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Tag: ACA

Failing Healthcare’s ‘Free Market’ Experiment in US: Single Payer to the Rescue?

By KHURRAM NASIR MD, MPH, MSc 

In the industrialized world and especially in United States, health care expenditures per capita has has significantly outgrown per capita income in the last few decades. The projected national expenditures growth at 6.2%/year from 2015 onwards with an estimated in 20% of entire national spending in 2022 on healthcare, has resulted in passionate deliberation on the enormous consequences in US political and policy circles. In US, the ongoing public healthcare reform discussions have gained traction especially with the recent efforts by the Senate to repeal national government intervention with Affordable Care Act (ACA).

In this never ending debate the role of government interventions has been vehemently opposed by conservative stakeholders who strongly favor the neoclassical economic tradition of allowing “invisible hands” of the free market without minimal (or any) government regulations to achieve the desired economic efficiency (Pareto optimality).

A central tenet of this argument is that perfect competition will weed out inefficiency by permitting only competent producers to survive in the market as well as benefit consumer to gain more “value for their money” through lower prices and wider choices.

Restrained by limited societal resources, in US to make our health market ‘efficient’ we need to aim for enhancing production of health services provision at optimal per unit cost that can match consumers maximum utility (satisfaction) given income/budget restraints.

Keeping asides the discussion on whether a competitive market solution for healthcare is even desirable as adversely impact the policy objective of ‘equity”, however from a pure ‘efficiency’ perspective it is worthwhile to focus on the core issue whether conditions in healthcare market align with the prototypical, traditional competitive model for efficient allocation of resources.

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Watch This Space: 3 Phenomena That Will Drive Health Care Innovation in 2019

By REBECCA FOGG Rebecca Fogg

Back at their desks after the holidays, health care payers, providers and policymakers across the country are staring down their list of 2019 priorities, wondering which they can actually accomplish. Innovation to improve care quality and reduce costs will top many lists, and progress on this front depends, in no small part, on conditions for such innovation in the health care marketplace. Here are three phenomena unfolding there that I’ll be following closely this year to understand what innovators are up against, and how they’re responding.

  1. The legal battle over the Affordable Care Act (ACA). Over 20 million previously uninsured Americans acquired health insurance between 2010 and 2017, many due to the ACA’s premium subsidies, ban on pre-existing condition restrictions, and Medicaid expansion. At the most fundamental level, this coverage expansion has vastly improved one of the most important conditions for a healthy population—access to health care. But it also supports innovation toward better, more affordable care.Coverage expansion means providers get reimbursed for more of the care they deliver to patients who are unable to pay, which strengthens their financial position. It also enables some patients to maintain more continuous health insurance coverage, hence see a doctor more regularly over time. This, in turn, facilitates providers’ development of more effective approaches to management of long-term, chronic disease, which causes untold suffering and costs the U.S. hundreds of billions in direct medical costs.
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Not Fake News! A Trump Administration Rule Models Government Civility

By MICHAEL L. MILLENSON Michael Millenson

A Trump administration regulation issued just hours before the partial federal shutdown offers quiet hope for civility in government.

What happened, on its face, was simple: an update of the rules governing a particular Medicare program. In today’s dyspeptic political climate, however, what didn’t happen along the way was truly remarkable – and may even offer some lessons for surviving the roller-coaster year ahead.

A regulatory process directly connected to Obamacare and billions in federal spending played out with ideological rhetoric completely absent. And while there were fervid objections to the draft rule from those affected, the final version reflected something that used to be commonplace: compromise.

Think of it as Survivor being replaced by Mr. Smith Goes to Washington. Or, perhaps, a small opening in the wall of partisan conflict.

More on that in a moment. First, let’s briefly examine the specifics.

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Win, Lose, or Draw: Not all ACA Enrollees Gain from Increased Competition

By KATHERINE HEMPSTEAD PhD 

The 2019 ACA plan year is notable for the increase in insurer participation in the marketplace. Expansion and entry have been substantial, and the percent of counties with one insurer has declined from more than 50 percent to approximately 35 percent. While urban areas in rural states have received much of the new participation, entire rural states have gained, along with more metropolitan urban areas.

Economic theory and common sense lead most to believe that increased competition is unquestionably good for consumers. Yet in the paradoxical world of the subsidized ACA marketplace, things are not so simple. In some markets, increased competition may result in a reduction in the purchasing power of subsidized consumers by narrowing the gap between the benchmark premium and plans that are cheaper than the benchmark. Even though the overall level of premiums may decline, potential losses to subsidized consumers in some markets will outweigh gains to the unsubsidized, suggesting that at the county level, the losers stand to lose more than the winners will win.

One way to illustrate this is to hypothetically subject 2018 marketplace enrollees to 2019 premiums in counties where new carriers have entered the market. Assuming that enrollees stay in the same metal plan in both 2018 and 2019, and that they continue to buy the cheapest plan in their metal, we can calculate how much their spending would change by income group.

Under these assumptions, in about one quarter of the counties with federally facilitated marketplaces (FFM) that received a new carrier in 2019, both subsidized and unsubsidized enrollees would be better off in 2019, meaning that they could spend less money and stay in the same metal level. In about thirty percent of these counties, all enrollees are worse off. In almost all of the rest, about forty percent, there are winners and losers, but in the aggregate, the subsidized lose more than the unsubsidized win. Overall, in about 70 percent of FFM counties with a new carrier, subsidized enrollees will lose purchasing power, while in about 66 percent of these counties, unsubsidized customers will see premium reductions. In population terms, about two-thirds of subsidized enrollees in counties with a new carrier will find plans to be less affordable, while a little more than half of unsubsidized enrollees will see lower premiums.

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MedPAC’s Proposed “Reforms” Should Be Tested Before They’re Implemented: CMS’s Hospital Readmissions Reduction Program Is Exhibit A

By KIP SULLIVAN JD Kip Sullivan about MedPAC’s Proposed Reforms

Egged on by the Medicare Payment Advisory Commission (MedPAC), Congress has imposed multiple pay-for-performance (P4P) schemes on the fee-for-service Medicare program. MedPAC recommended most of these schemes between 2003 and 2008, and Congress subsequently imposed them on Medicare, primarily via the Affordable Care Act (ACA) of 2010 and the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.

MedPAC’s five-year P4P binge began with the endorsement of the general concept of P4P at all levels – hospital, clinic, and individual physician – in a series of reports to Congress in 2003, 2004, and 2005. This was followed by endorsements of vaguely described iterations of P4P, notably the “accountable care organization” in 2006 [1], punishment of hospitals for “excess” readmissions in 2007 [2], the “medical home” in 2008 and the “bundled payment” in 2008. None of these proposals were backed up by anything resembling evidence.

Congress endorsed all these schemes without asking for evidence or further details. Congress dealt with the vagueness of, and lack of evidence supporting, MedPAC’s proposals simply by ordering CMS to figure out how to make them work. CMS staff added a few more details to these proposals in the regulations they drafted, but the details were petty and arbitrarily adopted (how many primary doctors had to be in an ACO, how many patients had to sit on the advisory committee of a “patient-centered medical home,” how many days had to expire between a discharge and an admission to constitute a “readmission,” etc.).

New rule, new culture

This process – invention of nebulous P4P schemes by MedPAC, unquestioning endorsement by Congress, and clumsy implementation by CMS – is not working. Every one of the proposals listed above has failed to cut costs (with the possible exception of bundled payments for hip and knee replacements) and may be doing more harm than good to patients. These proposals are failing for an obvious reason – MedPAC and Congress subscribe to the belief that health policies do not need to be tested for effectiveness and safety before they are implemented. In their view, mere opinion suffices.

