Back in January, I wrote a long rant about High Risk Pools. The general thrust was that in theory HRPs aren't necessarily a horrible idea; on paper they can be made to work...assuming the math adds up and they're properly funded on a permanent basis.
However, I also pointed out that due to the very nature of HRPs (i.e., segregating out a small, highly vulnerable group of people from the rest of society), it's incredibly easy for legislators not to properly fund or maintain them, especially after the initial funding comes up for renewal.
However, just out of curiosity, I did a little back-of-the envelope math to see just what sort of dollar figures would be required in order to properly fund a HRP which would serve those in the individual market. First, I used this study by the Kaiser Family Foundation, which found that about 5% of the population accounts for a full 50% of healthcare spending; the other 95% accounts for the remaining 50%.
As I noted in January:
Now, Ryan himself admits that 8% of people under 65 have "the same type" of pre-existing condition that the questioner has...in other words, batshit-expensive ailments like cancer/etc. 8% of 30 million is 2.4 million people. If it costs $10 billion per year for 875K, that's a good $27.5 billion per year for 2.4 million of them. That's eleven times as much as Ryan's plan is promising.*
Now, here’s the thing: Ryan claims that state-based high risk pools have “worked well”. Perhaps…IF they're properly funded. If Ryan and the rest of the Republicans move the decimal point to the right by a notch, perhaps we can talk.
*(At the time, Ryan was proposing a mere $25 billion over a decade, or $2.5 billion/year)
Even a cursory glance at the math suggests that you'd need at least $28 billion/year to take care of this population properly. But that was just my offhand math. A 2014 Commonwealth Fund study suggested that it would be far more:
Covering the majority of uninsured Americans with pre-existing conditions through a national high risk pool would cost an estimated $178 billion a year, according to a 2014 Commonwealth Fund report.
Now, the Commonwealth study was referring to covering “the majority of uninsured americans", which (at the time) was more like 45-50 million people. In this case we're only talking about 30 million, so let's lop that down by 40% and call it $106 billion. Hell, let's cut it down to an even $100 billion. Per year. To cover "most" of those with pre-existing conditions.
Now, you can certainly argue that the Commonwealth numbers are insane, but it sure sounds like we're looking at anywhere between $27 - $100 billion per year just for these 2.4 million people. The point is, it's orders of magnitude higher than Ryan's $2.5 billion.
The other day,, Topher Spiro of the Center for American Progress did his own back-of-the-envelope math on this:
OK, so that brings us to today.
Until now, as Spiro noted, the amount allocated by the AHCA towards potential HRPs is around $130 billion ($115 billion for the "state stability fund"; $15 billion for the "invisible risk pool", whatever the hell that is). It's important to note that this money isn't even guaranteed to go into HRPs; that's just one of the ways it would be allowed to be used by the states. Still, since we have no clue which states would theoretically establish one and which wouldn't, we have to assume, for the moment, that the entire amount would indeed go towards high risk pools.
- Using my estimate ($28 billion/year), the Trumpcare plan is underfunded by over 50%.
- Using Spiro's estimate ($33 billion/year), the Trumpcare plan is underfunded by over 60%
- Using the Commonwealth Fund estimate ($100 billion/year), the Trumpcare plan is underfunded by 87%.
Now, again, you can certainly quibble about the exact dollar amounts or the exact number of people who would have to be covered, but note this:
So let's call the range anywhere from a bare minimum of $200 Billion to as high as $1.0 Trillion over a decade.
And what "new money" is Scott referring to? This:
Top House Republicans scrambling to prevent another collapse of their push to repeal much of President Barack Obama's health care law may have found a way to win over some moderate GOP holdouts.
Rep. Fred Upton, R-Mich., an influential centrist who'd initially announced opposition to his party's health care bill, said he's crafting an amendment with the backing of party leaders that could gain crucial support for the languishing measure.
A respected authority on health care, Upton said the proposal would provide $8 billion over five years to help some people with pre-existing medical conditions pay costly insurance premiums. It comes with many moderates opposing the high-priority legislation, even as GOP leaders press holdouts to back it and push it through the House before the chamber begins a week-long recess scheduled to start Friday.
$8 billion. Over 5 years. That's around $1.6 billion extra per year.
That would bring the grand total up to...$138 billion total over a decade. Again, even the most absurdly GOP-friendly estimates say this would still fall short...and more realistic numbers suggest that it'd still be underfunded by at least 50%.
Earlier Tuesday, several Republicans said leaders were considering adding money to fund high-risk pools or other mechanisms for helping states ease costs for people with pre-existing illnesses, who are expensive to cover. There's already around $130 billion in the legislation for such assistance, which critics call a fraction of what would be needed for adequate coverage.
I should also note, as Spiro did this morning, that "adequate coverage" itself is a bit misleading as well:
Again, per my January article, here’s what he’s talking about:
Pre-existing condition exclusions – Nearly all state high-risk pools excluded coverage of pre-existing conditions for medically eligible enrollees, usually for 6-12 months. This made coverage less attractive for people who needed coverage specifically for their pre-existing conditions.
(Yes, that's right...even the high-risk pools, designed specifically for those with pre-existing conditions...denied those with pre-existing conditions from enrolling for up to a year. Tough luck if you've been diagnosed with a type of cancer which will kill you in less than a year without treatment).
Lifetime and annual limits – Thirty-three pools imposed lifetime dollar limits on covered services, most ranging from $1 million to $2 million. In addition, six pools imposed annual dollar limits on all covered services while 13 others imposed annual dollar limits on specific benefits such as prescription drugs, mental health treatment, or rehabilitation.
...A small number of states capped or closed enrollment to limit program costs, though enrollment caps were not allowed for HIPAA-eligible individuals. Limiting enrollment, directly or indirectly, was a key strategy to limit the cost of high-risk pools to states. By design, all state high-risk pools experienced net losses – that is, expenses greater than premium revenue.
But hey, they'd receive "access" to coverage "to some degree or another".
In short, don't fall for the $8 Billion Scam. Keep calling today at 866-426-2631. You can also use the Trumpcare Toolkit to contact targeted members of Congress directly.
UPDATE: Oh for Pete's sake...read this by David Anderson of Balloon Juice:
The Upton Amendment is out. It is $8 billion dollars to pay for the late enrollment penalty of people in states who elect to waive non-underwritten guarantee issue so that these people don’t get dropped into the high cost risk pool.
What the hell does that mean? Well, remember that the AHCA would replace Obamacare's $695/year individual mandate penalty for not being covered...with a 30% surcharge for getting covered after a previous break in coverage. Apparently Upton's amendment would pay that 30% penalty for those people, completely defeating the point of having the penalty.
I think.
As Anderson concludes:
Upton makes a complete hash of any personal responsibility and anti-free rider logic ever advanced in the bill. This is a mess.