• What’s Happening with Medicare Advantage and Why it Matters

      07/28/2021
      Tasha McAbee

    Tasha McAbee (@tasha_mcabee) is an MPH student at Boston University School of Public Health.

    For over 50 years, Medicare has provided affordable health insurance to hundreds of millions of people. At present, almost 62 million individuals depend on the public program to help cover the costs of medical services including hospitalizations, physician visits, prescription drugs, preventive services, and nursing facility or home health care.

    But it doesn’t cover everything. Most Medicare beneficiaries rely on additional supplemental insurance beyond traditional Medicare. This additional insurance commonly consists of employer retiree benefits, privately purchased Medigap policies, or Medicaid for people with low income.

    This is where Medicare Advantage comes in. Today, over 24 million Medicare recipients needing fuller coverage then what Medicare has to offer, instead enroll in more robust private plans obtained through Medicare Advantage. These managed care programs offer an expanded list of benefits at a fixed cost compared to Medicare, for which needed services may not be covered at all or come at a high price.

    Growing pains

    Enrollment in Medicare Advantage has rapidly grown since its implementation, from 18% of Medicare beneficiaries enrolled in 1999 to 39% in 2020. This growth, however, has not always been healthy.

    Being a private market, Medicare Advantage plans behave differently than traditional Medicare. Any program, private or public, must maintain profit to stay afloat, but a number of Medicare Advantage plans were initially riddled with aggressive marketing tactics and lacked government oversight to protect consumers. Some companies hired revenue maximization experts, who went beyond ensuring earnings, and encouraged private insurers to engage in questionable marketing tactics that weren’t always in the best interest of the consumer.  In the early days, a large number of beneficiaries were enrolled without a full understanding of the program or its disadvantages, and consumer satisfaction was low.

    Government regulation eventually caught up, establishing means to curtail any predatory practices in Medicare Advantage marketing when the Medicare Improvements for Patients and Providers Act was passed in 2008. The legislation strengthened government oversight over Medicare Advantage sales activities and consumer satisfaction has since improved, reaching a record 94% satisfaction in 2019.

    Bipartisan support for the program continues to foster steady growth no matter the political party of the sitting president, but how much growth and whom that growth most benefits — consumer or insurer — depends on which policy levers that administration pulls.

    Most recently, the Trump administration contributed to continued growth that potentially benefits both consumers and insurers. The Center for Medicare & Medicaid Services (CMS) expanded the list of benefits covered by Medicare Advantage plans and made some telehealth services more available. However, Trump also took drastic steps to deregulate and further privatize the Medicare Advantage market. Perhaps most bluntly exemplified by 125 pages of rules for Medicare Advantage marketing and regulation being cut down to just 80 pages, weakening government oversight.

    Further, the Trump administration failed to gain regulatory control over Medicare Advantage companies and their ability to alter risk adjustment scores, which determine the amount of money the federal government pays to subsidize the plans. The more control Medicare Advantage companies have over risk adjustment scores, the greater their potential ability to exaggerate the severity of a patient’s illness in order to maximize the amount of money they receive from the federal government. Inadequate auditing over risk adjustment not only allows for exploitation, but is a system that experts warn is “fatally flawed”, and has already resulted in several whistleblower lawsuits alleging risk adjustment fraud. When a Medicare Advantage plan over-withdraws funds from the federal government, it is more money drained from taxpayers and away from traditional Medicare needs.

    Where to go from here…

    The Biden administration is now left with the responsibility to manage continued growth while reining in the regulatory loosening that occurred under the prior administration. This administration should prioritize regaining regulatory control over risk adjustment practices and refocus policy decisions towards value-based care and consumer protection rather than policies that favor the facilitation of sales.

    For example, although it may sound entirely beneficial to consumers that Trump expanded the list of benefits covered by Medicare Advantage plans, it can also be interpreted as a move to simply increase profit, especially if the value of these newly permissible services to the consumer cannot be demonstrated. The Biden administration will need to balance the complexities of private plans so that they best serve the public.

    Medicare Advantage stands today as a more effective and stable program than when it was born. It is a powerful means for Medicare patients to get more value out of their spending and to maximize benefits. Moving forward, the government’s regulatory relationship with the program will need to ensure that as more people enroll, it doesn’t result in more consumers, or the government itself, being taken advantage of.

