Thursday, September 24, 2020

Trump Claims to Be Able to Guarantee the Coverage of Preexisting Conditions by Fiat

For more than twenty years we debated ways to protect people from preexisting conditions limitations in health insurance. We finally got those protections when the Congress passed, and the President signed (and the Supreme Court upheld), the Affordable Care Act, or Obamacare.

So, after twenty years of national public policy debate and hard-fought Congressional and Presidential approval, how does Trump conclude he can restore these protections should the Republican Supreme Court suit overturn them, with a simple executive order?

Trump and the Republicans couldn't pass an alternative to Obamacare in 2017 when they controlled the White House and both houses of Congress. But, now he can just sign an executive order and everything is fixed?

He has signed a number of health care related executive orders, including on drug pricing policy, and just about all of them are tied up in the byzantine federal regulatory process, or have faded away.

This is just an election-year gimmick in an attempt to persuade voters that Trump has health care policy under control.

There are a lot of governments in the world that operate by executive fiat. Ours is not one of them.

At least it hasn't been.


Recent Post: The Supreme Court Will Not Wreck Obamacare

Wednesday, September 23, 2020

The Supreme Court Will Not Wreck Obamacare

Now that it appears certain that the Republicans will approve a new Supreme Court justice in the coming weeks, there is great concern among Obamacare supporters that this could well mean the end of Obamacare.

That concern is being amplified in the hyper partisan environment in the ramp-up to the election––it makes for good scare tactics.

The Obamacare case currently before the court deals with the 2017 repeal of the law's individual mandate for people to buy health insurance coverage. In 2012, Chief Justice John Roberts cast the deciding vote in the 5-4 decision upholding Obamacare generally, and the individual mandate specifically, as valid under the Congress' taxing power. After the mandate repeal in 2017, a number of Republican state attorneys general sued, arguing that since the mandate was no longer tied to a specific tax penalty, it had lost its legal underpinning. They also argued that because the individual mandate was key to a number of the law's provisions that made it a workable system of insurance, the entire law should fall, including preexisting conditions protections.  

This whole legal process is now being driven by one decision by one Texas federal judge that bought the plaintiff's painfully tenuous arguments in deciding that the entire law is unconstitutional.

While it is certainly possible the Supreme Court could toss all of Obamacare before the end of this term, I see that as highly unlikely for the following reasons:

  • I don't know of any conservative legal scholars that led prior Supreme Court challenges to Obamacare who see the current challenge as credible on the merits. For example, the architect of the last challenge, Jonathan Adler of Case Western University, said in a friend of court brief the current challenge is, "unmoored from law or contemporary doctrine."
  • Those now arguing that the Court is capable of wrecking the law appear to believe Republican appointed justices are purely partisan political animals marching to the Trump political line. That reflects a lack of understanding about the justices and their dedication to the rule of law. According to the Supreme Court Database, from 2000 to 2018, 36% of all decisions were unanimous. Their 7-to-2 or 8-to-1 decisions made up 15 percent of decisions. The 5-to-4 decisions, by comparison, occurred in only 19 percent of cases. And, in the 2019-2020 term, with Gorsuch and Kavanaugh aboard, only 21% of the decisions were 5-3 or 5-4.
  • The concerns over the Court wrecking the whole law lie with the dubious notion that if the individual mandate is gone so should the broader parts of the law such as the Medicaid expansion and the individual insurance subsidies. The Medicaid expansion, for example, has absolutely nothing to do with the individual mandate that was originally placed in the law as a means to support insurance companies' ability to underwrite individual health insurance policies.
  • If the justices decided that the whole law had to go, they would force upwards of 20 million people onto the rolls of the uninsured overnight on the dubious premise that the excising of the individual mandate, which has actually already happened in the 2017 tax bill, undercuts the entirety of the coverage expansion. It is hard to see how one gets from eliminating the individual mandate, that has already been gone for three years, to justifying blowing up coverage for millions in an instant.

But many Democrats now want to paint that picture, if for no other reason that it fits an effective election season argument, that Republicans want to take away your preexisting condition protections, your insurance subsidies, and your Medicaid expansion.

