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Trump’s executive order would mean cheaper insurance premiums for healthy Obamacare customers
President Trump is expected to sign an executive order on Obamacare this week that would allow people to buy cheaper health insurance with fewer regulations, targeting healthcare goals that eluded congressional Republicans all year.
The full details of the executive order have not been released, but enough information has been reported to reveal its overall framework. Trump would direct the Departments of Labor, Treasury and Health and Human Services to make changes to regulations so more people could band together to buy “association health plans” which would allow individuals or small businesses to band together, such as members of a Chamber of Commerce, to buy plans sold across state lines. The order also would allow people to buy short-term health insurance plans for longer than the Obama administration allowed and would encourage the use of health savings accounts.
Both association health plans and short-term plans are less expensive than Obamacare plans because they offer limited coverage. They don’t guarantee same-cost coverage, or any coverage, for people with pre-existing illnesses and they do not cover a broad range of medical care, from addiction treatment to maternity care.
Critics have referred to the plans as “junk insurance,” warning that expanding access to them would take customers back to the days before the passage of Obamacare, formally known as the Affordable Care Act. They also warn that providing such options would peel more people from Obamacare’s exchanges, leaving an even sicker — and costly — population with Obamacare plans.
But people who don’t receive federal help paying for their premiums, meaning people who make more than $48,240 for an individual or $98,400 for a family of four, and who do not have a pre-existing illness, may look to use one of the options. Many of those customers are facing double-digit premium increases in 2018. The number of people who have unsubsidized health insurance is pegged at anywhere from 6 to 9 million people. Some will face insurance that is so expensive that under Obamacare they will not be required to pay the law’s penalty if they decide not to get coverage.
The executive order could offer an alternative, but it’s not clear how quickly the plans will become available to customers. Open enrollment for Obamacare begins Nov. 1 and runs through Dec. 15, and officials at the different agencies may not be able to change regulations in time for the start of 2018. The White House declined to provide details about the timeline for implementing the executive order.
Kathy Bakich, national health compliance practice leader at Segal Consulting, said the association health plan regulations may take longer than the short-term plans because the administration may have to propose new rules and take public comments, which could take months. The original rules took more than a decade to create, she said.
“There is a legitimate need in the marketplace for new types of systems to allow small employers to band together,” she said. “Whether this is the right way to do it is a tough question.”
It’s not clear how far the changes to the regulations can go. Depending on how they are written, they raise potential openings for fraud or for insolvency if claims exceed an association’s ability to pay them out, because states won’t be able to regulate plans that are sold elsewhere to crack down on problems or revoke licensing. Bakich raised the possibility of another option, known as reinsurance, that would inject federal funding into the exchanges so that higher-cost claims were paid for while others who have coverage would not see premium increases, but there is little appetite among most Republicans for such a proposal.
Instead, association health plans have been pushed even among House members, who passed a bill to allow more of them earlier this year.
“Unlike larger organizations, America’s small businesses are limited in their ability to negotiate for lower healthcare costs for their millions of employees,” said Rep. Virginia Foxx, R-N.C., chairwoman of the House Education and the Workforce Committee. “It’s time to level the playing field. That’s why the committee advanced and the House passed common-sense legislation to allow small businesses to band together through association health plans.”
Trump had been discussing the idea of association health plans with Sen. Rand Paul, R-Ky., for months. On Tuesday he said on Twitter that he was moving to act because Congress “can’t get its act together on healthcare.” Paul chimed in as well, sharing Trump’s tweet and calling it a “great plan” and a “big deal for millions of Americans.”
“Sen. Paul brought this idea to President Trump as a way to fix many problems in the individual market without more regulations and spending,” Doug Stafford, chief strategist for Paul’s political action committee, said in an email. “They have worked on this for quite some time now and are pleased it will be enacted soon.”
The association health plans could allow members of different industries to band together or allow individuals to join in. The proposal has been billed as one that would allow people to buy insurance across state lines because health plans could be located in states with fewer regulations, which would make them less expensive.
