Six senators, including three Republicans, are asking GOP leadership to block a Trump administration rule that slashes funding for a federal drug discount program.
The program, called 340B, requires drug companies give discounts to health-care organizations that serve high volumes of low-income patients.
But a new rule from the Centers for Medicare and Medicaid Services, which takes effect Jan. 1, cuts Medicare payments to hospitals enrolled in the program by $1.6 billion.
The senators are urging the cuts to be reversed in the year-end spending deal.
“We recognize there are opportunities to strengthen the program through targeted clarifications and improvements to ensure it continues to fulfill its purpose with integrity and efficiency and are willing to work with stakeholders to find productive solutions in this space,” the senators wrote in a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles Schumer (D-N.Y.).
“However, with a January 1, 2018 start date and over half of the Senate and half of the House of Representatives having expressed concerns with CMS’ rule, we request your help in ensuring the long-term sustainability of the 340B program by preventing these changes in an end of the year package.”
The request follows a letter 51 senators sent to CMS earlier this year expressing concerns over the changes.
Hospital groups argue the rule would jeopardize the ability to serve low-income patients.
The American Hospital Association, America’s Essential Hospitals and the Association of American Medical Colleges are suing the administration to block the rule.
CMS has argued that the changes will increase access to care and lower out-of-pocket drug costs for Medicare beneficiaries.
House Speaker Paul Ryan (R-Wis.) on Wednesday said House Republicans will aim to cut spending on Medicare, Medicaid and welfare programs next year as a way to trim the federal deficit.
“We’re going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit,” Ryan said during an interview on Ross Kaminsky’s talk radio show.
Health-care entitlements such as Medicare and Medicaid “are the big drivers of debt,” Ryan said, “so we spend more time on the health-care entitlements, because that’s really where the problem lies, fiscally speaking.”
Ryan said he’s been speaking privately with President Trump, who is beginning to warm to the idea of slowing the spending growth in entitlements.
During his campaign, Trump repeatedly promised not to cut Medicare, Medicaid or Social Security.
“I think the president is understanding choice and competition works everywhere, especially in Medicare,” Ryan said.
House and Senate Republicans are currently working on their plans for tax reform, which are estimated to add more than $1 trillion to the deficit. Democrats have voiced concerns that the legislation could lead to cuts to the social safety net.
Ryan is one of a growing number of GOP leaders who have mentioned the need for Congress to cut entitlement spending next year.
Last week, House Ways and Means Committee Chairman Kevin Brady (R-Texas) said that once the tax bill was done, “welfare reform” was up next.
Sen. Marco Rubio (R-Fla.), last week, said “instituting structural changes to Social Security and Medicare for the future” will be the best way to reduce spending and generate economic growth.
Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, told Bloomberg TV that “the most important thing we can do with respect to the national debt, what we need to do, is obviously reform current entitlement programs for future generations.”
Ryan also mentioned that he wants to work on changing the welfare system, and Republicans have in the past expressed a desire to add work requirements to programs such as food stamps.
Speaking on the Senate floor while debating the tax bill last week, Senate Finance Committee Chairman Orrin Hatch (R-Utah) said he had a “rough time wanting to spend billions and billions and trillions of dollars to help people who won’t help themselves, won’t lift a finger and expect the federal government to do everything.”
His comments were echoed by Ryan.
“We have a welfare system that’s trapping people in poverty and effectively paying people not to work,” Ryan said Wednesday. “We’ve got to work on that.”
The tax bill would trigger an automatic funding cut in the vital program.
AARP Chief Executive Officer Jo Ann Jenkins called on congressional leaders Thursday to keep their promise to America’s seniors and prevent a large cut to Medicare that the tax bill now being debated on Capitol Hill would trigger.
The tax measure would result in a $1.5 trillion increase in the federal deficit over the next decade, according to the nonpartisan Congressional Budget Office (CBO). Such a deficit would prompt an automatic $25 billion cut to Medicare as soon as January because of the “pay-as-you-go” law, commonly referred to as PAYGO.
The law was designed to keep the deficit in check by requiring the administration to reduce spending in many mandatory federal programs if Congress enacts a law that increases the deficit but doesn’t provide offsetting revenue.
In a letter to Senate Majority Leader Mitch McConnell, Minority Leader Charles Schumer, House Speaker Paul Ryan and Minority Leader Nancy Pelosi, Jenkins reminded McConnell and Ryan that they had recently issued a statement promising that “we will work to ensure these spending cuts are prevented.”
In their statement, the Republican leaders pointed out that the PAYGO law has never been enforced since it was passed in 2010 and “we have no reason to believe that Congress would not act again” to forestall the cuts PAYGO would require.
Medicaid, Social Security, food stamps and some other social safety net programs are exempt from the PAYGO law. But Medicare and programs like federal student loans, agricultural subsidies and the operations of U.S. Customs and Border Protection are not exempt.
The law caps how much the government can trim from Medicare at 4 percent. That’s $25 billion the first year, according to CBO. The amount could be higher in subsequent years, depending on the size of the deficit and Medicare’s budget.
The reduction would affect the payments that doctors, hospitals and other health care providers receive for treating Medicare patients. Individual benefits would not be directly cut, but the reduction could have implications for the care beneficiaries receive.
“The sudden cut to Medicare provider funding in 2018 would have an immediate and lasting impact, including fewer providers participating in Medicare and reduced access to care for Medicare beneficiaries,” Jenkins wrote. Health care providers might stop taking Medicare patients, she added, even as 10,000 older adults are enrolling in the health program each day.
In addition, Medicare Advantage plans and Part D prescription drug plans may compensate for the cuts by charging higher premiums or shifting more costs to beneficiaries in future years.
“Our members and other older Americans are counting on you to preserve their access to Medicare services, including their doctors and hospitals,” Jenkins wrote.
Our latest Freakonomics Radio episode is called “Nurses to the Rescue!” (You can subscribe to the podcast at Apple Podcastsor elsewhere, get the RSS feed, or listen via the media player above.)
They are the most-trusted profession in America (and with good reason). They are critical to patient outcomes (especially in primary care). Could the growing army of nurse practitioners be an answer to the doctor shortage? The data say yes but — big surprise — doctors’ associations say no.
On Wednesday, Attorney General Jeff Sessions announced that President Donald Trump’s counselor Kellyanne Conway will take on the opioid crisis, overseeing all White House initiatives combating the current overdose epidemic. More than 52,000 people lost their lives to drug overdoses in 2016 alone, according to a CNN report, with at least 33,000 of them were due to opioid drugs, including prescription painkillers. Trump labeled the opioid crisis a public health emergency in October.
Now, the president is calling for an “opioids czar” to lead efforts against the epidemic — and Conway is taking on that role. She will “coordinate and lead the effort from the White House” related to the opioid crisis, Sessions said at a news conference on Wednesday.
One opioid policy expert, Andrew Kolodny of Brandeis University’s Opioid Policy Research Collaborative, told BuzzFeed he thinks this is a good move.
However, he also pointed out that the administration still doesn’t have anyone leading the Office of National Drug Control Policy, nor has it released a comprehensive strategy for addressing this public health crisis. Trump has previously said he’d like to launch an advertising campaign similar to Nancy Reagan’s “Just Say No” campaign, which was widely unsuccessful.
There’s also less than $60,000 in the national public health emergency fund, and so far no one has requested more money from Congress to allocate towards this epidemic — which is expected to cost more than $500 billionannually. According to Sessions, in the new budget, Trump is requesting “more than $1 billion in anti-opioid efforts,” adding that he would consider additional funds if they can show their efforts are working.
Only, a lot of people aren’t impressed with that number. New Jersey Gov. Chris Christie said at a congressional hearing on Tuesday that “$1 billion [is] nothing for [a] national problem when [New Jersey] alone [is] spending $500M a year on [the] problem,” tweeted BuzzFeed’s Dan Vergano.
Christie also called the need for an opioids czar “overblown.” He feels that they already know how to handle the issue, and it starts with limiting the prescriptions for painkillers, cutting fentanyl exports from China, and providing naloxone to communities, BuzzFeed reported. Naloxone blocks and reverses the effects of opioid drugs, and gives non-medical people the ability to save lives. While it’s controversial, as some say it enables more drug use, it’s been shown to decrease the number of overdoses. There are also drugs, like methadone and buprenorphine, shown to help recovering addicts stay in treatment longer.
