Apparently we now have an official excuse for why the Republican health care bill is so bad: It's just Phase 1. Phases 2 and 3 will be coming later and will include all sorts of wonderful things like selling across state lines and so forth.

In related news, Donald Trump has some land in Florida for your purchasing consideration.

You know, if there was a flaw with Obamacare that everyone agreed about, it was this: the insurance pool included too few young, healthy people to balance out everyone else. The problem is that lots of young people who are short of money figured they didn't really need insurance, so they just skipped it.

Obamacare attempted to fix this by (a) providing subsidies so insurance would cost less, and (b) assessing a penalty if you didn't buy insurance. Unfortunately, it wasn't enough. The subsidies were too small and the penalty was too light. Lots of young people still didn't want insurance, and either paid the penalty or else did nothing and hoped they'd get away with it.

The answer to this is obvious: increase the subsidies and the penalty until you get to the point where young people decide they might as well just get insurance. So what does the Republican health care bill do? It reduces both the subsidies and the penalty. As a result, the insurance pool will be even more unbalanced, and even more likely to fall into a death spiral.

This is all very obvious stuff. It's not an accident. It's just another piece of evidence that Republicans don't really want their plan to succeed.

In my post this morning about the Republican health care bill, I was going to make a snarky comment about its weakness being driven partly by the Republican desire to avoid anything like the "2,700 page" ACA, which they've been griping about for years. But I desisted. There's no need to get sarcastic when there are plenty of substantive criticisms to make. But then we get this:

These guys never give up. But just for the record, it takes a lot of pages to set up a healthcare system. It takes one sentence to repeal it. That's why the Republican bill is so short.

And as long as we're on the subject, Ezra Klein says this today:

The GOP health bill doesn’t know what problem it’s trying to solve

Ezra makes a bunch of good points, and his piece is worth reading. But I disagree with him. There's no way to say this without sounding hopelessly partisan, so I'll just say it: Republicans knew exactly what problem they were trying to solve. Their preference has always been to repeal Obamacare and do nothing in its place, but they don't have the votes to overcome a Democratic filibuster, so they can't do that. They also realize that the optics of baldly ripping away health coverage from 20 million people would be mildly troublesome.

So their goal was simple: do what they could to destroy Obamacare and take away as much health coverage as they could, without making it look like they weren't offering a replacement. The result is a plan that offers the trappings of health care—subsidies, pre-existing conditions, etc.—but which is all but useless to the people who actually need it. It's too stingy for poor people, and mostly unnecessary for middle-class folks who already get health insurance from their employers. It will cost very little because virtually nobody will use it.

The part they apparently didn't realize is that keeping the pre-existing conditions clause—which is both popular and impossible to repeal—while tearing down the rest of Obamacare is likely to destroy the individual insurance market. At least, I assume they didn't realize that, since this would be bad news even by Republican standards. I don't know what, if anything, they plan to do about that. Maybe nothing. Maybe they're just counting on their repeal bill failing in the Senate, so nothing bad will happen and they can get back to complaining about Obamacare.

The American Council on Science and Health has teamed up with Real Clear Science to rate science journalism. What scientific technique did they use to do this?

Our assessments were based off more than fifteen years of shared experience aggregating quality science content. We tried our best to disegard our own ideological biases to evaluate the sources based on our chosen criteria (more on that below), presenting evidence to back our claims. We placed all the selected sites onto a grid and moved them around over the course of a week's worth of discussions. After eight iterations, here are the results.

....Notable bottom feeders in science include The Huffington Post, Mother Jones, INFO WARS, and Food Babe. Read these sites only if you want to reinforce your comfortable cocoon of pseudoscientific hokum.

Goodness. They don't seem to think very highly of Mother Jones. Let's take a look at the infographic:

Jeez, we're not even as good as Fox News, which rates better than the New York Times on the quality of its reporting. Does this seem a wee bit unlikely to you? Well, the Real Clear empire is a conservative outfit, while ACSH was initially a Scaife-funded group which then branched out to oil companies and other industry groups. Under the circumstances, I suppose it's only natural that they'd think fairly well of Fox and fairly poorly of us. After all, ACSH has a long history of skepticism toward government regulation of food and chemicals, while we have a long history of skepticism toward the food and chemical industries that have worked tirelessly over the decades to manufacture doubt about any attempt to cut into their bottom lines. I guess we're natural enemies.

