Thursday, December 14, 2017

Sabotage judo: States can turn individual mandate repeal to their advantage

With repeal of the ACA's individual mandate apparently imminent, health law scholar Nicholas Bagley urges states to mitigate the damage by...getting their own damn mandate:
Adopting mandates at the state level would help stabilize insurance markets, thereby keeping premiums in check and forestalling coverage losses. It would also provide a welcome source of revenue: Some people will still prefer to pay a penalty than buy insurance. Plus, the states don’t need to stick with the precise terms of the federal mandate, which has been reviled (from different quarters) both for heavy-handedness and its ineffectuality. Stiffer state-level penalties would still be unpopular, but at least they’d work better.
I'd like to suggest that states take this a step further. Why not use the revenue collected from the state mandate to partially fund a reinsurance program?  Reinsurance has repeatedly proven  to sharply reduce premiums  (leading Susan Collins to propose an underfunded federal program to offset the effects of mandate repeal).

CBO projects that mandate repeal will cost the federal government $5 billion per year in forgone penalty payments by 2020 and $6 billion per year by 2025 (while saving the government more than 10 times as much in premium subsidies). States can capture that revenue for themselves by implementing their own mandates. California, with 12% of the nation's population, might collect $600 million per year in 2020 (to the extent that mandate revenue is proportionate to population). New York, with 6% of the population, might pull in $300 million. Jersey might manage $135 million; Minnesota, $85 million. These are crude calculations, but they give some idea of scope.

Wednesday, December 13, 2017

On tax bill, Josh Gottheimer's Problem Solving is a problem

Josh Gottheimer, the member of Congress from New Jersey's 5th District (rural west and suburban north Jersey), beat a Tea Party incumbent in 2016 and so has to be cut some centrist slack. He has made bipartisanship his brand and co-leads the self-named Problem Solvers, a caucus of about 40 reps, half Republican and half Democrat. In the summer, after ACA repeal bills failed in the Senate, the Problem Solvers put forth an ACA marketplace stabilization proposal that looked rather like the Alexander-Murray bill that later took shape in the Senate (discussed in this post). It got no traction but did no harm.

In tax bill season, though, Gottheimer's bipartisan shtick is turning dangerous, IMO.  He has said he wants to "get to yes" on a tax cut bill; he's put out a proposal, in concert with NJ Republican Leonard Lance, that avoids the most direct harm to New Jersey (restoring SALT and mortgage deductions) while ignoring the bill's overall devastation of the federal budget and disfiguration of the tax code. This too will probably do no harm...but if the bill that comes out of House-Senate conference does mostly restore the SALT and mortgage deductions, a few Democratic votes in support would be a very bad thing.

That's my working assumption, anyway - and I have a letter in arguing as much. Gottheimer's claims that his plan provides "deficit reduction" particularly stick in the craw:

Tuesday, December 12, 2017

What I've learned as an ACA assister

This Open Enrollment period I've been volunteering a few hours per week as a Certified Application Counselor (CAC) for the ACA marketplace, at an office in Newark, NJ. I haven't had as much experience as I would have liked, but here, very generally, are a few things I've learned.
  • The government could save a lot of money by opening Medicare and Medicaid to all legally present immigrants*.  Marketplace premiums for Medicare-age immigrants are sky-high -- and often paid entirely by the federal government. Oddly, marketplace plans may actually be better than traditional Medicare for elderly immigrants -- if they stay in network, e.g., if their middle-aged children can find them in-network providers. That's because marketplace plans, unlike traditional Medicare, have an out-of-pocket maximum. Then again, dual eligibles would be better of Medicare/Medicaid.

  • Similarly, legally present immigrants with Medicaid-eligible income but subject to the 5-year bar for Medicaid eligibility cost the government more in marketplace plans than they would in Medicaid (as does anyone; see Private Option, Arkansas). They would also be better off in Medicaid -- the out-of-pocket costs attached to silver plans, even with strong Cost Sharing Reduction attached, are a high bar for people with Medicaid-eligible incomes.

Friday, December 08, 2017

Planning a two-step retirement, because health insurance

My last post looked at the various ways that self-employed people in particular can limit their taxable income to stay on the right side of the ACA subsidy cliff, which has reached untenable heights for people in their late 50s and early 60s. We're at the point where getting on the wrong side of the subsidy-eligible line can mean $10,000-plus in extra health insurance costs for older shoppers in the individual market for health insurance.

The situation reflects broader societal dysfunction. We have a gaping hole in the safety net patched by an insanely diverse panoply of tax-sheltered accounts -- which some lucky and nimble affluent-but-not-rich people may hopscotch across to safety.

Take the case of a couple of 58 year-olds in a northeast city where the cost of living is high -- their modest dwelling is worth over $600k and taxed accordingly. The wife, Samara, is a hospital nurse, and the husband, Aman, is a solo consultant of some kind. Both have earnings in the $75k range. Thanks to assiduous feeding of their 401k retirement accounts (they've saved a bit over $1 million between them), their Adjusted Gross Income (AGI) is about $110,000 -- far below their gross, but far above the ACA's subsidy eligibility threshold of $64,960. That's not an issue for now, because they get good insurance through Samara's hospital job.

But what if Samara is hoping by age 62 or so to...not retire, but work per diem, or try an encore career? An unsubsidized ACA-compliant two-person bronze plan with per person deductibles in the $6-7000 range  might cost them $1500 or $2000 a month by age 62.  Can the couple get below the subsidy line without a radical cut in income? Can Samara escape health insurance-induced job lock?

Wednesday, December 06, 2017

Steering clear of the subsidy cliff in the ACA marketplace

It's plain this year that the individual market for health insurance is unaffordable for many of the unsubsidized, particularly those in their late fifties or early sixties. The subsidy cliff has reached a fatal height for many.

This week Kaiser Health News reporter Rachel Bluth spotlighted a stark example: A 62 year-old woman in Chattanooga, Tennessee who earned $80,000 working for a consultancy deliberately cut her hours, reducing her income by a third to get herself and her husband below the subsidy line ($64,080 for a two-person household in 2017). The total household income was $92,000.  The woman, Anne Cornwell, cut her income by $24,000 -- and her insurance bill by $27,000.

This drastic solution set me thinking about ways to keep on the right side of the subsidy cliff, i.e., 400% of the Federal Poverty Level. In 2018, that's a  Modified Adjusted Gross Income (MAGI)  of $48,240 for an individual, $64,960 for a couple, and $98,400 for a family of four.

Many but not all resources for reducing MAGI are available only to the self-employed. They include the following.

Saturday, December 02, 2017

Where we're at now

Just a brief and not particularly original thought as I try to process Senate passage of this travesty of a tax bill.

While Trump's election has the feel of a perfect storm catastrophe, perfect storms are usually the result of a a long sequence of dysfunctions, and the total corruption of the Republican party was bound to lead to catastrophe at some point. I recall Jonathan Chait saying as much as an episode of debt ceiling legislative terrorism loomed in (IIRC) 2013. His point was not that that particular crisis would lead to default, but that a party always willing to go to the brink in defense of an ideology cooked up to serve the narrow interests of the superrich would lead us over the cliff at some point. Put another way, if it had not been completely evident before, it was evident after Obama's reelection that the fever would not break.

In some ways it's a consolation to view our plight not as an accident that a breath of wind could blown off course but as a reckoning with pathologies we've been collectively grappling with at least since the Reagan era (and far earlier, as every origin has multiple origins behind it).

Thursday, November 30, 2017

Late Days of Empire Edition: Health Wonk Review

We're addled on many fronts here in Trumpville, and this week's Health Wonk Review reflects that. We have snapshots of a country that continues to trail its peers in population health measures; an opioid vendor looking to short-circuit potential tobacco industry-level liability; an individual market for health insurance offering unaffordable plans to many of the unsubsidized, and freakish bargains to some of the subsidized; and, for a little futuristic relief, a human resources tech vendor that may chain healthcare data to a block, where it shall remain unaltered forever and ever.

At Workers' Comp Insider, Tom Lynch  looks at what the U.S. gets for spending 41% more on health care than our wealthy nation peers in the OECD and 81% more than the entire 35-nation OECD average. Spoiler: not much. We're "sort of like a big-market baseball team spending gazillions more for players than any other team, only to finish out of the running."

At Managed Care Matters, Joe Paduda notes that Purdue Pharma is trying to strike a deal to resolve all state claims relating to opioids. He warns: