Health Policy Updates: March 11 2017

The big health policy news this week was the revelation of the new GOP “repeal and replace”/Trumpcare plan, which has been named the American Health Care Act or AHCA.

Vox.com’s Sarah Kliff explains how some of the biggest proposed changes would work:

“In 2020, enrollment in the Medicaid expansion will “freeze” and states with no longer be able to sign new enrollees up for the program. Legislators expect that enrollment would slowly decline, as enrollees’ incomes change and they shift off the program…

On the surface, the tax credits for the oldest Americans seem the most generous. People in their 60s, for example, get twice as much help as those in their 20s….But under the Republican plan, insurers would be allowed to charge the oldest Americans five times as much as the youngest Americans. Their financial help would not scale nearly as much as their premiums would.”

I liked this “high yield” layout from the NYTimes of what the GOP plan will keep, change, or get rid of from Obamacare.

Conservative health policy expert Avik Roy weighed in on the plan in Forbes:

“Leading House Republicans have included a number of transformative and consequential reforms in their American Health Care Act, the full text of which was published Monday evening. But those reforms are overshadowed by the bill’s stubborn desire to make health insurance unaffordable for millions of Americans, and trap millions more in poverty.”

A much longer and more detailed description of the plan’s features in Health Affairs:

“In summary, the legislation’s tax cuts will be very attractive to wealthy Americans and health insurers and providers, who would get a trillion dollars in tax breaks. It could cause consternation for Medicaid recipients and state Medicaid programs, which would see federal funding for Medicaid steadily diminish, potentially thinning out coverage. The legislation could be bad news for recipients of current tax credits who are older, sicker, and poorer, and who live in areas where care is expensive.”

And from Andy Slavitt, CMS director under Obama:

“Despite President Trump’s stated goals of covering at least as many people as the ACA, with more affordable policies, the plan put forward by the House on Monday would cut coverage for millions and make it more expensive for millions more.”


Atul Guwande on ACA repeal, and replacement by “Trumpcare”:

“Now Republicans in Congress are facing the wrath of constituents who don’t want to lose those gains. Conservatives have had to back off from their plan to repeal Obamacare now and worry about replacement later. Instead, they must grapple with what they have tried to ignore: the complexities of our health-care system, especially in the four vital areas of employer-sponsored coverage, Medicaid, the individual insurance market, and taxes.”


Conservative health care policy expert Lanhee Chen makes the case for the GOP Obamacare replacement proposal:

“This is always the tension at the core of conservative health reform. On the one hand, I think you will have lower premiums. But those come, in some cases, with products where there is more expense for the consumer on the front end. Part of that is by design. We want a system where consumers have a better handle on the cost of care.”


Another “rave review” of the AHCA by libertarian-leaning policy commentator Megan McArdle:

“You’re not exactly seeing enthusiastic cheers from the journalists who opposed Affordable Care Act, of which I am one. See? This is me, emphatically not cheering. If such a thing is possible, I am actively failing to cheer. […] So who does like this thing? Well, um, I guess rich donors and the taxes-uber-alles wing of the conservative movement.”


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4 thoughts on “Health Policy Updates: March 11 2017

  1. Oh, I see now.

    Based on the Vox interview with conservative health care policy expert Lanhee Chen, the reason we’re not going back to the old fully pre-existing-condition-screened insurance system with high risk pools that was indicated by Paul Ryan as the coming replace less than two months ago in January is that the reconciliation process, allowing the “replace” to get passed with only 50 votes (no Democratic votes) in the Senate, won’t allow that change from Obamacare.

