Category Archives: Mandates

The Post-Election Edition of Health Wonk Review

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This most recent edition of HWR, a compendium of some of the best health care posts of the past two weeks, came out ten days ago. I apologize that I’ve been tardy in commenting— but, not to worry, it’s an “evergreen.” The problems Health-Wonkers raise haven’t been solved in the past week, and the issues discussed remain just as “hot”– as they were.

“Managed Care Matters” Joe Paduda does an outstanding job of hosting the round-up in a post titled: “Elections Have Consequences.”

He begins with “Health Policy and MarketPlace Review’s”  Bob Laszewski, who  notes in the wake of the election, we can be certain of one thing: Obamacare will be implemented. To be sure, there will be lawsuits challenging reform legislation, but Laszewski says, “I wouldn’t waste a lot of time worrying about those. Anyone in the market will do better spending their time getting ready for all of the change coming.” He’s far more worried about whether the government will be able to set up the Exchanges in time to meet the deadline—and how legislators are going to solve the “fiscal cliff” problem.

Writing on “Health Affairs” Timothy Jost agrees that “there is a great deal of work needs to be done before reform becomes a reality.”  He focuses on the many rules that the administration will need to issue to provide guidance to the states, to employers and to insurers:  “The exchanges must begin open enrollment on October 1, 2013,” he observes. “By that date, the exchanges must have certified qualified health plans.  But before health plans can be certified, they must have their rates and forms approved by the states.  And before that can happen, insurers must determine what plans they will offer and what premiums they will charge.  Yet insurers cannot establish their plans and set their rates until they know a lot more than they do now about the rules they are going to have to play by.” In other words, the administration had better “roll up its sleeves and get to work.”

Meanwhile, President Obama still must contend with ornery governors, and rebellious states. “In an ominous sign,” Jost notes, “Missouri passed a ballot initiative prohibiting state officials from cooperating with the federal exchange in its state,  and authorizing private lawsuits against any official who cooperates.”   (Thanks, Missouri–just what we need, lawsuits against officials trying to do their jobs..)  “Whether this is constitutional remains to be seen,” says Jost, who is a constitutional expert.

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The Future of Health Reform May Turn on Senate Races

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Below, the introduction to a post that I published earlier today on Healthinsurance.org

While all eyes focus on the presidential race, the ultimate fate of the Affordable Care Act (ACA) could depend on the Senate contests in the states.

Even if Mitt Romney were elected, he alone could not overturn major provisions of healthcare reform. Only Congress can pass the legislation needed to change the ACA.

Republicans are expected to maintain control of the House, but if Democrats hold the Senate, they will be able to block House bills aimed at eviscerating “Obamacare.”

Republicans are expected to maintain control of the House, but if Democrats hold the Senate, they will be able to block House bills aimed at eviscerating “Obamacare.”

What is At Stake

If Republicans take the Senate, the two chambers could pass legislation that would:

  • eliminate the premium subsidies designed to make health insurance affordable for middle-income and low-income families
  • bring an end to Medicaid expansion, and
  • rescind the individual mandate that everyone buy insurance or pay a tax.

Under “budget reconciliation,” Republicans would need only a simple majority to pass such legislation. In the Senate, 51 votes would do it. Today, Republicans hold 47 seats.

Razor-sharp margins in many states make it impossible to predict outcomes. Polls only give us a blurry snapshot of one moment in time – and in states like Arizona, candidates have been trading leads from week to week.

Much will depend on the demographics of who turns out to vote.

What Could Happen: Three Scenarios . . .

To read the rest of this post please go to HealthInsurance.org

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A Centrist Perspective: Makers and Takers, Obamacare, and the Path Forward

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Below, a guest post from Stephen Reid, Managing Partner at Pharmspective, a market research firm that provides advisory services to healthcare and pharmaceutical companies on strategic issues including the Affordable Care Act. (ACA)

I don’t  agree with Reid on every point. (For example, if Republicans take both the White House and the Senate, I believe that they could and would eliminate both the premium subsidies that will make insurance affordable for middle-class Americans and the mandate.) Nevertheless, when he sent his Op-ed to me I was impressed by how well he understands the legislation. A great many moderates have been confused by the arguments coming at them both from the left and from the right.  A combination of misinformation, half-truths and fear-mongering has created so much “noise” that it has become extremely difficult to separate fact from fiction.

By contrast, Reid does a very good  job of explaining the reasoning behind the Affordable Care Act, and how its “checks and balances” work. I agree with him that the legislation is far from perfect, but it represents a good beginning.

 There is just one major aspect of reform that I think Reid doesn’t understand: the rationale for expanding Medicaid. See my note at the end of his post.

                   A Centrist Perspective: Makers, Takers and Obamacare

by Stephen Reid

With a few days left before we elect a president, the prevailing belief is that an Obama win would propel the Affordable Care Act (ACA) forward with little delay and a Romney win would kill it. Both parties have gone to great lengths to characterize healthcare reform; the Democrats tout the legislation as essential to addressing a broken healthcare system that results in the U.S. spending twice as much as most developed countries on healthcare while leaving 50 million people without coverage; the Republicans cite the ACA as an example of hopeless dependency on government and contrary to free-market principles and individual rights.

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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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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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Reform under the Radar: What Medicare Needs to Do to Control Costs

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Below, a very welcome contribution from Shannon Brownlee,  author of Overtreated: Why Too Much Medicine Is Making Us Sicker and Poorer (2007),  an outstanding report on why ‘more care’ often is not ‘better care’.   An award-winning journalist and Schwartz Senior Fellow at the New America Foundation, Brownlee has written extensively about health care for the many publications including the Atlantic Monthly, the New York Times, and the Washington Post.

As I’ve suggested in the past, Medicare reform could be a stepping stone to national health reform. Ideally, we would do both simultaneously. In this post, Brownlee puts her finger on what is wrong with the way Medicare has traditionally tried to cut costs.  In future HealthBeat posts, we’ll talk more about specific proposals for cutting Medicare waste.

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While Barack, Hillary, and Paul Krugman slug it out over the individual mandate, it’s worth pausing for a second to wonder why nobody is saying much about controlling health care costs. Yes, covering everybody is the right thing to do, it’s the moral thing to do, but it isn’t the only thing to do. Theoretically, it shouldn’t even be the hardest thing to do, because at its core, covering everybody is mostly a matter of being willing to come up with the money.  In reality, of course, coming up with the money is a political nightmare.

Controlling costs, on the other hand, is a much deeper problem, but oddly enough it may be easier to achieve politically at the federal level than universal coverage. That’s because cost containment can begin with Medicare, which has been instituting cost control measures under the radar for years. Its efforts have resulted in a lot of bitching and moaning from the hospital industry and doctors, but not a lot of political fallout.

So why aren’t Medicare’s cost control measures working? Because CMS has focused most of its efforts to limit spending on controlling prices. This strategy arises out of the mistaken belief that if they could just rein in the price per unit of care, the price of each CT scan and each office visit, they could control spending overall. This would be a dandy strategy in any other industry, but in health care it hasn’t worked out. And it hasn’t worked out because in health care, the real driver of cost is volume. Costs go up when the amount of care doctors and hospitals deliver to each patient goes up. And because the amount of care delivered doesn’t have all that much to do with the amount of care that patients actually need, whenever Medicare slashes the price it will pay, hospitals and individual physicians can always find ways to deliver more stuff in order to maintain their revenue stream.   

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Update on Mandates

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Today the Wall Street Journal has been running a poll asking readers how they feel about mandates requiring that everyone sign up for health insurance. Asking “What should the federal government do about the uninsured?” the Journal gives readers three options:

(1) Require everyone to have insurance coverage, but keep private insurance.

(2) Adopt a single-payer, government-funded system.

(3) The government shouldn’t require everyone to have health care.

Late this afternoon, 347 people had responded, with 40 percent favoring mandates, 31 percent picking single-payer, and 29 percent saying the government should keep its sticky mitts off our free-market health care system.

Okay, this a very small poll, and it’s not random. But that is precisely what I find interesting.

I was surprised that 40 percent of the Journal’s relatively affluent readers voted for mandates since some of them are healthy and wealthy enough that they could easily “self-insure” by saving enough money in a health savings account to cover all but catastrophic medical expenses and then buying a low-cost, high deductible policy. Premiums for high-deductible insurance are going to be significantly lower than the premiums for mandated policies designed to ensure that everyone has comprehensive coverage (i.e. benefits comparable to what Medicare offers, plus maternity and other coverage younger people need).

Nevertheless, 40 percent think it is fair to require that  everyone to pay into the pool while another 31 percent pick a single-payer system that would be funded by taxpayers.

Of course, 71 percent isn’t everyone. Consider the curmudgeon who sent in this comment: “Medical needs are endless…You are not your brother’s keeper no matter what the Bible or any other book written by superstitious savages says.”

That is why we need mandates. Trust me, this fellow is not going to sign up voluntarily.

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Obama Says No One Should Be Forced to Sign up For Insurance; Edwards Says If You Don’t, He’ll Garnish Your Wages—Who is Right?

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John Edwards’ declaration that under his health reform proposal anyone who refuses to sign up for health insurance will be subject to having their wages garnished has led to a blogstorm of often confusing debates.  Under national health reform, should everyone be required to enroll? The Edwards and Clinton plans have mandates insisting that all Americans purchase insurance; the Obama plan has a mandate for children, but not for adults

New York Times columnist Paul Krugman stirred controversy Friday by defending Edwards, and criticizing Barack Obama: “Under Obama’s health care plan, healthy people could choose not to buy insurance—then sign up for it if they developed health problems later,” Krugman observed. “As a result, people who did the right thing and bought insurance when they were healthy would end up subsidizing those who didn’t sign up for insurance until or unless they needed medical care.”