     
      Economics, Health Policy, Politics
      ACA, Affordable Care Act, COVID-19, health care costs, health insurance, health reform, Medicare, Medicare Advantage
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  • The Best Health Care System in the World: Which One Would You Pick?

      09/20/2017
      multiple authors

    The following originally appeared on The Upshot (copyright 2017, The New York Times Company) and was jointly authored by Aaron Carroll and Austin Frakt. Click through to the original to cast your own votes in each health system face-off described below. This piece also appeared on pages A12 and A13 of the September 25, 2017 print edition.

    “Medicare for all,” or “single-payer,” is becoming a rallying cry for Democrats.

    This is often accompanied by calls to match the health care coverage of “the rest of the world.” But this overlooks a crucial fact: The “rest of the world” is not all alike.

    The commonality is universal coverage, but wealthy nations have taken varying approaches to it, some relying heavily on the government (as with single-payer); some relying more on private insurers; others in between.

    Experts don’t agree on which is best; a lot depends on perspective. But we thought it would be fun to stage a small tournament.

    We selected eight countries, representing a range of health care systems, and established a bracket by randomly assigning seeds.

    To select the winner of each matchup, we gathered a small judging panel, which includes us:

    • Aaron Carroll, a health services researcher and professor of pediatrics at Indiana University School of Medicine
    • Austin Frakt, director of the Partnered Evidence-Based Policy Resource Center at the V.A. Boston Healthcare System; associate professor with Boston University’s School of Public Health; and adjunct associate professor with the Harvard T.H. Chan School of Public Health

    and three economists and physician experts in health care systems:

    • Craig Garthwaite, a health economist with Northwestern University’s Kellogg School of Management
    • Uwe Reinhardt, a health economist with Princeton University’s Woodrow Wilson School of Public and International Affairs
    • Ashish Jha, a physician with the Harvard T.H. Chan School of Public Health and the director of the Harvard Global Health Institute

    A summary of our worldviews on health care is at bottom.

    So that you can play along at home and make your own picks, we’ll describe each system along with our choices (the experts’ selections will decide who advances). When we cite hard data, they come from the Commonwealth Fund’s International Country Comparison in 2017.

    But enough talk. Let’s play.

    FIRST ROUND

    Canada vs. Britain: Single-Payer Showdown

    Both have single-payer systems, but vary in the government’s role and in what is covered.

    In Canada, the government finances health insurance, and the private sector delivers care. Insurance, run at the province level, doesn’t cover drugs, dentists or optometry. Many Canadians have supplemental private insurance through their jobs to help pay for these. The government ends up paying for about 70 percent of health care spending in all.

    Britain has truly socialized medicine: The government not only finances care, but also provides it through the National Health Service. Coverage is broad, and most services are free to citizens once they’ve paid taxes, though there is a private system that runs alongside the public one. About 10 percent buy private insurance. Government spending accounts for more than 80 percent of all health care spending.

    U.S. analogues are Medicare (more like Canada) and the Veterans Health Administration (more like Britain).

    Canada and Britain are pretty similar in terms of spending — both spend just over 10 percent of G.D.P. on health care. They also have reasonably similar results on quality, although neither ranks near the top in the usual international comparisons. In terms of access, though, Britain excels, with shorter wait times and fewer access barriers due to cost.

    Our pick: Britain, 4-1

    AARON: Britain. It’s efficient. Given the rather low spending, it provides great access with acceptable outcomes.

    CRAIG: Britain. Patients in Britain have a greater ability to shop across providers (using additional private insurance). This, combined with reforms within the N.H.S., helped increase competition and quality.

    AUSTIN: Britain. While the countries are close in spending and quality, Britain has much lower cost-based barriers to access.

    ASHISH: Britain. Access problems can be profound in Canada — nearly one in five Canadians report waiting four months or more for elective surgery, which can be more than just an inconvenience.

    UWE: Canada. The Canadian system is simpler for citizens to understand and highly equitable.

