That is what we have been told the Obama administration will claim today as they begin the job of reselling Obamacare.
Is Obamacare even partly responsible for the slowdown in health care costs?
That is silly.
First, Obamacare is not a health care reform law; it is a health insurance reform law. No one on either side of the debate has ever argued anything different.
Does the law have some limited cost containment features in it?
Yes. But these are either pilot projects or are years from being fully implemented.
I have heard the argument that the Medicare cuts that were made to help pay for the program are examples of cost containment efforts that are having a short-term impact on controlling costs. The Democrats need to be careful with this one. I recall their countering Republican “Mediscare” claims by saying the Medicare cuts were not significant.
In a letter last year accompanying the Medicare Trustee’s report, the Medicare actuary said, “The [Obamacare Medicare cuts] will affect Medicare price levels more gradually, but a strong likelihood exists that, without very substantial transformational changes in health care practices, payment rates would become inadequate in the long range.”
Translated: The Obama Medicare provider cuts are not having a big impact in the short-run but will be unsustainable over the longer-term.
Continue reading “Is Obamacare Responsible For the Recent Slowdown in Health Care Costs?”
Filed Under: Economics, THCB
Tagged: Costs, Health care spending, Obama administration, Robert Laszewski, The ACA
Dec 6, 2013
In recent weeks, President Barack Obama has been appropriately raked over the coals for saying, multiple times, “If you like your health care plan, you’ll be able to keep it.” He shouldn’t have said it. The problem is, he shouldn’t have said it for entirely different reasons than most Americans think.
Let’s begin with a basic question: What does it mean to “like” one’s plan? And what is the value of this statement? All of this came to a head at an October 30 Congressional hearing with the Secretary of the Department of Health and Human Services, Kathleen Sebelius.
At the hearing, in a cantankerous challenge to Sebelius’s credibility, Tennessee Rep. Marsha Blackburn highlighted two constituents, Mark and Lucinda, who “like their plans,” but were being told they could not keep them because of the Patient Protection and Affordable Care Act (ACA), so-called “Obamacare.” A long-entrenched individualist rhetoric provided the framework for Blackburn’s point, namely that we should allow Mark and Lucinda to keep their plans in the name of individual freedom, just because they “like” them.
For purposes of argument, let’s assume that what Mark and Lucinda’s insurers are saying—that the cancellations are a result of the ACA—is true. But, as we do this, let’s also keep in mind that just because insurers claim premium hikes and cancellations are because of the ACA doesn’t mean that it’s true. In fact, it seems to be true only rarely and, even then, often as a half-truth.
But, anyway, let’s assume it is true. The question then becomes: why is it true? The problem is that this individual freedom is made possible by the assurances of a social safety net. This brings us back to the existential foundation of the ACA, namely that the choice to not carry health insurance—or to carry poor health insurance that individuals may find out, at some point, doesn’t cover something important—simply dumps those individuals into social institutions such as emergency rooms and local care centers, and does so in an extremely wasteful way. This returns us to the problem we started with and a question of whether or not ACA opponents are concerned with solving the problem of building a sustainable health care system.
In other words, Blackburn’s logic, as inspirational as it might be to some, bathed as it is in the rhetoric of freedom, is not premised on an analysis or understanding of health insurance, but deference to Mark and Lucinda to make their own choices, consequences be damned.
Continue reading “Why “Liking” Your Plan Is Not the Point”
Filed Under: OP-ED, THCB
Tagged: Daniel Skinner, Health Plans, Obama administration, The ACA
Dec 6, 2013
His emails arrive at night and land like scud missiles. He is an Old Testament retired CEO who is appalled at the state of America and as a thirty year healthcare system veteran and dutiful son, I am expected to interpret the complicated tea leaves of the Affordable Care Act ( ACA) and warn him if Armageddon (any form of change) is imminent. He needs three hours notice to hide his coin collection.
Today, his instant messaging is in large case font; He has forwarded an email that was forwarded to him from a friend of a friend of a friend – all retirees convinced that our current President is an operative for a hostile foreign government. I have to give high scores to his email chain author for his/her detail, veracity and creativity. Many of the stories are purportedly authored by retired Generals, Navy Seals, and in one case, a dead President.
I often scroll down these emails to see if I can find its genesis and author – perhaps it is Karl Rove or someone incarcerated for white-collar crime.
