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Cartoon – Going the Extra Mile
Trump Acting Solo: What You Need To Know About Changes To The Health Law
https://khn.org/news/trump-acting-solo-what-you-need-to-know-about-changes-to-the-health-law/
Apparently frustrated by Congress’ inability to “repeal and replace” the Affordable Care Act, President Donald Trump this week decided to take matters into his own hands.
Late Thursday evening, the White House announced it would cease key payments to insurers. Earlier on Thursday, Trump signed an executive order aimed at giving people who buy their own insurance easier access to different types of health plans that were limited under the ACA rules set by the Obama administration.
“This is promoting health care choice and competition all across the United States,” Trump said at the signing ceremony. “This is going to be something that millions and millions of people will be signing up for, and they’re going to be very happy.”
The subsidy payments, known as “cost-sharing reductions,” are payments to insurers to reimburse them for discounts they give policyholders with incomes under 250 percent of the federal poverty line, or about $30,000 in income a year for an individual. Those discounts shield these lower-income customers from out-of-pocket expenses, such as deductibles or copayments. These subsidies have been the subject of a lawsuit that is ongoing.
The cost-sharing reductions are separate from the tax credit subsidies that help millions of people pay their premiums. Those are not affected by Trump’s decision.
Some of Trump’s actions could have an immediate effect on the enrollment for 2018 ACA coverage that starts Nov. 1. Here are five things you should know.
1. The executive order does not make any immediate changes.
Technically, Trump ordered the departments of Labor, Health and Human Services and Treasury within 60 days to “consider proposing regulations or revising guidance, to the extent permitted by law,” on several different options for expanding the types of plans individuals and small businesses could purchase. Among his suggestions to the department are broadening rules to allow more small employers and other groups to form what are known as “association health plans” and to sell low-cost, short-term insurance. There is no guarantee, however, that any of these plans will be forthcoming. In any case, the process to make them available could take months.
2. The cost-sharing reduction changes ARE immediate but might not affect the people you expect.
Cutting off payments to insurers for the out-of-pocket discounts they provide to moderate-income policyholders does not mean those people will no longer get help. The law, and insurance company contracts with the federal government, require those discounts be granted.
That means insurance companies will have to figure out how to recover the money they were promised. They could raise premiums (and many are raising them already). For the majority of people who get the separate subsidies to help pay their premiums, those increases will be borne by the federal government. Those who will be hit hardest are the roughly 7.5 million people who buy their own individual insurance but earn too much to get federal premium help.
Insurers could also simply drop out of the ACA entirely. That would affect everyone in the individual market and could leave some counties with no insurer for next year. Insurers could also sue the government, and most experts think they would eventually win.
3. This could affect your insurance choices for next year. But it’s complicated.
The impact on your plan choices and premiums for next year will vary by state and insurer. For one thing, insurers have a loophole that allows them to get out of the contracts for 2018, given the change in federal payments. So, some might decide to bail. That could leave areas with fewer — or no — insurers. The Congressional Budget Office in August estimated that stopping the payments would leave about 5 percent of people who purchase their own coverage through the ACA marketplaces with no insurers in 2018.
For everyone else, the move would result in higher premiums, the CBO said, adding an average of about 20 percent. In some states, regulators have already allowed insurers to price those increases into their 2018 rates in anticipation that the payments would be halted by the Trump administration.
But how those increases are applied varies. In California, Idaho, Louisiana, Pennsylvania and South Carolina, for example, regulators had insurers load the costs only onto one type of plan: silver-level coverage. That’s because most people who buy silver plans also get a subsidy from the federal government to help pay their premium, and those subsidies rise along with the cost of a silver plan.
Consumers getting a premium subsidy, however, won’t see much increase in their out-of-pocket payments for the coverage. Consumers without premium subsidies will bear the additional costs if they stay in a silver plan. In those states, consumers may find a better deal in a different metal-band of insurance, including higher-level gold plans. Many states, however, allowed insurers to spread the expected increase across all levels of plans.
4. Congress could act.
Bipartisan negotiations have been renewed between Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) to create legislation that would continue the cost-sharing subsidies and give states more flexibility to develop and sell less generous health care plans than those currently offered on the exchanges. Trump’s move to end the cost-sharing subsidies may bolster those discussions.
In a statement, Murray called Trump’s action to withdraw cost-sharing subsidies “reckless” but said she continues “to be optimistic about our negotiations and believe we can reach a deal quickly — and I urge Republican leaders in Congress to do the right thing for families this time by supporting our work.”
Trump on Friday urged Democrats to work with him to “make a deal” on health care. “Now, if the Democrats were smart, what they’d do is come and negotiate something where people could really get the kind of healthcare that they deserve, being citizens of our great country,” he said Friday afternoon.
Earlier Friday, Senate Minority Leader Chuck Schumer (D-N.Y.) did not sound as if he was in the mood to cut a deal.
“Republicans have been doing everything they can for the last ten months to inject instability into our health care system and to force collapse through sabotage,” he said in a statement. “Republicans in the House and Senate now own the health care system in this country from top to bottom, and their destructive actions, and the actions of the president, are going to fall on their backs. The American people see it, and they know full well which party is doing it.”
A poll released Friday by the Kaiser Family Foundation shows that 71 percent of the public said they preferred that the Trump administration try to make the law work rather than to hasten replacement by encouraging its failure. The poll was conducted before Trump made his announcement about the subsidies. (Kaiser Health News is an editorially independent program of the foundation.)
5. Some states are suing, but the outcome is hard to guess.
Even though all states regulate their own insurance markets, states have limited options for dealing with Trump’s latest move. Eighteen states and the District of Columbia, led by New York and California, are suing the Trump administration to defend the cost-sharing subsidies. But it is unclear whether a federal court could say that the Trump administration is obligated to continue making the payments while that case is pending.
Gun Carnage Is a Public Health Crisis
“We’ll be talking about gun laws as time goes by,” President Trump promised all too casually after the Las Vegas gunman took 58 lives in a rapid-fire slaughter. Time is indeed going by, and the silence is alarming as the Republican Congress and Mr. Trump, the devoted candidate of the National Rifle Association, duck their responsibility to confront the public health crisis of gun deaths.
There were so many hundreds of casualties in Las Vegas that many were treated by local Air Force surgeons who found themselves serving as specialists in triage — in a civilian fire zone. “These were definitely injuries you would see in a war zone,” one of the doctors told The Washington Post. Victims bled from single wounds through the chest and abdomen because the gunman shot from a high perch with military-style weapons adapted to shoot rapidly downward into the concert audience that was his chosen target.
This is the domestic war zone now bedeviling the nation as Washington looks the other way. Republican leaders are once again contriving to divert public attention to the challenges of mental illness, whereas the core issue is and has been the egregious availability of military-style weapons that the gun industry and the N.R.A. are lethally marketing to civilians. The talk of outlawing the “bump stock” device that heightened the Vegas gunman’s rapid fire is similarly diversionary, since the problem is the weapon, not the latest accessory.
Washington has also hobbled basic research into what is clearly a public health disaster. In 1996, the Centers for Disease Control and Prevention was barred from spending any funds “to advocate or promote gun control.” Full and accurate federal information has been choked off repeatedly since then. Research ordered by President Barack Obama following the Sandy Hook Elementary School massacre of 20 children in 2012 was never carried out. California, by contrast, has chosen a more enlightened path. Reacting to the 2015 gun killings in San Bernardino, the state in July created the Firearm Violence Research Center at the University at California at Davis to get beyond the hobbles the gun lobby and Congress have put on federal researchers.
If there is any bright spot it is that little more than a third of American households own a gun now, compared with 50 percent in earlier decades. Still, this has driven the industry to try to sell more guns to fewer Americans, from battlefield-type weapons to the concealed-carry pistols marketed as stylish vigilante accessories. According to a 2015 study by Harvard and Northeastern Universities, 3 percent of American adults own half the nation’s guns — averaging a startling 17 guns apiece.
The Las Vegas shooter was one of these hard-core arsenal owners. He stockpiled dozens of weapons, apparently with no one, and no law, to question the practice or his rationale. The government should be asking how he was able to do this, and how it could have been prevented. To the nation’s continuing sorrow, however, it’s clear little can be expected of the president and congressional leaders as time goes by and the next mass shooting draws nearer.
Apple explored buying a medical-clinic start-up as part of a bigger push into health care
- Apple’s health team was until recently deep in talks to buy Crossover Health, the venture-backed start-up that runs its on-site medical clinic.
- It’s not clear if Apple wanted to own and operate a network of health clinics, like its retail stores, or simply partner to sell products with a health-related angle, like the Apple Watch
Apple has considered an expansion into health care clinics, and had talks to buy a start-up called Crossover Health, which works with big employers to build and run on-site medical clinics, according to three sources familiar.
Crossover Health is one of a small number of companies that specialize in working with self-insured employers to provide medical and wellness services on or near to campus. Among its clients are Apple and Facebook.
