More States Are Proposing Single-Payer Health Care. Why Aren’t They Succeeding?

The Democratic presidential primary might feel like a lifetime ago, but one important storyline in that race was health care — specifically single-payer health care, or the policy that the government should offer universal health insurance to everyone in the country. The nomination of now-President Biden, who opposed single-payer health care during the primary, has put single-payer health care on the backburner nationally. But that hasn’t stopped the issue from impacting state legislators, who have introduced more single-payer health care bills in the last few years than ever before.

Health care policy researchers Erin C. Fuse Brown and Elizabeth McCuskey tracked the number of unique single-payer bills introduced in state legislatures across the country from 2010 to 2019, finding a sharp uptick in bills introduced since 2017. During each of those three years, at least 10 single-payer proposals were introduced, according to Brown and McCuskey’s research, for the first time since 2013. In total, state legislators proposed more single-payer bills from 2017 to 2019 than in the previous seven years combined. And for 2021, we’ve identified 10 single-payer bills that legislators introduced across the country, from liberal states like California and Massachusetts to more conservative ones including Iowa and Ohio.1

What do all these proposals have in common? They’ve all universally failed. In fact, Vermont, the only state that managed to pass single-payer health care in 2011, ended up shelving its plan three years later.

It makes sense why single-payer advocates have tried to take these fights to the states. States have traditionally been seen as thelaboratories of democracy,” and some advocates of single-payer health care have argued that liberal states could provide unique opportunities to advance single-payer health care. But as I’ll explain, passing single-payer health care at the state level is next to impossible, as states are particularly limited in how they can allocate federal and private health care funds. There is, however, evidence that Americans may have an appetite for a public option, or government-run health insurance that people can opt into at the state level. Three states (Colorado, Nevada and Washington) have already passed a public option. It’s not single-payer health care reform, but it’s possible that we might see more states adopt their own public-option reforms.

One big reason single-payer proposals haven’t caught on at the state level is because finding a reliable way to pay for such a program is challenging. Single-payer advocates originally envisioned a federal proposal that would cover all Americans under a more generous version of a preexisting program — that is, Medicare, but now for all. Doing this state-by-state would require each state to apply for waivers to divert federal funds used for Medicare, Medicaid and Affordable Care Act exchanges to be used for their own single-payer plans. And that’s tricky because the Department of Health and Human Services has wide discretion to approve or deny states’ requests, which makes any proposal highly dependent on the national political climate.

This isn’t just a theoretical debate either: Trump’s administrator for the Centers for Medicare & Medicaid Services Seema Verma said in 2018 that she would deny waivers from states to create single-payer systems, while Biden’s Health and Human Services Secretary Xavier Becerra has expressed more favorable sentiments. Almost all single-payer proposals depend on these waivers and states don’t often have fallback plans for if this federal funding gets denied.

Employer-sponsored health insurance plans, which cover 54 percent of Americans, are another hurdle for states trying to pass single-payer health care. Federal law largely prevents states from regulating employer-provided health insurance, so states can’t just stop employers from offering their own health care benefits. The exact scope of this law has been litigated for decades, but suffice it to say that it’s successfully put the kibosh on many statewide health care reforms. Single-payer health insurance is particularly tricky as there’s no way to get everyone onto the plan without first changing how private insurance works. States have tried to address this through measures like increasing payroll taxes or restricting providers’ ability to accept reimbursement from private insurance plans. But the more elaborate these mechanisms get, the more complicated it becomes to implement — and the more people that could slip through the cracks.

Finally, another big financial barrier is that state governments have far less leeway than the federal government to increase budgetary spending. That means tax increases, which come with their own political challenges, are often necessary for states to secure the funding they need.

Take California’s single-payer proposal, which failed in late January. It would have required two-thirds of voters to pass a separate constitutional amendment to implement the necessary tax increases to pay for it. Concerns over tax increases also contributed to the demise of single-payer proposals in Colorado and Vermont. It’s true that a recent analysis of New York’s single-payer health care plan found that it would lower overall health care spending by 3 percent by 2031, but it would also require additional state tax revenue of $139 billion in 2022 — over 150 percent of the current state budget. Politicians facing the next election cycle may be leery of proposing short-term tax increases, even if the end result is long-term savings.

All of this creates a daunting picture for statewide single-payer health care. But the failures of single-payer doesn’t entirely close the door on health care reform, especially if these reforms are supplementing the existing system instead of entirely replacing it. Colorado and Nevada, for instance, successfully passed a public option in 2021, joining Washington, which passed one in 2019. Colorado’s success in advancing a public option is particularly striking, given that almost 80 percent of people voted against its single-payer proposal in 2016.

To be sure, though, efforts to implement a public option aren’t without their own challenges. In 2021, during its first year of implementation, Washington state’s public option struggled to enroll people and get health care providers to agree to lower payment rates. State lawmakers have tried to fix this problem by introducing legislation that would require more providers to participate and bring down premiums by increasing subsidies. Proponents have also cautioned that it might take years before the public option really gains a foothold with Washington state residents.

It’s not clear yet how successful these state-run public option plans will be, but it is possible that a public option may prove more popular than single-payer. For starters, while single-payer health care is popular among Democrats, the public option still polls much better among Republicans and independents. According to a Morning Consult/Politico poll from March 2021, the public option was roughly as popular as Medicare for All among Democrats — about 80 percent said they supported each. But support for the public option was much higher than support for Medicare for All among both Republicans and independents. Just 28 percent of Republicans and 50 percent of independents supported Medicare for All versus 56 percent of Republicans and 63 percent of independents who supported a public option.