The email offers me “the truth about Benghazi” or a grainy photo of the President giving out nuclear codes to Al Qaeda operatives behind a District of Columbia Stop & Shop. I am not always inclined to believe these missives but I love my Dad and his loyal concern for America. At 83, his draconian solutions are not always politically feasible and carry a decent chance of arrest if one actually tried to act on them. However, he has a 140 IQ and understands economics.
Continue reading “The T-Rex Takes on Healthcare Reform”
Filed Under: Uncategorized
Tagged: Michael Turpin, Obama administration, The ACA
Dec 4, 2013
Until now, virtually every president who has dabbled with comprehensive health reform has failed spectacularly, often at huge political cost. Think of Harry Truman’s lonely campaign for national health insurance, Jimmy Carter’s devastating conflict with the late Senator Edward Kennedy over universal health care coverage, the first George Bush’s ineffectual (and little-remembered) health insurance proposal, or Bill Clinton’s damaging first-term effort to pass health reform.
Health reform is a presidential nightmare. No sane presidential consigliere would ever recommend his or her boss try it. Our health care system is so complicated and convoluted that any conceivable proposal is bound to make someone worse off. And in health care, worse off can mean real pain and suffering that creates powerful, emotional stories that echo through the news cycle. There is simply no way for presidential health care reformers to avoid grievous political harm, as the experience of President Barack Obama is now demonstrating in spades.
Which raises the question: why bother? It would have been so easy for President Obama, in the midst of the Great Recession of 2008, to kick the health care can down the road, saying that his all-consuming priority was economic revival, and that health reform could wait.
The answer provides critical context for the relentless stream of troubling news—and the cacophony of charges and counter-charges—about the implementation of the Affordable Care Act (ACA) that fill the media each day. The reason to proceed with this painful technical and political process is that there is no alternative. Before the ACA, the current health care system—and especially its private insurance market—was collapsing before our eyes, like a house tipping into a sinkhole.
Continue reading “The Presidential Healthcare Curse – Why Do They Even Try?”
Filed Under: OP-ED, THCB
Tagged: David Blumenthal, Health Care Reform, Obama administration, The ACA
Dec 1, 2013
Recently, the President of the United States, the most powerful person on earth, the man whose finger rests on the nuclear button, struck a bold blow for . . . procurement reform?
“There are a whole range of things that we’re going to need to do once we get [the Affordable Care Act (ACA) rollout] fixed—to talk about federal procurement when it comes to IT and how that’s organized,” the president said on November 4, speaking to a group of donors and supporters.
People are clamoring for heads to roll, and the president is talking about what just could be the geekiest, most obscure topic ever to clog a federal bureaucrat’s inbox. Procurement reform? Has he gone off the deep end?
Well, not really. Among the causes of healthcare.gov’s difficulties, the federal process for purchasing goods and services could rank right up there with toxic politics, lack of funding for ACA implementation, and management goofs. Let me explain why, from personal experience.
From 2009 to 2011, I served as National Coordinator for Health Information Technology. My job was to implement the HITECH ACT, which aims to create a nationwide, interoperable, private, and secure electronic health information system. As national coordinator I had to lead a lot of federal contracts.
This is how that went.
Continue reading “A Tale of Two IT Procurements”
Filed Under: Tech, THCB
Tagged: David Blumenthal, Healthcare.gov, HIT, IT procurement, Obama administration
Nov 24, 2013
Last week President Obama announced that he will try to keep his oft repeated promise to Americans in the individual market that they can keep their plans if they like them … for a year. The media have done an excellent job explaining why President Obama’s temporary patch to the ACA may endanger its existence; in the process the American public has learned more than it ever wanted to about adverse selection, cream skimming, and most importantly crass politics.
Though the full costs of adverse selection will be muted in the first year by risk corridors and reinsurance, it is clear that the failing website, the bad press, and the recently announced delay are placing maximal stress on even those backup provisions of the bill.
Even if the ACA survives this additional insult against the economics that support its very existence, we have witnessed yet another missed opportunity for positive reform to President Obama’s signature legislative achievement. And this time we can’t just blame intransigent tea-party Republicans and their quixotic efforts at repeal; here the buck stops at 1600 Pennsylvania Ave, NW.
While many of the plans that are affected by the President’s temporary patch might actually be plans that don’t qualify as “insurance” (i.e. they have low lifetime caps on expenditures or don’t cover hospital services), numerous others actually offer quite good coverage that just don’t meet the exceptionally high standards of the newly developed minimum essential health benefit (EHB).
