The individual mandate is not the hill for Democrats to die on

A few days ago, Adrianna McIntyre sketched out the likely contours of Republican plans to replace the ACA.  In the main, three core changes have been floated in a variety of plans: deregulate the kinds of insurance plans available in the individual market (e.g., loosening age-banding, allowing lower actuarial values, and reducing EHBs); block-grant Medicaid (without, Adrianna guesses, clawing back the ACA eligibility expansion); and end the individual mandate, replacing it with "continuous coverage" protection from medical underwriting.

If those contours prove to be on target, the question of how many people lose coverage will come down to funding. If Republicans end the federal government's 90-100% funding of Medicaid for those rendered newly eligible by the ACA, as Ryan proposes, the ranks of the uninsured will rise rapidly. If subsidies for enrollees in the individual market are cut significantly, or become much skimpier for lower-income enrollees (the bulk of current enrollees), many enrollees will find themselves unable to pay. If the ACA's high federal matching rate for Medicaid is left in place and funding for tax credits in the individual market is not radically cut, change will be more gradual.

One change that need not be too disruptive, I suspect -- if done right -- is replacing the individual mandate with continuous coverage protection -- that is, protection from medical underwriting for anyone who maintains continuous coverage.  "Done right" means rendering coverage available and affordable to those who lose their jobs and/or income.

"Obamacare, Obamacare! stay a little. Ha!*

As Greg Sargent never tires of reminding us, Republicans have been promising an ACA replacement plan for 50 months now and haven't been able to deliver. Ergo, Sargent asserts, claims by Republican legislators that they are developing a plan to replace the ACA and keep premium subsidies flowing should the Supreme Court rule for the plaintiffs in King are a ruse, designed to convince swing justices that chaos won't erupt if the court invalidates subsidies credited through the federal exchange.

That is probably at least partially true, as Republicans have long proven themselves unable to unite behind a plan that would replace a large portion of ACA benefits while creating different winners and losers. But there are plans and plans (and motives and motives), and elected officials don't yank away existing benefits lightly. While Republicans may well be paralyzed by a Supreme Court decision that gives them what they say they want, there are elements in the plans they're floating that could find their way, sooner or later, into a post-King settlement.  Republicans' lack of unity could lead them to punt, perhaps declaring victory with relatively modest gains while restoring most of the status quo.

Most interesting in this regard are Republican proposals to freeze or patch the the current system while they devise a fix. Here's how one very sympathetically worded account describes such a measure:

On bronze-smithing the ACA

A couple of days ago I wrote about three conservative ways to change the ACA that would arguably increase viable options for individuals, insurers and (in one case) employers.  It occurs to me that a common thread runs through them all, and that thread may be twined round the heart of a system as invested as ours is in private enterprise, choice and competition.

Here are the three proposals:

1) Allow Cost Sharing Reduction (CSR) subsidies, currently available only with silver plans, to attach also to bronze plans, maintaining a proportionate difference in actuarial value between bronze and silver plans.

2) Allow smaller employers, or possibly even all employers, to fulfill the employer mandate by fully funding employee HSAs linked to HSA-qualified plans available on the ACA exchanges.

How conservatives might amend (rather than destroy) the ACA

The Affordable Care Act is by any rational assessment a conservative plan to expand access to healthcare -- relying in large part on private insurance and competition, devolving oversight and insurance industry supervision to the states, and imposing fiscal 'responsibility' on individuals with incomes as low as 138% of the Federal Poverty Level to contribute to the cost of their healthcare.

Yet conservatives complain bitterly that the private market is not free (i.e., to exclude benefits now deemed 'essential'); that the states are commanded to administer within a federal straitjacket; that the employer mandate will choke off job growth; and that the individual mandate is an unconstitutional impingement on personal liberty.

Looking back at a year of blogging about the ACA's increasingly successful implementation, it occurs to me that I've addressed three possible changes to the law that could reasonably be called conservative. Two increase viable consumer choice within the exchanges; one takes seriously the possibility of replacing the individual mandate, and one would loosen or perhaps partially replace the employer mandate.

Here they are:

Is health insurance worth the money? Would you do without it?

A rigorous study* of the effects of health reform in Massachusetts since its 2006 launch yielded powerful evidence that the state's expansion of access to health insurance improved health and reduced mortality, particularly among poorer citizens. Adrianna McIntyre summarizes the core finding:

Benjamin Sommers, Sharon Long, and Katherine Baicker estimate that overall mortality in Massachusetts declined 2.9 percent relative to control counties between 2007 and 2010; mortality amenable to health care declined 4.5 percent. This translates to one death prevented for every 830 people who gain insurance, and the effects were larger in counties with low income and low pre-reform insurance rates—the counties we would expect to be most favorably impacted by reform.

