Tag Archives: Uninsured

Block grant funding of public health insurance: the Canadian example

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Block grant funding of public health insurance: the Canadian example

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Speaker Paul Ryan wants to reform Medicaid by “block granting” the program, that is,

by capping federal funding and turning control of the program over to states. The aim of such reforms is to reduce federal funding over the long term, while preserving a safety net for needy, low-income Americans. An additional valuable aim of this effort has been to advance federalism by reducing the federal government’s role and giving states and governors more freedom and flexibility in managing their Medicaid programs and helping people in their states.

What are the likely consequences of block granting? Benjamin Sommers and David Naylor write in JAMA about how Canada’s joint federal/provincial funding of health care provides lessons about the likely consequences of block granting.

Canada is a single payer health care system. However, there isn’t a Canadian single payer. Rather, there is a single payer for each province: I am covered by the Ontario Health Insurance Plan (OHIP). These plans are primarily funded by provincial taxes. However, provinces also receive a health transfer from the Canadian federal government, i. e., a block grant. The provincial health insurance plans are run by provincial health ministers, not the federal minister in Ottawa.

So, does provincial autonomy facilitate experimentation and tailoring by the provinces? Sommers and Naylor think not.

there is little evidence that the alleged advantages of block grants have materialized in Canada. Advocates argue that with greater flexibility and proper incentives, states can reduce costs by improving the efficiency of care. In Canada, however, the provinces’ primary means of coping with budget pressures under block grants has been to reduce funding to hospitals and bargain harder with provincial medical associations. Ironically, then, if this scenario plays out in the United States, it would exacerbate one of the chief Republican criticisms of Medicaid — that it pays clinicians such low rates that they have reduced incentives to care for low-income patients.

Indeed, physician refusal to take Medicaid patients is one of Speaker Ryan’s central criticisms of Medicaid.

What about the effects of a block grant system on federal funding of health care?

Once block funding was initiated in 1977, health care funding became a line item in the federal budget that could be arbitrarily cut or capped for fiscal or political reasons, as opposed to a level of spending pegged to the needs and health care use of the population. Importantly, these cuts occurred under both conservative and liberal federal governments.

When the Canadian health transfer began, the federal government paid 50% of provincial costs. However, the transfer has steadily declined, until it is now about 20%. Sommers and Naylor predict that US federal block grants would also decline, and this is clearly one of Speaker Ryan’s goals.

However, Canadian health care spending per capita has not declined.

As the cost of providing care has risen, but the federal health transfer has stayed fixed or declined, the provinces have taxed more and the federal government has taxed less. The provincial governments hate this, because they would rather have the federal government make the unpopular choice to raise taxes. But it’s not clear whether block granting has made a big difference in the health care received by Canadians.

American states could similarly increase taxes in response to a declining federal Medicaid block grant, but would they? The key difference between Canadian public health insurance and Medicaid is that the former is universal, while the latter is means-tested. Ontarians prefer lower taxes, but if Ontario decreases funding for OHIP, every Ontarian will experience longer waits for care. But American states can cut Medicaid — and reduce taxes — without affecting the health care of better off and able-bodied citizens.

The affluent and able-bodied are also the citizens most likely to vote. American states determine their own voting procedures. Block granting gives states an incentive to manage voting so as to reduce the participation of the marginalized communities who are most in need of public health insurance. Block granting is likely to undermine the health care for the poor and disabled, and it could reinforce the post-Shelby County v. Holder efforts to restrict voting.

 

Trump’s New Plan to Penalize the Sick

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https://www.americanprogress.org/issues/healthcare/news/2017/04/06/430156/trumps-new-plan-penalize-sick/

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Republicans need to stop making a terrible health care bill even worse. A little over a week ago, President Donald Trump declared that the White House would be moving on from its efforts to repeal the Affordable Care Act, or ACA. However, in an abrupt about-face, the administration is now reportedly considering a new proposal in an attempt to reinvigorate talks: allowing insurers to drastically raise prices on people with pre-existing conditions, even to the point of preventing them from obtaining insurance at all.

First Republicans had a proposal that would lead to skyrocketing uninsurance and out-of-pocket costs while increasing premiums. Then they argued for driving up coverage prices for services like maternity care and substance abuse treatment while simultaneously weakening protections for employer-provided insurance. Now they’re threatening to eliminate protections for the up to 133 million individuals who have pre-existing conditions.

How Republicans Can Escape Their Health Care Dilemma, Part 3: Responsible Federalism

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https://www.forbes.com/sites/theapothecary/2017/03/31/how-republicans-can-escape-their-health-care-dilemma-part-3-responsible-federalism/#46636dd45063

Image result for How Republicans Can Escape Their Health Care Dilemma, Part 1: Universal Catastrophic Coverage

This is the last in a series of three posts. I’ve proposed three approaches that Republicans might use to get out of  the dilemma they are in over health care:

  • Universal catastrophic coverage (Part 1)
  • Universal safety net (Part 2)
  • Responsible federalism (Part 3)

The Case for a Responsible Federalism

We have had federalism in health care for many decades. The grandaddy of them all is the open-ended Medicaid program which obligates Uncle Sam to pony up federal matching dollars in lock-stop with state willingness to put up their dollars. As AEI health policy expert Joe Antos recently pointed out, Medicaid has needed fixing for 50 years. But even before that we have had federal grant-in-aid programs dating back to the 1930’s that channeled federal dollars into health care. In my view, responsible federalism in health care would entail reforming the perverse fiscal incentives embedded in Medicaid while also offering states much greater flexibility to solve their health problems without the heavy hand of Uncle Sam.

 

How Republicans Can Escape Their Health Care Dilemma, Part 2: Universal Safety Net

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https://www.forbes.com/sites/theapothecary/2017/03/31/dilemma-part-2-universal-safety-net/#215199391108

Image result for How Republicans Can Escape Their Health Care Dilemma, Part 1: Universal Catastrophic Coverage

This is the second in a series of three posts. In my last post I posed a dilemma: President Trump has argued repeatedly for “coverage for all.”  The CBO score showing that the AHCA would result in a loss of coverage for 24 million Americans was devastating for its political prospects. Yet Obamacare, despite leaving tens of millions of Americans uninsured, is universally viewed by Republicans as fiscally unsustainable over the long term. I’ve proposed three approaches to getting out of  this box:

  • Universal catastrophic coverage (Part 1)
  • Universal safety net (Part 2)
  • Responsible federalism (Part 3)

The Case for a Universal Safety Net

A universal safety net offers the possibility of a bipartisan reform that is politically feasible at an affordable cost. Again, there is more than one way to achieve this, but I will provide two examples.

 

How Republicans Can Escape Their Health Care Dilemma, Part 1: Universal Catastrophic Coverage

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https://www.forbes.com/sites/theapothecary/2017/03/31/how-republicans-can-escape-their-health-care-dilemma-part-i-universal-catastrophic-coverage/#64adb55c193e

Image result for How Republicans Can Escape Their Health Care Dilemma, Part 1: Universal Catastrophic Coverage

The demise of the American Health Care Act (AHCA) on March 24 was a humiliating defeat for both President Trump and Speaker Paul Ryan, both of whom had pledged the repeal and replacement of Obamacare would be the first order of business under a Trump administration. Now they both plan to move on to tax reform and it remains to be seen when or how a repeal and replacement effort will be resurrected.

I sit in an ivory tower, so perhaps my views will be dismissed as hopelessly unrealistic. But having studied health reform for more than four decades, the prospects for success are not as dim as most might think. This three part series by no means exhausts the possibilities, but should give readers a rough sense of three possible paths out of this mess. These include:

  • Universal catastrophic coverage (Part 1)
  • Universal safety net (Part 2)
  • Responsible federalism (Part 3)

President Trump has argued repeatedly for “coverage for all.”  The CBO score showing that the AHCA would result in a loss of coverage for 24 million Americans was devastating for its political prospects [1]. Yet Obamacare, despite leaving tens of millions of Americans uninsured, is universally viewed by Republicans as fiscally unsustainable over the long term. Therein lies the Republican’s political dilemma.

 

Is U.S. Preeminence in High-Tech Medicine a Myth?

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http://www.commonwealthfund.org/publications/blog/2017/apr/us-preeminence-in-high-tech-medicine?omnicid=EALERT1189645&mid=henrykotula@yahoo.com

U.S. health care has many well-documented shortcomings. However, it is often assumed that, because we invest so heavily in technology and specialists, our health care system performs well for patients who have rare or complex diseases.

New research shows that we should be skeptical of that assumption. A recent study in the Annals of Internal Medicine compares the health outcomes of U.S. and Canadian patients with cystic fibrosis, an incurable, genetic disease that affects about one in 10,000 people in both countries. The results are disturbing: on average, Canadian patients live 10 years longer than American patients. And the gap has been widening for the past two decades (see exhibit).

Median Age of Survival for Patients with Cystic Fibrosis over Time

Median age of survival (years)

The researchers suggest the likely culprit is the significant gaps in health insurance coverage among U.S. children and adults under age 65. Uninsured patients with cystic fibrosis, they find, face a much greater risk of early death than their insured peers. Of particular note, given recent events in Washington, D.C., Medicaid patients have significantly better health outcomes than those without insurance, despite the fact that they tend to be poorer and more socially vulnerable.

In Canada, of course, there are no uninsured: the government provides universal health coverage for all residents, without copayments for physician visits or hospital stays. (The study also finds that Canadian patients are much more likely to receive a lung transplant than U.S. patients—shattering another common assumption about the U.S. health system’s technological superiority.)

When one considers the medical needs of people with cystic fibrosis, it is obvious why lacking health insurance could lead to an early death. The disease causes abnormal secretions to impair functioning of the lungs, pancreas, and other organs, which in turn leads to infections and lung damage, and prevents the body from properly digesting food. Inhibiting the build-up of these secretions and ensuring proper nutrition and wellness are crucial to preventing the rapid progression of the disease. In this context, staying well requires constant self-management and frequent contact with the health care system—which comes at a cost. Coverage gaps and financial barriers to care are incredibly dangerous for these patients and can quickly undermine their health.

And while several promising pharmaceuticals that treat cystic fibrosis have hit the market in recent years, these are priced at a quarter of a million dollars . . . per year. High-quality care is simply out-of-reach for patients without insurance.

In medical terms, we might call uninsurance a “comorbidity”—one unique to the United States among all industrialized nations, and just as deadly as pneumonia or diabetes.

The study is a reminder, if one was needed, of the fundamental problem with the U.S. health insurance system: not everyone is covered. The focus of would-be health reformers should be—not solely on whether the 20+ million Americans who gained coverage under the ACA should be allowed to keep it—but rather how to extend those gains to the 28 million remaining uninsured. For some, their lives will depend on it.

What a Bipartisan Approach to U.S. Health Care Could Look Like

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https://hbr.org/2017/03/what-a-bipartisan-approach-to-u-s-health-care-could-look-like?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+harvardbusiness+%28HBR.org%29

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As a friend once told me, “Government is about compromise.” That friend was Tommy Thompson, a four-term governor of Wisconsin who went on to serve in George W. Bush’s cabinet as secretary of health and human services.

With the failure of the American Health Care Act, recently proposed by Republicans in the U.S. House of Representatives, it is clear that the Affordable Care Act (ACA) will continue to serve millions of Americans for the foreseeable future. Of course, the ACA (or Obamacare) remains a flawed law. But rather than allow it to “implode” or “collapse,” as some suggest it will (e.g., President Trump), a group of Republican and Democratic leaders in Washington should take action and fix the broken elements of the ACA for the good of the millions of Americans who depend on it. It is time for a compromise.

What might such a bipartisan agreement look like? Here are some ideas.

Fitch: Uncompensated care could increase next year under ACA

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http://www.beckershospitalreview.com/finance/fitch-uncompensated-care-could-increase-next-year-under-aca.html

Image result for uncompensated care

Without modifications to the ACA, exchange enrollment could suffer and hospitals are likely to see uncompensated care rise next year, according to Fitch Ratings.

Last Friday, the GOP’s proposal to repeal and replace the ACA was pulled from the House floor, leaving the ACA in effect for the time being.

Hospitals are not expected to see a rise in uninsured patients this year since those enrolled in an ACA plan for 2017 will keep it, Fitch said in a news release. However, with premiums rising and insurers leaving the exchanges, ACA enrollment is likely to decrease, the agency noted. Total signups for open enrollment fell 4 percent from 2016 to 2017.

