Tag: "ObamaCare"

House & Senate Agree on Balanced Budget Resolution

The House and Senate Budget Committees have announced that their conference committee has agreed on a balanced budget resolution. The conference report is 106 pages, so it will take me a few days to complete an analysis.

Nevertheless, it is important to recognize that this is an important achievement and the result of a lot of hard work by Dr. Price, Senator Enzi, their colleagues and staff. For many years, the Senate ignored its legal obligation to pass a budget.

With respect to health care, the resolution repeals and replaces Obamacare in full. It also continues to increase Medicare premiums for high-income households, and transitions to Paul Ryan’s “premium support” model for future beneficiaries.

One of the items I had been hoping for is offsets to pay for the bungled Medicare “doc fix” of last month. The resolution states that it accounts for the full cost of that “doc fix” (page 45). Okay, but the current president will not sign this budget. Are we meant to expect that the next President will take responsibility for the unfunded spending authority this Congress gave President Obama?

Senator Johnson Introduces King v. Burwell Alternative

Johnson2Senator Ron Johnson (R-WI) has introduced the Preserving Freedom and Choice in Health Care bill, which he frames as a response to the Supreme Court deciding for the plaintiffs in King v. Burwell. This lawsuit seeks to force the administration to obey the law by not paying tax credits to health plans that operate in states using a federal health insurance exchange (i.e. healthcare.gov).

Victory for the plaintiffs would cause massive disruption in health insurance in the 36 states using healthcare.gov because beneficiaries’ premiums would increase significantly. Up to nine million people would experience this effect.

It is necessary for Congress to have an alternative to Obamacare ready in case the Supreme Court decides in favor of King because President Obama will immediately propose an amendment to change the law to accord with how he is executing it. That is, let tax credits flow through healthcare.gov. It would be a very simple amendment – just a few sentences. The risk of Congress panicking and simply voting for that amendment, and finally surrendering to Obamacare, is unacceptable.

Medicaid Block Grants = Unconstitutional Coercion?

Professors Sara Rosenbaum and Timothy Westmoreland have an interesting opinion piece in the New England Journal of Medicine with a curious response to the proposal that federal Medicaid funding should be re-structured as block grants (via the Patient CARE Act, proposed by some Congressional Republicans).

It is a pretty well established Republican proposal. It falls short of NCPA’s proposal to convert federal subsidies for health care into refundable tax credits. Nevertheless, it removes the perverse incentive for states to ramp up Medicaid spending beyond what is necessary to pull down more federal funds. In the current system, a state that spends one more dollar on Medicaid will attract between one and nine more federal dollars. This causes states to spend themselves into penury to recover federal dollars.

Ms. Rosenbaum and Mr. Westmoreland suggest that the same Supreme Court that ruled Obamacare’s expansion of Medicaid unconstitutional would do the same for block grants:

Churn: Data Lacking on Critical Question

The media and most health policy wonks focus only on the number of insured versus uninsured people. They don’t really care if people are enrolled in Medicaid, Medicare, Obamacare plans, employer-based benefits, or whatever. As long as the percentage insured goes up, they are satisfied.

One of the problems this disguises is “churn” – people moving between different types of coverage, which leads to disrupted care. It is something that Obamacare surely makes worse, by introducing a new type of coverage for people within a certain range of income.

However, the people in charge of the new system are almost completely ignoring this problem, according to Modern Healthcare:

Experts say churn can be disruptive to people’s continuity of benefits and healthcare, particularly if they have medical conditions for which they are receiving treatment. In addition, it can be harder for people to access healthcare providers, particularly specialists, if they switch to Medicaid, which often pays lower rates.

“For a patient under a physician’s care for a condition like cancer or renal failure, changing providers in the midst of chemotherapy or dialysis can be incredibly disruptive,” said Chris Stenrud, executive director of government relations at Kaiser Permanente.

A CMS spokesman said no data on churning between private plans and Medicaid were available for the nearly three dozen states using the federal marketplace. But a committee of health plans selling products on the federal exchange that has been tracking the trend has noted a small but steady exodus from exchange plans. The committee, however, could not determine whether the people exiting the exchange plans were transitioned to Medicaid or employer coverage or became uninsured.

The solution to churn is a refundable, universal tax credit that allows people to buy health insurance of their own choosing, and getting rid of the artificially fragmented market that Obamacare has made worse.

Obamacare Cuts IRS Customer Service

According to the New York Times, Obamacare is to blame for the Internal Revenue Service’s decline in customer service:

The IRS’ overloaded phone system hung up on more than 8 million taxpayers this filing season as the agency cut millions of dollars from taxpayer services to help pay to enforce President Barack Obama’s health law.

What is sadly funny about this new disclosure is that when Obamacare opponents pointed out that Obamacare funded new IRS tax inspectors instead of doctors and nurses, its supporters alleged that the new bureaucrats were going to help ensure people who were owed tax credits got them.

Obamacare Exchanges Still A Bad Consumer Experience

The media have cheered the fact that Obamacare exchanges in 2015 operated better than 2014. It is one of the “achievements” that led them do declare “Mission Accomplished” for Obamacare.

Improvement over 2014 is a very low bar. Indeed, it is hard to imagine how the exchanges could possibly have performed worse this year. New research from the Wharton Business School at the University of Pennsylvania concludes that the exchanges are still ineffective:

Wharton

…… when users were provided with non-standardized plans sorted by price, an overwhelming 60% relied on a simple rule of thumb for making their selection: choose the plan with the lowest monthly premium. This emphasis on premium cost defeats the entire purpose of the exchanges.

The portals also came up short in helping consumers understand what they were purchasing. Research has shown that health insurance consumers have only a limited understanding of technical aspects of how health insurance works. In a study by the Penn Center for Health Incentives and Behavioral Economics at the Leonard Davis Institute, only 14% of consumers were able to correctly answer four multiple-choice questions about the most important terms in health care: deductibles, copays, premiums and maximum out of pocket costs

Barack Obama Has the Last Word on the Medicare “Doc Fix”

I thought that I had given the last word on the flawed Medicare “doc fix” last Monday. Nope: That honor goes to President Obama. During the three week period the secretly negotiated “doc fix” legislation was being rushed through Congress (“rushed” because the Senate was in recess for most of it), I wrote an article suggesting Republicans who voted for it might be casting their first vote for Obamacare. Well, don’t take my word for it. Now that he’s signed the bill, President Obama has hosted a fabulous garden party for the politicians who voted for it. Yahoo has the whole story, including a photo of Speaker Boehner planting a bipartisan kiss on the cheek of Minority Leader Pelosi. One of my charges was that the law increased federal control of the practice of medicine.

Here’s what the President had to say about that:

“I shouldn’t say this with John Boehner here, but that’s one way that this legislation builds on the Affordable Care Act,” Obama said, adding, “But let’s put that aside for a second.”

Health Plans’ Mastery of Obamacare Poses Challenge To Repeal

electronic-medical-record(A similar version of this Health Alert appeared at Forbes.)

Can Obamacare still be repealed? Well, that depends. If the politicians will legislate according to the people’s preferences, Obamacare is a jump-ball.

According to the Kaiser Family Foundation’s latest tracking poll, 43 percent have a generally favorable opinion of Obamacare, while 42 percent have a generally unfavorable opinion. Further, 22 percent claim Obamacare has hurt them or their family directly, while only 19 percent claim it has helped. That leaves more than half who do not think Obamacare has directly affected them.

Perhaps the 25 million who have become insured or dependent on Medicaid after Obamacare rolled out will confirm its success. Actually, there has been no improvement in access to care due to Obamacare. The Commonwealth Fund reports that 35 percent of adults delayed medical care because of cost last year – versus 37 percent in 2005. Further, the proportion of adults ages 19 through 64 who had a medical problem but did not visit a doctor or clinic was 22 percent in 2003 and 23 percent last year. Thirteen percent did not receive needed specialist care last year – the same percentage as in 2003.

Basically, when it comes to access to care, Obamacare has returned us to the status quo from before the Great Recession – at great cost to taxpayers. And that is only the picture in broad strokes. Very few people account for most medical spending, and those very sick people are doing poorly in Obamacare plans. A politician who offers a compelling plan to restore prosperity, as well as repealing and replacing Obamacare, should not face overwhelming odds convincing Obamacare beneficiaries.

The real obstacle to advancing an alternative to Obamacare will be interests in the health sector, which has mastered Obamacare remarkably. The latest evidence is the first quarter earnings reported by UnitedHealth Group and Hospital Corporation of America, both of which Forbes colleague Bruce Japsen describes as having had the “best Obamacare quarter yet.”

Administration Plays “Medicaid Hardball” With Holdout States

Obamacare was supposed to dramatically increase Medicaid dependency in exchange for reducing some direct federal funding of hospitals. Now, some governors of states that rejected Obamacare’s Medicaid expansion are reacting negatively to the federal government’s cutting back hospital funding.

Governor Rick Scott of Florida is suing the federal government for proposing to cut Low-Income Pool (LIP) funding to hospitals, which he describes as retaliation for the state rejecting Medicaid expansion. Now, it looks like the Administration is issuing the same threat to Texas.

It is not clear why the Administration cares whether federal money sent to a state for health care is sent to Medicaid or directly to hospitals.

NCPA’s long-standing proposal for a universal, refundable tax credit addresses the issue as follows: If people do not claim the tax credit for health insurance, it gets sent to a safety-net facility where they reside. We haven’t gone deep into the details of how that gets executed. Although, my latest proposal is that all federal funding for welfare be bundled into unified Opportunity Grants

Obamacare’s Hospital Monopolies

Obamacare induces significant consolidation among providers, which the Federal Trade Commissioner has long recognized can be anti-competitive. State antitrust overseers are also pushing back against this effect:

During the 2008 financial crisis, “too big to fail” became a familiar phrase in the U.S. financial system. Now the U.S. health-care system is heading down the same path with a record number of hospital mergers and acquisitions—95 last year—some creating regional monopolies that, as in all monopolies, will likely result in higher prices from decreased competition.

Some see the dangers. In a rare move, Massachusetts Superior Court Judge Janet Sanders recently blocked Partners HealthCare—Harvard’s affiliated 10-hospital conglomerate and Massachusetts’ largest private employer—from acquiring three competitor hospitals.

(Marty Makary, “The Obamacare Effect: Hospital Monopolies,” Wall Street Journal, April 19, 2015)