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Deconstructing the latest House GOP health bill

May 25, 2017by Robert Whitcomb in Uncategorized tagged , , , , , ,

By JULIE ROVNER

For Kaiser Health News

The Republican overhaul of the federal health law passed by the U.S. House this month would result in slightly lower average premiums and slightly fewer uninsured Americans than an earlier proposal. But it would leave as many as one-sixth of Americans living in states where older and sicker people might have to pay much more for their health care or be unable to purchase insurance at all, the Congressional Budget Office said Wednesday.

In some states, said the report, “less healthy people would face extremely high premiums, despite the additional funding that would be available” in the bill to help offset those increases.

The report incorporates the changes to the bill made just before it narrowly passed the House on May 4. Those changes included an amendment offered by Rep. Tom MacArthur (R-N.J.) that would let states waive some key provisions of the health law, including requirements to cover “essential health benefits” and to offer insurance to people with preexisting conditions at no extra cost.

CBO said the current version would result in savings of $119 billion over 10 years and 23 million more uninsured people than would be expected under the current law.

According to the estimate, premiums would be slightly lower than under the Affordable Care Act, but mostly because “the insurance, on average, would pay for a smaller proportion of health care costs.”

Before the changes, the CBO estimated that the bill would result in savings of $150 billion over the next decade and grow the number of uninsured Americans by 24 million. That dollar figure was a considerable change from the original version of the bill that CBO said would have saved $337 billion, but lawmakers decided to spend back some of those savings on help for those likely to be cut off from insurance.

The two earliest versions of the bill could not muster enough support for the House leadership to bring them to a vote on the floor. Later, MacArthur and leaders of the conservative Freedom Caucus negotiated changes that they said should help bring down premium costs for consumers. That is the bill approved and now evaluated by CBO.

The CBO also estimated that in states deciding to take the option to waive requirements related to charging sicker people more, “the nongroup market would start to become unstable.” In particular, said the report, “people who are less healthy (including those with pre-existing or newly acquired medical conditions) would ultimately be unable to purchase comprehensive nongroup health insurance at premiums comparable to those under current law, if they could purchase it at all.”

And in states that chose to waive the requirements for essential benefits, even people with insurance “would experience substantial increases in what they would spend on health care,” because their policies might no longer cover expensive treatments like those for maternity care or mental health and substance abuse.

Despite repeated assertions by President Trump and congressional Republicans that the Affordable Care Act is collapsing, the CBO specifically said that the market would continue “to be stable in most areas” under current law. It predicted the same for the original version of the House bill.

In fact, the only place the CBO specifically said the individual insurance market might become unstable is in states that decide to waive the ACA’s coverage requirements. It did not guess which states might do that, but the report says that one-sixth of the population could be subject to that instability.

“What is clear is that these waivers make life much, much worse for people with preexisting conditions, for older people, for sicker people,” said Aviva Aron-Dine, a senior fellow at the Center on Budget and Policy Priorities and former Obama administration health staffer.

The savings in the bill are mostly the result of capping federal funding to states for the Medicaid program for those with low incomes and scaling back the tax credits that help some people with low and modest incomes pay for private insurance. An estimated 14 million of the 23 million people who would no longer have insurance would otherwise have obtained it through Medicaid.

The bill would also repeal nearly all the taxes imposed in the ACA to pay for the new benefits, including taxes on wealthy individuals and much of the health industry.

Reaction to the new estimate fell mostly along predictable party lines.

“CBO continues to find that through our patient-focused bill, premiums will go down and that our reforms will help stabilize the market,” said a statement from House Energy and Commerce Committee Chairman Greg Walden (R.-Ore.) and its health subcommittee chairman, Michael Burgess (R.-Texas).

By contrast, Rep. Steny Hoyer (D.-Md.) said the new estimate shows “TrumpCare will kick millions of Americans off their insurance coverage and force consumers to pay more for less.”

But the reaction was not completely partisan. Sen. Bill Cassidy (R-La.), a key swing vote in the Senate, said that “Congress’s focus must be to lower premiums with coverage which passes the Jimmy Kimmel test,” referring to the late-night host’s tearful monologue about the health problems of his newborn son. The House-passed bill, he said, “does not. I am working with Senate colleagues to do so.”

Maine’s successful ‘invisible high-risk pool’

May 17, 2017by Robert Whitcomb in Uncategorized tagged , ,

By PATTY WRIGHT

For Maine Public Radio and Kaiser Health News

As the GOP health care bill moves from the U.S. House of Representatives to the Senate, many consumers and lawmakers are especially worried that people with preexisting conditions won’t be able to find affordable health coverage.

There are a number of strategies under consideration, but one option touted by House Republicans borrows an idea that Maine used just before the Affordable Care Act went into effect. It’s called an “invisible high-risk pool” — invisible because people in it didn’t even know they were.

The Maine pool earned higher marks than most state high-risk pools because it had a key ingredient: enough money.

