Tag Archives: Health Policy

House to vote Thursday on ObamaCare repeal

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House to vote Thursday on ObamaCare repeal

House to vote Thursday on ObamaCare repeal
The House will vote Thursday on a bill to repeal and replace ObamaCare, a GOP source said.

The announcement sets up a high-stakes vote that is expected to come down to the wire.

The move comes after the bill gained new momentum on Wednesday, after GOP Reps. Fred Upton (Mich.) and Billy Long (Mo.) said they would support the bill after a new amendment from Upton.
Still, no lawmakers other than those two have publicly given their support since the announcement of the new amendment.
“We will be voting on the healthcare bill tomorrow. We have enough votes. It will pass. It’s a good bill,” House Majority Leader Kevin McCarthy (R-Calif.) said after leaving a leadership meeting Wednesday night.

Asked by a reporter about whether the bill would have to be pulled from the floor again for lack of support, McCarthy replied: “Would you have confidence? We’re going to pass it. We’re going to pass it. Let’s be optimistic about life.”
McCarthy cited an insurer pulling out of the ObamaCare exchanges in Iowa Wednesday as a reason the law needs to be quickly repealed.
“That’s why we have to make sure this passes. To save these people from ObamaCare, which continues to collapse.”
The Upton amendment would provide $8 billion over five years to help people with pre-existing conditions afford their premiums in states that are granted a waiver from ObamaCare’s protections.
The House will vote without waiting for a new Congressional Budget Office (CBO) analysis of Upton’s changes or the amendment from Rep. Tom MacArthur (R-N.J.) that won over the House Freedom Caucus. That analysis will eventually provide insight into the bill’s effects on coverage and its cost.
The MacArthur amendment set off moderates’ concerns, because it allows states to waive ObamaCare protections that prevent people from being charged higher premiums based on their health. If those were repealed, insurers could go back to charging exorbitant premiums to sick people, which could put coverage out of reach for many.
Supporters of the amended bill argue high-risk pools could fill the gap, and note that people with pre-existing conditions would still be protected if they had no gaps in coverage.
Many health policy experts, though, said the additional $8 billion from the Upton amendment is not enough to help sick people get coverage.
The liberal Center for American Progress estimated on Tuesday that the high-risk pools are underfunded by $200 billion over 10 years.
Members of the moderate Tuesday Group discussed the changes at a Wednesday meeting that included House Energy and Commerce Chairman Greg Walden (R-Ore.).
Leaving that meeting, no lawmaker said they had changed their position.
Rep. John Faso (R-N.Y.) said he was still undecided and studying the changes. Rep. Adam Kinzinger (R-Ill.) declined to comment when asked if he was still undecided.
The underlying bill has several provisions some moderates object to, such as deep Medicaid cuts. The CBO estimated an earlier version of the overall legislation would result in 24 million more people becoming uninsured over a decade.
Major health groups like the American Medical Association and the American Hospital Association are strongly opposed to the measure, warning of coverage losses and other problems.
According to the Hill’s whip list, there are 20 no votes from the GOP on the latest iteration of the bill. No Democrats are expected to vote for the measure, meaning Republicans can only afford 22 defections.

Momentum for GOP Health Care Bill Boosted by $8 Billion Deal

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https://morningconsult.com/2017/05/03/momentum-gop-health-care-bill-boosted-8-billion-deal/

Image result for high risk pools

House GOP leaders and Trump administration officials on Wednesday agreed to pour an additional $8 billion into the latest version of their health care bill, part of a last-minute effort aimed at garnering enough support for a potential floor vote before a week-long recess starts on Friday.

The revision won over at least two moderates who had previously opposed the legislation, but it remains unclear whether House Republican leaders, who can afford to lose only 22 GOP lawmakers, have the support needed to send the bill to the Senate before legislators face their constituents next week. A House floor vote has not been scheduled.

The revision, offered by Rep. Fred Upton (R-Mich.), aims to quell the concerns of more than a dozen moderate Republicans who worry that people with pre-existing conditions wouldn’t be able to afford health insurance under the new measure.

The GOP bill lets states opt out of a federal mandate that bars insurers from setting premiums based on a person’s health status if they establish a risk-sharing or high-risk pool mechanism. Upton and Rep. Billy Long (R-Mo.) announced their support for the revised legislation after reaching a deal with President Donald Trump on Wednesday at the White House. The $8 billion would be allocated over a period of five years to states that opt out of the federal mandate.

