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Early negotiations over the shape and scope of the Senate’s bill to replace the ACA have divided conservative and moderate Republicans. One critical issue: the fate of the Medicaid program.
When stripped of emotion and hyperbole, the debate about repealing and replacing the Affordable Care Act (ACA) is fundamentally about how to stretch limited funds to offer health care to two populations in need: the poor, who receive health care through Medicaid, and the “near-poor,” who were frequently without coverage prior to the ACA’s enactment. While millions of the near-poor remain uninsured today, six out of 10 limited-income individuals who purchased health care through the ACA’s health insurance Marketplaces were uninsured prior to the ACA. It is this near-poor and recently insured population, and how to cost-effectively provide health care for them, that is the focus of this post.
Many insurers have ably managed their sicker- and poorer-than-expected Marketplace membership by borrowing from the playbook of the most similar market, Medicaid. In short, we believe that the “Medicaidization” of the Marketplaces is a necessary and positive trend, and we remind policy makers that regardless of legislation or regulatory change, health plans must employ the Medicaidization playbook to well-serve a population that both parties believe needs coverage.
Health insurance Marketplaces—the centerpiece of the ACA—provide health insurance in government-refereed individual and small-group markets. However, health plans offering coverage through Marketplaces have been confronted with challenges. Enrollment is roughly 12 million, far behind original Congressional Budget Office projections of 21 million by 2016. This is largely because fewer employers than expected dropped employee coverage after the law passed and because many younger and healthier people have chosen to remain uninsured or covered by their parents’ insurance. As a whole, Marketplace enrollees are sicker and more costly than expected, and more than 80 percent receive means-tested subsidies to buy down some of their insurance costs. Furthermore, lawsuits and congressional actions have hobbled the ACA’s risk mitigation programs and threaten its subsidies. As a result, several health plans left the Marketplaces in 2017 in many states, and at least one—Humana—will exit entirely in 2018.
While the struggles of the ACA-reformed markets and the insurers that operate within those markets are well-documented, there have also been some success stories. Medicaid-focused health plans, as well as commercial plans that adopted tactics common in the Medicaid market, have performed at near break-even or better while serving the near-poor population in the Marketplaces. The relative success of Medicaid-focused plans in the Marketplaces contrasts with the struggles of national for-profit insurers and has led to the Medicaidization of the Marketplaces.
The term “Medicaidization” is not new to this post. It has been used by others, sometimes with a negative connotation. So it is helpful to define the term more precisely. Medicaidization, as used here, describes a set of practices—from sensitivity to sociocultural issues to utilization management—that have evolved to serve the Medicaid population. Because of socioeconomic disadvantage and poor health, this population responds to its health care needs very differently than other populations. However, the term “Medicaidization” belies the fact that health plans beyond those that focus on Medicaid are capable of deploying these same practices—such as several Blues and provider-owned plans—as described below.
A rival group of Republican senators is seeking leverage to influence the direction of the Senate’s ObamaCare replacement bill.
The group, led by Sens. Susan Collins (R-Maine) and Bill Cassidy (R-La.), has been meeting “a couple times a week,” according to Sen. Shelly Moore Capitol (R-W.Va.).
Cassidy is a physician and Collins is a former state insurance commissioner. Both have been outspoken opponents of the House-passed American Healthcare Act, and have co-sponsored their own version of an ObamaCare repeal bill called the Patient Freedom Act.
Cassidy told The Hill he and Collins have been meeting with Senate leaders to talk about their legislation. However, he noted the politics of the Senate mean that every member’s voice matters.
“When you only have 52 senators, everybody has significant leverage. That tight vote margin means everyone is essential,” Cassidy said.
The main GOP working group on healthcare includes 13 men backed by Senate leadership who are seeking to bridge the divide between conservatives and centrists.
What ever legislation emerges from that group is likely to be the bill that comes to the Senate floor.
But if all of the Senate’s Democrats oppose the measure, Senate Majority Leader Mitch McConnell (R-Ky.) will only be able to afford two defections.