“The problem is that in order to do the Maine model — which I’ve heard many House people say that is what they’re aiming for — it would take $15 billion in the first year, and that is not in the House bill,” Sen. Susan Collins (R.-Maine) told Politico. “There is actually $3 billion specifically designated for high-risk pools in the first year.”

Here’s how the Maine model worked: When a resident applied for health insurance, they had to fill out a questionnaire. If they had certain medical conditions known to be costly, their application was flagged for the high-risk pool. To consumers, it was seamless: They paid regular premiums and got the same sort of coverage as any other enrollee in their chosen health plan.

What was different was how their medical bills were paid. The state set up a nonprofit entity — the Maine Guaranteed Access Reinsurance Association, or MGARA. Mitchell Stein, an independent health-policy consultant, explained that the money to pay for these high-cost patients came from two sources: the insurance policy premiums paid by patients within that high-risk pool and a $4-a-month surcharge on all policyholders in the state.

This “invisible high-risk pool” was just one part of a larger health-reform law in Maine, Stein said, and that makes a straight-up assessment of how well the strategy worked difficult. But it’s “a great theory,” he said, “and can be an appropriate way to handle these things.”

Eric Cioppa, superintendent of Maine’s Bureau of Insurance, agrees with Stein. “In Maine, for the period of time it was operating, it worked very well,” Cioppa said.

It was active from 2012 through 2013, as 2014 marked the advent of the Affordable Care Act’s marketplace insurance exchanges. Though in effect only for a brief period, Cioppa said, the invisible high-risk pool did keep costs down in the individual market, where Anthem was the largest insurer.

Without the invisible high-risk pool, Cioppa said, Anthem would have increased rates more than 20 percent, based on estimates the insurer had to make. Instead, the rates went up less than 2 percent.

But Steve Butterfield, policy director of the Maine-based advocacy group Consumers for Affordable Health Care, cautioned that one crucial component that made Maine’s high-risk pool work was that it was well-funded. The strategy proposed in the House Republicans’ American Health Care Act is not, he said.

“An analysis that was done on what this program would need showed that it would need $15 billion to $20 billion per year to have any kind of reasonable impact on premiums,” Butterfield said.

The GOP bill does allocate about $15 billion to $20 billion — but that is supposed to last almost a full decade, not per year.

“One of our concerns,” Butterfield said, “is if the feds are going to put this in place and only kick in a token amount of money, is it going to be up to the states to pick up the slack and pay into this thing to make it work?”

Furthermore, Butterfield said, as the law stands now, under the Affordable Care Act, there’s no need for high-risk pools of any sort. The idea to use invisible high-risk pools is a solution to a problem that the GOP health care bill creates. Right now people can buy insurance regardless of their health status, whether or not they have a preexisting condition. It’s the GOP bill that would allow states to opt out of that Obamacare rule.

“I don’t understand,” Butterfield said, “why it would be a good idea to, on the one hand, say, ‘Well, we’re worried about preexisting conditions, so we’re going to throw not enough money at a problem we’re creating. At the same time, we’re going to allow insurance companies to charge sick people more.’ ”

And the invisible high-risk pool, said consultant Stein, is just one small proposal within the larger health bill.

“There’s nothing inherently wrong with it,” Stein said, “but it doesn’t really fix all the other problems of the bill.”

Which, he said, include cuts to Medicaid and potential changes to what are, under Obamacare, guaranteed “essential benefits.”

This story is part of a partnership that includes Maine Public, NPR and Kaiser Health News.

CMS gives states reprieve on new Medicaid standards

May 12, 2017by Robert Whitcomb in Uncategorized tagged , , , , , ,

 

By PHIL GALEWITZ

Kaiser Health News

The Trump administration has given states three extra years to carry out plans for helping elderly and disabled people receive Medicaid services without being forced to go into nursing homes.

Federal standards requiring states find ways of delivering care to Medicaid enrollees in home and community-based settings will take effect in 2022 instead of 2019, the Centers for Medicare & Medicaid Services announced this week.

The standards were set by an Obama administration rule adopted in 2014 that governs where more than 3 million Medicaid enrollees get care.

Among other things, the rule requires states to provide opportunities for enrollees to engage in community life, control their own money and seek employment in competitive settings. It also ensures that enrollees in group homes and other residential settings get more privacy and housing choices that include places where non-disabled people live.

Matt Salo, executive director of the National Association of Medicaid Directors, applauded the delay.

“We have long been on record saying that the regulation was hopelessly unrealistic in its time frame,” he said. “Delaying it actually helps consumers because the underlying regulation was going to push too many changes too fast into a system that wasn’t ready.”

The Obama administration’s 2014 rule was an effort to create a federal standard to improve the quality of care that the disabled receive outside institutions.

Some states had tried — and struggled — to make changes on their own, partly due to a lack of funding and political difficulties of changing deeply entrenched relationships with providers.

Some had, for instance, forced providers to change long-standing operations at group homes and so-called sheltered workshops, such as Goodwill Industries, where disabled people often work apart from other employees, performing menial tasks for less than minimum wage.

