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Tag: The ACA

Be Careful What You Wish For

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By MICHAEL TURPIN

As the Supreme Court considers the testimony presented at the recent hearings over the constitutionality of certain provisions of the Patient Protection and Accountable Care Act, the debate continues to escalate over the role that individuals, business and the government should play in the “commerce of health care.”

Most industry experts agree that PPACA is first about insurance reform and the expansion of coverage to some 30m Americans; yet,  detractors have criticized the legislation for failing to incorporate any elements that would serve as a catalyst for reducing costs, improving quality and restructuring a misaligned system that has been paid to treat illness rather than prevent it.

In the last two years, hundreds of millions of private and public dollars have been invested as stakeholders adjust to an uncertain but radically changing delivery system.  States are in various stages of constructing purchasing exchanges.  Physicians and specialists are choosing to consolidate, often with hospitals leading the process to create integrated delivery systems and restore the role of coordinated care through Patient Centered Medical Homes and Accountable Care Organizations.  Employers are waiting and watching — seeking greater regulatory clarity while slowly complying with a chronological time-line of new rules and expanded coverage requirements.

Municipal, state and national budget deficits continue to loom large. As Europe battles over mounting sovereign debt and the suffocating burden of  generous public pension and healthcare entitlements,  flash points are erupting across the USA as municipal, government and collectively bargained workers brace to defend retiree benefits in the face of legislative efforts to more aggressively reduce public spending. The Federal government is at a tipping point. Facing a $38T net present deficit in its funding for Medicare and $15T of public debt, PPACA was scored by the CBO as reducing $140B of public debt by 2020.  To achieve this, the government needed to drive $940B of taxes, assessments and spending cuts and fall within estimates of the number of newly insureds likely to qualify for Federal subsidies offered through public exchanges.  The promise of PPACA was to reduce the deficit, not further contribute to it.Continue reading…

Health Care Reform: Good for Business

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By Brian England

Last week, the U.S. Supreme Court heard six hours of oral arguments for and against the constitutionality of the new health care law. As a small business owner, I am not a constitutional scholar, but I can definitively say this: the Affordable Care Act is cutting my health care costs and helping my business.

My wife and I run an auto repair shop in Columbia, MD. We started as a small, family-business in 1978. Now, we’re a well-respected business with 19 employees, a long string of awards and a reputation for service.

One of the biggest barriers to growing a successful business has been the rising cost of health insurance. We’re committed to offering insurance coverage, but over the past 10 years it has become a real struggle to keep up with the costs.

We’ve become accustomed to rates going up 10 percent to 20 percent each year (sometimes even more), and we’ve had to look at many different ways to deal with the extra expense. We’ve got a great agent who does a lot of research and works hard to find the best options for us. But in the end, we’re the ones who have to decide what to do — and foot the bill.

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Is There a Republican Alternative to ObamaCare?

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By John Goodman

“GOP to the Uninsured: (Feel Free to) Drop Dead.” So reads the title Michael Millenson post at the Health Care Blog yesterday. It gets worse:

[N]o Republican presidential candidate has ever presented a serious plan to cover all the uninsured … The difference between Democrats and this generation of Republicans — unfortunately including even the GOP Doctors Caucus — is not at its core a disagreement on what government can legitimately do to help create universal access to health care for the 50 million Americans without it, but whether the goal itself is worth pursuing.

Was Millenson completely asleep (like Rip Van Winkle) during the last election? Does he not read my Wall Street Journal editorials? Does he never visit my blog? Or was this meant to be an April fool’s column?

John McCain’s health plan was more radical and even more progressive than Obama Care. I’ve never seen any serious health policy wonk deny that.  Maybe Millenson doesn’t live in a battle ground state. If he did, he would know that the Obama campaign spent more money attacking the McCain health plan during the election than has ever been spent for or against a public policy idea in the history of the republic. In fact, it is probably no exaggeration to say that Obama successfully turned the election into a referendum on the McCain health plan!

The McCain health plan is discussed at this blog here, here, here, here and here.

And although Millenson singles out Oklahoma Senator Tom Coburn as an especially egregious example of the Republican failure on health policy, the McCain vision actually was based on a bill, sponsored by Sen. Coburn and Sen. Richard Burr (R-NC), along with Reps. Paul Ryan (R-WI) and Devin Nunes (R-CA), [hereinafter called the Coburn bill]. That bill, in turn, was based on an idea which Mark Pauly and I proposed in a Health Affairs article more than a decade ago. (Does Millenson not read Health Affairs?)

