The GOP is getting closer to passing its tax bill. Here’s what it could mean for health insurers

https://www.fiercehealthcare.com/payer/gop-tax-reform-bill-health-insurers-individual-mandate?mkt_tok=eyJpIjoiTTJFMk1XWm1aalV4WVRsayIsInQiOiJ2STJJYW85ZmhWc0tKakYzU2VlV05Ydk5NbVNpd1orNWt0anFYUW9GcDZkTDBMSmJlTGs0XC9tNDBIT3RmMDhzdmtFazBaTWpDYm9hMVplUjhSTElrSVgreHBJd3FLXC9YaHhzMXpPR2Y4MHVNRVJqcDVvMDVzOGdGQUNIMCtobDZtIn0%3D&mrkid=959610

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The House and Senate have agreed upon a unified tax overhaul bill, putting Republicans on the fast track to pass legislation that has significant implications for the health insurance industry.

For one, the compromise tax bill will repeal the Affordable Care Act’s individual mandate penalty, Senate Majority Leader Mitch McConnell said in a statement on Wednesday. To McConnell, axing the mandate will offer “relief to low- and middle-income Americans who have struggled under an unpopular and unworkable law.”

Health insurers and the healthcare industry at large have opposed removing the key ACA provision without a viable alternative to encourage healthy consumers to buy coverage, arguing that doing so will destabilize the individual markets. Indeed, the Congressional Budget Office has estimated that repealing the mandate would increase the number of uninsured people by 13 million over the next 10 years and hike individual market premiums by 10% during most years of that decade.

Yet while the individual mandate repeal is problematic for insurers that do business on the ACA exchanges, nearly all insurance companies stand to gain from the GOP tax bill overall, according to Leerink Partners analyst Ana Gupte, Ph.D. She estimates that insurers can capture about 10% to 15% of the potential 25% upside from the legislation, subject to regulatory constraints such as medical loss ratio rules and competitive pricing constraints.

Likely the biggest gain for insurers is the fact that, per the New York Times, the compromise bill sets the corporate tax rate at 21%—significantly lower than the current rate of 35%.

Though the House and Senate have ironed out the differences in their bills, the final version still must be approved by both chambers. GOP leaders have but two votes to spare in the Senate, and will likely have to include two bipartisan measures to shore up the ACA in Congress’ year-end spending bill to win the support of Sen. Susan Collins, R-Maine.

Collins said on Wednesday that Vice President Mike Pence assured her that those measures would make it into the spending bill, according to The Hill. Yet some House conservatives have expressed opposition to the bills, which would provide funding for cost-sharing reduction payments and state-based reinsurance programs, among other provisions.

Meanwhile, the results of the headline-grabbing Senate race in Alabama have put a major crimp in Republicans’ plans to retry repealing the ACA. Once Democrat Doug Jones officially takes his seat, the GOP will have an even slimmer majority in the Senate, where the defection of a handful of moderate Republicans was already enough to kill several repeal bills earlier this year.

 

Tax Bill Threatens Our Health and Our Democracy

http://www.chcf.org/articles/2017/12/tax-bill-threatens-our-democracy

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Earlier this month, the Senate passed legislation that would overhaul the tax code, make dramatic changes to federal health care policy, and undermine the budgets of Medicaid and Medicare, two pillars of the American health care system. The House and Senate are now trying to reconcile their two tax bills. Each passed the legislation on a party-line vote, with one Republican voting against the bill in the Senate.

Congress is now one step away from passing a tax bill that will have a profound effect on the health and well-being of Americans for a generation. No one should forget that, to get this close, the Senate rushed to approve a deeply unpopular proposal with little transparency and due diligence — and no bipartisanship. Left unchecked, these actions will harm millions of Americans — and American democracy itself.

Even though the legislation has been framed as a tax bill, it is very much a health care bill. The Senate bill would eliminate the Affordable Care Act’s individual health insurance mandate, which would lead to the destabilization of the individual health insurance market. The Congressional Budget Office (CBO) projects that this change alone would increase individual premiums by 10% a year and cause as many as 13 million Americans to join the ranks of the uninsured by the end of the next decade. In California, the uninsured population would grow by 1.7 million people. Congress may still pass separate legislation to restore some stability to the individual market, but the leading proposals are too modest to prevent much damage.

