What’s in the House version of AHCA?

Here’s the quick summary of the Republican bill. Lots of details here.

Net is the bill attempts to give states much more leeway in establishing and regulating health insurance policies and programs – sort of returning to the world we had pre-ACA.

While the bill was passed without a CBO evaluation/score, it is similar enough to the original bill. My guess is we could expect at least 15 million people will lose insurance coverage under this bill…but remember it’s not going to pass the Senate.

  • It replaces income-based subsidies (basing financial subsidies on a person’s income) with age-adjusted tax credits of fixed amounts.
    This means – wealthy and near-poor people of the same age get the same $ amount
  • Eliminates the individual and employer mandate
    This means – no requirement that people have health insurance.
  • Increases premiums for older people and reduces them for younger folks who get their insurance from small employers or in the individual market
    This means – more young people may sign up, more older folks will find insurance unaffordable
  • Ends funding for Medicaid expansion and caps future federal Medicaid payments
    This means – fewer low-income people will have coverage, states will have to come up with more money.
  • Penalizes individuals and families that don’t maintain continuous insurance coverage
  • Allows states to let insurers drop coverage for different types of medical care
    This means – consumers may not be able to get coverage for their condition or the type of care they need (e.g. drugs, behavioral health, maternity)
  • Eliminates taxes and tax increases from ACA
    This means – Medicare will run out of money in a couple of years instead of 10+

This is just what’s in the actual bill – which is already under fire by Senate Republicans; Portman, Heller, Graham, Scott, and Snowe have all voiced objections.

Instead of adopting or modifying the House Bill, expect an entirely new bill from the Senate. If the Senate bill is passed (which may – or may not – require 60 votes), then the House and Senate will have to figure out how to move forward and which bill is the vehicle.

 

 

ACA Deathwatch: No, AHCA is not going to pass Congress

AHCA is not going to become law.

IF it passes the House, there’s no way it gets enough votes in the Senate.  Two reasons.

  1. Senate Republicans are opposed to the bill.
  2. Enacting AHCA without massive changes would alienate core Trump voters.

Passing AHCA – without drastic changes – would be political suicide for politicians who voted for passage. And while pre-existing condition coverage is a big issue, the big issue is loss aversionmillions of Trump voters would lose coverage under AHCA.

The biggest winners – young, healthy people – don’t vote.

Oh, and AHCA keeps current ACA subsidies and protections for Congress and Congressional staff while chopping both for regular Americans

This from Nate Silver:

Republicans whose families make less than $30,000 a year were nearly three times more likely than those in families making at least $75,000 to say it was the government’s responsibility ensure Americans had health care coverage.

And from Jonathan Cohn – voters who stand to lose the most in insurance subsidies under AHCA are – by a wide margin – Trump voters…

Subsidy amounts lost by voters in 2016 election

AHCA drastically cuts assistance to older, lower-income Americans in rural areas, a demographic that overwhelmingly supported Trump. And, most of these voters earn too much to qualify for Medicaid, so they’ll be left:

  • with far lower subsidies
  • without coverage for pre-existing conditions
  • facing insurance premiums that are much higher than today’s because AHCA allows insurers to charge older folks much higher premiums.

Some may cynically hope AHCA passes as it will doom the GOP in the 2018 elections. But the cost of that political calculation is far too high; the millions will lose coverage are those most in need of healthcare coverage.

Of course, Congress won’t suffer – they keep subsidies, pre-ex coverage, and all the other goodies.

Congressional Republicans win; ACA repeal is NOT going to happen.

It’s official – Republicans’ efforts to repeal and replace ACA are done.

Finished.

Over.

And boy are they relieved!

I don’t know why anyone is surprised by this.  Only in the world of fantasy that exists inside the Washington Beltway would one think that changing legislation to appease far-right Freedom Caucus types wouldn’t cost votes from somewhat-more-moderate Republicans.

The latest defection is a big one – Fred Upton of Michigan said “I cannot support the bill with this provision (eliminating protection for individuals and small groups with pre-ex medical conditions) in it…”

What’s truly bizarre is this happened about the same time that Speaker Ryan was telling reporters “There are a few layers of protections for pre-existing conditions in this bill,”

Leaving aside the fact that the Speaker is wrong, think about the political implications for Republicans if they passed this legislation.  Their core voters in many states would find health insurance unaffordable, if available at all.

This isn’t liberal blather, it’s reality.  The best thing that can happen to Congressional Republicans is this bill isn’t going to pass.

And that’s before one contemplates the fate of the proposed bill in the Senate; if the House passes the AHCA repeal bill, their members will be hanging way out on a political limb as there’s no way the bill would ever get thru the Senate.

What does this mean for you?

Ignore the pundits.  AHCA is deader than this guy…

ACA Deathwatch – A Zero-Sum game

The ACA repeal movement may have gained a bit of momentum this week…The quick take – odds are this momentum will peter out as changes wanted by some Republicans are anathema to others.

My take is the hands on the Deathwatch Clock just moved back – not forward.

Here’s what’s going on.

The White House continues to push for a vote in the House by the end of this week, apparently to give President Trump a “win” in his first 100 days.

Hard-right Freedom Caucus Republicans have apparently agreed to a rough outline of a repeal plan. (details below)

Somewhat-more-moderate Republicans have publicly weighed in on the outline, and there’s a good bit of concern over coverage for pre-ex conditions and other provisions.

While the challenge faced by the Republicans is pretty straightforward, the solution is anything but. Put simply, changes that get support from the hard-right reduce support from more-moderate Republicans; It’s a zero sum game.

And that’s before it gets to the Senate, where it will die because Senate Republicans are loathe to pass anything remotely resembling AHCA.

Details on the latest legislation

Healthcare is brutally complicated, a reality that’s becoming increasingly apparent to GOP negotiators. To get to some sort of agreement between hard-rights and more-moderates, the latest repeal legislation includes:

  • waivers that allow states to set insurance premiums for older people 5 times higher than younger folks
  • ability for states to let insurance companies eliminate or limit coverage for different types of medical care – drugs, therapy, behavioral health, nursing home care, etc.
  • ability for insurance companies to “medically underwrite” individual and small group insurance again – in English, let insurers decide whether to cover you, and how much to charge, based on your medical history and risk factors.  To do this, states will have to provide high-risk insurance pools to help offset losses (this is a really complicated solution that hasn’t ever worked)

I won’t bore you with the nitty-gritty details, you can read them here.

What’s becoming increasingly apparent to Republicans in DC is they have a Hobson’s choice.

There is no way they can deliver on their campaign promise to repeal ACA and replace it with anything that won’t piss off a lot of their supporters.

But if they don’t repeal ACA, that will really piss off a lot of their supporters.

Add a President who doesn’t care what legislation does or doesn’t do, but cares a lot about “winning”, and we now understand why they are in the mess they are.

What does this mean for you?

The GOP has yet to transition from opposition to governing party.

Republicans channelling Monty Python

Why the President and Congressional Republicans are still trying to do healthcare legislation is truly a puzzle. Unhappy with their initial effort to completely blow up the insurance markets (and their political future), they’ve re-engaged in a pointless effort that is destined to fail – and wound themselves in the process.

Pointless because every concession to win votes from the Freedom Caucus guys costs votes from those slightly more moderate.  So, it’s a zero-sum game – win an arch-conservative’s support, lose a less-conservative vote.

perhaps they’re thinking the initial AHCA no-vote debacle wasn’t much of a concern…

To be fair, in the disastrous AHCA non-vote they ONLY lost one of their arms.  This time they’re looking to lose more appendages.  This is one of those “if you don’t laugh you’ll cry” moments, because ACA does need significant improvement, but – at least for now – improvements are being ignored as politics prevail.


There are a lot of reasons this is political suicide…

The President and Republican candidates committed to keeping coverage for pre-existing conditions.  The plan being discussed today would gut this entirely, leaving over a quarter of us without coverage for pre-ex.  Ignore claims to the contrary; the combination of changes to what’s covered (essential health benefits) and removal of restrictions on premiums would mean anyone in the individual or small group markets would be subject to medical underwriting (absent state regulations to the contrary).

A close friend and lifelong Republican (including experience working on Capitol Hill) emailed me this morning about this latest “reform the reform” effort using language that would peel the paint off a battleship.

Most Americans now believe the GOP “owns” health reform.  A just-published Gallup poll finds 61% of respondents said “any problems with the law moving forward are the responsibility of Trump and Republicans in Congress…”

Interestingly, ACA is now polling higher than ever, at 55% approval. That’s up 13 points since the election…

I think the Freedom Caucus guys understand their ideological purity means millions of Americans will lose insurance coverage – and thus healthcare. 

And when they do, every mother, father, aunt, uncle, and grandparent will be incensed beyond measure that their wife/husband/child/grandchild won’t get the care they need.

