One of the central questions of the 2020 Presidential campaign was posed last week before the Court of Appeals for the Fifth Circuit, in New Orleans, to a lawyer for the Trump Administration, who didn’t even pretend to have an answer. A three-judge panel was hearing the appeal of a ruling by Reed O’Connor, a Texas district-court judge, that the Affordable Care Act, or Obamacare, was unconstitutional in its entirety—an opinion that the Administration has endorsed. O’Connor had ordered that the government cease implementing or enforcing all aspects of the A.C.A., including its protections for people with preëxisting conditions, its ban on lifetime caps, its expansion of Medicaid and coverage for young adults on their parents’ plan, and its support for the treatment of addiction. The order could cost tens of millions of people all or much of their coverage, and throw the health-care system, which accounts for a fifth of the economy, into chaos. But O’Connor, in what Judge Jennifer Elrod, of the Fifth Circuit, described with no apparent irony as a “modest” act, had stayed his own order, pending appeals. Here, now, was the first appeal. So, if the stay is lifted, Elrod asked, “What’s the government planning to do?”
As the lawyer, August Flentje, struggled to answer (“This is a very complicated program—multifaceted, obviously”), it became clear that Republican opposition to the A.C.A. remains a project of blind destruction. One of President Trump’s few health-care initiatives, on drug prices, fell into disarray last week, with one measure defeated in court and another abandoned. Otherwise, he has mostly complained that Democrats want to extend care to, among others, undocumented people. His almost pathological need to undo President Obama’s legacy can be added to the mix; the restraint sometimes said to characterize conservatism can be subtracted. And there is a growing conviction among the A.C.A.’s opponents that the current Supreme Court, given the addition of Neil Gorsuch and Brett Kavanaugh, will back them up.
They may be right; the threat that this case, Texas et al. v. United States, presents to Obamacare should not be underestimated, especially as it is likely to reach the Court in the heat of the 2020 campaign. The case was brought by twenty states whose most distinct common quality is their redness. Maine and Wisconsin dropped out of the suit after the 2018 midterm elections, when their Republican governors were replaced by Democrats. When the Trump Administration declined to defend the law, a group of mostly blue states—currently twenty-one—got permission from the district court to do so. They were joined by a lawyer for the Democratic-controlled House of Representatives. When Kurt Engelhardt, another of the appeals judges, pointedly asked that lawyer why the Senate hadn’t sent someone to defend the law, he replied that the Senate “operates differently.” It is, after all, led by Mitch McConnell, not Nancy Pelosi.
The complaint concerns the so-called “individual mandate.” When the A.C.A. was enacted, in 2010, it directed every American to get insurance or face a penalty, which was calculated on a sliding scale (and dropped altogether for low-income people; other groups, such as prisoners, were exempt). The constitutionality of the mandate was the subject of an earlier challenge to the A.C.A., but Chief Justice John Roberts wrote an opinion classifying the penalty as a tax, which Congress has the power to levy. Trump’s 2017 tax package, however, reduced the penalty to zero. For the A.C.A.’s opponents, this led to a wild surmise: if the mandate had survived because the penalty was a tax, the absence of a tax might make the mandate unconstitutional. That point might seem academic—constitutional or not, the mandate is, for all practical purposes, already gone, now that there is no penalty for ignoring it. But Texas et al. makes a far more radical claim: The phantom mandate is not only unconstitutional but “inseverable” from the rest of the law. If it is invalid, then all nine hundred and six pages of Obamacare are also invalid.
This argument is as senseless as it is ruinous. It’s like saying that the 2017 tax bill was a stealth total repeal of the A.C.A., something that even leading Republicans denied at the time. And yet at least two of the judges, Elrod and Engelhardt, appeared inclined to accept it. The main issue for them seemed to be just how much of Obamacare to trash.
On that question, too, the Administration has been erratic. Initially, it argued that the court should invalidate only certain provisions, such as preëxisting-condition protections—a major feature that Trump has elsewhere claimed to like. Then, in March, the Administration said that it agreed with the Texas ruling: burn it all. Two months later, though, it argued that, while every word of the law was invalid, any relief that the lower court granted should be limited to damages suffered by Texas and the other states, without defining what those damages might be. This led to utter confusion in the oral arguments: Would there be different versions of the law for different states? Which provisions might the government want to keep? (“You would leave in place the calorie guides?” Judge Elrod asked.) Flentje, the Justice Department’s lawyer, told Elrod that, really, “things don’t need to get sorted out until there’s a final ruling”—that is, from the Supreme Court.
