Monday, September 18, 2017

My letter to Chris Christie on Graham-Cassidy

Graham-Cassidy's sponsors are relying in large part on support from Republican governors to win senators' votes for the bill. Today, Arizona Governor Doug Ducey came out in favor, notwithstanding that CBPP estimates that Arizona stands to lose $1.6 billion in federal funding in 2026 alone under the bill's redistribution formula.

At BlueWave New Jersey, we are calling on NJ Governor Chris Christie this week to defend the state's Medicaid expansion and coverage gains and come out against Graham-Cassidy. I have a letter in today's print Star-Ledger, but it's not online. Here is the text:
Behold the last and worst of the ACA repeal bills, introduced this week by four Republican U.S. senators.The bill ends the ACA Medicaid expansion, ultimately ends all ACA funding to help people gain health insurance, and guts federal spending on all Medicaid programs, which serve 75 million Americans. 

Saturday, September 16, 2017

How could Patty Murray "thread the needle" with Lamar Alexander?

Ever since the Cassidy-Collins bill was introduced in January, I've thought that Democrats should engage with Republicans in Congress who were willing to leave the ACA's taxes and core benefits intact. Cassidy-Collins didn't do that, but I thought it came close enough to be a basis for talks.

Triage was the byword. If a handful of the dozen-odd Republican senators who were then expressing qualms about repeal of the Medicaid expansion in particular could be engaged in compromise negotiations, I thought, that would lessen the chances of passage for a bill that would uninsure tens of millions -- as would the AHCA, the BCRA, and now Cassidy-Graham.

Events have almost proved me wrong. The prevailing Democratic strategy -- we'll talk about fixes when they give up on repeal -- has almost worked. Three repeal bills failed in the Senate. Lamar Alexander, HELP Committee chaired, has held hearings on a bipartisan bill to stabilize the individual market.  And on the other end of the equation, Cassidy -- who seemed like a possible partner since he wanted to preserve ACA taxes and so something like its scale of benefits -- is now a driving force behind a bill that would zero out ACA benefits and lay waste to Medicaid.

Still, ironically, we're at a point again where I'm tempted by similar logic: if Patty Murray and other Democrats engage with Alexander and come up with a compromise stabilization bill, that could blunt the drive toward Cassidy-Collins passage. Would co-sponsors of a stabilization bill, led by Alexander, turn around and vote for Graham-Cassidy?

Wednesday, September 13, 2017

Synthetic single payer

Here's a healthcare reform bill that fits on a postcard:

The Medicare-for-all Biosimilar Act of 2017

Title 1: Uniform Payment Rate
     Sect. 101. All payers for healthcare services shall pay providers at a rate equal to 120% of current Medicare payment rates. Price schedule will be maintained and updated by CMS, with existing alternative payment programs maintained at the 120% payment ratio. Medicare Advantage benchmarks will be adjusted accordingly.

Title II: Healthcare Budget
     Sect. 201. The Medicare tax will be increased to a level sufficient to fund the government's increased payments in Medicare and Medicaid.

Tuesday, September 12, 2017

Census: ACA cut uninsured rate in half in Medicaid expansion states by 2016

The Census Bureau released its report on health insurance coverage in the U.S. for 2016 today. One striking trend was flagged by Matt Broaddus at the Center for Budget and Policy Priorities: the gap between states that expanded Medicaid and those that refused continues to widen:

Uninsured Rate Gap Between Medicaid Expansion States and Others Widening

To this let me add a sidelight: in expansion states, the uninsured rate has been cut in half since the main ACA programs were implemented in 2014 -- from 12.9% in 2013 to 6.5% in 2016.

Monday, September 11, 2017

Elizabeth Warren is for single payer, sort of. And against healthcare profiteering...sort of.

Elizabeth Warren sent a letter to supporters last week announcing that she's co-sponsoring Bernie Sanders' Medicare for All bill and asking recipients to sign on as "citizen-co-sponsors."

That's interesting, as Warren herself does not sound exactly all-in.   My emphasis below:
I believe it’s time to take a step back and ask: what is the best way to deliver high quality, low cost health care to all Americans? Everything should be on the table – and that’s why I’m co-sponsoring Bernie Sanders’ Medicare for All bill that will be introduced later this month 
Warren is for putting Bernie's bill on the table -- not necessarily for passing it. There's more hedging near the bottom of the letter:

Friday, September 08, 2017

ACA innovation waivers: a need for speed? Not so fast, says Emma Sandoe

For all the relative comity of the Senate HELP Committee hearings on legislation to strengthen the individual market for health insurance (Sept. 6, Sept. 7), a potential battle line of sort was drawn on Tuesday in statements by the chair, Lamar Alexander, and ranking member, Patty Murray. As the Times' Robert Pear reported:
“To get a result,” Mr. Alexander said, “Democrats will have to agree to something — more flexibility for states — that some may be reluctant to support. And Republicans will have to agree to something, additional funding through the Affordable Care Act, that some may be reluctant to support. That is called a compromise.”

The senior Democrat on the panel, Senator Patty Murray of Washington, said: “Threading this needle won’t be easy. But I do believe an agreement that protects patients and families from higher costs and uncertainty, and maintains the guardrails in our current health care system, is possible.”

Sunday, September 03, 2017

How to hand the keys to an unfit successor

How do you hand the keys to the Oval Office to a man you've declared in no uncertain terms to be unfit for the presidency?

Obama's handwritten note to Trump, placed before Inauguration Day in the top drawer of the president's desk, is a carefully calibrated document -- a muted "don't be evil" plea on behalf of the nation, with goals distilled to the most basic: justice, security, democracy. Stark in its simplicity, it's generous without warmth, avoiding the hypocrisy of any hint of confidence in the recipient.

It begins with a depersonalized wish:

Wednesday, August 30, 2017

"Just a little procedural easing" those ACA innovation waiver guardrails!

The Senate HELP Committee's efforts to pass an ACA stabilization bill are likely to hinge on the ACA's Section 1332 innovation waivers, according to Axios' David Nather:
How they'll give states more flexibility: They want to beef up the ACA's "Section 1332" waivers, but Democrats don't want to do anything that undermines the "guardrails" in those waivers — They can't reduce the number of people with health coverage, make insurance less comprehensive or affordable, or increase the deficit.
  • Instead, they'll just try to ease the procedural rules, according to a Senate Democratic aide. The question is whether that will be enough for Republicans.
Just a little procedural easing, ladies and gentlemen! Recall, though, that the BCRA nominally left the ACA guardrails in place -- but effectively gave states carte blanche to knock them down "procedurally." Tim Jost explained back in June (my emphasis):

Thursday, August 24, 2017

ACA marketplace remake: Iowa leverages Wellmark's warm cooperation

This week the Iowa Insurance Division formally filed an ACA innovation waiver request to radically remake the state's individual market for health insurance.

The plan is cast as an emergency stopgap for a market said to be collapsing -- facing a 53% average requested rate increase for silver plans from its sole remaining insurer. The waiver submission forecasts a loss of 18-22,000 unsubsidized enrollees should the plan not be implemented.

The basic tradeoff in the proposal, dubbed the Iowa Stopgap Plan, seems to be to exchange Cost Sharing Reduction (CSR) subsidies for reinsurance and a more generous premium subsidy structure, which makes subsidies available to enrollees at all income levels and yields lower net premiums to almost all comers. Harsh as the loss of CSR for enrollees under 200% FPL would be, the repurposed dollars seem to yield a disproportionate dividend in premium reduction.

Wednesday, August 23, 2017

Not throwing away our Schatz: What kind of public option in the ACA marketplace?

Senator Brian Schatz's proposal to allow any American to buy into Medicaid is frustratingly vague: we don't know the plan design and how it would be integrated into the ACA marketplace, as David Anderson and Loren Adler point out in this Vox roundup of expert assessment.

Two disclosed details are salient, though -- and to me, point toward two essential features of an ACA redesign from the progressive side. The first is the provider payment rate: bumped up to Medicare. The second is a cap on premiums as a percentage of income -- 9.5% -- for any buyer. (Larry Levitt mentions that feature in the Vox roundup; it's apparently not yet part of any published plan outline.)

Those features bring me back to the compromise package floated by the Urban Institute's Linda Blumberg and John Holahan back in January (which in turn built on their 2015 ACA enrichment plan, with concessions to Republicans salted in). That plan included an 8.5% of income cap on premiums for any buyer -- and a cap on payment rates paid to providers (in concert with reinsurance):

Sunday, August 20, 2017

If I had $194 billion...spending the federal funds that CSR cutoff would waste

The CBO report on the effects of the federal government ceasing reimbursement of insurers for the Cost Sharing Reduction subsidies they are required to provide to qualifying ACA marketplace enrollees includes two projections tantalizing to Democrats.

