Archive for the ‘#ahca’ Tag

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So Rick has been gone for a month on a medical mission to Tanzania, which shows his really lousy timing. And I don’t feel qualified (enough) to analyze the Senate’s new-ish health insurance bill without my doctor-expert. But he found connectivity a few days ago and sent me his thoughts on the subject.

It’s disappointing that big places of Obamacare are left in place and Rick believes the current “repeal” legislation will merely slow the death spiral and not arrest it, but he notes that, for the most part, this is really a Medicaid reformation bill and that is definitely much needed. Block granting Medicaid to the states would improve quality of care and reduce overall costs. We’ve had 20 years of welfare reform to bolster the idea that states do it better than the federal government does.

Critics are savaging this idea, implying that “deep cuts” will hurt the quality of care. Some of them are even engaging in inflamatory and highly inaccurate rhetoric about people dying because of cutbacks. The problem with this is that nobody is proposing to cut Medicaid. Republicans are merely proposing to limit annual spending increases. But just like when Sarah Palin refused to allow the Alaska budget to grow chasing higher oil prices, in the upside-down world of Washington DC budgeting, this counts a “cut”.

The Washington Post contributes to this falsehood with a column explicitly designed to argue that the program is being cut.

…the Senate proposal includes significant cuts to Medaid spending…the Senate bill is more reliant on Medicaid cuts than even the House bill…spending on the program would decline in 2026 by 26 percent…That’s a decrease of over $770 billion on Medicaid over the next 10 years. …By 2026, the federal government would cut 1 of every 4 dollars it spends on Medicaid.

A New York Timesarticle even had a remarkably inaccurate headline as it shares out the dishonest rhetoric, especially in the first few paragraphs.

Senate Republicans…took a major step…, unveiling a bill to make deep cuts in Medicaid… The Senate measure…would also slice billions of dollars from Medicaid, a program that serves one in five Americans… The Senate bill would also cap overall federal spending on Medicaid: States would receive a per-beneficiary allotment of money. …State officials and health policy experts predict that many people would be dropped from Medicaid because states would not fill the fiscal hole left by the loss of federal money.

Here’s a chart showing the truth. The data come directly from the Congressional Budget Office.

At the risk of pointing out the obvious, it’s not a cut if spending rises from $393 billion to $464 billion.

Federal outlays on the program will climb by about 2 percent annually.

If opponents of reform want the program to grow faster in order to achieve different goals, that’s fine (everybody is allowed an opinion), but they should be honest about the numbers.

Of course, there is more than math involved here. There’s also policy.

The Wall Street Journal recently opined on the important goal of giving state policymakers the power and responsibility to manage the program. The bottom line is that recent waivers have been highly successful.

…center-right and even liberal states have spent more than a decade improving a program originally meant for poor women and children and the disabled. Even as ObamaCare changed Medicaid and exploded enrollment, these reforms are working… The modern era of Medicaid reform began in 2007, when Governor Mitch Daniels signed the Healthy Indiana Plan that introduced consumer-directed insurance options, including Health Savings Accounts (HSAs). Two years later, Rhode Island Governor Donald Carcieri applied for a Medicaid block grant that gives states a fixed sum of money in return for Washington’s regulatory forbearance. Both programs were designed to improve the incentives to manage costs and increase upward mobility so fewer people need Medicaid. Over the first three years, the Rhode Island waiver saved some $100 million in local funds and overall spending fell about $3 billion below the $12 billion cap. The fixed federal spending limit encouraged the state to innovate, such as reducing hospital admissions for chronic diseases or transitioning the frail elderly to community care from nursing homes. The waiver has continued to pay dividends under Democratic Governor Gina Raimondo. …This reform honor roll could continue: the 21 states that have moved more than 75% of all beneficiaries to managed care, Colorado’s pediatric “medical homes” program, Texas’s Medicaid waiver to devolve control to localities from the Austin bureaucracy.

By contrast, the current system in states that have not moved toward block granting is not successful. It doesn’t even generate better health, notwithstanding hundreds of billions of dollars of annual spending. Both Rick and I have worked in the medical field intersecting Medicaid and we’ve both seen how badly it works. Medicaid is what single-payer health insurance looks like and it isn’t pretty.

Avik Roy explained this perverse result in Forbes back in 2013.

Piles of studies have shown that people on Medicaid have health outcomes that are no better, and often worse, than those with no insurance at all. …authors of the Oregon study published their updated, two-year results, finding that Medicaid “generated no significant improvement in measured physical health outcomes.” The result calls into question the $450 billion a year we spend on Medicaid… And all of that, despite the fact that the study had many biasing factors working in Medicaid’s favor: most notably, the fact that Oregon’s Medicaid program pays doctors better; and also that the Medicaid enrollees were sicker, and therefore more likely to benefit from medical care than the control arm.