Crossover also has clinics in New York and the Bay Area, and touts its digital features like same-day appointments via a mobile app.
The Apple-Crossover talks went on for months but didn’t materialize into a deal, one of the sources said. Apple also approached nationwide primary care group One Medical, said two other sources.
Crossover Health did not respond to a request for comment. Apple declined to comment.
The discussions about expanding into primary care have been happening inside Apple’s health team for more than a year, one of the people said. It is not yet clear whether Apple would build out its own network of primary care clinics, in a similar manner to its highly successful retail stores, or simply partner with existing players.
It’s also possible Apple will just decide not to make this move.
Some experts see a move into primary care as a way to build out its retail footprint. Apple’s worldwide network of more than 300 stores has been one of its most important sales channels.
Canaan’s Nina Kjellson, a prominent health tech investor who has no knowledge of Apple’s plans, believes the move is plausible. “It would help build credibility with Apple Watch and other health apps,” she explained.
“Apple has cracked a nut in terms of consumer delight, and in the health care setting a non-trivial proportion of satisfaction comes from the quality of interaction in the waiting room and physical space,” she continued.
Richard Milani, chief clinical transformation officer at Ochsner Health System in New Orleans, which was one of the first hospitals to use the Apple Watch as a patient health monitoring tool, agrees it might make sense.
“Such a move wouldn’t surprise me as Apple has demonstrated that its interest in health care isn’t superficial,” said Milani. “Primary care is in great need of re-imagining and rethinking.”
Apple has a lot of health-related projects going on
Apple is expected to make a big move into health care in the coming years. CEO Tim Cook has said recently that he sees health as a “business opportunity,” rather than a philanthropic endeavor.
“There’s much more in the health area,” he said in an interview with Fortune. “There’s a lot of stuff I can’t tell you about that we’re working on, some of which it’s clear there’s a commercial business there.”
In the U.S., the demand for primary care services is outstripping the supply of physicians. According to some estimates, there could be a shortage of up to 35,000 primary care doctors by 2025.
In recent years, Apple has hired dozens of doctors, health consultants and other medical experts, working on campus. As CNBC recently reported, it scooped up Stanford’s rising star in digital health Sumbul Desai for a senior leadership role.
Apple is working with the U.S. Food and Drug Administration on finding better ways to fast-track digital health software through the regulatory approval process. It is also partnered up with researchers at Stanford to determine whether the Apple Watch is accurate and sensitive enough to be used as a tool to screen for a heart rhythm disorder known as atrial fibrillation.
It has other research and development projects, including a teamworking on a sensor to non-invasively and continuously track blood sugar levels.
The company is also working to make the iPhone the central repository for patient health information. Already, it has developed software tools for health developers to make it easier to recruit patients for clinical studies (ResearchKit) and share health information with third-party developers with consent (HealthKit).
No rush to stabilize ACA markets
President Trump’s decision to cut off the Affordable Care Act’s cost-sharing reduction subsidies doesn’t seem to have added much new urgency to the push to stabilize states’ insurance markets — which would likely include a guarantee to keep the subsidy payments flowing.
- Bad sign: GOP Senate leadership didn’t talk about the CSR issue at all last night in their weekly meeting, at least while staff was in the room, a senior aide told Axios’ Caitlin Owens. To them, it’s still all about tax reform.
- “They’re focused on tax reform,” Alexander, who’s been spearheading the stabilization effort, said of GOP leaders. “What I’ve asked the Republican leadership to do is to give us a chance to see if we can develop consensus among Republicans as well as Democrats.”
- “The sooner the better,” Alexander said. “We want whatever agreement we have to benefit people in 2018 by holding down increasing premiums and to lower them in 2019.”
Yes, but: Affecting 2018 premiums will be a tough task — the window to begin signing up for 2018 coverage begins in two weeks.
- Pennsylvania regulators announced yesterday that they’ve approved new premium hikes, more than 20% higher than the increases that were already on the books, because of the loss of CSR subsidies.
- If Congress reaches a deal in time, one senior GOP aide told Caitlin, states and insurers could look to options such as rate re-filings and rebates to help consumers next year.
- But the Kaiser Family Foundation’s Larry Levitt said turbulence for 2018 will likely be minimal. Most insurers had already planned for the payments to end, and therefore don’t need to make any changes.
- The Trump administration appears to be allowing new increases by insurers that didn’t plan for CSR payments to disappear, Levitt said.
- “Terminating the CSR payments is producing a lot of confusion, but the market will operate reasonably fine and the effect on consumers will be modest,” Levitt said. “If this was intended to end Obamacare, it’s probably not going to work. The real question at this point is the longer term effect of the administration’s overall strategy to undermine the marketplaces.”
One more problem: Even if a deal is struck, and it could muster 60 votes in the Senate, there’s a very real question of how it passes. Voting on the bill by itself, without being part of a larger package, would be difficult for Republicans. Most legislation that needs to get passed before the end of the year is expected to be clumped into one big bill in early December.
Tough decisions loom for Dems on ObamaCare
Congressional Democrats have to decide how badly they want an ObamaCare deal.
Senate Republicans are open to renewing the insurer payments that President Trump canceled last week, but, in return, they want to expand a program that allows states to waive Affordable Care Act regulations.
That asking price could be hard for Democrats to swallow.
While Democrats want to protect ObamaCare, they fear that expanding the waivers would allow states to chip away at the bedrock protections of the law, including the rules on what an insurance plan must cover.
The politics of the health-care debate are also shifting.
While ObamaCare used to be a liability for Democrats, a Kaiser Family Foundation poll in August found that 60 percent of respondents think Republicans are responsible for problems in the Affordable Care Act going forward. Only 28 percent said the responsibility rests with Democrats.
Polls like that make some Republicans nervous about an ObamaCare backlash in the 2018 elections. And Democrats, hopeful of winning back the House and potentially even the Senate next year, are eager to hang ObamaCare’s problems around the GOP’s neck.
“Republicans in the House and Senate now own the health-care system in this country from top to bottom, and their destructive actions, and the actions of the president, are going to fall on their backs,” Senate Minority Leader Charles Schumer (D-N.Y.) said on Friday.
Negotiations over an ObamaCare bill have been going on for weeks, with Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) seeking an agreement to stabilize the markets and protect people’s coverage options.
Democrats say they are pushing for a deal, and Murray said Friday she was “optimistic” that one could be reached.
Trump’s decision to cancel the payments to insurers added fresh urgency to the talks. Health-care experts warn the loss of the payments — meant to offset the cost of insuring some lower-income people — could cause insurers to flee the system before open enrollment begins Nov. 1.
Several Republicans have said they are worried their constituents will be hurt by a collapse of the marketplaces, seemingly bolstering the talks.
But it’s far from clear that any ObamaCare deal reached by the Senate can become law.
Speaker Paul Ryan (R-Wis.) said last month that an Alexander-Murray deal is “not viable” for the House GOP.
And Trump on Monday sent mixed signals about whether he’d be willing to sign a bill reviving the ObamaCare payments.
The president declared that ObamaCare is “dead” and boasted that he had ended the “gravy train” of payments to insurers, causing their stock prices to drop.
“Hundreds of millions of dollars a month handed to the insurance companies for very little reason, believe me. I want the money to go to the people. … I want the money to go to people that need proper health care, not to insurance companies, which is where it’s going as of last week. I ended that,” he said.
Yet Trump also seemed to endorse the Alexander-Murray talks, stating that the two parties are “meeting right now and right now they’re working on something very special.”
“I do believe we’ll have a short-term fix because I think the Democrats will be blamed for the mess. This is an ObamaCare mess,” he said.
Sen. Lindsey Graham (R-S.C.), who golfed with Trump over the weekend, said on CBS on Sunday that Trump had spoken with Alexander and that Trump is open to a deal to continue the cost-sharing reduction payments if there is enough flexibility for the states.
“We are willing to work with Congress to reach a legislative solution,” a White House aide said. “We will not provide bailouts to insurance companies until we provide the American people with relief from the ObamaCare disaster.”
Schumer said on Monday in a written statement that he welcomes Trump’s support for a deal.
“I’m hopeful that we are nearing an agreement that makes clear that we have no intention of supporting the president’s efforts at sabotage,” he said. “If he’s now supportive of an agreement that stabilizes and improves the existing system under the Affordable Care Act, we certainly welcome that change of heart.”
The negotiations have been hung up on the question of how far to go in waiving ObamaCare’s regulations.
Republicans say it is not enough to speed up the process for a state to get a waiver; instead, the scope of the waivers must be broadened.
Alexander says he has agreed to fund two years of the ObamaCare payments, known as cost-sharing reductions, which is more than his original offer of one year. He says Democrats need to give up something in return.
Democrats argue that they have already made significant concessions, including agreeing to expand low-cost “copper” health insurance plans, streamlining the waiver process by letting states choose from a “menu” of options and allowing insurers to charge higher out-of-pocket costs for some services.
Asked Monday if he wanted more flexibility for states than Democrats are willing to give, Alexander replied, “I want as much as we can get.”
“I mean, I would like to repeal and replace ObamaCare, and Sen. Murray would like to keep it intact, but that’s not how you make a compromise,” he said.
Alexander said Trump has encouraged him to make a deal, as has Schumer.
“I find that very encouraging, that both the president and Sen. Schumer encouraged me to do something,” Alexander said.
Still, he declined to put any timetable on when an agreement could be reached.
States have already tried Trump’s health care order. It went badly.
Even after Republicans in Congress failed three times to rid themselves of the Affordable Care Act, President Trump has proved that there is no shortage of ideas for how to disrupt the health-care system.
Like many appealing ideas, this one, proposed by Sen. Rand Paul (R-Ky.), has hidden land mines that are already well-mapped out based on previous failed attempts to enact them, even in Paul’s home state of Kentucky.The president signed an executive order Thursday that will allow small employers to join associations of small business — such as farm bureaus or chambers of commerce — that provide health coverage to their members. If such associations self-insure, existing law might enable them to avoid both state insurance regulations and the core of the ACA. Thus, a simple turn of the regulatory dials could free up a large portion of the most heavily regulated parts of the health-insurance market.
A version of these self-insured association health plans first became widespread in the 1980s, but they failed in droves because many were undercapitalized. More troubling, these earlier association plans had a history of becoming what the Labor Department termed “scam artists” and the Government Accountability Office reported were “bogus entities [that] have exploited employers and individuals seeking affordable coverage.” More than two dozen states reported in 1992 that these early association plans had committed “fraud, embezzlement or other criminal law” violations.
We might avoid such a fate by requiring groups to register and meet adequate solvency and consumer-protection standards. But that doesn’t solve the more ominous aspect of association health plans: market destabilization.
Because less-regulated association health plans compete with fully regulated markets, actuaries and regulators have long warned that association plans create an uneven playing field that can disrupt markets. People who don’t need to cover preexisting conditions or don’t want to pay community rates gravitate to the better deals offered by associations, leaving sicker people in the regulated markets. Naturally, regulated insurance prices increase as a result, sometimes causing a death spiral that crashes the market.
We could avoid such market disruption by making association health plans abide by the same regulations that govern individuals and small groups, but the whole point of Trump’s executive order is to sidestep existing regulations. The only other option for avoiding market disruption is to keep association plans separate from the regular market by ensuring that people cannot simply choose between association plans and regulated insurance based solely on their health status.That’s just what happened in Kentucky in the 1990s when it reformed its individual market but exempted association plans from the reforms. Enrollment with associations shot up, and most insurers selling in the regulated market pulled out. Within two years, the state repealed its reforms. Association health plans were only one part of Kentucky’s failed market reforms, but they are still a major reason why the so-called Kentucky disaster now serves as a lesson for other states to avoid similar measures.
Employer groups avoid this kind of adverse selection because people can’t just pick an employer simply to get the health insurance they want. But many association health plans allow just that. You don’t need to be a farmer to join the Farm Bureau, and business associations can be open to any person that files a Schedule C tax form. Some groups have such skimpy fig leaves for membership qualification that they are criticized as “air breather” associations — that is, the only commonality among their members is their dependency on oxygen.
Federal and state law attempts to avoid this by exempting associations from insurance regulations only if they are “bona fide,” meaning that obtaining insurance is not the reason people join them. But as regulators will tell you, that criterion is not easy to enforce, which is why the hot potato of association “bona fides” is regularly tossed back and forth among states, insurers and the Labor Department .
Despite this troubled history, association health plans have an important place in, and alongside, regulated health-insurance markets. Still, their history counsels caution in freely expanding that role. These plans should succeed based on delivering superior value rather than serving as a vehicle to cherry-pick regulations they do and don’t want to follow. For that to happen, association health plans need a set of carefully considered rules based on lessons from the past, rather than naive belief in a quick fix.
Healthcare Triage: Is Medicaid Coverage Better or Worse than Private Insurance?
Healthcare Triage: Is Medicaid Coverage Better or Worse than Private Insurance?
As we have discussed repeatedly here on HCT, it’s better for patients to have Medicaid than to be uninsured, contrary to critics of the program. But is having Medicaid, as those critics also say, much worse than having private insurance?
This episode was adapted from a column Austin and I wrote for the Upshot. Links to further reading and sources can be found there.
Cartoon – Zero Pay Raise this Year
HENRY KOTULA 