“I think it is likely now to pass in the House,” Upton, a former chairman of the House Energy and Commerce Committee, told reporters at the White House following the meeting.

But it’s uncertain whether more GOP moderates will reverse course and back the bill. One holdout, Rep. Ryan Costello (Pa.), told reporters he was still opposed to the bill despite the latest updates.

In an interview before Upton’s Wednesday meeting at the White House, Speaker Paul Ryan (R-Wis.) appeared unfazed that conservatives who now back the legislation could balk at the Upton amendment.

“Fred Upton identified something that he thinks will make the bill better that is mutually agreed to by people from all parts of our conference,” Ryan said in a radio interview with commentator Hugh Hewitt.

Even with the additional funding, some experts question whether people with pre-existing conditions could find adequate health insurance if the legislation were signed into law. The bill would let a state waive the federal requirement only if it is participating in a federal risk-sharing program or has established a high-risk pool.

Previous experience with high-risk pools have shown the cost challenges associated with them. The $8 billion would be in addition to more than $100 billion already in the bill to help states fund such programs.

“The amendment at hand focuses on high-risk pools, but the $8 billion amount is a pittance,” Robert Graboyes, a health care scholar at the Mercatus Center, said in a statement.

If the House passes the bill, the Upton amendment and other parts of the legislation may violate the Senate’s arcane budget rules. Congressional Republicans are using the budget reconciliation process to prevent Democrats from filibustering the bill in the Senate. But under the budget rules, all provisions in a reconciliation bill must directly reduce federal spending or revenues.

Senate Minority Leader Chuck Schumer (D-N.Y.) on Wednesday said the Upton amendment may not pass that test because it could increase federal spending.

Healthcare Triage: Orphan Drugs part 4 – Fixing the System

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Healthcare Triage: Orphan Drugs part 4 – Fixing the System

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Drug companies love the Orphan Drug Act. They say it encourages research into breakthrough therapies for people with rare disease. And sometimes that’s true. Lots of the time, though, the companies would’ve pursued the research anyhow. And those same companies have learned to game the Orphan Drug Act in a bunch of different ways, allowing them to jack up their prices for no good reason.

How could we fix the Orphan Drug Act? That’s the topic of this week’s Healthcare Triage.

 

Financial Performance of Health Insurers: State-Run Versus Federal-Run Exchanges

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http://www.commonwealthfund.org/publications/in-the-literature/2017/may/financial-performance-state-federal-exchanges?omnicid=EALERT1204178&mid=henrykotula@yahoo.com

Synopsis

Researchers compared health insurers’ profitability in 2013 and 2014, the years before and after the introduction of the Affordable Care Act’s (ACA) insurance marketplaces. The median loss for insurers overall in both years was 4 percent. Insurers performed better in states that operated their own health insurance marketplaces than in states that used the federal marketplace, with the difference largely driven by medical loss ratios.

The Issue

“Millions of newly covered beneficiaries presented insurers a golden business opportunity, but the new restrictions on medical underwriting meant that insurers faced uncertain actuarial risk in pricing their products.”

The ACA changed the dynamics of the individual health insurance market with rules intended to expand coverage and reforms to how individual insurance is priced and sold. In the years since the law went into effect, there have been concerns over insurers’ profitability, as some companies have sustained losses or left the market entirely. A Commonwealth Fund–supported study published in Medical Care Research and Review examined insurers’ key financial measures over two years (2013 and 2014) to assess profitability, identify factors driving financial performance, and compare performance in states that ran their own health insurance marketplace and those that used the federal marketplace.

Key Findings

  • For established insurers with significant enrollment, profit/loss levels remained statistically the same, with median losses of about 4 percent in both 2013 and 2014.
  • Insurers did better in states that operated their own marketplaces. In states with state-run marketplaces, 24 insurers went from a negative profit margin to a positive one in 2014, while 10 were positive in both 2013 and 2014. In total, 34 out of 76 insurers (45%) had positive profit margins in the state-run marketplaces in 2014.
  • In the federal marketplace, only four insurers went from a negative to a positive margin in 2014; 15 insurers were positive in both 2013 and 2014. Nineteen of 68 insurers (28%) had positive profit margins in the federal marketplace.
  • In states that used the federal marketplace, insurers’ median medical loss ratio—the percentage of insurance premium dollars spent on medical expenses and quality improvement—increased by 10 percentage points, while their median administrative cost ratio dropped by five percentage points. In states with their own marketplaces, there was no significant change in insurers’ medical loss ratio, but the administrative cost ratio dropped three percentage points.

