Saturday, September 2, 2017

Learning about our health care system from the inside

It was a dark and stormy night – actually it was another beautiful summer day here in Maine, Tuesday, August 29th. I had been experiencing a little shortness of breath when walking my dog Beau, so I made an appointment with my primary care doctor. Three days, two hospitals, and an ambulance transfer later, I was the proud container for two stents and had three daily medications I’ll be taking for a while.

I spend most of my days thinking about the health care system, but until now I’ve been incredibly lucky, having had minimal dealings with the system from the inside. While previously I’ve always tried to value the patient perspective, there is nothing quite like experiencing things for yourself. My direct exposure reinforced some of my ideas, caused me to re-examine others, and overall left me with a greater appreciation of all the individuals who make up our “system.”

I didn't think my shortness of breath was a big deal, but when my PCP did an EKG, she saw something that alarmed her and consulted with a cardiologist. A few hours later I was in the emergency room getting pumped full of blood thinners, so I didn't have a heart attack while they figured out what was going on. After a diagnostic catheterization at Mid-Coast Hospital revealed several blocked arteries, I was transferred to Maine Medical Center, where I had two stents inserted. Along the way, I couldn’t help myself and kept reflecting on our health care system – what was working, what wasn’t working and of course cost.

For what it’s worth, here are some random thoughts:
  • Nurses are angels – not all of them and not all the time, but most of them and most of the time. From the one who after checking the pulse on my leg at two in the morning gave my ankle a squeeze of reassurance after I had told her how unsettled I was, to the one who laughed at my lame jokes when I was trying to think about anything but my heart. Nurses do a tremendous amount of work, have an incredible amount of knowledge and move through their day in a caring and concerned manner. They truly make the system work
  • WTF, I was offered oxycodone – of course, not everything was positive (this is the real world after all) – I was shocked and appalled that when I said I had a headache, I was told I had been pre-approved for receive oxycodone for pain. I was there for heart issues, I wasn’t having surgery (catheterization is much less invasive), and there was no reason for me to have anything but Tylenol (which is what I took). Given what we now know about substance abuse issues, I should not have been offered such a powerful drug
  • I like the hub and spoke/feeder system of smaller hospitals sending patients to centers for specific complicated procedures. That’s how it works in Maine for the placement of stents – while the community hospital I started at did a diagnostic catheterization when it was determined I needed stents places, I was sent on to Maine Med. This means that the only people doing the procedures are the ones most qualified to do so. Makes sense, doesn’t it? Of course, there are financial implications both for the system and for low-income family members, but those are complications to be addressed, not reasons to abandon the approach
  • Riding in the back of an ambulance I was not checking prices, network participation or quality statistics. Talking about health care, I’ve often said that people don’t comparison price riding in an ambulance – so of course, when I was actually riding in one, I couldn’t help but consider the irony. But it was true, the last thing I was thinking about was being a good consumer – and call me crazy, but I don’t think we want to put that kind of stress on patients needing care by expecting them to do so 
  • Electronic records actually work – In the space of 72 hours I was at a doctor’s office and two hospitals – everyone knew who I was, what was going on, and what had come before. The interventionist had seen the film of the diagnostic catheterization; they knew my PCPs name (and had sent her my hospital records). EMRs get a lot of well justified bad press, but my experience reminded me that they are worth the trouble to get right

Was I thinking about all this to avoid thoughts of my mortality? Probably. But also, because this stuff is important. It is all incredibly complicated – coming up with solutions requires the participation of people with varied skill sets and perspectives. And finally, because as those who know me will understand, I can’t help myself. So, there you have it, if you were wondering what I’ve been this week, I’ve been on assignment inside the health care system. 

Thursday, July 20, 2017

Next steps – as of Thursday, July 20

Given the pace of developments, I felt compelled to put today’s date in the title.  I hope the contents will continue to be relevant and helpful, but as I’ve said before – I know nothing ¯\_()_/¯

With that in mind, I’m writing under the assumption that “repeal & replace” and “repeal & delay” are both dead.  Of course, that may yet prove to be false, but if the vote scheduled for next week does fail, we’ll need to be prepared to act quickly – so here is my look at what needs to be done.  

Contrary to what you have heard, the ACA is not failing.  For many people in many places, it’s working well.  According to the Administration’s own report, the markets are not imploding, and health plans are reporting better financial results this year.  That said, there are issues both with the law itself and with how the Administration is doing their administering.

Short of repeal, there are ways the Administration can undermine the law, and sadly it continues to do so. You’ve probably read about the sabotage, but here’s a quick review: Holding the cost sharing reduction payments to insurers hostage (in the announcement yesterday that they would be paid this month, no assurance that would be the case next month), lack of enforcement of the mandate, lack of support for open enrollment, and the release of misleading information (and here’s a story that broke today about using ACA funds to distribute that misleading information).  

The purpose of this post is to address what needs to be done immediately – as identified by both Democrats and Republicans.  For today we’ll forgo more expansive changes to the existing system, but of course, they loom over all our conversations. 

The four issues that can and should be addressed immediately:

Cost sharing reduction (CSR) payments

As you may know, the ACA calls for those earning less than 250% of FPL (federal poverty level) to receive a second subsidy – in addition to their premium subsidy, their cost sharing (deductible, copay, and coinsurance) are reduced.  The law required insurers to provide this benefit, but the funding for the benefit is not “mandatory,” and the Republicans in Congress have sued to prevent payment. The Obama Administration made the payments, and so far, the Trump Administration has as well.  However, the Trump Administration keeps threatening to stop the payments. 

Due to that threat, insurers have been “baking in” the cost of the CSRs in their 2018 premiums.  This, along with mandate issues (discussed below) is being referred to as the “Trump Tax.”  Half of proposed rate hikes for 2018 are due to these actions by the current administration.

Kaiser has estimated that not making payments incurs a net cost of over $2 billion.  That’s because the lack of payments is being built into the premium, and the increase in premium will result in increased subsidy costs of $12 billion vs. the cost of payments of $10 billion.

Needed immediate action:

Funding these payments with certainty for at least the next several years.

Underserved counties

Due to market instability, there are some counties that may have no insurers offering a plan in 2018.  There are also an additional number that will only have one insurer offering a plan.  There are several suggested ways to address this issue quickly.  While I would prefer that these actions are taken if there are less than two insurers present in a market, some action must be taken at least in markets where there are no insurers.

Needed immediate actions (for this issue I provide several alternatives, moving forward with one of the three options would address the issue):
  • The Federal Employee Benefit Plan (FEBP) has insurers offering plans in every county in the country.  For underserved counties, require the two largest FEBP plans to offer a silver plan on the marketplace
  • Medicaid buy in - Offer a “plan” on the marketplace allowing individuals to receive Medicaid coverage for a specified cost (can be thought of as a stop-gap public option)
  • Incentivize insurance companies to participate by requiring those firms in a state bidding for Medicaid contract to offer an exchange plan, or by requiring any insurer that wants to sell off the exchange in a state to sell in every county on the exchange as well. 

Degradation of risk pool

We need young healthy people to buy insurance.  If they don’t, we end up with a higher percentage of older and sicker people in the risk pool, driving up premiums because there are fewer people to cover their costs. 

Needed immediate actions:
  • Enforcement of the mandate (there is currently a provision in the House budget to prevent the IRS from spending money on mandate enforcement)
  • Sufficient marketing efforts supporting/encouraging enrollment (the administration cut advertising and promotion during the end of the open enrollment period)
  • Enrollment support through the hiring and promotion of navigators

Premium level

While making the CSR payments and enforcing the mandate will help lower premiums, it seems clear that more action is needed.  As noted in a recent Huffington Post article:

“The Senate bill that GOP leaders just abandoned included $182 billion for shoring up state insurance markets, including $50 billion dedicated to a reinsurance program. When Hillary Clinton ran for president, her agenda included $250 billion in new tax breaks to help consumers pay premiums or out-of-pocket costs.

Somewhere in there is a compromise. It might not be enough to fix all of the Affordable Care Act’s problems, but it could still mitigate them significantly.”

There is agreement from both sides that we need additional reinsurance/risk adjustment to help lower premiums (remember, the ACA had three risk adjustment programs, but they were temporary and underfunded).  There are several ways to proceed:
  • Utilize the bones of the Medicare Part D risk corridor program
  • Utilize a reinsurance program modeled on Alaska’s (which just received a waiver from CMS for 2018 to help fund their reinsurance program).
  • “Another idea is to require insurers to participate in broad regions, which would limit their ability to selectively work in more profitable ones and shun ones that are less so, like rural areas. This would be consistent with Medicare Part D, which requires insurers that offer stand-alone drug plans to do so in multi-state regions.“ Austin Frakt writing in the NY Times

Regarding reinsurance, note that there are several different methodologies being discussed.  (You may recall the discussion around false claims re Maine’s plan that was part of PL 90.)  The key to all of them is funding.  If you want to provide the same benefits but lower premiums the lost funds must come from somewhere.  There are better and worse ways to allocate that funding, but the bottom line is you need that additional funding.

Needed immediate action:

Pick a methodology, fund it, and implement it. 

That’s the immediate stuff.  While “nothing is easy” in my more optimistic moments I believe bipartisan action on the four items reviewed above is possible.  
Of course, that’s just for now.  Moving forward we need to address costs – both the out-of-pocket costs faced by individuals and the overall cost of care provided by our system.   Those conversations will, in fact, be complicated.

Appendix: Various “fix” proposals

  1. CSR payments
  2. In underserved counties, buy from DC exchange (like Congress does)
  3. Permanent reinsurance provision

  1. CSR payments
  2. In underserved counties: a) suspend tax, b) public option c) buy into FEBP
  3. Reinsurance

  1. “Second, Congress should ensure coverage for bare counties. The Federal Employees Health Benefits Program (FEHBP) offers private insurance coverage from multiple insurers in every county in the nation. For 2018 and 2019 only, the largest two FEHBP insurers in any county should be required as a condition of continued participation in the program to offer at least one silver-level plan through the federal exchange in all counties that would otherwise be without coverage. These plans should be eligible for premium tax credits and could otherwise charge actuarially appropriate premiums.”
  2. CSR payments
  3. Coverage for bare counties (Federal employee health benefit plan)
  4. Reinsurance
  5. Risk Corridor
  6. Mandate enforcement
  7. More generous tax credits for young
  8. Deductibility of premiums for individuals

  1. Replace mandate w late enrollment penalties used in Medicare Parts B and D
  2. End employer mandate
  3. Replace Cadillac Tax with cap on tax exclusion for employer-sponsored insurance
  4. Reduce premium and cost-sharing for low-income individuals, cap premium at 8.5% of income for all
  5. Given 4, relax 3:1 age band
  6. Reevaluate essential health benefits
  7. Increase marketplace enrollment
  8. Address insurer/provider concentration by capping rates in those markets (use Medicare or Medicare Advantage rates)
  9. Use broad revenue source to fund reinsurance

Monday, June 26, 2017

The Senate Bill and Pre-existing condition protections. A response to Senator Johnson

In today's New York Times, Ron Johnson, Republican senator from Wisconsin argues against the Senate health care bill because it DOES NOT remove the protections for coverage of pre-existing conditions (

Guess what, it already does.  I've put together the following explanation of what's going on in the current draft of the Senate bill.