Seismic Impact

On its own, the language in the tax bills would trigger a major earthquake in the health care system, and the aftershocks of this tax bill would be just as dangerous. By eliminating more than $1 trillion of federal revenue, the administration and congressional leaders are manufacturing a budget crisis that would likely lead to automatic cuts to Medicare under federal rules. The CBO, which examined the House bill, has estimated that those cuts could be around $25 billion a year. Republican leaders have also indicated they intend to use the revenue shortfall that they are engineering with this tax bill to seek deep cuts in safety-net programs, starting with Medicaid.

This isn’t merely about what the legislation will do to health care, because it also would exacerbate inequality and worsen health disparities in this country. Under both the House and Senate bills, low- and middle-income families would pay more in taxes and have a harder time paying not just for health care, but also for food, housing, child care, education, and other basic needs. When people struggle so much to make ends meet, they suffer more from illness and die younger. And if inequality keeps getting worse, it will undermine the economic, social, and political stability upon which our nation depends.

The burden on Californians would be particularly heavy. Our families would no longer be able to deduct what they pay in state and local taxes on their federal tax returns. This change alone would take more than $112 billion a year out of the pockets of hardworking Californians — more than any other state. The fact that Californians would be paying more in federal taxes would inevitably put new pressure on our state and municipal governments to reduce their taxes. Under that scenario, it is not hard to imagine a new wave of painful state and local budget cuts.

The irony is that California actually has the power to stop this runaway train. If the entire California congressional delegation worked together to protect their constituents, and if they were united and strong, they could prevent many — if not all — of the worst provisions in the tax bills from becoming law.

This moment is a test of leadership. Nothing less than the health of our people — and our democracy — are at stake.

Actuaries warn of premium increases from repealing ObamaCare mandate

http://thehill.com/policy/healthcare/364514-actuaries-warn-of-premium-increases-from-repealing-obamacare-mandate

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A group of insurance experts is warning Congress against repealing ObamaCare’s individual mandate, saying the move would raise premiums and could cause insurers to drop out of the market.

The American Academy of Actuaries wrote to congressional leaders on Tuesday saying that “eliminating the individual mandate would lead to premium increases.”

The Republican tax-reform bill which is nearing completion in Congress would repeal the ObamaCare mandate that people have health insurance or pay a fine.

Republicans argue the measure included in the Senate-passed bill is tax relief by removing a penalty for low-income people who choose not to buy insurance.

The actuaries warn that repealing the mandate would harm the health insurance market by removing an incentive for healthy people to enroll and balance out the costs of the sick.

The insurance experts also say that a measure pushed by Sen. Susan Collins (R-Maine), intended to help offset the premium increases from repealing the mandate, would not be enough to make up the difference.

That bill, sponsored by Sens. Lamar Alexander (R-Tenn.) and Patty Murray(D-Wash.), would fund key ObamaCare payments known as cost-sharing reductions. The actuaries say the payments “would not offset premium increases due to an elimination of the mandate.”

The letter says additional measures — such as funding to bring down premiums known as “reinsurance,” which Collins has also proposed — could help, though. Some experts say more funding than is currently proposed would be needed.

The instability from repealing the mandate also could lead some insurers to drop out of markets altogether, the actuaries warn, potentially leaving some people with no insurance options.

“Insurers would likely reconsider their future participation in the market,” the actuaries write. “This could lead to severe market disruption and loss of coverage among individual market enrollees.”

 

 

Why Do People Hate Obamacare, Anyway?

Why Do People Hate Obamacare, Anyway?

The Affordable Care Act, aka “Obamacare,” has roiled America since the day it was signed into law in 2010. From the start, the public was almost evenly divided between those who supported it and those who opposed it.

They still are. The November monthly tracking poll from the Kaiser Family Foundation found that 50 percent of those polled had a favorable view of the health law, while 46 percent viewed it unfavorably. Partisan politics drives the split. Eighty percent of Democrats were supportive in November, while 81 percent of Republicans were strongly negative. (Kaiser Health News is an editorially independent program of the foundation.)

That helps explain why Republicans are working to repeal a key element of the health law in the tax bill Congress is negotiating. The requirement that most Americans have health insurance or pay a tax penalty — the so-called individual mandate — is by far the most unpopular provision of the law, particularly among Republicans.

