ACA Under Biden

[onejayhawk]

ACA, "Obamacare", is still the law of the land, with only a couple of revisions. The individual mandate was repealed by law and prohibitions on on competing plans were lowered. The other 99% is intact. Barring a court challenge, which we will assume fails, the Biden administration must try to make this monstrosity function.

What will the administration do?
How will they do it?
New law is going to be problematic. How does this affect the first two answers?

Time is already short. 2022 midterms could be ugly for Democrats.

 

[GenMarshall]

I hope the individual mandate doesn’t get reintroduced. I don’t want to be fined for not having health insurance due to circumstances because employers cannot offer a company provided insurance plans to part-time workers.

 

[Ziggy Stardust]

Oh, this is easy. They're just going to use Trump's healthcare plan which is the best healthcare plan ever, and it's completely finished, it must be somewhere in the White House. He's had it for 4 years, so I'm sure some sort of record exists.

Funny to start about this 1 day after Biden became president elect, but not any time during the last 4 years. So very odd.

So are you making the case that democrats will hold their elected officials accountable while Trumpists just vote Trump, even if he doesn't deliver on his promises and no matter how incompetent he had been? That's a good point actually, well made.

 

[onejayhawk]

Oh, this is easy. They're just going to use Trump's healthcare plan which is the best healthcare plan ever, and it's completely finished, it must be somewhere in the White House. He's had it for 4 years, so I'm sure some sort of record exists.

Funny to start about this 1 day after Biden became president elect, but not any time during the last 4 years. So very odd.

To the contrary, I often said ACA was a trainwreck, going back a decade.

So are you making the case that democrats will hold their elected officials accountable while Trumpists just vote Trump, even if he doesn't deliver on his promises and no matter how incompetent he had been?

Considering Democrats have never even noticed that Biden is incompetent, that's rather silly. It's also silly to say Trump did not deliver on his promises, but that's a different thread

That's a good point actually, well made.

Why am I not encouraged?

Throughout, you evade the question. Biden's administration has to get ACA to function. The question is how?

J

 

[Oerdin]

ACA, "Obamacare", is still the law of the land, with only a couple of revisions. The individual mandate was repealed by law and prohibitions on on competing plans were lowered. The other 99% is intact. Barring a court challenge, which we will assume fails, the Biden administration must try to make this monstrosity function.

What will the administration do?
How will they do it?
New law is going to be problematic. How does this affect the first two answers?

Time is already short. 2022 midterms could be ugly for Democrats.

As a practical matter he is probably going to try to up the subsidies via administrative action in order to try to make end user costs appear lower. Of course, the total cost is still increasing each year at double digits so there is a limit to how much money he can subsidize plans without congressional approval. That might be hard to get if Republicans retain the Senate.

 

[RobAnybody]

The mandate wasn't repealed & Trump didn't get rid of it. That's just one of his many lies. The tax penalty was reduced to $0 as part of the Republican's tax cut bill. But it's still in place.

SCOTUS ruled the mandate Constitutional in the past based on it simply being a tax penalty. If you can have tax credits (e.g. kids) then logically you can also have penalties. However, they have also ruled in other cases that a $0 tax is not actually a tax. So there is, legally speaking, no longer a tax penalty for not following the mandate, & so the mandate is now in all likelihood Unconstitutional (the government can't just order people to buy things).

So on 11/10 (I think?), SCOTUS is revisiting Obamacare as a whole. The legal interpretation is that if one tiny part of a bill is Unconstitutional you can "sever" that part & just keep everything else. That's how it's always worked in the past. However Trump & the Republicans are hoping by packing SCOTUS the new justices will just randomly declare the whole of Obamacare Unconstitutional, depriving tens of millions of Americans of health care in the middle of a global pandemic,

 

[El_Machinae]

In the prediction thread, I said that the House would be won by Big Pharma. And I didn't see enough from Health Secretary Azar to indicate that their power has been sufficiently damaged when Trump had sufficient power to do so*. This means that the States are still engaging in a cost-plus payment system for their health insurance. Theoretically, that makes it easy to bribe politicians to 'improve' the ACA by increasing spending on it. Lobbyists only need a certain number of (R) votes - but McConnell will hold the line. And lobbyists could get enough (D) votes to get a veto-proof Republican version through as well ... but they won't. I've not seen (R) proposals to step-wise fix the ACA, merely damage it in a stepwise way. Theoretically there's a 'better version' in a duo-tang somewhere that can be instituted after the ACA is dead ... but I don't believe it.

