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3 Ways the Senate Budget Reopens the Door for 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
http://www.commonwealthfund.org/publications/blog/2017/jun/why-insurance-markets-need-regulation
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.
Presidential candidates in fantasy land over health care
Commentary: candidates say this and that about health care, but it’s the insurers and pharmaceutical companies that call the tune.
Presidential candidates from both parties are full of sound and fury about various aspects of the U.S. health care system, but unless we as a nation get serious about big money in politics, all the noise will ultimately amount to nothing.
Every one of the Republican candidates has pledged to repeal and replace the Affordable Care Act. But I’m not sure they realize that the interests of the insurance and pharmaceutical industries, as well as hospitals and physicians, were considered first and foremost as the law was being drafted.
Yes, Obamacare has brought some needed reforms to the insurance marketplace and has enabled millions of previously uninsured Americans to finally get coverage. But health insurers have not only thrived since the law was passed, they are more profitable than ever, and that has made their executives and investors happy—and richer. The stock prices of the five largest for-profit insurers have tripled and in some cases quadrupled since the law was passed.
And now that many more people can afford to see a doctor and pick up their prescriptions and hospitals are not having to provide as much charity care, most health care providers would be just as upset as the insurers if a repeal of the law became a real possibility.
On the Democratic side, Hillary Clinton and Bernie Sanders have both announced plans to fix some of the problems not addressed by the ACA. Both of them said they favored allowing Medicare to negotiate with pharmaceutical companies for lower prices and they both want to make it legal for Americans to re-import drugs from Canada and elsewhere. They also criticized the outsized profits of many drug makers and pledged to force the companies to provide more information about how much they actually spend on research and development.
Clinton also proposed capping out-of-pocket drug spending for some people with chronic conditions at $250 a month. Even though her campaign acknowledged that the cap would apply to only about a million people, the proposal drew sharp rebukes from both the insurance and pharmaceutical industries.
America’s Health Insurance Plans, the industry’s largest PR and lobbying group, said it opposed any plan “that would impose arbitrary caps on insurance coverage.”
AHIP even criticized Clinton’s and Sanders’ plans to enable Medicare to negotiate for lower drug prices, saying that imposing caps and “forc(ing) government negotiation on prescription drug prices will only add to the cost pressures facing individuals and families across the country.”
If you’re wondering why insurers don’t want Medicare to have the ability to negotiate with drug companies, here’s why: it would make their Medicare Advantage plans, which offered prescription drug benefits to seniors long before the traditional Medicare program could, much less attractive. The irony is that private insurers can negotiate with drug companies but the federal government cannot.
And if you’re wondering why that is, here’s why: lobbyists for drug companies and insurers have defeated every bill that has been proposed over the years to allow Medicare to negotiate for drug prices, just as they have been able to defeat every bill—even those with bipartisan support—that would allow Americans to order medications from Canadian pharmacies.
When Congress was considering legislation to add a prescription drug benefit to Medicare in 2003, industry lobbyists insisted that language that would have authorized the government to negotiate with drug companies be stripped out of the bill. Six years later, they won again when they the Obama administration caved in to pressure from the drug companies and made certain that the ACA would not include drug negotiation authority for Medicare. This despite the fact that Obama had said when he was a senator from Illinois that, “Drug negotiation is the smart thing to do and the right thing to do.”
In fact, the drug companies always win, which is why Americans pay far more than citizens of any other country for prescription medications. We pay exactly 100 percent more per capita for pharmaceuticals than the average paid by citizens of the 33 other developed countries that comprise the Organization for Economic Cooperation and Development (OECD).
Obama also once supported drug re-importation, as did Sen. John McCain, the Arizona Republican who lost to Obama in the 2008 presidential election. In 2012, two years after the passage of the Affordable Care Act, McCain teamed up with Sen. Sherrod Brown, (D-Ohio) in another attempt to get Congress to pass a drug re-importation bill.
When it became clear that his bill would not pass, McCain took to the floor to denounce the ability of well-financed special interests to control the federal government.
“What you’re about to see is the reason for the cynicism that the American people have about the way we do business in Washington. (The pharmaceutical industry)… will exert its influence again at the expense of low-income Americans who will again have to choose between medication and eating.”
Don’t expect that to change anytime soon. As long as interest groups can spend unlimited amounts of money to influence elections and can hire hundreds of lobbyists to do their bidding, millions of Americans will have to decide between health care and eating, while executives and shareholders get richer and richer.
Everyone Says We Must Control Exorbitant Drug Prices. So, Why Don’t We?
Of all the promises President Donald Trump made for the early part of his term, controlling stinging drug prices might have seemed the easiest to achieve.
An angry public overwhelmingly wants change in an easily vilified industry. Big pharma’s recent publicity nightmare included thousand-percent price increases and a smirking CEO who said, “I liken myself to the robber barons.” Even powerful members of Congress from both parties have said that drug prices are too high.
But any momentum to address prescription drug costs — a problem that a large number of Americans now believe government should solve — has been lost amid rancorous debates over replacing Obamacare and stalled by roadblocks erected via lobbying and industry cash.
“There is a very aggressive lobby that is finding any and all means to thwart any reform to a system that has produced very lucrative profits,” said Ameet Sarpatwari, an epidemiologist and lawyer at Harvard Medical School who follows drug legislation. “Everything that’s coming out is being hit and hit hard — even stuff that’s commonsensical.”
Those in Congress concerned with health policy have spent much of the year advancing proposals to overhaul the Affordable Care Act, none of which would affect pharmaceutical pricing. The latest Republican proposal, by Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, is no different.
Meanwhile, more than two dozen bills aimed at curbing drug costs have been introduced in this or the previous Congress, according to the Drug Pricing Lab, a Memorial Sloan Kettering Cancer Center program that has catalogued ideas for reducing prices. Many have bipartisan support.
Proposals include importation from other developed countries, where regulations keep prices down; allowing government to negotiate the price of Medicare-covered drugs; speeding approval of cheaper generics; requiring notification before raising drug prices; and restricting consumer drug ads.
What Graham-Cassidy means for pre-existing conditions
https://www.axios.com/what-graham-cassidy-really-means-for-pre-existing-conditions-2487720743.html
Jimmy Kimmel’s takedown of Sen. Bill Cassidy, and Cassidy’s response, ripped open the question of whether the GOP’s latest health reform bill protects people with pre-existing conditions. Cassidy and co-sponsor Sen. Lindsey Graham insist it does — as did President Trump in a tweet last night — but experts say that’s not really the case.
The bottom line: The bill’s funding cuts could pressure states — even blue states — to waive protections for sick people, as a way to keep premium increases in check. Older, sicker people in every state could end up paying more as states try to make up for a funding shortfall.
What the bill does: The bill wouldn’t repeal the Affordable Care Act’s rules about pre-existing conditions. But they might end up only existing on paper, the Kaiser Family Foundation’s Larry Levitt said.
Graham-Cassidy doesn’t let states waive the part of the Affordable Care Act that says insurers have to cover sick people. But it does allow states to opt out of several other ACA rules that can cause people with pre-existing conditions to pay more for their health care. Those provisions include:
- The ban on charging sick people higher premiums than healthy people.
- The requirement that insurers cover “essential health benefits,” including prescription drugs. People who need expensive drugs might not have access to a plan that covers those drugs, requiring them to pay out of pocket.
- Services that aren’t “essential” benefits aren’t subject to the ACA’s ban on annual and lifetime limits.
- The bill also would also loosen rules about how much insurers can raise their premiums because of a customer’s age. (Older people are more likely to have pre-existing conditions.)
What supporters will argue: The bill requires states to say how their waivers would provide affordable and accessible coverage for people with pre-existing conditions. But there’s no definition of what that means, and there’s also no enforcement mechanism.
- “The bottom line is these protections are much more at risk under this bill than they are now,” said Cori Uccello, a senior health fellow with the American Academy of Actuaries.
Another level: At least theoretically, because the bill gives states so much control, a more liberal state like California might choose to preserve more of the ACA’s regulations than, say, Alabama. But this bill would radically redistribute federal health care funding — generally away from blue and purple states and toward red states. Those cuts could back blue states into seeking more expansive waivers.
- Caroline Pearson of Avalere told me: “if you have less money, you either cover fewer people, or you cover the same amount of people with less generous coverage. People with pre existing conditions are very reliant on having access to affordable insurance and need insurance that is comprehensive. So if a bill reduces the availability of comprehensive insurance, people with chronic conditions are going to be disproportionately harmed.”
