repealed a year ahead of the current AHCA timeframe. This appears to be an appeal to conservative House Republicans who say that the law does not go far enough or quickly enough in its repeal of Obamacare.
Allow states to create work requirements for Medicaid. While 77% of Medicaid beneficaries are in households with a worker, Republicans have desired a provision that would allow states to mandate non-disabled people would have to be working in order to qualify for Medicaid.
Allow states to shift Medicaid funding to a block grant sytem. The current AHCA shifts funding for Medicaid expansion to per capita block grants, but the new provision would allow states to shift their funding for Medicaid to a simple block grant.
The moves come as Trump's White House tries to wrangle conservative votes in the House and Ryan tried to convince moderate Republicans to get on board.
Mark Meadows, the head of the conservative House Freedom Caucus, said before the package of changes that he had enough votes to block the law.
The House Rules Committee will consider the AHCA on Wednesday and a full vote on the bill is expected in the House on Thursday.
With just two days left before a vote on the GOP leadership's bill to overhaul the US healthcare system, a battle is brewing between the conservative wing of the Republican Party and its leadership.
On Monday night, it became clear that many conservative Republicans in the House Freedom Caucus would not budge on their opposition to the bill, the American Health Care Act, leaving it vulnerable to losing the House vote.
Statements made by conservative leaders, however, leave a door open for House Speaker Paul Ryan and President Donald Trump's administration to win over some of these representatives.
The question is whether GOP leaders have enough time to corral the members of their party.
Freedom Caucus pushback
The House Freedom Caucus has been against the AHCA since the release of the bill. The group has said it campaigned on a "full repeal" of Obamacare and the AHCA does not go far enough in dismantling the law, officially called the Affordable Care Act.
House Freedom Caucus Chairman Rep. Mark Meadows told reporters on Monday that his group was still opposed to the bill without substantial changes and that it would be "very difficult, if not impossible" for the GOP leaders to get enough votes for the bill without his caucus.
The group, however, has not taken an official position against the bill, meaning enough of its members have said they would vote in favor of it to prevent an official position.
Thus, the Trump team could in theory pick off members of the caucus, trying to win them over by promising more changes to the bill or additional measures in the future.
Despite this, Freedom Caucus members who are against the bill seem confident they can maintain the number of votes needed to block the bill if their demands are not met.
The new changes would move up the repeal of Obamacare's taxes to 2017 from 2018, allow states to shift to block grant funding for Medicaid, and allow states to create work requirements for Medicaid beneficiaries. All of these changes appear to be targeted at conservatives to persuade them to vote for the AHCA.
Despite the amendment, House Freedom Caucus leaders, including Meadows, said on Monday that these changes were not enough to win over the group.
Thus, it appears that the GOP leadership must stick to old-fashioned vote wrangling to convert enough Freedom Caucus and conservative members to their side.
According to Politico, the Trump administration, rather than Ryan, has been doing the bulk of contact with conservatives. The reports suggest that administration officials such as Office of Management and Budget Director Mick Mulvaney (a former Freedom Caucus members) have been contacting members of the House to persuade them to get on board with the plan.
Trump has had a limited role in directly selling the bill, according to Politico, outside taking a meeting with the Republican Study Committee, another conservative group that was originally against the AHCA.
Despite the lack of intense salesmanship from Trump so far, the president is meeting with congressional Republicans on Tuesday to make one last pitch for the AHCA.
This sets up a furious race to the finish line as conservatives push for changes and Republican leaders try to go member by member to pick off enough votes to get to the 218 needed to pass the bill.
The House is expected to vote on the AHCA on Thursday.
The American Health Care Act, the GOP's bill to repeal and replace Obamacare, does not seem to be winning over the American public.
Republican Rep. Justin Amash, a critic of the AHCA since its introduction, tweeted Monday that the bill was the most "universally detested piece of legislation" he has seen as a lawmaker.
And recent polling hasn't done much to dispute that narrative, showing a clear trend indicating that a plurality of Americans are against the AHCA in its current form.
According to Nate Silver at FiveThirtyEight, the most recent six polls from firms such as Fox News, Morning Consult, and YouGov/CBS News showed that an average of 30% of Americans support the American Health Care Act, while 47% of people surveyed were against it.
In contrast, Silver said, the Affordable Care Act had a 40% approval rating and a 49% disapproval rating when it passed Congress. And in the weeks after the ACA's introduction, 33% of Americans thought the bill was a good idea, while 32% thought it was a bad one.
Additionally, Silver said, the most favorable poll from Morning Consult used the name of the bill without providing context that it was the GOP's healthcare plan, perhaps skewing the results more positively.
Trump, despite these negative poll numbers, has in recent days gone all in to support the legislation, warning most recently on Tuesday that if the GOP votes against it, they would pay a political price.