Kelly Pfeifer, director of high-value care at California Health Care Foundation, an Oakland-based philanthropic nonprofit, explains to Bustle:
Unfortunately, there’s a stigma surrounding a lot of these treatments — people view it as trading one drug, for instance heroin, for another, like methadone. But scientific evidence continues to show the benefits of medication-assisted treatment versus complete abstinence. This has led the Hazelden Betty Ford Foundation, a top treatment provider in the United States, to even start providing anti-addition medications as part of its recovery program.
But Conway’s expertise isn’t so much in medicine or addiction as it is in “messaging,” according to Sessions.
Still, many feel the country needs a lot more than a good ad campaign and stricter laws. “We have spent billions on the failed ‘war on drugs’ and have learned that exclusive focus on law enforcement will not end the epidemic or save lives,” Pfeifer says. “The evidence is with addiction treatment — and that is where funding should go.”
Laquita Gardner, a sales manager at a furniture rental store here, was happy to get a raise recently except for one problem. It lifted her income just enough to disqualify her and her two young sons from Medicaid, the free health insurance program for the poor.
She was relieved to find another option was available for the boys: the Children’s Health Insurance Program, known as CHIP, that covers nearly nine million children whose parents earn too much for Medicaid, but not enough to afford other coverage.
But CHIP, a program that has had unusually strong bipartisan support since it was created in 1997, is now in limbo — an unexpected victim of the partisan rancor that has stymied legislative action in Washington this year. Its federal funds ran out on Sept. 30, and Congress has not agreed on a plan to renew the roughly $14 billion a year it spends on the program.
“I’m kind of shocked, because this is something for kids,” Ms. Gardner said Thursday as her 7-year-old, Alexander, braced for a flu shot at a bright, busy neighborhood clinic run by the Nemours Children’s Health System. Ms. Gardner pays $25 a month for her sons’ CHIP coverage, with no deductible or co-payments.
Congressional leaders may provide some temporary relief to a handful of states that expect to exhaust their CHIP funds before the end of this year. It would be tucked into a short-term spending bill intended to avert a government shutdown after Friday. Lawmakers from both parties hope to provide more money for CHIP in a separate, longer-term deal on federal spending. But Republicans will almost surely need Democratic votes to pass such legislation, and the antagonism between President Trump and Democrats in Congress is so great that no one can be sure of the outcome.
The uncertainty has been unsettling to parents, pediatricians and state officials around the country. States are weighing whether to freeze enrollment in CHIP, shut down their programs or find money from other sources. Last week Colorado sent letters to CHIP families, advising them to start researching private health insurance options because there was “no guarantee” that Congress would continue the program. Texas has drawn up a detailed “termination timeline” under which the state could begin mailing insurance cancellation notices on Dec. 22, three days before Christmas.
“It crushes me to think we’re in an environment where kids’ health is up for debate — that this somehow got tossed into the wrangling,” said Dr. Todd Wolynn, a pediatrician in Pittsburgh and a member of the American Academy of Pediatrics. “There are kids on protocols and regimens and treatment plans, and their families have got to try to figure out, what are we going to do?”
Here in Delaware, health officials anticipate running out of money for CHIP at the end of January if Congress does not act.
“I’ve been around a while and I’ve never seen a program that is this popular, and that goes across the aisle,” said Stephen Groff, director of the state’s Division of Medicaid and Medical Assistance. “To be having this discussion, that we may be in a funding crisis, is beyond belief.”
Members of both parties in the House and the Senate agree that Congress should provide money for CHIP for five years, through 2022. But they disagree over how to pay for it.
In early November, the House passed a bill to extend the CHIP program. But most Democrats voted against it because the legislation would have cut funds for other public health programs and ended insurance coverage for several hundred thousand people who had failed to pay their share of premiums for insurance purchased under the Affordable Care Act.
In the Senate, senior members of the Finance Committee say they have been making progress toward a bipartisan deal on CHIP, but they have been preoccupied for several weeks with their tax bill. The committee approved a five-year extension of funding for the program in early October, but did not specify a way to pay for the measure.
As Congress dithered, Minnesota received an emergency infusion of federal funds to continue CHIP for October and November, but is expected to be the first state to run out of federal money for the program. Emily Piper, the commissioner of the Minnesota Department of Human Services, said the state would use its own funds to fill the gap temporarily.