First, there are no Medicaid cuts, as the left is asserting, and second, Medicaid as currently operating, does such a poor job that it doesn’t have any effect on health outcomes. If the GOP actually did cut the program, it is entirely likely that people would actually get better care with no insurance at all. But that is not what is being proposed. The administration of Medicaid would move to the states, which was a highly successful improvement to welfare programs in the 1990s and is now working in a handful of states for Medicaid.

So whatever you’re hearing in the news is not news … it’s propaganda, created by those who don’t want to lose their power to control the lives of others.

Confessions of an Uninsured Graduate | Marianne March   Leave a comment

A few days ago I donned my gown and my cap with its little gold tassel, and I graduated with highest honors from my college. Now that I am transitioning out of student life, I have many decisions to make. What will I do? Where will I work? What am I going to do without my generous Obamacare stipend?

Image result for image of the happily uninsuredImmediately following high school, I entered the working world as a retail manager. I enjoyed the hard work, the promotions, and the encouragement I received from my supervisors. I was making just enough money to live in a rented 2-bedroom townhouse with a roommate, and my full-time status qualified me for healthcare coverage through the company. At the same time, I longed for work that would be more meaningful for me. I was disinterestedly interviewing to be the manager of my own store when I decided to pursue my education.

My passion for politics steered me towards a degree in policy and economics. For over four years I diligently prepared for exams, listened to several hundred hours of lectures, and participated in group projects that made me wish I could strangle my classmates without repercussions. I also worked part-time jobs, volunteered, interned at three different organizations, and attended a semester abroad.

When I turned 27, I was no longer covered by Mom’s insurance plan. As a student with a low-wage part-time job and the occasional unpaid internship, my tiny income allowed me to qualify for bodacious healthcare stipends. As a wage-earner in the lowest tax bracket, over 90% of my Obamacare costs were covered by a so-called premium tax credit. In 2017, things will be more complicated.

Related imageAs a recent graduate, I imagine myself carving a path in the world with the same patience that the Colorado River took to erode the Grand Canyon: slow and tedious, but not when you think of the intensity of the rapids and the roar of water as the waves pummel through the canyons and stone is forced to make way for water. I am taking a chance and accepting a temporary apprenticeship which excites me and will give me an opportunity to test-drive a career of passion.

At least one person looked me in the eye and urged me to reconsider. After all, I’m 28, I live in my parent’s basement, and I had a post-graduation plan that included dental and a 401k, not a benefit-free six-month gig. I admit it, this choice is a gamble. What am I going to do about money and healthcare? I have six months before student loan collectors come a-knockin’. Sure, there are many jobs that will provide for a closet full of clothes, a pile of bricks, and a matching storage unit. However, this opportunity just might be the onramp to a life that I long for and that I didn’t think was possible.

Unfortunately, as a temporary employee, I am not eligible for benefits like a 401k or employer-generated healthcare. I will receive compensation for my work, but my modest income will render my healthcare stipend to nearly evaporate. I will be earning too much money to keep my government assistance, but earning too little to comfortably afford the monthly premiums. Of course, there is always a choice to make: I can go back to work that is completely unfulfilling but will allow me to pay for healthcare coverage, or I can try to earn less money so that I qualify for support.

I can even shove my fists in my eyes and out-ugly Kim Kardashian’s cry-face, or I can be grateful that my organization is taking a chance on me. I can be happy that, although my financial future is questionable, delayed gratification is the very hallmark of adulting. I can’t know the future, but I believe this is the best move I can make at present.

And so, when the enrollment deadline for HealthCare.gov rolled around, I had another choice to make. My decision is to go without health insurance.

For weeks, I have received emails, automated phone calls, and voicemails, sternly reminding me, “Don’t wait for your monthly health care costs to increase by 50 percent or more in January,” and, “Come back to HealthCare.gov and try to find a less expensive plan.” But the plans are already outrageous. So, last night, at the zero-hour for signing up for healthcare, I decided to go without.

It makes me nervous. I fear the penalty. It seems ridiculous that my choice to pay out of pocket for medical visits will be punished later, and at a rate of 2.5% of my income. I think we can all agree that a monetary penalty would be better spent compensating a doctor, nurse, or dentist for their skills. The incentives are completely out of whack.

Weaning off the government teat is painful, I don’t enjoy the sensation, but there are no satisfying alternatives. So pass the vitamins and kale chips, I can’t afford any illnesses for at least six more months.

Source: Confessions of an Uninsured Graduate | Marianne March

ObamaCare House of Cards   Leave a comment

The Congressional Budget Office scored the American Health Care Act and claimed the bill will reduce deficits by $119 billion over the next decade and result in 23 million fewer people being insured by 2026. So clearly, people would be better off if Obamacare were unchanged. This new report from the Department of Health and Human Services dispels that myth.

Reality Bites

The DHHS report shows that premiums in the individual market exchanges increased by 105% in the 39 states using Healthcare.gov from 2013 to 2017. This is equivalent to $244 per month ($2,928 per year) in additional premium payments for people buying insurance through the exchanges. People not eligible for exchange subsidies are fully exposed to these increases, while taxpayers will bear the brunt of subsidies for eligible enrollees.

