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Tag: ACA

On the Morality of Insurance Premiums

As CVS-Aetna merger talks fill the air this Christmas season and experts weigh in on the impact this will have on the economy and consumers alike, I’m sitting at a little desk in a little office contemplating health insurance.

I run a little shop that’s about as far from CVS-Aetna as you can get in the health care space : a solo practice doctor with four full time employees and revenues a little south of $65 billion dollars.  I shouldn’t feel too alone.  Small businesses account for 99% of US firms and employ almost half of all private sector employees.  But knowing my problem is one shared by many provides only partial solace.

Prior to arrival of the ACA, I provided health insurance to everyone through the company.  At the time I had 3 full time employees and the insurance broker I worked with got me a quote for $1300 / month.  Now, I really didn’t want to be in the providing healthcare business, so when the ACA arrived with its individual market I was happy to facilitate buying health insurance from the exchanges.  So initially, I chose to pay for my employees plans on the individual market.  I was quickly told by my accountant that paying for my employees insurance in this manner was running afoul of a three letter entity of the federal government called the IRS.

Apparently the individual ACA market premiums were allergic to being deducted in this pre-tax manner.   Fine.  So I went ahead and paid each employee $6000 per year extra with the understanding that they would use that money to buy health insurance on the individual market.

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Watching Trumpcare Die

It’s hard to know what “Trumpcare” is, but whether it’s “repeal” or “repeal and replace with something terrific,” it was and is going to fail. It was either going to fail to be enacted by Congress, or if it was enacted, it was going to set off such a bipartisan backlash it would be repealed, either by a chastened Republican Congress or a new Democratic Congress and president.

The reason Trumpcare was doomed was that health care is not like global warming or police shootings or use of military force in foreign countries: It is an issue a large majority of Americans agree on, and it is an issue voters can assess with their own eyes in their own kitchens.

Republican voters are almost identical to Democratic voters in what they want in a health care system. They want comprehensive coverage, low out-of- pocket costs and affordable premiums, freedom to choose their own doctors (they could care less about freedom to choose between Aetna and Humana), and freedom from interference by bureaucrats (be they public or private). Obamacare became a liability for Democrats because the public clearly perceived that the ACA could not meet those requirement for millions of Americans. The public now clearly perceives Republicans want to enact legislation that would be even worse than the ACA.

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Is Trumpcare Dead?
Was It Ever Really Alive?

Senators Mike Lee and Jerry Moran said yesterday that they would not vote for the Better Care Reconciliation Act, effectively killing the legislation.  As anybody who has been following this story would have predicted, President Trump reacted publicly on Twitter on Tuesday morning, vowing to let the ACA marketplace collapse and then rewrite the plan later.

Senate Majority leader Mitch McConnell attempted a quick punt this morning, calling for an immediate Senate vote on the House bill, a trick card that if it worked, would give Republicans two years to work things out.

Unfortunately for McConnell, it probably won’t.

The White House sees the failure as saying more about the political establishment in Washington than itself, which shouldn’t be all that surprising. Caught up in the drama of the Watergate-Russia emails-Trump family narrative, major media outlets like the Washington Post and the New York Times see a historic defeat rather than a temporary setback. That may or may not turn out to be true. Predictably, conservative commentators and the alt-right believe the defeat says more about the mainstream media and the Deep State than it does about the Trump Presidency. For their part, Democrats clearly think they have found their issue and can be expected to continue to exploit it using legislative Viet Cong tactics (attack on social media, melt into the jungle, lob snarky public Molotov cocktails) to punish Republicans and keep the story on the front page.

One thing is clear. Instead of repealing and replacing Obamacare, the GOP now has to rewrite and replace its own plan. Doing that would be difficult under the best of circumstances, but in the current climate in Washington it is difficult to see how it would be possible without a major shift in the political landscape.

