Category Archives: Affordable Care Act

Who is Douglas Holtz-Eakin and why is he saying such terrible things about health reform?

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Today, the House Energy and Commerce Committee’s Subcommittee on Health will hold a hearing entitled: Unaffordable: Impact of Obamacare on Americans’ Health Insurance.  (Always nice to know that our elected representatives are keeping an open mind.)

Prominent on the list of witnesses: “Douglas Holtz-Eakin.” Even before reading his testimony, I knew what Holtz-Eakin would say: young, health Americans should brace for “sticker shock.”  Conservatives like Holtz-Eakin tend to stay on script. However stale the rhetoric, they firmly believe that if you repeat a sound-bite often enough, people will believe it.                                     

                                        Who is Douglas Holtz-Eakin?

If you recognize the name, it’s probably because Holtz-Eakin has become a familiar figure in the mainstream media, quoted in the New York Times, writing Op-eds for Reuters and Politico.com, and appearing, not only on Fox Business News, but on CNN and the PBS’ Newshour.

Alternatively, “Holtz-Eakin” may ring a bell because he served as a member of George W. Bush’s Council of Economic Advisers (CEA), and as Director of Bush’s Congressional Budget Office (CBO.)

In a remarkably candid 2011 interview, Holtz Eakin recalled his tour in the Bush administration:

“Going into the summer of 2001, things were getting worse. . . When we first went in and talked to the President, Glenn [Hubbard] and Larry Lindsey said, ‘Mr. President . . . We’re probably not going to run a surplus on budget.  We’re going to run a deficit.”

Bush’s reply: “We’re not going to run a deficit. If you come in here with a deficit, you’re both fired. Go fix it.’”

“We ended up running a budget surplus of one billion dollars,” Holtz-Eakin confided, “driven by gimmicks of remarkable proportions.”
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Why Is It That the Truth Never Goes Viral?–A Campaign of Misinformation Unites Conservative Activists and Insurers

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The Post below originally appeared on Healthinsurance.org (mm)

Wild rumors, such as the one claiming Obamacare premiums will start at $20,000 a year for a family of five, are much jucier than the truth.

About a week ago, Investor Daily’s website published a “Fact-Check” post that illustrates how misinformation spreads.

In the post, Jed Graham explains that when the IRS published a final rule about penalties under the Affordable Care Act (ACA), it included a few hypotheticals. For example, the IRS wrote, “The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000′ in 2016.”

The $20,000 figure was just an example, Graham explains. “The IRS always uses hypothetical numerical examples in its regulations to illustrate how the rules will work in practice and this was no different.”

Nevertheless, before long, the “conservative news site CNSNews.com began to blare out this shocking headline: ‘IRS: Cheapest Obama Care Plan Will Be $20,000 Per Family.’”

From there, “the ‘fact’ got picked up by countless media outlets and pundits” Graham reports, “most of them on the right,” including:

 •Betsy McCaughey writing for the New York Post;

•Rush Limbaugh;

•Breitbart

•On the left, even Naked Capitalism (a well-researched blog,) reported the news bulletin from CNSNews.com.

This is the problem: Once a faux-fact gets out there, even reporters who have no axe to grind continue to repeat it. If you see the number often enough, you assume it must be true.

How could a reporter tell that $20,000 wasn’t an IRS estimate?

It should have been clear that this was a hypothetical, Graham points out, if you just looked at other hypotheticals in the IRS ruling. “For example: ‘the annual national average bronze plan premium for a family of 4 (1 adult, 3 children) is $18,000.’

“Both examples can’t be true,” he observes, “unless an adult’s premium is $2,000 and a child’s is $5,333.”
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Obama to Boehner: “John, I’m Getting Tired of Hearing You Say That”

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This was President Obama’s reply, during fiscal cliff negotiations, when House Speaker John Boehner declared, for the umpteenth time, that “ The U.S. has a spending problem.” 

I can understand the president’s irritation. How could anyone believe that we have a “spending problem?’

Look around. Consider the state of our bridges, our roads and our crumbling inner city public schools. Are we spending too much on the nation’s infrastructure?

Next, think about unemployment. During this recovery we have lost 750,000 public sector jobs.  Republicans are intent on “starving the beast” (of government) and as a result Washington has not given states the financial support they need continue delivering public services. Across the nation, public school teachers have been laid off in droves, while class sizes increase at unprecedented rates.  Does this sound like government spending run amuck?

One in five American children now lives in poverty. Seventeen million children find themselves in homes where they can’t be sure of getting enough to eat.  (a.k.a. “food-insecure households.”)  At the end of the month, many kids go to bed hungry because the government Food Stamps program (now known as Supplemental Nutrition Assistance Program, or SNAP)  gives families less than $1.50 per person per meal. Are we being overly generous?

During the past two wars, we sent millions of American men and women to Iraq and Afghanistan –many went back for repeated tours. In some cases, their bodies were not  broken–but their minds were.  Now 1.3 million Vets seeking mental health services are told they must wait of 50 days before getting treatment.   A recent government report suggests that 22 Vets die by suicide every day – about 20 percent of all Americans who kill themselves. Are we spending too much on healthcare for Veterans?

Let me suggest that we don’t have a spending problem. We have a revenue problem. Current federal revenue levels are at their lowest levels since the 1950s. 

                      How Anti-Tax Pledges Have Weakened the Nation

In a recent post, Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, nailed it: “The tax system doesn’t raise enough revenue.  And that’s not just the recession; it’s also tax policy and anti-tax pledges  . . . The system has become less progressive, with the largest declines in effective tax rates at the top of the income scale.

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Health Wonk Review Posts Investigate

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Nursing Homes, Nurse-Practitioners Developing More  Expertise, Efforts to Block Exchanges, How Patients Respond to Evidence that Some Tests are Unnecessary, and Whether Obamacare “Screws” Young Americans  . . . 

This  time around Peggy Salvatore hosts a Valentine’s Day Edition of  Health Wonk Review –over at Healthcare Talent Transformation . Her round-up of some of the best of recent HealthCare posts includes:

—  A piece on Health Affairs Blog by David Rothman investigating how Americans respond to “evidence that certain medical tests and screenings might be unnecessary, harmful, and not worth the money.”  How do they react to research showing that some drugs are harmful? To find out, you’ll have to read the post.  (You will find the link to this post, and all of the posts discussed below, here )

—  Good news from Louise at Colorado Health Insurance Insider:  A bill that would have repealed the 2011 law that created Colorado’s health insurance exchange/ marketplace, died in committee in a 9-2 vote. “Republicans and Democrats on the Committee on the committee rejected his portrayal of the Exchange– which has already made a lot of progress towards an opening date this fall.”

Louise adds: “Given the progress that Colorado has made over the past two years in creating the state’s marketplace and implementing various other healthcare reforms (both state-based, like maternity coverage and gender-neutral premiums, and ACA-related, including the recent push to expand Medicaid), I would say that Colorado is on track to greatly improve its overall healthcare outcomes.

She also includes a useful map showing the states that have defaulted on setting up Exchanges. As she notes “this doesn’t mean they will get a pass on Obamacare.”  By law, the federal government will set up Exchanges for them.

—  A post by Disease Management Care Blog’s Dr. Jaan Sidorov pointing out that non-physician professionals and lay-persons are managing to achieve a remarkable degree of medical expertise. This is, as Peggy notes, a controversial subject.

— A report that asks “do non-profit nursing homes really provide better care than their for-profit counterparts”?   Over at Healthcare Economist Jason Shafrin analyzes a study that suggests the answer is  “Yes.”   How do they arrive at that conclusion? Again, you’ll  have to read the post.

— A post that takes on “a recent infamous article on Buzzhead ”  claiming  that Obamacare “screws” young Americans.  Over at California Access Health’s Anthony Wright observes:  “there are some obvious and non-obvious reasons why Obamacare is a boon to young adults. “ The non-obvious reasons are worth thinking about.

These are just a few of the treats in this Valentine’s Day Edition.  I recommend that you read the entire Review here.

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Obama’s Proposals For Medicare — Do They Go Far Enough? Will They Become Law?

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Not long ago, I wrote about the Center for American Progress’ (CAP’s) “Senior Protection Plan” —a report that aims to rein in Medicare “by $385 billion over ten years without harming beneficiaries.” In that post, I suggested that CAP’s proposals might well give us a preview of the “modest adjustments” that President Obama had said he would be willing to make to Medicare.  At the time, I highlighted three of CAP’s recommendations:

— increase premiums for the wealthiest 10% of Medicare beneficiaries (raising $25 billion);

— insist that drug-makers extend Medicaid rebates to low-income Medicare beneficiaries (saving $137.4 billion);

— prohibit “pay for delay” agreements that let “brand-name drug manufacturers pay generic drug manufacturers to keep generics off the market” (saving $5 billion).

Last week, in his State of the Union address, President Obama embraced the first two:  “Already, the Affordable Care Act is helping to slow the growth of health care costs,” he noted. “The reforms I’m proposing go even further. We’ll reduce taxpayer subsidies to prescription drug companies and ask more from the wealthiest seniors.”  (In time, I suspect that the administration also will call for a ban on those decidedly seamy “pay for delay” deals.)

“On Medicare,” he added, “I’m prepared to enact reforms that will achieve the same amount of health care savings by the beginning of the next decade as the reforms proposed by the bipartisan Simpson-Bowles commission.” The commission called for reducing Medicare spending by roughly $350 billion over 10 years–  a sum that is not far from CAP’s $385 billion target.

Are These “Adjustments” Too Modest ?

These may seem like small numbers. But keep in mind that this is on top of the $950 billion that the Affordable Care Act (ACA) saves by squeezing waste out of health care spending, while simultaneously raising new revenues. Of that $950 billion, some $350 billion comes in the form of Medicare savings achieved by:

—  Pruning over-payments to private sector Medicare Advantage insurers– $132 billion  

—  Containing Medicare inflation by shaving annual “updates” in  payments to hospitals and other large facilities by 1% a year for ten years, beginning in 2014– $196 billion

— Cutting disproportionate share hospital payments to hospitals that care for a disproportionate share of poor and uninsured patients over 10 years beginning in 2014 – $22 billion.

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IRS ruling a ‘disaster for Obamacare?’ Not quite. Ruling may be ‘unfortunate,’ but it won’t leave ‘millions’ uninsured

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Under the Affordable Care Act, Americans who are not offered “affordable” insurance at work can purchase coverage in the ACA’s health insurance exchanges, where many will be eligible for generous subsidies.

The law defines “affordable” as insurance that costs less than 9.6 percent of income. But the ACA doesn’t specify whether it is referring to individual coverage or family coverage, which is always far more expensive. The wording is ambiguous, an “oversight,” say many legislators.

Now the Internal Revenue Service (IRS) has ruled that the government will look at the cost of coverage for an individual – not a family – when deciding if a plan is “affordable.”

A disaster for Obamacare?

Earlier this week, Forbes ran a story about the rule under a headline that blared, “IRS Ruling to Create Millions of Uninsured Americans as It Undermines the Very Intent of Obamacare.”

Forbes’ take plays right into the conservative claim that Obamacare is a disaster. “We are now entering the crucial phase of the law’s enactment,” crows blogger Dwight L. Schwab, “and many critics are saying, ‘I told you so.’”

Whoa! Let’s look at Forbes’ argument, and the numbers.

Fear-mongering vs. facts

Forbes observes that, according to the Kaiser Family Foundation’s 2012 survey of employee benefits, on average, workers contribute $951 annually for an individual plan. But those buying family coverage fork over $4,316, “a number well in excess of the 9.5% of earnings for someone making just $35,000 a year.” Yet, under the IRS decision, “only the portion of the contribution attributable to the individual employee” can be “considered for the purpose of determining what is affordable – not the entire contribution.”

Forbes’ contributor Rick Ungar offers an example: If an employee who earns $35,000 and “is the sole breadwinner in the family” pays less than $3,325 annually for his own insurance … “nobody in the family qualifies for participation on the healthcare exchanges and nobody can qualify for the intended government subsidies.” If the employee signs up for a family plan with his employer it would cost “over 12 percent of their annual income … a crushing amount.”

“The result,” Ungar says, “will be millions of spouses and children left to go uninsured.”

Millions uninsured???

Let’s begin with that last sentence. Just how many children would be shut out? Bruce Lesley, president of First Focus, a children’s advocacy group, estimates that 500,000 children could remain uninsured.

A U.S. Government Accountability Office (GAO) report offers a similar estimate … that “460,000 children may be left uninsured if states stop funding the Children’s Health Insurance Program (CHIP) beyond 2015.” (Funding ends in 2015 because legislators assumed the ACA would protect kids.) “Federal funding could be extended,” the GAO notes. (My guess is that, if necessary, Congress would expand CHIP funding.)

But what about the mothers? If 500,000 children might be affected, that means that, at most, 500,000 mothers would be left uninsured. But in most of these cases, parents may well have have two children, sometimes more. Let’s assume that, on average, they have two children. That means 250,000 mothers (half of 500,000) might find themselves uninsured because of the IRS rule.  Add those 250,000 mothers to a maximum of 500,000 children, and 750,000 people wind up “going naked” as insurers put it.

Married couples who don’t have children also should be counted. If only one spouse works, and they cannot afford the family plan his employer offers, another adult could be left out. But, these days, few married women under 65 who don’t have children stay at home. We’re still far from “millions.”

