Monthly Archives: July 2019

In Wednesday’s second Democratic debate, 7 of 10 candidates support Medicare for All

Posted on by • Posted in 2020 Election Issues, ACA, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Policy, Medicare, Medicare Buy-In, Medicare for All, Out of Pocket Expenses, Preexisting Conditions, Public Good, Single Payer Health System, Single Payer Healthcare System, Underinsured, Uninsured, Universal Healthcare System • Leave a comment

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Democratic candidates take the stage during first debate in June.

Expanding coverage, lowering healthcare costs, central to Democratic agenda.

Tonight, Joe Biden, Kamala Harris, Cory Booker, Andrew Yang, Julián Castro, Tulsi Gabbard, Michael Bennet, Jay Inslee, Kirsten Gillibrand, Bill de Blasio take the stage for round two of the Democratic presidential debates.

Seven support Medicare for All. The others – Biden, Bennett and Inslee have come out in favor of a public option. Here, in no particular order, is a look at where each candidate stands on healthcare coverage.

Joe Biden

As vice president to President Barack Obama, former Senator Joe Biden carries into this election the legacy of the Affordable Care Act. As president, Biden said he would protect the ACA and prevent further Republican attempts to dismantle it.

Unlike many of his Democratic rivals, Biden does not support full Medicare for All. Instead of getting rid of private insurance, Biden said he would build on the ACA through the Biden Plan to create a public health insurance option. As in Medicare, costs would be reduced through negotiating for lower prices from hospitals and other providers.

He also has a plan to increase the value of the ACA tax credits by eliminating the 400% income cap on tax credit eligibility and lowering the limit on the cost of coverage from 9.86% of income to 8.5%. This means that no one would spend more than 8.5% of their income on health insurance. Additionally,  Biden would base the size of tax credits on the cost of the higher-tiered gold plan, rather than silver plan.

Biden also supports premium-free access to the public option for individuals in the 14 states that have not expanded Medicaid under the ACA. States that have already expanded Medicaid would have the choice of moving the expansion population to the premium-free public option, as long as the states continue to pay their current share of the cost of covering those individuals.

Biden also promises to stop surprise billing, tackle market concentration, repeal the exception allowing drug companies to avoid negotiating with Medicare over drug prices and limiting the launch price for drugs that face no competition, among other actions.

In his words: “When we passed the Affordable Care Act, I told President Obama it was a big deal – or something to that effect.”

Kamala Harris

California Senator Kamala Harris often refers to her mother’s diagnosis of colon cancer and her Medicare coverage for treatment as an example of why all Americans should have Medicare for All.

Harris is looking to eliminate premiums and out-of-pocket costs through government insurance that guarantees comprehensive care including dental and vision and coverage. Harris gives no estimate of the cost of universal healthcare, but says taking profit out of America’s healthcare system would save money.

Her Medicare for All plan, which is similar to Senator Bernie Sanders – would cover all medically necessary services, including emergency room visits, doctor visits, vision, dental, hearing aids, mental health and substance use disorder treatment, telehealth and comprehensive reproductive care services. It would allow the Secretary of Health and Human Services to negotiate for lower prescription drug prices.

As former Attorney General of California who won a $320 million settlment from insurers, Harris said she wants to take on Big Pharma and private insurers to lower the cost of prescription drugs.

She also has strong views on prosecuting opioid makers and for preserving women’s right to healthcare and protecting Planned Parenthood from the financial cuts and policies of the Trump Administration.

She would institute an audit of prescription drug costs to ensure pharmaceutical companies are not charging more than other comparable countries, a comprehensive maternal child health program to reduce deaths among women and infants of color, and rural healthcare reforms, such as increasing residency slots for rural areas with workforce shortages and loan forgiveness for rural healthcare professionals.

In her words on the ACA: “As someone who fought tooth and nail as Attorney General and as Senator to prevent repeal, that’s exactly what I will continue to do.”

Cory Booker

Senator Cory Anthony Booker, first African-American Senator from New Jersey, and former mayor of Newark, is also a Medicare for All proponent.

He also wants to implement universal paid family and medical leave.

He supports lowering costs for prescription drugs by allowing Medicare to negotiate prices and by importing drugs from Canada and other countries, the latter a policy announced today by Health and Human Services Secretary Alex Azar.

He would also invest in ending the maternal mortality rate and work to reduce racial disparities in maternal mortality rates.

One of his big issues is expanding eligibility for long-term services and support for low and middle-income Americans needing care at home. He wants long-term care workers to be paid a minimum of $15 an hour.To limit the impact of the program on state budgets, the new costs associated with the expansion of Medicaid long-term care services and workforce standards would be financed entirely by the federal government in, effectively, a 100% match. The cost would be financed by making the tax code more progressive by reforming the capital gains, estate, and income taxes.

In his words: “Healthcare is a human right.”

Kirsten Gillebrand

Kirsten Gillebrand, U.S. Senator from New York, originally ran for a House seat in that state on a platform that supported the expansion of Medicare, a view she still holds, and in 2017 expressed support for Senator Bernie Sanders’ Medicare for All bill.

In May, Gillebrand reiterated her support, saying the best way to achieve a single-payer system is to let people buy-in over a transition period of about four to five years. She favors allowing a public option to create competition with insurance companies. Medicare needs to be fixed first so that reimbursement rates better reflect costs, she said.

In 2011 she helped pass the James Zadroga 9/11 Health and Compensation Act, which provides treatment to the first responders of the Sept. 11, 2001 terrorist attacks. The law provides health monitoring and services for 9/11-related health issues among those exposed to the debris and tainted air of the attack’s aftermath.

In her words: “Under the healthcare system we have now, too many insurance companies continue to value their profits more than they value the people they are supposed to be helping.”

Bill de Blasio

New York Mayor Bill de Blasio believes everyone, including undocumented immigrants, has a right to receive healthcare, and has repeatedly voiced his support for a national single-payer health plan.

He and rival Elizabeth Warren raised their hands during the first debate when asked if they supported Medicare for All.

One of his accomplishments as mayor was signing a bill into law that established a paid sick leave and safe leave plan for the city.

First unveiled in January, the program NYC Care, guarantees healthcare for the roughly 600,000 New Yorkers who aren’t currently insured, which de Blasio touted as the “most comprehensive health system in the nation.” He has indicated that NYC Care could become a model nationwide.

The plan encompasses primary and specialty care, pediatric and maternity care and mental health services. The idea is that NYC Care works on what de Blasio said was a “sliding scale,” in which people can essentially pay what they can for care. While the city already has a public option for healthcare, de Blasio said NYC Care will pay for direct comprehensive care for people who can’t afford insurance or who aren’t covered by Medicaid.

The program costs $100 million per year for the city — an investment the mayor expects will yield returns.

In his words: “If we don’t help people get their healthcare, we’re going to pay plenty on the back end when people get really sick,” he said recently on MSNBC’s “Morning Joe” broadcast.

Jay Inslee

Washington Governor Jay Inslee has planted a flag as “the climate change candidate” and in many ways he’s all in on that single issue, reasoning that things like healthcare policy “become relatively moot if the entire ecosystem collapses on which human life depends.”

That said, he has a strong case to make on healthcare by virtue of having just recently put his state’s money where his fellow candidates’ mouths are: in May he signed the country’s first public option into law in Washington.

Expect him to bring up that accomplishment — in which the state will contract with private insurers to create a public option that pays at Medicare plus 60 percent — in any conversation about healthcare, as he did in the first debate.

In his words: “We hope this will be a smashing success. We hope that it will give a shot of courage to other governors to move forward toward universal access. We were willing to take the leap and we’re gonna learn as we go along, I’m sure, and there will be some modifications. But we had to get started.”

Michael Bennet

Colorado Senator Michael Bennet supports a public option he calls Medicare-X. But where his plan stands apart from others is a strong focus on the rural-urban divide on access to care. He intends to create a healthcare policy that will ensure that all regions of the country are covered by available health plans, addressing what he calls a failure of the ACA exchanges.

His plan is unusually detailed and includes lowering prescription drug prices, closing existing gaps in care, and, yes, promoting telemedicine and other technology that can bolster rural healthcare. He also has provisions for combatting substance abuse, improving maternal and mental health, and bringing more support to senior caregivers.

In his words: “As president, I would build on the Affordable Care Act to cover everyone, rather than doing away with our current system. My Medicare-X plan gives every family the choice to buy an affordable public option or keep the plan they have today. It starts in rural areas, where there is very little competition and requires the federal government to negotiate drug prices. I have fought for this approach for almost a decade, because it is the most effective and fastest way to cover everyone and drive down costs.”

Julián Castro

The former U.S. Secretary of Housing and Urban Development and San Antonio Mayor favors a Medicare for All, single-payer system.

To pay for the system, Castro has said he would raise taxes on corporations and on the wealthiest Americans — the “0.05, 0.5 or 1%,” he said.

While he favors a single-payer system, Castro said he would allow private insurance, saying that anyone who wants their own private insurance plan should be able to have one.

In his words: Castro said at an event in Iowa that, “The U.S. should be the healthiest nation in the world.”

Andrew Yang

Entrepreneur Andrew Yang of New York is founder of Venture for America, a two-year fellowship program for recent grads who want to work at a startup and create jobs in American cities.

He supports Medicare for All and has called the Affordable Care Act a step in the right direction that didn’t go far enough because access to medicine isn’t guaranteed and the incentives for healthcare providers don’t align with providing quality, efficient care.

Doctors are incentivized to act as factory workers, he has said, churning through patients and prescribing redundant tests, rather than doing what they’d prefer–spending extra time with each patient to ensure overall health.

Medicare for All will increase access to preventive care, bringing overall healthcare costs down. Cost can also be controlled directly by setting prices provided for medical services.

He cites the Cleveland Clinic, where doctors are paid a flat salary instead of by a price-for-service model. Redundant tests are at a minimum, and physician turnover is much lower than at comparable hospitals, he said.

And the Southcentral Foundation which uses a holistic approach to treat native Alaskans with mental and physical problems by referring patients to psychologists during routine physicals.

Also, the current system of employer-sponsored insurance prevents employees from having economic mobility.

In his words: “New technologies – robots, software, artificial intelligence – have already destroyed more than 4 million U.S. jobs, and in the next 5-10 years, they will eliminate millions more.”

Tulsi Gabbard

Rep. Tulsi Gabbard of Hawaii is a military veteran who supports Medicare for All as a cosponsor of H.R.676, the Expanded & Improved Medicare for All Act.

But she is currently getting press for her lawsuit against Google claiming alleged election interference.

Following the first Democratic primary debate on June 26, many people searched her name, but “without any explanation, Google suspended Tulsi’s Google Ads account,” her office said in a statement, according to The Verge.

Tulsi claims the tech giant suspended her campaign’s Google Ads account just after that first debate.

Congress must act to prevent the tech giant from exerting too much influence, she claimed Monday on “Tucker Carlson Tonight.”
In her words: “This is really about the unchecked power these big tech monopolies have over our public discourse and how this is a real threat to our freedom of speech and to our fair elections.”

