After the sad and tragic total collapse of the Ryan/TrumpCare plan last week the BlameShifter-In-Chief decided that he would turn criticism onto Democrats who he said never even tried to offer a vote on the plan, never-minding the fact that the CBO estimated the updated plan would take coverage away from 24 Million Americans, Trump seemed to imagine that there are some Democrats, somewhere, who might find a happy place to be sanguine about that idea.
After weeks of contentious negotiations over the American Health Care Act (AHCA), Republicans had to admit defeat as they could not gain sufficient support from their own side for the plan to overhaul US health insurance.
Speaking afterward in the Oval Office, Trump blamed Democrats for the failure of a bill to repeal the signature achievement of Barack Obama. “If [Democrats] got together with us, and got us a real healthcare bill, I’d be totally OK with that. The losers are Nancy Pelosi and Chuck Schumer, because they own Obamacare. They 100% own it,” he said.
Actually I think Barack Obama, Nancy Pelosi and Chuck Schumer are already fairly happy to 100% own Obamacare since it has provided insurance to over 20 Million Americans who previously didn’t have it. But that isn’t to say it’s perfect or that it couldn’t be made better still. Frankly, if anyone is going to get that done, it’s going to be Democrats.
Last week Senate Minority Leader Chuch Schumer was interviewed on Rachel Maddow where he states that even though Trump may complain that he didn’t have the support of any Democrats, the fact of the matter is that he never reached out and asked them for support on his bill.
Maddow: Did they even try to get Democrats on this?
Schumer: No, they never even talked to us, once. Look, on day one the President said “I’m going to introduce repeal.” Now, we Democrats have been against repeal from the get go, they never talked to us once, and this President when ever he runs into trouble — he points fingers. He’s gotta learn to lead, look and see what he did wrong and try to improve himself, but that’s not his way he points fingers and blame on something that was absurd. Look, if they are willing to say repeal is off the table, we’ll sit down and try to — we think the ACA is a good bill — we could make it better. We have some ideas of how to make it better, maybe they do to. They’ve got to take repeal off the table, and I think now they see — learned the hard way — how bad repeal is.
This week I contacted the Schumer Press Office and they confirmed what the Senator said here: Trump never even attempted to talk to Democrats about any of this. He treated them like non-entities. They also pointed me to a letter toTrump that 44 members of the Senate Democratic caucus have signed pledging that they are willing to work to improve Healthcare as long as repealing the ACA is taken off the table.
We respectfully request that you abandon your efforts to repeal the Affordable Care Act (ACA) and undermine the U.S. Health Care system so that we can work together to improve the law and lower the cost of health care for all Americans.
Members of the Democratic caucus remain ready and willing to work with you on policies that would improve the stability of the individual insurance market,” the senators write in the letter shared with The Washington Post. “We ask that you begin the work of improving health care for millions of Americans by rescinding your January 20th executive order.
The entire reason the GOP bill was broken into 3 “phases” with the first being a reconciliation bill — when there was nothing yet to reconcile — was because it was a method to completely cut Democrats out of the process and sidestep a filibuster. As I’ve said before the tactic trapped them with a bill that really didn’t change any laws significantly so they essentially couldn’t do what they claimed they wanted to do as Paul Ryan admitted during his fancy power-point presentation.
There are only so many things you can do in that bill because of the Senate floor rules for reconciliation. You can't put everything you want in that legislation because if you did, it would be filibustered and you couldn't even bring it up for a vote in the Senate.
With this letter announcing that 44 Senate Democrats are open to work in a bipartisan way, only 16 Republican Senators would have to agree to get past the 60 vote filibuster threshold and implement some substantive changes.
Democrats have a opportunity to step up and make the Republicans a set of offers they dare not ignore or refuse. Perhaps they should do as they did with the ACA itself and adapt ideas that the Republicans have already had, and seem to desperately want, and put them into practice in a way that actually would do what they claim — but only if they’re willing to accept some Democratic ideas as well.
I think this is an opportunity for Democrats, I think they should call Trump’s bluff on saying he’s willing to work with Democrats. It’s a chance for them to be the better and bigger person(s). Republicans had a kegger party without Dems that got busted up by the cops, somebody spiked the punch, half a dozen people tried to cannon-ball from the roof, the pool is now a toxic with urine but Democrats are not just gonna sit here and laugh at cha. Well, not entirely.
I believe that Democrats actually do have some ideas on how to clean this mess up. Here are a few examples that I’m placing on the floor for open discussion and comment.`
Increasing Competition
The Republican plan constantly touted the goal of expanding competition which in theory would reduce premiums and costs by allowing for insurance plans to be offered and bought across state lines. The first problem with this is that that feature already exists as part of the ACA’s Multi-State Plan Program which so far has only attracted a single insurer — Blue Cross/Blue Shield — and is only available in 25 states.
Besides the fact that this would cut the state insurance commissions and their local regulatory rules out of the picture — although admittedly some of them are barely in it to start with as shown above — the next problem here is that an insurer has to have already established a network of providers in a state in order to offer insurance there, and not every insurer has the resources to do that across the entire nation.
The trouble is that varying or numerous state regulations aren’t the main reason insurance markets tend to be uncompetitive. Selling insurance in a new region or state takes more than just getting a license and including all the locally required benefits. It also involves setting up favorable contracts with doctors and hospitals so that customers will be able to get access to health care. Establishing those networks of health care providers can be hard for new market entrants.
“The barriers to entry are not truly regulatory, they are financial and they are network,” said Sabrina Corlette, the director of the Georgetown University Health Policy Institute.
This then, in additional to the fact this program is limited to non-profit organizations, is exactly why the MSP program hasn’t taken off the way Republicans argue that selling across state lines would.
On the other side of the argument you have Senator Bernie Sanders who argues that we need either Single-Payer or Medicare-For-All in order to bring down prices and ensure access to those who are being priced out of the market by premium and deductible increases.
Generally speaking the cost of Medicare Part-A and B tends to be less than the private plans offered by Medicare Advantage with the exception of HMOs as noted by the CommonWealthFund.
Exhibit 2. Total MA Plan Costs Relative to Local Costs in Traditional Medicare Nationwide,in Rural and Urban Areas, and by Plan Type, 2012.
|
(A)
MA enrollees |
(B)
Annual MA
plan costs
per enrollee |
(C)
Annual
traditional
Medicare
costs per
beneficiary |
(D)
MA plan costs
per enrollee as a
percent of traditional
Medicare costs per
beneficiary
(B/C) |
(D)
MA plan costs
per enrollee as a
percent of traditional
Medicare costs per
beneficiary
(B/C) |
Nationwide |
8,829,576 |
$9,370 |
$9,413 |
100% |
-$378 |
By urban/rural
location: |
|
|
|
|
|
Urban |
8,422,171 |
9,344 |
9,452 |
99 |
-911 |
Rural |
407,405 |
9,915 |
8,607 |
115 |
533 |
By plan type: |
|
|
|
|
|
HMO |
6,019,570 |
8,980 |
9,681 |
93 |
-4,218 |
Local PPO |
1,551,761 |
10,335 |
8,738 |
118 |
2,478 |
Regional PPO |
764,888 |
10,307 |
9,210 |
112 |
839 |
PFFS |
493,357 |
9,645 |
8,584 |
112 |
523 |
Notes: The cost per enrollee figures above represent the cost per enrollee with a typical risk profile—that is, these figures are, effectively, risk-adjusted.
HMO = health maintenance organization; PPO = preferred provider organization; PFFS = private fee-for-service.
So although it isn’t true in all cases, Sander’s argument that making opening up Medicare for those younger than 65 and having them pay their premiums either out of their own pocket or with currently available tax credits indexed by income would ultimately bring down costs for those consumers.
Many sources indicate that Medicare is also more cost effective than private insurance plans.
Medicare Has Controlled Costs Better Than Private Insurance
.
- According to CMS, for common benefits, Medicare spending rose by an average of 4.3 percent each year between 1997 and 2009, while private insurance premiums grew at a rate of 6.5 percent per year. (See Table 13)
- According to a calculation by the National Academy for Social Insurance, if spending on Medicare rose at the same rate as private insurance premiums during that period, Medicare would have cost an additional $114 billion (or 31.7 percent). ...
- The CBO has predicted that the rising cost of private insurance will continue to outstrip Medicare for the next 30 years. The private insurance equivalent of Medicare would cost almost 40 percent more in 2022 for a typical 65-year old.
Similar results have been found for Medicaid as well by the Kaiser Family Foundation.