Let’s start with what the bill does not do:

“There’s nothing in the Senate bill that specifically would allow withdrawal of coverage for a person with a preexisting condition,” said Timothy Jost, emeritus law professor at Washington and Lee University in Virginia and an expert on health reform. “What it does do is allow states to get waivers” allowing exceptions to rules requiring comprehensive coverage, he said. (

The trouble lies with what some have been calling the “back door” approach, the potential for states to waiver the essential health benefits requirement.  The waiver provision in the Senate bill is large enough to drive a truck through ( 

The ACA deems ten categories of coverage to be essential, that was a huge step forward for the private insurance market as it made junk coverage a thing of the past (with some exceptions, but that’s for another time).  The Senate waiver provisions basically allow a state to eliminate that requirement on insurance plans for no reason.  That means plans can (and will) be offered that don’t offer drug coverage, or maternity coverage, or radiation coverage…

Here’s why. 

“Once a state waived EHBs, insurers would begin a race to the bottom to provide the most bare bones coverage. Those who provided more comprehensive coverage would attract less healthy customers and see their costs rise accordingly. To avoid this issue, insurers would jettison coverage of expensive treatments and try to cherry-pick only healthier customers. The CBO predicted, “Services or benefits likely to be excluded from the EHBs in some states include maternity care, mental health and substance abuse benefits, rehabilitative and habilitative services, and pediatric dental benefits.” The CBO’s prediction matches the reality of the pre-ACA insurance market, in which the vast majority of plans did not cover maternity care and a significant number of people did not have coverage for substance abuse or mental health services. Under the AHCA, people whose needs were not met by standard insurance would be forced either to buy coverage riders, which would expand the coverage provided by their policy for an added cost or to find a more expensive plan that provided a broader range of benefits.” (

Basically, healthy people will want a cheaper plan, insurers will offer bare-bones plans that only the healthy will want.  Only sick people will want comprehensive plans, meaning the costs will escalate quickly, making them unaffordable.

So while it’s true the Senate bill does not explicitly take away the pre-ex protections, the waivers mean the market still allow (force) insurers to do so.

Here are several sources:

Friday, June 23, 2017

Better Care Reconciliation Act – No, the bill title is not a joke, just another sign that irony is dead

Did anyone really think the Senate bill would be better?  It’s not.  In many ways, it’s very similar to the House bill, but it also manages to find new creative ways to be horrible.

I wanted to write a moderate post, talking about the good and the bad in the bill, finding places that might be the start of negotiation.  But I can’t.  Perhaps President Obama summed it up best: “The Senate bill, unveiled today, is not a health care bill. It’s a massive transfer of wealth from middle-class and poor families to the richest people in America.”

It is possible to have an intelligent debate on how to fix the health care system and to differ on methods.  However, to do so, you must agree on the goals of the reform.  My goal is for everyone to receive appropriate care they find affordable given their circumstances. Unfortunately, that is not the goal of this bill.

There is already a myriad of analyses out about the bill (some of the best are from the NY Times, Vox and Kaiser).  I’m not going to duplicate those efforts.  Instead, I want to provide a look at the process from here and shine a spotlight on a few of the bill’s provisions that are most problematic.

The bill released Thursday is a discussion draft.  That’s right, even though they hope to vote in less than a week, this is far from the final text.

We’ve already seen some conservative Republican Senators say that can’t vote for the bill “as written.”  Don’t be lulled into complacency – the best word to describe what they are doing is theater.  There is a distinct possibility this was pre-arranged so that already drafted amendments could be added the objecting Senators could claim to have scored a victory.  More important will be what we hear from the moderate Senators in the coming days.  (You can find a current scorecard here.)

Next, we’ll see a CBO score on Monday or Tuesday.  This will provide some new information and probably lead to more “new” amendments.  Important to note here that the amendments will NOT be scored by the CBO before the bill goes to a vote.

Once there is a CBO score, the Senate Parliamentarian needs to rule on the bill’s compliance with the reconciliation rules (the Byrd bath).  Remember, to pass this bill with only 51 votes (or 50 plus the tie-breaking vote of Pence) it has to follow certain rules.  Although, it is also possible for the Republicans to override the Parliamentarian and proceed anyway.  While that has never been done, much about this bills process has already been precedent shattering.

If the schedule holds, we’ll then see a vote in the Senate on Thursday.  Reports are that they will bring this to a vote regardless of if they think it will pass or not.  There have been some reports that Senate leadership wants this over one way or another so they can move on to tax reform and other matters – while I’d like to believe this is true and they will let a defeat stand, I remain skeptical.

If it does pass the Senate, it goes back to the House where the question will be: Does it go to a conference committee or does the House just vote on the Senate version?

So, while the next few days are as critical as any so far, it’s not the end of the story.

Like the House bill, the Senate version impacts both Medicaid and the private insurance market.


Much of the changes to Medicaid mirror the House bill.  A quick review:  The bill lowers taxes for the wealthy by cutting Medicaid budgets.  Cutting Medicaid puts our parents and grandparents at risk, since most seniors who end up in a nursing home end up having it paid for by Medicaid.  It also puts our friends and neighbors at risk, since, nationally, one-third of Medicaid’s spending is for people with disabilities. Here in Maine, that figure is closer to half.

But the shift to per-capita caps is made even worse than in the House bill by the use of general inflation instead of medical inflation for the annual adjustments.  That will mean States will be continuously faced with the dilemma of increasing their budgets or cutting services.  Read more about that here.

The Senate version also ends Medicaid expansion with the enhanced match phasing out over three years beginning in 2020.  Note that no new expansion states are allowed; this would impact the expansion referendum efforts currently underway here in Maine.  It’s also worth noting that for the seven states that have a trigger provision in their expansion legislation, ending their expansion as soon as the match rate changes.

The Senate version also includes the option of states adding work requirements to their Medicaid programs.

Note that I haven’t covered everything.  You can read more here: Senate Health Care Bill Includes Deep Cuts to Medicaid.

Private Insurance

The most prevalent complaint about the ACA is that premiums are too high and individuals pay too much out-of-pocket.  On an apples-to-apples basis, the Senate bill makes both problems worse.  Some will argue that premiums will go down – but that will only be if a state changes the definition of essential health benefits leading to cheaper less comprehensive plans.

As briefly as possible (really, I’m trying) let’s review some of the changes.

Starting with subsidies:  The current subsidies are based on silver plans with a 70% AV plan, the new subsidies are based on bronze plans with a 58% AV plan.  That means that the plans purchase will only cover on average 58% of an individual’s medical expenses, driving up their out-of-pocket costs.  Changing the basis of the subsidies is about a 15% across-the-board cut.

The bill changes the range of individuals who can receive a subsidy from 100% - 400% of the Federal Poverty Level (FPL) to 0-350% of FPL.  On the positive side, that means that those earning less than 100% FPL who are not eligible for Medicaid will receive some help, however, those earning 351% of FPL and now receiving assistance will no longer get help. 

In Portland Maine, a 60-year-old at 351% of FPL not gets a subsidy of $4,651 a year – under the Senate plan, that goes to $0.  In Anchorage Alaska, a 64-year-old making about $43,000 a year goes from getting a $20,000 subsidy under the current law to receiving $0. 

So much for lowering expenses.

The bill also changes the amount of the subsidy relative to income.  A 60-year old with income between 300 and 350 percent of the FPL would have to spend 16.2 percent of household income on premiums before becoming eligible for a subsidy, while a 28-year-old would only have to pay 4.3 percent. Under the ACA, both would have had to pay 9.5 percent.  So yes, some younger people would get greater percentage help, but remember, that is for a less generous plan than under current law.

Additional factors driving up costs for those most at risk:
  • The cost-sharing reduction provision of the ACA is eliminated after 2020
  • Individuals eligible for employer coverage would be ineligible for premium tax credits regardless of the affordability of the employer coverage
  • States can change rating bands from 3:1 to 5:1. As you may recall, that means premiums for older people will go up.

Again, so much for lowering costs for individuals.

But it gets even worse for the individual market.  The Senate bill eliminates the penalty for not having coverage but does not eliminate guaranteed issue of community rating.  These changes will inevitably lead to the dreaded death-spiral.  If an insurer has to offer coverage to everyone, but healthy people can skip buying coverage, only those who need care will end up buying insurance, driving up premiums, causing even more people to leave the market.

Pretty bad.  But as they say, wait, there’s more.

The Senate bill alters the ACA's 1332 waivers.  I’ll let Tim Jost explain:
“The provisions of the ACA subject to 1332 waivers (and not otherwise repealed by the Senate bill) include the essential health benefits, actuarial value, out-of-pocket limits (for individual plans), and other qualified health plan requirements, as well as the ACA’s exchange provisions (which are not otherwise repealed by the Senate bill) and its premium tax credit provisions. Under the Senate bill, these can be waived if a state describes how it would “provide for alternative means of, and requirements for, increasing access to comprehensive coverage, reducing average premiums, and increasing enrollment.””
This change means states can do away with EHB requirements.  The elimination of EHB requirements makes any pre-existing condition protections meaningless.  An insurer could offer plans without certain care covered, attracting healthy people thus driving up costs in the old plans that did cover the treatments (since only those needing the treatments would stay enrolled). 

Taken all together, under the bill as drafted, the individual market would not be viable, except for offering certain bare-bones plans with huge out-of-pocket costs.

On the employer side, the Senate bill removes the penalty for not offering coverage.  While most large employers will continue to do so, there will be some mid-size firms who take this as an opportunity to drop coverage.

The bill also eliminates the small business tax credit.  There is also a provision in the bill that allows for Association Health Plans.  These plans would be exempt from state insurance regulation and would lead to cherry-picking by insurers damaging the risk pool for small business plans still subject to state regulation.

Bottom line, this bill does nothing to improve health care and in many demonstrable ways makes the situation worse.

Before we go, a few final links covering some additional low-lights to the bill:

Wednesday, May 17, 2017

Comments on Maine’s 1115 Medicaid Waiver Application - Evidence and Empathy

DHHS is holding a public hearing on its Medicaid waiver application.  Below are the comments I will either read or submit (based on turnout at the hearing).

Good morning.  My name is Mitchell Stein, and I am an independent health policy consultant.  I offer these comments on Maine’s 1115 Medicaid waiver application as a private individual, no client is paying for my time, and I am solely responsible for my remarks.  I have spent my career working on various parts of our health care system. I started working for MetLife on long-term care insurance in 1991 and then spent over 15 years at Mercer Consulting in their healthcare practice.  I’ve lived in Maine for ten years during which time I’ve worked at Health Dialog, Consumers for Affordable Health Care and the Institute for Clinical and Economic Review.

As you might imagine, during this time my understanding of this complicated topic has grown, and my perspective has matured.  Today, when I analyze a proposed policy, I try and keep two things in mind; evidence and empathy.

Many speak of the need for evidence-based medicine.  Too much of our current treatment is based on what has been done in the past, not based on what works.  The same can be said of policy decisions.  Too many are made based on what sounds like a good idea, often contradicting the evidence of what has worked and what has not worked.

While evidence is crucial, equally important is maintaining empathy for the people we are trying to help.  If we start to treat them as data, we risk making decisions that denigrate their humanity.

With those points in mind, I will comment on two of the provisions of the proposed waiver: the asset test and the premium requirement.  Spoiler alert, the bottom line is that both provisions would end up costing the state money while discouraging coverage of individuals who are eligible for the program and in need of benefits. 

Before I continue, I’ll note that the written version of these comments contains details on the references I will cite.

