Uwe Reinhardt, 80, Dies; a Listened-to Voice on Health Care Policy
by Sam Roberts - NYT - November 15, 2017
Uwe Reinhardt, an economist whose keen, caustic and unconventional insights cast him as what colleagues called a national conscience in policy debates about health care, died on Monday in Princeton, N.J. He was 80.
The cause was sepsis, his wife, Tsung-Mei Cheng, said. He had taught in the economics department at the Woodrow Wilson School of Public and International Affairs at Princeton University since 1968.
Professor Reinhardt helped shape health care deliberations for decades as a prolific contributor to numerous publications, an adviser to White House and congressional policymakers, a member of federal and professional commissions and a consultant and board member, paid and unpaid, for private industry.
“His work was instrumental in advocating some of the reforms embodied in the Affordable Care Act, such as having Medicare pay for performance rather than entirely on a fee-for-service basis,” Professor Janet Currie, the chairwoman of the Princeton economics department, wrote in an email.
Another colleague, Stuart H. Altman, a professor at Brandeis University, wrote, “No one was close to him in terms of impact on how we should think about how a decent health care system should operate.”
In 2015, the Republic of China awarded Professor Reinhardt its Presidential Prize for having devised Taiwan’s single-payer National Health Insurance program. The system now provides virtually the entire population with common benefits and costs 6.6 percent of the nation’s gross domestic product (about one-third the share that the United States spends).
Just last month, he received the 2017 Bipartisan Health Policy Leadership Award from the Alliance for Health Policy, a nonpartisan research and educational group in Washington.
Professor Reinhardt argued that what drove up the singularly high cost of health care in the United States was not the country’s aging population or a surplus of physicians or even Americans’ self-indulgent visits to doctors and hospitals.
“I’m just an immigrant, so maybe I am missing something about the curious American health care system,” he would often say, recalling his childhood in Germany and flight to Canada and apologizing that English was only his second language.
Then he would succinctly answer the cost question by quoting the title of an article he wrote with several colleagues in 2003 for the journal Health Affairs: “It’s the Prices, Stupid.”
What propelled those prices most, he said, was a chaotic market that operates “behind a veil of secrecy.”
That market, he said, is one in which employers “become the sloppiest purchasers of health care anywhere in the world,” as he wrote in the Economix blog in The New York Times in 2013.
It is also defined by the high cost of prescription drugs, he said, and the astronomical amounts that hospitals spend in dealing with a maze of insurers and health maintenance organizations.
“Our hospitals spend twice as much on administration as any hospital anywhere in the world because of all of this complexity,” he told Managed Care magazine in 2013.
If the nation cut the cost of health care administration in half, he said, the savings would be enough to insure everyone.
Professor Reinhardt’s prescription for a more sensible system included imposing penalties on the uninsured so that people would not postpone buying policies until they got sick. That idea, the so-called individual mandate, requiring most people to purchase health insurance, became an integral component of the Affordable Care Act, otherwise known as Obamacare. Republicans in Congress are now seeking to repeal that provision as part of a tax overhaul.
Professor Reinhardt also advocated providing government subsidies so that low-income families could afford mandated insurance, another feature of Obamacare.
His ideal model was the German system in which insurers negotiate with health care providers to set common binding prices in a specific region.
“I believe it is still the best model there is, because it blends a private health care delivery system with universal coverage and social solidarity,” he told The Times in 2009. “It’s inexpensive and equitable. Coverage is portable. You’re never uninsured in Germany. No family goes broke over health care bills.”
Always opinionated, Professor Reinhardt was also unsparing in inflicting his mordant wit on any self-satisfied expert he considered hypocritical or illogical.
“He was a knife twister of the first class,” the health economist Austin Frakt wrote on the blog The Incidental Economist, of which he is an editor in chief. “Should you hold dearly an idea he targeted for systematic dismantling, you would squirm.”
Professor Reinhardt excoriated college students who blamed loneliness for their binge drinking, describing them as “among the most pampered and highly privileged human beings on the planet.” He suggested that before applying for college young people “be required to spend one to two years in a tough job in the real world.”
And when critics complained that doctors were overpaid, he countered that their collective take-home pay amounted to only 10 percent of national health spending. Slicing it by 20 percent, he wrote, “would reduce total national health spending by only 2 percent, in return for a wholly demoralized medical profession to which we so often look to save our lives.
“It strikes me as a poor strategy,” he added.
With near unanimity, colleagues and admirers praised Professor Reinhardt for transforming raw data into moral imperatives.
Senator Bernie Sanders, the Vermont independent who advocates a “Medicare for all” national health care system, wrote in an email, “Uwe Reinhardt was one of the leaders in the effort to make health care a right, not a privilege.”
And Professor Elliott S. Fisher of Dartmouth called Professor Reinhardt “in so many ways the conscience of the U.S. health care system.”
Uwe (pronounced OO-vuh) Ernst Reinhardt was born on Sept. 24, 1937, in the city of Osnabrück in northwest Germany. His father, Wilhelm, was a chemical engineer. His mother, the former Edeltraut Kehne, was a photographer and painter.
He was raised near the Belgian border and the Hürtgen forest, where American and German soldiers engaged in hand-to-hand combat for four months in 1944.
“I could not help but become witness daily to the horrors of war,” Professor Reinhardt wrote in 2003 in a Times Op-Ed article, praising a Marine chaplain for urging soldiers to pray for their enemies ad well as themselves. “Millions of Europeans of my generation, whom many Americans now disparage so contemptuously as pacifists, had a similar experience.”
His exposure to the war so dismayed him that in the mid-1950s, at 18, rather than be drafted into the army and have to salute a German officer in the wake of “the unimaginable atrocities committed by Nazi Germany” years earlier, his wife said, he left the country, setting off for Canada and leaving his parents and four siblings behind.
He landed in Montreal with $90 in his pocket and no Canadian connections. Having had some apprentice training in shipping in Germany, he found work at a shipping company and worked nights parking cars in a parking lot. He always ate oatmeal for breakfast because it was cheap, his wife said, and to make extra money he routinely volunteered to work overtime for co-workers who had families.
After three years, he had saved enough money to enroll, hundreds of miles away, at the University of Saskatchewan in Saskatoon, the cheapest university he knew of, Ms. Cheng said. (Selling his used Chevrolet and beloved guitar helped defray the costs.)
He graduated with a bachelor of commerce degree and went on to Yale, where he received his doctorate. His thesis was titled “An Economic Analysis of Physicians’ Practices.”
In addition to Ms. Cheng, a health policy research analyst at Princeton who is known as May, he is survived by their children, Dirk, Kara and Mark Reinhardt; his sisters, Heide Cermin and Imeltraut Arndt; his brother, Jurgen; and two grandchildren.
Professor Reinhardt joined the Princeton faculty in 1968 as an assistant professor. At his death, he was the James Madison professor of political economy and professor of economics and public affairs at the Woodrow Wilson School.
“He was so inspired a teacher,” said Henry J. Aaron, a senior fellow at the Brookings Institution, the research organization in Washington, “that he could make accounting the most popular course at Princeton.” Among his students was Bill Frist, a surgeon and a former Republican Senate majority leader from Tennessee.
In 2015, Professor Reinhardt humbly — and facetiously — announced that after reflecting on the global economic crisis that had occurred several years earlier, he was calling it quits.
“After the near-collapse of the world’s financial system has shown that we economists really do not know how the world works, I am much too embarrassed to teach economics anymore,” he wrote.
In an interview not long before that, though, he belied any pretense of self-doubt when he was asked whether he was perplexed by the seemingly insolvable challenges of health care economics.
“Have you ever seen a perplexed economist?” Professor Reinhardt replied. “We have an answer for everything.”
Obamacare, Reliant on Insurance
Requirement, Would Crumble
Under Senate Tax Bill
by Haeyoun Park - NYT - November 15, 2017
Senate Republicans want to eliminate the Affordable Care Act’s requirement that most people buy health insurance as part of their overhaul of the tax code. Repealing the rule, known as the individual mandate, is a longstanding Republican goal and would allow lawmakers to save hundreds of billions of dollars to help pay for broad tax cuts.
If the individual mandate is repealed, people with lower health costs would be less likely to buy insurance on the health law’s marketplaces. In fact, the Congressional Budget Office expects that 13 million more people would be uninsured in 10 years.
How the number of
uninsured would change
uninsured would change
50 million uninsured
If the individual
mandate
is repealed
Here’s why: The mandate exists to help ensure that there are enough healthy people in the insurance pool to balance out the sick, who are more costly to insure. The health law forces most people who go without insurance to pay a tax penalty.
Without the mandate, people who buy insurance to avoid the penalty and who do not expect to use much medical care would be more likely to drop coverage.
HEALTHY PEOPLE
EXITING INSURANCE
POOL
The pool would be left with more people with higher costs, which would cause the average price of coverage to rise.
As insurance got more expensive, more people would most likely exit the pool. Some healthy people could find insurance difficult to afford, and others with health problems could decide that coverage was no longer valuable relative to their needs.
MORE PEOPLE
EXITING INSURANCE
POOL
Almost all of the people exiting the pool would be those who are ineligible for premium subsidies from the federal government. That’s because people who qualify for the subsidies would largely be shielded from premium increases.
“The premium subsidies, which increase dollar for dollar as rates go up, cushion the impact and prevent a full-on death spiral,” said Larry Levitt, a policy expert at the Kaiser Family Foundation, in an email.
The cycle could continue, which would cause premiums to rise even more. The Congressional Budget Office expects premiums to rise by 10 percent for most years over the next decade if the mandate is eliminated.
While not popular, the individual mandate is a crucial part of the Affordable Care Act. Without the incentive, it would be hard for insurers to cover people with pre-existing conditions, one of the law’s most popular features.
Middle-Class Families Confront Soaring Health Insurance Costs
by Robert Pear - NYT - November 16, 2017
CHARLOTTESVILLE, Va. — Consumers here at first did not believe the health insurance premiums they saw when they went shopping for coverage this month on HealthCare.gov. Only five plans were available, and for a family of four with parents in their mid-30s, the cheapest plan went typically for more than $2,400 a month, nearly $30,000 a year.
With the deadline for a decision less than a month away, consumers are desperately weighing their options, dismayed at the choices they have under the Affordable Care Act and convinced that political forces in Washington are toying with their health and well-being.
