Bernie Sanders is the Pied Piper of Healthcare Hamlin

Political battles can be semantic, but important. Such is the case with Democrats wrestling with the meaning of Medicare for all.

This week Kamala Harris came out with a healthcare reform plan that seems designed to resolve her past flip-flops as to whether private insurance should be phased out entirely. In brief, she proposed a 10-year path to "Medicare for all" that includes Medicare Advantage -- private plans reimbursed by the federal government and conforming to strict coverage rules. Employers could also offer "Medicare Advantage" plans.  Lots of question marks, but the intent to preserve the public/private hybrid of Medicare as we know it is clear.

Bernie's camp lit into the plan, claiming in effect that the his bill's title (Medicare for All) is politically trademarked. “Call it anything you want, but you can’t call this plan Medicare for All," Sanders' campaign manager Faiz Shakir said in a statement. Pramila Jayapal, lead sponsor of the House version, tweeted, "as lead sponsor of #MedicareForAll, I find it misleading when my fellow Democrats use the #M4A name to describe proposals that are NOT #MedicareForAll."

That's a straight trademark play: we own the hashtag, we own the name. The subtext is that the One True Path to Medicare for All is Sanders and Jayapal's Big Rock Candy Mountain in which a single government entity provides 100% coverage of everything for everyone, funded entirely by over $3 trillion per year in new taxes ($1.5 trillion according to Bernie).

New colors in the spectrum of Democratic healthcare reform plans

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For some time, Democratic next-gen healthcare reform proposals have fallen on a spectrum  that I've thought as anchored by three main proposal types. Here they are, in ascending order of cost and degree of system change:

• ACA 2.0 - Improve the ACA mainly by a) bulking up the subsidies and extending them farther up the income scale, and/or b) introducing a national public option within the ACA marketplace framework. Chief exemplars: Elizabeth Warren's ACA 2.0 bill; Senators Bennet and Kaine's Medicare-X. 


• Medicare for all who want it: Introduce a strong public option that anyone can buy into on an income-adjusted basis, even if they have access to other affordable insurance, e.g., insurance offered by an employer. Chief current exemplars: The Center for American Progress's Medicare Extra, which is the basis of Reps. DeLauro and Schakowsky's Medicare for America bill.


• Medicare for All (that covers everything for everyone at no cost to anyone except via taxes). Private insurance essentially ends. Chief exemplars: - Bernie Sander's Medicare for All bill, and Rep. Jayapal's House variant.

The Ten Counts of Obstruction (with apologies to Lin-Manuel...)

It's been said no one's read Mueller's 448-page report. Well but, the 8-page summaries of Parts 1 and 2 are pretty direct. Well but, that's still a lot of text.

So let's try it Lin-Manuel Miranda style (soundtrack here):

The Ten Counts of Obstruction

For the nation's instruction,
The ten counts of obstruction:

Number 1: 

Russian hacks electrify the nation.
Call it fake news while you seek more information.

Number 2

Summon Comey to the throne like you're royalty.
Tell him you demand unconditional loyalty.

Pelosi and co. on impeachment: Not if, when?

In some ways, the press conference held by Pelosi, Cummings, Nadler and Schiff in the wake of Mueller's testimony today was exquisitely frustrating. Their dual message made no sense on its face: the president manifestly deserves impeachment but we need more evidence. Nadler said the president committed crimes. Pelosi also said that "crimes were committed against our Constitution," albeit in passive voice. Schiff said Trump was disloyal to the country, citing his negotiating the Moscow Trump Tower deal while seeking the presidency without telling the public. So how can they not open an impeachment inquiry?

At the same time, it seemed to me that these committee chairs and Pelosi in particular may have turned a corner. This was the first time I've heard Pelosi speak about impeachment without actively undercutting it. They were stalling, but they were implicitly promising to get there.

This promise -- too strong a word -- was almost explicit at the end. Schiff, all but acknowledging that the Senate would not convict, also declared that that was not the point. My emphasis (and rough transcript) below:

New enrollment drop in California: Probably the mandate repeal

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Covered California, the state's ACA exchange, recently released its March Active Member Profile, the year's first detailed breakout of enrollment data for all enrollees (repeated quarterly). It follows a prior breakout for new enrollees. The Active Member numbers show some market stability -- they're broadly similar to last year's. They may also support CoveredCA's previous explanation of a drop in new enrollment.

