Precisely because the CBO relied on research while the liberal critics of the CBO relied on managed care folklore, the CBO’s predictions of how the managed care fads in the ACA would perform were far more accurate than those of Obama, Baucus, Nancy Pelosi, Barbara Boxer, Peter Orszag, et al. The CBO’s December 2008 report estimated ACOs would cut Medicare’s costs by a tenth of a percent (see my discussion of this report in this THCB post ). That was remarkably accurate. Today (almost a decade later) we know CMS’s Pioneer ACOs have cut Medicare’s costs by a magnificent one-tenth to seven-tenths of a percent over their first four years (that’s not counting the costs the ACOs incurred) while the much larger MSSP ACO program has raised Medicare’s costs by about two-tenths of a percent (again, not counting the costs the ACOs incurred) over the same period.
For better or for worse, it is nearly impossible for the ACA’s insurance exchanges to implode to the extent that its detractors have long predicted. To understand why, it is important to understand how the subsidies and regulations in the ACA work. The ACA employs “price-linked subsidies.” That is, the premium subsidy consumers receive is based on the actual prices for insurance on the exchanges. In addition, the ACA’s regulatory framework caps the out-of-pocket expenses faced by consumers.
All in all, there’s reason to believe that the real decrement in coverage of the AHCA relative to the ACA is closer to 5 million, not 24 million. Furthermore, that 5 million decrement can be fixed with a few technical changes to the bill. I detail all of this in a new piece over at Forbes.
The basic issue is the movement in Obamacare from hypersensitivity to the immense geographic variation in the price of healthcare and health insurance in the United States to the complete insensitivity of the current Republican plan, the American Health Care Act (AHCA). Neither extreme is a good idea. Instead, the federal government, to the extent it is subsidizing health insurance, ought to be sharing the burden created by a failure or inability to control healthcare costs and health insurance premiums with the states and those who elected its representatives.
President Trump urged lawmakers Tuesday to swiftly approve a plan to repeal and replace Obamacare so he can move on to the biggest tax cut since Ronald Reagan’s presidency.“There’s going to be no slowing down, no waiting, no more excuses by anybody,” Mr. Trump told top House Republican lawmakers at a White House meeting on the new health care legislation. “We’re going to get it done.”After Congress tackles the health care law that was introduced in the House Monday, Mr. Trump said eagerly, “we work on the tax cut.”
Party leaders in Congress and in the Trump administration held up the American Healthcare Act as the GOP’s long-awaited deliverance on its promise to repeal and replace the Affordable Care Act with “patient-centered” market reforms, hoping to pass the bill through the House and Senate within a matter of weeks. But by Tuesday evening, it wasn’t clear whether the legislation would ever make it to a floor vote, and it was far easier to find lawmakers and organizations who were against the bill than it was to find those in favor of it.Republicans in Congress were increasingly looking to President Trump to help lift their flagging legislation.
Forced to navigate House Republican politics, the lobbying pressure from the insurance industry, and the obscure rules of the budgeting process, Ryan has produced a bill that nobody would ever propose as a sane solution to the problems with Obamacare. Its only chance is speed. If Ryan can rush and muscle it through the House and Mitch McConnell can do the same in the Senate, it might end up on Trump’s desk. But the more scrutiny this House bill is subjected to, the more likely it is to share the fate of most efforts at health-care reform and die somewhere on its journey to the Senate, and perhaps long before then. If his health-care-reform effort fails, Ryan himself may not survive as the House leader. Meadows and his colleagues catapulted Ryan to the Speakership, and they still have the power to bring him down.