Obamacare has reduced the number of uninsured Americans by twenty million and, while the system is imperfect, premiums are more manageable than is often reported. But, as the Texas case suggests, it can still all be undone. And there is much more to do; the United States has not achieved universal coverage. All the Democratic Presidential front-runners share that goal, but they have what are sometimes sharply diverging proposals for getting there. Vice-President Joseph Biden, Mayor Pete Buttigieg, of South Bend, and former Representative Beto O’Rourke, of El Paso, want to build on the A.C.A. and make Medicare available to all as a public option, alongside private insurance. Senator Bernie Sanders, of Vermont, has a Medicare for All bill that aims to displace private insurance, and in most cases make it unlawful, leaving a public option as the only real option. Senators Elizabeth Warren and Kamala Harris have signed on to Sanders’s plan, although Harris has at times tried to downplay the impact on private insurance.
The next Democratic debates, which will be held on July 30th and 31st, may sharpen the candidates’ positions or further polarize them. The Democrats need a plan to protect Americans’ health coverage. And they need a plan to win in 2020. Those might even be the same thing. ♦
Ruling finds employers can’t withhold contraception coverage, in fresh blow to administration’s deregulatory push
A federal appeals court unanimously upheld a lower court decision blocking a revised set of Trump administration rules allowing employers with religious or moral objections to opt out of providing their workers with birth-control coverage.
The ruling late Friday by the Third Circuit Court of Appeals is a blow to the administration, which had prioritized weakening an Obama-era mandate requiring employers to offer free contraceptive health coverage to their employees—a top concern for Catholic and antiabortion groups. The court’s decision, which applies nationwide, makes it much less likely that the administration will be able to fashion an exemption acceptable to the courts.
A spokeswoman for the Department of Health and Human Services didn’t immediately return a request for comment. The agency is expected to appeal the ruling to the Supreme Court.
The Trump administration’s rules, issued in November by the DHHS, would have exempted a broad swath of employers from the mandate contained in the Affordable Care Act. Those rules represented a second attempt by Trump officials to create such an exemption, after a first set was blocked in 2017.
Judge Patty Schwartz, writing for the court, said the Affordable Care Act plainly states women must be provided preventive health services. “Nowhere in the enabling statute did Congress grant the agency the authority to exempt entities from providing insurance coverage for such services,” she wrote.
That makes birth control another realm in which courts have halted the Trump administration’s deregulatory agenda. The administration has lost more than 90% of lawsuits brought over its deregulation efforts, according to New York University School of Law’s Institute for Policy Integrity.
“Yet another court has stopped this administration from sanctioning discrimination under the guise of religion or morality,” said Louise Melling, deputy legal director at the American Civil Liberties Union.
The Obama administration issued the birth-control mandate in 2011 as part of its broader implementation of the Affordable Care Act.
In response to court challenges by some Catholic employers that object on religious grounds to most forms of birth control—along with other religious employers with specific objections to emergency contraception—Obama health officials created a workaround allowing female workers whose employers objected to covering contraception to obtain it directly from insurers.
Religiously affiliated employers, however, considered that insufficient because the insurance plans they sponsored were still being used as a vehicle for providing birth-control coverage.
The Trump administration’s changes sought to exempt them from the requirement completely. The administration also added moral objections to religious ones as grounds for an exemption.
Democratic front-runner Joe Biden on Monday unveiled a health plan that’s intended to preserve the most popular parts of Obamacare — from Medicaid expansion to protections for patients with preexisting conditions — and build on them with a new government-run public insurance option.
Biden would also empower Medicare to directly negotiate drug prices, allow the importation of prescription drugs from abroad and extend tax credits to help tens of millions of Americans buy lower-priced health insurance.
The plan — which the campaign says will cost $750 billion over a decade, to be paid for by reversing some of the Trump administration’s tax cuts — is less transformative than the “Medicare for All” proposal advanced by Sen. Bernie Sanders (I-Vt.) and supported by some other Democrats, which would effectively do away with private insurance and shift all Americans to government-run health coverage.
“I understand the appeal of Medicare for All,” Biden said in a video posted Monday morning. “But folks supporting it should be clear that it means getting rid of Obamacare. And I’m not for that.”
Progressives have argued that Democratic candidates should aim for Medicare for All because it protects the party from starting with — and settling for — a more incremental compromise. Democrats and former President Barack Obama previously supported a public option that could compete with private health plans before dropping it as part of negotiations around the Affordable Care Act.
On a call with reporters on Sunday, campaign staff stressed that Biden wouldn’t settle for a watered-down compromise as president and that his plan would help 97 percent of Americans get health coverage. Nearly 5 million Americans in states that haven’t expanded Medicaid would get premium-free access to Biden’s new public option, for instance.
“We’re starting with the Affordable Care Act as the base and going to insist on the elements that we sought last time,” said a senior Biden campaign official. “And we’ll get them this time.”
Biden’s public option plan drew fire from Republicans and health care industry lobbyists who said that the proposal went too far.
The Biden administration also would allow all shoppers on the individual insurance market to qualify for premium tax credits, which are currently capped at four times the federal poverty level, or nearly $50,000 for an individual. Undocumented immigrants would be newly allowed to purchase coverage in the ACA marketplaces, although they wouldn’t be eligible for federal subsidies, a campaign official said.
Speaking with reporters, campaign staff slammed the Trump administration’s efforts to strike down the ACA in court and also addressed Biden’s differences with rival candidates. Biden on Friday suggested that there would be “a hiatus of six months, a year, two, three” that would put patients at risk if Democrats pursued Medicare for All — a claim that Sanders swiftly attacked as “misinformation.”
In response to POLITICO’s questions, Biden’s campaign said the former vice president was emphasizing the need for immediate action.
“We can’t afford the years it will take in order to write and maybe pass Medicare for All,” a spokesperson wrote in an email. “A stop in progress is unacceptable. That’s why the Biden Plan builds on Obamacare and works toward achieving universal coverage as soon as possible.”
Health policy experts said that Biden’s coverage plan appears to be more politically feasible than Sanders’ proposal.
“Building on the ACA is the quickest way to get more people insured and improve affordability, while not taking on any powerful health industry group or disrupting coverage for those who already have it,” said Larry Levitt, executive vice president of health policy for the Kaiser Family Foundation. But incremental improvements to the ACA would leave “an inefficient and costly health care system in place,” Levitt added, preserving high prices and high deductibles for the roughly 160 million Americans with employer-based health coverage.
But even Democrats’ incrementalist approaches face deep opposition from a well-funded health industry opposed to expanding government-backed health insurance.
“Vice President Biden’s proposal for a new government insurance system through a ‘public option‘ would undermine the progress our nation has made and ultimately lead our nation down the path of a one-size-fits-all health care system run by Washington,” said Lauren Crawford Shaver, executive director of the Partnership for America’s Health Care Future, in a statement released Monday morning. Shaver— whose group includes dozens of major associations, including hospital lobbyists— pointed to studies that hospitals would lose revenue if Medicare was expanded.
Republicans also attacked Biden’s plan, resurrecting arguments used to bash the ACA. “Obamacare 2.0: Because it worked so great the first time,” tweeted RNC spokesperson Elizabeth Harrington, pointing to the troubled rollout of the online insurance marketplaces, government coverage mandates and other implementation challenges.
Meanwhile, some Wall Street analysts were skeptical of Biden’s public option proposal, arguing the policy was flawed.
“We suspect that provision is unlikely to be implemented, as it would allow employers to ‘dump’ the highest cost patients into exchanges,” wrote Raymond James in an investor’s note Monday morning.
Biden also announced new ideas to combat the nation’s high drug prices. Pointing to lessons learned from his signature cancer initiative — which announced on Monday it was suspending operations because of Biden’s campaign — the former vice president says he’ll have the Department of Health and Human Services establish an independent review board that will link the price of new specialty drugs to the average price in other countries. His plan also calls for capping most drug price increases at the rate of inflation.
Meanwhile, Biden would seek to expand access to abortion and contraception, reiterating his recent calls — like those of other Democratic candidates — to enshrine Roe v. Wade in federal law and restore federal funding for Planned Parenthood.
Biden’s plan also takes aim at health care providers, suggesting that he’ll try to tackle problems like unexpected large medical bills and health care market concentration, although the details released by the campaign are sparse. Biden also would double investment in community health centers, arguing that the centers help reach underserved populations.
Campaign staff said Biden would soon announce additional proposals to combat gun violence, improve rural health and address other health care initiatives.
Shares of major health insurers and other healthcare companies surged July 11 after the Trump administration yanked a plan to curb drug rebates. The healthcare rally helped push the Dow Industrial Average to 27,088 — its highest close ever.
UnitedHealth Group led the Dow to its all-time high, according to The Wall Street Journal. UnitedHealth climbed 5.5 percent July 11 to $261.16 per share.
Shares of major pharmaceutical companies, including Merck, Pfizer and Eli Lilly, lost ground on July 11, hampering the Dow’s climb, according to TheStreet.
“Pharma is getting absolutely shellacked,” Jamie Cox, managing partner for Harris Financial Group, told TheStreet. “I think being in the crosshairs of both parties in advance of an election year is definitely not a good place to be. It’s the one area where Democrats and Republicans can agree-they can beat up on pharma and there’s no negative repercussions.”
