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Tag: The ACA

Breaking the Curve of Health Care Inflation

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By Maggie Mahar

The evidence is building: As we move toward making the Affordable Care Act a reality, Medicare spending is slowing, and even in the private sector, for the first time in more than a decade, insurers are focusing on reining in health care costs.

The passage of reform legislation two years ago prompted a change in how both health care providers and payers think about care. The ACA told insurers that they would no longer be able to shun the sick by refusing to cover those suffering from pre-existing conditions. They also won’t be allowed to cap how much they will pay out to an desperately ill patient over the course of a year –or a lifetime. Perhaps most importantly, going forward, insurance companies selling policies to individuals and small companies will have to reimburse for all of the “essential benefits” outlined in the ACA–benefits that are not now covered by most policies. This means that, if they hope to stay in business, they will have to find a way to ”manage” the cost of care–but they won’t be able to do it by denying needed care.

As for providers, they, too, will be under pressure. A growing number will no longer be paid “fee for service” that rewards them for “volume”–i.e. “doing more.” Bonuses will depend on better outcomes, and keeping patients out of the hospital–which means doing a better job of managing chronic illnesses. Meanwhile, Medicare will be shaving 1% a year from annual increases in payments to hospitals. If medical centers want to stay in the black, they, too, will have to provide greater “value” for health care dollars– better outcomes at a lower cost.

This summer the Supreme Court’s decision sealed the deal. The ACA is constitutional. Health care reform is here to stay.

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Is the Fact that I Am a Woman Considered a Pre-Existing Condition?

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By Maggie Mahar

The male body has long been considered the “standard” for health care coverage. Having a woman’s body is seen as an expensive anomaly, and women pay dearly for being different.

When they buy their own health insurance in the individual market, women must lay out an extra $1 billion a year, simply because they are women. Some argue that this is fair: after all, a woman could become pregnant, and labor and delivery are costly.

But the truth is that, even when maternity benefits are excluded, one-third of all health plans charge women at least 30 percent more, according to a report released just last month by the National Women’s Law Center.

In 36 states, “92 percent of best-selling plans charge 40-year-old women more than 40-year-old men,” the Center reports, and “only 3 percent of these plans cover maternity services … One plan in South Dakota charges a woman $1252.80 more a year than a 40-year-old man for the same coverage.”

Today, less than half of American women can obtain affordable insurance through a job, which explains why millions buy their own insurance in the individual market. In that market, just 14 states ban gender rating:  California, Colorado, Maine, Massachusetts, Minnesota, Montana, New Hampshire, New Mexico, New Jersey, New York, North Dakota, Oregon, Vermont, and Washington.

Pricing based on gender also plagues the small group market, where insurers frequently jack up premiums if a small or mid-size business employs too many women. This means that many of these employers just can not afford to offer insurance. Only 17 states address the problem.

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You Have to Break Some Eggs If You Want to Make an Omelet

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By David Dranove

In my last blog I explained how at one time our nation’s healthcare budget was relatively small and our economy was robust, so that economic growth could accommodate rising health spending and still allow us to spend more on other goods and services. Today our healthcare budget is huge and growing, while our economy stagnates. Economic growth is barely enough to pay for rising healthcare spending, with little left over to buy more of anything else. In the next few blogs I will explore our options for cutting health spending. To the extent that economic theory and empirical evidence allows, I will also discuss the likely consequences. It should come as no surprise to say that all of these options entail some risks. But if we are to avoid putting all our eggs in the healthcare basket, then we must decide which risks are worth taking.

A simple fact of accounting guides my analysis: If we want to spend less money on medical services, then we either (a) pay lower prices for the services we buy, (b) substitute away from high price services in favor of lower priced alternatives, or (c) purchase fewer services. There are no other options. Moreover, we can do these things either by government fiat or through markets and incentives. In this blog I explore options (a) and (b), mainly focusing on Medicare.

The Affordable Care Act calls for substantial reductions in Medicare fees, providing the largest anticipated cost savings in the ACA. (Private insurers relied on market forces to reduce provider fees in the 1990s, only to see providers gain the upper hand and sharply increase fees in the 2000s.) It is clear that the federal government has the power to reduce Medicare fees, but should it? What are the consequences?