Helping disabled people find work in places where they are not segregated costs states more money, said Gary Blumenthal, CEO of the Association of Developmental Disabilities Providers.

The delay in implementing the federal rule is “a victory for the status quo and for states reluctant to embrace the [new standards],” he said.

States spent several years fighting the new rules during the Obama administration and that slowed their planning, said Elizabeth Priaulx, senior legal specialist with the National Disability Rights Network. She noted states were under pressure from nursing homes and for-profit group homes to resist the changes.

“It is unfortunate the delay had to occur,” but many states were not ready, she said.

The new rule also directs states and providers to reconfigure existing community settings such as group homes to ensure that people will have more privacy. “Without these dollars it’s difficult to change the system,” Blumenthal said.

Funds Already Shifting

In 2014, state Medicaid programs for the first time spent more on long-term care in home and community-based settings than on nursing homes. But there was great variation: Mississippi spent about 25 percent of its long-term care dollars on home and community care while Oregon and other states spent nearly 80 percent.

Camille Dobson, deputy executive director of the National Association of States United for Aging and Disability, said the delay was important for states worried about losing federal funding if they didn’t meet the new standards.

“It was very likely that most of the states would not have been in compliance by March 2019 and so CMS would [have been] faced with taking money away from programs that help people stay in their homes rather than go to nursing facilities,” Dobson said.

The administration’s announcement of the delay came less than a week after the House passed the American Health Care Act, which would take $880 billion over 10 years out of the Medicaid program. It was expected after Health and Human Services Secretary Tom Price in March invited states to apply for waivers from federal Medicaid rules that he said were too onerous to help improve the program.

So far, Tennessee is the only state that has received final approval from CMS for its implementation plan. States still face a 2019 deadline to gain approval for their implementation plans.

Kathy Carmody, CEO of The Institute on Public Policy for People with Disabilities in Illinois, said there is concern the Trump administration may not just delay the rule’s implementation, but eventually eliminate it altogether.

“We are disappointed,” she said, noting that Illinois ranks last or near last on several measures of care for people receiving home and community-based services. That includes having about half of its disabled Medicaid enrollees in residential care settings with seven or eight other disabled people and less than 6 percent of its disabled enrollees in competitive employment, she said.

“We were really hoping the rule would be a push from the federal government to help us evolve into the 21st century and get out of the mid-1980s where we are stuck,” Carmody said.

Grady slashes uninsured-patient rate

May 10, 2017by Robert Whitcomb in Uncategorized tagged

grady

Grady Memorial Hospital, the flagship of Grady Health System.

Grady Health System, in Atlanta, increased its net revenue by $106 million last year.  John Haupert, its CEO, credits the system’s decision to change its charity-care policy and invest in an electronic health record system as main reasons for the improvement, which included going from losses to a $40 million profit.

But Pete Correll, the former chairman of Grady’s corporate governing board, told the Albany (Ga.) Herald earlier this year that Mr. Haupert’s decision to fix the system’s coding, billing and collections was the ”single greatest accomplishment in turning Grady around.”

Perhaps the most interesting achievement is that Grady sharply reduced its uninsured rate by reviewing its charity-care policy.  Traditionally,  once a patient qualified for charity care, he or she was always eligible for free or minimum cost care. But Mr. Haupert, told H&HN,  the system reassesses patients  every time that they visit the hospital to see if they are eligible for other types of funding.

“We were able to go from 42 percent of our patients being uninsured to 27 percent — meaning that difference came from Medicaid,” he said.

To read the H&HN article, please hit this link.

To read the Albany Herald article, please hit this link.

 

Deconstructing the House GOP’s health-insurance bill

May 5, 2017by Robert Whitcomb in Uncategorized tagged , , ,

 

PHIL GALEWITZ

For Kaiser Health News

The AARP called the health-insurance bill that House Republicans narrowly approved May 4 “deeply flawed” because it would weaken Medicare and lead to higher insurance premiums for older Americans.

The American Medical Association said it would undo health insurance coverage gains and hurt public health efforts to fight disease. The American Hospital Association said the bill would destroy Medicaid, the state-federal health insurance program for the poor that expanded mightily under the Affordable Care Act and buoyed hospitals’ bottom lines.

Normally, that would spell failure.

But in today’s Washington, despite vocal opposition from nearly every major constituency affected by the bill, the vote produced the opposite result. The chorus of nays was not enough to stop the Republican-controlled House from approving the American Health Care Act, which repeals many critical parts of Affordable Care Act — the 2010 law known as Obamacare that has dropped uninsured rates in the United States to historic lows but, despite its lofty name, did little to rein in rising health costs. The AHCA will now move to the Senate, where GOP senators are expected to demand many changes.

Republicans have promised to repeal Obamacare since the day it was passed with only Democrats voting for it and have been campaigning on that promise ever since. While the House voted to repeal the act more than 60 times under the Obama administration,  the May 4 vote was the first one that really counted because the GOP controls Congress and the White House.