Let’s start with asset tests.  On first blush, the requirement seems to make sense.  Why wouldn’t you want to keep individuals off the program if they sufficient assets to take care of themselves?  However, the evidence tells a different story.  While there are undoubtedly a few people who are gaming the system, experience in many states has shown that it costs much more in administrative costs to try and keep out these few bad actors than would ever be saved in program costs.  Additionally, while imposing these tests would keep out only a few bad actors, the added complexity would keep otherwise eligible individuals from getting the benefits they need.

The Kaiser Commission on Medicaid and the Uninsured produced a report of state experiences after eliminating the Medicaid asset test.  The report looked at the experience of ten states and concluded that the action cut administrative costs, improved program efficiency, and increased access to health care.  With that in mind, why would we want to add back this provision?

Quoting from the report: “The surveyed states generally found that, despite being cumbersome for agency staff to administer and onerous for applicants to document, an asset test actually kept few families from meeting Medicaid eligibility requirements and may have prevented some from completing the application process.”

Now let’s talk about the proposal to charge Medicaid beneficiaries premiums to participate in the program.  Again, at first, it may sound like a good idea – have individuals involved by contributing something to their coverage.  However, once again the evidence shows us that collecting premiums costs more money than is collected and the need for empathy reminds us that we are keeping individuals from receiving the care they need.

A review of the states currently charging their Medicaid enrollees premiums finds that for many, the premiums are unaffordable resulting in otherwise eligible individuals being dropped from the program.  Additionally, the attempted collection of premiums is not generating significant revenue for states.

Let’s look at two examples of the impact on enrollees:

In Michigan, 40 percent of people required to pay premiums are currently past due on their payments.

In Iowa out of approximately 17,000 enrollees subject to premiums, during December of 2015 5,760 cases were sent to collections for failure to pay while an additional 500 were disenrolled.  The previous month, 3,520 were disenrolled.

Now, let’s see what the impact is no state revenue:

In Arkansas, 2016 saw the state spend $12 million dollars to implement its premium program.  That after only collecting $384,000 in premiums the previous year.

In Michigan, the state is spending $20 million a year to implement the healthy Michigan program, while not all of that money goes to collecting premiums, a significant portion does.  And yet in 2015 during one three-month period the state averaged collections of only $181,000 in premium per month.

In conclusion, as we contemplate changes to the MaineCare program we must remember that the purpose of the Medicaid program is to promote health coverage and access.  It is more than fair to make changes that would save money while preserving this goal; however, the changes proposed under the 1115 waiver application would not do so.  Judged by the mantra of evidence and empathy, the proposed changes would result in increased administrative costs while denying benefits to eligible individuals in need of those benefits.

Acknowledgments:  In addition to the references cited, the resources of the Kaiser Family Foundation and Families USA have proven invaluable.  I’m also indebted to Deborah Roseman for her use of, and thoughts on, the phrase “evidence and empathy.”

Friday, May 5, 2017

Time to take a deep breath and then get back to work

OK, let’s all take a deep breath. I don’t want to stifle the outrage, believe me, I’m pissed, but we have a long road ahead. No one’s coverage has changed (yet). The ACA has not been repealed or replaced (yet). Passage in the House was only the first step so let’s all take a deep breath, maybe have a drink to drown our sorrows, and then get back to work.

At the end of this tweet is a summary of the AHCA as passed written by Tim Jost but I want to highlight a few things (you can find his analysis here).

Things to remember about the AHCA as passed by the House:
  • The ACA slightly transferred some funds from the rich to the poor, but the AHCA massively transfers money from the poor to the rich. It is an $880 billion transfer from people on Medicaid to people making more than $200K a year. 
  • The bill passed without hearings, with the final text made available mere hours before the vote, with many members of the House saying they had not read it, and without a CBO analysis. 
  • There was no public support for the bill: no provider groups, no patient groups, and no hospitals came out in support of the AHCA. 
  • As written it may benefit a few young healthy people, but it will harm many old, sick and low-income people.
  • Finally, note that supporters of the AHCA are still telling lies about the ACA – but now they are also telling lies about the AHCA (basically trying to convince people it’s not as bad as it is).

This weekend, Representatives and Senators will be returning home – they must be reminded how horrible we all think the bill is.

When they return to Washington, it’s the Senate’s turn. As of now, there are conflicting reports – some articles are saying the Senate will start from scratch, completely ignoring the bill as passed, some saying they will take the AHCA as the starting point. In either case, it will be an opportunity to change the bill.

The bill as currently conceived will also have to satisfy the reconciliation process – to pass the Senate with 51 votes instead of 60, all parts of the bill must impact the Federal budget. There are real questions if that is the case for some of the bill’s provisions. Again, an opportunity to change the bill.

If the Senate does manage to pass a bill, it is an open question as to if the new bill can get passed the House. Some of the provisions that won over the Freedom Caucus are the same provisions most likely to be changed by the Senate.

A long road and a lot of work ahead.

One more point before I stop for tonight; elections matter. We must remember those who voted for the bill in the house and do everything in our power to vote them out of office. The best way to avoid horrendous bills like this in the future is to take back Congress.

Speaking truth to power

24 hrs, 3 stories 

Stein said there’s nothing wrong with the structure of a reinsurance program like MGARA, but the key is how well it’s funded.
“In the end, it all comes down to how much money is put in,” Stein said.

MPBN May 2, 2017
And the invisible high-risk pool, Stein says, is just one small proposal within the larger health bill. 
“There’s nothing inherently wrong with it, but it doesn’t really fix all the other problems of the bill,” he says. 
Stein says those include changes to essential health benefits and cuts to the Medicaid program.

Bangor Daily News May 3, 2017
High-risk pools can work in theory, but only if they’re properly funded, said Mitchell Stein, a health policy expert who worked for the advocacy group Consumers for Affordable Health Care when Maine passed PL 90. They usually aren’t and historically have failed, leaving people with pre-existing conditions facing unaffordable premiums, he said. “It all comes down to money, as it usually does,” Stein said.
Under congressional Republicans’ plan, $110 billion would fund a high-risk pool over 10 years. One study estimates that it would cost at least $178 billion every year to adequately fund it. “The dollar amounts the Republicans are talking about are woefully inadequate chump change,” Stein said. 

