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Wednesday, March 8, 2017

Health Care Reform Articles - March 8, 2017

Fixing healthcare: Which single-payer system would be best for California?

by David Lazarus - LA Times - March 7, 2017
It’s misleading to say that California could have a single-payer healthcare system just like in other developed nations. Other nations approach their single-payer systems in a variety of different ways.
Canada’s system is different from Germany’s, which is different from Britain’s. Each country ensures that all residents have access to high-quality and affordable healthcare. But they take different roads to get there.
“Healthcare needs to be widely available, easily accessible and cheap, like electricity or tacos,” said Joe Flower, a San Francisco Bay Area healthcare consultant and author of “Healthcare Beyond Reform: Doing It Right for Half the Cost.”
He called the U.S. healthcare system, with millions of people lacking coverage or saddled with high-deductible plans, “both morally wrong and stupid economics.”
Legislation has been introduced by state Sen. Ricardo Lara (D-Bell Gardens) declaring California’s “intent” to establish “a comprehensive universal single-payer healthcare coverage program and a healthcare cost control system for the benefit of all residents of the state.”
As I wrote on Friday, this may be more feasible than earlier legislative attempts because President Trump and Republicans in Congress want to convert federal funding for Medicaid to block grants. While this probably would reduce funding for covering low-income people, it presents the unintended benefit of giving states more latitude in how the money is spent.
In other words, California’s version of Medicaid, Medi-Cal, could be more easily integrated with a statewide single-payer plan. Medi-Cal covers about a third of Californians.
So the question becomes: What sort of single-payer system would be best for the state’s nearly 40 million residents?
There are three basic approaches, as outlined by T.R. Reid in his excellent book “The Healing of America: A Global Quest for Better, Cheaper and Fairer Health Care.” Each has pluses and minuses:
Beveridge Model: Named for British social reformer William Beveridge, this is the system established in postwar England, Spain, New Zealand and most Scandinavian countries. Under this model, the government finances coverage through tax payments and also runs hospitals and clinics.
Pro: No doctor bills. You show up, get treated, leave. Con: Choices may be limited and certain costly treatments may be unavailable.
Bismarck model: Named for Prussian Chancellor Otto von Bismarck, who originated the idea in 1883, this approach relies on payroll deductions to fund nonprofit insurers and requires that they cover everyone. Coverage and medical pricing is strictly regulated by the state.
Aside from Germany, you’ll find variations of this system in France, the Netherlands, Switzerland and Japan.
Pro: Plenty of flexibility in choosing insurers and healthcare providers. Con: Doctors may seek higher fees through private clinics.
National Health Insurance model: Combining elements of both Beveridge and Bismarck, this is the system Canada started rolling out in 1947. All citizens pay into a government-run insurance program that deals directly with doctors and hospitals.
Pro: Costs are greatly reduced by administrative savings and efficiencies. Cons: Some treatments may be limited; long wait times for some patients.
Robert Field, a professor of health management and policy at Drexel University, said he generally prefers the Canadian-style approach because it eliminates most private insurers. “When you get private companies involved, it just adds another layer, which can drive up costs,” he said.
However, Field said a German-style approach, with nonprofit private insurers serving as a conduit for coverage, might make more sense for California.
“This would make it easier to incorporate Kaiser,” he said. “It’s one of the most successful private systems in the country, and you wouldn’t want to kill the goose that continues to lay golden eggs.”
A Kaiser spokesman declined to comment on the prospect of a single-payer system, steering me instead to the California Assn. of Health Plans, an industry group. Charles Bacchi, the organization’s president, said the state’s health insurers have consistently opposed efforts to introduce a single-payer system.
“It’s very difficult to have a one-size-fits-all system,” he told me.
Critics of a state single-payer plan cite a 2008 study by the Legislative Analyst’s Office projecting a $40-billion shortfall in funding. However, that study was based on outdated national (not California) data from as far back as 1998.
It also concluded that the shortfall could be closed if California employers and employees paid a combined tax rate of 16% rather than the 12% envisioned by a single-payer bill under consideration at the time. That legislation was written by former Democratic state Sen. Sheila Kuehl, who now serves as a Los Angeles County supervisor.
“Our analysis in 2008 was specific to a specific bill,” said Ben Johnson, an official with the Legislative Analyst’s Office. “We don’t believe it’s appropriate to use that 2008 analysis for the current debate.”
Clearly there’s room for creativity in setting things up. Field proposed carve-outs for Kaiser and other so-called integrated systems so they could continue operating in their own ecosystems — with pricing and regulations consistent with other insurers and medical providers.
The consensus among most experts I spoke with was that the German-style Bismarck model would represent the easiest transition for California.
While it might not offer the same level of savings as the Canadian approach, it would maintain a role for the private sector while also addressing universal access and affordable pricing.
Nancy Kane, a professor of management at the Harvard School of Public Health, said “single-payer” is a misnomer. Americans should instead embrace the idea of “single financing” — that is, a government role in fundraising for coverage but not necessarily serving as the insurer.
“A tax system, rather than premiums, is less regressive,” she said. “And it makes participation mandated without having to mandate anything.”
Louise Parker, a professor of healthcare management at the University of Massachusetts in Boston, agreed that financing coverage through payroll taxes is the easiest way to ensure that everyone’s covered, and also that everyone participates.
“There’s no way not to have a mandate,” she said.
Ultimately, California could structure a single-payer system any number of ways. It could simply emulate Medicare Advantage if state officials didn’t want to start from scratch.
It could join with other states in creating a more extensive single-payer network. California, Oregon and Washington could establish a West Coast regional system, or California could couple with New York, say, for a bicoastal risk pool.
“We absolutely cannot continue to do what we’ve been doing,” Parker said. “Our current system is going to fail.”
It’s time for California to lead the nation to a better system.
http://www.latimes.com/business/lazarus/la-fi-lazarus-single-payer-california-choices-20170307-story.html

American Medical Association Opposes Republican Health Plan

by Reed Abelson - NYT - March 8, 2017
The American Medical Association, a powerful lobbying group representing the nation’s doctors, announced on Wednesday that it opposed the House Republicans’ proposed legislation to replace the federal health care law, saying it was concerned the bill “would result in millions of Americans losing coverage and benefits.”
The group, which provided crucial support for the Obama administration’s contentious health care legislation before it was enacted in 2010, also sent a letter to the two House committees responsible for drafting the Republicans’ bill, called the American Health Care Act. The group’s concerns echoed some others raised this week among industry organizations like hospital groups worried about the possible losses of coverage that could result from the proposed legislation that was released on Monday.
All of the major hospital groups, including the American Hospital Association, also came out against the bill. “We are very concerned that the draft legislative proposal being considered by the House committees could lead to tremendous instability for those seeking affordable coverage,” the hospitals said in a letter to Congress. The hospitals also raised concerns about Republicans’ plans to significantly alter Medicaid, which they said could result in a loss of coverage and cuts to health care services.
The doctors’ main concern focused on the Republicans’ replacement of the subsidies now available to millions of low-income Americans with a flat tax credit for low- and middle-income people that is adjusted by a person’s age. The A.M.A. emphasized the need for the credits to “be sufficient to enable one to afford quality coverage,” but it also emphasized that the credits should be closely tied to an individual’s income as a way of covering more people and being a better use of taxpayer money. The doctors also voiced their opposition to the proposed rollback of Medicaid.
Even as the Republicans seemingly rush to pass a bill that would undo much of the current law, the doctors and hospitals urged them to be careful about whatever changes they made. The Congressional Budget Office has not yet weighed in with estimates of how many people the new legislation will cover and what the cost of the plan might be.
“As you consider this legislation over the coming days and weeks, we hope that you will keep upmost in your mind the potentially life altering impact your decisions will have on millions of Americans who may see their public, individual or even employer-provided health care coverage changed or eliminated,” wrote Dr. James L. Madara, the association’s chief executive.
The A.M.A. had earlier endorsed Dr. Tom Price as President Trump’s choice to head the Department of Health and Human Services, provoking a split with rank-and-file doctors and nurses who opposed his nomination.


Health Providers Denounce G.O.P. Bill as House Panels Get to Work

by Abby Goodnough, Thomas Kaplan and Robert Pear - NYT - March 8, 2017

WASHINGTON — Two key House committees began formally drafting a repeal of the Affordable Care Act on Wednesday morning, even as the nation’s largest doctors’ group and a coalition of hospitals came out strongly against the Republican plan for replacing the law.
Leaders of the committees — Ways and Means, and Energy and Commerce — portrayed the replacement bill in their opening statements as one that would rescue Americans from health coverage that had grown far too expensive and limited, painting a dire portrait of the nation’s health care system under the signature domestic achievement of President Barack Obama. But Democrats immediately began building their case against the legislation, emphasizing its elimination of taxes on businesses and high earners that have financed the Affordable Care Act.
“This bill suffers from an identity crisis,” said Representative Richard Neal of Massachusetts, the top Democrat on the Ways and Means Committee. “Is this health care, or is this a tax cut bill?”
Since congressional Republicans released the repeal-and-replace plan on Monday, a stream of medical and health advocacy groups, as well as the AARP, have come out against it. Supporters of the bill so far are largely limited to those who will most directly benefit from its passage — groups that represent industries and individuals whose taxes will be cut, including the U.S. Chamber of Commerce and Americans for Tax Reform, a conservative anti-tax group.
On Wednesday afternoon, all major hospital groups, including the American Hospital Association, the Association of American Medical Colleges, the Catholic Health Association of the United States and the Children’s Hospital Association, came out against the Republican bill. “As organizations that take care of every individual who walks through our doors, both due to our mission and our obligations under federal law, we are committed to ensuring health care coverage is available and affordable for all,” they wrote. “As a result, we cannot support the American Health Care Act as currently written.”
The American Medical Association, which has nearly 235,000 members and calls itself “the voice of the medical profession,” sent a letter to leaders of the two committees on Tuesday saying it could not support the Republican bill “because of the expected decline in health insurance coverage and the potential harm it would cause to vulnerable patient populations.” In particular, the group came out against a plan to replace the sliding, income-based premium tax credits provided under the Affordable Care Act with fixed credits based on age. The current system, it said, “provides the greatest chance that those of the least means are able to purchase coverage.”
America’s Essential Hospitals, which represents public and other hospitals whose patients are disproportionately poor, also criticized the Republican bill on Tuesday, saying its phaseout of the Medicaid expansion and its plan to change Medicaid financing to a fixed amount of money for each person in the program would harm its members and their patients.
Republicans have pressed forward, against the opposition not only of health care providers but their own conservative flank, which maintains that the bill leaves too much of the Affordable Care Act’s regulatory mandates in place.
Mr. Neal and other Democrats called Republicans irresponsible for moving ahead with consideration of the legislation before receiving estimates of how much it would cost, and how many people would lose coverage, from the Congressional Budget Office, the official scorekeeper on Capitol Hill.
As morning turned to afternoon, Republicans sought to keep the sessions focused on the idea that the legislation was a desperately needed solution to, as Representative Greg Walden of Oregon, chairman of the Energy and Commerce Committee, put it, “a government-run system that is in collapse.”
Representative Michael Burgess, Republican of Texas, described the Affordable Care Act as “a failed political and social experiment that ignored the will of people across the country.”
But Democrats worked feverishly to portray the Republican bill as a reverse Robin Hood scheme that would devastate lower-income families while benefiting the rich. Representative Frank Pallone Jr. of New Jersey, the senior Democrat on the Energy and Commerce Committee, said the bill would produce “a giant transfer of wealth, taking from hard-working families and giving to the rich.” Moreover, he said, “billionaires will benefit, while Republicans dump huge out-of-pocket costs on working families.”
The Republican bill would roll back several tax increases imposed by the Affordable Care Act to pay for it, including a surtax on investment gains, a tax on medical devices and a tax on tanning salons. It would also delay a tax on high-cost, generous insurance plans that was intended to discourage overuse of the health care system.
But Democrats focused heavily on a provision in the bill that would give a new tax break to health insurance companies, allowing them to take tax deductions for executive compensation exceeding $500,000 a year. The Affordable Care Act barred deductions for salary and other remuneration over that amount.
When Congress was writing that law in 2009 and 2010, Democrats harshly criticized insurance companies, their profits, and salaries paid to insurance executives.
Mr. Obama said back then that insurance companies “pad their profits” while canceling coverage for the sick. Another provision of the health care law, in effect, capped insurers’ profits on Affordable Care Act business, requiring them to pay out a certain percentage of every premium dollar on medical claims and activities that improve the quality of care.
Lifting the cap on the compensation that can be deducted will cost approximately $400 million over a decade, according to an estimate from the Joint Committee on Taxation. Representative Brian Higgins, Democrat of New York, called the provision “morally reprehensible.”
At noon, after 90 minutes of opening statements and parliamentary skirmishes, Democrats on the Energy and Commerce Committee insisted on a reading of the Republicans’ repeal bill. Committee clerks began reading the full text of the legislation, including an increase in federal funds for community health centers and a one-year ban on Medicaid payments to Planned Parenthood clinics.
House rules and precedents generally require that a measure and proposed amendments be read in full. This reading is usually waived by unanimous agreement, but on Wednesday, Democrats on the Energy and Commerce Committee were in no mood to go along. They complained that the Republicans were rushing to approve the bill without following customary procedures.
Before the committee meetings got underway, Republican leaders emphasized that they expect an assessment from the Congressional Budget Office on the bill’s overall cost and impact on insurance before the House votes on the measure. Mr. Walden pointed out that the C.B.O. would have to change its conclusions to accommodate any amendments to the bill anyway. He said he “would almost guarantee” a score before the full vote.
The C.B.O.’s final grade is vital, not only because of its political weight but because Republicans are operating under special budgetary rules to protect the health legislation from a filibuster in the Senate. In order for it to pass the Senate with 51 votes — not the 60 needed to overcome a filibuster — the measure must save the government at least $1 billion over 10 years. If it costs the government money, Democratic opponents will easily be able to block it.
But at this point, no one knows the legislation’s cost.
Mr. Walden dismissed criticism that Republicans were rushing their bill through.
“It’s kind of funny,” he said. “In the first couple of months we were accused of moving too slowly and not having a plan. We’re doing this step-by-step, major process.”
House Republicans seemed optimistic they could overcome their disagreements.
“How can any Republican go home and say they voted against repeal and replace?” said Representative Chris Collins of New York, a member of the Energy and Commerce Committee.



House Republicans Unveil Plan to Replace Health Law

by Robert Pear and Thomas Kaplan - NYT - March 6, 2017

WASHINGTON — House Republicans unveiled on Monday their long-awaited plan to repeal and replace the Affordable Care Act, scrapping the mandate for most Americans to have health insurance in favor of a new system of tax credits to induce people to buy insurance on the open market.
The bill sets the stage for a bitter debate over the possible dismantling of the most significant health care law in a half-century. In its place would be a health law that would be far more oriented to the free market and would make far-reaching changes to a vast part of the American economy.
The House Republican bill would roll back the expansion of Medicaid that has provided coverage to more than 10 million people in 31 states, reducing federal payments for many new beneficiaries. It also would effectively scrap the unpopular requirement that people have insurance and eliminate tax penalties for those who go without. The requirement for larger employers to offer coverage to their full-time employees would also be eliminated.
People who let their insurance coverage lapse, however, would face a significant penalty. Insurers could increase their premiums by 30 percent, and in that sense, Republicans would replace a penalty for not having insurance with a new penalty for allowing insurance to lapse.
House Republican leaders said they would keep three popular provisions in the Affordable Care Act: the prohibition on denying coverage to people with pre-existing conditions, the ban on lifetime coverage caps and the rule allowing young people to remain on their parents’ health plans until age 26.
Republicans hope to undo other major parts of President Barack Obama’s signature domestic achievement, including income-based tax credits that help millions of Americans buy insurance, taxes on people with high incomes and the penalty for people who do not have health coverage.
Medicaid recipients’ open-ended entitlement to health care would be replaced by a per-person allotment to the states. And people with pre-existing medical conditions would face new uncertainties in a more deregulated insurance market.
The bill would also cut off federal funds to Planned Parenthood clinics through Medicaid and other government programs for one year.
“Obamacare is a sinking ship, and the legislation introduced today will rescue people from the mistakes of the past,” said Representative Kevin McCarthy of California, the majority leader.
Democrats denounced the effort as a cruel attempt to strip Americans of their health care.
“Republicans will force tens of millions of families to pay more for worse coverage — and push millions of Americans off of health coverage entirely,” said Representative Nancy Pelosi of California, the Democratic leader.
Two House committees — Ways and Means and Energy and Commerce — plan to take up the legislation on Wednesday. House Republicans hope the committees will approve the measure this week, clearing the way for the full House to act on it before a spring break scheduled to begin on April 7. The outlook in the Senate is less clear. Democrats want to preserve the Affordable Care Act, and a handful of Republican senators expressed serious concerns about the House plan as it was being developed.
Under the House Republican plan, the income-based tax credits provided under the Affordable Care Act would be replaced with credits that would rise with age as older people generally require more health care. In a late change, the plan reduces the tax credits for individuals with annual incomes over $75,000 and married couples with incomes over $150,000.
Republicans did not offer any estimate of how much their plan would cost, or how many people would gain or lose insurance. The two House committees plan to vote on the legislation without having estimates of its cost from the Congressional Budget Office, the official scorekeeper on Capitol Hill.
But they did get the support from President Trump that they badly need to win House passage.
“Obamacare has proven to be a disaster with fewer options, inferior care and skyrocketing costs that are crushing small business and families across America,” said the White House press secretary, Sean Spicer. “Today marks an important step toward restoring health care choices and affordability back to the American people.”
The release of the legislation is a step toward fulfilling a campaign pledge — repeal and replace — that has animated Republicans since the Affordable Care Act passed in 2010. But it is far from certain Republican lawmakers will be able to get on the same page and repeal the health measure.
On Monday, four Republican senators — Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska — signed a letter saying a House draft that they had reviewed did not adequately protect people in states like theirs that have expanded Medicaid under the Affordable Care Act.
Three conservative Republicans in the Senate — Mike Lee of Utah, Rand Paul of Kentucky and Ted Cruz of Texas — had already expressed reservations about the House’s approach.
In the House, Republican leaders will have to contend with conservative members who have already been vocal about their misgivings about the legislation being drawn up. “Obamacare 2.0,” Representative Justin Amash, Republican of Michigan, posted on Twitter on Monday.
Representative Mark Meadows, Republican of North Carolina and the chairman of the conservative House Freedom Caucus, also offered a warning on Monday, joining with Mr. Paul to urge that Republican leaders pursue a “clean repeal” of the health care law.
“Conservatives don’t want new taxes, new entitlements and an ‘ObamaCare Lite’ bill,” they wrote on the website of Fox News. “If leadership insists on replacing ObamaCare with ObamaCare-lite, no repeal will pass.”
The move to strip Planned Parenthood of funding and the plan’s provisions to reverse tax increases on the high-income taxpayers will also expose Republicans in more moderate districts to Democratic attacks.
The bill would provide each state with a fixed allotment of federal money for each person on Medicaid, the federal-state program for more than 70 million low-income people. The federal government would pay different amounts for different categories of beneficiaries, including children, older Americans and people with disabilities.
The bill would also repeal subsidies that the government provides under the Affordable Care Act to help low-income people pay deductibles and other out-of-pocket costs for insurance purchased through the public marketplaces. Eliminating these subsidies would cause turmoil in insurance markets, insurers and consumer advocates say.
However, the House Republicans would provide states with $100 billion over nine years, which states could use to help people pay for health care and insurance.
The tax credits proposed by House Republicans would start at $2,000 a year for a person under 30 and would rise to a maximum of $4,000 for a person 60 or older. A family could receive up to $14,000 in credits.
Even with those credits, Democrats say, many people would find insurance unaffordable. But Republicans would allow insurers to sell a leaner, less expensive package of benefits and would allow people to use the tax credits for insurance policies covering only catastrophic costs.
While Republicans have argued over how to proceed, Mr. Trump has expressed only vague goals for how to repeal the Affordable Care Act and improve the nation’s health care system. On Capitol Hill, lawmakers and their aides are waiting to see whether he uses his platform, Twitter account and all, to press reluctant Republicans to get behind the House plan.
The new version of the House Republican bill makes several changes to earlier drafts of the legislation.
It drops a proposal to require employees with high-cost employer-sponsored health insurance to pay income and payroll taxes on some of the value of that coverage. In addition, it would delay a provision of the Affordable Care Act that imposed an excise tax on high-cost insurance plans provided by employers to workers.
Congress had already delayed this “Cadillac tax” — despised by employers and labor unions alike — by two years, to 2020. The new legislation would suspend the tax from 2020 through 2024.
House Republicans would offer tax credits to help people buy insurance if they did not have coverage available from an employer or a government program. Under earlier versions of the bill, the tax credits increased with a person’s age, but would not have been tied to income. Backbench Republicans said the government should not be providing financial assistance to people with high incomes.
Accordingly, under the new version of the bill, the tax credits would be reduced and eventually phased out.

G.O.P. Repeal Bill Would Cut Funding for Poor and Taxes on Rich

by Margot Sanger-Katz - March 7, 2017

Republicans in the House have performed major surgery on the Obamacare replacement plan they circulated a few weeks ago. But compared with the Affordable Care Act, the new plan still shifts a lot of benefits from the poor to those who earn more.
Legislative language for what House leaders call the American Health Care Act, released Monday evening, would substantially cut back funding to states that cover poor adults through their Medicaid program. It would cut back on financial assistance for relatively low-income insurance shoppers above the poverty line.
It would offer new financial benefits for the upper-middle class and the rich. Americans higher up the income scale would be eligible for subsidies to help them buy health insurance. Taxes on high incomes would be reversed. And the law would allow people to save more money each year in tax-free health savings and flexible spending accounts — accounts that are most valuable to people who pay high income tax rates and have money to save.
The bill even does away with a provision meant to tax incomes of insurance executives that top $500,000.
The bill is still subject to amendments and debate. The two House committees that wrote the legislation have scheduled hearings in the coming days. But the legislation was drafted in consultation with House leadership and Republicans on the other committees that oversee health care. President Trump, in a tweet and a brief statement from his press office Monday, signaled his general support for the plan.
The legislation comes with some numbers that we didn’t know before. Young adults who buy insurance coverage get $2,000 in federal cash to help them pay health premiums. Older adults get $4,000. Those numbers are higher than we’ve seen in previous G.O.P. proposals. But they would still mean that the Americans who have benefited most from the tax subsidies in the Affordable Care Act — individuals earning less than about $30,000 — would get substantially less help.
Obamacare’s subsidies were calculated to ensure that middle-class people didn’t have to spend more than a set percentage of their income on insurance. And a timely analysis from the Kaiser Family Foundation (based on a slightly earlier draft) shows that, in most parts of the country, low-income people would face a much larger gap between the value of their tax credit and the retail price of insurance than they do now.
Poor, older adults would face the largest crunch: The magnitude of their tax credits shrinks, even as a separate provision in the bill allows insurers to charge older people substantially higher prices than are allowed under the Affordable Care Act.
In some ways, the bill is less generous to the rich and less punishing to the poor than previous drafts of the legislation. The super-rich no longer qualify for a tax credit. Unlike previous drafts, which allowed anyone, regardless of income, to qualify for assistance, the bill offers the full subsidies only to individuals earning less than $75,000 a year or to joint filers earning $150,000. The subsidies slowly decrease above that threshold, meaning the country’s unemployed millionaires would still have to pay full freight for their health insurance.
The Medicaid provisions also give states more money to care for the poor adults who were newly covered by Obamacare for longer. Until 2020, states would continue to get the funding levels mandated by the Affordable Care Act.
But, after that, the Medicaid program would change in two important ways. Instead of paying a set percentage of medical bills, the new system would instead hand states a flat payment for each person who is signed up. And the amount states would get for the people signed up under the Obamacare expansion would be substantially reduced, by more than a third in some states, except in the case of people who stay continuously enrolled in Medicaid, a somewhat rare circumstance in a program in which people tend to cycle in and out of eligibility as their incomes change. States will retain the option of eliminating coverage for the Obamacare expansion population, and many may do so if their federal funding is cut and they can’t make up the difference.
Four Republican senators signed a letter Monday, before the bill was released, saying they could not support a plan that reversed the Medicaid expansion in their state. We will have to see whether this set of revisions is enough to overcome their concerns. (To pass, the bill needs 50 Senate votes, which means that leadership can’t afford to lose even three senators.)
The bill keeps some of Obamacare’s most popular provisions: Insurers have to offer health plans to people regardless of their health history. Plans cannot cap the amount they pay in claims in a year or the life of their customers. Adult children can continue to stay on their parents’ plans until they are 26. A list of required benefits that include preventive medicine and maternity care will still be required of all plans.
The numbers that are still missing are important. The nonpartisan Congressional Budget Office is still reviewing the bill. When it finishes its estimates, we’ll have a better sense of how much health insurance would probably cost under this plan and how many people would be covered. But it is reasonable to predict that the plan will cover fewer people than the current law does, and that the people who lose coverage will be those who are poorer.

