ACA Repeal, Again


According to Bloomberg, the White House wants Congress to vote on a revised bill next week.  There are some proposed amendments to the bill that failed in March in an effort to try to unify GOP House members to support the bill, but nothing has been finalized.

One item being considered is a proposal by Representative Tom MacArthur (R, NJ):

The amendment, reported earlier by Huffington Post, would allow insurers to charge higher premiums to people with pre-existing conditions in states that get a waiver. To obtain the waiver, states would have to provide sick people priced out of commercial insurance access to a so-called high-risk pool run by the federal government, or establish their own, and satisfy other conditions. (1)

A separate commentary on the same issue goes further:

According to a draft of the tentative deal obtained by POLITICO, the latest proposal would allow states to apply for “limited waivers” that would undermine Obamacare’s protections for pre-existing conditions. Under these waivers, states could opt out of Obamacare standards setting minimum benefits that health plans must offer and a requirement — called community rating — forbidding insurers from charging different prices to people based on health status. Both are provisions that the GOP’s ultraconservatives have pushed to eliminate as part of the repeal effort, contending that these coverage mandates drive up the cost of insurance.

What this means in practice is a two-tiered health system based on where people live. People in places like Mississippi and Kentucky that have relatively poor healthcare now, will have less access to healthcare and higher costs in the future. Conversely, states that offer better healthcare will maintain existing benefits. That’s a compromise that could pass, or could just make everyone unhappy.

Overall, this attempt keeps the negatives associated with the bill, and adds one more. Historically, risk pools haven’t worked. They’ve been budget-breakers when they’ve been tried for auto and health insurance in several states. If anything, more people will lose health coverage and costs will escalate as predicted by the CBO.


  1. Billy House, Jennifer Jacobs, “White House, GOP leaders at odds over plans for Obamacare vote,” BenefitsPro, 20 April 2017.
  2. Adam Cancryn and Josh Dawsey, “White House plans Obamacare showdown next week,” Politico, 20 April 2017.


Healthcare Reform: We’re probably not done yet


There’s no question that Washington is in disarray today.

On the heels of President Trump’s ultimatum to Republicans late Thursday to either pass the American Health Care Act on Friday or be stuck with ObamaCare, Collins [R, NY] said tensions are at an all-time high. “I’ve never seen this before,” Collins said. “People are just refusing to talk to each other. They’re storming past each other.”(1)

The ultra conservative Freedom Caucus was demanding a straight repeal of the Affordable Care Act with no replacement. To that, Collins responded, “Oh, that would get about 50 votes.” 217 would be needed for passage. Not happening.

With the AHCA bill, the last minute attempts to gain support among ultra conservatives chased away more moderate GOP congressmen. Functionally, the bill died at 11AM Friday morning, when GOP Representative Rodney Frelinghuysen (NJ, a moderate and chair of the powerful House Ways and Means Committee) announced his opposition to it. That’s when Paul Ryan requested a meeting with Trump, and the decision to withdraw the bill followed.

That leaves obvious choices for the Administration:

  • Figure out how to unify conservative and moderate Republicans (hasn’t happened and there’s no clear way forward), or
  • Start working with Democrats, which will further anger the GOP right wing, or
  • Simply play golf for the next four years.

The Freedom Caucus wants to revisit repeal of the ACA. Trump has said he will leave ACA alone and move to other issues, notably tax reform.

GOP Senator Lindsey Graham said this today:

A day after President Donald Trump labeled the Democrats the ultimate losers in the failed Republican plan to repeal and replace the Affordable Care Act, Sen. Lindsey Graham urged bipartisanship on the issue moving forward.

“I don’t think that one party’s going to be able to fix this by themselves,” the South Carolina Republican said Saturday at a town hall event. “I think the President should reach out to Democrats, I should reach out to Democrats, and we should say, ‘Let’s take a shot at doing this together because it ain’t working doing it by ourselves.'”
After Republicans were forced to pull their bill to replace Obamacare from the floor of the GOP-controlled House on Friday, Trump blamed Democrats and vowed to let Obamacare “explode.”(2)
Unless Trump wants to learn from this experience, golf might be his best option.
What you need to consider:
  • We’re probably not done with changes in healthcare. Something may happen later this year. However, any bill that ignores the needs of consumers is unlikely to pass. Most Congressmen want to keep their jobs and the House is up for re-election next year.
  • You need to conserve cash because healthcare costs are likely to rise, although perhaps not as much as forecast if the AHCA had passed.  Whatever you have in savings probably isn’t enough.
  • Despite the dire warnings from the GOP, it’s unlikely that the ACA (aka Obamacare) will “explode.” Insurance companies like to make money, and they only do so when they write profitable insurance policies. The sky isn’t falling.
  • People who put ideology ahead of common sense and practical solutions should be in theology, not politics. They perform no useful service in Congress.


