Tag Archives: Health Policy

How investing in public health could cure many health care problems

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http://theconversation.com/how-investing-in-public-health-could-cure-many-health-care-problems-84256?utm_medium=email&utm_campaign=Latest%20from%20The%20Conversation%20for%20October%201%202017%20-%2084576980&utm_content=Latest%20from%20The%20Conversation%20for%20October%201%202017%20-%2084576980+CID_49b12b4a2a39e7f173235a40290664ab&utm_source=campaign_monitor_us&utm_term=How%20investing%20in%20public%20health%20could%20cure%20many%20health%20care%20problems

Now that the Cassidy-Graham bill has been pulled, it’s a good time to think about concrete ways to improve health and health care in our country. Despite advances in medicine, U.S. health care spending grew to US$3.2 trillion in 2015, or 17.8 percent of the nation’s gross domestic product. To contain health care costs, the U.S. needs to invest in strengthening the public health system and reconsider approaches to making all Americans healthier.

Making Americans healthier should not be a partisan issue. Conservatives and progressives alike should agree on the importance of keeping Americans healthy – both on principled and financial grounds. The sicker the American people, the more expensive their care, and much of that cost will inevitably be borne by Medicare and Medicaid. Yet major challenges loom.

As the Dean of Columbia University’s Mailman School of Public Health, I have dedicated my career to the health of populations, using science and evidence to transition to a world where health and health care are collective priorities for all. My research and that of others suggests that this situation can be improved, but it will require a major national strategy and commitment to invest in public health – one that can be highly cost-effective.

Just the facts

Take, for example, the toll of chronic disease in the U.S. As of 2012, about half of adult Americans were living with one or more chronic health conditions, according to the Centers for Disease Control and Prevention, and one in four adults had two or more. Treating people with chronic diseases accounts for most of our nation’s health care costs. Eighty-six percent of the nation’s annual health care expenditures are for people with chronic and mental health conditions.

This problem will only grow as the U.S. population increases. And the census projects that the population will increase by 98 million between 2014 and 2060.

At the same time, America’s crumbling infrastructure is putting many Americans’ health at risk. The country’s drinking water systems, which are foundational to health, received a D grade on the 2017 Infrastructure Report Card of the American Society of Civil Engineers. Hazardous waste management and wastewater treatment earned only D+ grades.

The connection between health and infrastructure is strong: Infrastructure greatly affects access to healthy lifestyles. While access to clean drinking water and waste treatment are paramount, there are other examples, too.

Sidewalks and bike lanes encourage physical activity; public parks provide space for exercise and rejuvenation; and public transit is crucial to getting people out of cars, encouraging walking and, of course, reducing pollution and congestion. Subways and buses also enable older adults to reach needed services and remain in their homes longer.

Improvements to infrastructure are typically one-time expenses with recurring benefits. For example, one new sidewalk benefits an entire generation of walkers and runners. Research shows that every $1,300 New York City invested in building bike lanes in 2015 provided benefits equivalent to one additional year of life at full health over the lifetime of all city residents.

Other studies also have shown that preventing illness is far less expensive than paying for treatment. Trust for America’s Health estimates that “an investment of $10 per person per year in proven community-based programs to increase physical activity, improve nutrition, and prevent smoking and other tobacco use could save the country more than $16 billion annually within five years. This is a return of $5.60 for every $1.” With ever-rising health care costs, how can we overlook such opportunities?

Prevention policies and cessation help

The focus of American health care and health-related research needs to be shifted to include prevention, not just treatment. The “Cancer Moonshot,” which has strong bipartisan support, is a vital step in this direction, providing $1.8 billion in funding over seven years.

Cancer prevention must be a high priority, and the success of this effort could inspire a national consensus around future commitments to tackle other diseases and conditions.

Another prevention priority should be healthy aging. Today there are more than 46 million Americans aged 65 years or older; and by 2060, the number of seniors is expected to more than double, according to the Department of Health and Human Services and the Census Bureau. Promoting healthy aging for older Americans should, therefore, be paramount.

And healthy aging begins far earlier than 65 or 70. Obesity, in particular, may be determined in early childhood, even before. According to research by my Mailman School colleague Andrew Rundle, prenatal exposure to air pollution raises risk for obesity in childhood. His research shows that children who are overweight or obese at age five are more likely to be overweight or obese by age 50. We also know that these adults, and increasingly children too, will be more likely to have diabetes, high blood pressure and high cholesterol.

Efforts at smoking cessation should also be increased. The total economic cost of smoking in the United States is more than $300 billion a year in direct medical care and lost productivity, according to the CDC.