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If the Supreme Court Rules Against the Obama Administration …

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By Maggie Mahar

If the Court throws out both the “individual mandate” (the rule requiring that virtually all Americans buy insurance, or pay a fine), and the provision that insurers must cover all applicants, and cannot charge higher premiums, even if a new customer has just been diagnosed with cancer?  This might sound like the end of reform, but in fact, many of the most valuable reforms in the legislation would almost certainly still stand–including those that will change the way we pay for care, reducing costs, while lifting quality. Under the Affordable Care Act (ACA), hospitals will continue to find ways to reduce preventable errors–or face financial penaltie.. Doctors who succeed in managing chronic diseases, keeping their patients out of the hospital, will receive rewards. Medical students willing to practice in underserved areas “Where No One Else Will Go” will receive scholarships, and their ranks will grow. New funding will double the capacity of Community Health Centers that can provide medical homes for many who now receive their care in an ER. Reform will go forward.

There is, of course, the possibility that the court could declare the entire Affordable Care Act unconstitutional, but this seems extraordinarily unlikely. Too many planks in the law already are being implemented, and patients are benefiting.  As Henry J. Aaron pointed out in an earlier post on this blog, overturning the law would be an “Rx for Chaos.”

Still, even if the judges “only” throw out  the mandate and the requirement that insurers cover everyone, the results will be, as former Obama administration adviser  Ezekiel Emanuel recently put it in a New York Times opinion piece “less than optimal.” (Unlike Rahm Emanuel, Zeke is known for understatement.)

Under this scenario, premiums for those who do buy insurance would climb because, without the mandate, insurers could no longer count on millions of new, healthy customers.  Instead of “the 32 million Americans predicted to gain coverage under the health insurance reform act, only around 16 million Americans would gain coverage,” observes Emanuel.

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No, Overturning ACA Would not Smooth the Way to Single-Payer Care

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By Harold Pollack

This morning’s post by Matt Yglesias notes a fairly obvious but important issue that bears attention.

The comportment of conservative Supreme Court justices in oral argument leads many people to seriously consider what would happen if ACA is crippled or struck down. (Like Jonathan Cohn, Henry Aaron, David Cutler, Charles Fried, and Jonathan Chait, I was appalled by the oral argument. You can read my column at healthinsurance.org for more on that subject.)

Several commentators assert, or at least have mused, that overturning ACA might improve the prospects for a single-payer system. It’s easy to see why one might think so. Single-payer is less vulnerable to the commerce-clause challenge that bedevils the mandate. Outright failure of ACA would discredit bipartisan, market-based strategies within many core Democratic groups. The political and organizational simplicity of single-payer is appealing, too. Killing ACA heightens the contradictions of our fragmented and costly health care financing system, while taking off the political table some of the most workable strategies for incremental reform. Absent a serious and workable alternative, Medicare for all might look surprisingly attractive some years from now.

Still… I just don’t see it.

In the first place, I am confident that a smart and determined conservative judiciary would entertain new constitutional challenges to a single-payer system. Such a system would end or would damage much of the private insurance industry. It would reorder relations between the states and the federal government. It would upend self-insurance arrangements under ERISA, and more. If you believe ACA’s 2,700 pages was long and complicated, wait until you see the junk DNA that would accompany a politically and administratively viable single-payer bill. That’s fertile legal ground for opponents, even absent the current political polarization of the federal judiciary.

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What If We End Up with a Health Care System Like the One they Have In New Jersey?

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By Robert Laszewski

What would individual health insurance cost if the court strikes the mandate down and still requires insurers to cover everyone?

With the Supreme Court justices sounding like they might strike the mandate down, this is a question I’ve been getting a lot lately.

I have pointed to New Jersey as a real life example of what can happen when insurance reforms take place but there is no incentive for consumers to buy it until the day they need it.

