Tag: "health policy"

Federal Courts Zig and Zag on Obamacare Tax Credits

index1Obamacare opponents’ hearts rose this morning, as a three-judge panel of the DC Circuit Court of Appeals struck down the power of federal Obamacare exchanges to pay out tax credits to health insurers who sign up beneficiaries for subsidized Obamacare coverage. Because most states declined to set up their own Obamacare health insurance exchanges, subsidies to insurers would have come to a screaming halt in most of the country. Opponents have long hoped that such a decision would force the Administration back to the negotiating table with Congress.

However, merely a couple of hours later, the 4th Circuit Court of Appeals in Richmond, VA upheld the Administration’s position: That federal exchanges have the same powers as state exchanges to pay out subsidies to health insurers. The Administration plans to appeal the DC panel’s decision to the entire DC Circuit, en banc (i.e. all eleven judges).

Yippee! Medicare Won’t Go Bust Until 2030!

The latest Congressional Budget Office’s latest Long-Term Budget Outlook now asserts that Medicare’s so-called “Trust fund”. Talk about kicking the can down the road!

As the chart below shows, the problem is not that the “trust fund” will go bust in any given year, but that the federal government is borrowing money to finance consumption. “Other non-interest spending” includes major infrastructure and defense, tasks which constitutionally and under a proper economic understanding fall to the federal government. These were the purposes for which the Founders gave Congress the power to borrow money in the people’s name. Borrowing to finance seniors’ healthcare consumption does nothing for future generations’ prosperity.

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Healthcare Prices Jumped 50 Percent Year on Year from 12-Month Moving Average

The Altarum Institute is the go-to source for understanding healthcare prices and employment. According to its latest report:

Health care prices in May 2014 were 1.8% higher than in May 2013, well above the 12-month moving average of 1.3%. Hospital prices grew 2.1% while prescription drug prices rose 3.6%.  Physician and clinical services prices, which exhibited near-zero growth in the first quarter of 2014, grew by 0.6%. Health care gained 21,000 jobs in June 2014. Over the first half of 2014, the health sector grew by over 20,000 jobs per month, about 20 percent higher than in the first half of 2013.

Prices of prescription drugs jumped higher than prices of other healthcare goods and services. Further, healthcare prices continue to grow significantly faster than the Consumer Price Index (CPI). Exhibit 7 illustrates how ineffective Obamacare is at restraining costs: Per capita healthcare utilization increased at about 5.5 percent (year on year) in the first half of 2002, well before the December 2007 onset of recession, and dropped until the end of 2010. The growth of consumer-driven health care, including Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs) remains the most plausible explanation for this effect.

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Insurers are Starting to Pay for Cross-Border Treatment

In the New Republic, Adam Teicholz and Glenn Cohen discuss insurers whose provider networks run across the border:

conceptBefore dawn on a Wednesday in January, Cesar Flores, a 40-year-old employed by a large retail chain, woke up at his home in Chula Vista, California. He got in his car and crossed the border into Tijuana. From there, he headed for a local hospital, where he got lab tests — part of routine follow-up to a kidney stone procedure. He had his blood drawn and left the hospital at 7:30. He arrived home before 10.

But Flores’s situation isn’t medical tourism as we know it. Flores has insurance through his wife’s employer. But his insurer, a small, three-year-old startup H.M.O. called MediExcel, requires Flores to obtain certain medical treatment at a hospital across the border. In part due to cost-pressures generated by the Affordable Care Act, other sorts of plans that require travel have the potential to expand.

OxyContin Abuse: Stopping the Dealers Helps; Suing the Drugmaker Does Not

One of the biggest challenges with the regulation of prescription drugs is how to prevent the abuse of addictive ones. OxyContin, a powerful painkiller is probably the best known example. There are two ways to reduce the abuse of OxyContin: Punish the inventor and manufacturer of this valuable medicine; or go after those to take advantage of addicts who need help.

HSAAlthough OxyContin is widely prescribed by physicians and valued by patients who need powerful pain relief, trial lawyers decided that the medicine, not the addiction, was the problem. Years ago, the decided they could make some money by suing the manufacturer, Purdue Pharma. Back in 2008, Heartland Institute’s Lawsuit Abuse Fortnightly reported on the cost of this effort:

If anyone doubts tort claims are a burden on American drugmakers, consider the fees for Purdue Pharma L.P.’s defense of 1,400 lawsuits in 32 states, alleging that OxyContin, its prescription painkiller, is addictive.

CEO: “Soul-Crushing Regulations” Driving Entrepreneurs Out of Health Information Technology

Jonathan Bush, CEO of athenaHealth (NASDAQ: ATHN), testified to a Congressional committee on the impact the federal government has on entrepreneurship in health IT.

g“You guys have made things that work in every other industry illegal in healthcare,” he said. “You can be drunk and in the wrong country and you can get your bank balance reconciled because the bank that needed the info can pay the other bank $3 to get it. If that happened between a doc and hospital, it’s prison time for that crime of supply-chain partnership.” (Veronica Combs, MEDCIty News)

(It is always a good idea to pay attention to athenaHealth executives when they speak on public policy. They never churn out the “go along to get along” PR-speak generated by too many corporate spokespeople when they are trying to get something out of Uncle Sam.)

How Much Did ObamaCare Increase Your Premiums? A New County-By-County Calculator

The Manhattan Institute has published an interactive map that shows ObamaCare’s effect on premiums for individual health insurance in almost every U.S. county. On average, premiums have increased by 49 percent. However, there is huge variance:

Among men, the county with the greatest increase in insurance prices from 2013 to 2014 was Buchanan County, Missouri, about 45 miles north of Kansas City: 271 percent. Among women, the “winner” was Goodhue County, Minnesota, about an hour southwest of Minneapolis: 200 percent. Overall, the counties of Nevada, North Carolina, Minnesota, and Arkansas haven experienced the largest rate hikes under the law. (Avik Roy, Forbes)

Map2-home

Reflections on Risk Adjustment, Reinsurance, and Risk Corridors in ObamaCare

fgdfgOn Wednesday, June 18, 2014, I had the pleasure of testifying at the House of Representatives’ Committee on Oversight and Government Reform’s Subcommittee on Economic Growth, Job Creation, and Regulatory Affairs. The subcommittee held a hearing it called “Poised to Profit: How ObamaCare Helps Insurance Companies Even If It Fails Patients.”

Much of my testimony was drawn from content in this blog. What struck me was the minority’s emphasis that these provisions, which protect insurers from losing money in ObamaCare, are designed to motivate insurers to offer coverage to sick people.

It is a well-worn talking point of ObamaCare’s supporters that insurers can no longer charge higher premiums or deny coverage to applicants who are expected to have higher health costs, or exclude coverage for pre-existing conditions. Obviously, no insurer will seek to cover these people just because the government wants it to. The market has to be structured to achieve that objective.

The Sickest Low-Income Patients Will Pay the Most under ObamaCare

Follprescription-bottleowing up a February study, which showed that people needing drugs on the highest formulary tier will pay much higher out-of-pocket costs than other ObamaCare enrollees, consultants at Avalere have released another study, which shows that the low-income ObamaCare enrollees will suffer this effect even more than middle-class ones.

A formulary is a list of drugs that a health plan covers. It can be divided into up to four tiers. Drugs on the lowest tier (usually generic medicines) cost the least out of pocket, while those on the highest tier cost the most. However, those on the highest tier are the most expensive, and often indicated for those suffering the worst diseases.

Hits and Misses

woman-with-childA commonly used drug can protect fertility in women undergoing chemotherapy.

Shocker! Bernie Sanders, the only socialist in the U.S. Senate, wants to fix the VA by privatizing the provider network.

Are health insurers lobbying to extend the risk-corridor “bailout” beyond three years?

Thousands of Georgia doctors lack medical-malpractice liability insurance.

Californians complaining to state regulators about ObamaCare plans: Can’t get ID cards, few providers in networks.