Moreover, a public option may align more naturally with Americans’ existing views on the role of government in health care. Polls have long found that Americans still want a choice in their health care, even though they believe that providing health insurance to the uninsured is the government’s responsibility.

Ultimately, any health care reforms would be easier to implement on a federal level than a patchwork, state-by-state approach. But Washington, Colorado and Nevada remain important tests of state governments’ ability to implement a public option in lieu of action by the federal government. It’s not single-payer, but it’s still some of the most consequential health care reforms in decades — and a potential sign of where the debates over health care are heading.

Five takeaways on the Supreme Court’s Obamacare decision

Obamacare Returns as Galvanizing Issue After Ginsburg Death and Barrett  Nomination - The New York Times

In what has become something of a Washington tradition, the Supreme Court again upheld the Affordable Care Act on Thursday, in the third major case from Republican challengers to reach the high court. 

The margin this time was larger, 7-2, as the High Court appears less and less interested in revisiting the health care law through the judiciary. 

Democrats hailed the ruling as a boost to their signature law, and Republicans were left to figure out a path forward on health care amid another defeat. 

Here are five takeaways:

This could be the last gasp of repeal efforts

It is impossible to ever fully rule out another lawsuit challenging the health law or another repeal push if Republicans win back Congress. 

But after more than 10 years of fighting the Affordable Care Act, GOP efforts at fighting the law are seriously deflated, as many Republicans themselves acknowledge. 

“It’s been my public view for some time that the Affordable Care Act is largely baked into the health care system in a way that it’s unlikely to change or be eliminated,” said Sen. Roy Blunt (Mo.), a member of Senate GOP leadership. 

Asked if he still wanted to repeal and replace the law, which was the GOP rallying cry for years, Sen. Chuck Grassley (R-Iowa) said instead, “I think I want to make sure it works,” before attacking former President Obama’s promises about the law’s benefits. 

Even Sen. Josh Hawley (R-Mo.), who helped bring the lawsuit against the health law as attorney general of Missouri, said Thursday that the Supreme Court had made clear “they’re not going to entertain a constitutional challenge to the ACA.”

Supporters of the law said it is now even more entrenched, despite years of GOP attacks

“The war appears to be over and the Affordable Care Act has won,” said Stan Dorn, senior fellow at the health care advocacy group Families USA. 

Still, not all Republicans are throwing in the towel on at least verbally attacking the law. 

“The ruling does not change the fact that Obamacare failed to meet its promises and is hurting hard-working American families,” said House GOP leaders Kevin McCarthy (Calif.), Steve Scalise (La.) and Elise Stefanik (N.Y.). 

And there is at least one ACA-related lawsuit still working its way through the lower courts. Kelley v. Becerra challenges provisions of the health law around insurance plans covering preventive care including birth control.

The Supreme Court was fairly united 

The margin of victory for the health law was fairly large, with even more conservative justices such as Clarence ThomasAmy Coney BarrettBrett Kavanaugh and John Roberts ruling to uphold the law, joining the opinion from liberal Justice Stephen Breyer

The court’s other two liberals, Sonia Sotomayor and Elena Kagan, also joined the majority of seven. Two conservatives, Justices Samuel Alito and Neil Gorsuch, dissented and would have struck down the law. 

Through the three major Supreme Court cases on ObamaCare, the margin of victory has risen from 5-4 to 6-3 to 7-2. 

“There’s a real message there about the Supreme Court’s willingness to tolerate these kinds of lawsuits,” Andy Pincus, a visiting lecturer at Yale Law School, said of the growing margin of victory. 

The case was decided on fairly technical grounds. The Court ruled that the challengers did not have standing to sue, given that the penalty for not having health insurance at the center of the case had been reduced to zero, so it was not causing any actual harm that could be the basis for a lawsuit. 

Republicans did get some vindication in that Democrats had fiercely attacked Barrett during her confirmation hearings for being a vote to overturn the health law, when in fact she ended up voting to maintain the law. 

The ACA is stabilizing

The early years of the Affordable Care Act were marked with the turbulence of a website that failed at launch, premium increases, and major insurers dropping out of the markets given financial losses. 

Now, though, the markets are far more stable. For example, 78 percent of ACA enrollees now have the choice of three or more insurers, up from 57 percent in 2017, according to the Kaiser Family Foundation. 

Democrats, now in control of the House, Senate and White House, were able to pass earlier this year expansions of the law’s financial assistance to help further bring down premium costs. 

The Biden administration announced earlier this month that a record 31 million people were covered under the ACA, including both the private insurance marketplaces and the expansion of Medicaid. 

“We are no longer in the Affordable Care Act, ‘How’s it going to go? Is it going to survive?’ mode,” said Frederick Isasi, executive director of Families USA. “We really are in a whole new phase. It really is: ‘How do we improve it?’”

Republicans face questions on their health care message

The Republican health care message for years was summed up with the simple slogan “repeal and replace.

But now those efforts have failed in Congress, in 2017, and have failed for a third time in the courts. 

That leaves uncertainty about what the Republican health care message is. The party has famously struggled to unite around an alternative to the ACA, so there is no consensus alternative for the party to turn to. 

The statement from McCarthy, Scalise, and Stefanik calling the ACA “failed,” shows that party leaders are not fully ready to accept the law.

The leaders added that “House Republicans are committed to actually lowering health care costs,” which has been a possible area for the party to focus that is not simply about repealing the ACA. 

But any discussion of health care costs is fraught with complications. Republicans, for example, overwhelmingly oppose House Democrats’ legislation to allow the government to negotiate lower drug prices, arguing it would harm innovation from the pharmaceutical industry. 