That’s more than we’re spending on the Cancer Moonshot annually.

Thinking big

America has extraordinary research capability. The NIH invests nearly $32.3 billion annually in medical research for the American people. Targeted cancer therapies, for instance, are the focus of much anticancer drug development, according to the National Cancer Institute. Precision Medicine is a top priority at the NIH and other research agencies. Even at $32 billion, Americans are investing in the NIH only 1 percent of what we spend on health care annually. The U.S. should build its advantage by increasing research funding to enhance the potential of breakthroughs in preventing known diseases as well as future threats.

There is reason for optimism. The good news stems in large part from the fact that chronic diseases and conditions – such as heart disease, stroke, cancer, Type 2 diabetes, obesity and arthritis – are among the most preventable of all health problems. At least half of these diseases could be prevented, and we are making strides. Death rates from heart disease, the No. 1 cause of death in America, have been reduced by nearly half, for instance, since 1990, according to the American Heart Association.

The growth and aging of the U.S. population and the epidemic of chronic diseases and conditions pose major challenges for America’s health care costs, no matter how health care is constructed. But a relentless focus on public health – and disease prevention in all its dimensions – is the best way to reduce pressure on costs.

Five questions on healthcare following Price’s resignation

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Five questions on healthcare following Price’s resignation

Five questions on healthcare following Price's resignation

Tom Price’s resignation as Health and Human Services (HHS) secretary creates a big leadership void at the top of the department tasked with administering a health law Republicans hate.

President Trump accepted the embattled secretary’s resignation Friday on the heels of Politico reports detailing how Price’s travel on military and charter jet flights had cost taxpayers more than $1 million since May.

“I have spent forty years both as a doctor and public servant putting people first,” Price said in his resignation letter. “I regret that the recent events have created a distraction from these important objectives.”

Price’s resignation also follows the GOP’s latest failure to repeal and replace ObamaCare, which Trump had wanted accomplished quickly earlier in the year.

Here are five questions about what comes next:

Who is taking over?

Dr. Don Wright, a career official at HHS,  will serve as acting HHS secretary effective Saturday. Wright has served as the acting assistant secretary for health at HHS since February after joining the agency in 2007, according to HHS’s website.

He’s held a number of positions during his tenure at HHS, including deputy assistant secretary for health and director of the Office of Disease Prevention and Health Promotion.

During his time at HHS, Wright oversaw the national dietary guidelines and the department’s health literacy agenda.

He also represented the U.S. at the World Health Organization executive board.

Prior to joining HHS, Wright worked for the Occupational Safety and Health Administration (OSHA).

Before he started working for the government, he worked for 15 years in the private sector at a clinic and consulting practice in Texas.

What comes next on ObamaCare?

Congressional Republicans won’t be voting to repeal ObamaCare anytime soon. That’s because the vehicle they were using to repeal President Obama’s signature health law without requiring a single Democratic vote expires Saturday.

The focus will now be on how HHS implements the health law.

ObamaCare supporters and local groups tasked with enrolling consumers in the exchanges, known as navigators, are openly frustrated with the administration.

Democrats are arguing that the White House is blatantly sabotaging the law. They point to the administration’s decision to shorten the open enrollment window by half. In late August, HHS announced it was slashing advertising funding by 90 percent and cutting funding for navigator groups by 41 percent.

Open enrollment begins Nov. 1.

Who could replace Price permanently?

Several names have been reported as possibilities for taking over Price’s job.

One is Seema Verma, who heads the Centers for Medicare and Medicaid Services. She was an architect of several state-tailored Medicaid waivers, notably Indiana’s Medicaid expansion program when Vice President Pence was governor. Several Democrats joined Republicans to confirm Verma in a 55 to 43 Senate vote.

Verma was also dispatched to the Hill during the Senate’s ObamaCare repeal bill effort in attempts to smooth over intra-party divisions over how to tackle Medicaid.

Another name being floated is Scott Gottlieb, the Food and Drug Administration commissioner. A handful of Democrats also supported Gottlieb’s nomination.

Politico also noted that Department of Veterans Affairs Secretary David Shulkin was rumored to be a possible replacement, but Shullkin has had questionable travel expense of his own.

Before Trump nominated Price, a short-list of candidates for the HHS job included Housing and Urban Development Secretary Ben Carson, former Speaker Newt Gingrich (R-Ga.), Florida Gov. Rick Scott (R) and former New Jersey state Sen. Rich Bagger, according to a list obtained by Buzzfeed.

What will the confirmation process be like?

It’s unclear when Trump plans to nominate Price’s replacement. But Price’s resignation is setting up a potentially nasty confirmation process in the Senate.

Democrats have accused the Trump administration of trying to sabotage ObamaCare and whomever is nominated will likely be asked about how they would handle the law.

“Throughout his brief time leading the Department of Health and Human Services, Tom Price has repeatedly abused the public trust and betrayed the agency’s mission to improve Americans’ health care,” Sen. Ron Wyden, ranking Democrat on the Senate Finance Committee, said in a statement Friday.

“I hope that his resignation will mark the beginning of a new chapter for the Trump administration’s health care agenda. Tom Price’s replacement needs to be focused on implementing the law as written by Congress and keeping the president’s promise to bring down the high cost of prescription drugs.”

Democrats were opposed to Price’s confirmation, mostly because of questions about his stock trades and investments, which they said were a conflict of interest.

In protest, Democrats didn’t show up to the Finance Committee’s confirmation hearing, and Chairman Orrin Hatch (R-Utah) used a procedural maneuver to push through the nomination. He could likely do that again if Democrats don’t show up.

The whole process took a little less than three months, and it’s unlikely this one will move any faster.

That means HHS is unlikely to have a permanent health secretary in time for ObamaCare’s fifth open enrollment season.

Will Price still pay for his charter seats?

Price said he would pay $52,000 to the U.S. Treasury for the cost of his seats on the private charter planes. That’s a small amount compared to the more than $1 million he reportedly racked up.

But there are also questions about whether he still plans to pay that money back.

“Wait… did we get our money back first?” asked Rep. Linda Sanchez (D-Calif.)

Price, who was worth more than $8 million in January according to his nomination disclosure forms, didn’t mention the money in his resignation letter.

 

 

Obamacare Repeal Bills, Like ‘Game of Thrones’ White Walkers, Are Very Difficult to Kill

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https://www.americanprogress.org/issues/healthcare/news/2017/09/21/439380/obamacare-repeal-bills-like-game-thrones-white-walkers-difficult-kill/

Image result for game of thrones white walkers

Michele and Igor speak with Andy Slavitt, former acting administrator at the Centers for Medicare and Medicaid Services under former President Barack Obama—and Twitter hero—about the latest efforts in Congress to repeal the Affordable Care Act in the form of the Graham-Cassidy bill. He reminds listeners why health care is far more personal and significant than partisan politics and how to work toward universal coverage.

 

3 Ways the Senate Budget Reopens the Door for ACA Repeal

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https://www.americanprogress.org/issues/economy/news/2017/09/29/440039/3-ways-senate-budget-reopens-door-aca-repeal/

After the latest failed attempt to repeal the Affordable Care Act (ACA) in the Senate, Sens. Lindsay Graham (R-SC) and Ron Johnson (R-WI) declared that they would only support a new budget resolution that enabled them to keep trying to force through their own health care bill. The Senate has not had to meet the 60-vote standard to pass ACA repeal because of the budget reconciliation process, which lets the Senate pass legislation with a simple majority vote. This process began with reconciliation instructions included in the fiscal year 2017 budget that Congress passed in January 2017, but those instructions expire on September 30.

While the new FY 2018 budget resolution from the Senate Budget Committee retreats from ACA repeal to some extent—after massive public opposition—it would still enable Congress to revive major elements of ACA repeal using reconciliation. Here are three ways the proposed Senate budget supports ACA repeal.

1. An overly broad reconciliation instruction to the Senate Finance Committee

The Senate Finance Committee has jurisdiction over both tax policy and several federal health care programs, including Medicare and Medicaid. If the Senate wanted to limit the scope of a reconciliation bill to tax policy, the budget resolution could give instructions to the Senate Finance Committee that only cover revenues. Instead, the budget instructs the Finance Committee to produce legislation that increases deficits by up to $1.5 trillion over 10 years.

Since deficit changes can be accomplished via changes to both spending and revenues, the Finance Committee could use this reconciliation instruction to repeal ACA-related taxes as well as much of the spending that helps people purchase health insurance under current law. Politico reports that “95 percent of health care policy” goes through the Senate Finance Committee, according to a Republican Congressional staffer discussing ACA repeal. As a result, the staffer said, “it’s not like we couldn’t slip it in anyway.”

Every dollar the Finance Committee cuts from health care could be used to pay for tax cuts for the rich that would be on top of the $1.5 trillion tax cut financed by deficits. This reconciliation instruction could let Congress pass a huge deficit-financed tax cut for the wealthy and corporations, combined with major elements of ACA repeal, in a single omnibus reconciliation bill. If the Finance Committee’s overall bill does not increase deficits by more than $1.5 trillion over 10 years, the Senate could pass it on a party-line vote under reconciliation.