Health economists, as is their wont, have put  (tentative) price tags on lives saved.  The ever-humane Harold Pollack pegged the cost-per-life at $3.3 million, adding the essential caveat:

Republicans wouldn't scrap the main driver of ACA rate shock

As the reality that millions have benefited from full implementation of the Affordable Care Act takes hold, more and more Republicans are resorting to what Ezra Klein has dubbed Fauxbamacare: propose to repeal the hated law, replace all its popular components without providing any details.

Progressives counter that if you claim you want to make health insurance affordable to all, unless you come out in favor of a single payer system there is no real alternative to the basic structure of the ACA: guaranteed issue (that is, no variation in health plan price based on a person's medical history), an individual mandate or equivalent* to offset the influx of sick people into the risk pool, and subsidies (or Medicaid) for those who can't afford the premiums.

While that's mostly true, it's also true that some plans crafted to current conservative specs look significantly if not radically different from the ACA. The vast majority of Republican elected officials have shied from putting forward such a plan -- or ignored the one put forward by Senators Coburn, Burr and Hatch --  since such alternatives require tough tradeoffs. The main difference is that conservative schemes give insurers more leeway to sell plans with skimpier benefits and lower premiums. They eliminate or vastly reduce the Essential Health Benefits (EHBs) mandated by the ACA. They loosen the allowing "age banding" of premiums -- the degree to which older buyers can be charged more than younger ones -- from the ACA-mandated 3-to-1 to the pre-ACA norm of 5-to-1.

It's true that for healthy people who were buying insurance in the individual market prior to the ACA, the law's coverage rules substantially drove up the premium price. Rate shock is a real phenomenon. As the complaints poured forth, the EHBs were a prime attack point.  "I'm 55 -- I don't need childbirth coverage." "I'm of sound mind -- I don't need mental health coverage."  Limited age-banding was also a rallying point, since the 5-to-1 ratio was based on actuarial calculations.  Why should a 23 year-old pay more so that a 58 year-old can pay less?

These complaints have some legitimacy. The EHBs and age-banding limits involve tradeoffs that can be argued from either side. But they are not the prime drivers of the rate hikes caused by the ACA.

Obamacare to be repealed and replaced in 2017...

In at least one state, that is.

Almost everything that Republicans who profess to want to reduce the ranks of the uninsured on the ACA's scale say they want to do can be done via state waivers effective 2017.

Here is a summary of ACA Sec. 1332, Waiver for State innovation, from an ACA outline posted on the Democratic Policy and Communication Center website:

Beginning in 2017, allows States to apply for a waiver for up to 5 years of requirements relating to qualified health plans, Exchanges, cost-sharing reductions, tax credits, the individual responsibility requirement, and shared responsibility for employers. Requires States to enact a law and to comply with regulations that ensure transparency. Requires the Secretary to provide to a State the aggregate amount of tax credits and cost-sharing reductions that would have been paid to residents of the State in the absence of a waiver. Requires the Secretary to determine that the State plan for a waiver will provide coverage that is at least as comprehensive and affordable, to at least a comparable number of residents, as this title would provide; and that it will not increase the Federal deficit.

How Obama might ditch the individual mandate and save the ACA

The "doc fix" legislation that would replace the current unsustainable physician payment formula for Medicare while transitioning payments away from fee-for-service is a rather remarkable instance of substantive bipartisan cooperation. Republicans and Democrats have agreed on methods of bundling payments and paying for quality that, whatever their merits, would require intensive government monitoring.  Had these methods been incorporated in the Affordable Care Act, Republicans would doubtless be demonizing them as relentlessly as they have the thus-far-dormant Independent Payment Advisory Board for Medicare, notwithstanding that Paul Ryan included a similar board in his 2009 Patients' Choice Act.

The doc fix must be "paid for," however, since the un-implementable cuts to doctors' payments mandated by the law they would replace are incorporated into the federal budget baseline. And in the pay-for, Republicans in both houses of Congress have introduced a poison pill: delay or repeal the Affordable Care Act's individual mandate. That would save money by ensuring that far fewer people enroll in Medicaid or enroll in the ACA's Qualified Health Plans (mostly with federal subsidies). CBO estimates that  the 5-year delay proposed by the House GOP would result 13 million fewer insured Americans by 2018: seven million fewer buying private health plans, five million fewer in Medicaid, and a million eschewing employer-provided insurance.

As written, such a bill would probably destroy the ACA, draining the risk pool and thus inducing insurers to jack up prices. That's assuming no viable replacement for the mandate, however.  In fact the outline of a viable replacement exists, in the ACA "repeal and replace" proposal introduced in the Senate this past February by Senators Coburn, Burr and Hatch.

What if the (Republican) dog catches the Obamacar(e)?

Healthcare economists Austin Frakt, Donald Taylor and Yevgeniy Feyman on the future of healthcare reform

If Republicans win both houses of Congress and the presidency by 2017, what will they do to the Affordable Care Act?

The first substantive "repeal and replace" legislative proposal offered by Republicans since the ACA passed, unveiled in outline on January 27 by Republican Sens. Tom Coburn (OK), Richard Burr (NC), and Orrin Hatch (UT), purports to settle that question by making repeal of the ACA its first provision.  The Coburn-Burr-Hatch proposal (CBH*) has led healthcare wonks on the left and right, however, to conclude the opposite: "Repeal ACA, RIP," as Donald Taylor of Duke titled his analysis.

That's because after the "repeal" provision come the come the "replace" provisions, and to greater or lesser degree most are cousins of their counterparts in the ACA. CBH subsidizes insurance for people whose earnings fall between 100% and 300% of the Federal Poverty Level (FPL); provides a functional if more porous equivalent of the individual mandate and guaranteed issue; allows adults up to age 26 to stay on their parents' plans; bars lifetime coverage caps and  policy cancellations for reasons other than fraud; semi-privatizes Medicaid; taxes employer-sponsored insurance more heavily than the ACA does; and leaves the ACA's Medicare payment reforms and cuts untouched.

CBH thus clarifies that we are in a healthcare world remade by the ACA, and any conservative proposal that purports to cover as many people as the ACA, or close to it, must retain its basic infrastructure: subsidized private insurance, with some mechanism for minimizing medical underwriting and luring almost everyone into the risk pool. In short, the first relatively fleshed-out "repeal and replace" proposal demonstrates that "replace" effectively erases "repeal."

If repeal is all but off the table, how would a GOP-controlled federal government alter the ACA? I asked three healthcare economists to consider that question: progressives Donald Taylor of Duke and Austin Frakt of the U.S. Department of Veterans Affairs and Boston University, and conservative Yevgeniy Feyman of the Manhattan Institute. There was substantial consensus among them that repeal is dead -- but also that conservative alterations of the ACA are likely. Feyman is  eager to open the individual market to a greater variety of plans than the ACA allows on its exchanges.  Frakt and Taylor have long urged compromise that could win Republican acceptance and deploy "conservative designs for progressive ends," as Frakt put it (as the ACA itself does). Both Taylor and Frakt find some provisions of CBH palatable and even desirable on the merits. (Frakt, Taylor and Feyman all blog extensively on healthcare reform: Frakt at the healthcare policy blog The Incidental Economist, where he is co-editor in chief; Taylor on his personal blog; and Feyman at Forbes.)

As we hyperventilate, a quiet healthcare revolution?

Healthcare wonks were understandably a-twitter yesterday over the unveiling of the first substantive "repeal and replace" legislation -- a bill from Senators Coburn, Burr and Hatch that would re-remake the individual insurance market, semi block-grant Medicaid and take a big bit out of the employer's health insurance tax deduction.

The bill is important. Some of its core provisions could be enacted within the framework of the ACA. Some of those provisions -- e.g., replacing the individual mandate with a combination of continuous-coverage protection and default auto-enrollment -- are palatable to some progressives, and others -- capping the employer's tax deduction at 65% of the cost of an average plan -- might be downright attractive to them.  Others, not so much. But as a framework for possible compromise with ACA proponents -- e.g.,  if, say, Democrats have the Senate and Republicans the House and presidency in 2017 -- it has potential.

Under the radar, meanwhile, are two bipartisan efforts that could potentially have a more profound impact on healthcare costs, and therefore on healthcare delivery, as well as on the nation's long-term fiscal outlook.  Both are attempts to move government payment for health services away from fee-for-service. Both seek to foster a combination of coordinated care and pay-for-performance (as do pilot programs in the ACA).  Significantly, amazingly, this potentially revolutionary effort has not yet taken on strong partisan markings.

The most recent effort on this front bears the imprimatur of Congress's most creative and informed healthcare legislator, Senator Ron Wyden (D-Ore.), in concert with Sen. Johnny Isakson, (R-Ga.); Rep. Erik Paulsen (R-Minn.); and Rep. Peter Welch (D-Vt.). The bill, the Better Care, Lower Cost Act of 2014, hones in on the sickest Medicare patients, a small percentage of whom account for the majority of costs.  Modern Healthcare's Andis Robeznieks explains: