The Republicans have been working hard to find a way to repeal the Affordable Care Act (ACA) that doesn't leave most of their members of Congress unemployed. The basic problem is that their campaign against the ACA for the last seven years was a complete lie. They claimed that people were paying too much money for policies that were inadequate, leading people to believe that they had a way to provide better coverage for less money. They don't.
Unfortunately, NPR might have led listeners to believe otherwise in an interview with Mike Johnson, a Republican representative from Louisiana. Johnson explained that they would get premiums down by allowing insurers to exclude people with health conditions from their pool. This is more or less the situation we had before the ACA.
Most people are healthy and have few medical bills. Insurers are very happy to insure these people, since they essentially are just sending the companies money. The problem has always been the the roughly 10 percent of the population with substantial medical bills. Insurers don't want to insure these people, since their health care costs serious money. Of course, these are the people who most need insurance.
Johnson acknowledged that these people will face higher premiums under his plan, but then said that they had set aside $15 billion in their bill for subsidies for these people. Was this information helpful to you?
It didn't do much for me, since he didn't even tell us the time frame for this $15 billion. Budget numbers are often expressed over ten year periods reflecting the Congressional Budget Office's 10-year planning horizon. Was this a ten year number or a one year number? My guess is the former, but I really don't know. Hey, so we're off by a factor of ten, what's the big deal?
But it gets worse. What's the need here? Anyone know how far $15 billion will go over either a one year or ten year horizon?
To fill in the perspective a serious reporter would have given, the average annual health care costs for the 10 percent most costly patients is more than $50,000 a year. We're talking about 32 million people, so that comes to more than $1.5 trillion a year.
Many of these people are on Medicare, and some are covered by employer provided insurance, so many will not end up in these high risk pools and need subsidies. But, let's say that one third of them do end up in these pools. That means the cost would be $500 billion a year for these folks' health care. Mr. Johnson is proposing a subsidy of between $1.5 billion and $15 billion to help these people cover their insurance.
Got the picture now?