The AHCA is currently making its way through Congress. After a slew of changes were announced Monday through a manager's amendment, the House vote on the bill — expected on Thursday — will be a close call, since many conservative Republican lawmakers have threatened to vote against it.
Republican Rep. Pete Sessions, the head of the House Rules Committee, admitted during an interview with CNN's Chris Cuomo on Wednesday that the GOP has not done a good job of winning over voters on their new healthcare bill.
"Members are also having problems with people back home, and that's the problem" Sessions said. "It's the people back home who are being very vocal, who are in these conservative groups that do not understand the bill because it has not been sold to them, that's the real problem.
Sessions, whose committee will consider the AHCA on Wednesday, added that "the people back home are not sold" despite attempts by Republicans to convince constituents the plan is the right direction.
"That's partially my fault also," he said. "I've tried to take the time to explain to the American people why we're doing this, but we recognize its the back-home voter — not the Washington, DC, voter."
A new Morning Consult/Politico poll, which uses different language in its question that makes it more favorable for Republicans, showed on Wednesday that 40% of those surveyed supported the bill (down from 47% two weeks ago) and 37% were against it (up from 35% two weeks ago). Disapproval for the bill grew in every category, including among Republicans.
Additionally, a new poll from Harvard's Harris Polling found that just 26% of those surveyed felt the AHCA was an improvement, while 51% said it was a step back from the current system.
Session said despite these doubts, the planned vote on Thursday in the full House should still move forward because it is one of the first steps necessary to pass the bill. He said the kinks in the plan can be worked out in the Senate and conference committees.
Cuomo said Sessions is likely getting complaints from constituents on two sides: those who want Obamacare fully repealed, and those who don't want to lose their health coverage. Session pushed back on the idea of the latter.
"Nobody is going to lose their coverage. You'll be able to keep your same doctor, and keep your same plan," Sessions told Cuomo.
The Congressional Budget Office, in its analysis of the AHCA, said that as many as 24 million people could lose their coverage over the next 10 years if the bill is passed into law. The Brookings Institution also in a post on Tuesday that the recent additions to the bill could make coverage losses even worse.
Sessions also said that the AHCA is "two-thirds of a good bill" but better than Obamacare, so it should pass.
It's hard to decide which would be the more politically damaging outcome for Republican politicians: passing the American Health Care Act, and therefore owning the premium increases and coverage losses it would cause; or not passing the bill, and therefore failing to do anything that can be framed as "repealing Obamacare."
Each option is a political nightmare for Republicans for the same reason: Each would amount to an admission that Republicans cannot deliver what they have promised for years on healthcare.
For years, Republicans promised lower premiums, lower deductibles, lower co-payments, lower taxes, lower government expenditure, more choice, the restoration of the $700 billion that President Barack Obama heartlessly cut out of Medicare because he hated old people, and (in the particular case of the Republican who recently became president) "insurance for everybody" that is "much less expensive and much better" than what they have today.
They were lying. Over and over and over and over, Republicans lied to the American public about healthcare.
It was impossible to do all of the things they were promising together, and they knew it.
Then they unexpectedly won an election and had to face the question of whether they would break all of their promises — or only some of them.
If the AHCA passes, Republicans will have delivered on a couple of promises: lower taxes (mostly for people who make over $200,000 a year) and lower public expenditure (mostly because of Medicaid cuts, the main reason the bill could leave 24 million more Americans uninsured). All the rest of the promises will be broken.
And if they don't pass the AHCA, well, then they'll have broken all of the promises.
Either way, Republicans will have to face an angry electorate in 2018 and 2020 that did not get what it was promised. The exposure of Republican healthcare lies will do grave damage to the party, and that damage will be richly deserved.
A politics of bad faith
I want to draw a distinction between healthcare and most other issues.
Take, for example, tax policy. Even though I find some of the economic models Republicans use to evaluate taxes unconvincing, I think the tax debate is mostly conducted in good faith: Republicans sincerely believe taxes are bad morally and bad for the economy. So they roundly denounce taxes and, when they are elected, they try to lower them.
Republicans say they oppose abortion and, when elected to state legislatures, they vote for restrictions on it. They praise conservative judicial philosophies and, when elected president, they nominate conservatives to the bench.
The Republican Party is not wholly in the business of claiming to be for one thing and then doing another.
The difference on healthcare is that Republicans never had an ideology about it. So they were willing to lie, and there are two facts about the healthcare debate that a liar can exploit quite effectively until he is actually expected to make policy. People are always upset about how much healthcare costs, and healthcare is very complicated, so it is hard for voters to tell whether a politician is actually able to keep his or her promises about it.
