As House Republicans passed legislation toppling large portions of the ACA, groups representing hospitals, doctors, consumers and some insurers made no secret of their displeasure. Now, in the Senate, which hopes to complete its own version of a health overhaul by August, Republicans are unambiguous about their intention to draft an entirely new bill in a more deliberate manner with input from outside groups. Sen. Orrin Hatch of Utah, the Senate Finance chairman whose committee is responsible for drafting much of the legislation, has specifically asked for suggestions from industry associations.
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The Congressional Budget Office released its latest Obamacare-related estimates
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CBO claims that the House repeal and replace bill could degrade the quality of insurance. This editorializing could use some scrutiny. Without government supervision of insurance minutiae and a mandate to buy coverage or pay a penalty, CBO asserts that “a few million” people will turn to insurance that falls short of the “widely accepted definition” of “a comprehensive major medical policy.” Under the House reform, Americans won’t have any problem insuring against a bad health event, even if CBO won’t admit it. The House bill is designed is create more alternatives that can accommodate the diverse needs and preferences of a nation of some 320 million people. CBO has become a fear factory because it prefers having government decide for everybody.
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Blue Cross and Blue Shield of Kansas City announced yesterday it has decided to exit the Obamacare exchange next year. The decision affects about 67,000 Blue KC customers in 30 counties in western Missouri as well as Wyandotte and Johnson counties in Kansas. Danette Wilson, Blue KC’s president and CEO, said that the company has lost more than $100 million total on its exchange plans since the ACA rolled out in 2014.
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The political world waited with rapt attention Wednesday for the oracles at the Congressional Budget Office to release their cost-and-coverage predictions for the revised House health reform bill. CBO confirmed that the American Health Care Act (AHCA) is a major fiscal dividend, cutting taxes by $992 billion, spending by $1.1 trillion, and the deficit by $119 billion over 10 years. However, CBO says 14 million fewer people on net would be insured in 2018 relative to the ObamaCare status quo, rising to 23 million in 2026. The problem with this educated guess about enrollment is that CBO’s models put too much confidence in the effectiveness of central planning. CBO’s projections about ObamaCare enrollment are consistently too high and discredited by reality year after year.
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A new HHS report reveals that premiums for individual market coverage have increased significantly since Obamacare’s provisions have taken effect. Comparing the average premiums between 2013, before ObamaCare went into effect, and 2017 shows average exchange premiums were 105% higher in the 39 states using Healthcare.gov than average individual market premiums in 2013. Average monthly premiums increased from $224 to $476 over the period, and 62% of those states saw the average premiums double.
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President Trump has proposed a budget that increases government spending from $4 trillion today to $5.5 trillion in 2027. Only in the alternative reality of Washington can this be described as “budget cuts.” Looking at individual programs, it is a gross mischaracterization to state that spending on Medicaid programs will be cut. The new budget proposes to increase federal Medicaid spending from $378 billion a year today to $524 billion a year in 2027. It shows how far removed Washington is from everyday Americans for this increase of $146 billion to be called a cut. The fundamental problem is that special interests are addicted to the rising path of spending. Altering this path by increasing spending at a slower rate opens change-makers to extraordinary attacks.
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The entire Republican reform effort hinges on getting the tax credits right. A poorly-designed credit will lead millions to lose their health insurance and incentivize them to remain poor. It will harm efforts to reform the Medicaid program, because the insufficient tax credits won’t form a viable alternative. On the flip side: there is great opportunity in getting health reform right. The right kind of means-tested tax credit could make individual health insurance markets work for tens of millions of Americans. That success, in turn, could improve the opportunities for long-term entitlement reform, by giving Americans a robust option to buy insurance on their own.
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Should Republicans be worried that they will lose control of the House in 2018 because they adopted legislation that repeals Obamacare? Don’t bet on it. Under the current House bill, states could let insurers take a person’s health status into account when deciding how much to charge in premiums. According to the media narrative, this would take away coverage from those with pre-existing conditions. The public furor over this allegation is predictable, but that does not make pre-existing conditions an existential threat to Republican political chances in the next election. The GOP plan protects everyone who remains continually covered by health insurance and they cannot be charged more if they have a pre-existing condition.
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