|The politics and substantive rules of the road for the Affordable Care Act are more stable now than they have been in years. But chaos is never far away.
What to watch: The upcoming ACA enrollment season, which starts Nov. 1, will be the first one with the Trump administration’s agenda fully in place, and it will test just how effective that agenda is.
This period of relative certainty could come undone in court.
The bottom line: We’re either adjusting to the new normal, or in the calm before the storm. A federal judge in Texas and a six-week enrollment period will tell us which. — Sam Baker
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The data on second-lowest-cost silver plans for next year come two weeks after HHS Secretary Alex Azar praised President Trump for halting premium hikes, despite critics’ contentions to the contrary.
Celebrating the news as “especially gratifying,” Centers for Medicare & Medicaid Services Administrator Seema Verma released data Thursday morning showing that premiums for health plans on the federally facilitated exchange will drop next year for the first time since the Affordable Care Act took effect.
After years of double-digit increases, the average premium for second-lowest-cost silver plans will drop 1.5%, from $412 in 2018 to $406 in 2019, according to preliminary CMS data on the 39 states that use the federal ACA exchange. The final data are slated for release next month.
During a call with reporters, Verma said the ACA is still a broken piece of legislation that Congress should replace. Even so, President Donald Trump and his administration deserve credit for bringing these premiums down despite the less-than-ideal circumstances, she said, rejecting claims from critics who have argued Trump’s team has been sabotaging the ACA since Inauguration Day.
“Despite predictions that our actions would increase rates and destabilize the markets, the opposite has happened,” Verma said in a statement. “The drop in benchmark plan premiums for plan year 2019 and the increased choices for Americans seeking insurance on the exchanges is proof positive that our actions are working.”
“While we are encouraged by this progress, we aren’t satisfied,” she added. “Even with this reduction, average rates are still too high. If we are going to truly offer affordable, high quality healthcare, ultimately the law needs to change.”
The release of 2019 premium data comes two weeks after Health and Human Services Secretary Alex Azar said benchmark ACA premiums would drop 2% next year. Azar heaped praise on Trump for the good news, but critics noted that rates are flattening out for 2019 after a significant jump for 2018 in response to the Trump administration’s healthcare policymaking.
The 1.5% decrease follows last year’s 36.9% increase, which was significantly higher than the 25.4% increase heading into 2017, according to the CMS data released Thursday.
Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation, said last month that insurers on the exchange “overshot” their premium increases last year, which explains both their high profit margins at present and the average decrease for next year. That being said, although the Trump administration has taken steps to undermine the ACA, some of the administration’s actions have promoted stability, Levitt added Thursday.
Beyond premiums, though, Verma noted also that fewer insurers are dropping out of the exchanges, and some are returning. Most counties on the federal exchange, 56%, had only one issuer this year, but that figure will drop to 39% next year. There were 10 states with only one insurer this year, but that number will drop to four in 2019.
With less than a month before the midterm elections, endangered Republican lawmakers are mounting a defense against attacks they’re trying to dismantle a core element of the health-care law they fought to eliminate.
Democratic candidates on the campaign trail now regularly accuse Republicans of wanting to take away health-care protections for people with preexisting conditions. They’ve pointed to a lawsuit brought by 20 attorneys general in Republican-led states aiming to overturn the Affordable Care Act as proof the GOP wants to let such protections go down with the health-care law. That’s after Republicans whiffed in their effort to repeal and replace the ACA last summer.
Vulnerable Republican contenders are responding to the slams by airing campaign ads saying they embrace this portion of the ACA. They’re also introducing a wave of bills in Congress they say would protect those with prior illnesses from losing access to affordable health care. But experts question the efficacy of those measures, saying they seem more designed as protection against Democratic attacks than significant policy solutions, as I helped report in a story with Colby Itkowitz this week.
In August, 10 Senate Republicans, including Sen. Dean Heller of Nevada, one of the most vulnerable GOP senators facing reelection in November, sponsored a bill to guarantee protections for patients with preexisting conditions regardless of whether the ACA is struck down in court.