All of this is bad news for hospitals and health plans and a frightening development for consumers, although not the really bad news some had feared. The President’s threat to let the insurance marketplace die and then “figure it out” sounds good as a rallying cry to the troops on social media, but is not the kind of thing that investors and CEOs like to hear.  Realistically though, at this point everybody knew that the uncertainty would likely continue through the year (best case) or a year or longer (worst case) as the gridlock in Washington plays out. As depressing and frustrating as it is that the uncertainty will continue, by this point the industry is used to it. Insiders will continue to look for ways to minimize risk and for business opportunities to capitalize on the uncertainty.

Trump’s plan to allow the insurance exchanges to collapse is the kind of confrontational talk Trump and his advisors relish. In theory, the idea could work. There are in fact signs that it already is, as major insurers leave the marketplace and consumers hesitate before committing to expensive insurance policies.  In reality, however, the collapsing exchanges will create a political crisis that is even worse than the current one for the administration, with news cycle after news cycle dominated by stories of terminally ill cancer patients and parents with children with horrible diseases and no insurance coverage. At this point, it will be difficult for the party doing the collapsing to point at the other side and say “It was them. They did it!”

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Beyond “Repeal and Replace”

The toxic polarization of Washington politics might lead even the most stubborn optimist to abandon any hope for bipartisanship on healthcare. Despite endemic pessimism, the flagging efforts to forge a Republican consensus on “repeal and replace” might set the stage for overdue efforts at compromise. Congress will be tempted to move on to more promising areas such as tax reform and infrastructure funding. That temptation should be resisted. The threat to the nation posed by the current state of American healthcare calls for Congress to resurrect the long lost spirit of bold bipartisanship.

Before considering opportunities for compromise, the obstacles confronting the GOP reform efforts are worth considering.   Republicans face the same stubborn reality that confronted the framers of the Affordable Care Act (ACA): Expensive services cannot be covered by cheap insurance. The cost of U.S. healthcare has simply priced low income and even middle income individuals out of health insurance. Without subsides, they get left behind. The Congressional Budget Office’s estimated that the Ryan plan would result in 24 million losing coverage underscored the political divide: Confronted with unmanageable healthcare costs, most Republicans would opt to reduce public expense whereas Democrats plus a handful of Republican moderates prefer more extensive coverage. The effort of the GOP leadership to split the difference by preserving some residual subsidies and the structures supporting them—“Obamacare light”—remains unacceptable to many on the right. No clear middle ground has yet emerged.

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Death and Medicaid

I remember 7 South at the Children’s hospital very well. I remember the distinctive smell, the large rooms, the friendly nurses, and Shantel. For a brief period of time, Shantel and her little boy – a too skinny child named James – were there every time I was there with my little girl. 7 South was the GI floor – Shantel and I were there because our children had the same dastardly liver disease that, for the time being, was winning. And that was it. We had nothing else in common.

She grew up in North Philadelphia, not far from where I was finishing a residency program in Internal Medicine. She had three other children, was a single mother, and in the year that I spent shuttling to the hospital I never saw the father of her child. Shantel did not work, and relied almost exclusively on the welfare programs to make life work.

I was a medical resident, our family had a combined income north of $150,000/ year, and our health insurance was through my employer. My wife and I worked, which meant that we had the flexibility for one of us to stop working, and still maintain our benefits.Continue reading…

If Your Premiums Go Down but Coverage Gets Worse, Does Your Healthcare Matter?

Picture this. Amy becomes pregnant while working as a high school teacher. Her employer’s health insurance plan pays the maternity bills and she happily raises her twins.

Fast-forward a few years. She’s decided to become an entrepreneur and runs a small business. She becomes pregnant again but, this time, finds that her $400 a month individual health insurance policy won’t cover the expenses. In fine print, she discovers that she needed to purchase a special rider to activate maternity care benefits. She’ll have to pay $10,000+ out of pocket now, putting her burgeoning business at risk.