“I believe in the Affordable Care Act; it worked for me under the Obama administration,” said Sara Stovall, 40, who does customer-support work for a small software company. “But it’s not working as it was supposed to. It’s being sabotaged, and I feel like a pawn.”
Ms. Stovall said she might try to reduce her hours and income, so her family could qualify for subsidies on offer to poorer families to help pay for premiums.
Heather Griffith, a 42-year-old real estate broker, said she would put aside much less money for her retirement and the education of her two young children so she could pay the premiums.
And even though he does not need an assistant for his work as a developer of mobile apps, Ian Dixon, 38, said he might hire an employee just so he could buy health insurance as a small business, at a cost far below what he and his family would have to pay on their own.
“If one word captures all this, it’s ‘helpless,”’ Mr. Dixon said. “There’s rage and anger and all that stuff in there, too. Any reasonable person would agree that this should not be happening. And there’s no one to go talk to about it. There’s no hope that this is going to get fixed.”
The situation here in Charlottesville is an extreme example of a pattern that can be seen in other places around the country. The Affordable Care Act is working fairly well for people who receive subsidies in the form of tax credits, said Doug Gray, the executive director of the Virginia Association of Health Plans, which represents insurers. But for many others, especially many middle-class families, he said, “the premium is outrageous, and it’s unaffordable.”
Congress’s repeated efforts to repeal President Barack Obama’s signature health law have rattled insurance markets. Actions by President Trump and his administration have added still more uncertainty. Now, Senate Republicans have attached a provision to their $1.5 trillion tax cut that would repeal the health law’s mandate that most Americans have health insurance or pay a penalty.
All of those actions — along with flaws in the law itself — are having real-world impact.
“We share their pain,” Michael M. Dudley, the president and chief executive of Optima Health, said of his Virginia customers now shopping for policies on the health law’s online exchange. “The rate increases are very high. We can’t minimize that because it’s a fact.”
The Dixon family, which includes two girls ages 1 and 3, has been paying $988 a month this year for insurance provided by Anthem Blue Cross and Blue Shield. But Anthem plans will not be available in Charlottesville next year. The company told customers that uncertainty in the insurance market “does not provide the clarity and confidence we need to offer affordable coverage to our members.”
The online federal marketplace, HealthCare.gov, recommended another plan for Mr. Dixon in 2018. The new plan, offered by Optima Health, has premiums of $3,158 a month — about $37,900 a year — and an annual deductible of $9,200.
Alternatively, Mr. Dixon could pick a lower-cost plan offered by Optima with premiums of about $2,500 a month, or $30,000 a year. But the deductible would be much higher. The Dixons would need to spend $14,400 a year for certain health care services before Optima would begin to pay.
The Stovalls are facing similar mathematics.
“Our premiums will triple to $3,000 a month, with a $12,000 deductible, and that is far, far out of reach for us,” Ms. Stovall said after researching the options for her family of four on HealthCare.gov. “We are not asking for free health insurance. All we want is a reasonable chance to buy it.”
Subsidies are available to help low- and moderate-income people pay premiums, but no financial assistance is available to a family of four with annual income over $98,400.
Optima, a division of Sentara Healthcare, invited customers to share their personal stories on its Facebook page, and they obliged, with a fusillade of plaintive and sardonic comments.
Bill Stanford, who works for a floor-covering business in Virginia Beach, said, “Optima Health Care just raised my premium from an absurd $1,767 a month to an obscene $2820.09 per month,” which is more than the mortgage payments on his home for a family of four.
“At an average of $60 per visit,” Mr. Stanford said, “I could visit the doctor’s office 45 times a month for the premium that I’m paying. I think we will probably drop our insurance and get a gap policy.” Such short-term insurance is meant to fill temporary gaps, but typically does not cover maternity care or treatment for pre-existing medical conditions.
Mr. Dudley said in an interview that Optima, a Virginia company, felt an obligation to continue serving Virginians when larger national insurers were pulling back. But, he said, Optima is affected by the same factors destabilizing insurance markets elsewhere. These include President Trump’s decision to terminate certain federal subsidies paid to insurers and doubts about the future of the requirement for most Americans to have insurance — the individual mandate, which would be eliminated by the Senate Republicans’ tax bill.
And in the Charlottesville area, Mr. Dudley said, costs are high because many people receive care from an expensive academic medical center at the University of Virginia.
Carolyn L. Engelhard, director of the health policy program at the university’s School of Medicine, acknowledged that teaching hospitals often charged more. But another factor, she said, is that Virginia has not regulated insurance rates as aggressively as some other states.
Consumers are feeling the effects.
“Obamacare helped me,” Ms. Griffith said. “I had a pre-existing condition, could not get insurance and had to pay cash, nearly $30,000, for the birth of my first baby in 2010. For my second pregnancy in 2015, I was covered by Obamacare, and that was a huge financial relief.”
But the costs for next year, she said, are mind-boggling.
She and her husband, both self-employed, expect to pay premiums of $32,000 a year for the cheapest Optima plan available to their family in 2018. That is two and a half times what they now pay Anthem. And the annual deductible, $14,400, will be four times as high.