Updating and expanding on the previous research, another study 25 used MEPS data from 2005 and found that after adjusting for health and socio-demographic factors, total health care spending for a typical low-income Medicaid adult or child would have been far higher if covered by private health insurance. In particular, if a typical low-income Medicaid adult or child were instead covered by private health insurance, total spending would be 26 percent higher for adults and 37 percent higher for children.
- The study estimated that total health care spending would increase nearly 26 percent, from $5,671 per person per year to $7,126, if a typical low-income Medicaid adult were covered by private health insurance for a full year. In addition, total health care spending would increase 37 percent, from $909 per child per year to $1,247, if a low-income Medicaid or CHIP-enrolled child were covered instead by private health insurance for a full year.
- The study also showed that out-of-pocket spending was estimated to be six to seven fold higher under private insurance than under public insurance.
…
A 2013 study 28 used pooled MEPS data from 2003 to 2009 to compare health care access, use, and spending for low-income adults enrolled in Medicaid to their counterparts with private employer-sponsored insurance.29 The authors found that regression-adjusted comparisons generally showed that enrollees are less costly to insure in Medicaid. In fact, adjusting for health and socio-demographic factors using multiple regression techniques, the study found that if a low-income adult enrolled in Medicaid was instead covered by private health insurance, insurer payments (not including out-of-pocket costs) would be over 25 percent higher.
- The study also found that Medicaid provides access to health care services comparable to that of the privately insured sample but at significantly lower costs. In addition, the study found that the likelihood of using most health care services (e.g., primary care doctors, prescription drugs and inpatient care) would not differ significantly if Medicaid enrollees were instead covered by private insurance, with the exception of lower emergency department use and more specialist visits in private coverage.
- Additionally, given the differences in benefit design between the private plans and Medicaid, out-of-pocket spending for health care services was estimated to be over three times as high if Medicaid enrollees were instead covered by private insurance.
If we want to provide national-wide low-cost insurance across state lines, the fastest and simplest option would be to allow both Medicare and Medicaid to be sold through the Multi-State Plan Programs existing gateway to those who are above the income threshold or otherwise too young to have those programs provided for free. Both Medicare and Medicaid have existing national networks of doctors and hospitals, so that wouldn’t be an impediment to immediately increase the number of options available when markets may be shrinking or mergers like the ones that were recently dropped between Aetna with Cigna and Humana which tends to decrease the number of current insurance providers.
Right now the Multi-State program already supports non-profit plans, but in exchange for allowing it to support the direct purchase of Medicare and Medicaid, it could also include private for-profit plans — which would by definition be national or already have networks in multiple states — so that consumers can make any choice they would prefer. Democrats could offer this as a deal, they’ll support adding private plans to the MSP, as long as Medicare & Medicaid for All are included in the mix. Everybody would get something they want and the argument of which is “better” would play itself out in the marketplace.
Now part of the reason I suggest both Medicare and Medicaid is the fact that both of them have gaps in their coverage — no dental or visual for Medicaid, no long-term care on Medicare — which could be solved if consumer could by both or there was an option to combine them. Also the issue of the Medi-Gap should be addressed and the Doc Fix made permanent for these plans on the MSP because paying full price for services would help increase their networks to more providers, and the cost-shifting that occurs when providers are underpaid would be discouraged allowing prices for those in the rest of the system to drop in return.
Under this idea people could choose whatever they prefer. Choices would be greater as would competition. If private plans can beat the prices and quality available from Medicare or Medicaid, so be it. Under this plan they’d have some real competition to keep up with.
Controlling High Insurance Rate Increases
Contrary to the claims of the GOP the ACA actually does have mechanisms for handling insurance rate increases when they are 10% or more,
The Affordable Care Act (ACA) requires that insurers planning to significantly increase plan premiums submit their rates to either the state or federal government for review. The threshold for this requirement is 10%.
The rate review process is designed to improve insurer accountability and transparency. It ensures that experts evaluate whether the proposed rate increases are based on reasonable cost assumptions and solid evidence and gives consumers the chance to comment on proposed increases.
The ACA also requires that a summary of rate review justifications and results be accessible to the public in an easily understandable format. This site is designed to meet that mandate.
