Health Care Reform Articles - May 14, 2017

The Bipartisan ‘Single Payer’ Solution: Medicare Advantage Premium Support For All

Billy Wynne - Health Affairs Blog - May 11, 2017

In my last Health Affairs Blog post, I outlined a potentially bipartisan four-step plan to move past the American Health Care Act’s (AHCA’s) disastrous framework toward a more stable, less expensive health care system. For those seeking incremental, near-term solutions, I hope those recommendations provide helpful guidance.

But the AHCA’s reckless drive through the US House of Representatives has taught us something about the current status of health care politics and may have opened the window to more significant, ultimately more successful, reforms. To put it mildly, the public is essentially fed up with debating how to realign the fragmented elements of our Rube Goldbergian system. Its machinations are too complex, its politics too fickle, and its rent is too damn high for the care we are getting.

Where do we turn, then? More complexity? Cutting millions from coverage and shifting more costs to working families? With those options likely to be rejected, as conservative heavyweight Charles Krauthammer recently asserted, we may be heading “inexorably” toward a single-payer system. Poll after poll has in fact shown that a majority of Americans support such an approach. Most recently, an Economist/YouGov survey found that 60 percent of Americans support expanding Medicare to cover everyone, with only 23 percent opposed. If the AHCA defies odds and is enacted, this will only become exponentially truer as its impacts are felt.

But, you are quick to add, there are a variety of deep-seated concerns with a single-payer approach that have kept it out of mainstream political discourse so far. That’s undoubtedly true. They include: It will necessitate massive tax increases; it will cut reimbursement for services to unsustainably low rates; it will be lower quality than the employer-sponsored coverage most Americans currently have; it will consolidate power into the hands of a small number of bureaucrats; etc., etc.

My goal with this post is to demonstrate that a “unified” (punchline: It wouldn’t truly be single payer…), market-driven, federally regulated, privately delivered system need not possess any of these objectionable attributes. In fact, the parameters of such a system are all but staring us right in the face. I call it: Medicare Advantage Premium Support for All (MAPSA).

While any flavor of single payer may be the last thing that comes to mind when contemplating bipartisan initiatives, just as the far left and far right share some libertarian (and other) commonalities, we may have indeed finally come full circle in this tiresome, so-far-futile debate. By combining two shots of conservative orthodoxy with one overflowing progressive one, and stirring slowly, it is not at all far-fetched to envision an endgame cocktail for our health care system that covers everyone, decreases costs, and can pass Congress. Cheers.

Financing

The most important objection for any single-payer proposal to overcome is that it is so expensive it will require unpalatable tax increases. This has been raised invariably on the right and even on the left, including by columnist Paul Krugman in his notorious about-face on the issue. But, folks, our health care system is already unsustainably expensive. There is more than enough money already being spent on health care to provide affordable, high-quality coverage to every American, if we allocate the resources more efficiently.

To prove this point, I’m going to present you with some very barroom-napkin math that, nonetheless, relies on well-established data regarding health care spending in the United States, drawing from the most recent National Health Expendituresreport from 2015, unless otherwise noted.

In that year, the United States spent more than $3.2 trillion on health care, almost $10,000 per resident. If we remove Medicare (which is after all going to be the nucleus of the new system), that leaves more than $2.5 trillion. The components of that spending come from federal, state, and local governments (primarily Medicaid, Affordable Care Act [ACA] subsidies, coverage for federal employees, veterans, military families, and so forth). It also comes from employers, the tax exemptions they are afforded for it, and households—you and me.

If you remove employer and household spending from the equation for the moment, which means both elements would contribute nothing (you’re welcome), that leaves about $1.5 trillion or $5,371 per person available to fund the new system.

Now, Medicare spent about $11,642 per person in 2015, but keep in mind that these beneficiaries are aged or disabled, much less healthy, and more expensive to care for than the average American, which includes children, young invincibles, and so forth. If we take health plans and actuaries at their word, an “age rating band” (or ratio between what we charge the oldest and youngest members of the insurance pool) of 5:1 is appropriate. This is also, I’d note, the ratio advanced by Republicans in the AHCA.

This suggests that $6,985 is the average cost of coverage if we use Medicare spending as the benchmark (that is, calculating premiums at a 3:1 ratio if 5:1 is Medicare’s $11,642). That may be too high, because for this exercise we are actually excluding current Medicare beneficiaries, so the fifth quintile of the rest of the population would actually cost less, on average, to cover.

Another, perhaps better, benchmark, is the average cost of a gold-level plan in the individual market, which, in 2017, was $6,456 (before any applicable tax credit). I am using the gold tier as an illustration because, as I will explain later, it most closely resembles the Medicare benefit, primarily because such plans have an actuarial value of approximately 80 percent.

So, going back to our math equation, we’ve got $5,371 in all-government spending on health care to allocate to an average plan cost of $6,456. That leaves $1,085 as the average annual premium contribution with anticipated cost sharing of 20 percent, or $1,291. Per capita household spending would thus be $2,376, which is cheaper than the current average rate of $2,705.

If we wanted to increase household savings further, a maintenance of effort policy, or obligation to continue some portion of their existing health care spending, could be imposed on employers who will see their profits rise substantially when health care costs are dropped from their ledgers. I’m not recommending this, but just to further demonstrate the abundance of dollars currently in the system, if you required employers to maintain 100 percent of that spending on health care by paying in to this system, there would be more than enough funding to cover all anticipated household costs (premiums and cost sharing).

So, in summary, no new taxes, a $600-plus billion windfall for businesses, and about $350 in savings per person—and everyone is covered. This does not count the substantial efficiencies that the health care system would undoubtedly gain by economizing it in this fashion. (While the exact amount is disputed, even conservative analysis shows Medicare spends about 10 percent less on administrative costs than commercial coverage, yielding more than $200 billion in savings from that alone.)

Benefit Design

Okay, no more math for now. What kind of coverage do we get out of this deal? This is the part where I’m going to genuflect, with some pain, to House Speaker Paul Ryan and all others of Randian descent. Bear with me, progressives, we need to satisfy the ideological urges across the spectrum if we’re going to have a prayer of getting this done.

At the highest level, the per capita spending identified above will be delivered to households as a tax credit, with which they can purchase either a Medicare Advantage plan (the existing commercial coverage option already chosen by more than 30 percent of Medicare beneficiaries) or traditional Medicare, creating high-stakes competition among those carriers.

You might call traditional Medicare the “public option,” but giving consumers this choice between federally and commercially administered Medicare is exactly what Speaker Ryan’s “A Better Way” plan would do. If you don’t think his plan is market-based, take it up with him. I’m pretty sure it is.

Careful attention would need to be paid to indexing household tax credits to ensure costs are not shifted to them over time. But a consumer-driven (and tightly regulated, transparent) market such as this should help drive down costs even beyond administrative savings. We will be able to afford to inflate the tax credit over time in a way that keeps up with actual costs. Meanwhile, consumers who find lower-cost options can keep the difference. Those who want expanded benefits can pay more.

If you want a deeper (but still digestible) dive on Medicare benefit design, check out this Congressional Research Service report. Basically, Medicare covers inpatient and post-acute care services under so-called Part A, which everyone who has paid Medicare payroll taxes can receive without an additional premium, and outpatient services under Part B, which currently requires an annual premium of $1,608.

Medicare Advantage, as delivered by commercial insurers, combines all of these services and may also include prescription drug coverage, with flexibility to add benefits or reduce premiums and cost sharing if savings can be identified, as they often are. For fee-for-service enrollees, drug coverage can be obtained separately via private insurers or pharmacy benefit managers under Part D, with an average premium of $408.

This is not to say that the Medicare benefit itself could not be reformed. Currently, there is no out-of-pocket cap on costs, as there are for ACA-regulated plans. Others have suggested that implementing uniform cost sharing and deductibles across Medicare Parts A and B would simplify the benefit, potentially encouraging more prudent spending. This would also make the benefit more closely resemble the ACA’s benchmark gold plan currently being sold in the individual commercial market.

Notably, while Medicare has all of the consumer protections the public has come to expect from the ACA (guaranteed coverage, ban on preexisting condition exclusions, and so forth), it does not have an individual mandate per se. Part A is funded by a mandatory payroll tax, which essentially makes participation in it obligatory. There are also late enrollment penalties for Part B and Part D. Perhaps in conjunction with default enrollment, these incentives could be imposed to ensure essentially universal participation without a formal mandate.

If we apply this benefit structure to everyone nationwide, a host of other considerations must be taken into account, for sure. All of this benefit discussion and financing analysis relates to the average consumer. For example, children covered by Medicaid have access to some evidence-based benefits that are specifically tailored to their needs. We have to make sure that children and other vulnerable populations do not see the value of their coverage decline.

Additional considerations would of course need to be taken into account, including varying the tax credit and cost-sharing expectations by income and region, as Medicare and the existing gold-plan regime both currently do.

Reimbursement

This one is the real kicker for most health care stakeholders, rivaling cost concerns as the top reason single payer has never had a real chance of enactment. But I think there’s a straightforward response.

All of the numbers identified above relate to national health care spending across all payers—government, commercial, and so forth. So, the starting point for considering how much will be paid for health care services under MAPSA is the weighted average of the rates all of these various payers currently provide; that is, what providers and other stakeholders currently receive.

So a key weakness of single payer, under this approach, becomes one of its greatest strengths. Reimbursement for health care services remains strong but the cross-subsidizing acrobatics that providers currently perform to balance their finances would go away. For example, commercial rates are hiked, often stratospherically, to compensate for typically insufficient Medicaid reimbursement.

There are access (and moral) implications here too: Historical Medicaid enrollees will now be able to see the same doctors and go to all of the same facilities as those who currently have generous employer plans. There will no longer be any perverse incentive for providers to turn them away.

Finally, if you’re like me, your provider friends (and maybe spouses…) have complained interminably about their frustration with the current multipayer system. This is not just an issue with varying claims requirements and payment delays; it’s about caregivers being pulled in several different directions by multiple quality reporting and value-based purchasing programs that can often incentivize conflicting behaviors and clinical standards.

While the Medicare Advantage market would need to be expanded to ensure adequate consumer choice and plan competition, having all payers participate in a single, unified program will substantially alleviate this redundancy and frustration in our current system. Now, please stop asking me to fill out a paper-based intake form every time I come see you.

Implementation

This is another admittedly tricky element of MAPSA that warrants much further extrapolation, but, again, my goal here is only to persuade you that it is feasible. To move away from the various coverage programs currently in place, we might consider a protracted, step-wise approach. We are talking about almost 20 percent of our economy. That’s not an excuse for inaction, but it is a cause for care.

Five or so years after enactment, coverage from the narrower, federally funded programs such as the Federal Employees Health Benefits Program, Veterans Health, and TRICARE, could be transitioned to the new commercially driven, federally backed, MAPSA. Three or more years later, Medicaid and individual commercial insurance market enrollees would join. Last of all would be employer-sponsored insurance, where coverage is the most stable (and privately financed).

Believe me, I realize it’s easier to type this up on a computer than it is to actually pull it off. Every syllable above warrants much deeper inquiry, deconstruction, and reformulation. I said I wanted to convince you this is feasible, but I also want us to acknowledge how complicated it is. It cannot be done in one fell swoop of Bernie Sanders’ wagging finger; nor should it be casually dismissed as an economic and budgetary disaster. It doesn’t have to be either of those.

