Beginning in 2014, the Patient Protection and Affordable Care Act (PPACA) hands the Secretary of the U.S. Department of Health and Human Services a joystick – the Essential Health Benefits package – with the potential to rocket small-business health insurance premiums skyward. EHB is the menu of goods and services that must be covered under all exchange-purchased insurance plans and non-grandfathered small-group and individual insurance plans. By vesting one set of hands with control over EHB, small business faces permanent administrative uncertainty. At the same time, the brunt of EHB appears largely to bypass big business, unions, and governments.
EHB, Ban on Limits, Actuarial Value
Beginning in 2014, PPACA (§1302) makes EHB a mandatory feature of most insurance plans purchased by America’s 6 million small businesses and 21 million self-employed individuals. Exceptions initially include businesses with more than 100 employees and those with grandfathered policies. The EHB requirements apply to policies purchased both in exchanges and in non-exchange small-group or individual markets.
In the small-group and individual markets, annual or lifetime coverage limits on all EHB items are forbidden. And plans must have an actuarial value (AV) of at least 60 percent, meaning the plan’s total reimbursements must be at least 60 percent of the total qualifying health care costs incurred.
Section 1302 empowers the Secretary of HHS to define EHB, but gives little specificity beyond requiring that EHB include 10 general categories (e.g., ambulatory patient services) and “the items and services covered within the categories;” the Secretary is to also assure that EHB includes “benefits typically covered” by a “typical employer plan.” The meaning of these words in quotation marks is left to the Secretary (and future Secretaries) to define and redefine. The fluid definitions and concentrated discretion mean uncertainty, which carries a financial cost for small business.Continue reading…
What’s in a name? Everything, it would appear, when it comes to describing Rep. Paul Ryan’s plan to privatize Medicare, which the Republican-controlled House of Representatives backed in its budget resolution late last month. The plan would subsidize seniors’ purchase of private insurance plans instead of enrolling in traditional government-financed Medicare, although that would be preserved as an option. The government would finance a portion of the purchase.
Architects of the plan call it “premium support.” Opponents call it a voucher, which they say will over time lag behind medical inflation and force seniors to pay an ever-growing share of their health care bills.
Ten Republicans joined every Democrat in voting against the resolution, which passed 228-191. The Republican apostates abandoned their majority colleagues largely because they were afraid of being tarred with the voucher label during this fall’s re-election campaign.
And it was that label that Republicans on the House Ways and Means health subcommittee repeatedly attacked during Friday’s hearing on the Republican plan, which has not yet been introduced as legislation. Its details have not yet been scrutinized by health care experts or, more significantly, the Congressional Budget Office. “Premium support is not a voucher,” Ryan, R-Wis., said at the hearing.
According to an article in the current Journal of Health Politics, Policy, and Law, public opinion polls on health reform are at best incomplete and at worst misleading due to a systematic bias in non-responses.  Authors Berinsky and Margolis argue that, in the context of the healthcare debate at least, non-responses (e.g., answers like “Don’t know”) are more likely to come from individuals of lower socioeconomic status, and that “these same individuals who are victims of resource inequalities are natural supporters of the welfare state and, therefore, are more likely to back health care reform.”
The authors write that, to ensure full representation of views, nonresponses should not be ignored. Instead, the analysis “should incorporate information from respondents’ answers to other questions on the survey to understand what they might have said had they answered the question.”
Imputing the views and attitudes of non-respondents is a generally acceptable method for removing bias, provided it is done carefully using suitable assumptions. Berinsky and Margolis use income as the predictive variable. According to their analysis, for example, people making less than $30,000 annually are more likely to support health reform than those making more than $100,000.
You probably missed this one, but this bit of legislation will have profound implications not only for your health, but the health of our economy. A provision of the Patient Protection and Affordable Care Act (PPACA) created a 15-member Independent Payment Advisory Board (IPAB), delegating to it the responsibility to develop specific proposals to contain the growth rate of Medicare spending if it is projected to exceed targets also established by the law. These proposals are transmitted to Congress in the form of legislative proposals that must be enacted or substituted on a legislatively mandated basis.
Once it is in place, IPAB can be discontinued only by a joint resolution that must be introduced in January 2017. Since IPAB is not a government agency, and is not promulgating regulations, it is subject neither to open meetings or public comment requirements. There are no options for appealing the IPAB recommendations. The provisions for judicial review appear to be limited to the recommendations issued by IPAB based upon deliberations that are not open to the public. Judicial or administrative review of the Secretary’s implementation of those recommendations is prohibited. The clear intent of the law is to insulate the board and its decision from the full range of traditional democratic processes.