If you went around telling abortion opponents that you would ban abortion and abortion-rights advocates that you would give abortions out free, the two sides might notice you were promising two incompatible policies. But for years, Republicans were able to capitalize on public ignorance and get away with promises that amounted to "much less expensive and much better."
Their political strategy was cynically brilliant until it led to their getting elected.
Saying one thing and doing another
The need to actually make policy is exposing the fact that Republicans made many healthcare promises they never intended to keep.
Republicans have denounced insurance plans sold under Obamacare as insufficient, because the deductibles and co-payments under some plans are so high that many people feel they can't afford care even if they are insured. But the AHCA would allow insurers to sell plans that would cover an even smaller fraction of insured people's healthcare expenses.
The Kaiser Family Foundation estimates that deductibles for an individual-market insurance plan on average would rise by $1,550 under the AHCA.
Republicans complained that premiums were too high for people to afford, and then they proposed a law that would cut premium subsidies by hundreds of billions of dollars and would leave some people near retirement age with insurance premiums of more than half their income.
But in my view, the most galling lie was about Medicare.
Early in Obama's term, Democrats sought to implement a significant expansion of subsidized health insurance without growing the budget deficit, so they imposed substantial cuts to Medicare spending as part of the Affordable Care Act.
Republicans were outraged, and they made opposition to Medicare cuts the centerpiece of their (successful) 2010 campaign to retake the House of Representatives. When Paul Ryan ran on the Republican presidential ticket in 2012, he and his running mate promised to restore the cuts if elected, out of a desire to protect seniors.
But once Ryan was actually in a position to shape legislation on healthcare that might become law, he decided to leave the Medicare cuts in place, because he would rather have the money for tax cuts for rich people.
Actually, wait, that was only the second-most galling lie. The most galling lie was when Trump said he would provide "insurance for everybody" and then endorsed a plan that would take away coverage from 24 million people, according to the Congressional Budget Office's estimates.
"There's no surer way to make a conservative health wonk huffy than by saying Republicans don't have a health policy agenda. They insist they do, and an important part of it is high-risk pools: government entities that provide subsidized insurance to people with health risks who couldn't be covered affordably in private markets."
At the time, a mini version of the AHCA debacle had played out in the House of Representatives. In one of their many symbolic votes to "repeal Obamacare," Republicans had rolled out one of their typical pieces of healthcare vaporware: those high-risk pools.
These pools can get people covered in theory, but because sick people are expensive to give medical coverage to, you need very large subsidies if you wish to make the pools both affordable to the insured and profitable for the participating insurers. That is, it's easy to establish the pool, but you need to spend a lot of money if you actually want the pool to work.
Experts will differ on exactly how much a robust, national program would cost, but the figure is somewhere in the hundreds of billions of dollars for a decade. House Republicans were proposing a "demonstration" for $5 billion.
But then-Majority Leader Eric Cantor pulled the bill from the floor before it got a vote. He wasn't going to be able to get his caucus to vote for it. It was too expensive.
The Republican commitment to high-risk pools, like nearly everything else Republicans have said about healthcare for a decade, was a lie all along.
The speaker has no clothes
Through the years, healthcare experts on the right have allowed themselves to be used as window dressing for a party that was never actually interested in taking their policy advice.
The experts would write white papers about conservative approaches to healthcare. Republican politicians would indignantly wave the white papers around and insist that they had not only one plan for healthcare but many plans, and they involved high-risk pools and selling insurance across state lines and something something patient-centered mumble mumble mumble and whatever was in the paper was going to be way better than Obamacare.
Ryan even developed an undeserved reputation as a healthcare "wonk."
But those white papers were always just paper. The plans described in them were never going to be implemented by an actual Republican government, which would not be interested in paying for the plans the papers described. The only thing Republicans ever intended to use them for was indignant waving.
It was all a lie. And the lie is finally about to be punished.
White House press secretary Sean Spicer on Wednesday projected confidence that the Republican bill to repeal and replace Obamacare would pass a critical House vote.
Spicer told reporters during a daily press briefing that there is no back-up plan for the American Health Care Act, which has also been colloquially referred to as "Trumpcare" and "Ryancare," because the bill would pass.
"No, there is no plan B," said Spicer. "There is a plan A, and plan A. We're going to get this done. We're going to get it done, that's it, plain and simple."
During a recent meeting, Trump told conservative groups that are against the bill that his plan B was to allow Obamacare, officially named the Affordable Care Act, to "collapse" and then blame Democrats for any negative outcomes.
Spicer also said that Trump is working to corral as many votes for the AHCA as possible, using Paul Ryan's nickname "The Closer" to describe Trump.
"Members continue to come over with us," Spicer said. "The number [voting for the AHCA] is going higher and high, not lower and lower, so the trajectory is great. As I mentioned, everybody is out there, going full court press and this is the opportunity for anyone who wants to see this done."