“I have no choice,” Ms. Griffith said. “I agree that we need to make changes in the Affordable Care Act, but we don’t have time to start over from scratch. We are suffering now.”
Jill A. Hanken, a health lawyer at the Virginia Poverty Law Center, said, “People who qualify for premium tax credits are finding very affordable plans with low premiums, and those consumers are quite pleased.” But she added: “For people who don’t qualify for tax credits, the cost of plans has truly skyrocketed. They can’t afford or don’t want to pay the high premiums.”
When the Affordable Care Act was adopted in 2010, Democrats like Nancy Pelosi, who was then the House speaker, said the law would make it easier for people to switch jobs or start their own businesses because they would not have to worry about losing health insurance.
“We see it as an entrepreneurial bill,” Ms. Pelosi said, “a bill that says to someone, if you want to be creative and be a musician or whatever, you can leave your work, focus on your talent, your skill, your passion, your aspirations because you will have health care.”
And for a few years, Mr. Dixon said, that idea was appealing. “I would not be an entrepreneur if it were not for Obamacare,” he said.
With soaring premiums, that option is less attractive.
“When I saw the insurance prices for 2018, my initial instinct was to try and go back to my previous employer,” Mr. Dixon said. “But that would just smell of desperation.”
Who Really Gets a Tax Increase if the Individual Mandate Goes Away?
by Margot Sanger-Katz - NYT - November 17, 2017
If Obamacare’s requirement to have health insurance is revoked by Congress, some people will choose to go without it, and the government will save money because it won’t have to pay to subsidize their plans.
Almost everyone agrees on that. But precisely how much the individual mandate matters, and who would really be worse off without it, are trickier questions.
New estimates show that the mandate’s repeal would give low-income Americans a big tax increase. But Republicans say that’s not true. And they have a point. Meanwhile, left out of the tax tables is the fact that some higher earners, who look as if they are getting more of a tax cut, will get hit with higher insurance premiums if the mandate is repealed.
The Congressional Budget Office currently estimates that eliminating Obamacare’s individual mandate will cause 13 million more people to become uninsured, and save the government $338 billion over 10 years. Most Republican lawmakers don’t really believe dropping the mandate would so severely lower the number of insured, a point they argued loudly when they were hoping to repeal Obamacare earlier this year.
After long resisting that idea, the budget office recently signaled that it agrees, and it plans to lower its estimates next year. But for now, Republicans have seized on the unadjusted estimates, because fewer people with government-subsidized insurance means more money to help them finance other parts of their tax overhaul bill.
It looks as if the tax bill rises for some people who drop coverage.
Here’s why: The subsidies Obamacare offers to low- and middle-income Americans who buy their own insurance take the form of refundable tax credits, a kind of government-issued gift card that can be used only to buy health insurance. But if fewer people who qualify for these gift cards choose to buy insurance, the government spends less in tax money for the population that qualifies. The tax scorekeepers count this reduction in tax credits as an increase in tax liability for the group. Individuals would not actually pay more in taxes.
If they don’t buy insurance and don’t get the gift card, is that really the same thing as paying more in taxes? Republicans say it is not.
“Nothing in our mark will impact the availability of premium subsidy credits,” said Senator Orrin Hatch of Utah, the chairman of the Senate Finance Committee, on Thursday, using a technical term for draft legislation. “This is the result of an assumption about economic behavior that is 100 percent voluntary.”
Mr. Hatch has a point. The subsidies may count, technically, as tax benefits, but they are relatively unusual in the tax code, because they can be used only to buy health insurance. People who get insurance can get a gift card. People who don’t get nothing. But if someone chooses not to buy insurance, does that mean they’ve lost out financially?
Some analysts consider those losses real losses, because it appears that some people are spurred to investigate their insurance options because of the mandate, then learn they qualify for free insurance. Without a mandate, they might remain uninsured. (And even some of those who don’t qualify for free insurance might end up better off buying it — people who contract an expensive disease, or get in a serious accident.)
“In my view, those people are definitely better off with coverage than without coverage,” said Aviva Aron-Dine, a senior fellow at the liberal Center on Budget and Policy Priorities. “They’re protected from financial catastrophe. They can get primary and preventive care. And the mandate gave them a nudge.”
But others say that if customers valued health insurance, they would buy it.
“Since the credits go exclusively to pay the premium, it’s a little weird,” said Len Burman, an institute fellow at the Tax Policy Center, a research group that evaluates tax laws.
Another weird thing that Mr. Burman noted is that the more expensive health insurance gets, the bigger a tax increase the change appears to be in the government estimates. Under the Affordable Care Act, people below a certain income cap can’t pay more than a percentage of their income to buy health insurance, so as prices go up, so do their subsidies. Economists think that lifting a requirement for healthy people to buy insurance will tend to make the resulting pool of customers sicker, driving up insurance premiums. But the actual cost of insurance for that group wouldn’t increase.
“The credits look more valuable, because the proposal sabotages the health market, and premiums go up,” he said.
Others will have a tax cut but face much higher premiums.
But if the low-income people who won’t get tax credits aren’t clearly worse off financially — after all, they could claim them again if they choose to buy insurance — there’s another group that is certain to suffer if the mandate goes away. Higher-income people, who don’t qualify for government gift cards, have to pay the full price of health insurance. Single people earning more than about $48,000, or families of four earning more than around $98,000, earn too much to qualify for any insurance subsidies.
