The CBO Score Of Trumpcare By The (Grim) Numbers

The CBO report on Trumpcare came out late yesterday and the numbers are even worse than most imagined. Early estimates would be that between 10 and 20 million of current holders would lose their insurance but the CBO numbers are almost double those estimates. In addition, the savings to the federal budget come to just 0.2% of GDP, not even making a dent in the federal deficit and merely shifting most of the costs of those savings and more onto the states. Here are the numbers:

• 24 million more people will be uninsured by 2026
• 21 million more uninsured by 2020
• 14 million people would lose their insurance NEXT YEAR, in 2018!
• In 2026, 52 million will be uninsured compared with 28 million under the ACA
• The 24 million newly uninsured in 2026 breaks down like this: 14 million currently on Medicaid, 3 million in the individual markets, and 7 million IN EMPLOYER BASED INSURANCE!
• Premiums will rise 15% to 20% higher than under ACA until 2020. After 2020, as more and more older and sicker individuals are forced to leave the markets, premiums will rise at a lower pace than under the ACA resulting in premiums 10% lower than current law 2026.
• In general, if you are younger and healthier your costs may drop slightly compared to the ACA; if you are older and sicker, your costs will skyrocket. A 64 year old man making $26,500 per year will see his purchase costs to buy a plan increase to $14,600, over half of his income and nearly $13,000 more than under the ACA, and that does not include any deductibles and copays.
• Deductibles and co-pays will rise as compared to the ACA
• Cost savings to the federal budget will be a paltry $337 billion over 10 years, or just $34 billion per year. As a frame of reference, the annual deficit for 2016 was $587 billion and projected GDP in 2026 will be nearly $28 trillion.
• There will be $337 billion in savings to the federal budget and it breaks down like this: $935 billion in cost savings, $880 billion of which comes from cuts in Medicaid. But almost $600 billion of that savings goes toward tax cuts primarily skewed toward the wealthy.
• The $880 billion in Medicaid savings are for the federal budget only. That difference will have to be made up by the individual states who will have to decide whether to pick up those costs or simply reduce coverage or  reduce the number of people covered.

Here is a chart from Kieran Healy that compares the net premiums for different age groups and income levels under the ACA and Trumpcare:

The chart makes clear that if you are younger and/or richer, Trumpcare will actually be better for you. If not, you will be far worse off. And it is important to remember that Trumpcare will provide policies with fewer benefits, so an older person will be paying far more for less coverage. In addition, the Wall Street Journal provides this chart which shows that rural areas will also be hit much harder by Trumpcare.

Older, rural voters will bear the brunt of this plan which is highly ironic since those areas are the hardcore base of Trump's support.

Another item hidden in the CBO report also puts lie to the Republican claim that Obamacare is imploding. According to the CBO, "In CBO and JCT’s assessment, however, the nongroup market would probably be stable in most areas under either current law or the legislation." In other words, the individual market will be stable under the ACA and also even under Trumpcare.

One caveat to that claim is that Trumpcare increases the premium ratio of older to younger enrollees from 3:1 under the ACA to 5:1. That increase to the 5:1 ratio is what partly drives the enormously higher premium costs for older people. But a former parliamentarian in the Senate says the he doubts that raising the ratio will not be considered eligible for budget reconciliation. Now, the GOP has installed its own parliamentarian so it is not inconceivable that the former parliamentarian is wrong. But, if not, having to revert back to the 3:1 ration may threaten the stability of the individual market as insurance companies will not be collecting those higher premiums from older enrollees while the government support they received from the ACA will have been repealed.

The initial reaction from Republicans is to essentially deny reality. HHS Secretary Tom Price says that the CBO report is "just not believable" and insists that Trumpcare will actually increase the number of people covered. That statement is truly not believable. In fact, Politico reported last night that the executive branch's own estimate from the Office of Management and Budget showed that 26 million would lose insurance by 2026, 2 million more than the CBO.

Mark Mulvaney, the OMB chief, quite simply admits that insurance isn't really the point of Trumpcare, saying, "Insurance is not really the end goal here". He was unintentionally being honest as the real purpose is to defund Medicaid and pass the massive savings on to the rich in the form of tax cuts.

Paul Ryan has basically taken the same stance as Mulvaney, that insurance really isn't even the purpose of the Trumpcare bill. The fact that there will be millions of people who will become uninsured and tens of thousands who will needlessly die is secondary to his overriding goal of actually defunding a federal entitlement program, in this case Medicaid, and passing these savings on to his rich overlords in the form of a massive tax cut. Tweeted Ryan, "CBO report confirms it → American Health Care Act will lower premiums & improve access to quality, affordable care." and he later said that the CBO report was "encouraging". As described above, the reason premiums actual decline compared to the ACA is because his plan essentially throws older and sicker people off insurance making the remaining pool healthier and cheaper. Ryan was more explicit and excited about defunding Medicaid when he said "This is why I'm so excited..We are defederalizing an entitlement, block granting it back to the states, and capping its growth rate. That's never been done before." He earlier virtually admitted that coverage wasn't the issue saying, "We always know, you’re never going to win a coverage beauty contest when it’s free market versus government mandates." There is a real irony in Ryan's pride in capping the growth rate in Medicaid after years of complaining that "government run health care means healthcare will be rationed". By definition, capping Medicaid's growth rate will mean rationing.

Medicaid is designed to protect the health of children, the disabled, and the elderly who can either not afford health care or are indigent and need long-term care. For Ryan and the GOP, killing tens of thousands of these less politically powerful people is the price that must be paid in order to take the money from Medicaid and pass it on to the richest 1%. And it will all go to the 1%. Individuals in the top 0.1% would receive a tax cut of $200,000 per year and those in the top 1% would "only" receive $195,000 per year.

This CBO report would be a crippling blow for any other bill in any other time. And it may yet be the death knell for Trumpcare. But the GOP is currently so ideological and so protected in its electoral position, they may simply continue to try and ram it through. The days ahead will be provide some interesting moments for some Republicans in the House and the Senate.