Saturday, March 25, 2017

What just happened, and what happens next?

I think it’s safe to say that over the last few days we saw an unprecedented defeat for the party in power.  Despite having majorities in both houses of Congress and the Presidency, they were unable to fulfill a promise seven years in the making – instead, as put by Bill Gardner, The ACA Won.

Did you ever think you would hear Paul Ryan say, “Obamacare is the law of the land”? 

Today I mostly want to talk about next steps, but before that, I’ll take a little space to discuss how we got here.  Books and dissertations will be written about what went on, and I’m sure Tina Fey is already working on the movie version starring Alec Baldwin – but in the meantime, here’s my review (if you’ve already overdosed on coverage, feel free to skip down to the what’s next section).


First, it’s important to remember that the AHCA was not really a healthcare bill, it was a bill designed to cut Medicaid to pay for a huge tax cut.  And in case you forgot, here’s who would have benefited from those tax cuts:

After the initial introduction of the bill, it was clear that there was not enough Republican support for passage.  Changes started to be made to the bill, including to how the Essential Health Benefits (EHB) package portion of the law works.  As a reminder of why the EHB is so important, know that when last left to the states, only 12 required maternity coverage & only 17 states required mental health coverage.

Within the Republican party, there was opposition to the bill from both the left and the right.  The eventual defeat exemplifies that it’s hard to get someplace when you can’t agree on where you’re going.  In fact, as discussed by Jonathan Chait “It became the repeal bill because nobody in the Republican Party had a better idea.”  

This lack of a better idea resulted in a bill that before it was pulled had just a 17% approval rating in national polls.

Unsurprisingly, The President did not take any responsibility for the bill's defeat.  You can read here about the 6 ways President Trump tried to spin his total defeat on health care.  And in case you want even more, the NY Times takes a look at How the Health Care Vote Fell Apart, Step by Step.


The Setup

The question now is what will the administration do.  In remarks after the bill's defeat, the President said: “I’ve been saying for the last year and a half that the best thing we can do politically speaking is let Obamacare explode, it is exploding now.”

It is not exploding (we’ll get to that in a minute) but there are problems, and there are actions the administration can take to make those problems worse.

From NY Times reporter Margot Sanger-Katz:

The President seems to assume that even though Republicans control Congress and he is President, they won’t be blamed for what happens next – a dubious assumption some would say.

Before continuing, let’s talk about that “explosion”.  Simply put, it’s just not happening.  There is no death spiral.  The way the ACA was designed, most covered individuals are shielded from premium increases because the subsidies are based on the premiums, not on other factors.  It can be argued that is not a good way to control costs, but it’s still the way the law is written, meaning even if premiums were to go up significantly again this year, most individuals on the exchange would not feel the impact. 

Outstanding Issues

However, as I said, there are outstanding issues.  Insurers are deciding right now if they will offer products on the marketplace in 2018.  Insurers and the actuaries that work for them hate uncertainty.  Two looming areas of uncertainty are the cost-sharing subsidy lawsuit and the status of the risk adjustment programs. 

Those purchasing coverage on the marketplace earning less than 250% of FPL are eligible to receive cost-sharing subsidies.  However, those funds need to be allocated by Congress.  Over the past several years, when Congress failed to do so, the Obama Administration paid them out of other funds resulting in the House suing the President.  If the current administration decides not to pay these subsidies, insurers would be on the hook for the payments, resulting in large losses (the losses are theoretical, if the insurers do not receive the payments, they would pull out of the market).

The ACA had three risk adjustment programs designed to smooth out the impact of one company getting stuck with more sick people than another.  One of the programs (risk corridors) relied on funding being allocated - which it wasn't.  Failure to receive these payments would also result in insurers leaving the market.

These two issues feed into another immediate area of concern – there are some markets with no or only one insurer. 

Administrative Action (Sabotage)

In addition to the existing issues, there are actions the administration can take to make matters worse.  They’ve already made some changes that on the face are not game-changers, but they raise concern over how the law will be implemented.

Starting with the one of most concern, enforcement of the individual mandate.  The mandate is needed to keep the system in balance – while the mandate is part of the law, how rigorously it is enforced is subject to the actions of the administration, and they’ve already said they will be less strict.

HHS has also announced changes to the enrollment process – making the enrollment period shorter and making it harder to enroll during special enrollment periods. 

During the last open-enrollment period, the Administration pulled advertising during the final week (after Trump’s inauguration) resulting in a perceptible blip in enrollments.  Advertising and the use of navigators are essential to successful enrollment periods – both activities that the Administration controls through HHS.

Still on the table

It’s worth remembering that two ideas beloved by conservatives are still floating out there – Medicaid work requirements and block granting.  Both would be harmful to those who rely on the program.  You can find more information here:
Round 2
Last night, Rep. Keith Ellison (Deputy Chairman of the Democratic National Committee) tweeted out:  Don't gloat, get ready for round 2

Addressing the issues outlined above as well as fixing known problems is the next battle.
 “No federal benefits program -- not Medicare, not Medicaid, not the marketplace -- can thrive without constant adjustment, from administrators and legislators. Since inception, the ACA marketplace has been denied such essential adjustment, and has in fact had to withstand outright sabotage from Republicans -- who threw up hurdles to the training of enrollment counselors, undercut funding for a crucial risk adjustment program, and refused to fix obvious flaws, such as the so-called "family glitch" that renders many whose employers offer family coverage they find unaffordable ineligible for marketplace subsidies.”    Xpostfactoid


Will there be an opportunity to ensure the ACA continues to work and perhaps even make it better?  The only answer to that is the one provided by my totem, shruggie ¯\_()_/¯

But just because we don’t know if we will be successful, does not mean we shouldn’t try.

