2018 MIDTERM ELECTION

Time: D H M S

The GOP pushed the ACA into the water, wants credit for pulling it out.

OK, this metaphor will take a bit, but bear with me.

On March 16, 1981, CBS aired the 17th episode of Season 9 of M*A*S*H. For those of you too young to remember, M*A*S*H, set at a U.S. Army medical camp in Korea during the Korean War, was one of the most successful TV shows in history, running 11 seasons. I believe the series finale remains the most highly-viewed broadcasts in history. While M*A*S*H started out primarily as a sitcom, it evolved over the years into more of a drama with comedic moments.

Anyway, in S9 Ep17, "Bless You, Hawkeye", the main character, Dr. Benjamin Franklin "Hawkeye" Pierce (played by Alan Alda) finds himself stricken with a sudden, unexplained and violent allergic reaction to something. He spends much of the episode trying standard medical solutions, but his fits of sneezing and coughing become so bad that eventually a recurring character, psychiatrist Dr. Sydney Freedman, is brought in to see if there might be a psychological cause.

Freedman asks Hawkeye about his childhood, and Hawkeye, among other things, mentions his cousin Billy.

Unfortunately, I can't find a clip of the episode online, and the transcript doesn't do the scene justice, but the gist of it is that one time, when they were kids, Hawkeye and Billy went fishing in a boat at a local pond. Hawkeye fell in the water, nearly drowned but was then rescued by his cousin Billy.

Freedman pushes Hawkeye hard on the details of this story, and eventually Hawkeye has a revelation, as a long-suppressed memory boils up to the surface:

Sydney: But how did you get into the water?

Hawkeye: L-I stood up. And he was kidding around. He pushed me! [Sobbing] Why did he do that? I loved him! I loved him! L I hated him! Why did he push me? [Breathing Heavily] I got I got back in the boat.

He said to me "You're so clumsy. If it wasn't for me, you'd be dead." And I thanked him. He pushed me in the water and I hated him so much for that. And all I could do was thank him.

Sydney: Why couldn't you say you hated him?

Hawkeye: I couldn't. I couldn't even think it. I loved him.

Sydney: So you altered the event. He didn't push you in. He only pulled you out. And with that little piece of reality safely tucked away so was your conflict.

Hawkeye: - Until the day before yesterday.

It turns out that Hawkeye's allergic reaction is psychosomatic, triggered by the arrival of a wounded soldier two days earlier who had fallen into a ditch of moldy water.

Obviously the Democrats don't love the GOP, so why am I telling you about this scene?

Because, the Republican Party is on the verge of pulling off the most jaw-droppingly cynical, disingenuous con I've seen in some time.

I've written more times than I can count about the deliberate sabotage of the ACA that the GOP has inflicted over the years...and two of the most damaging maneuvers have been the Risk Corridor Massacre (from a couple of years ago) and the currently ongoing Cost Sharing Reduction debacle. The Risk Corridor Massacre, engineered (and later bragged about) by Marco Rubio, helped wipe out over a dozen ACA-created Co-Ops, which in turn kicked 800,000 people off their policies, put several hundred people out of work, causing a ripple effect in those states which in turn led to less competition and higher rate hikes...all to "save" the federal government several billion dollars...which may have to be paid out anyway, given several ongoing federal lawsuits.

The Cost Sharing Reduction brouhaha, meanwhile, is currently causing insurance carriers nationwide to either jack their rates up by an extra 20 points or so next year or to simply drop out of the individual market (either on exchange, off exchange or both) altogether. This crisis was caused by the House GOP filing a lawsuit challenging CSR payments (which are legally required to be paid to insurance carriers to reimburse them for covering large chunks of deductibles for around 7 million people) by claiming that they weren't formally appropriated in the ACA itself. They could have resolved this issue in 5 minutes by simply passing a 1-page standalone amendment appropriating the funds...or in no time at all by not filing the lawsuit. But they saw an opportunity to throw a huge monkey wrench in the works, jumped all over it, and today the situation is what it is.

So, first the GOP rails against "bailouts" of the insurance industry...even though:

  • b) The CSR program is not in any way a bailout regardless, since it's simply reimbursing insurance carriers for funds they had already paid out to healthcare providers as part of their contractual agreements.

