Saturday, March 25, 2017

A Victory for the Status Quo

What just happened and why?

The strangest thing happened this week and no one is talking about why.   Donald Trump gave a fake deadline of Friday to pass his poorly thought-out health care plan and then said, like a petulant suitor, "If you can't pass it, then forget I ever mentioned it!"

This is, of course, nonsense.  There is no real deadline to pass health care reform-reform.   Next week would work just as well as last.  In fact, the longer they take, maybe the better a bill could be crafted.  It seems both sides were hell-bent on rushing something through.  First, the poorly thought-out ObamaCare, and now the even more poorly thought-out TrumpCare.

Instead, we have this curious statement from Paul Ryan that Obamacare will be around "for the foreseeable future" - as if somehow the Republicans cannot craft a better alternative, or "repeal and replace" as they promised.

And even with Republican majorities in both houses of Congress, President Trump blames the Democrats for the failure of his bill - which he has been running away from since it was proposed.

What the heck is going on here?    Well, a victory for the Status Quo is what.

I think Trump realized that any half-assed chang to Obamacare is going to be a loser from the get-go.   It will give the Democrats an edge in the mid-term elections as people lose their benefits - or even fear losing them.   It also won't sit well with die-hard Ayn Rand type Republicans who want to return to the age of bloodletting and leeches as a form of health care.   Just kidding, but some of the "Repeal and Replace" crowd are not so keen about "Replace" at all, just Repeal.

And it was a shitty bill.   At the last minute they added an amendment that chucked out the onerous cradle-to-grave requirements of the ACA, such as mental health care (which is ungodly expensive).  These requirements (including requiring certain deductibles, making my $10,000 deductible plan illegal to offer) meant that premium costs would not go down but instead would continue to rise, while the subsidies were slashed in half.  They didn't even have this provision in the original bill.  And the part about shopping across State lines?   We'll get to that later.

What this would have meant for many Americans is that their costs of insurance would skyrocket, as they lost their subsidies.  Poorer Americans would simply drop out of their plans, with no penalties, signing up only when they became sick.   It was not a well thought-out plan.  It was not "Obamacare Lite" but "Obamacare Half-Assed".

What was needed was a comprehensive overhaul, not tinkering with a sledgehammer.   Just repealing would have been better than this replacement, but not by much.   And the disruption in the marketplace of either option would be, well, catastrophic.

So Trump plays political theater, claiming (lying) that since a replacement could not be passed this week, it is somehow physically impossible to ever replace it ever!   That wily Obama, putting the clause into Obamacare that it cannot be repealed except in the first 60 days of a new administration!  Oh, wait, that is not the case.

Trump is just realizing that politically, it makes sense to leave Obamacare in place and say "we tried....it's the Democrat's fault"    It also is politically expedient to have the Obamacare whipping boy in place for a few more years, claiming time and time again that it has "failed" and that Democrats, who are now essentially powerless, are to blame for all the country's woes.

And the way things are going, we may be headed for woes.  Seen the fourth-quarter profit reports for GM and Ford?  Is this 2009 all over again?   Maybe Hillary lost on purpose knowing a correction was due?   Maybe the "Trump Bubble" has already peaked?   This is scary to think about.  Any maybe a topic for my next posting.

The problems with Obamacare are many as I have pointed out before.  The biggest is the crazy subsidy system that provides a full subsidy if you are above the poverty line but no subsidy if you are below it, forcing you to go on Medicaid, if your State allows it.  If you make a dollar more than four times the poverty limit, your subsidy is cut off.

But should we be getting subsidies?   I have analyzed in the past whether you could get food stamps as a millionaire or other benefits.   And in the past, it may have been theoretically possible to so do, although it seems today they have an "assets test" to get foodstamps, so maybe that door is closed.

As many articles noted, if TrumpCare passed (and we are sticking his name to this mess, whether he likes it or not) many early retirees would be socked with huge insurance bills or just drop coverage entirely.   One reason I was able to retire early was that Obamacare took care of a big chunk of my retirement expenses. Last year, I paid $1098 a month for health insurance.  This year I pay $18.

TrumpCare would have changed that.  Assuming I went to the cheapest plan available (Obamacare allowed me to upgrade to a better plan as well - I got the best plan I could for the subsidy available) and premiums did not go up, I would be looking at about $5000 to $7000 a year for health insurance, at least initially.

For me, this is not too big an issue.  Obviously, like anyone else, I would like free money from the government, even if it makes me uneasy as to who is paying for it.   And we should expect people to do just that.  Any idiot (and there were many) who paid the "fine" and refused to sign up for Obamacare (which cost less than the fine) as an act of "political protest" was just being an utter fool.   Republicans are not going to pat you on the back and say  "way to go!" but instead pat you on the head and say, "good little fool, keep doing as we say."

If you qualify for a government program, take it.  If you believe government programs should be changed, then vote.  But that is the problem, ain't it?  Once you get that Uncle Sugar money, you kind of sort of like suckling at the government teat, and as politicians find out, woe be to the guy who turns off the sugar tap!

That, in short is why TrumpCare was pulled - not defeated - pulled.

Now for me, who voluntarily retired early, you might not have so much sympathy.  But for others, well, it is a different story.   For people who lost their jobs and cannot find any other jobs, other than low-wage service jobs, Obamacare was a godsend.  The factory worker who was making nearly a hundred grand a year until the plant closed, now finds himself making $20,000 a year, if that, working at Wal-Mart.   His benefits went South when his company went bankrupt.   So he is stuck, years away from Medicare, with rising health care costs as he ages.   Obamacare saved him.

And that is the problem for the GOP right there.  Because he is likely their sort of voter - the guy who wants the immigrants out and the Muslims banned.  The very poor who think Trump will bring back their factory jobs (which he won't, and any new factory jobs are not likely going to a 55-year old laid-off worker anyway).   Rip his healthcare out from under him, and well, you've lost a solid Republican voter.

So, they play this game, saying they could not pass a replacement by an artificial deadline so let's just forget we ever said anything.   And in this post-fact fake-news era, you can say that, and people will believe it.   I am sure the die-hard Trump supporters thought that March 24th was some sort of line in the sand that could not be crossed.  Trump tried - those nasty Democrats foiled him again!  Curses!

Meanwhile, that same Trump supporter will quietly enjoy his Obamacare and not really understand exactly just what happened in Washington this week....

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