Republicans want to kill you. Worse than that, they want to kill you so that they can give your money to rich people who don’t need it.
If you’ve been reading social media over the last week, that’s the main takeaway. It started when the Senate released its long-awaited health care bill, the culmination of nearly a decade’s promises to repeal and replace Obamacare. This bill was not so much a repeal as an adjustment, and not so much an adjustment as a tweak. But it did propose to eliminate most of the taxes used to fund Obamacare, including the reviled individual mandate, and alter the funding structure of Medicaid and the premium subsidies to make them somewhat less generous.
The criticism of the GOP plan got louder since the Congressional Budget Office released its score of the bill: The Senate bill would increase the number of people who are uninsured by 22 million in 2026, relative to current law. That’s fewer than the House bill but more than Obamacare.
An easier sell will be the deficit reduction numbers — a cumulative reduction of $321 billion over 10 years. That’s a massive improvement over Obamacare and a substantial improvement over the House version, which was projected to save only about a third as much in a similar time frame.
How they get to those numbers, however, is apt to cause some political headaches, particularly in swing states. According to the CBO, this bill cuts Medicaid by $772 billion over the decade, because of the switch to per-capita grants, and the gradual reduction of the extra funding that Obamacare provided for newly eligible Medicaid participants. It slashes $408 billion from various tax credits, notably premium subsidies and the “cost sharing reduction” subsidies, which provide special plans for people making less than 250 percent of the poverty line, offering lower deductibles and co-payments. Then it sends $541 billion back out the door in the form of tax cuts. Anyone who read the bill last week already knew the broad outlines, but these numbers put some flesh on the bones — and in the political spotlight, that flesh is not going to look particularly comely.
As we prepare for the coming days of Democratic senators leveling charges of mass homicide against their colleagues, it seems worth asking a few questions: “Is it true that this bill will kill people?” And “If it’s so deadly, how can Republicans possibly get it passed?”
First, then, the score itself. How reliable is it? Unfortunately, this score has the same problems that plagued the Congressional Budget Office’s score of the House bill: Its estimates of the number of uninsured, while undoubtedly made in good faith, seem rather implausibly large. However little liberals may like this bill when they compare it to Obamacare, when compared to the pre-Obamacare status quo ante, it offers many billions of dollars’ worth of subsidies for health insurance — premium tax credits for people buying insurance in the individual market, and substantial funds to insurers and states in order to stabilize the market.
It seems hard to believe, as the CBO predicts, that the net result will be almost no reduction in the number of uninsured people, relative to what you’d get if Obamacare was simply repealed and replaced with nothing. I do think this number is directionally right, and the net result of this bill would be a substantial decrease in insurance coverage. But I’m nearly equally sure that there is some deep problem with the CBO model that causes it to spit out unlikely results when fed this particular combination of insurance regulations, subsidies and penalties.
Digging deeper into the report offers some suggestion of what those problems might be. That net loss of 22 million covered people would come about, says the CBO, “primarily because the penalty for not having insurance would be eliminated.” This puts a whole lot of policy weight on a mandate that is, by the consensus of most experts I’ve spoken to, already far too weak to do the job it was designed for (namely, forcing healthy folks to buy insurance).
The mandate penalty actually phased in over several years — starting at $95 or 1 percent of income in 2014 (whichever was higher), rising to $325 or 2 percent in 2015, and maturing to its full adult size of $695 or 2.5 percent of income in 2016. Given how much stiffer the mandate penalties got as the years progressed, if the mandate were very effective at getting people to buy insurance, then I’d expect to see substantial growth in the number of folks buying insurance on the exchanges as folks got hit with an ugly tax bill, and decided they’d be better off paying premiums to insurers than penalties to Uncle Sam. Instead we saw a flood of new customers the first year, a slowing trickle in subsequent years, and in 2017, a slight ebb tide.
I’d place a lot more weight on the subsidies, which make insurance a very good deal for people whose incomes are relatively close to the poverty line. The CBO seems to have the relative weights reversed. And that was fair enough, in 2010, when the office was projecting the effects of a vast, hard-to-forecast experiment. But the experimental results have been filtering in, and I’m not sure the forecasters have adequately updated their hypothesis. Because my money’s on the subsidies, I think the coverage losses are likely to be more modest than the CBO projects, making the cries of roaming senatorial death panels seem slightly overblown.
The upshot? Regardless of whether Republicans want to kill you, what the Senate is proposing here is far more likely to kill some Republican political careers. The cause of death ought to be listed as “suicide.”
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