The bill, spearheaded by Sen. Thom Tillis (R-N.C.), would guarantee that insurers sold plans to individuals regardless of whether they have preexisting conditions. But critics and health-policy experts contend the bill leaves a loophole that would exclude coverage for certain services associated with those conditions. For example, a person with cancer wouldn’t be denied coverage, but the insurer wouldn’t be required to cover that patient’s cancer treatments.
Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation, explained the Justice Department’s argument in the Texas lawsuit that certain provisions of the ACA should be thrown out, including a “preexisting condition exclusion prohibition.”
Levitt said that such exclusions were common before Obamacare. While Tillis’s bill would restore some parts of the ACA if the Texas lawsuit is successful, it wouldn’t change rules that prohibit insurers from excluding coverage for those with prior illnesses.
“The thing about insurance regulation is it’s kind of like plumbing: A small leak becomes a big leak,” Levitt said. “Insurers would take advantage of that loophole.”
Tillis spokesman Daniel Keylin pushed back on those criticisms and said they are based on an assumed outcome of the Texas lawsuit.
Keylin said there have been “misleading and inaccurate claims made about this bill, claims that assume the courts will strike down the entirety of the Affordable Care Act in Texas versus United States.”
Keylin said the Tillis bill wasn’t meant to be “comprehensive health-care legislation,” or the “totality of Congress’s answer to the Affordable Care Act falling.”
“There is obviously no ironclad way to precisely predict how the court will rule. However, this legislation is an important preemptive step toward getting feedback, hashing out ideas, and underscoring the importance of protecting Americans with preexisting conditions,” Keylin said
He said Tillis would consider “modifications or amendments” to the measure if the court ruling goes beyond what the bill addresses.
On the House side, Rep. Steve Knight (R-Calif.), locked in a tight race in California’s 25th district, introduced a bill last month similar to Tillis’s proposal. Two other vulnerable Republican congressmen also introduced nonbinding resolutions affirming their support for protecting those with preexisting conditions, though neither contains substantive policy solutions.
Iowa Republican Rep. David Young’s resolution says regardless of what happens to the ACA, Congress should retain protections for preexisting condition. Texas Republican Rep. Pete Sessions’s resolution says states should be allowed the authority to restructure their individual health-care marketplaces, but should ensure people with preexisting conditions can access affordable coverage.
“It seems not to be politically acceptable anymore to be against protecting people with preexisting conditions,” Levitt said, pointing to all the Republican proposals. “If you look at an example, like Sen. Tillis’s bill, it shows how wide a gap there can be between a state of desire to protect people and the reality of what an actual piece of legislation does.”
For their parts, spokespeople for Young and Sessions said the congressmen’s views on protecting patients with certain conditions are not new. In a statement, Knight said he has “always advocated” for such coverage.
“He’s always been supportive of protecting preexisting conditions going back to the [American Health Care Act]. This is just another step,” Young spokesman Cole Staudt said. “This is not a new position for him.”
Sessions, Young and Knight voted to repeal the ACA, though Young co-sponsored an amendment to the Republican bill that would have buffered the impact of the repeal on people with preexisting conditions. Staudt added that Young would consider introducing legislation in the future depending on the outcome of the Texas lawsuit.
Yet Joel Ario, managing director of Manatt Health and former director of the Health and Human Service’s Office of Health Insurance Exchanges, said any proposal that “deviates from what was originally in the ACA as a single risk pool concept is going to disadvantage people with preexisting conditions.”
He pointed to Republicans’ record opposing individual pieces of Obamacare, pointing to the elimination of the individual mandate in the GOP tax overhaul: “Anybody who voted for the mandate repeal voted against people with preexisting conditions,” he said.
Ario called GOP messaging ahead of the midterms a response to public polling that shows how important preexisting condition coverage is to voters.
“Republicans are trying to play into public support for protecting preexisting conditions,” he said, adding they’re “ignoring the fact that their previous action disadvantaged people with preexisting conditions.”
The most enduring legacy of the Affordable Care Act may be emerging now in midterm races across the country, and our health care system may never be the same.
For the first time in our history, Americans are agreeing that even if you are sick you should be able to find private health insurance coverage you can afford. Not only do 81 percent of voters now think it should be illegal for insurance companies to deny coverage to people with pre-existing conditions, but both political parties have embraced this central tenet of Obamacare.
Responding to Democratic attacks and polling data, Republicans are backpedaling from opposition to the Affordable Care Act’s guarantees that the more than 50 million Americans with pre-existing conditions should be able to find coverage. Writing last month in the Wall Street Journal, Republican strategist Karl Rove urged candidates to embrace the pre-existing condition guarantee, but to find new conservative strategies for securing it.
This development is historic. Before the passage of the Affordable Care Act, Americans broadly embraced a national obligation to insure the elderly, the poor, and the disabled. We’ve now added the sick to this list. If the past is prelude, there will be no retreating from this commitment. Once acknowledged, commitments like Medicare and Medicaid are virtually impossible to claw back.
As policymakers look to respond to this newfound promise to the sick, they will be confronted with the harsh reality of private health insurance markets: The only way insurers can offer affordable coverage to the sick is if they have a substantial number of healthy enrollees.
Many of the ACA’s most controversial provisions are aimed at providing private insurers a steady supply of good risks. This includes the much-vilified individual mandate, as well as restrictions on the sale of skimpier, cheaper policies, such as short-term health plans, that appeal to healthy purchasers and siphon them away from the risk pools that cover less-healthy consumers. The ACA also provided temporary reinsurance that protected private plans against unpredictable, catastrophic losses likely to occur when they cover very sick clients. That provision, however, has expired.
The challenge facing policymakers going forward will be how to execute this new guarantee that the sick have access to private insurance. A wide variety of options spanning the political spectrum exist, but virtually all require some form of government involvement.
The left proposes that, if private companies don’t step up, the federal government should fill in by allowing consumers with pre-existing conditions (or even those without them) to buy into Medicare or Medicaid. As Medicare and Medicaid are among our nation’s most cost-effective insurers, this could be a way of expanding coverage while keeping costs in check.
Another alternative would be to build on the Affordable Care Act’s current provisions that require insurers to cover pre-existing conditions, prevent insurers from charging more for those conditions, and provide strong financial incentives for healthy individuals to purchase private marketplace plans. Despite the repeal of the individual mandate and other attempts to undermine the ACA, private insurance markets created by the ACA have shown considerable resilience, with premiums actually declining this year for the first time since the ACA was enacted.
Republicans have released legislation that would amend the Health Insurance Portability and Accountability Act to require insurance companies to sell plans to people with pre-existing conditions and not charge them more because they have been, or are, sick. Insurers, however, would be able to deny coverage for specific illnesses. In other words, insurers would have to sell coverage plans to people with pre-existing conditions, say diabetes, but would not have to cover their diabetes. Insurance companies could also increase premiums based on age, gender, or occupation.
Another Republican approach, discussed during the “repeal and replace” debate, would make available subsidized plans, such as the ACA, but increase premiums over time if individuals failed to purchase them at the outset. In theory, healthy individuals would jump into the pool to avoid paying a penalty at a later date. This is an approach used under Medicare Part B, a voluntary program that covers outpatient services, that has been fairly effective and politically acceptable.
These and other routes toward coverage for sick Americans will be fiercely debated in the coming years. As we do so, we shouldn’t lose track of the profound change in attitude and expectations around health insurance for the sick that will animate this debate.
Elected officials should expect to be held accountable this November, and for many Novembers to come.
- Hospitals across the U.S. are being battered by financial headwinds, and rural hospitals are vulnerable because they don’t have capital or diversified services to fall back on when the going gets rough. Between 2013 and 2017, 64 rural hospitals closed due to financial distress and changing healthcare dynamics, more than twice the number in the previous five years, a new Government Accountability Office analysis shows.
- Rural hospital closures disproportionately occurred in the South, among for-profit hospitals and among organizations with a Medicare-dependent hospital payment designation.
- One potential lifeline was Medicaid expansion. According to GAO, just 17% of rural hospital closures occurred in states that had expanded Medicaid as of April 2018.
Declining inpatient admissions and reimbursement cuts have taken a toll on rural hospitals. Since 2010, 86 rural hospitals have closed, and 44% of those remaining are operating at a loss — up from 40% in 2017.
CMS Administrator Seema Verma released a rural health strategy in May aimed at improving access and quality of care in rural communities. Among its objectives are expanding telemedicine, empowering patients in rural areas to take responsibility for their health and leveraging partnerships to advance rural health goals.
The agency also expanded its Rural Community Hospital Demonstration from 17 to 30 hospitals. The program reimburses hospitals for the actual cost of inpatient services rather than standard Medicare rate, which could be as little as 80% of actual cost.
Such initiatives can be helpful, but if a hospital can’t make ends meet on its Medicare and Medicaid businesses and has only a modicum of privately insured patients, “that’s just not a balance that works financially,” Diane Calmus, government affairs and policy manager at the National Rural Health Association, told Healthcare Dive recently.
In all, 49 rural hospitals closed in the South, or 77% of rural hospital closures from 2013 through 2017, according to GAO. Texas had the most closures with 14, followed by Tennessee with eight and Georgia and Mississippi, each with five. By contrast, there were eight rural hospital closures in the Midwest and four each in the West and Northeast.
GAO also looked at closures by Medicare rural hospital payment designation. Critical access hospitals made up 36% of rural hospital closures, 30% were hospitals receiving Medicare standard inpatient payment, 25% had Medicare-dependent hospital designation and 9% were sole community hospitals.
To aid rural hospitals and ensure access for patients, NRHA has urged CMS to adopt a common sense approach to the “exclusive use” standard and lobbied lawmakers to pass legislation eliminating the 96-hour condition of payment requirement, two policies that are particularly hard on rural providers.
Another bill, the Save Rural Hospitals Act, would reverse reimbursement cuts to rural hospitals, provide other regulatory relief and establish the community outpatient hospital, a new provider type offering 24/7 emergency services plus outpatient and primary care.
It’s 2018 and health insurance remains a major conundrum for America’s leaders, one hot political potato. Our current health system is worth $3.2 trillion to our economy — the most “valuable” in the world — but nearly 44 million people are without health insurance and our life expectancy falls behind thirty-six other nations.
The question remains: How can that be? And is healthcare really “a right” of all Americans?
Many other countries have successfully adopted single-payer systems, which means that no one is without coverage. Sen. Bernie Sanders (I-VT) is busy answering questions about his Medicare for All (M4A) platform, joined frequently by supporter and fellow democratic socialist and New York Congressional candidate Alexandria Ocasio-Cortez (D-NY).
“Health care must be recognized as a right, not a privilege,” he writes on his platform’s web page. “Every man, woman, and child in our country should be able to access the health care they need regardless of their income. The only long-term solution to America’s health care crisis is a single-payer national health care program.”
Summing it all up that way sounds very appealing, but making such a change would entail a seismic shift.
How Do We Really Feel?
A new Reuters/Ipsos survey shares that most of us, 70 percent, are in favor of the single-payer system: 85 percent of Democrats and 52 percent of Republicans. Perhaps even more surprising is that a mere 20 percent of us actually dislike the concept.
Under this plan, we’d all be lumped into one communal pot, run by the government, and we’d no longer have to fret over those confounding deductibles and premiums. We’d experience improved benefits, he promises, such as dental, vision and hearing.
Major tax increases would fund the plan that includes the following:
- A 6.2 percent income-based health care premium paid by employers.
- A 2.2 percent income-based premium paid by households.
- Progressive income tax rates.
- Taxing capital gains and dividends the same as income from work.
- Limiting tax deductions for rich.
- Savings from health tax expenditures.
The government’s costs would increase to nearly $33 trillion during its first 10 years (2022 to 2031) says a “working paper”reportfrom Charles Blahous at the Mercatus Center at George Mason University. That number assumes enactment this year.
Emory University health policy professor Kenneth Thorpe, who has also studied M4A, says annual costs to the federal government will average between $2.5 trillion to $3 trillion.
The idea of anything “for all” has enormous appeal, but wait just a minute, says The Atlantic. This whole idea of single-payer, “an indulgent fantasy,” evolved because Republicans sought to kill the Affordable Care Act (ACA), or Obamacare, but the party couldn’t unite around a coherent alternative. What then?
Democrats want to sweep away the complexity of our current health policy status quo, says the author Reihan Salam, who’s not all that optimistic. “All health reformers in America must confront the hospital sector.” The Blahous report says Medicare for All would slice hospital and physician payments by up to 40 percent which would significantly impact physicians and hospitals’ willingness and ability to care for Medicare patients (Medicare currently only covers 92% of costs).
Which “M” Word?
The word “Medicare” may, in fact, be misused when applied to a single-payer program, because, says Politico, Medicare isn’t single payer at all, but a “bewilderingly complex” system, “a massive public-private hybrid coverage scheme, funded mostly by taxes.“
Further, Medicare’s audience is specific: seniors who receive benefits when working-age people’s pay is taxed. We’re talking about greatly expanding the beneficiary pool here: “Paying for everyone’s health care that way would be a radically different proposition, and far more expensive.“
What we’re really talking about is Medicaid for All, suggests the National Review, which reminds us that “the devil really is in the details.” Medicaid is not free and is funded significantly by the Federal Government inversely related to each State’s per capita income and doctors dislike Medicaid with its low reimbursements, and consumers complain about long lines and treatment delays.
Sanders’ plan would say bye-bye to all private health insurance and would mean all abortions are free and that illegal aliens will get free health care courtesy of the taxpayer; things that many Americans will not tolerate.
Comparing Apples to Apples
Looking at the much bigger picture, proponents on the “yea” side of M4A say that its benefits far outweigh the risks. First and foremost, the entire population would have the opportunity to be healthier, since having access to health care improves health.
Currently, under the ACA, employers with 50 or more full-time employees must provide health insurance to all of them. For mega-corporations, that expenditure isn’t a huge ask, but smaller companies may find it a stretch. If the government funds health insurance, that then lightens the load for all companies that may find they can increase employee pay as a result — if they choose to do so, of course.
One point that seems to go “either way”: health care spending per capita. The United States spends nearly twice as much as other wealthy countries, topping out at $10,348 per person, according to 2016 numbers from Peterson-Kaiser. Compare that to the United Kingdom at
$4,192 and Japan at $4,519.
Given our expenditures, this is one tough pill to swallow: According to the latest report from The Commonwealth Fund, even though we spend more, “the U.S. population has poorer health than other countries” and is “failing to deliver indicated services reliably to all who could benefit.“
On the “nay” side of things, opponents cite those major tax hikes and longer waiting times to see a doctor, possibly extending into weeks and months. Add to that the elimination of innovations in the private sector that lead to breakthrough discoveries, all as a result of competition being removed from the medical technology playing field. Finally, funding all of this would require “shifting” funds from other priorities already deemed “urgent,” such as the nation’s infrastructure, those crumbling roads, and bridges now made more urgent due to the disastrous effects of climate change.
There’s no indication that this problem will be quickly solved, only that discussions will continue, while any momentum to effect positive change remains questionable. Americans would like to take the healthcare insurance coverage bull by the horns, but unfortunately, understand it’s just not within their power to do so. Until then, it’s a waiting game and may be for some time.
Several states will hold the first referendum on Obamacare since Congressional Republicans tried and failed to repeal it.
- Four states are voting on Medicaid expansion in November — Idaho, Montana, Nebraska and Utah.
- Medicaid expansion is a central tenet of President Barack Obama’s Affordable Care Act. It makes people living up to 138 percent of the federal poverty line eligible for Medicaid, the government-run health insurance program for the poor.
- Only one state, Maine, has approved Medicaid expansion through the ballot box.
- It is the first time voters will directly weigh in on provisions of the ACA since Congressional Republicans tried to repeal it.
It started with Maine. After years of failed attempts to get Gov. Paul LePage to sign off on Medicaid expansion, residents took to the ballot box and made it the first state where voters passed the health care policy.
It hasn’t been smooth sailing. Maine’s Republican governor has taken every opportunity to block the expansion — even asking the federal government to reject the state’s Medicaid expansion application that the courts made him send.
But the passage alone galvanized health care advocates who wish to see Medicaid expansion in the 14 states that have declined federal money to offer health insurance to the people who fall in a “coverage gap,” where they make too much money to qualify for Medicaid but can’t afford private insurance.
In November, four states are voting on the issue — Idaho, Montana, Nebraska and Utah. The ballot measures will test support for a central tenet of President Barack Obama’s Affordable Care Act (ACA) in red states, which make up the bulk of the 14 holdouts. It will be the first referendum on provisions of the ACA since Congressional Republicans tried and failed to repeal it last year.
Supporters of Medicaid expansion see it as a vital part of the social safety net, especially because qualifying for Medicaid in nonexpansion states can be tough. Opponents, however, see expansion as fiscally irresponsible since states will start picking up 10 percent of the costs in 2020.
While the price tag of Medicaid expansion can come with some sticker shock, independent analyses have found that states often save money by insuring people — there are fewer instances of uncompensated care, and people are healthier when they have insurance. According to a 2016 report from the Robert Wood Johnson Foundation, 11 states experienced some savings from Medicaid expansion.
In Idaho and Nebraska, there has been no major movement on Medicaid expansion from either the executive or legislative branches for years. Because of Idaho’s historic opposition to Medicaid expansion, and the fact that the ballot measure doesn’t mention how it would be funded, advocates could experience a bit of déjà vu there.
While the federal government initially pays 100 percent of the costs of Medicaid expansion, it eventually hands states a bill for 10 percent. The funding issue is what LePage has been using as a reason to refuse to implement Medicaid expansion in Maine. For his part, Idaho Lt. Gov. Brad Little, the Republican expected to succeed Gov. Butch Otter in November, is against Medicaid expansion but has said he would accept it if it passes.
“Proponents insist that it’ll pay for itself, but entitlement programs are historically costlier than anticipated. I imagine there are going to be some really tough discussions if it passes,” says Fred Birnbaum, vice president of the Idaho Freedom Foundation, which opposes the measure.
Nebraska’s measure also doesn’t have a provision that explicitly says how the state share would be paid for, but supporters don’t believe that should make a difference.
“We modeled our language based on the Maine initiative, so it’s clear and unequivocal,” says Democratic state Sen. Adam Morfeld, who introduced Medicaid expansion bills in the past. “The governor can say he won’t implement it, but we’ll have a court tell him otherwise.”
Republican Gov. Pete Ricketts, who is expected to win reelection in November, has opposed Medicaid expansion since the beginning but said that if it made the ballot, it’s up to the voters to decide.
“That’s honestly the best I could hope for,” says Morfeld.
In Montana and Utah, the questions before voters are a little more complicated.
Montana expanded Medicaid in 2015, but under the deal struck in the state legislature, it is set to expire June 30. Residents will be voting on whether to extend it, and how the state would fund their portion of it. The ballot measure proposes hiking taxes on tobacco products to $2 per pack.
Utah also already passed a bill to expand Medicaid, but it is awaiting federal approval. It would require nondisabled people to work, volunteer or participate in a job training program; the expansion would automatically end if the federal match dipped below 90 percent; and eligibility stops at the poverty line, which is $12,140 for a single person. (The federal government has rejected other states’ requests to limit expansion to people at the poverty line.)
The ballot measure, meanwhile, asks voters to expand Medicaid traditionally — without work requirements or eligibility limits past the federal poverty line. It also asks voters to increase the sales tax to fund the state’s share. It’s unclear what would happen if the ballot measure passes and the federal government approves Utah’s competing Medicaid waiver.
Only Utah has conducted polling on the issue, which was done in June. The Salt Lake Tribune and the Hinckley Institute of Politics found that 54 percent of voters support the measure, 35 percent oppose it, and the rest are undecided.
“There’s been a lot of discussion in Utah about this, we’ve been having this debate for a couple of years now,” says Danny Harris, associate state director of advocacy at AARP Utah, which is in favor of the ballot measure. “The polling has always been consistently in favor. People are ready for this issue to move forward.”