Rather, I’m convinced that some thoughtful, non-ideological citizens can come together to craft a market-based, government-backed system that provides lower cost, universal coverage for consumers while protecting the livelihood and robust economic contributions of health care companies and providers. Who’s with me?

http://healthaffairs.org/blog/2017/05/11/the-bipartisan-single-payer-solution-medicare-advantage-premium-support-for-all/

After Cruel Trumpcare Vote, Sanders Calls on California to Lead Nation on Single Payer

by Andrea Germanos - Common Dreams - May 8, 2017

Days after Republicans in the U.S. House of Representatives voted to pass the "atrocious" American Healthcare Act (AHCA), also known as Trumpcare, U.S. Senator Bernie Sanders (I-Vt.) called on the state of California to "send a message" to the nation and pass a proposed single-payer healthcare bill.

Sanders, who is expected to introduce a Medicare-for-all bill in the Senate this month, made the call at events this past weekend in Beverly Hills.

Speaking at an event Saturday where the senator and his wife, Jane Sanders, were honored as "Public Servants of The Year" by the California-based advocacy organization Consumer Watchdog, he said it would "make my life easier" if legislators in the Golden State passed the Healthy California Act (SB562), which would create a universal healthcare system. That proposal passed its first legislative hurdle last month when the state's Senate Health Committee advanced it, and it moves on to face the Senate Appropriations Committee May 26.

"The great state of California can send a message that will be heard all over this country and all over the world if you pass single payer here," the Sacramento Beereports him as saying.

At a Sunday event organized by Death Penalty Focus, where he was honored for being "the first presidential candidate in nearly 30 years to forcefully declare his opposition to the death penalty," he again called on California to set an example for the nation by passing SB562.

"You can help me, you can help this country pass single payer right here in California," the Los Angeles Times quotes him as saying.

As for the prospects of Trumpcare—which he dubbed "one of the most disgusting pieces of legislation ever passed," and a "death sentence for thousands"—moving forward in his chamber, Sanders bluntly declared it "dead in its tracks."

The California bill, meanwhile, counts among its supporters National Nurses United and the California Nurses Association, and those organizations' executive director, RoseAnn DeMoro, similarly said it could serve as a model for the nation.

"At a time of critical uncertainty in our national healthcare system, California can once again lead the nation," said DeMoro. "This bill will set a standard in America and be a catalyst for the nation."

And in a sign of building momentum for such a healthcare system, a record 104 House Democrats have signed on to co-sponsor a Medicare-for-All bill.

https://www.commondreams.org/news/2017/05/08/after-cruel-trumpcare-vote-sanders-calls-california-lead-nation-single-payer

Critics at Town Halls Confront Republicans Over Health Care

by Jacey Fortin and Daniel Victor - NYT = May 9, 2017

United States representatives often hold town halls with constituents in their home districts during a congressional recess. But this week, with the House on a break, few of the 217 Republicans who approved legislation to repeal and replace critical parts of the Affordable Care Act, or Obamacare, chose to defend their votes at public meetings.

Those who did were, in several cases, greeted by shouts and criticism.

The representatives who have not hosted gatherings in their home districts have not been immune from backlash, however. Protesters have rallied outside congressional offices and confronted representatives at events. Liberal critics say they intend to keep the heat on as the bill is debated in the Senate.

A party that controls the House avoiding constituents upset about health care legislation? You might have heard this one before.

The Republicans’ current situation is similar to that of Democrats in 2009 and 2010, when they controlled the House and faced opposition to health care legislation. Then, like now, the few town halls that were held were marked by voter rage.

This time around, instead of Republicans lamenting the passage of Obamacare, Democrats are lamenting the House passage of its replacement, the American Health Care Act. Several of the Republican representatives who have held events since the vote on Thursday have said they appreciated the opportunity to explain their decision, but the raucous reception they have endured shows the political risk they still face.

Here are critical moments from some of town halls already held.

Jeering in New Jersey

A high school student asked, looking for a yes-or-no, one-word answer: Is rape considered a pre-existing condition?

Tom MacArthur, who created the amendment that could undermine protections for patients with pre-existing conditions, thereby securing the support of the conservative House Freedom Caucus, preferred to speak in more detail. But his lack of a one-word answer angered hundreds of constituents in Willingboro, N.J., on Wednesday.

The bill does not define rape as a pre-existing condition, though sexual assault victims could face higher insurance costs because of resulting trauma or sexually transmitted diseases.

Mr. MacArthur vowed to take every question, and stayed for more than four hours.

Outrage in Idaho

The shouts erupted just as soon as the words left Raúl R. Labrador’s mouth.

Mr. Labrador, a Republican, was hosting a town hall in Lewiston, Idaho, on Friday when a woman argued that the health care bill passed by the House would force people on Medicaid to “accept dying.”

The congressman called her premise a lie. “Nobody dies because they don’t have access to health care,” he said. The audience jeered.

Blowback since then has been swift. While there is no clear consensus on the number of lives risked or saved by changes to health care policy, Medicaid expansions and improved access to insurance have been linked to lower mortality rates in numerous studies.

Naysayers in New York

Tom Reed, a Republican from New York, faced a mixed response that included booing and interruptions as he conducted three town hall meetings on Saturday. At one in Hinsdale, N.Y., a woman cited a Quinnipiac poll that found that only 17 percent of the American population supported the Republican health plan as it stood in mid-to-late March, before the vote.

“How can you say you’re representing your constituency when only 17 percent of the U.S. population is supporting this?” she asked, to applause.

Other recent polls support the idea that most Americans do not back the House bill.

Results released by Gallup in April found that for the first time, a majority of Americans approve of the Affordable Care Act. And a YouGov survey of 1,000 adults this month found that only 31 percent favored the House bill at least somewhat.

Indignation in Iowa

Rod Blum, a Republican from Iowa, faced combative audiences in Dubuque on Monday.

The crowd laughed and jeered after he assured people who were struggling with the federal government that, “We will go fight for you.”

That happened shortly after he walked out of a live television interview with a local news station, KCRG-TV9. The reporter, Josh Scheinblum, had pressed the congressman on why his town hall was open only to residents of the district. Mr. Scheinblum also asked whether Mr. Blum had accepted donations from people who lived elsewhere.

“This is ridiculous,” Mr. Blum said as he disconnected his microphone and stood up to leave. “Like he’s going to sit here and just badger me.”

Outcry in Oregon

Also on Monday, Greg Walden, a Republican from Oregon, angered attendees at a town hall in Baker City, Ore., when he said he could not predict how many people would lose health care under the House bill, The East Oregonian newspaper reported.

Though he was short on details, Mr. Walden tried to reassure the crowd about his intentions. “I care deeply about people with pre-existing conditions. I care deeply about people with disabilities,” Mr. Walden said. “This bill will take care of them.”

Before the Bill

Similar episodes had been taking place across the country even before the House passed its bill on Thursday. An earlier version of the House health care plan failed to come to a vote in March after the Congressional Budget Office estimated that, had it been implemented, 24 million fewer Americans would have health care in 2026.

“How could you have supported a bill that takes health care away from so many people that voted for you in good faith?” asked one woman at a March town hall meeting with Chris Stewart, a Utah Republican, The Salt Lake Tribune reported.

Also in March, Andy Harris, a Maryland republican, was booed repeatedly at a town hall in Wye Mills, Md. “Don’t treat us like children,” yelled one man as the congressman attempted to explain his position.

In February, one teacher was cheered when she challenged Diane Black, a Tennessee Republican, arguing that high risk insurance pools would be “effectively punishing our sickest people.”

All three representatives went on to vote for the House bill that passed last week.

https://www.nytimes.com/2017/05/09/us/politics/town-hall-meetings-.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&_r=0

13 Men, and No Women, Are Writing New G.O.P. Health Bill in Senate

by Robert Pear - NYT - May 8, 2017

WASHINGTON — The top Republican in the Senate, Mitch McConnell of Kentucky, has a reputation as a shrewd tactician and a wily strategist — far more than his younger counterpart in the House, Speaker Paul D. Ryan.

So the Senate majority leader’s decision to create a 13-man working group on health care, including staunch conservatives and ardent foes of the Affordable Care Act — but no women — has been widely seen on Capitol Hill as a move to placate the right as Congress decides the fate of President Barack Obama’s signature domestic achievement.

But Mr. McConnell, with only two votes to spare, could find that the Senate’s more moderate voices will not be as easily assuaged as the House’s when a repeal bill finally reaches a vote. Republican senators like Susan Collins of Maine, Lisa Murkowski of Alaska and Bill Cassidy of Louisiana may prove less amenable to appeals for party unity and legislative success when the lives and health of their constituents are on the line.

And certain issues, like efforts to reverse the expansion of Medicaid under the Affordable Care Act, are sure to receive more attention in the Senate than they got in the House. The prospect of higher premiums for older Americans living in rural areas will also loom larger in a chamber where Republicans from sparsely populated states hold outsize power.

“This process will not be quick or simple or easy,” Mr. McConnell said Monday.

Senator Mike Rounds, Republican of South Dakota, suggested that the Senate would spend at least two months working on the legislation.

The Senate Republican working group on health care includes the party’s top leaders, as well as three committee chairmen and two of the most conservative senators, Ted Cruz of Texas and Mike Lee of Utah.

Mr. McConnell’s decision to include himself and his top three lieutenants — but not Ms. Collins, Ms. Murkowski or more junior women Republicans like Deb Fischer of Nebraska and Shelley Moore Capito of West Virginia — speaks volumes about his direction and has raised eyebrows.

“The leaders have the right to choose whomever they wish,” Ms. Collins said Monday. “It doesn’t mean that I’m not going to work on health care.

“I’ve worked on health care for many years,” she continued. “I spent five years in state government overseeing the Bureau of Insurance many years ago, and I think I can bring some experience to the debate that will be helpful.”

By excluding Ms. Collins and Mr. Cassidy, perhaps viewed as potential troublemakers for the bill, Senate leaders may have inadvertently created a dangerous alliance. The two senators now have no obligation to fall in line behind the working group’s final product and will almost surely continue to work on their own ideas. Together, they and their allies could hold near-veto power.

Beyond neglecting Republican women, Senate Republican leaders overlooked Senator Tim Scott of South Carolina, the only black member of their conference. Before his congressional career, Mr. Scott sold insurance and owned one of the most successful Allstate insurance branches in South Carolina.

Mr. McConnell also left out of the group the only two Republican senators clearly in the Democrats’ cross hairs for 2018 — Dean Heller of Nevada and Jeff Flake of Arizona. With re-election campaigns looming, they will have their own political calculus to make. Both states have expanded Medicaid under the Affordable Care Act, providing coverage to hundreds of thousands of people.

Republicans, holding 52 seats in the Senate, can afford to lose only two members of their party on a vote to undo the health care law they have assailed for seven years. They will not receive any support from Democratic senators or the Senate’s two independents, but they can count on support from Vice President Mike Pence to break a tie, if needed.

Reince Priebus, the White House chief of staff, has said he expects the Senate to make improvements in the repeal bill that the House passed last week by a vote of 217 to 213. But senators have gone much further: The Senate is starting from scratch.

“Let’s face it,” Senator Orrin G. Hatch of Utah, chairman of the Finance Committee, said Monday. “The House bill isn’t going to pass over here.’’

Hospital executives, among the most outspoken critics of the House bill, are in town for the annual meeting of the American Hospital Association and will lobby the Senate this week. Thomas P. Nickels, an executive vice president of the association, predicted that the Senate would produce an “utterly different version” of the legislation.

Mr. McConnell is likely to find the same tricky dynamic that Speaker Ryan confronted in the House: Any bill that satisfies conservatives like Mr. Cruz and Mr. Lee risks alienating moderates like Ms. Collins and Ms. Murkowski.

Medicaid will also vex Republican leaders in the Senate in ways it did not in the House. Senators in both parties from states that have expanded the health care program for low-income people have expressed deep misgivings about the House bill, which essentially unravels the expansion.

Democrats said the Republicans’ failure to include women in the working group showed that they were politically clueless.

Senator Kamala Harris, Democrat of California, wrote on Twitter: “The G.O.P. is crafting policy on an issue that directly impacts women without including a single woman in the process. It’s wrong.”

The House bill would cut off federal funds for Planned Parenthood for a year and prohibit the use of federal tax credits to buy insurance that includes coverage of abortion. It would also allow states to seek waivers of provisions of the Affordable Care Act that require insurers to cover maternity care.

David Popp, a spokesman for Mr. McConnell, said on Monday that many Republicans were involved in devising a replacement for Mr. Obama’s health care law.

“Senators from throughout the conference have been working on solutions,” Mr. Popp said. “Those meetings and efforts continue.”

The Republicans’ working group includes Mr. McConnell and three other members of the Republican leadership: John Cornyn of Texas, the majority whip; John Thune of South Dakota, the chairman of the Senate Republican Conference; and John Barrasso of Wyoming, the chairman of the Senate Republican Policy Committee, who has been a point man for the party on health care.

The group also includes three committee chairmen: Mr. Hatch; Senator Lamar Alexander of Tennessee, chairman of the Senate health committee; and Senator Michael B. Enzi of Wyoming, the head of the Budget Committee.

The other senators in the Republican working group are from states that have expanded Medicaid under the Affordable Care Act: Tom Cotton of Arkansas, Cory Gardner of Colorado, Rob Portman of Ohio and Patrick J. Toomey of Pennsylvania.

The House bill would roll back the expansion of Medicaid, which has provided coverage to about 11 million people. The Congressional Budget Office said the bill’s Medicaid changes would save more than $800 billion over 10 years.

Savings would shrink if Congress allowed states to keep some or all of the Medicaid expansion.

For several weeks, senators have been working on possible changes to the tax credits offered in the House bill to help people buy insurance. Mr. Thune, for example, is drafting a proposal that would make the tax credits more progressive.

To people who do not have coverage at work or under a government program, the House bill would offer tax credits ranging from $2,000 to $4,000 a year, depending on age. A family could receive up to $14,000 a year in credits. The credits would be reduced for individuals making over $75,000 a year and families over $150,000.

Mr. Thune, not wanting to create a new middle-class entitlement, would like to provide more financial assistance to lower-income people and less to higher-income people.

Senators are also focusing on the difficulty of administering the tax credits in the House bill, which could be used either inside or outside the public insurance marketplaces, or exchanges.

Under the Affordable Care Act, the exchanges perform a vital role, determining whether consumers are eligible for premium tax credits, which, in most cases, are paid directly by the Treasury to insurance companies on their behalf. Under the House bill, consumers could get the tax credits without going through an exchange.

The Internal Revenue Service has expressed concern. The House bill, it said, “appears to greatly expand I.R.S.’s current responsibilities” and “could impose significant costs and administrative burden” on the agency.

https://www.nytimes.com/2017/05/08/us/politics/women-health-care-senate.html?smprod=nytcore-iphone&smid=nytcore-iphone-share

What Spain Gets Right on Health Care

by Carolyn Mcclanahan - NYT - May 11, 2017

JACKSONVILLE, FLA. — First came the Affordable Care Act, then the American Health Care Act — time and again, politicians talk about controlling health care costs but end up missing the point.

Based on the historical rate of inflation, health care spending could consume nearly 50 percent of gross domestic product in 30 years — an unsustainable trend that can’t be solved through changing the insurance landscape.

The A.C.A., or Obamacare, focused on expanding coverage, with very little to address cost of care in the early stages. That was a fatal flaw: Voters saw already expensive health care costs rise and were unhappy being forced into the system.

The A.H.C.A., which the House passed last week, focuses on the cost of coverage, but in the wrong way. Cutting billions from Medicaid will reduce government expenditures, but only by cutting care for millions of people. The move back to underwriting for pre-existing conditions will reduce the cost of insurance for healthy people but will drastically increase the cost of insurance for people with underlying health problems.

Instead, we have to tackle insurance itself. In the United States, we pay a large amount of money to insurance companies for the privilege of being the middleman in uninsurable primary care transactions.

Other industrialized countries, where health care costs per capita are less than half of what they are in America, offer lessons. Americans spend about 25 percent to 30 percent on administrative costs; if we brought that in line with those other countries, to about 15 percent, we could save about $320 billion of the $3 trillion our country spends on health care.

Countries that provide good primary care have better health outcomes and lower costs because they provide efficient care of common and chronic illnesses. In America, the high cost of medical education, a reimbursement system that favors specialists and a poorly supported primary care network have decimated our primary care work force.

In the 1980s, Spain created taxpayer-funded community health centers located within a 15-minute radius of every citizen. This dramatically improved health measures and provided a good base of primary care for everyone in the country.

In the United States, community health centers could be funded directly by the government based on population, not fee for service. They would provide a broad, well-defined range of services, including primary care, with weekend and evening hours, telemedicine, basic pharmaceuticals and education for management of chronic illness. Mental health care would be provided, including management of drug addiction. And they could serve as a base for managing crises such as epidemics and bioterrorism events.

Anyone could use a community health center without income verification, free. People could still use private primary care providers, but they would have to pay for them, directly. Insurance would be reserved for emergencies, through inexpensive catastrophic coverage. Even Medicaid and Medicare could eventually be moved into a catastrophic-only model.

Such centers already exist throughout the country, many providing state-of-the-art primary, mental and dental care for low-income people at about $1,000 each a year. At that price, the entire country could be covered for $325 billion a year.

The savings would more than pay for the program: Right now, the government spends $250 billion a year on tax credits for employer-based coverage. Since insurance costs would decrease significantly, the revenue lost by this credit would decrease proportionately. And about 11 percent of Medicare payments are for physician services and another 27 percent are for Medicare Advantage payments, totaling $240 billion per year. Since a good chunk of that is for primary care, it could be diverted to community health care services.