    FIRST ROUND

    U.S. vs. Singapore: A Mix of Ideas

    The United States has a mix of clashing ideas: private insurance through employment; single-payer Medicare mainly for those 65 and older; state-managed Medicaid for many low-income people; private insurance through exchanges set up by the Affordable Care Act; as well as about 28 million people without any insurance at all. Hospitals are private, except for those run by the Veterans Health Administration.

    Singapore has a unique approach. Basic care in government-run hospital wards is cheap, sometimes free, with more deluxe care in private rooms available for those paying extra. Singapore’s workers contribute 36 percent of their wages to mandated savings accounts that may be spent on health care, as well as on housing, insurance, investment or education. The government, which helps control costs, is involved in decisions about investing in new technology. It also uses bulk purchasing power to spend less on drugs, controls the number of medical students and physicians in the country, and helps decide how much they can earn.

    Singapore’s system costs far less than America’s (4.9 percent of G.D.P. versus 17.2 percent). Singapore doesn’t release the same data as most other advanced nations, although it’s widely thought that it provides pretty good care for a small amount of spending. Others counter that access and quality vary, with wide disparities between those at the top and bottom of the socioeconomic ladder.

    Our pick: United States, 4-1

    AARON: United States. Singapore is intriguing, because it’s so different from other systems. But its huge mandatory savings requirement would be a nonstarter for many in the United States.

    CRAIG: United States. Singapore, a scrappy underdog, has become a fan favorite of conservatives. But its reliance on health savings accounts is problematic: When people are spending more of their own money on health care, they tend to forgo both effective and ineffective care in equal measure.

    AUSTIN: United States. It’s hard for me to overlook Singapore’s lack of openness with data.

    ASHISH: United States. The lack of data in Singapore is a problem, and it had higher rates of unnecessary hospitalizations and far higher heart attack and stroke mortality rates than the United States. Plus, the U.S. has a highly dynamic and innovative health care system. It is the engine for new diagnostics and treatments from which Singapore and other nations benefit.

    UWE: Singapore. It’s hard to defend the messy American health system, with its mixture of unbridled compassion and unbridled cruelty.

    FIRST ROUND

    France vs. Australia: Everyone Covered

    The list of services covered in France is more extensive than in Australia — perhaps more than in any other health care system. Australia has the advantage in expense.

    Australia provides free inpatient care in public hospitals, access to most medical services and prescription drugs. There is also voluntary private health insurance, giving access to private hospitals and to some services the public system does not cover.

    The government pays for at least 85 percent of outpatient services, and for 75 percent of the medical fee schedule for private patients who use public hospitals. Patients must pay out of pocket for whatever isn’t covered. Most doctors are self-employed, work in groups and are paid fee-for-service. More than half of hospitals are public.

    Everyone in France must buy health insurance, sold by a small number of nonprofit funds, which are largely financed through taxes. Public insurance covers between 70 percent and 80 percent of costs. Voluntary health insurance can cover the rest, leaving out-of-pocket payments relatively low. About 95 percent of the population has voluntary coverage, through jobs or with the help of means-tested vouchers. The Ministry of Health sets funds and budgets; it also regulates the number of hospital beds, what equipment is purchased and how many medical students are trained. The ministry sets prices for procedures and drugs.

    The French health system is relatively expensive at 11.8 percent of G.D.P., while Australia’s is at 9 percent. Access and quality are excellent in both systems.

    Our pick: France, 4-1

    AARON: France. It provides almost everything you’d want, and it’s expensive only compared with countries other than the United States. (Compared with the U.S., it’s a bargain.)

    CRAIG: France. It has seemingly done a better job of using markets to create competition across public and private hospitals — which provides incentives for quality provision and innovation.

    AUSTIN: Australia. It was a close call. Australia achieves good outcomes (by some but not all measures better than France) with a lot less spending, making it a better value.

    ASHISH: France. Both countries cover everyone, but people in France report somewhat fewer problems getting access to care, as well as shorter waiting times.

    UWE: France. The Australian system is basically two-tiered: a public insurance-and-delivery system, and another based on private health insurance, each of which cover roughly half the population. This seems to work well in Australia, but in the U.S. the public system most likely would be badly underfunded. Therefore, France would be superior.

