DiscoverVox's The WeedsSenate Republicans' health care idea: Make the poor pay more for less

Senate Republicans' health care idea: Make the poor pay more for less

Update: 2017-06-23
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The Senate health care bill is out — and Sarah, Ezra, and Matt are back in the studio to dive into the details of what it means for the marketplaces, Medicaid, and very rich people.

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hello welcome to another set of the weeds boxes I was really Internet and said we need some advice media network that Yglesias that we have Ezra and Sarah in on a special Friday morning that has that health care bill finally came out on a Thursday just in time for us what else happened on Thursday what did happen even bigger news than the health care bill health care bill this is going to discuss the healthcare bill to get sidetracked here a worldly the first episode of Fox's new foreign policy podcast for the both of you actually most important stories in the world not just like what is happening the American healthcare system but will they be in the first episode a shooting war between America and Russia and Syria I was actually listening to it on the way and it's both great and I was very afraid by the end of it may be quite uncomfortable we can find it really find a podcast worldly the SEC teach him a new reason and Jen Williams and is excellent yes this is described as a But when you're done scaring yourself about the world you might also want to scare self that some of the details of the Senate Republican health care bill done when you think about this are curious timing of his legislation that was probably what Mitch McConnell staff was was aiming for because they knew of the bill was going to be really good and so they wanted a detailed breakdown of the CBO score they wanted to make sure that people have the opportunity to learn about what it did from the week so we tried to talk about this in an organized way and not just yell so you know the bill was a few main parts is all these things do a large tax component is pretty simple but it is important very large Medicaid component that's that's very important one is start by talking about what it does with the Affordable Care Act exchanges because it keeps them in place but it also changes them alive and to give it some credit I would say that there's a vision here when things are supposed to look like but then maybe a giant missing piece that renders it all and work yes yes so I think the T L D R of the Senate private market reforms is that asks low income older people to spend more money for worse health insurance that's kind of like the real time I'm not the first person to come up with that thought Larry Levitt and Kaiser Family Foundation with reading about this yesterday with the snow should follow him he has great health care source but iie which are really seeing is a ratcheting down of benefits and a ratcheting up of what people are expected to contribute to pay for those benefits so if you are someone who's that save like fifty five on the market plays turning light forty thousand dollars a year you are going to be asked to spend more of your paycheck and health insurance and in return you'll get a plan with probably a higher deductible and work up a man just what Americans want the good as they went and you like about their plan they say goes too low was the Israelites as they walk through like some of what is actually going on there so the way the Affordable Care Act works that you two key things to now is that others how much you spend on health insurance to how much are earning and basically says we think for someone earning fifteen thousand dollars usually have to spend two percent of your income on health insurance and it doesn't matter with the base premium as we will subsidize it or you only have to spend two percent on the committee level plan you get up to forty thousand dollars dresses than nine percent of your income on health insurance again the base premium doesn't really factor in as much so what are things you see going on in this bill is they're ratcheting up the amounts they want particularly older people to pay for someone who's that in their sixties or early sixties pre Medicare and earning like forty thousand or so dollars cap for how much they're expected to pay it goes from nine percent to sixteen percent which is a pretty significant change I ran the numbers yesterday were talking about going up from like thirty five thousand dollars a year in premiums to fifty five thousand the significant very vague entries for someone earning forty thousand dollars That's one big shaft is how much you pay the other side is like what you get so and this kid likes C per one gay but like us that if I need to get out of the weeds at some point to clarify what they're buying just so there is a term called actuarial value in health insurance and this is a wonky way of measuring on average how much of it and how much of an individual's costs does the plan cover and how much does it ask people to pay out of pocket some plans with high deductibles tend to have low actuarial values because they expect that the average generally will be kicking in a bigger percent of their bells under Obamacare you know these tax credits how much you were expected to pay it was tethered to a mid level seventy percent actuarial plan the so yes when you have a seventy percent actuarial value plan what it's saying is that given my expected health care costs the plan I have is going to pay seventy percent of the cost and through premiums deductibles co pays all the other thirty percent sort of Yemen else in the land so it's nothing like you as right you'll pay thirty percent it saying like if there was a weed health insurance plan on average they think Mazda and Sarah will kick and thirty percent and the insurance company will cover some dollars out of his own people was stuck in deductible way and others will go away oh yeah so on average it's going to cut wasn't pulling think what the Senate bill dies is it lowers that was the one of the levels in Obamacare yeah so right now there are four different levels there are bronze plans which have a sixty percent actuarial value silver which is at seventy goal that eighty platinum it ninety and the tax credit there's Heather to the silver plans of members talking earlier that I am Obamacare says for someone earning fifteen thousand dollars there in seconds and within two percent of their income on health insurance that is not for you know the platinum plan that is for the silver plans as to what the law says is that if you were earning fifteen thousand dollars We expect you to kick and two percent say and you will be able to afford a plan that on average covers seventy percent of your costs the thermometer structure of the reason they do that is that when you're doing subsidies right you could be an area where like your pore and you get tax subsidy from the government but plans are super expensive as it is getting the same amount in rural Alaska you get in Southern California just doesn't do very much but yes there's a bomb to subsidies subsidies guarantee you a certain kind of plan they think is reasonable health yes and the Senate bill does the House budget and do this this is kind of a big flop house does it said you could live in Alaska I lived where hundreds expensive you live an area where it's cheap you get the same amount of money so then it moves away from that news income based tax credits that kind of kept your contributions percent of income but one that doesn't ratchet down to actually get so instead of saying you kick and two percent of income will give you seventy percent plan is as you can to present a very Tom will give you a fifty eight percent plan to lower than the lowest in Obama Chloe as a sixties lows in Obamacare goes down to fifty eight Urban Institute has run some numbers on what age sixty percent plans is slightly more generous they estimate in order to like hit that of your insurance company the deductibles around like sixty five hundred for the individuals thirteen thousand for a family unit pre significant cost sharing so these are plans that would near certainly have higher deductibles think the thing all Obamacare enrollees I talk to complain about is the deductibles this would make that a lot worse so insanely high D i just wanna say this for a second like these are pretty poor person here and you're saying we're going give you a subsidy you who make whatever let's say forty thousand dollars Here are some incredibly poor but you know like your family making forty thousand dollars here I'm sorry your plan with thirteen or fourteen or fifteen thousand dollar deductible go for the find was a game this was a numbers guy is actually helpful so if you are someone like say companies making forty thousand dollars is like sixty two or something like that so they're already expected to stand to the numbers yesterday there in his inbox I think it's about five thousand dollars of their income on premiums on top of that you're going to layers it's an individual a sixty five hundred dollar deductible so you are someone who is sick they're essentially asking you to pay like more than a quarter of your income on health care expertise in every Texan gums are really talking about your actual disposable income it's very hard to see how one afford the plan is very easy to see how people say like that what I like spend fifty five thousand dollars a year of her plan that's going to ask me to spend sixty five thousand more dollars I actually need health care services show the Senate bill has a reason you have to come into the market even so red I mean they call it something maybe that is keeping the high deductible plans right I mean look it's easy to sort of say OK that deductibles so high it's unreasonable but we keep some people get very ill in life I mean you can be horrifying acts and you can have terrible cancer cases are very very sick I mean even a plan with this kind of high deductible would be really worth signing up for Sita make it work but also healthier people have to be in that in the market price was they look I mean just a lot for you I mean it's one of the wonders you guys are setting up so yeahh oh you guys are getting at is certainly there'd be a way to get the whole the people to buy this plan that you know cause a lot of money and isn't very conference of coverage in the answers knows her is not so this is like one of me was baffling things to me as I was reading through the Senate bill yesterday is that as I'm sure many listeners know for the characters this individual mandate penalty if you don't purchase health insurance can help people in the pool everyone hates the individual except for architects of health care law's you talk about three legged stools and how important it is of some kind of forcing mechanism to get people into the market and there's nothing in this bell to compel someone to buy stuff inserts Republicans did want to repeal the individual mandate as expected was in the bell that used to their place that was something else the kind of most popular thing that's been floating around so far those in the House bill was this continuous coverage requirement where if you had a lapse of coverage for three more months then you would have to pay higher premiums when you return to the individual market just something about that there's a lot of speculation the continuous coverage provision would not survive the Senate reconciliation process is that why it's not there so let's wait will get to that there's a number of theories that I've been discussing with some folks I think are all interesting theories of why it is not there because it's this huge gaping hole the continuous coverage isn't there there's like a lot of chatter about automatic enrollment in automatically enrolling people into high deductible plans get those held the lead healthy lives into the marketplace but there's nothing there is nothing to get people to purchase health insurance and this is like talking to a former Republican Senate staffers who used to work for the Senate Finance Committee during the four will captivate he was and this is a recipe for a death spiral this is someone who does not like Obamacare this is someone who like thinks Obamacare should be repealed and replaced the looks that this is lack of a continuous coverage or individual mandate or anything to incentive eyes healthy people in the marketplace he says when you go the market like that people just decide not to buy coverage until they actually need it and you make it so easy for people to stay out of the market which is just crazy you hear a lot of Republicans talking about Obamacare collapsing like this is a recipe for an insurance market collapse before I heard some I mean is it possible that this is just going to get fixed in the A I mean this this some amendments and things like that or the joy or also that look if they get this bill for Democrats ran way for whatever and an inhaler come back and say I like OK we need a bipartisan vote to repair these things and Democrats have like really quadrupled down on the view that like sabotaging an existing health care system just because you think that if it collapses you can replace it with something better is like the most immoral thing that anybody has ever done so in the end they'll be able to throw a few more things in here that Ted Cruz Mike Lee would vote for the pending that because I want to I think there's a lot of gaming out the politics of this but I want to say a couple more things about just what the vision for the Obamacare exchanges is here so as Sarah said at the root of a lot of what is in this bill of different policies are interlocking happening at different levels of health care system is a vision that poor people should pay more for health insurance like that it is a consistent vision throughout the bell and Sarah mentioned one of the ones I think is really important which is the re benchmarking of the subsidies to fifty percent plan to an extremely extremely high deductible plan right after I was on Face the Nation of Mitch McConnell couple months ago and he said the problems with Obamacare we left twenty five million people uninsured deductibles or two I copious are too high and that people are ending up in bad insurance was too expensive for them to use and I thought that's a good art that is correct Mr. Connelly you can argue with any of that and say Here's a bill that makes literally every one of these problems worse but so does a couple other things that work in the same direction is fun to make sure we hit before we move on so one thing is it changes as Sarah said not just the expected value of the plan subsidies by you but also accounts is an affordable plan so the percentage of your income that you can spend before you had an affordability trigger has gone up it allows states to waive or out of the essential benefits regulations are currently if you are offering a plan that is qualified under under the Affordable Care Act it has to cover things like hospitalization like pregnancy like mental health now they let states waive those regulations out which is also backed away of not covering people pre existing conditions because if you are an insurer in a state where you've been waived out of these regulations you can say Yeah I these plans anybody can buy it will give it for the same priced anybody who signs up it's doesn't cover anything related to cancer and then people who have a particular concern are in cancer care by the plan they bring down the subsidies he's currently you can get up to four hundred percent of the poverty line now is three hundred and fifty percent and the tilt them a little bit more towards the young the old cities right now or income related they sort of ad in an age to mention and felt a little bit more towards young so both dimensions that it makes it harder for older middle income people buy health insurance a lot happening here but everything in the bit like everything in the bill is a vision of your pore you should pay more for insurance that covers fewer things as higher deductibles I want to emphasize that because there's been a lot of back and forth what is a Republican health care mission and actually I thought it was this sort of what the Republican health one vision was before all this but it wasn't a circular place it was like something sort of universal but with really shady insurance it's been years complaining about deductibles in Obamacare years complaining about co pays and like now we see the reveal right which is they think higher deductibles are good they think spare or plans that maybe don't cover anything you need are fine and like they're going to build a system which is going to shovel money directly to insurers for plans of people very well may not find they're able to use it they cannot afford you don't cover what they need when they do need to use if Republicans had been willing to put this vision on the table in two thousand and nine right if like this exact law was like that Snowe Grassley plan it seems like you could have like a constructive discussion around it it's weird it was this like political game and double speak well like they didn't want to say this is what they wanted to do and now here we are and what they want to do yet I use so I want to circle back to kind of like time is like lack of continuous coverage like what this marketplace actually look like unlike some of the theories they think it actually fits in to thinking through what Republicans are trying to do here are and see what these markets that look like some of you there is like floating about this particular bank I think our publishing throw one isn't he just couldn't get into the Senate parliamentarians like they had to leave it out there like at the palms of the bailout I don't really buy that wet like I think they've been working on as another which is interesting and plausible to me is that they want the insurance industry to say nice things about the bell and they are using the left of this as an incentive to get a have to say something like mildly positive about this bill you need because the leverage point to leverage point to see which is a weird and crazy and the third which is interesting too that could push people towards those waivers you are talking about where if you don't have a continuous coverage requirements your market is going to spiral way to keep the sick people out is just a wave out a lot of benefits and you really then see this like returned to something very very similar to the pre AC a marketplace where only the healthy people can get coverage and the sick people are essentially shut out of coverage but the idea is that you are saying you can't say no to people there's not a sin something sitting around saying you can weave out of the requirement to provide health insurance that is not trail but you can backdoor into it right like you can like only you can let insurance plans not cover expensive health insurance benefits the ends so you could really see that as I gave the lack of that provision maybe it is intentional because you want to push the market towards less comprehensive plans thank you cousin Christy add some kind of continuous coverage requirement I mean is that something that would be within the state's like regular folk like the way question and I want to say yes states of a lot of sway over how to regulate their individual market say things like If you want and they say or any state on the west coast in the queue wanted to try make this work you might like layer on some e mail a plus up the subsidies to get to the K C A levels you my attic and you could you get a state level mandate if you want to probably like you could try and preserve the part of life and I wave the benefits yes add some kind of band aids to live ur state tax dollars even probably I like that fifty eight actuarial value standard to seventy if you if you want to but you're going to find state money it but all of us think you're going to finance this additional part of the expansion was out on that so one thing they do in the bill and this is could end up being extremely important is Obamacare has a section called thirteen thirty two waivers and it's a way that states can if they're willing to submit a plan that continues to meet Obamacare standards on how many people are covered how good the coverage they get is and how much it costs you can then re make of system no but those waivers a really tough to get for a variety of reasons I think this was a mistake the Obama administration made but whatever they were there the Republican plan opens up the thirteen thirty two system but what it does is that in addition making the wave is incredibly easy to get my picture they have to be certified by HHS anymore okay can I just talk about these like some of the waiver process but the really important thing we did hear was that they do not this is so crazy so even though what the bill does it brings down the standards of care they need to be offered standards of insurance coverage you need to be offered to get a waiver you don't need to meet that you no longer need to have as many people covered as the Senate bill would have nor do you have to have them covered as good insurance is a Senate bill offers even though that insurance is already quite bad the only thing you need to do is not increase the deficit over the new wave out of the essential health benefits through the process I mean you can with some other things too you can waive out of the hidden cost sharing reduction subsidies there's a whole list in the Affordable Care Act the stuff you can get out of and one of the kind of interesting changes they make and is really hard to spot because you've like I had my copy of the Affordable Care Act out to like figure out how this all relates because of changing like one word here and there are the watching Sara Firth on one of these days is like an amazing vase that copies of the bells of the new bell that its leaders but one things they say is that the wrestling which is the Secretary may approve a waiver if it meets all his requirements as I was outlining this enables as a secretary shall approve the waiver unless it increases the deficit so unless the left that is going up like the secretary's directed to like Say Yes to these waivers the waiver submitted by Governor they don't to be approved by state legislature like one person would submit his waiver unlike change the entire insurance market that it's just really a tool to do so much in these markets and you could use it very I think would actually use quite widespread because it'd be hard to run a functional insurance market with this like combination of guaranteed issue quest to get people in the market the deficit constraint is big right because if you don't have a waiver you can have no market so when you have no market you're not actually doing any subsidies so if you tried to use the waivers to make the market work you can increase the deficit to get more that's a good question and his people and by the insta keep in mind make if the if is does go into effect that these waivers can start coming and twenty eighteen and it's really up like the trumpeter just as I does this increase the deficit or not so I think like a lot of it falls like the regulatory powers that the federal government and who controls at Yes but we should talk about men we should talk about Medicaid the same as them to fire it up that Medicaid is alleged that the Inlet from the beginning discussion of the Affordable Care Act has been dominated by discussion of the ICA exchange right the Obama people for whatever reason they were really proud of this little baby that they that they birthed and then it kind of everybody was really unhappy with it the website didn't work the deductibles were really high it turned out that this like Wilkes think everyone in high deductible plans that will restrain costs did not really win them the like applause that they wanted but they also had in law really big expansion of Medicaid that's done like most of the coverage increase it has impacted a huge number of very vulnerable people and quickly it hasn't been afflicted by any of the like or Obamacare problem might like since the initial data to hit go on the website they've been my problems Clinton quote and that none of those in Medicaid problems is totally fine like when Donald Trump says Obamacare is dead if you wanted just like agree with him that all his factual claims every marketplace every county they're all going to evaporate making his far right so nothing that