The Big Picture

The authors conclude that the ACA’s implementation in 2014 “did not substantially disrupt the individual market among existing insurers of credible size.” However, they noted differences, largely driven by medical loss ratios, between states that operated their own marketplaces and those using the federal marketplace. Factors that likely contributed to higher profitability include:

  • greater efforts by some states to publicize their exchange and generate more enrollment, which may have resulted in a more balanced risk pool;
  • political cultures that were more supportive of the ACA in general;
  • greater accuracy in actuarial projections; and
  • a higher likelihood of expanding Medicaid, which takes higher-risk people out of the marketplace pool.

By focusing on the more manageable of these factors, like expanding outreach and enrollment efforts or improving actuarial projections, states might be able to improve the financial outlook for insurers participating in the marketplaces, the authors say.

About the Study

The authors used two data sets maintained by the Center for Consumer Information and Insurance Oversight, based on mandatory reporting by all regulated health insurers. The final sample included 144 insurers with a total of 7.8 million members. The authors looked at medical loss ratios, administrative costs, and operating profit.

The Bottom Line

The median insurer reported losses of 4 percent in the individual market in both 2013 and 2014, suggesting that the ACA did not substantially disrupt the individual market among established insurers.

Amendment to ACA Repeal-and-Replace Bill Likely to Increase Premiums and Decrease Covered Services for Many

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http://www.commonwealthfund.org/publications/blog/2017/apr/amendment-aca-repeal-and-replace-bill?omnicid=CFC1203092&mid=henrykotula@yahoo.com

Image result for aca repeal

Yesterday, House Republicans released an amendment to the American Health Care Act (AHCA), their proposed repeal and replacement of the Affordable Care Act (ACA). Congressional Budget Office (CBO) projections of its effects on coverage and the federal budget are not yet available.

The amended version of the AHCA is still likely to significantly increase the numbers of uninsured Americans, raise the cost of insurance for many of the nation’s most vulnerable citizens, and, as originally proposed in the AHCA, cut and reconfigure the Medicaid program. The new amendment specifically allows states to weaken consumer protections by, for example, permitting insurers to charge people with preexisting conditions higher premiums.

What the Amendment Leaves in Place

The amended proposed bill does little to change many provisions of the original AHCA including:

The CBO estimated in March that the combined effects of these provisions would increase the number of people without health insurance by 24 million by 2026. Older Americans would be particularly hard hit by the bill, experiencing much higher premiums relative to the ACA and the greatest coverage losses.

What the Amendment Changes

The amendment offers states the option to apply for waivers to reduce ACA consumer protections that have enabled people with health problems to buy private health insurance. Beginning in 2019, states could waive the ban on charging people with preexisting conditions higher premiums, as long as states set up special programs to help people with conditions like cancer or heart disease who could no longer afford coverage. States could also change the ACA’s required minimum package of health benefits for health plans sold in the individual and small-group markets.

Despite the fact the federal ban on preexisting condition exclusions would remain under the AHCA, as Tim Jost points out, insurers could reach the same end by not covering services like chemotherapy that sick people need, or by charging very high premiums for individuals with expensive, preexisting problems. In addition, waiving the ACA’s essential benefit requirement could weaken other consumer protections like bans on lifetime and annual benefit limits and caps on out-of-pocket costs.

States that allowed higher premiums for people with health problems would be required to set up programs such as high-risk pools or reinsurance for high claims costs. Or under an AHCA  amendment proposed earlier in the month, states could also participate in an “invisible risk-sharing” program, a hybrid between a high-risk pool and reinsurance for high claims costs. But while reinsurance options might protect insurers from high claims costs, giving them the ability to charge premiums based on health status would result in many people with preexisting conditions facing unaffordable premiums.  As for high-risk pools, prior research has found that such pools operated by states before the ACA were expensive both for states and for people enrolled in them, and covered only a small fraction of the individuals who would have benefited.

States that had these programs in place could also let insurers charge premiums based on health for people who had not maintained continuous coverage in the prior year.