In 1992, New Jersey passed health insurance reform that required insurance carriers to either offer individual health insurance on a guaranteed issue basis or pay an assessment to carriers that did. Other elements of the legislation were:

  • Guaranteed coverage and renewability for all eligible people regardless of their health status. A pre-existing condition exclusion does allow insurers to limit coverage during the first 12 months (a limitation which is not contained in the Affordable Care Act).
  • Guaranteed renewal of policies, provided (1) the insured does not become eligible for coverage under a group plan; (2) premiums are paid in a timely fashion; and (3) no fraud is committed by the insured.
  • Community rating of the premiums, with variation allowed only for family status (single, adult plus child, husband and wife, and family). (The Affordable Care Act allows rate variations of up to three times from young to old.)
  • Standardized insurance plans, referred to as Plans A, B, C, and D (indemnity options) and a single HMO plan.

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How Did the Challenge to the Affordable Care Act Ever Make it to the U.S. Supreme Court?

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By Maggie Mahar

In 2009, when someone asked Nancy Pelosi a question implying that health reform legislation might be unconstitutional, she replied: “Are you serious?”

Pelosi wasn’t alone. At the outset, many legal scholars considered the challenge to the Affordable Care Act (ACA) both “implausible” and “frivolous.”

But over the next two years, the notion that state courts might strike down the ACA took on a life of its own. Most people had only a hazy idea of what was actually in the legislation; nevertheless the idea of “health reform” inspired heated rhetoric. Soon, state attorneys general and governors responded to the political opportunities, banding together to make what Slate Senior Editor Dahlia Lithwick calls, “novel arguments in the form of what was always a constitutional Hail Mary pass … It’s no accident that until the lower district courts started striking down the act, none of the challengers really believed that they could succeed.”

Yet somehow, this week, the highest court in the land is hearing oral arguments in a case that even supporters viewed as a long shot. How did this happen?

The media played a major role, fanning political passions by quoting every challenge – including the absurd claim that the bill called for “death panels.” As Rachel Maddow observed Monday night: this case was “built up as the Super Bowl of American partisan politics.” Thus, the Supreme Court was left with little choice: it had to hear “The Case of the Century.”

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The Individual Mandate and Severability

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By Michael Cannon

[youtube width=”560″ height=”275″]http://www.youtube.com/watch?v=bCzJgHMH5pQ[/youtube]

THCB contributor and Cato Institute Director of Health Policy Studies Michael Cannon on the severability clause, which looms large after Tuesday’s Supreme Court hearing.

Health Care Jujitsu

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Not surprisingly, yesterday’s debut Supreme Court argument over the so-called “individual mandate” requiring everyone to buy health insurance revolved around epistemological niceties such as the meaning of a “tax,” and the question of whether the issue is ripe for review.

Behind this judicial foreplay is the brute political fact that if the Court decides the individual mandate is an unconstitutional extension of federal authority, the entire law starts unraveling.

But with a bit of political jujitsu, the president could turn any such defeat into a victory for a single-payer healthcare system — Medicare for all.

Here’s how.

The dilemma at the heart of the new law is that it continues to depend on private health insurers, who have to make a profit or at least pay all their costs including marketing and advertising.

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IPAB and Medicare Costs Are Bad Medicine

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By Douglas Holtz-Eakin

During the original debate over the Affordable Care Act, I wrote that the proposed law failed to address out-of-control Medicare spending. Two years later, this urgent problem remains.

Medicare is awash in a sea of red ink — $280 billion in cash flow deficits already and getting worse — that is driving the U.S. credit rating south and threatening the very foundations of the U.S. economy. It makes no sense to sit idly by while the social safety net unravels and the promise of our future dims.

Advocates argue the health care law solves this problem. Specifically, it creates the Independent Payment and Advisory Board, which will be formed in 2014 and could make its first recommendations in 2015. This advisory board will consist of 15 officials appointed by the president. Board members will be required to make recommendations to cut Medicare funding in years when spending growth exceeds targeted rates. For Congress to block these recommendations, it must veto the board’s proposal with a 60 percent majority and pass alternative cuts of the same size.

In other words, this board puts Medicare on a budgetary diet. What’s wrong with that?

First, the system is clearly set up so that the advisory board, rather than Congress, makes the policy choices about Medicare. This means that the IPAB is not just an advisory body — despite its name. And policy choices, which should be made by elected representatives, are not.

Second, the advisory board threatens the quality of patient care. It can, in essence, ration the health care available to seniors. While technically prohibited from directly altering Medicare benefits, the IPAB will have no choice but to attempt to ratchet back spending by slashing providers’ reimbursement rates.

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