NC Budget and Tax Center, public health

Senate GOP health “repeal without replacement” proposal would do great harm to NC

By now many have heard that the proposed Senate GOP “repeal and replace” health care bill is dead after some Senate Republicans could not support it. However, the bad news is that Senate Majority Leader Mitch McConnell says they will now pursue a vote to repeal without replacement. McConnell announced last night that the vote— which is expected to fail — will occur next week, at President Trump’s request.

What does this mean for North Carolina? If the Senate proceeds to repeal the ACA without a replacement, the number of uninsured North Carolinians would rise (and double) from 1.1 million to 2.1 million in 2019 alone. Furthermore, Federal government investments on North Carolina’s health care would be reduced by $1.6 billion in 2019, and by $59 billion from 2019 to 2028, because the Medicaid expansion, premium tax credits, and cost -sharing assistance would be eliminated.

This type of negative impact on the state’s most vulnerable and on the state’s budget is dangerous considering we recently reported that North Carolina is not on track to achieve its 2020 health objectives, and that the legislature’s Fiscal Research Division has projected state budget shortfalls of $1.2 billion to $1.4 billion in fiscal years 2019-20 to 2021-22.

Based on the facts, it is clear that NC’s two U.S. senators should support the idea of starting from scratch with a different, bipartisan approach that leaves Medicaid aside and focus on making real improvements to marketplace stability and affordability. We now know that it would not be in North Carolina’s best interest to see the GOP health bill, or elements of it, arise down the line and in other forms.

What would “Repeal without Replace” do?

Sen. McConnell now says that he plans to bring to a vote a version of the 2015 Affordable Care Act (ACA) repeal reconciliation bill that President Obama vetoed. Assuming a similar timeline to the 2015 version, that bill would:

  • Completely end expansion as of Jan. 1, 2020. There would be no phase-out and no statutory option for states to keep their expansions, even if they could afford to do so at regular match.
  • Completely eliminate the ACA’s tax credits and cost sharing subsidies – with no replacement – as of Jan. 1, 2020.
  • Immediately repeal the ACA’s high-income and corporate taxes, cutting taxes for households with incomes over $1 million by over $50,000 per year.
  • Immediately repeal the ACA’s individual and employer mandates.

What would the consequences of “Repeal without Replace” be?

The Congressional Budget Office (CBO) analyzed the consequences of this approach in January 2017, and found: Repealing much of the Affordable Care Act (ACA) would cause 32 million people to lose coverage by 2026 and roughly double premiums in the individual insurance market. Specifically, the report showed:

  • Coverage: 18 million people would lose coverage in 2018, 27 million would lose coverage by the early 2020s, and 32 million would lose coverage by 2026.
  • Individual market premiums: Compared to current law, premiums would be 20-25 percent higher in the first year, 50 percent higher by the early 2020s, and would double by 2026.
  • Individual market stability: By the early 2020s, about half of U.S. population would live in areas with no individual market insurers, increasing to 75 percent by 2026. Essentially, the individual market would collapse in most of the country.

According to the Urban Institute:

“The vast majority of those becoming uninsured would be members of working families (82percent), and more than half (56 percent) would be non-Hispanic whites. The vast majority of adults becoming uninsured would lack college degrees (80 percent).”

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center, Trump Administration

Oh, those pesky facts: White House wrongfully attacks nonpartisan Congressional Budget Office

Non-partisan government agencies that often go unnoticed but are grounded in upholding principles such as accountability, integrity, and reliability include the U.S Congressional Budget Office (CBO) and the Government Accountability Office (GAO). You might recall that CBO is the office that recently analyzed the President’s proposed budget as well as the Senate’s proposed health care bill and found:

Unfortunately, earlier this week, the White House released a video on Twitter to continue a discouraging and damaging pattern of attacking the CBO. At the state level, this would be equivalent to the Governor attacking the General Assembly’s Fiscal Research Division (FRD) or Program Evaluation Division (PED). It is worth noting that as the party in control of Congress, Republicans were the ones that hand-picked the current CBO director in 2015.