Looking Forward

Setting aside the amended AHCA’s potential effects on the health and health care of Americans, many questions and uncertainties remain about the bill’s timing and fate. First, the rush to introduce and pass it quickly seems likely to run afoul of Congress’ need to pass a spending bill this week that will keep the federal government funded beyond April 28. So it could be weeks before an amended AHCA gets serious consideration in the House. An important benefit of delay would be to give the CBO time to analyze the impact of the amendments.

Second, the fate of the amended AHCA in the Senate remains uncertain. Some possible provisions – affecting essential health benefits, premium increases based on health, and other features – may not withstand scrutiny by the Senate parliamentarian as she evaluates whether they are appropriate parts of a budget reconciliation bill, and thus exempt from filibuster. Furthermore, many moderate Senate Republicans reportedly have concerns about the Medicaid provisions of the AHCA.

Third, the complex legislative maneuvering around the AHCA should not detract attention from the fundamental facts. Health insurance saves lives and protects Americans from crippling medical debt and even bankruptcy. Changes to existing legislation that result in fewer insured Americans will undermine the health and quality of life of millions of people, as well as increase economic inequality in this country.

 

GOP struggles to find ObamaCare repeal votes

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GOP struggles to find ObamaCare repeal votes

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The Republican bill to repeal and replace ObamaCare appears to lack sufficient votes to pass the House, despite hopes from GOP leaders and the White House that it might be approved by the lower chamber this week.

According to The Hill’s whip list, 22 Republicans oppose the bill — the maximum number of GOP defections that can be afforded — assuming every Democrat also votes against it.

The latest Republican to announce his opposition is Rep. Billy Long (Mo.), a staunch conservative who often says he was “Tea Party before Tea Party was cool.”

He told The Hill he wouldn’t support the bill because of the impact it could have on people with preexisting conditions.

“I have always stated that one of the few good things about ObamaCare is that people with pre-existing conditions would be covered,” Long said in a statement to The Hill.

“The MacArthur amendment strips away any guarantee that pre-existing conditions would be covered and affordable.”

An amendment authored by Rep. Tom MacArthur (R-N.J.) would allow states to apply for waivers to two ObamaCare provisions: essential health benefits, which mandates what services insurers must cover, and “community rating,” which essentially bans insurers from charging people with preexisting conditions more for coverage.

While the AHCA keeps an ObamaCare provision banning insurers from denying coverage to people with preexisting conditions, allowing states to waiver out of community rating means insurers could charge sick people more.

States that get that waiver would have to have a high-risk pool as a backstop for people priced out of coverage. But those pools, in the past, have seen waiting lists, high premiums and other issues.

The Hill’s whip list includes some Republicans who were ready to vote for the bill before changes made the language backed by MacArthur and Rep. Mark Meadows (R-N.C.), the Freedom Caucus chairman.

They include Reps. Adam Kinzinger (Ill.) and Fred Upton (Mich.).

Rep. Mike Coffman (R-Colo.) went from being a yes on the bill to a no.

And four members of the GOP Whip team, Reps. David Valadao (Calif.), Erik Paulsen (Minn.), Elise Stefanik (N.Y.) and Kevin YoderKevin YoderGOP struggles to find ObamaCare repeal votesThe Hill’s Whip List: 22 GOP no votes on new ObamaCare replacement billGOP faces backlash over attack on internet privacy rulesMORE (Kansas) are undecided on the bill.

Rep. Kathleen Rice (D-N.Y.) told CNN that she’s talked to centrist Republicans who say they won’t back the bill because they don’t like it, and because they don’t think it will be approved by the Senate even if it does pass the House.

“They’re being asked to walk the plank on a bill they know won’t survive,” she said.

In another bad sign for the GOP’s whip count, Appropriations Committee Chairman Rep. Rodney FrelinghuysenRodney FrelinghuysenGOP struggles to find ObamaCare repeal votesHouse passes bill to avoid shutdownOvernight Finance: Dems explore lawsuit against Trump | Full-court press for Trump tax plan | Clock ticks down to spending deadlineMORE (R-N.J.) on Monday refused to say if it had his support.

Frelinghuysen came out against the bill shortly before it was pulled from the floor last month and told reporters Monday he was “still looking” at the changes.

“I’m focusing on the appropriations bill for 2017, so that’s my focus,” he said.

“My position is that I’m focused on the appropriations process, trying to get the bill across the finish line. I haven’t been focused on anything else.”

Although Vice President Pence was on Capitol Hill on Monday seeking to sway Republicans, the White House acknowledged the GOP’s American Health Care Act doesn’t yet have the support to pass and wouldn’t put a timeline on a vote.