First, if not executed until 2018, not mishandled by states and not coupled with other forms of sabotage (a lot of ifs!), CSR defunding need not harm individual market enrollees and will in fact provide a windfall to many (by about a million as of 2020, sustained through 2026).*

Second, this means of boosting coverage is colossally inefficient, in fact outright profligate. CBO projects that ending the CSR reimbursements will cost the Treasury $194 billion over ten years, $37 billion in 2026 alone (and so imagine the 20-year cost).

That's a lot of money for Republicans to spend to spite Democrats. To review, the ACA instructs the Treasury to reimburse insurers for CSR and built the cost of reimbursement into the funding baseline, though it quaintly leaves it to Congress to appropriate the money. Doing so has no impact on the deficit; refusing swells it by said $194 billion.

This suggests to me a rather perverse deal: Republicans, pay the money budgeted, and use the $194 billion in "savings" for tax cuts. The "savings"should just about cover the ACA's surtax on investment income for the wealthy, as CBO pegged the 10-year cost of repealing that tax at $172 billion). Sure, that's deficit-funded, but as Dick Cheney told us, deficits don't matter when Republicans are in control.

Of course, those who want the ACA to work and who want to expand coverage can think of better uses for the (otherwise wasted) money. We now have $194 billion in sugarplums dancing in our heads. I canvassed a handful of healthcare scholars as to what they'd do with the money.  A few possibilities:

Tuesday, August 15, 2017

Can Democrats afford to stand pat on the ACA?

A while back, I anticipated that Republicans would demand a steep price for passing legislation that would guarantee federal funding for the ACA marketplace's Cost Sharing Reduction (CSR) subsidies and possibly for a reinsurance program. I asked what Democrats should be willing to give up to secure those obviously necessary measures -- the first simply an end to sabotage, the second an individual market essential that Republicans bestowed liberally in their ACA replacement plans.

David Anderson counters that "this model of leverage is wrong" and that Democrats should be willing to give up...nothing.  The rationale is not "if you break it you own it" (i.e., Republicans will be blamed for market collapse),  but rather that forcing insurers to fund (and price for) the CSR subsidies as of 2018 would hand Democrats "an incredible policy victory."

Thursday, August 10, 2017

Compromise maybe a little? Urban Institute's Blumberg and Holahan on what's next for the ACA

In August 2015, Urban Institute healthcare scholars Linda Blumberg and John Holahan acknowledged that ACA marketplace subsidies were too skimpy to do all they were intended to and came up with a comprehensive proposal to enrich them.  In January 2016, staring down the barrel of Republican repeal vows, they remixed those improvements in a compromise package that included several concessions to conservative priorities. These included:
  • Repeal the employer mandate (requiring employers with more than 50 employees to offer insurance or pay a penalty)
  • Repeal and replace the individual mandate  (with a premium penalty for those who did not maintain continuous coverage)
  • Examine the Essential Health Benefits and look for responsible ways to lighten them
  • Allow states to drop the income threshold for Medicaid eligibility to 100% of the Federal Poverty Level (FPL). At present, the threshold is 138% FPL in states that have accepted the ACA Medicaid expansion. 
As I noted recently, these concessions were embedded with offsets: reinsurance to mitigate the premium hikes likely to be triggered by individual mandate replacement, and lower out-of-pocket costs to cushion the substitution for enrollees in the 100-138% FPL range of private insurance for Medicaid (richer subsidies across all income levels would also offset the ill effects of a weaker mandate substitute).

Sunday, August 06, 2017

What price will Republicans extract for CSR funding and reinsurance?

If the current glimmers of bipartisanship in healthcare legislation take on any sustained shine, the primary agenda for Democrats is obvious: appropriate funding for Cost Sharing Reduction payments and for some kind of reinsurance program to replace the program that expired in 2017.

The first is simply a matter of ending sabotage: CSR is integral to the structure of the ACA marketplace and incorporated in its budget baseline. Republicans have simply exploited a drafting error to destabilize the individual market. As for reinsurance, Republicans made its necessity manifest by including generous "stability funding" in the main House and Senate "healthcare" bills -- in fact, overly generous funding designed to compensate for their various disfigurements of the market (e.g., repeal of the individual mandate and measures to reintroduce medical underwriting and non-comprehensive insurance).

To have any real hope of getting these measures passed in a Republican Congress, however, Democrats are going to have to face up to the question: What pound of flesh will they let Republicans extract as payment for these essential, common-sense fixes? It's a foregone conclusion from a progressive point of view that changes Republicans will demand will not improve the market. What concessions might actually win passage and do less harm than the fixes will do good?

Wednesday, August 02, 2017

Are New York's Essential Plan and Minnesota's MinnesotaCare threatened by CSR fund cutoff?

A question hath arisen on Twitter: if federal Cost Sharing Reduction (CSR) reimbursements to insurers are cut off, either by Trump administration fiat or court ruling, would New York and Minnesota's Basic Health Programs formed under the ACA lose the portion of their federal funding derived from CSR payments?

To review, the ACA gives states the option of establishing a Basic Health Program (BHP) for qualifying residents with incomes between 138% and 200% of the Federal Poverty Level -- the very population eligible for strong CSR in the ACA marketplace in a state with no BHP*.   A BHP is designed to have low premiums and high actuarial value -- though not necessarily higher than that provided by CSR. So far, Minnesota and New York are the only states to have formed BHPs.  New York's BHP, the Essential Plan, has minimal cost sharing and a maximum premium of $20 per month (for those in the 150-200% FPL range). MinnesotaCare premiums top out at $80 per month; the actuarial value is 94%, matching CSR for marketplace enrollees with incomes up to 150% FPL.

Section 1331 of the ACA provides for federal funding of BHPs according to this formula:
The amount determined under this paragraph for any fiscal year is the amount the Secretary determines is equal to 85 percent [amended to 95%] of the premium tax credits under section 36B of the Internal Revenue Code of 1986, and the cost-sharing reductions under section 1402, that would have been provided for the fiscal year to eligible individuals enrolled in standard health plans in the State if such eligible individuals were allowed to enroll in qualified health plans through an Exchange established under this subtitle.

Tuesday, August 01, 2017

Peter Lee to HHS: Marketing makes the risk pool

Covered California, the golden state's ACA marketplace, released preliminary health plan rates for 2018 today. In a marketplace supported by political stability, the top line would be nothing to write home about -- a 12.5% average weighted increase, discounting a surcharge to be added to silver plans if the Trump administration or Congress does not guarantee CSR payments through 2018. 

But given the "unprecedented uncertainty" generated by active administration sabotage and a seven- month effort to repeal core parts of the ACA, those results are impressive. CoveredCA further claims that "If a consumer shops and switches to the lowest-priced plan in their same metal tier, they can reduce their 2018 rate change to an average increase of less than 3.3 percent." More on that in a bit.

In a telephone press conference, CoveredCA's executive director Peter Lee made a striking claim that speaks not only to the current market uncertainty but to the effects of seven years of unrelenting sabotage of the ACA marketplace by Republican senators, congressional reps, governors, state legislators and insurance commissioners. Asked how central marketing would be to enrollment in the coming year, Lee said (paraphrasing here):
If you don't sell, those who knock on the door are sick people.

Thursday, July 27, 2017

Managed Medicaid for all? A compendium

In an illuminating string about what she's learned from ACA enrollees, Sarah Kliff highlights a point that's come sharply into focus in the last year:
Medicaid is *way* more popular than marketplace plans. No deductibles or co-pays! (6/15)
This point has been driven home by enrollee surveys and focus groups as well as by good reporting from many, including Kliff. The negative counterpoint to Medicaid enrollees' satisfaction is Medicaid envy among those forced to pay more than they consider affordable in premiums and out-of-pocket costs -- particularly those on the wrong side of the ACA's deductible cliff.

Sunday, July 23, 2017

"Not losing, choosing"? - Avik Roy turns up the gaslight on the BCRA

Two weeks ago, I took on the argument of various BCRA proponents that most of the 22 million people forecast by CBO to lose insurance coverage should the bill become law would be "choosing, not losing." That write-off of legions of uninsured was founded on CBO's assertion that most of the first-year coverage loss of 15 million would occur "primarily because the penalty for not having insurance would be eliminated."  Expect to hear more of this, I forecast.

