Thursday, July 27, 2017

Managed Medicaid for all? A compendium

In an illuminating string about what she's learned from ACA enrollees, Sarah Kliff highlights a point that's come sharply into focus in the last year:
Medicaid is *way* more popular than marketplace plans. No deductibles or co-pays! (6/15)
This point has been driven home by enrollee surveys and focus groups as well as by good reporting from many, including Kliff. The negative counterpoint to Medicaid enrollees' satisfaction is Medicaid envy among those forced to pay more than they consider affordable in premiums and out-of-pocket costs -- particularly those on the wrong side of the ACA's deductible cliff.

Sunday, July 23, 2017

"Not losing, choosing"? - Avik Roy turns up the gaslight on the BCRA

Two weeks ago, I took on the argument of various BCRA proponents that most of the 22 million people forecast by CBO to lose insurance coverage should the bill become law would be "choosing, not losing." That write-off of legions of uninsured was founded on CBO's assertion that most of the first-year coverage loss of 15 million would occur "primarily because the penalty for not having insurance would be eliminated."  Expect to hear more of this, I forecast.

In brief, I suggested that argument depended on  1) conflating the forecast immediate effect of mandate repeal in 2018 with the ten-year effect; 2) ignoring the extent to which, in CBO's own telling, the mandate interacts with other changes in the marketplace and Medicaid; and 3) pooh-poohing the obvious and stated purpose of the mandate, which is to boost the ranks of the insured and reduce premiums by improving the risk pool -- which CBO clearly assumes it has accomplished in some measure.

Now here cometh Avik Roy, chief healthcare apologist for the Republican establishment, making the "choosing not losing" argument in detail.  Roy's addition to the argument hinges mainly on a rather breathlessly presented look at CBO's unpublished estimate of 10-year coverage losses attributable to mandate repeal under the BCRA (provided to Roy by a Congressional staffer). This estimate closely tracks CBO's published December 2016 analysis of the effects of repeal of the mandate alone, with the ACA left otherwise intact. CBO forecast that straight mandate repeal under the ACA would result in a ten-year coverage loss of 15 million, as compared to CBO's forecast that 22 million will lose coverage under the BCRA. Here's CBO's breakout of the losses under straight mandate repeal:

Thursday, July 20, 2017

Go ahead, Trump, cut off CSR payments -- starting in 2018

Imagine for a moment that Republicans fail to pass legislation repealing the ACA -- leaving the ACA marketplace intact as a matter of law,  however shaky its economic viability. Imagine further that Trump continues through this year to reimburse insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated by law to provide to qualifying enrollees, but announces that he will cease paying them in 2018 -- declining to contest the suit that House Republicans filed against the Obama administration, challenging its authority to pay the subsidies without Congressional appropriation.

That act of continued apparent sabotage might shake insurers and drive some to exit the marketplace. But having already priced CSR in to their 2018 filings, as they are now doing, they probably wouldn't exit en masse, as David Anderson has argued. Leaving aside other acts of sabotage, forcing insurers to price in and pay out the full actuarial value of all the plans they sell might actually improve the marketplace -- providing a kind of backdoor CSR subsidy for shoppers at the upper end of the subsidy scale.

Monday, July 17, 2017

If serious compromise on healthcare were possible, what would Democrats give?

As Republicans flail away at the BCRA, Democrats' first murmurs about bipartisan legislation to stabilize the ACA marketplace have been pretty basic: guarantee CSR payments and re-institute some kind of reinsurance program.

If bipartisan legislation were truly possible, however -- and admittedly, we're in contrary-to-fact territory here -- what might Democrats give up to get the most basic fixes, -and possibly further improvements?

Back in January, two leading progressive healthcare scholars at the Urban Institute, Linda Blumberg and John Holahan, floated a compromise proposal that offset provisions Democrats would not embrace unforced with improvements in subsidies and marketplace structure. Here is the package summary.Concessions to conservative priorities are bolded:
1. Replace the individual mandate with a modified version of the late enrollment penalties currently used in Medicare Parts B and D.