The proposal on short-term plans may be easier to tackle. The Obama administration changed the rules for short-term plans in fall 2016, saying they could be offered for only 90 days at a time, meaning that a customer’s deductible would renew if he were to purchase a plan again at a later date. Prior to that, insurers stretched the definition of “short-term,” with some providing coverage for as long as 364 days. It’s not clear what the difference in pricing will be, but in 2016 the average price for an Obamacare premium was $393 a month and short-term plans averaged about $124 a month. By 2017 unsubsidized premiums for mid-level Obamacare plans had risen across the country by an average of 22 percent and are expected to rise in the double-digits again next year.
Insurers have said that the increases are a result of uncertainty over how the Trump administration or Congress would change Obamacare, but also from incurring losses from selling the plans, which younger, healthier and cheaper enrollees haven’t flocked to.
Obamacare, Bakich said, left a gap in terms of dealing with people who don’t think they can afford the robust coverage and also say they don’t want a wide range of services.
“They just want to be protected from bankruptcy and buy the catastrophic plan and be protected from losing everything in a medical crisis,” she said.
Kev Coleman, head of research and data for HealthPocket, a website that helps consumers compare and buy health plans, said he is a proponent of allowing short-term plans to be used for a longer period, saying that industry data show people use them for about six months and that they are meant to be transitional.
Short-term plans and Obamacare plans have locked in rates with states for 2018 and that will not change the individual market, he said.
He also disputed that the short-term plans would be destabilizing to the Obamacare exchange, noting that the Obama-era regulations went into effect in April and that the number of people who used them previously were small. Data from 2015 peg customers at 148,100.
“This market has been around for decades and it hasn’t been a destabilizing force,” Coleman said.
Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation, said on Twitter that people who don’t receive subsidies but who have pre-existing illnesses such as cancer or diabetes would be particularly vulnerable because the short-term and association plans wouldn’t cover their medical needs.
“Short-term insurance plans can offer inexpensive coverage to currently healthy people, but they would exclude people with pre-existing conditions,” he wrote. “If healthy people can enroll in short-term plans and avoid the individual mandate penalty, the ACA marketplaces could collapse. Anything that creates a parallel insurance market for healthy people will lead to unaffordable coverage for sick people.”
But Coleman said working within the existing Obamacare system hasn’t worked.
“Politicians interested in optimizing the health of ACA risk pools would be well-advised to work backwards from consumers’ insurance priorities in order to arrive at a compelling market solution,” Coleman said. “You can’t achieve healthy risk pools without a product that has broad appeal.”
New York City Health+Hospitals to sue state over $380 million in withheld DSH payments
System is already cutting hiring, using attrition to conserve cash and will end the week with only 13 days cash on hand.
NYC H+H plans to sue New York state over the $380 million in disproportionate share hospital payments they claim should have been delivered to them by Sept. 30, NYC H+H interim CEO Stan Brezenoff said on Friday.
City spokeswoman Freddie Goldstein said the suit would be filed sometime next week, though she couldn’t specify whether it would be filed in state or federal court. She also couldn’t specify exactly what state entities would be named as respondents or whether it would include the federal government.
More details will be forthcoming in the coming days, but regarding the purpose of the lawsuit, she said the payments in question were allocated by the federal government for the purpose of reimbursing the city for services already rendered in fiscal 2017. She said the state has no role other than to be a vessel for this funding.
“They can’t change the purpose of the funding once it’s been allocated by the feds.”
Dean Fuleihan, director of the NYC Office of Management and Budget said pursuant to state law it’s clear the $380 million has to go H+H. While he recognizes that there are reconciliations after every fiscal year, he said the $380 million in DSH payments has nothing to do with that.
“That can not turn into we are not giving you the $380 million that you expected, that we knew you expected, that we never objected to and that had to be paid in the prior federal fiscal year.”
