Tag Archives: Medicaid

In Senate Health Care Bill, A Few Hidden Surprises

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http://healthaffairs.org/blog/2017/07/13/in-senate-health-care-bill-a-few-hidden-surprises/

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A low-income person, eligible for Medicaid but not enrolled, is hit by a car or a bullet. Gravely injured, she arrives at the hospital unconscious. Thanks to expert, intensive care that lasts for days or weeks, she gradually recovers. Eventually, her health improves to the point where she can complete the paperwork needed to apply for Medicaid.

Such a hospital can be paid today, thanks to Medicaid’s “retroactive eligibility.” Even if the combination of medical problems and bureaucratic delays prevents an application from being filed and completed for several months, Medicaid will cover the care if the patient was eligible when services were provided.

The newest version of the Senate health bill—the Better Care and Reconciliation Act, or BCRA—would end this longstanding feature of the Medicaid program for beneficiaries who are neither elderly nor people with disabilities. If services are received in one calendar month and the application is completed the following month, the hospital would be denied all payment, even if the patient was eligible and the services were both essential and costly.

It does not matter if the state is led by a governor who understands the devastating impact of this change on hospital infrastructure, especially in rural areas where many hospitals are hanging on by a thread. Today, states have the flexibility to seek waivers that limit retroactive eligibility. Under the BCRA, that flexibility would disappear, as states are forced to end retroactive coverage, whether they like it or not.

Almost certainly, this provision would come as a surprise to most senators who are being asked to support the BCRA. It is only one of many unpleasant surprises lurking largely undiscovered throughout the bill. Following are other selected examples.

A Massive Expansion In Federal Power Over State Budgets

The BCRA grants the federal government startling new power over state Medicaid programs and state budgets. Federal dollars per person would be capped, based on state data about prior spending. But in setting the initial cap for each state, the secretary of Health and Human Services (HHS) could change the amount to rectify what the secretary views as problems in the “quality” of state data. In later years, many states could have their caps adjusted up or down by as much as 2 percent per year. That may sound like a small number, but when applied to billions of federal Medicaid dollars going to a state, it could make or break a state’s entire budget. Medicaid costs triggered by a public health emergency are exempt from the cap, but only if “the Secretary determines that such an exemption would be appropriate.” No statutory limits bound the Secretary’s use of this decision-making authority, which can have an extraordinary fiscal impact on states experiencing an epidemic or other public health crisis.

These provisions would give HHS remarkable new leverage over states, which current or future administrations could use to compel state policy changes in any desired direction. The aggressive use of available leverage has been an unfortunate feature of past administrations’ relationships to state Medicaid programs, but it could become substantially more pronounced with the increased federal authority granted by the Senate bill.

Adding To Uncertainties Surrounding State Expenditures

One recurring theme in Medicaid’s history involves state efforts to claim federal matching funds without spending the requisite state dollars. The Senate bill appears to increase this risk. Under Section 207 in the Senate bill, new opportunities emerge for states desperate to counteract the loss of billions of federal dollars. The bill authorizes unprecedented waivers involving federal funding for tax credits that help consumers buy private health insurance. So long as officials complete a form explaining how the waiver’s replacement of federal safeguards would provide an “alternative means” of increasing “access to comprehensive coverage, reducing average premiums, and increasing enrollment,” a state arguably could convert some or all of this federal money into so-called “pass-through” funds that can be used for purposes unrelated to health care. Unlike the Senate bill’s new public health emergency provisions, which require federal audits of state expenditures, states’ use of pass-through dollars has no statutory audit requirement. A state could convert subsidies meant for health insurance to other uses, or simply use the money to close a budget shortfall. As the Congressional Budget Office (CBO) explained about the virtually identical prior version of this section, the Senate health care bill would “substantially reduce the number of people insured” if states “reduced subsidies, received pass-through funds, and used those funds for purposes other than health insurance coverage.”

Medicaid Treatment For Mental Health And Substance Use Disorders

The bill repeals the current requirement that Medicaid programs must cover all “essential health benefits,” including treatment of mental health and substance use disorders. CBO found that, as the per capita limits in the Senate bill grow progressively tighter, federal Medicaid funding would eventually decline by more than a third, compared to current law. States facing such an enormous drop in federal support may see themselves as having no alternative but to cut services classified as optional, which the Senate bill redefines to include mental health and substance abuse treatment.

A Disordered Process

These problems could have been averted had the legislative process followed regular order, with hearings, legislative staff explaining the bill’s provisions, expert testimony, a public markup, and opportunities to address policy and drafting anomalies. Embedded in a measure with underlying policy goals that the authors of this blog post find fundamentally questionable, the picture that emerges is extraordinarily troubling—a legislative effort to divert more than a trillion dollars away from health care for people who are sicker, poorer, older, and indigent, while leaving states with such massive funding deficits and federal leverage that some states may attempt to stem their losses in ways that harm their vulnerable residents even more.

Even people sympathetic to the bill’s core aims, however, have good reason to oppose the Senate making such consequential decisions without taking the elementary legislative steps needed to detect and avoid terrible mistakes. Continuing to shun all the protections of regular order, the Senate appears poised to act on a bill that almost certainly includes additional unpleasant surprises going beyond those discussed here. With legislation that governs one-sixth of the US economy and that directly affects the health and economic security of millions of constituents, Senators are being asked to vote largely in the dark.

New Medicaid worry emerges for centrists

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New Medicaid worry emerges for centrists

New Medicaid worry emerges for centrists

Some states would likely end their Medicaid expansions earlier than 2024 if the Senate’s healthcare bill becomes law, according to several sources.

That dynamic could deepen concerns among several senators who are undecided about the healthcare bill because of its changes to Medicaid, the federal healthcare program for the poor and disabled.

Sen. Lisa Murkowski (R-Alaska) has been deep in talks with her state, which might have to end Medicaid expansion early if the Senate bill passes.

Murkowski is a key vote that Senate leaders cannot afford to lose. With Sens. Susan Collins (R-Maine) and Rand Paul (R-Ky.) already opposed to the legislation, one more defection — from Murkowski or anyone else — would stop the bill in its tracks.

The revised healthcare bill that Senate Republican leaders released Thursday contains much of the same Medicaid provisions, such as cuts to Medicaid; converts federal financing to funding per enrollee or a block grant; and phases out the additional federal money for the expansion over three years, beginning in 2021.

In a nod to centrists, the bill does not fully phase out extra federal funding for ObamaCare’s Medicaid expansion until 2024.

But for some states, maintaining expanded eligibility would simply become too costly if the bill became law. Other states have automatic “triggers” that, if left unchanged, would end the expansion.

On Medicaid expansion, “I think it’s highly likely that they will end it sooner than you might think because the money is just not going to be there to maintain it as it starts to drop,” Matt Salo, executive director of the National Association of Medicaid Directors, said. “You can call it a soft landing, but it’s going to mean people are losing coverage.”

Earlier in the legislative debate, moderate senators had pushed for a gradual phase out of extra federal funds for Medicaid expansion, unlike the House bill, which halted the dollars starting in 2020.

As a nod to these senators, GOP leadership released its ObamaCare repeal-and-replace bill in late June that included a three-year phase out. Yet that is shorter than the seven-year glide path pushed by centrist Republicans, such as Sens. Rob Portman (R-Ohio) and Shelley Moore Capito (R-W.Va).

“I think a three-year glide path or a five-year glide path is not going to make a big difference in terms of whether states are able to keep the expansion going,” said Cindy Mann, who served as the federal director of Medicaid during the Affordable Care Act’s administration and is now a partner at Manatt Health.

In 2021, the 31 expansion states and Washington D.C. would, as a whole, be on the hook for a total of $6.6 billion in additional Medicaid funding. That figure would increase to nearly $43 billion more in total state spending, according to an analysis from the left-leaning Center on Budget and Policy Priorities (CBPP).

States would be faced with a tough decision on how to make up for the lost federal money. They’d have several choices, but dropping the expansion would be the most straightforward solution.

“Either you raise taxes, you cut other parts of the budget or you cut other parts of Medicaid or you drop the expansion,” Edwin Park, CBPP vice president for health policy, said. “Those are the choices, and they would have to figure that out. I think the most likely scenario would be that states start dropping the expansion.”

Some states may begin dropping the expansion in 2021 — and possibly even before the funds are reduced — Park said, “because they can’t absorb even the higher increase in spending that will be required, and certainly over time more and more states would start to drop the expansion.”

Throughout the healthcare debate, the changes to Medicaid have bedeviled leadership.

Senators from expansion states don’t want thousands of their residents to lose healthcare coverage. Some of their governors have been urging bipartisan reform rather than passing the GOP bill without a single Democratic vote, which Republicans can do under the fast-track budget maneuver they’re using to repeal and replace ObamaCare.

Less money for Medicaid expansion is a concern to states, some of which enacted guardrails to protect themselves from decreases in dollars they get from the federal government to implement the expansion.

At least nine states have provisions in their Medicaid expansions that would end it automatically or soon after if enhanced federal funds dip below a certain level. Those states are Arizona, Arkansas, Illinois, Indiana, Michigan, Montana, New Hampshire, New Mexico, and Washington, according to CBPP.

Sen. John McCain (R-Ariz.) represents a state where, under the Senate bill, the end of ObamaCare’s Medicaid expansion would be triggered in 2022.

After a closed-door meeting where rank-and-file members were presented with the bill’s revisions, McCain was asked if he supported a motion to proceed to the bill.

“My governor said that we needed three amendments for him to approve of it, and those three amendments were not included,” he replied.

One such amendment would extend the timeline of phasing out Medicaid expansion money, so as to give “states like Arizona the necessary time to adjust their budgets so citizens don’t have the rug pulled out from under them,” McCain said in a statement released Thursday.

Senate Majority Leader Mitch McConnell late late Saturday delayed the healthcare vote while McCain recovers from surgery.

Alaska doesn’t have a trigger in its Medicaid law, but would be at risk of losing the Medicaid expansion before the phase-out even begins.

The reason comes down to how Medicaid was expanded in Alaska. Independent Gov. Bill Walker used an executive order to expand Medicaid and could do so because Alaska is required to cover all groups federal law mandates be covered — even though the Supreme Court ruled it was optional. But the Senate bill makes covering more lower-income people optional instead of mandatory in 2020.

“We think that puts Alaska’s expansion at risk in 2020 because our state legal authority to maintain those services would be in question,” Valerie Davidson, the Alaska Department of Health and Social Services commissioner, said, adding she believes the expansion would end in 2020.

The possible policy change is paramount for Davidson, as the state saw nearly 34,000 adults covered due to the Medicaid expansion. She’s been in “constant communication” with her two state’s senators — Murkowski and Dan Sullivan.

During the week before July 4th recess, Davidson was in Washington, D.C., where her team essentially “camped out in [Murkowski’s] office, except that she was very welcoming.”

The issue has been on Murkowski’s radar screen, the senator said, and that “we would basically kick it back to our legislature who could vote to discontinue the expansion so we would not be part of that glide path that many of us have been trying to put in place.”

“It’s yet one more thing in the bucket of things that makes Alaska somewhat distinguishable,” Murkowski said.

Even if Alaska opted to find a way to keep the expansion, Davidson said it isn’t realistic due to the state’s budget deficit.

“Our state right now is looking to cut programs and cut our general fund, not add to it,” Davidson said, “and so I think for anybody to make the assumption that, well, the state will just take on more of that responsibility is not very realistic.”

How the American Health Care Act’s Changes to Medicaid Will Affect Hospital Finances in Every State

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http://www.commonwealthfund.org/publications/blog/2017/jun/how-changes-to-medicaid-will-affect-hospital-finances-in-every-state

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The American Health Care Act (AHCA), as passed by the U.S. House of Representatives, will reduce federal spending on Medicaid by more than $834 billion over the next 10 years. And the recently released Senate bill appears to cut Medicaid even more deeply. In addition to repealing the Medicaid expansion, the bills place caps on the federal dollars that states receive to provide health insurance to millions of low-income Americans, including the elderly, disabled, and people with opioid addiction.

We modeled the impact of this loss of Medicaid funding on U.S. hospitals and found that, over the next 10 years, hospitals in all states, but especially hospitals in Medicaid expansion states, will see an increase in uncompensated care—a treatment or service not paid for by an insurer or patient. We also saw declines in hospitals’ operating margins, particularly among hospitals in expansion states. Rural hospitals in nonexpansion states also would face marked operating margin decreases.

In the interactive state-by-state maps below, we present the estimated impact of the Medicaid provisions in the House-passed AHCA on the finances of all U.S. hospitals. The hospitals in the District of Columbia and the 31 states that expanded Medicaid are projected to see a 78 percent increase in uncompensated care costs between 2017 and 2026. Eleven of these states will see uncompensated care costs at least double between 2017 and 2026. For example, Nevada hospitals will see a 98 percent increase, West Virginia a 122 percent increase, and Kentucky a 165 percent increase.

In addition to growing uncompensated care, our projections indicate that under the AHCA, hospitals in most states will experience a decline in Medicaid revenues, even though the law restores Medicaid disproportionate share hospital (DSH) payments. Hospitals in Medicaid expansion states may experience a 14 percent drop in Medicaid revenues between 2017 and 2026, compared to a 3 percent anticipated reduction among hospitals in the 19 states that did not expand. Some states may see more dramatic drops. Arkansas hospitals, for example, are estimated to see a 31 percent decline in Medicaid revenue over the next 10 years.

 

Senate’s Updated ACA Repeal-and-Replace Bill Will Still Leave Millions Uninsured

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http://www.commonwealthfund.org/publications/blog/2017/jul/senate-updated-aca-repeal-and-replace-bill?omnicid=EALERT1242189&mid=henrykotula@yahoo.com

Yesterday, Senate Republicans introduced an updated version of the Better Care Reconciliation Act (BCRA), their proposed repeal and replacement of the Affordable Care Act (ACA). The revised bill makes changes aimed at winning over Republicans who oppose the bill.

The Congressional Budget Office (CBO) projections of the updated bill’s effects on coverage and the federal budget are not available yet, but it is still likely to significantly increase the number of uninsured Americans — and raise health care spending for low- and moderate-income people. While the updated bill would leave the ACA’s taxes on higher-income people in place, providing an estimated $231 billion in additional revenue over the original bill, Senate Republicans do not propose using the funds to significantly increase the affordability of coverage for low- and moderate-income Americans. And the new version of the BCRA still dramatically cuts and reconfigures the Medicaid program.

The revised bill leaves the original BCRA’s provisions intact, including a phase-out of the ACA Medicaid expansion starting in 2020 and smaller premium tax credits compared to the ACA that make coverage less affordable for low-income people. (For a more complete overview of provisions, see our original post on the CBO score for the bill.)

The CBO estimated in June that the combined effects of these provisions would increase the number of people without health insurance by 22 million by 2026. The coverage losses would be borne disproportionately by people with low and moderate incomes and particularly older adults who purchase their own coverage. The revised bill is unlikely to change those fundamental outcomes.

One of the biggest criticisms of the BCRA is that it would roll back the coverage expansions under the ACA aimed at lower- and moderate-income Americans and give the savings to higher-income people by repealing two taxes that helped fund the expansions. The bill responds to that criticism only by keeping those taxes in place; it doesn’t use the proceeds to make coverage more affordable for less economically privileged Americans.

New Tax Revenue Used for Small Changes

Instead, the bill uses some of that extra revenue to allow people to use health savings accounts (HSAs) to buy health insurance. But HSAs are pre-tax savings accounts whose tax benefits increase with income. Moreover, people with low and moderate incomes are unlikely to have the excess income required to finance an HSA in the first place. This means the tax benefits from this change would flow to higher-income Americans.

The bill provides about $70 billion in new funds for states to reduce premiums through mechanisms like reinsurance. And while this money would certainly help stabilize markets, it’s not enough to make coverage sufficiently affordable for the 22 million people projected to lose health insurance under the BCRA. Moreover, the full amount of the increase appears to be transferred for use in an amendment to the bill, described below.

Similarly the $45 billion proposed in the revised bill for opioid treatment wouldn’t come close to meeting the full health care needs of an estimated 220,000 people with opioid use disorder who are at risk of losing their coverage through the ACA’s Medicaid expansion and the marketplaces.

More Underinsured and Damage to the Individual Market

Another major criticism of the BCRA is that it would significantly increase deductibles and copayments in the individual market. But rather than improving cost-protection, the new bill doubles down by making it possible for people to use premium tax credits to buy even skimpier, catastrophic coverage. While this will result in cheaper plans for healthy people, it would only serve to increase the number of Americans who are underinsured. Yet, because the bill doesn’t make the BCRA’s premium tax credits more generous, it is hard to see how insurance with deductibles that could consume the majority of a low-income family’s income will entice more people to buy it.

But even if there are small gains in coverage under the revised bill, they would likely be more than offset by the damage inflicted on the individual market through an amendment modeled on one by Senator Cruz. By letting states allow insurers to sell ACA-noncompliant policies, the amendment would split the individual market into two pools — one with healthy risks and one with sicker risks. As the insurance industry has already pointed out, this would create the conditions necessary for a true premium death spiral in the individual market, and widespread losses of insurance. To combat this, the amendment appears to borrow the $70 billion in new funds for market stabilization in the revised bill to help states that opted to do this reduce premiums. But based on the U.S. experience with high-risk pools, the funds would likely fall well short of what would be required.

Looking Forward

The ACA has led to millions of people gaining health insurance, many for the first time in their lives. National survey data indicate that this expanded coverage has triggered population-wide declines in cost-related problems getting needed care and reports of problems paying medical bills. But the nation is nowhere near achieving high-quality health care that is affordable for all Americans. In proposing bills that would reverse the small but significant improvements realized so far under the ACA, Senate and House Republicans will only push a better health care system further beyond our reach.

Don’t Assume That Private Insurance Is Better Than Medicaid

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As we recently wrote, it’s better for patients to have Medicaid than to be uninsured, contrary to critics of the program. But is having Medicaid, as those critics also say, much worse than having private insurance?

This idea has become a talking point for conservatives who back big changes to Medicaid, as the Senate health bill proposes. The poor would benefit simply by being ushered off Medicaid and onto private insurance, they write.

But it’s far from proven that Medicaid is worse than private insurance. A lot depends on what kind of insurance is compared with Medicaid, and how they are compared.

Many studies that measure Medicaid against private insurance suffer from the same flaws that compare Medicaid with being uninsured. They’re terribly confounded, and can show only associations, not causation. People with private insurance are healthier and wealthier than those on Medicaid, and in ways not fully controlled for in statistical analyses. These factors almost certainly predispose someone on Medicaid to have worse outcomes than someone with private insurance.

Perhaps the most convincing way to compare Medicaid and private insurance would be with a randomized controlled trial that pits them head to head. No such trials exist. Recall that the Oregon Medicaid study randomly offered, via a lottery, the opportunity for low-income adults to enroll in Medicaid. It did not have another study arm that offered private insurance.

But we do have a decades-old trial that looked at varying levels of cost-sharing: the RAND Health Insurance Experiment. This is relevant because one substantial difference between Medicaid and most private coverage is the level of cost-sharing. Medicaid is nearly free. Most private coverage comes with deductibles and co-payments.

The RAND study randomly assigned 2,750 families to one of four health plans. One had no cost-sharing whatsoever — kind of like Medicaid. The other three had cost-sharing (money people had to pay out-of-pocket for care) at levels of 25, 50 or 95 percent — capped at $1,000 at the time, which is about an inflation-adjusted $6,000 today. This level of personal liability acts like a deductible, making the plan with a 95 percent level of cost-sharing comparable to a “Bronze” plan on the Affordable Care Act’s exchanges today.

The RAND study found that the more cost-sharing was imposed on people, the less health care they used — and therefore the less was spent on their care. The study also found that, over all, people’s health didn’t suffer from lower health care use and spending.

Lower spending and no decline in health — these are the results that everyone cites to justify increased cost-sharing, and to justify shifting people from Medicaid to private plans with high deductibles.

But the results of the RAND study, like so much in health care, are complicated. A deeper dive into the data shows that people decreased their consumption of necessary health care in equal measure to unnecessary health care. As a rule, people are terrible discriminators of what care is needed and what’s not. Since most people under the age of 65 are healthy, even in the RAND study, that doesn’t matter much.

But even if most people are healthy, some are not (and particularly those on Medicaid). In the RAND study, poorer and sicker people — exactly the kind more likely to be on Medicaid — were slightly more likely to die with cost-sharing.

Free care also resulted in improvements in vision and blood pressure for those with low income. As an influential 1983 New England Journal of Medicine paper put it: “Free care does make a difference.”