  1. “Republican congressman says the GOP ‘hasn’t figured out yet how to be the governing party’,” The Week, 24 March 2017.
  2. Eugene Scott, “Lindsey Graham on health care: Republicans and Democrats need to work together,” CNN, 25 March 2017.

What the CBO Report on the American Health Care Act Actually Says (updated)

Photo Courtesy of Holden Police Department

By now. most people have seen headlines or soundbytes about the report.  The Congressional Budget Office is a nonpartisan group. The head of the CBO was actually appointed by the GOP. The purpose of the office is to provide Congress with a source of “objective” information about the financial impact of legislation that is independent from information provided by the Executive Branch. In a complex world, this actually makes sense.


What the CBO report actually says:

  • Health insurance costs for individuals will under the new act (the AHCA is also known as “Trumpcare”), will increase through the year 2020 and may decrease after that.  The CBO expects increases in health insurance premiums under the new law of between 15% and 20% for 2018 and 2019 under the new law.  However, the CBO argues that by 2026, premiums might be 10% lower than under the ACA.
    • Some professionals refer to these as “hockey stick” forecasts, with a positive result occurring sometime in the remote future.  That could happen, but usually unforeseen events preempt the desired result.
  • Healthcare costs should decline for people in their 20s, but will increase sharply for older Americans.  The proposed tax credits will be insufficient to cover the cost increase.
  • The CBO estimates a $337 decrease in the Federal deficit from the AHCA law, mostly due to the repeal of Medicaid expansion and the end of subsidies for health insurance.  (As noted, the tax credits are smaller than the current subsidies.)  That averages out to about $33.7 billion per year.
    • The current US deficit is $441 billion in the current fiscal year.  Obviously, any reduction is good, but a savings of less than 10% of the deficit isn’t a cause for celebration.
    • The US budget deficit is expected to expand by over $10 trillion over the next decade, after shrinking during the Obama administration.
  • The Medicaid rollback will cost 14 million people their healthcare coverage immediately.  That plus the increase in out of pocket expense will ultimately mean that 24  million people will be forced to do without health insurance.
    • The CBO expects that some states will lose Federal funding for Medicaid in 2020 by their failure to provide the matching funds required under the new law.  That will further reduce Federal spending.
    • The matching funds requirement simply moves part of the tax burden from the Federal government to the states, and may require increases in state taxes.
  • Existing law requires the CBO to provide guidance on the impact of the law on the economy.  However, the CBO claims it has not had sufficient time to do this.
    • My argument is that anything that takes money away from consumers will be a drag on economic recovery.  This law does, by raising health care out-of-pocket expenses for most people.


  1. Congressional Budget Office, “Cost Estimate,” 13 March 2017. I’ve downloaded a pdf of the report from the CBO website, and will share it on request.
  2. Emily Stephenson, “U.S. deficit forecast to shrink in 2017 but climb over next decade,” Reuters, 24 January 2017.

Healthcare Repeal: Where we are tonight (23 March 2017)


17456_1269532813224_1076952025_30803996_7657050_nThe GOP House bill has emerged and it’s designed to hurt most Americans. The House committees involved are rushing to vote on this before the nonpartisan Congressional Budget Office (CBO) can weigh in on costs or impact. There’s a reason.


The bill keeps three elements of the Affordable Care Act:

  • Insurance companies can’t deny coverage based on pre-existing conditions.
  • No lifetime cap on benefits.
  • People can stay on parents’ coverage until age 26.

That’s the good news.

The good news for those with high incomes:

  • Tax credits for buying health insurance.
  • Elimination of health insurance related taxes on people with high incomes.
  • No requirement for having health insurance.
  • No tax penalties for not having it.
  • Double the amount they could contribute to Health Savings Accounts (tax benefit).

The bad news:

  • Large employers would no longer be required to offer health insurance.
  • A 30% rate increase is your health insurance lapses.
  • Income tax credits for health insurance based on income are replaced by smaller tax credits based primarily on age and family size. The amount of these credits would be reduced for individuals making more than $75,000 per year or couples making more than $150,000, but even the affluent would receive credits.
    • The credits range from $2,000 to $4,000 per person, with a cap of $14,000 for a family.
  • Rate increases:  According the the nonpartisan Congressional Budget Office, the cost for individual insurance will increase by between 15% and 20% for each of 2018, 2019 and 2020.
  • The special hit for those over 50:  The price range by age will increase from a factor of 3 to a factor of 5.  Under the ACA, people between the ages of 50 and 60 could be charged no more than 3 times what a healthy 20 year old would be charged.  Uncer the bill that changes to a multiplier of 5.  Assuming a 20-something pays roughly $300 for health insurance, here’s the math:
    • Under the ACA. a 60-year-old faced a monthly cost of $900 before subsidy, which could be as much as $500. That’s a net cost of $400 per month.
    • Under the new rules, with a conservative 18% base rate increase, the cost for a 60-year-old would be $1,770 per month, with a maximum subsidy of roughly $330. That’s a net cost of $1,440 per month.
  • The Medicaid rollback.  Obama extended Medicaid to those who couldn’t afford health insurance; the current bill reverses that, leaving up to 24 million with no health insurance coverage.
  • Reduced cancer screening:  Elimination of funding for Planned Parenthood — which impacts cancer screening for less affluent women.