In brief, I suggested that argument depended on  1) conflating the forecast immediate effect of mandate repeal in 2018 with the ten-year effect; 2) ignoring the extent to which, in CBO's own telling, the mandate interacts with other changes in the marketplace and Medicaid; and 3) pooh-poohing the obvious and stated purpose of the mandate, which is to boost the ranks of the insured and reduce premiums by improving the risk pool -- which CBO clearly assumes it has accomplished in some measure.

Now here cometh Avik Roy, chief healthcare apologist for the Republican establishment, making the "choosing not losing" argument in detail.  Roy's addition to the argument hinges mainly on a rather breathlessly presented look at CBO's unpublished estimate of 10-year coverage losses attributable to mandate repeal under the BCRA (provided to Roy by a Congressional staffer). This estimate closely tracks CBO's published December 2016 analysis of the effects of repeal of the mandate alone, with the ACA left otherwise intact. CBO forecast that straight mandate repeal under the ACA would result in a ten-year coverage loss of 15 million, as compared to CBO's forecast that 22 million will lose coverage under the BCRA. Here's CBO's breakout of the losses under straight mandate repeal:

Thursday, July 20, 2017

Go ahead, Trump, cut off CSR payments -- starting in 2018

Imagine for a moment that Republicans fail to pass legislation repealing the ACA -- leaving the ACA marketplace intact as a matter of law,  however shaky its economic viability. Imagine further that Trump continues through this year to reimburse insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated by law to provide to qualifying enrollees, but announces that he will cease paying them in 2018 -- declining to contest the suit that House Republicans filed against the Obama administration, challenging its authority to pay the subsidies without Congressional appropriation.

That act of continued apparent sabotage might shake insurers and drive some to exit the marketplace. But having already priced CSR in to their 2018 filings, as they are now doing, they probably wouldn't exit en masse, as David Anderson has argued. Leaving aside other acts of sabotage, forcing insurers to price in and pay out the full actuarial value of all the plans they sell might actually improve the marketplace -- providing a kind of backdoor CSR subsidy for shoppers at the upper end of the subsidy scale.

Monday, July 17, 2017

If serious compromise on healthcare were possible, what would Democrats give?

As Republicans flail away at the BCRA, Democrats' first murmurs about bipartisan legislation to stabilize the ACA marketplace have been pretty basic: guarantee CSR payments and re-institute some kind of reinsurance program.

If bipartisan legislation were truly possible, however -- and admittedly, we're in contrary-to-fact territory here -- what might Democrats give up to get the most basic fixes, -and possibly further improvements?

Back in January, two leading progressive healthcare scholars at the Urban Institute, Linda Blumberg and John Holahan, floated a compromise proposal that offset provisions Democrats would not embrace unforced with improvements in subsidies and marketplace structure. Here is the package summary.Concessions to conservative priorities are bolded:
1. Replace the individual mandate with a modified version of the late enrollment penalties currently used in Medicare Parts B and D.

Friday, July 14, 2017

A pill quite poison from Frelinghuysen

In late June, a subcommittee of the House Committee on Appropriations, chaired by Rodney Frelinghuysen (R-NJ), released a financial services appropriations bill that hamstrings the IRS's ability to police the phony "charities" corrupting our politics; bars the SEC from requiring disclosure of political contributions in SEC filings; and, amid sundry other acts of regulatory sabotage, prohibits the IRS from enforcing the ACA's individual mandate. The Appropriations Committee approved the bill yesterday.

Frelinghuysen, a once-moderate Republican driven relentlessly to the right and now riding the Trump train, was the focus of intense citizen action this spring, and a key last-minute opponent of the first iteration of the House ACA repeal/Medicaid destruction act.  He then flipped, reportedly under pain of losing his Appropriations chair, and supported the version that passed the House, which of course addressed none of his stated concerns (for Medicaid expansion beneficiaries and people with pre-existing conditions) and in fact made the bill's treatment of the latter worse. Now, he's given his blessing to ACA marketplace sabotage in the event Republicans fail to pass a bill still more horrific than the one he supported. In a press release, he praised the bill for "stopping burdensome regulations before they can damage our economy irreparably."

I have an op-ed in NJ Spotlight, a nonprofit state news source calling Frelinghuysen out for this. I signed it as a member of BlueWaveNJ, a local advocacy group based in Montclair, most of whose members are represented by Frelinghuysen. He encapsulates the descent of the Republican party first into right-wing extremism (he voted to defund Planned Parenthood) and then into fascist fellow traveling and even self-Trumpification  (he's been in the spotlight and may be in legal trouble for intimidating a local activist). We want him out.

Wednesday, July 12, 2017

Not drowning but waiving: Timothy Jost on how Democrats might compromise responsibly on ACA

There's news today -- good news -- of Democrats in both the House and Senate acknowledging flaws in the ACA and proposing their own fixes (House) or exploring bipartisan fixes with Republicans (Senate).

All reports of such discussions or proposals include a couple of no-brainers: 1) a permanent reinsurance program, such as those included in both the AHCA (the House repeal/replace bill) and the BCRA (the Senate iteration), and 2) permanent assurance that the ACA's Cost Sharing Reduction subsidies will be paid, which isn't a conceptual fix, just an agreed end to Republican sabotage.

There's scarce discussion of what Democrats would give up to get Republicans to drop their deadly assault on the ACA's core features and all Medicaid as well, that is, the assault against 1) the taxes that fund the ACA's extension of health insurance access; 2) the ACA Medicaid expansion; 3) the federal government's open-ended commitment to pay its agreed share to each state for all those who are determined eligible Medicaid; and 4) income-based private market subsidies funded at ACA levels, whether structured differently or not.

One possible field of compromise is in the structure of the ACA's Section 1332 "innovation waivers," which allow states to propose variations on ACA marketplace structure to HHS. Through these waivers, states can propose alterations to almost any ACA Marketplace feature -- including repealing the individual and employer mandates, changing subsidy structure and eligibility, and altering the Essential Health Benefits that every insurance plan is required to offer. The catch is that the state seeking a waiver must demonstrate -- and convince the Medicare actuary -- that its alternative scheme will cover as many people as comprehensively and as affordably as the default structure -- and do so without increasing the deficit. Critics complain that the option effectively boils down to "you can change everything, as long as you don't change anything." That's not true, but the guardrails are pretty tight.

Saturday, July 08, 2017

Those uninsured by the BCRA "not losing, but choosing"? Get ready to hear it more.

Bloomberg reporter Steve Dennis flags a Republican talking point in favor of their latest travesty of a 'healthcare" bill that we're likely to hear more of in the next two weeks:
That's in response to:
This argument was first voiced byPaul Ryan, defending the first iteration of the House bill, and later by Tom MacArthur*, whose amendment undermining protections for people with pre-existing conditions secured that bill's House passage. As Cornyn, the Senate majority whip, has emerged as gaslighter-in-chief defending the Senate bill (the so-called Better Care Reconciliation Act, or BCRA), we should regard it as a kind of front-line defense. If the cabal now redrafting the BCRA in secret manages to improve the CBO score by throwing a couple hundred billion dollars back in the coverage pot -- reducing the forecast increase in the uninsured to, say, 15 or 12 million --expect to hear a lot more of it.

There is a ghost of truth in the allegation, which can be made to look more substantial by gaslight. so let's shine some stronger light,. A few points:

Friday, July 07, 2017

Info sources for healthcare wars

If I post this, I'll have an easier time finding it index of fact/stat sources for our current healthcare wars as well as for our current healthcare system. Will update continuously without notification.

Sunday, July 02, 2017

Healthcare spending cuts, Democrat style. Healthcare spending cuts, Republican style

The cut to federal Medicaid spending that CBO estimates would result from the BCRA -- $750 billion over ten years -- superficially recalls ACA cuts to Medicare spending, estimated by CBO in 2010 at $455 billion. As Democrats raise the alarm about deep damage to Medicaid, so Republicans screamed for years that Democrats were cutting Medicare. But of course there are fundamental differences:
  • Democrats cut the growth in Medicare spending and spent the savings to extend health insurance to the uninsured. Republicans want to cut Medicaid to fund tax cuts for the wealthy and for healthcare companies.

  • The ACA specifies that the reductions it mandates in spending growth are not to reduce services provided to Medicare beneficiaries, but only payments to providers. The "Medicare guarantee" that has been stable in traditional (fee-for-service) Medicare for decades -- premium-free hospital coverage, 75% premium subsidy for physician services, actuarial value a bit over 80% for these services, and (since 2006), somewhat weaker drug coverage -- remained intact, and in fact strengthened on the drug front. 

