The GOP's growing problem of how to pay for Obamacare replacement - Axios
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The GOP's growing problem of how to pay for Obamacare replacement

Pictures of Money / Flickr Creative Commons

Republicans may quickly learn there's no such thing as an easy way to pay for health reform. After years of attacking Obamacare's industry taxes and other funding sources, the GOP is running out of ways to pay for their replacement plan without using the options they've criticized so heavily in the past.

The first red flag came last week, when key committee chairmen threw their support behind repealing the Obamacare taxes along with the law's subsidies and mandates. This would immediately gut revenue that could be used later to pay for a replacement plan.

Now, powerful lobbyists are trying to knock out another big source of money: the GOP plan to limit the tax break for employer health coverage. If both funding sources go, there's not much money left for an Obamacare replacement.

The lobbying behemoth opposing Obamacare's "Cadillac tax," which is aimed at expensive employer-sponsored health plans, is now warning Republicans not to limit the tax breaks for employer-sponsored insurance benefits. The group, the Alliance to Fight the 40, says the two ideas are essentially the same except for one key difference: The tax would only indirectly be paid by employees, while the limit on the tax breaks would come directly out of their pockets.

If those lobbyists are successful, it could be a problem, budget wonks say — because Republicans won't have any money left for a replacement plan if they lose all of the Obamacare taxes and don't generate any new ones. "This is a big deal," said Ed Lorenzen, a senior adviser at the Committee for a Responsible Federal Budget.

Quick refresher:

  • Obamacare taxes are paid by insurers, medical device manufacturers and drug companies. There's also a tax on high-income households. Together, these would bring in about $680 billion over ten years, according to the Brookings Institution.
  • Obamacare's "Cadillac tax" is aimed at unusually generous employer health plans. The employer pays the tax, but opponents argue that gets passed on to employees.
  • A cap on tax-exempt employer benefits effectively means that the tax break only covers up to a certain amount, and then the employees pay taxes on the rest.

In both cases, the goal is the same: increase federal revenue and control health care costs.

Why the cap is in trouble: The Alliance is unquestionably effective. Two years ago, it fought hard against the Cadillac tax and won a two-year delay: Congress pushed back its implementation from 2018 to 2020. Almost every Republican in Congress came out in opposition to the tax, and many Democrats also had issues with it. The group is now going to make the case that a vote against the Cadillac tax should be a vote against a cap.

The employer benefit cap is a large source of revenue in a Republican replacement plan, although how much it saves depends on where the threshold is set. Yet even Paul Ryan, who has included a cap in his own health reform proposals, wouldn't commit to including it in the GOP health plan last week: "Where Congress goes on this is an open question," he said during his weekly press conference.

The link to the populism that elected Trump is pretty obvious. Taxing premiums will increase deductibles and cost-sharing for workers, the Alliance says, which is something polling has shown is the opposite of what Americans want.

Why the Obamacare taxes are in trouble: While some Republicans have said they're nervous about repealing the taxes because of the budgetary issues down the road, they may be on the losing side of the battle. Sen. Orrin Hatch, chairman of the powerful Finance Committee, said in a Chamber of Commerce address last week that "all of the Obamacare taxes need to go as part of the repeal process."

Why it matters: If a GOP plan has no taxes or limit on tax breaks for those insured by their employer, then only about 40 percent of the funding for Obamacare's coverage expansion would be available for the replacement plan, Brookings estimates. That means the GOP plan would have to significantly reduce the amount of people covered or the benefits offered, unless they find a different way to pay for it.

Wonks aren't the only ones pointing this out; Democrats are too. "How are you going to put a subsidy in place for people buying on insurance exchanges? How are you going to provide states with the Medicaid money that we promised them?" Senate Minority Whip Dick Durbin asked me. "Pull the string and it all starts to unravel."

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New Trumpcare amendment would require states to define essential health benefits

(Alex Brandon / AP)

A final amendment to the American Health Care Act was introduced Thursday night by the authors of the legislation, a last-minute attempt to win conservatives over by requiring states to define what services insurers must offer enrollees.

Here's what's in the amendment, which will be voted on in the Rules Committee tomorrow before the bill heads to the House floor for a final vote:

  • Beginning in 2018, states will determine essential health benefits. There are currently 10 federal ones under Obamacare, which apply to the individual and small group markets.
  • The repeal of the Medicare payroll tax on high earners would be delayed until 2023.
  • The original bill's Patient and State Stability Fund would get an extra $15 billion to be used for maternity coverage and newborn care, as well as mental health and substance abuse disorder treatment.
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Apple says flaws in latest WikiLeaks disclosure are all old

Mike Deerkoski / Flickr cc

Although much was made about a new batch of iPhone and MacBook flaws disclosed by WikiLeaks on Thursday, Apple says the issues appear to all be old, since-fixed vulnerabilities.

"We have preliminarily assessed the Wikileaks disclosures from this morning," Apple said in a statement to Axios. "Based on our initial analysis, the alleged iPhone vulnerability affected iPhone 3G only and was fixed in 2009 when iPhone 3GS was released. Additionally, our preliminary assessment shows the alleged Mac vulnerabilities were previously fixed in all Macs launched after 2013."
Apple added that it has "not negotiated with Wikileaks for any information."

We have given them instructions to submit any information they wish through our normal process under our standard terms. Thus far, we have not received any information from them that isn't in the public domain. We are tireless defenders of our users' security and privacy, but we do not condone theft or coordinate with those that threaten to harm our users.
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Trump orders tougher Visa screenings

J. Scott Applewhite / AP

President Trump is ordering tougher screenings for Visa applicants as part of his "extreme vetting" policy. Last week Secretary of State Rex Tillerson sent four cables to U.S. embassies and consular officials demanding scrutiny be tightened up, as originally reported by Reuters.

The new rules don't apply to 38 countries who can be admitted using the visa waiver program, including Australia, New Zealand, Japan, South Korea, and most of Europe.

Profiling and delays: This will include "mandatory social media check" if an applicant has been in a territory controlled by ISIS. Such checks are rarely done at present, former officials told Reuters. Consular officials and immigration experts told the NYT this will make it much more common to be denied a Visa to the U.S. and they fear this might lead to profiling based on nationality. It will likely also extend Visa review times.

Context: The cables were issued to complement the travel ban that was upended by a court in Hawaii, but some provisions were remedied to abide by the temporary restraining order. Namely, questions specifically aimed at applicants from the six countries listed in the ban were rescinded.
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Trump's ultimatum: If vote fails, Obamacare stays

AP

Budget Director Mick Mulvaney has just laid down a gauntlet to House Republicans on behalf of President Trump: pass this bill, or Obamacare remains in place.

Members of the conservative Freedom Caucus want more concessions but, according to Mulvaney, Trump will not negotiate further.

The president demanded a vote tomorrow, and now it appears he will get it. He is all but daring Republicans to vote no.

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Twitter is weighing whether to build a paid version of TweetDeck

Richard Drew / AP

Twitter is considering whether to build premium software geared toward power users of its service.

The company already owns TweetDeck, a program geared toward those who juggle multiple Twitter accounts and spend a lot of time on the social media service. A paid version could offer extra features and bypass advertising.

Andrew Tavani, managing editor of Women in the World, first spotted a message from Twitter about the potential service.



Still pondering: It appears the idea is still in the early stages and Twitter hasn't decided if it'll build this. "We're conducting a survey to assess the interest in a new, more enhanced version of TweetDeck," a Twitter spokesperson told Axios, adding that Twitter is "exploring several ways to make TweetDeck even more valuable for professionals."

Why it matters: Twitter acquired TweetDeck in 2011 from developer Iain Dodsworth, but hasn't done much with it since as far as expanding features and capabilities. This could be a welcome option for users for whom Twitter is a critical part of doing their job.

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Here are the AHCA changes demanded by the Freedom Caucus

Alex Brandon / AP

The key changes to the Republican health care bill demanded by the conservative Freedom Caucus:

  • A repeal of ACA's Essential Health Benefits (like emergency or maternity treatment) guaranteed under Obamacare
  • An elimination of the "single risk pool," which prevents insurers from splitting the market into healthy and sick groups
  • An elimination of rating restrictions, which allow insurers to base premiums only on age, area, tobacco use and family vs individual plan
  • A repeal on lifetime or annual limits
  • A reversal of standard documentation mandates, which make it easier to compare insurance plans
  • A reversal on Medical Loss Ratio standards, which force large insurers spend at least 85% of premiums on claims

Why it matters: These changes would appease the Freedom Caucus, but could see moderates abandon the bill.

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Fox News: GOP expects 'smoking gun' proving Obama admin spied on Trump

Jack Gruber / AP

Republicans in Congress are expecting a "smoking gun" showing the Obama administration intentionally spied on Trump associates, and possibly Trump himself, Fox News reports:

The intelligence is said to leave no doubt the Obama administration, in its closing days, was using the cover of legitimate surveillance on foreign targets to spy on President-elect Trump, sources said.

A source told Fox that the surveillance left a "paper trail" indicating there was "no other plausible purpose... than to damage the incoming Trump administration." No, Trump Tower wasn't bugged, as POTUS claimed, but if the report is accurate his transition team was targeted for surveillance.

What's next: Fox says the House Intelligence Committee expects to receive the evidence this week. Trump said he felt "somewhat" vindicated by Devin Nunes' statements yesterday about "incidental" surveillance of Trump's communications. Expect him to be less restrained if this report proves accurate.




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Marketo apologizes after video promo for its conference panned as sexist

Marketo, which specializes in helping companies promote themselves, apologized Thursday after one of its own promotions fell flat.

The ad, promoting an upcoming Marketo conference, featured a ditzy female newscaster and the company's male CEO, Steve Lucas. Marketo told Axios the ad, which was roundly criticized on Twitter, has been pulled down.

We sincerely apologize for the offense we caused with what was intended to be a light-hearted promotion for Marketing Nation Summit. The video was created to promote the conference, playing off our theme of engagement. Marketo has always had a steadfast commitment to championing diversity and empowering female leaders in technology and beyond.
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Theranos offers shares to investors if they promise not to sue

Theranos

Theranos, the embattled blood-testing company, plans to offer additional shares to existing investors if they agree not to sue the company, according to a report from the Wall Street Journal citing anonymous sources. Theranos reportedly only has $200 million in cash left, but is already facing multiple lawsuits, including from former partner Walgreens and investor Partner Fund Management.

The deal: The shares would come from founder and CEO Elizabeth Holmes' personal stake in the company, which would result in her losing her majority ownership. According to the Journal, early investors aren't included in the deal, and weren't even informed of it.

Murdoch exit: Theranos has reportedly agreed to buy back the stake Rupert Murdoch, the executive chairman of News Corp. and 21st Century Fox, purchased for $125 million in 2015.

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Valeant's ousted CEO made $72.5 million in 2016

Manuel Balce Ceneta / AP

Michael Pearson, former CEO of Valeant Pharmaceuticals, cashed in $72.5 million worth of stock and severance pay in 2016 even as he and the drug company were under federal investigation for accounting fraud and a billing scheme tied to a specialty pharmacy it secretly owned.

Pearson took home $60.5 million in stock and the rest in severance pay and other benefits, Valeant disclosed Thursday to the Securities and Exchange Commission. He also still used Valeant's corporate jet. Joseph Papa replaced Pearson last year, and Papa earned $62.7 million even though Valeant remains mired in trouble.

Valeant's stock has cratered since the middle of 2015, and it has become a pariah in the pharmaceutical industry. Pearson led Valeant since 2008, building the company up on the controversial practice of acquiring drugs and jacking up the prices.