And, since Republicans have brought this suit and the White House has supported it, their actions legitimately lay Republicans wide open to that claim. And, that begs the question of why Republicans would do such a stupid thing.

Ironically, Republicans are now moving to blow up the law in court after abysmally failing to repeal and replace Obamacare in 2017 (in part leading to their 2018 election defeats) and abysmally failing to come up with a new replacement proposal since then.

Luckily, the Supreme Court is staffed by adults and will save Obamacare and the Republicans from themselves.

Tuesday, September 8, 2020

Would the Biden Health Plan Work?

IF the Democrats capture the White House, keep the House and take over the Senate the Biden health care outline stands a good chance of being enacted.

The Biden health care proposal directly takes on the big things that haven't worked in Obamacare.

Here are the things that are most broken in Obamacare:

  • The individual health insurance premiums and deductibles are, and have from the beginning of the program, been unaffordable for many but the most subsidized consumers.
  • That has led to dramatic anti-selection in the risk pool––particularly among those who get little or no subsidy. 
  • That in turn has led to a cycle of ever higher and more unaffordable premiums and deductibles––it isn't uncommon to now see unsubsidized family premiums in the $15,000 to $20,000 annual cost range with deductibles of $7,000 per person.
  • That has led to dramatic shrinkage in the number of those covered in recent years––particularly among the unsubsidized where the number of those covered fell by 40% during 2016 and 2017.
  • To counter substantial underwriting losses early in the insurance exchanges, the insurance companies dramatically increased premiums until the most highly subsidized and premium insulated consumers dominated the enrollment and the carriers had the premiums high enough that they made record profits––they are slated to rebate $800 million this year because they exceeded the law's profit limitations.
What has worked is the Medicaid expansion where 12 million people have gained coverage in the 38 states and DC that have expanded it––likely more states will do so shortly because public support in one traditionally Republican state after another––such as Virginia, Nebraska, Maine, Idaho, and Utah––has grown.

With that backdrop, here is what Democratic presidential candidate Joe Biden is proposing.

First, he is proposing to fix what he sees as wrong with the Obamacare individual health insurance market––not proposing a single-payer Medicare for all plan and thereby not doing away with employer-based care or tinkering with Medicare as we now have it for seniors.

Biden has a comprehensive plan to make the Obamacare individual market policies more affordable.

He would:
  • Base policy subsidies on the more expensive "Gold" plans that have relatively low deductibles, rather then the "Silver" plans that have higher deductibles. This would dramatically reduce the deductibles and co-pays subsidized people now face.
  • Make most families and individuals eligible for premium subsidies by removing the current cap limiting subsidies to only those who make less than 400% of the federal poverty level––under his plan all individual market consumers would pay no more than 8.5% of their income on health insurance premiums. 
  • Make coverage available to the 5 million low-income consumers in states that have not expanded Medicaid by offering access to a federal premium-free option.
The Biden plan directly takes on the most problematic parts of Obamacare by making individual market coverage affordable––particularly for the middle-class who are now the ones most hurt by the existing program.

The fundamental reason the Obamacare individual market policies have seen a long succession of more and more unaffordable rate increases is because of "anti-selection"––as the prices increase more, and more healthy people find the coverage unaffordable, and as a result take the risk of dropping out, leaving the sickest participants behind, and the prices even higher.

A healthy and efficient risk pool requires about 75% of the market to participate in order to ensure there are enough healthy people paying into the pool to pay the claims of the sick. It is likely that as much as 40% of today's high rates are directly the result of premium loading to counter the fact that less than 40% of the eligible market ever enrolled. That loading essentially amounted to the big Obamacare rate increases in recent years that were in excess of baseline health cost inflation.

Ultimately, as enrollment would ramp up under the Biden plan to an efficient level, the anti-selection premium-load carriers have had to apply to Obamacare in recent years, because healthy consumers fled the program, could be reversed as those same healthy consumers returned.

That is a process that would likely take a few renewal cycles as the risk pool improved and health plans were able to recognize better results. And, I would expect Democrats would reinstate an incentive for people to carry insurance as they have done in a number of Democratic states. Separately, premiums would continue to rise to offset annual health care inflation.