As of Wednesday, the margin for passage was razor-thin. Republicans could only have 22 defectors, but the conservative House Freedom Caucus leaders — whose members say that the bill does not go far enough to repeal Obamacare — said they have 25 members that plan to vote against the bill.
Watch Spicer's response below:
Sean Spicer: "There is no plan B" on health care bill. "There is plan A, and plan A"— pass it tomorrow. pic.twitter.com/eGpt8CzfdG
Republican leaders are in a furious last-minute push to wrangle enough House members to pass the GOP's healthcare bill in a vote expected to be carried out Thursday.
President Donald Trump, members of his administration, and House GOP leaders have continued to put the hard sell on the American Health Care Act — the GOP's bid to repeal and replace the Affordable Care Act, the healthcare law better known as Obamacare — to conservative members of the House to secure the 218 votes needed for the bill to pass.
As of Wednesday afternoon, they remained unsuccessful.
"Currently there are not enough votes to pass the legislation," Rep. Mark Meadows, the chair of the conservative House Freedom Caucus, said after a meeting at the White House.
A representative for the Freedom Caucus tweeted that 25 members were against the AHCA as of Wednesday afternoon in Washington, more than enough to defeat the bill in a House vote.
Additionally, a number of moderate Republicans have begun to state their intention to vote "no" on the bill as well, putting the AHCA even more in jeopardy.
Conservatives remain unconvinced that the AHCA fulfills their promises and have reiterated that they have enough votes necessary to block the bill from passing the House. Conservative-leaning groups have remained steadfast in opposition as well.
If the bill does not pass, it would be a serious setback for the legislative agenda of Trump less than 70 days into his presidency.
The importance and uncertainty of the vote have created the biggest opportunity yet for Trump to attempt to do what he says he does best: deal.
'They have seriously miscalculated'
The biggest blockade has become the House Freedom Caucus. The collection of roughly 35 House members grew out of the Tea Party movement and has pledged to uphold conservative ideals in the legislature.
The Freedom Caucus has opposed the AHCA from the outset, saying the bill does not fulfill the party's promise to voters that it would fully repeal the Affordable Care Act.
Meadows said the Freedom Caucus had more than 21 votes against the bill. He also told reporters that changes to positions were unlikely to come unless the Republican leaders budge.
"I certainly think that the president is the best guy to bring this home and close this deal out,"Meadows told reporters. "Hopefully, we'll be able to do that, but if everyone's entrenched at this particular point, it's going to be a very difficult 48 hours."
Other Freedom Caucus members have also reiterated that the bill does not have enough support.
"They don't have the votes to pass it," Rep. Justin Amash of Michigan tweeted Tuesday. "They have seriously miscalculated."
The Freedom Caucus has not taken an official position against the bill, meaning its members are free to vote how they choose. Alyssa Farah, a representative of the Freedom Caucus, tweeted, however, that this did not mean the group would split votes on the bill.
"Reports the Freedom Caucus won't oppose AHCA are incorrect,"Farah said Tuesday. "No position was announced last night — doesn't mean they won't vote as bloc."
Additionally, it appears that a number of more moderate Republicans are against the bill.
"While the American Health Care Act, legislation to repeal and replace Obamacare, is a very good start, it does not yet get it right and therefore I cannot support it in its present form," said the statement.
Additionally, moderate GOP Rep. Frank LoBiondo of New Jersey tweeted he will also vote against the bill.
"Regrettably, current healthcare proposal falls far short & is not better for #SouthJersey,"tweeted LoBiondo. "I will be voting no on American Health Care Act."
Given the make-up of the House, only 22 Republicans have to vote against the bill for it to fail.
Over the weekend, reports indicated that members of Trump's administration— such as Health and Human Services Secretary Tom Price and Office of Management and Budget Director Mick Mulvaney, a former Freedom Caucus member — were taking the lead on calling representatives to earn their support. Trump, reports said, was providing little assistance.
Over the past few days, however, Trump has increased his sales push for the AHCA. The president spoke with the House GOP members at a meeting Tuesday morning, threatening that if they did not pass the bill, they risked losing reelection in 2018. He even called out Meadows for his opposition, having him stand up and predicting he'd come around.
Trump followed it up by speaking at the National Republican Congressional Conference on Tuesday night, reiterating the need to pass the bill.
On Wednesday, Rep. Patrick McHenry — the deputy House whip for the GOP — told reporters at the White House that Trump was meeting with 10 House members who had "myriad concerns" with the bill and that the president was "bringing them closer."
House Speaker Ryan has repeatedly called Trump "a great closer," and he told conservative radio host Mike Gallagher on Tuesday that Trump was "fantastic" at the full House GOP meeting on Tuesday.
The question is whether the late push will be enough.