Grassley reached a bipartisan deal on somewhat less sweeping drug pricing legislation with Sen. Ron Wyden (D-Ore.) in 2019, but that bill went too far for many Republicans as well. 

Democrats want to go farther, but face an uphill climb

With the ACA further entrenched, and control of the House, Senate and White House, Democrats are looking at ways to build on the health law. 

The main health care proposal from the presidential campaign, a government-run “public option” for health insurance, has faded from the conversation and is not expected to be a part of a major legislative package on infrastructure and other priorities Democrats are pushing for this year. 

While the health care industry has largely made its peace with the ACA, pushing for a public option or lowering health care costs means taking on a fight with powerful industry groups. 

Progressives like Sen. Bernie Sanders (I-Vt.) have instead poured their energy into expanding Medicare benefits to include dental, vision, and hearing coverage, and lowering the eligibility age to 60. 

Allowing the government to negotiate lower drug prices also could make it into the package.

“Now, we’re going to try to make it bigger and better — establish, once and for all, affordable health care as a basic right of every American citizen,” said Senate Majority Leader Charles Schumer (N.Y.). “What a day.”

Medicaid insurers at heart of Nevada public option plan

Nevada Plans To Launch Their “Public Option” Medical Coverage By 2026 – Dr.  Daliah

The state will bid out the business to private insurance carriers instead of doing the work in-house. Medicaid managed care organizations will be required to submit a bid.

Nevada’s plan to launch a public option health plan hinges on participation from the state’s Medicaid managed care organizations.

After passing both houses of the legislature, Democratic Gov. Steve Sisolak told reporters Tuesday he will sign the bill that will likely crown Nevada as the second state to pass a public option — a government-run plan that promises to lower premiums and increase access to care by creating an additional insurance option for residents.

To achieve its aims, Nevada’s public option plan requires premiums to be 5% lower than the benchmark silver Affordable Care Act plan in each ZIP code and, ultimately, premiums must be reduced by 15% over a four-year period. At the same time, reimbursement to providers must not go below Medicare rates.

Coverage under the public option would begin in 2026. The bill is just the beginning of a process in which Nevada will seek a waiver from the federal government to enact the public option plan. In short, the state is asking to capture the savings it may generate for the federal government.

Similar to other public health programs, the state of Nevada will bid out the public option business to insurance carriers instead of doing the work in-house. The state will rely heavily on Medicaid managed care organizations, at least at first, as it tries to spur participation.

“As a condition of continued participation in any Medicaid managed care program,” Medicaid MCOs will be forced to offer a public option plan if they want a Medicaid contract with the state, according to the bill sponsored by a Democratic state senator and Nevada’s majority leader, Nicole Cannizzaro, which passed the body earlier this week.

The bill says Medicaid MCOs must submit a “good faith proposal,” in response to an eventual RFP.

Sabrina Corlette, a research professor at Georgetown’s Center on Health Insurance Reforms, said she “assumed they wanted a guaranteed pool of potential bidders for the public option. Maybe they were afraid that if they didn’t require some bidders, they might not get any.”

Currently, there are three Medicaid MCOs in the state of Nevada: Centene, UnitedHealthcare and Anthem Blue Cross Blue Shield.

None of the companies responded to a request for comment.

The Nevada bill comes at a time when there is a renewed interest at the federal level for a public option plan, and a push from a handful of other states interested in creating an affordable health plan option for residents who have found themselves ineligible for Medicaid but unable to afford a marketplace plan.

Washington was the first state to implement a public option plan, which went live this year. 

President Joe Biden is a proponent of a public option plan — instead of “Medicare for All” — as it would build on the ACA, a law he helped usher in under former President Barack Obama, instead of dismantle it.

The insurance lobby is strongly opposed to a public option and previously expressed concern over Nevada’s plan via an opposition letter dated May 3 and addressed to Cannizzaro and the state’s Health and Human Services Committee.

AHIP, America’s Health Insurance Plans, took aim at the way in which the bill requires premiums for the public option plan to be lower than certain competitive plans on the exchange. AHIP characterized it as arbitrary “government rate setting.”

The tactic of prodding insurers into offering a separate business line in a specific state is not new.

The exchanges, launched under the ACA, relied on insurers to voluntarily sell plans to a relatively new market. At times, some counties were at risk of having no exchange plan at all. Some states tried to alleviate this problem by creating incentives for Medicaid MCOs if they also offered an exchange plan.

In a more extreme example, New York banned insurers from providing plans to any other program, including Medicaid, if they exited the exchange, according to a 2017 executive order from Gov. Andrew Cuomo.

Over time, the exchanges have become a core business for Medicaid MCOs.

Selling exchange plans is a complementary business for Medicaid MCOs that traditionally contract with states to care for Medicaid-eligible members. By selling exchange plans, Medicaid MCOs attempt to attract the Medicaid members they were serving as they churn off the program as their income fluctuates. It’s a key strategy for players like Centene.

However, if they’re forced to participate in the public option plan they will have to undercut their own premium prices on the exchange.

In Nevada, UnitedHealthcare and Centene command the largest market share on the exchange, according to the Kaiser Family Foundation.

Few healthcare surprises in Biden’s FY22 budget

Healthcare Spending Cuts Proposed in Federal Budget Deal

https://mailchi.mp/f42a034b349e/the-weekly-gist-may-28-2021?e=d1e747d2d8

President Biden released his budget proposal for fiscal year 2022 on Friday, clocking in at a whopping $6T of federal spending on programs aimed at making sweeping investments in infrastructure, education, and social services, and banking on hefty government borrowing at low interest rates to fuel a major overhaul of the American economy.

