Ear To The Door: 5 Things Being Weighed In Secret Health Bill Also Weigh It Down

Medicaid word cloud concept

Source: Kaiser Health News

Anyone following the debate over the “repeal and replace” of the Affordable Care Act knows the 13 Republican senators writing the bill are meeting behind closed doors.

While Senate Majority Leader Mitch McConnell (R-Ky.) continues to push for a vote before the July 4 Senate recess, Washington’s favorite parlor game has become guessing what is, or will be, in the Senate bill.

Spoiler: No one knows what the final Senate bill will look like — not even those writing it.

“It’s an iterative process,” Senate Majority Whip John Cornyn (R-Texas) told Politico, adding that senators in the room are sending options to the Congressional Budget Office to try to figure out in general how much they would cost. Those conversations between senators and the CBO — common for lawmakers working on major, complex pieces of legislation — sometimes prompt members to press through and other times to change course.

Although specifics, to the extent there are any, have largely stayed secret, some of the policies under consideration have slipped out, and pressure points of the debate are fairly clear. Anything can happen, but here’s what we know so far:

1. Medicaid expansion

The Republicans are determined to roll back the expansion of Medicaid under the Affordable Care Act. The question is, how to do it. The ACA called for an expansion of the Medicaid program for those with low incomes to everyone who earns less than 133 percent of poverty (around $16,000 a year for an individual), with the federal government footing much of the bill. The Supreme Court ruled in 2012 that the expansion was optional for states, but 31 have done so, providing new coverage to an estimated 14 million people.

The Republican bill passed by the House on May 4 would phase out the federal funding for those made eligible by the ACA over two years, beginning in 2020. But Republican moderates in the Senate want a much slower end to the additional federal aid. Several have suggested that they could accept a seven-year phaseout.

Keeping the federal expansion money flowing that long, however, would cut into the bill’s budget savings. That matters: In order to protect the Senate’s ability to pass the bill under budget rules that require only a simple majority rather than 60 votes, the bill’s savings must at least match those of the House version. Any extra money spent on Medicaid expansion would have to be cut elsewhere.

2. Medicaid caps

A related issue is whether and at what level to cap federal Medicaid spending. Medicaid covers more than 70 million low-income people. Medicaid covers half of all births and half of the nation’s bill for long-term care, including nursing home stays. Right now, the federal government matches whatever states spend at least 50-50, and provides more matching funds for less wealthy states.

The House bill would, for the first time, cap the amount the federal government provides to states for their Medicaid programs. The CBO estimated that the caps would put more of the financial burden for the program on states, who would respond by a combination of cutting payments to health care providers like doctors and hospitals, eliminating benefits for patients and restricting eligibility.

The Medicaid cap may or may not be included in the Senate bill, depending on whom you ask. However, sources with direct knowledge of the negotiations say the real sticking point is not whether or not to impose a cap — they want to do that. The hurdles: how to be fair to states that get less federal money and how fast the caps should rise.

Again, if the Senate proposal is more generous than the House’s version, it will be harder to meet the bill’s required budget targets.

3. Restrictions on abortion coverage 

The senators are actively considering a measure that would limit funding for abortions, though it is not clear if it would be allowed to remain in the bill under the Senate’s rules. The Senate parliamentarian, who must review the bill after the senators complete it but before it comes to the floor, will decide.

The House-passed bill would ban the use of federal tax credits to purchase private coverage that includes abortion as a benefit. This is a key demand for a large portion of the Republican base. But the Senate version of the bill must abide by strict rules that limit its content to provisions that directly impact the federal budget. In the past, abortion language in budget bills has been ruled out of order.

4. Reading between the lines

A related issue is whether House language to temporarily bar Planned Parenthood from participating in the Medicaid program will be allowed in the Senate.

While the parliamentarian allowed identical language defunding Planned Parenthood to remain in a similar budget bill in 2015, it was not clear at the time that Planned Parenthood would have been the only provider affected by the language. Planned Parenthood backers say they will argue to the parliamentarian that the budget impact of the language is “merely incidental” to the policy aim and therefore should not be allowed in the Senate bill.

5. Insurance market reforms

Senators are also struggling with provisions of the House-passed bill that would allow states to waive certain insurance requirements in the Affordable Care Act, including those laying out “essential” benefits that policies must cover, and those banning insurers from charging sicker people higher premiums. That language, as well as an amendment seeking to ensure more funding to help people with preexisting conditions, was instrumental in gaining enough votes for the bill to pass the House.

Eliminating insurance regulations imposed by the ACA are a top priority for conservatives. “Conservatives would like to clear the books of Obamacare’s most costly regulations and free the states to regulate their markets how they wish,” wrote Sen. Mike Lee (R-Utah), who is one of the 13 senators negotiating the details of the bill, in an op-ed in May.

However, budget experts suggest that none of the insurance market provisions is likely to clear the parliamentarian hurdle as being primarily budget-related.

Feds To Waive Penalties For Some Who Signed Up Late For Medicare

Source: Kaiser Health News

Each year, thousands of Americans miss their deadline to enroll in Medicare, and federal officials and consumer advocates worry that many of them mistakenly think they don’t need to sign up because they have purchased insurance on the health law’s marketplaces. That decision can leave them facing a lifetime of enrollment penalties.

Now Medicare has temporarily changed its rules to offer a reprieve from penalties for people who kept Affordable Care Act policies after becoming eligible for Medicare.

