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Tag: 2012 Election

How One Man Wound Up Deciding the Fate of Healthcare Reform

Personally, I am delighted that Chief Justice Roberts voted to uphold the Affordable Care Act. But, I am troubled that the fate of U.S. healthcare turned on one man’s opinion. This is not how things are supposed to work in a democracy.

Healthcare represents 16 percent of our economy. It touches all of our lives. If we don’t like the laws our elected representatives pass, we can vote them out of office. The Supreme Court, on the other hand, doesn’t have to worry whether its decisions reflect the will of the people. The Justices are appointed for life. This is why they are not charged with setting public policy.

How then, did the Court wind up with the power to affirm or overturn the ACA?

The media shapes our expectations

As I suggested when oral arguments began back in March, a “media narrative” drove the case to the Court – a fiction that caught on, in the press, on television, and in the blogosphere, where it began to take on a reality of its own. A handful of “state attorneys general and governors” saw “a political opportunity” and floated the idea that the law might be unconstitutional. The media picked up the story, repeated the heated rhetoric, and “fanned the flames … Before long, what constitutional experts thought was a non-story became a Supreme Court case.”

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Are Fewer People in MA Paying the Individual Mandate Penalty?

Since the Supreme Court upheld the ACA/Obamacare, there has been a renewed interest in the Massachusetts healthcare law. I have blogged many times before to caution readers and the media not to assume the two laws will lead to the same results, because they won’t, mostly as Massachusetts is not the same patient with the same ailments as New Mexico, or Michigan, or even Florida.

I know I am fighting against the conventional wisdom,  but this issue warrants discussion as Congress passed a national program and modeled the behavior and cost estimates (incorrectly in my opinion) partially on our experience here in the Bay State.

As a result of the national interest, I assume we will see more local reports on Romneycare. On cue, WBUR’s CommonHealth Blog put up:

5 Quick Facts About Mass. Health Reform You Now Need To Know

One of the facts cited is the decrease in the number of Massachusetts residents paying the individual mandate penalty.

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Roberts’ “Flying Squirrel” Maneuver Takes Down the Affordable Care Act

After a four month “death watch” in the mainstream media for President Obama’s health reforms (following an ineffectual defense in March’s Supreme Court hearings), instant analysts were quick to characterize last week’s Supreme court decision as a ringing vindication of the Affordable Care Act and a big political victory for a struggling President Obama.

However, on closer reading, the instant analysts were wrong. The Roberts Court actually punched a huge hole in the law, potentially reducing its historic coverage expansion by as much as a third. In addition, the Court’s ruling will set off serious political conflict in southern and mid-western states that will ripple through those states’ health care markets, and fracture hospitals’ and health plans’ support for health reform.

Unlike the Act itself, which was almost unreadable, the Court’s opinions were written in English and will reward readers with fresh understanding of this complex law. They reveal two incommensurable philosophical positions eloquently argued and improbably bridged. There were two big surprises: Justice Robert’s apparent last minute support of the Court’s liberal wing in preserving the mandate and the remarkable decision to render the Medicaid coverage expansion optional! (Justice Kennedy, the presumed swing vote, actually supported killing the entire law).

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A Healthcare Contract With America

Critics of the Affordable Care Act (Obamacare) need an alternative vision. What follows is a short explanation of the core ideas posted at the Congressional Health Care Caucus and developed in greater detail in the book Priceless: Curing the Healthcare Crisis.

Tax FairnessFamilies at the same income level should get the same help from government when they obtain private health insurance, regardless of where they obtain it. The federal government encourages the purchase of private health insurance through the tax system. Yet the current approach is arbitrary, regressive and unfair. Instead of paying taxable wages, employers are able to purchase health insurance for their employees with untaxed dollars. These employer-paid premiums avoid federal income taxes, federal payroll taxes (FICA), and state and local income taxes as well. This “subsidy” is worth almost half the cost of the insurance for a middle income family. Yet the same family receives virtually no tax relief if it purchases the insurance on its own.