 

Democratic Debate Turns Ferocious Over Health Care

Posted on by • Posted in 2020 Election Issues, ACA, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Drug Prices, High Premiums, High Prices, Medicare, Medicare Buy-In, Medicare for All, Out of Pocket Expenses, Public Option, Single Payer Health System, Single Payer Healthcare System, Underinsured, Uninsured, Universal Healthcare System • Leave a comment

Candidates in the first night of this week’s Democratic presidential debates sparred over health care coverage.

It took only one question — the very first — in Tuesday night’s Democratic presidential primary debate to make it clear that the issue that united the party in last year’s congressional elections in many ways now divides it.

When Jake Tapper of CNN asked Senator Bernie Sanders whether his Medicare for All health care plan was “bad policy” and “political suicide,” it set off a half-hour brawl that drew in almost every one of the 10 candidates on the stage. Suddenly, members of the party that had been all about protecting and expanding health care coverage were leveling accusations before a national audience at some of their own — in particular, that they wanted to take it away.

“It used to be Republicans that wanted to repeal and replace,” Gov. Steve Bullock of Montana said in one of the more jolting statements on the subject. “Now many Democrats do as well.”

Those disagreements set a combative tone that continued for the next 90 minutes. The health care arguments underscored the powerful shift the Democratic Party is undergoing, and that was illustrated in a substantive debate that also included trade, race, reparations, border security and the war in Afghanistan.

In the end, it was a battle between aspiration and pragmatism, a crystallization of the struggle between the party’s left and moderate factions.

It is likely to repeat itself during Wednesday night’s debate, whose lineup includes former Vice President Joseph R. Biden Jr. and Senator Kamala Harris of California. He supports building on the Affordable Care Act by adding an option to buy into a public health plan. She released a proposal this week that would go further, eventually having everyone choose either Medicare or private plans that she said would be tightly regulated by the government.

Democrats know all too well that the issue of choice in health care is a potent one. When President Barack Obama’s promise that people who liked their health plans could keep them under the Affordable Care Act proved to be untrue, Republicans seized on the fallout so effectively that it then propelled them to majorities in both the House and Senate.

On Tuesday night, Representative Tim Ryan of Ohio evoked those Republican attacks of years ago on the Affordable Care Act, saying the Sanders plan “will tell the union members that give away wages in order to get good health care that they will lose their health care because Washington is going to come in and tell them they have a better plan.”

Republicans watching the debate may well have been smiling; the infighting about taking away people’s ability to choose their health care plan and spending too much on a pipe-dream plan played into some of President Trump’s favorite talking points. Mr. Trump is focusing on health proposals that do not involve coverage — lowering drug prices, for example — as his administration sides with the plaintiffs in a court case seeking to invalidate the entire Affordable Care Act, putting millions of people’s coverage at risk.

It was easy to imagine House Democrats who campaigned on health care, helping their party retake control of the chamber, being aghast at the fact that not a single candidate mentioned the case.

Mr. Sanders’s plan would eliminate private health care coverage and set up a universal government-run health system that would provide free coverage for everyone, financed by taxes, including on the middle class. John Delaney, the former congressman from Maryland, repeatedly took swings at the Sanders plan, suggesting that it was reckless and too radical for the majority of voters and could deliver a second term to Mr. Trump.

Mr. Sanders held firm, looking ready to boil over at time — “I wrote the damn bill,” he fumed after Mr. Ryan questioned whether benefits in his plan would prove as comprehensive as he was promising. Senator Elizabeth Warren of Massachusetts, the only other candidate in favor of a complete overhaul of the health insurance system that would include getting rid of private coverage, chimed in to back him up.

At one point she seemed to almost plead. “We are not about trying to take away health care from anyone,” she interjected. “That’s what the Republicans are trying to do.”

Mr. Delaney has been making a signature issue of his opposition to Medicare for all, instead holding up his own plan, which would automatically enroll every American under 65 in a new public health care plan or let them choose to receive a credit to buy private insurance instead. He repeatedly disparaged what he called “impossible promises.”

He was one of a number of candidates — including Beto O’Rourke, the former congressman from Texas; Senator Amy Klobuchar of Minnesota and Mayor Pete Buttigieg of South Bend, Ind. — who sought to stake out a middle ground by portraying themselves as defenders of free choice with plans that would allow, but not force, people to join Medicare or a new government health plan, or public option. (Some candidates would require people to pay into those plans, while others would not.)

The debate moderators also pressed Mr. Sanders and Ms. Warren on whether the middle class would have to help pay for a Sanders-style plan, which would provide a generous set of benefits — beyond what Medicare covers — to every American without charging them premiums or deductibles. One of the revenue options Mr. Sanders has suggested is a 4 percent tax on the income of families earning more than $29,000.

In defending his plan, Mr. Sanders repeatedly pointed out how many Americans are uninsured or underinsured, unable to pay high deductibles and other out-of-pocket costs and thus unable to seek care.

Analysts often point out that the focus on raising taxes to pay for universal health care leaves out the fact that in exchange, personal health care costs would drop or disappear.

“A health reform plan might involve tax increases, but it’s important to quantify the savings in out-of-pocket health costs as well,” Larry Levitt, executive vice president for health policy at the nonpartisan Kaiser Family Foundation, tweeted during the debate. “Political attacks don’t play by the same rules.”

A Kaiser poll released Tuesday found that two-thirds of the public supports a public option, though most Republicans oppose it. The poll also found about half the public supports a Medicare for all plan, down from 56 percent in April. The vast majority of respondents with employer coverage — which more than 150 million Americans have — rated it as excellent or good.