The bill creates a huge financial burden for Americans.  To put this in context, median weekly income for American workers is $849 (2016, Bureau of Labor Statistics). With deductibles and copays, more than one week of each month’s earnings would go to healthcare. For some Americans in the 50+ age group (pre-Medicare), the cost of health care could approach half of monthly take home.

We have to say “could” because the final rates for health policies for 2018 haven’t been approved by state insurance commissioners yet.  However, the CBO estimates are in line with the increases the insurance industry has said it will request.

That’s a huge dent into household budgets, and into consumer spending for other products and services. So much for economic growth.

The CBO is required by law to assess the economic impact of major legislation. However, backers are trying to rush this bill through Congress before the CBO has time to complete this analysis.(6)

As stated in other posts, part of the purpose of the Affordable Care Act was to allow for early detection of disease and reduced reliance on ER services for healthcare.  Both of those goals would actually reduce total spending on healthcare.  The GOP bill largely undoes both of these.

The mixed news:

  • The elimination of requirement that everyone have healthcare means that the “risk pool” for calculating rates will be smaller, and the cost per person will be higher.
  • The bill would give block grants to the states that could be used to help consumers pay for health insurance. But that would be up to state legislatures.


At this writing, the fate of the bill is uncertain.  Some extremists want the elimination of any government support for healthcare for Americans.  For them, the current bill offers too much to consumers.  The AARP has gone to war because of who the bill will impact people over age 50. GOP congressmen who are worried about re-election are nervous about supporting this bill.  Seniors are much higher rates of voting than other Americans and can swing close elections.  The vote on the bill in the House has been postponed as backers don’t have enough votes to pass it.

To gain additional support, the bill was changed this week to add more tax benefits for the wealthy.

Even if the bill passes the House, the ability to get it through the Senate is questionable.

Apart from extreme conservatives, opponents to the bill include:

  • The AARP.
  • The AMA and all other associations of medical professionals.
  • Hospitals and clinics, who don’t want and can’t afford an influx of clients without insurance.
  • Democrats who don’t want to see people lose coverage.

Four Senate Republicans have voiced opposition to the Medicaid rollback.

“We will not support a plan that does not include stability for Medicaid expansion populations or flexibility for states,” Sens. Rob Portman (Ohio), Shelley Moore Capito (W.Va.), Cory Gardner (Colo.) and Lisa Murkowski (Alaska) wrote in a letter to Senate Majority Leader Mitch McConnell (R-Ky.).

The bill will raise health insurance costs for most Americans.

One senior Republican suggested that under his party’s bill, Americans would have to pay a larger share of their own health care costs.

“Americans have choices, and they’ve got to make a choice,” Representative Jason Chaffetz of Utah, the chairman of the Oversight Committee, said on CNN Tuesday. “So rather than getting that new iPhone that they just love and want to go spend hundreds of dollars on that, maybe they should invest in their own health care.” (4)

This is as close to the infamous Marie Antonette quote, “Let them eat cake,” as we have ever seen in American politics.

What you need to remember

  • Insurance policies/contracts for 2017 will be unaffected. 
  • However, if you let policies lapse this year, that may affect what you pay in 2018, by a lot.


  1. Robert Pear and Thomas Kaplan, “House Republicans Unveil Plan to Replace Health Law,” The New York Times, 6 March 2017.
  2. House Republicans release long-awaited plan to replace Obamacare,” The Washington Post, 6 March 2017.
  3. FoxNews, “House Republicans release long-awaited ObamaCare replacement bill,” 6 March 2017.
  4. Zachary Tracer, Anna Edney, and Steven Dennis, “Aiming to bridge gaps within the party, GOP releases health care reform details,” BenefitsPro, 7 arch 2017.
  5. Robert Lowes, “House Releases ACA Repeal, Replace Bill That Transforms Medicaid,” Medscape, 8 March 2017.
  6. Congressional Budget Office, “American Health Care Act,” 13 March 2017.

Healthcare Changes — Updates


There were some ideas floated yesterday by GOP Congressional leadership, but nothing definite.  While Paul Ryan is expressing optimism that there will be a concrete proposal by17456_1269532813224_1076952025_30803996_7657050_n the end of February, others in the GOP are saying that it won’t happen “overnight” or are waiting for cost estimates from the Congressional Budget Office (CBO).


