Managed Medicaid for all? A compendium

In an illuminating string about what she's learned from ACA enrollees, Sarah Kliff highlights a point that's come sharply into focus in the last year:

Medicaid is *way* more popular than marketplace plans. No deductibles or co-pays! (6/15)

This point has been driven home by enrollee surveys and focus groups as well as by good reporting from many, including Kliff. The negative counterpoint to Medicaid enrollees' satisfaction is Medicaid envy among those forced to pay more than they consider affordable in premiums and out-of-pocket costs -- particularly those on the wrong side of the ACA's deductible cliff.

"Not losing, choosing"? - Avik Roy turns up the gaslight on the BCRA

Two weeks ago, I took on the argument of various BCRA proponents that most of the 22 million people forecast by CBO to lose insurance coverage should the bill become law would be "choosing, not losing." That write-off of legions of uninsured was founded on CBO's assertion that most of the first-year coverage loss of 15 million would occur "primarily because the penalty for not having insurance would be eliminated."  Expect to hear more of this, I forecast.

In brief, I suggested that argument depended on  1) conflating the forecast immediate effect of mandate repeal in 2018 with the ten-year effect; 2) ignoring the extent to which, in CBO's own telling, the mandate interacts with other changes in the marketplace and Medicaid; and 3) pooh-poohing the obvious and stated purpose of the mandate, which is to boost the ranks of the insured and reduce premiums by improving the risk pool -- which CBO clearly assumes it has accomplished in some measure.

Now here cometh Avik Roy, chief healthcare apologist for the Republican establishment, making the "choosing not losing" argument in detail.  Roy's addition to the argument hinges mainly on a rather breathlessly presented look at CBO's unpublished estimate of 10-year coverage losses attributable to mandate repeal under the BCRA (provided to Roy by a Congressional staffer). This estimate closely tracks CBO's published December 2016 analysis of the effects of repeal of the mandate alone, with the ACA left otherwise intact. CBO forecast that straight mandate repeal under the ACA would result in a ten-year coverage loss of 15 million, as compared to CBO's forecast that 22 million will lose coverage under the BCRA. Here's CBO's breakout of the losses under straight mandate repeal:

Go ahead, Trump, cut off CSR payments -- starting in 2018

Imagine for a moment that Republicans fail to pass legislation repealing the ACA -- leaving the ACA marketplace intact as a matter of law,  however shaky its economic viability. Imagine further that Trump continues through this year to reimburse insurers for the Cost Sharing Reduction (CSR) subsidies they are obligated by law to provide to qualifying enrollees, but announces that he will cease paying them in 2018 -- declining to contest the suit that House Republicans filed against the Obama administration, challenging its authority to pay the subsidies without Congressional appropriation.

That act of continued apparent sabotage might shake insurers and drive some to exit the marketplace. But having already priced CSR in to their 2018 filings, as they are now doing, they probably wouldn't exit en masse, as David Anderson has argued. Leaving aside other acts of sabotage, forcing insurers to price in and pay out the full actuarial value of all the plans they sell might actually improve the marketplace -- providing a kind of backdoor CSR subsidy for shoppers at the upper end of the subsidy scale.

If serious compromise on healthcare were possible, what would Democrats give?

As Republicans flail away at the BCRA, Democrats' first murmurs about bipartisan legislation to stabilize the ACA marketplace have been pretty basic: guarantee CSR payments and re-institute some kind of reinsurance program.

If bipartisan legislation were truly possible, however -- and admittedly, we're in contrary-to-fact territory here -- what might Democrats give up to get the most basic fixes, -and possibly further improvements?

Back in January, two leading progressive healthcare scholars at the Urban Institute, Linda Blumberg and John Holahan, floated a compromise proposal that offset provisions Democrats would not embrace unforced with improvements in subsidies and marketplace structure. Here is the package summary.Concessions to conservative priorities are bolded:

1. Replace the individual mandate with a modified version of the late enrollment penalties currently used in Medicare Parts B and D.

A pill quite poison from Frelinghuysen

In late June, a subcommittee of the House Committee on Appropriations, chaired by Rodney Frelinghuysen (R-NJ), released a financial services appropriations bill that hamstrings the IRS's ability to police the phony "charities" corrupting our politics; bars the SEC from requiring disclosure of political contributions in SEC filings; and, amid sundry other acts of regulatory sabotage, prohibits the IRS from enforcing the ACA's individual mandate. The Appropriations Committee approved the bill yesterday.