“We’re getting closer and closer every day, but we’re not there yet,” Spicer said when asked if there are enough votes in the House to put a bill on the floor.

A few Republicans are saying that a vote could be held this week.

Rep. Joe Barton (R-Texas), who is in the conservative Freedom Caucus and is also a member of the GOP whip team, said the legislation has the votes to pass by a slim margin because the latest changes had moved some moderates from no to yes.

He said a vote would “probably” happen this week and suggested that some lawmakers could be strong-armed into backing the new bill, as they would “rather be a no vote but if it needs their vote to pass then they’ll support it.”

He said he is not privy to the official whip count but has “knowledge of individual votes that I’ve talked to plus a general feel for the way the House is.”

Barton offered no names, however, and Rep. Charlie Dent (R-Pa.), co-chairman of the moderate Tuesday Group, said Friday the amendment didn’t move any moderates from ‘no’ to ‘yes.’

“I’m not aware of any members of the Tuesday Group who were a ‘no’ and became a ‘yes’ because of it,” he said.

“I suspect there were some who were maybe inclined to move in the other direction, either to undecided or a no. So, they didn’t pick up anybody from our group.”

If a bill is not approved by the House this week, it will significantly reduce the chances of ObamaCare repeal being approved at all. The House will go on recess next week, and lawmakers are moving on to tax reform and spending bills for next year.

 

Obamacare 101: Are health insurance marketplaces in a death spiral?

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http://www.latimes.com/politics/la-na-pol-obamacare-101-marketplaces-20170223-story.html

Obamacare website

It’s been a rocky few months for the health insurance marketplaces created by the Affordable Care Act.

Even if you’re not one of the roughly 11 million Americans who rely on these online exchanges to get your health insurance, you’ve probably seen the headlines about rising premiums and insurance companies pulling out of the system.

Last week, national insurance giant Humana announced it would stop selling plans on the marketplace. Aetna’s chief executive claimed the marketplaces are in a “death spiral.” Republicans say the marketplaces are Exhibit A that Obamacare is collapsing.

So what’s the real story? Are these things really kaput or can they be fixed? Here’s a rundown of where things stand.

How do marketplaces work?

Buying health insurance on the marketplaces was set up to be like shopping online for a hotel room. The Obamacare marketplaces, such as HealthCare.gov, allow people who don’t get health benefits at work to compare a variety of competing plans that all have to offer a basic set of benefits.

Low- and moderate-income consumers — currently about 80% of the 11 million Obamacare enrolees — get federal subsidies to help pay their monthly premiums. And the plans are prohibited from turning away customers who are sick.

This was a big deal. Before Obamacare, insurance companies were free to reject sick people. And even customers who could get a plan often found it didn’t cover what they thought because health plans didn’t have to meet the same standards they now must.

What went wrong?

Like all insurance markets, the Obamacare marketplaces rely on having a good mix of customers. Younger, healthier people, who typically have lower medical costs, offset the higher cost of older, sicker people.

 Unfortunately, many insurers discovered that the people who were signing up were sicker and more costly than they expected. That meant some insurers were losing money. Nobody likes that.

Insurers basically had two ways to deal with this. They could raise premiums. Or they could bail on the marketplaces.

There’s been a little of both over the past year. In some states, average 2017 premiums shot up more than 50%, though premium increases were more modest in other places.

Some insurers — like Humana, Aetna and UnitedHealthcare, all of whom are for-profit companies that have to answer to shareholders — pulled out of marketplaces altogether.

That’s created a lot of angry customers in some parts of the country.

So are the marketplaces going to collapse?

Probably not.

In a traditional “death spiral,” younger, healthier customers flee as premiums rise. That leaves behind sicker people, who are willing to pay higher premiums to keep coverage they need. Because the remaining customers have high medical costs, premiums tend to rise further, pushing away even more customers until the cycle destroys the market.

To date, there is little evidence this is happening. Enrollment on the marketplaces this year has remained relatively steady, even with the premium hikes.

Nonetheless, the departure of insurers has left consumers in some parts of the country with few options to choose from. In a handful of places, there may be no insurer next year unless something changes.

Many industry officials and independent experts believe that the marketplaces need some fixing.

What would it take to fix the marketplaces?

Everyone agrees that the key is attracting more young, healthy people into the market.