The ideas being discussed include:

  • Paying for repeal of the Affordable Care Act by levying a tax on healthcare insurance offered by employers.  Some versions of this proposal would limit the tax to higher end plans (gold, platinum or concierge plans), but that would go against Trump’s stated intention of giving tax breaks to the wealthy.
  • Subsidies for healthcare would be eliminated, and replaced by tax credits for people who don’t have employer provided care.
  • Elimination of some business taxes used to support the Affordable Care Act.
  • Expansion of Medicaid to more of the poor would be withdrawn.  Federal funding for expansion of Medicaid benefits would be eliminated.
  • Penalties for not having insurance will be eliminated.

The withdrawal of subsidies and removal of penalties will drive up the cost of health insurance for individuals who need insurance.  You should expect increases for 2018 that may be in the range of 20% or higher.

Removal of subsidies (for most people, an advance on a tax credit) means that more people will not be able to afford health insurance.  However, some in the GOP would prepay these tax credits — basically keeping much of the current system under a different name.

But Kenneth E. Raske, the president of the Greater New York Hospital Association, expressed alarm, saying the proposals would “put a huge amount of pressure on state budgets and put many Americans at risk of losing health care coverage.”(3)

The Medicaid change might be the most important of all of these provisions.  Many middle class Americans depend on Medicaid now to pay for nursing home care when that time comes.  At a national average of more than $92,000 per year, most people don’t have the savings to cover that.  The proposed revisions would “put Medicaid on a budget” and allow states to eliminate payments to nursing homes.

Of course, if the cost of ACA repeal is too high, none of this may go anywhere.

So the next step is to see what the CBO projections are.  We wait.


  1. Alan Fram, “GOP leaders unveil new health law outline, divisions remain,” Associated Press, 17 February 2017.
  2. Ana Radelat, “GOP gives House members proposal to repeal, replace the ACA,” The Connecticut Mirror, 16 February 2017.
  3. Robert Pear and Thomas Kaplan, “House G.O.P. Leaders Outline Plan to Replace Obama Health Care Act,” The New York Times, 16 February 2017.

Health Care “Reform” and Suicide


lights-1088141__340ACA repeal and Medicare reform may increase the suicide rate among middle age and older Americans.

While for years, suicide has been considered as a major threat among children and those of college age, the two age groups with the highest rate of suicide are

  • 45 to 64 year olds, followed by
  • those age 85 and older.

Those most prone to suicide are non-Hispanic white and Native American males.

Suicide rates are lowest in highly urban states with strong social service support systems:  e.g., New York, New Jersey and California.

The highest rates are in largely rural states, in the Plains and the South.  These states tend to have low spending on social services and lax gun laws.

  • The two states with the highest rates are Montana and Wyoming.
  • Half of all suicides are by gun.  Men prefer guns; women prefer poison or drug overdose.

While these states have lower costs of living, they also have lower household incomes.

The explanation for suicides is largely inferential and anecdotal.  No one to my knowledge goes around collecting suicide notes to tabulate causes.

Statistical inference points to economics, partly because that’s the data available, as per the quote from Professor Putnam, below.

“This is part of the larger emerging pattern of evidence of the links between poverty, hopelessness and health,” said Robert D. Putnam, a professor of public policy at Harvard and the author of “Our Kids,” an investigation of new class divisions in America.

Anecdotal evidence also points to the role of finances in suicide decisions.  Some of us know people who have shot themselves on receiving a cancer diagnosis when they have no medical insurance to cover the cost of treatment.

  • When the patient is unable to afford treatment and has only slight chance of recovery, suicide may just make sense.
  • Some may do this to keep their spouse from financial ruin.

Adding to this, statistical inference also suggests that states that make it easier to file for bankruptcy have lower suicide rates.  California, for example, leads in bankruptcy filings but has a very low suicide rate.

What does the ACA repeal have to do with this?

  • Access to doctors was designed to encourage screening and early detection of disease, when the illness is less obvious or painful, more easily treatable and less costly to treat.
  • Removal of access is going to mean that more disease is caught at later stages,  with patients having fewer options, pain, less likelihood of success and higher costs that may be unaffordable.     Repeal will put more people in this impossible position.  What do you expect them to do?



Latest Wrinkle in Healthcare Reform


OK, it’s widely understood that “ethical Congressman” is any oxymoron if not an entirely extinct species. Georgia Representative Tom Price is a Congressman. He also invests in medical technology and pharmaceutical companies to the tune of about $300,000. He also introduces bills and writes letters to regulators to help the companies whose stock he owns…

via ACA Reform: the newest wrinkle — Crain Insurance (AFLAC)