Blumberg and Holahan on belling the healthcare cost cat

This week, Urban Institute healthcare scholars Linda Blumberg and John Holahan published a report, Designing a Medicare Buy-In and a Public Plan Marketplace Option: Policy Options and Considerations.

The report demonstrates that while designing a Medicare buy-in would be dazzlingly complex (cf. my modest proposal for simplifying it), designing a "strong" public option would be relatively simple. For both programs, the rationale is also simple: moving part (or potentially all) of the individual market population into plans that pay Medicare rates to healthcare providers.  That, the authors note in conclusion, is is basically a sine qua non of healthcare cost control:

Regardless of the approach taken, providers are likely to resist new insurance options that may move more patients into plans paying lower rates. While this is to be expected, it highlights the perpetual quandary of health care cost containment. Health care spending and its growth cannot be reduced without either paying less, on average, per unit of service rendered or reducing the quantity of services provided. No matter the strategy for containing costs, achieving that goal will take money out of the pockets of providers. To protect providers financially means abdicating cost-containment efforts of any type.

Healthcare scholars who propose means of cutting payments to providers know that they're in the position of mice who propose putting a bell on the cat that stalks them. No one in elected office is willing to bell the cat.

The other side of John Sides' debate skepticism

Those of us who've enjoyed the blogging and tweeting of political scientists in recent years often tease them as the "nothing matters" crowd. As measured by polling, in the normal course of things, gaffes don't matter, campaign ads don't matter...usually even gender doesn't matter.

As for debates...the ur-text for data-driven skepticism about their impact is John Sides'  Do Presidential Debates Really Matter?, published in September 2012.  The subtitle gives you the rhetorical thrust: Remember all the famous moments in past debates that changed the outcome of those elections? Well, they didn’t.

As a preview for tonight's debate, Sides offers an update/recap.  On the skeptical side of the ledger, here are the takeaways:

Mean vs.Median in post-ACA health insurance

This from Princeton's Paul Starr, speaking about the rise in deductibles in employer-sponsored health plans, rang a bell:

Since the ACA, there has been no overall increase in cost sharing. There are higher deductibles, but the ACA has also eliminated most annual and lifetime limits. It has provided for more complete coverage of preventive care.
So, people actually have benefited from the ACA in some ways. But I do not think they understand that...

I think many policy analysts, looking at this objectively, would say this is actually a very good shift. That it makes sense to cover those preventive costs. It makes sense to protect against catastrophic risks. The offset to that is that people have more exposure to routine medical costs up to their deductible. 

Actually, it rang two bells. I noticed this apparent paradox myself in a 2015 Commonwealth Fund survey of underinsurance: deductibles had risen, but the percentages of enrollees going without needed care or having difficulty paying medical bills hadn't. 

More to the point, though, it reminded me of the core claim in a study by Brookings' Loren Adler and Paul Ginsburg of the post-ACA individual market: that premiums are lower than they would have been absent the ACA (and lower than forecast by CBO, even accounting for this year's spike).

"The political magic of C.S. Lewis" went just so far

In a NYT op-ed, Christian conservative Peter Wehner, whose principled opposition to Trump is worthy of respect, holds up C. S. Lewis as a repository of conservative political wisdom:

Professors Dyer and Watson write that Lewis had “a very limited view of government’s role and warrant,” was skeptical of its capacity to inculcate virtue and worried about its paternalistic tendencies. The duty of government was to restrain wrongdoing. Because he believed in the fallen nature of humanity, Lewis was concerned by the concentration of political power. “It is easy to think the State has a lot of different objects — military, political, economic, and what not,” Lewis wrote. “But in a way things are much simpler than that. The State exists simply to promote and to protect the ordinary happiness of human beings in this life.”

Lewis was wary of “morals legislation.” For example, during a period when the criminalization of homosexuality was considered by many to be justified, Lewis asked, “What business is it of the State’s?” Nor did he believe it was the duty of government to promote the Christian ideal of marriage. “A great many people seem to think that if you are a Christian yourself you should try to make divorce difficult for everyone,” he wrote in “Mere Christianity.” “I do not think that. At least I know I should be very angry if the Mohammedans tried to prevent the rest of us from drinking wine. My own view is that the Churches should frankly recognize that the majority of the British people are not Christians and, therefore, cannot be expected to live Christian lives.”

Wehner's portrayal of what Andrew Sullivan would call Lewis' "conservatism of doubt" is accurate as far it goes. That doubt was tonic in some ways. Lewis recognized that theocracy is the worst form of government; that God could be dragooned into support almost any political agenda; and that democracy was necessary to check the corrupting influence of power.

These points reflect Lewis' fundamental sanity and humility. They leave out, however, the limitations of his political perspective.

Medicare buy-in, Republican style

At healthinsurance.org, I explore a possible future political deal to amend the ACA, with help from Jack Hoadley of Georgetown and Harold Pollack of the University of Chicago:

One might assume that Republicans would never go for a Medicare buy-in, as it would expand the ranks of those who get "government-run" insurance.  But what if the buy-in were limited to Medicare Advantage plans, the GOP's beloved Medicare stepchild?

Republicans might view a buy-in limited to Medicare Advantage as a gateway drug. At present, only 2% of Medicare Advantage enrollees switch to traditional Medicare, so those who came in via a buy-in would probably stay in. Increasing MA's already-growing market share from the current 30% toward or beyond parity with traditional Medicare might be tempting to GOP lawmakers.

A few statistical anomalies in healthcareville

Struggling with a difficult post, I just made a little list in my mind of some statistical oddities I've stumbled across in the past year or so in the wonderful world of U.S.  health insurance. Some are mysteries, some are apparent errors, and some involve frames that may give the wrong impression. In no particular order:

1)  In 2016, CBO changed the way it counts Medicaid enrollees under age 65. No, there was not a surge of 16 million unanticipated enrollments, as reported more than once. Rather, CBO started counting "dual eligibles" under age 65 in the Medicaid total, along with enrollees in various limited benefit programs.  More here.

2. Oft-quoted stat: In 2017, the ACA marketplace may have only one insurer in almost one third of U.S. counties. Less quoted: 19% of the population lives in those counties. 72% of the population lives in counties with 3-8 insurers (Kaiser). This is not to sugar-coat bad news, but the effect of recent pullbacks on people should take priority over its effect on acreage.

Hastening to be slaves and tyrants

Here is C.S. Lewis' charming Screwtape, senior devil, who spends his time teaching"junior devils" how to tempt humans to hell. Last line is a blueprint for Trump and his minions:

The use of Fashions in thought is to distract the attention of men from their real dangers. We direct the fashionable outcry of each generation against those vices of which it is least in danger and fix its approval on the virtue nearest to that vice which we are trying to make endemic. The game is to have them running about with fire extinguishers whenever there is a flood, and all crowding to that side of the boat which is already nearly gunwale under. Thus we make it fashionable to expose the dangers of enthusiasm at the very moment when they are all really becoming worldly and lukewarm; a century later, when we are really making them all Byronic and drunk with emotion, the fashionable outcry is directed against the dangers of the mere “understanding”. Cruel ages are put on their guard against Sentimentality, feckless and idle ones against Respectability, lecherous ones against Puritansm; and whenever all men are really hastening to be slaves or tyrants we make Liberalism the prime bogey.

Scoping out a Medicare buy-in

Hillary Clinton's raft of healthcare policy proposals includes enabling 55-64 year-olds to "opt in" to Medicare. No detail is provided.

I have a piece in progress that looks at a variant of a Medicare buy-in. This is a scratch-pad post, to help me clarify for myself who might or might not benefit.

When Clinton first verbally expressed a willingness to consider a Medicare buy-in, Avalere Health scoped out the potential market, but they did it for a wider age group, 50-64, as Clinton first mentioned 50 or 55 as a threshold.  Avalere's Caroline Pearson and Chris Sloan were kind enough to provide me with a breakout of their calculations for 55-64 year-olds. As it's based on the 2014 American Community Survey, I have updated where possible, as explained in notes below.

Presumably the buy-in would not be offered to roughly 24 million people in the 55-64 age group who have access to employer-sponsored insurance -- including retirees with ESI, whom Kaiser estimated to number 5.3 million in 2012.  I doubt there's a single member of Congress, Senator or potential president other than Bernie Sanders with a more than theoretical interest in shaking up employer-sponsored insurance

The buy-in would be open to the uninsured in the 55-64 age band, who currently number about 3.4 million,* and to those who currently get their insurance in the individual market, of whom there are probably a bit over 5 million. That includes a shade under 3 million in the ACA marketplace, and probably another two million-plus buying off-exchange. About 2.4 million marketplace enrollees in the age group are subsidized, if. the marketplace income breakouts reported by CMS apply proportionately to this age group.**

New York Times calls out four Trump lies in one day

There seems to be a common thread in the New York Times' campaign coverage today. First, the lead story:

Donald Trump Clung to ‘Birther’ Lie for Years, and Still Isn’t Apologetic

It was not true in 2011, when Donald J. Trump mischievously began to question President Obama’s birthplace aloud in television interviews. “I’m starting to think that he was not born here,” he said at the time.

It was not true in 2012, when he took to Twitter to declare that “an ‘extremely credible source’” had called his office to inform him that Mr. Obama’s birth certificate was “a fraud.”

 It was not true in 2014, when Mr. Trump invited hackers to “please hack Obama’s college records (destroyed?) and check ‘place of birth.’” It was never true, any of it. Mr. Obama’s citizenship was never in question. No credible evidence ever suggested otherwise.

As more Americans move out of poverty, will some move into ACA marketplace?

Data from the Census Bureau's just-released Current Population Reports for 2015 records a trifecta for the U.S. economy: incomes soaring (after years of stagnation and shrinkage), poverty reduced, health insurance rates rising.

A thought occurred to me while reading this part of economist Jared Bernstein's overview:

The official poverty rate fell from 14.8 percent in 2014 to 13.5 percent last year, a decline of 3.5 million people in households whose incomes put them below the poverty threshold for their family type (the poverty threshold for a single parent with two children was around $19,000 in 2015). 

The thought: Families rising out of poverty could be pushing ACA marketplace enrollment from the bottom up, particularly in states that refused the ACA Medicaid expansion.

Give Republicans this: They know how to make insurers happy

After Aetna's threat to pull back from the ACA marketplace if its merger with Humana was contested by the Justice Dept came to light, I noted that even in CEO Mark Bertolini's Springtime for the ACA aria last April, there was an equivocal note. That is, 'this market can work if Congress does its work':

we see this as a good investment, hoping that we have an administration and a Congress that will allow us to change the product like we change Medicare every year, and we change Medicaid every year.

But we haven't been able to touch this product because of the politics. But if we can get to that point, we believe we are in a very good place to make this a sustainable program (my emphasis).

Why Bertolini might have thought "we can get to that point" in the foreseeable future, barring a Democratic blowout in the November elections, is anyone's guess.  Notwithstanding, that "if" gave him at least rhetorical pivot space. When Elizabeth Warren, Bernie Sanders and allied senators challenged the Aetna pullback this week, Aetna neatly foreclosed on the "if":

How bout adding a Medicare advantage to the ACA Marketplace?

The main purpose of the public option was to dive down the cost of insurance in the individual market by making it available through a plan that would pay Medicare rates to providers, rather than the much higher rates usually paid in the commercial market.

There are other ways to do that. In the Medicare Advantage program, insurers pay providers rates that are by all accounts very close to those paid by traditional Medicare. At healthinsurance.org, I delve into a proposal to accomplish that goal by indirection, via a relatively simple rule change. The proposal comes from  Jon Kingsdale, a health insurance industry veteran who was the founding executive director of the Massachusetts Connector, the insurance exchange established under Romneycare, prototype of the ACA marketplace. Here's the upshot:

The World Turned Upside Down: Risk adjustment and its discontents

In Kimberly Leonard's US News story about the quest to bring more young adults into the ACA marketplace, this input from Caroline Pearson of Avalere Health made my head spin:

Pearson says another phenomenon is contributing to the problem: Insurers don't receive adequate help in paying for this population from the government.

"There is an adverse incentive to aggressively recruit younger healthier people because insurers aren't being compensated adequately for them," she says, adding that this is something the administration could address without Congress.

That's counterintuitive, in that healthy young adults famously cost far less to insure that sicker older adults (or sicker younger ones, but the odds are with the young, as Leonard points out).  Indeed, a longstanding complaint about the marketplace from conservatives such as Avik Roy is that the oldest enrollees can only be charged three times as much as the youngest adult participants, compared to a prior industry norm of 5-to-1.  That is, conservatives argue that marketplace premiums should be lower for young adults, and higher for older ones.

The marketplace, however, is a tended garden, not a wilderness, and its plants are pruned by government shears, a.k.a. risk adjustment. In an email, Pearson explains what kind of compensation she was alluding to:

My take on the ACA marketplace

FWIW, here is a sort of global take on the ACA marketplace, its place in U.S. healthcare delivery, and how I'd change it if I could (unless those who are better informed convinced me otherwise).

1. The experience of basically every wealthy country in the world in distinction from the U.S. suggests that the sine qua non of effective healthcare cost control is some form of government rate-setting -- that is, government control over or oversight of a more or less uniform pricing schedule for medical services and drugs. Whether the government pays providers directly, sets rates for private insurers, or provides oversight  as insurers collectively negotiate rates, some uniformity and oversight is essential to keep healthcare providers from dividing and conquering payers.

2. The ACA marketplace leaves insurers to negotiate their own rates, as in the much larger employer market, but with pricing pressures that render the market viable only for those that pay government rates -- e.g., insurers whose primary business has been managed Medicaid.

In 2016, CBO started counting Medicaid enrollment differently

CORRECTION, 6/6/17: Somehow, I missed an email response to my query from CBO (and asked them again twice after receiving the email). In 2016, they did not count partial benefit enrollees in their Medicaid totals; rather, the difference was that they counted people with multiple sources of coverage, including Medicaid, as Medicaid enrolled, whereas in past years they counted only the coverage source deemed primary. I was correct that in 2016 they started counting dual eligibles in both Medicaid and Medicare.

In a US News article by Kimberly Leonard about why the ACA private plan marketplace is not meeting enrollment expectations, while the ACA as a whole is reducing the ranks of the uninsured more or less on schedule, this claim did not compute:

Under Obamacare, states were allowed to expand the program to many more people, but many states have opted not to. Despite that, 16 million people more than expected enrolled in Medicaid and the Children's Health Insurance Plan, including in states that did not expand the program. Many people, it turns out, realized that they could have qualified for Medicaid even before the passage of the health care law.

Similarly, last March, when the Congressional Budget Office published its latest forecast of the ACA's effects, The New York Times' Robert Pear reported:

Yes, the ACA marketplace needs to grow. But it also needs to shrink

As major health insurers cut back their participation in the ACA marketplace, observers have drawn the obvious conclusion that the market is too small to be viable. The CBO forecast year after year from 2010 through 2015 that 21-22 million people would be enrolled in marketplace plans in 2016; only 11 million currently are. The risk pool is older and too sicker than it should be; the marketplace needs an influx of younger and probably wealthier (and therefore healthier) enrollees.

All true. But it's probably also true that the marketplace needs to shrink even as it grows.

Our failures of political rhetoric are asymmetric

The study of rhetoric can yield great insights into the way power is structured and masses of people are moved. But those who study rhetoric closely are prone to mixing up cause and effect.

So it is with an essay by New York Times CEO Mark Thompson that usefully traces The Dark History of Straight Talk -- that is, of politicians' claims to authentically channel the mystical will of the people. Simpson begins with Shakespeare's rendition of Mark Anthony's funeral oration for Caesar, in which he claims to be "no orator," but a "plain, blunt man," eschewing the rhetoric that was the chief marker of political authority in Rome. He moves on to reaction against the rationalist language of the Enlightenment, to the hookup of "anti-rhetoric" with nationalism and Heidegger's fetishization of "authentic" language, culminating in his embrace of Hitler. Finally he focuses on the anti-elitism and demonization of out-groups by the current crop of authoritarians in western democracies, culminating (for the moment) in Trump.

All good so far. But here's where I think Thompson confuses conditions that make large numbers people responsive to "authenticism" with the current condition of rhetoric itself:

What we have lost and must strive to regain is a conception of rhetoric that strikes a balance between the demands of reason, character and empathy, and that strives for genuine truthfulness rather than theatrical “authenticity.”

That makes me wonder whether Thompson has ever listened to a certain Barack Obama, who won the presidency by sheer force of rhetoric -- and whose rhetoric has arguably balanced "reason, character and empathy" as powerfully as any president's since Lincoln (whose rhetoric Obama constantly, consciously channels).

Re the qualities Thompson thirsts for: for empathy, I suggest watching Obama tear up when speaking of the Sandy Hook shooting, or listening to him sing Amazing Grace after the Charleston, or read how he delineates the emotional logic of those who perceive reverse racism in his More Perfect Union speech in March 2009*, or lays out the plights of individuals who lack health insurance in his speech to rescue the health reform bill in September 2009.**

HHS markets to the lower income brackets

I have complained more than once about HHS's mantra that most ACA marketplace shoppers can find a plan for under $75 per month. My beef has been that the message overemphasizes premium price at the expense of balancing premium with out-of-pocket costs. That's particularly perverse since most shoppers have to buy silver plans to access Cost Sharing Reduction subsidies that render silver a better value than bronze.

Well, CMS is at it again, and in light of the marketplace's recent travails -- insurer losses, insurer exits, premium price spikes -- I was struck by another problem with the "most can get plans for under $75" assurance.

Today HHS released a brief emphasizing that since 85% of HealthCare.gov enrollees qualified for premium tax credits in 2016, that same overwhelming majority will be protected from premium price hikes in 2017. The premise is simple: if you're subsidy-eligible, you pay a fixed percentage of your income for the benchmark silver plan in your area, regardless of its sticker price. When prices rise, subsidies rise, and the spread between benchmark silver plans and cheaper bronze plans will widen slightly, slipping slightly more applicants in under the $75 and $100 thresholds.* Hence this highlight:

In a hypothetical scenario in which all Marketplace qualified health plan premiums
were to increase by 25 percent from 2016 to 2017:
          o 73 percent of consumers could find coverage for $75 or less.
          o 78 percent of consumers could find coverage for $100 or less.

Okay, but all this "most-people" messaging also brings home the fact that HHS anticipates marketplace enrollment remaining concentrated in lower income brackets -- mainly under 200% of the Federal Poverty Level (FPL). In 2016, somewhere between 61% and 66% of HealthCare.gov enrollees had incomes below that level.   HHS estimates that 70% of enrollees could have bought plans for under $75 per month, which suggests that about 70% had incomes under, say, 220% FPL.**

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.

In which Gingrich sums up his whole career

Via Brendan Nyhan, I happened on a July 22 CNN interview with Newt Gingrich in which that Trump precursor was astonishingly open about his theory of fact.

The interviewer was Alyson Camerota, and the subject was Trump's convention speech. Here's a transcript (my emphasis). Video clip at bottom.

CAMEROTA: Some people think it was too bleak. That he painted too bleak a picture of where we are in America. Crime is down in America. Violent crime is down. The economy is picking up --

GINGRICH: It is not down in the biggest cities.

[08:35:01] CAMEROTA: Violent crime, murder rate is down. It is down.

GINGRICH: Then how come it's up in Chicago, up in Baltimore, and up in --

CAMEROTA: There are pockets where certainly we --

GINGRICH: Your national capital, your third biggest city --

CAMEROTA: But violent crime across the country is down. We're not under siege in the way that we were in say, the 80s.