The state has argued that the impending massive federal cuts to the DSH program are the reason for not releasing the funds, and that the state will be conducting detailed financial analysis of each hospital that receives funds from the program to assess their situation and need. Gov. Andrew Cuomo said the $1.1 billion cut that will unfold over the next 18 months will mean the state can’t fund any public hospital 100 percent, and they have not made any DSH payments since Oct. 1, when the law went into effect. The cuts are a caveat of the Affordable Care Act.
Fuleihan also conceded that there is no actual statute stipulating the Sept. 30 deadline. Rather, the past pattern of payment dictated it, and the payments are for expenses incurred in fiscal 2017, which ended Sept.30. He said the state’s decision to withhold the funds is a first.
And there was no federal cut to DSH funding in fiscal 2017, so the money should come.
“Is there anyone in the state of New York that does not recognize that NYC H+H is the major provider of care to Medicaid recipients and the uninsured. One-third of our patients are uninsured and we don’t get any of the FY17 DSH money? The voluntaries got their money. We’re not getting anything,” said Brezenoff.
About a third of the system’s patients are uninsured and large number of them are not eligible for insurance.
Brezenoff has already told staff that they will using attrition and drastic cuts to hiring to try and conserve cash. He said by the end of Friday they’ll have only $255 million, equal to 13 days of cash on hand.
“You can see just how precarious our situation is…We have begun painful process of adjusting our operations in ways that will almost certainly impact services to patients and put additional strain on our hard working employees.”
He said they will now be looking closely at each position that becomes open and deciding whether or not to fill it, and that those decisions could ultimately impact clinical staff and patient care.
“It is definitely conceivable that some physician positions will not be filled,” Brezenoff said.
They are also slowing down payments to vendors, which could impact future pricing and maintaining of supplies.
“The longer this goes on, it will require more and more difficult things to conserve cash. That’s the mode NYC H+H is in.”
Between last fiscal year and this one, NYC H+H is looking at a more than $700 million gap, including the currently withheld DSH funds as well as a possible $330 million cut for fiscal 2018 if Congress does not repeal the cuts.
Brezenoff said they have no plans to ask the city for more funds, as the traditional amount that comes from the city to NYC H+H is between $1 billion and $1.3 billion. The city is currently slated to contribute $1.8 billion, with commitment for $2 billion in their financial plan. NYC is facing their own $3.5 billion budget gap for fiscal 2019.
Steep Premiums Challenge People Who Buy Health Insurance Without Subsidies
Paul Melquist of St. Paul, Minn., has a message for the people who wrote the Affordable Care Act: “Quit wrecking my health care.”
Teri Goodrich of Raleigh, N.C., agrees. “We’re getting slammed. We didn’t budget for this,” she says.
Millions of people have gained health insurance because of the federal health law. Millions more have seen their existing coverage improved.
But one slice of the population, which includes Melquist and Goodrich, is unquestionably worse off. They are healthy people who buy their own coverage but earn too much to qualify for help paying their premiums. And the premium hikes that are being announced as enrollment looms for next year — in some states, increases topping 50 percent — will make their situations more miserable.
Exactly how big is this group? According to Mark Farrah Associates, a health care analysis firm, as of 2017, there were 17.6 million people in the individual market, 5.4 million of whom bought policies outside the health exchanges, where premium help is not available. Combine that with the percentage of people who bought insurance on the exchanges but earned too much (more than four times the federal poverty level, or about $48,000 for an individual) to get premium subsidies, and the estimate is 7.5 million, or 43 percent of the total individual market purchasers, according to insurance industry consultant Robert Laszewski.
Who are these people?
“They’re early retirees,” says Laszewski. “They’re people working part time who have substantial outside income. They’re people who are self-employed of any age, people who are small employers.”
Melquist is one of those early retirees. He and his wife are both 59. He worked in the defense industry and retired at the end of 2016.
He always planned to retire at age 55 but ended up working longer, in part because he knew health insurance costs were rising. When he did retire and sought to purchase coverage for himself and his wife, he says, “I was shocked to find out how bad it actually was.”