“I don’t think Washington is working the way anyone in the country expects it to work right now,” she said. “A dysfunctional Washington has real consequences for people.”
Oregon, which expects to exhaust its federal CHIP funds this month, will also use state funds to continue coverage, said Gov. Kate Brown, a Democrat. “As Congress rebuffs its responsibilities, it is up to us, Oregonians, to stand up for our children,” she said.
Colorado was the first state to send warning letters to families with CHIP coverage. “We felt it was important that folks covered by CHIP understand what’s happening,” said Marc Williams, a spokesman for the state Department of Health Care Policy and Financing.
In Texas, more than 450,000 children could lose CHIP coverage on Feb. 1 unless the state can obtain $90 million. Even if it comes through, supporters of the program worry about the effect of cancellation warnings.
“It gets very, very complicated once the state sends those letters out and starts walking down that road,” said Laura Guerra-Cardus, deputy director of the Children’s Defense Fund-Texas. “It can really affect trust in the program. So many families still don’t realize this is coming, and the few I’ve informed, they go immediately into a state of alarm.”
Representative Greg Walden, Republican of Oregon and the chairman of the Energy and Commerce Committee, which is responsible for the program, said last week that “we need to get CHIP done” because “states are in a real mess right now.”
Democrats said Congress should have provided money for CHIP months ago, but that Republicans had placed a higher priority on dismantling the Affordable Care Act and cutting taxes.
“Because Congress failed to do its job — a bunch of elected officials who have insurance paid by taxpayers failed to do their job — children here in America are about to be kicked off of their health insurance,” said Senator Sherrod Brown, Democrat of Ohio.
Senator Orrin G. Hatch, Republican of Utah and the chairman of the Senate Finance Committee, insisted: “We’re going to get CHIP through. There is no question about that.”
Mr. Hatch led efforts to create the program in collaboration with Senator Edward M. Kennedy, Democrat of Massachusetts, in 1997. “Nobody believes in the CHIP program more than I,” Mr. Hatch said on the Senate floor last week. “I invented it.”
Doctors at the Nemours/Alfred I. duPont Hospital for Children, here in Wilmington, were continuing to see CHIP patients last week at the flagship of a system that treats 15,000 children with CHIP coverage each year. Dr. Jonathan Miller, chief of the system’s Division of General Pediatrics, said many receive therapy for developmental delays and treatment for chronic conditions like asthma and obesity.
“It provides specialized care for children that’s more comprehensive than a lot of private coverage,” he said, “which is really designed with adults in mind.”
Research has also found CHIP increasingly helps people whose employer-provided insurance is too expensive for their entire family. Ariel Haughton, a mother of two in Pittsburgh, said it would cost more than $100 more a month to put her two children on the plan her husband gets through his job as an apprentice plumber, which also requires them to pay a high deductible before the coverage kicks in. Without CHIP, Ms. Haughton said, she might have delayed visiting the pediatrician this summer when her daughter had a fever and rash that turned out to be Lyme disease.
“It makes it so much easier for me to actually take good care of my children,” said Ms. Haughton. “We’ve had a rocky last few years, but at least I can take them to the doctor without having to be like, ‘Their fever isn’t 105 so I guess I’d better skip it.’”
Olivia Carrow, who had brought her 2-year-old to the children’s hospital here to test for an infection, said her other three children were newly uninsured and she had heard they might qualify for CHIP. The 2-year-old, William, qualifies for Medicaid because of a serious condition that causes his trachea to collapse.
The rest of the family had insurance through Ms. Carrow’s job as a nurse, but lost it after she cut back her hours this fall. She and her husband started a chicken farm this year and delayed exploring other coverage options, she said, partly because of the protracted fight in Congress over proposals to repeal the Affordable Care Act.
“Not knowing how things are going to go — I feel that way about health coverage in general,” Ms. Carrow said. “It doesn’t surprise me, but it gets very sad.”
House conservatives thumb their nose at the Maine moderate’s bid to slow the demise of the health law.
Sen. Susan Collins is barreling toward yet another health care showdown with her own party. But this time, she might not have the leverage to get what she wants.
Republicans who watched Collins lead the rebellion over the GOP’s Obamacare repeal effort just three months ago are playing tough on yet another high-stakes bill, wagering they can do without the Maine moderate’s swing vote and still claim a narrow year-end legislative win on tax reform.
