Back in 2009, when the Affordable Care Act was being written, few doubted that Congress can constitutionally impose a tax penalty on people who refuse to carry adequate insurance. Congress’s power to regulate insurance markets under the Constitution’s commerce clause is settled law. While it seemed clear that Congress has the constitutional power to mandate coverage, some doubted the political wisdom of using that power. Simply forcing people to buy insurance seemed too much like a mean parent saying “eat-your-broccoli, or no dessert.” The mandate, it was feared, would arouse needless opposition. The opposition was needless because most people could be encouraged to buy coverage with positive incentives to enroll, such as direct subsidies, and penalties for refusal to enroll, such as extended denial of access to subsidies and exclusion from insurance market protections.
To the surprise of many, opponents of the Affordable Care Act took the broccoli analogy literally. Not buying insurance is simply inactivity, they argued. If government can prohibit this form of inactivity by forcing people to buy insurance, it can force them to buy anything, even broccoli. If Congress can prohibit such ‘inaction,’ they argued, freedom is in jeopardy. More to the point, the constitution doesn’t allow limits on ‘inactivity.’
The appeal to the broad public of the argument that not buying insurance is inactivity may not have been surprising. But the acceptance of the argument by some federal judges is downright astounding, as the distinction rests on a fundamental ignorance of how insurance markets work.
Contrary to the title, the IPAB is not a new Apple product. Rather, it is the “Independent Payment Advisory Board” created by the Affordable Care Act to solve the problem of ever-increasing Medicare spending.
In people’s worst nightmares, the IPAB is a death panel that will make decisions about how to ration health care for the elderly and disabled. Images of 15 people sitting in a room handing out death sentences flash through the minds of the anti-government crowd.
Nothing could be further from the truth, as the IPAB has no authority to limit benefits, increase beneficiaries’ out-of-pocket costs, or otherwise alter the Medicare program in any way that would “ration” care.
So what can the IPAB actually do to promote slower spending growth in Medicare?
They can suggest legislation, that’s what. Legislation that, for example, would reduce or alter the way in which payments are made to providers. It’s debatable if the recommendations from IPAB will work to actually control spending. What’s not up for debate is whether action will be taken, and that’s what I’m most pleased about.Continue reading…
Those challenging the ACA in court profess deep concern about government forcing citizens to buy insurance or pay a fine. The fundamental harm here is monetary; it’s about being required to purchase insurance, not to use it (or to get any medical care at all).
If the Court agrees with them, why can’t there be a parallel monetary right not to be bankrupted by health care costs? In the 1973 case San Antonio School District v. Rodriguez, the Supreme Court decided, by a 5-4 vote, that children did not have a constitutional right to education. But at that time, at least four justices thought the state was obliged to make a decent education available to all. Why can’t a future Court do the same for health care?
If the current Supreme Court were to declare the ACA unconstitutional, it would need to abandon several landmark precedents. That’s not a problem for the Roberts Court; it’s already jettisoned once-venerable holdings on campaign finance, equal protection, antitrust, and voting rights.
For many Americans in these tough economic times, rights to education, housing, health care, and food are a lot more meaningful than the right to be free of an insurance mandate. We the people can locate these ideals in a Constitution and a Declaration of Independence rich with grand and sweeping language. If the ACA’s opponents can use our nation’s founding texts to undermine the ACA, those who care about meeting basic human needs need to gear up to use them to do quite a bit more.
2013 may be the most significant year in health care policy ever.
But we have to get through 2012 first.
Once the 2012 election results are in there will be the very real opportunity to address a long list of health care issues.
If Republicans win, the top of the list will include “repealing and replacing” the Affordable Care Act. If Obama is reelected, but Republicans capture both houses of Congress, we can still expect a serious effort to change the law. Then there is the granddaddy of all problems, the federal debt. The 2012 elections could well prepare the way for entitlement reform—particularly for Medicare and Medicaid. Even if Obama is reelected, the 2013 agenda will include a serious debate about Republican ideas to change Medicare into a premium support system and block grant Medicaid to the states.
If the election is a draw with neither side able to unilaterally move their agenda—likely in the form of Obama still in the White House but facing a Republican Congress, the pressure to deal with the growing costs of Medicare and Medicaid as well as nagging concerns about the implementation of the Affordable Care Act will create an imperative for action in 2013.
The ACA has included a long series of bargains to achieve universal health care in the face of two forces: a multi-trillion dollar health care industry, and an implacable political opposition that refuses to bargain. Whatever the merits and blunders of the compromises taken, it should have come as no great surprise that the guidance released at the end of 2011 for the minimum benefit set (the “essential benefits”) was yet another compromise. It bowed to the existing authority of the states by allowing them leeway to decide the essential benefit package, despite the fact that the law itself seemed to intend a single national standard. There are limits, of course: ten categories of benefit must be covered (hospital, lab, maternity, dental, etc.) and the details on what is covered must be set by reference to one of four model plans:
• One of the three largest small group plans in the state by enrollment;
• One of the three largest state employee health plans by enrollment;
• One of the three largest federal employee health plan options by enrollment;
• The largest HMO plan offered in the state’s commercial market.
Predictably, immediate reactions were mostly negative. It was almost universally described as a “punt” by the administration, but a more accurate football metaphor is that the new guidance was a field goal. It’s certainly better than not scoring at all, and games can be decided by field goals. But it also means that your offense wasn’t good enough to close the deal on a touchdown. In that way, you can look at a field goal as one step closer to losing. For different reasons, that is exactly what some foes and supporters alike of the ACA will say about the new guidance.
