Elizabeth Warren is faking it on healthcare, part 2

Subscribe to xpostfactoid via box at top right (requires only an email address; you'll get 2-3 emails per week on average)

I was deeply disappointment by Elizabeth Warren's response to a question about Medicare for All in last night's debate. In brief, she went all in for Bernie's bill and Bernie's short path.

Charles Gaba usefully contrasts Warren's response last night to her response to a  question from a union member worried about losing good private insurance in a March Town Hall. There, Warren expressed openness to an incremental path either to Medicare for all (lower case "all," given the multiple paths she name-checked) or to universal coverage with a role for private insurance preserved (temporarily or permanently).

I don't think it's wise for Warren to leave herself no wiggle room to pursue health reform short of Medicare for All.  Last night she didn't:

There are a lot of politicians who say, oh, it's just not possible, we just can't do it, have a lot of political reasons for this. What they're really telling you is they just won't fight for it. Well, health care is a basic human right, and I will fight for basic human rights...

Fight, yes, but pick your battles and their pacing. If Warren fights all-out for Medicare for All -- Bernie's bill, which eliminates all other forms of insurance within four years and would require at least a doubling of federal revenue -- what happens to all those other plans she's got? Is she going to "fight for" universal childcare and free public college and near-total student loan forgiveness and a wealth tax and a sweeping new corporate charter -- all while making an industry that accounts for 1/6 of the country's economy in one fell swoop? And all with a razor-thin Senate majority -- if she's lucky.

Warren is doubtless aware of the extent to a drive to remake healthcare would absorb all political capital -- hence her earlier touting of multiple paths to universal coverage. I doubt Warren would disagree with this well informed liberal realist:

If we enact a voluntary public option, and huge numbers of people end up preferring public coverage, we might someday evolve to a public-dominated system. The chances that we will leap to that from our current system are essentially zero.

— Harold Pollack (@haroldpollack) June 27, 2019

Promising to fight for M4A might be tactically justifiable in a Democratic primary -- particularly for someone promising to fight moneyed special interests on all fronts and fighting Bernie Sanders for the left-end vote. But as in the past, Warren's diagnosis of what's wrong with U.S. healthcare is one-dimensional -- and disingenuous.

WARREN: So, yes. I'm with Bernie on Medicare for all. And let me tell you why. I spent a big chunk of my life studying why families go broke. And one of the number-one reasons is the cost of health care, medical bills. And that's not just for people who don't have insurance. It's for people who have insurance.

Look at the business model of an insurance company. It's to bring in as many dollars as they can in premiums and to pay out as few dollars as possible for your health care. That leaves families with rising premiums, rising copays, and fighting with insurance companies to try to get the health care that their doctors say that they and their children need. Medicare for all solves that problem.

She added in a later interjection:

...the insurance companies last year alone sucked $23 billion in profits out of the health care system, $23 billion. And that doesn't count the money that was paid to executives, the money that was spent lobbying Washington. We have a giant industry that wants our health care system to stay the way it is, because it's not working for families, but it's sure as heck working for them. It’s time for us to make families come first

$23 billion! American payers (federal and state government, employers, individuals) spend $3.5 trillion per year on healthcare. Insurers are certainly part of the systemic problem -- but mainly because they pay too much to providers in our divide-and-conquer payer system.  Medicare for All is as much anathema to hospitals and doctors as it is to insurers, as it would radically cut their payments rates. Warren knows this, but she never mentions providers' role in making healthcare ruinously expensive and a source of constant financial threat in Americans' lives.  As I noted after hearing Warren speak about healthcare in January 2018:

...she also presented the unaffordability of healthcare in the U.S., and the huge out-of-pocket costs that many insured Americans face, as purely a product of insurance industry rapine. Not a word about pricing-gouging by hospitals and doctors; the fine science of upcoding; the loopholes allowing self-dealing; the privileging of expensive procedures; the outsourcing to hedge fund- and private equity-backed price maximizers; the predatory balance billing. Providers got a total pass. I sentence Senator Warren to read Elisabeth Rosenthal's An American Sickness, which meticulously documents all these cost inflators and their evolution

I am a Warren admirer. I have heard her deliver her capsule diagnosis of American economic and social woes -- we sold our birthright for a mass of Reaganite pottage -- and I think all her many plans are designed (many if not all well-designed)  to undo galloping oligarchy. But on her policy piano, healthcare gets her left hand.

Warren is willing to take on banks and the tech giants -- and health insurers -- but healthcare providers are spared from her rhetorical fire. That won't make them any the less anxious to defeat her if she remains all-in on Medicare for All.

