Saturday, February 25, 2017

Health Care Reform Articles - February 27, 2017

Key Republican in Health Law’s Fate Hails From a State That Embraced It

by Robert Pear - NYT - February 25, 2017
ONTARIO, Ore. — When Representative Greg Walden of Oregon visits his expansive district, which swallows two-thirds of a very blue West Coast state, his constituents grouse amiably to their longtime Republican congressman about environmental regulations and federal lands policy.
And then the conversation shifts to the Affordable Care Act and what its repeal would mean for the struggling rural workers who have long voted for Mr. Walden, and for children like 11-year-old Rocco Stone. Because of the health law, Rocco has been able to live at home, attend school and have a nearly normal life despite having autism and a rare genetic disorder.
“Our life was completely changed when Oregon and the federal government partnered to provide home and community services through Medicaid,” Rocco’s mother, Dana M. Stone, told the congressman this past week. “We are deeply, deeply concerned about talk at the federal level about a complete repeal of the Affordable Care Act.”
Mr. Walden, the new chairman of the House Energy and Commerce Committee, is not just another backbench Republican dealing with suddenly energized supporters of the health law at town hall-style meetings. The lanky 60-year-old congressman will have a large role in drafting promised legislation to replace former President Barack Obama’s signature domestic achievement and a huge say in decisions about the future of Medicaid, which the health law greatly expanded.
As a former chairman of the committee responsible for electing Republicans to the House, Mr. Walden knows the politics of health care as well as anyone. But in his new role, he must reconcile the political goals of his party, which is committed to repealing the 2010 health law, and the interests of his state, where officials say the law has been a big success. In 2010, nearly one in five Oregonians lacked health coverage. Today, state officials say, 95 percent of Oregonians have coverage.
Since Oregon expanded eligibility for Medicaid under the health law in 2014, enrollment has increased more than 65 percent. Nearly one-fourth of the state’s four million residents are now on Medicaid.
In Mr. Walden’s district, the percentages are even higher. In some of his rural counties, more than one-third of the people are on Medicaid. President Trump easily carried those counties. Mr. Walden won a 10th term in the fall with 72 percent of the vote and was victorious in every one of the 20 counties in his district, which is about the size of New York, New Jersey and Connecticut combined.
But that does not guarantee that voters here endorse all the policies of his party. Hospitals are among the leading supporters and beneficiaries of Affordable Care Act. Mr. Walden was a trustee of a 25-bed hospital in his hometown, Hood River.
“We are very worried about what ‘repeal and replace’ might look like,” said David Underriner, who supervises the hospital, Providence Hood River Memorial, as Oregon’s regional chief executive for Providence Health and Services, the large Roman Catholic system that owns it.
Mr. Walden grew up on a cherry orchard, worked at radio stations owned by his family, and followed his father into the State Legislature. The political shifts that have turned all three Pacific Coast states reliably Democratic have begun to creep into a few of the conservative inland parts of Oregon. Hood River County, long known for fruit farming, windsurfing and the spectacular scenery of the Columbia River Gorge, has lately become a center for the production of surveillance drones, leading to an influx of software engineers, technology entrepreneurs and other young professionals.
Mr. Walden’s margin of victory in November in the county where he lives was just five votes — out of more than 10,590 cast.
“It’s just a little left-leaning,” Mr. Walden allowed. “It didn’t used to be that way.”
Unlike many Republicans in Congress, Mr. Walden has worked productively with Democrats. “I’m a problem solver,” he said in an interview after a town hall-style meeting here near the Idaho border. “I’m not an ideologue. I want to fix things.”
And in Oregon, some Democrats and health-law supporters are glad Mr. Walden is in his position.
“I’ve known Greg a long time,” said Andrew S. Davidson, the president and chief executive of the Oregon Association of Hospitals and Health Systems. “He is not interested in upending the progress we have made in this state.”
Representative Kurt Schrader, a Democrat whose district includes the southern suburbs of Portland and the capital, Salem, predicted Mr. Walden “will be mindful of the implications of any legislation for our state, which is leading the nation in the transformation of health care.”
Unlike Mr. Walden, Oregon has embraced the Affordable Care Act. State officials say many of the changes proposed by congressional Republicans, including a rollback of federal funds for the expansion of Medicaid, would reverse much of the progress they have made.
Oregon has a history of health care innovation that predates the Affordable Care Act. In the early 1990s, it ranked medical procedures according to their costs and benefits, and Medicaid uses this list to decide which services to cover. Under a federal waiver granted in 2012, Oregon treats Medicaid beneficiaries through 16 “coordinated care organizations,” which are governed by local citizen councils. The organizations have slowed the growth of health spending and improved the health of Medicaid beneficiaries, according to performance data collected by the state.
Even as he writes legislation to unwind the Affordable Care Act, Mr. Walden takes pride in Oregon’s success under the law.
“Our state of Oregon has had quite a bit of innovation over the years,” Mr. Walden said. “We’ve got the coordinated care organizations in place that have actually brought better health care outcomes at lower cost. There are great ideas out there among the states, but right now, they have to come back and beg permission from a federal bureaucrat to be able to do much of anything innovative.”
When Mr. Walden first ran for Congress in 1998, conservatives called him too liberal. Since then, he has taken more conservative positions, and the party has moved to the right.
“Times change,” he said. “You get a terrorist attack. You have different administrations come and go. Culture changes. My bedrock principles have stayed the same. I favor more local decision-making and less Washington decision-making.”
Mr. Walden never wavered in his opposition to the Affordable Care Act. On the day the House passed the bill in March 2010, he and other Republicans stood on the Capitol balcony, before a throng of protesters, and held up signs with handwritten letters that spelled out their message: “Kill the Bill.”
A month later, on the House floor, Mr. Walden announced the goal that he hopes soon to achieve, using words that became the mantra for Republicans: “We need to repeal and replace this law.”
Over the last four years, Mr. Walden has been a genial attack dog for Republicans. As chairman of the National Republican Congressional Committee, he averted a political blood bath for his party and secured the election of Republicans in many districts that voted for Hillary Clinton in the presidential election. Many of those House campaigns revolved around attacks on the health law that he is now charged with replacing.
Oregon tried to run its own health insurance exchange, but had a disastrous experience and decided, after a year, to use the federal website, The state has a competitive insurance market, but consumers have still seen substantial increases in prices, with the average premium for a popular benchmark plan on the exchange rising 27 percent this year and more than 20 percent last year, according to the federal government. (Subsidies cushion the impact for most consumers.)
“Medicaid did better than expected, and subsidized commercial insurance did worse,” said Dennis E. Burke, the president of the Good Shepherd Health Care System in Hermiston, Ore. “We have seen steep increases in premiums for commercial insurers, and as a result healthy people have dropped out.”
People newly covered under the health law “proudly present an insurance card,” Mr. Burke said, but in many cases their plans have high deductibles, and the hospital has difficulty collecting the patient’s share of the bill.
But Mr. Burke is not so quick as his congressman, Mr. Walden, to seek repeal.
“I think it could be fixed,” Mr. Burke said. “We need more of a retooling.”

Why Undoing Obamacare Will Be So Hard

by Steven Ratner - NYT - February 24, 2017
House Republicans will be unveiling their replacement for the Affordable Care Act (a/k/a Obamacare) next week and the White House has been signaling that it may reveal its thoughts not long after.
But what is becoming increasingly clear is the extent to which Obamacare has become embedded in the American health care structure and how difficult it will be to craft an acceptable replacement.
Any attack on the A.C.A. must start with the recognition that at least 23 million Americans (the Obama White House estimate) and perhaps more than 26 million (some private experts) have been added to the health care rolls. As shown below, this has driven the percentage of Americans without insurance down to 9 percent, by a considerable margin the lowest in history.

Source. Council of Economic Advisors

Perhaps not surprisingly, after years of unpopularity, Obamacare now commands support from a majority of Americans, according to recent polls. And more anecdotally, many of the comments that elected officials have been receiving at town hall meetings this week have focused on preserving the A.C.A., not dismantling it.
Even former Speaker John Boehner said Thursday that a full repeal and replace of Obamacare is “not what’s going to happen” and that Republicans will instead just make some fixes to the health care law “and put a more conservative box around it.”
It’s important to understand how the new health care law has accomplished such a dramatic reduction in the number of uninsured. First, it provides money to participating states to expand their Medicaid programs; about half of the newly insured were brought onto the rolls in this manner.
Second, it offers subsidies to Americans further down the economic ladder (but above Medicaid levels) to buy insurance on the new exchanges that were set up by the Federal government and many states. This group accounts for about 36 percent of the newly enrolled.
Smaller numbers received their insurance by being able to stay on their parents’ plans until age 26 – a popular feature of the A.C.A. – and by buying unsubsidized insurance on the exchanges.


The crux of the problem is that the Republicans want to repeal most — if not all — of the taxes that were put in place to finance the health care expansion, which would make maintaining the benefits mathematically impossible.
According to the Committee for a Responsible Federal Budget, the Medicaid expansion and the exchange subsidies will cost $2 trillion over the next 10 years. Some of that would be paid for by a variety of savings in the expenses of Medicare and Medicaid.
However, about $1 trillion – roughly half – of these costs are being paid for by a variety of taxes and fees that the Republicans want to repeal, provisions like the 3.8 percent levy on investment income, the 0.9 percent surtax on Medicare hospital insurance, penalties on individuals who do not buy coverage and so forth.

Estimates are for 2018-2027. Source: Committee for a Responsible Budget.

The Republicans seem to suggest that there are ways to restructure the program to allow for the elimination of most, if not all, of these taxes and fees and still not see material numbers of Americans become uninsured. I know of no serious expert who believes that is possible.
So as the new Republican health care proposals are unveiled, look beyond the flowery rhetoric to see what the real impact of these ideas would be.
For example, instead of Medicaid’s costs being tied solely to what benefits less well off Americans are entitled to, House Speaker Paul Ryan would like a fixed amount given to each state (known as a “block grant”). Particularly as time moves on, these amounts would almost surely be less than what is needed to maintain the current benefits.
Another favorite Republican idea is to replace the subsidies provided by Obamacare with tax credits. But the current subsidy program is tied to an individual’s income; those with less income get higher subsidies.
The Republican proposal would have the tax credits be a function of age, a regressive approach that would leave many poorer Americans less well off and result in millions losing insurance.
With all of these complications, I wouldn’t be surprised to see the essence of the Affordable Care Act remain intact. However, achieving that will still require fortitude; its enemies will surely be on the attack.

Exclusive: Leaked GOP Obamacare replacement shrinks subsidies, Medicaid expansion

The replacement would be paid for by limiting tax breaks on generous health plans people get at work.
A draft House Republican repeal bill would dismantle the Obamacare subsidies and scrap its Medicaid expansion, according to a copy of the proposal obtained by POLITICO.
The legislation would take down the foundation of Obamacare, including the unpopular individual mandate, subsidies based on people’s income, and all of the law’s taxes. It would significantly roll back Medicaid spending and give states money to create high risk pools for some people with pre-existing conditions. Some elements would be effective right away; others not until 2020.
The replacement would be paid for by limiting tax breaks on generous health plans people get at work — an idea that is similar to the Obamacare “Cadillac tax” that Republicans have fought to repeal.
Speaker Paul Ryan said last week that Republicans would introduce repeal legislation after recess. But the GOP has been deeply divided about how much of the law to scrap, and how much to “repair,” and the heated town halls back home during the weeklong recess aren’t making it any easier for them.
The key House committees declined to comment on specifics of a draft that will change as the bill moves through the committees. The speaker's office deferred to the House committees.
In place of the Obamacare subsidies, the House bill starting in 2020 would give tax credits — based on age instead of income. For a person under age 30, the credit would be $2,000. That amount would double for beneficiaries over the age of 60, according to the proposal. A related document notes that HHS Secretary Tom Price wants the subsidies to be slightly less generous for most age groups.
The Republican plan would also eliminate Obamacare’s Medicaid expansion in 2020. States could still cover those people if they chose but they’d get a lot less federal money to do so. And instead of the current open-ended federal entitlement, states would get capped payments to states based on the number of Medicaid enrollees. 
Another key piece of the Republican proposal: $100 billion in “state innovation grants” to help subsidize extremely expensive enrollees. That aims to address at least a portion of the “pre-existing condition” population, though without the same broad protections as in the Affordable Care Act.
It also would eliminate Planned Parenthood funding, which could be an obstacle if the bill gets to the Senate. And it leaves decisions about mandatory or essential benefits to the states.
According to the document, there’s only one single revenue generator to pay for the new tax credits and grants. Republicans are proposing to cap the tax exemption for employer sponsored insurance at the 90th percentile of current premiums. That means benefits above that level would be taxed. 
And while health care economists on both sides of the aisle favor tax-limits along those lines, politically it’s a hard sell. Both businesses and unions fought the Obamacare counterpart, dubbed the Cadillac tax. 
The document is more detailed than the general powerpoint House leaders circulated before the recess. Lawmakers are still in disagreement about several key issues, including Medicaid and the size and form of subsidies. Discussions within the House, and between House leaders and the White House about the final proposal are ongoing. President Donald Trump, who gives a major speech to Congress on Tuesday night, has said he expects a plan will emerge in early to mid March.
The exact details of any legislation will also be shaped by findings from the CBO about how much it will cost and what it will do to the federal deficit. 
But the draft shows that Republicans are sticking closely to previous plans floated by Ryan and Price in crafting their Obamacare repeal package.
“Obamacare has failed," said HHS spokesperson Caitlin Oakley. "We welcome any and all efforts to repeal and replace it with real solutions that put patients first and back in charge of their health care rather than government bureaucrats in Washington, D.C.”
Other changes proposed by Republicans align with previous ideas for strengthening the individual insurance market, which has been unstable under Obamacare with rising premiums and dwindling competition. For example, the legislation would allow insurers to charge older customers up to five times as much as their younger counterparts. Currently, they can only charge them three times as much in premiums. The insurers have been pushing for that change.
The proposal also includes penalties for individuals who fail to maintain coverage continuously. If their coverage lapses and they decide to re-enroll, they would have to pay a 30 percent boost in premiums for a year. Like the unpopular individual mandate, that penalty is designed to discourage individuals from waiting until they get sick to get coverage.
Republicans have vowed to dismantle Obamacare ever since it passed with only Democratic votes in 2010. But reaching agreement on what should come next has proven difficult since they gained full control of Congress and the White House. 
Recent polling has shown that Obamacare is increasingly popular. Supporters of the health care law have been turning out by the hundreds at town hall meetings across the country to demand that Republicans answer questions about what’s going to happen to the 20 million individual who have gained coverage under Obamacare.
According to the latest Kaiser Family Foundation tracking poll, released Friday morning, the public now views the Affordable Care Act more favorably than it has since the summer of its enactment. Some 48 percent view the law favorably — up from 43 percent in December. About 42 percent have an unfavorable view of the ACA — down from 46 percent in December. The pollsters say Independents are mostly responsible for the shift. A separate poll by the Pew Research Center found 54 percent approve of the health care law — the highest scores for Obamacare in the poll's history. Meanwhile, 43 percent said they disapprove.

Five takeaways from the leaked Republican bill to repeal Obamacare

by Dylan Scott - STAT - February 26, 2017
WASHINGTON — A formal draft of the House Republican plan to repeal and replace the Affordable Care Act leaked out on Friday.
The final version is likely to be different — how much different, it’s hard to say. The draft obtained by Politico is dated two weeks ago, and rumors have been swirling here that Republicans received an unfavorable analysis from the Congressional Budget Office, the official scorekeepers on the cost and coverage implications of legislation.
But this is nonetheless an important milestone — real legislative text, prepared with an eye toward the complex parliamentary procedures needed to pass ACA repeal with only Republican votes, and presumably with the endorsement of House leadership.
Much attention will be paid to the proposed tax credits offered for people to buy health insurance and the changes to the tax treatment of employer-based insurance. Here are five provisions with big implications for health and medicine.

It would dramatically overhaul Medicaid.
The bill would phase out by 2020 the Medicaid expansion that has covered millions of people under Obamacare. Instead, states would begin to receive a set dollar amount for each person covered by the program — with variations based on health status; more money would be allocated for the disabled — a change from the open-ended entitlement the program is now.
These proposals, long a goal of the GOP, have spurred a number of concerns. People with complex medical needs worry that, if spending is capped and states have more flexibility to decide what to cover, they could be at risk. There appear to be very few exclusions from the spending caps — some have theorized that if the plan exempted certain services from the caps, that could help mitigate the risks for high-cost patients.
The changes could also make it more difficult for the program to afford new breakthrough treatments, a challenge that the current iteration of Medicaid has already faced with the expensive hepatitis C drugs.
It would repeal Obamacare’s requirements for what health insurance must cover.
The legislation would repeal the ACA’s essential health benefits requirements, which mandated that health plans cover 10 categories of health care services. It would instead leave decisions about what coverage to require to the states, starting in 2020.
Among the services that the law required plans to cover were mental health and substance abuse treatment. In the midst of the opioid crisis, recovery advocates in Washington had been hoping to save that provision. It appears that that decision would now be in state officials’ hands, and the fear is plans might look to limit that coverage because people with addiction issues are expensive to treat and therefore cover.
It would repeal the Prevention and Public Health Fund.
The bill would repeal this funding stream, intended to support various prevention and public health activities, in 2019. Congress initially provided $15 billion over the fund’s first 10 years, and it was eventually suppose to increase to $2 billion per year in perpetuity.
The fund has been at perennial risk since its passage in 2010, pilfered at times for other programs, but it nonetheless remains an important source of public health funding. It has become an essential part of the Centers for Disease Control and Prevention’s budget — accounting for 12 percent of the agency’s funding by some estimates — and there would be no obvious replacement for those dollars without further congressional action.
It would repeal the tax on pharmaceutical manufacturers.
The drug industry has not agitated to have its manufacturer tax repealed, in the same way that the medical device and health insurance industries have. But the Republican bill would nonetheless nix the tax starting in 2017. The industry still had$4 billion to left to pay in 2017, $4.1 billion in 2018, and $2.8 billion per year after that.
The taxes on medical devices, health insurance plans, and even tanning beds would also be repealed. Those revenue streams help to cover the cost of the ACA. Republicans are instead proposing changing the tax treatment of employer-based health insurance, which is currently not taxed, to pay for their plan. It is an idea popular with economists, but politically perilous. Major employer groups are already aligning against it.
It loosens restrictions on health plans’ ability to charge older people more.
One thing the bill doesn’t do is repeal the ACA provision that prohibits health plans from discriminating against people with preexisting conditions. That may be because it would be hard to justify under the procedural rules that Republicans need to use to pass the bill — plus that policy is among the law’s most popular elements and even President Trump has said it should be maintained.
But another key insurance reform meant to protect sicker people takes a hit: The GOP bill would allow insurers to charge older people five times more than younger people; the ACA had limited the difference to three times as much. The powerful AARP is already mobilizing against such a change, long expected to be part of the plan.
The bill appears to try to mitigate that change by basing its tax credits for purchasing insurance on age: Older people would receive a bigger tax credit.
Is that sufficient to keep people covered, as Trump and other Republicans have pledged to do? That’s one of the questions that the scorekeepers at the CBO will be expected to answer.

A divided White House still offers little guidance on replacing Obamacare
by Juliet Eilperin and Amy Goldstein - February 26, 2017
A meeting Friday afternoon between President Trump and Ohio Gov. John Kasich, his former rival in the GOP primaries, had no set agenda. But Kasich came armed with one anyway: his hope to blunt drastic changes to the nation’s health-care system envisioned by some conservatives in Washington.
Over the next 45 minutes, according to Kasich and others briefed on the session, the governor made his pitch while the president eagerly called in several top aides and then got Health and Human Services Secretary Tom Price on the phone. At one point, senior adviser Jared Kushner reminded his father-in-law that House Republicans are sketching out a different approach to providing access to coverage. “Well, I like this better,” Trump replied, according to a Kasich adviser.
The freewheeling session, which concluded with the president instructing Price and Chief of Staff Reince Priebus to meet with Kasich the next day, underscores the un­or­tho­dox way the White House is proceeding as Republicans work to dismantle the Affordable Care Act and replace it with something else. The day after Kasich delivered his impromptu tutorial, Trump spent lunch discussing the same topic with two other GOP governors with a very different vision — Scott Walker of Wisconsin and Rick Scott of Florida.
Scott said Sunday that he used the lunch to press for principles he has pushed publicly, such as financial compensation for states that did not expand Medicaid under the ACA and the importance of providing competition and cutting required benefits to allow people to “buy insurance that fits them.”
While leaving most of the detail work to lawmakers, top White House aides are divided on how dramatic an overhaul effort the party should pursue. And the biggest wild card remains the president himself, who has devoted only a modest amount of time to the grinding task of mastering health-care policy but has repeatedly suggested that his sweeping new plan is nearly complete.
This conundrum will be on full display Monday, when Trump meets at the White House with some of the nation’s largest health insurers. The session, which will include top executives from Blue Cross and Blue Shield, Cigna and Humana, is not expected to produce a major policy announcement. But it will provide an opportunity for one more important constituency to lobby the nation’s leader on an issue he has said is at the top of his agenda.
Democrats and their allies are already mobilizing supporters to hammer lawmakers about the possible impact of rolling back the ACA, holding more than 100 rallies across the country Saturday. And a new analysis for the National Governors Association that modeled the effect of imposing a cap on Medicaid spending — a key component of House Republicans’ strategy — provided Democrats with fresh ammunition because of its finding that the number of insured Americans could fall significantly.
Trump, for his part, continues to express confidence about his administration’s ostensible plan. He suggested Wednesday that it would be out within a few weeks.
“So we’re doing the health care — again, moving along very well — sometime during the month of March, maybe mid- to early March, we’ll be submitting something that I think people will be very impressed by,” he told reporters during a budget meeting in the Roosevelt Room.
Yet some lawmakers, state leaders and policy experts who have discussed the matter with either Trump or his top aides say the administration is largely delegating the development of an ACA substitute to Capitol Hill. The president, who attended part of a lengthy heath-care policy session his aides held at Mar-a-Lago a week ago, appears more interested in brokering specific questions, such as how to negotiate drug prices, than in steering the plan’s drafting.
“The legislative branch, the House first and foremost, is providing the policy,” said Rep. Tom Cole (R-Okla.), who noted that the White House lacks “a big policy shop” and that Price and some key principals just recently got in place. Seema Verma, whom Trump has nominated to head the Centers for Medicare and Medi­caid Services, should play a key role in any reform effort if she is confirmed.
In the current process, the White House becomes “the political sounding board” in altering Obamacare, as the 2010 law is known, “and the final voice of reason is what the Senate can accept,” Cole said.
Within the administration, aides are debating how far and fast Republicans can afford to move when it comes to undoing key aspects of the ACA. White House officials declined to comment for this story.
Several people in Trump’s orbit are eager to make bold changes to reduce the government’s role in the health-care system. That camp includes Vice President Pence, who told conservative activists last week that “America’s Obamacare nightmare is about to end,” as well as Domestic Policy Council aides Andrew Bremberg and Katy Talento and National Economic Council aide Brian ­Blase.
Blase, who most recently worked as a senior research fellow at George Mason University’s Mercatus Center, published a paper in December titled “Replacing the Affordable Care Act the Right Way.” Its conservative blueprint emphasized the “need to reduce government bias towards comprehensive coverage” for all Americans and a revamping of Medicaid, which was expanded under the ACA and added 11 million Americans to the rolls. 
“Medicaid needs fundamental reform with the goals of dramatically reducing the number of people enrolled in the program and providing a higher-quality program for remaining enrollees,” Blase wrote.
Other White House advisers, according to multiple individuals who asked for anonymity to describe private discussions, have emphasized the potential political costs to moving aggressively. That group includes Kushner, NEC Director Gary Cohn, senior policy adviser Stephen Miller and chief strategist Stephen K. Bannon.
Asked by George Stephanopoulos, host of ABC’s “This Week,” whether Trump “won’t touch Social Security, Medicare or Medicaid,” White House principal deputy press secretary Sarah Huckabee Sanders said, “Look, the president is committed to doing that. . . . And I don’t see any reason to start thinking differently.”
Where Trump will end up remains unclear, although in both public and private settings he has tended to stress the importance of providing health coverage “for everybody” while lowering its cost. However, Price testified during his recent confirmation hearings that the administration would seek to give Americans access to, not guaranteed, coverage.
The policy proposal Trump has embraced most forcefully, albeit not always consistently, is to pressure pharmaceutical firms to lower their prices by negotiating government drug purchases through Medicare. The idea has considerable support among Democrats and from some Republicans but is currently prohibited under law. 
Kasich has proposed paring back some of the ACA’s more generous aspects, such as reducing the number of benefits insurers are required to offer and potentially cutting the eligibility level for Medicaid recipients from 138 percent of the poverty level to 100 percent if there is a stable marketplace with adequate subsidies they can join. He also wants states to have more flexibility in how they manage their Medicaid programs, as well as aspects of the private insurance market. 
But he has expressed skepticism about turning Medicaid funding into a block grant and opposes any move that would eliminate the coverage many adults in his state now have without a clear path to transition them to new plans.
“Frankly the reason why people are on Medicaid is because they don’t have any money,” he said Friday“So what are we supposed to say, ‘Work harder?’ ”
Asked to describe Trump’s reaction to his overall approach, the Ohio governor replied, “What he said is, he found it interesting. . . . It takes time, so you have to explain it, and explain it again.”

Activist muscle gives Obamacare a lift
by Mike De Bonis and David Wiegel - Washington Post - February 25, 2017
Seven years after the passage of the Affordable Care Act, Democrats seem finally to have secured a crucial element for its preservation: a robust grass-roots movement supporting it.
Pro-ACA protesters attended more than 100 rallies held Saturday across the country, organized by an activist group affiliated with Sen. Bernie Sanders (I-Vt.). That followed a congressional recess week during which GOP lawmakers were confronted by defenders of the health-care law in town hall meetings across the country. Numerous Democratic officeholders also held events touting the law’s successes.
The surge in activism comes as congressional Republicans prepare to take their next steps toward repealing the ACA, also known as Obamacare, and replacing it with what they say will be a more free-market-oriented system that is expected to cost the government less but cover fewer Americans.
The new mobilization represents a stark reversal of the recent political dynamics around health care. Until now, conservative activists have occupied the spotlight and relentlessly pushed Republicans to undo Obamacare, while Democrats and liberal groups largely stayed on the sidelines.
“There is a serious grass-roots element to this that previously the establishment Democrats didn’t really tap into,” said Julienne Gede Edwards, a 28-year-old Maryland attorney and colon cancer survivor, who attended a rally in Washington on Saturday and carried a sign calling on Republican lawmakers to lay out a health-care plan: “You’ve Had 7 Years — Let’s Hear It!”
Edwards added: “I don’t necessarily fault them for that. But I do think that now they are seeing that that energy is there, and that the grass-roots movement is working and is getting actual results.”
In Washington, several hundred protesters gathered Saturday afternoon on Capitol Hill, rallying in front of a deserted House office building before marching down Pennsylvania Avenue to the Trump International Hotel and on to the White House.
The crowd roared when Lance Christopher, a 29-year-old volunteer organizer, referred to President Trump and his chief strategist, Stephen K. Bannon, as “fascists.”
“If you think you can go to Starbucks, drink your lattes and life will go on as normal . . . you are sadly mistaken,” Christopher told the crowd. “These people are here, and they mean business, and we have to be as equally motivated.”
The event was one of more than 100 rallies planned for Saturday, many of them organized under the banner of Our Revolution — the grass-roots activist group that inherited staff and supporters from Sanders’s insurgent presidential campaign.
Had a pro-ACA rally been called several years ago, “I don’t think many people would have shown up,” Christopher said in an interview.
“I think there’s sort of a comfortability in the fact that your party occupies the White House, or even the Senate and House,” he said. And when the tea party movement pushed Republicans to repeal the law, “We sort of shunned it as a fringe movement,” he added.
Now, he said, “We can’t underestimate anything anymore.”
As the protesters gathered outside the White House, Trump was inside having lunch with Wisconsin Gov. Scott Walker (R) and Florida Gov. Rick Scott (R), where they discussed “how best to solve the problems of Obamacare,” according to a Trump administration statement.
Both Scott and Walker represent states that refused to cooperate with the law by either setting up a state-run insurance exchange or accepting federal assistance to expand the Medicaid program in their states.
House legislation that will undo key Affordable Care Act provisions is expected to be introduced as soon as Monday, according to congressional aides. That legislation would ultimately undo the system of income-based tax subsidies and penalties at the center of the ACA as well as phase out the expansion of Medicaid, the federally funded health-care program for the poor that now covers 74 million Americans.
In its place, the Republican plan will probably offer an age-adjusted tax credit to help Americans purchase private insurance and boost funding for hospitals that serve many uninsured patients.
Sanders, who spent Saturday evening talking to Democrats in Kansas, said that the conservative state was getting a hard lesson in supply-side economics. Gov. Sam Brownback (R), who had signed a series of tax cuts, was among the Republican governors now asking that any reform of the ACA save the Medicaid expansion — something Republicans had sued to get rid of.
“There’ve been massive cutbacks in programs for working families,” Sanders said. “This is what Donald Trump is threatening to do for the whole country — he told working families he wouldn’t cut their Social Security or their health care, and we are going to expose him for that hypocrisy.”
Numerous GOP aides and lawmakers say that the goal of their system is to ensure universal access to insurance, not universal coverage. But Democrats say that the Republican plan could potentially cause millions to lose their coverage, and they have sought to highlight cases of sick Americans who might not have been able to access health care if not for the ACA. A consultant’s report shared at a National Governors Association conference this weekend, obtained Saturday by Vox, shows that recently floated GOP replacement proposals would indeed lead to a major decline in the number of insured Americans.
Some Republicans have characterized the protests and the town hall confrontations as the work of “paid protesters” and fringe groups, and they say they remain confident that voters want the ACA repealed and replaced. Others have promised to preserve the more popular elements of the law.
“The activist left is giving Democratic leaders fits as they search for answers after their failures in 2016,” said Jesse Hunt, a spokesman for the National Republican Congressional Committee. “A constellation of progressive groups are more than happy to play a hand in the process to try and promote the same far-left agenda that has been rejected by the American people in two consecutive elections.”
Polling continues to show an uptick in public support for the law, but it remains deeply divisive. The most recent Kaiser Health Tracking Poll showed the highest-ever level of favorability toward the ACA, 48 percent favorable versus 42 percent unfavorable, although the public remains almost evenly deadlocked on whether to repeal the law.
Over the weekend, the Democratic leaders of all 57 state and territorial parties converged in Atlanta to elect new officers. A billboard truck, paid for by the conservative American Action Network, circled the hotel and convention center where they were meeting, showing an image of House Minority Leader Nancy Pelosi (D-Calif.) and accusing the ACA of bringing about “higher costs, fewer choices, and canceled plans.”
But that ad, which is mirrored in mail being sent to House districts, makes no mention of a potential Republican replacement. “They’ve got nothing, zero,” said Brendan Dillon, the chairman of the Michigan Democratic Party.
Jane Kleeb, the chair of Nebraska’s Democratic Party, said that defending the ACA had been a non-starter in her conservative state. In 2012, Republicans helped scare Democratic Sen. Ben Nelson into retirement over his vote for the law. Two years later, they elected Sen. Ben Sasse (R-Neb.), who promised to repeal it.
“Nobody was talking about it — everybody’s head was in the sand, even progressives,” said Kleeb. “We didn’t feel like we got everything we wanted.”
Those doubts, she said, disappeared when Trump won and Republicans promised to gut the ACA. “All the farmers I work with are self-insured,” she said. “They need their insurance costs to stay down, and they need rural hospitals to stay open. That only happens if Obamacare stays in place.”
The recent uptick in engagement appears to be because of people like Nissen Ritter, a 57-year-old resident of Chevy Chase, Md., who does not personally benefit from major ACA programs but has family members who do — and who had not attended a political rally for years before Trump’s election.
Ritter said she had not felt compelled to march for health care beforehand: “I assumed that the people would want that. And so I felt like I didn’t need to say anything at the time. But now I’m sorry I didn’t.”
Asked whether she plans to attend more protests, she said, “One hundred percent.”

Republicans Want You in a Health Savings Account. So Now What?

by Ron Lieber - NYT - February 24, 2017

If you’ve been watching the debate in Washington over what is to become of our health insurance plans, you know that Republicans already disagree on a whole bunch of things. They’re not sure about what any new plan will cost. They’re not sure how any new tax credits should work or who should get them. They’re not sure about how Medicaid should operate.
But there’s one thing they do know for sure: They want a whole lot more of us to have health savings accounts.
There’s a great deal to like about these accounts, which you can open and contribute to only if you are enrolled in a health insurance plan that has a pretty high deductible. They offer a rare triple threat to the tax man: You get a tax break on the money that goes in. You pay no taxes on the money as it grows, potentially over decades. Finally, you pay no taxes when the money comes out, as long as you use it on a long list of health expenditures.
Seems like magic, right? Well, it works nicely just as long as you can afford to save in the first place and as long as you don’t skimp on necessary care to keep your account balance high. A high balance doesn’t help if you die because you did not want to spend your H.S.A. money to have a doctor check a mysterious lump.
For the lucky among us with at least a bit of money to spare, however, the biggest problem with these accounts is their maddening complexity. Even people who have followed personal finance for a while confuse them with the more popular health care flexible spending account, which — unlike an H.S.A. — does not allow you to invest the money and spend decades watching the earnings compound.
H.S.A.s and the campaign to goad more of us into them represent yet another step in the decades-long fetishization of private accounts in general. The big idea here is to shift more of the responsibility for our financial well-being away from employers and the government and directly toward us, whether we know a lot about money or not.
These “account-based solutions,” as government enthusiasts like to refer to them (sounds innocuous, right?) have been proposed so often — over the last 30 years or so — that we have wound up with a big bowl of alphabet soup. There are 401(k)’s, I.R.A.s, Roths, 529s, F.S.A.s, D.C.A.s and T.R.A.s — and that’s before you start filling out your annual Fafsa (student financial aid application) and 1040 (you know this one) to track all this stuff. None of it goes down easy, and it’s probably going to get worse.
To prepare yourself, begin with a quick review session on H.S.A.s. To qualify, you must be enrolled in a high-deductible health plan. This year, that deductible has to be at least $1,300 for individual coverage and $2,600 for family coverage. As for the health savings account itself, individuals can drop in as much as $3,400 (including any employer contribution), and families can deposit $6,750.
You can use that money in the current year for nearly any health care expense, which helps since you have that high deductible to cover. But again, the real win here comes from letting that money ride for a very long time in the account (and in whatever investments your H.S.A. administrator makes available to you). As always with alphabet soup accounts, there are quirks, exceptions and footnotes to the footnotes, so consult Internal Revenue Service Publication 969 for all the fine print.
So who benefits from H.S.A.s? Lorens A. Helmchen at George Washington University and three colleagues used federal tax data from 2004 to 2012 to figure it out. Their study, which appeared in 2015 in the journal Health Affairs, found that across all age groups, people with the highest incomes (over $100,000 or so) were several times as likely both to have H.S.A.s and to max out their contributions as people from low-income households.
New data from Devenir, a company that helps administrators pick and carry out investment options for H.S.A.s, shows that people with older accounts do indeed have larger balances that seem to grow incrementally over time, suggesting that at least some actual saving is going on here. Devenir estimates there are about 20 million H.S.A.s today.
Now, enter our elected representatives, with three major plans. Speaker Paul D. Ryan, Republican of Wisconsin, has been promoting a plan that would raise H.S.A. contribution limits to what in 2017 would be $6,550 for individuals and $13,100 for families. More tax breaks for everyone!
Two other Republicans in Congress, Senator Rand Paul of Kentucky and Representative Mark Sanford of South Carolina, go further. They would remove the requirement to have a high-deductible health plan before someone could contribute to an account. And just to keep things interesting, they have tossed in a requirement that an H.S.A. could not be used to pay for an elective abortion.
Finally, there is the proposal from Senator Bill Cassidy, Republican of Louisiana, Senator Susan Collins, Republican of Maine, and three other senators. It wins the complexity award, in that it combines Roth I.R.A.s (which people already have trouble distinguishing from their regular I.R.A. cousins) and H.S.A.s (confusing on their own) into a whole new thing called Roth H.S.A.s. Grants or tax credits would land directly in individual accounts, and people would use the money to purchase insurance.
Let’s step into a cold bath of realism before we go too much further here. The criticisms of the Affordable Care Act are overwrought. Of course anything that big and complicated would not be perfect — or anything close to it — for many years. Nor should we expect the Republicans who are in power now to have a quick and easy blueprint for the necessary repair work. It’s just too complex, and every proposal above is merely a starting point for negotiation. We will be at this for a very long time.
Still, one clear pattern is emerging. Rather than just letting the government directly buy and pay for the thing that we all seem to want more of — good, affordable health insurance — the politicians in power want to push us toward a system that uses the levers of the tax system and individual accounts to make this happen instead. It is not simple, and complexity usually adds costs. It also leaves the less educated and overly busy behind and tends to produce other consequences that we cannot predict and do not intend.
Decades into our 401(k) account-based experiments with people’s life savings and ability to retire one day (or not), we learned the following this week from a couple of United States Census Bureau researchers: Two-thirds of Americans are not saving money for retirement in their workplace plans at all. They are not eligible, do not have enough money, or are confused by — or unaware of — their options.
We shouldn’t expect things to work out any differently with H.S.A.s unless large piles of money go into them automatically, as they might under some of the proposed plans. If free money does show up through some kind of tax break, they’ll at least be difficult for people to ignore.
So as you watch and listen and wonder how the health insurance debates will unfold, consider the following as you decide if it’s worthwhile to lobby your elected representatives: Health savings accounts today are most useful for the affluent, who earn the most, have the most left over and have the most to gain by avoiding income taxes, given that they pay them at higher rates.
Is that something we wish to cement and perpetuate? Because if we do, our health care system will start to resemble a wealth care system, too.

If Obamacare Exits, Some May Need to Rethink Early Retirement

by Austin Frakt - NYT - February 27, 2017
Here’s another possible consequence of repealing the Affordable Care Act: It would be harder for many people to retire early.
Americans reaching 65 become eligible for Medicare. Before reaching that age, some can get retiree coverage from their former employers. But not very many companies, especially small ones, offer medical insurance to retirees. If early retirees are poor enough, they could turn to Medicaid. To retire early, everybody else would need to turn to the individual health insurance market. Without the subsidies and protections the A.C.A. put in place, health care coverage would be more difficult to obtain, cost consumers more where available, and provide fewer benefits than it does today.
That means that if the A.C.A. is repealed, retiring early would become less feasible for many Americans.
This consequence is called job lock — the need to maintain a job to get health insurance. One of the arguments in favor of the A.C.A. was that it would reduce or eliminate job lock. With repeal of the law on the agenda of Congress and President Trump, there is renewed concern about how health insurance could affect employment and retirement decisions.
These relationships have been examined extensively by scholars. Though not all studies have found evidence of job lock in the pre-Obamacare era, a majority of high-quality studies have. That’s the conclusion of systematic reviews conducted by the Government Accountability Office and several health economists.
Because people approaching retirement age are more prone to illness and high health care costs, employment-based insurance is particularly valuable to older workers — so much so that many studies document that it influences retirement decisions. One study found that workers whose employers offered retiree health benefits were 68 percent more likely to retire early than those who lack employer-based retiree coverage.
Another study found a smaller effect, 47 percent. But that study also found that workers in poor health who had retiree health benefits were 88 percent more likely to retire early compared with similar workers lacking retiree health benefits. Both those studies used data that are now several decades old. But a 2014 study that incorporated more recent data — though still pre-A.C.A. — also found that retiree health benefits encourage early retirement. The inference from these studies is that coverage options in the A.C.A. marketplaces would similarly encourage early retirement.
Deferring retirement because of health benefits is just one form of job lock. Another example: Many studies show that spouses are much more likely to work if their partners do not have employer-based family coverage. Other studies show that workers with cancer are more likely to continue working if that’s how they get health insurance.
Two studies led by Cathy Bradley of Virginia Commonwealth University examined working women with breast cancer diagnoses. Both studies found that those who depended on their employment for coverage were more likely to remain working.
If not for job lock, we’d probably see greater job mobility and entrepreneurship. According to one analysis, two million more people would change jobs if it weren’t for job lock — presumably finding work that makes them happier or to which they are better suited. One study found that 25-to-55-year-old married men with no other coverage options are 22.5 percent less likely to switch jobs compared with those who have alternatives. Another study, examining 24-to-35-year-old married men, estimated smaller effects, between 10 and 15 percent.
The evidence of sticking with jobs instead of starting a business is mixed, but the preponderance of it suggests this kind of “entrepreneurship lock” exists, affecting up to four million people. Workers without coverage from a spouse — therefore, more reliant on their own employers’ coverage — are a few percentage points less likely to become self-employed, according to one study. Similarly, self-employment spikeswhen workers turn 65 and obtain Medicare coverage.
From the late 1980s to the early 2000s, tax deductibility of policies for self-employed workers was phased in, making those policies more affordable. Two studies provideevidence that this change increased self-employment. One found that it rose 10 percent among women without health coverage from a spouse versus those with such coverage. Another found that the tax change explained as much as half the total increase in self-employment between 1999 and 2004.
All of these studies suggest that job lock would be alleviated by more available and affordable coverage outside work. Whether Obamacare did that is less clear. Many policy experts expected the A.C.A. to reduce job lock. An analysis by the Urban Institute, conducted before the health insurance reforms were implemented, estimated that the self-employed would increase by about 1.5 million individuals as a result of the law. In 2014, the Congressional Budget Office anticipated that the A.C.A. would reduce the size of the labor force by at least two million people by 2024.
One post-A.C.A. study found that the prohibition of pre-existing condition exclusions for children increased job mobility for their parents. And in the months after the insurance market reforms rolled out, voluntary part-time work increased and the growth in the number of workers over age 55 slowed, both consistent with alleviation of job lock. But more rigorous studies of part-time work did not find an impact from the A.C.A.
According to a review of scientific papers by the economists Jean Abraham and Anne Royalty, for the University of Pennsylvania’s Leonard Davis Institute of Health Economics, few other studies have found solid evidence that the A.C.A. reduced job lock or had other effects on the labor market. For instance, studies have not foundthat allowing children to stay on their parents’ insurance until age 26 has influenced the labor market choices of young adults. Nor have they found that the A.C.A. increased early retirement or employment more generally.
One reason studies might not have found an impact on job lock could be because the law is relatively new, and there isn’t enough data available to researchers to tease out all its effects. It could also be because the law has been under siege on multiple fronts since passage, rendering its status uncertain. This may have raised doubts in workers’ minds about the wisdom of relying on it as a substitute for employer-offered coverage.
But it is clear that with A.C.A. repeal on the table, people contemplating early retirement may need to reconsider.