    (I’m deducing this from, in that interview,

    Lanhee Chen:
    “One issue is the House bill, as it’s designed now, is constrained by the reconciliation process, and so they can’t do as much elimination of regulations as conservatives want. They don’t address essential health benefits, they don’t address guaranteed issue, they retain the modified community rating structure.”
    )

    I had prior assumed the reason the Ryan January plan was not the just-announced replace was some combination of these pretty good reasons:

    a)The unfortunate PR aspect of the apparent unveiling of the plan at a CNN Town Hall
    ( http://www.cnn.com/2017/01/12/politics/audience-member-paul-ryan-town-hall-obamacare/ )

    b)That an Economist article calculated that the new Federal funding in the plan to the states for the high-risk pools was less than 1/4 of what would be needed to make them work

    ( http://www.economist.com/news/united-states/21715731-without-plenty-cash-high-risk-pools-would-be-poor-replacement-affordable-care )

    c)That some wonks caught that Paul Ryan’s assertion that 8% of pre-Medicare-aged people have relevant pre-existing-conditions is incorrect–the number is more like 27%

    ( http://kff.org/health-reform/press-release/an-estimated-52-million-adults-have-pre-existing-conditions-that-would-make-them-uninsurable-pre-obamacare/ ; http://www.latimes.com/business/hiltzik/la-fi-hiltzik-obamacare-ryan-townhall-20170113-story.html ) ,

    d)That other wonks caught that the reasoning in a 2/16/17 Republican policy wonks had rather weak (actually, preposterous!) reasoning to support that state-run high-risk-pools, with a new Federal infusion of < 1/4 of the needed funds through "State Innovation Grants", would now work.

    (The reasoning was:
    "Some may suggest State Innovation Grants would lead to enrollment caps or waiting lists like certain high risk pools functioned prior to Obamacare. This is false. These new and innovative State Innovation Grants are designed to help vulnerable patients. Why would anyone allow them to potentially harm the very patients they are intended to help?"

    The reasoning is the next to the last paragraph in https://assets.documentcloud.org/documents/3463969/The-New-Obamacare-Replacement-Template.pdf
    )

    ———–

    Since we'll be going back to full pre-existing-conditions as soon as the Republicans can manage it (and why not then for Medicare as well?), I'll keep around my links showing that under the pre-existing-condition-screened system, a person could apply for individual health insurance, fill in the pre-existing-conditions as honestly as their recollection allowed, be issued the insurance.

    And then, if a big medical claim came in, the insurer could do a careful review of medical records, and check the cross-insurer databases of claims and pre-existing conditions, and rescind the coverage, and not pay the claim.

    Here is some documentation of that:

    http://www.pbs.org/moyers/journal/07102009/watch.html (See 3:20 -7:00 on the video. Starting at 6:00, we have executives of several health insurance companies indicating they will continue to do post-issuance recision for pre-existing-conditions even when there was just an honest mistake by the applicant.)

    And, see a few more cases of such recision,

    here: http://www.cbsnews.com/news/blue-cross-to-docs-help-cancel-coverage/

    and here: http://www.ct.gov/ag/cwp/view.asp?A=2788&Q=333838&pp=12&n=1

    —-

    One additional reference:

    Additional description of Ryan's January plan: Throughout Charlie Rose of 1/18/17, here: https://charlierose.com/videos/29730

  2. Actually, I think there is a discrepancy between the New York Times and Sarah Kiff (Kiff agreeing with Julie Rovner at Kaiser Health News) on how complete the Medicaid extension phase out is.

    Times, your referenced article:

    “Would let states keep Medicaid expansion and allow states that expanded Medicaid to continue getting federal funding as they would have under the A.C.A., until 2020. Federal funding for people who became newly eligible starting in 2020 or who left the program and came back, however, would be reduced. The bill also proposes capping federal funding per enrollee, based on how much each state was spending in 2016.”

    (in particular, “would be reduced”)

    vs:

    Sarah Kiff has, here:

    http://www.vox.com/policy-and-politics/2017/3/7/14842912/american-health-care-act-short-explained

    “AHCA would keep the Medicaid expansion but only until 2020. At that point,
    states would have to stop enrolling people and anyone who fell off the
    program — perhaps because their income went up, or they simply forgot to
    enroll — would not be allowed back on.”

