Category Archives: Uncategorized

Obama Wins Round One of Budget Negotiations

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CNN is reporting that the “Fiscal cliff deal is down to wrangling over the details.” While others in the media continue to say that talks are stalled, everything I know about both the economics and the politics of the situation tells me that CNN is right.

At 4:30 this afternoon, CNN updated its story: “Both sides agree the wealthy will pay more, so now fiscal cliff  talks come down to how much Republicans can wring out of the White House in return for giving in on taxes.

“To President Barack Obama, it’s all about first locking in additional revenue from raising taxes on high-income owners, an outcome the GOP has long rejected.”

President Obama had made it clear that negotiations over government spending on safety nets such as Medicare wouldn’t begin until Republicans accepted a higher marginal tax rate for individuals earning over $200,000 and couples earning over $250,000.

The president dug in, and, according to CNN, he has won round one.

“Retiring Republican Rep. Steve LaTourette of Ohio told CNN on Thursday that he sensed a shift in the House GOP approach during a conference meeting the day before.

“A GOP source told CNN that talks between staff members on both sides resumed Thursday for the first time this week, after Obama and Boehner spoke by phone the day before.”

A Two-Step Approach

It is not clear whether negotiations over so-called “entitlements” will be concluded before the end of the year. But CNN, reports

“All signs point toward a two-step approach sought by newly re-elected Obama — an initial agreement that would extend lower tax rates for income up to $250,000 for families, while letting rates return to higher levels from the Clinton era on income above that threshold.”  That agreement on taxes will be signed and sealed before the end of the year.

“Even conservatives such as Oklahoma Sen. Tom Coburn and Louisiana Gov. Bobby Jindal acknowledge the obvious — taxes on the wealthy are going up despite opposition by Republicans.

“‘Whatever deal is reached is going to contain elements that are detrimental to our economy,’ Jindal wrote Thursday in an opinion piece published by Politico. ‘Elections have consequences, and the country is going to feel those consequences soon.’”

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The Pre-Election Edition of Health Wonk Review: Fact vs. Fiction

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 This week I am delighted to be hosting the pre-election edition of Health Wonk Review,  a bi-weekly compendium of some of the best healthcare posts of the past two weeks.

Below, a summary of posts tackling issues voters will be thinking about as they go to the polls.

Before you vote, get the facts:

– As President, would Mitt Romney protect  people suffering from “pre-conditions” and make sure that they could get insurance?

— Could Romney dismantle health care reform, as he has promised?

— Some people say women won’t and shouldn’t vote for Romney. Are they right?

— Can we really afford to insure an additional 30 million Americans?

—  What will happen to our Academic Medical Centers?

— What about the individual mandate: will it really “save lives”?

— What will “Comparative Effectiveness” research mean for patients?

—  If we add 30 million newly insured Americans to our health care system, will I be able to find a seat in my doctor’s’ waiting room? Will ERs be even more crowded?

— Why are gubernatorial candidates saying so little about Medicaid Expansion?

—  Is anyone still worried about “Death Panels”?

— If Romney is elected, wiil reform continue on the ground? ]

— Bonus for those just plain tired of the election, and who worry about what is happening outside of the U.S:  “Sugar Isn’t just killing us; it is killing those who harvest it for us.”

Below, I have tried to use sub-heads so that readers can focus on the issues that most interest (or worry) them, without reading every word of the post.

Romney & Pre-Conditions

On Managed Care Matters, Joe Paduda addresses the telling differences between the Affordable Care Act and Governor Romney’s version of reform in a post titled “What Parts of Obamacare Do You Want to Keep? Eliminate?” 

Governor Romney has said that, if elected, insurers will not be allowed to deny you coverage because you suffer from a “pre-condition.” But Romney doesn’t believe in “price regulation,” and as Paduda points out, this means he won’t insist that insurers sell a policy to a sick person at “list price.”

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Truth Squad: Is “Obamacare” Pushing Health Care Spending Higher? What Will Happen in 2014?

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In last Tuesday’s debate Mitt Romney suggested that, under Obamacare, health insurance premiums have spiraled by $2,500 per family. Not true.  (Hat tip to Healthcarefinancenews.com.)

 First let’s get the number right: According to an annual survey of employer plans  by the Kaiser Family Foundation and Health Research & Educational Trust, since the Affordable Care Act (ACA) passed in 2010, the average annual premium for family coverage has risen by $1,975 not $2500.  $1975 is a hefty sum, but 20% less than Romney claimed.

