Category Archives: Health Care Policy

The Affordable Care Act’s “Penalty”: If You Don’t Buy Health Insurance in 2014, How Much Will You Pay?

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Note to readers; a longer version of this post originally appeared on HealthInsurance.org, along with a penallty calculator.

Despite the hullabaloo about the Affordable Care Act’s mandate that nearly everyone puchase heath insurance in 2014–or pay a penalty–the Congressional Budget Office estimates that only 1.4 percent of Americans will wind up paying the tax.

That is because the vast majority of us either have health insurance, or are exempted from the mandate for any one of a number of reasons.  For example, at the end of 2014 you will owe no tax if:

  • your income is low enough that your share of premiums (after federal subsidies and employer contributions) would total more than 8 percent of your income;
  • your income is below the income tax filing threshold, and so you’re not required to file taxes;
  • you were uninsured for less than three months of the year (If over three, the penalty is pro-rated);

As a result the Urban Institute estimates that just 6  percent of the population (roughly 18 million Americans) will even have to consider the question: “Should I purchase health insurance, or pay a tax?” That’s right: a whopping 94 percent of the population will have no reason to worry about paying a penalty.

And 11 million of that 18 million will be low-income or middle-income Americans who are eligible for a government subsidy to help cover the cost of their premiums. Chances are, most of them will take the government up on its offer.
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Medicare, Medicaid, Global Warming and Gun Control– Can Liberals and Conservatives Find Middle Ground? Should They? Part 1

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 In a nation divided, “compromise” has become an extraordinarily appealing idea. Weary of the acrimony and endless wrangling, more and more Americans are asking: Why can’t conservative and liberal politicians come together and forge bipartisan solutions to the problems this nation faces?

Keep in mind that it is not only our elected representatives who are having trouble finding common ground. The Pew Research Center’s latest survey of “American Values” reveals that as voters head to the polls this November, their basic beliefs are more polarized than at any point in the past 25 years. In particular, when it comes to the question of government regulation and involvement in our lives, the average Republican has gravitated to the right. In 1987, 62% of Republicans agreed that “the government should take care of people who can’t take care of themselves.” Now just 40% support this proposition. Democrats haven’t changed their views on this issue: most continue to believe “there, but for fortune . . .”

In Congress, where polarization has led to paralysis, some argue that Republican leaders are responsible for creating gridlock by insisting on “party discipline.” But liberals in Washington also are accused of “dividing the nation.” Even President Obama, who set out to unite the country, has been described as “the most polarizing president ever.” During his third year in office, Gallup reports, “an average of 80 percent of Democrats approved of the job he was doing, as compared to 12 percent of Republicans who felt the same way. That’s a 68-point partisan gap, the highest for any president’s third year”–though this may say more about the temper of the times than the man himself. Nevertheless, many commentators believe that progressives, like conservatives, need to cede ground. The debate has become too contentious, too “political,” they say. I disagree. There are times when we cannot “split the difference.” Too much is at stake. We must weigh what would be won against what would be lost.

But reporters who have been taught that they must be “fair” and “balanced” often write as if all points of view are equally true. After all, they don’t want to be accused of “bias.” Thus they fall into the trap of what veteran Supreme Court reporter Linda Greenhouse calls “he said, she said” journalism. To them, the “middle ground” seems a safe place– a fair place– to position a story.

This may help explain why so many bloggers and newspaper reporters are calling for “bi-partisan consensus” as they comment on some of the most important issues of the day.

Global Warming

Writing about global warming, Huffington Post senior writer Tom Zeller Jr. recently declared: “Compromise is the necessary first step to tackling the problem. What ordinary Americans really want is for honest brokers on all sides to detoxify and depoliticize the global warming conversation, and then get on with the business of addressing it. That business will necessarily recognize that we all bring different values and interests to the table; that we perceive risks and rewards, costs and benefits differently; and it will identify solutions through thoughtful discussion and that crazy thing called compromise.” [ my emphasis] (Hat tip to David Roberts (Twitter’s “Dr. Grist”) for calling my attention to this post.)

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Breaking the Curve of Health Care Inflation

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The evidence is building:  As we move toward making the Affordable Care Act a reality,  Medicare spending in slowing, and even in the private sector, for the first time in more than a decade, insurers are focusing on reining in health care costs .  

The passage of reform legislation two years ago prompted a change in how both health care providers and payers think about care.  The ACA told insurers that they would no longer be able to shun the sick by refusing to cover those suffering from pre-existing conditions. They also won’t be allowed to cap how much ithey will pay out to an desperately ill patient over the course of a year –or a lifetime.  Perhaps most importantly,  going forward, insurance companies selling policies to individuals and small companies will have to reimburse for all of the “essential benefits” outlined in the ACA–benefits  that are not now covered by most policies.  This means that, if they hope to stay in business, they will have to find a way to “manage” the cost of care–but they won’t be able to do it by denying needed care.