“Many of these individuals did not receive the information necessary [when they became eligible for Medicare or when they initially enrolled] in coverage through the marketplace to make an informed decision regarding” Medicare enrollment, said a Medicare spokesman, explaining the policy change.

Those who qualify include people 65 and older who have a marketplace plan or had one they lost or canceled, as well as people who have qualified for Medicare due to a disability but chose to use marketplace plans.

They have until Sept. 30 to request a waiver of the usual penalty Medicare assesses when people delay signing up for Medicare’s Part B, which covers visits to the doctor and other outpatient care. Medicare beneficiaries who already pay the penalty because they had a marketplace plan can request that it be eliminated or reduced.

Medicare also imposes a waiting period for coverage on people who do not sign up when first eligible. If they meet the waiver requirements, they now can request that be lifted.

“This has been a problem from the beginning of the Affordable Care Act, because the government didn’t understand that people would not know when they needed to sign up for Medicare,” said Bonnie Burns, a consultant for California Health Advocates, a consumer group. “Once they had insurance, that relieved all the stress of not having coverage and then when they became eligible for Medicare, nobody told them to make that change.”

One of them is Lisa Grimes’ 49-year-old sister, who receives Social Security disability benefits because of mental illness. She became eligible for Medicare because she receives those disability benefits but had marketplace coverage at that time.

For the past year, Grimes, a St. Louis real estate lawyer, has been trying to unravel the problems that ensued after her sister opted to keep her marketplace plan and drop her Part B coverage, probably because her marketplace premium at the time cost half as much. Only after that $50 monthly premium ballooned to $360 did they learn that marketplace customers lose their premium subsidies when they join Medicare. (Grimes agreed to be interviewed as long as her sister was not identified.)

Other Medicare beneficiaries have made similar mistakes by assuming they didn’t need Part B if they had a marketplace plan, retiree coverage from a former employer or coverage through a current employer with fewer than 20 workers or with the Department of Veterans Affairs. None of these is a substitute for Medicare Part B.

Grimes said her sister couldn’t afford the new marketplace premium and had to drop her plan last year. The Social Security Administration denied her appeal to reinstate her Part B coverage with no penalty or wait period. Then she learned about the new Medicare waiver from a Missouri counselor at the State Health Insurance Assistance Program.

It took several hours for Grimes to find the right letters and other documents needed to apply since her sister’s “filing system was a large shopping bag,” Grimes said. With assistance from the Medicare Rights Center, her sister received Part B coverage without a late fee or waiting period. It was retroactive, so she might be reimbursed for the medical bills she paid last fall and winter when she had no insurance coverage for doctor visits.

People need to sign up for Part B usually within three months before or after turning 65 if they aren’t getting job-based insurance, or when their job-based health insurance ends if they are older than 65, according to Medicare rules. Most people under 65 who receive Social Security disability benefits qualify for Part B after 24 months of benefits.

Under the health law, people who qualify for Medicare will lose subsidies in the online exchange plans. And enrolling in one of those plans does not protect them from a permanent late enrollment penalty.

Marketplace insurers, who are often the first to spot when a member is turning 65, are barred under the health law from canceling coverage because that member may qualify for Medicare, Burns said. They are required, however, to cancel a Medicare-eligible member’s subsidies.

Last summer, Medicare officials began sending emails each month to about 15,000 people with subsidized coverage through the federally run marketplace. The notices target people approaching their 65th birthday and tell them how “to avoid an unwanted overlap in Marketplace and Medicare coverage.” Officials also began contacting individuals who already have both Medicare and subsidized marketplace coverage, urging them to discontinue the latter.

Yet the warnings have missed some people with marketplace coverage, who could find themselves on the hook to cover their own medical bills if their private insurer indicates they should have been on Medicare and refuses to pay.

“These are very complex rules,” said Stacy Sanders, federal policy director at the Medicare Rights Center, a consumer advocacy group that spearheaded an effort in 2015 by nearly 50 unions, insurance companies and seniors’ advocacy organizations urging Medicare officials to address the problem. “The lack of good notification was leading people down a dangerous path in terms of declining or delaying Part B.”

Those who enroll in Part B 12 months or later after becoming eligible can face a permanent penalty of 10 percent added to the Part B premium for each full 12-month period that a beneficiary could have had Part B, but didn’t enroll. This year, the Part B standard average monthly premium is $109.

Medicare began emailing letters in March about the temporary waiver to some people 65 and older who are enrolled in plans sold on the marketplaces run by the federal government. But the federal government is not reaching out to others who may be eligible.

California, with the largest state-run marketplace — serving 1.4 million consumers — is planning a similar information campaign. So are some other states that run their own marketplaces, including Connecticut, Massachusetts and New York.

For information on how to apply for the waiver, officially called “time-limited equitable relief,” go to the Medicare Rights Center’s Medicare Interactive webpage or call the center’s helpline at 800-333-4114.

Medicaid Expansion, Reversed by House, Is Back on Table in Senate

Image result for Medicaid expansion photosSource: The New York Times

Senate negotiators, meeting stiff resistance to the House’s plans to sharply reduce the scope and reach of Medicaid, are discussing a compromise that would maintain the program’s expansion under the Affordable Care Act but subject that larger version of Medicaid to new spending limits.

With 62 senators, including 20 Republicans, coming from states that have expanded Medicaid under the Affordable Care Act, the House’s American Health Care Act almost certainly cannot pass the Senate. The House bill could leave millions of Medicaid beneficiaries without health coverage, but in a House debate focused more on pre-existing medical conditions and tax cuts, the sweeping Medicaid changes received little attention.