The proposal includes big increases in discretionary spending, including raising funding for the Department of Health and Human Services (HHS) by 23.4 percent, to $133.7B, the largest increase in almost two decades. The budget bolsters funding for a variety of healthcare programs, but notably includes specifics on only two major increases in mandatory healthcare spending: making permanent the temporary subsidy increases for individual coverage that are part of the American Rescue Plan Act ($163B); and expanding home- and community-based services in Medicaid ($400B). Both of those proposals were announced earlier this year as part of Biden’s twin recovery packages for infrastructure and social programs.
 
Notably absent, apart from statements of general support, are any details for implementing a “public option” health plan, or for lowering the Medicare eligibility age to 60—two healthcare proposals that figured prominently in Biden’s campaign platform. Nor are there specifics on lowering spending on prescription drugs, another key area of interest among lawmakers. Like all presidential budgets, the Biden document is simply a statement of priorities, providing a starting point for negotiations in Congress.

But the relatively narrow scope of the healthcare proposals—as hefty as their price tags are—indicates that the White House is likely not willing to throw down over a major overhaul of coverage, at least while Congress is so closely divided. While there are bills afloat in both the House and Senate to more aggressively expand coverage, we’d expect this summer’s legislative horse-trading to result in something resembling what’s in the President’s budget—and not much more. 

“Medicare at 60” and a national public option are likely on hold, at least until after the 2022 midterm elections.

Colorado’s “public option” primed to move forward

https://mailchi.mp/097beec6499c/the-weekly-gist-april-30-2021?e=d1e747d2d8

What a Difference a Year Makes in Colorado's Case for a Public Option Plan  | Kaiser Health News

We’ve closely tracked Colorado’s pursuit of its own public option insurance plan, which seems now to have reached a compromise that will allow a bill to move forward, according to reporting from Colorado Public Radio. The saga began two years ago when state legislators passed a law requiring Democratic Governor Jared Polis’ administration to develop a public option proposal. Amid the pandemic and broad industry opposition, progress stalled last year on the proposal. Lawmakers picked up the proposal this session, and have made progress on a compromise bill now poised to pass the state’s Democratic legislature.

Unlike the earlier versionthe new legislation would not lay the groundwork for a government-run insurance option, but rather would force insurers to offer a plan in which the benefits and premiums are defined and regulated by the state. The bill would also allow the state to regulate how much hospitals and doctors are paid.

In the current version, hospital reimbursement is set at a minimum of 155 percent of Medicare rates, and premiums are expected to be 18 percent lower than the current average. While state Republicans and some progressive Democrats are still opposed, the Colorado Hospital Association and State Association of Health Plans are neutral on the bill, largely eliminating industry opposition

The role hospitals played in fighting the pandemic surely paved the way toward the compromise bill, which is viewed as much more friendly to providers than the previous proposal. With the Biden administration unlikely to pursue Medicare expansion or a national public option, we expect more Democratic-run states to pursue these sorts of state-level efforts to expand coverage.

In the wake of the pandemic, providers are well-positioned to negotiate—and should use the goodwill they’ve generated to explore more favorable terms, rather than resorting to their usual knee-jerk opposition to these kinds of proposals.

Expanding health coverage is good. But we also need to fix stingy plans.

https://www.washingtonpost.com/outlook/expanding-health-coverage-is-good-but-we-also-need-to-fix-stingy-plans/2021/03/05/5f92b206-7c7d-11eb-a976-c028a4215c78_story.html?

Underinsurance remains a significant barrier to health care, new survey  finds

President Biden promised on the campaign trail to expand the Affordable Care Act to cover more of the roughly 29 million nonelderly Americans (about 11 percent of that population) who remain uninsured. He also said he’d strengthen the law by, for instance, providing an accessible and affordable public option and increasing tax credits to make it easier for people who buy insurance on their own to afford monthly premiums. Once in office, Biden immediately moved to reopen the period when people could enroll in the ACA marketplaces.

Unfortunately, the administration is paying little heed to a problem that is in many ways just as insidious as lack of insurance: underinsurance. That’s when people get too little from the insurance plans that they do have.

After passage of the ACA, the number of Americans lacking any insurance fell by 20 million, dropping to 26.7 million in 2016 — a historic low as a percentage of population. The figure began to creep up again during the Trump administration, reaching 28.9 million in 2019. That’s the problem that the current administration wants to address, and it certainly needs attention.

But according to research by the Commonwealth Fund, a foundation focused on health care, 21.3 percent of Americans have insurance so skimpy that they count as underinsured: Their out-of-pocket health-care expenses, excluding premiums, amount to at least 5 to 10 percent of household income. The limits in coverage mean their plans might provide little financial protection in a health-care crisis.

High-deductible plans offered by employers are one part of the problem. Among people covered by the companies they work for, enrollment in high-deductible health plans rose  from 4 percent in 2006 to 30 percent in 2019, according to a report from the Kaiser Family Foundation. The average annual deductibles in such plans are $2,583 for an individual and $5,335 for families.

In theory, high-deductible plans, which make people spend lots of their own money before insurance kicks in, turn people into careful consumers. But research finds that people covered by such plans skip care, both unnecessary (elective cosmetic surgery, for instance) and necessary (cancer screenings and treatment, and prescriptions). Black Americans in these plans disproportionately avoid treatment, widening racial health inequities.

Health savings accounts are designed to blunt the harmful effects of high-deductible plans: Contributions by employers, and pretax contributions by individuals, help to cover costs until the deductible is reached. But not all high-deductible health plans offer such accounts, and many people in lower-wage jobs don’t have them. In the rare cases that they do, they often don’t have extra money to deposit in them.   

In a November 2020 article in the journal Health Affairs, scholars affiliated with Brown University and Boston University found that enrollment in high-deductible plans had increased across all racial, ethnic and income groups from 2007 to 2018; they also found that low-income, Black and Hispanic enrollees were significantly less likely than other groups to have a health savings account — and the disparities had grown over time.    

The short-term health-care plans — a.k.a. “junk” plans — that the Trump administration expanded also contribute to the problem of underinsurance. They often have low premiums but do not cover preexisting conditions or basic services like emergency health care.

Fortunately, proposals like Biden’s that make health care more accessible also tend to address the problem of underinsurance, at least in part. For example, to make individual-market insurance more affordable, Biden proposes expanding the tax credits established under the ACA. His plan calls for removing the cap on financial assistance, now set at 400 percent of the federal poverty level, in the insurance marketplaces and lowering the statutory limit on premiums to 8.5 percent of income (from nearly 10 percent).

The president also proposes to peg the size of the tax credits that subsidize premiums to the best plans on the marketplaces, the “gold” plans, rather than “silver” plans. This would increase the size of these credits, thereby making it easier for Americans to afford more-generous plans with lower deductibles.

The most ambitious Biden proposal is a public option, which would create a Medicare-like offering on marketplaces, available to anyone. Pairing this with allowing any American to opt out of their employer plan if they found a better deal on HealthCare.gov or their state marketplace — which they can’t now — would help some people escape high-deductible plans. The public option would also eliminate premiums and involve minimal to no cost-sharing for low-income enrollees — especially helpful for uninsured (and underinsured) people in states yet to expand Medicaid.

Given political realities, however, this policy may not see the light of day. So it would be best to target underinsurance directly. Most people with high-deductible plans get them through an employer. Yet unlike in the marketplace plans, the degree of cost sharing in these employer plans is the same for low-income as well as high-income employees. To deal with that problem, the government could offer incentives for employers to expand the scope of health services they cover — even in high-deductible plans. Already, many such plans exempt from the deductible some primary-care visits and generic-drug prescriptions. The list could grow to include follow-up visits and certain specialist care.

Instead of encouraging health savings accounts, the government could offer greater pretax incentives that encourage employers to absorb some of the costs that they have shifted onto their lower-income employees; that would help to prevent the insurance equity gap from widening further. The government could compensate employers that cover co-pays or other costs for their low-income employees. It could also subsidize employers that move away from high-deductible plans, at least for lower-income people. 

Health insurance is complicated: ­More-affordable premiums are good only if they don’t bring stingy coverage. Greater investment in well-trained (and racially diverse) “navigators” — the people who help Americans enroll in plans on the federal marketplace, for example — would make it less likely that consumers would choose high-deductible plans without grasping their downsides. But it’s also important that people have options beyond risky high-deductible coverage.

The ACA expanded coverage dramatically — but the government needs to make sure that coverage amounts to more than an unused insurance card.

One-third of small businesses say health insurance is a top concern during COVID-19: survey

Dive Brief:

  • Small businesses are struggling to cover the high costs of healthcare for their employees after a year of COVID-19, according to a new poll sponsored by the Small Business Majority and patient advocacy group Families USA.
  • More than one in three small businesses owners said it’s a challenge getting coverage for themselves and their workers. That pain is particularly acute among Black, Asian American and Latino businesses, which have fewer resources than their White counterparts, SBMfound.
  • As a result, small businesses want policymakers to expand coverage access and lower medical costs, beyond the temporary fixes included in the sweeping $1.9 trillion American Rescue Plan passed by Congress earlier this month.

Dive Insight:

Providing health insurance can be pricey for small employers, a challenge that’s been exacerbated by the pandemic and its subsequent economic downturn.

Accessing health insurance has been a major barrier over the course of COVID-19, the national survey of 500 businesses with 100 employees or fewer in November found. The poll, conducted by Lake Research Partners for SBM and Families USA, found many such businesses have had to slash benefits during the pandemic. Among small business owners that have reduced insurance benefits, 36% have trimmed their employer contribution for medical premiums and 56% switched to a plan with a lower premium.

Additionally, one in five small business owners say they plan to change or lower coverage in the next few months, while only about a quarter have been able to maintain coverage for temporarily furloughed employees.

The situation is bleaker for minority-owned small businesses. Overall, 34% say accessing health insurance has been a top barrier during COVID-19, but that figure rises to 50%, 44% and 43% for Black, Asian American and Latino business respondents, SBM, which represents some 80,000 small businesses nationwide, said.

That’s in line with past SBM polling finding non-white entrepreneurs are more likely to face temporary or permanent closure in the next few months than their white counterparts, and are also more likely to struggle with rent, mortgage or debt repayments.

Though employers expect a more stabilized business environment starting in the second quarter, many are still reeling from difficult economic circumstances last year. COVID-19 capsized normal efforts to calculate medical cost trends for 2021, complicating financial planning for the year ahead — especially for fragile small businesses.

Washington did allocate a significant amount of financial aid for small businesses last year, and the ARP includes numerous provisions including increased subsidies for health insurance premiums for two years, and extended COBRA coverage for laid off employees through September.

But respondents to this latest polling urged for more long-term support.

The most popular policy proposal was bringing down the cost of prescription drugs, with 90% of businesses saying they supported the measure and 54% saying they were in strong support. Protecting coverage for people with pre-existing conditions was also popular, with 87% of small business owners in total support and 51% strongly supporting.

Three-fourths of small business owners strongly support a public health insurance option, while 73% support expanding Medicaid eligibility in all states and 66% support letting people buy into Medicare starting at age 55.

Both a public option and lower age of eligibity for Medicare are key tenets of President Joseph Biden’s healthcare plan — though getting both through Congress is unlikely. And long-time business groups like the Chamber of Commerce and the National Federation for Independent Business hold major sway on such issues and tend to be more recalcitrant on progressive policy changes.

Still, calls have been mounting for employers, which insure more than half of the U.S., to do more to move the needle on medical costs, as price increases outpace overall inflation.

A survey of large to mid-size employers from the National Alliance of Healthcare Purchaser Coalitions published Wednesday found at least three-fourths of employers support drug price regulation, surprise billing regulation, hospital price transparency and hospital rate regulation.

The Rising Crisis of Underinsurance: How the Biden Administration May Shape Inequities in Patient Affordability

Image result for Health Underinsurance

The Affordable Care Act (ACA) made historic strides in expanding access to health insurance coverage by covering an additional 20 million Americans. President Joe Biden ran on a platform of building upon the ACA and filling in its gaps. With Democratic majority in the Senate, aspects of his health care plan could move from idea into reality.

The administration’s main focus is on uninsurance, which President Biden proposes to tackle in three main ways: providing an accessible and affordable public option, increasing tax credits to help lower monthly premiums, and indexing marketplace tax credits to gold rather than silver plans.

However, underinsurance remains a problem. Besides the nearly 29 million remaining uninsured Americans, over 40% of working age adults are underinsured, meaning their out-of-pocket cost-sharing, excluding premiums, are 5-10% of household income or more, depending on income level.

High cost-sharing obligations—especially high deductibles—means insurance might provide little financial protection against medical costs beneath the deductible. Bills for several thousand dollars could financially devastate a family, with the insurer owing nothing at all. Recent trends in health insurance enrollment suggest that uninsurance should not be the only issue to address.

A high demand for low premiums

Enrollment in high deductible health plans (HDHP) has been on a meteoric rise over the past 15 years, from approximately 4% of people with employer-sponsored insurance in 2006 to nearly 30% in 2019, leading to growing concern about underinsurance. “Qualified” HDHPs, which come with additional tax benefits, generally have lower monthly premiums, but high minimum deductibles. As of 2020, the Internal Revenue Service defines HDHPs as plans with minimum deductibles of at least $1,400 for an individual ($2,800 for families), although average annual deductibles are $2,583 for an individual ($5,335 for families).

HDHPs are associated with delays in both unnecessary and necessary care, including cancer screenings and treatment, or skipped prescription fills. There is evidence that Black patients disproportionately experience these effects, which may further widen racial health inequities.

common prescription has been to expand access to Health Savings Accounts (HSAs), with employer and individual contributions offsetting higher upfront cost-sharing. Employers often contribute on behalf of their employees to HSAs, but for individuals in lower wage jobs without such benefits or without extra income to contribute themselves, the account itself may sit empty, rendering it useless.

recent article in Health Affairs found that HDHP enrollment increased from 2007 to 2018 across all racial, ethnic, and income groups, but also revealed that low-income, Black, and Hispanic enrollees were significantly less likely to have an HSA, with disparities growing over time. For instance, by 2018, they found that among HDHP enrollees under 200% of the federal poverty level (FPL), only 21% had an HSA, while 52% of those over 400% FPL had an HSA. In short, the people who could most likely benefit from an HSA were also least likely to have one.

If trends in HDHP enrollment and HSA access continue, it could result in even more Americans who are covered on paper, yet potentially unable to afford care.

Addressing uninsurance could also begin to address underinsurance

President Biden’s health care proposal primarily addresses uninsurance by making it more affordable and accessible. This can also tangentially tackle underinsurance.

To make individual market insurance more affordable, Biden proposes expanding the tax credits established under the ACA. His plan calls for removing the 400% FPL cap on financial assistance in the marketplaces and lowering the limit on health insurance premiums to 8.5% of income. Americans would now be able to opt out of their employer plan if there is a better deal on HealthCare.gov or their state Marketplace. Previously, most individuals who had an offer of employer coverage were ineligible for premium subsidies—important for individuals whose only option might have been an employer-sponsored HDHP.

Biden also proposes to index the tax credits that subsidize premiums to gold plans, rather than silver plans as currently done. This would increase the size of these tax credits, making it easier for Americans to afford more generous plans with lower deductibles and out-of-pocket costs, substantially reducing underinsurance.

The most ambitious of Biden’s proposed health policies is a public option, which would create a Medicare-esque offering on marketplaces, available to anyone. As conceived in Biden’s proposal, such a plan would eliminate premiums and having minimal-to-no cost-sharing for low-income enrollees; especially meaningful for under- and uninsured people in states yet to expand Medicaid.

Moving forward: A need to directly address underinsurance

More extensive efforts are necessary to meaningfully address underinsurance and related inequities. For instance, the majority of persons with HDHPs receive coverage through an employer, where the employer shares in paying premiums, yet cost-sharing does not adjust with income as it can in the marketplace. Possible solutions range from employer incentives to expanding the scope of deductible-exempt services, which could also address some of the underlying disparities that affect access to and use of health care.

The burden of high cost-sharing often falls on those who cannot afford it, while benefiting employers, healthy employees, or those who can afford large deductibles. Instead of encouraging HSAs, offering greater pre-tax incentives that encourage employers to reabsorb some of the costs that they have shifted on their lower-income employees could prevent the income inequity gap from widening further.

Under the ACA, most health insurance plans are required to cover certain preventative services without patient cost-sharing. Many health plans also exempt other types of services from the deductible – from generic drugs to certain types of specialist visits – although these exemptions vary widely across plans. Expanding deductible-exempt services to include follow-up care or other high-value services could improve access to important services or even medication adherence without high patient cost burden. Better educating employees about what services are exempt would make sure that patients aren’t forgoing care that should be fully covered.

Health insurance is complicated. Choosing a plan is only the start. More affordable choices are helpful only if these choices are fully understood, e.g., the tradeoff between an HDHP’s lower monthly premium and the large upfront out-of-pocket cost when using care. Investing in well-trained, diverse navigators to help people understand how their options work with their budget and health care needs can make a big difference, given that low health insurance literacy is related to higher avoidance of care.

The ACA helped expand coverage, but now it’s time to make sure the coverage provided is more than an unused insurance card. The Biden administration has the opportunity and responsibility to make progress not only on reducing the uninsured rate, but also in reducing disparities in access and patient affordability.

Why Biden Has a Chance to Cut Deals With Red State Holdouts on Medicaid

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President Joe Biden has an unexpected opening to cut deals with red states to expand Medicaid, raising the prospect that the new administration could extend health protections to millions of uninsured Americans and reach a goal that has eluded Democrats for a decade.

The opportunity emerges as the covid-19 pandemic saps state budgets and strains safety nets. That may help break the Medicaid deadlock in some of the 12 states that have rejected federal funding made available by the Affordable Care Act, health officials, patient advocates and political observers say.

Any breakthrough will require a delicate political balancing act. New Medicaid compromises could leave some states with safety-net programs that, while covering more people, don’t insure as many as Democrats would like. Any expansion deals would also need to allow Republican state officials to tell their constituents they didn’t simply accept the 2010 health law, often called Obamacare.

“Getting all the remaining states to embrace the Medicaid expansion is not going to happen overnight,” said Matt Salo, executive director of the nonpartisan National Association of Medicaid Directors. “But there are significant opportunities for the Biden administration to meet many of them halfway.”

Key to these potential compromises will likely be federal signoff on conservative versions of Medicaid expansion, such as limits on who qualifies for the program or more federal funding, which congressional Democrats have proposed in the latest covid relief bill.

But any deals would bring the country closer to fulfilling the promise of the 2010 law, a pillar of Biden’s agenda, and begin to reverse Trump administration efforts to weaken public programs, which swelled the ranks of the uninsured.

“A new administration with a focus on coverage can make a difference in how these states proceed,” said Cindy Mann, who oversaw Medicaid in the Obama administration and now consults extensively with states at the law firm Manatt, Phelps & Phillips.

Medicaid, the half-century-old health insurance program for the poor and people with disabilities, and the related Children’s Health Insurance Program cover more than 70 million Americans, including nearly half the nation’s children.

Enrollment surged following enactment of the health law, which provides hundreds of billions of dollars to states to expand eligibility to low-income, working-age adults.

However, enlarging the government safety net has long been anathema to most Republicans, many of whom fear that federal programs will inevitably impose higher costs on states.

And although the GOP’s decade-long campaign to “repeal and replace” the health law has largely collapsed, hostility toward it remains high among Republican voters.

That makes it perilous for politicians to embrace any part of it, said Republican pollster Bill McInturff, a partner at Public Opinion Strategies. “A lot of Republican state legislators are sitting in core red districts, looking over their shoulders at a primary challenge,” he said.

Many conservatives have called instead for federal Medicaid block grants that cap how much federal money goes to states in exchange for giving states more leeway to decide whom they cover and what benefits their programs offer.

Many Democrats and patient advocates fear block grants will restrict access to care. But just before leaving office, the Trump administration gave Tennessee permission to experiment with such an approach.

“It’s a frustrating place to be,” said Tom Banning, the longtime head of the Texas Academy of Family Physicians, which has labored to persuade the state’s Republican leaders to drop their opposition to expanding Medicaid. “Despite covid and despite all the attention on health and disparities, we see almost no movement on this issue.”

Some 1.5 million low-income Texans are shut out of Medicaid because the state has resisted expansion, according to estimates by KFF. (KHN is an editorially independent program of KFF.)

An additional 800,000 people are locked out in Florida, which has also blocked expansion.

Two million more are caught in the 10 remaining holdouts: Alabama, Georgia, Kansas, Mississippi, North Carolina, South Carolina, South Dakota, Tennessee, Wisconsin and Wyoming.

Advocates of Medicaid expansion, which is broadly popular with voters, believe they may be able to break through in a handful of these states that allow ballot initiatives, including Mississippi and South Dakota.

Since 2018, voters in Idaho, Nebraska, Utah, Oklahoma and Missouri have backed initiatives to expand Medicaid eligibility, effectively circumventing Republican political leaders.

“The work that we’ve done around the country shows that no matter where people live — red state or blue state — there is overwhelming support for expanding access to health care,” said Kelly Hall, policy director of the Fairness Project, a nonprofit advocacy group that has helped organize the Medicaid measures.

But most of the holdout states, including Texas, don’t allow citizens to put initiatives on the ballot without legislative approval.

And although Florida has an initiative process, mounting a ballot campaign there is challenging, as political advertising is expensive. Unlike in many states, Florida’s leading hospital association hasn’t backed expansion.

Another route for expansion: compromises that could win over skeptical Republican state leaders and still get the green light from the Biden administration.

The Obama administration approved conservative Medicaid expansion in Arkansas, which funneled enrollees into the commercial insurance market, and in Indiana, which forced enrollees to pay more for their medical care.

Money is a major focus of current talks in several states, according to health officials, advocates and others involved in efforts across the country.

The health law at first fully funded Medicaid expansion with federal money, but after the first three years, states had to begin paying part of the tab. Now, states must come up with 10% of the cost of expansion.

Even that small share is a challenge for states, many of which are reeling from the economic downturn caused by the pandemic, said David Becker, a health economist at the University of Alabama-Birmingham who has assisted efforts to expand Medicaid in that state.

“The question is: Where do we get the money?” Becker said, noting that some Republicans may be open to expanding Medicaid if the federal government pays the full cost of the expansion, at least for a year or two.

Other efforts to find ways to offset state costs are underway in Kansas and North Carolina, which have Democratic governors whose expansion plans have been blocked by Republican state legislators. Kansas Gov. Laura Kelly this month proposed using money from the sale and taxation of medical marijuana.

Some Democrats in Congress are pushing to revise the health law to provide full federal funding to states that expand Medicaid now. Separately, in the stimulus bill unveiled last week, House Democrats proposed an additional boost in total Medicaid aid to states that expand.

Other Republicans have signaled interest in partly expanding Medicaid, opening the program to people making up to 100% of the federal poverty level, or about $12,900, rather than 138%, or $17,800, as the law stipulated.

The Obama administration rejected this approach, but the idea has gained traction in several states, including Georgia.

It’s unclear what kind of compromises the new administration may consider, as Biden has yet to even nominate someone to oversee the Medicaid program.

Some Democrats say it’s time to give up the search for middle ground with Republicans on Medicaid.

A better strategy, they say, is a new government insurance plan, or public option, for people in non-expansion states, a strategy Biden endorsed on the campaign trail.

“Democrats can no longer countenance millions of Americans living in poverty without insurance,” said Chris Jennings, a Democratic health care strategist who worked in the White House under Presidents Bill Clinton and Barack Obama and served on Biden’s transition team.

“This is why the Biden public option or other new ways to secure affordable, meaningful care should become the order of the day for people living in states like Florida and Texas.”

Hospital, insurer and employer groups band together in bid to achieve universal coverage

https://www.healthcarefinancenews.com/news/hospital-insurer-and-employer-groups-band-together-bid-achieve-universal-coverage

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The groups said that Americans “deserve a stable healthcare market that provides access to high-quality care and affordable coverage for all.”

This week, a coalition of healthcare and employer groups called for achieving universal health coverage by expanding financial assistance to consumers, bolstering enrollment and outreach efforts, and taking additional steps to protect those who have lost or are at risk of losing employer-based coverage because of the economic downturn caused by the COVID-19 pandemic.

The Affordable Coverage Coalition encompasses groups representing the nation’s doctors, hospitals, employers and insurers. They include America’s Health Insurance PlansAmerican Hospital AssociationAmerican Medical AssociationAmerican Academy of Family Physicians, Blue Cross Blue Shield Association, Federation of American Hospitals and the American Benefits Council.

They have banded together to advocate for achieving universal coverage via expansion of the Affordable Care Act, which is supported by President Biden. Biden also intends to achieve universal coverage through a Medicare-like public option — a government-run health plan that would compete with private insurers.

WHAT’S THE IMPACT

Despite a lot of pre-election talk about universal healthcare coverage from elected officials and those vying for public office, achieving this has remained an elusive goal in the U.S. In a joint statement of principles, the groups said that Americans “deserve a stable healthcare market that provides access to high-quality care and affordable coverage for all.”

“Achieving universal coverage is particularly critical as we strive to contain the COVID-19 pandemic and work to address long-standing inequities in healthcare access and outcomes,” the groups wrote.

The organizations support a number of steps to make health coverage more accessible and affordable, including protecting Americans who have lost or are at risk of losing employer-provided health coverage from becoming uninsured.

They also want to make Affordable Care Act premium tax credits and cost-sharing reductions more generous, and expand eligibility for them, as well as establish an insurance affordability fund to support any unexpected high costs for caring for those with serious health conditions, or to otherwise lower premiums or cost-sharing for ACA marketplace enrollees.

Also on the group’s to-do list: Restoring federal funding for outreach and enrollment programs; automatically enrolling and renewing those eligible for Medicaid and premium-free ACA marketplace plans; and providing incentives for additional states to expand Medicaid in order to close the low-income coverage gap.

THE LARGER TREND

The concept of universal coverage is gaining traction among patients thanks in large part to the COVID-19 pandemic. In fact, A Morning Consult poll taken in the pandemic’s early days showed about 41% of Americans say they’re more likely to support universal healthcare proposals. Twenty-six percent of U.S. adults say they’re “much more likely” to support such policy initiatives, while 15% say they’re somewhat more likely.

As expected, Democrats were the most favorable to the idea, with 59% saying they were either much more likely or somewhat more likely to support a universal healthcare proposal. Just 21% of Republicans said the same. Independents were somewhere in the middle, with 34% warming up to the idea of blanket coverage.

More than 21% of Republicans said they were less likely to support universal care in the wake of the COVID-19 crisis. Seven percent of independents reported the same, while for Democrats the number was statistically insignificant.

During his campaign, President Joe Biden said he supported a public option for healthcare coverage. He also pledged to strengthen the Affordable Care Act. By executive order, Biden opened a new ACA enrollment period for those left uninsured. It begins February 15 and goes through May 15.