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Us and Them-Ism

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By Rob Lamberts, MD

Us and Them
And after all we’re only ordinary men

The wanna-be congressman appeared with his neat hair and pressed suit, a competent yet compassionate expression on his face.  ”The first thing I am going to do when I get to congress is to work to repeal Obamacare,” he said, expression growing subtly angry.  ”I will do everything I can to give you back the care you need from those who think big government is the solution to every problem.”

My wife grabbed my arm, restraining me from throwing the nearest object at the television.  I cursed under my breath.

No, it’s not my liberal ideology that made me react this way; I’ve had a similar reaction to ads by democrats who demonize republicans as uncaring religious zealots who want corporations to run society.  I am a “flaming moderate,” which means that I get to sneer at the lunacy on both sides of the political aisle. I grew up surrounded by conservative ideas, and probably still lean a bit more that direction than to the left, but my direction has been away from there to a comfortable place in the middle.

It’s not the ideology that bugs me, it’s the use of the “us and them” approach to problem solving.  If only we could get rid of the bad people, we could make everything work.  If only those people weren’t oppressing us.  If only those people weren’t so lazy.  It’s the radical religious people who are the problem.  It’s the liberal atheists.  It’s the corporations.  It’s the government.  All of this makes the problem into something that isn’t the fault of the person making the accusation, conveniently taking the heat off of them for coming up with solutions to the problems.

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Why Should You Care Whether or Not Your State Decides to Expand Medicaid Coverage?

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By Maggie Mahar

By expanding Medicaid, the state-federal partnership that offers health insurance to low-income Americans, the Affordable Care Act set out to cover some 17 million uninsured – or roughly half of the 34 million who are expected to gain coverage under reform. But when the Supreme Court ruled on the Affordable Care Act in June, it struck down a key provision which threatened that if a state refused to co-operate in extending Medicaid to more of its citizens, it could lose the federal funding it now receives for its current Medicaid enrollees.

In a 7-to-2 decision, the justices ruled that this punishment was too coercive: “withholding of ‘existing Medicaid funds’ is ‘a gun to the head’” – that would force states to acquiesce.

As a result, states can, if they choose, opt out of the Medicaid expansion, and some governors are threatening to do just that – even though the federal government has committed to pay 100 percent of the cost from 2014 to 2017. After that, the federal share would gradually decline to 90 percent in 2020, and remain there. This is a generous offer; today the federal government now picks up just 57 percent of the Medicaid tab.

Nevertheless, some states claim that the 10 percent that they would have to ante up after 2020 is more than they can afford. A few go further and admit that this isn’t just about money: by rejecting the federal funds, they are voicing their objection to “Obamacare.”

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Latest CBO Report on Health Law Adds to Business Uncertainty

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By Matt Barry

Photograph by William B. Plowman/Redux
The Congressional Budget Office’s new estimates of the budgetary impact of the Affordable Care Act, made in the wake of the Supreme Court’s ruling last month, glides right by one obvious fact: the budget analysts really have no idea how the court ruling will affect their previous estimates.

The CBO report says very clearly that “what states will be able to do and what they will decide to do are both highly uncertain.” Translation? They don’t know any more than anyone else right now about how states will act, now that the high court has determined that the federal government can’t force states to participate in the expansion of Medicaid by withholding the federal share for existing activities.

CBO isn’t to blame for this uncertainty. Rather, they should be commended for their candor in acknowledging the degree of uncertainty that remains. Most news reports and commentaries on the new CBO findings have downplayed or ignored this problem.

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‘Help Wanted’ For Medicaid Expansion

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By John H. Schumann, MD

Despite its complexities and its politics, I support the Affordable Care Act (aka “Obamacare”).  As I’ve written elsewhere, I think it would be both morally and economically wrong for Governor Fallin and the Oklahoma legislature to opt out of the ACA’s vast Medicaid expansion – a position shared by Oklahoma Policy Institute.  So if Oklahoma does the right thing and opts to expand Medicaid for adults with incomes at or below 133 percent of the federal poverty level, what will happen?