For a bronze-level plan with a health savings account, Melquist says, “we pay $15,000 a year [in premiums] and the first $6,550 [for health care expenses] for each of us comes out of our pocket. So basically you could be looking at $30,000 out of pocket before anything gets covered.”
Insurance is important, Melquist says, particularly if a catastrophic health issue were to hit either of him or his wife. In the meantime, he can still pay the bills. But he’s frustrated. “I’m not eating dog food, but I’m also not able to do stuff for my grandchildren,” he says, like help with college costs. “It’s not that my life is falling apart, but the [Affordable Care Act] has ruined a lot of things I’d like to have done.”
The good news, if there is any, for Melquist is that premiums in Minnesota are going up by only small amounts for 2018, and in some cases going down, because of a reinsurance program passed by the state legislature that will help cover the costs for some of the state’s sickest patients in the individual market. That move will help keep premiums from spiking even more.
But that won’t be the case in Raleigh, where Goodrich and her husband, John Kistle, work as private consultants in the energy industry.
Goodrich, 59, and Kistle, 57, bought insurance through the ACA exchange in their state for three years. When premiums reached $1,600 per month with deductibles of $7,500 each, however, “it was just unbelievable. We decided just not to get insurance,” Goodrich says.
Eventually, they bought short-term plans that cover only catastrophic illness or injury. That insurance is not considered adequate under the ACA, so the couple could be liable for a tax penalty as well.
Goodrich, who volunteers to help people with their taxes in her spare time, says she has run the numbers and thinks that insurance is so expensive where she lives that the couple will be exempt from the penalty. That is because the cheapest insurance would cost the couple more than 8.16 percent of their income. Under the health law’s provisions, the penalty doesn’t apply above that level because insurance is considered unaffordable.
“We try to be good citizens and do the right thing,” she says. “Next year, we’re trying to figure out how to make less than $64,000 so we can get subsidies.” That amount is equal to 400 percent of the federal poverty line for two people, the cutoff for premium assistance because Congress assumed those who earned more could afford to buy affordable coverage.
Sabrina Corlette, a research professor at Georgetown University who specializes in health insurance, agreed that this is a population “that faced big hikes” in premiums when the health law took effect.
But, she says, in many cases, people in the individual market were previously paying artificially low premiums. Some of those old policies had substandard coverage. For others, however, the higher prices are the result of one of the fundamental changes enacted by the health law. “These are folks who were benefiting from a system that was affordable solely because insurers were able to keep sick people out,” Corlette says, adding that they are now being asked “to pay more of the true cost of health care.”
This is a population that is also more likely to vote Republican, says Laszewski, “which is one of the grand ironies now.”
Republicans in Congress and President Trump haven’t been able to “repeal and replace” the health law. But some of their efforts are undermining it — primarily the administration’s threat to stop paying billions of dollars to insurers in subsidies to help some lower-income people pay their out-of-pocket costs. The uncertainty surrounding those subsidies has led insurers to boost premiums next year by an estimated 20 percent. Those who get premium help from the government won’t have to pay more. But those who are paying the full freight will.
Also driving up premiums for next year, says Corlette, are the administration’s threats not to enforce the individual requirement for insurance and its decision to cancel most advertising and outreach for the year’s open-enrollment period that begins Nov. 1. Both of those provisions bring more healthy people into the insurance pool to help spread costs.
“One could argue that the 2014 premium increases were painful, but it was about getting us to a system that was more fundamentally fair and just,” Corlette says. “Now, it’s completely unnecessary price increases for unsubsidized folks that could so easily be avoided by a rational political system.”
Senate leaves town with no Obamacare fix
The Senate left town on Thursday for more than a week without reaching a deal to stabilize Obamacare’s marketplaces.
Talks between Democrats and Republicans started up again in earnest late last month after the GOP’s latest attempt at Obamacare repeal collapsed. However, the Senate left town Thursday without finalizing any deal, although negotiators pledged to continue talks.