The budget office estimates that eliminating the mandate would drive up premiums an average of 10 percent every year beyond their normal rate of increase. Based on this year’s prices, that would mean a price increase of more than $50 a month for a 40-year-old single customer in large sections of Nebraska and North Carolina, even for the very cheapest high-deductible plans on the market. Unsubsidized 40-year-old customers in Alaska, who qualify for credits at slightly higher rates of income, would face increases of more than $70 a month for the least-expensive plan. In the cheapest markets in the country, in Indiana and Texas, premiums would rise for single 40-year-olds by about $19 a month.
Such a premium increase could largely cancel out the tax benefits of the reform bill for many people in that income range who buy their own insurance. A Center on Budget and Policy Priorities analysis of the first draft of the Senate tax bill found that the average family earning between $50,000 and $75,000 would save around $750 on their taxes. Compare that with the $600 premium increase a single customer in Nebraska might face.
Both Susan Collins of Maine and Lisa Murkowski of Alaska, Republican senators whose votes may be needed to pass the tax bill, have expressed some concern about the premium increases for this group as a kind of hidden middle-class tax increase. Those changes may not show up as increases on a government table the way the missing tax credits appear for their lower-income neighbors. But the effect on their bottom line may be more significant.
Margot Sanger-Katz is a domestic correspondent and writes about health care for The Upshot. She was previously a reporter at National Journal and The Concord Monitor and an editor at Legal Affairs and the Yale Alumni Magazine.
GOP's Obamacare Tax Scheme Will Create an Insurance Nightmare for the Middle Class
Senate Republicans just announced that the repeal of the individual mandate (in the form of reducing the penalty tax to zero) will be in the Senate Finance Committee's version of tax reform.
The individual mandate has never been successful toward the objective of attracting people to the program. There are much better ways to do that.
But killing the mandate while simultaneously opening up the market to cheaper stripped down alternatives would combine to create unintended consequences the Republicans haven't appeared to comprehend.
Recently, President Trump encouraged his administration to craft regulations that would enable insurance companies to sell short-term medical policies with a duration of 12 months.
These short-term medical policies would not have to comply with the Obamacare benefit mandates. They could exclude people with pre-existing conditions.
Today, buying one of these policies would trigger the individual mandate tax penalty because a person had not purchased qualified coverage.
But, if the individual mandate tax penalty is repealed as part of the Republican tax bill there would be no such penalty to buy one of these policies.
I could easily see the individual health insurance market bifurcated into a sick and healthy pool because of these changes:
I could easily see these policies costing half of what the Obamacare compliant policies cost.
So, the healthy would have the best of both worlds––cheap and even arguably attractive coverage while still being guaranteed to be able to opt into a much more comprehensive Obamacare policy every January 1st if they got sick.
It's not hard to see what would happen. We would have two risk pools:
In other words, this scheme works much better than what we have today––until you get sick. And, everyone ultimately acquires a pre-existing condition.
A health insurance system that works only while you are healthy is not a health insurance system.
Obamacare is a disaster because it only works best for the sickest and those with the lowest incomes. As a result, the healthy have disproportionately stayed away driving the costs up to unaffordable levels for those who don't get the big subsidies. And, only 40% of those who are subsidy eligible are now participating.
This Republican scheme would work best for the healthiest. It would also work well for the poor because the premium subsidy system would protect them from the even higher costs inside of Obamacare.
But the Republican scheme would be devastating for those in the unsubsidized middle class who would not be able to afford coverage once they got sick.
Ironically, the people the Republican scheme would hurt the most would be those in the middle class (the unsubsidized) that have been most vocal in calling on the Republicans to fix the system.
The individual mandate has never been successful toward the objective of attracting people to the program. There are much better ways to do that.
But killing the mandate while simultaneously opening up the market to cheaper stripped down alternatives would combine to create unintended consequences the Republicans haven't appeared to comprehend.
Recently, President Trump encouraged his administration to craft regulations that would enable insurance companies to sell short-term medical policies with a duration of 12 months.
These short-term medical policies would not have to comply with the Obamacare benefit mandates. They could exclude people with pre-existing conditions.
Today, buying one of these policies would trigger the individual mandate tax penalty because a person had not purchased qualified coverage.
But, if the individual mandate tax penalty is repealed as part of the Republican tax bill there would be no such penalty to buy one of these policies.
I could easily see the individual health insurance market bifurcated into a sick and healthy pool because of these changes:
- The sickest taking advantage of the guarantee issue protections in the Obamacare compliant market.
- The healthiest buying a succession of these "short-term" 12 month policies while guaranteed to be able to opt back into the Obamacare market when they got sick. In fact, I could see these "short-term" policies sold on a calendar year basis so those prohibited from renewing, because of a recently acquired condition, would be able to conveniently opt into the Obamacare guaranteed insurability market when their short-term coverage expired right in line with the annual open enrollment.
I could easily see these policies costing half of what the Obamacare compliant policies cost.
So, the healthy would have the best of both worlds––cheap and even arguably attractive coverage while still being guaranteed to be able to opt into a much more comprehensive Obamacare policy every January 1st if they got sick.
It's not hard to see what would happen. We would have two risk pools:
- The very expensive Obamacare compliant risk pool with only the very sickest left in it, and
- The very cheap "short-term" policy risk pool with the healthiest people.
In other words, this scheme works much better than what we have today––until you get sick. And, everyone ultimately acquires a pre-existing condition.
A health insurance system that works only while you are healthy is not a health insurance system.
Obamacare is a disaster because it only works best for the sickest and those with the lowest incomes. As a result, the healthy have disproportionately stayed away driving the costs up to unaffordable levels for those who don't get the big subsidies. And, only 40% of those who are subsidy eligible are now participating.
This Republican scheme would work best for the healthiest. It would also work well for the poor because the premium subsidy system would protect them from the even higher costs inside of Obamacare.
But the Republican scheme would be devastating for those in the unsubsidized middle class who would not be able to afford coverage once they got sick.
Ironically, the people the Republican scheme would hurt the most would be those in the middle class (the unsubsidized) that have been most vocal in calling on the Republicans to fix the system.
What States Can Learn From One Another on Health Care
by Dhruv Khullar - NYT - November 16, 2017
We know that where you live matters: There are huge disparities in health and costs across the country.
The uninsured rate in Texas is six times higher than in Massachusetts. You’re four times more likely to be readmitted to the hospital in Maryland or New Jersey than in Hawaii. One-third of low-income adults in Texas forgo medical care because of cost, but only 9 percent in Vermont do. Alaska spends twice as much on health care per person as Utah does.
If all states were to improve to the level of top performers, we’d see gains across the country: 20 million more people insured and 14 million fewer skipping care because of cost; 12 million more adults screened for cancer and 500,000 more children vaccinated; 124,000 fewer hospital readmissions and 90,000 fewer premature deaths.
How can we get there? Although it’s important to learn from states at the top, it’s perhaps more instructive to see what states with large improvements are doing, or have done, to get better.
Health care is perhaps the area most consistently recognized as ripe for state-based policy innovation, in keeping with the ideal of states as laboratories of democracy. Nearly all recent health reform proposals, especially from Republicans, focus on granting states greater flexibility to design and manage their health systems.
Seema Verma, the director of the Centers for Medicare and Medicaid Services, has promised to give states an “unprecedented level of flexibility” to devise their Medicaid programs, including the option to impose work requirements. Senators Lamar Alexander and Patty Murray have put forth a plan to make it easier for states to get federal waivers to reshape their health systems.
There are good reasons to pursue such a strategy. States have markedly different populations with varying needs, resources and cultures — and systems that work well in one state may not work well in another. But what do we know about how states use health policy freedom?
Stabilizing Marketplaces and Lowering Premiums
One fundamental challenge in the Obamacare insurance marketplaces is that a few very sick patients can increase premiums for everyone, especially in states with small individual markets. To address this problem, Alaska applied for a Section 1332 waiver to expand its reinsurance program, which brings in federal funds to cover costs for people with particularly expensive conditions.
Alaska thus “reinsures” its insurers for high-cost patients, and prevents those costs from being passed on to healthier people. Because premiums don’t rise as steeply, the federal government pays out less in premium subsidies — keeping the program deficit-neutral. The waiver is expected to lower premiums by 20 percent in 2018, and insure nearly 1,500 additional Alaskans.
Minnesota recently received a similar waiver, and several other states are exploring their own reinsurance programs.
Tackling Health Care Prices
Prices for health care services vary widely across the United States with little relation to quality. The price of an M.R.I., for example, is 12 times higher in the most expensive markets than in the least expensive ones, and can vary by a factor of nine even within the same area.
In 2011, the California Public Employees’ Retirement System (Calpers) changed how it paid for common procedures, a move that drastically reduced prices and saved the state millions. Before the initiative, prices for knee and hip replacements ranged from $15,000 to $100,000 with no difference in quality. That’s when Calpers introduced reference pricing — meaning it set an upper limit on how much it would pay for a given procedure, and patients would pay the rest.
For example, Calpers would pay up to $30,000 for knee or hip surgery at 41 acceptable-quality hospitals, defined by measures like infection and readmission rates. Patients could still go wherever they wanted, but would have to cover the additional cost of a high-priced hospital.
The results were impressive. Referrals to lower-priced hospitals increased by nearly 20 percent. The average price of the procedures dropped to about $26,000 from $35,000 — driven primarily by hospitals not initially included, and hoping to compete. There was no change in how well patients did or how much they paid out of pocket. California saved $5.5 million on knee and hip operations in the first two years. It also saved $7 million on colonoscopies, $1.3 million on cataract operations, and $2.3 million on arthroscopies. Prices fell by about 20 percent for each procedure.
Reducing Infant Mortality
The United States has one of the highest infant mortality rates among wealthy nations — and does worse than even many poorer countries like Cuba and Belarus. Mississippi’s infant mortality rate puts it on par with Botswana and Bahrain. The infant mortality rate in the U.S. is nearly three times higher than in Finland or Japan.
Georgia, which recently had one of the highest infant mortality rates in the country, has had perhaps the largest improvement in the past decade. The state has taken a three-pronged approach to the problem.
