Senators Scott Brown (R-MA) and Ron Wyden (D-OR) have introduced a bill that would let states apply in 2014 for waivers to allow them to get federal funding for health reform schemes that opt out of such integral provisions of the Affordable Care Act as the individual mandate, the employer penalty for not providing coverage, and minimum standards for a basic health insurance policy. Currently, states may only apply for such waivers in 2017—three years after the insurance exchanges and other major provisions of the legislation have been set in motion.
In theory, this bill, dubbed the "Empowering States to Innovate Act", could allow Vermont, for example, to set up the single-payer system that both the governor-elect and Senator Bernard Sanders support. It could also allow Tennessee to receive federal funding for a free-market, consumer-driven system that focuses on health savings accounts and catastrophic coverage, a plan advocated by some leaders in that state. There are important caveats included in the bill, according to Wyden: States will only be granted waivers if their plans will result in the same number of residents having affordable coverage as would occur under the ACA's mandates and subsidies. Also, the insurance coverage must be “at least as comprehensive as provided under federal law,” and the plan must not add to the federal deficit.
Interestingly, Wyden voted for the Affordable Care Act earlier this year and helped author (along with Vermont’s Sanders) the amendment to the legislation that lets states seek waivers beginning in 2017. But that was likely just a compromise; Wyden and Brown—both hailing from states that have comprehensive health programs already in place—say that making all states set up insurance exchanges and adopt other policies required by the health law in 2014, only to be granted waivers in 2017, will not only stifle innovation, but also will be a huge waste of resources.
Some liberal pundits agree. According to Jon Walker from Fire Dog Lake’s blog, “Forcing a state to go through all the work of setting up one system for 2014, only to go through all the work again to set up a replacement three years later is ridiculous. That is an extremely wasteful burden that will likely discourage states from trying to innovate.”
Ezra Klein, writing on his Washington Post blog, sees the Wyden-Brown bill as offering the various critics of the ACA the chance to prove that they're right about health reform. It’s a challenge, a real put-your-money-where-your-mouth-is opportunity. “If industry players make the system work better, then the states that prize their involvement will prosper. If conservative solutions are more efficient, that will be clear when their beneficiaries save money. If liberal ideas really work better, it's time we found out. Forget repeal and replace, or even reform and replace. How about compete and succeed?”
Despite some tentative signs of bipartisan support, the Obama administration has remained mum about the Wyden/Brown bill. The Hill quotes an unnamed “administration official” as saying: “The president has said that he will work with members of Congress who have healthcare proposals which do not undermine the important protections offered to Americans under the Affordable Care Act…The administration will examine this proposal as we move forward.”
In my mind, this proposal would clearly undermine the important protections offered by the ACA and could open the way for up to 50 separate health care plans across the nation; each reflecting the political leanings of the state. First of all, this legislation will not placate hard-core opponents of reform who will settle for nothing less than full repeal of the ACA. These tea-partiers and other conservatives are now looking toward 2012 when they believe a newly-elected Republican president will deep-six this version of health reform. At best, they will use the waiver program as a ruse to develop state-based health care systems without an individual mandate, without a minimum level of benefits and without significant subsidies; actions that will save money but worsen disparities in health care.
Robert Laszewski, President of Health Policy and Strategy Associates, a consultant to the health insurance industry, wrote in Kaiser Health News that it isn’t just a “pipe dream” that some Red states will welcome the chance to get federal funding to design their own version of health care reform. He points out that the Republicans were successful in winning majorities in many state legislatures and in electing GOP governors. “They now control both houses of the state legislature in 26 states. And they control the entire state legislature and the governor's mansion in 16 states! In other words, Republicans have the electoral ‘trifecta’ in 16 states—they can pretty much pass whatever they want.”
This prediction highlights the most significant problem with the Wyden/Brown bill. Timothy Jost, law professor at Washington and Lee University says, “moving [the waiver program] up to 2014 creates new risks because it allows states to deviate from the ACA before even giving it a chance to work.” Jost warns that it is a “dangerous idea to let states off the hook so early on; it threatens the integrity of the legislation and the goal of universal coverage.”
Ken Terry, a former senior editor at Medical Economics Magazine, and author the book “Rx For Health Care Reform” agrees, writing that the Wyden/Brown bill is “a Trojan horse that would spell the end for any effort to reach near-universal coverage across the U.S.”
The truth is, most states are by necessity beginning to plan for federal health reform: the Department of Health and Human Services is required by law to take over in states that haven’t made substantial progress in establishing a health insurance exchange by 2012. Already, some 48 states have received grants from HHS to begin studying how best to set up insurance exchanges and many have started drafting plans for implementing them. And innovation and flexibility are already inherent in this process. As Jost points out in this recent Health Affairs blog, “Although the ACA sets out basic requirements that an exchange must meet, it leaves a great deal of leeway to the states for designing exchanges.” Jost notes that HHS issued guidance on state exchanges just last week and clarified “that both an ‘active purchaser’ (Massachusetts or California) or ‘open marketplace’ (Utah) model are acceptable under the ACA.”
In the end, implementing the ACA is an ongoing, evolving process. There is plenty of innovation built into the legislation through Medicare demonstration projects, leeway on exchange design and whether these programs will be run by the government, a non-profit or in partnership with the insurance industry. But the legislation needs to have strong basic standards to get off the ground. The individual mandate, employer penalties for not providing coverage, a minimum set of benefits, subsidies—these are integral components of the legislation that must be implemented by all states at the start.
Three years down the road, in 2017, individual states may have worked through the process enough to identify elements of reform that could use tweaking. This is the right time for them to start thinking about applying for waivers to try out novel schemes that could provide equal benefits and coverage for their citizens but are better suited for their states. Moving the waiver application process back to 2014 risks making the same mistakes we made during the Bush years with Medicaid. Those waiver projects led to an inequitable, disjointed and largely dysfunctional system that didn’t meet the needs of the poor. With an intact ACA we have the chance to at least approach comprehensive coverage for all.
unclear to me what’s wrong with allowing states to serve as a laboratory for democracy. if plans okay with ron wyden, who’s been a leader in extending coverage and reforming system, its worth a serious test.
Jim,
I think I make it clear in my post what’s wrong with the Wyden/Brown bill: It effectively sabotages the ACA before it even has a chance to get off the ground. As far as Ron Wyden’s leadership in health reform, his plan (authored with Utah’s Sen. Robert Bennett)was rejected because it would have set up a new free-market private insurance system that would eventually take the place of employer-sponsored coverage, Medicaid and SCHIP. The basic concern, detailed in this analysis by the Center on Budget and Policy Priorities http://www.cbpp.org/cms/?fa=view&id=674 is that because of adverse selection, these private plans would end up being too costly for poor and disabled Americans and would ultimately add to the problem of unaffordable insurance for those with pre-existing conditions. Wyden’s general slipperiness (he’s for the individual mandate, he’s against it; he voted for ACA, now says he wants to change it, etc.)and affinity for the private insurance industry make it difficult for me to see his plan as worthy of a serious test.
While I acknowledge that there are some good provisions in the ACA such as beginning on January 1st people who are on Medicare will be able to get preventative care like check-ups, colonoscopys without having to pay co-pays and deductibles and that insurance corporations won’t be able to deny people health care because of illness, it’s by far not the greatest thing since white bread. One of the things that I am most disappointed about the bill is that since the new law isn’t Medicare For All, that Medicaid(Medi-Cal in California) won’t be extended to people within 133% of the Federal Poverty Level until 2014 and that the supposedly federally subsidized High-Risk Pool for people who have been turned down by insurance corporations due to “pre-existing” conditions that took effect this year is JUST PLAIN GARBAGE as I found out. I have a friend who I was hoping would have at least been able to either benefit by the improved Medi-Caid provision THIS YEAR or that supposedly federally subsidized High-Risk Pool that went into effect this year. Under the terms of that high-risk pool, my friend would have had something like an annual $1,000 deductible and a similar annual premium. Needless to say, she did not enroll. Like I said before, had Obama simply pushed for improved Medicare for everyone(using the term Medicare as everyone knows what Medicare is), that along with more work on putting people to work, the Democrats would have made gains in the recent elections rather than terrible losses.