One limitation of the RAND study is its age. It took place between 1971 and 1982. There have been no studies of cost-sharing to rival it since. Still, the best recent evidence we have is that giving free care to poorer and sicker people improves health and saves lives. It is reasonable to conclude that switching them to a plan with high cost-sharing (even a private plan) would do the opposite.

Some of the more recent studies were nicely summarized in a paper by Katherine Swartz for the Robert Wood Johnson Foundation’s Synthesis project. She found that increased cost-sharing for low-income populations was associated with a shift toward more costly services, like increased emergency room visits because people skipped taking their drugs. She also found that increased cost-sharing affects poor people differently than everyone else, confirming RAND’s findings. A more recent study found that enrollment in plans with high deductibles led to reductions in necessary care, which would have consequences for the poor and sick.

Austin wrote previously herehow increased cost-sharing may lead people to take fewer drugs for their high cholesterol, hypertension and diabetes. In his first Upshot column, Aaron wrote that parents delay taking their children for asthma treatment when cost-sharing rises.

Even small premiums can lead to problems. A $10 increase in monthly Medicaid premiums was followed by a 6.7 percent reduction in Medicaid and coverage of CHIP (Children’s Health Insurance Program) for people just above the poverty line.

Unquestionably, private coverage can work very well for many people. Take us, for instance. The insurance that we each have from our employers is probably better for us than Medicaid would be. Though these plans come with cost-sharing, we have incomes that can handle it. Our plans cover things that Medicaid often does not, like dental checkups.

Our plans have great networks, and they reimburse well for the care we receive. Just like Medicaid enrollees, we also receive support from the federal government, which waives tax collections on dollars contributed to premiums. That tax break is higher than the cost of Medicaid in many cases.

We’re also relatively healthy and would probably be fine on any plan (unless and until our health deteriorates).

But because our plans require considerable cost-sharing, even Medicaid enrollees would struggle on them. More important, neither House nor Senate repeal and replace bills offer poor Medicaid enrollees plans as generous as ours.

The Senate’s health care plan, for example, would offer much less generous plans. A 64-year-old woman with an income of $11,400 would face a deductible of at least $6,000. For her, such a plan is not better than Medicaid; it is most likely much worse if she is also sick. Because of the deductible, the care she’d need would be financially out of reach.

A recent paper in Health Affairs documented that outcomes in Arkansas, which allowed poor people to buy private plans on the exchanges, were similar to those in Kentucky, which expanded access to poor people through Medicaid. But those private plans came with significant cost-sharing subsidies, which would be stripped away by the Senate’s bill. Even so, the evidence did not suggest that the private coverage of Arkansas was better than the public coverage of Kentucky.

There are certainly private plans for poor and sick Americans that are better than Medicaid. But plans with very high cost-sharing — which are the ones being offered in Congress as A.C.A. replacements — are not among them.

 

Is Medicaid driving the budget deficit, as Pat Toomey said?

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http://www.politifact.com/truth-o-meter/statements/2017/jul/12/pat-toomey/medicaid-driving-budget-deficit-pat-toomey-said/

Sen. Pat Toomey, R-Penn., defended the Senate health care bill’s curbing of Medicaid spending by calling Medicaid the single-biggest driver of the federal budget deficit.

Toomey said the proposed cuts to Medicaid spending would slow the growth of entitlement programs, which he claimed are “driving the fiscal train wreck we’re on” in a Morning Joe interview on July 10, 2017.

Medicaid “is the one that is growing most rapidly, and is contributing to 70 percent of our budget deficit right now. It’s the one that is in our lap because of Obamacare,” Toomey said.

Is Medicaid the primary culprit behind the federal budget deficit? We found Toomey is playing parlor games with budget figures.

‘Misleading’ numbers

When we asked Toomey’s office for evidence that Medicaid is contributing up to 70 percent of the deficit, they pointed out that spending on Medicaid is equal to 70 percent of the deficit. They divided projections on Medicaid spending in 2017 ($389 billion) by the estimated budget deficit ($559 billions) to get 69.6 percent. The figures come from the nonpartisan Congressional Budget Office, or CBO.

The problem is, that same calculation can be made with any federal program to reach a different conclusion. Dan Mitchell, an economist with the libertarian Cato Institute, agreed with Toomey’s arithmetic. But, he said, the framework of the calculation is misleading.

“I’m not a fan of creating a link between the deficit and any program, Medicaid or otherwise … but it happens all the time,” Mitchell said.

Dividing Medicaid spending by the budget deficit makes little sense to Dean Baker, the co-director of the left-leaning Center for Economic and Policy Research.

By the same logic, Baker said, “since we will spend $634 billion on the military this year, defense spending is more than 100 percent responsible for the deficit. No one would take this argument seriously about the military and the deficit, nor should they take his argument seriously about Medicaid and the deficit.”

Defense spending would account for 113 percent of the deficit, non-defense discretionary spending 103 percent, and Medicare 101 percent if we were to divide spending by the deficit in the same way Toomey did.

“Clearly, there’s something misleading about the calculation you’re making when things are adding up to 300 percent or more,” said Ben Sommers, a health policy and economics professor at Harvard University.

Toomey’s office made a more nuanced argument about their calculation, though, discussing Medicaid in the context of entitlements and net spending.

“Unlike the other entitlement programs, Medicaid has no dedicated revenue stream, so it is taken solely out of general revenue or the deficit. Therefore, when direct revenue streams are taken into account, Medicaid spends the most on net,” said Kasia Mulligan, the communications director for Toomey.

