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The Republicans’ Jekyll-and-Hyde Health Care Plan
The Senate Republicans’ health bill that was made public today is a Jekyll-and-Hyde plan: in some ways kinder than the House Republican plan, and in some ways meaner, to use President Donald Trump’s yardstick. Overall the plan will benefit the wealthy and young adults, but hurt larger numbers of people who are old or poor.
On Medicaid, the federal-state health program covering 69 million lower-income people, the Senate plan is harsher than the House plan. Like the House bill, the Senate bill would effectively kill the expansion of Medicaid that was allowed under the Affordable Care Act. It will do this by phasing out, over four years, the law’s requirement that the federal government cover 90 percent of the cost for people added under Medicaid expansion — many of them single adults below or just above the poverty line. Medicaid expansion covers 14 million people in 30 states and the District of Columbia. (The remaining states chose not to expand their programs.) Expansion states would have to come up with hundreds of millions, in some states billions, of dollars from their own budgets to replace those lost federal funds. Based on my experience as a state human services commissioner — for a Republican governor — I predict that few if any states will be able to do that. It is also highly unlikely that other states will join the expansion once the federal match is gone.
Both the Senate and the House plans also impose a per capita cap on future federal Medicaid spending. The Senate plan imposes a harsher formula for its cap than the House plan, which already cuts Medicaid spending by $834 billion over 10 years. Because states have to balance their budgets every year, unlike the federal government, many will struggle to compensate for reductions in federal aid caused by a spending cap. Many states will be forced to choose between Medicaid and other priorities, like education, law enforcement and prisons. The inevitable result will be a reduction in health care spending on low-income people. And you cannot cut over $800 billion from Medicaid without adversely affecting health services for the poor.
Governors might be expected to loudly protest these Medicaid cuts, but the Senate bill delays the harshest cuts until 2025, after the current governors are gone. We will see how those governors balance their states’ health care futures and their own political interests.
That’s Mr. Hyde. Now for Dr. Jekyll. The part of the Senate bill that deals with the individual insurance market and the A.C.A. marketplaces is in some respects Obamacare-lite. The House bill was sharply criticized for replacing Obamacare’s system of tax credits and subsidies, intended to make insurance more affordable, with a system of tax credits that were far less generous. The Senate bill would maintain Obamacare’s tax credit system, but it would scale back the value of the credits. And as under the A.C.A. but not the House plan, the tax credits will be adjusted for income and geography — which will benefit people in parts of the country with high premiums, especially rural areas. Still, deductibles are likely to rise under the Senate plan.
Another key difference involves community rating, which prohibits insurance companies from charging sick people more than healthy people. The House bill would authorize states to apply for waivers allowing insurers to charge sick people more. The Senate bill would not allow such waivers. But it would make it easier for states to seek exemptions from other provisions of the law, including the essential benefits insurers must cover, such as maternity care and mental health. How this would play out nationally would vary greatly from state to state, but it seems certain that some states would allow significant reductions in essential benefits.
Each of the plans would eliminate funding for Planned Parenthood for one year, as well as prevent plans participating in the insurance marketplaces from providing abortions.
Conservatives may like the idea of capping and cutting Medicaid, but they will not like the Senate bill’s Obamacare-lite tax credits. Liberals and moderates will resist what they consider the near decimation of the Medicaid program. Nor will they like the idea of handing so much control over Medicaid to the states. They will see little logic in reducing eligibility for the A.C.A.’s tax credits. How, they will rightly ask, would that “fix Obamacare” when middle-class consumers who buy their own insurance are struggling to pay their bills now?
Overall, it’s important not to focus too much on the differences between the Senate and House plans. Both plans will reduce federal health care spending and cap Medicaid while shifting greater responsibility to the states. And both plans will cause more Americans to go without coverage and struggle with health care bills. Both bills are likely to increase the number of Americans having problems paying medical bills — about a quarter of the public today. For voters, that is the single most important barometer of the performance of the health care system.