ACA debate is really a debate over wealth redistribution

by Karen Tumulty - Washington Post - March 8, 2017

Redistribution of wealth - one of the most radioactive subjects in American politics - has moved from being a subtext in the national debate over health care to being the core of it.
Politicians prefer to talk about health reform in terms of benefits - expanding medical coverage to those who lack it, curbing increases in costs and improving quality.
They offer gauzy, have-it-all promises to make the system better, more efficient and more generous, as though it can all be done without anyone having to sacrifice anything.
House Republicans, led by Speaker Paul Ryan, R-Wis., say that the measures they introduced Monday will increase competition and give consumers more choices.
What makes the latest health care battle different from past ones is that it is not about building a new government program. This time, the question is whether to abolish one - and replace it with something else.
That means it is harder to gloss over a bedrock philosophical and ideological question that has always been in the background of any argument about the government’s role in health care: What is the minimum that society should provide for its poorest, most vulnerable citizens, and how much should be taken from the rich and powerful to do it?
“Even though it is a technical discussion, it’s a really big value discussion,” said Robert Blendon, a professor of health policy and political analysis at Harvard University.
Democrats, who had passed the seven-year-old system known as Obamacare without a single Republican vote, say that the GOP proposal to repeal more than 20 taxes enacted under the law amounts to a windfall for the rich and for corporate interests.
The Republican plan also would likely make Medicaid, the program that provides coverage to the poor, less generous.
Overall, it would be “a big transfer. This is a massive tax cut for unpopular industries and wealthy individuals,” said Andy Slavitt, who was acting administrator of the Centers for Medicare and Medicaid Services during the final years of the Obama administration. “It is about cutting care for lower-income people, seniors, people with disabilities and kids to pay for the tax cut.”
Meanwhile, conservative critics argue that it goes too far the other way. In their view, for instance, the individual tax credits included in the Ryan-backed plan to offset the cost of insurance are actually a new entitlement, not all that different from the subsidies provided under the Affordable Care Act.
“The House Republican proposal released last night not only accepts the flawed progressive premises of Obamacare but expands upon them,” said Michael Needham, the head of Heritage Action for America.
However, Bruce Bartlett, an economic official in the administrations of Ronald Reagan and George H.W. Bush, said that argument ignores that health insurance itself is a means of spreading the cost of health care around.
“Republicans argue that redistribution is inherently immoral, without acknowledging that the very nature of insurance is per se redistributive,” Bartlett said. “You’re taking money from people whose houses don’t burn down, to give it to the people whose houses do burn down.”
There were many ways that Obamacare also redistributed the burden of medical costs - from the sick to the healthy, with provisions like the one denying insurers the ability to refuse coverage to people with preexisting conditions; from the old to the young, with a mandate that everyone have coverage or pay a penalty; from the rich to the poor, with an array of new taxes.
By contrast, “the Republican plan, as outlined right now, really is centrally about income redistribution, of the reverse Robin Hood variety,” said Austan Goolsbee, a University of Chicago economics professor who was chairman of Obama’s Council of Economic Advisers.
Democrats are framing their argument against the Republican approach in precisely that way.
“If Republicans have their way, working families, older Americans, and people with disabilities will face huge new health costs. Families across America are going to be pushed off their health coverage just so Republicans can hand a massive tax break to the wealthy,” House Democratic leader Nancy Pelosi, D-Calif., said in a statement.
By producing their own proposal, Republicans are wandering into a familiar political thicket.
“The problem that the Republicans are going to have is anything they do makes them the inheritor of anger at the health system. That’s not a pleasant place to be, and now, they’re going to own it. All the Democrats know exactly how that feels,” Goolsbee said.
White House press secretary Sean Spicer insisted that widespread dissatisfaction is going to help the Republicans pass their plan to replace the Affordable Care Act. Health care costs have continued to rise, and in many states, insurance companies are pulling out of the health care exchanges that were set up under the law.
“What we’ve seen over the last few years with Obamacare is you can have an insurance card, but that doesn’t mean that someone’s going to take it, and it sure doesn’t mean that it’s going to be affordable,” Spicer said.
“When it comes to communication, I think, one of the things that’s really helpful is that part of the sell is done for us,” Spicer said. “We don’t have to explain the problem: People are living it.”
The question now is how to come to grips with the fact that it will not be painless to fix it.


ACA repeal: House Republicans’ breathtaking recklessness
by Jennifer Rubin - Washington Post - March 7, 2017

House Republicans on March 6 released legislation that would repeal and replace the Affordable Care Act. Here’s what you need to know about the plan. (Bastien Inzaurralde/The Washington Post)
The Post reports, “House Republicans on Monday released long-anticipated legislation to supplant the Affordable Care Act with a more conservative vision for the nation’s health care system, replacing federal insurance subsidies with a new form of individual tax credits and grants to help states shape their own policies.” However, let’s be clear how little we know — and how little members will know — about what this entails. For example, “it is unclear what the size of the tax credits will be compared to the ACA’s subsidies.” We don’t know whether tax credits “would be restricted to people under a certain income threshold — perhaps $75,000, according to the House member briefed on the plan — or whether the subsidy would taper off after a specific income level but not end entirely.” In what must be the understatement of the year, it seems, “several House Republicans expressed concerns that the committees might start to work on the legislation without a complete fiscal assessment.” That’s putting it generously
House Speaker Paul D. Ryan’s (R-Wis.) office says it has no Congressional Budget Office score for the bill to repeal Obamacare. Well, I asked, how then do you know:
  • What the impact will be on the deficit?
  • What the increase would be in out-of-pocket costs?
  • How many people will lose coverage?
  • How many people will be eliminated from Medicaid?
The answer: We don’t have a CBO score.
For starters, I frankly don’t believe that. Ryan can direct the CBO to score whatever he pleases, and it defies common sense to think he doesn’t have a very, very good idea how CBO would score this, even with recent changes to reintroduce income as a consideration in calculating the size of the tax credit. Moreover, the notion that House Republicans would vote to end legislation on which tens of millions of people depend for health-care coverage without knowing critical facts about their bill arguably is the most irresponsible display of governance in my lifetime. House Minority Leader Nancy Pelosi (D-Calif.) was berated for saying members would have to vote for the Affordable Care Act to find out what was in it, but members knew far more about what was in that bill than Republicans now know about the American Health Care Act (AHCA) — and Republicans are taking coverage away.
Conservative health-care guru and Obamacare critic Avik Roy bluntly criticizes “the bill’s stubborn desire to make health insurance unaffordable for millions of Americans, and trap millions more in poverty.” He notes the “critical” flaw in the bill, namely “its insistence on flat, non-means-tested tax credits. The flat credit will price many poor and vulnerable people out of the health insurance market.” The bill is far more generous to upper-income people than the ACA is, provided that the new tax credit does not phase out entirely for a single 40-something individual before $105,000 in earnings. Roy’s conclusion should bring smiles to Democrats’ faces:
It’s not clear why they’re proceeding without a [CBO] score, but it means that members of the House Energy & Commerce and Ways & Means Committees will not have the information they need to make informed decisions about how best to revise the bill.
The CBO is likely to score the AHCA as covering around 20 million fewer Americans than Obamacare. There are flaws in the way the CBO models health reform legislation, but the AHCA itself contains enough flaws that there can be little doubt that the plan will price millions out of the health insurance market.
Expanding subsidies for high earners, and cutting health coverage off from the working poor: it sounds like a left-wing caricature of mustache-twirling, top-hatted Republican fat cats.
Another conservative commentator agrees that the House bill will look horrible upon closer inspection, including: “significant erosion of up to 10-20 million individuals with employer-provided health coverage; a new entitlement — the refundable tax credits — that by and large wouldn’t expand coverage, but instead cause individuals currently in employer plans to switch to the credits; more federal spending via the refundable tax credits; a tax increase — a cap on the current exclusion for employer-provided health coverage — to pay for the new spending on the credits; and an increase in the uninsured (compared to Obamacare) of at least 15 million — nearly as much as repealing the law outright.” He speculates that 10 million to 20 million could lose coverage.
Meanwhile, in the grown-up world, four GOP senators already have staked out a clear position on Medicaid. Rob Portman (Ohio), Shelley Moore Capito (W.Va.), Cory Gardner (Colo.) and Lisa Murkowski (Alaska) sent a letter to Senate Majority Leader Mitch McConnell (R-Ky.) outlining concerns that the House will not “provide stability and certainty for individuals and families in Medicaid expansion programs or the necessary flexibility for states.” Not unreasonably, they argue:
We are concerned that any poorly implemented or poorly timed change in the current funding structure in Medicaid could result in a reduction in access to life-saving health care services. The Medicaid population includes a wide range of beneficiaries, many of which cycle on and off Medicaid due to frequent changes in income, family situations, and living environments.  The Department of Health and Human Services reports that nearly one-third of individuals covered under the Medicaid expansion have a mental health or substance use disorder. As the largest payer of mental health and substance use services in the United States, it is critical that any health care replacement provide states with a stable transition period and the opportunity to gradually phase-in their populations to any new Medicaid financing structure.
We believe Medicaid needs to be reformed, but reform should not come at the cost of disruption in access to health care for our country’s most vulnerable and sickest individuals
Well, from what we can gather about the House bill, they are right to be concerned. (The Post reports, “Starting in 2020, however, the GOP plan would restrict the government’s generous Medicaid payment — 90 percent of the cost of covering people in the expansion group — only to people who were in the program as of then. States would keep getting that amount of federal help for each of those people as long as they remained eligible, with the idea that most people on Medicaid drop off after a few years.” The rest of the states would get a lump sum of $10 billion over five years.) What about those who lose Medicaid coverage, the poorest and sickest? House Republicans do not bother to ask, let alone provide a satisfactory answer.
Interestingly, the House drops its bill on a day we find that the vast majority of Americans want to repair, not repeal, Obamacare. The Hill reports, “According to a national poll from the liberal-leaning Hart Research Associates, 68 percent of voters favor keeping what works in the healthcare law and fixing what doesn’t. Meanwhile, 32 percent say ObamaCare should be repealed and replaced with a new law.” And while Republicans may not care about the details of Medicaid, their base does. “60 percent of voters polled viewed changing Medicaid’s funding to block grants unfavorably, while 40 percent view it favorably. Among people who voted for President Trump, 33 percent view the proposal unfavorably.” Oh, and, “58 percent of voters said they would be less likely to support their senator or congressman for reelection if they voted for block grants and cuts to the program.”

The Republican House of Horrors Offers a Terrifying Healthcare Vision

by Rose Ann DeMoro - Common Dreams - March 7, 2017

Halloween arrived early this year featuring the Republican house of horrors seeking to fulfill their long lust for repeal of the Affordable Care Act. 
While there are legitimate criticisms of the ACA—notably the 28 million still uninsured and its abject failure to limit escalating out of pocket costs—the coverage gains made through the ACA, through Medicaid expansion and the crackdown on insurance abuses, are largely eviscerated by the GOP plan.
Instead we have a plan that again fetishizes a market-based healthcare fundamentalism that saw the U.S. plummet in a wide array of health care barometers, including infant mortality and life expectancy rates and people skipping needed care due to cost compared to the rest of the developed world, especially before the ACA.
With the hodgepodge plan hurriedly released Monday night, the House majority attempts to straddle growing public support for a government role in establishing health security for the American people and the Tea Party crowd that views any fingerprints of public protection as akin to Satanism. 
The bill fails on both counts, while also betraying promises made by then candidate Donald Trump that  "we’re going to have healthcare for everybody" that is "far less expensive and far better." 
Pretending to retain popular components of the ACA, the bill offers refundable tax credits to replace the ACA subsidies to buy private insurance, temporary continuation of the ACA Medicaid expansion, and requiring insurers to sell insurance to people with pre-existing conditions. But it’s like fools gold, each component sabotaged by the not-so-fine print.
The principal effect of the new bill will be the loss of existing health coverage for tens of millions of people, without any restraints on healthcare industry pricing practices that add up to massive health insecurity for the American people.
Some low lights:
  • Medicaid expansion, the mechanism of most of the ACA expanded coverage, is temporarily retained, but open ended federal funding would be ultimately replaced by a cap on federal payments that would encourage financially strapped states to slash eligibility of those covered and sharply cut covered services.
  • Refundable tax credits would provide less financial support than the current ACA subsidies, and by most initial analyses provide far less help for low and moderate-income people.
  • A 30 percent premium penalty surcharge on people who allow their “continuous coverage” requirement to lapse completely undermines the false promise that the bill retains the ban on insurers denying coverage for people with pre-existing health conditions. Even through the ACA health exchanges, insurers routinely change plan designs yearly in ways to increase out of pocket costs and limit patient choice through narrower networks. The surcharge will increase insurer incentives to engage in these practices.
  • Cuts in minimum covered health benefits, services now required by the ACA. Those would expire in 2020.
  • Elimination of funding for Planned Parenthood is a significant attack on women’s overall healthcare. Planned Parenthood clinics provide a wide array of needed health services.
  • Reduced funding for public health. Elimination of the ACA’s Prevention and Public Health Fund will disproportionately harm low-income people and patients with chronic illnesses like diabetes and heart disease that will worsen the health of communities and facilitate the spread of infectious diseases. As reported today by Vox, affected programs include the federal vaccines program, and programs to reduce heart disease and hospital acquired infections.
And, the architects of the new bill have exploited the repeal and replace meme with paybacks to some of their wealthiest friends and donors.
The draft bill includes a roll back of most corporate and high income taxes used to pay for the ACA, and, "as Rep. Keith Ellison has noted, a tax cut for wealthy people’s investment income and tax deduction for healthcare CEOs making more than $500,000 a year."
If you follow the rhetoric of the repeal and replace crowd, they pay a lot of lip service to restoring "freedom" and "liberty."  But their approach to healthcare restricts freedom in the most personal aspect of our lives:  healthcare.
Freedom to choose junk insurance has nothing to do with getting the care we need. In fact, it is the false choice of a faux freedom. This bill lets insurance shape what procedures doctors do, what drugs we take, and even which doctors we can see.
Nurses know there is only one real fix to our broken, dysfunctional, profit-focused healthcare system – an improved Medicare for all system, much as the rest of the developed world assures healthcare for its people.
NNU’s California affiliate, the California Nurses Association, is sponsoring a bill in California that could become the national model as an alternative to both the ACA and the fraudulently named GOP American Health Care Act.