Medicaid looks worse compared with Medicare or Social Security because its federal share is wholly financed by general revenues, whereas Medicare is partially covered by payroll taxes and premiums, according to Diane Rowland, executive vice president at the Kaiser Family Foundation.

General revenues still help finance Medicare and Social Security, however. Discounting payroll taxes and premiums, Medicare represents 34 percent of the deficit and Social Security 17 percent (using Toomey’s rationale). This would make Medicaid the biggest contributor within entitlements, but entitlements aren’t the only contributors to the deficit.

Defense spending is also wholly financed by general revenues, and surpasses Medicaid in the amount it contributes to the deficit.

“All spending has to be paid for with tax revenue from some source, or it contributes to the deficit,” Sommers said. “There’s no way to say that a dollar spent on Medicaid is any more responsible for the deficit than a dollar spent on defense or discretionary spending or anything else the government does.”

Is the Affordable Care Act to blame?

Toomey blamed Medicaid spending on the Affordable Care Act, but that’s not exactly right, either.

Elderly people and those with disabilities account for two-thirds of Medicaid spending and low-income children account for one-fifth; two groups that were unaffected by the Medicaid expansion introduced by the Affordable Care Act, Rowland said.

Medicaid spending has been growing faster than Medicare or Social Security in recent years, as Toomey claimed, but per-capita costs are actually growing at a slower rate than for Medicare or private insurance. An increased number of people covered by Medicaid is responsible for higher costs.

The cost of this increased coverage was covered by taxes imposed by the Affordable Care Act that added to the general revenue so as not to grow the deficit.

Our rating

Toomey said that Medicaid is contributing to 70 percent of our budget deficit.

The truth is, Medicaid spending annually is about 70 percent of the size of the federal budget deficit. The same logic, if applied to defense spending, would mean defense spending contributes more than 100 percent to the deficit. Experts say both comparisons are flawed and misleading.

Blaming the Affordable Care Act for the rise in Medicaid spending isn’t entirely right either, as the majority of Medicaid spending was already in place before the law, and taxes were imposed to offset the Medicaid expansion’s strain on the deficit.

Toomey’s claim contains an element of truth but ignores critical facts that would give a different impression.We rate this statement Mostly False.

Obamacare 101: Is there a smaller fix for the Affordable Care Act?

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http://www.latimes.com/politics/la-na-pol-obamacare-101-marketplace-fixes-20170712-story.html?utm_campaign=KHN%3A%20First%20Edition&utm_source=hs_email&utm_medium=email&utm_content=54139610&_hsenc=p2ANqtz-_oK9ym4MAYbgjGTqJrtwWnYS7JczHHbl_O85RanUGaeiUnTcx9hvcqv7rFbgtEigUowQiiD8dTN5J0Reyhnc3D456E0Q&_hsmi=54139610

Image result for aca limited fix

With Senate Republicans struggling to find votes for sweeping legislation to roll back the Affordable Care Act, several GOP lawmakers have raised the prospect of a more limited bill — passed with help from Democrats — to stabilize health insurance markets around the country.

That may be heresy for conservative Republicans who’ve spent seven years demanding the full repeal of Obamacare, as the law is often called.

But most patient advocates, physician groups, hospitals and even many health insurers say more-targeted fixes to insurance marketplaces make more sense than the kind of far-reaching overhaul of government health programs that Republicans have been discussing.

Why do a more limited Obamacare ‘fix’?

For one thing, it would be politically easier. More-targeted legislation also wouldn’t threaten insurance protections for tens of millions of Americans.

The political debate over the 2010 healthcare law has focused for years on what has been happening to insurance marketplaces like HealthCare.gov, which were created by the law for Americans who don’t get health insurance through work.

For a variety of reasons, the marketplaces’ first several years have been rocky.

Insurers in many states struggled to figure out how much to charge for their plans and then raised premiums substantially when customers turned out to be sicker than they expected.

And as uncertainty over the future of the markets has intensified since President Trump’s election last year, several leading national insurers have decided to stop selling plans in some states, leaving consumers in some places with few if any health plans to choose from. Trump has called Obamacare a “disaster” and “dead.”

But the marketplaces — where about 10 million Americans currently get coverage — represent a very small fraction of the U.S. healthcare system.

By contrast, more than 70 million Americans rely on Medicaid and the related Children’s Health Insurance Plan, the government safety net plans for the poor.

Altering Medicaid, as proposed under the GOP plan, would be far more disruptive. And, as congressional Republicans are learning, it is much more controversial.

But isn’t Medicaid a big problem, too?

Many conservatives have long argued the federal government can’t afford to provide so much healthcare assistance to the poor.

But Medicaid has become a vital lifeline for tens of millions of Americans. Medicaid provides assistance to more than one in three U.S. children, protects millions of Americans with disabilities and is the largest funder of nursing home care for elderly Americans, in large part because Medicare does not cover nursing homes.

Obamacare’s Medicaid expansion, which made coverage available to working-age adults in many states, is credited with driving down the nation’s uninsured rate to the lowest levels ever recorded.

And a growing body of evidence shows it is improving low-income Americans’ access to needed medical care, reducing financial strains on families and improving health.

That is why Medicaid has been fiercely defended by patient groups, doctors, nurses, educators and even some Republican governors.