Jitters and a tough path forward
Republicans have insisted that they need to get the healthcare law done before they can move on to other legislative changes, such as tax reform and regulatory cutbacks.
The possibility that the AHCA may not be passed, which would push tax reform to the backburner, may have even given investors jitters. Numerous market analysts and investors have cited the possible delay in Trump's agenda as the reason for the Dow Jones industrial average's 237-point fall on Tuesday.
It is clear that a large number of Trump's promises to make big changes hinge on the passage of the bill.
And while the heat is increasing in the House, the effort may all be for naught when the bill hits the Senate.
The Republicans hold an even slimmer margin in the chamber, with just a 52-to-48 majority. While the AHCA is going through a process called budget reconciliation, meaning it needs only a simply majority, the GOP can only afford to lose three votes in the Senate.
A large concern seems to be the changes to Medicaid in the AHCA. The rollback of funding for the ACA's Medicaid expansion could cost many their coverage, according to the nonpartisan Congressional Budget Office analysis. Over 11 million people have gotten onto the Medicaid rolls because of the ACA expansion.
Four senators wrote a letter to Senate Majority Leader Mitch McConnell hours before the AHCA was first released expressing concerns about a leaked draft's cuts to Medicaid funding that were similar to the current bill's.
President Donald Trump took a hardline on thawing US relations with Cuba during the final weeks of his campaign, likely in a move to shore up his support with some segments of the electorate.
In the two months since he took office, though, Trump's Cuba policy — to the extent that it exists — has been far from clear, especially because of Trump's past vacillations on the issue.
A New York Times report about wrangling on Capitol Hill over the Republican healthcare bill indicates that at least one Florida Republican sees the debate as a way to gauge Trump's stance on Cuba.
According to The Times:
As part of the discussions, Representative Mario Diaz-Balart, Republican of Florida, made it clear to White House officials that he wanted assurances that the president would hold to his pledge to consider reversing President Barack Obama’s opening with Cuba, the White House official said. Mr. Diaz-Balart backed the measure in the Budget Committee last week, although the official said there had been no explicit discussion of trading his vote for a promise on Cuba.
Ads about the repeal of Obamacare, many of them negative, have saturated South Florida airwaves in recent weeks, according to the Miami Herald. The ads appear to be targeting Diaz-Balart (a Cuba hardliner), Carlos Curbelo, and Ileana Ros-Lehtinen, all Republican representatives.
Ros-Lehtinen has said she doesn't support the repeal, and Diaz-Balart, though undecided, is leaning against it, according to the Herald. Curbelo passed the bill to repeal out of the House Ways and Means Committee earlier this month, and a spokeswoman told the Herald Curbelo was "encouraged" by changes made to it after a CBO report.
A Diaz-Balart spokeswoman told the Miami Herald that the congressman is "still reviewing the recent changes to the bill and continues to negotiate with House Leadership about multiple aspects of the bill, including how the legislation handles older, low income constituents."
While Trump's feelings on Cuba remain unclear, the people who ushered his administration into office are decidedly against the island nation and its isolated Communist regime.
Trump's transition team reportedly ceded the staffing of government positions dealing with Latin America to Cuban-American legislators.
According to Chris Sabatini, a professor at Columbia and editor of Latin America Goes Global, the people appointed to those posts may push for a return to a strict embargo and a more aggressive stance toward Cuba.
Despite prior insistence that negotiations over the healthcare bill were over, Politico reported Wednesday that "White House officials" are looking to make "tweaks" to the American Health Care Act to win the votes of holdout conservative members of Congress.
One change the White House is reportedly looking at could create a lot of unintended consequences.
Conservatives in the House are upset that the AHCA doesn't do enough to remove insurance regulations imposed by Obamacare, and therefore doesn't do enough to lower premiums. So they want to eliminate the "Essential Health Benefits" (EHB) rules that say what health insurance plans have to cover, in hopes this will make insurance more customized and less expensive.
Repeal of the EHB rules was included a leaked "discussion draft" for the health care bill in February. Its exclusion from the final bill was something of a surprise.
That said, there are some plausible reasons Republicans backed off the effort to repeal EHBs — and why reinserting the repeal at the behest of conservatives could create new problems for the already-troubled bill.
Many EHBs are pretty essential
Obamacare names 10 EHBs that all health plans must cover, and they're not exactly bells and whistles. The first benefit deemed essential is outpatient care — that is, doctor's visits. The second is visits to the emergency room. The third is hospitalization.
If the EHB rules were repealed, insurers could literally sell plans that do not pay for you to go to the doctor, or that don't pay for prescription drugs, or that don't cover pregnancy-related care.
Of course, repealing the EHB rules would not forbid insurers from offering these various benefits. You could go out and look for an insurer who offers plans with benefits you really care about. But without the EHB rules, you might find such plans are newly unaffordable.
Without the EHB rules, insurers could, for example, sell some plans that cover maternity care and others that do not. Men would not buy maternity coverage, and many women would wait to buy maternity coverage until they thought they were likely to get pregnant.
The problem is, if you choose to pay for something, insurers will assume you are highly likely to use it and price accordingly.
In the case of maternity care, the consulting firm Milliman estimates that premiums for women under 40 who want coverage would be anywhere from 25% to 70% higher than the premiums for no-maternity plans, if plans with maternity coverage were available at all in a given state.
That would mean an upcharge of anywhere from about $1,000 to several thousand dollars a year for women who might have children.
Repealing the EHB rules could cause a quirky variation on an insurance 'death spiral'
More broadly than just maternity, people in good health would tend to buy plans with relatively narrow benefits, and people in poor health would tend to buy plans with a lot more benefits.
This fact would force insurers to price the broad plans much higher than the narrow plans. That would discourage healthy people from buying broad coverage, further shrinking the participant pool and pushing premiums even higher.
Before Obamacare, insurers could mitigate this behavior by evaluating the health status of people who wanted to buy insurance and refusing to sell to people they thought would be expensive, or by refusing cover people for their pre-existing conditions.
But because the AHCA would preserve Obamacare's rules about "guaranteed issue" and its ban on preexisting-condition exclusions, insurers couldn't stop sick people from gravitating toward the most generous plans, and therefore causing the premiums for such plans to skyrocket.
As a result, Dylan Scott of Stat News notes, some insurance markets could experience a death spiral that does not kill off all plans, but that puts premiums for benefits that some people really care about (like hospitalization, prescriptions, or substance-abuse treatment) out of reach, forcing most people to buy plans that omit key benefits.
Indeed, one libertarian critic of the AHCA, Rep. Justin Amash (R-Mich.) noted on Twitter early Thursday that repealing the EHB requirement while leaving other Obamacare provisions in place would make the bill even more of a mess:
Repealing EHB, w/out making other substantial changes, would make the bill worse, not better. It would hurt the sickest people on exchanges.
States could mitigate these issues by imposing their own version of an EHB requirement. But states generally did not have comprehensive EHB requirements before Obamacare, and to the extent they implemented them now, they would negate the benefits conservatives hope to see from EHB repeal.
Plus, if Republicans ever make good on their promise to allow interstate sale of insurance (not something included in the AHCA) individual states would be powerless to deem specific benefits essential — insurers could just sell policies from whichever state imposed the fewest mandates.
Repealing the EHB rules could also cost the government a lot of money
Ending the EHB requirement would have a sort of bizarre effect on the overall coverage statistics. Without EHB requirements, it would be harder for many people to get the coverage they want or need. But repealing EHBs would probably increase the number of people who get some sort of coverage.
Under the AHCA, most American adults under the age of 65 would qualify for a tax credit worth between $2,000 and $4,000 toward the purchase of health insurance, unless they have employer-based coverage or Medicaid.
But you would only get the credit if you actually buy a health plan. So, even if you don't want to spend your own money on insurance, or don't have any money to spend on insurance, you might as well buy a plan with a premium no higher than the tax credit itself.
Use it or lose it, as they say.
With the EHB rules in place, this strategy wouldn't be workable for most people. Insurance would have to be reasonably comprehensive, and it couldn't be priced as low as $2,000 a year in most cases. But without the EHB rules, it should be possible for insurers to design a plan that covers something for adults in any age group, at a price between $2,000 and $4,000.
He notes that if lots more people buy some kind of insurance because they can get some kind of plan for the same price as their tax credit, a lot more people will use their tax credits, and that will make the AHCA a lot more expensive.
In addition to meaning the government would be spending a lot more money on not-very-good insurance, it could also mean the AHCA would spend so much it would increase the deficit — in which case, the bill couldn't be enacted because it would not comply with the reconciliation instructions Congress passed earlier this year, which say the law must reduce the deficit.
These are the sorts of details that one would expect to evade President Donald Trump. But they are reasons that EHB repeal could create new problems for the law he wants to see passed, even if it draws some votes from the most conservative members of the House.
There must be a reason Paul Ryan didn't want to do this
Members of the House Freedom Caucus have been asking for an AHCA amendment to repeal the EHB rules for weeks. House leadership and the White House, despite wanting their votes, has strongly resisted the request until Wednesday.
I suspect the real answer to Ryan's reluctance has to do with the CBO score.
Maybe the CBO was going to say that this provision would lead to huge deteriorations in the quality of health insurance purchased by many Americans, as state insurance markets went through a form of death spiral in which insurance plans omitted more and more benefits.
