The Individual Mandate: Has the Obama Administration Silently Repealed the Rule that Virtually Everyone Must Have Health Insurance?

Obamacare’s critics continue to argue that the Affordable Care Act (ACA) will self-destruct.  Now, some claim that the mandate that uninsured Americans must purchase coverage– or pay a stiff fine— is so riddled with new “loopholes and exemptions,” that it no longer exists.

                                            14 New Waivers

When the ACA passed Congress in 2010, it offered a handful of basic exemptions to the mandate that everyone must be insured. For example, if the only comprehensive coverage available would cost more than 8% of a household’s income, the fine would be waived. Individuals who were in jail, or belonged to a recognized religious group that objects to all insurance, including Medicare and Social Security, also would be excused.  

But then, late in 2013, the administration quietly added some 14 new ways that uninsured Americans could dodge the fine. “This latest reconstruction” of the ACA received zero media coverage,” a Wall Street Journal editorial declared, “and the Health and Human Services Department (HHS) didn’t think the details were worth discussing in a conference call, press materials or fact sheet.”

Yet if the new waivers went largely unnoticed, reform’s opponents claim that the swelling list of escape clauses will have a huge impact. By 2016, they say, almost 90% of the nation’s 30 million uninsured will be able to ignore the mandate that they buy insurance—without paying the piper.  So much for universal coverage.

Just last week Bloomberg reported that some Republicans politicians now refer to the new list of loopholes as a “stealth repeal” of the individual mandate. To her credit, Bloomberg’s Caroline Chen points out the contradiction in the GOP’s arguments: the same critics who, in the past, argued that the mandate represented “unwarranted government coercion” now criticize it for being too “wimpy.” Can they really have it both ways?

                                       “Hardship Exemptions”

The new waivers were designed to help those who are facing hard times.  Some exemptions will suspend penalties for 3 months—others for a year.

Perhaps the most important waiver bails out low-income Americans who have the bad luck to live in a state that has refused to expand Medicaid.  Originally, the ACA stipulated that states must extend Medicaid to adults earning less that 138 percent of the federal poverty level ($27,310 for a family of three), with the Federal government paying the lion’s share of the extra cost. At the same time, the ACA set out to help low and middle-income families earning more than 138% of the FPL, by providing government subsidies designed to help them purchase insurance in their state exchanges.

But then, two years after the ACA passed Congress, the Supreme Court blind-sided reform’s architects by ruling that states could opt out of expanding the federal/state. program. No surprise, politicians in Red states saw this as an opportunity to undermine Obamacare.

Today, twenty-two states still are refusing to open the Medicaid umbrella to cover some of their poorest citizens. As a result, in many cases, only parents earning less than 50% of poverty ($9,893 for a family of three) qualify for Medicaid, while childless adults remain ineligible in almost all of these states.  (When Medicaid passed Congress in 1965 legislators decided that only “the worthy poor” should be covered. People who didn’t have children were not considered “worthy”.)

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A New Edition of Health Wonk Review—Does Barack Obama Remind You of Richard Nixon? . . . Will Most States Expand Medicaid? Do All Non-Profit Hospitals Deserve a Tax Exemption? Why Didn’t Anyone From J&J Go to Jail?

Brad Wright has hosted the most recent edition of Health Wonk Review http://www.healthpolicyanalysis.com/2013/11/07/if-you-like-the-health-wonk-review-you-currently-have-you-can-keep-it/, a round-up of some of the best recent healthcare posts in the blogosphere. It’s an excellent read.

Wright begins with a post by John Goodman, published at the NCPOA Health Policy Blog, and titled “The Selling of Obamacare.” There, Goodman acknowledges, “As for the president himself, he is a complete enigma to me. I’ve never felt that I understood him.’  Goodman goes on to prove his point by comparing Barack Obama to Richard Nixon.

According to Goodman, when “the President suggested that most people will be completely unaffected by the new health law . . . he was lying.” After all millions who buy their own insurance in the individual market place are now getting cancellation notices. The President “looked directly into the TV camera and said something that was blatantly untrue . . . over and over and over and over again. You have to go all the way back to Richard Nixon to find something comparable.”

That’s one way of looking at things,” Wright observes, “but it’s certainly not the only way. Over at the Colorado Health Insurance Insider,/ Louise Norris counters with these words:

“Much has been said recently about how the ACA is causing a tidal wave of policy cancellations, and resulting in people losing coverage that they would prefer to keep.  The frustrating part about this – as has generally been the case with every big uproar about the ACA – is that we’re not really getting a complete picture of what’s going on, and it’s hard to see the reality through all the hype and hysteria.

I agree.

Here is the larger picture: in fact, most Americans will not be affected by Obamacare. The vast majority are insured by their employers. Medicare, Medicaid or the military. Of the 311 million people who now live in the U.S., just 15 million purchase their own insurance. They represent 5% of the population. And only some of the 5% who buy their own coverage are getting those cancellation letters,

We are talking about less than 3% of the population –far from “most people.” 