Collins went along with the tax bill that repeals Obamacare’s individual mandate after Senate Majority Leader Mitch McConnell pledged to pass a pair of bills propping up Obamacare’s shaky insurance markets, including a bipartisan deal resuming payments on key subsidies that President Donald Trump halted in October.
But Speaker Paul Ryan has made clear he’s not bound by the deal, and there’s little urgency among House Republicans to do much of anything on health care before the end of the year. On Thursday, Republican Study Committee Chairman Mark Walker said conservatives received assurances that talks on a spending package to keep the government open won’t address Obamacare.
“The three things we were told are not gonna happen as part of our agreement: no CSRs, no DACA, no debt limit,” he said, referring to efforts to fund Obamacare’s cost-sharing subsidies.
That could cost Collins’ support after she signaled that her vote on the final bill may hinge on the fate of the health care measures.
She told a Maine CBS affiliate Thursday night that she’d wait to see the final language from the conference committee working on the tax bill before committing her vote.
“I won’t make a final decision until I see what that package is,” Collins told CBS WABI 5.
One bill, known as Alexander-Murray, would temporarily restore subsidies to insurers. The second would fund a two-year reinsurance program helping health plans cover particularly expensive patients.
Senate Republicans can only afford two defections and still pass the tax bill using a fast-track procedure that requires a simple majority,with Vice President Mike Pence ready to cast the tie-breaking vote. The margin would become razor thin if Collins holds out, and Sen. Bob Corker maintains his opposition over concerns about the bill’s impact on the deficit.
Yet House Republicans still chafing over the Senate’s failure to repeal Obamacare insist they won’t bend to Collins’ demands. And while Senate Republicans are trying to keep Collins in the fold, there’s little apparent worry so far that her opposition would sink the tax effort.
“I think you guys have to find something else to be concerned about,” said Sen. Tim Scott, one of the 17 GOP lawmakers assigned to merge the House and Senate versions of the tax plan.
Sen. Lamar Alexander, who coauthored Alexander-Murray and has championed its inclusion in a year-end agreement, also waved off the need to pressure House Republicans on the issue.
“The House knows our position,” he said. “When they see that they can lower premiums 18 percent … reduce the debt, reduce the amount of money going to Obamacare subsidies, I think it’ll be a Christmas present they’ll want to give to their constituents.”
One of the few moderates in a Republican conference that narrowly controls the Senate, Collins has regularly used her voice and vote to extract concessions from GOP leaders and ensure she’s a central figure in negotiations.
During the health care debate, she urged the GOP to protect Medicaid and preserve more subsidies for people to buy insurance. When they stuck with their blueprint, Collins joined fellow Republicans Lisa Murkowski and John McCain in a dramatic vote that killed the months-long repeal bid.
And in the run-up to the Senate’s late-night tax vote, she secured three late changes to the bill, including the expansion of a provision allowing people to deduct hefty medical bills that House Republicans had voted to eliminate entirely.
That was on top of McConnell’s “ironclad commitment” to tackle the two health care bills at year’s end — measures that Collins claims will help offset premium increases stemming from the bill’s repeal of Obamacare’s mandate that most Americans be insured.
Collins said Thursday she considers House passage of those Obamacare bills part of that commitment, even though McConnell has only publicly agreed to “supporting passage” of them and can’t singlehandedly force the House to take up legislation.
Ryan hasn’t officially ruled out the possibility, but declined to commit to rolling either of the bills into upcoming spending agreements. Conservatives have loudly opposed any aid for Obamacare, and even moderates who support stabilizing the health law have shrugged at the exact timing.
“What the vehicle is to get it through the system, in the House and the Senate to the president’s desk, I’ll leave that to our leadership,” said Rep. Tom Reed, who co-chairs the bipartisan Problem Solvers Caucus.
Collins insists she’staking the long view, claiming progress Thursday on trying to win over House Republicans during rounds of private negotiations.
“I remain confident, despite your skepticism, that we will eventually get that,” she said.
And as the GOP learned during the repeal debate, the whip count could shift suddenly. Sens. Jeff Flake and Ron Johnson remain wild cards, and either could conceivably join Corker and Collins in torpedoing the tax bill if they dislike the final version.
For now though, Republican leaders are signaling once again that Collins may not get everything she wants on health care — and gambling it won’t cost them a second time.
“I think that these are separate issues,” said Sen. David Perdue. “I’m hopeful that that won’t derail this [tax bill]. We’ve got to get it this done and get it on the president’s desk.”
Marguerite Moniot felt frustrated and flummoxed, despite the many hours she spent in front of the computer this year reading consumer reviews of health insurance plans offered on the individual market in Virginia. Moniot was preparing to buy a policy of her own, knowing she would age out of her parent’s plan when she turned 26 in October.
Marguerite Moniot recently purchased health insurance on the open market with the help of a health navigator. She and her parents began searching for a policy several months ago, but the details of each plan became too complicated for the family. (Courtesy of Marguerite Moniot)
She asked her parents for help and advice. But they, too, ran into trouble trying to decipher which policy would work best for their daughter. The family had relied on her father’s employer-sponsored plan through his work as an architect for years, so no one had spent much time sifting through policies.
“Honestly, my parents were just as confused as I was,” said Moniot, a restaurant server in Roanoke.
In defeat, just before Thanksgiving, she went with her mother to meet a certified health insurance navigator, buying a policy that allowed her to keep her current doctors.
A new crop of young people like Moniot are falling off their parents’ insurance plans when they turn 26 — the age when the Affordable Care Act stipulates that children must leave family policies.
They were then expected to be able to shop relatively easily for their own insurance on Obamacare marketplaces. But with Trump administration revisions to the law and congressional bills injecting uncertainty into state insurance markets, that task of buying insurance for the first time this year is anything but simple.
The shortened sign-up period, which started Nov. 1, runs through Dec. 15. That window is half as long as last year’s, hampering those who wait until the last minute to obtain insurance.
Reminders and help are scarcer than before: The federal government cut marketing and outreach funds by $90 million, and federal funding to groups providing in-person assistance was whacked by 40 percent.
“I think it’s definitely going to be difficult. There’s just additional barriers with [less] in-person help, just fewer resources going around,” said Erin Hemlin, director of training and consumer education for Young Invincibles, an advocacy group for young adults.
Emily Curran, a research fellow at Georgetown University’s Health Policy Institute, said those actions combined with the Trump administration’s vigorous criticism of the health law could further handicap the uphill battle to entice young people to enroll. As of Dec. 2, more than 3.6 million people had enrolled through the federal marketplace, according to the Centers for Medicare & Medicaid Services. The data were not sorted by age.
“There’s already a barrier where young adults are having difficulty understanding what the value of insurance is,” she said. “Coming out … and saying prices are going up, choice is going down and this law is a mess doesn’t really get at the young adult population.”
Trouble Attracting Young Adults
Before the Affordable Care Act, young adults had the highest uninsured rate of any age group.
The ACA made coverage more affordable and accessible. It allowed states to expand Medicaid to cover single, childless adults. Tax credits to help pay for premiums made plans on the individual market more affordable for people whose incomes fell between 100 and 400 percent of the federal poverty level (between $12,060 and $48,240 for an individual). And young adults were allowed to stay on their parents’ plan until their 26th birthday.
If the Trump administration’s moves dampen enrollment, insurers could face additional challenges in attracting healthy adults to balance those with illnesses, who drive up costs.In all, the uninsured rate dropped to roughly 15 percent among 19- to 34-year-olds in 2016. Still, young adults have not joined the individual market in the numbers as expected. About a quarter of marketplace customers in 2016 were ages 18-34, according to the Department of Health and Human Services. But that age group makes up about 40 percent of the exchanges’ potential market, according to researchers and federal officials.
“When you’re relatively healthy, it’s not something that you’re thinking about,” said Sandy Ahn, associate research professor at Georgetown University’s Health Policy Institute.
But illness does not recognize age. Dominique Ridley, who turned 26 on Dec. 6, knows this all too well.
Ridley has asthma. She always carries an inhaler and sees a doctor when she feels her chest tighten. The student at Radford University in Virginia relies on her mother’s employer-sponsored plan for coverage.
Ridley started peppering her parents with questions about health insurance as soon as she started seeing ads for this year’s open enrollment.
“I don’t want to just go out there and apply for health insurance, and it be all kinds of wrong and I can’t afford it,” she said.