Despite the promises that Obamacare would “cut the cost of a typical family’s premium by up to $2,500 a year,” average premiums on the exchanges more than doubled over this period. In some states, such as Alabama and Alaska, the average premium more than tripled. Welcome to my world.

B-b-but, Alaska is a small-population state with a huge land mass and people who have to travel long distances to medical care. Surely ….

No, the high average increase is not driven by a few outliers. Twenty-three out of the 39 states included in the analysis experienced premium increases in excess of 105%. Only three states, North Dakota, New Hampshire, and New Jersey, had cumulative premium increases below 50%.

 

As the report acknowledges, the composition of the population enrolling in plans through the exchanges has changed over time due to the adverse selection problems created by the law’s subsidy and regulation frameworks.

Example?

The community rating age bands, which dictate how much more companies can charge older, higher-risk enrollees, were set at 3:1 under Obamacare. A recent study by Milliman estimated that relaxing these age bands to 5:1 would reduce premiums for people aged 20-29 by 15% while increasing premiums for older enrollees.

Lower premiums for younger, healthier people would encourage more of them to enroll through the exchanges instead of foregoing health insurance because it is too expensive for them. Older, less healthy people make up a larger share of the exchange population now than in earlier years, which exacerbates the premium increases on that population.

Due to data limitations, the report does not deal with the population getting plans on the individual market but not through the exchanges. These people accounted for more than a third of the total individual market. They are not eligible for the law’s subsidies, so there is likely less adverse selection for the off-exchange population, but these enrollees have to bear the entirety of the costs of those increases.

Families choosing a plan through the exchanges have seen their premiums more than double since 2013. Alabama and Alaska, which have seen the two highest cumulative premium increases, are both down to only one insurer. In the entire country, only Virginia saw the number of participating insurers increase from 2016 to 2017. Just today, Blue Cross Blue Shield of Kansas City announced it would be exiting the exchange, leaving 25 counties in Missouri without a participating insurer for now.

The trend is absolutely unsustainable.

The lack of choices and competition in a growing number of places makes it unlikely that there will be an end to rapid premium growth without reform. While the CBO estimates will provide some insight into the effects of the bill in its current form, a working group of Senators is crafting a revised bill with major alterations.

Getting the design of replacement legislation right is important, and the CBO score will give the working group more information about which aspects of the bill that passed the House need the most adjustment. Provisions that allow for more competition and choice for people trying to get insurance through the individual market should help bring down annual premium increases.

Real vs Fake Health Care Reform, and How to Tell the Difference | Jeffrey A. Tucker   Leave a comment

You want to know why the “freedom caucus” has balked at passing the Trump-backed Ryancare health care proposal?

Source: Real vs Fake Health Care Reform, and How to Tell the Difference | Jeffrey A. Tucker

Image result for image of freedom caucus balking at ahcaBecause the package does not address the core problem of the existing system. They are leaning – correctly – on a brilliant insight from F.A. Hayek.

Let’s think this through.

Objecting to Obamacare doesn’t have to be a matter of ideology. The contraption just didn’t work.

What was the most fundamental problem with Obamacare? It attempted to set up an artificial market that lacked the most salient feature of markets: genuine competition. Real competition. I don’t mean teams struggling for control. I mean an institutional setting in which producers can innovate. They face free entry and exit. Their well-being depends on serving the consumer.

Obamacare has flopped because it disabled what remained of the competitive system with defined benefits packages, mandates that everyone be covered, requirements that everyone must purchase, and geographic limits on service provision. All these together took health care out of the realm of markets and made it a form of central planning.

And so: Obamacare resulted in soaring premiums, soaring deductibles, shoddy access, and ever-increasing bureaucracy. It became untenable. Objecting to it doesn’t have to be a matter of ideology. The contraption just didn’t work.

The core insight of the “freedom caucus” comes from Hayek and his fascinating piece “The Meaning of Competition”:

It is only through competition that we can assume that these possible savings of cost will be achieved. Even if in each instance prices were only just low enough to keep out producers which do not enjoy these or other equivalent advantages, so that each commodity were produced as cheaply as possible, though many may be sold at prices considerably above costs, this would probably be a result which could not be achieved by any other method than that of letting competition operate …

Yet the current tendency in discussion is to be intolerant about the imperfections and to be silent about the prevention of competition. We can probably still learn more about the real significance of competition by studying the results which regularly occur where competition is deliberately suppressed than by concentrating on the shortcomings of actual competition compared with an ideal which is irrelevant for the given facts.

I say advisedly “where competition is deliberately suppressed” and not merely “where it is absent,” because its main effects are usually operating, even if more slowly, so long as it is not outright suppressed with the assistance or the tolerance of the state.

The evils which experience has shown to be the regular consequence of a suppression of competition are on a different plane from those which the imperfections of competition may cause. Much more serious than the fact that prices may not correspond to marginal cost is the fact that, with an entrenched monopoly, costs are likely to be much higher than is necessary …

Competition is essentially a process of the formation of opinion: by spreading information, it creates that unity and coherence of the economic system which we presuppose when we think of it as one market. It creates the views people have about what is best and cheapest, and it is because of it that people know at least as much about possibilities and opportunities as they in fact do. It is thus a process which involves a continuous change in the data and whose significance must therefore be completely missed by any theory which treats these data as constant.

Let me paraphrase and apply: no, there will not be a perfect world. Total freedom is not a political option right now. So what’s the priority for any reform? The most crucial institutions in any society are the signaling systems of prices that reflect existing knowledge and possibilities.

When those are malfunctioning, nothing else works. Costs go up, quality goes down, innovation stops, and the sector starts to atrophy.

Competition Restoration Means Health Care Restoration

The first priority is that competition must be restored through some measure of deregulation. The mandates must go. The pre-set benefits packages must die. Insurers must gain control over their business affairs and customers have to be able to shop and choose.

It is not about ideology. It is about a system of health care insurance that actually works to serve the common good.

We must regain flexibility to inspire innovation and achieve profitability. This must happen or else premiums will keep going up. This is a requirement. Obamacare failed because it disabled the market. Any reform must restore that market. This is more important than any other feature of reform.

Trumpcare or Ryancare or whatever you want to call it does not do that. It replaces a mandate to buy with a tax incentive to buy. Otherwise it leaves the problem of the absence of genuine competition in place. True, the alternative doesn’t do anything about the transfer of payments, but, if you follow Hayek, you know that these are less important to eliminate than are the barriers to competition.

The restoration of competition will discover for us things we do not know about service provision: treatments, plans, new institutional arrangements, new forms of insurance, new methods for serving the public. Competition will grow the market and make profitability the test of success or failure.

If that does not happen, premiums will keep increasing, quality will go down, access will continue to shrink, and public anger will grow as a result.

Now is the time. Again, it is not about ideology. It is about a system of health care insurance that actually works to serve the common good.

This Is Why Government Shouldn’t Be Involved in Health Care | Jeffrey A. Tucker   7 comments

Image result for image of ahcaThe Republican-controlled House vote to “repeal Obamacare” – if that is what this was – was a stunning mess.

Did they get it right? The answer is obviously no, and that’s inevitable. Just imagine a bill that sets out to reorganize any industry that is currently mostly market driven, such as shirts, software, groceries, or furniture. Would any bill coming from Congress that pertains to the whole of any of these be wonderful? It’s impossible.

This is because the minds of politicians working together – with all their mixed motives of special-interest acquiescence, electoral fears, and general ignorance – cannot possibly replicate, much less improve upon, the brilliant mind of the market at work.

Sadly, any structural change in the industry is pushed through via legislation.

Fortunately, we don’t have to deal with such bills in most markets. But the health care industry is different. It’s been heavily regulated for more than a century. Obamacare went in the wrong direction, toward more rather than less government control. It actually disabled the mind of the market. The result has been soaring deductibles and premiums, insurers going belly up, and average citizens being forced to pay for insurance they can’t afford to use.Change is necessary. Sadly, any structural change in the industry is pushed through via legislation. That is a tragedy. The challenge is to sort out real vs. fake reform, and do this amidst grandstanding, bombast, posturing, ideological panic, rhetorical bombast, and media mania.

The Miasma of Politics

The House had little more than one day to consider a bill that would affect the lives of every single living American in the most fundamental way. Meanwhile, those of us in the peanut gallery had to try to make sense of whether or not this bill is a promising development, remembering that not backing something necessarily means de facto settling with the legislative status quo.

Even getting the core facts of the legislation was a challenge.

What is the core standard by which any health care bill should be evaluated, given that nothing coming out of Congress that can gain a majority of Republicans will ever be right? The test is this: does this bill take us in the direction of restoring market competition and market signaling, or does it preserve the current managed, artificial, coercive, and unworkable system that relies on government control?

Donald Trump does not understand this at all.

Two main features of Obamacare (explains David Henderson) disable market competition: guaranteed issue and community rating. Guaranteed issue mandates what is covered under all health insurance, thus ruling out flexibility on the part of either buyers or sellers. Community rating forbids insurance pricing from being influenced by risk assessment, which takes the insurance out of insurance. A reform worthy of support must deal directly with these problems.Donald Trump does not understand this at all. He keeps tweeting that he absolutely insists on keeping the mandate that all health insurance must cover pre-existing conditions. The dogmatic demand painted the Republicans in a corner. They couldn’t repeal the very mandates and disabled-pricing schemes that have created such a mess in the industry.

States, You Do It

Yet Obamacare is so bad that some states have toyed with actually nullifying the law. Taking their cue from such movements, the House bill encourages states to take some steps to do just that. Whether they come through or not is another matter.

Still, this amendment brought some skeptics on board. The final bill permited the states to opt out of both the guaranteed issue and the community rating mandates, thus removing Congressional culpability but allowing a decisive number of votes to come out in favor of the bill.