Frelinghuysen, a once-moderate Republican driven relentlessly to the right and now riding the Trump train, was the focus of intense citizen action this spring, and a key last-minute opponent of the first iteration of the House ACA repeal/Medicaid destruction act.  He then flipped, reportedly under pain of losing his Appropriations chair, and supported the version that passed the House, which of course addressed none of his stated concerns (for Medicaid expansion beneficiaries and people with pre-existing conditions) and in fact made the bill's treatment of the latter worse. Now, he's given his blessing to ACA marketplace sabotage in the event Republicans fail to pass a bill still more horrific than the one he supported. In a press release, he praised the bill for "stopping burdensome regulations before they can damage our economy irreparably."

I have an op-ed in NJ Spotlight, a nonprofit state news source calling Frelinghuysen out for this. I signed it as a member of BlueWaveNJ, a local advocacy group based in Montclair, most of whose members are represented by Frelinghuysen. He encapsulates the descent of the Republican party first into right-wing extremism (he voted to defund Planned Parenthood) and then into fascist fellow traveling and even self-Trumpification  (he's been in the spotlight and may be in legal trouble for intimidating a local activist). We want him out.

Not drowning but waiving: Timothy Jost on how Democrats might compromise responsibly on ACA

There's news today -- good news -- of Democrats in both the House and Senate acknowledging flaws in the ACA and proposing their own fixes (House) or exploring bipartisan fixes with Republicans (Senate).

All reports of such discussions or proposals include a couple of no-brainers: 1) a permanent reinsurance program, such as those included in both the AHCA (the House repeal/replace bill) and the BCRA (the Senate iteration), and 2) permanent assurance that the ACA's Cost Sharing Reduction subsidies will be paid, which isn't a conceptual fix, just an agreed end to Republican sabotage.

There's scarce discussion of what Democrats would give up to get Republicans to drop their deadly assault on the ACA's core features and all Medicaid as well, that is, the assault against 1) the taxes that fund the ACA's extension of health insurance access; 2) the ACA Medicaid expansion; 3) the federal government's open-ended commitment to pay its agreed share to each state for all those who are determined eligible Medicaid; and 4) income-based private market subsidies funded at ACA levels, whether structured differently or not.

One possible field of compromise is in the structure of the ACA's Section 1332 "innovation waivers," which allow states to propose variations on ACA marketplace structure to HHS. Through these waivers, states can propose alterations to almost any ACA Marketplace feature -- including repealing the individual and employer mandates, changing subsidy structure and eligibility, and altering the Essential Health Benefits that every insurance plan is required to offer. The catch is that the state seeking a waiver must demonstrate -- and convince the Medicare actuary -- that its alternative scheme will cover as many people as comprehensively and as affordably as the default structure -- and do so without increasing the deficit. Critics complain that the option effectively boils down to "you can change everything, as long as you don't change anything." That's not true, but the guardrails are pretty tight.

Those uninsured by the BCRA "not losing, but choosing"? Get ready to hear it more.

Bloomberg reporter Steve Dennis flags a Republican talking point in favor of their latest travesty of a 'healthcare" bill that we're likely to hear more of in the next two weeks:

Frequent GOP talking point in Senate hallways: +22M won't be "losing" health insurance, they'll be "choosing" to go without. https://t.co/o4Anh6DY5i

— Steven Dennis (@StevenTDennis) July 6, 2017

That's in response to:

Not lose, choose. Apparently you believe freedom is optional https://t.co/WIUJz2Mxv7

— JohnCornyn (@JohnCornyn) July 6, 2017

This argument was first voiced byPaul Ryan, defending the first iteration of the House bill, and later by Tom MacArthur*, whose amendment undermining protections for people with pre-existing conditions secured that bill's House passage. As Cornyn, the Senate majority whip, has emerged as gaslighter-in-chief defending the Senate bill (the so-called Better Care Reconciliation Act, or BCRA), we should regard it as a kind of front-line defense. If the cabal now redrafting the BCRA in secret manages to improve the CBO score by throwing a couple hundred billion dollars back in the coverage pot -- reducing the forecast increase in the uninsured to, say, 15 or 12 million --expect to hear a lot more of it.

There is a ghost of truth in the allegation, which can be made to look more substantial by gaslight. so let's shine some stronger light,. A few points:

Info sources for healthcare wars

If I post this, I'll have an easier time finding it myself...an index of fact/stat sources for our current healthcare wars as well as for our current healthcare system. Will update continuously without notification.