Among the topics of conversation should be the addition of a public option (to address markets without enough insurers) and the possibility of a Medicare buy-in for 55+ (to address high premium costs for seniors).

Another avenue is to try and find middle ground with moderate Republicans.  While I still find a lot not to like about Cassidy-Collins, can it be a starting point for negotiations?  This NY Times op-ed looks at the possibility: The Democrats’ Next Move on Health Care.

Before I go, one more link – this one to a piece in Harvard Business Review written by the President and Vice President of the Commonwealth Fund:

  • First, we need to create balanced risk pools that include both healthy and less healthy persons in individual insurance markets.
  • Second, we need to extend subsidies higher up the income scale than the ACA’s limit of 400% of the federal poverty level.
  • Third, if we want private insurers to participate in ensuring that Americans have access to affordable insurance, the business of selling this product must be viable.
  • Fourth, and perhaps most important, public and private stakeholders must accelerate efforts to control the costs of health care services, which are the primary determinants of the cost of health insurance in all markets, including employer-sponsored, individual, and public.

(bullets excerpted from above link)

To sum up, we won a victory with the defeat of the AHCA, but there are many battles ahead to preserve (and expand on) the successes of the ACA.

Sunday, February 26, 2017

A tumultuous 48 hours for the future of the ACA

Friday and Saturday (2/24-2/25) saw several developments concerning the future of the ACA.  We now know more directionally about the “replacement” plans, where this is will all end up is still anyone’s guess.

Let’s look at what happened and what it might mean.  Here’s the timeline:
  • Fri AM - First analysis of the net financial impact on Americans of the proposed Republican modifications to health care premiums after tax credits, plus cost sharing.
  • Fri PM – Leaked full text of Republican legislation presumably presented to CBO for scoring (dated February 10, 2017)
  • Fri PM – updated Medicaid details leaked
  • Sat – Presentation to National Governor’s Association on the impact of ACA replacement

After seven years, the Republicans have put together draft legislation on how they would replace the ACA. Based on other developments, parts of the draft are already out of date (particularly the Medicaid section); however, understanding the approach taken is still informative (and terrifying).

Let’s review the highlights…  (Below, for those interested, I go into the gory details and provide links for each of the four developments.)

The analysis based on the general approach (not the specific draft legislation) does not paint a pretty picture.  Higher costs for most coupled with fewer benefits for those who can still afford coverage and millions losing coverage.

The draft bill contains the following:
  • For funding, the plan would eliminate all of the ACA taxes and instead limit the tax deductibility of employer-sponsored health insurance.  This is an approach that has been supported by economists on both the right and the left for years (think Cadillac tax), but the forces stakeholders will marshal to prevent this change are formidable.
  • Regarding Medicaid, the draft eliminates the expansion and changes the entire program to a per-capita funding basis.  These changes have been called a “non-starter” by some in Congress and by several governors (including prominent Republicans).
  • Regarding private insurance, the essential health benefits definition is eliminated, a continuous coverage requirement for pre-existing condition coverages is added, and the individual mandate is eliminated.  Taken together, these changes are a recipe for market instability.

The most recent information on Medicaid indicates the expansion will continue to be funded at current levels (at least for a period of time) and new money would be available to the states that had not expanded.

The National Governors Association has been meeting in Washington DC.  On Saturday, they were given a private presentation outlining the potential impact of a sample replacement plan.  It would be an understatement to say most of the governors were not pleased.  Across the country, the net result would be millions more uninsured and increased financial burden to the states.  (If you just click on one link, click on the one to the actual presentation, it’s eye-opening.)

So, what does this all mean?  State budgets threatened, millions more without insurance, and the individual market in a death spiral.  If you think that will be a tough sell, you’re right.  There is already significant opposition from within the Republican party:
While the chances of the currently outlined plan passing are small – the danger remains real.  Even if the above plans are mitigated, millions will lose coverage and millions more will face higher costs.

The details:

Fri AM - First analysis of the net financial impact on Americans of the proposed Republican modifications to health care premiums after tax credits, plus cost sharing.

“We estimate that the Republican approach would increase the average total cost for an individual covered by the Affordable Care Act by $1,744 per year. The impact would be particularly severe for individuals ages 55 to 64, whose total costs would increase by $6,089 annually.”

“These estimates are average cost increases. Scaling back essential health benefits would raise costs for some individuals by even more.”

“Doing so dramatically changes the picture. The Republican plans do reduce premiums — predictably, given how much less coverage consumers would receive. But our analysis shows that the current Republican proposals would substantially increase total costs on average — not to mention the risks of a financially devastating health care expense.”

Fri PM – Leaked full text of Republican legislation presumably presented to CBO for scoring (dated February 10, 2017)

 “The legislation would take down the foundation of Obamacare, including the unpopular individual mandate, subsidies based on people’s income, and all of the law’s taxes. It would significantly roll back Medicaid spending and give states money to create high-risk pools for some people with pre-existing conditions. Some elements would be effective right away; others not until 2020.”

“According to the document, there’s only one single revenue generator to pay for the new tax credits and grants. Republicans are proposing to cap the tax exemption for employer-sponsored insurance at the 90th percentile of current premiums. That means benefits above that level would be taxed.”

“The leaked draft makes insurance better for people who are young and healthy. It makes insurance worse for people who are old and sick.”

  • Continuous coverage requirement for pre-existing condition coverage
  • Tax credits by age, not income, not adjusted for premium costs
  • 5:1 rating band based on age (as opposed to current 3:1)
  • Essential health benefits package up to each state
  • Continue to allow “grandfathered” plans and allow to enroll new members
  • Eliminate funding for Medicaid expansion
  • Turn Medicaid into a per-capita program, sending each state fixed sum (on a scale of 1-10, with 1 being block grants, per-capita is a 2.
  • $100 billion over a decade to finance state programs that would cover people with the highest medical costs (including but not limited to high-risk pools)

Bill text:  The _______________ Act of 2017  (Note they could not even agree on a name.)