But I wonder what they think about lead and crime?

I was reading through the Republican health care bill last night, and it struck me that a lot of longtime Republican hobbyhorses are missing. This is a tentative guess on my part, since big chunks of the bill look like this:

You can hide a lot in legalese like that, which is why it pays to have experts pore through the text of a bill looking for Easter eggs. That said, I'm pretty sure the bill doesn't include any of the following:

  • No tort reform. That's not a surprise, I guess, since it's a big subject and Republicans could barely even agree on the basics.
  • No insurance sales across state lines. This has been a huge talking point among both Republicans and President Trump since forever. It's almost literally their panacea for the entire health care market. But it's not in the bill.
  • No change to the essential benefits required of all health care plans. This has also been a huge GOP talking point. They insist that Obamacare forces people to buy more insurance than they need, and insurance companies need to be set free to offer whatever they want.
  • Obamacare is chockablock with regulations of all kinds, including incentives to reduce costs and rules about how doctors are paid. These appear to be intact under the Republican bill.

Why is this? If you look carefully, you'll see what these things all have in common: they don't directly affect the federal budget, which means they can't be passed via reconciliation. They have to be passed in a separate bill under regular order, which means Democrats can filibuster them. Republicans don't have 60 votes in the Senate to overcome a filibuster, so they can't do any of this stuff.

Republicans can starve the subsidies to make Obamacare virtually useless for the poor, but they can't repeal the entire law. The result of such a partial repeal is likely to be such obvious chaos that they'll be lucky to get their bill passed in the House, let alone the Senate. There are bound to be at least three senators who just aren't willing to clap loudly and pretend that everything is OK. It's very hard to see a path to passage for this bill.

UPDATE: I originally said that Timothy Jost claimed the GOP health care bill eliminates Obamacare's medical loss ratio. That was a misreading on my part. He was talking about the actuarial value of the various metal levels. Apologies. I've removed this from the text.

WikiLeaks is at it again:

WikiLeaks on Tuesday released thousands of documents that it said described sophisticated software tools used by the Central Intelligence Agency to break into smartphones, computers and even Internet-connected televisions....The initial release, which WikiLeaks said was only the first part of the document collection, included 7,818 web pages with 943 attachments, the group said. The entire archive of C.I.A. material consists of several hundred million lines of computer code, it said.

Hmmm. I'm beginning to think the only computer in Washington that hasn't been hacked is Hillary Clinton's private server. So where did this stuff come from?

WikiLeaks indicated that it obtained the files from a current or former CIA contractor, saying that “the archive appears to have been circulated among former U.S. government hackers and contractors in an unauthorized manner, one of whom has provided WikiLeaks with portions of the archive.”

I gather that the tools in this archive are mostly bits of malware that can be inserted into smartphones and other devices. Once there, they can intercept communications before they're encrypted, and then relay the plaintext data back to the spies who put it there.

The stuff appears to be fairly recent, but I wonder how valuable it really is? Technology changes so fast that the life of a malware bug is probably measured in months these days. You find something you can insert into a Samsung TV in 2014, and by 2016 new models are out with different features and new code. Ditto for everything else. I'd certainly be interested in hearing more about this from folks with a working knowledge of how these kinds of hacks operate.

Sad news today: the United States has dropped to 7th in the US News rankings of the best countries in the world. Naturally, I blame Obama. Donald Trump has his work cut out for him, but taking away health insurance from millions should surely help get us back to the top.

How bad is the Republican health care bill? Nancy LeTourneau points me to Christopher Jacobs, who shares some scuttlebutt about the CBO score of a previous draft of the bill:

Based on my conversations with multiple sources close to the effort, the Congressional Budget Office (CBO) had indicated to congressional staff that the prior House framework could see at least 10 million, and potentially up to 20 million, individuals losing employer-sponsored health insurance.

Huh? Both Obamacare and the Republican bill are all about the individual market. Why would the Republican bill lead to massive declines in employer insurance?

According to CBO, the combination of a cap on the [tax] exclusion for employer-provided health insurance, coupled with an age-rated tax credit for insurance, created a dynamic where expanding health insurance coverage was all but impossible. An age-rated credit provides much greater incentive for firms to drop coverage, because all workers, not just low-income ones, can qualify for the credit.