Peter Kongstvedt, a Virginia health-industry consultant, said some House Republicans are likely betting the Senate blocks their legislation from going forward. “Nobody wins with this vote — that’s the damnedest part,” he said. “It’s a shallow political statement.”

The vote was about healthcare, but it was a display of political theater, too. Representatives sent a message not to hospitals, doctors and patients but to President Trump and his devoted followers who propelled the GOP to power.

“The president needed a win and so does House Speaker Paul Ryan,” said Jason Fichtner, a healthcare expert at the conservative Mercatus Center at George Mason University, in Fairfax, Va. “With this vote, they can go back to their constituents and say they did something about Obamacare.”

That is, the 217 GOP House members who voted for the bill. Twenty voted no, joining 193 Democrats.

Trump’s team scored him a touchdown, but their run to the goal line wasn’t politically pretty:

  • The bill passed without an updated analysis of costs and benefits from the nonpartisan Congressional Budget Office, whose review in March came before the GOP added sweeteners to win over its conservatives and moderates.
  • Democrats passed Obamacare after a year of debate. The GOP spent only two months hammering out its replacement plan.
  • Business groups — such as the drug and hospital industries — played no part in shaping the AHCA. The Obama administration got both groups on board early on.

The GOP’s focus was not so much on what can lower prices and increase health coverage but how to persuade the right-wing Freedom Caucus to back the legislation.

In the end, passage mattered less about how the bill played in public polls — poorly — or among key interest groups — nearly all opposed. “Coming to agreement and avoiding the embarrassment of not coming to agreement was more important than what was in the final bill,” said Jim Morone, a political scientist at Brown University in Rhode Island. “Republicans have become a deeply ideological party … and they don’t care what interest groups think; they are going to press ahead.”

Part of the unlikely victory is that the bill makes the biggest change to Medicaid since the program was established in 1965 and there hasn’t been as much debate about that as one might expect. The AHCA could lead to huge cuts in federal funding of Medicaid, which now covers more than 75 million Americans.

Alan Levine, a hospital executive who was the top health official under former Republican governors Jeb Bush in Florida and Bobby Jindal in Louisiana, said Republicans who ran on repealing Obamacare felt that they had no choice but to vote for the bill, despite its flaws. “I don’t think Republicans can face voters in 2018 and have a credible argument to keep them in control of Congress, if they did not do their No. 1 campaign priority to repeal Obamacare,” said Levine, CEO of Mountain States Health Alliance, a hospital system based in Johnson City, Tenn.

Besides, he said, even if the GOP bill becomes law, it’s set up so that the changes won’t affect many people before the 2018 midterm elections. “People won’t feel this — good or bad — until well after the election.”

CMS seeks to adjust readmission penalties to account for duel-eligibles

April 19, 2017by Robert Whitcomb in Uncategorized tagged , , , ,

revolvingdoor

The Centers for Medicare & Medicaid Services wants to adjust penalties in its Hospital Readmissions Reduction Program according to a hospital’s proportion of dual-eligible (Medicare and Medicaid) patients — a move long supported by hospital-industry stakeholders.

The proposed rule would take effect in fiscal 2019. In it, the CMS laid out several approaches  for determining   hospitals’ proportion of dually eligible patients and other key metrics.The change stems from the 21st Century Cures Act,  enacted last December. The law required Medicare to consider patient background when calculating payment reductions to hospitals under the Hospital Readmission Reduction Program, and to adjust those penalties based on the proportion of patients  dually eligible for Medicare and Medicaid.

The  Medicare Payment Advisory Commission has reported that while these dual eligibles constituted 18 percent of beneficiaries they accounted for nearly a third of total Medicare fee-for-service spending in 2012.

To read more, please hit this link.

 

Looking for middle ground on the ACA debate

April 18, 2017by Robert Whitcomb in Uncategorized tagged , ,

By EMILY LAZAR

For Kaiser Health News

Joel Hay, a professor at the University of Southern California, describes his political views as “conservative, free market.” But in a counterintuitive twist, his proposal to fix the Affordable Care Act would expand the largest source of public health coverage in the country: Medicaid.

Hay, who specializes in health policy and economics, envisions an Obamacare replacement plan that would scrap health insurance exchanges such as Covered California, which sell subsidized private market plans.

Instead, he would allow people under the age of 65 to buy into Medicaid, called Medi-Cal in California. Their premiums would be based on family income and a surcharge would be assessed on those who are uninsured at the time they apply. That would be intended as an incentive to keep them from buying insurance only when they’re sick. People could acquire coverage regardless of preexisting conditions.\

Under Obamacare, 31 states and the District of Columbia expanded Medicaid, the federal-state health care program for people with low incomes. In doing so, they added more than 11 million people to the rolls, including about 3.7 million in California.

Hay believes that the Medicaid expansion was the most successful part of the ACA and contends that the health insurance exchanges have struggled to provide affordable plans with adequate networks in many states.

He said expanding Medicaid further could achieve two important goals: slowing the growing costs of health care, which he said is better achieved by Medicaid than private market plans, and giving all Americans access to at least basic health coverage.