How that is a winning proposition escapes me, but good for the Freedom Caucus for standing up for what they believe in.

Of course, you need to have legs if you want to stand.

 

UPDATE – looks like the Freedom guys and their Republican opponents can’t agree on what the White House said the new bill would include.  Either that or the WH folks told the two parties different things.

AHCA has failed – what’s the next step?

AHCA has failed, and with it the Republicans’ efforts to repeal ACA.

Despite President Trump’s threats, cajolery, and bribing the Freedom Caucus, the attempt to repeal ACA is, for now and probably for the long term, dead.

(Please allow me this opportunity to point out that I predicted three months ago that ACA would NOT be repealed)…OK, chest pounding interlude is over…

What does the future hold?  While we all wish Congress would adopt sensible solutions to fix ACA, that’s highly unlikely. Steps such as

  • increasing the penalty for not carrying insurance to levels originally recommended by the Heritage Foundation,
  • fully funding the risk corridors and co-op support measures
  • fixing the “family glitch”
  • require insurers to operate in broad areas so they don’t cherry-pick only the most profitable locations, and
  • requiring full transparency from all medical providers

would help a lot, and that’s not even adding a Medicare-for-all option. As I noted in a previous post, Democrats helped fix G W Bush and the GOP’s Medicare Part D plan when it was cratering.

Unfortunately, it’s more likely the administration will do everything it can to hamstring ACA – refuse to enforce the mandate, end premium support, defund the federal Exchanges, you name it.  In the process, they’ll likely blame the prior president, or Democrats, or whatever. And in so doing, they will hurt businesses, taxpayers, individuals, patients.

What’s most likely is a concerted and persistent effort to defund Medicaid.  This will be described as allowing states more flexibility, as refusing to use federal funds for abortions, as reducing the federal deficit, but make no mistake, the real priority is to shrink funding for the poor, elderly, kids, and disabled.

Lest you think that’s harsh, recall that those are precisely the people Medicaid helps.  It remains to be seen if Republicans will be successful, or if they will come together and heal the fractures so visible within the party.  If they do, they will likely find Democrats willing to work with them, perhaps using the Cassidy Collins bill as a starting point.

There’s been a lot of energy focused on blocking or passing AHCA.  Let’s take a few days to let the smoke clear, and then try to get Congress to work together to fix ACA.

Because it isn’t going to be repealed.

ACA Deathwatch: Damned if they do…or don’t

GOP Representatives are being strong-armed by President Trump and wooed by House leadership, and nowhere is the stress more intense then where I live – upstate New York.

While Trump blusters and leadership cajoles, wheedles, and bribes, Katko, Tenney, Faso et al (upstate GOP Congresspeople) are facing furious constituencies livid at the possibility that they and their neighbors will lose coverage – and that their state is being held hostage.

photo credit WSKG News

New York is the only state that requires counties to pay a chunk of Medicaid expense – 13% to be precise.  In my home county, Onondaga, that amounts to just over $100 million, and costs the average  homeowner about $600 annually in property taxes. In an effort to bribe/force upstate’s Republican Representatives to support AHCA, the bill was modified to specifically force New York to eliminate counties’ financial requirement and shift it to the state.

In Onondaga, 80,000 people, one out of six residents, is covered by Medicaid.  There are 26,000 healthcare jobs in the county paying $58,000 each.  If the AHCA passes and Medicaid expansion funding disappears, we’re going to lose over a thousand jobs – and $60 million in wages. Sure property taxes will go down, but state taxes will have to increase.

Syracuse – the biggest part of the county – has the highest minority poverty rate in the nation, and the lowest economic opportunity of any municipality as well.  Other upstate communities are better off – but not much.

If AHCA passes, an already desperate economic and health situation will get immeasurably worse.  That’s why Katko won’t hold town halls and is avoiding any and all public appearances; he knows that a NO vote on AHCA will cause a tweetstorm while a YES vote will likely cost him his seat.

That’s the dilemma facing all House Republicans, even those in “safe” seats. While Freedom Caucus members don’t know it yet, passing AHCA would cost many their seats. Voters HATE losing things they already have, and now that they have health coverage, and were promised the replacement will be better/cheaper/with lower deductibles and more access, when that proves to be false they are going to be really pissed off.

Medicaid cuts will result in their parents losing coverage for nursing home stays, neighbors’ disabled kids losing medical care, friends losing jobs in healthcare, and hospitals in rural America closing.

Fortunately, it’s extremely unlikely AHCA will pass, as several Republican Senators are strongly opposed to AHCA and will not be intimidated by Trump tweets.