Maybe the office was going to say that this provision would add greatly to the cost of the AHCA, as insurers designed limited products to match the price of available tax credits, meaning nearly everybody who was eligible for a tax credit would claim one.
Or maybe Ryan was hearing from members who didn't want to face attack ads about how they voted for a bill that would mean health insurance might not cover pregnancy or drug treatment anymore.
Maybe the problem was all of those things.
The most widely cited reason for not touching EHBs, the one discussed by Politico, has to do with reconciliation, the special process for budgeting through which the Senate can act by simple majority instead of needing 60 votes. Republicans have just 52 seats in the Senate and need to move the AHCA through reconciliation if they hope to pass it.
It's widely believed that the Senate parliamentarian wouldn't allow the EHB regulations to be repealed through the reconciliation process, regardless of whether they grow the deficit or not, because they don't have a sufficiently direct relationship to taxes and spending. Typically, reconciliation isn't supposed to be used to set insurance regulations.
But the rules around reconciliation are very complicated, and it's not totally obvious that EHBs can't be touched. Conservative Sen. Mike Lee is making the case that the Senate may be able to do so and should try.
Plus, there are several other provisions of the AHCA whose compatibility with reconciliation is questionable, including a ban on Medicaid spending at Planned Parenthood.
But the existence of those other provisions is why I suspect House Speaker Paul Ryan's reticence was not about that aspect of reconciliation. If he was willing to pull a stunt with Planned Parenthood (including a provision in the expectation the Senate would strip it), shouldn't it have been easy to do the same with EHBs? Why not agree to this weeks ago?
I suspect it was because of the CBO.
If Ryan goes ahead with this amendment on EHBs because he sees no other way to save his bill, we'll learn what the CBO has to say in a few days. We'll learn whether the EHB provision survives the Senate in a few weeks.
WASHINGTON (AP) — House Republicans' health care bill provides massive tax cuts to the wealthy while increasing taxes for many lower income families, adding to America's big income gap between the rich and everyone else.
Over the past quarter century, only one group of people has seen significant increases in income — those at the very top. Families in the middle or at the bottom of the economic ladder have seen little or no increase in wages.
And since 2000, most middle- and low-income families have seen their incomes drop, when inflation is taken into account, according to Census Bureau data.
The GOP health bill exacerbates those disparities, according to a new report by the nonpartisan Tax Policy Center. On average, taxes would go down for families making more than $50,000 a year, while taxes would increase for many families making less, the report said.
"This is a massive transfer of wealth from working families to the very richest people in this country," said Sen. Bernie Sanders, I-Vt. "In this case, all the people will be forced to pay more for health insurance while billionaires get a tax break."
Income disparities and an eroding middle class helped spawn two populist political movements during last year's presidential election. Sanders was the standard-bearer on the left as he ran for the Democratic nomination. President Donald Trump led the movement on the right.
Yet Trump's first piece of major legislation doesn't provide much tax relief for the white working-class voters who supported him. Regardless, Trump is pressing hard for House Republicans to vote for the bill, meeting with wavering lawmakers at the Capitol and the White House.
The House is expected to vote on the bill Thursday.
The measure would repeal major parts of former President Barack Obama's health law, capping future funding for Medicaid and cutting tax increases for high-income families, health insurance companies and drug makers.
The biggest tax cut would eliminate a 3.8 percent tax on investment income for high-income individuals and families. Another would repeal an extra 0.9 percent Medicare tax on wages above $200,000 for individuals and $250,000 for married couples.
Families making more than $200,000 would get tax cuts averaging $5,680 a year, once the bill is fully implemented, according to the Tax Policy Center report. The average tax cut jumps to more than $51,000 for families making more than $1 million a year.
"That's not what Trump ran on. He ran on helping the little guy," said Rep. Joseph Crowley, D-N.Y. "I would think if you got all of the millionaires in a room, they're not going to turn it down, but they would admit to you they don't need this assistance. They don't need a $50,000 tax break."
House Republicans highlight the tax cuts, noting that many small business owners would get relief. They also say their bill would repeal several Obamacare mandates — one on individuals to get health insurance and one on large employers to provide coverage to workers.
In place of these mandates, Republicans say they offer a plan that provides more choice and less government interference for patients.
"The bottom line is, we made a promise to repeal and replace Obamacare, and we are going to keep our word," said House Speaker Paul Ryan, R-Wis.
The bill raises taxes for some because it repeals tax credits that people can use to purchase health insurance on marketplace exchanges. It replaces them with a new tax credit that is less generous for most.
The tax hikes would be relatively small but they would hit the working poor who could least afford it. For example, families making between $20,000 and $30,000 a year would get tax increases averaging $200. Families making between $30,000 and $40,000, would get tax hikes averaging $180.
Many of these families have seen their wages stagnate for much of the past 20-plus years.