    FIRST ROUND

    Switzerland vs. Germany: Neighborly Rivalry

    Germany’s system and Switzerland’s have a lot in common. Germany has slightly better access, especially with respect to costs. Switzerland has higher levels of cost-sharing, but its outcomes are hard to beat — arguably the best in the world.

    Like every country here except the U.S., Switzerland has a universal health care system, requiring all to buy insurance. The plans resemble those in the United States under the Affordable Care Act: offered by private insurance companies, community rated and guaranteed-issue, with prices varying by things like breadth of network, size of deductible and ease of seeing a specialist. Almost 30 percent of people get subsidies offsetting the cost of premiums, on a sliding scale pegged to income. Although these plans are offered on a nonprofit basis, insurers can also offer coverage on a for-profit basis, providing additional services and more choice in hospitals. For these voluntary plans, insurance companies may vary benefits and premiums; they also can deny coverage to people with chronic conditions. Most doctors work on a national fee-for-service scale, and patients have considerable choice of doctors, unless they’ve selected a managed-care plan.

    A majority of Germans (86 percent) get their coverage primarily though the national public system, with others choosing voluntary private health insurance. Most premiums for the public system are based on income and paid for by employers and employees, with subsidies available but capped at earnings of about $65,000. Patients have a lot of choice among doctors and hospitals, and cost sharing is quite low. It’s capped for low-income people, reduced for care of those with chronic illnesses, and nonexistent for services to children. There are no subsidies for private health insurance, but the government regulates premiums, which can be higher for people with pre-existing conditions. Private insurers charge premiums on an actuarial basiswhen they first enroll a customer, and subsequently raise premiums only as a function of age — not health status. Most physicians work in a fee-for-service setting based on negotiated rates, and there are limits on what they can be paid annually.

    Both systems cost their countries about 11 percent of G.D.P.

    Our pick: Switzerland, 3-2

    AARON: Switzerland. It has superior outcomes. It’s worth noting that its system is very similar to the Obamacare exchanges.

    CRAIG: Switzerland. The Swiss system looks a lot like a better-functioning version of the Affordable Care Act. There’s heavy, but quite regulated, competition among insurers and an individual mandate.

    AUSTIN: Germany. Germany has a low level of cost-based access barriers — tied with Britain for the lowest among our competitors.

    ASHISH: Switzerland. Switzerland outperformed Germany on a number of important quality measures, including fewer unnecessary hospitalizations and lower heart attack mortality rates.

    UWE: Germany. The Swiss social insurance system — a late comer, enacted only in the 1990s, and financed by per-capita premiums — is less equitable than many other European systems, including Germany’s.

    SEMIFINALS

    Switzerland vs. Britain: Meaning of a Market

    How does the cost-effectiveness of Britain’s “socialized medicine” stack up against the competitive but heavily regulated private system of Switzerland?

    Our pick: Switzerland, 3-2

    AARON: Switzerland. It has better quality, and perhaps access, but those come at a higher cost. I’m willing to make that trade-off.

    CRAIG: Britain. Switzerland’s system — privately funded with private insurers — is often held up as a bastion of competition. But it is not necessarily more of a market than Britain; it just hides the heavy hand of government a bit more. In reality, the insurance and provider market is heavily regulated.

    The U.K. system is almost entirely publicly funded, but it has done a lot to try to increase the competition between facilities, which has increased the quality of service.

    AUSTIN: Britain. It systematically incorporates cost effectiveness into coverage decisions.

    ASHISH: Switzerland. These are two countries with high-performing health systems, but Switzerland has better access and quality, albeit at somewhat higher costs.

    UWE: Switzerland. Switzerland has better facilities and speed of access to care.

    SEMIFINALS

    France vs. U.S.: Access vs. Innovation

    France has extensive coverage, with costs that are high relative to many other nations. The U.S. system, praised as dynamic and innovative, is even more expensive, falls short of universal coverage and can be bewilderingly complex. Which do our experts prefer?

    Our pick: France, 3-2

    AARON: France. France provides an amazing level of access and quality for the cost. The U.S. is considered the driver of health care innovation, which comes at a high price. But there are other ways to incentivize innovation in the private sector besides how we pay for and deliver care.