Scrapping the exchanges may not be an easy sell in the Golden State, where Covered California has been lauded as a national model.

Laurel Lucia, director of the health care program at the University of California at Berkeley Center for Labor Research and Education, agrees with Hay that the Medicaid expansion has been a success, but she wonders whether middle class consumers will enroll in Medicaid as readily as private market plans.

California Healthline recently interviewed Hay about his proposal, and Lucia for a contrasting point of view. Their comments, below, have been edited for clarity and length.

 

Joel Hay proposes scrapping the Obamacare exchanges and building on the expansion of Medicaid instead. (Courtesy of Joel Hay)

Q: Can you provide an overview of your Obamacare replacement plan?

It would build on the successful part of the Affordable Care Act, namely the Medicaid expansion that is responsible for the majority of the increased coverage.

This is how it would work: Below some family income threshold that would be yet to be determined, the cost of getting Medicaid would be zero. Above that, there would be premiums based on family income up to some maximum threshold, where the cost would be something like 10 percent of family income.

People would always have an option of opting out into a private plan if one is available to them. But this is a backup for anybody that doesn’t have other options.

This plan focuses on the two biggest problems in American health care. No. 1: Not everyone has health insurance. No. 2: We have the highest health care costs in the world.

Medicaid is a no-frills health plan available in all states. It’s not perfect, but it works. There are certainly access problems, but it seems to do a much better job, even in some of these rural areas where we’re seeing problems with the health insurance exchanges.

Q: In some states, such as California, the exchanges seem to be working reasonably well. Why lump all exchanges in one basket?

There’s a philosophical issue here. Is competition across health plans the best way to get affordable, basic care to everyone?

Among the majority of people that are reasonably well-educated, middle class or better, have good jobs and in fact maybe get their insurance through their jobs, the competition between insurance plans works reasonably well. But when you go further down the income scale, that’s where the competition doesn’t seem to work.

The Obamacare experience thus far backs that up. A lot of people just don’t seem to be able to get a good plan either because the premiums are skyrocketing or because the narrowing of the coverage options they have is prohibitive.

Q: Would your plan require everyone to have health insurance?

There is no mandatory requirement for having health insurance, but there are penalties if you go without coverage. If you don’t sign up during open enrollment, the only option you can get outside of that window would be this Medicaid option. The longer you delayed getting into it, the higher your monthly premiums would be.

Q: Would subsidized health plans still be offered through exchanges?

No. The subsidies to help people buy into Medicaid should be targeted to making sure everybody has access to essential care. The subsidies would be focused on helping low-income people get into a no-frills Medicaid health plan. The subsidies will phase out at some upper income level.

If you’re earning $96,000 for a family of four, hopefully the private market will generate options for you. But if you have no other option, this would be available to your family at a premium of 10 percent of your family income. That’s going to work out to be something like $10,000. That’s a lot of money, but that’s the problem we have.

Q: What do you mean when you say “that’s the problem we have”?

We’ve reached the point in this country where the average cost of health care per capita is over $10,000, whereas the median family income is only $54,000. A median family of 2.6 people is going to see over half of their income going to health care.

We have to consider other options. Medicaid is cheaper. It gets the lowest price for drugs by law and negotiates vigorously to get extremely low prices for medical services, hospitalizations, doctors. If you can get your health care through Medicaid, the cost per every unit of service is lower.

Q: Can the already-stressed Medi-Cal program {California’s Medicaid program} handle millions more enrollees?

It’s better than what has been demonstrated in the private health insurance exchanges under Obamacare. In Medicaid, people may have to travel long distances for specialty care, although some of those things can be overcome with telemedicine and other mechanisms. But we’ve seen pretty much a collapse of the private markets to handle people in rural, hard-to-reach places. Yet Medicaid has provided care to people in every state, including in every one of these remote access areas. It’s not perfect. Rural health care access is never going to be perfect.

Q: You have mentioned block grant funding of Medicaid as part of your proposal. That is what Congressional Republicans have been pushing to reduce federal spending on the program. How can you do that and significantly expand Medicaid at the same time?

I certainly wouldn’t want to hang the whole program on whether or not it’s block-granted. The argument in favor of block granting is if you give a certain amount of money per-capita to the states, it’s up to them to allocate the resources efficiently and effectively to provide the highest quality of care. If you continue with the current funding approach for Medicaid, the states have 50 percent or less of the responsibility for how the dollars are spent and so they’re not going to work as effectively to control costs and quality.

Some people on the far right want to actually destroy Medicaid. They think by block granting Medicaid, they can eventually make it go away. That’s not my goal here. My goal is to provide sufficient federal funds to make this thing work.

Q: Have you discussed this idea with any lawmakers?

I’m just beginning. What I see so far is that everybody is so polarized, that there really isn’t any movement in the middle. I’ve presented this to left-wing academics, and they say what they want to do is push through single payer, even if it’s only in California. They’re just not interested in compromise. I’m sure the same would be true of Tea Party Republicans.

No Death Spiral In Obamacare Exchanges

From Laurel Lucia, University of California at Berkeley Center for Labor Research and Education, health care program director

I agree with the conclusion that the Medicaid expansion has been working really well, especially in California. It’s true that Medicaid costs are lower than the costs to cover an equivalent population with private insurance and that Medicaid costs have been growing more slowly than costs in private insurance.

Q: What do you think of Professor Hay’s idea?

But I disagree with the premise that the individual market components of the ACA are failing. In California, the individual market reforms and subsidies have been working very well, and nationally I’d say they’re mostly working.

In California, we’ve had very high enrollment and we still have significant competition in the individual market. The vast majority of Californians have a choice of at least three insurers through Covered California.

Nationally, millions of people have been newly insured as a result of the individual market subsidies under the ACA. And affordability has improved significantly for low- and middle-income people who don’t have job-based coverage and need to rely on the individual market.

Both nationally and in California, I would not say that the individual market is in a death spiral.

Q: Aren’t there places where premiums have skyrocketed and choices have decreased?

There are places in the United States where much more plan choice is needed. We need to build on the Affordable Care Act reforms in the individual market to ensure greater choices and greater competition, rather than starting from scratch.

Q: It doesn’t seem like the current Congressional leadership wants to build on the ACA.

If there’s bipartisan will to make the ACA work better in terms of the individual market, it’s very possible to do with some policy changes. And in some places, like California, it is already working well.

Q: So why not end subsidized private plans and allow people to buy into Medicaid instead?

It’s an interesting idea to expand upon Medicaid. There is a question of whether middle-class consumers would enroll at the same rate in a Medicaid-type plan as they do in private insurance.

The provider networks in Medicaid are often quite different than those in plans offered through Covered California. Some consumers may be less likely to enroll in Medi-Cal if they have a strong attachment to their provider and that provider is not in the Medi-Cal network or isn’t accepting new Medi-Cal patients.

Q: Would middle-class consumers be less likely to sign up for Medicaid because of a perception or stigma that it’s just for poor people?

I just don’t know how Californians or Americans at higher income levels would perceive a new program like this that builds upon Medicaid.

If you were going to expand Medicaid to a broader population, you would want to make sure that it is adequately funded. One part of Professor Hay’s proposal would fund Medicaid through block grants, which would actually do just the opposite.

Most research has indicated that block-grant funding for Medicaid would result in substantial cuts to federal Medicaid spending over time without resulting in better cost efficiency. The loss of federal funding would force states to make difficult decisions like cutting eligibility, cutting benefits or implementing enrollment caps.

Block-grant funding would not only threaten Medicaid coverage for existing enrollees, but it would also be especially harmful if you were considering expanding the Medicaid population at the same time.

Q: What can be done to moderate health care cost growth, if not through Medicaid?

Cost containment is an important next step in federal health policy and state policy as well. Costs are growing too rapidly, not just in the individual market but also in job-based coverage, but those are trends that started well before the ACA.

They’re not due to the ACA. In fact, since the ACA, private insurance premiums have grown at a slower rate.

But we do need more focus on slowing the rate of cost growth. I think a lot of the barrier there is political. There have been a lot of solutions proposed to reduce costs, for example allowing Medicare to negotiate with drug companies on drug prices. And often Congress doesn’t want to take on the drug industry or the hospital industry or other aspects of the health care industry to reduce costs.

 

ACA could suffer death by a thousand cuts

April 10, 2017by Robert Whitcomb in Uncategorized tagged , , , , , ,

By JAY HANCOCK

For Kaiser Health News

The Affordable Care Act’s worst enemies are now in charge of the vast range of health coverage it created. They’re also discussing changes that could affect a wider net of employment-based policies and Medicare coverage for seniors.

Republicans failed last month in their first attempt to repeal and replace the ACA. But President Trump vows that the effort will continue. Even if Congress does nothing, Trump has suggested he might sit by and “let Obamacare explode.”

Health insurance for the 20 million who benefited from the ACA’s expanded coverage is especially at risk. But they’re not the only ones potentially affected. Here’s how what’s going on in Washington might touch you.

A three-year-old lawsuit threatens many plans.

A suit by the Republican-led House challenges some subsidies supporting private plans sold to individuals and families through the ACA’s online marketplaces, also called exchanges. It has already gained one court victory. By many accounts, it would wreck the market if successful, stranding up to 12 million without coverage.

“It’s the single-biggest problem facing the exchanges,” said Rachel Sachs, a health-law professor at Washington University in St. Louis. “That would make insurers not only exit tomorrow but also not want to offer plans in 2018.”

The litigation involves lesser-known ACA subsidies that reduce such out-of-pocket costs as copayments and deductibles for lower-income consumers. These are different from the law’s income-linked tax credits, which help pay for premiums.

Filed in 2014, when Barack Obama was president, the suit could backfire by politically harming the Republicans now in charge. House leaders have delayed the litigation and said they won’t drop the lawsuit but will continue the subsidies while it gets considered. The administration has not said how it plans to handle the lawsuit.

Policy confusion undermines coverage.

Even if Congress doesn’t repeal the ACA, the continuing battle makes insurance companies think twice about offering marketplace policies for next year. The less clarity carriers have about subsidies and whether the administration will promote 2018 enrollment, the likelier they are to bail or jack up premiums to cover themselves.

Preserving the subsidies, which limit out-of-pocket costs for lower-income consumers, “is essential,” said Kevin Lewis, CEO of Community Health Options, a nonprofit Maine insurer. “Markets don’t like uncertainty. The ‘sword of Damocles’ hanging over our collective heads is unsettling, to say the least.”

Democrats say Republicans are sabotaging Obamacare.

Shortly after taking power, Trump officials yanked advertising designed to maximize enrollment in marketplace plans just before a Jan. 31 deadline. It was partly restored after an outcry.

Then the administration said it would scrap an Obama-regime plan of rejecting tax returns from individuals who decline to say whether they had health insurance — weakening the requirement to be covered.

Trump aide Kellyanne Conway suggested in January  that the administration might entirely stop enforcing that requirement — the part of the law most hated by Republicans. If officials persist with that message, plans could attract even fewer of the young and healthy members whose premiums are needed to support the ill. That would cause more rising premiums and insurer exits.

“More mischief can be done,” said Dr. Peter Kongstvedt, a health industry consultant and senior faculty member at George Mason University. “It is absolutely possible that some markets will end up with no carriers unless a combination of state and federal government act to preserve the market” with taxpayer money.

Trump officials will move to roll back ACA coverage even if Congress doesn’t repeal.

Tom Price, M.D., secretary of the Department of Health and Human Services, has signaled his intent to reverse parts of the ACA through regulation even if Congress doesn’t repeal the law.

For example, Price couldn’t unilaterally eliminate coverage for birth control or maternity care, both of which many Republicans object to on moral grounds or because of cost. But birth control might no longer be free as a preventive benefit. Maybe the administration would let states limit the number of prenatal visits in maternity coverage. Perhaps more employers could gain religious exemption from providing birth control.

Medicaid coverage for low-income people could shrink.

Obamacare’s coverage expansion included government Medicaid coverage for folks with lower incomes. Thirty-one states and the District of Columbia expanded Medicaid to most adults with incomes below about $16,000 for singles and $28,000 for a family of three — although eligibility varies.

Republicans want to reduce the growth of Medicaid spending and give more control over the program to states. Discussions for a Medicaid overhaul focus on replacing ACA provisions with fixed, less-generous federal grants to states.

But even if the ACA survives, it’s likely the administration will give states more say in who gets Medicaid coverage and how much. Many Republicans favor work requirements for Medicaid recipients and raising out-of-pocket payments for patients.

Under the failed House replacement bill, the American Health Care Act, 9 million people in those states would have lost Medicaid coverage in 2020, estimated the nonpartisan Congressional Budget Office.

At the same time, however, Republican support for the ACA’s Medicaid expansion is growing, which might mean overall cutbacks would be less severe or Medicaid coverage could increase among the 19 states that didn’t expand the program under the ACA.

Some Republicans want to overhaul Medicare for seniors.

House Speaker Paul Ryan wants to restrain Medicare growth by giving members fixed, “premium support” payments to buy plans and possibly raise the age of eligibility. Both could lead to less coverage or greater out-of-pocket expense.

But the proposal wasn’t part of the Republicans’ replacement bill. Changing Medicare likely would trigger loud objections from AARP and other powerful lobbies. And Trump doesn’t seem inclined to back a change.

“I don’t think … Trump wants to meddle with Medicare or Social Security,” White House chief of staff Reince Priebus said in January.

Job-based coverage could become less generous.

Although ditching Obamacare would end the requirement for large employers to offer health insurance, most companies would keep their plans as a way to attract workers, analysts say.

But that coverage could become less generous. The ACA limits employer-plan members’ annual out-of-pocket cost and also prohibits caps on annual and lifetime benefits. At the same time, it prohibits waiting periods for covering a new worker’s preexisting illness.

Any replacement law signed by Trump might not include those protections.

Right, wrong ways to fix the ACA

March 28, 2017by Robert Whitcomb in Uncategorized tagged ,

 

Harris Meyer writes in Modern Healthcare about right and wrong ways to fix the Affordable Care Act.

“Experts have ideas about what can be done to stabilize the ACA’s individual insurance markets and enable states to better control Medicaid costs. These include steps to encourage more young, healthy people to sign up for insurance, while discouraging people from enrolling only when they need medical care, then dropping coverage.

“But experts also have emphatic ideas about what not to do, including using reckless rhetoric about letting the insurance markets collapse, and making piecemeal changes without carefully considering corollary effects on the complex, inter-related healthcare system.”