This has to stop. In this two-part essay I argue for a new rule:  MedPAC shall not propose, and Congress shall not authorize, any program that has not been shown by rigorously conducted experiments to be effective at lowering cost without harming patients, improving quality, or both. This will require a culture change at MedPAC. Since its formation in 1997, MedPAC has taken the attitude that it does not have to provide any evidence for its proposals, and it does not have think through its proposals in enough detail to be tested. Over the last two decades MedPAC has demonstrated repeatedly that it believes merely opining about a poorly described solution is sufficient to discharge its obligation to Congress, taxpayers, and Medicare enrollees.
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All Health Policy Is Local: The Case of the Individual Mandate Penalty in New York

By CHRISTINE EIBNER, SARAH NOWAK, PREETHI RAO

Sarah Nowak

Preethi Rao

Christine Eibner

Although signed into law in 2010, the Affordable Care Act has been in constant flux, with key aspects changing due to time-dependent provisions, Supreme Court decisions and shifts in U.S. policy. The effects of changes to the ACA on health insurance enrollment and premiums often depend on state regulatory decisions and other state-specific factors. The elimination of the individual mandate penalty is a prime example of this when applied to New York state, which has unusual rules in its individual insurance market.

In 2019, consumers will no longer face financial penalties stemming from the ACA’s individual mandate, which requires most people to secure health insurance. Without pressure from the individual mandate to enroll, younger and healthier people might drop coverage, leading to premium increases. New York’s health insurance regulations and expansive safety-net programs could make the state’s insurance market particularly susceptible to premium increases after the penalty’s elimination.

New York uses what is known as “full community rating” in its individual health insurance market, which means that all adult enrollees, regardless of age or whether they use tobacco, are charged the same premium. In most states, the youngest adults in the market pay one-third of what older adults do, and tobacco users are charged 1.5 times as much as non-users. New York’s flat premium structure raises costs for younger enrollees and nonsmokers, making them more likely drop coverage when the penalty goes away.

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The November 6 Midterm Elections and Their Impact on Obamacare:Q&A

By ETIENNE DEFFARGES

1) What is the likelihood the ACA will be repealed?

This straightforward question has a very simple answer: It depends on the results of the upcoming November 6 U.S. congressional elections.

If the Republicans retain control of both the House and the Senate, the probability that the ACA will be repealed is very high: The Republicans would be emboldened by such a victory and would most probably attempt in 2019 to repeal the health care law—again. It is worth remembering that in July of last year, the repeal of the ACA (a version of which had passed the House in May) was defeated in the Senate by the narrowest of margins, because three Republican Senators, Susan Collins, Lisa Murkowski, and the late and much regretted John McCain, voted against the repeal. This is very unlikely to happen again, although one would also have to consider the margins by which the Republican would have gained control both Chambers after these November midterms. In July of 2017, the Republicans held a 52-48 advantage in the Senate. Given ever-increasing polarization, such a margin, plus Republican control of the House, would likely spell the end of the ACA in 2019.

If the Democrats gain control of either the House of Representatives or the U.S. Senate, then the ACA will remain the law of the land. The only issue in the horizon will be the lawsuit filed in February of this year by a coalition of 20 states, led by Texas and Wisconsin. This lawsuit claims that Obamacare is no longer constitutional after the Republicans eliminated in December of 2017 the tax penalty associated with the ACA’s individual mandate. The 20 Republican attorney generals argue that without the tax penalty, Congress has no constitutional authority to legislate the individual mandate. Even if this case reaches the Supreme Court, one has to remember that the Court affirmed twice the constitutionality of the ACA, in June of 2012 and then 2015, with Chief Justice John Roberts voting with the majority on both occasions.

2) What do recent congressional changes to the ACA mean for those who buy insurance on health care exchanges?

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Please support Charles Gaba at ACASignups

By CHARLES GABA

It’s pretty rare that I ask THCB readers to go over to another blog and support that blog with money BUT, today is the day to do that. Charles Gaba has been THE leading source of information about exactly who is signing up for ACA plans on which exchange, and what impact on the ACA Trump et al have had. He’s not in academia, not on some big company or foundation payroll, just a one man band web designer who has basically torpedoed his own business to deliver what I think is a vital service. I support him and anyone interested in health policy could do a lot worse than shove a few bucks a year his way. Read on for his story & how you can helpMatthew Holt

On October 11th, 2013, I posted the following in a blog entry over at Daily Kos, where I’d been a regular contributor since 2003:

“Seriously, though, HHS should really start releasing the official (accurate) numbers of actual signups for all 50 states (or at the very least, the 36 states that they’re responsible for) on a daily–or at least, weekly–basis. I don’t care if it’s a pitifully small number. 100,000? 10,000? 100? 10? Even if it’s in single digits, release the damned numbers. Be upfront about it. Everyone knows by now how f***** up the website is, so be honest and just give out the accurate numbers as they come in.”

Two days later, on October 13th, I registered “ObamacareSignups.net” (which soon changed to ACASignups.net, not because I had a problem with “Obamacare” but because it was easier to type) and posted an announcement over at dKos, asking for some crowdsourcing assistance.

This was supposed to be just a lark…a six-month thing which would combine my passion for data analysis, politics and website development into one nerdy hobby.

Instead…well, if you’ve been following my work for any length of time, you know the rest of the story. ACASignups.net soon caught the attention of major media outlets, and it’s been cited and used as a resource ever since by media outlets spanning the ideological spectrum including the Washington Post, Forbes, Bloomberg News, Vox.com, MSNBC, the New Republic, USA Today, the CATO Institute, National Review Online and The New York Times among others, and has even received a mention (albeit an obscure one) in prominent medical journals such as the New England Journal of Medicine and The Lancet.

For awhile I pretended that this was still a “hobby”…I accepted donations, sure, and even slapped some banner ads on the site to drum up a few bucks, but in my mind, I was still officially a website developer…even though I was spending 90% of my time posting updates here instead of maintaining my business. In April 2014, at the peak of the media attention and insanity over the crazy first open enrollment period, I even came down with a nasty case of shingles whch laid me up for over a month. I was in denial for years even as the business suffered, constantly thinking that as soon as this Open Enrollment Period was over, I’d wrap things up…

My ass was effectively saved by Markos and the Daily Kos community that year, who collectively raised enough money to not only make up for my lost business in 2014, but also to allow me to keep the site operating through 2015 as well. I’m eternally grateful for that support.

In the fall of 2016, things came to a head and I realized that I could no longer continue living with one foot in each world: I had to either mothball this site and refocus my efforts on building my web development business back up…or I had to try and earn a living at it.

At the time–and I swear on my life this is true–I was planning on doing the former. My reasoning was simple: If Hillary Clinton had become President, there probably wouldn’t be that much interest in my work here going forward. There’d still be plenty of healthcare stuff to write about, but the ACA would be safely embedded into the American landscape and interest in the day to day minutiae of its developments would fade over time.Continue reading…

Health in 2 Point 00 — Episode 39

Jessica DaMassa decides the the way to deal with mourning Croatia’s loss in the World Cup Final is to make you suffer through my explanation of what’s wrong with the Trump Administration’s decision to screw over health plans and destabilize the exchanges. Oh and Higi gets a mention too — Matthew Holt

Adjusting for Risk Adjustment

Risk adjustment in health insurance is at first glance, and second, among the driest and most arcane of subjects. And yet, like the fine print on a variable-rate mortgage, it can matter enormously. It may make the difference between a healthy market and a sick one.

The market for individual health insurance has had major challenges both before and after the Affordable Care Act’s (ACA’s) risk adjustment program came along. Given recent changes from Washington, like the removal of the individual mandate, the market now needs all the help it can get. Unfortunately, risk adjustment under the ACA has been an example of a well-meaning regulation that has had destructive impacts directly contrary to its intent. It has caused insurer collapses and market exits that reduced competition. It has also led to upstarts, small plans and unprofitable ones paying billions of dollars to larger, more established and profitable insurers.

Many of these transfers since the ACA rules took effect in 2014 have gone from locally-based non-profit health plans to multi-state for-profit organizations. The payments have hampered competition not just in the individual market, which has never worked very well in the U.S., but in the small group market, which arguably didn’t need “help” from risk adjustment in many states.

The sense of urgency to fix these problems may be dissipating now that the initial rush for market share under the ACA is over and plans have enough actuarial data to predict costs better. There has been an overall shift to profitability. But it would be a serious mistake to think that just because fewer plans are under water, the current approach to risk adjustment isn’t distorting markets and harming competition.

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