Mitigating the Medicaid cuts

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Look for the helpers

The enactment of the Republicans’ monstrous budget bill in one sense sets politics and policy at odds, at least for Democrats. Annie Karni, congressional report for The New York Times, frames a political problem for Dems:

A challenge for Ds who expect the passage of this bill to help them win elections is that it may take a while for people to feel the full negative effects. Rs front loaded some temporary tax cuts for working people and backloaded cuts to Medicaid to hit after the midterms.

As KFF’s Larry Levitt points out in response, funding cuts and some impediments to enrollment in the ACA’s private-plan marketplace kick in immediately or almost immediately, i.e., for OEP 2026, beginning Nov. 1 this year (and Charles Gaba has tallied provisions in both Medicaid and marketplace that will take effect before the midterms). That said, Republicans will of course exploit the time lag, which extends to other benefit cuts as well (SNAP, student loans, energy credits), using it to add plausibility to their claims that, as MAGA go-along Tom Kean Jr. (NJ-7) boasted, “we protected Medicaid for every intended beneficiary in New Jersey and across the country.” That is, the bill does not change Medicaid eligibility for anyone (except various classes of lawfully present noncitizens, who are just human waste in Republican parlance). Instead, Republicans set up a thicket of administrative enrollment impediments and cuts to state funding (mostly delayed) that will increase the uninsured population by some 12 million by CBO’s estimate (with another 4 million losing coverage due to Republicans’ refusal to extend the enhanced ACA marketplace subsidies funded through 2025*). If enrollment reductions on that scale don’t happen — as many Republicans claim — neither will the cuts to federal spending that help fund the bill’s gargantuan tax cuts.

All that said, I’d like to consider Democrats’ alleged political “challenge” from the opposite end of the telescope. To what extent can Democrats in state government — and, more speculatively, in Congress — mitigate the coverage and funding losses? Administrative barriers can be erected with steel or Styrofoam — though Trump’s CMS, led by people whose chief passion in life is to ensure that someone somewhere doesn’t get a benefit to which they’re not technically entitled**— will doubtless work to insist on steel. If Democrats take the House, they may be able to delay or reduce some spending cuts — the annual ratchet-down of the provider tax safe harbor, for example, strikes me as the kind of thing Congress is prone to pause.

No mandate penalty, no problem? The jury's still out

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The Kaiser Family Foundation is peerless as a source of data and analysis of the ACA marketplace, and indeed of all U.S. healthcare markets. So it's probably foolish of me to question a simple, unequivocal and important conclusion by KFF president and CEO Drew Altman. Still...

Altman, who has a regular column conforming to Axios' radically short format, begins his latest with this declarative:

The Affordable Care Act’s insurance market has not been materially affected by the elimination of the individual mandate penalty.

Evidence: premiums are down in 2020, marketplace insurers are profitable, the risk pool has not apparently worsened, enrollment is more or less stable, and the Medicaid expansion appears to have been "largely unaffected."

That's a lot of evidence in short space. The marketplace, and the Medicaid expansion are clearly functioning without the mandate. But still, I think it's too soon to declare the effect of zeroing out the mandate negligible.  Caveats:

The Kaiser Family Foundation is shaping (or showing the shape of) our healthcare debate

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There is a subtext to Abby Goodnough's excellent overview of voters' preference for a public option or Medicare buy-in over Medicare for All:  the extent to which the Kaiser Family Foundation and its tracking poll of voters' healthcare concerns and perceptions are shaping the debate.

Voters cited in Goodnough's piece reflect the concerns about M4A flagged in Kaiser polls:

About two-thirds of voters like the idea of a public option or Medicare buy-in, according to several recent national polls. This month, the Kaiser Family Foundation tracking poll, which has asked voters about the plan four times since July, found that 65 percent of the public favors the idea, compared with 53 percent who support “Medicare for all.” Large majorities of Democrats and independents favored a public option in Kaiser’s November poll, as did 41 percent of Republicans — roughly the same level as earlier Kaiser polls found but down from an unusual spike of 58 percent in October....

Employer-sponsored insurance as we know it is unsustainable. Now what?

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Kaiser's 2019 Employer Health Benefits Survey, released yesterday, highlights a basic I noted a month ago (based on a Kaiser precursor report): employer-sponsored health insurance is deteriorating. Average family plan premiums have topped $20,000; average deductibles have topped $1,600. Family premiums have increased 54% over ten years. That's actually down from the previous ten years, when rates more than doubled. But the climb in excess of inflation has been relentless.

The system most consistently fails low income workers -- many of whom would be better off if the employer offered no insurance, rendering them eligible for ACA marketplace subsidies. KFF president Drew Altman lays out the basics:

• Roughly 36 million American workers earn $25,000 per year or less — retail workers, personal care attendants, warehouse workers and many more.
• Just 33% of workers at lower-wage firms offering health benefits are covered by their employer’s health benefits, well below the 63% share at other firms offering coverage.
• These low-wage workers pay an average of $7,000 per year just toward the premium for a family plan.
• Workers in low-wage firms also face much higher deductibles: a $2,679 annual single deductible, while at other firms, the average is $1,610.

My takeaways:

Which Democratic healthcare reform bills offer the most affordable coverage to the most people?

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Drew Altman, president and CEO of the Kaiser Family Foundation, has a message for elected officials and candidates. With regard to healthcare policy

it’s the candidates who can connect their plans and messages to voters’ worries about out of pocket costs who will reach beyond the activists in their base. And the candidates aren’t speaking to that much, at least so far.   

That claim is based mainly on Kaiser polling, which finds that 48 percent of voters worry about paying their health care bills, and half of people who are sick have trouble paying their medical bills.