Editor's Note:

The following article is a searing critique of the GOP's bill from a leading conservative think tank in what seems to be in full panic mode!

-SPC

The House GOP Leadership’s Health Care Bill Is ObamaCare-Lite — Or Worse

by Michael F. Cannon - The Cato Institute - March 7, 2017

During the presidential campaign, Donald Trump promised legislation that “fully repeals ObamaCare.” Monday night, the Republican leadership of the House of Representatives released legislation it claims would repeal and replace ObamaCare. Tuesday afternoon, Vice President Mike Pence will travel to Capitol Hill to pressure members of Congress to support the bill. On Wednesday, two House Committees will begin to mark-up the legislation. House and Senate leaders are hoping for quick consideration and a signing ceremony, maybe by May, so they can move on to other things, like tax reform and confirming Supreme Court nominee Judge Neil Gorsuch.
Everyone needs to take a step back. This bill is a train wreck waiting to happen.
The House leadership bill isn’t even a repeal bill. Not by a long shot. It would repeal far less of ObamaCare than the bill Republicans sent to President Obama one year ago. The ObamaCare regulations it retains are already causing insurance markets to collapse. It would allow that collapse to continue, and even accelerate the collapse. Republicans would then own whatever damage ObamaCare causes, such as when the law leaves seriously ill patients with no coverage at all. Congress would have to revisit ObamaCare again and again to address problems they failed to fix the first time around. ObamaCare would consume the rest of Congress’ and President Trump’s agenda. Delaying or dooming other priorities like tax reform, infrastructure spending, and Gorsuch. The fallout could dog Republicans all the way into 2018 and 2020, when it could lead to a Democratic wave election like the one we saw in 2008. Only then, Democrats won’t have ObamaCare on their mind but single-payer.
First, let’s look at how the main features of this bill fall short of repeal.
Medicaid Expansion
ObamaCare expanded Medicaid to able-bodied adults below 138 percent of the federal poverty level. The federal government covers a much larger share of the cost of covering Medicaid-expansion enrollees than enrollees in the “old” Medicaid program—currently 95 percent, bottoming out at 90 percent in 2020. So far, 31 states have chosen to implement the Medicaid expansion; 19 have declined.
The House leadership’s bill would not even start to repeal ObamaCare’s Medicaid expansion until 2020, more than two and a half years from now, and even then would repeal it only one enrollee at a time. In 2020, states could no longer enroll new able-bodied adults into the Medicaid expansion. Yet the federal government would continue to pay for each and every continuously covered able-bodied adult who enrolled in the expansion before then. And it would do so at the enhanced ObamaCare matching rate, in perpetuity, until an enrollee leaves the program. If the House leadership has its way, we may be decades away from full repeal of the Medicaid expansion.
For the two-plus years between enactment and 2020, the House leadership bill would continue to allow states both to opt into the expansion and to go on an enrollment binge, for which the federal government could be paying for decades. It is likely that the number of states participating, and the number of people enrolled in the Medicaid expansion will be higher after “repeal” than before.
Which means the Medicaid expansion may never disappear at all. By 2020, the constituency for preserving the Medicaid expansion would be much larger than it is now. More states, more voters, and more special interests will resist repealing the expansion than do today. As I discuss below, Congress will likely be more Democratic than it is today.
When eventually we see a Congressional Budget Office score of the bill (House leadership has numbers, but they’re not sharing them), it may show a reduction in federal spending on the Medicaid expansion after 2020. I would not bet on that happening.
Medicaid Reform
Currently, Congress matches states’ spending on their Medicaid programs. When a state spends $1 on its program, Congress contributes between $1 and $3. This creates a pay-for-dependence incentive. It encourages states to expand both enrollment and benefits far beyond what they would if states bore the full marginal cost.
The House leadership bill would reform the Medicaid program by converting it to a system of “per capita block grants.” It would give each state a fixed amount of money per enrollee, with the amount varying by the type of enrollee (aged, blind, disabled, children, non-expansion adults, and expansion adults).
A per-capita block grant would therefore resemble ObamaCare’s Medicaid expansion. States would get additional federal dollars for each additional person they enroll in their programs. But states would face the full marginal cost of providing new or existing benefits to enrollees. Just as ObamaCare’s Medicaid expansion creates incentives for states to expand their programs to able-bodied adults, while reducing access to care for the aged, blind, disabled, children, and pregnant women, the House leadership bill would create (or preserve) an incentive to expand enrollment to less vulnerable populations while cutting benefits for more vulnerable populations.
Private-Insurance Overhaul
Economists describe the basic architecture of ObamaCare’s overhaul of private health insurance as a three-legged stool. The three legs of the stool are (1) “community rating” price controls that force insurers to charge healthy and sick people of a given age the same premium, and only allow premiums to vary from older to younger enrollees by a ratio of 3 to one, (2) an individual mandate that penalizes taxpayers who do not purchase a government-designed health plan, and (3) subsidies to help low-income people purchase that compulsory, overpriced health insurance. The House leadership plan retains all three legs of the stool, as well as many other ObamaCare provisions designed to mitigate the damage done by the community-rating price controls.
The first thing the House leadership’s bill does is expand ObamaCare by appropriating funds for the law’s so-called “cost-sharing” subsidies, something no previous Congress has ever done.
The House leadership bill retains the very ObamaCare regulations that are threatening to destroy health insurance markets and leave millions with no coverage at all. ObamaCare’s community-rating price controls literally penalize insurers who offer quality coverage to patients with expensive conditions, creating a race to the bottom in insurance quality. Even worse, they have sparked a death spiral that has caused insurers to flee ObamaCare’s Exchanges nationwide, including driving all insurance companies from the market in 16 counties in eastern Tennessee. As of next year, 43,000 Tennesseans in those counties could have no way to obtain coverage. Nearly 3 million Exchange enrollees are just one more carrier exit from the same fate.
The leadership bill would modify ObamaCare’s community-rating price controls by expanding the age-rating bands (from 3:1 to 5:1) and allowing insurers to charge enrollees who wait until they are sick to purchase coverage an extra 30 percent (but only for one year). Even with these changes, however, premiums would remain high, ObamaCare would continue to make it easier for people to wait until they are sick to purchase coverage, and the law would continue to penalize high-quality coverage for the sick. In fact, the House leadership’s decision to leave ObamaCare’s community-rating price controls in place while relaxing its “essential health benefits” requirements would cause coverage for sick to deteriorate even faster than ObamaCare does.
It is because the House leadership would retain the community-rating price controls that they also end up retaining many other features of the law. Observers have started to notice that successive iterations of the bill look increasingly like ObamaCare.
For example, the House leadership bill retains and modifies another leg from the three-legged stool: ObamaCare’s advanceable, refundable, and means-tested tax credits for health insurance. Though they sound like tax cuts, ObamaCare’s tax credits are actually 94 percent government outlays and only 6 percent tax reduction. The House leadership’s tax credits are likely to be similarly lopsided.
House leaders are retaining all that government spending—again, we don’t yet know how much ObamaCare spending the bill retains—largely because retaining community rating drives premiums unnecessarily high. Ironically, due to congressional budget rules, the fact that there are tax credits in the bill makes it impossible for Republicans to repeal ObamaCare’s community-rating price controls and other regulations. The CBO reportedly has projected that if the bill repealed those regulations, the price of insurance would fall so much that many more people would take advantage of the tax credits, and the bill would run afoul of budget rules by increasing federal deficits. Republicans evidently cannot repeal ObamaCare’s regulations if they hold on to health-insurance tax credits.
The tax credits could create a very thorny problem for both House and Senate Republicans. The House leadership bill prohibits the use of its tax credits for health plans that cover abortion. Due to an arcane Senate rule, Democrats likely can and will strip any such restrictions from the bill before final passage. This means that if the House bill ever makes its way to President Trump’s desk, it could subsidize abortion even more than ObamaCare does.
To the extent the bill’s modified tax credits are tax reduction, however, they are the functional equivalent of ObamaCare’s individual mandate. The flip side of tax credits that are available solely to those who purchase health insurance is that those who do not purchase insurance must pay more to the IRS than those who do. Just like a mandate. And since the effective penalty is just an increase in the taxpayer’s income-tax liability, tax credits for health insurance are actually more coercive than ObamaCare’s individual mandate, because the IRS has many more tools it can use to collect the penalty.
Conservatives deny any similarities between an individual mandate and a tax credit for health insurance. But consider the following. ObamaCare’s individual mandate penalty for single adults is $695 or 2.5 percent of income, whichever is greater. Suppose that instead, Congress had simply enacted a tax with those features, and then come back and provided an equivalent tax credit for anyone who purchases health insurance. The end result would be identical to ObamaCare’s individual mandate. But which would it be, a tax credit or a mandate?
Like ObamaCare’s tax credits, the House leadership’s tax credits would involve burdensome projection and verification of the taxpayer’s income (taxpayers above a certain threshold are ineligible for credits) as well as whether the taxpayer has an offer of qualified health insurance from an employer (taxpayers with an offer of coverage from an employer are ineligible).
Finally, the House leadership creates a new program of matching grants to states to fund things like Exchange subsidies, insurer bailouts, high-risk pools, and perhaps a “public option,” even after Republicans spent years railing against many of these things. If states don’t use the money, the federal Centers for Medicare & Medicaid Services can use the funds for insurer bailouts. The funding formula for this new grant program appears to reward high-cost states.
Taxes
The House bill zeroes out the individual and employer mandates and outright repeals all manner of ObamaCare taxes, including: the tax on over-the-counter medications; the additional 10-percent tax on non-medical HSA withdrawals; the limits on health flexible spending arrangement contributions; the medical device tax; the tax on poor and/or sick patients (the AGI threshold for the medical-expenses deduction reverts from 10 percent to 7.5 percent); the “Medicare” “payroll” tax; the net-investment tax; the tanning tax; the tax on insurance-executive compensation; the health-insurance tax; and the pharmaceutical-manufacturers tax.
In a pretty crass budget gimmick, the bill retains the “Cadillac tax” on high-cost health plans but delays its onset until 2025.
Swallowing the Republicans’ Agenda
Republicans don’t seem to have any concept of the quagmire they are about to enter with this bill.
ObamaCare’s Exchanges are already on the brink of collapse. Since this bill does not repeal the community-rating price controls, repeals the individual mandate, shifts the benefits from ObamaCare’s tax credits up the income scale, and tasks states with devising new bailout schemes of uncertain timing and efficacy, the threat of death spirals will remain. Even where the individual market does not collapse, the coverage will get increasingly worse for the sick. If the tax credits (read: subsidies) for low-income Americans are less than under ObamaCare, many more low-income patients will lose coverage. Premiums will continue to rise. Republicans will take the blame for all of it, because they will have failed to repeal ObamaCare, or learn its lessons, when they had the chance.
The leadership bill therefore creates the potential, if not the certainty, of a series of crises that Congress will need address, and that will crowd out other GOP priorities, in late 2017 before the 2018 plan year begins, and again leading up to the 2018 elections. If Congress gets health reform wrong on its first try, health reform could consume most of President Trump’s first term. Pressure from Democrats, the media, and constituents could prevent Republicans from moving on to tax reform, infrastructure spending, or even Supreme Court nominees.
Partial Repeal Is the Road to Single Payer
Flubbing ObamaCare would at once united and embolden Democrats while dividing the GOP base, driving the former to the polls in 2018 and 2020 while causing the latter to stay home. If ObamaCare is not doing well, and Republicans take the blame, it will create the potential for the sort of wave election Democrats experienced in 2008, when they captured not just the House and the presidency, but a filibuster-proof, 60-vote supermajority in the Senate. If that happens, and ObamaCare is not doing well, Democrats will be less interested in rescuing ObamaCare than repealing and replacing it themselves—with a single-payer system.
ObamaCare opponents often muse that supporters designed the law to fail because it would give them the excuse to enact a single-payer system. Republicans have a choice. They can either prevent that future from unfolding, or they can help it along.
Conclusion
Widespread voter dissatisfaction with ObamaCare produced Republican gains in 2010 and 2014, and a GOP sweep in 2016. President Trump and congressional Republicans pledged full repeal of the law, and to replace it with free-market reforms. The parts of the country that stood the most to gain from ObamaCare swung the most to President Trump. That looks suspiciously like a mandate. The good kind.
If Republicans care about covering people with expensive medical conditions, they should stick to that promise. Making health care better, more affordable, and more secure requires first repealing all of ObamaCare’s regulations, mandates, subsidies, and taxes. Next, Congress should block-grant the Medicaid program, giving each state a fixed sum of money that does not change from year to year, combined with full flexibility to target those funds to the truly needy. (If states want to cover less-needy populations, like able-bodied adults, they can pay 100 percent of the marginal cost of that coverage.)
Finally, and crucially, Congress needs to enact reforms that make health care more affordable, rather than just subsidize unaffordable care. To make health insurance more affordable, Congress should free consumers and employers to purchase health insurance licensed by states other than their own. To drive down health care prices, Congress should expand existing tax-free health savings accounts into “large” HSAs. Large HSAs would be a larger effective tax cut than the Reagan and Bush tax cuts combined, adding $13,000 to the wages of a typical worker with family coverage. Large HSAs would drive down prices by making consumers cost-conscious at every margin, and would reduce the problem of preexisting conditions by freeing consumers to buy portable coverage that stays with them between jobs. Sen. Jeff Flake (R-AZ) and Rep. Dave Brat (R-VA) have introduced legislation to create Large HSAs.
The House Republican leadership bill does not replace ObamaCare. It merely applies a new coat of paint to a building that Republicans themselves have already condemned. Since the most important asset health reformers have is unified Republican opposition to ObamaCare, at least in theory, it would set the cause of affordable health care back a decade or more if Republicans end up coalescing around this bill and putting a Republican imprimatur on ObamaCare’s core features. If this is the choice, it would be better if Congress simply did nothing.
But this can’t be the only choice. Right?



