States brace for ‘nearly certain’ Medicaid budget shortfalls amid COVID-19

https://www.healthcaredive.com/news/states-brace-for-nearly-certain-medicaid-budget-shortfalls-amid-covid-19/578120/

Coronavirus updates: Virus reaches all 50 states, stock futures fall

Dive Brief:

  • Most states with budget projections expect Medicaid shortfalls due to rising spending as more people lose jobs and enroll into the safety net insurance for low-income Americans due to the COVID-19 pandemic, according to a new Kaiser Family Foundation survey.
  • Almost all states with enrollment projections and more than half with spending projections expect program growth to surpass pre-pandemic estimates. Nearly all states anticipate growth will accelerate even more in the 2021 fiscal year, KFF found. As a result of that growth, 17 of 19 states with budget projections report a shortfall is “nearly certain” or “likely” for the upcoming fiscal year.
  • The survey comes as Congress once again considers raising the federal match rate for Medicaid in the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions Act, passed by the House of Representatives on Friday.​

Dive Insight:

Medicaid is often the top line spending item in state budgets, sending states scrambling for ways to reduce spend in the safety net health insurance program, including controversial block grants for funding.

At the start of the 2020 fiscal year, states anticipated modest Medicaid spending growth, and flat enrollment growth due to the strong economy. That forecast quickly shifted as the coronavirus spread in the U.S., which lost some 21 million jobs in April as businesses shutter their doors in compliance with stay-at-home orders, sending the unemployment rate to 15%.  

Because the U.S. generally couples coverage to employment, skyrocketing job loss could make an estimated 17 million people newly eligible for Medicaid and 6 million eligible for subsidies in the Affordable Care Act marketplaces by January 2021.

Medicaid officials from 38 states shared their budget projections with KFF for the survey. States that did not respond were still gathering data about the coronavirus or didn’t have updated enrollment or spending projections for the 2020 or 2021 fiscal years, KFF researchers Robin Rudowitz and Elizabeth Hinton said.

Thirty-two of 34 states with enrollment projections think enrollment will exceed initial projections in 2020, and 30 of 31 states anticipate that growth in 2021 will outpace the current fiscal year.

States are more mixed on spending projections. Over half of states with projections, 18 of 32, expect 2020 Medicaid spending to exceed pre-pandemic estimates. Eight states anticipate no change, and the remaining six project slightly lowered spending due to lower healthcare utilization as non-essential services have largely ground to a halt.

State Medicaid officials are more in lockstep when it comes to 2021 spending projections. Nearly all states with projections — 29 of 30 — think Medicaid spending rates in 2021 will increase over 2020.

Without greater support from the federal government, the survey hints states will face significant spending cuts for Medicaid for the upcoming fiscal year, which begins July 1 for most states. Multiple groups, including the National Governors Association and the National Association of State Medicaid Directors, have called for a higher federal match rate.

One of the first legislative packages designed to mitigate the fallout of COVID-19, the Families First Coronavirus Response Act passed March 18, authorized a 6.2 percentage point increase in the rate for Medicaid if states meet certain requirements. States can’t increase premiums or restrict eligibility standards and must cover COVID-19 testing and treatment without cost-sharing.

The HEROES Act passed by Democrats in the House on Friday would increase the match rate by 14 percentage points from July 1, 2020, through June 30, 2021, along with benchmarking an additional $100 billion for providers.

However, Senate Majority Leader Mitch McConnell, R-Ky., and President Donald Trump have said they’re in no rush to pass another round of legislation adding to the more than $3 trillion Congress has approved so far.

 

 

 

 

Jay Powell warns US recovery could take until end of 2021

https://www.ft.com/content/2ed602f1-ed11-4221-8d0b-ef85018c96ea

Fed Makes Second Emergency Rate Cut to Zero Due To Coronavirus ...

Fed chair says economy may not fully bounce back until virus vaccine is available.

Federal Reserve chair Jay Powell has warned that a full US economic recovery may take until the end of next year and require the development of a Covid-19 vaccine.

“For the economy to fully recover, people will have to be fully confident. And that may have to await the arrival of a vaccine,” Mr Powell told CBS News on Sunday. A full revival would happen, he said, but “it may take a while . . . it could stretch through the end of next year, we really don’t know”.

He added: “Assuming there is not a second wave of the coronavirus, I think you will see the economy recover steadily through the second half of this year.”

Mr Powell told CBS it was likely there would be a “couple more months” of net job losses, with the unemployment rate climbing to as high as 20-25 per cent. But he said it was “good news” that the “overwhelming” majority of those claiming unemployment benefits report themselves as having been laid off temporarily, meaning they are expecting to go back to their old jobs.

Oil prices and stocks in Asia rose on Monday despite the gloomy outlook. West Texas Intermediate, the US crude benchmark, climbed 4.4 per cent to take it above $30 a barrel for the first time in two months. Brent crude, the international benchmark, rose 3.6 per cent to $33.67 a barrel. Japan’s Topix was up 0.4 per cent and China’s CSI 300 index of Shanghai- and Shenzhen-listed stocks added 0.6 per cent.

Donald Trump, US president, said last week that he hoped to have a vaccine ready by the end of 2020. But public health experts, including Anthony Fauci, the head of the US National Institute of Allergy and Infectious Diseases, and Rick Bright, the recently ousted head of the US Biomedical Advanced Research and Development Authority, have warned that the process is likely to take longer.

Dr Fauci, a high-profile member of Mr Trump’s coronavirus task force, has said he expects the search for a vaccine to take at least a year to 18 months. But Dr Bright has said that was too optimistic.

Some world leaders have also raised doubts about the immediate prospects for a vaccine. Giuseppe Conte, prime minister of Italy, said at the weekend that his country could “not afford” to wait for a vaccine, while Boris Johnson, UK prime minister, warned that a vaccine “might not come to fruition” at all.

Mr Powell said that while lawmakers had “done a great deal and done it very quickly”, Congress and the Fed may need to do more “to avoid longer-run damage to the economy”.

The Fed chair said fiscal policies that “help businesses avoid avoidable insolvencies and that do the same for individuals” would position the US economy for a strong recovery post-crisis.

Mr Powell also reiterated his position against using negative interest rates, something Mr Trump has called for. The Fed chair told CBS that the Federal Open Market Committee had eschewed negative interest rates after the last financial crisis in favour of “other tools” such as forward guidance and quantitative easing.

The US Congress has already approved nearly $3tn of economic relief measures intended to support struggling businesses and individuals, but there is growing consensus in Washington that more fiscal stimulus will be needed — even if Democrats and Republicans are divided over how to dole out federal funds.

Late on Friday, the Democrat-controlled House of Representatives passed Nancy Pelosi’s plan for $3tn in new stimulus spending.

Mr Trump has repeatedly called for the next stimulus to include a cut to payroll taxes — deductions for entitlements such as social security and Medicare. Last week, Larry Kudlow, the top White House economic adviser, suggested that lower corporate taxes and looser business regulation should be part of any future relief package.

The Trump administration has taken a more bullish stance on the US economic recovery than Mr Powell, with White House officials repeatedly insisting that the economy will bounce back before the end of the year.

Mr Powell told CBS it was a “reasonable expectation that there will be growth in the second half of the year” but “we won’t get back to where we were by the end of the year”.

 

 

 

 

 

Fed’s Powell warns unemployment could reach Depression-level 25 percent

https://www.politico.com/news/2020/05/17/powell-unemployment-depression-25-percent-264500

Fed's Powell warns unemployment could reach Depression-level 25 ...

The Fed chief expressed hope that the economy would come out of recession in the second half of the year.

Federal Reserve Chair Jerome Powell on Sunday warned that the nation’s unemployment rate could soar to 25 percent during the worst of the coronavirus crisis, though he said the economy should recover more quickly than during the Great Depression, when joblessness last reached those levels.

“Those numbers sound about right for what the peak may be,” Powell said on CBS’ “60 Minutes” after reporter Scott Pelley asked whether unemployment could reach 20 percent or even 25 percent.

His remarks came just days after the central bank released a survey showing that one in five American workers lost their jobs in March — including almost 40 percent of those in lower-income households.

The Fed chief expressed hope that the economy would come out of recession in the second half of the year, but cautioned that a second outbreak of the coronavirus could derail that path.

“This economy will recover,” he said. “We’ll get through this. It may take a while. … It could stretch through the end of next year. We really don’t know.”

The central bank has taken extraordinary measures to rescue the economy since the pandemic began sweeping through the country — slashing interest rates to zero, rolling out trillions of dollars in lending programs for financial markets, and taking the unprecedented step of bailing out state and city governments.

“There’s really no limit to what we can do with these lending programs,” Powell said. “There’s a lot more we can do to support the economy, and we’re committed to doing everything we can as long as we need to.”

He said the economy stands a good chance of bouncing back more quickly than in the 1930s.

“When the Depression, well, when the crash happened and all that, the financial system really failed,” Powell said. “Here, our financial system is strong.”