Those changes would, for the first time, put Medicaid on a budget, limiting federal payments to states for care provided to tens of millions of low-income people — not just those who gained Medicaid coverage as a result of the Affordable Care Act, but also children, people with disabilities and nursing home residents who have been eligible for decades under the law that created Medicaid in 1965. The House bill would cut expected Medicaid spending by more than $800 billion over 10 years, according to the most recent estimate from the Congressional Budget Office.

A bill to repeal the Affordable Care Act has been “leveraged, by a sleight of hand, into reform of the entire Medicaid program,” said Greg Moody, director of the Office of Health Transformation in Ohio, run by the state’s Republican governor, John R. Kasich.

States could face tough choices because Medicaid spending per beneficiary is expected to increase faster than the limits in the House bill, according to the Congressional Budget Office and an independent commission that advises Congress on Medicaid policy. State governments could cut services, limit beneficiaries or take on more of the funding responsibility.

“We have a hard time seeing this as anything more than a budget fix for the federal government,” said Leslie M. Clement, director of health policy and analytics at the Oregon Health Authority, which runs the state Medicaid program. “It’s a cost shift to Oregon and other states.”

As senators begin what is likely to be weeks of negotiations, Republican leaders have made it clear that the legislation that ultimately emerges will look very different from the bill that narrowly cleared the House. Controversial House provisions relaxing the Affordable Care Act’s health coverage requirements and rules on pre-existing conditions are likely to be changed, as are the size and distribution of tax credits to help people purchase health insurance plans.

Senators may wish to provide more assistance to low-income people and older Americans. But talks cannot gain real momentum until the Congressional Budget Office delivers its final analysis of the House bill next week. And Senate leaders will face the same difficult dynamic that House leaders confronted: Any move to ease the concerns of moderate Republicans or senators from Medicaid-expansion states runs the risk of alienating conservative hard-liners, especially Senators Rand Paul of Kentucky, Ted Cruz of Texas and Mike Lee of Utah.

On Medicaid, senators have discussed possible trade-offs. One idea is to preserve the expansion of Medicaid eligibility but impose new limits on Medicaid spending. Senators could modify the House bill to change how the caps are computed, but they are far from any final decisions.

Speaker Paul D. Ryan has described the proposed changes in Medicaid as “the most historic entitlement reform we have ever had.”

But Bruce Lesley, the president of First Focus, a child advocacy group, said the per capita limits would prompt states to curtail eligibility, cut lifesaving health benefits or reduce payments to providers.

The American Medical Association weighed in on Monday, urging the Senate to prevent any loss of insurance. “Changes to the financing of Medicaid must also guarantee that the safety net remains strong and is able to respond quickly,” Dr. James L. Madara, chief executive of the association, said in a letter to Senate leaders.

Under current law, the federal government and states share the costs of Medicaid, with the federal government reimbursing states for a percentage of their spending. The federal commitment is open-ended: If more people enroll in Medicaid because of a recession, or if costs per person go up because of a disease outbreak or the development of an expensive new medicine, the federal government automatically provides additional money.

By contrast, under the bill passed this month by the House, the federal government would set an annual limit on payments to each state, starting in 2020. In the bill, the limit is called a “per capita cap on payments for medical assistance,” but that is somewhat misleading. The bill does not limit how much Medicaid can spend on any particular individual. Rather, it limits how much the federal government will pay a state in the aggregate for all its Medicaid beneficiaries.

The limit would be set by calculating the average per-person cost of care for five specified groups of Medicaid beneficiaries (people 65 and older, people with disabilities, children under 19, newly eligible adults and other nondisabled adults under 65). These numbers would be increased each year to reflect growth in medical costs and would be multiplied by the number of Medicaid beneficiaries in each category to determine the overall limit on federal payments to each state.

The formula would automatically increase payments when enrollment increased. But state Medicaid officials say it would not provide an adequate allowance for increases in medical costs or for changes in the needs of beneficiaries in each enrollment group. If a state spent more than its target, as defined by Congress, the federal government would not provide additional funds to match that spending.

Medicaid spending varies greatly among the five groups, averaging $3,500 a year for children, $14,500 for beneficiaries over 65, and $20,000 for people with disabilities.

Under the bill, the limits for most Medicaid beneficiaries would rise with one measure of the cost of care: the medical component within the “basket of goods and services” that the government uses to calculate the Consumer Price Index, a government measure of inflation. The caps for older and disabled Medicaid beneficiaries would be allowed to rise by an additional percentage point.

Vernon K. Smith, a former Medicaid director in Michigan who is now a consultant to many states, said increases in Medicaid costs were not always captured in that national measure of inflation. Hepatitis C, for example, is more common among Medicaid beneficiaries than in the general population, so when effective but expensive new hepatitis drugs became available several years ago, Medicaid costs were affected much more than national health spending.

Mr. Moody of the Ohio Office of Health Transformation said that Mr. Kasich and some other Republican governors could live with per capita limits on Medicaid spending if they had more freedom to manage the program and keep costs under the cap. For example, he said, Medicaid spending on prescription drugs is growing much faster than spending on other items, and state officials could better control pharmacy costs if they had more freedom to decide which drugs to cover.

Although Democrats now oppose per capita allotments in Medicaid, they once supported the idea. “A per capita cap would limit the amount of federal spending per eligible person while retaining current eligibility and benefit guidelines,” President Bill Clinton said in a 1996 message to Congress proposing ways to balance the budget.