Aside from the Finance Committee, the only other committee involved in ACA repeal in the Senate is the Health, Education, Labor, and Pensions (HELP) Committee. The Senate budget resolution does not give a reconciliation instruction to the HELP Committee, which signals a meaningful retreat from full ACA repeal. Nevertheless, the Finance Committee instruction would still enable the Senate to change major parts of the law, which could include nullifying the ACA mandate for individuals to purchase health insurance, repealing the ACA-related taxes that finance the coverage expansion, and making all of the Medicaid cuts in earlier ACA repeal legislation, such as repealing the Medicaid expansion and making further cuts by turning the program into a block grant.

2. A deficit-neutral reserve fund for ACA repeal

The Senate budget resolution further smooths the path for ACA repeal with a deficit-neutral reserve fund for “repealing or replacing” the ACA. This allows Senate Budget Committee Chairman Mike Enzi (R-WY) to adjust the aggregates that are included in the budget resolution, such as overall spending and revenue levels, to accommodate ACA repeal. This reserve fund helps the Senate majority avoid points of order that could otherwise create hurdles for passing a future health care bill. A similar reserve fund was also included in the FY 2017 budget resolution.

Budget resolutions often include many reserve funds that are mostly designed to signal rhetorical support for an issue. Not only does the reserve fund for health legislation smooth the way for ACA repeal, it also shows that supporters of the Senate budget continue to endorse ACA repeal even after the FY 2017 reconciliation instructions expire on September 30.

3. Deficit-financed tax cuts

Even if Congress does not go after the ACA using reconciliation instructions in the FY 2018 budget, the deficits from the tax cuts the Senate budget enables will be used by the ACA’s opponents to attack the law in the future. Whipping up hysteria about budget deficits is a common tactic to advocate cuts to programs such as Medicare and Medicaid, and it is already being used to justify ACA repeal. When asked a question on CNN from a person who had recovered from substance abuse addiction and who worried about loss of Medicaid coverage for treatment for others suffering from addiction, Sen. Graham responded, “Let’s talk about $20 trillion of debt.”

If lawmakers increase the debt with the very tax cuts that Treasury Secretary Steven Mnuchin says will be “done by the end of the year,” it will add further fuel to their drive to slash programs for low- and middle-income Americans using reconciliation instructions in their next budget resolution for FY 2019. This will not be a long delay—the FY 2019 budget would be passed by April 15, 2018, if Congress follows the schedule for the regular budget process.

Lawmakers can cut taxes, increase deficits, and use those higher deficits to justify a renewed push to repeal the ACA, all before the 2018 midterm elections.

Conclusion

The window is closing for Congress to pass ACA repeal using the FY 2017 reconciliation instructions, but the Senate Budget Committee is reopening it with the FY 2018 budget. The quest to repeal the ACA—thereby cutting taxes for the wealthy, taking health insurance from tens of millions of Americans, eliminating protections for preexisting conditions, and driving up out-of-pocket costs—will continue if Congress passes the Senate budget resolution.

What’s Past Is Prologue: CBO’s Score for the House-Passed AHCA Reminds Us Why Insurance Markets Need Regulation

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http://www.commonwealthfund.org/publications/blog/2017/jun/why-insurance-markets-need-regulation

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The Trump administration has been arguing for months that the insurance market reforms of the Affordable Care Act (ACA) are not working and are even harming consumers. But four years of accumulated data on Americans’ experiences in a reformed individual market provides considerable evidence to the contrary. Americans’ ability to buy comprehensive health plans on their own has improved significantly since the reforms went into effect in 2014. Most people with marketplace plans are satisfied with them and have used their plans to get health care they couldn’t have obtained in the past. A majority of those eligible for subsidies have premiums and deductibles similar to those in employer plans. And while policy fixes are needed to improve affordability, as well competition in some areas of the country, the marketplaces were looking increasingly stable for both consumers and insurers at the beginning of this year.

It is actually the lack of certainty about the administration’s actions regarding the enforcement of the market reforms, rather than the reforms themselves, that are the primary source of the marketplace’s current problems. The importance of the ACA’s insurance market reforms were underscored last week in the Congressional Budget Office’s (CBO) analysis of the House-passed American Health Care Act (AHCA), the Republican’s ACA repeal-and-replace bill. The report included an assessment of an amendment that would allow states to undo some of the reforms. That assessment is a powerful illustration of why these reforms were needed in the first place.

The MacArthur Amendment Relaxes ACA Individual Market Reforms

In the week before the House vote in May, Representative Tom MacArthur sponsored an amendment to the AHCA that provided waivers for states that wanted to relax two major sets of ACA reforms:

  • The requirement that insurance companies sell policies that cover a standard set of health benefits similar to those in employer-based coverage
  • The ban that prevents insurance companies from charging people more based on their health.

Under the first waiver, states could let insurers eliminate coverage for many services, significantly driving up out-of-pocket costs for people who need these services. Under the second waiver, states could allow insurers to price, or underwrite, people’s insurance based on their health if they applied for a plan and had a gap in their insurance of 63 days or more. States with the waivers would be required to establish high-risk pools or reinsurance programs to make coverage affordable for people who had higher premiums as a result. They could draw funds from the AHCA’s Patient and State Stability Fund, a pool of $10–$15 billion a year over 2018–2026 that was supplemented for various purposes through amendments.1

CBO Estimated About Half the U.S. Population Lives in States That Would Request Waivers

If there were doubts about whether any states would apply for the waivers, the CBO had some news: half the U.S. population could live in states that would use these waivers to begin deregulating their individual insurance markets. The basis for their estimate? In part, they considered state approaches to their individual markets prior to the ACA. States that had previously allowed insurers the freest rein in consumer coverage denials, rating on health, and flexibility in what services they would cover were expected to loosen the reins again.

CBO also expected that states that sought the waivers would implement them in different ways. Some states might modestly deregulate their markets while others might make more dramatic changes. For example, some states might require insurers to cover a core set of benefits but allow them to exclude maternity or mental health services. Using 2014 data, RAND researchers have estimated that this could increase the costs to families of having a baby by $6,900 to $9,300 and the annual costs of mental health care by $1,300 to over $12,000. Other states might go a step further and let insurers determine the entire content of their benefit packages as they did in many states prior to the ACA, leaving many people with preexisting conditions stuck with the full cost of their care.

Likewise, CBO assumed that some states would take different approaches to reintroducing individual underwriting in their markets. Because healthy people would face lower premiums if they were rated on the basis of their health, they would have little incentive to maintain continuous coverage, since they would prefer the lower rate they would receive if carriers rated them on health. In order to keep healthy people in the community-rated risk pool (the one with both healthy and unhealthy enrollees), a state might only allow underwriting of people with health problems.

Other states might go whole hog and allow underwriting on health for everyone who had a coverage gap, regardless of their health status. These markets over time would begin to look like those of the pre-ACA past: markets segmented into pools where people in good health could find affordable plans and those with health problems were priced out of the market. The CBO concluded that the funds set aside for state high-risk pools for people with health problems were inadequate to make coverage affordable for people with preexisting conditions in these states.

What’s Past Is Prologue

Decades of experience with the individual market in the United States has shown that without considerable regulation the market simply cannot function for all those who rely on it. Allowing insurers in the past to price each individual’s policy according to their health penalized those who were the sickest and rewarded those who were the healthiest. The 35 states that tried to patch high-risk pools onto their individually rated markets and the ACA’s own transitional Preexisting Conditions Insurance Plan program left robust evidence that high-risk pools were expensive for states and the people who enrolled in them, left millions uninsured, and were ultimately unsustainable. States that had attempted to ban pricing based on health status (like New York and New Jersey) also experienced instabilitybecause the lack of premium subsidies and an individual mandate left their markets lopsided: too many people in poorer health without the balance provided by those in better health.  As a result, premiums soared.

In contrast, four years of experience with the ACA’s insurance market reforms demonstrates that it is possible for this market to offer affordable, comprehensive insurance to people with diverse health needs. In 2010, 60 percent of adults who tried to buy a plan in the individual market said that they found it very difficult or impossible to find one they could afford. By 2016, that number had fallen by nearly half, to 34 percent. While this rate leaves plenty of room for improvement, the substantial decline suggests that the U.S. has been headed in the right direction if private markets are the nation’s preferred path to universal coverage. But any future movement along this path will require the full commitment of the Trump administration and Congress to enforcing and improving the ACA’s reforms of our complex private health insurance markets.

ACA “Bare Counties”: Policy Options to Ensure Access Must Address Longer-Term Stability and Competition

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http://www.commonwealthfund.org/publications/blog/2017/sep/aca-bare-counties

Image result for Bare Counties

 

Continued uncertainty about federal funding for health plans is contributing to higher individual market premiums and insurer withdrawals in 2018. The danger that consumers in some regions wouldn’t have any coverage option next year seemed to subside when insurers in the affected states eventually agreed to broaden their participation. But with the September 27 deadline for deciding to participate in the Affordable Care Act (ACA) marketplaces fast approaching, Virginia officials announced an insurer withdrawal that may leave as many as 63 counties without coverage. At the same time, many more counties appear likely to have just one insurer offering marketplace coverage. The risk that any consumer might be without options for health coverage deserves the right response from policymakers.

Relief for Bare Counties?

The threat of counties without individual market insurers, known as “bare counties,” should be a real concern of policymakers. Even if consumers in all counties have a marketplace plan that gives them access to ACA subsidies, a single plan choice locks consumers into the plan that is available to them, not necessarily the one that best meets their needs. It also fails to foster competition on price and quality, and leaves state officials tasked with approving plans in a difficult position. Two proposals in the Senate would address bare counties, and although both might provide access to federal subsidies, each has significant side effects that are likely to negatively impact market stability and future plan choices.

The Health Care Options Act (S. 761), introduced earlier this year by Senator Lamar Alexander (R–Tenn.), would allow individuals who live in an area without a marketplace plan to qualify for premium tax credits — paid at year-end — to purchase coverage off of the marketplace, including coverage that doesn’t comply with ACA consumer protections. A second bill introduced by Senator Claire McCaskill (D–Mo.), the Health Care Options for All Act (S. 1201), would allow individuals living in a bare county to purchase coverage through the District of Columbia marketplace, where members of Congress and their staff obtain coverage.

By allowing tax credits to be used for coverage that does not meet ACA requirements, the Alexander bill will likely encourage insurers to sell skimpy policies and healthy individuals to enroll in them. Noncompliant policies would have far lower premiums than compliant ones, which, because of the ACA, cannot discriminate based on an individual’s health status. Consequently, insurers that choose to sell in the off-marketplace market likely will hike their premiums for comprehensive coverage to account for the likelihood of enrolling fewer and less healthy individuals. Indeed, they may find that offering such coverage is unsustainable, particularly given that they would still be able to capture healthy, subsidized enrollees through the sale of noncompliant plans.

In contrast, the McCaskill bill would allow consumers to continue to have access to the ACA’s upfront premium and out-of-pocket help and would limit federal financial help to marketplace plans that meet critical consumer protections. However, by requiring insurers selling in the District of Columbia’s small business marketplace to offer individual market coverage to out-of-state consumers, many of whom live in rural areas and are likely to be higher-cost individuals, the proposal may undermine premiums and plan choice for D.C.’s residents and small businesses.

Other potential solutions would offer help to residents of bare counties without the potential harm of the Senate proposals. For example, Congress could allow individuals living in bare counties to use ACA subsidies to buy into other comprehensive coverage — for example, the Federal Employees Health Benefits Program or Medicaid — to ensure access to ACA financial help without undermining market stability.

Policymakers also might consider requiring a fallback plan modeled on the approach taken in the Medicare prescription drug benefit. When that program was enacted, policymakers ensured adequate plan participation in the new market by designating a fallback plan that would provide coverage in any county with two or fewer plans. Such an approach would solve not only the bare counties problem but also would foster competition and ensure adequate plan participation.

Looking Forward

Policymakers looking to stabilize the market and avoid bare counties are right to start by ensuring that payments for cost-sharing reductions continue. Insurers have made clear that guaranteeing federal funding for cost-sharing reductions is a defining factor in their decision to participate in marketplaces next year. In the event there are counties without insurers, it is important that policymakers consider not just the immediate effects of potential policy fixes, but also their longer-term consequences for access to affordable, comprehensive coverage. Solutions for bare counties that allow individuals to use upfront assistance to buy a fallback plan that offers comprehensive coverage would help those individuals who are affected buy and maintain comprehensive coverage while insuring healthy and competitive markets for all.

Down to the Wire: Indecision on ACA Cost-Sharing Reduction Payments Creates Confusion for States

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http://www.commonwealthfund.org/publications/blog/2017/sep/cost-sharing-reduction-payment-indecision

Among the Trump administration’s first promises was to give states more flexibility and control over their health insurance markets than they had had during the Obama years. To date, however, the administration has offered states only uncertainty about what to expect in 2018, which has made it difficult to set premium rates. In particular, state officials are struggling to keep their insurance markets afloat in the face of the Trump administration’s continued indecision over whether to reimburse insurance companies for Affordable Care Act (ACA) cost-sharing reduction (CSR) plans. And time is running out.

No Clarity About Future Payments

Under the ACA, insurers are required to offer plans with reduced cost-sharing for out-of-pocket expenses like copayments and deductibles to eligible low-income enrollees; the government then reimburses insurers for the higher cost of those plans. The Trump administration has threatened to cut off those reimbursements, which for 2018 were projected to reach $8 billion. If these reimbursements do terminate at the end of this year, the Congressional Budget Office has estimated that 2018 premiums will rise by an average of 20 percent. This projection is consistent with similar estimates from the Kaiser Family Foundation and insurers’ own proposed 2018 rates, which were submitted to states this summer.