The folks I worry about most are those who should qualify for Medicaid under the Affordable Care Act, but live in states that have refused to expand the program. (Often they are not eligible for Medicaid simply because they don’t have children, no matter how poor they are.)

Wright offers hope by spotlighting Joe Paduda’s post on Managed Care Matters. There, he asks: “What’s happening with Medicaid Coverage?”

 
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The Affordable Care Act and the Smokers’ Penalty

Under the ACA smokers  buying insurance in the Exchanges will have to pay a 50% “Premium Surcharge.” For a 55-year-old smoker, the penalty could reach nearly $4,250 a year. http://news.yahoo.com/penalty-could-keep-smokers-health-overhaul-205840155.html Does this mean that Americans who smoke won’t be able to afford coverage?

No. In the end, most smokers should be able to get health insurance without paying a stiff penalty.

For one, it’s up to individual states as to whether they want to let insurers charge smokers more. By early April of 2013, Rhode Island, Vermont, Massachusetts and D.C. had voted to eliminate smoking premiums in their health care exchanges:  The American Cancer Society, which is opposed to the surcharge, is working to persuade other states to ban it. (The ACS explains: “We’re anti-smoking, not anti-smoker.”)

I agree with the ACS that the penalty is counter-productive.  If it makes insurance unaffordable for some smokers, this means that they won’t have access to smoking cessation programs, nicotine patches and other drugs that could help them quit.  Keep in mind that most smokers want to quit, and these programs have proved extremely successful.

The good news is that many Americans who are addicted to nicotine will be eligible for Medicaid. In the U.S. 39 percent of adult smokers live below the poverty level. . Many more live below 133 percent of the poverty level. As states expand Medicaid, they, too, will become eligible for the program. Since Medicaid charges no premiums, they will not pay a premium surcharge.

Meanwhile, new research by the George Washington University School of Public Health and Health Services indicates that including comprehensive tobacco cessation benefits in Medicaid insurance coverage can result in substantial savings for Medicaid. The study found that every dollar spent on tobacco cessation program costs resulted in an average program savings of $3.12, which represents a $2.12 return on investment. 

Under the Affordable Care Act all state Medicaid programs are required to cover tobacco cessation medications, beginning in 2014.

Finally smokers who receive health benefits from their employer are likely to find that they don’t have to pay the premium if they join a smoking cessation program.

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Expanding Medicaid Is Not Enough–Making Medicaid A Federal Program

 Note to readers—please read the post below, “Pulse—More Stories from the Heart of Medicine” (which includes “One More Child Left Behind”) before you read this post.

When I read “One More Child Left Behind,”  all I could think of was how much Aaron’s arm must have hurt during the more than 24 hours that he didn’t receive treatment. I also imagined how frightened and bewildered the six-year-old must have been as he heard his mother and grandmother talk, and realized that they couldn’t persuade a doctor to help him.

This story was published in 2009—one year before the Affordable Care Act was passed.  The ACA extends Medicaid to millions. But even under reform legislation, many children like Aaron will not receive care. This is because Medicaid now pays an average of 34% less than Medicare for exactly the same treatment.

Why on earth would we pay doctors and hospital less to care for poor patients than we would pay them to care for the elderly?

Lower Medicaid fees are part of the legacy of racism. (I write about this in Money-Driven Medicine.)  When the Medicare and Medicaid laws were passed in 1965, Southern Congressmen refused to agree to laws that would pay doctors who treated the poor as much as they reimburse physicians who care for older patients.

At the time, relatively few African-Americans living in the South were over 65.  Most died long before they would be eligible for Medicare. Yet many African-Americans were poor, and would qualify for Medicaid. This is what disturbed Southern legislators. They wanted to make sure that healthcare remained segregated.    

Even under Reform, Specialists Who Treat the Poor Will be Under-Paid   

Medicaid rates vary widely by state, but on average, according to the Kaiser Family Foundation, the new program will offer PCP’s a 73 percent raise This should open doors for millions of Medicaid patients. In some states that have been paying the lowest rates, the hike will be much higher. (See this map) The ACA guarantees raising Medicaid reimbursements for primary care for just two years (2013-2014). But I expect this program will be extended, although increases may be modified. Once begun, it will be very hard to justify ending it.

At the same time, specialists who care for Medicaid patients will continue to receive about 1/3 less than when treating seniors.  As a result, even under the ACA a great many Medicaid patients will be hard-pressed to find a specialist willing to see them.
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More Stories from “Pulse—voices from the heart of medicine”

Every Friday, thousands of readers smile when they see an e-mail from Pulse: voices from the heart of medicine in their in-box. Pulse is a free, online magazine  that publishes riveting, often moving, sometimes controversial, and occasionally hilarious first-person stories and poems about medicine.  (Click on “hilarious” for a story that will astound you, and, if you share my sense of humor, make you laugh. )

All of these tales are true, and the authenticity of the writers’ voices helps explain their power.  Written by patients and doctors, nurses, caregivers, and students, these unblinkingly honest stories and poems bear witness to the suffering that patients endure, and to the compassion of caregivers — as well as their doubts.  