First, it began a Safe to Sleep campaign to educate parents and health care providers about putting babies on their backs to sleep, in a separate bed, free of loose bedding or soft objects. The Department of Public Health developed “hot-spot” maps to focus the campaign on six areas with the highest infant mortality.
Second, based on research suggesting that short intervals between births lead to poorer outcomes, Georgia introduced a program to expand access to long-acting reversible contraception (LARC). The state received a Medicaid waiver so it could be reimbursed for LARC insertion immediately after births in the hospital, overcoming a major barrier to broader LARC use among low-income women.
Finally, Georgia aimed to reduce early elective deliveries, which increase the risk of feeding, breathing and developmental problems, by changing its reimbursement policy so that non-medically necessary inductions and cesarean sections before 39 weeks of gestation would no longer be covered.
Back to Basics
There’s much to learn from state-level innovations, but there are also general principles that apply across states. High-performing states have competitive and accessible insurance markets; strategies for data-sharing and health information technology expansion; more value-based purchasing; greater emphasis on primary care; and strong partnerships with community organizations. They also expand Medicaid.
It’s also important to note that many state-level policy changes do not require federal approval, and that states don’t always use their flexibility to improve population health. Proposals that allow states to weaken protections for those with pre-existing conditions, for example, could harm patients and their ability to access care.
Greater flexibility for states is an opportunity, not a solution. The enormous variation in quality, costs and access across the nation should remind us that experiments succeed and experiments fail. Having laboratories is probably a good thing. But it depends on what they cook up.
Pope urges guaranteed health care for all people
by Francis DeMilio - Associated Press - November 17, 2017
VATICAN CITY — Pope Francis on Thursday urged lawmakers to ensure that health care laws protect the “common good,” decrying the fact that in many places only the privileged can afford sophisticated medical treatments.
The comments came as lawmakers in Washington, D.C., have been debating how to overhaul the nation’s health insurance laws.
In a message to a medical association meeting at the Vatican, Francis expressed dismay at what he called a tendency toward growing inequality in health care. He said in wealthier countries, health care access risks being more dependent on people’s money than on their need for treatment.
“Increasingly, sophisticated and costly treatments are available to ever more limited and privileged segments of the population, and this raises questions about the sustainability of health care delivery and about what might be called a systemic tendency toward growing inequality in health care,” the pope said.
“This tendency is clearly visible at the global level, particularly when different countries are compared,” Francis said. “But it is also present within the more wealthy countries, where access to health care risks being more dependent on individuals’ economic resources than on their actual need for treatment.”
Without citing any countries, Francis said health care laws must take a “broad and comprehensive view of what most effectively promotes the common good” in each situation, including looking out for society’s most vulnerable people.
The Vatican meeting explored end-of-life issues and Francis repeated decades-old church teaching forbidding euthanasia.
He also reiterated Vatican teaching that says “not adopting, or else suspending, disproportionate measures, means avoiding overzealous treatment. From an ethical standpoint, it is completely different from euthanasia, which is always wrong.”
On end-of-life, the pope said, countries must “defend the fundamental equality whereby everyone is recognized under law as a human being.”
Public Health Care and Defining Canada: Readers Speak Out in the Canada Letter
Ian Austen - NYT - November 17, 2017
As symbols of national identity go, public health care’s wallet-sized ID card is pretty prosaic. But when I recently asked you if public health care defines Canada, your answers were anything but.
The question was prompted by a visit to Toronto by Margot Sanger-Katz, a health policy reporter in The Times’s Washington bureau. She had tagged along with Senator Bernie Sanders who took a field trip to look at Canada’s health care system.
As a visiting American, Ms. Sanger-Katz was particularly struck by one thing. Time and again, people in the health care system and patients used the word “fairness” when discussing it.
The overwhelming consensus of Canada Letter readers, at least based on your emails, was twofold. Despite its flaws and regional variations, public health care is generally a key to defining Canada. And for many of you, it reflects a more collective spirit lacking in the United States, particularly now. Though, of course, not everyone agreed.
Many of your emails mentioned how the system owed its existence to Tommy Douglas, the Baptist minister who, as premier of Saskatchewan, introduced the first provincial health care program in 1947. Mr. Douglas, as many of you also noted, was the father of the actress Shirley Douglas and grandfather of Kiefer Sutherland, who plays an accidental president of the United States in the television thriller “Designated Survivor.”
Mr. Douglas may have pioneered public health care, but he never saw his dream of a socialist Canada realized. The party he once led, the New Democrats, has never held power federally. And a Liberal government made universal health care a national reality in 1966.
Few, if any, politicians within the mainstream spectrum would dare suggest ending it today, although calls for reforming its services, which are delivered by the provinces, and its funding have become the perpetual motion machine of Canadian politics.
Space doesn’t allow me to include all of your responses, but here are some of the highlights, which have been condensed and edited for clarity:
Defining Values
“It is all about fairness. Canadians believe that every citizen has a right to the same services and privileges as everyone else — and the same responsibilities as every other citizen. The latter is less often expressed, but is part of the fabric of our society.
We have worked very hard as a society to ameliorate or eliminate disparities as much as possible, across a vast landscape with a sparse population. Universal health care is one of those measures.”