While the administration has continued to make the monthly CSR reimbursements so far, federal officials have not committed to any future payments. The Trump administration has extended the deadline for finalizing premium rates to September 20, 2017, but even that deadline is fast approaching. Once rates are finalized by states, insurers are locked into them for the full calendar year.

State Decisions Will Drive Insurer Participation and Costs for Consumers and Taxpayers

Whether insurers continue to participate in the ACA marketplaces and what consumers — and federal taxpayers — ultimately pay could depend on the actions of 50 different state insurance commissioners (plus D.C.). Yet, as noted, these state regulators and insurers are in a race against the clock to develop, review, and implement 2018 premium rates that reflect insurers’ likely costs as accurately as possible.

To date, state departments of insurance have given insurers different directives about how to set their premium rates for next year. The variation in these directives will result in different — and potentially significant — consequences for consumers, insurers, and federal taxpayers.

At least one state insurance department, Maryland’s, is currently requiring insurers to submit 2018 premium rates assuming they will be reimbursed for CSR plans throughout 2018. This approach has the advantage of helping to keep rate increases in check for consumers, particularly those not eligible for the tax credit subsidies that shelter low- and moderate-income enrollees from premium hikes. But this directive also carries big risks. If the Trump administration cuts the CSR reimbursements and insurers don’t have sufficient time to submit new rates, then they will face significant financial losses and some (if not all) will likely exit the market, leaving consumers without coverage options.

Other states, such as in New York and Utah, have required or allowed insurers to assume they won’t be reimbursed for CSR plans in 2018. While this means big premium increases for many consumers, it gives insurers more confidence to participate in the market by protecting them from major financial losses. At the same time, if the Trump administration decides to keep the CSR reimbursements going (or if Congress steps in to appropriate the necessary funds), these insurers will reap a windfall, financed largely by federal taxpayers through the ACA’s premium tax credits. Yet more state insurance departments, such as in Arkansas, California, Michigan, and New Mexico, have tried to hedge their bets by asking insurers to submit two sets of rate requests — one assuming CSR reimbursements will be paid, one assuming they won’t.

Still other states have not yet provided directives or reassurances to their insurers, essentially leaving it up to each company to decide how to respond to the uncertainty over CSRs. However, allowing each insurer to decide for themselves could lead to significant market disruption. For example, if one insurer sets premiums assuming they will be paid CSRs, but others in the market increase premiums assuming they will not, it will drive enrollment to the lower-cost plan at the expense of its competitors, placing that insurer at risk of insolvency if the CSRs are not paid.

Looking Ahead

Most observers have hoped that federal policymakers would announce a decision on CSRs one way or another in time for insurers to adjust premium rates for 2018. But as the deadline for finalizing rates looms, it is less and less likely that states will have the clear federal signal they need to decide how to best regulate their insurance markets and review proposed premiums for the upcoming year. Without clarity from federal officials or commitment from Congress to continue funding for CSRs, state insurance departments and insurers will need to make some high stakes bets on the future of these markets by setting premiums that may be too high or too low. Ultimately, the risk of losing these bets will be borne primarily by consumers and federal taxpayers.

Following the ACA Repeal-and-Replace Effort, Where Does the U.S. Stand on Insurance Coverage?

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http://www.commonwealthfund.org/publications/issue-briefs/2017/sep/post-aca-repeal-and-replace-health-insurance-coverage

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Conclusion and Policy Implications

The findings of this study could inform both short- and long-term actions for policymakers seeking to improve the affordability of marketplace plans and reduce the number of uninsured people in the United States.

Short-Term

The most immediate concern for policymakers is ensuring that the 17 million to 18 million people with marketplace and individual market coverage are able to enroll this fall.

Congress could take the following three steps:

  1. The Trump administration has not made a long-term commitment to paying insurers for the cost-sharing reductions for low-income enrollees in the marketplaces, which insurers are required to offer under the ACA. Congress could resolve this by making a permanent appropriation for the payments. Without this commitment, insurers have already announced that they are increasing premiums to hedge against the risk of not receiving payments from the federal government. Since most enrollees receive tax credits, higher premiums also will increase the federal government’s costs.9
  2. While it appears that most counties will have at least one insurer offering plans in the marketplaces this year, Congress could consider a fallback health plan option to protect consumers if they do not have a plan to choose from, with subsidies available to help qualifying enrollees pay premiums.
  3. Reinsurance to help carriers cover unexpectedly high claims costs.10 During the three years in which it was functioning, the ACA’s transitional reinsurance program lowered premiums by as much as 14 percent.

The executive branch can also play an important role in two ways:

  1. Signaling to insurers participating in the marketplaces that it will enforce the individual mandate. Uncertainty over the administration’s commitment to the mandate, like the cost-sharing reductions, is leading to higher-than-expected premiums for next year.
  2. Affirming the commitment to ensuring that all eligible Americans are aware of their options and have the tools they need to enroll in the coverage that is right for them during the 2018 open enrollment period, which begins November 1. The survey findings indicate that large shares of uninsured Americans are unaware of the marketplaces and that enrollment assistance makes a difference in whether people sign up for insurance.

Long-Term

The following longer-term policy changes will likely lead to affordability improvement and reductions in the number of uninsured people.

  1. The 19 states that have not expanded Medicaid could decide to do so.
  2. Alleviate affordability issues for people with incomes above 250 percent of poverty by:
    1. Allowing people earning more than 400 percent of poverty to be eligible for tax credits. This would cover an estimated 1.2 million people at an annual total federal cost of $6 billion, according to a RAND analysis.11
    2. Increasing tax credits for people with incomes above 250 percent of poverty.
    3. Allowing premium contributions to be fully tax deductible for people buying insurance on their own; self-employed people have long been able to do this.
    4. Extending cost-sharing reductions for individuals with incomes above 250 percent of poverty, thus making care more affordable for insured individuals with moderate incomes.
  3. Consider immigration reform and expanding insurance options for undocumented immigrants.

In 2002, the Institute of Medicine concluded that insurance coverage is the most important determinant of access to health care.12 In the ongoing public debate over how to provide insurance to people, the conversation often drifts from this fundamental why of health insurance. At this pivotal moment, more than 30 million people now rely on the ACA’s reforms and expansions. Nearly 30 million more are uninsured — because of the reasons identified in this survey. It is critical that the health of these 60 million people, along with their ability to lead long and productive lives, be the central focus in our debate over how to improve the U.S. health insurance system, regardless of the approach ultimately chosen.

 

Healthcare’s Dangerous Fee-For-Service Addiction

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https://www.forbes.com/sites/robertpearl/2017/09/25/fee-for-service-addiction/#49a2e221c8ad

For its many users, healthcare’s fee-for-service reimbursement methodology is like an addiction, similar to gambling, cigarette smoking and pain pill abuse. Doctors and hospitals in the clutches of this flawed payment model have grown dependent on providing more and more healthcare services, regardless of whether the additional care adds value.

I don’t use this metaphor lightly, nor wish to trivialize our nation’s growing problem with addiction. Rather, as a physician and former healthcare CEO, I am increasingly concerned with the impact this payment structure is having on American health. And I worry about whether providers are willing to “kick the habit” before it’s too late.

Addictive Qualities

The Affordable Care Act, signed into law March 2010, included several provisions encouraging doctors to focus on increasing value (instead of simply maximizing the volume) of healthcare services. And yet, seven years later, between 86% and 95% of U.S. healthcare providers are still paid for each individual test, procedure and treatment they provide, an arrangement that continues to drive up healthcare costs with little to show for it. According to the latest Commonwealth Fund report, the United States spends more on healthcare than any other industrialized country but ranks at or near the bottom in almost every measure of comparative quality.

As with any addiction, America’s dependence on fee-for-service has dire financial and health consequences. This year, the estimated cost of care for an insured family of four will reach nearly $27,000, paid for through a combination of employer health insurance ($15,259), payroll deductions ($7,151) and out-of-pocket expenses at the point of care ($4,534). Year over year, patients are on the hook for a higher percentage of their total healthcare costs, which rose 4.3% compared to just a 1.9% increase in the U.S. GDP last year. This is a major warning sign. If medical costs continue to surge 2% to 3% higher than our nation’s ability to pay, the healthcare system will soon reach a breaking point. Businesses, the government and insurers will have no choice but to ration care or slowly eliminate coverage for the nation’s poor, middle-class and elderly populations.

As with all addictions, the fee-for-service model has mind-altering effects, distorting the perceptions of its users in ways that make them unaware of their growing dependence. When providers are paid for doing more, that’s what they do: They increase utilization of services and ratchet up the cost of care without even realizing they’re part of the problem. According to one study, just 36% of practicing physicians were willing to accept “major” responsibility for reducing healthcare costs. Of course, the first step, as with other habits, is to recognize the problem. Only then can we explore treatment options.