                                        Some of My Favorites

Long-time readers may remember poems and stories from Pulse that I have cross-posted in the past. 

 —  “Useless (But Needed), A Doctor’s Constant Companion”  — one of my favorites

 — “First Do No Harm,”  a story about how we train doctors that drew thoughtful and provocative comments from both doctors and nurses; 

— “Broken”– a controversial story about what happens when a trauma surgeon overrules an obstetrical resident. The question:  should they have tried to save the baby or the mother? Could either be saved?                                       

                A Stairwell Conversation, And a Unique Magazine is Born

Pulse founder Paul Gross, practices family medicine at Montefiore hospital in the Bronx, New York.  He recalls how Pulse was conceived:

 “What would it be like, I wondered, if there were a magazine that told about health care the way it really is? What if patients and health professionals alike got to tell their stories? 

“Around the same time, I had a stairwell conversation with a hospital director of nursing. It stopped me short. ‘For the first time in my long career,’ she said, ‘I’m ashamed to be in this business.’

“To me, this sounded like a cry for help; it sounded like a system in crisis,” Gross adds. “And yet, for the most part, popular magazines and medical journals seemed oblivious.

“It occurred to me that if we found a way to share our stories—the difficult moments along with the glorious ones—perhaps we could jump-start a national conversation about health care. Maybe this exchange could lead us toward a better health system.”
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Health Wonk Review –Waste, Warnings and the Future

 

Last week I hosted Health Wonk Review for HIO.  This round-up of some of the health care posts published over the past two weeks includes:

—  A piece by Managed Care Matter’s Joe Paduda that takes a hard look at “Flu season and Tamiflu,” and asks “Which one’s more hyped?”

 — A investigative post on Health Care Renewal that reviews “The Tragic Case of Aaron Swartz,”  the young computer activist who faced criminal charges for downloading thousands of scientific scholarly articles from the site JSTOR. After being pursued by a “tough as nails, relentless federal prosecutor,” Swartz committed suicide. Yet blogger Roy Poses notes, this same U.S. Attorney has been “soft as a marshmallow when dealing with top executives of health care corporations.”

— A post by The Hospitalist Leader’s Brad Flansbaum questioning the ACA’s assumption that a high rate of hospital readmissions signals waste. Just how many were preventable?

 —  In  a provocative post on Health Business Blog, David E. Williams asks why Cincinnati hospitals are furious because some employers have signed up for an insurance plan that would pay all hospitals just 40% more than Medicare pays for the same service.  The Hospitals claim  that isn’t enough. Moreover, each hospital would like to set its own prices—quietly. (This allows brand-name hospitals to charge far more than some of their competitors, for exactly the same services. )

 — On Wright on Health, Brad Wright describes a new rule, proposed by the Department of Health and Human Services that could prove “disastrous” for patients on Medicaid: “HHS is now attempting to woo states into participating in the Medicaid expansion by allowing them to increase cost-sharing in Medicaid” for all but the poorest of the poor. (More bloggers and reporters might want to write about this. The proposed rule will be open for comment until Feb. 13.)

 

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Health Wonk Review-The Holiday Edition

On this last holiday week-end, I hope many of you will have the time to read  the  newest edition of Health Wonk Review, a round-up of some of the best health care posts of the past two weeks.

This time Lynch Ryan hosts HWR on  Worker’s Comp Insider. . The posts raise provocative  questions:

Did the LA Times Sensationalize Blue Cross of California’s rate increases?

Why doesn’t President Obama require that CMS negotiate for drug discounts –a move that would take us $200 billion closer to a cliff-avoiding deal?

[My guess is that this will happen sometime this year. Back in April of 2011 Naomi published a HealthBeat post suggesting that Obama had put the idea of letting Medicare negotiate prices back on the table].

How do commercial insurers evaluate physician quality?

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

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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Medicare, Medicaid, Global Warming and Gun Control– Can Liberals and Conservatives Find Middle Ground? Should They? Part 1

 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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Health Wonk Review: ‘Voices from the Blogosphere’

The following post originally appeared on the null.com blog.

This week, Maggie Mahar edits the Health Wonk Review, a biweekly compendium of the best of the health policy blogs.

Voices from the Blogosphere, May 21-June 6

I’ve decided to let the “Voices” of healthcare bloggers become the theme of this edition of Health Wonk Review. Some are passionate; others are dispassionate; some are disarmingly candid; others are angry.

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