Archive for the ‘#repealobamacare’ Tag

Mere Medical Insurance Won’t Fix Our Problems   6 comments

Hi. This is Rick. I’m a research doctor, which means that I work on salary for a major medical center. I won’t name it here, but you’ll probably figure it out by what I’m about to write. That I work on a salary meant that I made the exact same amount of money before Obamacare was enacted that I made after. In other words, I can’t be accused of trying to line my own pockets. My concern is the care my patients receive, not how much it costs them … but, I should say that we’ve offered ample evidence that it cost them more under Obamacare. But I want to suggest that medical insurance is not going to fix our health care problems because coverage is not the problem. We are!

For the first time in my adult life, I voted Libertarian in 2016. I started out as a somewhat liberal Democrat, son of working-class folks who’d always voted Democrat until the Party was hijacked in 1972. I voted for Carter both times, then for Reagan’s second term (so did a lot of moderate Democrats). I was in Europe for Bush 1’s election, so missed it entirely, then went back to voting Democrat for Clinton’s first term. But Hillarycare REALLY bothered me. As a doctor, I knew it was a very dangerous thing for patient care. I’d worked in Europe for several years and I can tell you that universal health care doesn’t work as advertised. So I voted against Clinton’s second term, then found myself agreeing with the Contract with America (yeah, I was surprised too). I voted for GW Bush the first time, was out of country and forgot to vote the second time, voted for Barack Obama the first time and then stopped being a Democrat entirely and stayed home in protest of his truly terrible policies (and not just Obamacare) the second time. I was planning to stay home last fall too when Lela said she was voting for Gary Johnson out of protest for the devil’s choice the Clinton-Trump face-off made for us. I actually heard Johnson speak a couple of times. He would have been a good choice for president, though he never had a chance.

The Trump presidency is kind of a scientific marvel to me. There are diseases I’ve studied that are a curse that also impart some brilliant advantages. That’s sort of my view of the Trump presidency. Lela likens it to watching a horror film through your fingers. I guess that’s my reaction too. The repeal and replacement of Obamacare is, for me, the most important domestic issue of the year … possibly the century, followed closely by the Supreme Court nominations.

With Republicans set to control the federal legislative and executive branches next year, the hyperbole of the last six years has soared to new heights. You’ve got suppossedly reputable media outlets insisting that 21 million … or 40 million … or 300 million people will lose coverage if Obamacare is replaced.

Others have tried to ground the discussion in reality, focusing on the details of the most comprehensive replacement plans floated to date: that’s what Lela and I have been doing. Speaker Paul Ryan’s “A Better Way,” and Avik Roy’s “Transcending Obamacare.” both provide market-based approaches to comprehensively overhauling the health care system in America, while also addressing the numerous (and now abundantly-clear) problems of Obamacare.

While avoiding many of the defects of Obamacare, Ryan and Roy’s plans both have two fundamental and interrelated flaws: first, they focus on health insurance

  1. they focus on health insurance coverage rather than medical care.
  2. they fail to take into account that a large number of Americans are too dysfunctional to benefit significantly from the proposals.

Providing truly affordable health insurance coverage might equate to obtaining health care, but any proposed reform to our health care system must take account of the limitations of the populace it will serve.

Politicians and policy wonks are often too far removed from true dysfunction to understand how pervasive it is, and how it prevents even the most perfectly devised plan from succeeding as intended. Politicians residing in the D.C. bubble are unlikely to have seen the lives of the truly dysfunctional – those suffering from severe mental illness, drug or alcohol addicts, or just run-of-the-mill adults who lack basic skills to manage their own affairs and that of their families. They usually have no idea how to reach out to a politician and so them the reality of their world.

I grew up in an average working-middle-class home in Washington State. I didn’t know these people existed until I went off to medical school, living in an apartment I could afford, and started spending weekends in that same lower-income neighborhood’s “free clinic”. There I got a close-up view of urban poverty. Later I would spend two years in rural Wisconsin and find out that the same dysfunctionality exists all over.

 

An appropriate health care plan, whether fully or nearly fully subsidized, will be beyond these people’s capabilities. Providing tax credits to offset the cost of privately purchased insurance will be lost on the transient worker who already lacks the knowledge and wherewithal to claim the Earned Income Tax Credit. Signing up for Medicaid might be easier, but that does not translate into health care. There is an extremely limited number of doctors willing to accept the low reimbursement rates, for one. And, then Medicaid recipients actually seek out and find those doctors.

Many cannot or wish not to, which is why they do not regularly obtain preventative care and why, when sick, they end up in the emergency room. In reality, 25% of children in foster care do not receive the required check-ups. These children are in the care of “professional” parents cleared by the government as appropriate caregivers and their medical coverage is government provided. Do you think their dysfunctional birth parents could do better?

I am absolutely in favor of repealing Obamacare and replacing it with something that makes sense, or better yet, with a low-income medical care system that makes sense. Don’t judge the success of replacement legislation on the number of people with health insurance coverage, whether private or governmental. It tells us nothing about medical care or health outcomes. Until we address the lack of medical care as evidenced by poor health outcomes, we aren’t fixing our health care crisis.  Medical care is a separate issue and outside of the insurance and Medicaid structure. Here are a few ways to do so.

A huge part of America’s health outcomes problem comes from lifestyle choices – drug addiction, smoking, high-fat diets, lack of nutritious eating, overeating, alcoholism. Many health conditions and illnesses are preventable. Congressman Paul Ryan highlighted this point in his predecessor legislative initiative, The Patients’ Choice Act, writing:

“[F]ive preventable chronic diseases (heart disease, cancer, stroke, chronic obstructive pulmonary disease, and diabetes) cause two-thirds of American deaths while 75 percent of total health expenditures are spent to treat chronic diseases that are largely preventable. In government programs, the problem is even worse with chronic disease spending consuming 96 cents of every Medicare dollar and 82 cents of every Medicaid dollar.”

Preventing disease by encouraging lifestyle choices and immunizations would greatly reduce medical care costs. Private insurers use “wellness programs” to promote preventative care, weight loss, and smoking cessation programs; they offer reduced premiums or other rewards when certain goals are met. That’s not feasible for Medicaid and relying on advertising campaigns designed by social marketing professionals that focus on health promotion and disease prevention don’t work.

All the advertising in the world will not provide access to healthier food options and even if it did, that will not change eating behaviors. Lower-class Americans do not need more marketing. They need more markets. “America’s Worst 9 Urban Food Deserts” highlighted this problem:

[T]he United States Department of Agriculture reports that about 23.5 million Americans currently live in food deserts, including 6.5 million children. Typically, food deserts are defined by:

  1. the lack or absence of large grocery stores and supermarkets that sell fresh produce and health food options; and
  2. low-income populations living on tight budgets.

These food deserts are also signified by high levels of obesity, diabetes and cardiovascular disease in the community, which result from residents buying their food from corner stores that sell processed foods, and plentiful fast food options.

The solution is to create health oases. Unfortunately, Democratic control of large cities has often led to resistance to “big-box” retailers. That’s code for non-union superstores, such as Wal-Mart. These Democratic governments throw up barriers that prevent large grocery stores from opening in urban areas. Detroit has recently done adopted business-friendly policies to encourage grocery stores to enter the inner city, attracting the regional super-store Meijers, which is now looking to open a third store within the city. Not only does this provide access to healthy food options, it also provides employment opportunities that are lacking in the inner city.

Promoting the expansion of large grocery stores within the inner city will also greatly reduce the rampant fraud in the government food stamp (SNAP benefits) and WIC programs. Large corporate-run grocery stores have internal controls in place that prevent cashiers from trading government benefits for cash, ineligible items (alcohol, cigarettes), and even counterfeit apparel. Corner stores, owned and run by individuals and families and with unmonitored access to cash, have the means to misappropriate government funds. Check out the Chicago Tribune article “Why Food Stamp Fraud is ‘Fairly Rampant’ at Corner Stores in Some Chicago Neighborhoods.”

Large grocery stores often have in-store pharmacies, which have the capability to provide vaccinations. Some states also allow nurse practitioners working out of pharmacies to prescribe basic antibiotics for common conditions, such as ear infections and strep throat. Further legislation to encourage the expansion of store-run pharmacies and access to nurse practitioners will further assure medical care access, making such super-stores truly health oases.

I am personally opposed to abortion, so my next suggestion should not be misunderstood. Fund crisis pregnancy centers. Pro-“choice” advocates regularly accuse pro-lifers of caring only about the baby—not the mother—and then only until the baby is born. While that might make a pithy talking point, it bears no resemblance to reality. Most crisis pregnancy centers offer a wide-range of services, from pregnancy testing, ultrasounds, counseling, goal setting, prenatal care or referrals, parenting classes, and “reward” programs by which moms can earn necessary baby and household items. Oftentimes, counselors end up serving as birth coaches for women abandoned by the father and their family. And these relationship and services continue long after the baby is born.

What better place, then, to assure women and children obtain preventative care and nutritional guidance? Rather than dump more money into the Medicaid system, which has shown no better results for recipients than the uninsured have, we should shift funding to states and experiment with providing grants to crisis pregnancy centers.

These grants could fund hiring nurse practitioners, who could see children while parents work with goal counselors. Parents could earn “points” or rewards for meeting certain targets, such as obtaining routine vaccinations or smoking cessation. Stop funding more government public service announcements, and instead fund nutritional education, smoking cessation, and “rewards” implemented during parenting classes. And fund smoking cessation programs out of the centers. Many centers are already doing some of these things, with great results.

The Women’s Care Center is one such center. Formed in 1984 in South Bend, Indiana by Dr. Janet Smith, the Women’s Care Center now serves women in eight states. (I served on the Women’s Care Center Board of Directors and as the Treasurer for seven years.) A recent newsletter showcases one example of how crisis pregnancy centers can achieve what the government cannot:

The Federalist highlighted a pro-life center, Turning Point, in this piece by Jay Hobbs. As Hobbs explained, “Started in October 2010, Turning Point opened as a fully medical clinic, with ultrasound and STD/STI testing, in addition to material aid that meets the needs of a city where 30 percent residents live at or below the federal poverty rate—twice the national average.” Hundreds (I suspect thousands) of similar crisis pregnancy centers already exist throughout the country. These centers have the infrastructure and experience and the relationships that government bureaucrats cannot forge that are necessary to assure that health coverage translates into medical care and healthier outcomes.

Just as the Women’s Care Center and Turning Point model how crisis pregnancy centers can reach at-risk populations, the San Antonio police department’s mental health squad showcases a new and ideal prototype for reaching the mentally ill. NPR featured this unique program in its piece “Mental Health Cops Help Reweave Social Safety Net in San Antonio.” As NPR explained, select officers receive Crisis Intervention Training; when a 911 call comes in involving a mental health emergency, those officers are dispatched.

Furthermore, San Antonio built a Restoration Center as a separate facility that offers “a full array of mental and physical health services.” According to NPR, “[m]ore than 18,000 people pass through the Restoration Center reach year, and officials say the coordinated approach has saved the city more than $10 million annually.”

This approach should be mirrored throughout the country to address not just severe mental illness, but also the escalating problem of drug addiction. Addicts and those suffering severe mental illness, even if they are competent enough to obtain health coverage, do not have it within their means to access medical care. And as Dallas Police Chief David Brown said after the murder of five of his officers: “We’re asking cops to do too much in this country. We are. Every societal failure, we put it off on the cops to solve. Not enough mental health funding, let the cops handle it.”

While the police will always be our front line of defense, with proper training and the funding to address the health care needs of addicts and the severely mentally ill, over time, the demands will be less. And more people in need of health care will receive it in an appropriate setting, rather than in prison.

As the debate continues over Obamacare’s appropriate replacement, politicians and policy experts should not pretend that a perfect plan can reach all segments of our society. Congress should instead recognize that health “coverage” is an imperfect proxy for health “care” and “outcomes,” and refocus a portion of its attention and funding on policies and programs that provide health care to the severely mentally ill, the addicts, and dysfunctional members of society.

This approach will also go a long way toward providing employment opportunities, combatting fraud, reforming the criminal justice system, and assuring our first responders have access to the resources they need when confronted with impossible situations.