As the New Year begins, I look forward to reading and commenting on the latest developments in health economics. I thought I would start by making a few predictions:
1) With the economy on a slow but steady road to recovery, Republicans will resurrect health reform as a key issue in the fall election. They run a controversial ad showing a patient named Debbie getting diagnosed by her iPhone’s Siri. In response, Democrats show Debbie filing for bankruptcy because her insurance refused to pay for Siri’s consultation fee.
2) The Supreme Court will uphold the purchase mandate in the Affordable Care Act. Lobbyists for every major industry flood Congress with requests for more purchase mandates.
3) Healthcare continues to be a bright spot in a sluggish labor market. As a way to simultaneously address persistent unemployment and the growing needs of the elderly, Nancy Pelosi proposes a new law mandating that all baby boomers purchase a caregiver for their parents.
4) CMS will release new revised rules for ACOs. The new rules discourage ACOs from only covering patients in good health by reducing reimbursements for patients who are able to lift the new 1200 page ACO rulebook.
There is broad agreement that historical rates of increase in health spending are “unsustainable”, and we must therefore find ways to bend the health care cost curve. However, there is surprisingly little consensus – and not even much being written – about what growth rate would be “sustainable”? Defining sustainable growth and establishing a credible target is one of the top research priorities of our Center. We have put a lot of energy into providing more timely estimates of health spending and having a target for comparison is a key next step.
In this blog, the first in a planned series, I lay the groundwork needed to estimate sustainable health spending growth rates. I begin with a definition of sustainable health spending that I hope you will find intuitively appealing, even if it does not match your own perspective. I then identify key stakeholders affected by health spending increases and who, in the absence of the Affordable Care Act (ACA), would have their own particular sustainability thresholds. Next, I argue that under ACA, the federal government blunts the impact of health spending growth on most other stakeholders and, in so doing, focuses the sustainability question more fully on its ability to raise the tax dollars required to meet its ACA commitments.
Defining “sustainable” health spending
I consider the nation to have achieved sustainable health spending when theprojected growth path of spending is within what the nation is willing and able to pay. Note that this definition introduces elements of choice into the determination of sustainability. If there is an absence of willingness to pay, the spending will be unsustainable even if there is ability to pay.
In a prior post, I provocatively suggested that providers, hospital boards and policymakers should hedge their bets and prepare for the possibility of a “post-ACO world.” If the Group Practice Demo’s disappointing results are any guide, the likelihood of a happy ending for accountable care organizations is on numerical par with Congress’ approval rating. While I like the mutual “win-win” theoretical construct that underlies ACO gain sharing, it also recalls a life-lesson: want you want and what you get are usually two different things.
So, if the Feds have to eventually retreat on the non-success of ACOs, what will be left in its wake? More on that in future posts.
And while the uncertainty surrounding ACOs isn’t bad enough, I have also been astonished by the battered Euro, the appearance of hospital-employed cardiologists and the absence of a Lady Gaga Christmas album. Accordingly, I have learned my lesson and assume nothing.
Since the passage of health reform (Affordable Care Act), many have wondered what would be covered in the benefits offered through the State Exchanges. We have been reassured that the benefits that are “essential” would be comprehensive yet affordable. But essential to whom? What is an essential benefit and who gets to decide? Tough questions. No easy answers.
Last week HHS released a bulletin punting part of the issue to the States. States will have more “flexibility” to determine what is in the essential benefit package. Of course, not complete flexibility. These benefit plans MUST include, at least, the ten categories of benefits that are defined in the law. Those categories include:
Section 1302(b)(1) provides that EHB include items and services within the following 10 benefit categories: (1) ambulatory patient services, (2) emergency services (3) hospitalization, (4) maternity and newborn care, (5) mental health and substance use disorder services, including behavioral health treatment, (6) prescription drugs, (7) rehabilitative and habilitative services and devices, (8) laboratory services, (9) preventive and wellness services and chronic disease management, and (10) pediatric services, including oral and vision care.*
Here are some questions that you might want to know about what is unfolding:
This holiday season you may be surprised to find some gifts from the Affordable Care Act (aka health reform) in your stocking. I say “surprised” because a recent Kaiser Family Foundation poll found that the American public still doesn’t know what is in the health reform law and what is not.
If you haven’t been sick this year or are not included in the following categories of people who are benefiting from health reform, it makes sense that you won’t have paid much attention. You may not experience concrete benefits until it is fully implemented in 2014. But just in case you know someone in these categories, here’s the list of health reform “gifts” available this year (see my blog on the Health Insurance Resource Center for more details):
1. If you are 65 or older — (and eligible for Medicare) — seniors who are enrolled in Medicare Advantage plans (that’s Part C or the managed care part of Medicare) may have seen their premiums reduced this year. Some may even have access to ZERO premium health plans. Seniors also now receive free preventive treatments and a rebate of $500 if their drug coverage hits the “donut hole” in 2011.
2. If you haven’t turned 26 yet — you may have been able to stay on your parents’ health plan this year, even if you are working or don’t live at home. 1.8 million young people had access to this benefit. And 90,000 children under the age of 19 could not be denied coverage because of a pre-existing condition due to a change that was implemented in 2011.
3. If you needed preventive care (or had the good sense to get it) — you had access to it this year without a co-payment or deductibles.