    CRAIG: United States. The U.S. system is a bit of a mess in that it is quite expensive and doesn’t offer complete coverage to its populace. But the system really does have the strongest incentives for innovation on medical technology — which provides an amazing amount of welfare for citizens around the globe.

    AUSTIN: France. It’s hard to justify the very high level of U.S. spending based on innovation alone, particularly without mechanisms to steer innovation toward technologies that are cost-effective.

    ASHISH: United States. France has a far more equitable system, with few delays and reasonably good outcomes. However, the U.S. delivers a superior quality of care on the measures that matter most to patients, and the system is far more dynamic and innovative. It was close, but I picked the United States.

    UWE: France. The U.S. is just too expensive for what it delivers, and includes too much financial insecurity to boot. At international health care conferences, arguing that a certain proposed policy would drive some country’s system closer to the U.S. model usually is the kiss of death.

    FINAL

    France vs. Switzerland: Top of the Mountain (Alps Edition)

    France’s system is impressively comprehensive and in some respects simpler. Switzerland relies on a competitive yet much-regulated system of private insurers. Which has the edge and why?

    Our pick: Switzerland, 3-2

    AARON: Switzerland. This is a tough call. Switzerland does a good job of combining conservative and progressive beliefs about health care systems into a workable model providing top-notch access and quality at a reasonable cost. It doesn’t hurt that it does so through private (although heavily regulated) insurance.

    CRAIG: France. Its system has more competition among providers than Switzerland’s does.

    AUSTIN: Switzerland. The Swiss system is so close to the A.C.A.’s structure (which, to date, has survived all manner of political attacks) that something like it could work in the U.S.

    ASHISH: Switzerland Both of these countries spend a lot on health care, outpacing the average among high-income countries, and both perform comparably on measures of access to care. However, in general, the Swiss health care system delivers a higher quality of care across a range of measures and invests more in innovation that fuels new knowledge and, ultimately, better treatments that we all benefit from.

    UWE: France. It is cheaper, its financing is more equitable, and its system is simpler.

    Conclusion

    Germany would have tied Switzerland had we averaged our rankings of the nations instead of using head-to-head matchups in a bracket system (Switzerland eliminated Germany in the first round). It’s an example of how close the voting was. Not one vote was unanimous among the judges, and all the semifinal and final votes were 3-2. Clearly, there is room for disagreement about the relative merits of health systems, and different experts would surely reach different conclusions.

    Some judges took a global view, giving the edge to countries, like the United States, that promoted innovation that benefited the rest of the world. In other cases, how health systems treated the poorest of society was paramount.

    To nobody’s surprise, the United States could do better at balancing health care costs with access, quality and outcomes. But there are many ways to reach that goal, and there will always be trade-offs. Learning about them from other systems and debating them honestly would probably do us a lot of good.

    We hope that readers will consider this to be merely the beginning of a discussion, not the end. We welcome your questions or comments. In fact, we look forward to writing articles in which we answer those questions and ask other experts with different views to weigh in.

    Have you experienced a health system outside the United States? Tell us its best or worst feature. And what advice would you give Americans?

    The panel:
    Craig Garthwaite is a conservative economist who believes that well-regulated markets offer the best means of providing quality and innovation. He’s a lifelong Republican but has been broadly supportive of the market-based A.C.A.

    Uwe Reinhardt, who has analyzed health care systems around the world for half a century, has been a longtime supporter of single-payer, although he has said he doesn’t believe the United States could manage that system well because it’s captured by special interests.

    Ashish Jha and Aaron Carroll believe in universal coverage. Austin Frakt is less invested in universal coverage than universal access to affordable coverage. All three pay less attention to whether a system is more government-run or more market-based because they think either approach can succeed if devised well. Aaron and Austin blog at The Incidental Economist. For more information on health care systems, you can view Aaron’s Healthcare Triage playlist of videos. Ashish blogs at an Ounce of Evidence.

     
      Health Policy
      Australia, canada, France, Germany, health reform, Singapore, Switzerland, UK, Upshot
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  • The rich are about to get a big tax cut.

      12/06/2016
      Nicholas Bagley

    Shortly after his nomination as Treasury Secretary was announced, Steven Mnuchin went on television to offer some tax-reform principles that would guide the new administration:

    Any reductions we have in upper income taxes will be offset by less deductions so that there will be no absolute tax cut for the upper class. There will be a big tax cut for the middle class, but any tax cuts we have for the upper class will be offset by less deductions that pay for it.

    This appears to be false, at least if Republicans follow through on their plan to repeal-and-delay the ACA. Although the bill that’s under discussion would only gut the ACA in 2019, it would immediately cut taxes on the very rich.

    How big is the tax break? According to CBO, the reconciliation bill that Republicans are using as a template would cut taxes by $623 billion over ten years. Of that, $123 billion would come from the repeal of the Medicare tax surcharge and $223 billion from the repeal of the tax on investment income.

    That $346 billion represents about $1,000 for every man, woman, and child in the United States. Every cent will go into the pockets of people making more than $200,000 per year—the “upper class” that Mnuchin says won’t be getting any tax cuts. To my knowledge, there has been no discussion of offsetting those cuts in the repeal-and-delay bill. Maybe offsets will come later, but you’ll forgive me for some skepticism.

    Also, where does this leave Republicans when they look to finance their version of health reform? If the party remains steadfast in its anti-tax commitment, the only options are savage budgets cuts or deficit spending. Neither option is appealing, which will complicate negotiations over any “terrific” replacement.

    Look, Republicans won the election. They can go ahead and cut taxes if they want. But they don’t get a freebie just because this particular cut is part of a health-care bill. Call repeal-and-delay what it is: a big tax cut for the wealthy coupled with a vague commitment to Republican-style health reform in a couple of years.

    @nicholas_bagley

     
      Health Policy, Law
      Affordable Care Act, health reform
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  • Walking back repeal

      11/12/2016
      Austin Frakt

    That was fast.

    Mr. Trump, in an interview to be broadcast on CBS’s “60 Minutes,” said the guarantee of coverage for people with pre-existing conditions was “one of the strongest assets” of the law. He also said he would try to preserve the measure allowing young adults to remain on their parents’ insurance until age 26.

    “We’re going to do it simultaneously — it’ll be just fine,” he said.

    That’s from The New York Times. The Wall Street Journal has more:

    On health care, Mr. Trump said a big reason for his shift from his call for an all-out repeal was the meeting at the White House with Mr. Obama, who, he said, suggested areas of the Affordable Care Act, widely known as Obamacare, to preserve. “I told him I will look at his suggestions, and out of respect, I will do that,” Mr. Trump said in his Trump Tower office.

    “Either Obamacare will be amended, or repealed and replaced,” Mr. Trump said.

    So, possibly just amended then? That could mean anything. Nevertheless, given his track record, I would not take President-Elect Trump’s recent statements to the bank. Best to assume everything’s on the table, and he — with the help of Congress — could bring it all crashing down to the floor.

    @afrakt

     
      Health Policy
      health reform, repeal and replace
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  • Today’s repeal and replace reading list

      11/11/2016
      Austin Frakt

    It’s hard to keep up. Here are things I’ve read so far today. I’ll add more throughout the day, as warranted. (Provision of this list does not imply endorsement or non-endorsement of anything at the links.)

    @afrakt

     
      Health Policy
      health reform, repeal and replace
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  • It’s the taxes, stupid

      11/11/2016
      Nicholas Bagley

    With the caveat that this is a bad week for predictions, I’d like to offer my thoughts on what might happen next to the Affordable Care Act. I suspect there’s a pretty relentless political logic that’s about to take hold.

    For starters, I doubt that Republicans will be able to coalesce around an alternative to Obamacare. They’ve demonstrated time and again that they can’t get past the white-paper stage. The reason is simple: health policy is hard. There are winners and losers and extending coverage to the uninsured costs a bunch of money.

    Democrats barely managed to pass health reform in 2010 even though they cared passionately about it. The Republican Party has never cared much about expanding coverage. There’s no reason to think Republicans care enough this time to get their restive membership on board with a replacement, especially since Donald Trump is unlikely to make health reform a priority. Just a few defections in the Senate and a new bill is toast.