Still, while partisanship is a major reason why some people hate the health law, it’s far from the only one. Here are four more: 

Ideology

Conservatives and libertarians strongly object to the federal government becoming ever more involved in the nation’s health care system. While the refrain that the ACA represented a “government takeover” of health care was a significant exaggeration, the law did insinuate the government significantly further in its funding and oversight of health care.

Adding to that was the unhappiness with the ACA’s individual mandate. Although the idea was originally suggested by Republicans in the late 1980s, the GOP had mostly backed away from it over the years (with the notable exception of Massachusetts Gov. Mitt Romney, who supported that state’s health overhaul in 2006).

But conservatives are not alone in opposing the ACA on ideological grounds. Many liberals don’t like the law, either. They think it does not go far enough toward a fully government-run system and gives too much power to private insurance companies. 

Lack Of Knowledge

A big part of why people don’t like the health law is that they don’t understand what it does or how it works. Some of that is because health care is complicated.

Even some of the main arguments made by the law’s supporters are not well understood. For example, the health law is responsible for some 20 million Americans gaining health insurance. Yet in 2016, when the uninsured rate hit an all-time low, only one-quarter of respondents to the Kaiser tracking poll knew that. A little under half thought the rate had remained unchanged, and 21 percent thought the rate had risen to an all-time high.

But some misperceptions follow intentional fabrications or exaggerations of the law’s impact. Many people came to believe (incorrectly) that the law would create “death panels” to decide the fate of seniors on Medicare, which became PolitiFact’s “Lie of the Year” in 2009. Other outlandish and untrue claims about the law included the idea that it would require people to be microchipped, that it would create a “private army” for President Barack Obama and that it would require hospitals to fire obese employees.

Even the derisive nickname “Obamacare” fed the confusion. In a now-famous skit by comedian Jimmy Kimmel, people on the street expressed a strong preference for the Affordable Care Act over Obamacare — unaware that they were the same thing. 

Confusing The Health Law With The Rest Of The Health System

Once the ACA became law, basically everything bad that happened in health care was attributed to it. This is the famous “you broke it, you bought it” problem — the law became the scapegoat for any number of problems in the health care system, regardless of whether they predated its enactment.

For example, rising prices for prescription drugs has been a problem for years. But the ACA did not seek to address that, except for one provision that sought to facilitate generic copies of some of the most expensive biologic medications.

Also, before the ACA, some insurers stopped offering plans in the individual market, while others raised premiums dramatically and often would not cover care at high-cost providers like teaching hospitals. 

Some People Actually Are Worse Off

The ACA did create some losers. Healthy people who managed to buy individual health insurance before the law’s passage have seen their premiums and out-of-pocket costs soar as insurers have raised prices to accommodate sicker people who had been largely shut out of coverage. Among those hardest hit are people who earn just slightly too much to qualify for federal premium subsidies, particularly early retirees and people in their 50s and early 60s who are self-employed.

Many of those people would have been helped if Democrats had been able to pass some of their original ideas for the ACA, including a “public option” plan run by the government, or a “Medicare buy-in” that would have given people age 55 and older the option of purchasing Medicare coverage before the normal eligibility age of 65. Both were rejected by more conservative Democrats in the Senate.

Some people found themselves in a “coverage gap” after the Supreme Court in 2012 ruled that the ACA requirement for states to expand Medicaid had to be optional. That meant people with incomes under the poverty line but still too high to qualify for Medicaid in their states have no affordable program available.

Others were forced to give up coverage that they liked, even if it did not offer many benefits, or were angry because their doctors and hospitals were no longer in their insurers’ networks. Obama’s promise that “if you like your health plan you can keep it” was PolitiFact’s “Lie of the Year” for 2013.

However, even some of those consumers have seen benefits from the law, although they might not realize it, like required rebates from insurers who charge too much for administrative costs.

But it is human nature for people who feel wronged to complain loudly, while people who are satisfied merely go on with their lives. In the end, that is why it seems so many more people hate Obamacare than actually do.

 

Consumer-directed health plans enrollment up but costs are not coming down, RAND finds

http://www.healthcarefinancenews.com/news/consumer-directed-health-plans-enrollment-costs-are-not-coming-down-rand-finds?mkt_id=1526895&mkt_tok=eyJpIjoiWm1NeVpXWmtNall4WTJWbCIsInQiOiJDV1RRSkR0bFhQOGpsaDlib0hldGUrdEVoK0ttS2Q1VXBQQldYaFhFeXRaYW4xRE9ZXC9rU1gxd0QwdlFtbCtPYWR5d3QwK0hHTlEwb0NKSnkrd2pcL0J1NCtOTklqc2hyZ1ArWDZRY2E5RjBoXC80NG8xaVhzT1kyV3Z1N0tIUnRCeCJ9

 

Even though high-deductible insurance options could save patients thousands of dollars every year, most people are not shopping around.

An increasingly popular form of health insurance touted for its money-saving potential has not reduced spending on unnecessary medical services, a new study shows.

Researchers from the USC Schaeffer Center for Health Policy and Economics and the RAND Corp. found that consumer-directed, high-deductible health plans have little or no effect on curbing spending on 26 services that medical professional and industry groups have deemed “low value.”

The researchers compared patient spending on unnecessary medical services, such as an MRI for lower back pain or imaging for an uncomplicated headache, before and after they switched from a traditional insurance plan to a consumer-directed health plan — a form of high-deductible insurance.

The study, published in The American Journal of Managed Care, is the latest of several to indicate that high-deductible plans are falling short of their promises of significant savings.
Recent work by researchers at USC Schaeffer Center, the USC Price School of Public Policy and the USC School of Pharmacy have found that most consumers on high-deductible plans are not comparing prices to find the best deals on services or on prescription drugs, even though the research indicates that some patients could potentially save hundreds or thousands of dollars per year.

Unnecessary services add up to an estimated $750 billion in wasteful healthcare spending each year, according to the National Academy of Sciences. Examples of the unnecessary services in the list of 26 that the researchers tracked were T3 testing for hypothyroidism, a spinal injection for low-back pain and stress testing for stable coronary artery disease.

Patients on consumer-directed health plans share more costs for their care than patients on traditional plans as they pay a higher deductible. With the high-deductible plan, a patient can open a pre-taxed healthcare savings account and use it to pay for out-of-pocket medical services. This type of plan is often pitched as way to give consumers more skin in the game, presuming they will shop and compare prices for services or skip unnecessary care and therefore spend less.

Enrollment in these plans has risen dramatically in the last decade, with a nearly seven-fold increase. Only about 4 percent of Americans with employer-sponsored insurance were on a consumer-directed health plan in 2005, compared to about 30 percent today. The vast majority of individuals who obtained insurance under the Affordable Care Act are on consumer-directed health plans.

Patients are reducing their spending overall, but not for low-value services in particular — and medical providers also often lack incentives to curb spending on these services, which are frequently ineffective.

The study focused on 26 common, low-value services from various sources, including the Choosing Wisely campaign, national guidelines, peer-reviewed literature and professional consensus. Launched in 2012 by the American Board of Internal Medicine Foundation to raise awareness about unnecessary services, the Choosing Wisely campaign has compiled recommendations from more than 70 medical professional and specialty societies identifying common and wasteful medical tests, treatments and procedures whose use should be questioned or avoided.

While spending on unnecessary services did not significantly change after a patient switched plans, the high-deductible plan did result in an average, annual $231 decrease on outpatient spending.

Actuaries: Alexander-Murray won’t offset mandate repeal

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The American Academy of Actuaries is throwing some cold water on Republicans’ claims that they’ll offset the damage from repealing the ACA’s individual mandate by restoring funding for the law’s cost-sharing subsidies.

  • “While making cost-sharing reduction reimbursements to insurers … would offset premium increases due to the prior termination of those payments, it would not offset premium increases due to an elimination of the mandate,” the actuaries wrote in a letter yesterday.
  • This should not come as a surprise. This is hardly the first time nonpartisan experts have said the move to restore cost-sharing payments — a bill sponsored by Sens. Lamar Alexander and Patty Murray — would not make up for the effects of repealing the mandate. They are separate things.

The big question: Does Collins believe this analysis, and does she care? Collins has made two ACA-related demands — a vote on Alexander-Murray, and a vote to establish a new reinsurance fund — in return for her vote to repeal the individual mandate.