In many ways, the first dollar coverage for preventive care and the wide ranging number of services covered by the ACA aren’t truly insurance either. Instead, these features amount to a very generous pre-payment plan for medical services supported by the United States treasury.
These elements of the EHB are too costly and unnecessary. Perhaps even more concerning, they are just the ante. As time goes on, vested interests for everything not included in the EHB will work tirelessly to insure that their favorite benefits are included. If you want evidence of this eventuality, you need look no further than the remarkably long and growing list of benefits mandated by most states.
Keep in mind that as the EHB grows more generous the premiums and subsidies on the exchanges will also grow. And we know who will pay their “fair share” of those increases.
Continue reading “The Real Fix? The Exchanges Aren’t Working. Here’s Why …”
Filed Under: Economics, THCB
Tagged: Craig Garthwaite, David Dranove, Essential health benefits, Health Insurance Exchanges, Health Plans, Obama administration, Obamacare Fix, The ACA
Nov 18, 2013
With his announcement on Nov. 14 of a plan to offer a temporary reprieve to people facing cancellation of their health-care policies, President Barack Obama may have created his own version of the much-maligned, often yearly, Medicare “doc fix”.
The doc fix, a recurring effort by Congress to override statutory formulas that limit the growth in Medicare payments to doctors, often sparks political theatrics as lawmakers work to assuage the concerns of physician groups and Medicare recipients. Many members of Congress want to repeal and replace the underlying program — the sustainable growth rate formula for reimbursing physicians — but agreement has proved elusive, in part because of deficit concerns and the high cost of repealing the formula.
The president may have set himself up for another situation similar to the doc fix with his proposal to administratively tweak the health law. Obama said he will temporarily allow health insurance companies and state insurance commissioners to continue offering insurance plans “that would otherwise be terminated or canceled” for failing to meet the requirements of the Affordable Care Act (ACA).
Has President Obama created his own version of the annual “doc fix” by continuing insurance plans that would have otherwise been canceled?
While this change will help some health-insurance consumers, it is a serious complication for health insurers who in a few weeks will have to readjust their plans. In the 24 hours since the announcement, the initial reaction from insurers and state health insurance commissioners has been mixed. Some insurers have already voiced concerns that any short-term fix will deprive their ACA-compliant exchange plans of the healthier customers needed to keep rates down for everyone, including older, sicker customers.
Fast-forward 11 months to late October, 2014, with the midterm elections imminent and the president’s “transitional policy” about to expire. Will Democrats want the issue of whether people can “keep their health plan if they like it” raising its ugly head again, just as voters are about to cast their ballots?
Continue reading “What the “Doc Fix” Should Tell You About the “Grandfather Fix””
Filed Under: THCB
Tagged: Democrats, Doc Fix, Grandfather Fix, Health insurance, Matt Barry, Obama administration, Obamacare Fix, The ACA
Nov 15, 2013
Facing a revolt by Democratic lawmakers unhappy with the rollout of the health law, the Obama administration announced this morning that it will allow insurers to renew cancelled health plans that fail to meet the standards set by the Affordable Care Act.
Insurers will be required to notify customers with cancelled plans that they have the option of upgrading to an ACA-compliant plan. Plans can be extended through the end of 2014.
The decision does not impact new customers who will still be required to buy coverage that meets the stricter standards set by the new health law – either on the exchanges or directly from an insurer.
The move is likely to add additional confusion and uncertainty to an already chaotic marketplace shaken by the widely publicized problems at HealthCare.gov.
It is unclear, for example, how the customers of specific health plans who have already had their coverage cancelled will be impacted. The decision of whether or not to reinstate individual plans is being left up to individual insurers.
Exactly why they’d want to reinstate the cancelled plans isn’t obvious. Five million people have received cancellation letters according to one recent estimate.
Health plan insiders have argued for months that reversing course will be difficult, if not impossible, for plans that have built their actuarial models on the assumption that certain numbers of healthy people will enroll by certain dates. Industry representatives immediately warned that the impact would likely be higher premiums.
