Tuesday, March 7, 2017

CATO: Trumpcare is Worse Than Obamacare

Michael F. Cannon, the Cato Institute’s director of health policy studies, is out with an analysis blasting the Republican House bill just released that is designed to "repeal and replace" Obamacare.

He writes (My highlights):
Everyone needs to take a step back. This bill is a train wreck waiting to happen.
The House leadership bill isn’t even a repeal bill. Not by a long shot. It would repeal far less of ObamaCare than the bill Republicans sent to President Obama one year ago. The ObamaCare regulations it retains are already causing insurance markets to collapse. It would allow that collapse to continue, and even accelerate the collapse...
The House leadership’s bill would not even start to repeal ObamaCare’s Medicaid expansion until 2020, more than two and a half years from now, and even then would repeal it only one enrollee at a time. In 2020, states could no longer enroll new able-bodied adults into the Medicaid expansion. Yet the federal government would continue to pay for each and every continuously covered able-bodied adult who enrolled in the expansion before then. And it would do so at the enhanced ObamaCare matching rate, in perpetuity, until an enrollee leaves the program. If the House leadership has its way, we may be decades away from full repeal of the Medicaid expansion...
For the two-plus years between enactment and 2020, the House leadership bill would continue to allow states both to opt into the expansion and to go on an enrollment binge, for which the federal government could be paying for decades. It is likely that the number of states participating, and the number of people enrolled in the Medicaid expansion will be higher after “repeal” than before. 
Which means the Medicaid expansion may never disappear at all. By 2020, the constituency for preserving the Medicaid expansion would be much larger than it is now. More states, more voters, and more special interests will resist repealing the expansion than do today...
The first thing the House leadership’s bill does is expand ObamaCare by appropriating funds for the law’s so-called “cost-sharing” subsidies, something no previous Congress has ever done..
[T]he House leadership’s decision to leave ObamaCare’s community-rating price controls in place while relaxing its “essential health benefits” requirements would cause coverage for sick to deteriorate even faster than ObamaCare does...
To the extent the bill’s modified tax credits are tax reduction, however, they are the functional equivalent of ObamaCare’s individual mandate. The flip side of tax credits that are available solely to those who purchase health insurance is that those who do not purchase insurance must pay more to the IRS than those who do. Just like a mandate. And since the effective penalty is just an increase in the taxpayer’s income-tax liability, tax credits for health insurance are actually more coercive than ObamaCare’s individual mandate, because the IRS has many more tools it can use to collect the penalty...
The House Republican leadership bill does not replace ObamaCare. It merely applies a new coat of paint to a building that Republicans themselves have already condemned. Since the most important asset health reformers have is unified Republican opposition to ObamaCare, at least in theory, it would set the cause of affordable health care back a decade or more if Republicans end up coalescing around this bill and putting a Republican imprimatur on ObamaCare’s core features. If this is the choice, it would be better if Congress simply did nothing.


  1. The bill ends the mandate, creates a new tax credit, doubles the amount you can save in a HSA, and repeals the ACA taxes on health insurance, drugs and medical devices. Definitely in the direction of liberty.

  2. This is Ryan's bill. Why call it TrumpCare? I don't see Trump going to bat for this.

    1. Doesn't matter. It's something bad, therefore Trump.

    2. Isn't Trump the one who blamed every bureaucratic decision under Obama on him personally? By that same logic, any federal building that needed some paint while Obama was president was Obama's fault for not painting it well enough. Besides that, Trump has been on twitter defending this, and he'll sign whatever they send him, and he really doesn't understand how this bill hurts people or why it should be repealed in full immediately.

      Welcome to the weakest "repeal" of the welfare state ever.

  3. Socialist Medicine re-branded as Patriotic Medicine!