If the plan passes and is signed into law, congressional Republicans and the president will win plaudits from their base for repealing Obamacare. But then they will own the problems in the health care system, including those created by their own legislation.
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A Brief Analysis of Health Insurance Competition and Commercial Market Share
Health plan market share is an important measure of competitive positioning for insurers. Health insurance carriers often assess the number of people enrolled in their health plans at the state level or at a more defined geographic area to determine their market position. Companies not only look at their own market position but also routinely analyze competitor membership to evaluate relative market share. In this brief, Mark Farrah Associates (MFA) presents an overview of market demographics and market share data, with a focus on health plan market position in three Metropolitan Statistical Areas in Pennsylvania.
Market Demographics
Health insurance competition can be assessed by using many performance variables with health plan enrollment and market share metrics being the most common. Enrollment can be divided into two core segments, commercial health insurance and government-sponsored programs. The largest segment within the commercial market is employer-based plans, also known as the group segment. The group segment includes fully-insured/risk-based policies or self-funded/ASO (administrative services only) arrangements with employers. Individual or non-group plans, including Marketplace products, are also part of the commercial segment. Government programs, Medicare and Medicaid, provide coverage for the elderly or people with disabilities and low income populations.
As of December 31, 2016, insurance companies provided medical coverage for approximately 264 million people, based on enrollment as reported in Mark Farrah Associates’ Health Coverage Portal™. The employer-based ASO and risk-based segments remained the largest sources of coverage in the industry, collectively enrolling 196 million people in the commercial segment. Medicaid and SCHIP programs enrolled nearly 75 million people and within this segment, approximately 51 million are covered by managed care plans. Approximately 57 million seniors were enrolled in Medicare programs at year-end 2016. This included more than 38.7 million people with original Medicare and 18.7 million members enrolled in Medicare Advantage plans.
Competition and Market Share
To analyze health insurance competition, analysts often start with state-by-state assessments of competitor enrollment and market share. Data from statutory filings can provide valuable insights about state health insurance competition. Based on data filed in statutory financial reports from the NAIC (National Association of Insurance Commissioners) and the CA DMHC (California Department of Managed Health Care), Mark Farrah Associates’ Health Coverage Portal™ is a tool widely used by health plans for easy access to market share data and financial performance metrics.
For the purposes of this brief, MFA first looked at the competitive mix in Pennsylvania’s commercial market by analyzing state enrollment figures from the Health Coverage Portal™. The chart below illustrates the leading companies in Pennsylvania’s commercial health insurance market. Three Blue Cross Blue Shield affiliates and Aetna comprise the largest percentage of market share for the state.
Winners and losers from the Senate repeal bill
http://www.politico.com/story/2017/06/22/gop-health-care-bill-winners-losers-239869
The wealthy, young and healthy come out ahead in the GOP’s newly revealed plan, while addiction treatment programs and Planned Parenthood are slated to lose funding.
The Senate’s Obamacare repeal bill, which touches all parts of the health care system and beyond, creates new sets of winners and losers. Here are a few:
THE WINNERS
The young and healthy: The plan focuses on lowering premiums by allowing states to cut some of Obamacare’s major insurance rules that help protect sicker patients but also drive up the cost of coverage. For instance, states could cut mandated coverage of emergency care and substance abuse treatment. Younger and healthier people with fewer health care needs would be able to buy skimpier health insurance.
GOP governors who fought Obamacare: Republican governors who sought less federal oversight and more state control over their insurance markets will get tremendous leeway under waivers in the Senate bill. The Senate plan would roll back requirements about what insurers must cover and expedite state applications seeking more flexibility. For instance, governors would no longer need permission from their legislatures to obtain waivers.
Some health industry groups: Medical device makers, health insurers and tanning establishments, among others, would see the eventual elimination of ACA taxes on their products or services — although some of those taxes may be kept temporarily to pay for parts of the plan. Major provider groups, however, including the American Hospital Association, have come out forcefully against the Senate bill, while many other industry groups were still reviewing the plan Thursday afternoon.
