Tag Archives: Entitlement Reform

“The Inevitable Math behind Entitlement Reform”

Posted on by • Posted in Uncategorized • Tagged , , , , , , , , • Leave a comment

“The Inevitable Math behind Entitlement Reform”

Image result for Entitlement Reform

 

That’s the title of a new NEJM Perspective by Michael Chernew and me. After crunching the numbers, our argument is that for long term cost control we will probably need to address growth in per capita health care utilization. The easy “solutions” won’t be enough.

Much of the projected increase in inflation-adjusted spending on health care entitlements, particularly for Medicare, stems from assumed increases in utilization (e.g., 2.75 percentage points of the 5.33% annual projected growth for Medicare spending). Strategies for holding utilization growth below projections (and more in line with very recent historical growth) will thus be central to the success of any attempt at cost containment.

[One approach] is to dissuade patients from seeking care by charging them more at the point of service. About 85% of Medicare beneficiaries have supplemental plans (e.g., Medigap) that reduce their out-of-pocket costs. Policies that limit the generosity of such plans could reduce Medicare spending considerably. However, such strategies would increase beneficiaries’ financial risks, reduce access to care, and probably exacerbate health disparities.

A second strategy is to help beneficiaries improve their health by enhancing long-term care management and preventive services with the goal of avoiding more expensive services. Evidence suggests that although this type of approach is probably beneficial to patients and may be cost-effective, it is generally not cost saving.

The piece continues with some more promising approaches, in our view. Click to read it in full (unfortunately pay-walled though).

 

Medicaid is GOP target in 2018

Posted on by • Posted in Uncategorized • Tagged , , , , , , , • Leave a comment

http://thehill.com/policy/healthcare/366728-gop-could-push-medicaid-cuts-in-2018

Image result for medicaid target

Medicaid could face crucial tests in 2018 at both the federal and state levels.

Republicans in Congress failed in their attempts earlier this year to impose drastic cuts to the program as part of ObamaCare repeal, but GOP lawmakers could try again next year.

The tax bill that President Trump recently signed into law is projected to add $1 trillion to the federal deficit, making cuts to Medicaid an even more tempting target for some conservatives.

“Medicaid is front and center in any budget exercises, and now that deficits have increased, it puts Medicaid squarely in the bull’s-eye,” said Joan Alker, the executive director of the Georgetown University Center for Children and Families.

Speaker Paul Ryan (R-Wis.) has said he wants to bring down entitlement spending, saying in December that “health-care entitlements such as Medicare and Medicaid are the big drivers of debt.”

Any entitlement cuts from Ryan will likely face pushback from members of his own party, including Senate Majority Leader Mitch McConnell (R-Ky.). McConnell has said he doesn’t expect to see entitlement reform on the agenda next year ahead of the midterms.

“The sensitivity of entitlements is such that you almost have to have a bipartisan agreement in order to achieve a result,” McConnell told reporters in late December.

Medicaid covers nearly 75 million people, and the program has proven resilient in the face of conservative opposition.

Cindy Mann, a consultant at Manatt Health who ran Medicaid under former President Obama, said attacks on Medicaid have made it more popular.

“Medicaid has always been supported by the people closest to it,” Mann said.

Some Republican senators have recognized the political risks of Medicaid cuts, too. The GOP’s ObamaCare repeal push failed in part because of senators opposed to the Medicaid cuts.

“The Medicaid program is starting to get a politically powerful status,” said Eliot Fishman, the senior director of health policy at Families USA, an advocacy group.

Fishman noted that Maine, Arizona and Alaska are all Medicaid expansion states represented by Republican senators who have shown a willingness to protect the expansion funding.

Over 16 million people have enrolled in Medicaid since states began expanding coverage under ObamaCare. The program could continue to grow in the near future, as more states could seek to take advantage of the additional federal money offered by the health law.

Future Medicaid expansions could be especially likely if a Democratic wave in November’s midterms gives Democrats control in more statehouses.

In Virginia, Gov.-elect Ralph Northam (D) has promised to expand Medicaid, something Democrats in the state have been unable to accomplish in the last four years in the face of a GOP-controlled legislature. But with a 50-50 split in the House or even a 51-49 Democratic minority, depending on the results of a recount, Northam has much better odds than current Gov. Terry McAuliffe (D).