Then, when their sabotage efforts...again, all supposedly in the name of "saving taxpayer dollars" from "bailing out" the evil insurance companies...prove to be devastating to the individual market as they intended, what do they do?

They pull a complete flip flop and do this:

Health insurance companies lost money selling policies in the individual market again last year, as premiums from healthy people weren’t enough to cover the costs of the sick. The red ink is a big reason why companies such as Aetna Inc. and UnitedHealth Group Inc. left the Affordable Care Act marketplaces in several states this year.

Now, the bill that Senate Republicans hope will repeal Obamacare includes a pile of money to help struggling insurers in those marketplaces, where about 12.2 million Americans got coverage this year. Specifically, it includes $50 billion over the next four years “to fund arrangements with health insurance issuers to address coverage and access disruption and respond to urgent health care needs,” according to the bill text.

That’s more than enough to cover the industry’s Obamacare losses, new data released Friday by consulting firm McKinsey & Co. indicates. Health plans lost between $5.5 billion and $7.5 billion on the individual market in 2016, according to McKinsey’s analysis of regulatory filings.

The Senate bill would allocate more than twice that figure—$15 billion each year in 2018 and 2019—to stem insurers’ losses and potentially moderate future rate hikes. Premiums increased more than 20 percent for 2017, suggesting that insurers’ results should improve further this year, said Jim Oatman, who co-authored the McKinsey report.

The irony of this big payday is that Republicans fought provisions in the original Obamacare law intended to stabilize the individual insurance market. Back in 2013, Florida Senator Marco Rubio warned that the law would “bail out insurance companies at the expense of taxpayers.” Rubio later bragged that “we led the effort and wiped out the bailout fund.”

As a result, insurers didn’t get some of the money they were counting on. Several of them sued the federal government, claiming they weren’t paid the stabilization money as required by law. For example, insurer Molina Healthcare Inc. is seeking $52 million in stabilization payments it says the government owes for 2015 losses, the company said in its most recent quarterly filing. Across the industry, the total sum exceeds $8 billion, a Modern Healthcare analysis found in December.

Health insurers live and die by political whim as well as market forces. Republicans, having stymied the law’s original policy meant to cushion health plan losses, are now ready to come through with billions of dollars to put them on a solid footing.

Yes, that's right: The Republican Party pushed Obamacare into the water, nearly drowning it, and is now "pulling it out of the water" by throwing several times more money at the industry than was even owed in the first place.

But wait, there's more: Technically speaking, this particular $50 billion isn't officially allocated towards making the $8 billion in legally-owed Risk Corridor payments; those are still tied up in federal court via class action lawsuits. Since there's really no question about whether the payments are owed (they are), the odds are very high that eventually the government will have to pay that money out (even if much of it ends up going to the creditors for the now long-defunct Co-Ops). That means $58 billion in "bailouts", according to the official GOP Playbook.

That leaves the CSR reimbursements--which, again, various Republicans (including Trump) keep falsely referring to as an "industry bailout". Guess what shows up on the very last page of the GOP Senate's new #BCRAP bill?

SEC. 207. FUNDING FOR COST-SHARING PAYMENTS.

There is appropriated to the Secretary of Health and Human Services, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary for payments for cost-sharing reductions authorized by the Patient Protection and Affordable Care Act (including adjustments to any prior obligations for such payments) for the period beginning on the date of enactment of this Act and ending on December 31, 2019. Notwithstanding any 10 other provision of this Act, payments and other actions for adjustments to any obligations incurred for plan years 2018 and 2019 may be made through December 31, 2020.

Yep, that's it. That's the entire amendment. 100 words (in fact, the last 36 words wouldn't even be necessary if the first 64 words were a standalone bill, since all they do is set the 2-year cut-off date).

Even if you argue that they were justified in filing the lawsuit in the first place (as part of protecting Congress's power of the purse, etc etc), the fact remains that the GOP could have passed this 100-word bill with unanimous consent at any time over the past 4 years and resolved this issue for the American people, which is supposed to be their job, after all. And again, even if they planned on killing off the CSR funding, they could at least have made sure it was covered through the end of 2019.

Instead, they tacked these 100 words onto the repeal bill itself...except that the CSR cut-off doesn't actually happen until well after the midterm elections. Of course, the very last lines of the BCRAP bill are to do just that:

SEC. 208. REPEAL OF COST-SHARING SUBSIDY PROGRAM.