    So no replace, at least not yet. But what about repeal? On this, I think the Republicans will press forward. Every single Republican in the House and Senate (except Susan Collins) has already voted for a reconciliation bill that eliminates the individual mandate, the subsidies, and the ACA’s new taxes. They can use that as a template to wipe the ACA’s most controversial provisions from the books.

    At the same time, Republicans would have a ready excuse for keeping some popular parts of the law, most of which aren’t subject to reconciliation because they don’t affect spending or revenue. They include rules about preexisting conditions, lifetime and annual caps, allowing young people to stay on their parents’ insurance, and zero cost-sharing for preventive care.

    But wait a minute. Wouldn’t the reconciliation bill unravel the individual market? Won’t Republicans be skittish about repeal if they can’t do replace?

    I don’t think so. You’ve got to bear in mind that passing the reconciliation bill would represent an immediate $346 billion tax cut over ten years to the wealthy—$123 billion from the Medicare tax surcharge and $223 billion from the tax on investment income. All of that money—every dime—will go to people making more than $200,000 a year. However ambivalent Republicans may be about health reform, they are not at all ambivalent about big tax cuts to the wealthy.

    As importantly, the Republicans have no real choice but to take a vote that they can genuinely characterize as repeal. Nearly every single Republican in office has run on repealing the ACA for the past six years. Primary challengers would come out of the woodwork if the Republicans can’t get their act together now.

    Besides, the Republicans can and will delay the day of reckoning. Already, the reconciliation bill doesn’t kick in until 2018. It’d be child’s play to extend that to avoid a collapse of the insurance markets right before the midterm elections. Republicans would then get to take credit for repealing Obamacare without pitching millions off their plans. It’s a neat trick.

    Sure, some members will kick and scream that this doesn’t count as a “real” repeal. So too will some activists and interest groups. But they’ll get over it: $346 billion is a big tax cut.

    What happens when the ACA is finally set to lapse? I honestly have no idea. The political scene will look very different in a couple of years.

    It’s safe to say, however, that passing a reform bill would be even harder at that point. The reconciliation bill does not increase the federal budget deficit, mainly because it retains the Medicare cuts that the Republicans previously deplored. But that means that paying for a meaningful Obamacare replacement will require new sources of tax revenue. It’s possible that the Republicans won’t care about deficit spending—they didn’t pay for Medicare Part D, either. But it will create political headwinds among the deficit hawks in Congress.

    Without a reform bill, Republicans could just let the ACA lapse, with all the pain and suffering that a massive insurance contraction would entail. Or they might choose to kick the can down the road—delaying the date of the ACA’s demise. I honestly don’t know which they’ll pick.

    Maybe I’m wrong about all of this. Maybe Republicans will pull together a plausible replace bill. Or maybe they really will just blow the whole damn thing up. My hunch, though, is that unwinding the ACA won’t be as easy as the political rhetoric suggests.

    @nicholas_bagley

     
      Health Policy, Law
      Affordable Care Act, health reform
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  • Repeal and replace: The Democrats’ role

      11/10/2016
      Austin Frakt

    Avik Roy articulates how Democrats might be drawn onto the repeal and replace wagon:

    [I]t is definitely possible for the GOP to repeal and replace Obamacare. The sequence would go something like this:

    1. Partially repeal Obamacare via reconciliation, with the subsidies expiring in 2019.
    2. Get Republicans to agree on a pathway to market-based universal coverage that reduces, instead of increasing, the federal role in health care.
    3. Use the two-year window to achieve market-based universal coverage by repealing the ACA’s premium-hiking regulations, replacing it with a system of means-tested tax credits.

    There are likely to be 60 votes for the Obamacare replacement under this scenario, because once Obamacare’s subsidies have been repealed, Republicans will have negotiating leverage with Democrats who would prefer a more statist approach.

    This is clever. To get around a filibuster, it puts a gun to the Senate Democrats’ heads, so to speak. “Do you want something or nothing?”

    @afrakt

     
      Health Policy
      health reform
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  • Repeal and replace watch

      11/10/2016
      Austin Frakt

    It’s way too early to tell with much certainty, but what could this mean?

    House Speaker Paul Ryan on Wednesday suggested Congress would seek to use a budget tool known as reconciliation to repeal the Affordable Care Act under the incoming Trump administration.