Insurers say too many people are gaming the system by signing up only when they are sick. The industry wants tighter restrictions on when consumers can enroll in coverage on the marketplaces. The Trump administration just gave the industry some of what it wanted by limiting when people could sign up.

Insurers also say they could make health plans cheaper and more attractive to younger people if they could charge those people less, though that might mean charging older customers more. That, of course, doesn’t sit well with groups like AARP.

Others say that offering consumers more financial assistance to pay their premiums would help, though that would naturally cost the government more money.

What do Republicans want to do?

We don’t really know yet.

Many GOP lawmakers are talking about completely overhauling the way Americans who use the marketplaces get coverage.

Instead of making insurers all meet basic standards, for example, Republicans would let states set their own standards. That means that insurers in some places might no longer have to offer the same sets of benefits.

As importantly, many GOP plans would also replace the way that marketplace consumers get financial assistance with their premiums.

The Obamacare subsidies are linked both to consumers’ incomes and to how much health plans cost in their states.

Republicans are talking about linking the value of the subsidy to age, with older consumers getting more financial assistance than younger consumers.

Will that work?

It’s difficult to say since Republicans haven’t offered many details about their plans. What’s important to understand is that everything involves tradeoffs.

Reducing requirements on which benefits insurers must offer, for example, might allow more plans with limited benefits. Those could be cheaper.

But they might also leave consumers without vital protections they need. That was common before Obamacare, when insurers routinely sold policies that limited treatment of some conditions or excluded some benefits, such as prescription drugs.

Similarly, a new system of financial aid that is based only on a consumer’s age would be much simpler than the current system.

But it also would mean that young people with low incomes might have a hard time affording a health plan. That would deprive insurance markets of the healthy enrollees they most need.

 

Obamacare 101: 4 things you need to know about ‘essential health’ benefits

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http://www.latimes.com/politics/la-na-pol-obamacare-101-essential-benefits-20170323-story.html

clinic

Among the most important — and little understood — new insurance rules put in place by the Affordable Care Act was a requirement that health plans cover a basic set of benefits.

The requirement was part of a package of new consumer protections in the healthcare law, including a prohibition on insurers denying coverage to people with preexisting medical conditions and bans on annual- or lifetime-limits on coverage, which were once common.

Conservative House Republicans have been demanding the so-called essential benefit requirements be scrapped.

Here’s a rundown of what this debate is about.

What are the essential health benefits?

The 10 benefits include:

— Ambulatory patient services, which include outpatient care such as doctor visits and surgeries that don’t require hospitalizations;

— Emergency services, including ambulance transportation;

— Hospital care;

— Maternity and newborn care;

— Mental health and substance abuse treatment;

— Prescription drugs;

— Rehabilitative services, including physical therapy and other care such as speech and occupational therapies;

— Lab services;

— Preventive care, some of which must currently be covered without any co-pay or other cost sharing;

— Pediatric care, including dental and vision care for children.

Why were essential health benefits included in the Affordable Care Act?

Before Obamacare was enacted, health plans routinely had holes in coverage that consumers often learned about only after they sought care.

For example, in 2011, one-third of health plans available to consumers who bought insurance on their own rather than through an employer, did not cover substance abuse treatment, according to data gathered by the U.S. Department of Health and Human Services.

Nearly one in five did not cover mental health. And nearly one in 10 plans did not include coverage for prescription drugs.

Why do conservative Republicans say they want them out?

Many Republicans say the essential benefits push up the cost of health insurance and force people to buy health plans with more coverage than they need.

They often point to maternity coverage, which they say men and older women do not need and therefore should not be forced to pay for.

The House Republican bill to roll back Obamacare already would remove these requirements benefits from Medicaid plans.

What impact would removing the requirements have?

Allowing for skimpier plans would likely be a boon for healthy people who don’t need much medical care. They would be able to get cheaper plans.

But many experts warn that the consequences of scrapping the benefit requirements could be serious.

For one, consumers could once again find themselves in health plans that do not cover things they did not anticipate they might one day need. .

For example, a health plan without prescription drug coverage might sound good when someone is healthy, but would be catastrophic if that same consumer were diagnosed with an unexpected cancer.

Secondly, making consumers pay only for the benefits they need might lower the cost of skimpier plans, but it would make plans that cover extra benefits like mental health or maternity care much more expensive. That would effectively penalize people who are sick or need medical care.