Her parents didn’t have the answers, but her mother linked up Ridley with a friend that runs a marketing company tailored to promoting the Affordable Care Act. Ridley then connected with a broker who signed her up for a silver plan that will cost her less than $4 per month, after receiving a premium subsidy of more than $500 a month.
“If you don’t have health insurance, you don’t have anything,” Ridley said.
A Digital Campaign
The Obama administration relied in part on partnerships to attract young enrollees to sign up. Last year, it collaborated with national organizations like Planned Parenthood Federation of America and Young Invincibles on a social media campaign called #HealthyAdulting. Emails, according to Joshua Peck, former chief marketing officer for healthcare.gov, were particularly effective for recruitment.
The Centers for Medicare & Medicaid Services, which oversees the marketplaces, said it will focus this year’s resources on “digital media, email and text messages.”
“But obviously we can’t make up for $90 million in advertising” that’s been cut, said Hemlin.Hemlin said the government has not asked Young Invincibles to assist in marketing. Her group will use its own resources to pay for targeted ads on social media to reach the target demographic, she said.
One factor that might compensate is that 20-somethings are facile at shopping online, said Jill Hanken, director of Enroll! Virginia, a statewide navigator program.
“Our job is to make sure they understand to look at provider networks and drug formularies if they have health concerns. But they’re able to do the mechanics of enrollment on their own very often.”
James Rowley, a 26-year-old entrepreneur from Fairfax, Va., is among those who signed up without help. He started his own company two years ago while covered under his father’s health plan. When he turned 26, he signed up for health insurance on his own through a special enrollment period this year. After general enrollment opened this fall, he once again picked a plan.
“I might not 100 percent need it now, but there will come a time where health insurance is important,” said Rowley.
There are 450 dense pages in the legislation recently passed by the U.S. House of Representatives to change the tax code and another 467 in the Senate version. It is sweeping and complex. Most people understandably focus on the new individual rates: will it save or cost them money?
But with both 30-plus years of public finance experience and as a former Congressional aide, I approach this tax code legislation differently. I ask, how might some of the other proposed changes affect the lives of the average American?
While I found many parts of the proposed law are likely to have a pronounced impact, there was one I focused on in particular. Buried deep — on Page 288, Subtitle G, Section 3601, starting on Line 13 to be exact — was a provision eliminating the ability of local community hospitals to borrow money at favorable tax-exempt rates.
It is technical financial stuff; even my eyes glaze over a bit.
But let me break it down for you: Did you spend any time in a hospital this year? Or maybe a family member, friend, or loved one did?
You probably answered yes. I know I did. Almost everyone knows someone who was recently in a hospital. Some are big, internationally known institutions like the Mayo Clinic. Others, such as Baylor University Medical Center, are teaching facilities. Some have religious affiliations — Catholic Health Initiatives is a good example. But most likely the hospital you were thinking about was your local community hospital. There are more than 4,800 community hospitals around the nation. While there are some large ones, most are just small hospitals, like the 25-bed Pawnee Valley Community Hospital in Larned, Kansas, with doctors and nurses working hard to serve rural communities across America.
Nearly 80% of these community hospitals are not-for-profits. That means they operate to provide essential public services — no shareholders, no private owners. Any money they make goes back into the facility and the community.
To keep their facilities and medical services up to date, most not-for-profit hospitals need millions of dollars. To get that kind of money, they need to borrow. Providing this money is a large but surprisingly little known part of Wall Street. It is called the municipal bond market.
The municipal bond market, all $3.7 trillion of it, is where Wall Street meets Main Street. State and local governments, not-for-profits, and other public-service governmental authorities use this market to borrow money to build bridges, maintain roads, keep tap water flowing, toilets flushing, and a host of other public services we use every day and usually take for granted.
When a municipality, agency or hospital borrows, it sells bonds to investors. A bond is like when you go to the bank to get a mortgage. Just like you promise to repay the mortgage at a certain interest rate, a hospital promises to pay investors both their initial investment (principal) and interest (coupon).
Both investors and borrowers like the municipal bond market for several reasons, but the two main ones are that the municipal bond market is tax-exempt and it lends money for 30 years. Investors buying the bonds don’t pay taxes on the interest they receive. Because tax-exempt interest rates are usually lower than, say, the taxable interest rates that corporations borrow at, not-for-profits like your local community hospital get to borrow at lower rates, saving money that can be used to provide care, buy new technology, or to keep charges down. Savings can total in the millions of dollars.