Direct effects of BCRA (Senate bill)

CBO on BCRA 2.0 - July 20

CBO on BCRA: June 26 2017

CBO addendum on BCRA: 20-year effects on Medicaid (35% cut)

CAP: BCRA coverage losses by state

AARP: BCRA effects by state

Urban Institute: on BCRA coverage losses by state/age

Kaiser: BCRA premiums/OOP

Healthcare spending cuts, Democrat style. Healthcare spending cuts, Republican style

The cut to federal Medicaid spending that CBO estimates would result from the BCRA -- $750 billion over ten years -- superficially recalls ACA cuts to Medicare spending, estimated by CBO in 2010 at $455 billion. As Democrats raise the alarm about deep damage to Medicaid, so Republicans screamed for years that Democrats were cutting Medicare. But of course there are fundamental differences:

• Democrats cut the growth in Medicare spending and spent the savings to extend health insurance to the uninsured. Republicans want to cut Medicaid to fund tax cuts for the wealthy and for healthcare companies.


• The ACA specifies that the reductions it mandates in spending growth are not to reduce services provided to Medicare beneficiaries, but only payments to providers. The "Medicare guarantee" that has been stable in traditional (fee-for-service) Medicare for decades -- premium-free hospital coverage, 75% premium subsidy for physician services, actuarial value a bit over 80% for these services, and (since 2006), somewhat weaker drug coverage -- remained intact, and in fact strengthened on the drug front. 

The real cost of "benchmark silver" for low income BCRA enrollees

For ACA marketplace enrollees with incomes under 200% FPL -- over half of all enrollees -- benchmark silver plans have an average actuarial value of about 91%, i.e. roughly platinum equivalent. This post accordingly looks at the likely cost of AV 90% plans for low income enrollees under the BCRA. If you want to cut to the chase see the two charts at bottom.

Senate Republicans' bill to eviscerate Medicaid, advertised as an ACA repeal and replace bill, provides for income-based  private market premium subsidies that superficially look something like those of the ACA marketplace, but with these differences:

• Subsidy eligibility begins at zero income, rather than at 100% or 138% of the Federal Poverty Level (FPL) as in the ACA. Theoretically, these private market subsidies for the poor and near-poor are meant to compensate for repeal of the ACA Medicaid expansion.
• Subsidy eligibility ends at 350% FPL compared to 400% FPL in the ACA.
• The benchmark against which subsidies are calculated is a plan with an actuarial value (AV) of 58%, compared to AV 70% for the ACA's benchmark silver plans. AV refers to the percentage of the average user's medical costs the plan is designed to cover.
• Subsidy size, calculated to leave the enrollee paying a fixed percentage of income for a benchmark plan, varies by age as well as income.
• There are no Cost Sharing Reduction (CSR) subsidies to reduce out-of-pocket expenses (boosting AV) for low income enrollees, as in the ACA.
• "Age-rating" is increased from the ACA's 3:1 to the pre-ACA individual market norm of 5:1, meaning that a 64 year-old's plan will cost five times as much as a 21 year-old's plan rather than three times as much.

Of these, the difference in the value of a benchmark plan (AV 58% vs. 70%) has gotten the most attention, as analysts are at pains to make apples-to-apples comparisons. Both the Brookings Institute and the Kaiser Family Foundation have put out papers highlighting the cost of AV 70% coverage under the Senate bill, the so-called Better Care Reconciliation Act (BCRA).

These comparisons are appropriate in that insurers price silver plans under the ACA at 70% actuarial value. But Cost Sharing Reduction (CSR) subsidies, tacked on separately and reimbursed separately to insurers, dramatically alter the actual AV accessed by marketplace enrollees. As of April 2016, in the 39 states using the federal marketplace, healthcare.gov, silver plans purchased in-marketplace had an average weighted AV of 85% (see note at bottom here).  Among enrollees with incomes below 200% FPL -- about 60% of all on-marketplace current enrollees -- the average AV for a silver plan is 91% . About 85% of enrollees below that income threshold select silver plans and so access CSR.

The party of Cost Sharing Inflation

When House Republicans sued the Obama administration in 2014 to stop federal payments to health insurers for Cost Sharing Reduction subsidies in the ACA marketplace, the simple goal was sabotage: use any tool that came to hand to hobble the markets.  (That goes as well for refusing to appropriate the budgeted funds for CSR.)

At the same time, I suggest today in a healthinsurance.org piece that will be out this morning, this particular bit of legal vandalism made ideological sense, in that Republicans do not believe in cost sharing reduction. They believe in cost sharing inflation: if each of us pays a higher percentage of our medical costs, we'll demand better prices for care, and prices will go down.

This ideology is fully expressed in the BCRA, which asks low income people to swap out Medicaid coverage, or CSR-enhanced marketplace coverage at AV 94% or 87%, for coverage at AV 58%. That's a feature, not a bug. Hope you'll take a look. 