—Jane Mattei, Calgary, Alberta
Setting Us Apart
“We do see our health care system as a defining feature of our society, but as with many of the things we see as integral to our own self-image (multiculturalism, bilingualism, peacekeeping, gun restrictions, the monarchy) we choose to identify with it mainly because it sets us apart from the U.S.A.
Remember: In the context of developed countries, the Canadian health care system is pretty unremarkable. It is the U.S. that swims against the current.”
—John Ringer, from Toronto currently living in Britain
“The Canadian and American health systems did not diverge greatly in the first part of the 20th century. Some Canadians and some Americans shared enthusiasms for public power, a graduated income tax and government-based health care. They included many doctors on both sides of the border, especially those who, in the 1930s, were tired of being paid in chickens and bacon.
The first federal project was concocted during the war, though it remained on the shelf. There was another flare-up in 1945-6 with plans for an Ottawa-run social welfare system and the health part probably resembled Harry Truman’s medical care project. Canadian and American schemes for universal health care strongly resembled each other. But the Canadian one was enacted, while the American was only partially realized.”
—Robert Bothwell, professor of history, the University of Toronto
Ideological Divide
“People say that the border between Canada and the U.S. is artificial and the people are the same on both sides. But Canadians have evolved differently, with a sense of fairness and equality that is not seen south of the border.
It may date back to our founding. The motto of the U.S. — ‘Life, Liberty and the Pursuit of Happiness’ stresses individuality, while Canada’s Constitution talks about ‘Peace, Order and Good Government,’ stressing a belief in the government that the U.S. doesn’t seem to have.”
—Eric Cohen, Toronto
Community vs. Profit
“There is a collectivist sentiment here that emphasizes equity and interpersonal decency (frequently manifested as Canadian politeness), one that supersedes the highly entrepreneurial approach that health care has long had in the U.S.
This is reflected in every step of the system, including the lack of private medical schools and universities. The health system attempts, with considerable success, to make collective health the goal, rather than emphasizing the intervention-heavy, irrational-life-prolonging-at-all-costs marketplace that is available to the select cadre of Americans who can afford it.”
—Dr. Erica Frank, professor of public health, University of British Columbia, Vancouver.
Angus King Urges Senate To Act On Health Center Bill
by Mal Leary - Maine Public - November 17, 2017
Independent U.S. Sen. Angus King has called on the Senate to fund federally qualified health centers, a month after they lost 70 percent of their federal funding and amid talks about layoffs and cutbacks in services starting in January.
“If we leave at the end of the year and haven’t done this, it will be a tragedy for rural America, it will be a betrayal of rural America, it will be a betrayal of our constituents,” he says.
Maine’s 20 federally qualified health centers operate 70 health care facilities across the state, with over 200,000 Mainers depending on the centers for their health care.
“They provide $16 million worth of uncompensated care that goes to Maine people who need the help. They are efficient. They’ve saved Medicaid over $100 million in Maine,” he says.
King says the issue is not partisan, but nonetheless, Senate leaders have not brought legislation forward for a vote to make sure the centers keep operating at existing levels.
Analyses: Repealing Individual Mandate Would Leave 50,000 More Mainers Uninsured
by Patty Wight - Maine Public - November 17, 2017
About 50,000 Mainers would lose health insurance under the proposed Senate Republican tax bill, according to progressive-leaning state and national policy organizations. They say the tax bill’s provision to eliminate the Affordable Care Act’s individual mandate tugs at a thread that would significantly unravel the federal health law.
Both the Maine Center for Economic Policy and the Washington, D.C.-based Center for American Progress crunched the numbers from a Congressional Budget Office analysis to get state-specific data on the effect of repealing the individual mandate. They arrived at the same conclusion.
“Even a small state like Maine would have 50,000 more uninsured residents by 2025,” says Emily Gee, an economist at the Center for American Progress. The Maine Center for Economic Policy projected the same number of uninsured by 2027.
Analyst James Myall says that assumes Maine will expand Medicaid. If the state doesn’t, the number of uninsured will be even higher. Those hardest hit, he says, are middle class Mainers who don’t qualify for subsidies on the ACA marketplace or only qualify for small subsidies.
“The worst-hit folks are people who live in rural parts of the state, in western Maine or The County, or Down East, because that’s where premiums are already high,” he says.
If the individual mandate is repealed, Myall says younger, healthier people will likely opt out of buying health insurance. That will leave older, sicker consumers in the marketplace. To cover the cost of their care, insurance companies will likely raise premiums.
The Center for American Progress estimates the average marketplace premium for a family in Maine will increase about $2,300. Steve Butterfield of Consumers for Affordable Health Care says that will wipe out any benefit the tax bill might provide middle class families.
“That is not a path to any kind of solution except causing chaos,” he says.
Myall says plucking out the individual mandate from the ACA may seem like an easy way to reduce costs to help fund the tax bill. But he says unraveling the mandate will bring hidden costs. Hospitals will see a rise in uncompensated care, and sicker employees will find it difficult to work.
“What it really means is undermining the whole system and making the insurance market and ultimately public health in Maine worse for everyone,” he says.
Republican U.S. Sen. Susan Collins of Maine expressed concern earlier this weekthat repealing the individual mandate would increase premiums, though she has not announced whether she’ll vote for or against the tax bill.
No comments:
Post a Comment