G.O.P. Health Bill Faces Revolt From Conservative Forces

by Jennifer Steinhauer - NYT - March 7, 2017

WASHINGTON — After seven years of waiting longingly to annul President Barack Obama’s signature health care law, Republican leaders on Tuesday faced a sudden revolt from the right that threatened their proposal to remake the American health care system.
The much-anticipated House plan to repeal the Affordable Care Act also drew skepticism from some of the party’s more moderate members, whose constituents have benefited from expanded coverage in recent years.
The criticism came even before lawmakers knew the cost of the replacement plan and how many people might lose their health care if it were enacted.
House Republicans were rushing the legislation through two powerful committees — Ways and Means, and Energy and Commerce — with the hope of a full House vote next week, an extraordinarily compressed time frame considering that the legislation affects many parts of the United States economy and could alter the health care of millions of Americans.
But the swift opposition from fellow Republicans signaled that they might have to drastically reconsider their approach, and the White House portrayed the bill as a work in progress. If more than a dozen House Republicans defect, the bill will be in jeopardy, with Democrats almost certainly united as a bloc.
“Doing big things is never easy,” Speaker Paul D. Ryan conceded at a news conference on Tuesday after absorbing broad-based criticism of the bill. Still, he guaranteed he would drum up the 218 votes needed for passage, saying, “The nightmare of Obamacare is about to end.”
The Republican bill would eliminate the mandate for most Americans in favor of a new system of tax credits to induce people to buy insurance on the open market. It would also eventually roll back the expansion of Medicaid that has provided coverage to more than 10 million people in 31 states.
Vice President Mike Pence met Tuesday with conservative members of the House to assure them that their feedback was still being considered, and President Trump entertained a group of House Republicans charged with persuading their colleagues to vote for the measure.
“We’re going to do something that’s great, and I am proud to support the replacement plan released by the House of Representatives,” Mr. Trump said. “This will be a plan where you can choose your doctor, and this will be a plan where you can choose your plan. And you know what the plan is. This is the plan. It’s a complicated process, but actually it’s very simple, it’s called good health care.”
Some White House officials insist that Mr. Trump will be directly engaged in persuading lawmakers to back the bill.
But many of the factions that provided financial and political support to back Republicans who vowed to wipe out the Affordable Care Act are nowhere near satisfied with the option rolled out on Monday.
“This is not the Obamacare repeal bill we’ve been waiting for,” said Senator Mike Lee, Republican of Utah, who was joined by a constellation of conservative groups, including the Club for GrowthHeritage Action for America and Charles G. and David H. Koch’s Americans for Prosperity. “It is a missed opportunity and a step in the wrong direction. We promised the American people we would drain the swamp and end business as usual in Washington. This bill does not do that.”
The Republican bill would scrap the mandated coverage in the Affordable Care Act in favor of tax incentives to coax people to purchase health care. But the legislation maintains many of the act’s mandates and basic benefits, including prohibiting insurers from denying policies for pre-existing conditions or capping benefits in a year or a lifetime.
Some conservatives have labeled the House plan “Obamacare lite,” saying it is nearly as intrusive in the insurance market as the law it would replace. In particular, they dislike the delay in getting rid of the law’s Medicaid expansion. They also dislike the tax credits in the Republican plan, which can exceed the amount a consumer actually owes in federal income taxes, meaning that the Internal Revenue Service would be issuing checks to cover insurance premiums. The House plan also maintains many of the demands on insurers that the Affordable Care Act has, including a defined suite of “essential benefits” that all insurers must offer.
Representative Jim Jordan, Republican of Ohio, said that he would introduce a “clean repeal” bill and that Senator Rand Paul, Republican of Kentucky, would offer a companion bill.
Republicans have been counting on Mr. Trump to use his influence to persuade wavering members to support the plan. But despite his characterization of the bill as “tremendous” on Tuesday, others in his administration seemed to concede that changes, perhaps major ones, were likely.
Speaking to reporters after meeting with Senate Republicans at the Capitol, Mr. Pence offered the White House’s imprimatur, calling the bill the “framework for reform.” He added that the administration was “certainly open to improvements,” making clear that the wrangling had just begun. Tom Price, the secretary of health and human services, said twice at a briefing with reporters at the White House that the bill was “a work in progress.”
He also suggested that some provisions Mr. Trump is seeking, like the ability to buy insurance across state lines and the lowering of drug prices, might be addressed through regulation.
Representative Mark Meadows, Republican of North Carolina, said Mr. Pence had portrayed the bill as a work in progress that would no doubt be amended, perhaps significantly. “The bill that was introduced last night is still open for negotiation and certainly for modification,” Mr. Meadows said. “And we took that as very encouraging news.”
Even with substantial changes, passage of the bill is in no way assured. House Republicans accomplished too little in shrinking the size of the government’s role in the health sector to pull the most conservative members their way, yet they may not have done enough to allay the concerns of some Republican senators who are skeptical of elements like rolling back the Medicaid expansion and defunding Planned Parenthood.
In an interview with a radio station on Tuesday, Senator Roy Blunt, Republican of Missouri, said, “What I don’t like is it may not be a plan that gets a majority of votes and lets us move on, because I think we can’t stay where we are with the plan we’ve got now.”
The response from insurers was largely muted on Tuesday. They have praised the initial steps taken by the administration to stabilize the individual market, and they said they were encouraged by the desire to provide a smooth transition in the next two years. But several questioned the adequacy of the tax credits.
“It is important that the tax credit for 2020 creates a marketplace that enables people to get the coverage they need at a price they can afford,” Alissa Fox, a senior vice president at the BlueCross BlueShield Association, said in a statement. “We look forward to working with Congress to create a stable and affordable private market.”
By proceeding so swiftly, and largely in secret, Republicans have opened themselves to the same criticisms that they leveled at Democrats in 2010. If the bill is passed by the full House as early as next week, Senator Mitch McConnell of Kentucky, the majority leader, has promised to bring it immediately to the Senate floor without a single hearing.
“After years of howling at the moon about Democrats rushing through the Affordable Care Act — the mantra they said over and over and over again on the floor here and in the House, ‘read the bill’ — Republicans are having committee votes two days after the bill is released,” Senator Chuck Schumer of New York, the Democratic leader, said on the Senate floor. “No wonder they don’t want anyone to know what’s in the bill.”

Republicans’ Changes to Medicaid Could Have Larger Impact Than Their Changes to Obamacare

by HayYoun Park - NYT - March 7, 2017

House Republicans are proposing to fundamentally alter the way the federal government has been financing Medicaid for more than 50 years. The changes are part of their plan to replace the Affordable Care Act, also known as Obamacare.
“This is potentially more major than repealing the Affordable Care Act,” said Joan Alker, the executive director of the Center for Children and Families at Georgetown University.
Medicaid provides health insurance to 74 million people, or one in five Americans. Of the 20 million who gained insurance under Obamacare, at least half were through Medicaid expansion.
The changes would not begin until 2020. But the long-term impact on states would be unequal, with some faring better than others, depending on how much they spent on the program, their demographics and whether they participated in President Obama’s expansion of Medicaid eligibility.
The Republican bill calls for capping how much the federal government gives each state per Medicaid enrollee, based on how much the state was spending on the program in 2016.
Spending varies widely from state to state. Nevada and Georgia, for example, spend less than $4,500 per enrollee, while Massachusetts and New York spend more than $10,000 per enrollee.
Since it was created in 1965, federal funding for Medicaid grew as needs changed for the states. If more people became eligible, say, because of a recession, or if costs rose because of expensive new medicines or a public health crisis, states received more federal money.
Federal spending on Medicaid flexes as states alter their policies, eligibility rules and payment rates for doctors, hospitals and nursing homes.
Under the Republican plan released on Monday, federal funding for every Medicaid beneficiary would essentially freeze, rising only with the medical component of the Consumer Price Index, or the price of medical care. That change would allow funding to grow if more people sign up for Medicaid, but not if the cost of care for Medicaid patients spikes, or states want to offer new benefits or increase payments to doctors.


Some health experts worry that over time, states would be unable to respond to changes in the health care needs of their population unless they use their own money, potentially risking the survival of a program that has been a critical source of health coverage for the poor.
“I think of it as essentially putting states behind bars,” said Sara Rosenbaum, a professor of health law and policy at George Washington University. “Whatever you were doing circa 2016 is what you’re going to do forever.”
Virginia, where the governor has declared its opioid crisis a public health emergency, recently decided to significantly expand the scope of its Medicaid benefits to spend more on drug treatment for patients.
If there was a cap on federal funding, the state would not be able to share these cost increases — beyond simple medical inflation — with the federal government, Ms. Rosenbaum said.
“That is the core problem with aggregate limits, whether across the board or per capita, is that they’re impervious to the factors that drive health care spending,” she said. “The potential effects are enormous.”


Why Republicans Can’t Do Health Care

by Ross Dothan - NYT - March 8, 2017

After the 1976 election, the Democratic Party seemed to enjoy a commanding position in American politics, with Jimmy Carter ensconced in the White House, a Senate supermajority and an advantage of nearly 150 seats in the House of Representatives. Yet over the next four years the Democrats achieved little of consequence, Carter passed into history as a failure, and Ronald Reagan ushered in a lasting rightward realignment.
I have compared Donald Trump to Carter before, but with the release of the House Republican “replacement” (I use that term loosely) for Obamacare, it’s worth returning to the analogy. It rests, in part, on the work of the political scientist Stephen Skowronek, who argues that certain presidencies are “disjunctive” — straddling a political order passing into history and another one struggling to be born. And “disjunctive” generally means ineffective, because the parties such presidents are leading are likewise trapped between past and future and unable to unify and act.
Carter is Skowronek’s prime disjunctive example, and a variety of writers, including Corey Robin and Dylan Matthews on the left and Reihan Salam on the right, have recently argued that Trump fits the role as well.
Just as Carter sensed that the New Deal-Great Society coalition was no longer viable and campaigned against certain liberal orthodoxies in ’76, so in 2016 Trump offered a vision of the G.O.P. as a nationalist “workers party” in which certain Reaganite pieties would no longer set the terms of conservative debate.
But just as Carter’s mix of proto-New Democrat centrism and old-school liberalism never translated into a workable congressional agenda, Trump’s bridge to a new conservatism will crumble if his party can’t agree on policies that fit his vision.
The health care debate makes this danger particularly clear. In the long Reagan era, the Republican Party was, in effect, the party of the health care status quo — bending to accept certain expansions of the welfare state (S-CHIP, a prescription drug benefit in Medicare) in order to forestall a larger government takeover of health insurance.
By the late 2000s, however, the decline in employer-provided coverage and the steady rise of health care costs made status-quo politics untenable: Too many workers who made too much to qualify for Medicaid were unable to afford insurance. Meanwhile, over the same period, Republicans were winning more working-class votes, which meant that their own constituents increasingly stood to benefit from a coverage-expanding health care reform.
This created a strong incentive for Republicans to accept one. But there were still stronger incentives to resist, because the party’s limited-government ideology was hostile to increased spending, and many of its strongest interest groups stood to lose out from reform. So resist the G.O.P. did — sometimes by embracing a more libertarian vision of health care, but more often by incoherently and opportunistically attacking whatever the Democrats proposed.
This strategy was ultimately a policy failure, and it left Obamacare an established fact. At which point the G.O.P. was boarded and seized by candidate Trump, who clearly grasped the political logic of reconciling his party to some form of coverage expansion, even though he lacked an interest in actually hammering out the details. His campaign thus pointed ahead to a likely future in which the G.O.P. accepts a health care subsidy for the working class, without addressing all the internal reasons that the party can’t agree on what that subsidy should look like.
Those internal tensions that have given us the botch that is the House G.O.P.’s Obamacare alternative. It’s a piece of legislation caught betwixt and between: It includes enough in the way of tax credits and regulation to be labeled “Obamacare lite” by the party’s would-be ideological enforcers, but it also promises to throw many people off the insurance rolls — many Trump voters included — for the sake of uncertain policy goals. Its outline bears some resemblance to what the smartest conservative health policy thinkers favor, but it doesn’t want to spend the money (whether on risk pools or pre-funded health savings accounts or income-linked subsidies) that would make that approach politically viable. And its desire to spend less while keeping Obamacare’s most popular regulations (the ban on discrimination based on pre-existing conditions, above all) promises to make the risk of an insurance death spiral that much worse.
So it’s a bill that nobody on the right much likes: Not libertarians and not reformocons, not right-wing donors and not mushy moderates, not the Tea Party senators who promised full repeal and not the swing-state senators who well know that their own voters want the coverage expansion to endure. As for Americans who aren’t ideologically committed, forget about it: Passing the bill would be an invitation to a political beheading.
But in fairness to its designers, there was no bill that could have united all of the right’s disparate factions, because on health care policy, as on a range of issues, the Republican Party as an organism does not know what it believes in anymore.
Which brings us back to Trump’s resemblance to Jimmy Carter, who presided over a party suffering a similar crisis of belief. The political-science schema that makes the two men comparable figures is more compelling as history than as prophecy: It tells us how Trump could fail; it doesn’t tell us that he necessarily will. A strong-enough, savvy-enough, effective-enough president, placed in the transitional role that Carter occupied, could become transformative rather than disjunctive, and build a new ideological majority amid the rubble of the old.
And Trump does have a few of the necessary qualities. On policy he is incurious yet also more politically savvy than the party’s congressional leaders, more attuned to where his own voters and the country stands. His “workers party” is a more compelling vision for the right’s future than either status quo bias or “tax cuts plus nothing” zeal. With focus, attention and the judicious use of the bully pulpit, he could potentially bigfoot all the right’s ideological factions. Instead of tepidly embracing legislation that doesn’t come close to fulfilling his campaign promises, he could force his party to accept a bill that makes more political sense — be it the more redistributive plan advanced by conservatives like Avik Roy, or the federalist compromise floated by Republican Senators Bill Cassidy and Susan Collins.
Alas, as anyone on Twitter is regularly reminded, focus, attention and judiciousness are all qualities that this disjunctive president lacks. Which is why, even though nothing is inevitable, the Carter precedent — a majority wasted and then lost — looms as this administration’s most likely destination.