The IPAB approach to problem solving in a democracy is unwarranted under all but the most dire of circumstances. Moreover, if enabled, an approach such as IPAB should have a reasonable chance of solving the stated problem. It does not. The dire circumstance of “unsustainable” health care expenditures that IPAB is built to help resolve is truly a manufactured crisis. That statement may resonate as heresy to established dogma to many readers, but the facts support the statement.
Call it the Scott Walkering of America.
Even though tax revenues are finally rising faster than expenses, governors across the nation are recommending more austerity in the budgets they’re presenting to state legislatures this year, the latest survey from the National Governors Association shows.
For the fiscal year beginning July 1, governors are recommending a 2.2 percent increase to $683 billion in general revenue fund spending. That’s down from the 3.3 percent increase in state spending in 2012. Revenue, meanwhile, is projected to rise four percent during the coming fiscal year.
“The public sector has even more uncertainty at this time than the private sector,” said Dan Crippen, executive director of the NGA and former head of the Congressional Budget Office. Citing the looming Supreme Court decision on health care reform, the uncertain levels of federal aid from the “fiscal cliff” negotiations, and talk of tax reform that could cut tax expenditures that benefit state and local governments, “it’s pretty hard for states to plan,” he said.
As best as I can tell, the arguments at the Supreme Court did not touch on a critical part of the discussion about government’s role in health care: the broken market for private insurance. And I think I know why.
A key assumption underlying the arguments, questions and answers was that all uninsured people are uninsured by choice. Sure, some very ill people with preexisting conditions do not qualify. But the implication was clear: Most uninsured people either do not want to pay for insurance or cannot afford it. Justice Samuel Alito said, “You can get health insurance.” Justice Ruth Bader Ginsburg made the point that people who don’t participate are making it more expensive for others, that their “free choice” affects others. The “free rider” problem is thoroughly examined.
It was as if the court forgot that the private insurance market does not function as a normal market. If you are not employed and you want to purchase insurance in the private market, you cannot unilaterally decide to do so. An insurer has to accept you as a customer. And quite often, they don’t. Insurers prefer group plans, with lots of people enrolled to spread the risk. Can you blame them? The individual consumer is a lot of work, is a higher risk and produces relatively little revenue.
This morning’s wretched jobs report tells a now-familiar tale: Employment has risen nicely in health care (a net gain of more than 340,000 jobs between May 2011 and May 2012). But almost every other sector has been flat or worse.
You might think that would mean that new-graduate nurses are having an easy time finding work. That’s still true in rural areas — but elsewhere, no.
In many U.S. cities, especially on the west coast, there’s real evidence of a nursing glut. The most recent survey conducted by the National Student Nurses’ Association found that more than 30 percent of recent graduates had failed to find jobs.
How is that possible?
While demand for nurses has been rising, it actually hasn’t risen as fast as most scholars had projected. Meanwhile, the supply of nurses has spiked unexpectedly, at both ends of the age scale: Older nurses have delayed retirement, often because the recession has thrown their spouses out of work. And people in their early twenties are earning nursing degrees at a rate not seen in decades. We’re now in the sixth year in which health-care employment has far outshone every other sector, and college students have read those tea leaves.
So what will happen next? Here are crude sketches of two possible futures:
I. THE NURSING SHORTAGE OF 2020
(This scenario draws from a talk that Vanderbilt University’s Peter Buerhaus gave two weeks ago at the U. of Maryland School of Nursing. Buerhaus still sees a shortage coming, though a less severe one than the shortage that he and two colleagues had predicted in a widely-cited 2000 paper.)
- In June 2012, the Supreme Court upholds the Affordable Care Act, and Republicans never manage to do much to weaken the law. Tens of millions of Americans gain access to insurance, and the demand for nurses rises in tandem.
- Some time around 2014, the general labor market finally recovers. There’s less desperation in the air. Sixty-year-old nurses are more likely to retire, and twenty-year-old college students who aren’t actually that interested in nursing go back to majoring in anthropology or accounting or whatever, because they’re reasonably sure they’ll find jobs.
- The millions of soon-to-retire Baby Boomers utilize Medicare at rates similar to previous cohorts of 70-year-olds.
- Changes in health care delivery mean that nurses and nurse practitioners are heavily deployed to provide primary care and to coordinate patients’ services.