Some insurers might decide they simply don’t want to offer plans with the extra benefits because insurers would not want customers who incurred higher medical costs they might have to cover.

Finally, the elimination of essential health benefits threatens other popular consumer protections.

The bans on annual and lifetime caps on health coverage, for example, are linked to the mandated benefits. If there are no more mandated benefits, the caps become meaningless.

 

 

 

Obamacare 101 — What’s the big debate over health insurance cost-sharing subsidies?

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http://www.latimes.com/politics/la-na-pol-obamacare-101-cost-sharing-reductions-20170425-story.html

USC patient

As President Trump and congressional leaders scrambled to put together a spending bill to keep the government from shutting down at the end of this week, negotiations almost collapsed over an arcane, but critical part of the Affordable Care Act: cost-sharing reduction payments, or CSRs.

If you’ve never heard of this piece of the Obamacare puzzle, here’s a rundown of what they are, why they were pulled into Trump’s first budget fight and what their fate may be in the future.

What are the cost-sharing reduction payments?

One of the pillars of Obamacare are the insurance marketplaces that allow Americans who don’t get coverage through an employer to shop among health plans that must all cover a basic set of benefit.

Low- and moderate-income shoppers with annual incomes between 100% and 400% of the federal poverty level — between about $12,000 and $48,000 — qualify for subsidies that offset the cost of their monthly insurance premiums.

Less well-known are the so-called cost-sharing reductions. Consumers who make between 100% and 250% of the poverty line can get this additional assistance to cover co-pays and deductibles if they select certain health plans on the Obamacare marketplaces.

These cost-sharing reductions mean that someone who might otherwise face an annual deductible of $2,000 or more would potentially have no deductible at all. This additional assistance can be especially important as many low-priced health plans force consumers to pay high deductibles before their medical care is covered.

This year, the CSR payments will cost the federal government about $7 billion, according to the nonpartisan Congressional Budget Office.

Why are they an issue now?

Most spending in Obamacare is mandatory, which means that it does not require Congress to appropriate it every year in a spending bill. But there has been some debate about whether the CSR payments fall into this category.

The Obama administration initially sought congressional approval for CSR payments but later maintained this was not necessary. And since 2014, Obama administration has made CSR payments to lower deductibles for millions of low-income consumers.

Republicans have argued this usurped Congress’ authority over spending. Last year, a federal judge agreed with them, though she suspended her order while the case was being appealed.

What would happen if the CSR payments are stopped?

Health insurers and other experts have been warning for months that eliminating the payments could destabilize the Obamacare marketplaces and cause some insurers to stop offering health plans.

That is because the payments currently go to insurers, who use them to offset the losses they incur from covering medical expenses that consumers would normally have to pay until they reach their deductibles.

If the payments are stopped, insurers would still be barred from charging low-income consumers for deductibles. But insurers would no longer be able to get financial aid for the costs they are bearing.

Some insurance companies would likely decide that it was no longer worth selling health plans on the marketplaces. Others might conclude that they have to raise premiums to cover the additional losses.

That could cost some consumers more, particularly those who don’t qualify for government assistance.

It could also cost the federal government more as higher premiums would mean higher subsidies for those who qualify (because the value of subsidies is tied to the cost of insurance premiums).

The additional cost of the subsidies might even outstrip the savings that would be generated by stopping the CSR payments, according to a new analysis from the nonprofit Kaiser Family Foundation, which estimates that stopping the CSR payments would save $10 billion in 2018 but lead to $12 billion in additional subsidy payments, assuming insurers did not abandon the Obamacare markets next year.

How did the CSR payments get dragged into the current budget debate?

To prevent an insurance market meltdown, insurers industry officials and many Democrats urged congressional leaders to include funding for the CSR payments in the spending bill that Congress must pass this week to keep the government open.

That would make the fate of the payments less dependent on the ongoing lawsuit and prevent Trump from using them as a bargaining chip down the road, risking the collapse of insurance markets. At one point, Trump and GOP leaders had floated the idea of using the payments as a way to pressure Democrats to support funding for a border wall with Mexico or to increase military spending.

The White House and GOP leaders ultimately decided against including the payments in the spending bill. But the administration said Wednesday that it would agree to keep funding the CSRs administratively, at least for now.

What could happen further down the road?

Assuming the CSR payments are not included in a future spending bill, the Trump administration could threaten to cut them off again in the future.

That means that insurance markets will likely remain unsettled for some time, even if a collapse is not imminent.