Got health insurance? That doesn’t mean you’ll be able to pay your medical bills.

by John Murawski - McClatchy News Service - March 4, 2017

Hospitals around the country are reporting record levels of debt on their books from an unlikely source: patients with health care coverage.
As health insurers and employers have shifted health care costs to patients through high deductibles and other out-of-pocket expenses, people who in the past may not have worried about paying for a hospital visit or a surgical procedure are getting hit with massive medical bills that they can’t pay. 
Duke University Health System has seen patient interest-free payment plans rise from $19 million in June 2010 to $43 million in January. The increase is largely attributable to rising deductibles, said Keith Stover, Duke’s vice president of finance and chief financial officer. 
Duke is fielding 1,500 patient calls a day, most of them asking why they got a bill since they’re insured, Stover said. The call volume is up from about 1,000-1,200 five years ago, he said.
“It’s something everyone in the country is thinking about,” Stover said. “This stuff is mind-blowing – they really don’t understand their benefits until it’s too late.”
WakeMed Health & Hospitals also is experiencing a spike in patients needing help, setting up an average of 1,810 payment plans per month since October. Between February 2015 and October 2016, it was averaging 439 payment plans a month. At University of North Carolina Hospitals, patients were repaying $29 million in patient plans as of the end of January. Comparable data for past years was unavailable.
Health insurance deductibles – the amount the patient has to pay before the insurance company starts paying the bills – used to be just several hundred dollars, and zero-deductible policies were not uncommon. But deductibles have been creeping up for more than a decade as insurers, in an effort to keep monthly premiums under control, have shifted medical expenses to those who use the health care system. 
This stuff is mind-blowing – they really don’t understand their benefits until it’s too late.
Keith Stover, vice president of finance, Duke University Health System
The trend toward higher deductibles has been seen in employer-sponsored health insurance as well as individual coverage under the Affordable Care Act. This deductible inflation could become even more widespread as Republicans in Congress work to dismantle the ACA. Replacement proposals include provisions that could indirectly lead insurers to opt for even larger deductibles to control costs.
Those who are healthy prefer the higher deductibles to sky-high premiums because they’re not paying for services they’re not using. But when they do get sick or injured, they may experience sticker shock.
Jen Stern of Clayton got a crash course in deductibles in December after breaking her ankle in a roller derby game. 
Stern, 42, accumulated medical bills in excess of $6,000 – from a hospital emergency room in South Carolina and orthopedic surgery in Raleigh, North Carolina. 
“I wasn’t even aware that the deductible was $10,000,” Stern said. “I heard about it on the phone with the surgery center, and it was pretty devastating.”
A bartender with three kids, she still owes more than $3,000 and expects it will take her two years to pay off the debt.
Hospitals have come up with various ways to collect on the bills.
Duke Health, like other nonprofit hospitals, will adjust a bill on a sliding scale according to household income. Those who still don’t pay are eventually forwarded to a collections agency and a credit ratings firm. Charity care is available for insured people whose incomes are below a certain level.
Wake Forest Baptist Medical Center in Winston-Salem, North Carolina, started offering zero-interest loans through Commerce Bank in November in response to patient deductibles as high as $14,300. Southeastern Regional Medical Center in Lumberton, North Carolina, in December began assigning “financial counselors” to patients’ rooms to explain insurance benefits and payment options. Duke Health’s 225 financial counselors contact patients before their scheduled procedures to discuss insurance benefits and payment options; every Duke clinic now has a full-time financial counselor on staff to work with patients.
UNC Health Care has 200 financial counselors to assist patients.
“It’s going to be our responsibility to collect,” said Mark Miller, chief financial officer of UNC Health Care in Chapel Hill, North Carolina. “So much is getting left on the table because we can’t get it from the patient, or because they have chosen not to pay it, or they can’t.”
As of last year, the national average deductible on an employer-sponsored health plan was approaching $1,500 a year for an individual, and had surpassed $2,000 for individual employees at small businesses. Those amounts have nearly doubled in the past eight years, according to the independent Kaiser Family Foundation
Republicans in Congress have been unable to coalesce around a single proposal to replace the ACA. But their proposals so far could drive up deductibles by lifting the ACA mandated cap on the out-of-pocket costs patients have to pay, Pollitz said. That cap sets the upper limit on deductibles: $7,150 for an individual and $14,300 for a family in 2017. Some GOP proposals would count employer-sponsored health benefits as taxable income, a move that could provide an incentive to trim health benefits and increase deductibles.
Deductibles can be tricky for the layperson to comprehend. Insurance policies can have multiple deductibles – one for doctors and another for hospitals, one for medical care and another for pharmaceuticals, one for in-network providers and another for out-of-network, and a separate deductible for every single member of the family. 
“There is no straightforward insurance coverage anymore,” said Janelle Colosimo, director of revenue cycle at Southeastern Health in Lumberton. “People will say, ‘Can’t you call the insurance company and make them pay,’ which is an old concept.”

Hardships multiplying

Consumer advocates say the high deductible trend is unsustainable.
“They can be a barrier to care for people,” said Mark Rukavina, principal, Community Health Advisors, a Boston organization that advises nonprofit hospitals on billing, collections and finance. “Over time we’re going to see people delaying care and needing more expensive care as a result.”
The Kaiser Family Foundation has found that the financial hardship cases are multiplying. The organization reported last year that 1 in 5 people with health insurance are reporting problems paying medical bills. They drained their savings, took on extra jobs, borrowed money, maxed out their credit cards, or withdrew money from retirement accounts and college funds. A small percentage have taken out a second mortgage on their home.
“You can see where this medical debt could become a gift that keeps on giving if it permanently impairs your ability to retire, or if you have to spend your kid’s college savings fund so now they can’t afford to go to school,” Pollitz said.
Scott Greenough, 49, was treated for liver and kidney failure in 2015 and 2016, and faced about $30,000 in medical costs – $10,000 of which was from deductibles during those two years. Without a job – which he had lost shortly before the diagnosis – he had no income.
The Raleigh software developer, however, was fortunate. His insurance premiums were paid for by the National Kidney Foundation, his living expenses by his family, and friends and relatives donated nearly $24,000 through his GoFundMe page.
Today he’s off dialysis and working again. 
“I probably would have had to tap into my retirement plans,” he said. “When I wasn’t working and GoFundMe paid for my bills, it helped save my future, honestly.”
Stern, the amateur roller derby player, also turned to GoFundMe for help paying off her medical bills, raising $1,231 of her $5,000 goal. Stern, who is separated from her husband, missed two months of tending bar while recovering and had been living off child support.
“At this point I’m not able to pay my other bills,” she said. “My very short term goal is to try to save my house.”
Federal tax policy allows the creation of special financial accounts dedicated to paying deductibles and out-of-pocket costs. 
The money in these accounts is not taxed, boosting purchasing power, but the accounts are governed by different rules. 
One option, the Flexible Spending Account, is bound by the “use it or lose it” rule and must be spent by a certain date or its owner forfeits his money. 
Another option, the Health Reimbursement Account, is owned by the employer and only accepts employer contributions. It typically can’t be carried to your next job. 
The Health Savings Account may be the most versatile account but requires a high deductible. It is available through employer-sponsored plans and through individual plans purchased through the Affordable Care Act or directly from an insurance company. The HSA is portable and can be carried by the employee from job to job. It rolls over every year and can be used for a variety of medical expenses. 
Not every plan with a high deductible qualifies as an HSA. An HSA requires a minimum deductible of $1,300 for an individual and $2,600 for a family. It also has out-of-pocket maximum caps lower than the federal cap. Annual tax-free contributions are capped at $3,400 for an individual and $6,750 for a family. 
If the HSA owner withdraws money for non-medical reasons, the amount is taxed and also subject to a 20 percent penalty. 
HSA contributions lower one’s taxable income and money withdrawn for medical expenses is tax free. The money can also be rolled over into a retirement account.

This man knows how to keep older Mainers healthy and happy at home

by Meg Haskell - Bangor Daily News - March 7, 2017

Dr. Allan “Chip” Teel, teacher, physician, innovator and entrepreneur, has plotted an independent path throughout his professional life. Now at age 66, when he might well be contemplating retirement, he is instead embarking upon a challenging new mission: to reconfigure the way health care is delivered to aging Mainers across the state.
Recently named medical director for clinical systems innovation at Brewer-based Eastern Maine Healthcare Systems, Teel, who is low key and soft-spoken, says the change in Maine reflects a national trend being driven by a combination of economic, cultural and medical factors.
The tax-funded Medicare program for Americans 65 and older already has started reimbursing medical providers for how well they manage their patients’ health and penalizing them for unnecessary diagnostics, treatments and inpatient admissions, he explained. That trend is growing, and by 2018, he said, Medicare aims to allocate up to 50 percent of its coverage for compliance with specific health care guidelines and positive patient outcomes instead of the more traditional fee-for-service payments for medical interventions. That means hospitals, doctors and other health care providers have a strong incentive to keep older Americans well, independent and out of institutional care when possible.
In addition, and perhaps more importantly, repeated surveys have shown that older Americans have a powerful preference for staying in their own homes and communities as they age and through the end of life, Teel said.
“Instead, we know that about 28 percent of Medicare spending occurs in the last few weeks of life,” he said, “driven by people dying in an expensive, medicalized setting instead of a warm, loving environment.”
Taken together, he said, these trends make it clear that the health care system needs to retool its approach to caring for the elderly, with a focus on building a powerful safety net of home-based and local community resources.
That doesn’t mean older people shouldn’t have access to needed and appropriate medical interventions, he emphasized.
“Fixing your knee at 85 is not a bad investment if it keeps you active, out of a wheelchair and living independently at home for another 11 years,” he said. “This is all about access and wise investment in appropriate health care.”