As it happens, the cap on the tax exclusion was ditched in the version of the bill released today, but the age-based subsidies were retained. I'm going to try to recreate what this means. Here we go.

Suppose a health policy would cost you $10,000. Acme Corp. doesn't want the hassle of running a health care plan, so instead of buying a group plan they just give you $10,000 and tell you to go out and buy your own policy. The problem is that this $10,000 is taxable, so on net a middle-class taxpayer might take home only $7,000 or so. Then he'd have to shell out another $3,000 of his own money.

That's a bum deal, obviously. It's better for Acme to use that $10,000 to buy you insurance. It's the same deal for them, but since health care is nontaxable, it doesn't cost you anything. That's how things work today.

Obamacare doesn't change this much since middle-class taxpayers make too much money to get any subsidies. But now let's run this scenario under the Republican plan.

Unlike Obamacare, the GOP plan doesn't care how much money you make. A middle-aged, middle-class worker is eligible for a $3,000 tax credit no matter what. So now Acme can give you $10,000, you take home $7,000, and then receive a $3,000 tax credit. That's enough for you to buy a policy without shelling out any of your own money. Under those circumstances, Acme might well decide to get out of the health care business and just give people extra money they can use to buy their own coverage.

Obviously the Republican plan would affect different people differently, and not everyone would make out so well. On average, though, the Republican plan would make it more likely that an employer could just get out of the group health business altogether and not face a riot from their employees.

At the same time, poor people who don't have employer health care in the first place would be screwed. A $3,000 tax credit wouldn't come close to paying for an individual policy. They'd be thousands of dollars short and would simply go without, as they did before Obamacare.

The net result is that (a) lots of people would get dropped from employer health care, and (b) anybody who's less than middle class wouldn't be able to afford insurance using the tiny Republican tax credit, so they'd drop out of the insurance market altogether. After running the numbers, the CBO apparently figured that virtually no one who makes less than an average income would be able to afford insurance, while those above an average income would mostly be people who were just getting moved from employer coverage to individual coverage. The net result is that the Republican plan wouldn't do any more good than no plan at all.

On the bright side, all of this means that the Republican plan wouldn't cost much. Poor people wouldn't use the tax credits at all, so they wouldn't cost anything. Middle class folks who lost their employer plan would use the tax credits, but that would be made up for by taxes on the money their employer gives them to buy an individual policy. All that's left is the high-risk pool and Medicaid—and Republicans plan to gradually cut back on Medicaid.

So I might have been wrong this afternoon. The Republican plan might cost little more than $10-15 billion per year, and on net it might cover no one at all. We'll find out when the CBO announces its score.

A reader emails to tell me something about the new Republican health care bill. Out of its 66 pages, a full tenth of them are devoted to...

...a new rule allowing states to deny Medicaid coverage to lottery winners.

Seriously. That's a tenth of the bill. This is part of the insane conservative preoccupation with making sure that no undeserving person ever gets away with anything. That's why they'll spend six solid pages on something that will probably affect about 0.01 percent of all Medicaid recipients. It's too bad they don't pay equal attention to all the deserving people their bill will hurt.

Republicans have finally released their shiny new health care plan. It's pretty much the same as the discussion draft that leaked a couple of weeks ago, and includes the following basic features:

  • Subsidies (in the form of advanceable tax credits) are age-based, starting at $2,000 for young people and going up to $4,000 for older folks.
  • The subsidies begin to phase out above incomes of $75,000 ($150,000 for households). This will affect about 10 percent of the population and probably reduces the cost of the bill by about 5 percent at most (since most people at that income level already have insurance through their employer).
  • Obamacare's Medicaid expansion is frozen in 2020 and then gradually phased out.
  • The bill allocates about $10 billion per year for high-risk pools run by states. This is far too little to work effectively.
  • The tax meant to pay for everything was removed.
  • Insurers are required to cover everyone who applies, even if they have pre-existing conditions. However, if you have a coverage gap longer than two months, insurers can impose a premium surcharge of 30 percent for one year. This "continuous coverage" provision is designed to motivate people to buy insurance, since the bill repeals the individual mandate. However, this is very weak motivation and won't persuade very many young, healthy people to get covered.
  • The funding formula for Medicaid is changed to a "per-capita allotment," which is a fancy way of saying it gets cut.
  • All the Obamacare taxes on the rich are repealed.