Biden also deals with a number of other health care system issues:
  • Medicare could negotiate directly with drug companies for lower prices in that program.
  • Launch prices for drugs that face no competition would have their Medicare and individual market prices tied to a process called "external reference pricing"––based on what a market basket of other nations are willing to pay thereby bringing U.S. prices more in line with what is paid in other industrialized economies.
  • Biden would increase the community health center budget to improve care for underserved populations.
Biden would pay for his plan by:
  • Eliminating the 20% flat tax on capital gains for those with incomes over $1 million and have them pay the top tax rate of 39.6% on capital gains.
  • Roll back the Trump tax cuts for the "very wealthy" and restore the top bracket to 39.6%.
Biden is also proposing a public option to be marketed alongside the private individual health insurance options in the insurance exchanges:
"Whether you're covered through your employer, buying your insurance on your own, or going without coverage altogether, the Biden Plan will give you the choice to purchase a public option health insurance option like negotiating lower prices from hospitals and other health care providers."

Biden goes beyond the historic definition of a public option by making it available to people beyond the individual health insurance market––even letting those participating in employer-based care to opt out of their coverage to take advantage of it.

This is the most controversial part of his plan. Insurance companies, hospitals, doctors, and other health care providers are likely to cheer his proposed efforts to make individual market policies more attractive––and thereby enable insurers to sell more policies in a more stable market and have those private policies pay providers for more care at commercial reimbursement rates.

But effectively putting Medicare in direct competition with the insurance companies and paying providers at Medicare rates––about 50% lower than commercial rates for hospitals and 20% less on average for doctors, and much less for certain specialties––will be a much heavier political lift.

But, most Democrats now regret that they didn't include the public option when they passed Obamacare in 2010 and found themselves in bed with the insurance industry as Obamacare floundered in the face of unaffordable premiums for the middle-class.

If Democrats can't get to Medicare for all in 2020, and as I said in an earlier post I don't believe they can, they will surely settle for nothing less than a public option.

IF the Democrats capture the White House, keep the House and take over the Senate this Biden health care outline stands a good chance of being enacted.  

Related post:

Obamacare is "Stable" at an Incredibly Unstable Place





Monday, August 24, 2020

Why Are Trump and the Republicans So Afraid of Competition When It Comes to Drug Prices?

President Trump recently signed two executive orders directly related to prescription drug prices in the U.S.

One order would allow the "reimportation" of prescription drugs from Canada. This longstanding idea would allow U.S. pharmacies and drug wholesalers the ability to pay generally much lower prices for their prescription drugs by getting them from Canadian suppliers who benefit from government management of the system. Many consumers have been buying direct from Canadian pharmacies for years since current prohibitions have not been enforced against individuals.

Saturday, August 15, 2020

Kamala Harris Has Had Some Difficulty With the Health Care Issue

Kamala Harris has had some notable difficulty with the health care issue.

At a Democratic debate in June 2019, the candidates were asked, "Who here would abolish [employer-provided] health insurance in favor of a government-run plan?'

Harris enthusiastically raised her hand––joined over the two evenings of the debate by Sanders, Warren, and de Blasio. Not a surprise since she had already signed on to Bernie Sanders' single-payer health bill.

But the next day she walked that hand raising back. This from

Kamala Harris was one of two candidates who raised their hands when asked at Thursday night's debate if they would get rid of private health insurance, but the California senator said Friday she'd misunderstood the question.

"No," Harris told MSNBC's "Morning Joe" when asked if she'd work to abolish private health insurance in favor of "Medicare for All" if elected president.

But in her subsequent answers, she struggled to clarify her position about the role of private insurance under her plan, something that has become a pattern in recent months as Democratic candidates look to navigate politically charged questions about Medicare for All's policy implications.

Sunday, August 9, 2020

Trump Calls for Making Permanent Cuts to Social Security Payroll Taxes

President Trump said over the weekend, "If I'm victorious on November 3rd, I plan to forgive these [payroll taxes for Social Security] and make permanent cuts to the payroll tax."

Currently, employers and employees split the 12.4% payroll tax on the first $137,700 of 2020 earnings and also split the 2.9% Medicare tax on all earnings. The self-employed pay the entire tax.

Trump not only wants to suspend the Social Security tax during the pandemic crisis, he says he wants to make permanent cuts to the tax.

First, the only people who pay these taxes are people who still have their jobs and their earnings. With millions unemployed it can be argued that it would make more sense to increase deficit spending by providing help directly to those who don't have any earnings––the unemployed.

But the bigger question revolves around the suspension of funding to Social Security––particularly permanent cuts.

Both the Medicare and Social Security trust funds are running out of money––both face an inability to pay full benefits if their problems aren't solved by either increasing funding or cutting benefits. That is projected by the Congressional Budget Office to happen for Medicare in 2025 and Social Security in 2031.

So, with Social Security solvency teetering, why would you cut the taxpayer provided funding source?

Friday, August 7, 2020

Well, That's a Fine Fiscal Mess They've Gotten Us Into––Fiscal Irresponsibility and Hard Hearted Republicans

The Covid pandemic has led to extraordinary government spending.

I have no doubt that it is necessary in order to avoid not only further economic collapse but massive suffering. Sure, there are some people making more in unemployment benefits than they made working and have spent the summer partying at the beach and ignoring social distancing rules.

Remember, the $600 a week additional unemployment benefit was originally the Trump administration's idea.

But I have no doubt there have been more families that have been able to put food on the table had it not been for this assistance. Emergency action gets really messy.

Republicans seem only to be able to see the partying and have a blind eye to the suffering. 

Wednesday, April 22, 2020

Is the Federal Government Prepared to Give 300 Million Coronavirus Vaccine Injections in Early 2021?

Are any of the world's governments and drug companies ready to give a billion or more injections in 2021?

Anyone who believes that our economy will be able to fully open up before a vaccine is not only developed but deployed is dreaming. Will you take a vacation without being vaccinated? Sit at a bar? Attend a business meeting or convention? Go to a movie?

After watching our federal government constantly playing from behind these past few months, I don't see any evidence the White House is thinking about the logistics necessary to vaccinate everyone in America––or the diplomatic issues that are going to occur when the rest of the world wants to get their hands on that vaccine.

Friday, April 3, 2020

Best Review of Practical Information on the Coronavirus I Have Seen

Dr. David Price, an ICU physician at Weill Cornell Medical Center on the front lines in New York City, held an informal briefing for his friends and family on his experiences and recommendations for regular people.

It is the most comprehensive and practical primer on the epidemic that I have seen and I highly recommend it to you.

You can access it here.

Sunday, March 29, 2020

A Step By Step Plan to Manage the Pandemic and Reopen the Country

I sense that the discussion on where we go next, among those who truly know what they are talking about, is centering on a phased approach that responsibly balances both medical safety and reopening of our economy.

My last post directed you to David Katz's op-ed which generally outlined such an approach.

The American Enterprise Institute (AEI) now has a more lengthy paper authored by a number of experts, led by former FDA Commissioner Scott Gottlieb.

Their plan has three key phases:
  1. Slow the Spread - This is essentially where we are in the nation's various lock downs. "These measures will need to be in place in each state until transmission has measurably slowed down and health infrastructure can be scaled up to safely manage the outbreak and care for the sick."
  2. State-by-State Reopening - "Individual states can move to Phase II when they are able to safely diagnose, treat, and isolate COVID-19 cases and their contacts."
  3. Eliminating Physical Distancing Restrictions and Other Phase II Measures - "Can be lifted when safe and effective tools for mitigating the risk of COVID-19 are available, including broad surveillance, therapeutics that can rescue patients with significant disease or prevent serious illness in those most at risk, or a safe and effective vaccine."
I will suggest that we are so far behind the curve in making testing readily available and supplying health care providers with their equipment needs, that it will be months, not weeks, before "transmission has measurably slowed down and health infrastructure can be scaled up to safely manage the outbreak and care for the sick."

