The official government weighers have weighed in. Yesterday, the Congressional Budget Office and the staff of the Joint Committee on Taxation released their estimate of the financial impact of the Republican plan to replace Obamacare—and what an impact it has! (Or may have!)
(Or who knows?)
On the plus side, the CBO/JCT says the “legislation would reduce federal deficits by $337 billion over the 2017-2026 period”—though most of that savings would come from proposed cuts to Medicaid and from nixing certain subsidies that taxpayers now receive with Obamacare.
On the (more) negative side, the plan, if enacted, would cause an additional 14 million Americans to lose their health insurance by next year, relative to current law—and push that figure up to 24 million by 2026—the government accountants said.
On the side that’s somewhere in the middle—think of it as the Möbius strip portion of the legislation—premiums would go up for a few years (until 2020), then go down.
But mostly, the government bean counters said, the effects of the GOP’s American Health Care Act are on the undecided side. “The ways in which federal agencies, states, insurers, employers, individuals, doctors, hospitals, and other affected parties would respond to the changes made by the legislation are all difficult to predict,” they wrote—as is the plan’s larger impact on the economy. “Because of the very short time available to prepare this cost estimate,” the agencies continued, “quantifying and incorporating those macroeconomic effects have not been practicable.”
Naturally, politicians on both sides of the aisle have jumped to highlight the stats that feed the narratives they’re selling.
What few seem to be emphasizing, though, is the most compelling takeaway of the CBO/JCT report, in my view: that no one quite knows what impact Trumpcare would have were it to become the law of the land. (The government’s financial arbiters use the word “uncertain,” or a form of it, 10 times in their 37-page report.) Which means that rushing the bills through the reconciliation process—a legislative E-ZPass lane that sharply limits debate and vetting—is an exercise in recklessness, if not outright cynicism.
The Republicans control the White House and both chambers of Congress. They’ve earned the right to craft policy for the nation. But when that policy has the power to radically change the lives of tens of millions of Americans—and in ways that no one can fairly predict—it makes good honest sense to air it out a bit before turning it into law, doesn’t it?
Just a thought, anyway. More news below.
SXSW festival features tech, biopharma, government rock stars (including Joe Biden). The South by Southwest media, technology, and music festival in Austin, Texas often draws impressive guests. This year, one of the biggest stars to hit the stage wasn’t of the rock variety – but former Vice President Joe Biden brought down the house anyways. Speaking about health care costs and his highly personal effort to find cancer cures following the death of his son, Biden repeated his oft-used refrain that defeating cancer is the “only bipartisan thing left.” And he also signaled faith that the Trump administration will continue with the Obama administration’s Cancer Moonshot effort. “I’m confident that the new administration, once it gets organized—and I’m not being facetious—will be as enthusiastic of ending cancer as we know it,” said Biden. There were also a number of other health care-related panels during the festival, including a discussion between IBM CEO Ginni Rometty and Johnson & Johnson chief Alex Gorsky. The pair chatted about J&J’s collaboration with IBM Watson Health, and the structural changes in health care that could help fully harness the power of artificial intelligence. Rometty, for instance, said that a strong public cloud is actually essential to the security aspect of data analysis because the information is all contained under a uniform system with consistent standards.
Allergan gets in on the CRISPR game. Pharma giant Allergan is hooking up with Editas Therapeutics in an R&D pact that encompasses up to five of Editas’ CRISPR gene-editing therapies for eye disorders. Allergan will pay Editas $90 million upfront for access to these experimental treatments, including Editas’ lead candidate to treat the rare genetic disorder Leber Congenital Amaurosis. Editas has been flying high since February’s landmark patent ruling in favor of the Broad Institute of MIT and Harvard, with which the biopharma firm is affiliated. Editas shares are up 9% today. (Reuters)
Novartis wins early approval for breast cancer drug Kisqali. Swiss pharma giant Novartis on Monday scored a key, first-line approval for Kisqali, an oral treatment that’s part of a popular and promising new class of breast cancer treatments called CDK 4/6 inhibitors. This space includes Pfizer’s Ibrance, which cleared $2 billion in sales last year and was expected to reach the $3 billion mark in 2017. But Kisqali’s approval as a go-to option (in combination with another treatment) in breast cancer could put a dent in those rosy projections as Pfizer is forced to grapple with a formidable new competitor. (Reuters)
Bill Ackman finally exits his Valeant stake. It finally happened – activist investor Bill Ackman has parted ways with Valeant Pharmaceuticals after his stubborn, and massive, investment in the company cost Pershing Square investors more than $3 billion. Valeant shares are tanking on the news today (down more than 11%, just 25 cents away from a 52-week low). But the question is: Why did Ackman take so long to make what was, to many, such an obvious decision? Valeant’s alleged shoddy accounting and price hiking tactics have been in the public spotlight for a considerable amount of time. My Fortune colleague Stephen Gandel has a grim prognosis for the outspoken investor. “Ackman’s returns, after two years of dismal numbers, have improved somewhat recently. But that doesn’t really matter anymore,” he writes. “Even if he is able to hit a home run or two, Ackman’s Valeant misadventure has shown he is not able to manage the downside of mistakes when they happen. It may not just be time for Ackman to move on from Valeant, but to move on completely.” (Fortune)
THE BIG PICTURE
The CBO’s Obamacare assessment is out, and the players are out of sync. As Cliff notes above, the CBO is out with a cursory assessment of the Republican health care plan, and it’s a decidedly mixed (and uncertain) bag. But the overwhelming focus has been on the agency’s projection that 24 million fewer Americans would have insurance under Trumpcare in 2026 relative to current law (and 14 million fewer would be covered in 2018). Beyond the topline numbers, though, the immediate political fallout underscored the confusion surrounding how to react to the report card. For instance, HHS Secretary Tom Price questioned its accuracy and said the projections “defied logic.” Meanwhile, House Speaker Paul Ryan and other Congressional Republicans tried their best to spin the analysis as a positive, drawing skepticism from reporters like Fox News’ Bret Baier. (Fortune)
Senate confirms Seema Verma to lead CMS. Beyond the ongoing Trumpcare drama, the U.S. Senate filled on of the most important positions at HHS on Monday – Seema Verma was confirmed as the new administrator of the Centers for Medicare and Medicaid Services (CMS), which oversees major entitlements such as Obamacare, Medicare, and Medicaid. Verma is known for her conservative alternative to Medicaid expansion in Indiana, and she is closely allied with Vice President Mike Pence (who used to be the governor of Indiana). She was confirmed on a largely party line 55-43 vote. (USA Today)
Yahoo’s New Male CEO Will Make Double Melissa Mayer’s Salary, by Jen Wieczner
Scotland Tries for Independence One More Time, by Geoffrey Smith
3 Reasons Trump’s Deficit Pledges Are Fake News, by Shawn Tully
Will Cheap Robots Prevent a Comeback in Jobs? by Jennifer Alsever
|Produced by Sy Mukherjee|
Find past coverage. Sign up for other Fortune newsletters.