VIDEO: To Help Maine Seniors ‘Age in Place,’ It Takes Two Villages 

Letter to the editor: Sen. Collins must stand against efforts to harm Medicare

I recently sent a letter to Sen. Susan Collins, urging her to resist efforts by her party to tamper with Medicare. She is one of a handful of Senate Republicans who could serve as a firewall against harmful changes to a program that 306,000 Maine seniors and people with disabilities rely upon.
The majority in Congress has proposed to privatize Medicare, raise the eligibility age from 65 to 67 and repeal the Affordable Care Act, which made important improvements to Medicare. These actions will reduce health care coverage and increase out-of-pocket costs for beneficiaries already struggling to make ends meet.
Maine’s Medicare beneficiaries have a lot to lose if the ACA’s improvements to Medicare are repealed. The ACA provided Medicare beneficiaries with annual wellness visits and preventive screenings with no out-of-pocket costs. In 2016, 70 percent of Maine seniors took advantage of these free screenings.
The ACA also shrank the Part D prescription drug “doughnut hole.” Repealing that provision will cost seniors an average $1,000 per year. A new study by our foundation revealed that raising the Medicare eligibility age from 65 to 67 would result in 1.9 million more uninsured seniors nationwide.
Sen. Collins should also oppose plans to privatize Medicare, which would provide seniors with vouchers to buy private insurance. While healthier seniors might opt for private coverage, older and sicker beneficiaries would likely remain in traditional Medicare – resulting in a death spiral for the program.
Seniors only need three Senate Republicans to vote against these harmful changes. Sen. Collins has stood up to her party in the past, when the interests of working Americans were at stake. In Maine, 306,000 seniors and people with disabilities are counting on her to have the courage to do that once again.
Max Richtman
president and CEO, National Committee to Preserve Social Security and Medicare
Washington, D.C.

Employer fee is necessary to support health care

Boston Globe Editorial - February 27, 2017

Without using the dreaded T word, Governor Charlie Baker has proposed a stiff hikein the fees that some businesses must pay to state government. Semantics aside, the proposed $2,000-per-employee assessment is essentially a tax, and it’s sent ripples of consternation through the business community that once thought they had an ally in the Republican governor.
Baker’s office is now discussing modifications to the plan. But with the state’s health care bills rising at unsustainable rates, Baker’s fee — or something strongly resembling it — will be necessary to steady the state’s budget.
The state’s health care bills have been skyrocketing as more Massachusetts residents enroll in MassHealth, the state’s Medicaid program for low-income residents. The Baker administration attributes some of that shift to workers choosing not to enroll in workplace plans, which may have high deductibles or lower quality, coupled with the expanded eligibility for Medicaid under the federal Affordable Care Act (aka Obamacare). The bottom line is that Massachusetts taxpayers are taking a financial burden off many employers of low-wage workers by providing subsidized insurance to those employees. The administration estimates that the number of full-time employees who do not receive employer-sponsored insurance has gone up by 118,000 workers since 2011. Last year, 379,000 employed Massachusetts residents were also on MassHealth.
The $2,000 fee is intended to address the fiscal consequences of that shift. The proposal would apply only to businesses that have 11 or more full-time employees and provide insurance to fewer than 80 percent of their workers. The assessment would be on a sliding scale, and shrink as businesses approach the 80 percent figure. Baker’s proposed assessment resembles, in some respects, the original “fair share” provision of the Massachusetts health care reform that was repealed in 2013 to harmonize the state’s law with the Affordable Care Act.

Overall, the outline of Baker’s proposal is sound, and reflects the guiding principle that insurance is a shared employer responsibility. The details, though, need some work to focus more narrowly on the right group of employers.
A reasonable criticism voiced by the Associated Industries of Massachusetts, among others, is that Baker’s proposal doesn’t take into account the many reasons an employee may not sign up for coverage through their employer. For instance, some workers may be offered perfectly good insurance but still choose to get health coverage through a spouse’s employer. Why should an employer be punished for the employee’s choice in that scenario? What about employees under age 26 who are offered insurance but choose to stay on a parent’s plan, or veterans who get care through the VA? The Baker administration has a good reason to be strict: Officials rightly fear creating a perverse incentive for employers to provide inferior insurance in order to push employees onto their spouse’s or parent’s insurance plan instead. But there should be a middle ground, and as the Baker administration mulls changes, it should seek a way to accommodate employers who can demonstrate that they made a bona fide effort to offer quality insurance but fell short of the 80 percent uptake rate for reasons outside their control. 
Additionally, Baker’s initial plan didn’t take into account how much employees make, which could lead to some bizarre outcomes: a hedge fund or law firm might be subject to the tax, even though it is unlikely that any of its highly paid employees are even eligible for MassHealth. The proposal should be specifically tailored to employers who pay low wages.
The $2,000 figure in Baker’s plan — a huge increase over the old $295 fair-share fee — also needs scrutiny. The Baker administration points out that the average cost of insuring a MassHealth enrollee is $6,737, but it would be helpful to know exactly how much of the marginal increase in overall spending can be attributed to workers leaving employee plans.
The debate in Massachusetts plays out against uncertainty over the future of the Affordable Care Act, which Republicans in Congress and President Trump nominally remain committed to repealing. Critics of Baker’s plan argue that any state action should wait for resolution on the federal level. But that could take years, given the new presidential administration’s general ineptitude. 
For now, the state has to operate within the reality of the Commonwealth’s employer-based health insurance system and the Affordable Care Act. When a minority of employers choose not to offer adequate health insurance to low-wage workers, it doesn’t make the cost of covering their employees go away — it just sticks someone else with the bill. That someone else is MassHealth, and Baker and his administration deserve credit for confronting the resulting fiscal problems head first.