In a letter sent to state health insurance commissioners this morning, Center for Consumer Information and Insurance Oversight (CCIIO) director Gary Cohn spelled out the details of the fix. A plan must have been in effect on October 1st, 2013. Health plans must notify consumers in writing of their eligibility for an ACA-compliant plan. And they must explain what they’re not getting. A request that, in effect, asks insurers to advertise the Obamacare plans, something they haven’t exactly been enthusiastic about doing in the past. That may or may not turn out to be a smart move.
Health plan consultant Robert Laszewski – a frequent THCB contributor – warned:
This means that the insurance companies have 32 days to reprogram their computer systems for policies, rates, and eligibility, send notices to the policyholders via US Mail, send a very complex letter that describes just what the differences are between specific policies and Obamacare compliant plans, ask the consumer for their decision — and give them a reasonable time to make that decision — and then enter those decisions back into their systems without creating massive billing, claim payment, and provider eligibility list mistakes. This puts the insurance companies, who have successfully complied with the law, in a hell of a mess.
Continue reading “You Can Keep Your Plan. Maybe.*”
Filed Under: THCB
Tagged: AHIP, Cancellation, Non-compliant plan, Obama administration, Obamacare Fix, Renewal, THCBist
Nov 14, 2013
That past month of debate over the botched launch of the health care exchanges has brought the programming geeks, and their hired mouthpieces, out in the open to defend the indefensible. As painful as this has been for so many Americans, we cannot help but be amused to hear so many commentators doing their best impression of Captain Renault and expressing their shock that the federal procurement system could have produced such an outcome. Of course, most of this is a sideshow, the opening act to an even more serious drama in the making.
Let us be clear from the outset, the rollout of Healthcare.gov is an embarrassment. However, this only becomes a real problem if it dissuades enough people who were already marginal customers with respect to their purchase of health insurance on the exchanges to simply pay the penalty and avoid the hassle of staring at a computer screen, waiting on hold for hours, or refusing to try again once the geeks get this all sorted out.
While the self-appointed technology experts on both sides of the aisle have been debating the causes of the web site debacle, attention has been diverted away from the necessarily frank discussions we must have about the real potential benefits and looming costs of the exchanges.
In a valiant attempt to steer the conversation towards the benefits of the ACA, President Obama held a rose garden press event where he repeatedly claimed that the health insurance on the exchanges is good product. But as is all too often the case, the President talked about the benefits and side stepped the difficult conversation about the costs.
At least he is half right. If they can ever fix the web sites, people with pre-existing conditions who shop on the exchanges will gain access to insurance at a more affordable price. Enrollees may save thousands of dollars. But let’s not kid ourselves.
The exchanges do not reduce the cost of medical care; they only change who pays for it. And we all know who that is.
Continue reading “The Opening Act”
Filed Under: Economics, THCB
Tagged: business of healthcare, Craig Garthwaite, David Dranove, Economics, Employers, Health Insurance Exchanges, Healthcare.gov, Obama administration, The ACA
Oct 28, 2013
As Congress begins investigations into the Affordable Care Act rollout and the healthcare.gov flaws, Republicans are calling for resignations as far up as the Secretary of Health and Human Services. The logic goes: if managerial issues were behind failures to test the website component of the federal health care exchange, we need new management.
That concern is a valid one. In the private sector and often times in the public sector, when misakes happen—particularly in an area critical to the executive’s interests—heads roll.
Yet, Kathleen Sebelius will stay, and Republicans have no one to blame but themselves.
Why is this? In an ironic twist of fate the Republican Party’s obsession with filibustering, delaying, or holding executive branch nominations will finally have negative consequences for the GOP instead of the president.
Over the past several years, Republicans in Congress had refused to confirm a director of the Consumer Financial Protection Bureau because they did not like the law that authorized the agency. They refused to confirm nominees to the National Labor Relations Board because of opposition to unions. They put a hold on the chairman of the Federal Communications Commission for fear he may require more transparency in campaign activity. The examples go on.
Why, then, would President Obama remove Secretary Sebelius and nominate a replacement? The HHS Secretary oversees the implementation of the Affordable Care Act. And GOP opposition to CFPB or NLRB or FCC pales in comparison to the visceral and existential contempt the party feels toward Obamacare. Given such opposition, the president would be foolish to make such a change in HHS leadership.
Continue reading “Should Sebelius Resign?”
Filed Under: THCB
Tagged: GOP Repeal, Healthcare.gov, HHS, John Hudak, Kathleen Sebelius, Obama administration, The ACA
Oct 27, 2013