Oklahoma faces a serious shortage of primary care access. The Oklahoma Health Care Authority, the agency in charge of administering Medicaid, recently compiled county-by-county maps, color-coded to classify areas of severe physician shortage based on presumptive levels of Medicaid expansion.  At a glance, these maps reveal something we already know: rural areas are hurting for physicians and populous counties seem to have more capacity.  In my opinion, however, the maps don’t paint a full picture of the eventual shortfall.Continue reading…

The Supreme Court May Have Saved Lives … by Keeping People Off Medicaid

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By John Goodman

Here’s the most underreported story of the summer. When the Supreme Court ruled on the Affordable Care Act (ObamaCare) it inadvertently liberated millions of people who were going to be forced into Medicaid. Now they will have the opportunity to have private health insurance instead. What difference does that make? It could be the difference between life and death.

A Congressional Budget Office (CBO) report this week says there are 3 million such people. The actual number could be several times that size. But first things first.

Imagine that you are the head of a family of three, struggling to get by on an income, say, of $25,000 a year. You’ve signed up for your employer’s health plan because you want your family to get good health care when they need it. But that takes a big bite out of your paycheck — $250 a month.

When you first heard about the president’s health plan, you heard him say that if you like the plan you’re in you can keep it. That was good news. You also believed the whole point of the reform was to help families like yours get health insurance if for some reason you had to seek insurance on your own.

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To Gauge ObamaCare Impact, Ignore CBO and Focus on AQC

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By Dan Diamond

The big health care story in Washington, D.C this week comes down to three letters: CBO. The Congressional Budget Office released its latest projections about the Affordable Care Act’s cost and coverage, concluding that the Supreme Court’s changes to the ACA will lead to some states to opt out of its Medicaid reform. As a result, the ACA’s cost would fall by $84 billion over 11 years but lead to about three million fewer people receiving health insurance.

The CBO numbers are incredibly important in one sense: They reframe the debate over the ACA yet again. As I noted last week, more than two-thirds of states are waffling on whether to participate in the law’s Medicaid expansion, and the new CBO numbers will offer new targets for supporters and opponents of ObamaCare to make their case.

But the CBO score is also more of a political story than policy news. And as both parties continue to haggle over the ACA’s price and impact, keep in mind that the CBO’s projections about health law costs are often wrong.

So rather than focus on estimates of future reforms, we’ll focus on results from a current one: the Alternative Quality Contract. It’s an important payment pilot developed by Blue Cross Blue Shield of Massachusetts — and a key forerunner of the ACA’s accountable care organizations.

AQC Offers Template for ACO

Under the AQC, which Blue Cross launched in January 2009, a hospital or physician group negotiates a budget — or global payment — that covers the cost of care for all patients in their practice. If participating providers stay under budget, they receive bonuses; if they overspend, they pay the difference.

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Health Care Reform and the Laws of Unintended Consequences

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By Steven M. Gillon

When the Supreme Court ruled that President Obama’s sweeping overhaul of the nation’s health care system was constitutional, about the only thing critics and supporters could agree on was the historic importance of the legislation itself. But if history is any guide, there will be one other inescapable truth: The Affordable Health Care for America Act of 2010 will generate the same unintended consequences that have shaped, distorted, and even perverted so many other important pieces of legislation in our nation’s history.

Whether tackling social security, veterans’ benefits, civil rights or immigration reform, Congress has demonstrated over the past 75 years that when it addresses significant social issues with complicated legislation, the results will, more often than not, vary dramatically from what was originally intended. In some instances, as in the case of the GI Bill, the impact was broader than the original drafters could have dared to hope. More commonly, as in the case of social security or immigration reform, a small detail has ended up undermining the loftiest goals of the original bill.

A general rule of thumb for determining how likely a bill is to veer off course is to ask how ambitious the legislation is: the more far-reaching, the more likely it is to produce unanticipated consequences. As we saw with health care reform, big, complicated laws are often the product of partisan brokering and compromise that makes their “intent” ambiguous and open to interpretation. That gives enormous power to the government bureaucrats charged with enforcing the law, and to the courts that are inevitably called upon to settle the conflicts. The gap that opens between the bill’s lofty goals and its often haphazard implementation is the breeding ground for unforeseen results.

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