What would it take to stabilize insurance markets?

Probably not that much, actually.

There is widespread agreement that the federal government must first continue funding assistance through Obamacare to low-income consumers to help offset their co-pays and deductibles.

This aid — known as cost-sharing reduction, or CSR, payments – was included in the original law.

But the payments have become a political football as Republicans argued the aid can’t be provided without an appropriation by Congress. And Trump administration officials keep threatening to cut off the payments.

Many insurers say that would be devastating, forcing them to raise premiums by double digits.

Congress could simply put an end to that uncertainty by voting to appropriate the CSR money.

Secondly, most insurance industry officials and independent experts say the federal government must create a better system to protect insurers from big losses if they are hit with very costly patients.

Such reinsurance systems are used in other insurance marketplaces such as the Medicare Part D prescription drug program and are seen as critical to stabilizing markets.

Thirdly, current and former marketplace officials say, the federal government should aggressively market and advertise to get younger, healthier people to buy health plans on the marketplaces.

This strategy has helped Covered California, that state’s marketplace, which has not been beset by some of the problems in other markets.

Finally, many experts say, federal officials likely will have to come up with additional incentives to convince health insurers to offer plans in remote, rural areas.

Some Republicans have suggested that consumers in these areas could be allowed to buy health plans that don’t meet standards set out in the current law.

Would these steps cost more money?

Yes.

But both the House and Senate GOP bills to roll back Obamacare included billions of dollars to stabilize markets over the next several years.

So could Congress put that aid in a smaller healthcare bill?

That’s still unclear.

Many congressional Republicans are reluctant to spend any more money on healthcare aid, especially for a law that most have sworn to repeal.

But polls indicate that Americans now hold congressional Republicans and the Trump administration responsible for the fate of the nation’s healthcare system, including the insurance marketplaces.

That suggests that there could be a political price to pay for the GOP if the markets are not stabilized.

At the same time, Senate Democrats have signaled a willingness to work with Republicans on marketplaces fixes if GOP lawmakers agree to drop their repeal campaign.

But major hurdles remain, including demands from many GOP lawmakers that at least some of Obamacare’s provisions be repealed, such as the highly unpopular mandate requiring Americans to have health insurance.

Rather than stabilizing markets, however, eliminating the insurance requirement could lead to even more turmoil, experts say.

Senate health bill a ‘death sentence’ for rural hospitals

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costs

The Senate’s healthcare bill, if passed, could spell doom for some cash-strapped rural hospitals, many of which are already vulnerable to closure, experts say.

Much of the concern is centered on cuts to Medicaid in the bill—a proposal that is also worrying to large hospitals and health systems—which could leave millions more uninsured and significantly increase uncompensated care costs.

“These hospitals are hanging on by their fingernails,” Maggie Elehwany, vice president of government affairs for the National Rural Health Association, told CNN. “If you leave this legislation as is, it’s a death sentence for individuals in rural America.”

The cuts wouldn’t only hurt patients, according to a new report. Some of the bill’s proposals could also lead to thousands of rural healthcare workers losing their jobs. The Chartis Center for Rural Health, a part of strategic planning firm The Chartis Group, estimated that the BCRA, if passed as is, could cause 34,000 rural healthcare jobs to be eliminated.

Under the Senate’s bill, the cuts could cost rural hospitals $1.3 billion in lost revenue. Much of this would be felt in reduced Medicaid payments; expansion states, this would be about $442,000 lost each year per facility, while it would equal about $224,000 in lost revenue. It would likely push nearly 150 more rural facilities into the red, according to the analysis.

One such vulnerable facility is Lincoln Community Hospital, the small, regional hospital in Hugo, Colorado. The 50-bed hospital serves the the town of about 825, according to an article from National Public Radio, with many of its patients on either Medicare or Medicaid.

The funding cuts proposed in the Better Care Reconciliation Act have given leaders at Lincoln pause, and if the hospital were to close it would leave local residents in a “medical desert,” as it’s more than 100 miles to the next nearest hospital.

The facility was nearly shut down several decades ago, and former board member Ted Lyons said that, though the Affordable Care Act is far from perfect, he hopes that members of Congress work to protect rural hospitals if they intend to move forward with a repeal.

“You don’t drown the duck to get the feather out of him,” Lyons told NPR.

Rural healthcare leaders in Pennsylvania expressed similar concerns. Washington Health System operates two hospitals, one with 260 beds and one with 49 beds, in the western part of the state. CEO Gary Weinstein told WESA that if its smaller Waynesburg hospital closed, patients would have to travel at least 30 minutes for care.

The Waynesburg facility is located in Greene County, which is ranked 60th out of 67 Pennsylvania counties in per capita income, so many of its patients are Medicaid recipients. If a patient without insurance comes into the hospital, it recoups just 5% of its costs, Weinstein said.

“We don’t make money when somebody is insured by Medicaid, but at least we get something,” Weinstein said. “But when somebody has no insurance at all, a lot of times they just aren’t able to pay any part of the bill.”

Weinstein said he has spoken to Sen. Pat Toomey, R-Pennsylvania, one of the 13 senators involved in crafting the Senate’s bill, about that possibility, asking him to make additional changes to the legislation.

Aetna Better Health threatens to terminate Medicaid contracts in Illinois over $698M in unpaid bills

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Illinois statehouse courtesy ilstatehouse.com

Illinois’ budget woes have caused Aetna Better Health to give notice that it could terminate its five Medicaid contracts unless the state pays up.

Aetna Better Health, a subsidiary of Aetna, is owed $698 million in back payments, according to the declaration filing by Laurie Brubaker, CEO of Aetna’s Medicaid business.

Providers could also suffer if the state doesn’t pay. Aetna Better Health may no longer be in a position to pay providers the full amount owed, Brubaker she said. In turn, providers may stop serving the Medicaid and Medicare population.

At least two other Medicaid MCOs in the state have slowed or stopped payments to their providers, Brubaker said.

Illinois has been operating without a budget for two years as a showdown ensued after the election of Republican Governor Bruce Rauner.

The state has racked up $15 billion in unpaid bills and owes Medicaid managed care organizations such as Aetna Better Health, $3.1 billion, according to the filing.

Aetna Better Health filed the termination declaration on June 29, a week before the Illinois House finally passed a $36 billion budget by overriding the veto of the governor.

In its notice of intent, Aetna left room to rescind its decision to terminate the contracts should the state take care of its Medicaid funding crisis.

“If Aetna Better Health is compelled to exercise its termination rights under the state contracts, it would do so with the hope that those terminations would ultimately be unnecessary upon an interceding, mutually agreeable resolution of the pending Medicaid-funding crisis before year end – either through a Fiscal Year 2018 budget or through state compliance with this court’s orders,” Brubaker said.

The state needs to pass a 2018 budget on or before July 1 that secures a reliable revenue stream or Aetna Better Health may terminate its contracts on or before December 21, she said.

Aetna Better Health is owed $698 million in bills that have been piling up since October 2016.

The money owed to Aetna Better Health is for unpaid premiums, $13 million in interest, plus estimated charges for beneficiary and rate discrepancies that have yet to be resolved, according to the notice.

An additional $115 million will come due under the contracts each month, Brubaker said.

Aetna must advance cash to Aetna Better Health to sustain operations.

The state continues to make some Medicaid payments. Illinois has paid Aetna Better Health about 20 percent of what it is owned for 2017, about $21.5 million versus the approximately $115 million that comes due each month.

The vast majority of the money being paid – 95 to 100 percent – has been funded by the federal government. This is from the ACA-expansion rates and the Medicare portion under a dual-eligibles contract.

Aetna Better Health has about 235,000 Medicaid beneficiaries in Illinois under four contracts for which it is paid capitated monthly payments and another for which it receives compensation from the state upon completion of certain tasks and benchmarks.

Survey Says: Medicaid Recipients Really Like Their Coverage And Care

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Is Medicaid the best health care possible?

A lot of people who use it seem to think so.

A new study released by Harvard’s Chan School of Public Health shows that people enrolled in Medicaid are overwhelmingly satisfied with their coverage and care.

The researchers looked at survey data collected by the Centers for Medicare and Medicaid Services from more than 270,000 people who were enrolled in Medicaid in 2013. They gave the program an average rating of 7.9 out of 10, where 10 was considered “the best health care possible.” Nearly half of the respondents rated Medicaid a 9 or 10.

“If nearly half the people are giving it nearly a perfect score, that’s pretty good,” says Michael Barnett, a researcher in the Department of Health Policy and Management at Harvard’s Chan School. “There aren’t a lot of services that we get for anything, government or not, where you’d give it a perfect score.”

The study, published as a research letter in the July 10 issue of JAMA Internal Medicine, also shows that 84 percent of Medicaid recipients felt they were able to get all the medical care they needed in the last six months. Only 3 percent said they could not get care because of long wait times or because doctors would not accept their insurance.

The results applied across the board to those in traditional Medicaid, Medicaid managed care plans and among the elderly and disabled. The study did not include people who got Medicaid through the Affordable Care Act expansion or people in nursing homes.

The survey results come just as Republicans in the Senate are debating a complete overhaul of the Medicaid program, and they counter some of the major arguments for those changes.

House Speaker Paul Ryan, who has championed the Medicaid overhaul, often argues that many doctors refuse to accept Medicaid patients.

“I mean, what good is your coverage if you can’t get a doctor?” he asked in a presentation to reporters in March.

Health and Human Services Secretary Tom Price made a similar argument in testimony to the House Ways and Means Committee last month.

“One-third of doctors in America do not accept new Medicaid patients,” he told the committee. His office didn’t respond to a request for comment on the new study.

Barnett, the study’s author, says the new data is the first that shows what Medicaid users think of the program.

“Part of what motivated this study is that there is a lot of rhetoric and what we would call misinformation around ‘What does Medicaid do, how effective is it, and how satisfied are enrollees with their coverage?'” he says. “This is the survey that really provides the most reliable large scale information that we have to date, [with] over 270,000 enrollees, and they’re largely satisfied.”

The bill being considered by the Senate would slowly roll back the expansion of Medicaid benefits to many poor, non-disabled adults, that happened as part of the Affordable Care Act, or Obamacare. And it would change Medicaid from an open-ended program that pays for all the care beneficiaries need, to one that offers states a set amount of money each year based on the number of people who qualify for Medicaid in that state.

The analysis issued by the Congressional Budget Office last month estimates spending on Medicaid would be $770 billion less over ten years under the Senate bill than under current law and that 15 million people would lose Medicaid coverage by 2026.