Bruce C. Vladeck, then the head of the agency that runs Medicaid and Medicare, defended the proposal at a congressional hearing. Per capita limits, he said, would put Medicaid spending on a sustainable course while protecting coverage for beneficiaries.

Republicans say it is hypocritical of Democrats to resist the caps now.

But in an interview, Mr. Vladeck said the situation was different today. In 1995 and 1996, he said, the Clinton administration embraced per capita caps as a “negotiating position” to counter Republican efforts to convert Medicaid into a block grant, a fixed amount of money that would not respond to population growth or an economic downturn.

In the current fight over the future of the Affordable Care Act, Mr. Vladeck said, Democrats should not even discuss per capita limits while Republicans are “trying to end coverage for 12 million people” by phasing out the expansion of Medicaid.

Do High-Risk Pools Work? It Depends

Image result for high risk pools photos

Source: The Washington Post

If the American Health Care Act ultimately becomes law, states will have the option to once again let insurers on the individual market charge those with preexisting conditions more than healthy people. Among the more contentious pieces of the AHCA, which the House of Representatives passed narrowly on Thursday, is a provision allowing states to request waivers to rules otherwise forbidding higher premiums based on a person’s health status. To get a waiver, states would have to explain how their approach would reduce premium growth and increase enrollment or competition; a late amendment to the bill added $8 billion to help defray higher costs to individuals with health conditions.

I have helped manage one federal and two state “high-risk pools” of the kind that could be re-created under this provision of the AHCA. Before the full implementation of the Affordable Care Act, states had significant discretion over their individual insurance markets, and most allowed plans to place a surcharge on individuals with preexisting conditions. Such “risk rating” was allowed because, before the ACA’s coverage mandate, those who didn’t get health insurance through their employer, Medicare or Medicaid could simply go without until they needed it, with no tax penalty. As a result, those who chose to buy insurance on the individual insurance market were more likely to have preexisting conditions and to incur higher health-care costs.

In 35 states, surcharges were applied to those with health conditions through the mechanism of high-risk pools — or plans that segregated these individuals from the rest of the commercial market. High-risk pools insulated healthier customers from higher costs to encourage people to buy coverage before they needed to use it. With adequate funding and affordable pricing, some state high-risk pools worked well.

I was the executive director — and the first employee — of Maryland’s high-risk pool when it opened in 2003. The state provided $120 million a year in subsidies for the plan, and people were eligible to join if they had been turned away by commercial carriers because of conditions ranging from cancer to hypertension, obesity, depression and even acne. Because commercial insurers denied 14 percent of applicants, Maryland’s pool grew to cover 21,000 enrollees — or approximately 20 percent of the market, a good take-up rate. While premiums were approximately 30 percent above what healthy individuals paid, pool members received more extensive coverage. And lower-income members had access to subsidies — this was well before Obamacare’s became available — that cut their premiums up to half what healthy individuals paid.

Inadequate funding produced different results elsewhere, however. Before Maryland, I helped manage California’s high-risk pool, which received $40 million a year in subsidies from tobacco taxes — one-third of what Maryland provided for a state six times more populous. California’s pool enrollment reached a peak of 21,000 in 1999, but it gradually declined as funding remained stagnant, resulting in a waiting list of up to a year. Premiums were 20 to 37 percent above what healthy individuals paid, with no low-income subsidies. Furthermore, California’s pool capped individual coverage at $75,000 annually — a limit hit by 3 percent of members with catastrophic levels of claims.

Another inadequately funded high-risk pool was actually created under the ACA. Because the Obamacare marketplace took nearly four years to launch, the bill established a temporary federal high-risk pool, which I helped set up. Four months after President Barack Obama signed the bill in 2010, the federal Pre-Existing Condition Insurance Plan began covering individuals who had been rejected by commercial carriers. The plan imposed no premium surcharge and was funded through a one-time, $5 billion appropriation. Enrollment peaked at 115,000 before we had to close it to new enrollees, nine months before the Obamacare exchanges opened, to stay within the $5 billion appropriation.

As these experiences show, funding mattered greatly to whether states took a somewhat benevolent (Maryland) or more neglectful (California) approach to high-risk pools. Is the money in the AHCA sufficient to subsidize premium surcharges for those with health conditions? The answer depends on many factors: How would insurers adjust their premiums in the new market? How would consumers respond to the end of the tax penalty, restructured tax credits and a 30 percent premium penalty on those who don’t maintain coverage? Would the elimination of Medicaid expansion coverage affect demand on commercial markets? How many states would request waivers? How well would programs and subsidies be promoted to those with preexisting health conditions?

The AHCA would also provide $130 billion over 10 years — a significant amount — to stabilize the individual and small-employer insurance markets, and states would be required to add tens of billions for market stabilization in the 2020s. How would those funds be applied? How much difference would they make?

If well-administered, the American Health Care Act could allow premiums to stabilize and help those with health conditions acquire affordable coverage. But if not, uninsured individuals with health conditions could end up longing for the good old days of the ACA.

Obamacare Premiums Rise as Insurers Fret Over Law’s Shaky Future

Image result for health premiums rising photos

Source: Bloomberg

Health insurers are asking for sharp increases in the cost of their Obamacare plans next year, thanks to instability in the law’s coverage markets that’s been compounded by the Trump administration.

In Maryland, Virginia and Connecticut — the first states to make filings public — premiums for Affordable Care Act plans will rise more than 20 percent on average, according to data compiled by ACASignups.net and Bloomberg. The increases follow years of rising premiums under ex-President Barack Obama.

The increases can be blamed in part on uncertainty among insurers about the strength of the law’s requirement that people carry insurance. The Trump administration has raised doubts about whether it will enforce what is considered by some insurers to be an already insufficient penalty.

“Failure to enforce the individual mandate makes it far more likely that healthier, younger individuals will drop coverage and drive up the cost for everyone,” Chet Burrell, chief executive officer of CareFirst, said in a statement. The insurer is asking for an at least 50 percent increase in premiums in Maryland. Burrell said uncertainty over the mandate played a “significant role” in the insurer’s rate requests.

The Affordable Care Act is at a critical juncture. Republicans and Trump want to repeal much of the law, and say the rising premiums are proof it isn’t working. At the same time, many insurers point to a lack of support for Obamacare’s programs as a reason for the increases, and have asked for help.

Rising Premiums

“It would be good to have some more aggressive stabilization efforts going on,” said Joel Ario, a managing director at Manatt Health who previously worked on the Affordable Care Act at the Department of Health and Human Services. “Uncertainty equals higher premiums.”

Health and Human Services Secretary Tom Price has said the administration will do what it can administratively to “support the reform effort by reviewing and initiating administrative actions to put patients, families and doctors in charge of medical decisions, bring down costs, and increase choices.”

Insurers are quitting Obamacare’s markets because the health law is “fundamentally flawed,” Alleigh Marre, an HHS spokeswoman, said in an emailed statement. “Repealing and replacing Obamacare remains the best option.”

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Politics and Policy

There are several other factors to blame for rising premiums, including underlying medical costs.

“We are seeing claims experience that reflects increased medical and prescription drug costs along with higher utilization,” Connecticut Insurance Commissioner Katharine Wade said in a statement.

That’s true in Maryland, too, said Insurance Commissioner Al Redmer. There, carriers are requesting average rate increases from 18 percent to 59 percent. That means in the Baltimore area next year, a 40-year-old could buy a basic “silver” plan for $714.95 a month from CareFirst, or one from Kaiser Permanente for $359.25 with a more limited network of doctors.

Medical Costs

“If carriers in Maryland are losing just on medical claims you can’t point to the current political climate and say, ‘Now things are worse,’” he said.

The rates are preliminary, and regulators often have the power to change them. Most other states will report their rates over the next several months.

CareFirst is a major insurer in Maryland, Virginia and Washington, D.C., and sells coverage under the Blue Cross and Blue Shield brand. The company said its premiums still fall short of covering its customers’ medical costs. It projects its accumulated Obamacare losses from the start of the program through the end of 2017 will reach $600 million.

Trump has cheered on some of Obamacare’s troubles, using them to justify his party’s efforts to repeal the law.

“Insurance companies are fleeing ObamaCare – it is dead. Our healthcare plan will lower premiums & deductibles – and be great healthcare!” Trump tweeted on May 4, the day House Republicans narrowly passed a bill to repeal much of the ACA. While the legislation faces a difficult time in the Senate, the premium increases are likely to remain a part of the debate.

Positive Signs?

It’s too early to say whether the results from the three states are indicative of broader trends. An analysis of Blue Cross and Blue Shield plans by S&P Global Ratings showed that insurers’ results were generally improving and the market stabilizing in the law’s third year.

BlueCross BlueShield of Tennessee will expand in the state next year, entering counties around Knoxville that would otherwise have no Obamacare plans after Humana Inc. said it would exit. After recording more than $400 million in losses from 2014 through 2016, BCBS Tennessee’s financial performance this year is improving, according to a letter the insurer sent to state regulators Tuesday.

Still, its premiums will include additional costs because of “the potential negative effects of federal legislative and/or regulatory changes,” CEO JD Hickey said in the letter. “These risks include but are not limited to the elimination of Cost Sharing Reduction subsidies (CSRs), the removal of the individual mandate and the collection of the health insurer tax.”

Scaling Back

Anthem Inc., which sells insurance under the Blue Cross and Blue Shield brand in 14 states, has said it may scale back that footprint. In Virginia, where it has 165,000 customers in the individual market, Anthem is raising rates about 38 percent. In Connecticut, the insurer has 35,000 customers and is raising rates 34 percent.

“We are forecasting that the individual market will continue to shrink, and that those individuals with greater health-care needs will be the most likely to purchase and retain their coverage,” Anthem told Connecticut regulators.

In some cases, rather than raising rates insurers are dropping out. Humana is withdrawing from Obamacare’s individual market entirely. Aetna Inc. has quit Virginia and Iowa has experienced broad pullouts. In an interview on ABC’s This Week with George Stephanopoulos, House Speaker Paul Ryan said the withdrawals showed the law is failing.

“What we’re trying to do here,” Ryan said, “is step in front of this collapsing law and make sure that we can have a system that works, a system with choice and competition and affordable premiums.”

Could GOP Bill Affect Employer Health Coverage, Too

Image result for employer health coverage photosSource: The New York Times

If it becomes law, the American Health Care Act will have the biggest effects on people who buy their own insurance or get coverage through Medicaid. But it also means changes for the far larger employer health system.

About half of all Americans get health coverage through work. The bill would make it easier for employers to increase the amount that employees could be asked to pay in premiums, or to stop offering coverage entirely. It also has the potential to weaken rules against capping worker’s benefits or limiting how much employees can be asked to pay in deductibles or co-payments.

