Time: D H M S

Along with 1,000 *other* terrible things, the GOP just knocked ~15M people onto the barroom floor.

Welp. The Republicans did it. And later today, barring some dramatic last-minute development, the GOP Tax Scam is gonna be signed into law.

UPDATE: It's done. It passed the GOP House, GOP Senate and GOP House (again). Trump's signing it at any moment.

The GOP Tax Scam does many terrible things, of course, many of which are worse than repealing the ACA’s individual mandate. And even within the healthcare arena, the $25 billion PAYGO Medicare cut caused by the GOP tax scam is arguably more damaging overall.

Still, ACA stuff is my wheelhouse, so I’ll stick to the direct impact the bill (if it does become law) would have on the Affordable Care Act.

Above is the video explainer I whipped up a few weeks ago. It’s long and a bit wonky, but it should give a pretty good overview of the situation.

What about the two “market stabilization” bills that Susan Collins was supposedly demanding in return for her “Yes” vote? Yeah, about those:

  • The first bill, called “Alexander-Murray”, would do several things, but the main impact would be formally appropriating the Cost Sharing Reduction (CSR) reimbursement payments which Donald Trump cut off back in October. Unfortunately for Senator Collins, that was already extremely unlikely to happen even before this development:

BIG PROBLEM BREWING — In House GOP meeting this morning, several members stood up and expressed opposition to restoring CSR payments in the year-end spending bill

— Jake Sherman (@JakeSherman) December 19, 2017

The short version here is that restoring CSR payments would lower unsubsidized premiums on the individual market by about 15% or so...but in doing so, due to the way the ACA subsidy formula works, would actually raise premiums by 15-20% or even more on subsidized enrollees (technically it wouldn’t actually raise the premiums, but it would lower the subsidy amount they receive by far more than the premiums themselves are lowered).

I supported passing Alexander-Murray before the 2018 premiums were locked in, but now that ship has sailed; the industry has already compensated for the cut-off, and restoring them now would simply confuse/complicate the issue for 2019, while hurting ~9 million or so subsidized enrollees. It would simply reverse the population of people who get hurt, helping the middle class somewhat while hurting lower-income folks.

Believe it or not, even some Republicans have realized this...thus the tweet above.

Oh, yeah...and A-M would only last 2 years anyway. The insurance carriers, which just went through quite a bit of trouble to adjust for life without CSRs would have to go back and recalibrate their pricing again if they were restored...and only for two years at that. Some of them will likely say “screw this noise” and just drop out of the individual market altogether.

The second bill, called “Collins-Nelson”, would basically throw $5 billion per year at the insurance companies to cover reinsurance programs. There’s nothing too fancy going on here—it literally amounts to the government paying a chunk of the healthcare costs for really expensive enrollees. By doing this, the carriers can lower rates for everyone else.

Reinsurance is a great idea, and I would fully support Collins-Nelson if it didn’t come at the cost of killing the mandate penalty. Reinsurance is already needed to lower premiums for unsubsidized enrollees NOW.

In addition, Collins-Nelson would also only last two years, once again putting the insurance carriers in the position of not knowing WTF the deal is gonna be just a couple years later. Many of them may, again, say “to hell with this, I’m out of here” rather than deal with these headaches very year or two.

But again, that’s moot as well since the odds of Collins-Nelson going through are even less likely than Alexander-Murray, since Freedom Caucus hardliners are adamant about not “bailing out Obamacare” and so forth.

OK, so the ACA’s Individual Mandate is effectively dead starting in 2019. What does that mean?

Well, individual states could simply pass their own mandate penalty. Massachusetts already has one back to RomneyCare...and it’s still on the books. A few other blue states are already discussing adding one, or a similar mandate requirement.

However, assuming that doesn’t happen, here’s what the official projections are, according to the CBO:

Up to 13 million people losing (or “voluntarily dropping”) healthcare coverage; and…

An additional 10% tacked onto unsubsidized individual market insurance policy premiums.

Both of these figures are subject to a lot of debate, but I’ll just focus on the second one for the moment. Here’s some basic math for the 15-16 million people enrolled in individual market policies today:

1. In 2017, the average unsubsidized indy market premium was $470/month.

2. In 2018, the average premium increase is around 30%. Most of this is already caused by other types of Trump/GOP sabotage, but that’s a different discussion.

3. That means the avg. unsubsidized 2018 premium will likely be around $610 per month per person.

4. If the CBO’s +10% is accurate, that means 2019 premiums will cost an additional $61/month, or $732/person.

5. For a couple that’s an extra $1,460 per year. For a family of 4 it’s potentially up to $2,800, although that’s not a precise thing since premiums are quite a bit lower for children than adults.

6. This is obviously very rough, back-of-envelope math, and some may quibble with my "throwing 15 million to the floor" wording since around 9 million of the enrollees are subsidized and therefore won’t see any of that premium increase. HOWEVER, that's only true if their carriers stick around the market. All the subsidies in the world don't help if there aren't any carriers willing to participate in the market at all. That came very close to happening this year in several states/counties...and in some areas, the only carrier willing to participate has paper-thin networks like what happened with Centene in Washington State.

7. The other 6-7 million people paying full price, however, are pretty much SOL.

In other words, Jennifer Rubin nailed it:

Since the tax bill includes repeal of individ mandate shouldn't tax calculators include increase in individ premiums which in many cases will be much > any tax increase for modest income Americans?

— Jennifer Rubin (@JRubinBlogger) December 20, 2017

8. Of course, the unsubsidized rates have already become unaffordable for millions of people thanks in large part to the CSR sabotage already imposed by Trump, so when you combine that with the additional 10% hit, millions of these people will instead drop their coverage entirely...which is where some of that 13 million figure comes into play.

9. So what happens to them? Well, some will indeed save that money. They’ll either cross their fingers and go without any coverage, or will instead enroll in one of the cheap, bare-bones “Short-Term” or “Association” plans (aka #ShortAss Plans) which the GOP is so fond of and which Trump is also pushing to vastly expand.

10. Those plans are, indeed, quite affordable, with far lower premiums...because they don’t cover serious illnesses or injuries.

11. Therefore, when (not if...everyone develops a serious condition sooner or later) those folks become seriously ill or injured, they’re basically screwed.

12. ...which takes me right back to the 3-legged stool video above.