    In particular, “would not be allowed back on”

    Julie Rovner of Kaiser Health News has the same thing.

    Here,

    http://khn.org/news/five-ways-the-gop-health-bill-would-reverse-course-from-the-aca/

    “The biggest changes the Republican bill would make are to the Medicaid
    program. Starting in 2020, it would roll back federal funding for the ACA’s
    expansion that allowed states — if they so chose — to provide Medicaid
    coverage to all low-income individuals under 138 percent of the poverty
    level, rather than just the specific categories of poor people (children,
    pregnant women, elderly, disabled) who were previously eligible. Thirty-one
    states opted to pursue this ACA provision. People who are covered under the
    expansion would continue to be funded by the federal government after that,
    but states would no longer be allowed to enroll anyone under those expanded
    criteria. And an enrollee who loses eligibility for the expansion program
    could not re-enroll.”

    —–

    (For most states, the difference between the two accounts should be nil. If the 90% Medicaid-expansion federal funding is reduced a lot, as in NYTimes, they’ll probably not allow people to re-enroll. However, richer states willing to raise taxes some could perhaps allow people to re-enroll.)

  3. Avik Roy in Forbes has me a little puzzled by seemingly proposing removal of the one (very weak) adverse-selection-prevention mechanism in the bill:

    “Worse still, the bill contains an arbitrary “continuous coverage” provision, in which those who sign up for coverage outside of the normal open enrollment period would pay a 30 percent surcharge to the normal insurance premium. This surcharge is an arbitrary price control. While 30 percent represents an approximate average of the additional health risk of late enrollees, the 30 percent provision incentivizes those who face much higher costs to sign up, forcing insurers to cover them at a loss. This seems like a recipe for adverse selection death spirals.”

    Well, O.K., it might in fact cause, not prevent, death spirals. But this 30% is the only thing they’ve got in the bill to keep people from signing up for insurance just when they get sick. (CBO: I hope you catch that!)

    Already, it’s been commented that 30%, for just 1 year, is an inadequately-effective adverse-selection / death spiral / soaring premiums protection. Already too like NY pre-Obamacare, or MA pre-Romneycare, with adverse selection and death spirals all over the place.

    —-

    Also, I note from Avik Roy confirmation that we’re not going to full pre-existing-condition screening only because the reconciliation method is needed to pass the bill in the Senate without 60 votes–need at least 8 Democrats.

    So in the future, if they can, full pre-existing-condition screening again, to unleash the full power of the miracle of the marketplace. (Why not Medicare as well?)

    Quoting, from Roy:

    “Unfortunately, the AHCA’s efforts at replacing Obamacare’s health insurance exchanges are problematic. A key limitation is that Republicans have decided to repeal and replace Obamacare on a party-line vote using the Senate’s reconciliation process. But reconciliation can only repeal Obamacare’s taxes and spending; it can’t replace most of the law’s premium-hiking insurance regulations.

    The AHCA does make an effort to repeal Obamacare’s two costliest regulations: its requirement that plans charge similar premiums to the young and the old (age-based community rating); and its requirement that plans contain generous financial payouts (high actuarial value)”

  4. Aah, I see I’ve not been getting to the Health Affairs blog articles quickly enough.

    My prior comment unclarity on the grandfathering of the Medicaid expansion seems answered

    (http://healthaffairs.org/blog/2017/03/10/the-american-health-care-act-and-medicaid-changing-a-half-century-federal-state-partnership/comment-page-1/#comment-2631736 )

    in that the NY Times seems to agree with the (I-assume-definitive) Health Affairs.

    (Starting 2020, people losing eligibility for the Medicaid Expansion for a month or more could be re-enrolled by their state when their income goes back down if the state chooses, but the state would only receive traditional-level funding of 50-70%, not the enhanced 90%.)

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