THE LOSERS
Poorer, older insurance consumers: The Senate plan, like the House bill, would allow insurers to charge their older customers up to five times as much as younger customers for the same health plan. That’s an expansion of the so-called age band in Obamacare, which allows insurers to charge older customers no more than three times as much as younger ones. In two years, the Senate plan would also eliminate a key subsidy program that helps cover out-of-pocket medical bills for low-income consumers.
People struggling with addiction: The bill rolls back the federal government’s generous funding for Medicaid expansion, which has been a major source of substance abuse treatment amid the opioid epidemic. The Senate draft earmarks $2 billion for opioid treatment in 2018 — compared to the House’s provision of $15 billion over 10 years for mental health, substance abuse and maternity care. The Senate bill does loosen some restrictions on Medicaid funding of long-term treatment for people with substance abuse and mental health issues.
Planned Parenthood and its clients: The women’s health organization, a frequent GOP target for defunding, would be cut out of the Medicaid program for one year. However, this provision could be problematic for moderate Republican Sens. Susan Collins of Maine and Lisa Murkowski of Alaska, and Republicans can’t afford to lose more than two votes.
Public health agencies: The draft kills the ACA’s $1 billion Prevention and Public Health Fund in 2018, one year earlier than the House-approved health bill. The fund makes up roughly 12 percent of the Centers for Disease Control and Prevention’s budget and has been used to address public health threats, including the Zika virus outbreak, as well as for preventive health services and immunization programs.
The Senate Puts Medicaid on the Chopping Block
https://www.theatlantic.com/politics/archive/2017/06/ahca-senate-draft-medicaid-changes/531231/
A draft version of the AHCA released Thursday shows even deeper cuts to the program than the House version.
After weeks of secret gestation in back rooms, the Senate released a discussion draft of the chamber’s version of the American Health Care Act. Like the version passed through the House to cheers in May, it is likely to make health care less affordable for low-income, sick, and near-elderly people; it makes Obamacare tax credits for exchange coverage less generous; it restricts and slashes Medicaid funding deeply over the next decade; and it attempts to smooth euphemistically-named “market disruptions” from all those reforms by injecting billions into state funds and reinsurance.
There are some substantial changes in the specifics, though. For starters, the Senate bill would tweak the House bill’s tax subsidy for private insurance purchased on the exchanges. The final version of the House bill provided a tax credit to people making up to 400 percent of the federal poverty line that would be less generous than the existing ACA credits. It would also reduce the amount of expenses covered as recipients get older and have more expenses.
The Senate’s version would cut the eligibility for premium tax credits to those earning up to 350 percent of the poverty line. It would be slightly more generous for poor and near-poor people, although credit percentages would taper off more sharply as recipients grow older, and they would be severely restricted for people as their income approaches that 350 percent threshold. Unlike the House plan, however, the Senate plan would fund Obamacare exchange cost-sharing subsidies through 2019, which would soften some of the immediate impacts of a less generous tax credit.
The House’s bill would allow private insurers to charge people more as they grow older, and permit plans in certain states to cover fewer services. It also would have made exchange coverage more expensive and less comprehensive on average for low-income, sick, and older people. It would likely reduce coverage for pregnant women and people with mental-health issues as well. The last Congressional Budget Office score found that many of the 23 million fewer people who would be covered were drawn from those groups, as well as many of those who would keep coverage but suffer dramatic increases in premiums.
The Senate bill would alleviate some of these issues with slightly more generous credits for the poor, but would keep those central disruptions intact, and would leave more middle-class people without affordable coverage. It also allows even less generous plans to stand as benchmarks for exchange and employer coverage, which could likewise contribute to disruptions and deductible increases.
In recognition of the disruptions to the state-level exchanges through which individuals purchase coverage, the House bill set up a “Patient and State Stability Fund,” which would inject over $100 billion into state high-risk pools and reinsurance funds. The Senate largely replicates this approach with slightly less funding, although it does add an additional $2 billion fund for fighting the opioid crisis in 2018.
