Thanks for Sharing, The Republican Party Offers Up a Health Reform Plan
Ezra Klein over at the Washington Post does a fine job of analyzing the political lesson in the recently proffered Republican health care reform plan–and the even more recent initial Congressional Budget Office analysis of the plan:
Late last night, the Congressional Budget Office released its initial analysis of the health-care reform plan that Republican Minority Leader John Boehner offered as a substitute to the Democratic legislation. CBO begins with the baseline estimate that 17 percent of legal, non-elderly residents won’t have health-care insurance in 2010. In 2019, after 10 years of the Republican plan, CBO estimates that …17 percent of legal, non-elderly residents won’t have health-care insurance. The Republican alternative will have helped 3 million people secure coverage, which is barely keeping up with population growth. Compare that to the Democratic bill, which covers 36 million more people and cuts the uninsured population to 4 percent.
But maybe, you say, the Republican bill does a really good job cutting costs. According to CBO, the GOP’s alternative will shave $68 billion off the deficit in the next 10 years. The Democrats, CBO says, will slice $104 billion off the deficit.
The Democratic bill, in other words, covers 12 times as many people and saves $36 billion more than the Republican plan.
Congressman Boehner had this to say: “Not only does the GOP plan lower health care costs, but it also increases access to quality care, including for those with pre-existing conditions, at a price our country can afford.”
In regard to savings, CBO notes that
some provisions of the legislation would tend to decrease the premiums paid by all insurance enrollees, while other provisions would tend to increase the premiums paid by less healthy enrollees or would tend to increase the premiums paid by enrollees in some states relative to enrollees in other states.
As to provisions of the legislation which would “tend to decrease the premiums paid by all,” CBO points out that savings may be derived from
“Changes in the extent of insurance coverage purchased”
Yes, that’s exactly what that says: the Republican plan will afford us all the opportunity of saving money on insurance (but not nearly as much as the Democrats’ plan), by granting us the right and ability to have less insurance coverage.
The second source of change in average insurance premiums is changes in the average extent of coverage purchased. Those changes can reflect both changes in the scope of insurance coverage–the benefits or services that are included–and changes in the share of costs for covered services paid by the insurer–known as the “actuarial value.” With other factors held equal, insurance policies that cover more benefits or services or have smaller copayments or deductibles have higher premiums, while policies that cover fewer benefits or services or have larger copayments or deductibles have lower premiums. Provisions in the amendment that would reduce insurance premiums by affecting the amount of coverage purchased include the State Innovations program, which would encourage states to reduce the number and extent of benefit mandates that they impose, and provisions that would allow individuals or affiliated groups to purchase insurance policies in other states that have less stringent mandates. CBO’s assessment was that the amendment would not have a substantial effect on actuarial values.
So the actuarial costs– “the share of costs for covered services paid by the insurer,” will not be substantially affected; but “the scope of insurance coverage–the benefits or services that are included” for people, will be decreased. Worse insurance, less money–thus a lower premium and Republican “savings.” Couple that with 17 percent uninsured after 10 years, increased premiums for “less healthy” enrollees, some malpractice “reform” and a few other sundry measures and we’ve got us a plan. Thanks for sharing.
If this is true, then it is going to be a disaster.
Leading Republicans actually have filed several “comprehensive” health reform bills this year, but they got very little attention, in part because their Republican sponsors didn’t seem to want to talk about them, even during the August town hall meetings. It’s interesting that this latest version shies away from the more politically challenging features of their earlier bills that made some sense, such as funding insurance subsidies for lower-income people by killing the tax exclusion for employer-paid coverage, and establishing a health insurance exchange with insurance reform rules.