Health Policy Updates: December 3, 2017

It has not been a good week for US health care.

This week the Senate passed “a health care bill disguised as a tax cut.” The result, argues Sarah Kliff, will be a sweeping change to many parts of the US health care system, starting with (per the CBO) 13 million Americans dropping health insurance coverage.

“First, the bill repeals the individual mandate, a key piece of Obamacare that requires most Americans get covered. Economists expect its elimination to reduce enrollment in both the Affordable Care Act’s private marketplaces and Medicaid by millions. The money saved will be pumped into tax cuts for the very wealthy. The bill also includes tax cuts so large that they would trigger across-the-board spending cuts — including billions for Medicare. The last time Medicare was hit with cuts like this, patients lost access to critical services like chemotherapy treatment.”

Even while the individual mandate is getting repealed, other attempts to “sabotage” the ACA/Obamacare marketplaces are beginning to have the intended effect. Recent work from the Kaiser Family Foundation has found that insurers are being forced to raise premiums into the White House’s policy of stopping cost-sharing reduction payments. Is the White House on the way to forcing the ACA into a death spiral?

“These results are generally consistent with a KFF estimate released in April projecting that silver marketplace premiums would have to increase by 19% on average to compensate for the loss of CSR payments, with the amount varying substantially by state…Data on 2018 marketplace premiums indicate premiums will increase substantially for the vast majority of insurers due to the discontinuation of cost-sharing reduction payments.”

Meanwhile, the Children’s Health Insurance Program (CHIP) has still not been renewed, and many states are getting close to running out of funding.

“The policy effects are already being felt in terms of wasted money and diverted personnel hours, state administrators have said…If states were to start to send their letters to parents—Nablo said Virginia is just days away from that point—the policy implications would be significant, health analysts have warned. Parents might find themselves confused by the program and less trusting in its soundness. Kids might never sign up, or might drop out.”

Finally, under Donald Trump and CMS secretaries Tom Price and Seema Verma, CMS (the agency that oversees Medicare and Medicaid) has been reversing a positive trend towards reimbursement reform and cost reduction. Rather than continuing the push towards bundled payments and other alternative payment models, the flawed status quo of fee-for-service is being favored.

“Mr. Price defended the old model…arguing that the health care system in the United States — “the finest,” he said, in the world — had developed around it.

“The agency’s Centers for Medicare and Medicaid Services, led by Seema Verma, has suggested it will accept more recommendations than it did in the past from a committee of doctors formed by the American Medical Association on how much Medicare should pay for services and procedures — essentially letting doctors set their own pay.”


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