Obamacare Premiums Drop: A Triumph for Trump?

Obamacare Premiums Drop for 2020: A Triumph for Trump?

Affordable Care Act insurance markets are looking stable for 2020, with premiums for benchmark plans set to fall for a second straight year — and some Trump administration officials are touting those developments as a success, even as the administration looks to have the health care law invalidated.

Average premiums for mid-level plans sold on the federal health insurance marketplaces will be lower in 2020, the Centers for Medicare & Medicaid Services (CMS) announced Tuesday. Specifically, a 27-year-old buying the second least-expensive silver plan will pay 4% less, CMS said, marking the second year in a row the so-called benchmark premium has fallen.

Some other details on the state of Obamacare in 2020, from Politico’s Dan Goldberg:

• The average premium for the benchmark plan will fall from $406 to $388.
• About 87% of enrollees will receive subsidies.
• Of those receiving subsidies, about two thirds will pay less than $75 a month, while one third will pay less than $10.
• For those not receiving subsidies, more than a third will pay over $500 a month.
• The median deductible for benchmark plans is more than $4,600, a 3% increase from 2019.
• Just 12% of enrollees live in a county with only one insurance provider, an improvement over 20% in 2019.
• Delaware will see a 20% drop in premium costs, the largest reduction nationally.

The Trump administration, which is currently involved in a lawsuit seeking to invalidate the Affordable Care Act, was quick to take credit for the dip in premiums. “The President has delivered lower costs and more options under the Affordable Care Act for two straight years,” said Department of Health and Human Services Secretary Alex Azar. “The ACA simply doesn’t work and it is still unaffordable for far too many. But until Congress gets around to replacing it, President Trump will do what he can to fix the problems created by this system for millions of Americans,” Azar added.

Obamacare supporters rejected the White House claim, attributing the fall in prices to a market that has stabilized despite the administration’s efforts to kill it. Leslie Dach of Protect Our Care, a group that supports Obamacare, said in a statement that “administration deserves zero credit for the success of the ACA. … The success of the ACA, despite Republicans best efforts to repeal it, shows that Americans want and need the affordable quality coverage the law provides.”

Senate Dems to Force Vote on IRS SALT Cap Rules

Senate Democrats say they will force a vote Wednesday to nullify IRS rules implemented to prevent blue states from creating workarounds to the $10,000 cap on state and local tax (SALT) deductions enacted as part of the 2017 Republican tax law.

“On Wednesday, Senate Democrats will force a vote to nullify the IRS’s horrible rule and put power back in the hands of homeowners,” Senate Minority Leader Chuck Schumer (D-NY) said in a statement. “America’s homeowners shouldn’t be forced to bear the brunt of the GOP’s political games.”

The background: The $10,000 limit on SALT deductions was included in the 2017 law as a way to raise hundreds of billions of dollars in revenue to offset some of the cost of other tax cuts. Republicans also argued that the deduction subsidized high taxes in states including California, New York, New Jersey and Illinois and that it was appropriate that the new cap would pressure those states to lower taxes.

Critics, including Democrats and Republican lawmakers from high-tax states, argued that the cap would hurt their residents and would threaten the public services offered by their states. But the IRS in June blocked efforts by high-tax states to create programs to circumvent the cap.

Why it matters: The battle over the controversial cap lives on. Democrats may face a challenge in getting the votes required for their resolution to pass in the Republican-controlled Senate. But House Democrats are reportedly working on legislation to undo the cap. Repealing the cap would lower taxes for an estimated 13.1 million tax filers — 94% of whom have income of $100,000 or more, according to estimates by the Joint Committee on Taxation. About 99% of the tax savings from repeal would flow to taxpayers with $100,000 or more in income, meaning that the tax code would become less progressive. Uncapping the deduction would reduce federal revenue by more than $77 billion this year, according to the JCT, or more than $670 billion over 10 years, according to the conservative Tax Foundation.

The bottom line: “This issue generates a level of passion that is almost unrivaled by anything else,” Rohit Kumar, a former aide to Senate Majority Leader Mitch McConnell, told Bloomberg recently. “There is political value in being seen as fighting for something even though they know in their heart of hearts that it won’t happen.”

House Committee to Consider Vaping Tax That Would Raise $10 Billion

The House Ways and Means Committee is set to consider a bill Wednesday that would impose the first federal tax on vaping products.

Roll Call reports: “The bipartisan bill, from New York Reps. Tom Suozzi, a Democrat, and Republican Peter T. King, would tax ‘any nicotine which has been extracted, concentrated or synthesized’ at the same rate cigarettes are currently taxed, or the equivalent of $50.33 per 1,810 milligrams of nicotine.”

“We must address this public health crisis now rather than waiting years to do so, as we did with cigarettes,” Suozzi said in a statement.