Forbes’ example

Forbes’ example of a single-breadwinner family is the exception, not the rule. Among families earning $25,000 to $60,000, 67 percent of mothers and 85 percent of fathers work.In these cases, couldn’t each parent purchase insurance through their employer?

Note: The post originally appeared on Healthinsurance.org  To find the answer to that question, and why the Forbes Op-ed represents “fear-mongering, pure and simple”, please click here.  If you like, come back here to comment.

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Join the debate on “Reining in Medicare Costs without Hurting Seniors”

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The January 26 post below (“How to Rein in Medicare costs without Hurting Seniors“) has drawn some 43 comments (including mine, as I responded to readers). I thought of turning a couple of my replies into posts, but then decided it might be more interesting for you to read them in the context of what other readers said.

I would love to see more readers participate in this thread. Comments are still open.

It’s a lively thread that takes on a number of third-rail issues: Does Medicare spend too much on pricey cancer drugs, end-of-life care and brand name hospitals?

 Should we try to spend less on end-of life care? Many say “Yes,” but Zeke Emanuel (a medical ethicist and oncologist who was part of the Obama team during the president’s first term), says “No.” I link to a column where he notes that “It is conventional wisdom that end-of-life care is an increasingly huge proportion of health care spending. . . Wrong. Here are the real numbers: end-of-life care (not just for the elderly, but for all Americans) accounts for just 10% to 12% of  total health care spending. This figure has not changed significantly in decades.”

He goes on to suggest that while we probably can’t make end-of-life “cheaper,” we can make it “better . . .  Here are four things the health care system should do to try to improve care for the dying, even if they won’t save money.”

A number of readers comment on what is driving Medicare spending. Is it “patient expectations,”  “doctors’ fear of litigation,”  “regulations that dictate nurse-staffing ratios,” “practice patterns that doctors learned long ago,” or is the biggest problem “promotional efforts by manufacturers?”

Other questions come up: Does anyone really have any idea how much Medicare will cost in 2022?  By then will Medicare have begun negotiating with drug-makers and device-makers for discounts on drugs (the way the VA does now, saving 40%)?  How far will Medicare go in using medical evidence to decide what to cover?

One doctor/reader points out that in his field Medicare has begun to refuse to pay for procedures when research shows that they are not effective. He and another reader agree that in this way Medicare can provide “political cover” for private sector insurers who will follow Medicare’s lead.

We also discuss the deficit, and whether we should be trying to address the deficit now — or wait until the recession ends and unemployment falls. Also, is the deficit already dissolving as CAP suggests? 

And is the deficit our biggest problem? On this question, you will find links to Paul Krugman, Peter Orszag (who analyzes the slow-down in health care spending over the past three years as a “structural change, not just the result of the recession) and Ezra Klein,

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How to Rein in Medicare Spending Without Hurting Seniors

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In his Inaugural speech, President Obama renewed his commitment to safety nets:  “Medicare and Medicaid and Social Security–these things do not sap our initiative, they strengthen us.

Yet last week, he signaled that he is “open to making modest adjustments to programs like Medicare.” Should seniors brace for bad news?

No. There are many ways to cut Medicare spending without drawing blood. It’s a matter of using a scalpel, not an axe, to trim the fat.

Not long ago, the Center for American Progress (CAP) unveiled a Senior Protection Plan that would do just that, revealing how we could reduce Medicare spending by $385 billion without harming beneficiaries.”

The administration pays attention to CAP. Recently Bloomberg News described CAP as “the intellectual wellspring for Democratic policy proposals, including many that are shaping the agenda of the Obama administration.” This suggests that the report’s proposals may offer a preview of “adjustments to Medicare spending” that the president would consider.

How would CAP save $358 billion without rationing benefits or shifting costs to middle-class seniors? The report focuses on squeezing waste out of the system. Waste doesn’t help beneficiaries.

During recent fiscal cliff negotiations, Democrats and Republicans agreed to adopt four of CAP’s proposals, and I suspect that, over time, we will see more of its recommendations become part of the reality of health care reform.

Recently, I interviewed CAP president NeeraTanden and Topher Spiro, CAP’s managing director for health policy. I was impressed by how their practical approach differs from conservative strategies for slicing “entitlements.”
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The Newest Health Wonk Review—on Health Affairs

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Chris Fleming hosts the latest edition of Health Wonk Review, a compendium of recent posts on health care blogs.

On Managed Care Matters, Joe Paduda offers 5 predictions for health care in 2013.  He’s convinced that all but a handful of states will expand Medicaid. (“The pressure from hospitals and providers will be overwhelming.”) He also predicts that “The feds and CMS will get even more aggressive on Medicare and Medicaid fraud.”  (For what it’s worth, I think he’s right on both counts.)