The House’s plan also restructured the open-ended funding of Medicaid to a per-capita cap scheme, where states receive a capped amount of funding each year per enrollee, and could choose to receive the funding up front in block grants. That Medicaid restructuring increased yearly funding by the medical Consumer Price Index plus 1 percent, a measure designed to keep per-capita caps roughly in line with inflation in the industry, but one that would also underfund Medicaid over time, leading to a growing gap between the number of patients who would be eligible under current guidelines, and the funds available to pay for their care.
Several independent analyses have concluded that this funding structure would lead to large-scale shortfalls in every state, which would need to be closed by reducing enrollment or benefits, and cutting capacity to respond to disasters and public-health crises. Those affected most would be poor children, people with mental-health issues, and disabled people.
After President Trump reportedly called the House draft “mean” earlier this month, many observers expected the Senate to produce a more moderate plan. Instead, the Senate plan actually deepens long-term Medicaid cuts. The bill keeps the same basic inflationary index of the House bill until 2025. But after that, instead of using the more generous medical inflationary index (since costs in the health-care sector increase faster than broader measures of inflation), the Senate plan uses the general Consumer Price Index for all urban consumers (CPI-U), which will dramatically slow the rate at which funding for the program increases.
A recent report from the Urban Institute shows some of the long-term effects of this switch in inflationary indexes. While it assumes an existing Medicaid expansion and compares an immediate difference in indexing, instead of the 2025 phase-in, the paper illustrates how Medicaid funding will be flattened in the future under the CPI-U. States will have to plan for much less generous Medicaid funding down the road, and most signs point to even more cuts in benefits and eligibility for some of the most vulnerable populations than under the House plan.
That restriction on Medicaid might seem like bad politics, and it remains to be seen if moderate Republicans will warm to the bill, or if public pressure will change some minds. But among the Republican base especially, Medicaid remains deeply unpopular, and is frequently maligned. Even as strengthening the private-insurance subsidies became a key issue for Senate Republicans, Medicaid remained a target, and reducing its generosity has long been a rather uncontroversial piece of the party’s goals.
The full impact of all these changes in the Senate draft won’t be known until it receives a score from the CBO. But what appears clear is that along with broad cuts in Obamacare taxes that mostly benefit middle-class and upper-income people, the Senate plan—perhaps even more so than the House plan—is a massive constriction of the safety net. It will have a substantial impact on both wealth and health, shifting the benefits of public policy away from the poor and the sick, and toward the healthy and the affluent. For Republicans who have long despised the redistributive effects of Medicaid, that is precisely the point.
Promises Made To Protect Preexisting Conditions Prove Hollow
Built into the Senate ACA replacement bill are loopholes for states to bypass those protections and erode coverage for preexisting conditions. That could lead to perverse situations in which insurers are required to cover chronically ill people but not the diseases they suffer from.
Senate Republicans praised the Affordable Care Act replacement bill they presented Thursday as preserving coverage for people with cancer, mental illness and other chronic illness. But the legislation may do no such thing, according to health law experts who have read it closely.
Built into the bill are loopholes for states to bypass those protections and erode coverage for preexisting conditions. That could lead to perverse situations in which insurers are required to cover chronically ill people but not the diseases they suffer from.
Depending on what states do, plans sold to individuals might exclude coverage for prescription drugs, mental health, addiction and other expensive benefits, lawyers said. Maternity coverage might also be dropped.
Somebody with cancer might be able to buy insurance but find it doesn’t cover expensive chemotherapy. A plan might pay for opioids to control pain but not recovery if a patient became addicted. People planning families might find it hard to get childbirth coverage.
“The protection your insurance provides could depend a lot on where you live,” said Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. In some states, “over time, [patients with chronic illness] might find it increasingly difficult to find insurance companies that will offer plans that cover their needs.”
The Senate provisions aren’t expected to affect job-based health plans or Medicare for seniors. It would mainly affect the kind of insurance sold to individuals through the Affordable Care Act’s online exchanges, which cover about 10 million people.