Saturday, July 01, 2017

The real cost of "benchmark silver" for low income BCRA enrollees

For ACA marketplace enrollees with incomes under 200% FPL -- over half of all enrollees -- benchmark silver plans have an average actuarial value of about 91%, i.e. roughly platinum equivalent. This post accordingly looks at the likely cost of AV 90% plans for low income enrollees under the BCRA. If you want to cut to the chase see the two charts at bottom.

Senate Republicans' bill to eviscerate Medicaid, advertised as an ACA repeal and replace bill, provides for income-based  private market premium subsidies that superficially look something like those of the ACA marketplace, but with these differences:
  • Subsidy eligibility begins at zero income, rather than at 100% or 138% of the Federal Poverty Level (FPL) as in the ACA. Theoretically, these private market subsidies for the poor and near-poor are meant to compensate for repeal of the ACA Medicaid expansion.
  • Subsidy eligibility ends at 350% FPL compared to 400% FPL in the ACA.
  • The benchmark against which subsidies are calculated is a plan with an actuarial value (AV) of 58%, compared to AV 70% for the ACA's benchmark silver plans. AV refers to the percentage of the average user's medical costs the plan is designed to cover.
  • Subsidy size, calculated to leave the enrollee paying a fixed percentage of income for a benchmark plan, varies by age as well as income.
  • There are no Cost Sharing Reduction (CSR) subsidies to reduce out-of-pocket expenses (boosting AV) for low income enrollees, as in the ACA.
  • "Age-rating" is increased from the ACA's 3:1 to the pre-ACA individual market norm of 5:1, meaning that a 64 year-old's plan will cost five times as much as a 21 year-old's plan rather than three times as much.
Of these, the difference in the value of a benchmark plan (AV 58% vs. 70%) has gotten the most attention, as analysts are at pains to make apples-to-apples comparisons. Both the Brookings Institute and the Kaiser Family Foundation have put out papers highlighting the cost of AV 70% coverage under the Senate bill, the so-called Better Care Reconciliation Act (BCRA).

These comparisons are appropriate in that insurers price silver plans under the ACA at 70% actuarial value. But Cost Sharing Reduction (CSR) subsidies, tacked on separately and reimbursed separately to insurers, dramatically alter the actual AV accessed by marketplace enrollees. As of April 2016, in the 39 states using the federal marketplace,, silver plans purchased in-marketplace had an average weighted AV of 85% (see note at bottom here).  Among enrollees with incomes below 200% FPL -- about 60% of all on-marketplace current enrollees -- the average AV for a silver plan is 91% . About 85% of enrollees below that income threshold select silver plans and so access CSR.

Thursday, June 29, 2017

The party of Cost Sharing Inflation

When House Republicans sued the Obama administration in 2014 to stop federal payments to health insurers for Cost Sharing Reduction subsidies in the ACA marketplace, the simple goal was sabotage: use any tool that came to hand to hobble the markets.  (That goes as well for refusing to appropriate the budgeted funds for CSR.)

At the same time, I suggest today in a piece that will be out this morning, this particular bit of legal vandalism made ideological sense, in that Republicans do not believe in cost sharing reduction. They believe in cost sharing inflation: if each of us pays a higher percentage of our medical costs, we'll demand better prices for care, and prices will go down.

This ideology is fully expressed in the BCRA, which asks low income people to swap out Medicaid coverage, or CSR-enhanced marketplace coverage at AV 94% or 87%, for coverage at AV 58%. That's a feature, not a bug. Hope you'll take a look

Thursday, June 22, 2017

Trading Medicaid coverage for high deductible private market coverage

The Senate version of the AHCA, the Orwellianly named Better Care Reconciliation Act, does even more fundamental damage to the U.S. healthcare system than the House bill. While it phases out the ACA Medicaid expansion more slowly, stepping down the enhanced federal contribution over several years, it imposes even tighter per capita caps on Medicaid, limiting annual growth to the straight CPI after 2024. The damage to Medicaid will be continuous in perpetuity, barring further legislation.

The BCRA does toss a bone to the dis-insured poor by offering private-market subsidies to those who are shut out of Medicaid. Under the ACA, in the 31 states plus D.C. that accepted the law's Medicaid expansion (rendered optional to states by the Supreme Court), anyone whose household income is below  139% of the Federal Poverty Level (FPL) qualifies for Medicaid, and so not for subsidies in the private plan marketplace (with one class of exceptions*).  In states that refused the expansion -- a possibility not envisioned by the law's drafters -- eligibility for Marketplace subsidies begins at 100% FPL, and those below that level are left out in the cold -- because their state's governors and legislatures wanted it that way.

The BCRA allows people with incomes in 0-100% FPL range to buy a "benchmark" plan for 2% of income, and those in 100-133% FPL range** to buy one for no more than 2.5% of income:

Quick thoughts before the bill hits the tape

The Senate iteration of the AHCA is due out in about 40 minutes. A couple of quick thoughts, brought into focus by David Anderson's "how to read the bill" cheat sheet:

1) Back-loaded per capita caps imposed on Medicaid can theoretically be repealed before they kick in. But if the bill's massive tax cuts are not similarly back-loaded (to improve the CBO score), new tax increases would have to be passed in concert with repeal.

2. The more Republicans fiddle around with and publicly fight over individual market subsidies and rules, the easier they'll likely find it to pass the massive cuts to Medicaid that are the bill's core feature.

3.I can't shake the feeling that McConnell has some trick up his sleeve to make the CBO score a positive shock that helps sweep the moderates into the yes column. A "positive shock" might be a forecast of,, say, a reduction of a mere 8 million in the number of people with insurance by 2026, which Republicans can explain away as a result of personal choices (no mandate coercion) or CBO error.

4. What could that shock be? A cap on the tax exclusion for employer-sponsored insurance? Hard to believe. A little coup within CBO? Don't know how that work. Something else? Nothing?

So much for idle speculation....

Wednesday, June 21, 2017

AHCA would increase New Jersey's uninsured population by 540,000: NJPP Report

540,000 fewer people in New Jersey will have health insurance by 2026 under the American Health Care Act (AHCA) than under current law, according to an updated analysis by Raymond Castro of New Jersey Policy Perspective. The update takes into account the May 24 cost estimate by the Congressional Budget Office (CBO) of the amended AHCA that passed the House on May 4.

Should the AHCA become law, NJPP forecasts:
  • The state uninsurance rate would increase by 50%, from 9.8% to 14.7% in 2026.
  • The uninsurance rate would double in Rodney Frelinghuysen's Congressional district, and more than double in Tom MacArthur's.
  • Almost all of the 562,000 New Jerseyans covered by the ACA Medicaid expansion would lose Medicaid coverage, and about two thirds of them would remain uninsured.
  • About one in ten New Jersey adults would lose Medicaid coverage.
  • The state would lose $28 billion in federal funding over ten years -- $21 billion in Medicaid funding, and $7 billion in reduced Marketplace subsidies.
  • The wealthiest 5 percent of NJ households would receive $13 billion in tax cuts over 10 years.
  • About 100,000 New Jerseyans would lose coverage in the individual market through reduction in subsidies for premiums and out-of-pocket costs.

Tuesday, June 20, 2017

Amend the Senatized AHCA

To help Democrats introduce thousands of amendments before the (Senatized) AHCA comes to a vote, Indivisible is inviting all of us to add our own stories to their amendment*; they'll ask  our senators to make their constituents' testimonials part of the Congressional Record. Contribute here!

With Democratic senators being tasked with offering thousands of amendments, I thought I'd propose a few. Some are mutually exclusive, some would cost money, some would only work under current law, some may be unworkable. Brainstormer's licence...
  1. Nothing in this bill shall be construed to render anyone who was eligible for Medicaid under prior law ineligible.

  2. Congress shall not cap the federal contribution to Medicaid by any formula that reduces the Federal Medical Assistance Percentage (FMAP) in effect prior to enactment of this legislation.

  3. Any insurer that participates in a state's nongroup health insurance market must offer plans on the state Marketplace, in every area where it sells off-Marketplace.

Saturday, June 17, 2017

An American road to single payer

Ezra Klein offers an astute political forecast:
...if Republicans leave Obamacare gutted and the political arguments that led to it in ruins, there’s not going to be a constituency for rebuilding it when Democrats win back power.

Instead, they’ll pass what many of them wanted to pass in the first place: a heavily subsidized buy-in program for Medicare or Medicaid, funded by a tax increase on the rich. A policy like that would fit smoothly through the 51-vote reconciliation process, and it will satisfy an angry party seeking the fastest, most defensible path to restoring the Affordable Care Act’s coverage gains.
A few thoughts:

1. If a Medicaid income-adjusted buy-in were offered only to nonelderly who lack access to employer-sponsored insurance or other government programs, it shouldn't require more funding than the ACA marketplace. OTOH, if the AHCA has passed, Democrats will need to replace the revenue provided by the ACA taxes Republicans will have repealed (close to $900 billion over ten years, rather than the $600+ billion Klein cites, if you include revenue from the repealed ACA mandates).