But, I will also suggest we will not be able to get back to anything resembling normal until we have a vaccine, mass produce it, and have made it available to the general population. Hearing experts tell us that all of this won't likely occur for one to two years makes it necessary to come to an agreement on what Phase Two will look like and when we can move to it.

You can see the full AEI report here.

Monday, March 23, 2020

A Plan to Quickly Confront and Defeat Coronavirus Without Collapsing the Economy?

What America lacks right now is a plan as we veer into one reaction to this pandemic after another.

I am not an epidemiologist so I offer no professional opinion on just what that plan should be.

But, if you haven't yet read the op-ed in the NY Times by David Katz of Yale University, you should.

An excerpt:
The data from South Korea, where tracking the coronavirus has been by far the best to date, indicate that as much as 99 percent of active cases in the general population are “mild” and do not require specific medical treatment. The small percentage of cases that do require such services are highly concentrated among those age 60 and older, and further so the older people are. Other things being equal, those over age 70 appear at three times the mortality risk as those age 60 to 69, and those over age 80 at nearly twice the mortality risk of those age 70 to 79...

The experience of the Diamond Princess cruise ship, which houses a contained, older population, proves the point. The death rate among that insular and uniformly exposed population is roughly 1 percent...

The clustering of complications and death from Covid-19 among the elderly and chronically ill, but not children (there have been only very rare deaths in children), suggests that we could achieve the crucial goals of social distancing — saving lives and not overwhelming our medical system — by preferentially protecting the medically frail and those over age 60, and in particular those over 70 and 80, from exposure...

If we were to focus on the especially vulnerable, there would be resources to keep them at home, provide them with needed services and coronavirus testing, and direct our medical system to their early care. I would favor proactive rather than reactive testing in this group, and early use of the most promising anti-viral drugs. This cannot be done under current policies, as we spread our relatively few test kits across the expanse of a whole population, made all the more anxious because society has shut down.

This focus on a much smaller portion of the population would allow most of society to return to life as usual and perhaps prevent vast segments of the economy from collapsing. Healthy children could return to school and healthy adults go back to their jobs. Theaters and restaurants could reopen, though we might be wise to avoid very large social gatherings like stadium sporting events and concerts...

A pivot right now from trying to protect all people to focusing on the most vulnerable remains entirely plausible. With each passing day, however, it becomes more difficult. The path we are on may well lead to uncontained viral contagion and monumental collateral damage to our society and economy. A more surgical approach is what we need.

Tuesday, March 10, 2020

Will the Trump Administration's Testing Snafus for Coronavirus Be Their Political Version of the Democrats' Catastrophic Launch of Obamacare?

As I have watched the Trump administration fumble the ball on getting mass coronavirus testing available to communities, I am reminded of the way the Obama administration fumbled their own ball during the Obamacare launch in 2013:

  • Repeated statements on how well things were going in the face of facts that did not match their rhetoric.
  • Not having a handle on what could go wrong and what did go wrong from beginning to end.
  • Delays that led to a public lack of confidence in the administration.

The difference this time is that the Obamacare fiasco was ultimately brought under control and, while people not being able to sign up for their health insurance for a few weeks was not a small deal, it wasn't the life and death scenario we are facing today.

Monday, February 24, 2020

Read "The Dispatch"

A few months ago, Steve Hayes and Jonah Goldberg founded a news site.
There are tons of those. This is different and worthy of your time.
In their own words:

Tuesday, February 11, 2020

Why Obamacare Supporters Should Favor the Trump Administration's Medicaid Block Grant Proposal

Readers of this blog know that no one has been more critical of Obamacare's flaws––particularly over the impact the program has had on middle class consumers in the individual health insurance market.

And, readers already know that no one has been more supportive of the Medicaid expansion from the very beginning.

Now, the Trump administration wants to give states the option to abolish the open-ended federal funding of Medicaid via fixed block grants for only a small portion of those eligible, or potentially eligible.

Critics argue that by fixing these funds, particularly at a growth rate lower than paid in the past, will result in less money and if there is less money there will be fewer benefits and fewer people covered given the flexibility states would have to redefine the program.

That is a logical conclusion.