Oh, and the bill includes a one-year ban on funding for Planned Parenthood. Conservatives love this, but it's also likely to generate some sure no votes in the Senate. Remember that Republicans can only afford two defections in the Senate. Any more than that and their bill fails.

Needless to say, there's not yet an analysis from the Congressional Budget Office about how much the GOP plan will cost or how many people it will cover. It's safe to say that on the cost side, it will be a lot cheaper than Obamacare. In fact, since the tax credits are so stingy, it's likely that very few people in the bottom third of the income spectrum will use them. They leave insurance too expensive for most poor people to afford.

Because of this, my horseback guess is that the Republican plan will be used by about 3 million people, compared to 10 million for Obamacare. The Medicaid expansion will be unchanged for a while, continuing to cover about 10 million people. Total cost for subsidies + high-risk pools + Medicaid expansion will run about $25 billion per year, compared to $100 billion for Obamacare.

Three million is far too small a pool for any kind of successful program, and the pre-existing conditions clause ensures that the pool will be not just small, but very, very heavily weighted toward the very sick. It's a disaster for insurance companies, who will almost surely refuse to participate.

That's my guess, anyway. It's a bloodbath. More detailed analysis from think tankers will be available soon, and the CBO will weigh in eventually too. It's not going to be pretty.

The New York Times reports that the Koch brothers are about to unleash the hounds. They. Have. Had. Enough:

Saying their patience is at an end, conservative activist groups backed by the billionaire Koch brothers and other powerful interests on the right are mobilizing to pressure Republicans to fulfill their promise to swiftly repeal the Affordable Care Act.

....The sudden caution of the Republican Party leadership, as it grapples with the enormously complicated challenge of replacing the Affordable Care Act, has baffled conservatives who have been fighting the health law for years. In the House, Republicans have voted dozens of times to dismantle the law, and it has been a primary issue in congressional races since 2010. Repealing the law, many conservative lawmakers believe, is the one clear mandate they have from voters.

....The repeal effort by the conservative groups is intended to sway members of Congress who may be hesitating because of public pressure back home. That pressure, conservatives said, is no reason to renege.

Talk about clueless. Sure, constituent pressure is having an effect, but it's nowhere near the biggest issue here. The biggest issue is that after voting to dismantle Obamacare dozens of times when they knew it was just a symbolic protest vote, Republicans suddenly have to think about what will happen if they dismantle it in real life. Answer: they now have to admit that they can't dismantle the whole thing. They never fessed up to that before, so it's no wonder the base is confused, but the House and Senate leadership have always known it. They can only dismantle the parts related to the budget because Democrats can filibuster the rest. And if Republicans dismantle only half the law, it will probably destroy the individual insurance market.

Oops. That would be bad, even by Republican standards. Plus there's the fact that millions of people would lose coverage, which is bad by centrist voter standards, even if Republicans don't really care about it. In other words, the GOP leadership is finally having to face up to the fact that repealing and replacing Obamacare is a tough nut to crack. Centrists will abandon them if they cause chaos, but hardliners will abandon them if they spend too much money. That's why they've agreed to modify their current plan to exclude subsidies for the well-off:

The concession on tax credits is a middle ground between what conservatives were demanding and what leadership wanted. Freedom Caucus Chairman Mark Meadows (R-N.C.) and RSC Chairman Mark Walker (R-N.C.) in recent weeks came out against the GOP plan to replace Obamacare tax subsides with advanceable health care tax credits.

They preferred a tax deduction that would not allow those who don’t pay taxes to receive a check in the mail, calling such “advanceable” credits a “new entitlement.” At the crux of their concerns is the price tag, which they worry would increase the deficit.

A tax deduction, of course, would be useless to the poor and working poor, the very people who need help the most. But the Freedom Caucus doesn't care about that. Luckily for them, their leadership understands just what a political disaster that would be.

In any case, the Freedom Caucus is right about one thing: advanceable tax credits are a new entitlement. Or, more accurately, a continuation of an old entitlement. There's really not much difference between Obamacare's subsidies, which are paid directly to insurance companies, and Ryancare's tax credits, which are paid to the taxpayer, who then pays the insurance company.

As for the deficit, well, Ryan's plan will only increase the deficit if Republicans also repeal all of Obamacare's taxes and then decline to pass any new ones. Which they will. So that's a legitimate complaint too.

As usual, it all comes down to money. That's really the only thing that matters.