The S&P 500 also reached a record July 11, trading 0.2 percent higher. In the S&P 500, Cigna jumped 9.2 percent to $175.34 per share, while shares of CVS Health climbed 4.7 percent to $57.97. However, pharmaceutical companies and biotechnology firms broadly declined, according to The Wall Street Journal.
As recent congressional hearings on Medicare for All proposals have illustrated, members of Congress and presidential candidates are looking outside the United States to find ways to achieve universal coverage. Some have suggested that other countries are able to provide universal coverage because they “ration” care — a term rife with negative connotations. This post examines the extent to which health care is rationed in Germany, the Netherlands, Sweden, Switzerland, and the United Kingdom — as compared to the U.S.
Examples of health care rationing tend to focus on long wait times for procedures —such as hip replacements, or MRIs — or limited access to the newest drugs. This happens in some (but not all) countries and can be a challenge for policymakers. But there are other ways in which health systems engage in rationing, by restricting access to insurance, through insurance benefit design, or by imposing high patient cost-sharing. While other countries may ration because of national budget constraints and supply-side factors, the United States’ lack of access to comprehensive insurance and affordable care represent a de facto form of rationing that leads people to delay getting care or going without it entirely.
In the five European countries we examined, all residents are entitled to health care through the national system. These range from tax-funded systems in Sweden or the U.K. to private insurance-based systems in Germany, the Netherlands, and Switzerland. In the latter, governments regulate premiums to be affordable and provide income-related subsidies to low-income families, which include 27 percent of Swiss and 30 percent of Dutch residents. Governments also mandate generous benefit packages that typically guarantee a minimum set of services: primary, specialty, and hospital care; prescription drugs; mental health; maternity; and palliative care.
In comparison, there are 30.4 million uninsured people in the U.S. Not having affordable, comprehensive insurance coverage often means that sick Americans do not even get in the door to see a doctor. For those who do have coverage, new rules that allow states to circumvent the Affordable Care Act’s mandated essential health benefits may mean skimpy coverage for some.
Patients in some countries face longer wait times for specialty care than in the U.S., where only 25 percent of Americans need to wait longer than one month for a specialist appointment. Patients in Germany and Switzerland get in just as fast (27% and 26%, respectively) as their U.S. counterparts, but those in Sweden and the U.K. do not (45% and 43%, respectively). Similarly, very few U.S., Dutch, and Swiss patients (4% to 7%) who need elective surgery face wait times longer than four months, while 12 percent of Swedish and British patients do. It should be noted that in Sweden and the U.K., where wait times for specialty care are longer, people can buy supplemental insurance to gain quicker access to private specialists.
While Americans overall enjoy shorter wait times for specialty care, wait times for same- or next-day appointments when sick are around average compared to other countries. U.S. adults are among the most frequent users of emergency departments. Nearly half who do report doing so because they couldn’t get an appointment with their regular doctor.
In a recent Commonwealth Fund survey, fewer than one of 10 patients in the U.K., Germany, the Netherlands, or Sweden reported skipping needed care or treatments because of cost. This contrasts sharply with the U.S., where one of three Americans reported the same. This is partly because of the rise in high deductibles, unpredictable and opaque copayments, and higher health care prices in the U.S. than in other countries. An estimated 44 million Americans who have insurance are effectively underinsured because their out-of-pocket costs and deductibles are very high relative to their incomes.
Other countries are more protective. In the U.K., Germany, and the Netherlands, patients have no out-of-pocket costs when they visit a primary care doctor, and Brits never pay for hospital care. In Germany, out-of-pocket costs are capped at 2 percent of annual household income and 1 percent for chronically ill people. In Sweden, out-of-pocket costs for physician visits and drugs are capped at $370 annually. No one in these five countries declares bankruptcy because of medical debt.
A commitment to providing universal coverage means that other countries have to make hard choices to ensure that each health care dollar is spent effectively.
Countries aim to give patients access to the most clinically meaningful and cost-effective drugs. In the U.K., only drugs that are deemed cost-effective are covered, while in Germany, manufacturers have to demonstrate that their new drug adds clinical benefit to negotiate a higher price than other existing drugs. This doesn’t mean that new technologies aren’t available; in fact, 79 percent of new cancer drugs are approved for routine use in the U.K.
These kind of controls, coupled with fixed copayments and annual caps on patient drug spending, translate into better access. While nearly one of five U.S. adults skip doses or do not fill a prescription because of costs, just 2 percent to 9 percent of patients do so in the other countries discussed here.
It would be a missed opportunity for America to ignore lessons about universal coverage from other countries out of a fear that they ration health care more than we do. In reality, more people in the U.S. forgo needed health care because access to care is rationed through lack of access to adequate insurance or unaffordable services and treatments.