In truth, Mr. Delaney’s own universal health care plan could also face political obstacles, not least because it, too, would cost a lot. He has proposed paying for it by, among other steps, letting the government negotiate drug prices with pharmaceutical companies and requiring wealthy Americans to cover part of the cost of their health care.

Had Mr. Sanders not responded so forcefully to the attacks, it would have felt like piling on, though some who criticized his goals sounded more earnest than harsh.

“I think how we win an election is to bring everyone with us,” Ms. Klobuchar said, adding later in the debate that a public option would be “the easiest way to move forward quickly, and I want to get things done.”

 

 

White House races to come up with health-care wins for Trump’s campaign

Posted on by • Posted in 2020 Election Issues, ACA, Health Policy, Hospital Industry, Pharmaceutical Industry • Leave a comment

https://www.washingtonpost.com/health/trump-to-unveil-drug-price-health-initiatives-in-walk-up-to-2020/2019/07/31/f4adc4de-af1a-11e9-8e77-03b30bc29f64_story.html?utm_term=.559659aa0911&wpisrc=nl_most&wpmm=1

Image result for healthcare initiatives

 

White House advisers, scrambling to create a health-care agenda for President Trump to promote on the campaign trail, are meeting at least daily with the aim of rolling out a measure every two to three weeks until the 2020 election.

One of the initiatives would allow states to import lower-priced drugs from Canada and other countries and another would bar Medicare from paying more than any other country for prescription drugs, according to two senior administration officials and lobbyists — controversial ideas in line with Democratic proposals. Yet it remains unclear the administration has the legal authority to execute some of these policies without Congress.

The White House is already facing fierce pushback on some proposals from Republicans on Capitol Hill and the pharmaceutical industry, which will likely go to court to challenge any measure it opposes.

The furious push reflects the administration’s sense of vulnerability on an issue that Democrats successfully used in 2018 to win control of the House of Representatives. White House officials are eager to inoculate the president against a repeat of that strategy in 2020 — and reduce the GOP disadvantage on an issue that pollsters say plays to Democratic strengths. Most of the Democratic presidential candidates have made health-care proposals, including Medicare-for-all plans, key to their campaigns. Health care is already playing a starring role in the debates and Democrats are sure to assail Trump for his attempts to eliminate coverage for millions of people by challenging the Affordable Care Act in court.

“President Trump has said we will protect people with preexisting conditions, lower drug prices, end surprise medical bills, and make sure Americans get the highest quality of care they deserve,” said White House spokesman Judd Deere. “While the radical left has sweeping proposals for a total government takeover of the health system that will hurt seniors and eliminate private insurance for 180 million Americans, the Trump administration is working on real solutions.”

Some, however, are doubtful a flurry of executive orders and new regulations would have an immediate effect on consumers’ pocketbooks. What is clear is that the approach, which includes White House support for a bipartisan Senate bill to cap Medicare drug price increases to the rate of inflation, is putting congressional Republicans in a tough spot: Embrace Trump’s agenda and abandon conservative precepts about interference in the marketplace, or buck the president on one of his top priorities.

While Republicans have largely fallen in line with Trump on free trade and immigration even when he has blown up GOP orthodoxy, many rely heavily on donations from the pharmaceutical industry and are reluctant to sour those relationships.

One lobbyist, who spoke on the condition of anonymity, described being stunned at a recent White House meeting when Domestic Policy Council Director Joe Grogan said the administration would not let Democrats run to the president’s left on lowering the prices of prescription medicines.

In another tense meeting, top pharmaceutical executives were told bluntly “it wasn’t in the industry’s best interests” to block the bipartisan Senate bill backed by Trump. If it failed, they were told, they’d see “the president of the United States negotiating with Nancy Pelosi [on allowing the government to negotiate drug prices in Medicare],” said a person familiar with the meeting.

On Wednesday, Health and Human Services Secretary Alex Azar announced the outlines of a plan to eventually allow Americans to import certain lower-cost drugs from Canada and other countries. White House officials are also weighing an Obamacare replacement that Congress would take up after the election, a Medicare plan to contrast with Democratic Medicare-for-all proposals, help for beleaguered rural hospitals and steps to reduce maternal death rates, according to two senior administration officials.

The health-care effort is being driven by the White House’s Domestic Policy Council Director Joe Grogan, Chief of Staff Mick Mulvaney and the White House Office of Management and Budget acting director Russ Vought. Other participants in the sometimes contentious daily meetings include Azar, the president’s son-in-law and senior adviser Jared Kushner, White House counselor Kellyanne Conway and representatives from the vice president’s office.

One senior administration official, who spoke on the condition of anonymity to discuss internal deliberations, said the White House believes it has “tremendous authority” to write executive orders under food, drug and cosmetic laws, as well as through the ACA, which gives the government broad power to test ways to improve health care and reduce costs in government programs.

“We think the [ACA] authority is pretty tremendous,” the official said. The administration is currently arguing in federal court to overturn the law, however, with a decision expected late summer or fall.

But many health policy and legal experts disagree and are also skeptical the steps the administration is talking about would have a tangible effect on consumers before the election.

“It’s unlikely the administration is going to be able to use an executive order that Americans are going to be able to notice before the election,” said Benedic Ippolito, a health economist at the American Enterprise Institute. “It’s an incredibly ambitious timeline.”

Others see court challenges as inevitable, noting the drug industry has already shown a willingness to sue the administration over policies it opposes; it recently won a lower court victory against an Health and Human Servies regulation that would have required drugmakers to include the list prices of their medications in television ads.

“I’m not sure they can get anything done and survive a court challenge before the election,” said Chris Meekins, a former HHS official who is now a health care policy research analyst at Raymond James, a financial services firm.

The White House is also attempting to build support for the Senate bill authored by Finance Committee Chairman Charles E. Grassley (R-Iowa) and ranking Democrat Sen. Ron Wyden (Ore.), that for the first time would require drugmakers to pay back the federal government if they raised the prices of medications in the Medicare program in excess of the rate of inflation. It would also limit out-of-pocket costs for beneficiaries.

The pharmaceutical industry opposes the bill, and some Republicans have already derided the legislation as tantamount to negotiating drug prices or imposing “price controls” — a line in the sand for many who oppose what they see as government interference in the market. Senate Majority Leader Mitch McConnell (R-Ky.) has not said whether he will bring a drug-pricing legislative package up for a vote, but he is generally opposed to voting on health-care legislation ahead of the election.

Against the advice of many congressional Republicans, White House advisers are also working to craft an Obamacare replacement plan that Trump could campaign on, especially if the Fifth Circuit should declare the law unconstitutional this fall and catapult the issue to the forefront of the 2020 races.

Some GOP lawmakers and strategists worry about rolling out a plan that has no chance of passage in the current Congress and that Democrats could pick to pieces during a long campaign. Many also have little appetite to return to the debate over repealing Obamacare.

Nonetheless, the White House is considering a plan, put together by conservative think tanks, that would eliminate the ACA’s subsidies for low-income consumers and replace the open-ended federal commitment to Medicaid with a lump-sum payment for each state in the form of a block grant, according to a copy posted online. The proposal largely follows the outlines of a 2017 Republican bill, which the Senate never voted on because it did not garner enough support.

“We don’t have a lot of buy in on the Hill,” acknowledged the senior administration official, “but we’re figuring it out.”

Some of the other health-care proposals under review also appear largely aspirational, for instance, a draft executive order that instructs agencies to speed development of a universal flu vaccine, first reported by Politico, that proposes no new funding. Other efforts, such as the initiatives to reduce HIV infections, reduce end-stage kidney disease and double the number of transplants, contain new funding and have been widely heralded.

“Every chance we have to set or tweak a rule we are doing it.” said the senior official. “This administration has been more creative and accomplished more when it comes to health care and health than anybody has given us credit for.”

If the U.S. economy is in good shape, why is the Federal Reserve cutting interest rates?

Posted on by • Posted in Federal Reserve Board, Inflation, Unemployment, Wall Street • Leave a comment

https://www.washingtonpost.com/business/2019/07/31/if-us-economy-is-good-shape-why-is-federal-reserve-cutting-interest-rates/?utm_term=.1346fb3da080&wpisrc=nl_most&wpmm=1

Federal Reserve Board Chair Jerome Powell speaks during a Senate Banking Committee hearing on July 11.

The Federal Reserve is all but certain Wednesday to do something it hasn’t done in more than a decade: cut interest rates. The question on a lot of people’s minds is why.

Lowering interest rates, the Fed’s main way to boost the economy, is typically used in dire times, which it’s difficult to argue the United States is experiencing right now. Instead, top Fed officials are defending this as an “insurance cut” that’s akin to an immunization shot in the arm. They want to counteract the negative effects of President Trump’s trade war and prevent the United States from catching the same cold that Europe, China and elsewhere seem to have.

The Fed’s big decision comes at 2 p.m. Wednesday and will be followed by a 2:30 p.m. news conference from Fed Chair Jerome H. Powell, a frequent target of Trump’s criticism.

The Fed is widely expected to do a modest cut on Wednesday, probably lowering the benchmark interest rate from about 2.5 percent down to just shy of 2.25 percent. But the Fed seldom does just one cut, which is why Trump, Wall Street and much of the world will be listening closely to Powell for signs of when another cut is likely.

Wall Street is pricing in that the Fed will lower interest rates to about 1.75 by the end of the year, a far more dramatic move. And Trump has been blasting the Fed for months, saying he wants to see a “large” cut.

“The Fed is often wrong,” Trump said this week, reiterating his view that the stock market would be up 10,000 more points if the Fed had not raised interest rates four times last year. “I’m very disappointed in the Fed. I think they acted too quickly, by far. I think I’ve been proven right.”

But there are plenty of economists and prominent investors saying the Fed shouldn’t cut at all because it is not justified and will look as though the Fed is caving in to Trump’s bullying — or Wall Street’s.

“I have to conclude the Fed has lost some independence here,” said Blu Putnam, chief economist at CME Group.

The last time the Fed cut rates was in December 2008, when unemployment was over 7 percent (and rising quickly), the stock market had lost a third of its value, and a major financial institution, Lehman Brothers, had just declared bankruptcy, rocking the financial system.

Today unemployment is at a half-century low (3.7 percent), the economy is growing at a healthy pace (over 2 percent) and the stock market is sitting at record highs.

Congress gave the Fed two mandates: to keep unemployment low and prices stable. By about any measure one can look at, the Fed has achieved those goals. The job market is strong, and inflation remains surprisingly low.

The world will be listening closely for Powell’s rationale for lowering rates during fairly good economic times — and for his signal about whether another cut is coming in the fall.

It’s a tricky calculus. The one thing nearly everyone agrees on is this would be the biggest gamble yet for Powell, who took over as the central bank’s chair in early 2018.

The likely cut on Wednesday should make loans a little cheaper for businesses and Americans looking to buy homes and cars or start a company. But realistically, one cut won’t do much. The reason the stock market has rallied sharply in recent weeks is an expectation that this is the first of several cuts.

If the Fed does not do three cuts this year, the market could pull back, making financial conditions “tight” again, even though the Fed is cutting rates to try to loosen conditions.

Top Federal Reserve leaders see three key reasons to cut now.

1. Trump’s trade war. There is concern about the trade war, as well as weakness overseas, dragging down the U.S. economy. A closer look at the U.S. economy reveals there are already a few yellow, if not red, flags. Manufacturing was in a “technical recession” the first half of the year, the housing market remains sluggish, and business investment tanked in the spring as corporate leaders grow more wary of the ongoing trade tensions.

Powell and Fed Vice Chair Richard Clarida refer to these as “head winds” and “downside risks” that are picking up, and they prefer to address them before they grow into deeper problems. Clarida often points to 1995, when the Fed did three modest rate cuts (starting in July 1995 and ending in January 1996) that helped keep the economy growing for years to come.

2. The Fed needs to act sooner rater than later. New York Fed President John Williams, among others, has made the case that the Fed has limited medicine in the medicine cabinet to aid the economy and that it’s better to administer the pills at the first signs of trouble rather than waiting for full-blown illness when there might not be enough medicine left to make a difference. “When you only have so much stimulus at your disposal, it pays to act quickly to lower rates at the first sign of economic distress,” Williams said in a speech earlier this month.

Interest rates are very low by historical standards. For example, the benchmark rate was over 5 percent before the Fed started reducing it in 2007. Now the benchmark rate is half that amount, meaning there will be less stimulus this time around from cutting rates.

3. Inflation is too low. The Fed wants to see inflation of about 2 percent a year. For the past several years, it’s been running below that threshold and is currently sitting around 1.6 percent. Some Fed leaders, such as St. Louis Fed President James Bullard, say the Fed should cut rates to try to run the economy a bit hotter to boost inflation. They see little risk in doing this since inflation is so low, but they see great risk in not getting inflation back to target because business leaders will stop believing that 2 percent is the true target if it is never achieved.

While there are reasons to cut, some Fed leaders, including Boston Fed President Eric Rosengren and Kansas City Fed President Esther George, have raised doubts about whether it makes sense to cut now, before there are clear signs of trouble in the United States.

Rosengren has warned in recent speeches that insurance cuts do not come without a cost. Keeping rates low tends to spur bubbles that can come back to harm the economy later on. Already there are concerns about too much risky corporate lending, and lower rates are only likely to encourage more of those loans. He and others have also pointed out that using up the medicine now doesn’t leave much left to fight worse problems later on.

There are 10 members on the Fed’s committee that decides interest rate policy, and they do not appear to be in unison on this decision, let alone what to do in the fall, a reminder of just how much debate there is about the right course of action.

The U.S. economy is in the midst of a record-breaking expansion that has been growing for more than a decade, the longest expansion in U.S. history. Powell says keeping it going is his top goal.

 

 

 

How a Medicare Buy-In or Public Option Could Threaten Obamacare

Posted on by • Posted in 2020 Election Issues, ACA, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Medicare, Medicare Buy-In, Medicare for All, Pharmaceutical Industry, Public Option • Leave a comment
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Some Democrats are proposing a government alternative to private insurance. But allowing people to choose such a plan may destabilize the A.C.A., some experts say.

It seems a simple enough proposition: Give people the choice to buy into Medicare, the popular federal insurance program for those over 65.

Former Vice President Joseph R. Biden Jr. is one of the Democratic presidential contenders who favor this kind of buy-in, often called the public option. They view it as a more gradual, politically pragmatic alternative to the Medicare-for-all proposal championed by Senator Bernie Sanders, which would abolish private health insurance altogether.

A public option, supporters say, is the logical next step in the expansion of access begun under the Affordable Care Act, passed while Mr. Biden was in office. “We have to protect and build on Obamacare,” he said.

But depending on its design, a public option may well threaten the A.C.A. in unexpected ways.

A government plan, even a Medicare buy-in, could shrink the number of customers buying policies on the Obamacare markets, making them less appealing for leading insurers, according to many health insurers, policy analysts and even some Democrats.

In urban markets, “a public option could come in and soak up all of the demand of the A.C.A. market,” said Craig Garthwaite, a health economist at the Kellogg School of Management at Northwestern University.

And in rural markets, insurers that are now profitable because they are often the only choices may find it difficult to make money if they faced competition from the federal government.

Some insurers could decide that a smaller and uncertain market is not worth their effort.

If the public option program also matched the rates Medicare paid to hospitals and doctors, “I think it would be really hard to compete,” Mr. Garthwaite said. Even leading insurers do not have the leverage to demand lower prices from hospitals and other providers that the government has.

Whether to implement a public option or Medicare buy-in has become a defining question among Democratic presidential candidates and is likely to be a contentious topic at this week’s debates.

On Monday, Senator Kamala Harris took an alternate route, unveiling a plan that would allow private insurers to participate in a Medicare-for-all scheme, akin to their role currently offering private plans under Medicare Advantage.

The recent spate of proposals reprises some of the most difficult questions leading up to the passage of the A.C.A., in many ways a compromise over widely divergent views of the role of the government in ensuring access to care.

After a shaky start, the federal and state Obamacare marketplaces are surprisingly robust, despite repeated attempts by Republicans to weaken them. They provide insurance to 11 million customers, many of whom receive generous federal subsidies to help pay for coverage.

The A.C.A. is now a solidly profitable business for insurers, with several expanding options after earlier threats to leave. For example, Centene, a for-profit insurer, controls about a fifth of the market, offering plans in 20 states. It is expected to bring in roughly $10 billion in revenues this year by selling Obamacare policies.

In spite of stock drops because of investors’ concerns over Medicare-for-all proposals, for-profit health insurers have generally thrived since the law’s passage.

But a buy-in shift in insurance coverage could profoundly unsettle the nation’s private health sector, which makes up almost a fifth of the United States economy. Depending on who is allowed to sign up for the plan, it could also rock the employer-based system that now covers some 160 million Americans.

In a recent ad, Mr. Biden features a woman who wants to keep her current coverage. “I have my own private insurance — I don’t want to lose it,” she said.

A spokesman for Mr. Biden argued that a public option can extend the success of the Affordable Care Act.

“Joe Biden thinks it would be an egregious mistake to undo the A.C.A., and he will stand against anyone — regardless of their party — who tries to do so,” said Andrew Bates, a spokesman for Mr. Biden, in an email.

Major insurers and hospital chains, pharmaceutical companies and the American Medical Association have joined forces to try to derail efforts like Medicare-for-all and the public option. Mr. Sanders denounced these powerful interests in a recent speech.

“The debate we are currently having in this campaign and all over this country has nothing to do with health care, but it has everything to do with the greed and profits of the health care industry,” he said.

Other critics of the public option, including Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, argue Democrats’ programs will lead to a “complete government takeover.”

“These proposals are the largest threats to the American health care system,” she said in a speech earlier this month.

Some experts predict that private insurers will adapt, while others warn that the government could wind up taking on the sickest customers with high medical bills, leaving the healthier, profitable ones to private insurers.

It’s uncertain whether hospitals, on the other hand, could thrive under some versions of the public option. If the nation’s 5,300 hospitals were paid at much lower rates by a government plan — rates resembling those of Medicare — they might lose tens of billions of dollars, the industry claims. Some would close.

One variant of the public option — letting people over 50 or 55 buy into Medicare — is often depicted as less drastic than a universal, single-payer program. But this option would also be problematic, experts said.

This consumer demographic is quite valuable to insurers, hospitals and doctors.

Middle-aged and older Americans have become the bedrock of the Obamacare market. Some insurers say this demographic makes up about half of the people enrolled in their A.C.A. plans and, unlike younger people who come and go, is a reliable and profitable source of business for the insurance companies.

The aging-related health issues of people in this group guarantee regular doctor visits for everything from rising blood pressure to diabetes, and they account for a steady stream of lucrative joint replacements and cardiac stent procedures.

The 55-to-64 age group, for example, accounts for 13 percent of the nation’s population, but generates 20 percent of all health care spending, according to the Kaiser Family Foundation.

Health Spending

People age 55–64 are responsible for one fifth of total health spending and account for a sizable share of the private insurance market. People 65 and older are eligible for Medicare and account for one third of total spending.

Several experts said that designing a buy-in program that is compatible with the existing public and private plans could be daunting.

“You’d have to do it carefully,” said Representative Donna Shalala, a Florida Democrat who served as the secretary of health and human services under President Bill Clinton.

Linda Blumberg, a health policy expert at the Urban Institute, a nonpartisan think tank, agreed. “The idea of Medicare buy-ins was taken very seriously before there was an Affordable Care Act,” she said. “In the context of the A.C.A., it’s a lot more complicated to do that.”

Many dismiss concerns about whether insurers can compete.

“Any time a market shrinks in America, insurers don’t like it,” said Andy Slavitt, the former acting Medicare administrator under President Obama and a former insurance executive. Mr. Slavitt noted that insurers raised similar concerns about the federal law when it was introduced. “They’ll figure it out,” he said.

In Los Angeles County, five private insurers that sell insurance in the A.C.A. market already compete with L.A. Care Health Plan, which views itself as a kind of public option, said John Baackes, the plan’s chief executive.

The insurer offers the least expensive H.M.O. plan in the county by paying roughly Medicare rates. “We’ve proved that the public option can be healthy competition,” he said.

But the major insurance companies, which were instrumental in defeating the public option when Congress first considered making it a feature of the A.C.A., are already flexing their lobbying muscle and waging public campaigns.

In Connecticut, fierce lobbying by health insurers helped kill a state version of the public option this spring. Cigna resisted passage of the bill, threatening to leave the state. “The proposal design was ill-conceived and simply did not work,” the company said in a statement.

Blue Cross plans could lose 60 percent of their revenues from the individual market if people over 50 are shifted to Medicare, said Kris Haltmeyer, an executive with the Blue Cross Blue Shield Association, citing an analysis the company conducted. He said it might not make sense for plans to stay in the A.C.A. markets.

Siphoning off such a large group of customers could also lead to a 10 percent increase in premiums for the remaining pool of insured people, according to the Blue Cross analysis. More younger people with expensive medical conditions have enrolled than insurers expected, and insurers would have to increase premiums to cover their costs, Mr. Haltmeyer said.

Tricia Neuman, a senior vice president at the Kaiser Family Foundation, which studies insurance markets, said a government buy-in that attracted older Americans could indeed raise premiums for those who remained in the A.C.A. markets, especially if those consumers had high medical costs.

But some experts countered that prognosis, predicting that premiums could go down if older Americans, whose health care costs are generally expensive, moved into a Medicare-like program.

“The insurance companies are wrong about opposing the public option,” Ms. Shalala said.

Dr. David Blumenthal, the president of the Commonwealth Fund, a foundation that funds health care research, said a government plan that attracted people with expensive conditions could prove costly.

“You might, as a taxpayer, become concerned that they would be more like high-risk pools,” he said.

Jonathan Gruber, an M.I.T. economist who advised the Obama administration during the development of the A.C.A., likes Mr. Biden’s plan and argues there is a way to design a public option that does not shut out the private insurers.

“It’s all about threading the needle of making a public option that helps the failing system and not making the doctors and insurers go to the mat,” he said.

Many experts point to private Medicare Advantage plans, which now cover one-third of those eligible for Medicare, as proof that private insurers can coexist with the government.

But the real value of a public option, some say, would stem from the pressure to lower prices for medical care as insurers were forced to compete with the lower-paying government plans, like Medicare.

Washington State recently passed the country’s first public option, capping prices as part of its plan to provide a public alternative to all residents by 2021.

“It’s couched in this language in expanding coverage, but it does it by regulating prices,” said Sabrina Corlette, a health policy researcher at Georgetown University.

The hospital industry would most likely fight just as hard to defeat any proposal that would convert a profitable group of customers, Americans who are privately covered at present, into Medicare beneficiaries.

Private insurers often pay hospitals double or triple what Medicare pays them, according to a recent study from the nonprofit Rand Corporation.

While Ms. Shalala supports a public option as an alternative to “Medicare for All,” she is clear about how challenging it will be to preserve both Obamacare and the private insurance market. “You can’t do it off the top of your head,” she said.

 

HCA Misses on Key Financials, Stock Drops Sharply

Posted on by • Posted in For-Profit, Health System, Hospital, Hospital Industry, Operating Margin, Operating Performance • Leave a comment

https://www.healthleadersmedia.com/finance/hca-misses-key-financials-stock-drops-sharply

The Nashville-based for-profit hospital operator’s revenues went up slightly, but other metrics missed the mark.

Though HCA Healthcare’s total revenues increased to $12.6 billion in Q2, the company missed on other key areas, according to its latest earnings released Tuesday morning.

HCA reported a net income of $783 million, down from $820 million this time last year, and an adjusted EBTDA of $2.29 that was better than Q2 2018 but fell from Q1 2019.

The Nashville-based for-profit hospital operator’s financial numbers from Q2 sent its stock tumbling in early morning trading, where it was down more than 10% by 10 a.m.  

Same facility admissions and same facility equivalent admissions each rose by 2.1% and 2.6%, respectively, while same facility emergency room visits jumped 3% year-over-year.

However, growth in same facility outpatient surgeries and same facility revenues per equivalent admission slowed in Q2 while same facility inpatient surgeries declined 0.1%.

The company updated its financial guidance in light of its Q2 results, projecting diluted earnings per share in a range between $10.25 and $10.65.

HCA had two major developments in Q2, asking a federal judge to dismiss a class action lawsuit alleging unfair billing practices at three Florida hospitals and its acquisition of 24 MedSpring urgent care centers from Fresenius Medical Care.

ADDITIONAL HCA Q2 EARNINGS REPORT HIGHLIGHTS:

  • Salaries, benefits, supplies, and other operating expenses accounted for 81.9% of revenues, down from 80.8% this time last year.
  • The company repurchased $242 million worth of stock in Q2 and has just over $1.75 billion remaining under its existing repurchase agreement.
  • The company also declared a quarterly cash dividend of $0.40 per share to be paid on September 30.
  • By the end of Q2, HCA was operating 184 hospitals, down from 185 hospitals at the end of Q2.

For complete financial information, review HCA Healthcare’s filing with the Securities and Exchange Commission.

 

 

 

Hackensack Meridian acquires three northern NJ nursing homes

Posted on by • Posted in Health System, Hospital, Hospital Industry, Mergers & Acquisitions, Nursing Home, Post Acute Care • Leave a comment

https://www.crainsnewyork.com/health-pulse/hackensack-meridian-acquires-three-northern-nj-nursing-homes?utm_source=health-pulse-wednesday&utm_medium=email&utm_campaign=20190730&utm_content=hero-readmore

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Hackensack Meridian Health, the 17-hospital system in New Jersey, said Tuesday that it has added three nearby nursing homes to its network as it looks to better coordinate hospital and post-acute care.

The nursing homes are the 210-bed Prospect Heights Care Center in Hackensack, the 180-bed Regent Care Center in Hackensack and the 180-bed West Caldwell Care Center in West Caldwell. Prospect Heights is exclusively a subacute-care facility that provides rehab services after people leave the hospital. The facilities have a combined 750 employees.

Hackensack Meridian acquired 100% of Regent Care and 51% each of Prospect Heights and West Caldwell in a deal valued around $65 million, including cash and the assumption of debt. Tandem Management Co. owned all three facilities and will continue as a joint partner in Prospect Heights and West Caldwell.

With the deal, Hackensack Meridian now operates 13 post-acute-care facilities and has rebranded the new additions under the system’s name.

“Patients are staying fewer and fewer days in acute-care facilities,” said Robert Garrett, CEO of Hackensack Meridian Health. “Changes in technology are allowing patients to go home quicker even after receiving pretty intense care and receiving complicated procedures. The best way to ensure that there is a good hand-off is if we own and operate these post-acute-care facilities.”

Hospitals can benefit from having a strong relationship with the nursing homes they refer people to by avoiding federal readmission penalties.

Garrett said the deal will make it easier to find a nursing home bed for patients ready to be discharged and free up beds for patients waiting in the hospital’s emergency department. Hackensack Meridian Medical Center is about a mile away from two of the nursing homes.

The system did not commit a defined amount to capital improvements but plans to make significant investments in the facilities’ IT systems so they can share electronic medical records with its hospitals, said Stephen Baker, Hackensack Meridian’s president of post-acute care.

Baker said Hackensack Meridian’s staffing model is different from other nursing homes in that its facilities use mostly registered nurses; other nursing homes use mostly licensed practical nurses. Its patients tend to be more complex, which allows the system’s facilities to receive higher payments from Medicare. Some of its facilities earn 50% to 60% from Medicaid, which typically pays lower rates.

“We’re able to subsidize lower rates with higher rates from subacute care and favorable rates from managed care organizations,” Baker said. —Jonathan LaMantia