Walter–
I’m afraid you are mistaken about the popularity of Medicare for all.
For it to work everyone would have to be enrolled in Medicare for All.
Tooday, 85% of Americans have insurance, and the vast majority have employer-based insurance, with their employer paying 60% to 100% of the cost. (Employers paying 80% to 85% of the cost is typical)
Employees who have this insurance do not want to give this up.
If we moved to some version of “Medicare-for-all” b ut those who have employer-based insurance were allowed to keep it, then the people who enrolled in Medicare for all would be primarily low-income people who cannot afford insurance, low-income people who work for small companies that don’t offer insurance, low income people who cannot afford paying 15% to 405 of the cost of their employer’s insurance, and low-income and middle-income people who have very poor coverage through their employer.
Low-ncome people are in poorer health than the rest of us (due to stress poor nutrition, poor air quality where they live, etc. etc.,) Poor people die are significantly more likely to suffer from serious (and expensive) chronic diseases.
So if those with employer-based insurance were allowed to keep it, the pool of people in Medicare-for-all would be much sicker than average–which means Medicare for all would be very, very expensive. (Probably $20,000-$25,000 a year for a couple.)
Also, you need to realize that most upper-middle-class and upper-income people have pretty good to excellent insurance through their employer.
I don’t earn a large salary, but my employer is a non-profit that offers very gvenerous benefits. The insurance I have through my employer is better than Medicare (better coverage, no caps, no deductible and it costs me nothing.) And this is insurance that the Century Foudnation buys from a profit insurance company. (the best option available in N.Y.C.) My employer pays an arm and a leg for it.
When I worked for a large corporation, I also had
insurance that was better than Medicare.
The vast majority of people in my situation would Not be willing to switch to Medicare for all. If you tried to force them to do that, they would revolt– and universal coverage would never have passed.
In addition, we are now in the middle of a recesssion/depression that threatens the entire economy.
The Accountable Care ACt raises taxes for the wealthiet Americans. But this is not a time that we can raise taxes for the middle class. (Even those who have jobs are barely keepng their heads above water.)
As for Medicaid– if we tried to expand Medicaid this year, where would you get the pmoney to pay for it? (The Federal Governement will be paying 100% of the additional cost.)
I realize that you’re not an economist, but if you sat down and looked at the numbers, it would be apparent that we need another 3 years to get ready to come up with the money that will be needed for this expansion of Mediciad.
I wish that we had passed the ACA back in the early 1990s when the Clintons were pushing for a fairly similar bill. But at the time, the majority of the American people were not in favor of health care reform.
The Clintons made some mistakes in how they went about preparing the bill, but the big problem is that the majority of Americans just werent’ comfortable with the idea of government interventing in heatlh care to that degree.
This time around, the major reason the bill had as much public support as it had this time around (and even then, the support was hardly overwhelming) is because unemployment is so high. A great many people are afraid they will lose thier jobs and their insurance, and they like the idea of knowing that universal coerage will be their as a back-up.
But as long as they keep their jobs, they don’t want to give up their employer-based insurance.
The high-risk pool is a band-aid– to help people who are extremely sick hold on until 2014.
From what you write, I have a feeling that you don’t realize the magnitude of the task of tranforming a health care system of this size.
Health care costs far more than the wars in the Middle-East. And it is a recurring expense. (Thankfully, we are not at war every year; but every year, we are paying for healthcare.)
This is not something that can be done in one or two years.
The only way it will be at all affordable is if we cut health care spending–by eliminating all of the unncessary tests, surgeries, treatments, etc.
And this will take time. Most Americans who are insured or on Medicare don’t realize that they are being overtreated. They believe that they need the mammograms when they are 45, the PSA testing for prostate cancer, the knee surgery when they are 50 (without having tried physical therapy and medication) the angioplasy (even though 1/2 of all people who undergo angioplasty derive no benefit) the chemo (even though much of it is futile) the antibiotics for a child with an ear-ache (the child needs a pain-killer, not anti-biotics), the back srugery (much of which does no good) . . .