Fri PM – updated Medicaid details leaked

“It would temporarily keep federal dollars flowing to cover almost the entire cost of the roughly 11 million Americans who have gained Medicaid coverage but would block that enhanced funding for any new participants.

At the same time, the GOP approach would open a fresh spigot of aid for the states — all but one of which has a Republican governor — that eschewed the additional Medicaid money because of their elected officials’ antipathy to the law. This extra aid would probably go to hospitals with a large share of poor and uninsured patients.”

Sat – Presentation to National Governor’s Association on the impact of ACA replacement
From the Axios coverage:
  • “The impact would vary by state, but in a sample state that expanded Medicaid, it's estimated that:
  • The state would lose $635 million in federal funding, a 65 percent decrease.
  • 110,000 current enrollees would no longer be able to afford a plan.
  • 20,000 currently uninsured people would buy a plan with the new tax credit provided by the GOP plan.
  • Additionally, 115,000 low-income people may lose Medicaid coverage, with no affordable alternative on the individual market.
  • A per capita cap — which would limit funding for each person in the program — would reduce federal spending by 24 percent over five years, requiring the state to spend $6.2 billion to close the gap.
In a sample non-expansion state, it's estimated that:
  • The state would lose $885 million in federal funding, an 80 percent decrease.
  • 130,000 current enrollees would no longer be able to afford a plan.
  • 10,000 currently uninsured people would be able to buy coverage with the new tax credit.
  • A per capita cap would reduce federal spending by 6 percent over five years, requiring states to spend $1.5 billion to close the gap

Key takeaways (excerpted from presentation):
  • Medicaid caps are likely to result in state funding gaps
  • Capped funding is likely to be paired with more flexibility for states on coverage and benefits
  • Because states must balance their budgets annually, reductions in federal funding may lead to cuts in eligibility, benefits, or payment rates
  • Per capita caps offer more flexibility to respond to enrollment growth, but they cannot easily adapt to new products or technology (e.g., high-cost drugs)

Tuesday, February 14, 2017

Rep Poliquin and the ACA - slogans are easy, policy is hard

Hi, it's been a while since I've posted on this blog.  However, now that I'm back on my own, it's a good place to park some of my longer musings on healthcare.

Representative Poliquin of Maine’s second district has prepared a handy form letter to send to constituents who write or call his office expressing support for the ACA.  I thought it would be helpful to walk through some of his statements to see how they hold up.  A full copy of the letter is at the end of this post (I’ve removed the name of the recipient who shared the letter with me).

Just for fun, along with each of my comments, I’ll include sources for my statements – you know, facts. Before we get started, a note about my perspective.  As many of you know, I support the ACA and continue to think it is a great step forward.  Twenty million more people have health insurance now than before the law was passed.  However, no one denies that the law needs adjustments.  Changes are often required after a complicated law gets passed.  Unfortunately, in this case, due to the partisan rancor in DC, once the law was passed there were no fixes permitted by Congress, leading to the current issues.

Now let's look at some specifics.

“…suffocating under the spiking ObamaCare monthly premiums...”

Yes, premiums went up for 2017 at a greater rate than they did the previous two years - but let’s remember how premiums acted before the passage of the ACA – they went up in even greater increments. It is also worth noting is that the headlines regarding spiking premiums refer to averages across carriers and across the country.  In many states, the market is working well.  States that have chosen to expand Medicaid (MaineCare) have seen lower premium increases than states like Maine that have not.  Additionally, the subsidies received by many of the enrollees will shield them from the increases.

“…losses of more than 30 million of taxpayer dollars...”

He is referring to Maine Community Health Options (MCHO), one of the COOP plans that were created through the ACA.  These plans do not receive federal money.  What they have received is loan guarantees from the Federal Government.  While MCHO had a bad year in 2016, they are recovering; as noted by Maine’s Bureau of Insurance: “CHO's ability to stabilize its operations in 2016 and achieve plan results up to this point is encouraging and merits its re-entry into the Maine individual health insurance market for 2017.”

“…supported the Obamacare repeal initiation vote...”

Many times, over the past several years the house has voted to repeal the ACA.  In all that time, they have not come up with a replacement plan.  It’s easy to vote for a bill that you know will be vetoed – it’s a lot harder to come up with workable policy proposals.

This link is a walk through the history of promises by the Republicans to come up with a replacement plan:

“…replacement includes coverage for pre-existing health conditions...”

Slogans are easy; policy is hard.   What does Rep. Poliquin mean by including coverage for pre-existing conditions?  If, as in the ACA, it means they will be charged the same rate as everyone else then there will need to be a mechanism, like the mandate, so that people do not just purchase coverage when they need it.  If they mean something else, we need details – it will be easy to say it includes coverage but how much might that coverage cost?  Will they require "continuous coverage" - an ideal state that in the real world is hard to execute?

“…eliminate job-killing taxes...”

My question here is how will the replacement plan be financed if the taxes associated with the ACA are eliminated?  Providing Medicaid or subsidies takes money.  If the taxes are repealed, how will the replacement plan be funded?  What do you think the chances are that the Republican House and Senate will impose new taxes to cover their “replacement” plan?

If they don’t intend to provide subsidies at least as large as the current ones, millions of people will lose coverage, contrary to the current promises of Republican leadership and the President.  Don't be fooled by the phrase "universal access”.  Access is not coverage.  I have access to purchasing a Lamborghini, but that doesn't mean I have the funds to do so.

To sum up, the letter below contains several half-truths and misdirections.  It also gives no credit to the positive impact the law has had.  As the debate over the future of the ACA continues, let's try and stick to the facts.