  • Plenty of experts have said Alexander-Murray wouldn’t do much.
  • Reinsurance would.
  • But it’s not clear either proposal can pass the House. If one of them can, it’s probably Alexander-Murray.
  • That leaves a distinct possibility that insurance markets will not actually see the stabilizing effects Collins is bargaining for.

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ObamaCare fight could threaten shutdown deal

http://thehill.com/policy/healthcare/364046-obamacare-fight-could-threaten-shutdown-deal

ObamaCare fight could threaten shutdown deal

A fight over ObamaCare is spilling into Congress’s December agenda, threatening lawmakers’ ability to keep the government open.

President Trump signed stopgap legislation Friday aimed at averting a shutdown and keeping the government funded through Dec. 22. The bill allows lawmakers to focus on the next — and seemingly more difficult — negotiating period.

Lawmakers on both sides of the aisle have a host of priorities they want to include in the bill, but the question of funding ObamaCare’s cost-sharing reduction (CSR) payments appears to have divided Republicans.

Senate Republicans want to include the cost-sharing payments in the spending package, but House conservatives have little interest in funding subsidies they see as bailing out a law they despise.

Senate Republican leaders view the payments as a necessary bargaining chip.

In order to pass their tax-reform bill and get a much-needed legislative victory, Senate Majority Leader Mitch McConnell (R-Ky.) made a deal with Sen. Susan Collins (R-Maine), a key swing vote.

In exchange for Collins’s vote for the tax bill, McConnell gave an “ironclad commitment” to pass a pair of bipartisan bills.

One bill, sponsored by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), would temporarily fund the cost-sharing payments. Another would provide “reinsurance” — money to pay for the costs of sick enrollees and bring down premiums.

Together, the bills would shore up ObamaCare’s insurance markets, which experts predict could be gutted by a provision of the tax bill that repeals the mandate to buy health insurance.

But the commitment to Collins came from McConnell, who can’t force the House to take up legislation. Speaker Paul Ryan (R-Wis.) hasn’t given any indication that he would support passing the ObamaCare bills, though he also hasn’t ruled it out.

“I wasn’t part of those conversations,” Ryan told reporters Thursday when was asked about McConnell’s promise to Collins. “I’m not deeply familiar with those conversations.”

Earlier in the week, Ryan reiterated his commitment to repealing ObamaCare, but didn’t tip his hand on the spending bill.

“We think health care is deteriorating. We think premiums are going up through the roof, insurers are pulling out and that’s not a status quo we can live with,” Ryan said.

House conservatives have also said they have little energy for passing a government funding bill that contains any ObamaCare provisions.

“None of us voted in favor of ObamaCare, so supporting it, sustaining it’s not exactly a high objective,” said Rep. Tom Cole (R-Okla.), a leadership ally.

Rep. Mark Walker (R-N.C.), chairman of the conservative Republican Study Committee, said that he had been assured by House leaders that ObamaCare payments would not be attached to the next funding bill.

“The three things that we’ve been told are not going to happen as part of our agreement: no CSRs, no DACA, no debt limit,” Walker said, referring to the Deferred Action for Childhood Arrivals (DACA) program, which offered protections for immigrants brought into the country illegally as children. Trump ended the program with a six-month delay in September.

When asked about any assurances made to Walker, Ryan’s office declined to comment on member discussions.

Separately, Walker said any effort to add ObamaCare provisions to the spending bill would cost Republicans more votes from the GOP than they would gain with Democratic lawmakers.

If the Senate includes ObamaCare payments in the funding package, it could force a showdown with House Republicans, who would be under pressure to pass the Senate’s bill or risk a shutdown.

For now, Democrats are trying to maximize their leverage and are content to let Republicans fight among themselves.

Republicans need at least eight Democrats to break a filibuster in the Senate for any spending bill, and often rely on Democrats to make up for GOP defections in the House.

Alexander, who has long pushed for his bill to be included in a year-end spending bill, dismissed the idea that Republican senators need to pressure their House colleagues.

“The president’s for it, Sen. McConnell’s for it, most Republicans in the House have voted for both two years of cost sharing” and reinsurance in the past, Alexander said. “I feel pretty good about it.”