More importantly, $1,975 represents the combined increase in contributions made by employers and employees— with employers picking  up the lion’s share of the hike. “In reality, premiums paid by employees haven’t changed that much.” Factcheck observes. In fact, when you look at the rise in how much employees contributed, “the federal health care law was responsible for a 1 percent to 3 percent increase because of more generous coverage requirements.” In other words, employees were paying a little more, but getting value for their dollars.

After telling a whopper about how much employee’s health care premiums have risen in the past, Romney went on to assert that if Obamacare is  “implemented fully, it’ll be another $2,500 on top” of that. His evidence?  None.

                                              The Media Spreads the Myths

Yet the media continues to swallow the notion that under “Obamacare” health care spending will levitate. A few days ago, the Washington Post’s Robert J. Samuelson wrote: “Almost every expert agrees that controlling health costs is the crux of curing chronic budget deficits. Health-care spending already exceeds a quarter of federal outlays. With Obamacare’s coverage of the uninsured starting in 2014 and retiring baby boomers flooding into Medicare, the share is headed toward a third.”

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“The Third Rail of Payment Reform”–Tackling Wide Variations in How Much Providers Charge

Gallery

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Why do some hospitals and doctors charge far more than others for exactly the same routine procedure?   “Because they can; it’s not any more sophisticated than that,” says Gerard Anderson, director of the Johns Hopkins Center for Hospital Finance and … Continue reading →

Paul Ryan’s Plan for Medicare: A Disaster for Seniors (Why Doctors Might Stop Taking Medicare)

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“Robin Hood in reverse, on steroids”–that’s how Robert Greenstein, President of the Center on Budget Policy and Priorities (CBPP),  has described vice-presidential candidate Paul Ryan’s blueprint for the 2013 budget: It could likely produce the largest redistribution of income from the bottom to the top in modern U.S. history.”

I quoted Greenstein in April, in a post that originally appeared on HealthInsurance.org. There, I explained that Ryan’s budget would shift Medicare costs to seniors  and slash Medicaid, while simultaneously offering tax breaks for Americans perched on the top of a our income ladder.

Under the newest version of the Ryan plan, Washington would give seniors a voucher equal to the cost of the second-cheapest private-sector Medicare plan in their region. In theory, this gives seniors “choice” — the opportunity to pick a Medicare policy that best suits their needs, and their pocketbook.

If they don’t want to buy a plan from a for-profit insurer, they could, if they wish, use the voucher to buy traditional government-sponsored Medicare–though if it costs more than that second-cheapest private plan in their area, they will have to make up the difference.

Romney and Ryan are convinced that the private sector is always more efficient than government. Thus, for-profit insurers will be bound to offer better care at a lower price. Their faith is remarkable, given that past attempts to privatize Medicare (Medicare + Choice and Medicare Advantage) have largely failed on both counts.

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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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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 →

Some States Recognize How Much They Stand to Gain By Expanding Medicaid

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While most pundits focus on the governors who are refusing Medicaid dollars, Health Access Blog’s Anthony Wright highlights five states that have gone ahead and expanded the program without waiting for 2014.  

The Affordable Care Act gave states the option of starting early and California, Connecticut, Minnesota, New Jersey and Washington and the District of Columbia all have done just that. Already, they have extended coverage to some 500,000 low-income Americans. 

“California is a leader in maximizing the benefits of the law,” says Wright, offering the map below to explain why.

map of uninsured (click to see map)

“Californians are more likely to be uninsured than residents of most other states–less likely to get coverage at work, less likely to afford coverage as an individual, more likely to be denied for a pre-existing condition,”  Wright explains. Indeed, “there are only a handful of states that are worse off.” (Census Bureau stats put California 6th or 7th from bottom.)”

Among the states in which 18% to 25% of the population is uninsured, “California is the only one aggressively taking advantage of the benefits of the law to address these problems,” he adds. “On the map, virtually all the other dozen states with well-above-average uninsured rates are currently led by Republican Governors reluctant or antagonistic to ‘Obamacare.’”  Yet, precisely because they have so many uninsured, these are the states that would gain the most if they embraced the program.

Perhaps someone should explain to the citizens of  Texas and Florida that since the federal government is paying 50% of the cost of this early expansion (and 100% beginning in 2014, 90% thereafter), their federal tax dollars are being used to provide healthcare for low-income Americans in California and Minnesota. In those states federal Medicaid dollars will also be creating jobs as hospitals, lab and nursing homes hire more workers to care for the newly-insured.

In the end, states that agree to open up Medicaid to millions of new enrollees “may actually save money” explains Ezekiel Emanuel.  In a recent New York Times Op-ed Emanuel  points to “a September 2009 report by the Council of Economic Advisers,” which observes that states (and state taxpayers) “currently pay for the uninsured in two ways. First, there is the hidden cost shift. Insurance premiums are higher for state workers (and for others whose employers cover them) because of the uninsured. Second, many states pay for uncompensated care at public hospitals and clinics. While states may have to pay 10 percent of the Medicaid expansion in 2020, they will save money from eliminating the cost shift and the uncompensated care.”