Because of the way we subsidize private health insurance, the higher the family’s tax bracket, the greater the subsidy. A family earning $100,000 gets six times as much tax relief as a family earning $25,000. We are giving the most encouragement to those who need it least.

As an alternative, we should replace the current system of tax and spending subsidies with a system that offers everyone a uniform, fixed-dollar tax credit for the purchase of health insurance. The credit would be refundable, so that it would be available even to those with no tax liability. A reasonable goal, for example, would be a credit of $2,500 per adult and $8,000 for a family of four.

Universality: Unclaimed tax relief should be made available to local safety net institutions to be used in case the uninsured cannot pay their own medical bills. If an individual chooses to be uninsured, the unclaimed tax credit should be sent to a safety net agency in the community where the person lives. These funds would provide a source of finance in case the uninsured are unable to pay their medical bills.

Under this approach, the government pledges a fixed sum of money for every individual and money follows people. If everyone in Dallas County opts to obtain private insurance, there would be no need to fund a safety net and all the government’s support would be in the form of tax credits for health insurance premiums. On the other hand, if everyone in Dallas County opts to be uninsured, all the unclaimed tax credits would go to safety net institutions in Dallas.

This is an easy reform to implement, even if peoples’ insurance status changes often over the course of a year. All the federal government needs to know is how many people live in each community. If the tax credits claimed on income tax returns fall short of their potential for the community as a whole, the balance would be provided in the form of a block grant to be spent at the local level.

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Climbing the Medicaid Mountain

Multistate Challenge to the Affordable Care Act

The Affordable Care Act envisions a major expansion of health insurance in America, with some 30 million Americans gaining coverage. That figure includes some 17 million people with low incomes who were to get health insurance via an expansion of Medicaid eligibility. With eligibility raised—from 100 percent of the poverty level to 133 percent—many states will enlarge their Medicaid rolls and pay for it with federal funds, at least for a few years.

But the Supreme Court clouded that part of the vision last week, ruling that states cannot be penalized for refusing the federal money—thus leaving in doubt how many of the projected 17 million poor or near poor citizens will actually get coverage.

In short, the Supreme Court allowed the federal carrot to remain, but took away the stick. Matt Salo, the executive director for the National Association of Medicaid Directors, an organization for those who run state programs, summed it up for The Washington Post: “Prior to the court’s decision, failure to implement this expansion meant you [the states] lost all your Medicaid funding. Now you have a political and financial decision to make: Do you do this?”

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What Will the Supreme Court Decision Mean For the November Election?

Thursday, when Chief Justice Roberts explained that the Affordable Care Act (ACA) is constitutional because the “penalty” that some Americans will have to pay is, for all practical purposes, a “tax,” you could hear tea cups shattering from Billings to Boca Raton. In conservative and libertarian circles, the initial reaction was shock, but it didn’t take long for President Obama’s opponents to rally.

The word “tax” might as well have been a pistol shot at a horse race. In the blink of an eye, Obama’s opponents were off and running, megaphones in hand, blasting the president for lying to the American people while hiking taxes under the guise of healthcare reform. Presidential candidate Mitt Romney’s campaign then began providing regular Twitter updates on the campaign contributions it was raking in following the decision. Friday, it announced that it had collected $5.5 million.

Will Republicans suceed in turning defeat into victory?

Sarah Palin is convinced that they will. On her Facebook page, she celebrated: “Thank you, SCOTUS. This Obamacare ruling fires up the troops as America’s eyes are opened.”   Palin, like Republican leader Mitch McConnell, believed that the Court’s ruling would galvanize Republic voters, sealing Romney’s victory in November.

This might be true if conservatives were not already so ardently committed to what McConnell has called his party’s “single most important” goal: “for President Obama to be a one-term president.”  As Democratic pollster Celinda Lake noted, “Republicans are already as energized as they can get.” It would be hard to turn up the dial on their passion. Opinion surveys have shown that Republican voters already were more motivated than Democrats to go to the polls this fall.   (In November, Obama’s challenge will be to get his supporters out, including those who are disillusioned that the president hasn’t done more to help the poor and the unemployed. )

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Is the Center For Innovation Innovating Too Fast?