But it's a lot more complicated than that.

Monday, February 10, 2020

Despite All of Its Efforts to Insure Everyone and Control Health Costs Things Are Getting Worse in Massachusetts

Guest Post By: 
Jeffrey Hogan
Northeast Regional Manager 
Rogers Benefit Group

Few states have done as much as Massachusetts (MA) over the last 30 years to lower healthcare costs, improve quality and outcomes and, in general, to innovate.   

Last week the MA Health Policy Commission issued its 2019 Annual Health Care Cost Trends Report documenting wins, losses, and opportunities for change. Romney Care was passed in 2006 and, in 2012, the state passed a sweeping initiative to focus on a healthcare growth target and transparent metrics for evaluating healthcare performance statewide. 

Despite significant initiatives, the state reports slippage in many metrics, including burdensome cost increases for employers and their employees. 

Wednesday, February 5, 2020

Profitability in the Health Care Market Has Never Been Better

For many years I have followed Allan Baumgarten's detailed health care market reports.

His latest covers the state of Florida and provides what I am sure is a representative sample of what is happening across the country.

A few excerpts:

Iowa Caucus Goers Strongly Support Single-Payer Health Care

This from the Washington Post:
About 6 in 10 Democrats at the Iowa caucuses on Monday reported that they support eliminating private health insurance as part of establishing a single-payer health-care system, according to preliminary poll results, suggesting that most of the party’s voters agree with Sen. Bernie Sanders (I-Vt.) on the divisive issue.
 Only these voters can reelect Donald Trump.

Monday, January 27, 2020

Comprehensive Enrollment and Cost Estimates for the Biden Health Plan, the Buttigieg Health Plan, the Warren Health Plan, and the Sanders Health Plan

In this hyper-partisan environment, I can't think of an organization that better fits the definition of bipartisan than the Committee for a Responsible Federal Budget.

Their mission is to keep the federal budget process honest and responsible. 

Its current board members include a veritable who's who of Washington, DC adults; Mitch Daniels, Leon Panetta, Tim Penny, Erskine Bowles, Kent Conrad, Vic Fazio, and Bill Gradison.

The Committee has just released a comprehensive evaluation of the leading Democratic candidates' health care plans.

It is required reading for any serious health policy wonk. Disbelieve their work at your own peril.

Monday, January 13, 2020

Republican Health Care Reform: The Congressional Republicans' Irrational Opposition to Medicaid

Congressional Republicans have consistently, if not unanimously, opposed Obamacare's expansion of Medicaid.

Their opposition is irrational.

It is also unpopular with voters. In dark red states like Nebraska, Idaho and Utah voters recently went over the heads of their Republican legislators and governors by approving referendums to expand the program. And, Kansas is about to become the 37th state to expand Medicaid under Obamacare after a bipartisan agreement between the Democratic governor and Republican leaders in the legislature.

While Obamacare's individual health insurance reforms and subsidies have been a disaster for the middle class (See: Obamacare is "Stable" at an Incredibly Unstable Place), the Medicaid expansion in the states that have approved it has covered millions of people that would never have been covered otherwise––at a cost that could never have been less.

Republican opposition has centered around a number of arguments. Let's take a look at each of them.

Wednesday, January 8, 2020

Biden, Bloomberg, and Buttigieg Have the Health Plans That Can Become Law and Will Work

In an earlier post, I pointed out that there is no better chance of passing a Medicare for all health care plan through Congress in the coming years than there was in 1977, or 1993, or 2009.

Then Elizabeth Warren showed us just how politically unrealistic single-payer health care is when she released her funding plan and then quickly backtracked to the public option approach in the face of rapidly declining polls. See my post: Elizabeth Warren Backs Into the Public Option and Effectively Takes Medicare for All Off the Table for Democrats in 2021

In a separate post, I pointed out that single-payer advocates, like Sanders and Warren, have yet to answer the biggest financial questions surrounding putting the entire country on a single government reimbursement system: How will their paying providers Medicare rates for everything not bankrupt hospitals and doctors? And, if they don't pay providers these lower Medicare rates, how will their proposals save us any money?

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