Thursday, December 01, 2016

Tom Price will probably cut your health insurance subsidy in half

Last week, I noted that the federal government pays a bit more than two thirds of total medical costs for the average traditional Medicare enrollee. That is, the government pays about 85% of the premium(s) for insurance that covers a bit more than 80% of the average user's annual Medicare costs (that latter percentage is known as a health plan's actuarial value). Subsidies for those who chose Medicare Advantage plans are comparable.

In a followup post, applying the same calculation to subsidized enrollees in the ACA marketplace and prospective enrollees in HHS Secretary nominee Tom Price's ACA repeal-and-replace plan, I came up with the following total subsidy values:

Traditional Medicare:  85% of premium paid for AV 81% coverage = 69% of costs

Subsidized ACA marketplace: 73% of premium paid for AV 81% = 59% of costs (highly variable)

Tom Price ACA replacement: 59% of premium paid for AV 60% coverage = 35% of costs

Tuesday, November 29, 2016

Attention, Paul Krugman: Not everyone votes

Am I crazy or is Paul Krugman making a really elemental mistake here?
As Greg Sargent points out, the choice of Tom Price for HHS probably means the death of Obamacare. Never mind the supposed replacement; it will be a bust. So here’s the question: how many people just shot themselves in the face?

My first pass answer is, between 3.5 and 4 million. But someone who’s better at trawling through Census data can no doubt do better.

Here’s my calculation: we start with the Census-measured decline in uninsurance among non-Hispanic whites, which was 6 million between 2013 and 2015. Essentially all of those gains will be lost if Price gets his way.

How many of those white insurance-losers voted for Trump? Whites in general gave him 57 percent of their votes. Whites without a college degree — much more likely to have been uninsured pre-Obama — gave him 66 percent. Apportioning the insurance-losers using these numbers gives us 3.42 million if we use the overall vote share, or 3.96 million if we use the non-college vote share.
The assumption appears to be that everyone votes. Turnout this year is currently reported at 58.6%. It's probably lower for most of those who gained insurance via the ACA, as their incomes are below median: according to the Current Population Survey, almost three quarters of those who gained insurance in both 2014 and 2015 have incomes below twice the Federal Poverty Level, and nearly all have incomes under 300% FPL. Lower income people have lower turnout rates.  It would appear that Krugman's total needs to be sliced almost in half.


Tom Price's ACA replacement plan opens a sluice gate to privatizing Medicare

Tom Price, Trump's choice for HHS Secretary, is the author of the Empowering Patients First Act,  an ACA replacement plan that provides age-based subsidies for deregulated health insurance, unadjusted by income.

Those subsidies are skimpy, particularly for older buyers, as Price would loosen age banding, and for low income shoppers, as the subsidy level would leave coverage unaffordable.  Jed Graham of IBD runs the numbers for a 64 year-old couple earning 150 of the Federal Poverty Level (FPL) and finds that while an ACA plan might cost them 8-12% of their income (($2-3,000, out-of-pocket costs included) in a bad year, a plan purchased under Price's legislation would take 80% ($18,000).

The Price plan (let's call it EPFA)  is a bare-bones version of "premium support," in which the government gives beneficiaries a fixed sum and sends them to shop in a deregulated marketplace (the ACA sets up a more generous and regulated premium support program).  Since Price also aims to pass legislation this year to convert Medicare to a premium support system, his plan -- which allows people to opt out of Medicare and receive the plan's fixed tax credit --  can be viewed as an ultimate vision for Medicare, Republican style.

Monday, November 28, 2016

Can the electoral college revert to its original function to negate its original intent?

There's a knot in the logic of those urging the presidential electors to deny Trump an electoral college majority. It comes between these two propositions:

1. The founders (wisely?) established the electoral college as a potential veto of the popular choice* in case the people (or state legislatures) voted in a demagogue.

2. The popular choice in this election was not a dangerous demagogue, as Hilary Clinton will end up with about 2.5 million more votes than Trump.

Thus, the electoral college should use its veto function to un-veto the popular choice rather than to countermand it.

The disconnect is between the electoral college as designed versus the electoral college as evolved. It was designed to be a deliberative body (or set of bodies, as each state's electors meet separately). It evolved into an inexact and unreliable mirror and intended rubber stamp of the popular choice. Like a human appendix, it serves no practical function except to rupture occasionally.

Saturday, November 26, 2016

Many people don't know what's on offer through the ACA. Or through Medicare.

According to the Kaiser Family Foundation's most recent estimate, as of March 31, 64% of Americans who were eligible for subsidized health plans sold in the ACA marketplace were enrolled. 

One persistent barrier to getting the uninsured covered has been simple ignorance of what's available (though a too-large percentage of the uninsured who do check out their options find marketplace coverage unaffordable). While the numbers have improved year by year, in the Commonwealth Fund's 2016 tracking survey, 43% of the uninsured with incomes under 250% of the Federal Poverty Level were unaware of the existence of the ACA marketplace. Of the uninsured who were aware of the marketplace, 64% said they did not visit it because they did not think they could get affordable coverage there. While that was probably true for a significant number (e.g., the undocumented, those with an employer's offer of insurance, and those who did not qualify for subsidies), , a substantial portion doubtless remain unaware that subsidies are available.

Wednesday, November 23, 2016

"What have you got to lose?" -- Republicans' latest lie about the ACA

As they gear up to repeal all or part of the ACA, Republicans in Congress are coming out with a new (or recycled) lie about the benefits they'll be taking away, with or without a replacement. The lie has some basis in truth, but it is a gross distortion.

Here's the ur-iteration as voiced by Sen. Johnny Isakson, R-Georgia, to Politico's Jennifer Haberkorn, who asked Isakson what might become of the roughly 20 million people who have gained coverage through the ACA. His response:
Most of those 20 million got bronze policies with a great big deductible and not much insurance, so I don’t know that there’s going to be a big backlash,..There are some minefields out there but we can deal with them.
In a note, Politico points out that "most people on the exchanges choose silver plans, which provide a higher level of benefits." But that only clears one level of the mendacity expressed here.

For starters, more than 60% of those who gained coverage through the ACA did so via the Medicaid expansion (though not in Isakson's Georgia, which has refused to implement it). Medicaid generally has no premium and covers all, or very close to all, out-of-pocket expenses. People who have obtained Medicaid coverage through the ACA express high levels of satisfaction -- 88% of new Medicaid enrollees were satisfied with their coverage, according to the Commonwealth Fund's 2016 tracking survey.

Tuesday, November 22, 2016

What exactly is the Medicare guarantee?

As Paul Ryan revs up Republican engines for Medicare privatization, Nancy Pelosi vows to Greg Sargent that Democrats will fight it to the death:
Pelosi adamantly stated that Democrats would not give any ground on the core ideological dispute here, which is over whether to maintain a government coverage guarantee. “We are not going to a casino — this is a guarantee,” Pelosi said. “This is a value system for us, and we will fight for it. Is it a guarantee, or not?”
This raises a question: what precisely is the Medicare guarantee?

At present, there's a pretty specific answer: for 95% of seniors, the federal government will pay about 85% of the premiums for insurance that covers a bit more than 80% of the average user's medical costs. That's what traditional Medicare does right now, via Parts A, B and D, for those whose incomes are below $85,000 for a single person or $170,000 for a couple.

Put another way, the federal government pays a bit more than two thirds of the average senior's total medical costs. Low income beneficiaries have all or part of their premiums and out-of-pocket costs paid by Medicaid, though a variety of programs. High income seniors pay higher shares of their premiums, with the percentage stepped up through several income brackets.

Monday, November 21, 2016

What Ryan wants to do to Medicare

Last week, Paul Ryan indicated that he wants to move fast not only to repeal the ACA but to privatize Medicare to a premium support structure, as he's been proposing since 2011.

Of course, Medicare is already almost 1/3 privatized, in that 31% of enrollees have chosen Medicare Advantage plans rather than traditional fee-for-service Medicare. And MA's market share is growing year by year.  So why is Ryan so compelled to accelerate the process?

I have a post up at medicareresources.org, sister publication to healthinsurance.org, that aims to answer that question. Democrats generally assume that Ryan wants to shift the costs of Medicare away from the federal government and onto seniors, and I think that's right, but he has not explicitly called for doing so since 2011. His plan is studiously vague, and therefore hard to pin down. But what it would do, I think, along with de-emphasizing traditional Medicare by making it one choice among many on an exchange, is cut the cord that currently binds the rates that MA plans pay to providers to the rates paid by traditional Medicare.  That would accelerate cost growth in MA, which would in turn probably trigger a shift of costs to seniors.

I hope you'll read the post.

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