any Republican has said about Obamacare over the past years has any applicability at all to make you agree with them about all of their claims that everything and there's no reason to change Medicaid so they do in the bell is no one thing their Medicaid is also much more popular than the Affordable Care Act itself a card is a fifty five percent which is very popular for the Affordable Care Act Medicaid that seventy four yes you actually talk to people who use the programs we did a poll a survey monkey and you find people who are on Medicaid they like their coverage much more than people on the market places and it makes I think there's a view going into the open Medicaid patients can't get into doctors you know they don't like their coverage it turns out it's much more popular people are OK with slightly less doctor choice when they donât like a giant deductible as part of that and so people on Medicaid like Medicaid the public as a whole supports Medicaid problems with affordable care to imitation impact Medicaid the president of United States repeatedly in the Republican Party primary promise not to cut Medicaid so they go with a bill that far away as largest fiscal impact is cutting Medicaid cuts Medicaid not just to where it was before the Affordable Care Act but much much much lower than it ever was before then and it is by far the biggest rollback of the welfare state in American history I mean the amount of dollars involved in this dwarfs the ninety six welfare reform and that ninety six welfare reform bill whatever you think about it at the FTC was very unpopular it had become a real political albatross so the reason that there was a bipartisan push to cut that program is that the program was unpopular Medicaid very popular polls well again Bill Clinton promised to reform welfare which is one reason I did promise not to do this how do the Medicaid cuts work because they're somewhat complicated well there's a very complicated song and dance around the expansion benefits I'm gonna have to let Sarah explained because I don't understand it but there's a one time cut to every bout where a chunk of the population into a few different categories like Medicaid kids get Medicaid old people you make a disabled I think pregnant women as the eye and so then for each category you then say instead of if you're eligible we will pay your costs according to the program rules they say you know a person of this tie is worth X dollars and a kid is worth that small amount disabled person a higher amount of a per capita cap on spending that's how the House bill also worked in the per capita cap has to grow over time because of inflation and life and staff the House bill tried to peg this to the consumer price indexes medical care some component which I think there's some technical problems with that idea but the idea I think that you can if you want to explain English language rhymes with trying to do with their trying to say is that per person Medicaid spending should not grow faster than overall healthcare spending that was that the House bill and I think is important as to whether he would really work what they're doing in this Senate bill is saying that per person Medicaid spending has to grow much slower than the growth of overall medical care costs so everybody getting a certain year right gets a weird bait and switch thing where they use the house growth rate for the firsts for some years he comes in I think twenty twenty four twenty three it's far enough out that it like it when twenty five long raises the prime Gnostic caters question of Iwo maybe this will never happen but take them and they were ready so it's going to happen you're going to start seeing that every year the amount of money available to cover given sick person grows by a lesser amount than the cost of getting medical care for a person the exact consequences of that for state governments are little hard to game out is possible that more liberal states will kick in the extra money themselves and will cover what it costs to take care of sick people it's possible that other states will have to resort to some kind of gaming of the system to work it out which likely is it just the trade offs within the kinds of groups right so some elderly people who need long term care are sixty six and some elderly people who need long term care are hundred and four the age difference between a sixty six around one hundred four year old is actually quite large anyone who can I can't do math but it's a large number of years to simply say that they're all senior citizens is a little facile again the same amount of money for all of them you going to have to try to do something to avoid covering the high cost people disability rate is a broad categorization of people the actual health care needs that they have are very very different he'll be squeezing each group each and every year giving an inadequate amount of money to cover everybody's medical costs so you're going to have to either dump the people with the least objective me you because you're trying to be humanitarian or find a way to dump the people with the highest need because it's the only way to make the math work but if you took it seriously and I think we should because ten F which was that the replacement for the old welfare was set up in in a similar kind of way worried growth was not added with no inflation adjustment at all I think if you would cast a sort of serious quite well for farmers the time they would said well you know I mean like Congress is going we visit their site you know look at whatever hours I thought no I didn't like once Congress had decided that just like not taking care of what low income single mothers needed in terms of cash assistance was ok they just weren't taking care of right and if we go down this road if you can just say we're not going to cover the kind of people in Medicaid in an adequate way and you get away with it politically like I don't see why it won't just run on autopilot and twenty twenty five sets of that's a ways off but like the matte said
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Senate Republicans' health care idea: Make the poor pay more for less