(a) IN GENERAL.—Section 1402 of the Patient Protection and Affordable Care Act is repealed. 16 (b) EFFECTIVE DATE.—The repeal made by subsection (a) shall apply to cost-sharing reductions (and payments to issuers for such reductions) for plan years beginning after December 31, 2019.

CSR payments amount to roughly $7 billion this year, and presumably will grow a bit over the next 2 years. The June payment has already been made for 2017, so you're really talking about perhaps $20 billion more which will likely be owed to the carriers between now and the end of 2019.

That means that, in total, the Republican Party is now committing to around $78 billion in "insurance industry bailouts" (to use their own phrasing)...the very same "bailouts" which they've railed against for years in order to cram their monstrosity of a bill through the Senate.

Oh, and in case you're wondering why the insurance industry as a whole has been fairly neutral about the GOP's repeal/replace garbage bills, with only a handful doing more than grumbling quietly in the background?

This bill is bad for insurers. Congress and the Administration have threatened that if they oppose the bill they won't get paid $7bb/yr owed

— Gary Cohen (@garcohsf) June 23, 2017

Who is Gary Cohen, and how is he in a position to know this for certain?

Gary Cohen has joined Blue Shield of California as vice president of Public Affairs. He will be responsible for leading the Government Affairs team and advancing the nonprofit health plan’s strategic long-term public policy initiatives, including efforts to reduce the uninsured rate, stabilize the individual market and increase price transparency.

Cohen brings more than 30 years of legal, business and regulatory experience to Blue Shield. He was most recently vice president of enterprise regulatory strategy and policy at Kaiser Permanente.

Even if Mr. Cohen's credentials on this subject were in question, there's precedent for exactly what he claims. Remember this from last month?

At one recent meeting, Seema Verma, whom Trump picked to oversee the federal Medicare and Medicaid programs, stunned insurance industry officials by suggesting a bargain: The administration would fund the CSRs if insurers supported the House Republican bill to repeal the Affordable Care Act.

It looks as if this attempt at extortion half worked: Insurance carriers haven't been supportive of either the AHCA or BCRAP, but they haven't openly opposed it either. The Trump Administration and Congressional Republicans are essentially holding CSR reimbursements hostage to push their bill through.

But here's where it gets really evil: Due to the timing of both the "bailouts" and the other provisions of BCRAP, the GOP will try to claim victory REGARDLESS of whether BCRAP becomes law or not.

How? Well, let's suppose the bill passes:

  • CSR payments are guaranteed for 2 years, meaning the ~33% premium rate hikes which are currently looming over 2018 get knocked down to perhaps 10-15%
  • Some of the carriers which had previously announced that they're leaving the exchanges change their minds and re-enter the market.
  • Rate hikes for 2019 are presumably similarly less dramatic than they otherwise would be (although with the retroactive repeal of the individual mandate to the beginning of last year included, it's possible that the adverse selection impact will cancel out some of that $50 billion)
  • However, the worst provisions of BCRAP don't actually go into effect until a few years later.

This means that the GOP will get to claim that they "successfully rescued Obamacare" for the next two years and, at the same time, that "the Democrats scared everyone over nothing" when the most horrific consequences of BCRAP don't immediately come to pass before November 2018. All the screaming and hollaring and tearful pleas going on right now will be mocked since "see, they raised a fuss over nothing, what a bunch of crybabies" etc etc.

Ah, but what if the bill doesn't pass and Trump/GOP continue to sabotage the law at every turn without actually doing anything useful. What happens then?

Well, Trump/GOP are hoping that the following scenario plays out:

  • CSR payments aren't made (or at least aren't guaranteed) and the individual mandate isn't enforced (or at least is left very iffy), meaning massive (33%+ or higher?) average rate hikes, while more carriers likely bail out of the exchanges entirely, decimating the landscape next year and into 2019.

This allows them to claim "I told you so!" next year.

EITHER WAY, the GOP is hoping to be able to attack the ACA, even though by that point they'll have been in complete charge of everything for nearly two years, and even though their blatant sabotage efforts are utterly transparant.

Will they get away with it?

For the country's sake, we better hope not.