Looking at Arizona which has been frequently brought up you can use the ACA Rate Review search to list and organize price increases for all the plans in the state. there was only one plan — Pheonix Health Plans (PHP) for the Individual Market that went up 163%. Under the ACA they had to explain their reasons which were basically that they didn’t have the experience to properly set their rates in the first place,
Since PHP does not have credible actuarial experience for the base period of 2014, the increases are primarily driven by an increase in the manual rate. Prior to the 2017 rates, the manual rate was based on large group experience and adjusted to the individual market, considering the expected average health of the market. For 2017, the 2014 individual market experience was used to develop the manual rate, adjusting for the expected 2017 individual population. The 2014 individual experience appears to show a market with significantly more adverse selection than assumed in 2016, i.e., the claims costs are significantly higher than those observed in the group markets. The overall manual is increasing approximately 84 percent from that assumed in 2016. This is the primary driver of the increase. The factors influencing the manual rate increase include issuer exits from the market, higher assumed risk profile of the 2017 market due to the large rate increases in the market and higher provider costs due to greater than previously expected out of network costs.
One insurance plan correcting their own mistake should be taken as a guide for the entire nation. Most Individual market plans in Arizona only went up a fraction of this amount and several in the small group market actually went down, but the downside is that state laws need to be passed to allow an Insurance Commissioner to reject exorbitant increases, and many states — particularly those who haven’t fully implemented the ACA — haven’t done that. Arizona happens to be one of those states, and in fact they’ve only partially instituted their rate review program for the individual market only, their small market rate review is handled Federally. Some states like Texas, Oklahoma, Louisiana, Alabama, Wyoming and Missouri don’t have an effective rate review program at all, HHS has to do it for them, and they don’t have any mechanism to block high rate increases.
Generally speaking states that haven’t fully embraced the provisions of the ACA have seen higher rates increases.
The states which are 100% on board with the ACA exchange provisions (running their own full state-based marketplace, expanding medicaid and sticking to the original cut-off date for "transitional" policies) average around 18%. If you remove Minnesota from the equation, it's just 15.2%.
Those which implemented only one or two of the above provisions come in at around 26%. In a possibly coincidental quirk, all five fo the "halfway" state exchange states (Hawaii, Oregon, Nevada, Kentucky and New Mexico) just happen to also fall into this category as well, which is completely appropriate.
Finally, states which are fighting the ACA kicking and screaming (no Medicaid expansion, no state exchange and allowing transitional plan extensions as long as possible) are averaging around 30%.
The outlier states who are far above the average include Tennessee, Oklahoma, Illinois, Arizona, West Virginia, Montana and Minnesota.
A simple solution to this problem is that now that there is a nationwide rate review process in place, we may need to authorize HHS to reject unreasonable increases where current state laws are lacking in this area — just as we’ve had the Federal government implement exchanges when the states have refused to do so on their own.
Creating Jobs
Republicans have repeated claimed the “ObamaCare is a job Killer.” Part of that view is based in the explorer mandate which requires business to provide healthcare for their employees if they work more than 20 Hrs/week. They’ve argued that this causes employers to keep their workers on part time with less than 20 hours specifically so that they don’t have to pay for health care. Unfortunately for them repeated studies of this have not turned out the way they predict.
A new study further undercuts a major claim by critics of the Affordable Care Act, who contended that the law would encourage companies to slash full-time workers' hours and shift them into part-time work in order to avoid having to offer them health insurance.
The research "found little evidence that the ACA had caused increases in part-time employment as of 2015," according to a summary of the findings published in the journal Health Affairs on Tuesday.
"We can say with a large degree of confidence that there is nothing we can see nationwide when we look at the whole workforce" that would support a claim that the so-called employer mandate or other Obamacare features have led to increases in part-time employment at the expense of full-time jobs, said Kosali Simon, a professor at Indiana University, and a co-author of the report.
What they often ignore is the fact that the ACA provides a 50% tax credit to small businesses to help them pay for the cost of providing healthcare.
If you are a small employer, there is a tax credit that can put money in your pocket.
The small business health care tax credit benefits employers that:
- Have fewer than 25 full-time equivalent employees
- Pay average wages of less than $50,000 a year per full-time equivalent (indexed annually for inflation beginning in 2014)
- For tax years 2015 and 2016, the inflation-adjusted amount is $52,000
- Pay at least half of employee health insurance premiums
To be eligible for this credit, you must have purchased coverage through the small business health options program, also known as the SHOP marketplace.
For tax years 2010 through 2013, the maximum credit is 35 percent of premiums paid for small business employers and 25 percent of premiums paid for small tax-exempt employers such as charities.