What does this mean?

Elections have consequences – and so do votes.

If upstate Republicans vote to overturn ACA and the bill doesn’t pass the Senate, they are going to pay a very heavy price from voters on both ends of the political spectrum.  

Three-legged horses can’t run

If you cut a leg off your horse, it’s not going to run far or fast.  If you cut two legs off, it’s going to fall over.  And if someone else cut your horse’s legs off, you wouldn’t help them fix their horse.

Common sense, right?

So why is Paul Ryan et al complaining about ACA?

He and his fellow Republicans chopped not one, but two legs off that horse, and now they scream loud and long that that horse won’t run, so they need to shoot it and replace it with…what?

I bring this to your attention because it explains why there’s so much reluctance on the part of Democrats to work with their Republican colleagues on an ACA replacement. Put bluntly, Congressional Dems believe they got screwed and are really pissed off about that. So pissed off that they are more than happy to let the Republicans shoot themselves in the head all by themselves.

Here’s a quick summary of steps Republicans took that harmed ACA. (more here; a LOT more here)

  • Removed funding for risk corridors which kept co-ops and other plans alive
  • Didn’t expand Medicaid in 17 states
  • Hobbled ACA marketing efforts in multiple states
  • Sued the Obama Administration to block premium supports

I’ll leave aside the things the GOP could have done to help fix ACA, common sense stuff such as:

  • increasing the penalty for not carrying insurance to levels originally recommended by the Heritage Foundation,
  • fixing the “family glitch”
  • require insurers to operate in broad areas so they don’t cherry-pick only the most profitable locations, and
  • requiring full transparency from all medical providers.

If they had, ACA would be operating a lot better today, but Sen McConnell, Speaker Ryan et al weren’t interested in fixing ACA.  (In contrast, Democrats helped fix G W Bush and the GOP’s Medicare Part D plan when it was cratering)

The result of the Republicans’ successful efforts to hamstring ACA were made public earlier this week when President Trump did a photo op with several “Obamacare victims” including a Colorado woman who claimed her health insurance costs had tripled under ACA (note there’s no independent corroboration of her claim). Ms Couey said she’d had to switch insurers multiple times – while there’s no detail on this, it is likely more than one of her previous insurers went belly-up for one of several reasons.

(Warning, this gets pretty wonky) A big reason for Ms Couey’s issues – ACA had provisions specifically designed to help new insurers develop, grow, and become viable competitors – in local markets – in an industry dominated by behemoths. These provisions included “risk corridors”; financial vehicles designed to help health insurers entering markets by offsetting initial losses by transferring profits from their wealthier competitors.

The idea was to force competition into and help sustain that competition in a market where size is all that matters, where it is all but impossible for new, entrepreneurial competitors to start, much less succeed.

Those provisions disappeared, killed off by a Congress ostensibly interested in the competition and the free market.  Specifically, Sen Marco Rubio inserted the clause in the Cromnibus bill that prevented the Feds from moving money around to cover the Co-Ops’ losses in 2014.

Let’s remember that the risk corridor payments were to be budget neutral over the three year lifespan of the program.  The Rubio amendment (Section 227) forced CMS to shift that to a “pay as you go” model.

What does this mean for you?

If someone had chopped the legs off your horse, would you be eager to help them fix their’s? 

 

AHCA, CBO, and Workers’ Comp

There’s lots of news out there about the Congressional Budget Office’s scoring of the Republican healthcare reform bill known as AHCA; we’ll narrowly focus on what passage of AHCA would mean for workers’ comp – and highlight what’s missing from every other analysis of the CBO report.

Briefly, I’d expect case-shifting and claims-shifting to workers comp to increase significantly, resulting in higher work comp expenses for employers, and more business for the work comp service industry.

Here’s why.

The expansion of Medicaid and the individual mandate covered about 13 million more workers than pre-ACA; 81% of Medicaid recipients’ families have at least one member working. When workers who have health insurance get hurt, they are less motivated to claim it was on the job. And, if they are hurt on the job, work comp doesn’t have to pay for non-occupational medical conditions (e.g. dealing with hypertension before doing surgery).

The newly insureds are also working in jobs with higher claim frequency than average.

Some argue that the high deductibles and copays common in some insurance plans negates my argument; I respectfully disagree.  That’s because the newly insureds are poorer than average, thus they are much more likely to either:

  • get premium support payments from ACA which also cover deductibles and copays or
  • be covered by Medicaid, which has no cost-sharing (except in Indiana).