As for providers, they, too, will be under pressure. A growing number will no longer be paid “fee for service” that rewards them for “volume”–i.e. “doing more.” Bonuses will depend on better outcomes, and keeping patients out of the hospital–which means doing a better job of managing chronic illnesses.  Meanwhile, Medicare will be shaving 1% a year from annual increases in payments to hospitals. If medical centers want to stay in the black, they, too, will have to provide greater “value” for health care dollars– better outcomes at a lower cost.

This summer the Supreme Court’s decision sealed the deal. The ACA is constitutional. Health care reform is here to stay.

(Granted, if Mitt Romney wins the White House in November, all bets are off. But the Five Thirty Eight f’orecast, which has an impressive track record, suggests that Obama has a 70 percent chance of winning.  That said, liberals  should not be smug. The economy remains the greatest threat to President Obama’s re-election.)

Medicare Spending

The Obama administration should be broadcasting the news: Medicare spending is no longer growing at an unsustainable rate. Wednesday, Bloomberg columnist Peter Orszag commented on the “sharp deceleration” in Medicare’s outlays. A common way to evaluate the growth in spending for Medicare is to compare the increase per beneficiary to income per capita,” the former director of the Office of Management and Budget (OMB) wrote.  “Over the past 30 years, this excess cost growth for Medicare has averaged about 2 percent a year. The goal of many policy proposals, including provisions in the 2010 Affordable Care Act, is to reduce the future excess cost growth to about 1 percent annually.”

What is astonishing is that Medicare is now exceeding that goal. Over the past year, “excess cost growth has been much less than the target of 1 percent,” Orszag reports. “According to the most recent figures from the Congressional Budget Office, total Medicare spending this year through June rose 4 percent from the previous year. Meanwhile, the number of Medicare beneficiaries rose by almost 4 percent, too, and income per capita rose by about 3 percent. So excess cost growth has been significantly below zero let alone below the target of 1 percent a year.” 

This suggests that the nation’s Medicare bill does not have to pose a threat to the economy, even as the  number of Americans on Medicare’s rolls grows. Widely accepted reserach reveals that at least one-third of Medicare dollars are wasted on over-priced products and unnecessary reatments. Cut that fat, and we can accommodate an aging population.

Sweden faced the problem of a greying population years ago, and has managed to avoid what many who would like to slash “entitlement programs”  insist is an “inevitable” explosion in medical spending as a nation grows older. Healh care spending in Sweden has remained remarkably stable since the 1980s, costing roughly 9% of GDP, and when it comes to quality of care–and patient satisfaction– Sweden’s health care system is rated as one of the best in the developed world. Continue reading →

The Supreme Court’s decision buys time: More Americans will have a chance to learn what reform means

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Now, the power to make a decision about health reform is back where it should be – in the hands of the American people. In November, they will vote.

Ironically, the Supreme Court challenge may have put them in a better position to vote in their own self interest.

When the case went to the Court, a dreary policy debate turned into a contest that piqued our interest. Americans like spectator sports: Who will win? Who will lose?

Thanks to the publicity, some learned that the Affordable Care Act’s mandate will apply only to Americans who don’t have employer-based insurance, Medicaid or Medicare. And while that relatively small group will be subject to a penalty if they don’t buy insurance, they also will be eligible for a subsidy if they do.

Since the Court announced its controversial decison, some media coverage has delved a little deeper into the details of reform.

For example, last week, the Christian Science Monitor offered a quick lesson in “How the Supreme Court Ruling Affects Families.” Consider a “family of four, headed by a 45-year-old, with an income of $60,000″ purchasing their own insurance. In 2014, they “would reap a tax subsidy of $9,308.”

If they didn’t buy insurance, in 2014 they would pay a penalty of $285. Suddenly, health reform doesn’t sound so scary.

I published this post on HealthInsurance.org a few hours ago.  To read the rest of the post, click here

Self-fulfilling Media Narratives: How One Man Wound Up Deciding the Fate of Healthcare Reform

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Personally, I am delighted that Chief Justice Roberts voted to uphold the Affordable Care Act (ACA)   But, I am troubled that the fate of U.S. healthcare turned on one man’s opinion. This is not how things are supposed to work in a democracy.

Healthcare represents 16% of our economy. It touches all of our lives. If we don’t like the laws our elected representatives pass, we can vote them out of office.  The Supreme Court, on the other hand, doesn’t have to worry whether its decisions reflect the will of the people. The Justices are appointed for life.  This is why they are not charged with setting public policy.

                        The Media Shapes Our Expectations 

As I suggested when oral arguments began back in March,  a “media narrative” drove the case to the Court– a fiction that caught on, in the press, on television, and in the blogosphere, where it began to take on a reality of its own. A handful of “state attorneys general and governors” saw “a political opportunity” and floated the idea that the law might be unconstitutional.  The media picked up the story, repeated the heated rhetoric, and “fanned the flames … Before long, what constitutional experts thought was a non-story became a Supreme Court case.”

These media narratives are based on what “that those in power and in the media have concluded is likely to happen,” says Lyle Denniston, known by some as the “Dean” of Supreme Court reporters.  Writing on “Scotusblog.com,” he observes: “One ‘narrative’ about the health care law began building up in Washington, and perhaps beyond, right after the Supreme Court held its hearings in late March.  The mandate, it was said, was going to be struck down, the government’s lawyer had blown it, and the President was going to be deeply wounded politically over the loss of his treasured domestic initiative.”  Some media outlets were so persuaded by their own myth-making that initially, they reported that the Court had ruled against reform!

Denniston explains that once the story goes viral, the conventional wisdom is then repeated, over and over, until “often, it seems, such ‘narratives’ become self-fulfilling.”

He then points to a “currently prevailing ‘narrative’ that most of the country is stubbornly committed to the Tea Party’s wish to limit the power of the federal government.”   The facts contradict the  fiction: Tea Party Candidates have been “losing  steam” in recent elections   In April, a WashingtonPost/ABC poll revealed that support for the Tea Party among young adults had plunged to 31%– down from 52% in the fall 2011. Half of those polled said that the more they heard about the Tea Party, the less they liked it.

I wrote this post for null.com, where it appeared earliler today, To Read the Rest of the Post, go to https://www.null.com/blog/2012/07/12/self-fulfilling-media-narratives/

 

How to Avoid Avoidable Care–by George Lundberg

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Below, a  guest-post by Dr. George Lundberg, Editor-at-Large of MedPageToday; Editor in Chief of Collabrx; President and Board Chair of the Lundberg Institute.  (Full disclosure: I am a member of the Lundberg Institute’s Board)

What Lundberg says is not meant to be news.  Today, physicians tend to agree that many of the tests that patients undergo are unnecessary. Three years ago, one hospitalist shared a story on HealthBeat, describing how he warned his residents about over-testing.  His hospital may not have been happy about his disclosure: tests boost revenues.

But in some cases, we have solid medical evidence showing that for certain patients, these tests do more harm than good– though vested interests may try to bury that evidence. (See Dr. Hoffman’s post below.)

Yet doctors continue to order the tests– why?  

George Lundberg brings a unique perspective to this problem. Drawing on his wealth of experience, both as a practitioner and as a teacher, he puts it in a historical context.  For 40 years, he has asked physicians why they perform so many tests. The frankness of their responses is matched only by Lundberg’s own candor as he diagnoses the excesses in our medical system . 

How to Avoid Avoidable Care 

George Lundberg

Why do physicians order laboratory tests?  The traditional reasons are: diagnosis 37%, monitoring 33%, screening 32%, previous abnormal result 12%, prognosis 7%, education 2%, and medicolegal 1%.

In  order to confirm these data, I began to ask the same question of many groups of clinical and laboratory workers over three continents in the 1970s, ‘80s and ‘90s during  Socratic teaching sessions on how to use the clinical laboratory correctly. And I began to get very different answers.  

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What Will the Supreme Court’s Decision Mean for the November Election?

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Thursday, when Chief Justice Roberts explained that the Affordable Care Act (ACA) is constitutional because the “penalty” that some Americans will have to pay is, for all practical purposes, a “tax,” you could hear tea cups shattering from Billings to Boca Raton. In conservative and libertarian circles, the initial reaction was shock, but it didn’t take long for President Obama’s opponents to rally.

The word “tax” might as well have been a pistol shot at a horse race. In the blink of an eye, Obama’s opponents were off and running, megaphones in hand, blasting the president for lying to the American people while hiking taxes under the guise of healthcare reform. Presidential candidate Mitt Romney’s campaign then began providing regular Twitter updates on the campaign contributions it was raking in following the decision. Friday, it announced that it had collected $5.5 million.

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On Tour Now: The Balancing Act at the Center of Reform

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After writing about “Essential Health Benefits” for HealthBeat, I wrote a shorter post for Time.com (the online version of Time magazine), updating what I had written here. 

This month, the public will have a chance to weigh in how they think “essential” should be defined.  See below for a link to places, times, and dates where “listening sessions” will be held in cities across the nation, as well as information on how to register. Time is of the essence. Insurers are calling for the Secretary of Health and Human Services to spell out the essential benefits that must be included in all policies sold to individuals and small employers by the end of December. 

This Time.com post appeared Tuesday. Below, the first half of the post (You can read the full piece on Time.com’s  “Moneyland”)  

At the end of the excerpt below, I comment on how both tax credits and the state-based Purchasing Exchanges will make insurance more affordable for small employers and individuals who are buying their own policies.      

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The Future of Health Care Reform: Health Wonk Review Raises Some Provocative Questions:

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Should the Preventive Services Task Force Depend on Congress for Funding?

Should Doctors Who Share Decision-Making Be Protected Against Lawsuits?

If Doctors Don’t Tell Patients What They Are Doing, Is This Malpractice?

Should Physicians Who Want Tort Reform Give Something in Return?

Should Nurses with PhD’s be Called “Doctor”?

These are some of the questions I thought about after reading the latest edition of Health Wonk Review, hosted by Health Affairs’ Chris Fleming. In this two-part post, I focus on just five of the best health care posts of the past two weeks. Inevitably, I have omitted some outstanding posts. I urge you to read the full round-up here.
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