Trading Medicaid coverage for high deductible private market coverage

The Senate version of the AHCA, the Orwellianly named Better Care Reconciliation Act, does even more fundamental damage to the U.S. healthcare system than the House bill. While it phases out the ACA Medicaid expansion more slowly, stepping down the enhanced federal contribution over several years, it imposes even tighter per capita caps on Medicaid, limiting annual growth to the straight CPI after 2024. The damage to Medicaid will be continuous in perpetuity, barring further legislation.

The BCRA does toss a bone to the dis-insured poor by offering private-market subsidies to those who are shut out of Medicaid. Under the ACA, in the 31 states plus D.C. that accepted the law's Medicaid expansion (rendered optional to states by the Supreme Court), anyone whose household income is below  139% of the Federal Poverty Level (FPL) qualifies for Medicaid, and so not for subsidies in the private plan marketplace (with one class of exceptions*).  In states that refused the expansion -- a possibility not envisioned by the law's drafters -- eligibility for Marketplace subsidies begins at 100% FPL, and those below that level are left out in the cold -- because their state's governors and legislatures wanted it that way.

The BCRA allows people with incomes in 0-100% FPL range to buy a "benchmark" plan for 2% of income, and those in 100-133% FPL range** to buy one for no more than 2.5% of income:

Quick thoughts before the bill hits the tape

The Senate iteration of the AHCA is due out in about 40 minutes. A couple of quick thoughts, brought into focus by David Anderson's "how to read the bill" cheat sheet:

1) Back-loaded per capita caps imposed on Medicaid can theoretically be repealed before they kick in. But if the bill's massive tax cuts are not similarly back-loaded (to improve the CBO score), new tax increases would have to be passed in concert with repeal.

2. The more Republicans fiddle around with and publicly fight over individual market subsidies and rules, the easier they'll likely find it to pass the massive cuts to Medicaid that are the bill's core feature.

3.I can't shake the feeling that McConnell has some trick up his sleeve to make the CBO score a positive shock that helps sweep the moderates into the yes column. A "positive shock" might be a forecast of,, say, a reduction of a mere 8 million in the number of people with insurance by 2026, which Republicans can explain away as a result of personal choices (no mandate coercion) or CBO error.

4. What could that shock be? A cap on the tax exclusion for employer-sponsored insurance? Hard to believe. A little coup within CBO? Don't know how that work. Something else? Nothing?

So much for idle speculation....

AHCA would increase New Jersey's uninsured population by 540,000: NJPP Report

540,000 fewer people in New Jersey will have health insurance by 2026 under the American Health Care Act (AHCA) than under current law, according to an updated analysis by Raymond Castro of New Jersey Policy Perspective. The update takes into account the May 24 cost estimate by the Congressional Budget Office (CBO) of the amended AHCA that passed the House on May 4.

Should the AHCA become law, NJPP forecasts:

• The state uninsurance rate would increase by 50%, from 9.8% to 14.7% in 2026.
• The uninsurance rate would double in Rodney Frelinghuysen's Congressional district, and more than double in Tom MacArthur's.
• Almost all of the 562,000 New Jerseyans covered by the ACA Medicaid expansion would lose Medicaid coverage, and about two thirds of them would remain uninsured.
• About one in ten New Jersey adults would lose Medicaid coverage.
• The state would lose $28 billion in federal funding over ten years -- $21 billion in Medicaid funding, and $7 billion in reduced Marketplace subsidies.
• The wealthiest 5 percent of NJ households would receive $13 billion in tax cuts over 10 years.
• About 100,000 New Jerseyans would lose coverage in the individual market through reduction in subsidies for premiums and out-of-pocket costs.

Amend the Senatized AHCA

To help Democrats introduce thousands of amendments before the (Senatized) AHCA comes to a vote, Indivisible is inviting all of us to add our own stories to their amendment*; they'll ask  our senators to make their constituents' testimonials part of the Congressional Record. Contribute here!

With Democratic senators being tasked with offering thousands of amendments, I thought I'd propose a few. Some are mutually exclusive, some would cost money, some would only work under current law, some may be unworkable. Brainstormer's licence...

1. Nothing in this bill shall be construed to render anyone who was eligible for Medicaid under prior law ineligible.


2. Congress shall not cap the federal contribution to Medicaid by any formula that reduces the Federal Medical Assistance Percentage (FMAP) in effect prior to enactment of this legislation.


3. Any insurer that participates in a state's nongroup health insurance market must offer plans on the state Marketplace, in every area where it sells off-Marketplace.

An American road to single payer

Ezra Klein offers an astute political forecast:

...if Republicans leave Obamacare gutted and the political arguments that led to it in ruins, there’s not going to be a constituency for rebuilding it when Democrats win back power.

