The repeal and replace effort has failed for now. Republicans will move on to tax reform. It remains to be seen what they accomplish in an effort that is arguably at least as complicated as health reform. Ironically, Senator John McCain, the man whose thumbs down deep-sixed the frantic effort to find a way to get something resembling Obamacare repeal passed in the Senate, long ago offered one of the boldest proposals I have seen in my lifetime as it relates to both health reform and tax reform.
Senator McCain proposed to completely eliminate the tax exclusion for employer-provided health coverage (rather than merely capping it–a half measure designed to mitigate rather than eliminate the distortions caused by the exclusion while doing nearly nothing about its unfairness). As detailed in this Heritage report: His plan “would replace the special tax breaks for employer-based health insurance with a universal system of health care tax credits for the purchase of health insurance.
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President Donald Trump has recently twhreatened (that’s a threat communicated via Twitter) to stop payments of billions of dollars out of the federal treasury that have been going to insurance companies selling health insurance policies on the Exchanges created by the Affordable Care Act. Indeed, rumors are circulating that he may order a stop as early as tomorrow (August 1, 2017). Whether he does so this week, next week or next month, President Trump will be perfectly within his rights in stopping these illegal payments. It doesn’t matter whether these payments are “a good idea” or not or whether they actually save the federal government money.
In Part 1, we learned that real per capita health spending saw a 25-fold increase the 8 decades starting in 1929 even as real per capita GDP grew only 5-fold during the same period.
Whereas the previous post looked at cost trends in broad 20-year snapshots, today’s post looks at that extraordinary growth in health spending in much finer annual-level detail. Looking at real per growth has the advantage of removing general inflation so that we get a clearer picture of what’s going on, as well as telling us what is happening to the average U.S. resident.
With that in mind, I examined the difference in annual growth rates for real per capita health spending vs. all real non-health GDP per capita over the full period for which such data are available: 1929 to 2015. Doing the comparison in this fashion has the advantage of not letting the health sector’s ever-increasing size distort our picture of how much the rest of the economy is growing.
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With Republican repeal-and-replace efforts temporarily sidelined, now is a good time to step back and take a big picture view of exactly how we got into the mess we are now in regarding health care. What should be clear to people of all political persuasions is that Obamacare did not solve America’s health care woes.
If we take a long-term view (i.e., remembering that 90% of the nation’s population was uninsured back in 1940), the law has modestly reduced the number of uninsured. Most other promises made for the law were broken, most notably that a) if you like your plan, you can keep your plan (PolitiFact’s 2013 Lie of the Year); b) the law would lower premiums for the average family by $2,500 per year; c) the law would not add one dime to the deficit; and d) there would be no new taxes on the middle class. The jury is still out on another huge promise, but at this point I see no overwhelming evidence that the law has bent the cost curve as promised.
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Senate Republicans couldn’t agree on a way to repeal and replace Obamacare. So now they’re contemplating a totally different approach: Blow it up and let the states sort it out.
The latest attempt to resuscitate the GOP’s repeal bid would reshape the nation’s health care system by sharply curtailing the federal government’s role and placing the future of Obamacare in the hands of governors. But Republican senators will have a hard time overcoming the internal divisions that doomed their three attempts last week to unravel the Affordable Care Act.
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With the House on recess and the Senate’s leader saying it’s time to move on, a bipartisan group of more than 40 House members said Monday that Congress needs to act quickly to stabilize the individual health insurance market.
A five-point plan from the bipartisan Problem Solvers Caucus would abandon any pretense of repealing the Affordable Care Act, or Obamacare, while boosting spending, repealing one tax, and relaxing regulations.
The caucus, co-chaired by Republican Rep. Tom Reed of New York and Democratic Rep. Josh Gottheimer of New Jersey, is built around an agreement that once members reach consensus on issues, they pledge to vote as a bloc.
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A coalition of roughly 40 House Republicans and Democrats plan to unveil a slate of Obamacare fixes Monday they hope will gain traction after the Senate’s effort to repeal the law imploded.
The Problem Solvers caucus, led by Tom Reed (R-N.Y.) and Josh Gottheimer (D-N.J.), is fronting the effort to stabilize the ACA markets, according to multiple sources. But other centrist members, including Rep. Kurt Schrader (D-Ore.), and several other lawmakers from the New Democrat Coalition and the GOP’s moderate Tuesday Group are also involved.
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The Federalist: Surely there are some Democratic Senators who want to work on bipartisan fixes to Obamacare. Why are they not coming to the table?
Grace-Marie Turner: That’s actually what Senator Chuck Schumer said in an impassioned speech before Tuesday’s vote on the Senate floor: “Let us work in a bipartisan nature.” But sadly it’s disingenuous. Their bipartisanship means that the ACA stays in place and that you just add more money to it, or you create new regulations to force even more people to purchase coverage they don’t want.
The bipartisanship really is difficult because of the different ideologies we bring to the table. The words sound nice—and the Senate may wind up going there. But at that point “reform” is going to mean minor tweaks around the edges. We would end up having Obamacare forever if they move towards a ‘bipartisan’ process.
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Congress’s last-ditch attempt to pass a “skinny” bill to kill a few pieces of the health law — many of which Trump could have abolished himself with an executive order — collapsed.
In the intervening six months, Republicans were bedeviled by an enormous backlash from a public that suddenly decided it likes the health care law, cold feet over stripping health care coverage from millions of Americans, damaging intraparty squabbling and a White House that threw bombs at their efforts. Ultimately, an old truth held: Once politicians bestow social benefits, it’s almost impossible to take them away.
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President Donald Trump made one of his most explicit threats to cut off payments to insurance companies to force senators and lobbyists back to the bargaining table for a GOP health-care bill, and saying, for the first time, that he was also willing to cancel some of lawmakers’ health-care benefits.
“If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!” Mr. Trump tweeted Saturday.
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