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Tag: The States

Feds’ Power Grab Must Be Stopped

Florida and more than half of the states in the nation have challenged the federal government’s Affordable Care Act because it deprives Americans of their individual liberty and violates the United States Constitution. The U.S. Supreme Court will decide whether to enforce constitutional limitations on federal authority — or, conversely, whether to allow the federal government to dominate states and individuals to the point of dictating day-to-day decisions.

The court should reaffirm the basic constitutional bargain struck among the states that makes our federal government one of limited, enumerated powers.

The act’s chief problem is its individual mandate, which requires virtually everyone to obtain health insurance coverage simply as a condition of living in America. Forced conscription into a commercial market is a startling new exercise of federal power that Congress has never before attempted.

The individual mandate’s stated goal is to lower insurance costs by forcing “healthy individuals” to buy expensive policies that they do not want or need so that insurers can charge less to others. Congress’s central planning on both the supply and demand side of the insurance market exceeds its constitutional authority because the bare power to “regulate” commerce does not include the power to force Americans into commerce. If it did, there would be no end to Congress “fixing” markets with the wallets of ordinary citizens. Congress could require Americans to obtain unwanted loans to bail out failing banks, to purchase a car to reinvigorate struggling carmakers or to buy solar panels to resuscitate failed Solyndra-like investments.Continue reading…

The Massachusetts Miracle: Romney’s Health Care Reform Plan Works

It’s too bad former Massachusetts Gov. Mitt Romney doesn’t want to talk about his state’s health care reform legislation on the campaign trail. If he did, he’d have a pretty good story to tell.

The reform plan, which President Obama used as a model for the national reform, lifted the number of insured residents in the Bay State from 86.6 percent in 2006 to 94.2 percent in 2010, according to a new study published yesterday by Health Affairs.

An expansion of public programs didn’t account for the gains. The number of people with employer-based coverage rose to 68 percent of the adult population in 2010 from 64.4 percent four years earlier. This is exactly the opposite of what many business groups are claiming will happen after the national reform goes into effect in 2014.

Moreover, out-of-pocket expenses declined for the average beneficiary. The number of people reporting they paid 10 percent of their family income on health care fell from 9.8 percent to 6.1 percent over the four years. Again, early fears that the Massachusetts reform would lead to a major shift in costs to consumers have not panned out.

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What Mitt Romney Should Say

Preface: In the past few weeks Governor Romney has received withering criticism for his support for the Massachusetts Health Plan and his seemingly hypocritical opposition to Obamacare. Frankly, his responses to this criticism have not been stellar. I sometimes wonder if he realizes that he is on firm ground here. So as a favor to the Governor, I offer this prepackaged statement:

My fellow Americans. Not a day goes by when some of my colleagues in the Republican Party accuse me of hypocrisy for supporting the Massachusetts Health Plan when I was governor of that great state, while opposing Obamacare. I cannot respond to this accusation in a simple sound bite. So please lend me your ears for five minutes while I explain my position.

My job as governor was to implement policies reflecting the wishes of the people of Massachusetts. By approving the Massachusetts Health Plan, I did what my constituency elected me to do. I am proud to have signed the legislation authorizing the Massachusetts Health Plan, but this does not mean that I support Obamacare.

My critics point out two similarities between the two plans. Both plans mandate health insurance purchase and both create health insurance exchanges. Both features were right for Massachusetts. Health insurance markets do not work perfectly; that is why there isn’t a single state, red or blue, that does not heavily regulate them! Many individuals are shut out from buying health insurance. If they get sick, they face financial ruin. And if they are unable to pay for their medical care, providers shift the costs onto the rest of us.

The health insurance exchange levels the insurance playing field and assures that everyone can purchase insurance at affordable rates. Every health economist with whom I have spoken tells me that the exchange will not work without a purchase mandate. Once everyone is buying insurance, the cost shift will end; this will hold down health insurance costs for everyone.

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Can You Really Fire Your Insurance, Mitt?


Romney’s remark last week about firing your insurance company apparently harmed him little  in the New Hampshire primary. But as the quote has rocketed around, it might be misleading some into thinking that the Massachusetts health care reforms that Romney signed into law made it so people can willy-nilly get rid of an insurer that doesn’t pay their claims on time.

The comment deserves a second look. Can you really fire your insurance company? The answer is that it’s darn difficult even in Massachusetts—the land of Romneycare.Continue reading…

Legislative Pressures

As financial pressures impinge the health care system, the various players sometimes seek legislation to protect their interests.  I have heard of two such situations in Massachusetts, and I offer them for your consideration and your comments.

The first involves emergency ambulance service.  Earlier this year, several of the major insurers in the state stopped reimbursing out-of-network ambulance providers, and instead started to send the checks to patients who used those ambulances. Those ambulance companies now have to try to collect from people for payments, and they are losing hundreds of thousands of dollars.

(This only relates to emergency calls, not routine transfers. For routine transfers, ambulance providers already agreed to be reimbursed at agreed-upon rates with insurers and municipalities.)

I can understand why the insurers want to use lower cost ambulance services, but I have trouble imagining a more cruel thing than approaching a patient or a patient’s family after an emergency situation (which perhaps led to long-lasting disability or death) to collect funds that the insurers have sent to the family.  It is also inherently inefficient and adds costs if the ambulance companies have to try collect funds from hundreds of individual patients rather than the few insurance companies.

Rep. Jim Cantwell of Marshfield has filed a bill to force insurers to pay EMS providers, and it has a cost-control provision that would give ultimate rate-setting power to local selectmen.  The Fire Chiefs Association, Massachusetts Municipal Association and Massachusetts Hospital Association support this bill.  This sounds like one that, in legislative parlance, “ought to pass.”

Then there is a proposal that comes out of the growth of tiered networks, in which insurers charge higher co-pays or otherwise limit coverage to patients who choose higher cost providers.  Well, it turns out that some of those high-cost providers are seeking legislation that would require insurers to include them in the low-cost tier of the network.  The two fields at play are pediatrics and cancer care.  The providers’ argument is that they offer essential services not available at other providers, or that they offer similar services but at higher quality.Continue reading…

Florida’s Problem: Cutting Medicaid May Cost More

Florida is concerned that it spends too much on Medicaid. Unfortunately for policymakers, proposed cuts to Medicaid are likely to be self-defeating according to an Orlando Sentinel article. They may result in more spending as well as boosting the number of people with no coverage – especially children. Components introduced under the guise of personal responsibility –such as charging $10 per month per beneficiary or $100 for non-emergency use of the emergency department– have great intuitive appeal to taxpayers and legislators, yet can backfire in practice.

Experience from Oregon suggests that even modest, sliding scale premiums result in huge drops in coverage. A report from the Health Policy Institute at Georgetown University suggests 82 percent of those who leave coverage would be children, of whom 98 percent would be below the poverty level.

There are clear examples of emergency room overuse, but what’s crystal clear in retrospect is not always evident up front. In any case, hospitals can do their part with effective triage that sends patients to lower acuity settings or back home when patients who shouldn’t be there show up.

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Massachusetts and Hawaii Offer the Most Cost-Effective Health Insurance Coverage

What makes a state’s health insurance successful for its citizens? It should be affordable, it should cover a lot of people, and it should manage its members well, keeping people healthy as measured both by preventive care as well as actual health outcomes.

It turns out that, using those criteria, the state with the highest Health Insurance Success Score (HISS) is Massachusetts. One would expect high quality, good outcomes and of course close to 100% coverage in the Bay State, but it also — quite surprisingly — ranks 5th in affordability, as described below.

Hawaii is a very close second. (One could also argue that Hawaii’s circumstances are unique and non-comparable because that state differentially attracts and retains healthy residents, but the analysis eschewed all subjectivity and second-guessing of the data.) Texas is last, one point behind Arkansas. In both the best and worst listings, there is a noticeable gap between the two states at the extremes and their respective runner-up pelotons.

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Florida Sanctions Top Medicaid Prescribers, After a Shove

At Dr. Huberto Merayo’s bustling psychiatry practice in Coral Gables, Fla., hundreds of poor patients on Medicaid walked away each year with prescriptions for powerful antipsychotic drugs.

Merayo’s prescriptions for the drugs totaled nearly $2 million in 2009 alone, state records show.

The 59-year-old psychiatrist is also in demand by the makers of these drugs. He’s earned more than $111,000 since 2009 delivering promotional talks for AstraZeneca, Eli Lilly & Co. and Pfizer, according to ProPublica’s database of drug-company payments to doctors.

This year, Florida regulators finally challenged Merayo’s enthusiasm for the pricey drugs, which are used to treat schizophrenia and bipolar disorder. A state review found he hadn’t documented why patients were prescribed the pills and had given them to patients with heart ailments or diabetes despite label warnings.

In May, Florida summarily ended his contract with Medicaid. But the action, though decisive, followed years of high prescribing by Merayo, according Florida’s own statistics. And he was booted only after public questioning by U.S. Sen. Charles Grassley, R-Iowa, who had asked states to investigate such cases.

Merayo’s situation is one of at least three in which Florida allowed physicians to keep treating and prescribing drugs to the poor amid clear signs of possible misconduct.

The state’s responses were marked by head-scratching errors, including the misspelling of Merayo’s name on official documents, and lengthy delays.

In another example, Florida allowed Dr. Joseph M. Hernandez of Lake City to continue prescribing narcotic pain pills to Medicaid patients for more than a year after he was arrested and charged in 2010 for trafficking in them.

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What Difference Does Health Insurance Make?

Almost everyone thinks we should insure the uninsured. I don’t recall even a single dissenter. Yet it is precisely when everyone agrees on something that thinking begins to get very sloppy. So let me be the devil’s advocate and challenge the idea.

Why do we want to insure the uninsured? Forget about the costs, for a moment. Are there any benefits? What are they? I can think of four candidates. If people are insured:

  • They may get more health care.
  • They may get better care.
  • They will enjoy protection from the financial effects of catastrophic illness.
  • They will be less likely to be free riders on the charity of others.

The first three items are “it’s for his own good” benefits and, frankly, the case for them is pretty lame — especially in the context of RomneyCare and ObamaCare. If you expand the demand for health care but do nothing to increase supply, people in the aggregate will not be able to get more care. One person’s gain in care will be offset by someone else’s loss. (At least that tends to be the case, when the principal currency patients use to pay for care is time and not money.)  Since the costs of non-price rationing will rise in the process, the whole exercise must make society as a whole worse off.

The same objection applies to the idea of “better care.” Better care for one person must be obtained at someone else’s expense, if the supply of medical resources is unchanged.

[I suppose you could make an additional argument: If we insure the uninsured, they will have a better chance of getting a “fair share” of health care. In other words, care will be distributed more equally. While that argument makes sense in the abstract, it doesn’t work if you segregate the previously uninsured into plans that pay providers below-market rates — as both RomneyCare and ObamaCare do — and cause them be pushed to the rear of the waiting lines. See below.]

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Christie on Obama’s “Government Takeover”

A “government takeover of health care” is back. At least it is in the mind of New Jersey governor Chris Christie. In an interview with talk radio show host Dom Giordano, the governor, who supports Mitt Romney’s presidential campaign, dished out strong clues about how Republicans are going to fight the health reform law. The weapon of choice: Frank Luntz’s focus-group tested messages. On the show Christie showed he was in sync with Romney’s defense of the Massachusetts reform law, which Romney’s administration supported and which later became the model for national reform. But to distance himself from the federal law, Romney has said what was good for Massachusetts at the time may not be good for the rest of the country. And Christie has said that what happened in the Bay State “would not be good for New Jersey.”

On the show, Christie urged the president to tell the truth about the reform law. What truth would Christie tell?

I’d say to the president, in Massachusetts, we didn’t propose to raise taxes, as you proposed to raise taxes a trillion dollars to pay for a government takeover of health care…. Ninety-three percent of the people in Massachusetts had private insurance then and have private insurance now. That’s not what’s gonna happen under Obamacare. It’s gonna be a government takeover of health care.

Really, Governor? As Campaign Desk has repeatedly noted, the health reform law does not call for a government takeover of health care. The law simply brings private insurance to people who are uninsured. You know, the kind sold by those giants of the American insurance business—UnitedHealth Group, Blue Cross, Cigna, and Humana—which just posted a large profit gained mostly from selling private Medicare Advantage plans to seniors.

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