From 1979 to 2015, middle-income households saw their incomes rise by just 14 percent, when inflation is taken into account, according to Census Bureau statistics. These households make an average of $56,800 a year.
Over the same period, low-income households saw their incomes rise just 2 percent. These households average just $12,500 a year in income.
Meanwhile, the top 5 percent of households saw their incomes jump 75 percent. The average income for these households: $360,000 a year.
"The issue here is that for 30 or 40 years, the middle class in this country has been shrinking," said Sanders, echoing one of the main themes of his failed presidential campaign.
"Clearly, Trump's so-called health care plan and certainly his budget will make a very bad situation worse — more tax breaks for the rich, throwing millions off their health insurance and cutting back on programs that working families need," he said.
WASHINGTON (AP) — The GOP's long-promised legislation to repeal and replace "Obamacare" stood on the brink just hours before Republican leaders planned to put it on the House floor for a showdown vote. Short of support, GOP leaders looked to President Donald Trump to close the deal with a crucial bloc of conservatives, in the first major legislative test of his young presidency.
The stakes could hardly be higher for a party that gained monopoly control of Washington largely on promises to get rid of former President Barack Obama's signature legislative achievement and replace it with something better. Now Republicans are staring at the possibility of failure at the very moment of truth, an outcome that would be a crushing political defeat for Trump and Hill GOP leaders and would throw prospects for other legislative achievements into extreme uncertainty.
Frenzied last-minute wheeling and dealing was under way on Capitol Hill and the White House, where Trump summoned the balky conservative Freedom Caucus to meet with him mid-day Thursday, ahead of the planned vote. But concessions being offered to the conservatives, who sought to limit requirements for health plans to offer certain benefits including substance abuse and maternity care, appeared to be scaring off moderate Republicans.
A late-night meeting of moderate-leaning members in Speaker Paul Ryan's office Wednesday broke up without resolution or a deal as most lawmakers and Ryan himself left out of side exits and avoided talking to reporters.
One lawmaker present, GOP Rep. Ryan Costello of Pennsylvania, said members had been asked to weigh in on the changes being offered to the Freedom Caucus. He demurred on how the concessions might impact his vote, but said, "The Freedom Caucus has presented what it will take for them to make some 'yeses' and I think there are a lot of members who will now have to evaluate things a little bit further."
Shortly thereafter a key moderate who had been in the meeting, Rep. Charlie Dent of Pennsylvania, issued a statement saying he would be voting "no" on the health bill. "I believe this bill, in its current form, will lead to the loss of coverage and make insurance unaffordable for too many Americans," said Dent, a leader of the Tuesday Group of moderate-leaning Republicans.
Yet Freedom Caucus members, even after winning the prospect of eliminating the so-called "essential health benefits," were not quite ready to guarantee their support.
"Tonight is an encouraging night," Rep. Mark Meadows, R-N.C., leader of the Freedom Caucus, said after a late round of negotiating Wednesday. But after boasting for days he has the votes to kill the health bill, Meadows added that "I don't want to be so optimistic as to say the deal is done."
Thursday's White House meeting between Trump and Freedom Caucus members looked to be pivotal as to whether the vote could go forward as planned. Trump has played an increasingly central role, repeatedly summoning different groups of lawmakers to the White House, traveling to the Capitol himself, and calling others on the phone to press for "yes" votes.
And congressional leaders have increasingly put the onus on the president to close the deal, seemingly seeking to ensure that he takes ownership of the legislation — and with it, ownership of defeat if that is the outcome.
In a count by The Associated Press, at least 26 Republicans said they opposed the bill, enough to narrowly defeat the measure. The number was in constant flux amid the eleventh-hour lobbying.
Including vacancies and expected absentees, the bill would be defeated if 23 Republicans join all Democrats in voting "no."
In a show of support for the opponents, the conservative Koch network promised Wednesday night to spend millions of dollars to help House members who vote against the health care bill.
The Republican legislation would halt Obama's tax penalties against people who don't buy coverage and cut the federal-state Medicaid program for low earners, which the Obama statute had expanded. It would provide tax credits to help people pay medical bills, though generally skimpier than the aid Obama's statute provides. It also would allow insurers to charge older Americans more and repeal tax boosts the law imposed on high-income people and health industry companies.
Moderates were daunted by projections of 24 million Americans losing coverage in a decade and higher out-of-pocket costs for many low-income and older people, as predicted by the nonpartisan Congressional Budget Office.
Yet some Republicans were showing irritation at their party's holdouts.
"At some point we have to cowboy up and prove we can govern," said Rep. Kevin Cramer, R-N.D. "Otherwise we're just going to be the 'no' party and some people are OK with that, it appears."
Associated Press reporters Alan Fram, Kevin Freking and Ken Thomas contributed to this report.