Developing a regional response

Teel, who lives with his wife, Carol, in the Lincoln County town of Nobleboro, knows something about these ideas. During his 30-year career as an independent primary care physician in Damariscotta, his patient population has consistently skewed older.
“I was always taking care of old people,” he said. “Maine has the oldest median age of all the states, and Lincoln County has the oldest population of any county in Maine.”
As a result of his patient interactions over time, Teel came to intimately understand the challenges facing aging individuals and their families. These included making appropriate decisions about health care interventions as well as issues related to safety, isolation and independence.
Over the past 20 years, Teel has pioneered a number of efforts to provide low-level support that can help seniors age safely in their homes and communities. He co-founded the Eldercare Network of Lincoln County in the mid-1990s and developed a “home-sharing” model in the region, helping older homeowners pair up with younger adult roommates who could help with daily activities and home maintenance in exchange for free or inexpensive rent. Alternatively, some older community members found safe, affordable housing with young families, occupying a spare room and taking part in family activities in exchange for a modest rent.
“We made some nice matches,” Teel said, but the informal home-sharing model ran into some real-world challenges, including the absence of a next step, when seniors’ needs escalated and occasional problems associated with privacy and trust.
In 1998, Teel opened the first of seven small assisted living homes in towns throughout Lincoln County. Known informally as “the Greens,” they are situated in renovated village houses close to amenities and activities. Pet-friendly, ADA-compliant and staffed by a small team of local caregivers, they each accommodate six to eight residents, except for Hodgdon Green in Damariscotta, which can house 16 residents.
“The idea was born of the rise of high-end ‘retirement homes’ along the coast,” Teel said. “They were in easy reach for people of means, but low-income people didn’t have much opportunity for that kind of living.” By contrast, the Greens are funded almost entirely by MaineCare, the state’s Medicaid program for low-income seniors.
More recently, Teel founded Full Circle America, a for-profit company based in Nobleboro that provides a range of technological services to help keep elders safe and well in their homes. From familiar telehealth technology — which allows doctors, nurses and other medical providers to make online home visits — to edgier in-home cameras, motion detectors and “smart” devices that can turn off appliances and lock doors from a remote location, the aim is to use technology to prolong independent living, promote safety and facilitate communication with caregivers and loved ones.
“My dad was my guinea pig,” Teel said. With his father’s permission, he placed cameras in the home so he could monitor activity and check on his dad’s well-being at any time.
“Because he had limited mobility and used a wheelchair, I could call him when I saw he was tooling past the phone and say, ‘It’s time to take your meds, and I’m going to watch you do it now.’ At suppertime I could say, ‘Go turn on the microwave for two minutes,’ and I could make sure he remembered to eat.”
Teel’s father died two years ago, but Full Circle America continues to operate and has served about 100 people to date, ranging in age from 80 to 105, for about 20 percent of the cost of institutional care.

Scaling up to a statewide system

In his new role at EMHS, Teel plans to bring the solutions he has pioneered to the next level, adapting them to rural and urban areas across the state. Importantly, he said, the organization already has a number of home-based programs in place, including telehealth capability, public health programming that promotes healthy lifestyles and partnerships with agencies that address issues of food and housing insecurity.
Colleen Hilton, president and CEO of the EMHS visiting nursing, home health and hospice arm, said Teal’s innovative thinking and technological expertise will be key to expanding the organization’s existing home-based services.
“We’ve been doing this for years, but now we’ll be seeing an intensification. The broader aim is to facilitate aging in place safely and at a high level of satisfaction for aging seniors,” she said. “The way health care is designed and delivered now is not sustainable. EMHS is investing in the future — not in the hospital but in the home.”
Hilton expects that within the next few months, the organization will have several people under care in the kind of “virtual assisted living” Teel has developed in Full Circle America. “Our healthcare system truly embraces innovation, and Chip is very forward-thinking about what we need to do in the future,” she said.
Teel acknowledges he has a learning curve to conquer as he seeks to scale up his home care model. His first task, he said, is to take an inventory of the programs already working to keep seniors safe at home within the EMHS system. That system stretches from northernmost Aroostook County south to Bangor, Waterville and, since the system’s acquisition of Portland’s Mercy Hospital in 2013, to Cumberland and York counties.
“The task the health care system has ahead of it is enormous,” he said. “It will require skill, teamwork and integrations that will create new opportunities and new demands.”
The payoff is also enormous. “If we can keep you at home where you want to be, if you’re happier, healthier and it costs less [than institutional care], what else do you need to know?”
And on a personal level, he added, “At this stage of my life, this is the most exciting thing I can imagine doing.”

Fear Over Losing Health Care Coverage Causing Spike in Anxiety Cases

by Patty Wight - Maine Public - February 28, 2017

As Congress deliberates the future of the Affordable Care Act, the issue is causing anxiety for some here in Maine — literally. Some therapists say they’re seeing a spike in patients with significant fears about losing health care coverage.
It was the middle of the night on Election Day when Ruth Dean woke up to check the results. They weren’t what she expected.
“When I saw that it was Trump, I burst into tears. And I started to say things like, ‘Oh no. Oh no. What’s going to happen to our health care?’” she says.
Before the Affordable Care Act, Dean spent the better part of seven years without insurance. She and her husband run a guitar-making business in South Portland. Whenever she shopped for insurance plans, she says they were unaffordable.
“The cheapest plan I could get for a family of five was $1,500 a month with a $15,000 deductible. It was more than our mortgage, more than sending our kid to college, more than our groceries,” Dean says.
But with an ACA Marketplace plan, she now pays around $120 a month to cover most of the family — her two younger children are on MaineCare. Insurance coverage brought peace of mind for Dean, but she says that’s evaporated as President Donald Trump and Congressional Republicans plan to dismantle the law.
She says she worries constantly.
“Every day. Every day in the news, we just don’t know what Trump is going to do. We don’t know if we’re going to be without health care tomorrow,” Dean says.
She hasn’t sought professional help to address her fear, but others have.
“Over the past 10 years or so, I have seen this slow increase in anxiety related to health care. Access to it, and ability to afford it,” says Amy Davenport, a licensed professional counselor in Bangor. “I must say that this year, I’ve seen a spike in anxiety related to health care and ability to pay.”
Davenport says out of her caseload of about 40 people, around 65 percent have anxiety about losing health coverage. Another Bangor counselor, Dr. Christopher Garrison, has noticed a similar spike in about half of his patients.
“They started to come forward with the anxiety, I would say, right after the election occurred,” he says.
Garrison says the fear is spread from patients with ACA Marketplace plans to those with employer-based plans that have rising premiums, and to patients covered by federal programs.
“And they’re very concerned that even Medicare, or Medicaid — that those programs will be cut,” he says.
Dr. Jeff Matranga, a psychologist in Waterville, says anxiety about access to health care has been around for awhile.
“In my observations, in the last couple of years with the Affordable Care Act, that’s gotten better. And now, with the prospect of it being taken away and what will it be replaced with, I do hear some comments about that,” he says.
Matranga, who has been in practice for 30 years, says patients express fears about Trump that go beyond health care, from scientists concerned that valid data will become politicized or obscured to people dismayed that voters overlooked Trump’s faults and sent him to the White House.
“I’ve never seen this kind of reaction to a presidential election,” he says.
It’s a reaction that appears to bear out nationally. The American Psychological Association conducts an annual “Stress in America” survey. Over the past decade, says the association’s Dr. Lynn Bufka, stress has declined. But in its most recent survey in January, she says there was a statistically significant increase in stress.
Two-thirds of Americans, both Democrats and Republicans, reported stress about the future of the nation.
“And that was the first time we had a statistically significant increase,” Bufka says.
She says the source of anxiety typically is uncertainty. To cope, she says it’s important to think through options and prepare. And Davenport says therapists may need to follow their own advice.
“As private practitioners, we’re self-employed. So, as providers, as anybody who’s self-employed, we’re worried about access to health care and cost, and what that’s going to mean for our clients and ourselves, so it’s almost double the stress on our shoulders,” she says.
Uncertainty is likely to build as Congressional lawmakers face growing pressure to reach consensus on the fate of the Affordable Care Act and the next generation of health care policy in the Trump era.

How Republicans Plan to Ration Health Care

by Ezekiel Emanuel, Aaron Glickman and Emily Gudbranson - NYT - March 7, 2017

It looks as if Republicans want to bring back health care rationing.
In 2010, Mark Price, a 37-year-old resident of Goodyear, Ariz., was struggling to pay the bills for his leukemia treatment. His house was under foreclosure. He had insurance through Medicaid, and yet he died after the state said it would not pay for a potentially lifesaving bone marrow transplant.
Facing a $2.6 billion budget deficit, Gov. Jan Brewer and Arizona Republicans had opted to ration care, eliminating state payments for bone marrow, liver, heart, lung and other transplants. Simultaneously, the state changed eligibility rules to cut health care for 47,000 low-income children and 310,000 low-income adults.
Arizona was not the only state that cut lifesaving health care benefits during the Great Recession. In 2010, Indiana’s Medicaid program denied an infant with a deadly rare disease a tissue transplant, reversing course only after local media coverage led to public outrage.
If the Republicans replace the Affordable Care Act with the plan released on Monday, we should expect more stories like those.
First, the Medicaid rolls will shrink. The Affordable Care Act extended Medicaid to all Americans earning under 138 percent of the federal poverty line — $16,643 for a single person and $33,948 for a family of four in 2017. Under the Republican plan, enrollment in the Medicaid expansion will freeze starting in 2020. The 11 million Americans who already gained coverage can, in theory, keep it — but only if they never let their enrollment lapse or their incomes rise.
Then Republicans want to go further, by changing how all of Medicaid is funded: They would replace federal Medicaid payments, which guarantee coverage to anyone who qualifies, with so-called per-person allotments, or per-capita caps. These give states a fixed amount of money for each person on Medicaid, adjusted based on whether the person is blind, disabled, a child, an adult or elderly. The states then decide how to budget the money.
The problem is that the amount given to the states will not keep up with projected health care costs. Changes in the allotment will be tied to changes in the medical part of the Consumer Price Index, which, for various reasons, is unlikely to increase as quickly as the cost of health care. This shortfall in federal funding will force more states to make the kinds of rationing choices Arizona and Indiana made.
A second hidden kicker is that the grants will not increase in response to changing needs. Currently, federal funding is tied to actual Medicaid costs. So if a state has a natural disaster or an epidemic that unexpectedly increases spending, federal funding automatically increases, too. But the Republicans’ allotments will not respond to real-world changes. Again, this will force states to make more difficult choices — cutting lifesaving treatments or nursing home care for the elderly or support for disabled children.
The Republicans say they want to give states more flexibility. But that flexibility most likely means they could use the money for non-health-care programs, or to close state budget gaps. When given budgetary flexibility with large sums of money, this is a common state tactic.
In 1998, as part of a major settlement with tobacco companies, in which the companies agreed to pay Medicaid costs related to lung cancer, emphysema and other smoking-related illnesses, states got a windfall of a minimum of $206 billion over 25 years. What did they do with the money? A 2001 Government Accountability Office report found that 26 percent was being spent on non-health programs, including infrastructure and budget shortfalls. A mere 7 percent was spent on programs related to getting people to stop smoking.
State flexibility has led to other coldhearted decisions. Before the Affordable Care Act, Medicaid was a categorical program, meaning that Americans were eligible only if they were low-income and had another qualifying condition, such as being a child or pregnant or disabled. States could determine those eligibility requirements. And financial pressures made many pretty callous.
In many states, non-disabled working adults were denied any Medicaid benefits. In Wyoming, a working family of three with an income over $9,480 was not eligible for Medicaid. In Alabama, that family had to make just $4,392 — 24 percent of the poverty line — to be denied coverage. These people were not lazy or, in Mitt Romney’s words, “takers.” About 67 percent of uninsured Americans were in families with at least one full-time worker, and more than 10 percent worked two jobs. The uninsured just happened to work for companies that did not or could not provide health insurance.
State flexibility is a ruse. Per-person allotments are an elaborate cost-shifting mechanism — a fancy way to reduce federal funding and transfer financial responsibility for the health care of low-income Americans to states. A 2014 assessment by the Center on Budget and Policy Priorities of Representative Paul Ryan’s plan, which contained elements similar to those in the current proposal, estimated that this accounting trick would increase Medicaid costs for state budgets by $169 billion by 2026. So, under the banner of flexibility, the current Republican plan would force states to make a series of Hobson’s choices.
This would be even worse than going back to the days before the Affordable Care Act. It would force states to ration care and deny some Americans lifesaving treatments or nursing home care. Cruel only begins to describe the Republican plan.

GOP’s Obamacare replacement cracks down on lottery winners who receive Medicaid
by Ben Guarino - Washington Post - March 8, 2017


The lottery is a famously bad bet. People are more likely to be zapped by lightning while drowning, canonized a saint or hit by an asteroid than win a jackpot. Very few people walk away from the Powerball with massively engorged bank accounts. In 2016, the Powerball was won nine times, either by individuals or pooled groups.
Smaller wins occur more frequently but are still not common. Fewer than two dozen people, for instance, have won sums of $100,000 or more in the Connecticut lottery this year.
Yet 10 pages into the American Health Care Act, the bill took aim at lottery winners who receive Medicaid. The measure that House Republicans unveiled Monday as the replacement for the Affordable Care Act devoted roughly a tenth of its 6o-odd-pages to lottery winners.
Under the new bill, states would be able to disenroll “High Dollar Lottery Winners” from Medicaid. The joint federal and state program, which helps low-income Americans, provides health-care coverage to more than 70 million people.
The size of a winner’s loot would affect how long he or she lost Medicaid: one month for a win of $80,000 or less; two months for wins of $80,000 to $90,000; and three months for winnings up to $100,000, plus an added month, to a limit of 10 years, per every additional $10,000. The bill proposed an exemption for medical hardships, as allowed by an individual’s state.
Why the AHCA’s authors devoted so much space to lottery winnings might strike some as curious. The bill’s brevity, after all, was a point of pride for the White House. During a news conference Tuesday, press secretary Sean Spicer gestured to two stacks of paper, one towering and one svelte.
“Look at the size,” Spicer said, pointing first to a stack representing Obamacare and then to the Trumpcare pile. “This is the Democrats. This is us.”
(The number of pages — a function not only of words, but text size, paper dimensions and margins — has been criticized as a poor shorthand for a proposed law’s transparency or elegance.)
Despite the poor odds and low numbers involved, a few current and former members of Congress have eyed the intersection of Medicaid and the lottery as an opportunity for savings. Retired Rep. Joe Pitts (R-Penn.) had pushed for a similar measure in the past.
“Medicaid is meant to help the poor — not big jackpot winners,” Pitts said in a statement in January 2016, when he introduced legislation that would treat lotto wins as income for purposes of Medicaid eligibility. Pitts estimated that such a measure would save $400 million over the course of a decade.
That number was in line with a Congressional Budget Office estimate in March 2016. Using data supplied from the state of Michigan and the lottery industry, the CBO predicted that, if the loophole were closed, 9,000 to 10,000 lottery winners would lose Medicaid in any given month.
“Using the typical per capita cost for Medicaid adults,” according to the CBO, “this provision would reduce direct spending by $475 million over the 2016-2026 period.”
In 2011, the media circulated reports about a Michigan man who won $2 million in a “Make Me Rich!” lotto game but remained eligible for food stamps. In 2012, Michigan Gov. Rick Snyder signed a law preventing lottery winners from receiving food or other assistance programs. By 2013, the state had expelled some 500 lotto winners from various welfare programs, Michigan Live reported.
Congressman Fred Upton (R-Mich.) introduced a bill in February to alter Medicaid so that it would continue to take lump-sum lotto winnings into account after the month in which they were won, allowing states to disenroll winners. “Medicaid is meant to help the most vulnerable amongst us — not high-dollar Lottery winners,” Upton said in a statement at the time.
“We believe this bill would bring in savings in the hundreds of millions,” a spokesman for Upton told U.S. News with respect to the new AHCA provisions.
People with low incomes make up a disproportionate share of lottery players. One 2011 study found that the people who spent the most days gambling on the lottery had the highest neighborhood disadvantage — a term that reflected unemployed adults, households on public assistance and poverty levels.
It would not be inconceivable for lottery players to seek medical assistance or other welfare programs, even after winning. The nonprofit National Endowment for Financial Education estimated that 70 percent of people who won large lotto sums or had significant cash windfalls could not properly manage their bank accounts, going broke within a few years.
“Everybody dreams of winning money, but nobody realizes the nightmares that come out of the woodwork, or the problems,” said William “Bud” Post III in 1993, a Pennsylvania man who felt besieged after his $16.2 million lotto win.
As The Post recounted at the time of his death in 2006, his woes included: “a brother who tried to hire a contract murderer to kill him and his sixth wife; a landlady who forced him to give her one-third of the jackpot; and a conviction on an assault charge, after Mr. Post fired a shotgun at a man trying to collect a debt at his deteriorating dream house in northwestern Pennsylvania. He went bankrupt, came out of it with $1 million free and clear and spent most of that windfall, too.”
Richard Lustig, a seven-time lotto grand-prize winner from Florida, would advise other winners to hire financial planners and accountants.
“The reason you hear those horror stories about people who win huge amounts like that,” he told Time magazine in 2016, “and all of a sudden they’re filing bankruptcy is because it’s usually from people who have never had that kind of money before in their lives.”
“They just go through it like crazy. They think there’s no tomorrow. Well, there is a tomorrow and eventually it will run out.”


No Wonder the Republicans Hid the Health Bill

The Editorial Board - NYT - March 7, 2017

Republican House leaders have spent months dodging questions about how they would replace the Affordable Care Act with a better law, and went so far as to hide the draft of their plan from other lawmakers. No wonder. The bill they released on Monday would kick millions of people off the coverage they currently have. So much for President Trump’s big campaign promise: “We’re going to have insurance for everybody” — with coverage that would be “much less expensive and much better.”
More than 20 million Americans gained health care coverage under the A.C.A., or Obamacare. Health experts say most would lose that coverage under the proposal.
Let’s start with Medicaid. Obamacare expanded the program to cover 11 million more poor Americans in 31 states and the District of Columbia. The Republican bill would end the expansion in 2020. Although people who sign up before 2020 under the expanded Medicaid program, which covers people with incomes up to 138 percent of the federal poverty level (about $33,900 for a family of four), would be allowed to stay on, many would be kicked off over time. The working poor tend to drop in and out of Medicaid because their incomes fluctuate, and the Republican plan would bar people who left the expanded program from going back in.
The bill would also, for the first time ever, apply a per-person limit on how much the federal government spends on Medicaid. This change could shift about $370 billion in health care costs over 10 years to state governments, according to the Center on Budget and Policy Priorities. Many state governments, faced with limited budgets, would be forced to cut benefits or cover fewer people.
For people who buy insurance on federal or state-run health exchanges, the G.O.P. plan would greatly reduce the A.C.A.’s subsidies, which come in the form of tax credits. For example, a 40-year-old living in Raleigh, N.C., who earns $30,000 a year would receive $3,000 from the government to buy insurance, 32 percent less than under current law, according to the Kaiser Family Foundation. The bill would provide older people more generous subsidies — those over 60 get a subsidy of $4,000, or twice as much as 20-somethings — but insurers would be allowed to charge older people five times as much as younger people.
The plan would do away with the current mandate that requires nearly everybody to obtain insurance or pay a penalty. (Instead, insurers would be allowed to charge people who don’t maintain their insurance continuously 30 percent more for coverage.) But because the legislation would still require insurers to cover pre-existing conditions, people would have a strong financial incentive to buy insurance only when they got sick — a sure way to destroy the insurance market.
House Speaker Paul Ryan and Tom Price, the secretary of health and human services, have railed against high premiums and deductibles for plans sold on the health exchanges, but that problem would only worsen under their proposal because insurers would almost certainly raise their prices as the pool of the insured shrank. Republican lawmakers seem to think that people who can’t afford insurance are simply irresponsible. Representative Jason Chaffetz of Utah, for instance, told CNNthat people should invest in their health care, “rather than getting that new iPhone.” Word to Mr. Chaffetz: Health insurance costs more than $18,000 a year for an average family; an iPhone costs a few hundred dollars.
While working people lose health care, the rich would come out winners. The bill would eliminate the taxes on businesses and individuals (people making more than $200,000 a year) who fund Obamacare. The tax cuts would total about $600 billion over 10 years, according to the Joint Committee on Taxation.
House committees will start considering the bill on Wednesday. Even if it passes the House, some Republican senators object to the Medicaid cuts and the Tea Party wing hates the idea of retaining any subsidies.
Republicans have been vowing to repeal the Affordable Care Act even before it became law in 2010. But they still haven’t come up with a workable replacement. Instead, the G.O.P.’s various factions are now haggling over just how many millions of Americans they are willing to harm.

LePage rips GOP health plan, calls Trump job rumors ‘wishful thinking’

by Christopher Cousins - Bangor Daily News - March 7, 2017

Good morning from Augusta, where Gov. Paul LePage is back after a weeks-long trip through Florida and Washington, D.C.
But he’ll be headed back to the nation’s capital later this week to protest the House Republicans’ plan to repeal and replace the Affordable Care Act. LePage said he doesn’t like the plan as it was unveiled Monday. 
“Right now I am very, very discouraged and disappointed with what House Republicans are introducing,” LePage said Tuesday during a radio interview on WVOM. “We don’t know what the cost is, but based on what I see and I’m reading and what has happened over the last 15 years, I don’t think it’s an improvement. I think we’re punting the ball, is what we’re doing.”
Republicans in the U.S. House of Representatives released their long-awaited plan to replace the Affordable Care Act on Monday. It substitutes a system of tax credits and grants to states for federal subsidies and would wind down support for Medicaid expansion after 2020.
But it leaves in place many provisions of former President Barack Obama’s health care law — including the popular pieces that allow children to stay on parents’ health plans until age 26 and preventing insurers from charging people with pre-existing conditions more for coverage.
LePage said he supports the health insurance exchanges currently offered by the ACA because people can purchase their health insurance on a sliding scale. 
“The exchanges are wonderful,” the Republican governor said. “[Patients] ought to have copays and ought to have consequences when they miss appointments. … There is nothing wrong with asking people who are able bodied to have skin in the game.”
But U.S. Rep. Bruce Poliquin, a Republican from Maine’s 2nd District, said in a late Monday statement that the new proposal will “bring much needed health insurance relief” to Mainers “suffocating” under increasing premiums under current law.
And Democrats aren’t showing any signs of accepting the plan, with U.S. Rep. Chellie Pingree, a Democrat from Maine’s 1st District, saying it’ll cost many more. 
“I expect my Republican colleagues not to forget the millions of Americans for whom the Affordable Care Act has been a lifesaver, including thousands in Maine who’ve shared their stories with me,” she said. — Christopher Cousins and Michael Shepherd


Panel recommends regulating hospital prices to bring down costs

by Priyanka Dayal McCluskey - Boston Globe - March 7, 2017

After six months of often contentious debate, a special state commission is calling for tighter regulation to control hospital costs, but the panel remains sharply divided over how to proceed.
That recommendation is the most controversial of nine outlined in a more than 100-page report that examines why some Massachusetts hospitals are paid much more than others for the same services, and how to tackle the disparities.
The draft report, a copy of which was obtained by the Globe, also calls for more transparency about the costs of medical services and encourages greater use of tiered health plans, in which consumers pay more out of pocket to use higher-cost hospitals.
The panel’s suggestions will add pressure on legislators to find ways to control health care costs for businesses and consumers without harming hospitals, which are among the state’s largest employers.
The commission is the product of hastily approved legislation last year to avoid a controversial ballot question from the Service Employees International Union. The initiative sought to slash payments to Partners Healthcare, the state’s largest health care network, and redistribute the money to lower-paid hospitals.
The panel, composed of hospital and insurance executives, public officials, employers, and academic experts, cannot issue new regulations.
It will send its completed report next week to legislators and Governor Charlie Baker, who could choose to act on the recommendations.
Hospital leaders are already bracing for major changes to national health care law under President Trump.
The planned overhaul of the Affordable Care Act, also known as Obamacare, could cut into hospital payments, which hospital leaders say could force them to cut jobs.
The commission’s work made clear that there is little consensus about how to deal with the issue of health care price disparities in Massachusetts.
After a half-year of deliberations, members of the 23-member group still clashed during their final meeting Tuesday.
“There are parts of this report that I flat-out disagree with,” said Partners chief executive Dr. David Torchiana. Partners’ hospitals, including Massachusetts General and Brigham and Women’s, are among the priciest in the state and are likely to feel the effects of any regulation of hospital prices.
Members of the panel remained so divided that they decided to scrap the executive summary of their report, after failing to agree on the language.
“Not everybody will agree with every aspect of the report,” acknowledged state Senator James T. Welch, cochairman of the commission, “but that’s what consensus and collaboration and negotiation is all about.”
The commission agreed that variation in prices is sometimes warranted, but that a hospital’s market power and brand alone should not be used to justify higher prices.
Reports have shown that some large health care providers extract higher payments from insurers at least partly because of their size. This drives up medical spending because the most expensive providers also tend to attract the most patients.
Baker, in his budget plan, already proposed capping hospital rates. His plan would allow no annual rate increase for the state’s most expensive health care providers, while mid-priced providers would be limited to 1 percent increases, and the lowest-priced providers would not be capped.
The commission’s proposal is less specific: It says a state entity, such as the Health Policy Commission or the Division of Insurance, should be given the authority to reject contracts between insurers and care providers if the payments are too high. It also suggests establishing a minimum rate for providers on the low end of the payment scale, in order to help struggling community hospitals.
But Partners’ Torchiana said in an interview that such “price caps” amount to “sanctions” on Partners hospitals, which are among the most prestigious in the country.
“Really what we need in health care more than anything else — we need some stability, we need some freedom from new interventions, new regulations,” he said.
A group representing the health insurance industry, meanwhile, said the commission’s recommendation didn’t go far enough in suppressing high hospital payments.
“I never was under any illusion that this wouldn’t be really, really hard and there would still be a real lack of consensus even on the last day,” said Lora M. Pellegrini, president of the Massachusetts Association of Health Plans.
The SEIU’s Local 1199, which pushed the issue in its ballot campaign last year, applauded the draft report for addressing “the unfair way Massachusetts hospitals are reimbursed for care.”
The debate over health care pricing is likely to continue in the Legislature, which could address the issue in the state budget, as the governor has proposed, or wait and pursue new health care legislation.
House Speaker Robert A. DeLeo avoided talking about health care costs in a speech before business leaders Tuesday. A spokesman said DeLeo will review the commission’s report when he receives it.
Senate leaders have said they want to tackle health care costs this legislative session, but Senate President Stanley C. Rosenberg’s office also declined to comment on the report Tuesday because it has not been completed.
A spokeswoman for the governor said Baker looks forward to reviewing the commission’s recommendations “as the Commonwealth explores future options to reduce the cost of health care and increase transparency for taxpayers.”


Read more here: http://www.mcclatchydc.com/news/nation-world/national/article136500163.html#storylink=cpy
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