The implications of this borrowing tax-status change are substantial. Big, well-known companies such as Microsoft or Apple have no problem issuing their taxable bonds to investors around the world. But a small community hospital? It doesn’t have that kind of size or name recognition to attract investors at interest rates that would be as low as the previous tax exempt rates.
With higher rates, potentially at less favorable terms and shorter repayment schedules, many hospitals might find themselves facing budget problems. Increased borrowing costs might mean having to increase charges for services or not having money for necessary medical equipment upgrades. Not only might patients end up paying more, but also it is equally possible insurance coverage, be it private, Medicare, or Medicaid, won’t reimburse for the higher charges. Patients might have to pay a lot more out-of-pocket.
So while others may think they are pocketing more money with the new individual tax rates, keep in mind the implications of other parts of the proposed tax changes. They may cost you more than you’re saving.
Two short months after they appeared to move past their campaign to dismantle the Affordable Care Act (ACA), Senate Republicans passed a tax reform package that includes a repeal of the law’s individual health insurance mandate. House Republicans have indicated they will follow suit.
The mandate is an easy target. Since before the ACA was passed, it has been portrayed as un-American. President Trump articulated this criticism during his inaugural address to Congress, when he argued that “mandating that every American buy government-approved health care was never the right solution for our country.” It has also been labeled anti–free market, and it has been called an affront to personal freedom.
It is none of these things.
An individual mandate to purchase health insurance was first proposed in the U.S. by the conservative Heritage Foundation, which in 1989 saw it as a way of creating healthy insurance pools, a solution to what they saw as the “free-rider” problem in health care, and as an alternative to a single-payer system. It was first passed into law by Mitt Romney, the Republican governor of Massachusetts, who promoted it as a market-based idea grounded in the principle of individual responsibility.
Does the individual mandate restrict freedom? Yes, but not unreasonably, and it isn’t unique in this regard. The 49 state laws requiring drivers to carry auto insurance also restrict individual freedoms, as do fishing licenses and nearly all taxes. In the case of compulsory auto insurance, every state except New Hampshire has made the calculation that the harm of curtailing freedom is outweighed by associated goods — for compulsory auto insurance this is the sense of security one gets from knowing that if a faulty driver hits you he or she will have the means to pay your medical bills or repair your car. When one turns to health insurance, the associated goods are much more profound.
The benefit of the individual insurance mandate derives from the collective goods we all receive from increased participation in insurance markets — these include lower rates of uncompensated care, healthier insurance markets, and ultimately lower premiums and better access to health care.. It helps makes the ACA marketplaces sustainable, thereby giving millions a source of comprehensive health insurance, and millions more the peace of mind knowing that they have a place to go if they ever need to buy it. For these last reasons, the individual mandate actually enhances freedom. Having universally available, high-quality health insurance frees us from the fear of being one illness away from financial ruin, from being tethered to a job (or relationship) because it is the only means of coverage, and frees us and our loved ones from the physically or financially disabling effects of an unmanaged illness.
Repealing the individual mandate and the destabilizing of health insurance markets that will follow will harm a lot of Americans. The Congressional Budget Office projects that 13 million people will lose their health insurance because of the repeal.
Nonetheless, Republicans appear poised to move ahead. Crippling the marketplaces hasn’t garnered the ire of key Republican governors who weighed in strongly on the large Medicaid cuts proposed as part of earlier repeal bills. And senators who may have been concerned about the consequences of repeal cared more about passing tax reform — a must-have political victory for Republicans.
The other reason why this newest attack on the ACA may be more successful than earlier ones is that, from the outset, the individual mandate has never had strong public support; it polls lower than other key provisions and has been the target of a disproportionate share of the harsh rhetoric aimed at the law. The Obama administration was never able to sell the public on the connection between a strong mandate and high-quality, affordable health insurance, so for some it has felt like pointless government intrusion.
Regardless of how people feel about the mandate, the facts are clear: millions of Americans have benefited from it and live more freely because of it. Congress should remove the individual mandate repeal from the tax bill to help ensure that 13 million people don’t lose the freedoms it has given them.
HENRY KOTULA 