Meanwhile, the Senate is in recess all of next week and won’t return until Oct. 16, just a few weeks before 2018 open enrollment starts on Nov. 1. A Senate aide said there is “no question a sense of urgency if you want to have impact on 2018.”
Sen. Lamar Alexander, R-Tenn., leading the Republican side of the talks, said Thursday that Democrats and Republicans remain in good faith negotiations.
When asked if it was too late to reach an agreement to affect the 2018 coverage year, Alexander quickly responded “no.”
Sen. Patty Murray, D-Wash., did not give a timeline for when to finish a deal.
“We are absolutely working on this. No one should think this is easy,” she said.
Some senators were perturbed they are leaving for a week without any bipartisan plan.
“I had hoped that we would pass before leaving town a bill that would help stabilize the insurance markets and lower premiums,” said Sen. Susan Collins, R-Maine, a major proponent of an agreement.
The basic framework of the agreement is funding insurer subsidies in exchange for giving more flexibility to states for waivers.
The subsidies reimburse insurers for lowering copays and deductibles for low-income Obamacare customers. The Trump administration has been making the payments month to month but has not made a commitment to the payments for 2018, which insurers have been pleading with them to do.
Republicans want in exchange for the subsidies greater flexibility and a quicker approval process for states to waive Obamacare regulations for insurers. States have complained the current process for approving waivers by the federal government is slow and burdensome and they want fewer constraints on what regulations they can waive.
Alexander said earlier this week the two sides have “differences in opinion on what amounts to giving states meaningful flexibility in exchange for two years of cost-reduction payments.”
Insurers are already finalizing rates for next year and some could charge higher rates without the subsidies.
For instance, Highmark Blue Cross Blue Shield in Delaware announced Thursday it will raise Obamacare rates by 25 percent next year, according to Delaware Online. The insurer said the rate request was based on the uncertainty surrounding the payments and questions around whether the federal government will enforce the individual mandate that forces people to have insurance.
The nonpartisan Kaiser Family Foundation has estimated that rates for silver plans, the most popular of Obamacare’s three metal tier plans, will go up 19 percent without the payments.
As ACA enrollment nears, administration keeps cutting federal support of the law
For months, officials in Republican-controlled Iowa had sought federal permission to revitalize their ailing health-insurance marketplace. Then President Trump read about the request in a newspaper story and called the federal director weighing the application.
Trump’s message in late August was clear, according to individuals who spoke on the condition of anonymity to discuss private conversations: Tell Iowa no.
Supporters of the Affordable Care Act see the president’s opposition even to changes sought by conservative states as part of a broader campaign by his administration to undermine the 2010 health-care law. In addition to trying to cut funding for the ACA, the Trump administration also is hampering state efforts to control premiums. In the case of Iowa, that involved a highly unusual intervention by the president himself.
And with the fifth enrollment season set to begin Nov. 1, advocates say the Health and Human Services Department has done more to suppress the number of people signing up than to boost it. HHS has slashed grants to groups that help consumers get insurance coverage, for example. It also has cut the enrollment period in half, reduced the advertising budget by 90 percent and announced an outage schedule that would make the HealthCare.gov website less available than last year.
The White House also has yet to commit to funding the cost-sharing reductions that help about 7 million lower-income Americans afford out-of-pocket expenses on their ACA health plans. Trump has regularly threatened to block them and, according to an administration official who was not authorized to speak publicly, officials are considering action to end the payments in November.
The uncertainty has driven premium prices much higher for 2018. A possible move by the Treasury Department to ease the requirement that most Americans obtain coverage could further erode a core element of the law.
On Friday, Sen. Margaret Wood Hassan (D-N.H.) called on the administration to abandon its “attempts to sabotage health care markets and raise health care costs for millions.” Such efforts, warn health advocates as well as state and local officials, will translate into more uninsured Americans.