Stat of the Day
5 Ways the Graham-Cassidy Proposal Puts Medicaid Coverage At Risk
5 Ways the Graham-Cassidy Proposal Puts Medicaid Coverage At Risk
The Graham-Cassidy proposal to repeal and replace the Affordable Care Act (ACA) is reviving the federal health reform debate and could come up for a vote in the Senate in the next two weeks before the budget reconciliation authority expires on September 30. The Graham-Cassidy proposal goes beyond the American Health Care Act (AHCA) passed by the House in May and the Better Care Reconciliation Act (BCRA) that failed in the Senate in July. The Graham-Cassidy proposal revamps and cuts Medicaid, redistributes federal funds across states, and eliminates coverage for millions of poor Americans as described below:
- Ends federal funding for current ACA coverage and partially replaces that funding with a block grant that expires after 2026. The proposal ends both the authority to cover childless adults and funding for the ACA Medicaid expansion that covers 15 million adults. Under Graham-Cassidy, a new block grant, the “Market-Based Health Care Grant Program,” combines federal funds for the ACA Medicaid expansion, premium and cost sharing subsidies in the Marketplace, and states’ Basic Health Plans for 2020-2026. Capped nationally, the block grant would be lower than ACA spending under current law and would end after 2026. States would need to replace federal dollars or roll back coverage. Neither the AHCA nor the BCRA included expiration dates for ACA-related federal funds or eliminated the ability for states to cover childless adults through Medicaid.
- Massively redistributes federal funding from Medicaid expansion states to non-expansion states through the block grant program penalizing states that broadened coverage. In 2020, block grant funds would be distributed based on federal spending in states for ACA Medicaid and Marketplace coverage. By 2026, funding would go to states according to the states’ portion of the population with incomes between 50% and 138% of poverty; the new allocation is phased in over the 2021-2025 period. The Secretary has the authority to make other adjustments to the allocation. This allocation would result in a large redistribution of ACA funding by 2026, away from states that adopted the Medicaid expansion and redirecting funding to states that did not. No funding is provided beyond 2026.
- Prohibits Medicaid coverage for childless adults and allows states to use limited block grant funds to purchase private coverage for traditional Medicaid populations. States can use funds under the block grant to provide tax credits and/or cost-sharing reductions for individual market coverage, make direct payments to providers, or provide coverage for traditional Medicaid populations through private insurance. The proposal limits the amount of block grant funds that a state could use for traditional Medicaid populations to 15% of its allotment (or 20% under a special waiver). These limits would shift coverage and funds for many low-income adults from Medicaid to individual market coverage. Under current law, 60% of federal ACA coverage funding is currently for the Medicaid expansion (covering parents and childless adults). Medicaid coverage is typically more comprehensive, less expensive and has more financial protections compared to private insurance. The proposal also allows states to roll back individual market protections related to premium pricing, including allowing premium rating based on health status, and benefits currently in the ACA.
- Caps and redistributes federal funds to states for the traditional Medicaid program for more than 60 million low-income children, parents, people with disabilities and the elderly. Similar to the BCRA and AHCA, the proposal establishes a Medicaid per enrollee cap as the default for federal financing based on a complicated formula tied to different inflation rates. As a result, federal Medicaid financing would grow more slowly than estimates under current law. In addition to overall spending limits, similar to the BCRA, the proposal would give the HHS Secretary discretion to further redistribute capped federal funds across states by making adjustments to states with high or low per enrollee spending.
- Eliminates federal funding for states to cover Medicaid family planning at Planned Parenthood clinics for one year. Additional funding restrictions include limits on states’ ability to use provider tax revenue to finance Medicaid as well as the termination of the enhanced match for the Community First Choice attendant care program for seniors and people with disabilities. Enrollment barriers include the option for states to condition Medicaid eligibility on a work requirement and to conduct more frequent redeterminations.
Much is at stake for low-income Americans and states in the Graham-Cassidy proposal. The recent debate over the AHCA and the BCRA has shown the difficulty of making major changes that affect coverage for over 70 million Americans and reduce federal funding for Medicaid. Medicaid has broad support and majorities across political parties say Medicaid is working well. More than half of the states have a strong stake in continuing the ACA Medicaid expansion as it has provided coverage to millions of low-income residents, reduced the uninsured and produced net fiscal benefits to states. Graham-Cassidy prohibits states from using Medicaid to provide coverage to childless adults. With regard to Medicaid financing changes, caps on federal funding could shift costs to states and result in less fiscal flexibility for states. States with challenging demographics (like an aging population), high health care needs (like those hardest hit by the opioid epidemic), high cost markets or states that operate efficient programs may have the hardest time responding to federal caps on Medicaid spending. Faced with substantially reduced federal funding, states would face difficult choices: raise revenue, reduce spending in other areas, or cut Medicaid provider payments, optional benefits, and/or optional coverage groups.
Why We Need Medicare for All
This is a pivotal moment in American history. Do we, as a nation, join the rest of the industrialized world and guarantee comprehensive health care to every person as a human right? Or do we maintain a system that is enormously expensive, wasteful and bureaucratic, and is designed to maximize profits for big insurance companies, the pharmaceutical industry, Wall Street and medical equipment suppliers?
We remain the only major country on earth that allows chief executives and stockholders in the health care industry to get incredibly rich, while tens of millions of people suffer because they can’t get the health care they need. This is not what the United States should be about.
All over this country, I have heard from Americans who have shared heartbreaking stories about our dysfunctional system. Doctors have told me about patients who died because they put off their medical visits until it was too late. These were people who had no insurance or could not afford out-of-pocket costs imposed by their insurance plans.
I have heard from older people who have been forced to split their pills in half because they couldn’t pay the outrageously high price of prescription drugs. Oncologists have told me about cancer patients who have been unable to acquire lifesaving treatments because they could not afford them. This should not be happening in the world’s wealthiest country.
Americans should not hesitate about going to the doctor because they do not have enough money. They should not worry that a hospital stay will bankrupt them or leave them deeply in debt. They should be able to go to the doctor they want, not just one in a particular network. They should not have to spend huge amounts of time filling out complicated forms and arguing with insurance companies as to whether or not they have the coverage they expected.
Even though 28 million Americans remain uninsured and even more are underinsured, we spend far more per capita on health care than any other industrialized nation. In 2015, the United States spent almost $10,000 per person for health care; the Canadians, Germans, French and British spent less than half of that, while guaranteeing health care to everyone. Further, these countries have higher life expectancy rates and lower infant mortality rates than we do.
The reason that our health care system is so outrageously expensive is that it is not designed to provide quality care to all in a cost-effective way, but to provide huge profits to the medical-industrial complex. Layers of bureaucracy associated with the administration of hundreds of individual and complicated insurance plans is stunningly wasteful, costing us hundreds of billions of dollars a year. As the only major country not to negotiate drug prices with the pharmaceutical industry, we spend tens of billions more than we should.
The solution to this crisis is not hard to understand. A half-century ago, the United States established Medicare. Guaranteeing comprehensive health benefits to Americans over 65 has proved to be enormously successful, cost-effective and popular. Now is the time to expand and improve Medicare to cover all Americans.
This is not a radical idea. I live 50 miles south of the Canadian border. For decades, every man, woman and child in Canada has been guaranteed health care through a single-payer, publicly funded health care program. This system has not only improved the lives of the Canadian people but has also saved families and businesses an immense amount of money.
On Wednesday I will introduce the Medicare for All Act in the Senate with 15 co-sponsors and support from dozens of grass-roots organizations. Under this legislation, every family in America would receive comprehensive coverage, and middle-class families would save thousands of dollars a year by eliminating their private insurance costs as we move to a publicly funded program.
The transition to the Medicare for All program would take place over four years. In the first year, benefits to older people would be expanded to include dental care, vision coverage and hearing aids, and the eligibility age for Medicare would be lowered to 55. All children under the age of 18 would also be covered. In the second year, the eligibility age would be lowered to 45 and in the third year to 35. By the fourth year, every man, woman and child in the country would be covered by Medicare for All.
Needless to say, there will be huge opposition to this legislation from the powerful special interests that profit from the current wasteful system. The insurance companies, the drug companies and Wall Street will undoubtedly devote a lot of money to lobbying, campaign contributions and television ads to defeat this proposal. But they are on the wrong side of history.
Guaranteeing health care as a right is important to the American people not just from a moral and financial perspective; it also happens to be what the majority of the American people want. According to an April poll by The Economist/YouGov, 60 percent of the American people want to “expand Medicare to provide health insurance to every American,” including 75 percent of Democrats, 58 percent of independents and 46 percent of Republicans.
Now is the time for Congress to stand with the American people and take on the special interests that dominate health care in the United States. Now is the time to extend Medicare to everyone.
MESA: An Innovative New Value-Based Health Insurance Plan
https://altarum.org/about/news-and-events/MESA
https://altarum.org/our-work/MESA
Click to access ALTARUM_MESA_BLUEPRINT_BRIEF.FINAL__0.pdf
Click to access ALTARUM_MESA_BLUEPRINT_BROCHURE_FINAL_0.pdf
MESA Will Improve Quality and Lower Costs for Those Who Use Health Care the Most;
Pilot Sites Will Test Model
To provide consumers with an affordable alternative to high deductible health plans (HDHPs), Altarum has created an innovative new model for those who use health care the most. The Medical Episode Spending Allowance (MESA) plan, developed with support from the Robert Wood Johnson Foundation, is especially well suited for those with chronic or serious health conditions, and takes value-based insurance design to a whole new level, improving quality of care while lowering costs.
“Employers and consumers are looking for alternatives to increasingly unaffordable health coverage, and finding a solution that works is essential,” said François de Brantes, vice president and director of Altarum’s Center for Payment Innovation. “That’s what our MESA Blueprint is all about. By turning the high deductible health plan on its head, the MESA plan significantly reduces the potential for people with on-going illnesses from foregoing needed care.”
How Does MESA Work?
MESA’s incentives are finely calibrated to encourage consumers to seek out high value care and for providers to deliver it. The plan is based on a reference pricing model, so consumers can choose service providers that offer high quality care at a lower price.
Members pay out-of-pocket only when the cost of care extends above the specified allowance for a given episode of care. Plan members who select network providers that have accepted financial risk—for example through a bundled payment—could potentially avoid out-of-pocket expenses entirely. MESA also arms consumers with tools to research procedures, identify providers in their area, and view providers’ costs and quality ratings, so they can select the best care.
“As Americans are being asked to pay more for their health care, health insurance innovations, such as the Medical Episode Spending Allowance (MESA), that align consumer and provider incentives on quality and cost measures are an essential step forward,” said A. Mark Fendrick, MD, director of the University of Michigan Center for Value-Based insurance Design. “Strategies that reduce the patients’ out of pocket cost burden for clinically indicated services provided by from high performing clinicians are a necessary and important strategies to achieve the Triple Aim.”
“The Kentuckiana Health Collaborative, a coalition of employers, payers, providers, and consumers of health care, supports alignment of incentives to reduce barriers to high-quality, high-value care. We strongly encourage efforts to drive adoption of rational, creative alternative payment models and commend Altarum’s efforts to innovate with MESA,” said Stephanie Clouser, Kentuckiana Health Collaborative data scientist.
A New Path Forward
Each MESA benefit is finely tuned to incentivize the physician/patient relationship towards mutual cooperation and motivation to do the right thing, at the right time, in the right place—in a fully transparent marketplace. Information on the benefit model is available in the MESA blueprint, which provides employers and payers with a practical understanding of the framework, including compliance with legal and regulatory statues and actuarial equivalence to existing group health plans.
“MESA provides a comprehensive plan that marries payment reform with benefits reform, provider engagement with consumer engagement, and physician accountability for costs of care with patient accountability for managing their health and costs of care,” said Emmy Ganos, program officer at the Robert Wood Johnson Foundation. “Many of the concepts aren’t new—they are tried and tested—but their combination is, quite simply, a better solution.”
That solution will be tested in selected pilot sites throughout the United States in years to come. The criteria for sites to become pilots include willing employers and providers, current engagement in and familiarity with alternative payment models, and a commitment to price and quality transparency. Those interested in becoming pilot sites should contact Altarum at press@altarum.org.
From Payment Reform to Benefit Reform
Over the past ten years, the Center for Payment Innovation’s PROMETHEUS Payment® model has revolutionized the way we pay for medical care. PROMETHEUS packages payment around a comprehensive episode of medical care that covers all patient services related to a single illness or condition. The model has been used as a basis for most of the public and private sector bundled payment models that are implemented in the United States today. One of its offshoots is the PROMETHEUS Analytics® software, which can help power the MESA model and now revolutionize health benefits.
HENRY KOTULA 