This is what Maya MacGuineas, the President of the nonpartisan Committee for a Responsible Federal Budget had to say in response to this latest attack:

“The CBO is the fiscal scorekeeper of Congress. Its work is solid, nonpartisan and provides a tremendous service in understanding the costs and tradeoffs of thousands of different proposed policies.

Going after the CBO reminds me of those parents on the soccer sidelines screaming at the ref who, while he may not be 100-percent perfect, isn’t rooting for either team. He sure as heck is doing a better job than the screaming parent would be if he or she were calling the game.

It is important to remember that their estimates are just that — estimates. Of course the CBO is not perfect. But importantly, they do their work employing rigorous analysis, excellent oversight and no political agenda. Their output is incredibly important and helpful in guiding the policymaking process.

As former CBO Director Rudy Penner said, ‘A forecast does not have to be perfectly accurate to be useful. If a weather forecaster predicts three inches of rain and only two inches fall, it can be said that it was a terrible forecast in that it was off by one-third. Nevertheless, it was useful to know that a lot of rain was coming.’

Thank goodness the CBO continues to play by the rules, release unbiased estimates and continues to contribute important information to the discussion. It’s not as though they make up economic growth numbers to make the numbers add up. Now that would be something to tweet a snarky video about.”

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

NC Budget and Tax Center, Trump Administration

CBO: President Trump’s budget policies lack details, drastic budget cuts won’t solve debt issue

The Congressional Budget Office (CBO) has released its first analysis of President Trump’s proposed 2018 budget and it is worth noting that CBO could not provide a comprehensive analysis of the effects of the proposed policies in the President’s budget because many of them do not contain the details necessary to assess those effects.

Throughout its analysis of the President’s 2018 budget, CBO indicated:

“The President’s proposals would affect the economy in a variety of ways; however, because the details on many of the proposed policies are not available at this time, CBO cannot provide an analysis of all their macroeconomic effects or of the budgetary feedback that would result from those effects.”

Unfortunately, this is not surprising as we’ve previously reported that the President’s initial budget omitted 85% of details that previous administrations have included.

CBO’s analysis also shows that even though President Trump has proposed to cut spending by $4.2 trillion over the next ten years the deficit would generally rise each year under the President’s budget, totaling $720 billion in 2027. The cumulative deficit over the 2018–2027 period would total $6.8 trillion. In other words, the President’s drastic budget cuts to critical programs that various communities and families across the country and here in North Carolina depend on to thrive will not solve the federal debt issue.

CBO is not blunt in calling out the President’s incoherent budget a disappointing mix of unrealistic assumptions, gimmicks and punts, but points out in a restrained way that:

The deficits that CBO estimates would occur under the President’s proposals are larger than those estimated by the Administration. Nearly all of that difference arises because the Administration projects higher revenue collections—stemming mainly from a projection of faster economic growth.

Based on CBO’s analysis it is clear the President’s budget is not a real blueprint that would help America. A credible and strategic budget would at least contain details for proposed policies, would improve the debt issue in the long-term, and would be based on credible economic assumptions.

Below are other key points from CBO’s latest report: Read more

NC Budget and Tax Center, public health

Latest data: NC will not come close to 2020 health objectives; legislature’s policy failures implicated

One of North Carolina’s goals is “to be one of the healthiest states in the nation.” However, the reality is that our state is not on track to reach this goal anytime soon.

Every 10 years since 1990, North Carolina has set decennial health objectives with the goal of making North Carolina a healthier state. In 2011, the state identified 13 major health focus areas and established 41 objectives and targets to be meet by the year 2020. According to our state’s health improvement plan, “Healthy NC 2020: A Better State of Health”:

“The case for improving the health of individuals throughout the state is strong…the improvement of population health is an important economic development strategy, because health is a form of human capital and as such is a significant “input” into our economic system.”

Unfortunately it appears our state will fall woefully short of achieving the goals outlined in its health improvement plan. Analysis of the latest state data and overall health rankings finds the following:

  • North Carolina is not on track to achieve major health objectives by 2020.

The state is not likely to meet targets for 32 out of 41 health objectives (78 percent) by 2020. At the current pace it would take the state 48 more years (or until the year 2065) to achieve all of its 2020 targets. As a result, 12 out of the 13 (92 percent) state’s major health focus areas are negatively affected and not likely to be successful in achieving the 2020 objectives related to them.

  • North Carolina is worse off in 18 key health objectives compared to nine years ago. In other words, instead of making progress, certain conditions have gotten worse.

Major health objectives in our state that are worse off today compared to nine years ago include: the unintentional poisoning mortality rate; the percentage of individuals aged 12 years and older reporting illicit drug use; the suicide rate; the rate of mental health-related visits to emergency rooms; the percentage of people spending more than 30 percent of their income on rental housing; the percentage of adults who have had permanent teeth removed due to tooth decay or gum disease; the number of critical violations per restaurant/food stand; and the percentage of adults with diabetes. Read more

NC Budget and Tax Center, Trump Administration

Would the U.S. Senate healthcare bill affect NC’s budget in a negative way? Definitely, here’s why…

The Senate GOP has released its proposed healthcare bill, and analysis shows that it would cut federal Medicaid spending even more over the next ten years than the House passed health plan. How much more? $467.4 billion. This cost shift to the states would cause greater state budget shortfalls: Instead of North Carolina losing at least $6 billion over the next 10 years in federal funding for Medicaid, it is estimated that the state would now lose and have to make up at least twice as much ($13 billion) over the same period for Medicaid.

To put that in perspective, North Carolina has only had to contribute $3.1 billion a year for Medicaid in state appropriations, on average, each of the past seven years.

How does this happen? Through a framework proposed by the GOP in Congress called Medicaid Per-Capita Caps. The Urban Institute explains that the American Health Care Act (AHCA) changes the way Medicaid is funded by capping federal Medicaid payments per enrollee, beginning in 2020. Under the House version of the AHCA, these caps would grow at the rate of the medical Consumer Price Index (m-CPI) for most Medicaid enrollees, adding 1 percent to the rate for the elderly and disabled.

The Senate bill, however, lowers the growth rate to the Consumer Price Index for All Urban Consumers (CPI-U) beginning in 2025. Over the next decade, it’s projected to grow at 2.4 percent, compared to the m-CPI rate of 3.7 percent used in the House version. This means a shortfall between federal Medicaid payments and projected costs that will grow over time, and states will have to make the difference up by raising taxes, cutting enrollment, reducing benefits, or reducing provider reimbursement.

President Trump has admitted that he used the word “mean” to describe the House GOP’s health plan. Given the fact that the Congressional Budget Office (CBO) is set to release its estimate for the Senate GOP health care plan very soon, and that it will show that millions of Americans will lose health coverage and billions in Medicaid costs will be shifted to the states, there is one question left to be answered:

Will North Carolina’s own U.S. senators, Richard Burr and Thom Tillis, do the right thing and reject the current proposal that would cut health coverage for millions of vulnerable Americans and shift billions in costs to North Carolina?

In Case You Missed It

Most of the debate regarding North Carolina’s state budget took place last week. And interestingly enough there was one topic that legislators did not address: the federal funding cuts that loom overhead. This is concerning given the massive cuts to federal funding proposed by the President and GOP in Congress. Based on those federal cuts, we know that North Carolina would have to come up with at least $13 billion in additional revenue over the next 10 years to maintain existing vital programs – one of those being Medicaid.

Before the Senate released its proposed health care bill last week we reported that the GOP’s health plan secrecy and Medicaid per-capita caps should raise alarms in NC. We stated If the Senate produces a new health plan bill and keeps Medicaid per-capita caps in its framework, North Carolina’s state budget and its people will suffer in the long-term.”

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.