My portfolio is bullish on Big Pharma - which means I'm betting against the American citizen. That said, Trump's bull-market didn't flow into Big Pharma as much as elsewhere, so Azar must've done something.

*Medicare D has proven for over a decade now that Big Pharma is more powerful than politics.

 

[Oerdin]

We need to get rid of the whole cost plus system in general if we want to contain costs. Companies have every incentive to drive up costs in a cost plus system because the higher the costs the higher their profits. We need a system which rewards cost reductions and doesn’t reward cost increases.

 

[RobAnybody]

As a practical matter he is probably going to try to up the subsidies via administrative action in order to try to make end user costs appear lower. Of course, the total cost is still increasing each year at double digits so there is a limit to how much money he can subsidize plans without congressional approval. That might be hard to get if Republicans retain the Senate.

This is actually a common misconception as well (bolding mine). Blue Cross NC has lowered its ACA rates, before subsidies of any kind are applied, for 3 straight years. I don't know why this doesn't get more publicity. Just kidding. I totally know why this doesn't get more publicity. But maybe it'll start to.

EDIT:

We need to get rid of the whole cost plus system in general if we want to contain costs. Companies have every incentive to drive up costs in a cost plus system because the higher the costs the higher their profits. We need a system which rewards cost reductions and doesn’t reward cost increases.

This one is completely false. The more the insurance company can lower your costs, the more profit they make. The payment to the hospital/doctor/drug company for a patient's treatment is a pass-through. Meaning if they charge you $100 & the hospital charges them $95 they only make $5. But if they can drive down your costs (by forcing the hospital to accept lower rates via leverage) to $90, they make $10 in profit.

Or maybe they start charging you $96 instead of $100. They'd still make more profit than before but now they can undercut their competitors who are charging $100 & gain more customers, & even more levrage over hospitals/doctors/drug companies to try to lower your costs even further..

 

[Birdjaguar]

ACA, "Obamacare", is still the law of the land, with only a couple of revisions. The individual mandate was repealed by law and prohibitions on on competing plans were lowered. The other 99% is intact. Barring a court challenge, which we will assume fails, the Biden administration must try to make this monstrosity function.

What will the administration do?
How will they do it?
New law is going to be problematic. How does this affect the first two answers?

Time is already short. 2022 midterms could be ugly for Democrats.

Mitch McConnell will do everything in his power to make sure no legislation gets passed. It worked for 6 years under Obama.

The mandate wasn't repealed & Trump didn't get rid of it. That's just one of his many lies. The tax penalty was reduced to $0 as part of the Republican's tax cut bill. But it's still in place.

SCOTUS ruled the mandate Constitutional in the past based on it simply being a tax penalty. If you can have tax credits (e.g. kids) then logically you can also have penalties. However, they have also ruled in other cases that a $0 tax is not actually a tax. So there is, legally speaking, no longer a tax penalty for not following the mandate, & so the mandate is now in all likelihood Unconstitutional (the government can't just order people to buy things).

So on 11/10 (I think?), SCOTUS is revisiting Obamacare as a whole. The legal interpretation is that if one tiny part of a bill is Unconstitutional you can "sever" that part & just keep everything else. That's how it's always worked in the past. However Trump & the Republicans are hoping by packing SCOTUS the new justices will just randomly declare the whole of Obamacare Unconstitutional, depriving tens of millions of Americans of health care in the middle of a global pandemic,

A current tax rate of 0% doesn't remove the likelihood of that 0% changing in the future. Therefore it is still taxable. In addition, in the past if a part of law is found unconstitutional, but the remainder of the law doesn't depend upon that part to function, the court has often left the law in place.

I suspect/hope they will leave the law mostly intact.

 

[El_Machinae]

EDIT:This one is completely false. The more the insurance company can lower your costs, the more profit they make. The payment to the hospital/doctor/drug company for a patient's treatment is a pass-through. Meaning if they charge you $100 & the hospital charges them $95 they only make $5. But if they can drive down your costs (by forcing the hospital to accept lower rates via leverage) to $90, they make $10 in profit.

Hmmmn, you seem to be describing "market forces". In the US, it doesn't really work like that, because of oligopoly power and subsidies. Insurance companies are 'allowed' to make a legislated profit over top of costs. And then they charge that amount for premiums that people are forced to pay. Because the profit is a legislated percentage, the goal is to have a cost that's always rising. This is why insurance companies find that their costs rise at the rate the legislation also allows.

The American healthcare system is a mess of incentives. and market failures.

 

[RobAnybody]

A current tax rate of 0% doesn't remove the likelihood of that 0% changing in the future. Therefore it is still taxable.

You'd think so, because logically that makes sense. But Justice Roberts has defined a "tax" as a means to raise money. A $0 "tax" doesn't meet that criteria & therefore can no longer be legally referred to as a tax. No tax, no mandate, simple as that.
The below article is from 2018, hence the time mentioned:
In his words, the "essential feature of a tax" is that it raises money. Seven months from now, Obamacare won't. Live by $1 in revenue, die by $0 in revenue.

Hmmmn, you seem to be describing "market forces". In the US, it doesn't really work like that, because of oligopoly power and subsidies. Insurance companies are 'allowed' to make a legislated profit over top of costs. And then they charge that amount for premiums that people are forced to pay. Because the profit is a legislated percentage, the goal is to have a cost that's always rising. This is why insurance companies find that their costs rise at the rate the legislation also allows.

The American healthcare system is a mess of incentives. and market failures.

I'm going to assume you're referring to the ACA, because if not, insurance companies are "allowed" to make whatever profit they can achieve. The ACA says 80% of the premium an insurance company collects has to be used to pay medical costs. It says nothing about profit. Of that remaining 20%, if the company can keep overhead to to 12%, they can make 8% profit. If overhead is 18%, they can only make 2% profit. If overhead is >20%, they lose money.

 

[Birdjaguar]

You'd think so, because logically that makes sense. But Justice Roberts has defined a "tax" as a means to raise money. A $0 "tax" doesn't meet that criteria & therefore can no longer be legally referred to as a tax. No tax, no mandate, simple as that.
The below article is from 2018, hence the time mentioned:
In his words, the "essential feature of a tax" is that it raises money. Seven months from now, Obamacare won't. Live by $1 in revenue, die by $0 in revenue.

But SCOTUS will rule in the spring and we'll see. I think it is unlikely that they will want to destroy the healthcare of millions of people when they don't have to. They can leave the law in place and just remove the tax. They might be that stupid, but I think not.

 

[RobAnybody]

The case I'm talking about is happening this Tuesday.

 

[Birdjaguar]

The case I'm talking about is happening this Tuesday.

Verbal arguments next week, The ruling will be months after.

 

[El_Machinae]

The ACA says 80% of the premium an insurance company collects has to be used to pay medical costs.

This is cost-plus

You make more money by having costs rise.

 

[RobAnybody]

If that was the extent of the ACA, yes. But we were only talking about regulations of profits. The ACA also limits what can be charged & the rate increases that can be granted each year. Meaning not only can they not charge you more than $100, they also have to spend at least $80 on medical costs. I was clarifying that the 2nd part says nothing about how that remaining $20 has to be allocated - if you could run the company for $1 you could keep $19 in profit. You still can't charge more than $100. And $105 next year, And $110 the year after. Etc. (trend is not that simple but you get the idea)

As you can see from the Blue Cross NC ACA rates I linked above, they do not have an incentive to drive up costs & have instead been lowering ACA rates for three straight years, so even though they almost certainly *could* get approved for a rate increase (& therefore more profit if your theory was correct), they are filing rate decreases.

 

[Birdjaguar]

The key aspect of the ACA is that pre-existing conditions are covered.

 

[El_Machinae]

We are agreeing, we're using different words.
""This is why insurance companies find that their costs rise at the rate the legislation also allows."

is the same as your

"The ACA also limits what can be charged & the rate increases that can be granted each year."

Because that rate-increase is something that lobbyists can haggle with bureaucrats (spending other people's money), it's a mess

The bit you got bothered by was me saying that profit was legislated, but you correctly identified it as a maximum that could go into 'other' expenses, not as profit specifically but including profit.

 

[RobAnybody]

That's fair. It did bother me because I don't agree when people say insurance companies have incentives to raise rates. Their incentives are to lower costs because 1) they can only charge so much, 2) 80% of that has to go towards medical care (this is also an ACA provision that would go away), & not be overlooked 3) to undercut the competition & get more customers.