The tax would raise $9.9 billion in revenue over 10 years, according to the Joint Committee on Taxation. That money would be used to offset the cost of other legislation before the Ways and Means Committee Wednesday, which would require certain high-deductible health plans to cover the cost of inhalers used to treat chronic lung diseases and to allow people to use health savings accounts to buy over-the-counter medications and menstrual-care products.

The vaping measure would exempt products that the secretary of Health and Human Services certifies have been approved by the Food and Drug Administration for use as nicotine replacement therapy.

Two New Examples of the Millions Being Spent on Health Care Lobbying

FreedomWorks, the conservative political group, said it spent more than $2.7 million on federal lobbying efforts from July through September, the most it has ever reported in a quarter and up from about $1.9 million for all of last year, according to Roll Call. FreedomWorks’ vice president of legislative affairs told Roll Call that much of that lobbying was focused on opposition to health care proposals such as ‘Medicare for All’ and a bill supported by Democrats to lower prescription drug prices.

A separate coalition of doctors groups owned by private equity firms and investment groups spent $4.1 million last quarter lobbying Congress on legislation to end surprise medical bills, The Hill reports. The group, Physicians for Fair Coverage, opposes a House bill that would end surprise bills by setting the rates that insurers would pay doctors. It instead favors a bill that would have an arbitrator set the payment rate. The House Energy and Commerce Committee last month launched a bipartisan investigation into the role private equity firms play in surprise billing.

Twitter Thread of the Day

Billionaire John D. Arnold, a former energy trader and hedge fund manager turned philanthropist with a particular focus on health care, posted a 22-tweet thread Tuesday defending House Speaker Nancy Pelosi’s bill to lower prescription drug prices.

Arnold argued that the legislation would save even more over the long term than the Congressional Budget Office’s 10-year projected savings of $345 billion, while the impact on the pharmaceutical industry and new drug development would be minimal. “Do not fall for the pharma industry’s talking points. They are scare tactics designed to maintain status quo,” he wrote. “I know it's hard for Congress to stand up to the pharma lobby, but we must demand courage from our electeds. The time to pass comprehensive legislation is now.”

Read his full thread on Twitter.

News

• U.S. Envoy Says He Was Told Trump Wanted Ukraine Aid to Be Contingent on Probe of Bidens, 2016 Election – Washington Post
• Why Baby Elijah Lost Medicaid, and a Million Fewer Children Have It – New York Times
• Pelosi Drug Plan Hits Resistance from Left – Politico
• Conservative Republicans Unveil Obamacare Replacement Plan – CNN
• Drug Companies Are Paying Hundreds of Millions of Dollars to Settle Opioid Lawsuits. Spend It to Treat Addiction, Experts Say – USA Today
• Partisan Divide Grows Over Opioid Settlement Plan – NPR
• Warren, Buttigieg Shift Stances in Battle Over 'Medicare for All' – The Hill
• When Wall Street Took Over This Nursing Company, Profits Grew and Patients Suffered – Bloomberg
• Taxing the Rich to Fund Welfare Is the Nobel Winner’s Growth Mantra – Bloomberg
• Defense Secretary Mark Esper Recuses Himself from Massive Pentagon Contract, Citing Son’s Employment – Washington Post
• Anxious Democratic Establishment Asks, ‘Is There Anybody Else?’ – New York Times
• From Learning on His Feet to Policy Director – The Hill
• Jeff Bezos Enlists Lockheed, Northrop in NASA Moon Bid – Politico

Views and Analysis

• How to Reform Social Security for Future Generations of Americans – Jacob Lew, Henry Aaron, Kenneth Appel and Robert Reischauer, The Hill
• The Tax Cuts and Jobs Act Made the Debt Worse and Makes Fixing It Even Harder – Maya MacGuineas, AEIdeas
• IRS Needs New Technology So Taxpayers Pay Their Fair Share – Mark Everson and Jay Soled, The Hill
• Mick Mulvaney, from Washington Reformer to Chief of Graft – Patricia Murphy, Roll Call
• How Warren Could Pay for 'Medicare for All' – Alica Miranda Ollstein, Politico
• The Medicare for All Cost Debate Is Extremely Dishonest – David Dayen, The American Prospect
• Can Warren Escape the Medicare Trap? – Paul Krugman, New York Times
• Would Medicare for All Require a Middle-Class Tax Hike? – Committee for a Responsible Federal Budget
• Behind the Numbers: The CBO Just Handed Us $2 Trillion – J.W. Mason, Roosevelt Institute
• Amend the Tax Cuts and Jobs Act for More Inclusive Growth and Better Jobs – Isabel V. Sawhill and Christopher Pulliam, Brookings Institution
• 2020 State Business Tax Climate Index – Jared Walczak, Tax Foundation