But he took the opportunity to again warn that Congress will need to spend more to prevent long-lasting damage, even after U.S. lawmakers have shelled out trillions of dollars for American businesses and consumers.

The most important policy objectives should be to “keep workers in their homes, keep them paying their bills,” he said. “Keep families solvent so that when this comes, we come out the other end of this, we’re in a position to have a strong recovery.”

 

 

 

 

The coronavirus economy could make a Medicare buy-in more popular

https://www.axios.com/coronavirus-economy-unemployment-medicare-health-insurance-85d23c97-4ad6-486d-b081-a46bdd2b894b.html

Coronavirus-driven layoffs may boost calls for a Medicare buy-in ...

The economic disruption caused by the coronavirus pandemic could help create a much stronger push to let some older Americans buy into Medicare.

By the numbers: 2.4 million adults between the ages of 55 and 64 lost their jobs just since March, bringing the unemployment rate in this group to 12.5% — up from 3.4% in March.

Between the lines: Many of these people will struggle to find affordable coverage, and a slow recovery will leave many without job-based health coverage for a long time.

  • Medicaid will cover many of the newly uninsured, though not in states that haven’t expanded the program. The Affordable Care Act will help many others maintain coverage, but those plans often come with high deductibles. COBRA is available to people who lost jobs that offered insurance, but it’s often prohibitively expensive.

Millions of uninsured 55-65 year-olds could add new urgency to calls for a Medicare buy-in if Democrats control the White House and Congress in 2021.

  • Narrower options consistently poll better than more sweeping expansions of public coverage, and older adults are a politically powerful group.

Where it stands: The leading Medicare buy-in plan in Congress would allow people who are older than 50 to purchase Medicare coverage, with a subsidy for low-income enrollees similar to the subsidies in the Affordable Care Act.

  • Former Vice President Joe Biden has proposed a different twist: He would simply lower Medicare’s eligibility age from 65 to 60, without a buy-in.

Yes, but: All the old fault lines would still be at play if such an effort got serious consideration.

  • Some Democrats prefer Medicare for All. Republicans and hospitals have typically opposed all Medicare expansions.

The bottom line: The more dire the economic and health insurance circumstances of 55-64 year olds turns out to be, the greater the urgency for an early -in to Medicare is likely to become.

 

 

 

 

Quantifying the massive blow to hospital volumes

https://mailchi.mp/f4f55b3dcfb3/the-weekly-gist-may-15-2020?e=d1e747d2d8

Even after hearing dozens of reports from health systems about how steep their COVID-related volume losses have been, we were still floored by this analysis from healthcare analytics firm Strata Decision Technology, documenting a 55 percent drop in patients seeking hospital care across the country.

The report, which analyzed data from 228 hospitals in 51 health systems across 40 states, found that no clinical service line was immune from steep volume losses. The graphic below shows volume loss by service line in March-April 2020 compared to the same period in 2019.

Unsurprisingly, ophthalmology, gynecology, ortho/spine and ENT—all specialties with a high portion of elective cases, and heavily dependent on procedures—saw volume declines of greater than 70 percent. But even obstetrics and neonatology (which we expected to be “pandemic proof”) and infectious disease (which we thought might be busier in the throes of COVID-19) saw losses of 20-30 percent.

Looking at specific procedures, complex elective surgeries like spinal fusion and hip and knee replacements were almost completely obliterated. Precipitous declines in encounters for chronic diseases like coronary heart disease and diabetes (down 75 and 67 percent, respectively) and cancer screenings (a 55 percent decline in breast health and a 37 percent decline in cancer care overall) point to the likelihood of worrisome disease exacerbations, and a future full of more complex patients.

The volume losses, plus a 114 percent rise in uninsured patients, led to average two-week losses of $26.5M per health system across the study’s cohort. Strata will continue to track and publish volume changes, but this early snapshot paints a bleak picture of staggering financial hits, and “lost” patient care that will carry lasting ramifications for the health of communities nationwide.

 

 

 

 

The pandemic broke America

https://www.axios.com/coronavirus-america-broken-2baa69e4-60e6-49a5-932a-5d118441ae20.html

The coronavirus pandemic broke America - Axios

Eight weeks into this nation’s greatest crisis since World War II, we seem no closer to a national strategy to reopen the nation, rebuild the economy and defeat the coronavirus.

Why it matters: America’s ongoing cultural wars over everything have weakened our ability to respond to this pandemic. We may be our worst enemy.

  • The response is being hobbled by the same trends that have impacted so much of our lives: growing income inequality, the rise of misinformation, lack of trust in institutions, the rural/urban divide and hyper-partisanship.
  • We’re not even seeing the same threat from the virus. Democrats are far more likely than Republicans to be worried about getting seriously ill, while Republicans — including the president — are more likely to think the death counts are too high.

Without even a basic agreement on the danger of the pandemic and its toll, here’s how we see the national response unfold:

  • The Centers for Disease Control and Prevention, the crown jewel of the globe’s public health infrastructure, has been sidelined, its recommendations dismissed by the White House.
  • President Trump declares the U.S. has “prevailed on testing” at a time when health experts say we still need far more daily tests before the country can reopen safely.
  • Distribution of the promising coronavirus drug remdesivir was initially botched because of miscommunication between government agencies.
  • More than two thirds of Americans say it’s unlikely they would use a cell phone-based contact tracing program established by the federal government, a key component of a testing regime to control the virus.
  • The second phase of a program to aid small businesses isn’t fully allocated because firms are either concerned about its changing rules, confused about how to access it, or find the structure won’t help them stay in business.
  • With the unemployment rate at a post-Depression record last month, and expected to go higher, there is no meaningful discussion between the parties in Congress on aid to the out-of-work.
  • States and local governments are facing billions in losses without a strategy for assistance.
  • The virus is literally inside the White House. Aides have tested positive for coronavirus, leading to quarantines for some of the nation’s top public health officials and a new daily testing regime for White House staff and reporters who enter the West Wing.
  • The No. 1 book on Amazon for a time was a book by an anti-vaxxer whose conspiracy-minded video about the pandemic spread widely across social media, leading to takedowns by platforms like YouTube and Facebook.

The other side: There’s better news at the state level. “Governors collectively have been winning widespread praise from the public for their handling of the coronavirus outbreak,” the Washington Post reports.

Between the lines: Nationwide, 71% of Americans approve of the job their governor is doing, according to the Post. For Trump, the figure is 43%.

  • And former presidents we often expect to help rally the nation in trying times are scarce.
  • George W. Bush released a video, in which his face barely appeared, calling for unity in the fight against the virus. Barack Obama was recorded in leaked remarks to former staffers calling Trump’s coronavirus response “an absolute chaotic disaster.” Trump attacked both of them on Twitter.

The bottom line: An existential threat — like war or natural disaster — usually brings people together to set a course of action in response. Somehow, we’ve let this one drive us apart.

 

 

 

 

Another 3 million Americans filed for unemployment last week

https://www.axios.com/jobless-claims-coronavirus-3-million-460364c8-be73-437c-b99c-fa7d75aad87e.html?stream=top&utm_source=alert&utm_medium=email&utm_campaign=alerts_all

Data: U.S. Employment and Training Administration via FRED; Chart: Andrew Witherspoon/Axios

Data: U.S. Employment and Training Administration via FRED; Chart: Andrew Witherspoon/Axios

Another 2.98 million Americans filed for unemployment last week, the Labor Department said on Thursday.

Why it matters: The coronavirus is still forcing a historically high number of Americans out of work. In two months alone, more than 36 million people have filed jobless claims.

Between the lines: The pace of new applications has slowed from its peak in March, but the weekly numbers are still way higher than before businesses shuttered to contain the outbreak.

  • There are more jobless workers that haven’t been able to get their application through. State unemployment offices are racing to get through an avalanche of unemployment filings — with states like New York processing more claims in the past few months than they have in years.
  • Measuring the backlog is “like trying to measure the ocean, it’s constantly moving,” New York Labor Department commissioner Roberta Reardon said in a press call yesterday.
  • While more Americans than ever before are eligible for unemployment, including gig workers, some states are just beginning to scale up to accept those applications.

By the numbers: The total number of people continuing to receive unemployment benefits — after initially applying — rose, bringing the total to a record 22.8 million.

  • A decrease in this figure would be an indication that Americans are returning back to work.

The bottom line: Goldman Sachs estimates the unemployment rate will hit 25%, matching the peak level of joblessness during the Great Depression.

 

Window of Opportunity is Closing for Coronavirus Response

https://www.axios.com/rick-bright-testimony-opening-statement-6817ae7a-5196-4357-b83c-d3ff96990efd.html?stream=health-care&utm_source=alert&utm_medium=email&utm_campaign=alerts_healthcare

Window of opportunity – definition and meaning – Market Business News

A top vaccine doctor who was ousted from his position in April is expected to testify Thursday that the Trump administration was unprepared for the coronavirus, and that the U.S. could face the “darkest winter in modern history” if it doesn’t develop a national coordinated response, according to prepared testimony first obtained by CNN.