Two bellwethers that I follow in Congress because of their principled stand for market freedom – Justin Amash of Michigan and Thomas Massie of Kentucky – voted differently. Amash was a yes and Massie was a no.

Massie released the following statement:

As recently as a year ago, Republicans argued that mandates were unconstitutional, bailouts were immoral, and subsidies would bankrupt our country. Today, however, the House voted for a healthcare bill that makes these objectionable measures permanent.

The former Democrat Speaker of the House was rightfully derided for imploring Members to vote for a healthcare bill to “find out what was in it.” Yet today, we voted on a healthcare bill for which the text was available only a few hours before the vote. In fact, the Congressional Budget Office had no time to even provide Congress with a preliminary estimate of the full cost of this bill.

By repealing a small number of Obamacare mandates, while leaving others in place, this bill runs the risk of destroying what remains of the individual health insurance market.

The option in this bill that allows States to apply for waivers from some Obamacare mandates is well-intentioned. However, it falls far short of our promise to repeal Obamacare. There also remains the risk that State legislatures, like our federal legislature, are unable to withstand the political pressure from lobbyists who defend Obamacare, and the pressure from those who receive Obamacare’s welfare handouts.

This bill should have included measures that allow Americans to take charge of their own healthcare and get the government out of the way. These measures include allowing the deduction of health insurance costs from income taxes, giving everyone the ability to purchase insurance across state lines, and allowing individuals to band together through any organization to purchase insurance.

In weighing my vote, I heeded the wise advice that “one should not let the perfect be the enemy of the good.” If this bill becomes law, it could result in worse outcomes, fewer options, and higher prices for Kentuckians who seek health care. In summary, I voted against this bill not because it’s imperfect, but because it’s not good.

His argument is strong. If you live in a state that does not opt out of the community rating, you are stuck with the bulk of Obamacare. Massie had an intuition about this: the pressure would be too great to preserve the status quo, thus making the “repeal” wholly illusory. Then the Republicans get stuck with a failure.

Amash has not released a formal statement on his yes vote, but his rationale is easy to anticipate. This bill is nothing like what it should be, but we also know that the right kind of bill could never pass the House. This one does repeal some mandates and taxes. It does permit a path for states to opt out. A no vote effectively means the preservation of the status quo. A yes vote does not make this bill law; it only sends it to the Senate, which will pass something very different (better or worse is yet to be seen).

Democrats Celebrate

Meanwhile, in the aftermath, Democrats imagine that they just won the greatest victory since 2010, even to the point of singing a song on the House floor. The passage of Obamacare was a catastrophe for them. It nearly wrecked a two-term presidency and contributed heavily to the loss of the Senate and the presidency. It has been an albatross around their necks. Now they get to hurl that onto their enemies.

But that alone presents another danger. If this bill is perceived to be authentic “deregulation” and “free market reform,” every failure will come to be blamed not on government but rather insufficient control. “We tried your free markets and they failed!” And there is no question that the partisans of socialized medicine are already positioning themselves in this direction. If you believe the New York Times editorial after the House vote, we’ve already entered into health-care anarchy.

My purpose here is not to settle the question of how one should have voted or what the effects or eventual outcomes will be. There is a bigger and more important lesson here. Any good, service, or industry that is removed from market control and put into the hands of government thereby becomes subjected to the grueling and ghastly machinations of the political process in all its subterfuge, duplicity, and vast waste.

Even if you don’t like every result of market control, it’s hard to imagine that anyone can defend what necessarily replaces it once you surrender any market to control by government.

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Source: This Is Why Government Shouldn’t Be Involved in Health Care | Jeffrey A. Tucker

Posted May 5, 2017 by aurorawatcherak in Common sense, Uncategorized

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It Stinks Less, but It Still Stinks   Leave a comment

Rick, my cousin who is a world-class research doctor who has been helping me to understand medical insurance reform, finally got around to sending me his analysis of the most recent Republican effort to sort of repeal and sort of replace the Affordable Care Act. If I were a Trump voter who voted for Trump and the GOP believing the promise that they would repeal of the Affordable Care Act before it bankrupted me, I’d be a bit annoyed. I am a bit annoyed and I didn’t vote for them expecting them to actually do anything because I knew Trump likes universal medical insurance and socialized medical care. He said things supportive of it back in the run-up to the ACA passing.

Related imageBut, here we are, waiting with baited breath to see if the Republicans actually have a votable bill this time.

The AHCA relies on three stages. The passage of the AHCA is simply Stage 1. As Senator Ted Cruz pointed out when the original iteration of the AHCA was being debated, the basket of goodies in the second and third baskets are what the GOP has been promising voters for over half a decade. The problem is that the first “basket” changes almost nothing and the subsequent baskets rely on easily changed mandates from the Secretary of Health and Human Services, who could be a raving progressive from England after 2020.

If the AHCA can in any way be heralded as a conservative win, it’s the amendments made since the March failure-to-launch that move us toward a medical care system based on free markets that are note-worthy, but the AHCA still isn’t a “free market solution.” To make the bill palatable to the must-have House Freedom Caucus, two amendments were added that allow states to apply for waivers to opt-out of the pre-existing conditions requirement and the provision regarding “essential health benefits”.

However, with one dumb comment from President Trump and a moving story from Jimmy Kimmel — another amendment was added that provides $8 billion over 5 years for the nearly inconsequential issue of “pre-existing conditions.”

People really should know, about pre-existing conditions coverage in America, because mention of the phrase seems to halt all rational discussion, while precious few Republicans are prepared to defend the point eloquently or adequately. It is something vital to understand.

Rushing the medical care vote in March has made Americans, and particularly Republicans, wary. The president and Republican Congress only have themselves to blame because they should have spent months talking about the bill before voting on it. That talking would have educated people on what is actually in the bill. Falling short on today’s vote will leave most Americans who voted for Republicans because they promised to repeal Obamacare and later to replace it with something better, with the clear understanding that Republicans never meant what they said. Bye-bye, GOP!

So we’re stuck with what it is … at least for now.

In broad terms, the bill would likely reduce government spending and decrease insurance premiums for people who are healthy and young and don’t get insurance through their employers. It also likely will increase costs for older, sicker people and take away government-provided coverage from people in the lower middle-class. Those are, despite what the naysayers want you to believe, are good things.

The new American Health Care Act would have far less impact on people who get insurance from their employers, but let’s be clear — the AHCA is a complicated bill that builds off of the ACA, another even more complicated bill, so its potential impact is complicated and, therefore, difficult to predict. But Rick identified some of the major changes to the medical care landscape that could occur if the AHCA passes in its current form.

People with pre-existing conditions will no longer be treated as if they are healthy.

The House Freedom Caucus fought for an amendment to be introduced that loosens regulations that requires insurance companies to sell plans to people who buy insurance independent of their employers or the federal government.  It potentially will impact rules that protect people with pre-existing medical conditions from being discriminated against by medical insurers.

Right now there’s panic among Obamacare supporters that the amendment could make insurance coverage unaffordable for people with existing medical issues. And Republicans and conservatives have proved ill-equipped at defending their position as equally compassionate but packaged in a different vehicle. This allows appeals to emotion, like that of Jimmy Kimmel’s tear-jerker about how his baby wouldn’t be covered because he was born with a heart condition, to shut down all thinking and conversation when the phrase “pre-existing condition” is uttered.

 In truth, the MacArthur amendment keeps the ACA’s guaranteed access clause, which requires insurers to provide policies to those with pre-existing conditions. However, the bill would allow states to apply for waivers that could change the cost and quality of their coverage.

First: prior to the ACA, the vast majority of Americans with medical insurance were already in plans that were required to offer them coverage regardless of pre-existing conditions. Employer-based plans were required to offer coverage to everyone regardless of pre-existing conditions. So were Medicare, Medicaid, and other government programs like the VA. Employer- and government-based plans, prior to Obamacare, represented 90 percent of Americans with medical insurance.

The other 10 percent were people buying coverage on their own, on the individual market. In most — but not all — states prior to Obamacare, people buying coverage on their own could, in theory, be denied coverage for a pre-existing condition.

In reality, in practice, a tiny percentage of Americans were being denied coverage due to a pre-existing condition prior to the ACA. We know this in general because surveys consistently indicated that this was the case, and in detail because of an Obamacare program called the Pre-Existing Condition Insurance Plan, or PCIP.

PCIP was designed to work from the years 2010 to 2014, as a bridge until Obamacare’s insurance regulations took effect. During those years, Americans could sign up for heavily subsidized coverage under PCIP if they had documented proof that they had been denied coverage by an insurance company and had a pre-existing condition.

What happened? Enrollment in PCIP peaked in February 2013 at 114,959.

Under the AHCA with the MacArthur amendment, states could opt out of the law’s essential medical benefits measure, which requires insurers to cover 10 main benefits, including hospitalization, prescription drugs and other services. Insurers in those states would likely offer trimmed-down policies might not cover for all the treatments and medications that those with medical issues need. Carriers would likely offer more comprehensive policies to consumers with costly conditions at higher premiums.

Let’s remember that the #1 driver of the out-of-control premium increases under Obamacare has been people with costly conditions paying the same premiums as healthy individuals who don’t go to the doctor nearly as often.

The amendment addresses this by allowing states to change the ACA’s community rating provision, which bans insurers from charging enrollees higher premiums based on their medical history. Under the revised bill, insurers could charge higher premiums to those with pre-existing conditions who let their coverage lapse. This is very similar to what existed prior to the passage of the ACA. It gave people with pre-existing conditions an incentive to remain covered while holding a lid on premium increases for the rest of us.

States that apply for this waiver would have to set up high-risk pools or other programs aimed at minimizing insurers’ exposure to costly policyholders. This would offset some of the price hikes carriers would levy on those with pre-existing conditions. They’ve only set aside $130 billion to fund these programs through 2026, which some observers feel is woefully inadequate, but the alternative is the bankrupting of the middle-class with the ACA’s out-of-control premium increases, so it’s worth it to return to a system that worked in the past. High risk pools existed before Obamacare, but many were underfunded, charged policyholders premiums in line with the costs of their ongoing care and had waiting lists.

 

Lower-income people could get caught by this amendment if the bill becomes law. A Congressional Budget Office analysis of an earlier version of the bill found 24 million people could become uninsured under the GOP legislation. That number is likely ginned up because it assumed that everyone who went on Medicaid under the ACA would be ineligible under reform, but we showed in our earlier analysis that this is not true. The few lower-income folks who become uninsured due to the rollback of Medicaid expansion may encounter higher premiums when they try to get insurance because insurers would be allowed to set rates based on their health backgrounds.

In other words, people will once more pay premiums based on what their cost of care is likely to be.

 

Medical care is incredibly expensive in the United States, and if you get sick, it’s going to cost a lot. Which is why it’s important for older and less healthy people to purchase medical insurance, but when Obamacare required everybody to buy insurance and insurers to offer coverage to everybody, regardless of their cost of care, it distorted the insurance market and drove up premiums to unaffordable levels for everyone. Before Obamacare, insurance companies were required to sell insurance to people with medical issues provided the person could pay the premiums dictated by their cost of care. That was actually a provision within HIPPA that Obamacare supporters refuse to acknowledge.

Why the ACA is failing is that it regulated how much insurers could charge people with medical issues. This is called “a community rating”. That meant insurers suddenly had to charge everyone the same price for the same coverage. Prices can’t currently be based on factors such as a person’s sex or how sick they are. Under the GOP plan, states could get a waiver that would allow insurers to set prices based on how healthy a person is.

Republicans have argued that they wouldn’t be totally eliminating protections for people with pre-existing conditions because states don’t have to ask for a waiver. Obamacare supporters believe that claim ignores some difficult realities.

Subsidies that help people buy insurance will be reduced under the AHCA. That will likely lead healthier people to leave the insurance market, further increasing premiums for those who remain. Yeah, freedom sometimes allows people to act in their own best interest. States might have to seek the waivers to keep the insurance marketplaces up and running. Yup, that’s the whole supply-and-demand cycle that economists warn us about. All this could add up to insurers’ offering coverage that is unaffordable to people with pre-existing conditions.

The AHCA tries to combat those increased costs through a fund for high-risk pools, insurance programs for people with extremely high health care costs. I am familiar with Alaska’s high-risk pool and it did a good job in covering people with pre-existing conditions … far better than having only one insurance company in all of the state of Alaska to cover everybody in the individual market at very high premium prices.

Monopolies can pretty much charge what they want and Obamacare created a lot of monopoly in the insurance market.

 

Medicaid would go back to being a program for the poor.

Although amendments to the AHCA have gotten the most coverage in recent weeks, changes to Medicaid from the original version of the GOP bill are what cut government spending while rolling back multiple taxes.

Before the ACA, Medicaid was an insurance program for people below the federal poverty line and those who met certain criteria, such as having a disability, being pregnant or being a woman with children. Obamacare changed that by opening up Medicaid to everyone below 138 percent of the federal poverty line in states that chose to expand the program. Thirty-one states and D.C. opted to expand Medicaid, and more than 11 million people joined the Medicaid rolls. Many were already eligible for Medicaid and had chosen not to apply or they only became aware that they were previously eligible when they were forced to apply.  Medicaid expansion included families of four making up to $55,000 here in Alaska. The GOP bill would freeze that part of the program on Jan. 1, 2020.

Some Obamacare supporters claim the AHCA wouldn’t just cut back Medicaid expansion, it would also trim the prior existing program, by capping how much states would be reimbursed for enrollees. The Congressional Budget Office estimates that the net effect of the changes would be 14 million fewer people on Medicaid, which might delay the impending bankruptcy of that program by a decade.

 

Insurance premiums would go down for some, but others would pay more than they currently do.

 

Then there are the insurance subsidies and monthly premiums for people who buy insurance on the private market instead of through an employer. The AHCA would make several big changes that would likely lower premiums somewhat, according to the CBO’s analysis. In addition to potentially changing the costs for people with pre-existing conditions, the bill would allow older people to be charged a lot more than they currently are  …  up five times what younger enrollees pay. Again, older people who are not in good health are a primary driver of the premium increases we’ve seen under Obamacare. Currently, subsidies available to people who buy on the Obamacare marketplaces are calculated so that lower-income people won’t pay more than a set percentage of their income. Subsidies go up if you earn less, live in an area where insurance is more expensive or are older. Under the GOP bill, the system would become simpler: You’d get a subsidy based on your age, which would begin phasing out for people with an income of $75,000 a year.

The McArthur amendment would also allow states to get a waiver on the essential health benefits required by Obamacare. This provision requires plans to cover a range of services, including hospital, maternity and mental health care. So, if you’re a single male, you pay for maternity coverage whether you need it or not. The requirements push up insurance premiums, because insurers must cover more services.

This aspect of the AHCA brings up a larger question facing the bill overall. Passage in the Senate is far from certain, but even before that, the AHCA would have to pass muster with the Senate parliamentarian, the gatekeeper for Senate rule making. See, this GOP replacement bill is not really a full replacement; it’s kind of like an update to the ACA. That’s because the GOP doesn’t have the votes to fully repeal the ACA, which would require 60 senators, so it’s using a process called reconciliation, which allows the Senate to to pass bills that affect the federal budget with a simple majority. Much of the AHCA, such as the cuts to Medicaid and changes to insurance subsidies, falls within that mandate. But other changes, such as waivers to essential health benefits, don’t have a direct budgetary impact, leading some experts to believe the Senate parliamentarian will flag those changes as outside the realm of reconciliation.

 

What We Couldn’t Find in the Bill?

There’s still no interstate purchase of insurance and there isn’t a mechanism for allowing individuals to form groups that are not employer-based, so the two biggest tools for driving down premiums remain unavailable. They may come in one of the two later stages, but as already explained, these are easily swept aside by every new Secretary of Health and Human Services.

While the Republican bill may be a step toward making medical care more affordable to most Americans, it is a far cry from the “repeal” Republicans ran on when the Tea Party began to make inroads and win seats and they realized promising something they couldn’t really deliver was better than being realistic.

The AHCA still stinks like three-day-old fish left out on the counter, but it may not stink quite so much as the ACA. Premiums will go down for healthy individuals in the middle class, but so long as we’re still mostly required to buy insurance or pay a penalty, we aren’t really free to make our own decisions.

 

Do Republicans Want to Be Blamed?   Leave a comment

There’s no question that the unAffordable Care Act needs to be replaced. It is an example of why government interventions into the marketplace are not a good thing. Government starts out trying to fix something, but their very intervention necessitates following interventions to fix the problems created by their attempt for fix what they perceived as a problem.

Image result for image of gop blamed for ACA failurePretty much every analyst agrees that the insurance market under the ACA has entered a death spiral. Something must be done. And, the GOP in the House attempted to do just that with the American Health Care Act. The problem is that it was inadequate to the task assigned to it.

The ACA’s provisions are all intertwined. You cannot just tweak one or two and “fix the problem.” To avoid an even larger disaster, all of the provisions must be repealed at once. By the way, this was a known problem with the bill before it was passed.  You were warned, folks. You refused to listen. For highly political and chicken-livered reasons, the Republican establishment chose a compromise bill which keeps the requirements for pre-existing conditions coverage at community ratings, but does away with the individual mandate … sort of … replacing it with a mandatory 30% surcharge, payable to insurance companies, for those who go without coverage for longer than 60 days and then choose to purchase another plan.

Basically, the AHCA removes Obamacare’s funding mechanism while keeping the requirements that made the individual mandate necessary in the first place. Those requirements are what is now driving up the costs of medical insurance to a point where people are dumping insurance altogether. That wasn’t an unexpected outcome of the ACA, either. You were warned. You did not listen. Or, Democrats listened, but only enough to decide to create the individual mandate to punish people for not purchasing insurance … which works only so long as premiums remain less than the tax penalty for not purchasing insurance. We passed that exit some time ago.

Oddly, the surcharge will punish people who decide they now want to buy insurance. That doesn’t provide a lot of incentive for people to continuing paying huge premiums while they’re healthy, which leaves insurance providers unable to remain solvent in a massively distorted market, which will hasten the death spiral.

So, my question to the GOP is … do you WANT to be blamed for this mess?

I ask because … well,  you would have been if you’d passed the AHCA in its current form. The insurance market would have collapsed even more rapidly than it is going to under the ACA and the blowback would be pointed at your face, not the Democrats who caused this mess in the first place. The progressives who were so enthused about the ACA would insist that the chaos that followed was the fault of deregulation and the free market rather than what actually caused the problem — Obamacare.

Grow a spine, GOP! Either repeal it (I don’t care if you replace it) or stand back with your hands in the air and let the ACA fail and let the Democrats be blamed for what they caused. That is likely to happen this fall, when you can make a perfect argument for going back to more free market systems.

The Republicans promised the American people that it would repeal every word of Obamacare. You’ve passed two bills that did that, knowing that Obama would veto them. Now you have a President who has said he wants to repeal the ACA, so dust off one of those full repeal bills and send it to him. DO IT!

A real, full repeal is only the first step in repairing health care. A repeal needs to be followed by true free market reforms, with the goal of a complete separation of the health care industry and government. In the interim, the reforms recently proposed by Senator Rand Paul are a long step in the right direction. Only free markets can provide the cheapest and highest quality medical care to the largest amount of people.

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