Friday, July 14, 2017

A pill quite poison from Frelinghuysen

In late June, a subcommittee of the House Committee on Appropriations, chaired by Rodney Frelinghuysen (R-NJ), released a financial services appropriations bill that hamstrings the IRS's ability to police the phony "charities" corrupting our politics; bars the SEC from requiring disclosure of political contributions in SEC filings; and, amid sundry other acts of regulatory sabotage, prohibits the IRS from enforcing the ACA's individual mandate. The Appropriations Committee approved the bill yesterday.

Frelinghuysen, a once-moderate Republican driven relentlessly to the right and now riding the Trump train, was the focus of intense citizen action this spring, and a key last-minute opponent of the first iteration of the House ACA repeal/Medicaid destruction act.  He then flipped, reportedly under pain of losing his Appropriations chair, and supported the version that passed the House, which of course addressed none of his stated concerns (for Medicaid expansion beneficiaries and people with pre-existing conditions) and in fact made the bill's treatment of the latter worse. Now, he's given his blessing to ACA marketplace sabotage in the event Republicans fail to pass a bill still more horrific than the one he supported. In a press release, he praised the bill for "stopping burdensome regulations before they can damage our economy irreparably."

I have an op-ed in NJ Spotlight, a nonprofit state news source calling Frelinghuysen out for this. I signed it as a member of BlueWaveNJ, a local advocacy group based in Montclair, most of whose members are represented by Frelinghuysen. He encapsulates the descent of the Republican party first into right-wing extremism (he voted to defund Planned Parenthood) and then into fascist fellow traveling and even self-Trumpification  (he's been in the spotlight and may be in legal trouble for intimidating a local activist). We want him out.

Wednesday, July 12, 2017

Not drowning but waiving: Timothy Jost on how Democrats might compromise responsibly on ACA

There's news today -- good news -- of Democrats in both the House and Senate acknowledging flaws in the ACA and proposing their own fixes (House) or exploring bipartisan fixes with Republicans (Senate).

All reports of such discussions or proposals include a couple of no-brainers: 1) a permanent reinsurance program, such as those included in both the AHCA (the House repeal/replace bill) and the BCRA (the Senate iteration), and 2) permanent assurance that the ACA's Cost Sharing Reduction subsidies will be paid, which isn't a conceptual fix, just an agreed end to Republican sabotage.

There's scarce discussion of what Democrats would give up to get Republicans to drop their deadly assault on the ACA's core features and all Medicaid as well, that is, the assault against 1) the taxes that fund the ACA's extension of health insurance access; 2) the ACA Medicaid expansion; 3) the federal government's open-ended commitment to pay its agreed share to each state for all those who are determined eligible Medicaid; and 4) income-based private market subsidies funded at ACA levels, whether structured differently or not.

One possible field of compromise is in the structure of the ACA's Section 1332 "innovation waivers," which allow states to propose variations on ACA marketplace structure to HHS. Through these waivers, states can propose alterations to almost any ACA Marketplace feature -- including repealing the individual and employer mandates, changing subsidy structure and eligibility, and altering the Essential Health Benefits that every insurance plan is required to offer. The catch is that the state seeking a waiver must demonstrate -- and convince the Medicare actuary -- that its alternative scheme will cover as many people as comprehensively and as affordably as the default structure -- and do so without increasing the deficit. Critics complain that the option effectively boils down to "you can change everything, as long as you don't change anything." That's not true, but the guardrails are pretty tight.

Saturday, July 08, 2017

Those uninsured by the BCRA "not losing, but choosing"? Get ready to hear it more.

Bloomberg reporter Steve Dennis flags a Republican talking point in favor of their latest travesty of a 'healthcare" bill that we're likely to hear more of in the next two weeks:
That's in response to:
This argument was first voiced byPaul Ryan, defending the first iteration of the House bill, and later by Tom MacArthur*, whose amendment undermining protections for people with pre-existing conditions secured that bill's House passage. As Cornyn, the Senate majority whip, has emerged as gaslighter-in-chief defending the Senate bill (the so-called Better Care Reconciliation Act, or BCRA), we should regard it as a kind of front-line defense. If the cabal now redrafting the BCRA in secret manages to improve the CBO score by throwing a couple hundred billion dollars back in the coverage pot -- reducing the forecast increase in the uninsured to, say, 15 or 12 million --expect to hear a lot more of it.

There is a ghost of truth in the allegation, which can be made to look more substantial by gaslight. so let's shine some stronger light,. A few points:

Friday, July 07, 2017

Sunday, July 02, 2017

Healthcare spending cuts, Democrat style. Healthcare spending cuts, Republican style

The cut to federal Medicaid spending that CBO estimates would result from the BCRA -- $750 billion over ten years -- superficially recalls ACA cuts to Medicare spending, estimated by CBO in 2010 at $455 billion. As Democrats raise the alarm about deep damage to Medicaid, so Republicans screamed for years that Democrats were cutting Medicare. But of course there are fundamental differences:
  • Democrats cut the growth in Medicare spending and spent the savings to extend health insurance to the uninsured. Republicans want to cut Medicaid to fund tax cuts for the wealthy and for healthcare companies.

  • The ACA specifies that the reductions it mandates in spending growth are not to reduce services provided to Medicare beneficiaries, but only payments to providers. The "Medicare guarantee" that has been stable in traditional (fee-for-service) Medicare for decades -- premium-free hospital coverage, 75% premium subsidy for physician services, actuarial value a bit over 80% for these services, and (since 2006), somewhat weaker drug coverage -- remained intact, and in fact strengthened on the drug front. 

Saturday, July 01, 2017

The real cost of "benchmark silver" for low income BCRA enrollees

For ACA marketplace enrollees with incomes under 200% FPL -- over half of all enrollees -- benchmark silver plans have an average actuarial value of about 91%, i.e. roughly platinum equivalent. This post accordingly looks at the likely cost of AV 90% plans for low income enrollees under the BCRA. If you want to cut to the chase see the two charts at bottom.

Senate Republicans' bill to eviscerate Medicaid, advertised as an ACA repeal and replace bill, provides for income-based  private market premium subsidies that superficially look something like those of the ACA marketplace, but with these differences:
  • Subsidy eligibility begins at zero income, rather than at 100% or 138% of the Federal Poverty Level (FPL) as in the ACA. Theoretically, these private market subsidies for the poor and near-poor are meant to compensate for repeal of the ACA Medicaid expansion.
  • Subsidy eligibility ends at 350% FPL compared to 400% FPL in the ACA.
  • The benchmark against which subsidies are calculated is a plan with an actuarial value (AV) of 58%, compared to AV 70% for the ACA's benchmark silver plans. AV refers to the percentage of the average user's medical costs the plan is designed to cover.
  • Subsidy size, calculated to leave the enrollee paying a fixed percentage of income for a benchmark plan, varies by age as well as income.
  • There are no Cost Sharing Reduction (CSR) subsidies to reduce out-of-pocket expenses (boosting AV) for low income enrollees, as in the ACA.
  • "Age-rating" is increased from the ACA's 3:1 to the pre-ACA individual market norm of 5:1, meaning that a 64 year-old's plan will cost five times as much as a 21 year-old's plan rather than three times as much.
Of these, the difference in the value of a benchmark plan (AV 58% vs. 70%) has gotten the most attention, as analysts are at pains to make apples-to-apples comparisons. Both the Brookings Institute and the Kaiser Family Foundation have put out papers highlighting the cost of AV 70% coverage under the Senate bill, the so-called Better Care Reconciliation Act (BCRA).

These comparisons are appropriate in that insurers price silver plans under the ACA at 70% actuarial value. But Cost Sharing Reduction (CSR) subsidies, tacked on separately and reimbursed separately to insurers, dramatically alter the actual AV accessed by marketplace enrollees. As of April 2016, in the 39 states using the federal marketplace,, silver plans purchased in-marketplace had an average weighted AV of 85% (see note at bottom here).  Among enrollees with incomes below 200% FPL -- about 60% of all on-marketplace current enrollees -- the average AV for a silver plan is 91% . About 85% of enrollees below that income threshold select silver plans and so access CSR.