In Maine, voters approved a ballot initiative allowing the state to expand Medicaid. Gov. Paul LePage (R) has refused to implement it, but a new governor replacing LePage after he leaves office in the face of term limits could be more willing to accept the results.

If even a few more states choose to expand Medicaid, “it starts to get to be enough critical mass nationwide that I would hope it just makes it a permanent part of the Medicaid program,” Fishman said.

But advocates worry that unprecedented flexibilities offered by the Trump administration will allow states to completely change the nature of Medicaid.

Administration officials have said they will allow governors to add work requirements, time limits and lockout periods for people who can’t pay their premiums on time.

Advocates say adding such provisions would further the Republican case that Medicaid is a welfare program, instead of health insurance.

“Whether you support them or not, those activities are not the function of a Medicaid program,” Mann said. “People can differ as to the efficacy of those efforts, but few people can accurately say that’s what health insurance ought to be doing.”

In the coming months, the Trump administration could approve waivers allowing states like Arkansas, Arizona, Indiana and Kentucky to impose work requirements on Medicaid beneficiaries.

Arizona also wants to impose a five-year limit on Medicaid eligibility for the “able-bodied.”

States that want work requirements have acknowledged that tens or even hundreds of thousands of people would lose Medicaid coverage under the proposals.

Prior to ObamaCare, Medicaid mainly covered children, the disabled and pregnant women. The law’s optional expansion allowed many more low-income people to become eligible, leading to criticisms from conservatives that “able-bodied” beneficiaries were essentially freeloading off the government.

Alker said that’s the wrong way to look at it.

“[Medicaid is] predominantly run by managed care insurance companies, so that kind of rhetoric is a gross oversimplification,” Alker said. “But people who want to cut it, they tend to focus on one population.”

The Republican health-care plan the country isn’t debating

Posted on by • Posted in Uncategorized • Tagged , , , , , • Leave a comment

https://www.washingtonpost.com/opinions/the-republican-health-care-plan-the-country-isnt-debating/2017/02/09/919464e2-eee8-11e6-9662-6eedf1627882_story.html?_hsenc=p2ANqtz-_zh-MmG6tEeoYRPpXGnfQ4Br6yG61Zm_BUto5iuDDy7KmrCnce1x4mfC1IJZgA7lEGZpWUtS2wTehJJCZgUSr8nli9FQ&_hsenc=p2ANqtz-_g3ACJaUm5w_DwBb7DyuzIOw5pujA6z1qZbrcFLgKCShQytC1zSXx63-Yuh-gFk2Ivyjf6z-tWrzEpQHRkhxEck_TU4w&_hsmi=42381353&_hsmi=42404172&utm_campaign=KFF-2017-Drew-WashPost-feb10-GOPplans&utm_campaign=KFF-2017-The-Latest&utm_content=42381353&utm_content=42404172&utm_medium=email&utm_medium=email&utm_source=hs_email&utm_source=hs_email&utm_term=.ce2754889c96

With the debate about the Affordable Care Act drawing so much scrutiny, a broader Republican agenda to fundamentally change the federal role in health care is flying under the radar. It’s the most important issue in health care we are not debating.

Many Republicans in Congress want to convert Medicaid to a block-grant program and transform Medicare from a plan that guarantees care into one in which seniors would receive a set amount of money to purchase coverage. Meanwhile, Republicans would replace existing subsidies for premiums under the ACA with less generous tax credits — all while eliminating the expansion of Medicaid that enables states to cover low-income childless adults.

Taken together, these changes would amount to a fundamental rewriting of the health-care role of the federal government. They would end the entitlement nature of Medicaid and Medicare, cap future increases in federal health spending for these programs and shift much more of the risk for health costs in the future to states and consumers.

If Republicans shy away from Medicare for the time being, for fear of angering senior voters, the fulcrum for this policy shift will be the debate about converting the Medicaid program to some form of a block grant, most likely one that would cap spending on a per- enrollee basis. This would be an enormous shift. Medicaid spending exceeds half a trillion dollars , and the program represents more than half of all federal funds spent by states. Medicaid has changed dramatically from its beginnings as a program largely for women and children on welfare. It now has more than 70 million beneficiaries, and its reach is so broad that almost two-thirds of Americans say that they, a family member or a friend have been covered by Medicaid at some point.