Angry at this, Amy decides to switch insurers but, to her dismay, she finds that the four largest insurers in her area don’t cover most expenses associated with a normal delivery. Amy has nowhere to go. Also, since pregnancy is a pre-existing condition, Amy is advised by her doctor to “not become pregnant again” if she wants to get quote reasonable health insurance rates during her search.

This is not an exaggerated or dystopian situation, it’s a real example from 2010.

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GEHA’s Seven-Year “Glitch”

In a little piece of legislation known as the Affordable Care Act, preventive services are mandated to be covered with no out-of-pocket expense to consumers. According to the Healthcare.gov website, approved insurance plans must cover a “list of preventive services for children without charging a copayment or coinsurance.” Number 18 on that preventive care list is: childhood immunizations for children from birth to age 18, acknowledging regional variation in the standard recommendation schedule. After all, vaccinations are the cornerstone public health achievement of the last century and have saved countless pediatric lives.

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Health Reform Must End the Harms of Prior Authorizations

As the White House continues to push for a revised Republican proposal to replace the Affordable Care Act (ACA), one thing is for certain, many of the sickest Americans will continue to suffer as they are denied medications and other treatments under current health insurance strategies to save costs.

Both the ACA, and the recently proposed MacArthur Amendment, do not address a well-established practice of health insurers’ use of restrictive prior authorization requirements to deny or delay coverage of medications and treatments to seriously ill patients. In my own practice caring for cancer patients and those with terminal conditions, I have witnessed the additional suffering caused by denying these patients timely access to medications for pain.

A prior authorization is essentially a check run by insurance companies or other third party payers before approving certain medications, treatments, or procedures for an individual patient. Insurance companies justify this practice as a means to save costs to consumers by preventing unnecessary procedures from being covered, or requiring generic drugs to be used instead of brand-name, more expensive alternatives.

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Would Repealing the ACA Violate International Law?

Barely one month after a stinging and stunning legislative defeat, President Donald Trump has committed to revising the AHCA and potentially resubmitting it for Congressional approval.

In addition to Democrats and widespread popular opinion against ACA repeal, the AHCA may face another obstacle – international law.

This week the Washington Post’s Dana Milbank reported that the United Nations Office of the High Commission on Human Rights forwarded a four-page letter to the Acting Secretary of State, Thomas A. Shannon, to express the Commission’s “serious concern” that the US was in danger of violating its obligations under international law if the U.S. ratified legislation repealing the ACA.

The letter authored by Dainius Puras, a Lithuanian with the somewhat remarkable title of UN Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, argues that repealing core elements of the ACA would negatively impact almost 30 million Americans’ right to the “highest attainable standards of physical and mental health”, particularly those in moderate and low income brackets and those suffering from poverty or social exclusion.

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Reform & Improve

With the failure of the Republican’s American Health Care Act (AHCA), what’s next? Congressional Republicans face the ugly choice of admitting defeat and funding the Affordable Care Act (ACA), including the cost-sharing reductions (CSRs) that they have tied up in federal court, de-funding the ACA and likely being blamed for its demise, or compromising with Democrats to improve it. In all likelihood, the next set of moves will focus on avoiding/shifting blame for the imminent crisis of health plan withdrawals that failure to fund CSRs would precipitate.

But the long-term problems with the ACA should be addressed: How to sustain health plan competition? How to simplify a nearly incomprehensible medical financing scheme? How to cover more of the uninsured? How to win enough moderate Republican support to de-escalate partisan wars over the ACA? Sooner or later, Congress needs to consider serious compromise proposals for improving the ACA.

So, what might they consider?

Were a bargain on improving the ACA to be struck, Democrats would insist that it ensure full federal funding and maintain goals related to covering most Americans. Taxes will be the “sticking point” for many Republicans, but not all: Senators Cassidy & Collins’ Patient Freedom Act (PFA) retains 95% of current funding.) On the other hand, the price of support from moderate Republicans probably includes making substantial changes that borrow heavily from the best ideas in the AHCA and the PFA. The approach proposed below does both.

I propose three goals for a bipartisan effort to “reform and improve” the ACA:

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