Related: Elizabeth Warren is faking it on healthcare

Timothy Jost and Harold Pollack weigh in on Medicare Extra

Yesterday, the Center for American Progress released a sweeping but incremental proposal to vastly expand Medicare and transition the U.S. to a more or less "all-payer" system, in which whatever private insurance remains (in employer plans, and Medicare Advantage-like plans) pays more or less the same rates and offers more or less the same benefits as a revamped Medicare, dubbed Medicare Extra. Medicaid and CHIP would also be folded in. Everyone would be covered.

It's a well designed proposal that's hard for a progressive not to like on the merits. But could Democrats ever pass anything like this? I asked Timothy Jost and Harold Pollack and got surprisingly different answers (I'll say that Pollack surprised me more than Jost). The article, with extensive input from both, is up at healthinsurance.org

POSTSCRIPT, 2/24: One thing is nagging me a bit as reaction to the article unfolds. Harold Pollack suggests that  "Democrats will be much more ruthless the next time around" -- they're done trying to placate not only Republicans but, to a certain extent, healthcare industry interests; they're virtually forced to go for broke if they get the chance. That strikes a deep chord with progressives; it breaks something loose in a progressive heart. Timothy Jost, on the other hand, throws cold water, ticking off the forces that will be aligned against a strong drive toward universal coverage and cost control. What fun is that? But Jost and Pollack's reactions are not as far apart as they appear. Jost does point out that if Democrats gain power any time soon they'll be under strong pressure from the activists a party depends on to go big. And Pollack, in comments that did not make it into the text (my bad?), said that he thinks there's a good chance Trump will be re-elected -- and also acknowledged that industry would hack some parts off before anything like this would ever get enacted.

Pollack's take on the politics the Medicare Extra plan surprised me. I thought he'd be as dubious about the prospects for success as Jost. The fact that he wasn't gives this article its charge, I think (along with the workable architecture of the Medicare Extra plan itself). But I'm also pretty sure that Pollack would be the first to acknowledge that Jost may well be right -- that our political system will prove incapable of putting through such sweeping and coherent reform.

Health Policy Valentines 2018

Wait, no, this can't be my fifth year of #HealthPolicyValentines.* But yes: here is Love Knows No Repeal (2017),  Love in the Time of Obamacare (2016), love, 2015, and first love, 2014.

And who'd have thought we'd have at least two Trump-era V-days with the ACA unrepealed? But here we are...

Spite is served hot,
Revenge is served cold.
Trump cut off CSR,
We got cheap bronze and gold.

     *      *      *

Replace came up empty,
Repeal served up zeroes.
We love you, Little Lobbyists,
True national heroes.

     *      *      *

Heller was craven,
Capito, afraid.
Collins, McCain, Murkowski
saved our Medicaid.

*      *      *

If I had $194 billion...spending the federal funds that CSR cutoff would waste

The CBO report on the effects of the federal government ceasing reimbursement of insurers for the Cost Sharing Reduction subsidies they are required to provide to qualifying ACA marketplace enrollees includes two projections tantalizing to Democrats.

First, if not executed until 2018, not mishandled by states and not coupled with other forms of sabotage (a lot of ifs!), CSR defunding need not harm individual market enrollees and will in fact provide a windfall to many (by about a million as of 2020, sustained through 2026).*

Second, this means of boosting coverage is colossally inefficient, in fact outright profligate. CBO projects that ending the CSR reimbursements will cost the Treasury $194 billion over ten years, $37 billion in 2026 alone (and so imagine the 20-year cost).

That's a lot of money for Republicans to spend to spite Democrats. To review, the ACA instructs the Treasury to reimburse insurers for CSR and built the cost of reimbursement into the funding baseline, though it quaintly leaves it to Congress to appropriate the money. Doing so has no impact on the deficit; refusing swells it by said $194 billion.

This suggests to me a rather perverse deal: Republicans, pay the money budgeted, and use the $194 billion in "savings" for tax cuts. The "savings"should just about cover the ACA's surtax on investment income for the wealthy, as CBO pegged the 10-year cost of repealing that tax at $172 billion). Sure, that's deficit-funded, but as Dick Cheney told us, deficits don't matter when Republicans are in control.

Of course, those who want the ACA to work and who want to expand coverage can think of better uses for the (otherwise wasted) money. We now have $194 billion in sugarplums dancing in our heads. I canvassed a handful of healthcare scholars as to what they'd do with the money.  A few possibilities:

Alternative Facts, Alternative Realities Edition of Health Wonk Review

In a divided country and interconnected world, it often feels as if reality is fracturing before our eyes. When a spokesperson for the President asserts the administration's right to promulgate "alternative facts," it's a major challenge to convince a critical mass of people that verifiable facts are in fact verified. On the plus side, as ever more of the previously voiceless find or create a forum, we have the chance to see how differently a given law or trend may affect different people -- not alternative facts, but variant effects.  This week's Health Wonk blog reflects that variety, as well as battles over fact and interpretation.

First up is Harold Pollack in healthinsurance.org, tilting against alternative facts of the pure variety -- a.k.a. lies. In You can only lie about policy in Washington D.C., Pollack takes on four of Paul Ryan's assertions about the AHCA (delivered in short space) that the Congressional Budget Office (CBO) analysis of the bill directly contradict.  Most of them boil down to claims that the AHCA will make insurance and healthcare more affordable to more people, but Ryan also avers for the umpteenth time that the ACA marketplace is collapsing under its own weight.

At InsureBlog, conversely, Patrick Paule takes on CBO the old fashioned way -- with a factual critique rather than a go-team cry of fake news. Paule asserts "four reasons the CBO score is flawed."noting that CBO  1) pits AHCA individual market enrollment against CBO's 2016 baseline for the ACA, which overestimated enrollment by 4 million; 2) assumes that under current law, more states would embrace the ACA Medicaid expansion; 3) assumes (thanks to the MacArthur Amendment, allowing states to waive ACA coverage rules) that some health plan enrollees won't have comprehensive coverage, but does not define what coverage must be provided to make the cut; and 4) does not delve into the implications of its forecast that millions will voluntarily drop insurance in the absence of a mandate to obtain it.

"Medicaid expansion is the jewel of the ACA"

As Trump gleefully forecasts -- and thereby threatens to trigger -- the implosion of the ACA marketplace, methinks Democrats are starting to emotionally decouple from it. "You break it you own it" is a preemptive strike in messaging -- and potentially, a step toward planning the next phase when Democrats are in a position to shape public policy.

The AHCA's double-barreled assault on Medicaid -- repealing the ACA expansion and imposing per capita caps -- helped Democrats to see the ACA whole.  Hours before the bill hit, Andy Slavitt provided some clarity:

When #ACA replacement bill is out, don't get distracted by exchanges.

The big issue is dramatic cuts in Medicaid to pay for huge tax cuts.

— Andy Slavitt (@ASlavitt) March 6, 2017

Now enter Harold Pollack, who has a granular sense of how Medicaid functions in U.S. society, chronicling how Republican governors' support for the ACA expansion helped sink the AHCA. Pollack, like Slavitt, reframes the ACA -- at least in public discussion forever obsessed with the private plan marketplace:

In political and human terms, Medicaid expansion is the jewel of the ACA. Within the states that embrace it, Medicaid expansion is the most important public health advance in decades.

Medicaid, Medicaid...made in the shade with a garden spade. Better yet once ACA'd...

More startling still is Pollack's conclusion:

Progressives, don't forget: The Freedom Caucus killed the AHCA

Defenders of the ACA are right to take some satisfaction and pride in the failure of Paul Ryan's repeal bill, the American Health Care Act.  All those packed Town Halls, jammed phone lines and floods of mail had their effect. Dozens of Republican reps and senators, moderate and not so moderate, expressed qualms about un-insuring tens or hundreds of thousands of their constituents -- and tens of millions of Americans.

As we consider next steps, though, it's important to take full measure of the rather mind-bending fact that it's the Freedom Caucus that really sank the bill. They reportedly killed it partly because Trump managed somehow to trivialize their concerns even as he caved to most of them -- but more fundamentally, because it left some ghost of the ACA tax credits and consumer protections intact for those seeking insurance in the individual market.

For these zealots (and their right-wing think tank backers), the AHCA wasn't harsh enough.  It didn't cut the taxes that fund Obamacare benefits fast enough. It didn't uninsure beneficiaries of the Medicaid expansion fast enough. It didn't kill the concept of subsidized private insurance dead enough. It didn't take us back to the future of medical underwriting and health "insurance" that would render unaffordable coverage for such incidentals as childbirth and mental health treatment.

What if a public option were added to the ACA marketplace now?

Aetna's sudden sharp cutback in its participation in the ACA marketplace has renewed discussion of how the marketplace might be stabilized. The most obvious fix is to boost the subsidies and thus lower subsidized  enrollees' premiums and out-of-pocket costs. At present, Kaiser estimates that about 64% of people eligible for subsidies are enrolled in marketplace coverage. Many of the subsidy-eligible uninsured find the offered coverage unaffordable. If the marketplace were attracting 90% of those eligible the risk pools would be much deeper. That would in turn moderate the pending price hikes for the unsubsidized.

The premium hikes and large-insurer pullbacks have also renewed calls to create the public option -- a government-run plan competing on equal terms with private insurers in the marketplace. In the runup to the ACA's passage, progressives regarded the public option as a linchpin, an essential means of keeping private insurers from price-gouging. Its absence from the final bill was regarded as a major defeat.

What would be the likely effects of adding a national public option now, if it were politically possible? A few points:

1. Before risk adjustment and reinsurance are factored in, ACA-compliant plans were calculated to have paid out an average 110% of premiums collected in medical claims in 2014 and, for  the entire individual market 4th-largest health insurer HCSC* in 2015,, 117% .  Those negative loss ratios have driven average weighted average premium increases of 24% this year (though the increases will likely prove lower for the plans most people will buy). Those losses have led to exits and pullbacks that, according to Avalere Health, will leave 55% of rating areas nationally with two or fewer competitors (though that number disproportionately includes low-population areas, and so most buyers will probably have more choices).  In many regions, if a public option managed to significantly underprice the competition, it might well become the only option.

A Medicare buy-in? Harold Pollack discusses Clinton's trial balloon

Hillary Clinton recently made headlines by expressing openness to allowing not-quite-elderly Americans to buy into Medicare:

“I'm also in favor of what's called the public option, so that people can buy into Medicare at a certain age,” the Democratic presidential front-runner said during a roundtable with local residents at the Mug'N Muffin coffee shop. “Which will take a lot of pressure off the costs.”

That's...confusing, since the public option, as originally conceived and as debated when the Affordable Care Act was being drafted, was a publicly financed health plan that would be offered in the ACA marketplace to prospective enrollees of all ages, competing directly with private plans. It was connected to Medicare only insofar as "strong" versions mandated that the plan would pay healthcare providers at Medicare rates, which are generally lower than those paid by private insurers.

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:

When Nick Kristof stretches a study

They say that three times is a trend, so I will have to make do with two thirds of a trend regarding Nicholas Kristof's use of social science research. Or more precisely, regarding Kristof's use of research to back what he presents as inconvenient truths regarding the behavior of poor people or the efficacy of attempts to help them.

Instance 1: Kristof is currently taking a lot of heat from liberal social policy experts for using anecdotal evidence to suggest that significant numbers of parents of children receiving Supplemental Security Income (SSI) deliberately keep their children illiterate to avoid losing the child's disability check.  More precisely, Kristof uses anecdotal evidence supported by statistical sleight-of-hand.

Harold Polllack rather gently points to the questionable deployment of data. I'd like to elaborate a bit. Pollack's case first:

Paul Ryan's Medicare/Medicaid shell game

Harold Pollack points out that Paul Ryan's plan to restructure Medicare can't be considered in isolation from his plans to block-grant and gut spending on Medicaid, which seniors also rely on. I would add that Ryan's Medicare plan places new burdens on Medicaid.

Pollack explains how Medicare and Medicaid tag-team to cover seniors' healthcare needs today:

High risk pools within 3 months? How?

Considering it will take four years to get the health insurance exchanges set up, I'm a little mystified how the Patient Protection and Affordable Care Act can get a program offering catastrophic coverage for people with pre-existing conditions up and running within three months, as the law mandates. Equally mystifying: how can the budgeted $5 billion cover the program?

The basics, as stipulated in Section 1100 of the PPACA and contextualized by Kaiser Health News, are as follows. People with pre-existing conditions who have been without coverage for at least six months can buy coverage in the high risk pool at rates comparable to those available to people without such conditions. The oldest people eligible may pay up to four times as much as the youngest (as opposed to a 3 to 1 ratio in the exchanges).  Their yearly out-of-pocket expenses are capped at  $5950 for individuals and $11,900 for families.  The plans must cover at least 65% of total costs. The program is a stopgap that will end in 2014, when people with pre-existing conditions will be able to purchase insurance from the exchanges on the same terms as everyone else. It is unclear whether the Federal government will set up a single pool or whether The National Association of State Comprehensive Health Insurance Plans will adapt and expand existing state plans.  Nonprofits may also be tapped to administer the plans.