The extent to which various Democratic bills to improve or replace the ACA address the demand for affordability can be viewed in two dimensions. First is the degree to which they make coverage more affordable and reduce out-of-pocket costs for the ACA's original intended beneficiaries: those who lack access to other affordable insurance, mainly employer-sponsored insurance (ESI). Second is the degree to which they impact affordability for the 150-plus million current ESI enrollees (roughly 56% of the population under age 65).

The bills affect the affordability of ESI in three ways.

Kaiser and me, on average AV

Drew Altman, president and CEO of the Kaiser Family Foundation, wrote on March 22 that under Ryan's ACA repeal plan, the average deductible in the individual market for health insurance would rise $1550 from current levels in the ACA-compliant market.

That was based on an estimate that the average actuarial value in the current market is 72%, vs. a norm of 65% that CBO calculated for Ryan's bill. Actuarial value (AV) is the percentage of the average user's yearly medical costs covered by plan. It's calculated according to a formula mandated by the ACA.

The 72% average AV figure jumped out at me, because in April 2016 I calculated the average weighted AV in the individual market as 75.5%.  Altman's piece cites an average AV in the ACA marketplace of 79%.That's exactly what I initially calculated, though I later bumped my estimate to 80%, based on likely silver plan selection by enrollees eligible for Cost Sharing Reduction at different income levels (see note at first asterisk, here).

The difference in the overall estimate appears to stem from estimates of metal level selection (bronze, silver, etc., with AV set by statute at each level) in off-marketplace enrollment, which is something of a black box. I used unsubsidized enrollees in the ACA marketplace as a proxy and calculated their average weighted AV at 68.7%.  According to an as-yet unpublished methodology note forwarded to me, Kaiser appears to have relied on 2016 data from the online broker eHealth, which included  a metal level breakout among their customers indicating an average weighted AV of 65.8%:

Medicaid envy in the rust belt

Yesterday, Drew Altman, president of the Kaiser Family Foundation, published an op-ed in the New York Times in which he reported results of focus groups that KFF conducted with Trump voters in rust belt states who are enrolled in Medicaid and ACA marketplace plans.  One set of complaints from marketplace enrollees is worth pondering:

They spoke anxiously about rising premiums, deductibles, copays and drug costs. They were especially upset by surprise bills for services they believed were covered. They said their coverage was hopelessly complex. Those with marketplace insurance — for which they were eligible for subsidies — saw Medicaid as a much better deal than their insurance and were resentful that people with incomes lower than theirs could get it.

While Medicaid enrollees may have difficulty finding an in-network provider for a given need, they generally not only pay little-to-nothing in premiums and out-of-pocket costs, but also are shielded from balance billing to greater or lesser extent by state law*, Medicaid beneficiaries generally rate their coverage higher than marketplace enrollees -- although, as Altman points out, large majorities of marketplace enrollees also generally rate their coverage at least satisfactory (Trump voters are likely less satisfied than the average). While no one likes a narrow network, it may be the case that what people dislike most is not a narrow choice of providers, but the risk that an out-of-network provider will inflict himself on you, or more exactly, on your checkbook.

Do Democrats and Republicans get the same coverage in the ACA marketplace?

UPDATED 5/20: Liz Hamel, Kaiser's director of survey research, was kind enough to send me some cross-tabs addressing the core question here -- whether Democrats and Republicans obtained similar coverage in the individual market.  See below!

Kaiser Family Foundation president Drew Altman, previewing a Kaiser survey of enrollees in private plans sold in the ACA marketplace, highlights the startling fact that partisanship seems to be the dominant factor in whether enrollees report being harmed or helped by the law.

While no one would likely dispute Altman's main conclusion, it does, to my mind, raise a question. Here's the gist:

In the Kaiser survey, which will be published next week, 29% of Republicans in marketplace plans (i.e., Obamacare) say they have benefited from the ACA compared with 75% of Democrats, a 46-point difference. There is no reason to believe that there are demographic differences between these Republican or Democratic marketplace enrollees that would explain this large of a difference in their responses. They are all purchasing coverage in the ACA marketplaces, and most members of each group are receiving premium subsidies under the law. Overall, substantially more marketplace-plan enrollees say that they benefited from the ACA (54%) than say they were negatively affected (35%).

Demographic differences between Democrats and Republicans doubtless don't explain this large of a difference in perception. But it seems possible to me that demographic differences -- specifically income differences -- might explain part of the perception divide.

This subsidized health insurance was brought to you by...?

Urging caution in response to current ACA signup stats and polling results, Jonathan Bernstein reiterates his  favorite question with regard to the political fallout:

How many of those in the exchanges, in expanded Medicaid, and newly eligible for their parents’ insurance plans are aware that they are covered by Obamacare? I’ve consistently guessed that a large number of people wouldn't make the connection, but we still have no data.

I have always found the possibility that some people would sign up for coverage made available through the ACA without knowing that the ACA (or "Obamacare") was responsible fascinating and challenging. Sometimes Bernstein emphasizes that over time -- say, five years from now -- a lot of people who buy Qualified Health Plans or sign up for Medicaid on Healthcare.gov or the state exchanges won't know that their options originated with the new law. That seems easier to credit than that a significant percentage, if not a majority, of this year's signups would not know that "Obamacare" was the source of their coverage.

Regarding awareness among this year's signups, a few thoughts:

1. It takes a village:  Drew Altman, President of the Kaiser Family Foundation, points out that in California, which spent more on ACA outreach than all the federal exchange states combined, relatively few of the uninsured signed up on their own: