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Monday, March 06, 2017

Obamacare repeal rocks

The House Republican plan to repeal Obamacare goes beyond that and will truly reform and reduce America's health care prices.

The dirty little secret no one in politics or the press will mention is that Medicaid -- the free health care for the poor -- is the biggest driver of inflation in medical prices, and is slowly driving state budgets into the ground.

In repealing Obamacare, Republicans will fix that.

First the facts.

1. Medicaid is a federal subsidy of state Medicaid plans mandated by Congress. The feds pay between 50% and 75% of a state's spending on Medicaid, depending on how wealthy the state is.

2. Medicaid now accounts for 15% of the state budgets of the various states.

3. That's more than the states spend on higher education (13%) and second only to school spending (24%) on things states spend money on.

4. While Congress mandates the minimum states can provide, the real problem is the maximums.

Here is why that is a problem.

Lobbying by the $3 trillion-a-year medical industry makes it nearly impossible for state legislators to say no to an extra service Congress offers help in funding.

Often the argument is for every dollar the state spends, it gets a dollar from the federal government.

All that money out there chasing a finite supply of medical services jacks up medical prices, even when Medicaid "negotiates" a lower price.

The percentage of state funds that go to Medicaid rose from 6% in 1988 to 15% in 2014. That is unsustainable.

How do we solve this? In repealing the Patient Protection and Affordable Care Act of 2010, Republicans in the House want to reform Medicaid.

From the Associated Press:
The plan would repeal the statute's unpopular fines on people who don't carry health insurance. It would replace income-based premium subsidies in the law with age-based ones that may not provide as much assistance to people with low incomes. The payments would phase out for higher-earning people.
The proposal would continue the expansion of Medicaid to additional low-earning Americans until 2020. After that, states adding Medicaid recipients would no longer receive the additional federal funds Obama's law has provided.
More significantly, Republicans would overhaul the federal-state Medicaid program, changing its open-ended federal financing to a limit based on enrollment and costs in each state.
And from Fox News:
“We begin by repealing the awful taxes, the mandate penalties and the subsidies in ObamaCare,” House Ways and Means Committee Chairman Kevin Brady, R-Texas, told Fox News’ “Special Report with Bret Baier” in an exclusive interview. 
Asked about some conservatives’ concerns that GOP leaders are merely pushing ‘ObamaCare Lite,’ Brady countered, “It is ObamaCare gone.” 
House Energy and Commerce Committee Chairman Greg Walden, R-Ore., told Fox News they also “are not pulling the rug out from under people.” Rather, he said Republicans want to restore power to the states and control costs in Medicaid and elsewhere. 
“It’ll amount to the biggest entitlement reform, probably in at least the last 20 years,” he said. 
Zero Hedge summed up the plan:
A breakdown of core aspects removed from the existing law (courtesy of Axios):
  1. All Obamacare taxes
  2. All Obamacare subsidies, including its premium tax credit
  3. Individual, employer mandate penalties
  4. "Cadillac tax"
  5. No longer will limit the tax break for employer-sponsored health coverage
  6. No payments to insurers for cost-sharing reductions
  7. Selling insurance across state lines (can't be done in the "reconciliation" bill)
  8. Medical malpractice reform (can't be done in the "reconciliation" bill)
What is being added:
  1. Pre-existing condition coverage
  2. Continuous coverage — 30 percent penalty if people don't keep themselves insured
  3. Special fund to help states set up "high-risk" pools, fix their insurance markets, or help low-income patients
  4. Enrollment in expanded Medicaid will be frozen
  5. Current enrollees can stay until 2020, and keep getting extra federal funds, until they leave the program on their own
  6. Medicaid will change to "per capita caps" (funding limits for each person) in fiscal year 2020
  7. A new, refundable tax credit will be available in 2020 to help people buy health insurance
  8. Covers five age groups — starts at $2,000 for people in their 20s, increases to $4,000 for people in their 60s
  9. It's not means tested, but phased out for upper-income people (starting at $75,000 for individuals, $150,000 for families)
  10. Insurers can charge older customers five times as much as young adults
People are overlooking the importance of that Medicaid cap. Medicaid is a half-trillion-dollar-a-year program.

That's where the big money is.

Medicaid is the sacred cow that President Trump must turn into hamburger by ending the "open-ended federal financing" of Medicaid.

You think the medical industry will let that happen without a fight?

Their crony Social Justice Warriors will turn this into a battle royale.

President Trump and House Speaker Paul Ryan have a battle cry that will trump them on that:
Repeal Obamacare.
Kind of ironic that the Democratic Party's attempt to expand government control of the medical industry may actually lead to a reform that makes health care insurance affordable again.

This bill is 66 pages. Obamacare topped 2,700. Unlike Obamacare, legislators do not have to pas it to see what's in the bill. It is online.

Don't let the purists and Politically Correct Conservatives in Washington and Manhattan lead you astray.

Repealing coverage of pre-existing conditions and the like are not worth bothering with. They are popular, so keep them because they do not drive up medical prices.

Medicaid does. You want lower medical prices? Reduce Medicaid spending.

This is the best chance to rein it in -- ever.

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  1. This and reducing the fraud in Medicare and Medicaid will be a giant help. Commercials for free scooters, knee braces, etc = fraud. Hope
    to see something on interstate competition too.

  2. Replies
    1. Same here. Not too thrilled with McConnell in the Senate, either.

    2. Ryan and McConnell are not conservatives, they are Republicans. Which means they are Democrat lite. They are doing the biding of the elites just like the Dems. The elites protect their favorite pet politicians while we pay the consequences.

      Obamacare will not go away unless it causes harm to the elite class or if Trump vetoes it until we are happy; we the people are who he is connected with.

  3. Let us put Obamacare down, and out of our misery.

  4. This summary actually sounds very good. Except that the states will want the Feds to give them block grants for Medicaid. Maybe that's a good idea, maybe not. We'll see. Try it and see if it works.

    Hawaii is thinking about using Medicaid funding to provide HOUSING for the homeless. The proponents of this measure claim it will reduce the costs of medical care for the homeless. Forgetting for a second the drug addicts who live on the street, the awful conditions under which the homeless live is a major reason they end up having persistent health problems. Give them housing and their health will improve, and they will stop running to the hospital ER twice a week. I say let states experiment. Things can't be worse than the mess we have now, can they?

    1. This is just my observation and not statistically proven. I volunteered for years with the homeless. Befriended and tried to help many. I was always amazed that they were not sick much. I think not being around others where germs are spread was a reason. Every week, my friends were there waiting.

      I think visits to the ER were to get prescription drugs.

    2. Well if Hawaii wants to be flooded with homeless people, that is Hawaii's problem. I favor one-way tickets for any meth head in West Virginia. The weather is better, and Hawaii will give you free housing.

    3. Mainland states already dump their homeless people on Hawaii by giving them FREE air tickets. West Virginia would join a long list of states that do it. Federal courts have ruled no state can limit the right of someone to travel, even if they are homeless and intend to go on welfare.

  5. They need to repeal it and add nothing. Let the states deal with it.

  6. I note that there is no mention of medical malpractice tort reform in the draft bill and no mention that healthcare insurance can be sold across state lines. At least one was called out explicitly by Trump in his speech to the joint session of Congress. Without removing the incentive to practice "defensive medicine" that drive endless batteries of tests (failure to look is malpractice, failure to find is not) to ward off lawsuits, prices won't drop much. [Teapartydoc can sort me out if this is off-base] Also, gutting a source of revenue for liberal trial lawyers is a tactic that is fun and temprarilly sates my ever-growing desire for revenge on the liberal elites.

    Selling insurance across state lines is even better because it drives real innovation in the insurance markets. Let people in God-forsaken places like CA, MA, IL and NY vote with their wallets and make an end run around the costs associated with in-state plans that have expensive extras like gender assignment surgery and the like mandated by virtue-signalling state assemblies.

    1. I agree those are two huge items missing. Trump Tweeted to not worry, those are still coming. I sure as hell hope so.

  7. Trump's on the Ponzi Pharma graft this morning--He definitely will "negotiate" this. That and "cost shifting" is an issue that is causing the log ramp in medical costs.

    The entire package is so complicated to me that it makes my eyes blury, but here's some of the apparent (loudest) opposition points that it represents "Obamacare Lite":

    RYANCARE: 5 Serious Problems With The Republican Replacement For Obamacare

    I personally have to agree with a couple of them: medicare expansion, and tax credits essentially similar to EIC. I have no problems with an insurance charging a penalty for those that drop and enroll as their medical status changes--that's what the younger people are doing now. Social security even has a penalty if you want bypass the rules for open enrollment. I also have a bit of a problem with pre-existing conditions. As an example, think of the number of people who have knee problems that won't get them repaired. At 15K per hole on the meniscus repairs (usually 3 required for each knee) that sucks for payouts.

    I'm with Don, however, just repeal that damn ACA monster and get Rand Paul and the House conservative caucus in a room together and work out the 5 issues. If you think about it a total of 5 talking points on replacements is something normal people could work out in a weekend with some beer and hot dogs.

  8. It's a mess and it will stay a mess.
    Abolish medical licensing.

  9. thank you for this informative information Mr. Surber

  10. One disagreement, Don. Pre-existing conditions most certainly do drive up INSURANCE costs. No, not medical costs, but if you could force auto insurance companies to insure your car after it is wrecked, they pass that cost on not only to you but to your entire rate base.

  11. Medical malpractice reform is an issue in a few states where it is abused (most states are very pro doctor). But even if you get rid of medical malpractice torts entirely, you will not significantly lower the cost of health care. You will also find if you doctor screws up you will be SOL.

    We can't have this Obamacare replacement be a prepaid health plan. It needs to be insurance, as in, you pay up to a high deductible and then catastrophic coverage kicks in. You give a window for people to shift over (with pre-existing conditions) and that is it.