II. THE NURSING GLUT OF 2020
- In June, the Supreme Court strikes down the ACA’s insurance mandate. Mitt Romney wins the 2012 election and pushes his health proposals through Congress. In this scenario, at least 45 million fewer people have health insurance than would have been the case with an intact ACA.
- The EU zone goes to hell, and the ensuing financial crisis means that the U.S. labor market stays miserable for years. College students continue to pour into health care fields, because that’s the one sector with better-than-zero growth.
- The millions of soon-to-retire Baby Boomers utilize Medicare at significantly lower rates than previous cohorts of 70-year-olds. (Unlike the other items on this list, this one is good news.)
- Changes in health care delivery don’t lead to a relative increase in the deployment of nurses and nurse practitioners. Accountable Care Organizations use social workers and other non-nurses to coordinate patients’ care across providers.
What will actually happen? Probably something in between, of course. (Or maybe the Yellowstone volcano will erupt and this will all be moot.)
We had better hope that it is something close to halfway in between. Both shortages and gluts are bad for patients and bad for the nursing profession. Nursing shortages, because patients are even more likely than usual to face understaffed units and overstretched nurses. Nursing gluts, because nurses are so afraid of unemployment that they don’t speak up about problems on their units.
David Glenn is a student at the University of Maryland School of Nursing and author of the blog, Notes on Nursing, where this post originally appeared.
President Franklin D. Roosevelt reacted with fury when major legislative pillars of his New Deal were declared unconstitutional by a Supreme Court anchored by four ideological conservatives. He lashed out at the justices, accusing them of practicing crass politics disguised as constitutional law.
Seventy-five years ago last month, FDR proposed his ill-fated court-packing plan that would have allowed him to stack the court with new appointees sympathetic to the New Deal.
Will history be repeated this term when the Roberts court decides the constitutional fate of President Obama’s signature legislation, the Affordable Health Care Act?
The justices will hear five-and-a-half hours of arguments over three days, March 26-28, on the healthcare law and deliver their judgment by the end of the term. If the court strikes down all or part of the law, Obama, like FDR before him, will almost certainly denounce the court’s decision. After all, he has already had practice in publicly criticizing the court. At his 2010 State of the Union address, with the justices sitting directly in front of him, he accused the court majority in the Citizens United decision of reversing a century of constitutional law to open “the floodgates for special interests… to spend without limit in our elections.”
Besides the willingness of both FDR and Obama to criticize the court, there are other parallels between the two Democratic presidents. Both came to office as liberal reformers who envisioned a large role for the federal government in promoting the nation’s welfare. But in defending their policies, they revealed their very different political styles and temperaments.
The Affordable Care Act faced a possibly fatal challenge when the constitutionality of its individual mandate provision was argued in the Supreme Court.
Much of the terrain was easy going. Neither the justices nor the lawyers doubted that the healthcare and healthcare insurance markets involve interstate commerce — insurance and healthcare providers are usually national or at least regional operations, folks who cross state lines get sick and must be cared for away from home regularly, and people are often unable to relocate to another state for fear of losing employer-based coverage. Nor was it disputed that the mandate was sincerely motivated by and closely related to the regulation of these interstate markets. Those two conclusions are usually sufficient to justify the exercise of congressional power under the commerce clause of the Constitution.
But then things got more treacherous. The problem, suggested by numerous questions from the conservative justices on the court, was the slippery slope they saw created by the mandate — the idea that Congress was requiring individuals to buy something. If the feds can require each person to buy health insurance, what can’t they force people to purchase?
During the health reform debate, there was controversy and disappointment over the failure to include a public option in the Affordable Care Act. Not only did the public option idea not die, it is alive and well in California.
In northern California last week, Kaiser Health News correspondent Sarah Varney interviewed the CEO of the Alameda Alliance for Health, Ingrid Lamirault, about their intention to participate in the California Health Benefit Exchange when it goes live in 2014. The Alameda Alliance is a non-profit insurer (governed locally) that competes with private for-profit plans in the county to deliver health services to Medicaid beneficiaries (called “Medi-Cal”) and public employees.
California does not have a monolithic or centralized Medicaid program. There are a variety of innovative programs that deliver cost-effective high quality care to Medi-Cal beneficiaries. Alameda Alliance is one of fourteen “two plan” counties that serve 3 million beneficiaries. Alameda has to market to Medi-Cal members in competition with a commercial plan. These public plans have been competing with the private sector for over a decade, and despite initial concern from both the left and the right, Medi-Cal beneficiaries and providers are pretty satisfied with the program, which has been able to live within its budgetary limits.