On Sunday former FCC Commissioner Reed Hundt called Krugman out on TPM Cafe in a post headlined “Ease up, Dr. Krugman.” According to Hundt: “The very idea of government mandates directed to individuals evokes a command-and-control model that disturbs citizens who want to enjoy certain freedoms in choosing health care.” As of yesterday, Hundt’s post had drawn some 60 comments—some on point, others muddying the waters.

Meanwhile, at TNR Jonathan Cohn weighs in with a long discussion of just how many people Obama’s plan might leave uncovered—and suggests that one of Obama’s advisers has information showing that under Edwards’ plan, even more Americans would be left “going naked.”

Because the conversation in the blogosphere has become such a mix of good information, misinformation and false assumptions, I’ve decided to try to spell out, as clearly as possible, why we need a mandate. Very simply, it addresses a serious defect in our health care system:  under existing rules, you don’t have to buy insurance, but you can be priced out of the insurance system if you are sick.

After examining that problem–and looking at how requiring insurance solves it– I’d like to answer a sensible question that observers like the Washington Monthly’s Kevin Drum have raised: Why force people to buy insurance? Why not just tax everyone, put the money in a pool similar to the Medicare Trust Fund, and use it to buy universal insurance?

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Is State-Level Health Care Reform Doomed?

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It’s a waste of breath to say that health reform is a big issue in the states. But is it also the case that health reform in the states is a waste of time?

With health reform experimentation popping up across the nation, conventional wisdom has become, as Massachusetts State Senator Richard T. Moore put it in a blog post for the Commonwealth Fund, that states are “critical laboratories for quality and innovation.”

Yet while Moore is right to say that “common elements of success will serve as a useful learning experience for other states and national leaders in considering more comprehensive health care reform,” there’s another side of the issue to consider: there may be some states that can’t sustain universal coverage without more comprehensive federal reform—no matter how insurance programs are designed. There’s also a danger that failure at the state level could be used to argue that comprehensive health reform is simply an impossible goal.

Among the biggest problems with universal coverage is cost: how can we afford to insure everybody? One answer is to require that everyone buy coverage.  By mandating insurance, a state can spread the cost across a larger pool of people that includes low-risk individuals who can help share the burden of insuring high-risk individuals.

Without a mandate, no one would buy insurance until they were sick or elderly; the pool would be made up of people who are expensive to insure, and soon coverage would become unaffordable. The only alternative would be to pass laws saying that if you don’t sign up before you become sick, insurers have the right to refuse to cover you –or to charge you five times what they would charge a healthy person. This is what happens in many states today, which is why one serious illness can send a family into bankruptcy. If we want to say that insurers can’t leave anyone out in the cold—even if they are very sick –then we also have to say that everyone must participate in the system.

The question remains:  will mandates work at the state level?

Consider Maine. In 2005, Maine launched the nation’s first experiment
in universal health coverage through the “Dirigo Health Act,” named
after Maine’s state motto, “Dirigo,” Latin for “I lead.” Dirigo is
entirely voluntary, and as a result only 18,800 people (most of which
already had private sector insurance) have signed up for DirigoChoice,
the main arm of the program devoted to small businesses and
individuals. Meanwhile, some 130,000 Maine residents remain uninsured.

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Health Care Reform: What Do Americans Want? (Or Think They Want?)

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On the surface, it seems that American voters have made their will clear.  Poll after poll shows that they are calling for a major overhaul of our health care system.

But when you look closer, their responses bristle with contradictions, contradictions that I think the reform-minded presidential candidates will have to consider when deciding how to approach health care reform. 

In a poll reported in Health Affairs at the end of last year, sixty-nine percent of respondents rated the US system as “fair” or “poor.” Yet in the same survey, when asked about their own experience with receiving medical services or with their own physician, 80 percent who had received care in the last year ranked their care as “excellent” or ”good.”

Other polls reveal the same pattern.

According to a survey released by Greenberg Quinlan Rosner in July, voters express doubts about the quality of the American health care system (with 49 percent dissatisfied), while 74 percent were dissatisfied with the cost.   Yet, “at another, more personal level,” the pollsters note, “a slightly different picture emerges. Fully eight in ten (82 percent) describe themselves as satisfied with the quality of the health care they receive personally. This number jumps to 90 percent among seniors (64 percent very satisfied), but includes impressive majorities of nearly all groups…”

Nevertheless, when the pollsters asked the same group about health care reform, three-quarters called for “major changes” or “completely rebuilding” the system. 

If they are satisfied with the care they are receiving, why would they want radical change? Because they don’t feel secure that they will be able to keep what they have:  “There’s a precariousness to Americans’ contentment with their own health insurance coverage,” the Kaiser Family Foundation reported after looking at a number of polls at the end of last year.  “Among the insured, six in ten are at least somewhat worried about being able to afford the cost of their health insurance over the next few years, and nearly as many (56 percent) said they worry that by losing a job, they or their family might be left without coverage.”

This, then, is why so many Americans want universal health care: it would guarantee that they and their families would always be covered.

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