The big picture: Rick Bright, the former head of the Biomedical Advanced Research and Development Authority (BARDA), will tell Congress that leadership at the Department of Health and Human Services ignored his warnings in January, February and March about a potential shortage of medical supplies.

  • He will testify that HHS “missed early warning signals” and “forgot important pages from our pandemic playbook” early on — but that “for now, we need to focus on getting things right going forward.”
  • Bright’s testimony also reiterates claims from a whistleblower report he filed last week that alleges he was ousted over his attempts to limit the use of hydroxychloroquine — an unproven drug touted by President Trump — to treat the coronavirus.

What he’s saying: Bright will testify he urged HHS to ramp up production of
masks, respirators and medical supplies as far back as January. Those warnings were dismissed, Bright says, and he was “cut out of key high-level meetings to combat COVID-19.”

  • “I continue to believe that we must act urgently to effectively combat this deadly disease. Our window of opportunity is closing. If we fail to develop a national coordinated response, based in science, I fear the pandemic will get far worse and be prolonged, causing unprecedented illness and fatalities.”

Bright will call for a national strategy to combat the virus, including “tests that are accurate, rapid, easy to use, low cost, and available to everyone who needs them.”

  • “Without clear planning and implementation of the steps that I and other experts have outlined, 2020 will be darkest winter in modern history.”

Read Bright’s prepared statement.

 

 

 

 

The latest in the U.S.

https://www.axios.com/newsletters/axios-vitals-72173ec6-3383-4391-afbb-a5ed682e5d7a.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

COVID-19 in the U.S.

As of May 12, 2020, 11pm EDT

Deaths       Confirmed Cases

82,376           1,369,574

Trump and some top aides question accuracy of coronavirus death ...

 

The U.S. will “without a doubt” have more coronavirus infections and deaths in the fall and winter if effective testing, contact tracing and social distancing measures are not scaled up to adequate levels, NIAID director Anthony Fauci testified on Tuesday.

  • He also said that the “consequences could be really serious” for states and cities that reopen without meeting federal guidelines.

Sen. Mitt Romney (R-Utah) criticized the Trump administration’s coronavirus testing coordinator Adm. Brett Giroir at a Senate hearing Tuesday, accusing him of framing U.S. testing data in a politically positive light: “I find our testing record nothing to celebrate whatsoever.”

Millions of Americans are risking their lives to feed us and bring meals, toiletries and new clothes to our doorsteps — but their pay, benefits and working conditions do not reflect the dangers they face at work, Axios’ Erica Pandey reports.

House Democrats released Tuesday their phase 4 $3 trillion coronavirus relief proposal that would provide billions of additional aid to state and local governments, hospitals and other Democratic priorities.

The American Federation of Teachers launched several capstone lesson plans Tuesday to help K-12 teachers measure student progress during school closures and overcome the challenges of a remote learning setting.

Grocery staples in the U.S. cost more in the last month than in almost 50 years, according to new data out Tuesday from the U.S. Bureau of Labor Statistics.

A new study by economists at the University of Illinois, Harvard Business School, Harvard University and the University of Chicago projects that more than 100,000 small businesses have permanently closed since the coronavirus pandemic was declared in March, the Washington Post reports.

 

 

 

 

 

Coronavirus likely forced 27 million off their insurance

https://www.axios.com/newsletters/axios-vitals-72173ec6-3383-4391-afbb-a5ed682e5d7a.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

The coronavirus pandemic is hitting Main Street and triggering ...

Roughly 27 million people have likely have lost job-based health coverage since the coronavirus shocked the economy, according to new estimates from the Kaiser Family Foundation.

Why it matters: Most of these people will be able sign up for other sources of coverage, but millions are still doomed to be uninsured in the midst of a pandemic, Axios’ Bob Herman reports.

By the numbers: For the 27 million people who are losing their job-based coverage, about 80% have other options, said Rachel Garfield, a health policy expert at the Kaiser Family Foundation and lead author of the report.

  • Roughly half are eligible for Medicaid or the Children’s Health Insurance Program.
  • Another third are eligible for subsidized health plans on the Affordable Care Act’s marketplaces.
  • The remaining 20% are pretty much out of luck because they live in a state that didn’t expand Medicaid or are ineligible for other kinds of subsidized coverage.
  • House Speaker Nancy Pelosi’s latest coronavirus relief bill would fully subsidize the cost of maintaining an employer plan through COBRA — an option that would otherwise be prohibitively expensive for many people. But that’s a long way from becoming law.

The bottom line: The coronavirus is blowing up health insurance at a time when people need it most.