“In Ohio, the Trump administration has already inflicted the damage,” said Lisa Hamler-Fugitt, executive director of the Ohio Association of Foodbanks. After its nearly $1.7 million enrollment-assistance grant was cut 72 percent last month, the group decided it no longer could effectively participate. “We are past the point of no return on this,” Hamler-Fugitt said.
HHS has told its regional administrators not to even meet with on-the-ground organizations about enrollment. The late decision, which department spokesman Matt Lloyd said was made because such groups organize and implement events “with their own agenda,” left leaders of grass-roots organizations feeling stranded.
“I don’t think it’s too much to ask the agency tasked with outreach and enrollment to be involved with that,” said Roy Mitchell, executive director for the Mississippi Health Advocacy Program, which receives no federal funding for its ACA efforts. “There’s money for HHS to fly around on private jets, but there’s not money and resources to do outreach in Mississippi.”
Administration officials make no apologies for actions scaling back federal support for the ACA, also known as Obamacare. Trump, Vice President Pence and those carrying out the law at different agencies take most every opportunity to claim that it is failing. HHS Secretary Tom Price’s abrupt resignation Friday, prompted by the furor over his use of expensive chartered planes for work trips, is not expected to shift this overall approach.
After failing to repeal and replace the Affordable Care Act, Republican leaders said it will “implode.” Health-care experts disagree, saying the ACA is stable under current law — but President Trump and congressional Republicans could change that. (Daron Taylor/The Washington Post)
“Obamacare has never lived up to enrollment expectations despite the previous administration’s best efforts,” Lloyd said in an email last week. “The American people know a bad deal when they see one, and many won’t be convinced to sign up for ‘Washington-knows-best’ health coverage that they can’t afford.”
Trump and his aides also are looking for ways to loosen the existing law’s requirements, now that the latest congressional attempt to repeal it outright has failed. The Treasury Department may broaden the ACA’s “hardship exemption” so that taxpayers don’t face costly penalties for failing to obtain coverage, a Republican briefed on the plan said. That is sure to depress enrollment among the younger, healthier consumers whom insurers count on to help buffer the health-care costs of sicker customers.
“We should fully expect the Trump administration to take a more activist route to deal with Obamacare, given the inability of Congress to move through with a repeal-and-replace bill,” said Lanhee Chen, a research fellow at Stanford University’s Hoover Institution.
While the law’s open enrollment period has attracted the most public attention, a more obscure battle within the administration over several states’ proposed changes for their marketplaces speaks volumes about the president’s approach to the law.
It was a Wall Street Journal article about Iowa’s request that provoked Trump’s ire, according to an individual briefed on the exchange. The story detailed how officials had just submitted the application for a Section 1332 waiver — a provision that allows states to adjust how they are implementing the ACA as long as they can prove it would not translate into lost or less-affordable coverage.
Iowa’s aim was to foster more competition and better prices. The story said other states hoping to stabilize their situations were watching closely.
Trump first tried to reach Price, the individual recounted, but the secretary was traveling in Asia and unavailable. The president then called Seema Verma, administrator of the Centers for Medicare and Medicaid Services, the agency charged with authorizing or rejecting Section 1332 applications. CMS had been working closely with Iowa as it fine-tuned its submission.
State Insurance Commissioner Doug Ommen has repeatedly described the “Iowa Stopgap Measure” as critical to expanding marketplace options there. The plan would abolish the ACA exchange there and convert consumer subsidies into a type of GOP-styled tax credit. New financial buffers would help insurers handle customers with particularly high medical expenses.
Without the measure, “over 20,000 middle class farmers, early retirees and self-employed Iowans will likely either go uninsured or leave Iowa,” Ommen warned in a Sept. 19 statement. Those who sign up for 2018 exchange coverage face premium rate increases of 57 percent on average from the single insurer participating.
Some administration officials are still pressing for the waiver to be granted, according to interviews with several Republicans. The HHS spokesman confirmed last week that Iowa’s application “has been deemed complete and is currently under review” but did not address the president’s directive on the matter.
Eliot Fishman oversaw such waivers at CMS during the previous administration and said in an interview that President Barack Obama weighed in on those decisions only in “unusual” cases” toward the end of the process.
“Things that are tough calls typically go to the president, but they go with a [staff] recommendation that often carries a great deal of weight,” said Fishman, now senior director of health policy for the liberal health-care advocacy group Families USA.
Iowa is not the only red state to chafe at the administration’s unwillingness to allow more flexibility.
On Friday, Oklahoma sent a letter to Price and Treasury Secretary Steven Mnuchin saying it was withdrawing its federal waiver request because administration officials had not provided an answer “after months of development, negotiation, and near daily communication over the past six weeks.”
“While we appreciate the work of your staff, the lack of timely waiver approval will prevent thousands of Oklahomans from realizing the benefits of significantly lower insurance premiums in 2018,” wrote Terry Cline, the state’s health secretary.
In at least one case, CMS has approved a waiver in a way that upended a state’s plan to maximize health coverage for its residents. Minnesota applied to CMS for permission to establish a reinsurance program, which can lower premiums by giving insurers a guarantee that they will have limited financial exposure for customers with particularly high medical expenses. The agency informed Gov. Mark Dayton (D) on Sept. 22 that it would provide $323 million for the program since the lower premiums would mean savings to the federal government on subsidies to Minnesotans with ACA health plans.
But, Verma added, the federal government also would cut $369 million in funding for a separate program aimed at residents who earn between 138 percent and 200 percent of the federal poverty level and don’t qualify for the same subsidies.
Minnesota’s entire congressional delegation, Democrats and Republicans alike, issued a joint statement saying they were “disappointed that our state is facing a last-minute penalty” and “exploring possible paths forward.”
Sen. Patty Murray (Wash.), the top Democrat on the Health, Education, Labor and Pensions Committee, said Trump should devote time to forging a bipartisan agreement to stabilize the ACA marketplaces.
“If he is only interested in sabotaging the market, that is a dangerous road for him to ride, because he will own it,” she said.
The medical bill score: How the public judges health care
The bottom line: The “medical bills score” is the single most important measure of how we are doing in health care from the public’s perspective. And ultimately, if Congress ever passes a new health care bill, it is how the public will evaluate that plan — from Graham-Cassidy to Medicare for All and everything in between.
The numbers that matter: As we found in a Kaiser Family Foundation poll in February:
- 31% of Americans age 18-64 report they or a family member face problems paying their health care bills.
- But that number shoots up to 57% for people who are sick.
It makes sense that people who use more care have more health care bills, but it also reveals how poorly our system performs from a consumer perspective when people who need care the most are protected the least by insurance coverage.
The impact: People are not just whining about necessary cost sharing. In a survey we did with the New York Times, we found that:
- 70% of people with problems paying medical bills report cutting back on food, clothing and other basic necessities.
- 59% report using up most of their savings.
- 41% say they’ve taken an extra job to help pay for their health care.
Not surprisingly, the uninsured (41%) are more likely to have problems paying medical bills. But this is not a problem limited to the uninsured: 30% of the insured – think voters — have problems with medical bills.
The back story: The share of the public reporting problems paying their medical bills has not moved much in recent years. The Affordable Care Act has extended coverage and better financial protection to tens of millions, but it doesn’t have much of an impact on affordability beyond people covered by the Medicaid expansion and the marketplaces.
In the far larger employer-based health insurance sector, deductibles and other forms of cost sharing have been growing about five times faster than wages, and deductibles have been growing especially sharply for people who work for smaller employers. .
What to watch: Health care is a pocketbook issue for most of the public and the American people have their own scoring system. They may give this or that mostly partisan response about a health reform idea on a poll, but until they see how they’ll get help paying their health care bills, they will ultimately be disappointed by every health reform plan.
Cartoon – Home Care isn’t an option.
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.
HENRY KOTULA 