“One target for the would-be bipartisan reform camp is the ACA’s taxes on health insurance premiums, medical devices, high-value employer health plans and branded prescription drugs. It’s easy to imagine Republicans and Democrats, backed by a wide range of eager healthcare stakeholder groups, uniting to repeal some or all of those taxes, which they argue increase premiums and medical costs.

“Those levies, however, provide funding for the ACA’s coverage and benefit expansions. Once you pull one thread of the ACA’s financing, the whole ball of yarn could unravel, because every interest group would demand its fair share of the returned booty. Then the hospital industry likely would insist on a return of its contribution, in the form of repealing the law’s Medicare payment cuts.”

To read Mr. Meyer’s article, please hit this link.

5 takeaways from the AHCA collapse

March 27, 2017by Robert Whitcomb in Uncategorized tagged , , , , , ,

 

Billy Wynne, writing in Health Affairs, presents five lessons from the failed launch of the American Health Care Act:

They are:

“Nothing is inevitable”

“There’s a difference between making a political statement and enacting real policy. The latter is invariably complex and time-consuming, creating vulnerabilities and pitfalls both known and unknown at the outset. While a cornerstone of tried and true policymaking is to leverage the ‘strategy of inevitability’—more than seven years ago, the ACA campaign itself vigorously deployed just such a strategy—the underlying premise of that strategy is always inherently false.’’

“Stakeholders matter’’

“Virtually every hospital and hospital group, every physician group, nurses, patient groups representing the young, old, disease-stricken, and disabled, and many others fervently opposed AHCA. They added analysis of AHCA’s impact on them, as governors did regarding its impact on their states. At the end of the day, this was simply a bad bill. Stakeholders figured it out and acted when it counted.’’

‘’Ultimately, on the day AHCA was originally supposed to get its final House vote, a Quinnipiac University poll came out showing only 17 percent of the public supported the bill, while 56 percent opposed it, a startling gap rarely seen in any bona fide political polling.’’

“The ACA stole most of  the good conservative ideas’’

‘’While it was lambasted by Republicans as the manifestation of a Marxist dystopia, the truth of the ACA is that it is a very moderate law. …As Health Policy Counsel to then-Finance Committee Chairman Max Baucus in the prelude to President Obama’s election, I know the pains he took to build bipartisan consensus. In 2008, he negotiated with Republican counterparts on reforming the market for small businesses, in what became the SHOP Act component of the ACA (drawing from legislation originally co-led by Republican Olympia Snowe). He convened an all-day, fully bipartisan Prepare to Launch summit to query experts and debate ideas. He released a series of white papers that laid out detailed policies he believed could gain bipartisan support (welcomed by the conservative Heritage Foundation as ‘a starting point for serious discussion’). And all of that was before President Obama was elected.”

‘’The centerpiece of the ACA became tax credits for the purchase of commercial—not government—health insurance, with a tax-driven mandate that everyone take responsibility for buying in. This had been the linchpin of numerous Republican health reform proposals prior to that time. While Medicaid expansion was also included, it took on a greater role only because that is a less costly way to expand coverage, and Democrats were utterly committed to ensuring the bill did not increase the deficit.”

‘’Other key conservative ideas were embedded in the law as well. Numerous new payment reforms were instituted to drive efficiency and lower costs; states were allowed to pool their markets (though notably none have yet); price and value transparency was instituted so consumers could compare their coverage options side-by-side; emphasis was placed on prevention and community health centers; states were free to run their own exchanges and establish their own essential health benefits; dozens of new program integrity and oversight protections were instituted.’’

“Tom Price is now the most important person in healthcare”

“While the Trump Administration has some more thinking to do before it commits to letting our health care system crash and burn, via sabotage or neglect, it certainly has that power. The locus of that power is the Department of Health and Human Services and its Secretary, former Republican Congressman Tom Price, M.D., a former orthopedic surgeon.

‘’As we have already seen, simple maneuvers like pulling publicity for HealthCare.gov and creating an aura of uncertainty can adversely impact insurance enrollment. Payment and delivery system reforms, intended to lower costs and improve quality, have been halted in their tracks. Governors have been informed that they are now freer to impose premiums and increase cost-sharing for Medicaid enrollees.

“As destabilizing as these changes are, they pale in comparison to some of the more nuclear options Secretary Price has at his disposal to wreak havoc on health care. Perhaps the foremost of these, and the one readily accessible at any moment, is the option to refrain from defending the cost-sharing subsidies.”

.

“Bipartisanship is still possible’’

“While not as expedient or gratifying to the inner ideologue inside us all, the long, frustrating work of compromise is the only viable path forward.

‘’There is a lot of lower-hanging fruit and we should give AHCA credit for bringing some of those to people’s attention. Insurers have now made clear what they think will help stabilize markets and perhaps make them more competitive, including funding risk corridor and reinsurance programs. Meanwhile, several start-up health plans are eyeing a wide array of markets where competition is limited and ripe for a lower-cost competitor. Some have faced obstacles at the state-level, undoubtedly due in part to the objections of entrenched interests. Can a Price-led HHS help open up these markets?’’

 

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