“The failure of the AHCA [American Health Care Act] to move forward means that the ACA exchanges will be ostensibly functioning in 2018, but hospital companies will likely face higher levels of uncompensated care as fewer individuals enroll in exchange products,” Fitch said.

Still, Fitch said it is the ACA’s Medicaid expansion — not the exchanges — that have primarily driven a decrease in uncompensated care for hospitals.

“The AHCA’s changes to the ACA related Medicaid expansion were relatively more benign than the expected dislocation in the exchange covered lives with respect to the ultimate influence on hospital companies’ patient payer mix and the financial burden of treating uninsured patients,” Fitch said. “However, while current Medicaid enrollment is likely to be stable, more states will not likely expand eligibility given the uncertainty of future funding.”

Insurance Coverage, Access to Care, and Medical Debt Since the ACA: A Look at California, Florida, New York, and Texas

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http://www.commonwealthfund.org/publications/issue-briefs/2017/mar/coverage-access-medical-debt-aca-california-florida-new-york-texas

Background

More than 30 million Americans now have health insurance under the provisions of the Affordable Care Act.1 These provisions include those that have allowed or encouraged people to enroll in coverage through expanded Medicaid eligibility, tax credits to help pay for premiums, state and federal outreach efforts, and consumer-friendly market regulations.2 A recent analysis found that the percentage of uninsured working-age adults dropped from 20 percent in 2010 to 12 percent in 2016.3

The law gives states flexibility in implementing provisions, including the choice of operating their own health insurance marketplace or leaving that task to the federal government. Moreover, in 2012, the U.S. Supreme Court gave states the option to decide whether or not to expand Medicaid eligibility to more lower-income adults. These choices, combined with each state’s unique demographics and history, have resulted in varying experiences among Americans. In this brief, we use data from the Commonwealth Fund Biennial Health Insurance Survey to examine differences in health insurance coverage, problems getting needed care because of costs, and medical bill and debt problems among 19-to-64-year-old adults in the nation’s four largest states: California, Florida, New York, and Texas.4

These states fall into two distinct categories. The first group, California and New York, both operate their own health insurance marketplaces and have expanded eligibility for Medicaid to adults with incomes at or below 138 percent of the federal poverty level—$16,394 for an individual or $33,534 for a family of four. Florida and Texas, the second group, are using the federal marketplace to enroll residents in health plans and have declined to expand Medicaid eligibility (Exhibit 1).

Conclusion

The Affordable Care Act has significantly affected health insurance coverage and access among U.S. adults. But the decisions made by state leaders in implementing federal policy, along with other state laws, have ongoing implications for their residents. California and New York began seeing declines in their adult uninsured rate earlier than other states because of such choices. California expanded eligibility for Medicaid even before 2014 by creating the Low Income Health Program, which provided coverage to adults with incomes less than 200 percent of poverty.20 New York expanded Medicaid eligibility to parents with incomes up to 150 percent of poverty and childless adults up to 100 percent of poverty starting in 2000.21 In addition, both states opted to establish their own marketplaces and have conducted expansive outreach campaigns to increase awareness of coverage options. Alternatively, Florida and Texas—although they have experienced robust enrollment in private plans through the federal health insurance marketplace—have not expanded Medicaid eligibility and have made less progress covering uninsured residents.

However, the variation in insured rates is not entirely the result of states’ decision. The ACA does not provide access to any new coverage options for undocumented immigrants. They are ineligible for Medicaid coverage and cannot purchase private plans through the marketplace, subsidized or unsubsidized. This is likely a contributing factor in Texas’s higher uninsured rate.

While expanded coverage is the necessary first step to improving timely access to care and reducing medical financial burdens among U.S. families, the quality and comprehensiveness of coverage across all sources of insurance—marketplace plans, individual market plans, employer-provided coverage, and Medicaid—also has a significant impact.

The gains documented in this survey and many other private and federal analyses indicate that the Affordable Care Act has been successful in insuring millions of Americans and enabling them to get health care they may not have been able to afford previously. Further expanding coverage and improving affordability should remain a priority. Alternatively, repealing the law without a replacement that is at least equally effective will risk reversing the substantial gains the nation has made.