Another View   1 comment

Rick shared our write-up on the Patient Freedom Act (Cassidy Collins, if you prefer) with a coworker and she asked if she could write up her impressions and publish under me. As I’ve said, if you’re not in private practice, it’s dangerous for a doctor to say “boo” about Obamacare. I don’t mind being used by doctors to get the message out.

 

Image result for image of medical careFirst, the PFA would dramatically expand taxpayer funding for abortions, even when compared to Obamacare, something Rick realized he’d missed on our write-up.

The PFA (text available here, and a summary available here) gives states a choice of three options regarding the health care system within their borders. They can either:

  1. keep Obamacare in place
  2. use an allotment, based on 95 percent of a state’s Obamacare spending, to create their own insurance regime (albeit with several federal mandates remaining)
  3. go out on their own and not receive any federal funds.

Section 104 of the bill contains a complicated formula to determine state allotments for option two—the default option for states under the PFA. Section 104(b)(2) provides that states that did not expand Medicaid under Obamacare will receive 95 percent of the amount they would have received had they accepted the Medicaid expansion.

Instead of reducing Obamacare’s spending, the Patient Freedom Act could well increase by giving new Medicaid funds to states that declined to expand.

Medicaid reform should not disadvantage states that did not expand Medicaid under Obamacare, but the proper solution does not lie in adding to nearly $2 trillion in Obamacare spending over the coming decade. Instead, it lies in freezing enrollment in the Medicaid expansion, unwinding that new spending, and transitioning beneficiaries over time off the rolls and into work.

The Patient Freedom Act does not repeal any of Obamacare—the word “repeal” doesn’t appear anywhere in its 73 pages—but, it effectively ends the current HSA regime, making Health Savings Accounts less attractive to individuals.

Current law makes HSAs tax-privileged in two ways. First, contributions to an HSA can be made on a pre-tax basis—either via a payroll deduction through an employer or an above-the-line deduction on one’s annual tax return. Second, HSA distributions are not taxable when used for qualified health expenses under Obamacare.

The Patient Freedom Act would abolish the first tax preference while retaining the second. Individuals must contribute after-tax dollars to an HSA, but their contributions could grow tax-free, and distributions would be tax-free when used for qualified health expenses, as under current law. Section 201(b) prohibits additional contributions to “traditional” HSAs following enactment of the bill, instead diverting new contributions to the Roth HSAs created by the measure. While the bill does not require individuals to convert their existing HSAs to the new Roth HSAs, account administrators at banks and mutual funds could require their customers to do so at some point, which could result in a hefty tax bill .

Health Savings Accounts are a proven vehicle to help control the growth of health costs. In fact, expansion should have been used before Obamacare was ever considered. While Obamacare included new restrictions on HSAs, Democrats did not upend the accounts nearly as much as contemplated by the Patient Freedom Act. Significantly reducing the tax preferences for Health Savings Accounts would not lower health care costs. If anything, it would raise them.

In recent years, some Americans have faced the problem of “surprise” medical bills. These can occur when individuals seek emergency care at an out-of-network hospital, or when some providers at a facility remain outside an insurer’s network (for example, a surgeon and the hospital are in-network, but the anesthesiologist is out-of-network). To address these issues, Section 1001 of Obamacare included new mandates that insurers not impose prior authorization requests on emergency care, and require only in-network cost-sharing for all emergency care, regardless of whether the patient was treated at an in-network hospital or not.

Section 121(a)(2) of the Patient Freedom Act goes further than Obamacare, imposing maximum charges for emergency services: 85 percent of insurers’ usual, customary, and reasonable charges for physician care; 110 percent of Medicare payment rates for inpatient and outpatient hospital care; and acquisition costs plus $250 for drugs and biological pharmaceuticals.

While the issue of “surprise” medical bills does present a policy problem—individuals caught in the middle of stand-offs between providers and insurers regarding payment rates—there are other ways to resolve it short of government price controls.

Sections 105(c) and 107(c) of the PFA create parameters through which states can automatically enroll their residents in health insurance—complete with restrictions on the type of coverage states can auto-enroll individuals in. While individuals can opt out of insurance should they wish to do so, this mandate that doesn’t call itself a mandate could prove even more problematic than Obamacare’s requirement that all individuals purchase health coverage.

Automatic enrollment represents bad policy. Much of it comes down to two questions:

  • With the most recent enrollment estimates in Obamacare’s exchanges from seven months ago (June 30), how will states determine who is insured, and who should be auto-enrolled in coverage, in real time?
  • Even if states could compile all that data, why should individuals have to give their personal insurance details to another government database?

Nearly four years ago, tSen. Bill Cassidy said this about the IRS’ power in enforcing Obamacare:

Obamacare requires thousands of IRS agents to implement the law…They’re going to go through the small businesswoman’s books, to make sure that she actually has the number of employees that she claims, and that she has adequate insurance. That’s a little scary when you see what the IRS has been doing with their political targeting.

Granted, the PFA doesn’t have an employer mandate to enforce, but why is Sen. Cassidy’s “solution” to big government overreach at the federal level allowing states to impose their own intrusive requirements on individuals and businesses…?

Conservatives seeking to repeal Obamacare should be disappointed by the ways in which the Patient Freedom Act exceeds Obamacare in several key respects, while liberals will undoubtedly oppose any attempt to devolve or deregulate health care coverage to the states. Its Senate sponsors notwithstanding, the bill appears to lack a natural constituency and it doesn’t really address the very real problems with Obamacare. It appears just to transfer them to the states. The question is — would making an intrusive, inefficient federal health care coverage system into an intrusive, inefficient state health care coverage somehow make it more palatable?

Compromising for Freedom   Leave a comment

The “Patient Freedom Act” is a compromise, a bill that recognizes that an outright repeal and replacement of Obamacare is a heavy political lift. It also recognizes that the persistence of Obamacare nationwide is likely to be challenging and expensive. It relies on fiscal federalism — the federal government collects the money (more likely prints it) and gives it to states (kind of like expanded Medicaid) who can then choose to keep their Obamacare if they like. Alternatively, the states can receive about the same amount of money and use it to provide healthcare in different ways.

The Cassidy-Collins Patient Freedom Act has several great virtues.It’ll probably make more people happy. People tend to choose the state they live in because of its culture suits their political views, so decentralization of power leads to more people getting their way.

It allows for experimentation. Nobody really knows what works in healthcare coverage. Obamacare was a singular experiment that has failed gloriously. It has helped some people receive useful healthcare, but it has also failed to meet expectations by being more expensive per person than anticipated while covering fewer people. (Cue up reflexive mutual blame by Republicans and Democrats here). And while we can point all we want to Canada or Britain or Singapore and assert that adoption of their system would be great, the truth is we don’t know how well those systems work when they are inserted into a society with a different history, different medical traditions and a different culture.

Cassidy-Collins lets each state give it their best shot. Let’s actually see what happens when the states can use federal dollars to provide healthcare to their people. It’s not as if most state legislatures are greatly more dysfunctional than their monolithic counterpart in Washington, DC. Probably some states will use the money poorly. There may be people who would be better off under Obamacare than they will be under a state-fashioned alternative. Still, I suspect there are many states that will use the money wisely and there will definitely be people who will be considerably better off under the state alternative than they would if Obamacare insurance was unaffordable or the state’s medical markets had been distorted beyond recognition as a result of the interplay of numerous federal policies.

More importantly, the Cassidy-Collins Patient Freedom Act would permit states to learn from each other and adapt in a way that is not possible under Obamacare and that would be challenging under some of the other Republican alternatives. Maybe a Vermont single payer system really will work wonders without requiring massive tax hikes, though I doubt it. Maybe a Texas approach based more on health savings accounts will result in smarter and cheaper healthcare without worsening health among the poor. Unfortunately, bad Supreme Court decisions like Shapiro v. Thompson make it hard for one state to be particularly generous with social benefits lest it become a nationwide magnet for the poor, but there are still enough impediments to interstate movement to allow for considerable state flexibility.

It’s also one of the few proposals that can actually be implemented before Obamacare collapses. Like it or not, the friendly environment in which Obamacare has limped on is about to disappear. The reinsurance subsidies for insurers have gone away. The IRS under President Trump has weakened the individual mandate by deliberately perpetuating what might have been seen as a bug in its enforcement: it has “discovered” that it’s apparently optional to indicate that you have qualifying health insurance coverage on your 1040 tax return. As a result of the complete dysfunctionality of Obamacare, insurers are already departing or threatening to depart for 2018 if market reforms are not made. It’s highly unlikely that Republicans are really going to shore up Obamacare greatly while we wait for formation, enactment and implementation of their replacement. I suspect the Trump administration has a rule pending that modifies special enrollment and does a few other things that will marginally increase the stability of Obamacare, but that’s a blue tarp over one hole on a roof that leaks like a sieve.

That said, Cassidy Collins is neither perfect in concept or details. As currently conceived, it’s way, way too expensive. The Patient Freedom Act says that each state gets 95% of the amount that their residents would have received in Obamacare premium tax credits and cost-sharing reductions. Precisely because the ACA has increased premiums greatly over original projections, provision of premium tax credits and cost-sharing reductions is costing the federal government a large sum of money. This expense persists even though enrollment on the ACA exchanges is far less than original projections. So paying 95% of a really large sum of money is still placing a heavy burden on the federal government, which really can’t raise tax and seems seriously unwilling to reallocate funds from other federal programs. Moreover, the federal government currently saves tens of billions per year when states refuse to go along with expanded Medicaid. The Cassidy-Collins Patient Freedom Act ends that unequal treatment, but it does so in a very expensive way by giving non-expanding states basically the same amount of money as expanding states, 95% of what “would have been received” had the state expanded Medicaid. Given what we are seeing on the healthcare expenses of the population in expanded Medicaid, this equal treatment of the states could be a stunningly expensive component of the proposal.

The “would have received” language in the bill also leaves a lot to interpretation that could easily lead to escalating federal obligations. There are lots of important questions.

  • Will the formula just count people who actually enrolled in the state or will it count people who could have enrolled?
  • How will the formula work in states that choose not to continue with Obamacare?
  • How will the formula work in states that have never expanded Medicaid?
  • How do we know which people would have enrolled on the exchanges or what their subsidy-determining financial situation would have been?
  • How would we know in 2020 what the premiums would have been in, say, Texas, if Texas discontinued Obamacare in 2018?
  • And how could one compute cost-sharing reduction obligations, which requires knowledge of the premium charged by each insurer and the number of policies purchased from each insurer?
  • How do we know how many people would have enrolled in expanded Medicaid if the state had gone along with it?

Yes, a tight-fisted administration could likely answer these questions and interpret “would have received”language  in such a manner that the overall bill did not escalate dramatically, but there is an equal risk that an administration eager to please constituents and willing to engage in yet more debt finance could interpret “would have received” in a way that was extremely costly.

We may already be looking at a $30 trillion gross federal debt amount in 2027, which will be 107% of projected GDP, which would put the United States into the Italy-Portugal zone of fiscal recklessness. The Patient Freedom Act would be improved if the amount paid by the federal government was diminished well below 95% of the “would-have-received” amount, with states being free, if their own taxpayers oblige, to provide additional appropriations for additional benefits. The Patient Freedom Act would be further improved if a specific schedule were in place for its aggregate budget.

Conceptually, the Patient Freedom Act is a bit strange. Instead of saying that states can use the money either for perpetuated Obamacare or for a plan featuring health savings accounts and high risk pools, why not just have the federal government give states the money and say that they can, within broad limits, do what they want with it in order to address healthcare? What if a state wanted to keep most of Obamacare but let insurers charge its oldest enrollees more than three times what it charges the youngest adults? What if a state wanted to keep many of the ideas of Obamacare but use a different income-based schedule to determine subsidies? If block grants are good enough for Medicaid, why are they not good enough for other forms of healthcare insurance? And, of course, the Patient Freedom Act exemplifies the conceptual issues with “fiscal federalism.” If states want to provide generous healthcare coverage, why not let them raise their own taxes and face clear accountability for their decisions rather than relying on a more elaborate system in which the federal government taxes and then gives some money back to the states.

The Cassidy-Collins Patient Freedom Act needs considerable work and has some conceptual challenges. Rick isn’t ready to dismiss it entirely. He thinks that it might be a tolerable bride with some work on the details. I suspect the Patient Freedom Act is going to be a big lift for a couple of reasons. Liberals will insist fellow United States citizens in less enlightened states will be denied the benefits of the signature accomplishment of their beloved president. ACA despisers, particularly those in red states, will see their tax money continue to go to what they regard as an expensive, freedom-infringing federal government system. They probably also have trouble with accepting that they control the Presidency and both houses of Congress and still can’t come up with an idea that is ideologically pure, politically palatable, and economically sound. Deficit hawks should be mortified at what it will all cost. I predict the Cassidy-Collins bill won’t become an actual viable option until Obamacare is clearly in collapse and then it might actually be more palatable to everyone simply because something is required rather than just an option.

What Is Rand Thinking?   Leave a comment

When Politico reported that the House Freedom Caucus, an influential group of House conservatives, was considering whether to give its official endorsement to Sen. Rand Paul’s Obamacare Replacement Act (S. 222) I was excited. I’ve always been a fan of Rand Paul. But then we looked at it and discovered that it’s got a lot of problems.

 

First and foremost, it doesn’t repeal most of Obamacare. Yes, it repeals almost all of the law’s major mandates … the individual and employer mandates to obtain insurance, the guaranteed issue to those with pre-existing conditions, the community rating regulations, the essential health benefits, and various other insurance mandates that work to raise premiums.

Image result for image of rand paulStill, the bill doesn’t repeal Obamacare’s new entitlements – the subsides for exchange health insurance and the massive Medicaid expansion to the able-bodied and gainfully-employed, leaving in place nearly $2 trillion in spending over the coming decade. It doesn’t repeal any of the Obamacare taxes used to fund the spending, except those associated with the individual and employer mandates.

It has some similarities to the reconciliation bill that Congress passed, but President Obama vetoed, in 2016. That bill would have repealed the law’s entitlements (after two years), and its tax increases (effective immediately), but not its regulations. Paul’s office might argue that his bill repeals the critical portions of Obamacare not included in last year’s reconciliation bill—the major insurance regulations—while providing a replacement vision to go beyond repeal.

But that position assumes last year’s reconciliation bill will be the starting point for this year’s discussion—and it doesn’t appear to be right now. Politico reported that Republicans were having difficulty figuring out how to square Medicaid reform with Obamacare’s massive Medicaid expansion. Likewise, some Republicans have discussed not repealing the law’s tax hikes. The Paul bill repeals the individual and employer mandates, even though last year’s reconciliation measure also effectively repealed them, but it doesn’t repeal all the other tax hikes and spending increases. Why not? Perhaps it’s because his home state expanded Medicaid to the able-bodied under Obamacare and the leadership there wants to avoid taking a position on whether to keep that expansion.

The Paul bill does provide tax credits for health coverage, but largely of the non-refundable kind, which is an important difference. Paul’s bill provides a $5,000 tax credit to individuals who contribute to Health Savings Accounts (HSAs), but only to the extent such individuals have income tax liability. The Paul bill also includes a refundable tax credit for health insurance premiums, but the refundable portion of the credit only applies up to the limit of an individual’s paid payroll taxes.

Many Republican health reform plans would offer refundable tax credits to individuals in excess of tax liabilities, which represents pure welfare spending—the government issuing “refunds” to people with no net income or payroll tax obligations. By contrast, the Paul bill would ensure that credits only apply to individuals with actual payroll and income tax obligations.

This critically important distinction will likely be lost on many members of the press — not to mention the public. I can see the headlines now. “House Freedom Caucus Endorses Tax Credits.” Having endorsed tax credits once, the pressure on Freedom Caucus members to then go further and endorse the House leadership plan for refundable tax credits will be immense. Put simply, the slippery slope to endorsing a major spending package in the form of refundable tax credits starts with the Paul bill.

While the Paul bill includes no outlay spending—its incentives all come via tax cuts—those incentives are numerous, and costly. The legislation would supplement the current, uncapped exclusion on employer-provided health insurance with a new, uncapped deduction for individual-provided health insurance. It would eliminate contribution limits to HSAs, and introduce a new federal subsidy (via the tax credits) of up to $5,000 for HSA contributions.

Apart from the direct fiscal implications of the tax incentives, economists on all sides of the political spectrum believe that the current uncapped exclusion for employer-provided health insurance encourages over-consumption of health insurance, and thus health care. Instead of reining in this tax incentive as one element of pro-growth tax reform, Paul’s bill goes in the other direction, creating two new uncapped tax incentives for health insurance.

As a medical doctor, Paul has shown little inclination to rein in health care spending. He voted for budget-busting Medicare physician payment legislation in 2015 that raised the deficit by more than $140 billion in its first decade alone, while failing to solve the long-term problems it purported to address. He has also previously proposed budgets that included minimal savings to Medicare, despite long-running deficits within Medicare.

Health care already consumes nearly one-fifth of our economy. With our national debt approaching $20 trillion it doesn’t seem that solution really lies in creating new, uncapped incentives for tax-free spending on health care and health insurance.

While ostensibly promoting market-oriented solutions, the legislation contains several strategic trip-wires that could contaminate any attempt to repeal Obamacare, or enact a conservative alternative.

Four Very Similar Weak Ideas   3 comments

Let’s be clear. The Republican majority with the ability to pass a repeal and replacement of Obamacare just taken office a few weeks ago. So it seems odd that the Democrats are accusing them of failing to put forth a replacement plan for Obamacare. After all, these things are supposed to take time and it might be a good idea to think it out a little longer than the Democrats did.

Republicans in both the House and the Senate have unveiled a number of proposals to replace Obamacare in the years since Barack Obama signed the ACA into law. They never got out of committee, but most share some key provisions … offering tax credits to consumers, expanding the use of health savings accounts or reforming Medicaid.

They say the devil is in the details and the strengths and weaknesses of each proposal can be found there. There are at least four plans being crafted to replace the law. I plan to focus on the Cassidy-Collins bill later, but basically, it repeals only Obamacare’s mandates, maintains its subsidies and taxes and allows states that like Obamacare to keep Obamacare.

 

In addition to the Cassidy-Collins plan, there are proposals offered by Paul Ryan and the Republican conference; Rep. Tom Price, R-Ga., who is now President Trump’s Secretary of Health and Human Services; the Republican Study Committee; and Sen. Richard Burr of North Carolina, Sen. Orrin Hatch of Utah, and Rep. Fred Upton of Michigan.

Image result for image of obamacare replacements

Price’s Empowering Patients First Act offering age-adjusted, refundable tax credits and individuals can opt out of the government health care programs and receive the tax credit instead. It creates a one-time, refundable tax credit for HSA contributions and increases the amount of money individuals and families can contribute. It caps the tax exclusion at $20,000 for families, $8,000 for individuals. It requires insurers to provide coverage to those with pre-existing conditions if the patient has had coverage for at least 18 months. It also creates high-risk pools and allows consumers to purchase insurance plans across state lines.

House Speaker Paul Ryan and the House Republican Conference have proposed A Better Way for Health Care. It also offers age-adjusted, refundable tax credits and health savings accounts. It also expands access to HSAs for BIA benefit and Tricare recipients. It caps tax exclusions for employer-sponsored coverage. It requires insurers to provide coverage for pre-existing conditions for those maintain continuous coverage and it creates high-risk pools. It allows consumers to purchase plans across state lines and covers dependents on their parents’ plans until age 26. It also reforms Medicaid.

The Republican Study Committee also came out with the American Health Care Reform Act of 2017 which allows tax deductions for individuals and families, health savings accounts that include Indian Service or Tricare and allows HSAs to be used for long-term care, premiums for HSA-qualified plans and Cobra. Of course, it requires insurers to provide coverage to those with pre-existing conditions who maintain continuous coverage and it creates high-risk pools. It also allows consumers to purchase plans across state lines.

Senators Richard Burr and Orrin Hatch and Representative Fred Upton have comes out with the Patient CARE Act. It also provides age-adjusted and income-based tax credits and expands health savings accounts to BIA benefit holders, as well as allowing consumers to use HSAs to pay for COBRA and premiums for HSA-qualified plans. It caps the tax exclusion on employer-sponsored coverage at $30,000 per family. It coverages pre-existing conditions and creates high-risk pools. It allows consumers to purchase coverage across state lines and keep their kids on the family plan until age 26. And of course, it reforms Medicaid.

All four of these proposals are basically the same bill with somewhat different details, so I am not going to focus on them beyond this brief coverage (unless Rick comes up with something he wants to share). All of them share an element that could work. It’s similar to a suggestion Ben Carson made at the Prayer Breakfast that made him a conservative darling. In his suggestion, he recommended annual deposits by the government from birth to whenever that you can pass onto your kids. That is similar to something parents here in Alaska can do with a portion of the Permanent Fund  Dividend to fund an Education Fund for their children. I know young people who are attending college without debt now using these accounts.

But I have issues with them because they really don’t go far enough. More on that later.

 

 

 

For a Reasonable ACA Debate   Leave a comment

Back in January, Chuck Schumer kicked off the fight to save Obamacare with the slick slogan “Make America Sick Again.” Basically, the idea is to frame the dialogue by pushing hte narrative that Republicans want to repeal Obamacare and deprive millions of people of health insurance without a replacement plan. If Republicans can’t disprove that dark fantasy, they will deserve a midterm drubbing.

Image result for image of obamacare failureLet’s be clear – Obamacare is horrible. The unAffordable Care Act has increased health-care costs for many people. You don’t get to keep your doctor or your insurance plan. That’s important to say because it is the overwhelming reality for many Americans.

But recognize that Obamacare’s misguided supporters can trot out individuals who have benefited from the provisions of the Affordable Care Act and these two points against Obamacare does nothing to counter the now-growing narrative that 20 million Americans will lose their insurance if Congress repeals Obamacare.

I totally hate Obamacare, especially since Brad has spent the last three months just trying to get in to see a doctor for a shoulder injury and still hasn’t received any actual treatment, though he now has a diagnosis – quadralateral space syndrom. A muscle was damaged (trying to keep up with the teenager at bouldering) and the resulting scar tissue is pressing on a nerve. By the way, without an MRI machine or any real training in medical care beyond a few basic first aid classes, I guessed this problem. I sent him to the doctor to FIX the problem, but so far, crickets. Except we are now paying medical bills. Was the point of Obamacare to make health care less affordable? It’s working.

Back to the topic. Opponents of Obamacare must acknowledge, frankly and sincerely, that the Affordable Care Act has helped some Americans and assure the pubic that the replacement plan will also protect the sick and vulnerable. Take the anxiety away. Then stress that while the law created some winners, it also created many more losers, and that Obamacare supporters are blindly ignoring this reality.

Next, the repeal and replace faction must counter the false impression that the Affordable Care Act created 20 million winners. It’s important to understand that 20 million figure was an estimate from the Obama administration that comes from a government figure rather than actual enrollment data.

Here, proponents of repeal and replace should first remind Americans that the 20 million figure is merely an estimate from the Obama administration. Actual enrollment data, compiled by the Heritage Foundation, tells a different story. About 14 million people gained coverage from the end of 2013 to the end of 2015. Of that 14 million, 11.8 million gained their insurance through Medicaid expansion (otherwise known as welfare) and 2.2 million through private coverage. Other problems with the 20 million figure were outlined by the Heritage Foundation, laid out at length for Forbes. These too should be highlighted.

But adjusting the 20 million figure downward to reflect a more accurate count will still result in a fairly large number of Americans obtaining insurance under the Affordable Care Act. So how to answer that? Explain that health insurance does not equal health care.

Brad and I have good health insurance. My employer is the largest group pool in Alaska. The union I am reluctantly a member of has been fighting being labeled a “cadillac policy.” That doesn’t do Brad any good because despite having medical insurance, he can’t get medical care.

We have to remind the public that while Obamacare helps some individuals, it harms many more. That’s my major argument with Obamacare boosters. They seem incapable of acknowledging this truth. They portray the Affordable Care Act as merely having some minor glitches which, if Republicans only helped, could be addressed. “Just tweak it,” they say.

Nonsense. It’s not a glitch that the unAffordable Care Act created losers. The law was intended to do that. Obamacare sought to cover older and sicker Americans by providing them government subsidies, which makes the taxpayers the losers and ripping off younger and healthier Americans. Because young and healthy Americans stayed away from the exchanges, insurance companies were forced to increase deductibles and co-pays and limit doctor and hospital networks, making the healthy individuals who did buy insurance even bigger losers.

The more indirect losers—such as workers unable to find full-time employment because of the Obamacare mandates, as well as doctors in private practice forced to sell out to hospitals—are more difficult to quantify, but they are just as real.

The Left hammers the need to protect those with preexisting conditions, but then acts as if Obamacare is the only way to do this. The public needs to learn that individuals with preexisting conditions who were unable to obtain insurance before Obamacare were only about 14 percent of the population. Obamacare did not adequately address the issue. About 10 percent of individuals with pre-existing conditions are still uninsured, and Obamacare doesn’t assure medical care for the seriously or chronically ill. There are a lot of people now paying so much for health insurance that they can’t afford actual medical care.

While those with uninsurable preexisting conditions represent just a small portion of our society, a replacement plan must address their needs, but what many Americans don’t know is that the Health Insurance Portability and Accountability Act of 1996 already provides some protection for those with pre-existing conditions who lose their insurance.

While the public thinks of HIPAA as a law protecting the confidentiality of medical records, prior to Obamacare, HIPAA prohibited both group insurance plans and plans obtained in the individual market from excluding coverage of pre-existing conditions, under specific circumstances.

HIPAA’s protections had some gaps, but an Obamacare replacement plan can address those limitations separately, and without upending the entire insurance market, perhaps by providing grants to states to fund high-risk pools. Alaska already had such a pool that offered coverage prior to Obamacare. Like many states that offered these plans, it was discontinued as a result of Obamacare, but the Alaska Legislature is already seeking to reinstate the state-sponsored pool as high-risk insurers flee the market.

Other than adult children with chronic health conditions, the real beneficiaries of Obamacare’s 26-year-old coverage mandate are the parents. I cover both of our adult children because it gives us peace of mind that if something happens to my risk-takers, they will have coverage. But that benefit comes at the cost of higher premiums for all families with children. Require insurance companies to provide one quote covering children up to 26 and one that doesn’t. The true cost will no longer be masked, and parents can decide then if the cost is worth it. And I’ll negotiate with my children as to whether they should reimburse me for this expense as we do with care insurance.

Finally, Congress should add provisions for tax-free contributions to health savings accounts for the payment of medical expenses and for the purchases of medical insurance.

Then stop. Americans don’t want another comprehensive health care overhaul. Let’s give it time to see if the reform works to bring down costs and improve medical care again.

Republicans Have No Plan?   1 comment

Image result for image of obamacare failureWe all remember when America’s streets were strewn with the bodies of the neglected and dead. Before Obamacare began to cover people with medical insurance, people were dying right and left and it was HORRIBLE! And the Republicans have no viable plan to replace Obamacare, so riot in the streets to protect the only health care coverage that has ever worked in the United States.

No, I haven’t become a pod person. I’m just stating what the Democrats are doing as they focus on this myth that Obamacare is working for most Americans. They must create the impression that no viable alternatives exist. According to pundits on CNN and PBS, the Republicans haven’t produced a viable comprehensive plan that replace the unAffordable Care Act.

Most progressive pundits don’t consider a replacement plan “serious” if it doesn’t meet the following criteria:

  • expensive
  • highly regulatory
  • forces Americans to participate through a series of mandates

 

If that’s the definition of a plan, we can hope the GOP never comes up with one. If we’re talking a proposal that will actually accomplish something, the GOP has several plans.

The speaker of the House has come up with one and there are numerous other conservative plans being floated. Figuring out a way to turn them into legislation that can pass both houses and meet the approval of a new populist president will probably take more than a couple of weeks.

Remember, it took the Democrats several months to work out their plan … and it didn’t turn out well. They had been talking and scheming to reform the health-care system for decades and they still trotted out a reform plan that failed … a reform plan that anyone with a modicum of economic intelligence knew would fail from the moment it was proposed … hence all those town halls asking for Congress to stand against it. Then Democrats had to drop the public option and redo their abortion coverage to make the bill politically palatable to the moderate Democrats. Then they passed the basic structure of Obamacare without worrying about any Republican opposition in the Senate, only later being forced to use reconciliation to make it acceptable for the Democrats in the House.

It’s possible Republicans are embracing a newfound competence by avoiding those political pitfalls and looking for consensus on timelines and specifics that will make it more feasible. Most likely, we’ll get to watch sausage be made again.

Democrats know their policy promises have failed, but they still perpetuating the myth that there are no replacement plans, acting as if coverage can only exist through fake state-run exchanges or welfare.

Don’t worry! Today’s “they have no plan!” is tomorrow’s “that plan is extremist!”

Yeah, the Democrats will insist that the replacement plan must be conceptually or functionally similar to Obamacare, but that’s not really true. The main failures of Obamacare are its comprehensiveness, massiveness, complexity, and rigidity. It might be better to pass replacement legislature piecemeal.

For instance, the GOP can start by overturning the “nondiscrimination rule” that assaults religious freedom. They can get rid of the individual mandate. They can cut funding to abortion mills.like unPlanned Parenthood  They can deregulate to bring down costs and grant waivers that allow states to innovate in ways previously closed to them. Democrats demanded change overnight. The GOP doesn’t have to do the same.

Yes, Republicans will need to convince the American people on the wisdom of market-based solutions. They will have to contrast that vision with the top-down economics adopted by the Left. They are likely adopt some of the more popular aspects of Obamacare like coverage for preexisting conditions. I’m not sure how they plan to pay for it without a mandate if the tradeoff is deregulation of Obamacare’s most intrusive components, it would be worthwhile in the long run.

They will also have to deal with Medicaid expansion. The the vast majority of Obamacare’s “newly insured” are actually new welfare recipients. They will have to answer Democratic claims that “millions of Americans will lose insurance, and thousands more will die unnecessarily each year because of lack of care.” Republicans will have to convince voters that opening up affordable and competitive markets without coercion is preferable to preserving unsustainable state-run programs that grow in perpetuity.

So, can they do it? They’re making a good start, despite what Democrats would have us believe otherwise.

Obamacare Failure   1 comment

I found this article on The Federalist and I liked what the gal had to say so much that I decided to post it here. M. G. Oprea is a writer based in Austin, Texas. She holds a PhD in French linguistics from the University of Texas at Austin. You can follow her on Twitter here.

Image result for image of obamacare failureIt’s that time of year. No, not New Years. It’s Obamacare enrollment time—that is, if you’re unfortunate enough to not have employer-sponsored health insurance.

There’s been a lot of media coverage lately about rising premiums. But the headache isn’t just financial, although that’s certainly part of it. With more insurance providers fleeing the individual market and coverage becoming worse and worse, getting the care you need can feel almost impossible.

To illustrate, I’d like to share my own experience buying insurance on the Obamacare exchange and trying to get treated for a chronic health problem.

My Health Insurance Couldn’t Be More Frustrating

For several months now I’ve been having nearly constant migraines or headaches and frequent vertigo. More than an inconvenience, this type of illness makes it hard to use a computer—where I do all of my work.

After five months with an excellent ear-nose-and-throat (ENT) doctor, as well as multiple rounds of steroids and antibiotics (not to mention ripping out half of my house doing mold remediation), we’ve come to the conclusion that I need sinus surgery.

Until September, my doctor (let’s call him Dr. A) was covered under my health insurance provided through the University of Texas. However, when I left the university and started working for myself, I had to begin buying health insurance on the individual market. The insurance options were limited so I bought a plan with Scott and White. This insurance, however, didn’t cover Dr. A. In fact, it only covered three ENTs in Austin.

One of these three doctors—let’s call him Dr. B—was well reviewed and liked by Dr. A. Great, problem solved. I get surgery with Dr. B and I’ll be in good hands. When I called Dr. B’s office to make an appointment last week and told them I have Scott and White, they said that they do indeed take that insurance. Wonderful.

Even Insurance Providers Have Had Enough

But there’s a catch. My health insurance covers office visits with Dr. B, but doesn’t cover surgeries with him. Wait, what?

That’s right, Scott and White only covers surgeries that are done in their hospital system, rather than in the far less expensive—and less dangerous— outpatient surgical centers. Dr. B, although a highly regarded ENT, doesn’t have admitting privileges in their hospitals.

Alas, this doesn’t matter. My insurance is being cancelled at the end of the year because Scott and White is withdrawing from the individual market in Texas. And they’re not the only ones. It turns out that several big insurance providers are leaving the individual market at the end of 2016, including Cigna and Aetna, the third largest provider in the country. This is happening all over the country.

The only plans that are available for purchase in Texas for next year are HMOs or EPOs with highly restrictive networks. Half of those are Blue Cross Blue Shield Blue Advantage HMO plans. The other half is some provider called Ambetter (an Orwellian name if there ever were one). 

And the Headaches Aren’t Over Yet

Thankfully, according to ehealthinsurance.com, Dr. B is covered by the BCBS plans. So, I called his office again and made sure there’s nothing tricky with BCBS like there was for Scott and White. The receptionist informed me that while Dr. B does take BCBS, he doesn’t take BCBS Blue Advantage HMO plans.

Unfortunately, that’s the only BCBS plan available for purchase. BCBS of Texas stopped offering individual PPO plans at the beginning of 2016. They reportedly made this decision after individual market claims exceeded premiums by $400 million in 2014.

So I’m back to square one, with no ability to buy insurance that will allow me to go to either of these doctors or to buy a PPO, no matter how much money I have.

What’s even more frustrating is that, even if Dr. B did accept an HMO plan, I would first have to go to a primary care physician to get a referral to see a specialist. Never mind that I have five months of medical records with a specialist and a CT-scan showing that I need surgery. What’s more, getting a referral approved by an insurance company requires a herculean effort.

What’s the Solution For People Like Me?

To illustrate, a good friend of mine has had a shoulder injury for years that recently got way worse. As a self-employed lawyer, he has an HMO bought on the individual market. It took over a month to get approved to see an orthopedist, meanwhile he’s in moderate to severe pain and wearing a sling. Even his doctor admitted that getting in to see a specialist was a long shot.

But let’s say I were able to get that sought-after referral, I’d still have a deductible upwards of $7,000, unless I wanted to pay $500 a month for insurance. In that case, the out of pocket max is still fairly high.

So what’s my solution? I’m going to get surgery at the Surgical Center of Oklahoma, and pay for subsequent ENT check ups with Dr. A out-of-pocket. 

The Surgical Center of Oklahoma is operated by doctors and anesthesiologists that work out prices directly with the patient. They charge a flat fee with no hidden costs. My surgery will cost $3500 plus the trip to Oklahoma City (thankfully just a six hour drive for me). This is potentially thousands of dollars less expensive than going through an insurance plan bought on the individual market.

This Is Healthcare In a Post-Obamacare World

This wouldn’t be the first time I’ve negotiated a price directly with a healthcare provider since getting my Obamacare-compliant individual insurance. I worked out a price I could afford with Dr. A and did direct pay to get a CT-scan of my sinuses in October.

Rather than go through insurance, which wouldn’t pay for the CT-scan anyway (at least not until I reached my $6,000 deductible), I called around and found the cheapest imaging center. You see, they don’t want to deal with insurance companies either, so they offer an enormous discount if you pay at the time of service. I was able to get a CT-scan for $247. 

At the end of the day, I’m paying hundreds of dollars a month for an insurance plan that doesn’t cover the doctors I need to see and has such a high deductible that I end up paying for most costs out of pocket anyway. And it doesn’t even allow the use of a Health Savings Account.

Maybe there’s something I missed. Maybe there’s some fantastic plan out there, one that neither me nor my husband (who worked for years in healthcare policy) nor my lawyer friend could figure out. But I doubt it. This is just the reality of getting health care in the post-Obamacare world.

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