California, for example, is expected to shell out “about $195 million for expanding Medicaid when the federal government pays 90 percent in 2020.” But, the Council projects that  “it would save more than $210 million in reduced state employee premiums and more than $2 billion in uncompensated care for a net savings of more than $2 billion.  

continued

Note to readers: I published this post yesterday on HealthInsurance.org.  To read the rest of the post click here.

 

Why Should You Care Whether Or Not Your State Expands Medicaid?

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By expanding Medicaid, the state-federal partnership that offers health insurance to low-income Americans, the Affordable Care Act set out to cover some 17 million uninsured– or roughly half of the 34 million who are expected to gain coverage under reform.

But when the Supreme Court ruled on the Affordable Care Act in June, it struck down a key provision which threatened that if a state refused to co-operate in extending Medicaid to more of its citizens, it could lose the federal funding it now receives for its current Medicaid enrollees. In a 7-to-2 decision, the justices ruled that this punishment was too coercive: “withholding of ‘existing Medicaid funds’ is ‘a gun to the head’ ” — that would force states to acquiesce.

As a result, states can, if they choose, opt out of the Medicaid expansion, and some governors are threatening to do just that–even though Washington has promised to pay 100% of the cost from 2014 to 2017. After that, the federal share would gradually decline to 90% in 2020– and remain there. This is a generous offer; today the federal government now picks up just 57 percent of the tab.

Nevertheless, some states claim that the 10% that they would have to ante up after 2020 is more than they can afford. A few go further and admit that this isn’t just about money:  by rejecting the federal funds, they are voicing their objection to “Obamacare.”

What these governors ignore is the impact that the loss of those Medicaid dollars will have on insurance rates in their states, says Joe Paduda, editor of Managed Care Matters. Hospitals have been counting on the influx of new Medicaid dollars to reduce the cost of uncompensated care.

Assuming that Medicaid will expand, the Affordable Care Act has already trimmed subsidies to hospitals that care for a disproportionate share of impoverished patients.  But now, if states turn down the Medicaid funding, the hospitals in these states “are going to have to make up the revenue loss from somewhere,” says Paduda, “and that ‘somewhere’ is going to be from privately-insured patients. That will lead to health insurance costs increasing much faster in ‘non-expansion’ states than in the rest of the country.” 

We have been told that in some red states conservatives “hate poor people.” But my guess is that they’ll hate higher premiums more.  If premiums go up, governors who turned down federal Medicaid dollars will have to answer to voters.

(continued)

Note to Readers: I published this post on HealthInsurance.org yesterday. You’ll find the rest of it here. You can comment there, or come back here. I’ll check comments on both blogs.

 

Doctors Fighting for the ACA in Flyover Country — Dr. Pat S.

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Below, a guest post by a longtime HealtlhBeat Reader, Dr. Pat S.

When people talk about organizing physicians, they invariably speak of “herding cats.”  But the story Pat tells illustrates that if just one or two physicians stand up to support health care reform, they can and will draw an answering response from other health care professionals. 

Pat and his colleagues are practicing in what has become an increasingly conservative part of the country. There, the voices of the Tea Party are loud.  Physicians, nurses, nurse practitioners must make their voices heard above the din.  They know, better than anyone, what is wrong with our health care system. They know that if you’re sick in America, and don’t have insurance, chances are you won’t receive care. And they are in a better position than many to appreciate how the reforms in the Affordable Care Act could help their patients.     

This is why health care professionals need to band together to lead reform– and to educate the public about what the Affordable Care Act will mean for them. Some might want to join a large national organization.  By many may be more comfortable working in their communities, forming local networks like the “Friends of Al” that Pat describes below. Doctors, hospital administrators, nurses and pharmacists can get a grassroots movement rolling by writing an Op-ed for their local newspapers, talking to their neighbors, their colleagues, their customers and their patients, reassuring them that the myths that Tea Partiers have been broadcasting just aren’t true.

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A few days ago I was sitting in a very nice house with a stunning view of Lake Superior, the guest of a husband and wife doctor couple who were hosting a meeting for what we were calling “Northland Health Care Providers for Health Care Reform.”  The group was made up of local doctors, with a few nurse practitioners and physicians’ assistants, a couple of pharmacists, a chiropractor-turned-hospital-chaplain, and one lonely administrator.  We were there trying to figure out ways we could educate the public about what the Affordable Care Act really means and convince them that they should support politicians who support the law.

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