Since ACA was fully implemented in 2014 we’ve seen historically-low work comp medical trend rates, a strong indication that ACA is a major factor in lower work comp costs.

The CBO has projected:

  • 14 million will lose health insurance next year
  • 7 million more by 2020
  • another 5 million will lose coverage by 2026
  • most of those losing coverage would be older
  • deductibles and copays would be higher than under ACA

(credit Washington Post)

All of these projections are bad for work comp; older workers’ injuries are more expensive, and the higher deductibles and copays, along with a big drop in Medicaid coverage, would financially motivate workers to “claim shift.”

(credit Washington Post)

So, those losing health insurance would be:

  • much older
  • more likely to be employed in higher-risk jobs
  • more likely to be currently covered by Medicaid

What’s missing

…from all of the press reports and analyses of the CBO report is a discussion of how providers would react to passage of AHCA. That’s in part because the CBO report (full copy here) doesn’t address the issue.

Insurance coverage is just part of the story; doctors, hospitals, pharma and other providers are going to be hugely affected by a big decrease in their customer base.

More on that tomorrow.

What does this mean for you?

For work comp payers, higher claims and higher medical bills.

 

ACA Deathwatch: Republicans should hope AHCA doesn’t pass

I’ll stipulate to this – ACA needs major fixing. See below, and multiple past posts, for my take on what’s needed.  Unfortunately that doesn’t look likely.  The internecine warfare among Republicans over the American Health Care Act was inevitable, and will not be easily resolved.

That’s because there’s no consensus among Congressional Republicans on what healthcare reform should look like, who should pay for it, or what the priorities should be – access, coverage, cost control, less government intrusion, lower taxes, budget deficits are all in play, and many conflict. There’s also palpable and well-justified fear of the conservative infrastructure, a force including media outlets, think tanks, consultants, donors, and fringe groups that is extremely vocal, very powerful, and critical to the political future of individual Republicans.

Outside the reliably Republican world there is even more danger lurking.

What’s not being reported is this – If AHCA passes, the Republicans are in deep trouble.  10 – 15 million Americans will lose coverage (and loss aversion is powerful indeed).  Insurers will drop out of many markets overnight.  Hospitals, especially in rural America, will get crushed due to lower reimbursement and higher bad debt. Trump voters who believed him when he said he’s lower costs and improve insurance are going to be disappointed indeed. Deficits will go up.

Thus Republicans are in a can’t win situation; they have to deliver on impossible campaign promises, and if they do, voters will blame them for loss of coverage, higher prices, and anything and everything related to healthcare.

While Republicans battle amongst themselves, the medical provider community – AMA, AHA, American Nurses Association – just about every national interest group has come out firmly against AHCA. Insurance companies are warily walking the fence, not willing to provoke a tweetstorm but concerned indeed that AHCA will pass and their risk pools will crater. Seniors are up in arms, outraged that they’d have to pay more (!) for insurance if younger people don’t subsidize their needs.

There is a possible compromise bill, Cassidy Collins does offer some hope as it would likely garner support from both sides of the aisle if it gets any attention – and a lot of modification along the way.  But that is a very big “if”.

While all have different and specific issues, the net is this: AHCA will not lower the cost of care, and will increase the number of Americans without health insurance by at least 10 to 15 million people at the outset.

If AHCA passes, that number will inevitably increase as insurers’ risk pools experience worsens when fewer young people enroll, driving up costs for older folks. The death spiral in the individual markets will accelerate until…something happens.

There’s no question ACA needs fixing.

  • An excellent start would be to re-fund the risk corridor program killed by Sen Rubio in 2015 when he was able to force thru defunding of risk adjustment in the budget agreement.
  • Adding a public option to markets with limited choice would provide an insurance backstop, much like residual markets in workers’ comp.
  • Increasing the penalties for failing to carry insurance is another wise step.
  • Replacing deductibles with co-insurance requirements would help ensure people could afford the care they need while making sure the high-utilizers think long and hard about their medical care.
  • Requiring all to take greater responsibility for personal behaviors that increase health risks should be front and center. Obesity, substance abuse, medication adherence and failure to utilize preventive medicine should all be addressed

The intractable problem is cost. AHCA focuses on insurance markets, subsidies, eligibility, and credits.  It does nothing to address what drives cost – the massive waste due to unnecessary care and inflated prices for drugs, services, devices.

What does this mean for you?

AHCA won’t pass, a fate Republicans should be forever grateful for.