Once more unto the breach, dear friends

A new insidious threat reared its head yesterday when a provision eliminating the individual mandate was added to the Senate version of the tax bill.

Fellow Mainers, please let Senator Collins know this is unacceptable.

As many of you know, the mandate works to bring everyone into the system.  Without it, the CBO estimates 13 million fewer people would be covered and premiums would rise 10% over the baseline increase.  

Note that the CBO analysis assumes all else being equal, we still have the threat of the changes encouraged by the Executive Order (Donald Trump’s Terrible Executive Order on Health Care).

For those needing a refresher, Paul Krugman provides this explanation of why the mandate is needed (remember the three-legged stool?): 

"It starts by requiring that insurers offer the same plans, at the same prices, to everyone, regardless of medical history. This deals with the problem of pre-existing conditions. On its own, however, this would lead to a “death spiral”: healthy people would wait until they got sick to sign up, so those who did sign up would be relatively unhealthy, driving up premiums, which would in turn drive out more healthy people, and so on.

So insurance regulation has to be accompanied by the individual mandate, a requirement that people sign up for insurance, even if they’re currently healthy. And the insurance must meet minimum standards: Buying a cheap policy that barely covers anything is functionally the same as not buying insurance at all.

But what if people can’t afford insurance? The third leg of the stool is subsidies that limit the cost for those with lower incomes. For those with the lowest incomes, the subsidy is 100 percent, and takes the form of an expansion of Medicaid.
The key point is that all three legs of this stool are necessary. Take away any one of them, and the program can’t work."  

Source:  Three Legs Good, No Legs Bad

As you read about events, please don't be fooled by the bone being tossed of the Alexander Murray bill being approved in tandem with the tax bill.  Given the way the premium subsidy changes played out, Alexander Murray would end up cutting subsidies for some and doing little to stabilize the markets.  Senator Murray has already indicated that she would not support passage of her bill in light of the mandate being eliminated.

"But Ms. Murray rejected any suggestion that the mandate repeal could be paired with her legislation. 

“That is the exact opposite of what we should be doing,” she said. “Americans have stood up and spoken loudly for the last year saying they do not want the markets destabilized, and their provision in the tax bill that they are talking about will really destabilize the marketplaces.”"

Source:  Senate Plans to End Obamacare Mandate in Revised Tax Proposal

There are many reasons to object to the tax bill.  Another one of relevance to the health care discussion is the CBO report yesterday that the GOP tax bill could spur $25 billion in Medicare cuts.  

I don't usually include a call to action in my writings, I try and explain a situation as I understand it and leave the rest to you.  But this time is different.  Without trying to be hyperbolic, I believe that passage of the Senate tax bill would be the beginning of the end of the ACA as a functioning law.  

If you are a fellow Mainer, please let Senator Collins know how you feel.  And if you've found this piece helpful, please share.

Evidence and Empathy – Two Reasons to Vote Yes on 2

On Thursday night November 2, I'll be speaking at "A Faith-Based Perspective on the Need for Medicaid Expansion in Maine" taking place at Woodfords UCC Church at 7 PM.  Below are 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.

Tonight, we’ll talk about Medicaid expansion through the lens of evidence and empathy. Spoiler alert, it passes both tests.  I’ll go over some of the evidence; providing some of the facts and figures.  My fellow panelists will then, much more eloquently than I’m capable of, talk about the empathetic and moral reasons why this is so important.

Before we dive into the details about the proposed Medicaid expansion, permit me to digress for one minute to remind you about another part of the ACA, the open enrollment period.

If you buy your health coverage on the individual market – that means you don’t get it at work and are not eligible for government programs like Medicaid, the open enrollment period started this week.

Sadly, the current Administration is doing everything they can to sabotage the process, so here are some very brief reminders:

1. The ACA was not repealed
2. Open enrollment has begun
3. Open enrollment is only half as long as last year, it ends December 15th
4. Yes, premiums are going up, but so are premium subsidies
5. Premium subsidies AND cost-sharing subsidies are still available
6. Due to distortions in premiums caused by the Administration stopping the payments to insurers for the cost-sharing subsidies, it is more important than ever to comparison shop. Increased silver plan premiums mean subsidies are higher so some will be able to buy insurance for less this year than last.  Some will be able to get bronze plans for free and some will be able to get a gold plan, with lower out-of-pocket costs than silver, for only a few dollars more a month than a silver plan.  So, if you are not eligible for cost-sharing subsidies and you purchased a silver plan last year, this year a bronze or gold plan might make more sense
7. Help is available, go to enroll207.com to find help here in Maine.

Thanks for listening to that now let’s get back to the reason we’re here tonight, talking about why a yes on 2 vote makes so much sense.  Or in other words, why we need Medicaid expansion.

Before I get into the facts and figures of what passing question 2 will accomplish in the future, let’s start with a brief history lesson.

Did you know that the way health coverage is structured in this country is Hitler’s fault?  Here’s why.  During World War 2, there were wage and price controls.  However, employers were desperate for workers, since much of the working age population was off fighting the war.  To help attract workers, they offered additional health coverage. They were allowed to do so on a pre-tax basis, not subject to the wage and price controls - and so employer-sponsored coverage spread rapidly. 

Fast forward to 1965, in order to provide health coverage to more of the population, President Johnson signed the law creating Medicare and Medicaid.   As you know, Medicare covers seniors and Medicaid covers a combination of low income, disabled and seniors.

Fast forward again to 2010 when the ACA was passed.  The ACA was designed to take our existing system and use all the elements to expand coverage, lowering the number of uninsured.  That included making it easier for those who didn’t have access to coverage through a job to either purchase their own on the individual market, or if their income was low enough, receive coverage through Medicaid.

According to the original intent of the law, those earning less than 138% of the Federal Poverty Level or FPL would be eligible for Medicaid.  Those earning above 100% of FPL would be eligible for premium subsidies.

So why are we voting on expanding Medicaid? 

In response to a legal challenge, the Supreme Court ruled that Congress could not require states to expand, making it an opt-in program.  So far, 31 states have expanded Medicaid, and Maine may become the next state to do so if the referendum passes.  In states that have not expanded Medicaid, those earning less than 100% of FPL and were not previously eligible for Medicaid are out-of-luck, they currently have no help available to them.

Our state legislature tried – they passed expansion five times.  But each time it was vetoed by the Governor and there were not enough votes to override the veto.

As of 2015, nationally about half of the population receives coverage from their employer.  Another 19% from Medicaid, 14% from Medicare, 7% from the individual market, 2% from other government programs such as the VA and about 9% are uninsured.  Although that last number is edging back up.

How much does the Federal government spend on this?  In 2016 the Medicare budget was 675 billion, the Medicaid budget was 450 billion and the employer tax exclusion for health coverage also cost about 450 billion.

I mention these dollar amounts so that as we proceed, we can take into account those who are already benefiting from Federal expenditures as we consider the fairness of adding additional populations who are in need.  Specifically, think about some of the opponents to the referendum who get health coverage from their employers – they don’t seem to worry about the lost federal revenue where their benefits are concerned.

With that background, let’s get into the specifics.  We’ll look at; who expansion will help, what it will cost, some of the additional benefits of the referendum, and some of the weak arguments against it.  Lot’s to cover so let’s keep going.

Who would this help?

The most important reason to vote for question 2 is that it would provide health care coverage to more than 70,000 Mainers.  The group eligible for Medicaid would be expanded to include all those who earn less than about $16,000 a year for an individual or $34,000 for a family of four.

It’s worth noting that many of those who would be newly eligible are working while others are unable to work.

Half of the adults who would be covered by the Medicaid expansion are permanently disabled, have serious physical or mental limitations or are in fair or poor health. Low-wage jobs are often physically demanding, precluding those with limitations from employment.

Of the other half, who might be viewed as “able-bodied,” 62 percent are already working or in school and 12 percent are looking for work; only 25 percent of that half are not currently working or in school.

The bottom line then is that only 13 percent of adults covered by Medicaid’s expansion are able-bodied and not working, in school, or seeking work. Of that small group, three-quarters report they are not working in order to care for family members and the rest report other reasons, like being laid off.

Keep in mind that contrary to what those who are against the expansion would have you believe, even if you are working it does not mean you have access to affordable health coverage. Only 28 percent of employees of private firms with low wages such as retail, food service, and agriculture get health insurance through their jobs. Almost half of employees (42 percent) of these firms are not even eligible for job-based health insurance.

Surveys of Medicaid expansion beneficiaries in Ohio and Michigan have found that Medicaid expansion has actually made it easier for people to look for work and maintain employment.  In Ohio, among expansion enrollees who were unemployed and looking for work when they gained coverage, 75 percent said Medicaid made the task easier.  Among those who were employed, half said Medicaid made it easier to stay working.

Although some of these people, those earning more than 100% of FPL, are currently eligible for premium subsidies, at those incomes, visits to a doctor or filling a prescription are not in the budget.  Many are overwhelmed by the deductibles and co-payments for health care services. The reality is that despite the improvements under the ACA, there are still working Mainers who simply cannot afford health insurance coverage.  As the Congressional Budget Office reported, many poor people would choose not to be covered, because even if they could afford the premiums with help from tax credits, deductibles and co-payments would still be prohibitively expensive.

Cost

So, what would this cost Maine? Is it a good deal for us?  The Office of Fiscal and Program Review, a non-partisan part of our state government, said expansion would cost taxpayers $54 million a year while Maine would receive $525 million a year from the federal government for Medicaid expansion.  Note that the $54 million represents only five percent of current state Medicaid expenditures and 2 percent of our state budget.

The Feds will pay 94 percent in the first year declining over time to a federal match rate of 90 percent by the state fiscal year 2021.

The federal money brought into the state would be used to pay for medical services – it will be distributed to hospitals, clinics, and doctors’ offices.

Maine taxpayers are already paying for Medicaid expansion in other states. We should also get the benefits here.

Additional benefits

In addition to providing health coverage to over 70,000 people – providing the physical well-being and mental peace of mind that goes along with having coverage - there are additional reasons why expansion makes sense.

We hear about the nation’s and Maine’s opioid crisis every day.  Expanding Medicaid will help to address Maine’s drug crisis by greatly improving access to treatment services for currently uninsured people struggling with addiction;

Covering these 70,000 people would also reduce the uncompensated care burdens on our hospitals, especially important for our struggling rural hospitals.  In states with Medicaid expansions, uncompensated care fell sharply resulting in improved financial margins. These effects were not observed in non‐expansion states.

And as I alluded to earlier, rather than discourage work, there is evidence that Medicaid helps to keep people working.  John Kasich, Republican Governor of Ohio recently wrote: “According to a recent assessment of Ohioans who gained coverage through Medicaid expansion, a majority now find it easier to find or keep a job, manage their health to avoid costly trips to the hospital down the road, and even find it easier to put food on the table.”

Objections

Given the times we’re living in, sadly it seems every issue is contentious.  Even, or maybe especially, issues like this designed to help those in need.  This is certainly true of question 2.  While the objections have been loud, they are not particularly compelling.  Let’s take a few minutes and review some of the details.

Objection: We tried this already

Maine’s earlier Medicaid expansion in 2001 resulted in uninsured rates dropping substantially.  Despite claims that this rise was associated with steep cost increases to the state budget. An analysis of the Maine experience shows that cost increases were in line with Medicaid cost increases nationally and that most of the cost increase was attributable to factors associated with the major recession in the early 2000s – that is, to increased enrollment in the traditional Medicaid program.

Objection: Medicaid doesn’t work

Not true.  Just one example is a Kaiser Family Foundation survey explored the experiences of those currently covered by Medicare and Medicaid. Very large majorities of those covered report positive experiences with Medicare (91%) and with Medicaid (86%).  These numbers are similar to what people with employer coverage say (87% positive).

Objection: We’ll hurt seniors

AARP, although not taking a position on the referendum, issued a statement in response to claims that seniors would be harmed: “These claims are inaccurate,” reads the AARP statement. “Multiple independent fact checkers and nonpartisan analysts including the Kaiser Family Foundation have confirmed that there is no connection between Medicaid expansion and waiting lists for long-term care services for the aged and disabled including nursing homes and home and community-based services (HCBS). In fact, the vast majority of states without HCBS waiting lists have expanded Medicaid.”

There is also no evidence from other states that Medicaid expansion caused states to reduce care for the elderly, cut school funding or do any of the other scary things opponents say will happen if Question 2 passes in Maine.

There are no waiting lists to enroll in Medicaid; states must enroll all eligible beneficiaries, including children, seniors, people with disabilities, and adults, in coverage — without exception.  States can — and many do — have waiting lists for Medicaid’s home- and community-based services (HCBS), which give people needing long-term services an alternative to nursing homes. Gov. LePage and other conservative policymakers have said the Medicaid expansion is responsible.  There’s no connection between the two.  Nine of the 11 states without HCBS waiting lists are expansion states, and the non-expansion states of Florida and Texas have the biggest waiting lists.

Final thoughts

I started out talking about passing the dual tests of evidence and empathy.  The evidence is clear, expanding Medicaid will help over 70,000 Mainers by providing them with health coverage and does so in a fiscally responsible fashion.  On the empathy front, to me, it’s also clear - taking care of one another is just the right thing to do.  I’m sure our next speakers will elaborate a bit more eloquently on that point.

So, I’ll conclude with two final figures.  First, support for expansion crosses party lines - 17 Republican governors fought to maintain Medicaid expansion as the Administration worked on repealing the ACA.  Second, we know that expansion works - the uninsured rate declined an average of 48 percent in expansion states and only 28 percent in non-expansion states from 2013 to 2016. The ACA was always meant to work in two major ways, private insurance reforms, and Medicaid expansion.  Without expansion, we’re leaving the work unfinished.

So please vote yes on question 2 to pass Medicaid expansion.