2. If a buy-in were subsequently offered to employers -- perhaps starting with small employers -- that buy-in would amount to a voluntary payroll tax.

Friday, June 16, 2017

The Medicaid Dismemberment Act

Over at, I've made a case that the AHCA is not simply -- or even primarily -- an ACA repeal bill. It's a Medicaid dismemberment bill.  That goes for the Senate variant in progress as well.  Furthermore:
The degree of damage to be wrought by the legislation's various spending reductions is almost the inverse of where media emphasis falls;
and finally
the damage Republicans will likely do to the individual market is dwarfed by the damage they will certainly do (if they pass anything) to Medicaid. Thus all the high drama over medical underwriting and EHBs continues to serve as a smokescreen for Medicaid's dismemberment.
I rank the bill's three primary means of doing violence to existing parts of our healthcare system. Hope you'll take a look. 

Monday, June 12, 2017

Senate "moderates" promised long ago to support the ACA repeal bill in progress

I keep reading that Senators Capito and Portman and Heller, relative Republican "moderates" from states that have embraced the ACA Medicaid expansion,  have reversed themselves by signaling willingness to repeal the expansion if the repeal timeline is stretched out.

Capito may have made some contradictory noises over the last few months, occasionally indicating that she does not want to see the expansion repealed.

But look again at the letter to McConnell that Capito and Portman signed onto just before the House repeal bill, the AHCA, was released.  That letter, which was read as defense of the Medicaid expansion, demanded
that any health care replacement provide states with a stable transition period and the opportunity to gradually phase-in their populations to any new Medicaid financing structure.
In Republican-speak, that means expanding the timeline in which enhanced federal funding for the Medicaid expansion population is phased out -- as the Senate bill will do. I examined the letter's consistency with the course the Senate is undertaking now in more detail in this post.

Saturday, June 10, 2017

Senate Republicans may outspend the ACA on individual market subsidies -- at Medicaid's expense

While Republican senators working on ACA repeal will doubtless screw up the individual market for health insurance, they are not planning to spend less money on it. All of their spending cuts -- needed to pay for tax cuts -- will come out of Medicaid's hide. Since the Medicaid expansion they're planning to repeal is a roaring success, they're following the House in diverting everyone's attention with emotionally fraught questions about individual market structure.

According to Vox's Dylan Scott, Senate Republicans are near agreement on the basic outline of their Medicaid cuts -- they will roll back the expansion over more or less years and impose per capita caps on all Medicaid spending, as Ryan's AHCA does. As for the individual market:
There’s broad agreement to increase the money the House bill would spend subsidizing Americans who buy insurance on the individual market. That increase would probably improve, at least somewhat, the Congressional Budget Office’s projection that the House bill would cause 23 million fewer Americans to have health insurance a decade from now.
In fact, any improvement to the AHCA individual market design and funding will improve CBO's uninsured estimate for the AHCA only marginally. In CBO's forecast, the individual market will insure only two million fewer people under the AHCA than under current law ten years from now (though enrollees will be wealthier, younger and more skimpily covered, and most of the roughly 7 million ACA enrollees with incomes under 200% FPL will likely be priced out).

Wednesday, June 07, 2017

Senate exterminators gear up to expel Medicaid expansion beneficiaries

Earlier this spring, we had a squirrel in our eaves. An exterminator installed a one-way door, leaving the squirrel free to rattle about until circumstances drove her outside. Which of course they did, after a few days -- maybe three, maybe seven.

Way back in mid-January, when the AHCA was just an exhalation from Paul Ryan's college memories, this promise from Texas Senator John Cornyn seemed startling and impressive:
When Cornyn was asked if he was concerned about people who’ve benefited from Medicaid expansion losing coverage, he said it was a shared concern.

“Were all concerned, but it ain’t going to happen,” Cornyn said. “Will you write that down… It ain’t gonna happen.”

As Republican moderates cave on Medicaid cuts, what can Dems do?

As I feared back in March, the "moderate" Republicans in the Senate who profess concern about plans to repeal the ACA Medicaid expansion and impose per capita caps on federal funding for Medicaid are going squish. They'll settle for slowing repeal of the expansion rather than stopping it, and perhaps for some partial easing of the per capita caps, such as exempting coverage for the disabled.

Now as in March, Republican senators in states that have benefited from the expansion speak as if repeal of the expansion and a steady erosion in federal funding for all Medicaid programs is a natural disaster that they must help their constituents cope with, rather than their own free choice to inflict suffering on vulnerable people to fund tax cuts for the wealthy.

Here's Bill Cassidy of Louisiana, until now the strongest defender among Republican senators of maintaining ACA-level funding, speaking to Matt Fuller and Sam Stein of the Huffington Post. Over 300,000 Louisianians have gained Medicaid coverage since incoming governor John Bel Edwards implemented the expansion, beginning July 1, 2016.

Monday, June 05, 2017

AHCA Reduces Federal Spending on Private Health Insurance by....4%

[originally posted May 30]  The Republican bill rejiggers subsidies for the individual market but barely reduces them on net. Almost all the real cuts are in Medicaid     

Hours before House Republicans introduced the American Health Care Act, their ACA partial repeal/replace bill, on March 6, former CMS director Andy Slavitt tweeted:
That remains true. In fact, it's truer than has been fully recognized.

The basic math of the AHCA, according to the Congressional Budget Office (CBO), is a $992 billion* reduction in federal revenue over ten years, offset by a $1.1 trillion reduction in spending on health insurance benefits. Most of that spending cut is in Medicaid, reduced by $834 billion over ten years, according to the updated CBO analysis released on May 24.

The rest of the spending reduction ostensibly comes from cuts in subsidies to private insurance. But that reduction is largely illusory -- - because two of the major tax cuts included in the AHCA subsidize privately purchased health insurance and medical care.

Sunday, June 04, 2017

The senescence of the United States

About five years ago my father-in-law, then in his mid-80s, of sound mind, gave my wife power of attorney and turned over management of his financial affairs, after 60 years of capably managing them himself.  "That's how it often works," his financial adviser told us. "They're very hands-on, and then suddenly they let go."

That came to mind as I read this Times editorial board review of Trump's "leadership":
In short order, Mr. Trump has pulled out of the Trans-Pacific Partnership, ceding leadership on trade in Asia to China; refused to reaffirm the mutual defense commitment that has been the bedrock of trans-Atlantic security for half a century, forcing America’s European allies to think about dealing with threats like Russia on their own; and abandoned a landmark agreement on climate change signed by 190-plus other nations, ceding leadership on the issue to Europe and China, and, in the bargain, forfeiting the rewards of participating in a worldwide clean energy economy that the agreement will bring.
I'm not thinking of Trump here, but of the United States. Maybe, collectively, we got tired, our faculties sapped by 40 years of galloping inequality and risk shift, as we fell behind much of the developed world in education, opportunity, health care and income growth and outpaced our peers (all afflicted to some degree) in letting the superrich capture a growing share of national wealth and, concomitantly, power. The portion of our population mired in job loss, income stagnation, family and community disintegration and right-wing gaslighting reached critical mass.

Thursday, June 01, 2017

Alternative Facts, Alternative Realities Edition of Health Wonk Review

In a divided country and interconnected world, it often feels as if reality is fracturing before our eyes. When a spokesperson for the President asserts the administration's right to promulgate "alternative facts," it's a major challenge to convince a critical mass of people that verifiable facts are in fact verified. On the plus side, as ever more of the previously voiceless find or create a forum, we have the chance to see how differently a given law or trend may affect different people -- not alternative facts, but variant effects.  This week's Health Wonk blog reflects that variety, as well as battles over fact and interpretation.

First up is Harold Pollack in, tilting against alternative facts of the pure variety -- a.k.a. lies. In You can only lie about policy in Washington D.C., Pollack takes on four of Paul Ryan's assertions about the AHCA (delivered in short space) that the Congressional Budget Office (CBO) analysis of the bill directly contradict.  Most of them boil down to claims that the AHCA will make insurance and healthcare more affordable to more people, but Ryan also avers for the umpteenth time that the ACA marketplace is collapsing under its own weight.