That gives the other group leverage.
“Let’s look at it practically,” Capito told The Hill. “You can only lose two votes on any one issue … so I think a bloc of four or five can be very effective.”
Health lobbyists have noted many members of the leadership-led group have been fairly measured in their criticisms of the House bill approved earlier this month.
Collins and Cassidy, in contrast, both seem keen on turning sharply from the House bill.
Uncertainty among insurers about how the Trump administration will handle the Affordable Care Act could translate into double-digit premium increases for 2018.
Insurers are beginning to file rate requests with state insurance regulators, and some states could see premium increases of 50 percent or more.
Insurers are worried about how President Trump’s plans for -ObamaCare — particularly whether the requirement for individuals to buy insurance will remain and whether insurer subsidies for covering low-income enrollees will continue.
“It’s a significant factor in pricing this year,” said Cynthia Cox, a health insurance expert with the Kaiser Family Foundation.
“I think it’s fair to say these rates are higher than we would have expected to see in the absence of uncertainty.”
Insurers also blamed rate increases on an unbalanced risk pool — which means there are too many sick, expensive patients and not enough healthy ones — higher claims for medical care and drugs, and the reinstatement of an -ObamaCare tax on health insurers.
Maryland’s largest health insurer, CareFirst BlueCross BlueShield, is proposing an average rate increase of more than 50 percent.
In a statement, CareFirst said the “lack of clarity” about whether the individual mandate would be enforced played a “significant role” in its proposed rate increases.
“Failure to enforce the Individual Mandate makes it far more likely that healthier, younger individuals will drop coverage and drive up the cost for everyone else,” CareFirst said in a statement.
The company is also requesting premium increases of 35 percent in Virginia and 29 percent in Washington, D.C.
Another Maryland insurer, Evergreen Health, is requesting rate increases of 27 percent, blaming uncertainty about -the ObamaCare insurer payments and the enforcement of the individual mandate as the “primary driver.”
In Connecticut, Anthem is requesting an average premium increase of 34 percent for plans on the -ObamaCare exchanges. The state’s other exchange insurer, CTCare, is requesting a 15 percent increase.
Rate requests must be reviewed and approved by state regulators and can often change.
Connecticut and Maryland both have earlier filing deadlines than most other states, which align more closely with the federal deadline of June.
Still, these states have been a good indicator of how insurers in other states will set their premiums, Cox said.
Because -ObamaCare subsidies are designed to increase as premiums go up, the people most affected by rate hikes would be those with higher incomes getting insurance through the exchanges and people getting insurance in the individual market.
It is difficult for insurers to price plans when they don’t know what will happen to -ObamaCare next year.
The House managed to narrowly pass its ObamaCare repeal bill by finding a delicate balance between hard-line conservatives and moderates. Now the Senate is looking to achieve the same feat, only with a smaller margin for error.
Senate moderates have already put their markers down on the healthcare issues that concern them the most. Individual senators hold much more power in advancing the health bill than individual House members, and if Senate Republicans can’t find a balance among their caucus, the ObamaCare repeal effort could be doomed.
The Senate will only need 51 votes to pass the bill, but because of their slim majority, Republicans can only afford to lose two votes.
The centrist senators have several major concerns with the House bill, known as the American Health Care Act (AHCA), most notably its changes to Medicaid.
The Affordable Care Act allows states to expand Medicaid coverage to more people, funded mostly by the federal government. So far, 31 states and D.C. have done so.
Even as the healthcare bill was working its way through the House, moderate GOP senators hailing from states that took the Medicaid expansion objected to the proposed cuts to the program.
In early March, Republican Sens. Rob Portman (Ohio), Shelly Moore Capito (W.Va.) Cory Gardner (Colo.) and Lisa Murkowski (R-Alaska) sent a letter to Majority Leader Mitch McConnell (R-Ky.) objecting to the Medicaid cuts in the House bill. “We will not support a plan that does not include stability for Medicaid expansion populations or flexibility for states,” the lawmakers wrote.
The legislation has changed since then, but the Medicaid provisions have been largely left alone. The House bill would undo ObamaCare’s Medicaid expansion by 2020, and would cut over $800 billion from the program.
After the House passed the legislation last week, Portman, Capito and Sen. Dean Heller (R-Nev.) were quick to say they still opposed the bill because of the Medicaid provisions.
Capito on Monday said she would like to see some form of Medicaid expansion remain permanent.
“I have seen a lot benefits to the Medicaid expansion in our state, particularly in the mental health and opioid and drug abuse areas,” Capito told reporters. As for the people who have gained coverage through expansion, Capito said “you can’t just drop them off and wish them good luck. “
Moderates have also objected to the fact that the most recent estimates of an earlier version of the House bill would have resulted in 24 million fewer people having insurance coverage over a decade.
Sen. Bill Cassidy (R-La.) has crafted, along with Collins, a different ObamaCare replacement bill that would allow states to decide whether they want to keep ObamaCare or enact something different.
Cassidy has repeatedly objected to the House version of the legislation because he says it doesn’t fulfill President Trump’s promises to “lower premiums, maintain coverage and protect those with pre-existing conditions.” During a May 8 speech at the American Hospital Association, Cassidy said that while the AHCA may lower premiums, it does so by giving people “terrible coverage.”
Aside from coverage issues, abortion is also likely to cause some headaches in the Senate.
The primary group in the Senate working on the bill includes prominent conservatives like Ted Cruz (R-Texas) and Mike Lee (R-Utah), who are likely to insist that the Senate keep a provision from the House that largely strips Planned Parenthood of funding. But Collins has said any Planned Parenthood language is a non-starter.
Moderates are also likely to insist on making sure language is removed from the House bill that would prohibit the bill’s tax credits from being used to purchase coverage on insurance plans that cover abortion. That could be a major problem for conservatives, especially if the revised bill is to have any chance at passing the House again.
Senate Majority Whip John Cornyn (R-Texas) on Monday acknowledged the balancing act leaders will need to pull off. “Now it’s a question of building consensus within the Republican conference. All 52 Republican senators are going to be part of the process … because we’re going to need everybody.”
Cornyn also said he wasn’t concerned about losing votes if the Planned Parenthood language remained in the bill.
Billionaire investor Warren Buffett fielded questions at the annual shareholders meeting for his company Berkshire Hathaway. He offered thoughts and insights on everything from Republicans voting to repeal Obamacare, to the Wells Fargo scandal, to how artificial intelligence and technology might reshape America. Here are some highlights:
Repealing Obamacare is “a huge tax cut for guys like me”
When asked about the bill Republicans in Congress just voted to pass to repeal and replace Obamacare, Buffett signaled his distaste for a tax cut provision. Obamacare pays for health care for Americans in part by taxing wealthier people. The Republican bill scraps that tax on the wealthy.
And Buffett has apparently done the math here. If the Republican bill had been law last year, he said, “my federal taxes would have gone down 17 percent last year, so it’s a huge tax cut for guys like me.”
“That is in the law that was passed a couple days ago,” he added. “Anybody with $250,000 a year of adjusted gross income and a lot of investment income is going to have a huge tax cut.”
In the past, Buffett has bristled at tax policy that he sees as favoring the wealthy — famously saying it’s not fair that he pays taxes at a lower rate than his secretary.
The medical cost “tapeworm”
Buffett said at the meeting that health care costs have become a bigger issue for American businesses than taxes.
He said if you go back to about 1960, corporate taxes were about 4 percent of GDP and now they’re about 2 percent of GDP. At that time, healthcare was 5 percent of GDP and now it’s 17 percent of GDP. “So when American business talks about taxes strangling our competitiveness,” he said, “they’re talking about something that as a percentage of GDP has gone down from 4 to 2.” Meanwhile, medical costs have exploded. “So medical costs are the tapeworm of American economic competitiveness,” he said.