For tax years beginning in 2014 or later, there are changes to the credit:
- The maximum credit increases to 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers.
- To be eligible for the credit, a small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace or qualify for an exception to this requirement.
- The credit is available to eligible employers for two consecutive taxable years.
For employers below 25 full-time equivalent employees this is a fairly good deal. But then what happens for those above 25 full-time employees? Do they suddenly lose the tax credit? At the very least they should be able to retain the credit for the first 25 FTE employees when they reach number 26, 27 or 30. The ACA employer mandate doesn’t kick-in until the company has 50 FTE employees, so going further perhaps the tax credit should be expanded up to the 50 FTE point at 35% so that their isn’t as large a gap and steep climb for those businesses that are on the verge of outgrowing 25 FTE but are deterred from expanding at the risk of immediately losing their tax credit and having their healthcare costs immediately double.
It also might be wise to allow this credit to employers who are shopping in the Small Market as well as the SHOP marketplace. Yes of course the tax credit would have a negative impact on the deficit, but that should be somewhat offset by an increase in hours for workers and greater income tax revenues as more small companies are less discouraged from expanding.
Expanding Choices
The other idea that was brought in at the end of the failed GOP plan was the idea of allowing states to adjust the ACA list of 10 Essential Health Benefits which now have to be included in all plans.
- Outpatient care—the kind you get without being admitted to a hospital
- Trips to the emergency room
- Treatment in the hospital for inpatient care
- Care before and after your baby is born
- Mental health and substance use disorder services: This includes behavioral health treatment, counseling, and psychotherapy
- Your prescription drugs
- Services and devices to help you recover if you are injured, or have a disability or chronic condition. This includes physical and occupational therapy, speech-language pathology, psychiatric rehabilitation, and more.
- Your lab tests
- Preventive services including counseling, screenings, and vaccines to keep you healthy and care for managing a chronic disease.
- Pediatric services: This includes dental care and vision care for kids.
The argument here is that leaving holes in coverage for some plans essentially drives up the costs for those who actually need these services versus those who may not necessarily require them at certain points in time. The GOP wanted states to reshape this list — which when they also wanted plans sold across state lines would create an obvious conflict as some states would have had one set of essential benefits while another states benefits could have conflicted with them — but perhaps the end decision isn’t better made by the state, perhaps the consumer should have the choice of deferring payments on one or more of the benefits when it doesn’t currently apply for them in order to gain a discount on their premiums or deductibles.
This isn’t to say they aren’t being covered, only that while they aren’t using this benefit — they can get a discount until they actually have a need for that benefit — and like the other GOP idea for those that going without coverage paying a premium when they restart coverage — they would begin paying for it from the point of use forward with an additional 20% or 30% surcharge for the rest of their current plan year.
The GOP actually do have a point that people without children may not need pediatric services, or men may not need prenatal care services, or some people may not have a chronic condition requiring physical or occupational therapy. People may justifiably argue they don’t want to pay for something they’re probably never going to use, and there’s a fair argument to be made that they should be able to opt-out in some cases. Since premiums are continuing to rise — albeit at a rate that is 40% less than they were prior to the ACA — granting this kind of flexibility to the consumers, as opposed to having it entirely under government control, might convince more people to buy insurance rather than pay the tax penalty or else have to face massive deductibles in order to get the lower premium rates.
But then again, situations can change — circumstances can change. No one expects that they’re going to need to go to an emergency room within a specific time frame, but these things do happen. There’s a good reason these benefits were made “essential” and why they should remain so. People can become pregnant unexpectedly, they can get into an accident or contract a chronic disease. Since insurance generally works based on those who are more healthy paying into a pool that helps provide needed support for the 15% of the public who have the more expensive care needs, the deferred payment with a surcharge would keep the healthier people in the pool and help prevent it from being drained because of their non-participation, paying the tax penalty which so many on the right deeply resent or else having them saddled with a unaffordable deductible,
I think some of these ideas could be cost effective and might be something some Republicans could go for — in fact they might have a hard time turning down expanding competition across all states, implementing expanded tax relief for small business, increasing consumer choice and control, and ending exorbitant premium rate hikes — but on the other hand if they do choose to stonewall even their own ideas it places Democrats in an even stronger political position for 2018 by simply saying — “If they won’t, We Will.” Either way, it’s a win for the Dems.
The floor is open to discuss.