America has spent almost a decade making dramatic changes in its health insurancesystem, without addressing the real problem. We have the capacity to tackle the underlying costs with a tried-and-true solution. The only question is, do we have the political will?

https://www.nytimes.com/2017/05/11/opinion/health-care-spain.html?smprod=nytcore-ipad&smid=nytcore-ipad-share

A Health Care Bill That’s Bad for Moms and Babies

by Kyla Nguyen - NYT - May 9, 2017

In March, when House Speaker Paul Ryan and his fellow Republicans threatened to repeal the Affordable Care Act, I pulled a pussyhat over my infant son’s bald head, fetched my 6-year-old daughter from school and raced to a pop-up protest at the Capitol. The sign I’d quickly made wasn’t artful, but it was sincere: “I am a postpartum R.N. This bill is bad for mamas and babies. Vote no!”

A few hours later, when Mr. Ryan had to pull that bill, I drove my kids home tentatively optimistic that other mothers and children might avoid the harms this draconian legislation would have inflicted. I later recycled the sign into a polar bear for the People’s Climate March. I guess I should have kept the original. On Thursday, when the House passed the American Health Care Act, the long list of those endangered by Republican ideologues and an unprincipled administration expanded to include women and babies like those I’ve cared for as a nurse in a busy hospital in Northern Virginia.

Among the 2,000 mothers and newborns I’ve worked with in the past two years, I’ve been thinking this week of one woman whose plump baby boy arrived with a shock of brown hair and his mother’s doe eyes. Having had an uncomplicated pregnancyand delivery, she was effortfully cheerful and seemed impatient to be back home, where two energetic young sons were waiting. But as I did the usual discharge instructions, warning her of the signs of postpartum depression and the importance of support from family and friends, she started to cry. A few questions revealed that the man who was coming to the hospital to take her and her baby home had been physically abusing her. Our team rapidly mobilized, the police were called, the mom and newborn were moved to another unit for their protection, and the two young sons were placed in the care of the patient’s mother until she could be discharged safely home. That very night the baby seized and was admitted to the neonatal intensive care unit. Imaging revealed a brain bleed, possibly the result of a beating his mother suffered while pregnant.

Prenatal visits and childbirth hospitalization are often the primary opportunity for screening women and intervening to prevent the tragic outcomes of abuse. Under the Obama administration’s Affordable Care Act, imperfect as it was, insurers had to provide a basic set of benefits, maternity care among them. The new House bill, which lets state governments waive such essential coverage, threatens the small but significant gains made for vulnerable women in the years since Obamacare became law. According to Kaiser Family Foundation research, women’s health coverage levels have now reached an all-time high, and the share of women who forestall or avoid getting health care because of the expense has declined. Prenatal care and contraceptive use are up, and unintended pregnancies have plummeted.

Another patient I’ve been thinking of lately was a reflexively warm, financially strapped young woman closing in on her social work degree. After a routine prenatal check suggested her fetus was constricted in her womb, she delivered her daughter at 36 weeks. The girl was tiny with doll-like features, but healthy and ready to grow — so her mom could concentrate on getting the baby to latch to her breast instead of worrying about a lifetime of developmental deficits.

Nearly every day at a hospital there are reminders of how crucial decent maternity care is. When maternal risk factors like sexually transmitted infections, gestational diabetes, pregnancy-induced hypertension, placental abnormalities, domestic violence and substance abuse aren’t identified, catastrophic outcomes may follow, including long-term disability and death. Studies repeatedly show a higher rate of maternal mortality and neonatal death among women who receive late, inadequate or no prenatal care. What public health studies seldom demonstrate is that lower taxes for the rich and less care improve the general citizenry’s well-being.

When I graduated from nursing school in 2014, the Affordable Care Act had made it easier than in earlier years for pregnant women to enroll in Medicaid. So it was almost a matter of course that lower-income women in my community received not only maternity care but also ongoing preventive services including family planning, in the name of healthier pregnancies and healthier families. Access to family planning and contraception prevents pregnancies in quick succession, and the attendant risks of premature birth and low birth weight — outcomes that often come with staggering costs.

In a cruel paradox, by defunding Planned Parenthood, the new health care bill would increase Medicaid births at the same time that it grossly underfunds Medicaid. This belies any understanding of maternal-child health and its long-term social implications. The months before and after birth are a critical but ephemeral time in human development. Benefits to babies in that period may resonate for decades, as will any ill effects suffered — which is to say, the well-being of mothers and babies is intrinsically linked to the future health of America as a whole. That’s a link this health care bill is blind to.

As I watched gleeful Republicans in the Rose Garden last Thursday, I was bemused by the contrast between Mr. Ryan’s stated concern for vulnerable people and the obvious disregard his health care bill shows for them. But the speaker did say one thing I agreed with: “The issues are just too important, the stakes are just too high.” And that’s especially true for women and infants if Trumpcare becomes law.

To keep melancholy at bay, I try to remind myself that an earlier, better Congress directed the Institutes of Medicine to study inequalities in American health care in the first place. The idea that Republicans in this Congress might be punished for their health care vote in coming elections provides less consolation, because should this law pass, the damage done in the interim to some mothers and babies will be permanent. Every time I stand in a nursery full of newborns in knit caps, crib cards bearing surnames of every possible origin, I long for the country of their birth to better reflect our democratic value of justice for all. We’re going to need a lot more signs.

https://www.nytimes.com/2017/05/09/opinion/a-health-care-bill-thats-bad-for-moms-and-babies.html?

Republicans Don’t Feel Your Pain

by Thomas B. Edsall - NYT - May 11, 2017

Well before the House voted last week to replace Obamacare with President Trump’s American Health Care Act, Senator Joe Manchin, a centrist Democrat from West Virginia who is up for re-election in 2018, met with the president. By his own account, Manchin told Trump:

Mr. President, 172,000 West Virginians got insurance for the first time. These are working people, but they’ve got something they never had before. They don’t know how they got it, they don’t know who gave it to them, they don’t know the Democrats, nothing about, “It’s Obamacare." They don’t know any of that. All they know is they’ve got it. And you know what? They voted for you, Mr. President. The Democrats gave it to them but they voted for you. They’re going to know who took it away from them.

During the campaign, Trump appeared to fully grasp Manchin’s point.

Trump declared that “there will be no cuts to Social Security, Medicare & Medicaid” and added that “the middle class has to be protected.”

Safety net commitments were crucial to Trump’s appeal to white working-class voters, the constituency that put him over the top in the key states of Wisconsin, Michigan, Ohio and Pennsylvania. In Manchin’s West Virginia, Trump swept every county, carrying the state with 67.9 percent of the vote compared with Hillary Clinton’s 26.2.

Even after he won the presidency, Trump maintained his pro forma commitment to social insurance.

On April 24: If our health care plan is approved, you will see real health care and premiums will start tumbling down.

On May 1: It will be every bit as good on pre-existing conditions as Obamacare.

What in fact would the Trump-backed measure passed by the House last week actually do?

The bill cuts spending by Medicaid by more than $800 billion over ten years. This enormous cut endangers continued coverage for millions of struggling voters who cast ballots for Trump. The bill also includes starkly regressive tax provisions.

By 2022, when the provisions of the AHCA would be fully effective, those in the bottom two quintiles would pay higher taxes, up to $160 annually, according to the nonpartisan Tax Policy Center. Those in the middle of the income distribution would get an average annual tax cut of $240; those in the fourth quintile, a cut of $510; and those in the top 20 percent, an average tax cut of $2,830.

The distributional impact of the tax provisions is most apparent in the highest income brackets: those in the top one percent, whose household income is more than $770,000, would get an average tax cut of $37,220. Those in the top 0.1 percent, who make $4 million or more, would get an average reduction of $207,240.

According to the nonpartisan Center on Budget and Policy Priorities, at the highest point of all, the 400 households with annual incomes exceeding $300 million apiece, the tax cut would be worth an estimated $7 million.

The tax cuts are financed, in turn, by the multibillion dollar reduction in Medicaid spending noted above.

According to the Kaiser Family Foundation,

the proposed changes to Medicaid under AHCA would disproportionately affect low-income individuals and people of color for whom the program is a central source of coverage. Medicaid covers over half of all poor families, one in five adults of color, and over half of children of color.

Medicaid itself reports that nearly two out of every three adult women enrolled in Medicaid are in their reproductive years, and that Medicaid currently finances about 45 percent of all births in the United States.

It has sometimes been overlooked that whites make up a solid plurality, 41 percent, of Medicaid recipients; 22 percent of recipients are African-American and 25 percent Hispanic. In the four pivotal 2016 states that supported Trump I referred to earlier,whites are the majority of recipients, ranging from 58 to 67 percent.

Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities, described some of the AHCA changes in Medicaid in an email.

Beginning in 2020, Solomon wrote,

states can freeze enrollment and only cover the “grandfathered” enrollees who were enrolled on 12/31/19. The block grant option allows states to cut eligibility. The only requirement would be to cover pregnant women and children under age 6 with incomes under 138% of the poverty line, and children 6 to 18 below the poverty line.

Along similar lines, Matthew Fiedler, a Brookings fellow, wrote me:

The two most important Medicaid provisions under the AHCA are: (1) cutting federal funding for covering the ACA Medicaid expansion population; and (2) implementing a “per capita cap” that would limit the total amount of federal funding states could receive per person they enroll. Both provisions would give states very strong incentives to curtail eligibility, but neither would directly require states to do so.

Those placed at highest risk under these provisions, according to Fiedler, are “non-elderly adults with incomes below 138 percent of the poverty, particularly those without kids.” Many of these “childless adults” — adults without dependent children— are not actually childless but aging parents whose children are grown and do not live at home.

Just as the tax changes in the Republican bill flow to the rich, so do the health care benefits.

Howard Gleckman, a senior fellow at the Tax Policy Center, found that cuts in Medicaid and new health care tax subsidies would have upwardly redistributive consequences:

Those making less than $10,000-a-year would lose an average of about $1,400, or nearly one-third of their income — under the AHCA relative to the ACA. Middle-income households, those making $50,000 to $75,000, would see little change — an average increase in net government transfers of about $60. However, those making $200,000 or more would receive an average net increase in government support of $5,640, or 1.1 percent of their income.

Gleckman explained that the

decline in well-being for low-income people would result from the AHCA’s proposals to cut the federal contribution to Medicaid and its move to eliminate cost-sharing subsidies for lower-income households that buy non-group insurance, thus raising their deductibles and co-pays.

In March, the Congressional Budget Office evaluated an earlier version of the legislation and estimated that 24 million people would lose coverage by 2026. Most experts believe that if something like the House bill becomes law, more than 10 million people, and quite possibly many more, will lose coverage.

The provisions of the House bill for those with pre-existing conditions are deliberately ambiguous. Will Doran, reporting for Politifact.com, noted that while insurers would “have to provide access to coverage for people with pre-existing conditions,” the measure “says nothing about the rates of that coverage.” As a result, the law would

allow for people with pre-existing conditions to be charged more per year for their insurance coverage — possibly to the tune of thousands or even tens of thousands of dollars more per year.

The American Medical Association opposes the legislation, contending that it would

result in millions of Americans losing their health care coverage and could make coverage unaffordable for people with pre-existing conditions.

From another vantage point, one with political significance, maps created by the Kaiser Family Foundation show how individuals of different ages and incomes would fare if the AHCA replaces Obamacare.

The affluent come out ahead. Older voters with modest incomes — a core element of Trump’s support — would be penalized, paying more for health coverage in almost every section of the country.

The accompanying Kaiser map shows the sections of the country where a 60-year-old making $30,000-a-year would pay more (in orange) or less (in blue) in 2020. The only places where such an individual would pay less are in New York and Massachusetts.

The Trumpcare Premium 

Here is how insurance premiums would change in 2020, for 60-year-olds with income of $30,000, under the American Health Care Act passed by the House. This analysis covers people buying their own insurance on the individual market, not those getting it through employer-sponsored plans. 

Where premiums would rise

Where premiums would fall

Up to $5,000 increase

$10,000 to $15,000 

More than $15,000 (increase is at least 50 percent of total income)

Some of the steepest changes

(including A.H.C.A. tax credits)

Portions 

of Alaska

La Paz and Yuma 

counties, Arizona

28 counties in

western Nebraska

8 counties in

North Carolina

PREMIUM AS A

PERCENT OF INCOME

The consequences of the House bill, if it is enacted into law, are plain to see.

Mark A. Peterson, a professor of public policy, political science, and law at U.C.L.A., put the case in straightforward terms in an email:

The Medicaid cuts and caps would withdraw coverage from large swaths of the poor, the working poor, and lower-paid working class individuals who do not have access to affordable employer-sponsored insurance. The shift to the tax credits for insurance purchase would mean that many working- and lower-middle-class individuals and families would be unable to afford insurance. The weakening of the pre-existing condition protections, and the reliance on usually problematic high-risk pools, would be most detrimental to people with those conditions who are not in the higher ranks of income.

Benjamin Sommers, a professor of health policy and economics at Harvard’s School of Public Health, was similarly direct:

The AHCA repeals hundreds of billions of dollars in taxes on high-income households and insurance companies, while reducing the Obamacare tax credits that helped lower and middle income families purchase health insurance. The changes to Medicaid are even more dramatic, with more than $800 billion dollars in federal money for the program cut over the next decade — this will have a huge impact on the 70 million lower-income children, adults, disabled individuals, and elderly who currently rely on Medicaid for their health care.

Add in the termination of the taxes of investment income and the higher tax obligations in general of more affluent individuals and the AHCA would lead to a dramatic shift of resources away from the poor, working class, and lower middle class, especially for people with jobs outside of the realm of large employers.

As is always the case in legislation as complex as health care, the devil is in the details, the significance of which is often hidden from the general public. It is these details that ultimately determine the winners and the losers of any legislative program.

Henry Aaron, a Brookings senior fellow and an expert on the details, is outspoken in his criticism of the AHCA:

For many years, some conservatives have berated the political left for “waging class war” whenever the left suggested that conservative policies helped to further enrich the wealthy at the expense of the poor.

In a harsh critique, Aaron added:

The AHCA is stunning in its shamelessness and baldness. Even allowing for the fact that Republicans will be ashamed and embarrassed if, after seven years, of promising to “repeal and replace” they were to do nothing, it is difficult to understand why the shame of voting for so egregious and contemptible a piece of legislation did not cause more of them to find it impossible to vote for it.

The most surprising aspect of the politics of the AHCA is that by and large the winners cast majorities for Clinton and the losers backed Trump.

My Times colleague Nate Cohn of The Upshot found that

voters hit the hardest — eligible for at least $5,000 less in tax credits under the Republican plan — supported Mr. Trump by a margin of 59 percent to 36 percent.

Affluent constituencies that cast pluralities or majorities for Hillary Clinton actually gained from the measure.

Conservative tax reform — perhaps better described as radical tax cuts for the rich — is the very highest priority issue on the Republican legislative agenda. It is also dear to Trump’s heart.

For budgetary reasons, tax legislation cannot be passed until federal health care expenditures are brought down, as Alan Rappeport of The Times explained on March 15:

In order to get any tax overhaul through the Senate with a simple majority, the tax bill under Senate rules can’t increase the federal deficit. Since the health care bill would cut the federal deficit it makes it easier to come back later and pass more tax cuts.

What Trump’s support for the AHCA reveals is that when push comes to shove he is neither willing nor prepared to stand up for his working class voters. Instead, he is driven by his own self-interest. To that end, he has to accommodate the needs of House ideologues, from the Freedom Caucus to Speaker Paul Ryan, all of whom oppose spending that they see as expanding “the welfare state.”

Trump’s worldview rejects the fact that the Washington swamp includes the hard right wing of the Republican Party, a faction made up of politicians who place race ahead of class and (even more than politicians customarily do) ideology before the public interest.

After courting low-to-moderate income whites throughout his campaign, Trump has now shed that guise and aligned himself with the establishment and business wings of the party — on both health care and his proposed budget.

He appears headed to replicate that performance in a third arena, tax policy. Trump is deploying appeals to white identity politics in order to win approval of his massive tax cuts — the next big legislative issue on Capitol Hill. These cuts are designed to shift money up the income ladder and to reduce the size of government — to “starve the beast” or “drown it in the bathtub,” as the anti-tax radical Grover Norquist famously put it.

In the March 23 issue of Rolling Stone, Bridgette Dunlap pointed out that manipulating racial — and now ethnic — resentment is a time honored political strategy in the United States. The “scam” Trump used, she wrote,

is an old one: divide and rule. The rich guy convinced much of the white working class that he would “take back” the country from the rest of the working class and other undeserving non-white and non-Christian people, as well as the coastal elites giving those folks jobs and handouts at the expense of “real” Americans. It’s a strategy as old as this country.

Dunlap is on target. But it’s one thing to gut regulations and change tax rates to benefit the affluent and another thing altogether to take away someone’s health care coverage. Voters who are denied medical care or find themselves unable to pay bills from doctors or hospitals are unlikely to be receptive to a campaign that seeks to “divide and rule,” no matter how receptive they may have been in 2016.

https://www.nytimes.com/2017/05/11/opinion/republican-health-care-bill.html?smprod=nytcore-ipad&smid=nytcore-ipad-share