On January 30, CoveredCA put out an analysis  as of the end of open enrollment, emphasizing that while enrollment was virtually flat overall compared to 2018 (down 0.5%), new enrollments had tumbled 23.7%. CoveredCA attributed this worrisome drop (offset by a 7.5% increase in re-enrollments) to repeal of the individual mandate penalty, noting that the new enrollment drop was "relatively evenly spread across demographics." California has since enacted measures intended to reverse the damage, instituting a state individual mandate and state-funded premium subsidies to supplement the federal subsidies.

I wondered whether part of the drop in new enrollment may have been caused by an overall 8.7% average weighted increase in premiums in 2019 and/or by changes in the discounts in gold and bronze plans generated by silver loading (see note at bottom for an explanation). The answer appears to be no -- it was the mandate repeal. Ready for a null-result report?

Gold plans are pretty cheap in Florida's ACA marketplace. They should be way cheaper

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Florida's ACA marketplace has benefitted from silver loading. But not as much as it should.

("Silver loading" refers to the pricing of Cost Sharing Reduction subsidies into silver plans only, creating discounts in bronze and gold plans. The practice began in 2018 after Trump cut off direct reimbursement to insurers for CSR. See note at bottom for a fuller explanation.)

Florida has more marketplace enrollees than any state -- and has marginally increased enrollment since 2016 (up 2%) while enrollment has dropped 10% nationally and 14% in the 39 states on the federal exchange, HealthCare.gov. There are several reasons for that:

Biden Plan: An ACA 2.0/Medicare for America hybrid

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Joe Biden released a healthcare reform plan outline today. It looks like a cross between the Medicare for America bill, which would create a strong national public option, and various "ACA 2.0" bills, which would bolster ACA premium subsidies and reduce enrollees' out-of-pocket costs.

In brief, here are the core features of these antecedents:

• ACA 2.0 bills and plans, including Elizabeth Warren's, are generally variants on an ACA enhancement plan published in August 2015 by Urban Institute scholars Linda Blumberg and John Holahan.  The core is simply to increase ACA premium subsidies and extend them to more people. Blumberg and Holahan proposed raising the ACA benchmark, against which subsidies are calculated, from "silver" to "gold" - -that is, from an actuarial value of 70% (paying that percentage of the average user's annual medical costs) to 80%. They further proposed raising AV higher than that income levels up to 300% FPL, improving the ACA's Cost Sharing Reduction subsidies at lower income levels; reducing the percentage of income paid for the benchmark at every income level; and capping premiums as a percentage of income at 8.5% for anyone at any income level who lacks access to employer insurance or other insurance -- removing the ACA's 400% FPL income cap on subsidies. At bottom, I've posted Blumberg and Holahan's proposed premium and AV schedule.


• The Medicare for America Act of 2019 would create a revamped Medicare available to people at all income levels, paying Medicare rates (adjusted modestly) to providers, and costing no one more than 8% of income. All Americans would be eligible for income-based premium subsidies, even if their employers offer affordable coverage. The plan would be free -- with no cost-sharing -- to people with incomes below 200% of the Federal Poverty Level (FPL). Newborns would be auto-enrolled. Employers could "buy in" by paying a payroll tax, or continue to offer coverage. Existing Medicare and Medicaid would be integrated into the new program, which would include long-term care insurance. Medicare would negotiate drug prices, and a price review board would be empowered to crack down on price gouging.

Ambiguity on key points

Biden's plan would establish "a public health insurance option like Medicare" that, "like Medicare...will reduce costs for patients by negotiating lower prices from hospitals and other health care providers."  Note that it's not entirely clear whether this option will simply adopt Medicare prices or negotiate separately -- in fact, the language implies the latter. The plan will be available to anyone, including those with access to employer insurance -- but here too the language is ambiguous; it's not clear whether those with access to employer insurance would be eligible for subsidies.

Sweeney's amendment to ACA exchange bill: Moar Medicaid enrollment integration?

Some clarification about what New Jersey state Senate president Stephen Sweeney was seeking when he held up passage of the bill to create a state ACA exchange -- other than leverage in bigger battles with Gov. Phil Murphy. 

After threatening not to allow a floor vote on the bill, Sweeney relented at the last minute after negotiating an amendment concerning integration of Medicaid processing in the platform. If the bill had not passed by the end of the legislative session, there would not have been time to meet federal requirements to get the exchange up and running in the fall of 2020 for enrollment in 2021.

Sweeney's amendment changed the language concerning Medicaid integration, directing the state to pursue federal funding for the integration. The text to be replaced is in brackets.

Mining the silver lode (or not): A tale of two blue states

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I have argued in recent posts that

1. State insurance regulators should take the advice of actuaries Greg Fann and Daniel Cruz and force the silver loading spring -- that is, pretty much mandate that insurers price on-exchange gold plans below or at least only slightly above on-exchange silver plans. Fann and Cruz recommend that regulators require insurers to price silver plans more or less as if their actuarial value is 87% or higher, as it is for enrollees with incomes up to 200% FPL. If they do so, no one at incomes above 200% FPL will buy silver, so the AV estimate will become a self-fulfilling prophecy. (See note at bottom for a brief explanation of silver loading, which began in 2018.)


2. New Jersey enrollment has suffered since 2017 from a lack of discounts in bronze and gold plans that silver loading has produced in many other states. 

States that have refused to expand Medicaid have a built-in silver loading advantage. Since eligibility for marketplace subsidies in nonexpansion states begins at 100% FPL rather than the 139% FPL threshold in expansion states,  the nonexpansion states have a high concentration of silver plan enrollees who obtain the highest level of CSR, which raises the actuarial value of a silver plan 94%.  Still, some expansion states have enjoyed pronounced silver loading effects, while others have seen almost none.

Below, I contrast the experience of two expansion states, New Jersey and California. All enrollment figures are derived from the 2019 state-level Public Use Files published by CMS, unless otherwise noted.  I am going to indulge in a bit of shorthand in this post and neglect to provide definitions and back story, excepting the note on silver loading at bottom.

Turning Washington's public option to gold

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Washington state legislators made ACA history last month by passing the first state-based "public option," to be sold in the state ACA marketplace. An unkind reaction reaction, partly prompted by the main actors' own assessments, would be that the creators labored mightily to produce a mouse.

In an early version, the bill to create the public option stipulated that the program would pay healthcare providers at Medicare rates. As the bill neared passage, the payment rate jumped to 150% Medicare -- and then, at passage, to 160%. David Frockt, the bill's sponsor in the state Senate, claimed that providers would not participate at lower rates, particularly in rural areas, where the state has had a hard time attracting insurers into the exchange.* Frockt later told Sarah Kliff that the bill would not have passed without the rate bump.

State officials estimate that the plan will reduce individual market premiums by a modest 5-10%. That's a boon to unsubsidized enrollees -- with no guarantee of any pricing benefit to subsidized enrollees, who pay a fixed percentage of income for the benchmark (second cheapest) silver plan in their area. In fact, lower base premiums sometimes reduce affordable options for subsidized enrollees as lower premiums tend to reduce price spreads between the benchmark, which determines subsidy size, and cheaper plans.

Perhaps the public option's chief benefit is the guarantee that at least one insurer, paying not-exorbitant rates to providers, will operate in rural areas ( though the bill also empowers the state exchange to pay higher rates in areas where they can't attract sufficient providers). That's not nothing, but it's not exactly a game changer [though per update at bottom, 14 of 39 counties in 2019 had just one insurer, and some have no bronze plans]. The state exchange also will design the plans with an eye to reducing deductibles and offer some services not subject to the deductible, presumably favoring those that meet a stated goal of encouraging "choice based on value." A plan designed with the intent to maximize benefit to enrollees is good -- but there's just so many ways to slice the actuarial value  mandated for each metal level by the ACA. And the state will not administer the plans -- it will engage private insurers to do so.

Some regulatory alchemy is needed

There is a way, however, that the plan's administrators (which include the state exchange, the insurance commissioner, and the state Health Care Authority), could  increase the value of the public option to enrollees at the upper income levels of  subsidy eligibility. They could require  that gold plans be priced more cheaply than silver plans. They should be, because Washington's silver plan enrollees, taken together, obtain a slightly higher actuarial value than do gold plan enrollees -- and that value difference will expand if the plans are priced appropriately. (Actuarial value is the percentage of the average enrollee's costs a plan is designed to cover, computed according to a federally mandated formula.)