Thread by @mfcannon

A few issues with the @EnergyCommerce "Build Back Better Act" provisions relating to states that rejected #ObamaCare's #MedicaidExpansion.

Based on a summary by @CenterOnBudget's @JudyCBPP: cbpp.org/research/healt….

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1. Rewards Republican states for rejecting #ObamaCare.

It would authorize Exchange subsidies for people below the poverty line--but only in states that rejected the #ACA's #Medicaid expansion.

That gives GOP states a better deal than Democratic states that embraced #ObamaCare.

2. Costs more than expanding Medicaid.

Taxpayers in Democratic states would end up paying more to cover those 2 million people because:

- "private" #ObamaCare plans spend more per person than Medicaid

- governments in non-expansion states wouldn't have to contribute anything

3. Effectively creates a "public option."

Unlike other workers, the target population could get "free" Exchange plans even if their employer offers "affordable" coverage. That turns "private" #ObamaCare plans into a public option -- with a very uneven playing field.

Again, Democrats are planning to create this public option only in Republican states.

4. Adverse selection.

Congress generally allows Exchange enrollees to switch plans only during certain parts of the year, because otherwise #ObamaCare's community-rating price controls would have an even greater negative impact on quality & could cause the Exchanges to collapse.

On how #ObamaCare's community-rating price controls create a race to the bottom on quality, see: healthaffairs.org/do/10.1377/hbl…

The @EnergyCommerce bill would allow the target population to switch Exchange plans any time of year, leading to greater adverse selection and a faster race to the bottom on quality.

Congress would have to subsidize these plans heavily to prevent the market from collapsing.

5. Gouging taxpayers for family planning and contraceptives.

The bill requires the new #ObamaCare plans to cover all family-planning providers.

This would eliminate insurers' negotiating leverage and empower such providers to charge taxpayers whatever prices they want.

#ObamaCare's contraceptives-coverage mandate did the same, leading to wild price increases for hormones & oral contraceptives: infogram.com/figure-4-real-….

The would further gouge consumers and taxpayers for those items by extending that mandate to 2 million more consumers.

6. Setting the stage for even more government spending.

The bill is unlikely to deliver on its plan to move the target population out of "private" Exchange plans and into "private" (or "privately administered") Medicaid coverage after three years.

Enrollees won't like getting dropped from their health plans into Medicaid, where they would have less provider choice.

Providers won't like getting paid less to treat those patients.

State officials won't like that less federal money would be coming into their states.

Thus...

The @EnergyCommerce bill increases federal spending on health care in the immediate term and creates incentives for interest groups to lobby heavily for even more federal spending in just three years.

7. Hypocrisy.

It really is remarkable how @TheDemocrats complain that the U.S. health sector is so expensive but then every chance they get, they throw more taxpayer money at it.

Addendum to #3.

@JudyCBPP writes, "All people who would be eligible for Medicaid if their states had expanded, including those with incomes between 100 and 138 percent of the poverty line, would be eligible to enroll in the enhanced plans."

That has important implications.

For one thing, it means the target population is not just the 2 million uninsured people below the poverty line that @JudyCBPP mentions at the outset of her paper.

It also includes another 2 million (acasignups.net/21/05/10/updat…) or so people already in #ObamaCare Exchange plans.

Federal spending on those other 2 million folks would increase, because they would receive more comprehensive coverage under the @EnergyCommerce plan than under current law (e.g., 99% vs. 94% actuarial value).

The @EnergyCommerce plan would also make the enhanced Exchange plans available to people between 100-138% FPL in non-expansion states who *aren't* currently enrolled in Exchange plans.

At the same time, the @EnergyCommerce plan would tear down the barrier to Exchange subsidies for workers who have an offer of "affordable" coverage from an employer.

Can you see where this is going?

The @EnergyCommerce plan would offer essentially "free" health care (99% AV) everyone below 138% FPL in non-expansion states, including workers who already have employer coverage.

The @EnergyCommerce bill would essentially create a "public option" in the form of #ObamaCare coverage, and tilt the playing field heavily in favor of that public option, for ALL households below 138% of the poverty line in non-expansion states.

The @EnergyCommerce bill would create huge incentives for employers to find ways to drop coverage for low-wage workers rather than try to compete with "free" health care.

I also have an addendum to #6.

Another interest group that will line up to expand this new program would be Democratic states. The @EnergyCommerce bill would offer these new subsidies only in states that didn't "do the right thing" by expanding Medicaid.

Democratic states that did expand Medicaid will claim it is unfair that they have to pay more because non-expansion states "aren't paying their fair share."

Democratic states will call this the "Medicaid expansion penalty."

They will demand that Congress end that "penalty" by--you guessed it--expanding this program into Medicaid-expansion states, giving Democratic states the same $$ that Republican non-expansion states are getting.

I had first surmised the @EnergyCommerce bill's proposal to move the target population from enhanced Exchange plans to this new form of Medicaid coverage in 2025 would never occur.

There would just be too much pressure from interest groups to keep the new Exchange money flowing.

I'm now ready to predict that will occur before this bill even passes Congress.

If @TheDemocrats go this route, they will make the @EnergyCommerce's new Exchange plans permanent from the get-go, and scrap the new Medicaid program for this population.

If they do keep the new Medicaid program, it will just be a budget gimmick to keep down the CBO score of what they know is going to happen -- i.e., setting in motion new Exchange plans for this population, that eventually become permanent, in all states.