One of the few health policy issues that receives bipartisan support is the need to dramatically alter the way providers are paid, shifting from “paying for volume” to “paying for value” to alter the trajectory of health care spending while improving health care quality.

To facilitate this shift, the Affordable Care Act equipped the Centers for Medicare & Medicaid Services with a range of cost-cutting and quality-enhancing tools―the most significant of which might be its new Center for Medicare and Medicaid Innovation. In this blog post, we share insights from recent research funded by the Robert Wood Johnson Foundation on the Innovation Center’s new role, organization, and model selection criteria.

Based on interviews with senior leadership, it’s clear the organization sees its role as two-fold: complementing existing efforts to innovate; and delving into new ideas.

Most of the Innovation Center’s efforts to date have focused on the former―implementing congressionally-mandated demonstrations or ideas that Congress or policy experts have already conceived (e.g., accountable care organizations). More recently, the Innovation Center has begun to seek new ideas from innovators across the country and to promote bottom-up innovation―primarily through its Innovation Challenge.

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Supreme Court Upholds Affordable Care Act

By THCB STAFF

Defying predictions that the Obama administration would suffer a landmark political defeat, the US Supreme Court upheld the Affordable Care Act this morning. The implications for healthcare for the 2012 election are obviously nothing less than staggering.

What will the landmark legislation mean for the healthcare industry? For heath IT companies? For hospitals and health insurers?

We’ll be posting reactions from THCB analysts over the course of the day and in the days to come. In the meantime, if you have an opinion on the ruling, post your comments in the thread below.

If you can’t wait, you can download the ruling here in pdf format.

What Romney Should Do On Health Care

Americans believe in second chances. Mitt Romney will get his if the Supreme Court rules to throw out part, or all, of the president’s federal health insurance law. Should Romney propose replacing it with a federal version of the Massachusetts health law or a federal mega-bill that mandates a one-size-fits-all free-market solution?

The question is now central to the election — the high court has made that certain — and eclipsed in importance only by the debate over jobs and the economy.

President Obama may cite Romney’s Massachusetts reform as an inspiration for his own efforts, but there are profound differences between the laws — the size and reach, financing, the underlying philosophy. Romney sought an open marketplace for individuals to purchase benefit plans ranging from catastrophic to generous. Romney’s successor, Democratic Governor Deval Patrick, has obscured those differences by taking a big-government approach to implementation, drastically limiting choices and mandating minimum coverage levels beyond private-market norms.

Even with weak implementation, the Massachusetts law has yielded some positive results, including broadening insurance coverage, especially for minorities, and decreasing premiums for individual purchasers of insurance.

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Why Reform Will Survive Mandate’s Fall

The Supreme Court’s imminent decision on the Affordable Care Act will trigger a political firestorm whether they accept the legislation in its entirety, throw out every page of the 906-page bill or do something in between, which is the most likely outcome.

If the high court follows the polls, it probably will rule the requirement that individuals purchase insurance – the mandate – is unconstitutional but leave the rest of “Obamacare” intact. A CBS/New York Times poll released earlier this month showed that 41 percent wanted the entire law overturned, 24 percent supported it fully and 27 percent supported it but wanted the mandate eliminated.

Pooling the latter two groups suggests there is majority support for the coverage expansion, insurance protections and delivery system reforms contained in the bill – as long as there is no mandate. It was only the Obama administration’s decision to include the requirement that individuals purchase health coverage – something done to win insurance industry backing for the law – that gave opponents the cudgel they needed to stoke widespread opposition to reform.

The insurance industry, recognizing many of the reforms are popular, is already preparing for a thumbs-down ruling on the mandate. Three major carriers, UnitedHealth, Aetna and Cigna, said last week they would continue to allow young adults to stay on their parents’ plans until age 26, pay for 100 percent of preventive services and eliminate lifetime caps on coverage, reforms from the ACA that are already in place.

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