At InsureBlog, conversely, Patrick Paule takes on CBO the old fashioned way -- with a factual critique rather than a go-team cry of fake news. Paule asserts "four reasons the CBO score is flawed."noting that CBO  1) pits AHCA individual market enrollment against CBO's 2016 baseline for the ACA, which overestimated enrollment by 4 million; 2) assumes that under current law, more states would embrace the ACA Medicaid expansion; 3) assumes (thanks to the MacArthur Amendment, allowing states to waive ACA coverage rules) that some health plan enrollees won't have comprehensive coverage, but does not define what coverage must be provided to make the cut; and 4) does not delve into the implications of its forecast that millions will voluntarily drop insurance in the absence of a mandate to obtain it.

Wednesday, May 31, 2017

Does Avik Roy want to preserve or privatize the Medicaid expansion?

Conservative healthcare wonk Avik Roy, unlike Republicans in Congress, wants health insurance to be affordable for all Americans. But his proposal for an amended AHCA has an enormous hole in it: Medicaid.

Roy favors income-adjusted tax credits, which the AHCA maintains on an interim basis until 2020, with age-based adjustments to the ACA schedule. In 2020, a credit that adjusts only for age (and not sufficiently for that) takes over. Here's Roy's suggested amendment:
If the Senate were simply to remove the House bill’s uniform tax credit and continue the hybrid model past 2019 through 2020 and beyond, the bill would most likely get a better coverage score from the C.B.O. The Senate would be able to direct more financial assistance to those who need it, whether because of old age, ill health or low income. Indeed, the Senate could tweak the exact formulas for age and income adjustment, to maximize the number of people with health insurance in the most cost-effective way.
Under the 2018-19 subsidy schedule that Roy wants to make permanent, enrollees with incomes "up to" 133% of the Federal Poverty Level pay 2% of their income for a benchmark plan.The ACA specifies, however, that eligibility for credits begins at 100% FPL -- and the AHCA does not repeal that provision (and uses the same "up to 133" language in its subsidy schedule).. In states that accepted the ACA Medicaid expansion (after the Supreme Court made it optional for states in 2012), adults with incomes under 133% FPL (138% FPL in practice, because of a 5% deduction), are eligible for Medicaid. What happens to them under Roy's plan? Or to those with incomes under 100% FPL in non-expansion states, who currently are left out in the cold?

Monday, May 29, 2017

CBO flips off the Upton Amendment to the AHCA

The CBO report on the amended AHCA that passed the House expends considerable ink on the malign effects of the MacArthur amendments that won over the Freedom Caucus. Those amendments allowed states to opt out of ACA regulations banning medical underwriting and mandating that all qualified health plans cover ten Essential Health Benefits.   CBO forecast that states encompassing one sixth of the U.S. population would  fully embrace the opt-out -- and that in those states, guaranteed issue would effectively end, and services removed from EHBs such as maternity care would become prohibitively expensive. The individual market in these states would  thus become unstable, according to CBO.

When the MacArthur amendment became part of the AHCA, many Republican moderates anticipated such results and announced that they could not support the legislation because it did not adequately protect people with pre-existing conditions. A critical mass flipped back, however, when Fred Upton -- one of those who said he could not support the bill with the MacArthur amendment -- introduced an amendment allocating a mere $8 billion over 10 years for states to use to lower premiums for those harmed by the return of medical underwriting.  While that amendment was widely derided as a band-aid on a gunshot wound, Upton issued a statement declaring it sufficient:
“This week, I expressed my deep concerns with the AHCA as it was written to both President Trump and our leadership. We immediately got to work on a responsible fix.

Friday, May 26, 2017

AHIP puts Medicaid first in "do no harm" plea to Republicans

Early this week, in a letter to Senate Finance Committee Chair Orrin Hatch, the America's Health Insurance Plans (AHIP), the largest association of private health insurers, basically begged Republicans to stop threatening to uninsure tens of millions in the name of reform. 

AHIP voiced support for community rating, guaranteed issue, income- and age-based subsidies, and an enforcement measure sufficient to induce people to buy insurance. In other words, for preserving the ACA marketplace with a few regulatory teaks  -- and with the AHCA's $138 billion in federal funding for state reinsurance or other "stability" measures tossed in.

Striking on its face though the health insurance industry's renunciation of medical underwriting may be, the most remarkable part of the letter comes early, in its reframing of what healthcare "reform," Republican-style, is all about. AHCA opponents have been screaming for months that at the bill's core is a $900 billion tax cut* paid for by an $800+ billion Medicaid cut. It's been hard to break through the noise with that core equation, given the AHCA drafters' high-strung debates about various proposed malformations of the individual market. AHIP puts the pieces in perspective:

Thursday, May 25, 2017

CBO: Some states will kill protections for those with pre-existing conditions -- and oh yes, the AHCA still eviscerates Medicaid

In late April, Matthew Fiedler explained in a Brookings brief that the MacArthur amendment to the AHCA, which allowed states to subject people who fail to maintain continuous coverage to medical underwriting, would not just affect those who fail to maintain continuous coverage. Fiedler's summary:
...the framework created by the waiver would allow states to effectively eliminate community rating protections for all people seeking individual market coverage, including people who had maintained continuous coverage.

In brief, healthy people would have a strong incentive to “opt out” of the community-rated pool and instead pay a premium based on health status. With healthy enrollees opting out of the community-rated pool, community-rated premiums would need to be extremely high, forcing sicker individuals—including those with continuous coverage—to choose between paying the extremely high community-rated premium or being underwritten themselves. Either way, people with serious health conditions would face prohibitively high premiums. As a result, community rating would be eviscerated—and with it any meaningful guarantee that seriously ill people can access coverage.
The CBO analysis of the amended AHCA released yesterday reproduces this argument:

Wednesday, May 24, 2017

Medical Billing: The Ten Do-well Commandments (after Elisabeth Rosenthal)

Elisabeth Rosenthal, reporter of the monumental Paying Till it Hurts series in the New York Times and author of  An American Sickness: How Healthcare Became Big Business and How You Can Take it Back, has been out front with the "Ten Economic Rules of the Dysfunctional Medical Market" with which the book leads off -- e.g., on Twitter and on Medium.

To those of us who have saturated themselves in Lin-Manuel Miranda's Hamilton (which already feels like a relic of a bygone era), "10 rules"  inescapably conjure up The Ten Duel Commandments. So I have set them to imagined music below. At bottom, the rules as Rosenthal worded them.

A disclaimer: While the rules in isolation may seem excessively cynical, I don't think Rosenthal's point is that all providers follow them all the time, but that the incentives in our dysfunctional system pull them this way.  Another disclaimer: I haven't read the book yet. Too much current bad news to absorb. But I'll get there.

The Ten Billing Commandments

Number one: The treatment. More is always better.
Feed the bottom line, be a real go-getter.

Number two: Keep 'em coming. More is always more.
A lifetime of treatment trumps a simple cure.

Number three: Amenities and marketing are the way it's done.
Look like Cedars-Sinai and the battle is won.

Tuesday, May 23, 2017

Single Payer in CA? The impediments are mountainous

The widely reported topline of the analysis of California's single payer bill released by the state Senate Appropriations Committee is a highly uncertain forecast that the state would need to roughly double its revenue to pay for the benefit. That is, the total cost of care could run to $400 billion per year,  offset by up to  $200 billion in existing federal funding for Medicaid and Medicare -- if  HHS granted basically every waiver sought to transfer that funding from multiple programs. The spending would also replace an estimated $100-150 billion in employer-sponsored insurance. Funding it would require an estimated 15% payroll tax or equivalent revenue.

That level of spending, and cost-shifting from the private to the public sector, could be defensible, in the abstract. But the report, released under the name of committee chair Ricardo Lara and consultant Brendan McCarthy, asserts a host of practical impediments to implementation, including:

1. No cost control: The Healthy California Act imposes no premiums, no deductibles and no copays on enrollees (who include every resident in the state) and mandates no gatekeeping functions -- any enrollee can contract with any accredited provider and get 100% coverage for service.  Payment is essentially on a fee-for-service basis:
While the bill would allow for other forms of payment, the basic requirement in the bill that payments be cost-based and requirements in the bill that patients are able to see any willing provider of services would make it difficult for the Board to create capitated payment systems that would work under those constraints.
Consequently, and given the participation of every provider in the state, "the analysis assumes a 10% in health care service utilization over fee-for-service Medi-Cal...likely a conservative assumption."

Saturday, May 20, 2017

My letter to the Senate Finance Committee about ACA repeal legislaton

Topher Spiro, veep for health policy at the Center for American Progress and a forceful ACA advocate on Twitter (@topherspiro), got hold of a letter from Senate Finance Committee Chair Orrin Hatch to healthcare "stakeholders," inviting their input by May 23 on Republican senators' efforts to write an ACA repeal bill. Hatch asked that letters be sent to

Since the Republican senators' bill-writing process is as secretive and rushed as the House's, Spiro seized the opportunity to encourage non-privileged "stakeholders" -- all of us -- to send their two cents to the email address provided. He has offered to tweet any letters tweeted at him, with a screenshot.

Here's mine:

Dear Members of the Senate Finance Committee:

As a constituent, husband and father of two adult children, son and son-in-law of four aged parents, member of a community and citizen of a nation with many people who lack affordable, reliable access to health insurance or are at risk of losing newly obtained insurance, I urge you
  • not to eviscerate Medicaid by imposing per capita caps on federal funding or imposing a block grant formula; 
  • not to phase out the ACA Medicaid expansion or reduce the enhanced federal funding that enables it;
  • not to end income-based subsidies for premiums and out-of-pocket medical expenses that render individual market coverage and actual healthcare affordable to millions of low-and moderate-income Americans; 
  • not to compromise the ACA's ban on medical underwriting or mandating of guaranteed issue or requirement that health plans provide Essential Health Benefits; and 
  • not to repeal the ACA taxes that have enabled some 20 million Americans thus far to gain insurance coverage.

Friday, May 19, 2017

CMS's warmup for AHCA-world: Guidance on ACA innovation waivers

CMS recently issued guidance to states seeking ACA Section 1332 "innovation waivers," by which states can apply to alter or even thoroughly redesign their ACA marketplaces.

The checklist offers explicit encouragement to states to seek federal funding for reinsurance programs or high risk pools:
In particular we welcome the opportunity to work with states to pursue Section 1332 waivers incorporating a high-risk pool/state-operated reinsurance program. State-operated reinsurance programs have a demonstrated ability to help lower premiums, and if the state shows a reduction in federal spending on premium tax credits a state could receive Federal pass-through funding to help fund the state’s reinsurance program. 
Encouragement to states to implement a reinsurance program is good news, as reinsurance does keep down premiums, and the expiration of the ACA's federal reinsurance program after 2016 contributed to the 2017 premium spike. Including the high risk pool (HRP) option is a bit of a mystery, since 1332 waivers cannot be used to waive the ACA's ban on medical underwriting or guaranteed issue. (The waivers can be used to alter the ACA's Essential Health Benefits required of all qualified health plans, as well as subsidy formulas and the individual and employer mandates.)

Thursday, May 18, 2017

A Sparer means to universal health insurance

Last November Michael Sparer, chair of Columbia's Mailman School of Public Health, proposed that managed Medicaid programs be used as a fallback for regions of the country in which no insurer was participating in the ACA marketplace.  Today Sparer went one better and proposed, in a NYT op-ed, that managed Medicaid replace the ACA marketplace:
Some liberals have proposed using Medicare, the federal health care program for the elderly and disabled, as the basis for providing universal health insurance. But Medicaid is the better fit. It has a more generous benefits package, is less costly and is developing more innovative care-management strategies. Moreover, the integration of the Obamacare exchanges into Medicaid would be relatively seamless: Many health plans are already in both markets...

Moderates in both parties recognize that the chance of success for an insurance marketplace that serves only the self-employed, part-time workers and small businesses, as Obamacare does now, is small. So why not eliminate the insurance exchanges — enabling Mr. Trump to claim he “repealed” Obamacare — while allowing exchange beneficiaries to buy into Medicaid, using tax credits to pay the premiums. Recent surveys showing that Medicaid beneficiaries are generally satisfied with their coverage, more so than their exchange counterparts, makes the case even more persuasive.
Of course this excites me, since so far as I can tell the only person who has consistently suggested that managed Medicaid, or something close to it, is the best way to serve those currently dependent on the individual market I have argued that using a solo public option to push private insurers' costs down is pushing on a string; that marketplace enrollees have given ample testimony to Medicaid envy; that insurers are happier in markets in which government effectively sets rates (happier than in the individual market, at any rate); and that managed Medicaid is the only path to fulfilling Trump's healthcare promises (not that those promises are worth anything).

Wednesday, May 17, 2017

The Beatles mourn Republican moderates

Okay, this is silly, but...
Every time I hear or think "Cassidy-Collins" I hear "Eleanor Rigby." So...

Pick up the vibes from a House
Where a bill has been passed.
Relevant at last...
Work on the sidelines
Hauling in one or two Dems as they walk by the door...
Come, let's make law...
Ah the lonely moderates,
Where do they all come from?
Ah the lonely moderates,
Where do they all belong?

Also undead: Cassidy-Collins

Rising out of the grave with the monstrous AHCA, or at least wriggling its toes a little, is the more moderate Cassidy-Collins ACA remake bill, dubbed the Patient Freedom Act. That bill, introduced in January, preserves the ACA's funding base and allows states to maintain the Medicaid expansion and, if they wish, their ACA marketplaces in their current form.  

Back in March, in the New York Times online, I urged Senate Democrats to engage on the Cassidy-Collins, if only to shore up Republican Senate moderates in their efforts to stave off roughly matching trillion-dollar cuts to benefits and revenue. I submitted the piece on March 13, and it appeared on March 24, hours before House Republicans pulled the AHCA without a vote. When Paul Ryan declared that "Obamacare will be with us for the foreseeable future," the op-ed seemed insta-obsolete. No more.

Saturday, May 06, 2017

An ill-timed vacation

Back in prehistory, in October, my wife and I booked a long-postponed trip to Italy -- for now. So here I am, watching the ACA apparently about to get gutted, from a distance.  I saw last night the horrible posse of senators assigned to task. I imagine the only glimmer of hope is that moderates will balk, and I've always considered them squish. Glimmer 2: House and Senate can't agree. Glimmer 3: some crisis, hopefully not world- or democracy-ending, distracts everyone.  Ping me if any such glimmer peeks through.

Tuesday, May 02, 2017

Medicaid is cheaper. Ergo...

In Inside National Health Reform (2012), John McDonough, a former Senate aide who was in at the birth of the ACA, recounts how the ACA's threshold for expanded Medicaid eligibility came to be set at 133% of the Federal Poverty Level (de facto 138% FPL, as everyone gets 5% of income discounted). In so doing he highlights a rather obvious fact about Medicaid: it's cheap.
The decision to go higher than 100 percent of the federal poverty level in the Senate and the House were driven by dollars. The Congressional Budget Office, the nonpartisan congressional advisory body, estimated much higher costs to cover individuals through an exchange rather than through Medicaid because the latter pays medical providers much less than private insurers can get away with and because Medicaid administrative costs are much lower. In the early summer of 2009, when Senate Majority Leader Harry Reid and the White House pressured Baucus to abandon plans to tighten the federal health insurance tax exclusion as a financing source, Senate Finance leaders and staff scrambled to find new revenues and to hold down costs—moving from 100 to 133 percent of the FPL for Medicaid eligibility was one important step in that direction. Why not 150 percent? Finance officials knew there were existing Medicaid populations at 133 percent of the FPL, including children up to age six and pregnant women, while there were none at 150 percent of the FPL—it would be a more difficult and complex change. Further, governors and some Democratic senators felt going higher than 133 percent of the FPL was a line they were not willing to cross: 133 was it.

Monday, May 01, 2017

Start over, MacArthur

Decry his poor policymaking and gaslighting, but give Rep. Tom MacArthur this: he painstakingly crafted an intraparty compromise that got the Freedom Caucus behind the American Health Care Act. The MacArthur amendment allows states to re-instate medical underwriting -- charging people different rates for health insurance based on the medical history -- if they either establish a high risk pool or create a reinsurance program. It also allows states to alter the Essential Health Benefits that the ACA mandates to be covered by all qualified health plans.

Saturday, April 29, 2017

Will Medicaid drown in a high risk pool? (updated)

Update, 5/3/17: $100 billion over ten years for high risk pools, as speculated below? Ha ha ha -- a HRP patch has been proposed, and it's all of $8 billion over 5 years. That's after a $15 billion "invisible risk" fund was tacked onto a $115 billion state stability fund... the math outlined below still broadly applies. As Larry Levitt said of the $15b infusion, it's all chump change. And they're making the ACA look simple.
Rumor has it that Republican leadership may lure "moderates" holding out against AHCA passage by throwing perhaps $100 billion over ten years into high risk pools. Moderates could then declare themselves satisfied that prospective individual market enrollees who have pre-existing conditions will have access to coverage.

Leaving aside the historic poor performance of high risk pools, this reinforces my fear that all the public hand-wringing about medical underwriting is a smokescreen, giving moderates cover to eventually sign onto a bill that still rolls back the Medicaid expansion and cripples all Medicaid via per capita caps.

In fact, the patchwork of funding grants slapped onto the bill via amendment  (pregnant women and addiction! invisible risk! more medical expense deduction!) can be used to obfuscate and only modestly soften the original AHCA's basic math: over ten years, $1.2 trillion in healthcare spending cuts offsetting $880 in revenue loss stemming from repeal of the ACA's taxes and mandates. In the original bill, the spending cuts include:

Friday, April 28, 2017

The pre-existing condition smokescreen

In a snappy summary by Axios's David Nather of  the latest AHCA stall-out, this caught my eye:
The holdouts are mainly worried about weakening coverage for sick people. Rep. Ryan Costello of Pennsylvania: "Protections for those with pre-existing conditions without contingency and affordable access to coverage for every American remain my priorities for advancing healthcare reform, and this bill does not satisfy those benchmarks for me."
What this tells me is that the moderates will ultimately go along with ending the ACA Medicaid expansion and girdling all federal Medicaid spending with per capita caps.  I have long worried that Republican relative moderates will go squish on Medicaid if AHCA damage to the individual market is moderated past a certain threshold.

Now more than ever, the bottom line remains what Andy Slavitt said it was two months ago:

Thursday, April 27, 2017

Sing away the AHCA

For months, New Jersey activists have been staking out the local offices of New Jersey Rep. Rodney Frelinghuysen (NJ-11), a onetime Republican moderate pulled relentlessly right in recent years. While voting for almost all of the Trump agenda, Frelinghuysen stunned the world on March 24 with a pivotal statement against the AHCA on  grounds that the bill "would place significant new costs and barriers to care on my constituents in New Jersey. In addition to the loss of Medicaid coverage for so many people in my Medicaid-dependent state, the denial of essential health benefits in the individual market raise serious coverage and cost issues."

Noble words, but now Frelinghuysen is wavering -- with Ryan reportedly threatening to strip him of his treasured chairmanship of the House Appropriations Committee -- and Jersey progressives are going all-out to provide the counter-pressure, as in this petition.  With the AHCA risen from an unquiet grave, we are reviving old (month-old) arguments. So why not a months-old songbook? Here's one that I had to serenade solo in Morristown upon one freezing day. I can't say it's "sung to the tune of Hamilton's My Shot, but it's intoned to something like the rhythm of it:

Our Shot 

We are not throwing away our...SHOT
We are not throwing away our..SHOT
Ya know, we're just like Obama,
all action, no drama,
and we're not throwing away our..SHOT.

We're gonna stand outside your windows, Frelinghuysen
chantin singin make-all-kinda-noisin
until you let us freezin girlz and boyz in
to prove to you that Ryancare is poison --

Tuesday, April 25, 2017

The Kaiser misunderstanding

The Kaiser Family Foundation has a useful measure of how close to capacity the ACA marketplace is operating. Well, check that...Kaiser has two measures, and one has generated some confusion for some time.

The more useful measure is a national and state-by-state estimate of  Marketplace Enrollees Receiving Financial Assistance as a Share of the Subsidy-Eligible Population. For this, Kaiser combines analysis of enrollment data provided by CMS with Census data on income and insurance status. Importantly, Kaiser accounts for people whose income would qualify them for subsidies but who are disqualified by an offer of employer insurance, as well as people disqualified by immigration status.

As of  March 31, 2016*,  Kaiser estimated that 64% of those eligible for premium subsidies nationally were enrolled. State scores ranged from 92% in Florida, which has developed a culture of enrollment, with plenty of assistance available and advertised, to 31% in Colorado.** Kaiser estimated last October that 5.3 million of the uninsured were eligible for marketplace subsidies.

Friday, April 21, 2017

Tom MacArthur doesn't want you to know he's ready to uninsure millions

Defending his support of the ACA repeal bill, the American Health Care Act (AHCA), Rep. Tom MacArthur scolds a constituent who accused him of hypocrisy for "partisan finger-pointing." Yet MacArthur's rebuttal is riddled with obfuscations and errors.

1) MacArthur claims that a court found the ACA's Cost Sharing Reduction subsidies, which reduce out-of-pocket costs for low income enrollees, unconstitutional. Not true. A lower court agreed that if Congress does not allocate funds for those subsidies, as the ACA drafters intended and for which they budgeted, the executive branch lacks authority to pay insurers for them. If Congress allocates the funds, they are unambiguously legal. There is nothing inherently unconstitutional about them, and the Republican Congress's refusal to appropriate the budgeted funds is pure sabotage.

2) MacArthur implies that he's protecting the 11 million Americans and 500,000 New Jerseyans who gained coverage through the ACA's Medicaid expansion. Yet he supports repeal of enhanced federal funding for new expansion enrollees as of 2020. That effectively ends the expansion, as people typically churn in and out of Medicaid at short intervals. The Congressional Budget Office (CBO) forecast that if that cut occurs, the higher federal payments will apply to just 5% of enrollees by 2024.

Thursday, April 20, 2017

Tom MacArthur's faith-based waiver for the AHCA

Representative Tom MacArthur, R-NJ, has taken the lead in advancing amendments to the AHCA designed to bring both the Freedom Caucus and the moderate Tuesday Group aboard.  For the moderates, MacArthur writes that there will be an additional $160 billion in funding over 10 years to increase tax credits for older buyers and preserve Medicaid coverage for new mothers (was that on the block?!) and addiction treatment. For the conservatives, an amendment has been published  that would allow states to opt out of prohibiting medical underwriting or requiring insurers to cover the ACA's Essential Health Benefits.

Actually, the amendment begins by purporting to restore EHBs, community rating and guaranteed issue, the prohibition on denying coverage or charging more to people with pre-existing conditions. But it then tacks round and enables states to seek "limited waivers" to amend the EHBs, community rating -- and medical underwriting, if the state establishes a high risk pool.

How are those waivers limited? There's the rub. Beginning in 2017, the Affordable Care Act enables states to seek waivers to change the structure of their ACA marketplaces, but requires that the state's alternative plan "provide coverage that is at least as comprehensive and affordable, to at least a comparable number of residents, as this title would provide; and that it will not increase the Federal deficit."

Sunday, April 16, 2017

Trump logic, self-defined

A nation in which 40-plus percent of voters would choose for president a man who wildly insults anyone who criticizes or crosses him is a nation where emotional intelligence, let alone political judgment, is severely impaired.

Trump would presumably never admit, obvious as it is, that his insults and praise are determined purely by whether the party in question has been nice to him -- that "failed," "crooked," "cheating," "dumb" etc. simply means "criticized or crossed me."

Except that he just did:

Friday, April 14, 2017

Cutting off CSR is a war on the near-poor

Most coverage of the Trump administration's threats to stop paying Cost Sharing Reduction (CSR) subsidies focuses on the effect of withdrawal on insurers. And rightly so: insurers can't foot the bill for those subsidies on their own without massively raising premiums. If the federal funding is withdrawn, they will exit the ACA marketplace en masse.

It's worth stepping back to notice, though, that from an enrollee point of view, the marketplace can't function without CSR -- at least, not for the 50% of current enrollees who access strong doses of it. Without CSR, the marketplace wouldn't be even marginally serviceable for prospective customers with incomes below 200% of the Federal Poverty Level -- as 55% of uninsured Americans were in 2013, before the marketplace opened.

The average employer-sponsored plan has an actuarial value (AV) of about 82% -- that is, it covers about 82% of the average enrollee's medical costs. CSR raises the AV of a silver plan to 94% for enrollees with incomes below 150% FPL, and to 87% for enrollees in the 150-200% FPL range.& Over 60% of current marketplace enrollees are below the 200% FPL threshold, and about 85% of them select silver plans and so access the benefit, which is available only with silver.

At AV 94%, CSR generally reduces the deductible of a silver plan to the $0-250 range, and at AV 87%, to the $500-1000 range. Deductibles for silver plans without CSR average over $3,500 in 2017.

The AHCA, Paul Ryan's ACA "replacement" bill, is grossly inadequate to the needs of lower income customers, not only because its premium subsidies don't adjust for income and don't adjust adequately for age, but because it also does not adjust exposure to out-of-pocket costs according to income. That's a main reason why, for someone with an income below 150% FPL, the ACA picks up between 2 and 5.5 times as much of the total cost of healthcare (premium plus out-of-pocket expense) as does the AHCA. Because subsidies are available to people higher up the income scale in the Ryan plan, the individual market would shed lower income enrollees and pick up higher income ones should the bill be enacted (it would also shed older enrollees and pick up younger ones).