    But at a Capitol Hill press conference later in the day, Senate Majority Leader Mitch McConnell would not commit to using the process to repeal the law.

    Since Majority Leader McConnell has also indicated that repealing the ACA is “high on our agenda,” this could mean he intends to remove the filibuster as a means by which Senate Democrats could oppose repeal. (Budget reconciliation bills cannot be filibustered.)

    On the other hand “high on our agenda” leaves lots of wiggle room.

    More on the filibuster here.

    UPDATE: Ben Carson may be involved in crafting a replacement plan.

    Ben Carson says he’s still ironing out his role in the incoming administration of President-elect Donald Trump, but one thing’s certain: He’ll have a role in helping craft the replacement plan for Obamacare.

    “I think the replacement obviously must come first and it must be something that is very appealing and easy to understand. And then, only then, would you dismantle what’s in place,” the retired neurosurgeon said in an interview.

     Asked if he intends to be involved in designing that plan, Carson said, “Yes, of course.”

    @afrakt

     
      Health Policy
      health reform
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  • The next health reform

      11/09/2016
      Austin Frakt

    It’s not hard to guess what it might include.

    Trump’s agenda is far less detailed than the 37-page Ryan document. Of 7 items on the Trump agenda, 5 also are part of the Ryan plan: (1) complete repeal of the ACA; (2) permitting interstate sale of health insurance; (3) allowing individuals to deduct the cost of health insurance premiums on their federal tax returns; (4) expanding use of health savings accounts; and (5) reforming Medicaid by implementing state spending block grants (or per beneficiary enrollment caps as an alternative under Ryan’s plan). Trump’s plan also promotes price transparency for physicians and hospitals, and would permit the importation and domestic sale of drugs with regulatory approval in other countries.

    Ryan’s plan includes more details on the proposals it shares with Trump’s approach, plus policy proposals not included in Trump’s plan. Most of Ryan’s proposals reflect recommendations that are also key elements of other Republican and conservative plans, such as: capping the tax deductibility of employer provided health insurance; nationwide limits on noneconomic damages in medical liability litigation; continuing the ACA’s guaranteed issue of health insurance though only for individuals who maintain “continuous coverage,” and reestablishing state high-risk pools for uninsured persons with preexisting conditions; not allowing expansion of Medicaid as permitted by the ACA in states that had not expanded Medicaid by January 1, 2016; raising the eligibility age for Medicare to 67 years; and moving Medicare toward a premium support financing structure to limit the federal government’s financial obligations.

    Many of Ryan’s proposals are ambiguous. Moreover, the plan has not been written in legislative language, preventing scoring by the Congressional Budget Office to determine the likely cost and the impact on health insurance coverage. Regarding the Trump proposals, an analysis by the Committee for a Responsible Federal Budget, a nonprofit, nonpartisan organization, concluded that it would increase the number of uninsured by 21 million by 2018, raising the number of uninsured Americans from nearly 30 million to about 50 million, and increase the federal budget debt over 10 years by between $330 and $550 billion.

    That’s from a recently published JAMA Internal Medicine Viewpoint by John McDonough and David Jones to which I’ve inserted links. Find more here.

    UPDATE: Per my tweets, here’s more on this topic.

    See also Tim Jost and Margot Sanger-Katz.

    @afrakt

     
      Health Policy
      health reform
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  • AJMC: Frontiers in health care

      03/23/2016
      Austin Frakt

    Last fall, I participated in a series of discussions hosted by the American Journal of Managed Care about health reform and the changing health insurance and delivery landscape. The video below is one exchange from the series, focused on frontiers in health care.

    I was joined by

    • Leah Binder, President and CEO of The Leapfrog Group
    • Margaret O’Kane, President of the National Committee for Quality Assurance
    • Matt Salo, Executive Director of the National Association of Medicaid Directors
    • Dennis Scanlon (moderator), Professor of Health Policy and Administration and Director of the Center for Healthcare and Policy Research, College of Health and Human Development, The Pennsylvania State University

    I’ll post other videos from the discussion series, but if you can’t wait, you’ll find more here.

    @afrakt

     
      Health Policy
      AJMC, health reform
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