Instead, they’ll pass what many of them wanted to pass in the first place: a heavily subsidized buy-in program for Medicare or Medicaid, funded by a tax increase on the rich. A policy like that would fit smoothly through the 51-vote reconciliation process, and it will satisfy an angry party seeking the fastest, most defensible path to restoring the Affordable Care Act’s coverage gains.

A few thoughts:

1. If a Medicaid income-adjusted buy-in were offered only to nonelderly who lack access to employer-sponsored insurance or other government programs, it shouldn't require more funding than the ACA marketplace. OTOH, if the AHCA has passed, Democrats will need to replace the revenue provided by the ACA taxes Republicans will have repealed (close to $900 billion over ten years, rather than the $600+ billion Klein cites, if you include revenue from the repealed ACA mandates).

2. If a buy-in were subsequently offered to employers -- perhaps starting with small employers -- that buy-in would amount to a voluntary payroll tax.

The Medicaid Dismemberment Act

Over at healthinsurance.org, I've made a case that the AHCA is not simply -- or even primarily -- an ACA repeal bill. It's a Medicaid dismemberment bill.  That goes for the Senate variant in progress as well.  Furthermore:

The degree of damage to be wrought by the legislation's various spending reductions is almost the inverse of where media emphasis falls;

and finally

the damage Republicans will likely do to the individual market is dwarfed by the damage they will certainly do (if they pass anything) to Medicaid. Thus all the high drama over medical underwriting and EHBs continues to serve as a smokescreen for Medicaid's dismemberment.

I rank the bill's three primary means of doing violence to existing parts of our healthcare system. Hope you'll take a look. 

Senate "moderates" promised long ago to support the ACA repeal bill in progress

I keep reading that Senators Capito and Portman and Heller, relative Republican "moderates" from states that have embraced the ACA Medicaid expansion,  have reversed themselves by signaling willingness to repeal the expansion if the repeal timeline is stretched out.

Capito may have made some contradictory noises over the last few months, occasionally indicating that she does not want to see the expansion repealed.

But look again at the letter to McConnell that Capito and Portman signed onto just before the House repeal bill, the AHCA, was released.  That letter, which was read as defense of the Medicaid expansion, demanded

that any health care replacement provide states with a stable transition period and the opportunity to gradually phase-in their populations to any new Medicaid financing structure.

In Republican-speak, that means expanding the timeline in which enhanced federal funding for the Medicaid expansion population is phased out -- as the Senate bill will do. I examined the letter's consistency with the course the Senate is undertaking now in more detail in this post.

Senate Republicans may outspend the ACA on individual market subsidies -- at Medicaid's expense

While Republican senators working on ACA repeal will doubtless screw up the individual market for health insurance, they are not planning to spend less money on it. All of their spending cuts -- needed to pay for tax cuts -- will come out of Medicaid's hide. Since the Medicaid expansion they're planning to repeal is a roaring success, they're following the House in diverting everyone's attention with emotionally fraught questions about individual market structure.

According to Vox's Dylan Scott, Senate Republicans are near agreement on the basic outline of their Medicaid cuts -- they will roll back the expansion over more or less years and impose per capita caps on all Medicaid spending, as Ryan's AHCA does. As for the individual market:

There’s broad agreement to increase the money the House bill would spend subsidizing Americans who buy insurance on the individual market. That increase would probably improve, at least somewhat, the Congressional Budget Office’s projection that the House bill would cause 23 million fewer Americans to have health insurance a decade from now.

In fact, any improvement to the AHCA individual market design and funding will improve CBO's uninsured estimate for the AHCA only marginally. In CBO's forecast, the individual market will insure only two million fewer people under the AHCA than under current law ten years from now (though enrollees will be wealthier, younger and more skimpily covered, and most of the roughly 7 million ACA enrollees with incomes under 200% FPL will likely be priced out).

Senate exterminators gear up to expel Medicaid expansion beneficiaries

Earlier this spring, we had a squirrel in our eaves. An exterminator installed a one-way door, leaving the squirrel free to rattle about until circumstances drove her outside. Which of course they did, after a few days -- maybe three, maybe seven.

Way back in mid-January, when the AHCA was just an exhalation from Paul Ryan's college memories, this promise from Texas Senator John Cornyn seemed startling and impressive:

When Cornyn was asked if he was concerned about people who’ve benefited from Medicaid expansion losing coverage, he said it was a shared concern.

“Were all concerned, but it ain’t going to happen,” Cornyn said. “Will you write that down… It ain’t gonna happen.”