                                       Food for Thought

Some posts are likely to stir controversy, either because they’re rebutting the conventional wisdom, or because they’re questioning some deeply held beliefs.  I think these posts are important because they define issues that we should all think about.

Over at Colorado Health Insurance Insider, Louise Norris examines the question of whether smokers should pay more for their health insurance.  Under the ACA, smokers can be charged up to 50 percent more than nonsmokers.  . . .

“Norris prefers the carrot over the stick,” Fleming observes, “endorsing the requirement that all plans cover tobacco cessation programs as part of the ACA’s preventive services mandate, although she cites evidence showing that implementation of this requirement has been inconsistent. “ (It’s worth noting that tobacco cessation programs work. “Sticks,” behavioral psychologists tell us, just aren’t nearly as effective.) 

The Hospitalist Leader’s  Brad  Flansbaum suggests that our emphasis on getting everyone vaccinated during a severe influenza (and claims about Tamiflu) may well amount to “oversell.”  Eye-opening.

 At the Innovative Health Media Blog  David Wilson writes: “The Medicare Annual Wellness Visit  (AWV) is the perfect vehicle to address the increasing need for early detection of cognitive impairment.  The AWV” gives physicians the opportunity “to provide such a screening and receive reimbursement for it .

“Once a patient shows the need for additional testing physicians can use self-administered computerized tests to perform the additional screening without referring the patients to another doctor or office,” he adds. ” This also creates additional reimbursement for physicians.” 

MM–I can’t help but ask: “Since we have no cure or effective treatments for Alzheimer’s (or most forms of senile dementia) do you really want to know that, in three or four years, you may  be diagnosed with full-blown Alzheimer’s?”

Certainly, seniors who want this testing should have access to it. Perhaps, one day, accumulated data will help researchers understand the disease. But Medicare patients should know that they can say “No” There is no requirement that this be part of your Annual Wellness visit.

On the Health Business Blog, another David Wilson has published a post that is likely to be even more controversial. He argues that “The Nursing Shortage is a Myth.”

We have plenty of nurses,  Wilson suggests. In fact, in the future, he writes, “robots will be replacing nurses “just as robots have replaced “paralegals” and “actuaries.” (“Insurance companies used to hire tons of them, but their work can be done much more efficiently with computers.”)

Over at Wright on Health, Brad Wright takes a look at the recent Institute of Medicine report comparing health in the U.S. to health in other wealthy nations. He notes that data on preventable deaths among young people points to the importance of public health interventions, including reducing access to guns.

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Under the ACA, will YOUR Insurance Premiums Rise or Fall?

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Today, many Americans are asking: will my premiums go up in 2014?

There is no simple answer.

According to Families USA ,the Affordable Care Act (ACA) will have a positive effect on the typical family’s budget. Using an economic model that can factor in all provisions of the Act (ACA), Family’s USA estimates that by 2019, when the law is fully implemented, “the average household will be $1,571 better off.”

Even high-income families will save: thanks to rules that limit co-pays, and reward providers for becoming more efficient, “those earning $100,000 to $250,000” will spend $779 less on medical care.” But these are “averages.” They don’t tell you whether your health care costs will rise or fall.

The answer will depend on: your income, your age, your gender, who you work for, what state you live in, whether a past illness or injury has been labeled a “pre-existing condition,”  and what type of insurance you have now: 

If you work for a large company:

—  The ACA will have a “negligible” effect on your premiums says the Congressional Budget Office(CB0). This doesn’t mean that your costs won’t climb at all in 2014. As  long as medical product-makers and providers continue to raise prices, premiums will edge up each year.

But in 2012 average premiums for employer-based insurance rose by just 3% for single coverage and 4% for families, a “modest increase” when compared to 8% to 12% jumps in past years. And on average, employee co-pays and deductibles remained flat.

Granted, a 3% to 4% increase still outpaces growth in workers’ wages (1.7% percent) and general inflation (2.3%) percent).But as reform reins in spending annual increases for large groups could fall to 2%–or less. 

If you work for a small company with more than 50 employees:

Your boss will be more likely to offer affordable benefits, in part because, if he doesn’t, he will have to pay a penalty

Moreover, he will find insurance less expensive. Today, small businesses pay 18% more than large companies because the administrative costs of hand-selling plans to small groups are sky-high. But starting in 2014  businesses with fewer than 100 employees will begin buying insurance in “Exchanges” where they will become part of a large group, and eligible for lower rates.

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