Friday, April 28, 2017

The pre-existing condition smokescreen

In a snappy summary by Axios's David Nather of  the latest AHCA stall-out, this caught my eye:
The holdouts are mainly worried about weakening coverage for sick people. Rep. Ryan Costello of Pennsylvania: "Protections for those with pre-existing conditions without contingency and affordable access to coverage for every American remain my priorities for advancing healthcare reform, and this bill does not satisfy those benchmarks for me."
What this tells me is that the moderates will ultimately go along with ending the ACA Medicaid expansion and girdling all federal Medicaid spending with per capita caps.  I have long worried that Republican relative moderates will go squish on Medicaid if AHCA damage to the individual market is moderated past a certain threshold.

Now more than ever, the bottom line remains what Andy Slavitt said it was two months ago:

Medical underwriting should not be allowed -- or rather, should not be necessary -- in any civilized society (if anyone knows of a successful national healthcare system in which it's practiced, please let me know). One mechanism or another (or set of mechanisms) should ensure that everyone is insured and that risk is adequately distributed.  Medical underwriting allows for tremendous suffering, and it also carries tremendous symbolic weight, since it's a rabbit hole that almost anyone could theoretically fall into.

It's a fairly narrow hole -- though still potentially deadly -- in the MacArthur amendment to the AHCA. States can allow medical underwriting for up to a year for people who don't maintain continuous coverage (with a gap of more than 63 days) -- which is likely to happen, with the AHCA's skimpy subsidy structure. Further (inadequate) cover is provided by the requirement that the opt-out state stand up either a high risk pool or a reinsurance program, or participate in the skimpily funded federal "invisible risk" program. As Timothy Jost points out, a) reinsurance lowers premiums but does not protect those with pre-existing conditions, and  b) high risk pools are chronically underfunded -- as is, I would add, the sketchy invisible risk program.

But in my view, as Republicans carry on their repeal efforts, the funding battle remains more fundamental: will they repeal the ACA's taxes and so be forced to radically cut Medicaid spending (along with marketplace subsidies)? If the ACA were amended by a superwaiver provision, with funding intact, states that wanted to test-drive conservative nostrums would have to take federal funding for the marketplace -- or perhaps, in a combined waiver, for the marketplace and the Medicaid expansion -- and use that money to try to make their alternative schemes work. That's pretty much what Oklahoma is considering right now, on the assumption that the Price/Verma HHS will look with favor on a scheme that relies on HSAs and puts the Medicaid expansion population in private plans.

The ill effects of giving states the latitude to tamper with ACA consumer protections in the individual market are dwarfed, in my view, by the ill effects of gutting Medicaid spending across the board and phasing out the Medicaid expansion.  It's important not to let "moderates" hide behind their concern for protecting people with pre-existing conditions so that they can acquiesce when those protections are shored up, while the AHCA's damage to Medicaid is only mildly ameliorated.

Update/afterthought: Even if Republicans back off ACA repeal, they may still seek to impose per capita caps on Medicaid spending. Anything to pay for tax cuts, inside or outside the ACA.

Update 4/29: Here is the scenario I fear:
Tuesday Group member Rep. Chris Collins (R-N.Y.), who supports the bill, said there are tweaks to the Medicaid language being discussed that could sway some more moderates toward yes.

“There are discussions about a couple of other tweaks that could occur on the Medicaid side to help in some extent without it being such a new issue that it would lose any votes,” Collins said.
Tweaks. To an $839 billion spending cut.  

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