He argued against the tax system crippling competitiveness “or anything of the sort.” He also noted that other developed countries appear to have found better ways to contain medical costs.
http://fortune.com/2017/05/04/ahca-pre-existing-conditions/
The Republican plan to repeal and replace the the Affordable Care Act (ACA), which narrowly passed a vote in the House today, rolls back protections for people with pre-existing conditions, which could increase health care costs for an estimated 130 million Americans.
The American Health Care Act stipulates that states can allow insurers to charge people with pre-existing conditions more for health insurance (which is banned under the ACA) if the states meet certain conditions, such as setting up high-risk insurance pools. Insurers still cannot deny people coverage outright, as was a common practice before the ACA’s passage, but they can hike up premiums to an unaffordable amount, effectively pricing people out of the market.
In fact, premiums could reach as high as $25,700 per year for people in high-risk pools, according to a report from AARP. People who receive insurance through their employer would not be affected, unless they lost their job or moved to the individual insurance market for some other reason.
But what counts as a pre-existing condition? While it depends on the insurer—they have the right to choose what counts as “pre-existing”—these ailments and conditions were universally used to deny people coverage, according to the Kaiser Family Foundation, a nonprofit focusing on health care research.
But Cynthia Cox, Kaiser’s associate director, notes that the above list is a conservative sampling of all of the issues and maladies that insurers could count as pre-existing conditions. ” There are plenty of other conditions, even acne or high blood pressure, that could have gotten people denied from some insurers but accepted and charged a higher premium by other insurers” says Cox.
Here are some examples of those other conditions that experts have noted could hike premiums:
The left-leaning Center for American Progress notes that high blood pressure, behavioral health disorders, high cholesterol, asthma and chronic lung disease, and osteoarthritis and other joint disorders are the most common types of pre-existing conditions.
Just how expensive are pre-existing conditions? A recent report from the Center for American Progress found that insurers could charge people with metastatic cancer as much as $142,650 more for their coverage, a 3,500% increase.
A Squeaker In The House Becomes Headache For The Senate: 5 Things To Watch
After weeks of will-they-or-won’t-they tensions, the House managed to pass its GOP replacement for the Affordable Care Act on Thursday by a razor-thin margin. The vote was 217-213.
Democrats who lost the battle are still convinced they may win the political war. As the Republicans reached a majority for the bill, Democrats on the House floor began chanting, “Na, na, na, na … Hey, hey, hey … Goodbye.” They claim Republicans could lose their seats for supporting a bill that could cause so much disruption in voters’ health care.
Now the bill — and the multitude of questions surrounding it — moves across the Capitol to the Senate. And the job doesn’t get any easier. With only a two-vote Republican majority and no likely Democratic support, it would take only three GOP “no” votes to sink the bill.
Democrats have made clear they will unanimously oppose the bill. “Trumpcare” is just a breathtakingly irresponsible piece of legislation that would endanger the health of tens of millions of Americans and break the bank for millions more,” said Senate Minority Leader Chuck Schumer (D-N.Y.).
And Republicans in the Senate have their own internal disagreements, too.
Here are five of the biggest flashpoints that could make trouble for the bill in the upper chamber.
Molly Reynolds, fellow in Governance Studies, considers what’s next for the AHCA in the Senate following the House narrowly passing the bill.
I have a pre-existing condition. I do things “the right way”.
When I was a medical student, I started to notice blood in the toilet. I was a medical student, so I panicked. I called my father, who at the time was still a practicing surgeon, and he told me it was likely hemorrhoids. Given the alternatives, I breathed a sigh of relief.
The blood didn’t go away, though. Soon, I started to have diarrhea, cramps, and the urge to go to the bathroom all the time. That summer, I worked at Children’s Hospital of Philadelphia on a research project, and I had to go to the bathroom so many times, I thought they were going to fire me. It got so bad, my Dad (who is a minimalist), finally sent me to the gastroenterologist. The short version of the story is they determined I had ulcerative colitis.
I’ve written about this before, so I’m not going to get into the details of the disease. The only reason I bring any of this up is so you understand that I was diagnosed when I was 22 years old and a full-time student.
None of it was my fault.
Today, I eat a well-balanced diet. My weight is good. I exercise 5 times or so a week. I don’t smoke or do drugs. I don’t drink more than socially. I do everything I’m supposed to do. I still have ulcerative colitis, and I will until I die, likely. I’m doing the things I need to do to keep my body healthy. I lead a good life.
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I try very hard to see the good in others. When I write, when I debate others, I do my best to assume that the intentions of those with whom I disagree are righteous. Even when we see the world differently, I make every effort not to think that others are “bad” or want to see people suffer. I’m not one who writes that people who want to reform the insurance system want “to kill people”. I don’t think that people who want to reform welfare “hate the poor”. I’m not perfect, so sometimes I screw up. When I do, I apologize.
Yesterday, a Congressman went on TV and said (emphasis mine):
“My understanding is that it will allow insurance companies to require people who have higher health care costs to contribute more to the insurance pool. That helps offset all these costs, thereby reducing the cost to those people who lead good lives, they’re healthy, they’ve done the things to keep their bodies healthy. And right now those are the people—who’ve done things the right way—that are seeing their costs skyrocketing.”
I cannot adequately describe how much this enraged me. This is one of those things that you hear people say “the other side believes”, but discount. I don’t want to believe that people think this. I don’t want to believe that people think that some others deserve to be sick. I don’t want to believe that people equate being ill with a moral failing.
I didn’t do anything to get ulcerative colitis. I did nothing wrong. I lead a good life. I didn’t fail.
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My brother, amazingly enough, has Crohn’s disease; the Carroll GI protoplasm ain’t the best. When I was a resident, and he was a law student, we would talk often about how we would both have to work for very large companies or organizations in order to get health care. It was a fact of life. We both knew that on the individual market, no insurance company would touch us. Ever. Because of our pre-existing conditions, we’d be screwed for the rest of our lives.
He didn’t do anything wrong either, by the way. He was diagnosed in high school, and he was a really good boy, too.
I could start quoting statistics here, but what’s the point? A huge number of Americans have pre-existing conditions. They couldn’t get insurance on the individual market before the ACA because it was in insurance companies’ best interest not to issue them policies. It made good business sense. That didn’t mean it was right.
There is certainly a case to be made that people have some responsibility for their health. But the lines aren’t clear at all. It’s easy to point at smokers and say they’re doing something harmful and are raising costs for all of us. That’s why we can charge smokers more under the ACA. After that… it gets dicey.
Do you start regulating what people eat? What they drink? If you eat dessert, and I don’t, why should I have to pay for your healthcare? Should we charge people more if they drive cars (number one killer of children!)? I like to ski. That has risks. So does rock climbing. Or playing contact sports. Should we make them stop, or charge them more? What about people who scuba dive?
Should we start penalizing people who have different organs in their body than we do?
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I expect that this Congressman will soon be issuing a statement saying he was “taken out of context”. Something along the lines of “he misspoke”. But maybe not. Maybe he does believe what he said, that people who did things the right way are the ones who are healthy. If that’s the case, then I have just one question for him.
What did the baby born prematurely, the one with congenital heart disease, or the toddler with sickle cell disease, or the child with autism, or the little girl with leukemia, or the boy with asthma, or the adolescent with juvenile arthritis, or the young woman with lupus, or the young man with testicular cancer, or the new mother with breast cancer, or the new father with inflammatory bowel disease, or the woman with familial heart disease, or the man with early onset Parkinson’s disease, or the retiring woman with Alzheimer’s disease, or the elderly man with lymphoma – what did they do wrong?
Did they lead bad lives?
I guess I had two questions. Take your time answering. I’ll wait.
HENRY KOTULA 