It will take time–and education–for seniors and well-insured Americans to begin to realize that ‘more cere is not necessarily better care”–that less can be more.
This is why transforming our health care system will be a process. My guess is that it will take 10 years to make the deep structural changes that we need to make if we are going to have affordable care for all.
Maggie,
Where you say “Today, 85% of Americans have insurance, and the vast majority have employer-based insurance, with their employer paying 60% to 100% of the cost. (Employers paying 80% to 85% of the cost is typical), because the greedy insurance corporations keep raising their premiums many employers are requiring their employees to pay more for their insurance and/or requiring higher deductibles and co-pays. Unfortunately the ACA does not have strict regulations on the premiums. It is commendable that your employer the Century Foundation provides generous benefits which is not the case with an increasing number of employers, and quite a few small businesses who want to be generous but can’t afford to. And again, the ACA does very little or nothing to regulate the premiums. Besides a lot of people don’t know if their jobs are secure or not and if they will be laid off. Under a Medicare for All plan, the premiums that people and employers pay would be much less than what they pay to insurance corporations for much better care. When I said that Obama should have pushed for extending Medicare to everyone, I did say IMPROVED Medicare. As for how to pay for it, there is the Lewin Report mentioned here http://www.pnhp.org/facts/single_payer_system_cost.php?page=all. This can also be paid for by higher taxes on the wealthy, cuts to the military budget, and getting out of Afghanistan among some other things. Single Payer works in Canada and numerous countries throughout the world. Whatever imperfections there might be, no government in any of those countries would dare toss their systems out for what we have here. I absolutely agree with you about how too many people are being over treated. We also need more encouragement of alternative care such as chiropractic, acupuncture, and naturopathic care. There are a lot of people today who get surgeries and take medicines who are not being helped, but who would be much better if they could be better informed about the alternative treatments and this would save a lot of money under a universal health plan or Medicare for All. I am a staunch supporter of SB810 which will set up a single payer or Medicare for All plan here in California, and I hope that we will successfully encourage our new Governor Jerry Brown to sign it after the Legislature passes it. If the opponents put it on the ballot, we will be prepared to educate people and win.
Maggie,
I neglected to mention in my last remarks below, regarding where you wrote “The high-risk pool is a band-aid– to help people who are extremely sick hold on until 2014,” so people who can’t afford those something like $1,000 premiums and deductibles will be left out in the cold until 2014, or perhaps will go to the cemetery.
Walter–
Yes, but people who cannot afford insurance have been going to an early death for decades.
Some of the people who now think that health care reform should happen overnight weren’t in favor of it (or at least didn’t really push for it) in the early 1990s–when it would have been much easier, and much cheaper.
Perhaps this is because they were younger then, and not worried about their health. But they should have been concerned about the health of Americans who were in the 50s back then. . . .
If your uninsured friend is ill, I wonder–couldn’t relatives and friends like each donate $100 to $250 to cover the $1000 premium– and even the deductible?
Maggie, We have people here in Chico California, and I’m sure across the country who have been pushing for single-payer health care since the early 1990’s. My friend does go to a clinic for her health care where she pays a sliding scale, but if she needs to go to a specialist she has to pay out of pocket. Here in Chico we also have the Shalom Free Clinic which is staffed by volunteers, where on certain days of the week people can go and get care. The clinic raises funds and as a matter of fact, there is a fundraiser next weekend. However to ask people to pony up $1,000 annually to buy insurance for 1 person plus another $1,000 to pay an annual deductible is something else. I thought that we’re talking about getting legislation passed so that everyone has health care now. After all it was in 1965 that Medicare was passed, which was a long 45 years ago. I recall that when Medicare was passed that both of my grandmothers were covered the very next year. If we get the middle-man meaning the private insurance corporations out of the way, health care will be a lot cheaper for everyone as I said