Whether those changes happen depends on how the Trump administration, states and employers act. The possible effects on the employer health system got little attention during congressional debate.

The employer health benefit system existed long before the Affordable Care Act and was little changed by that law, which focused on expanding coverage for people who did not get their insurance from work. But Obamacare did expand some consumer protections for employer coverage. It also included a controversial “employer mandate,” which required large employers to offer affordable, comprehensive coverage to their workers or face a fine.

The Republican health bill, which passed the House last week and faces changes in the Senate, would weaken or eliminate those protections.

Employers who do not offer insurance to their full-time workers would no longer be fined. Under a Republican health law, benefits consultants predict that most employers would keep offering insurance so as to retain workers. But smaller employers, particularly in certain industries, may choose to cut back.

In its estimate of the effects of an earlier version of the bill, the Congressional Budget Office said that about seven million fewer Americanswould have insurance through work if the Republican health bill became law, compared with what would happen under current law. (Many of those people would still get coverage, the office said — they would just need to buy it themselves — but some would become uninsured.)

Employers would also be freed from penalties if their insurance did not meet a certain affordability standard for their workers; that could mean charging workers a larger share of insurance premiums.

Changes to Obamacare’s consumer protection rules are harder to predict. But it is possible, through the interaction between the health bill and current regulations, that employers would be able to skirt rules that forbid them from limiting the total amount of health care they will pay for in a year or a worker’s lifetime. A rule capping the amount that a worker can be asked to pay in deductibles and co-payments each year could be similarly vulnerable. That possibility was covered last week in The Wall Street Journal.

Matthew Fiedler, a fellow in economic studies at the Brookings Institution and a former Obama administration official, explained in a recent blog posthow the bill could bring back coverage limits. He said that the Trump administration could prevent employers from rolling back the rules through regulation. But he noted that a permissive regulatory approach, which could allow employers to impose limits on coverage, seemed consistent with the administration’s policy preferences. “I think it’s the most likely outcome, but it’s not a guaranteed outcome.”

Zach Hunter, a spokesman for the House Energy and Commerce Committee, which helped draft the bill, said that legislators did not intend for waivers to have any effect on the employer market. “Any ambiguity caused by previous administrations’ guidance from H.H.S. could be resolved by Secretary Price,” he said, referring to Tom Price. Alleigh Marré, a spokeswoman for the Department of Health and Human Services, told The Journal that the department would write regulations in line with the legislation’s intent.

Before the Affordable Care Act, limits on overall coverage were quite common. A Kaiser Family Foundation study found that 59 percent of American workers with employer health plans were covered by plans with a lifetime limit in 2009. A 2009 study from the benefits consulting firm Mercer reached a similar conclusion. It is not clear whether such caps would become as widespread in the future, but, if allowed, may become appealing for some employers looking to reduce costs.

“Lifetime limits affect very few people,” said Larry Levitt, a co-author of the Kaiser study, explaining employers’ thinking. “It allows you to lower your costs without affecting very many people.” But, he noted, such limits can be devastating to those with very costly health conditions.

Obamacare rules limiting the total amount patients with catastrophic illnesses could be asked to pay through deductibles and co-payments may also be weakened by the health bill. Currently, individuals can’t be asked to pay more than $7,150 annually for essential care. The limit for families is $14,300.

A recent survey of 666 employers from the benefits consulting firm Willis Towers Watson found that 15 percent of the employers would consider imposing lifetime coverage limits if it were allowed. The survey did not ask about raising out-of-pocket maximums.

James Gelfand, a senior vice president for the ERISA Industry Committee, a trade group that works with large employers on health benefits, said he thought the return of lifetime limits was extremely unlikely, even if the American Health Care Act became law. He spoke with some members in April about the issue. “That was an eye roll,” he said.

Changes are most likely among employers with fewer workers, or those that tend to pay hourly wages. Those were the types of businesses least likely to offer comprehensive coverage in the years before the Affordable Care Act. The Mercer study found that about 22 percent of wholesale and retail companies offered their workers so-called “mini-med” insurance plans, made illegal by Obamacare, with sharply limited medical benefits.

The Republican bill would not allow employers to charge higher insurance prices to those with pre-existing health conditions. That practice was barred by the Health Insurance Portability and Accountability Act in 1996, and was not changed by the Affordable Care Act. Some people who buy their own insurance might face a return of such health-based pricing under the Republican bill.

The bill would also ease a current pressure on employers to lower the cost of their health plans. Enactment of the so-called Cadillac tax on expensive insurance plans will be postponed until 2026 under the American Health Care Act.

Even if the law changes, coverage by most large employers is likely to remain widespread and robust, particularly if a strong economy prompts them to compete to attract workers. But even in past downturns, health benefits have proved tricky to take away. In the years before the Affordable Care Act, employers had no requirement to offer coverage and few rules about what benefits they should include. Still, in those years, generous employer coverage was the norm for large companies. “It’s not likely they would abandon that approach in a post-A.C.A. environment,” said Tracy Watts, the United States health reform leader at Mercer.

Why Blue States Might Ditch Beloved Obamacare Protections

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Source: California Healthline

Under the Republican health bill, it’s up to states whether to dismantle key parts of the Affordable Care Act.

Red, or GOP-leaning, states are sure to be interested in rolling back the law’s coverage requirements and freeing insurers to charge people more when they have preexisting conditions.

As strange as it sounds, deep-blue, heavily Democratic states supportive of Obamacare, including California and New York, may be forced to do the same, according to experts, regulators and consumer advocates.

The American Health Care Act, which narrowly passed the House on Thursday and now heads to the Senate, would significantly cut the federal subsidies on which many Americans rely to buy coverage. Unless the legislation fails or changes substantially, many consumers across the country could see the amount they pay every year for premiums increase by thousands of dollars, making coverage effectively unaffordable.

Few, if any, states would be able to fund subsidies on their own. To keep insurers in the market and bring costs down, state leaders might feel compelled to seek exemptions from rules that require health plans to provide 10 “essential health benefits” and prohibit them from charging higher rates for sicker consumers. The new GOP health care bill would allow such waivers.

“With the skimpier subsidies, states are going to be under enormous pressure to apply for these waivers,” said Sabrina Corlette, a research professor at Georgetown University’s Center on Health Insurance Reforms.

These opt-out provisions could accelerate the unraveling of Obamacare, even in places that fully embraced the landmark law.

“Certainly the Californias and New Yorks of the world will do what they can to hold onto the ACA protections. But when confronted with insurer exits and big price hikes, many states with the best of intentions may feel they have little choice but to get a waiver,” Corlette said.

Republican leaders insist the current health law isn’t worth saving because it has left consumers with double-digit rate hikes, onerous deductibles and little or no competition in some states, as insurers exit the marketplaces.

Rep. Kevin Brady (R-Texas), chairman of the House Ways and Means committee, said the GOP health bill grants states the flexibility they need to remove the “crushing mandates” that have led to “Obamacare plans you don’t want and can’t afford.”

Nationally, the average tax credit for enrollees in the online marketplaces would be 41 percent lower under the American Health Care Act by 2022, according to a study by the Kaiser Family Foundation. (Kaiser Health News, which produces California Healthline, is an editorially independent program of the foundation.)

The GOP bill also ends the penalty for not having coverage, which experts say might increase premiums as fewer healthy people sign up, leaving health plans with a higher proportion of  sick patients.

All this could put the focus back on which benefits are deemed essential in health insurance — an all-too-familiar battle in statehouses before the ACA set a nationwide standard.

The health law now requires all plans sold on the individual and small-group markets to cover the 10 essential health benefits, including hospitalization, prescription drugs and mental health treatment. It has made coverage more comprehensive and prevented insurers from selling bare-bones plans that had cheaper premiums but often exposed consumers to huge medical bills after they sought care.

California would be loath to cut benefits. If you’re selling a policy to a young adult without maternity care, that’s nuts.

Even in California, a liberal bastion that enthusiastically implemented Obamacare, the law’s supporters are bracing for a fight over the waivers.

“As premiums go higher, it will create pressure on us to undercut the standards we have,” said Beth Capell, a lobbyist for the consumer advocacy group Health Access California.

In California, premiums and out-of-pocket costs would rise by $2,779, on average, under the House bill, according to the analysis by the Center on Budget and Policy Priorities.

“California policymakers will once again hear what we heard year after year before the ACA: ‘Some coverage is better than no coverage. More limited benefits are better than nothing,’” Capell said.

John Baackes, the chief executive of L.A. Care Health Plan, with about 26,000 enrollees in the California exchange, said state leaders would exhaust every other option before slashing coverage.

“California would be loath to cut benefits,” Baackes said. “If you’re selling a policy to a young adult without maternity care, that’s nuts.”

No matter the state, red or blue, experts anticipate vigorous debate over these waivers because consumer protections under Obamacare have become more popular.

Wisconsin Gov. Scott Walker, a Republican, experienced that firsthand last week when he suggested his state may opt out of the ACA’s preexisting condition rules — and then immediately backtracked amid strong opposition.

Michael Miller, director of strategic policy for Community Catalyst, a Boston-based national consumer group, said waiver requests won’t necessarily proceed “quietly even in the red states. … People have heart disease and cancer and asthma in those states, too.”

As California Debates Single-Payer Health Care, Consider How Much Your Taxes Would Increase

Image result for single payer health care photosSource: The Sacramento Bee

At a recent town hall, California’s Sen. Dianne Feinstein was unfairly criticized for expressing concern about proposed state legislation to create a “single-payer” health care system for California. Her concerns are well founded. The practical reality is that setting up a single-payer system, especially for just one state, is unworkable.

Under a single-payer system, health care would be financed through taxing people to support a government-run program rather than through having them or their employers pay for private health insurance coverage. Doing that would require a massive tax increase on California families along with huge pay cuts for nurses, doctors and other health care professionals. And, it would spell the end of the employer-sponsored insurance that half the state relies on and values.

Debating the single-payer proposal also divides the state’s health care community at the very moment that it needs to be united in moving toward universal coverage under our existing system. Abandoning the Affordable Care Act, as Senate Bill 562 does, telegraphs to Congress that California was never committed to this law, which makes preserving our shared progress that much more difficult.

California’s current system relies in large part on employer-sponsored insurance, which is still the source of health care coverage for tens of millions of people. That coverage would disappear under SB 562. Instead of receiving coverage financed by their employers, working Californians would see a tax increase of well over $10,000 per year for many middle-income families.

For some Californians, this will be less than they are paying out of pocket for health insurance. For many it would be more. All, however, could see health spending in the state budget swell toward the state’s total health spending of $250 billion per year, crowding out essential investments that are also critical to the health of Californians, such as funding for education and transportation. Spending less would mean cutting the pay of nurses, doctors and other health care professionals by at least 50 percent.

The average salary of a registered nurse in California is $135,000. In equivalent dollars, Canadian nurses under their single-payer system make $65,000 per year. Though some private insurance companies do make profits, more than 90 cents on the dollar goes directly toward health care services and necessary administrative costs. Eliminating private health insurance companies would also undermine California’s innovative and effective integrated delivery systems that are a source of coverage and care.

Californians rightly criticized Congress for racing forward with health reform proposals before evaluating or “scoring” the actual impacts of these proposals. The current single-payer health care bill has not received an evaluation from our Legislative Analyst’s Office. In fact, it does not yet include a mechanism to pay for the program that could even receive a score, though the bill’s sponsors promise one in the coming month.

When the actual score came out for the first version of the American Health Care Act a month ago, it signaled its death knell since it showed that there would be 24 million fewer people insured as a result of the proposal. The last time a fully articulated single-payer bill was scored in California, it showed that even after the massive payroll tax increases proposed, the funding for the law was still $40 billion short, also effectively ending debate on that bill.

California needs to be leading the nation right now on sensible, responsible public policy. The Legislature is doing that right now on issues like transportation and climate change. This is not the time to abandon our critical leadership on moving toward universal, affordable coverage building on the Affordable Care Act.

Who Wins and Who Loses in the Latest GOP Health Care Bill

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Source: MSN

The American Health Care Act, set for a House vote Thursday, would transform the nation’s health insurance system and create a new slate of winners and losers.

If the bill becomes law, it will repeal and replace large portions of the Affordable Care Act (Obamacare). It will change the rules and subsidies for people who buy their own insurance coverage, and make major cuts to the Medicaid program, which funds care for the poor and disabled.

Any sizable change in our complex health care system leaves some people and businesses better or worse off. For some, insurance will become more affordable — or taxes lower. Others will lose out on financial support or health care coverage. You can see how you might be affected in our summary of winners and losers.

Winners

High income earners: The bill eliminates two taxes on individuals earning more than $200,000 or couples earning more than $250,000: a 0.9 percent increase on the Medicare payroll tax, and a 3.8 percent tax on investment income. It also allows people to save more money in tax-excluded health savings accounts, a change most useful to people with enough money to have savings.

Upper-middle-class people without pre-existing health conditions: The Affordable Care Act cut off subsidies to help people buy their own insurance at an income of around $48,000 for a single person. The American Health Care Act would let people get government subsidies much higher up the income scale — up to about $150,000. But the bill would allow states to waive rules on minimum benefit standards and rules that prevent insurance companies from charging higher prices to customers with pre-existing illnesses. That means, overall, the gap between the tax subsidies and the cost of needed care could widen, even for some people who will get extra financial help.

Young, middle-class people without pre-existing health conditions: The bill would change how insurance companies price their products in a way that would lower prices for young customers. It also gives them a flat subsidy that is, in many cases, higher than what they would receive under Obamacare. There is some variation by region, and people with pre-existing conditions could be charged higher prices in some states.

People who wish to go without insurance: The bill would eliminate the individual mandate, which charges a tax penalty to Americans who can afford insurance but do not obtain it.

People who want less comprehensive health coverage: The bill would allow insurers to offer health plans with higher deductibles and co-payments, a change likely to lower premiums. Customers in states that waive benefit rules may also be able to buy plans not covering as many medical services, like maternity coverage.

Large employers: The bill eliminates Obamacare’s employer mandate, which required large employers to offer affordable coverage to their workers. If the bill becomes law, companies that do not wish to cover their workers will face no penalty. All large employers would freed of the complex reporting necessary to enforce the provision. It also pushes back enactment of a tax on high-cost employer health plans.

Medical device companies, indoor tanning companies and a few other medical industries:The bill rolls back taxes on devices, tanning, prescription drugs and health insurance products. Some of those industries may lose a little as well as benefiting — insurance companies, for example, may have fewer paying customers.

Losers

Poor people: If it becomes law, the bill is likely to result in many states rolling back their expansions of the Medicaid program to cover childless adults without disabilities. The bill would also substantially reduce subsidies available for Americans just over the poverty line, the group that benefited most from Obamacare’s subsidies. Poor Americans would be much more likely to become uninsured under the bill, according to the Congressional Budget Office, and those who retained coverage would pay much more of their limited incomes on premiums and deductibles.

Older Americans, in most states: The same factors that make the bill better for many young Americans make it worse for those who are older. Insurance companies would be allowed to charge a 64-year-old customer five times the price charged to an 18-year-old one, to cite the most extreme example. The changes in the subsidy formula would also require older middle-class Americans to pay a much larger share of their health insurance bill. The Congressional Budget Office estimates that far fewer older Americans would have insurance coverage under this bill than do under the Affordable Care Act.

People with pre-existing health conditions, particularly in some states. The bill would allow states to waive rules on minimum benefit standards and on rules that prohibit insurance companies from charging higher prices to customers with a history of illness. Those changes could make insurance more expensive for people with a history of serious — or even minor — diseases, and could mean their insurance covers fewer medical services. The benefit changes could also affect Medicaid beneficiaries, and they could mean cutbacks on coverage for mental health and drug addiction treatment. States that waive the rule about prices would be required to set up a program for high-risk customers, and would get some federal funding to do so, but the details are unclear.

State governments: The bill would cut back substantially on federal funding for state Medicaid programs, while offering states only limited new flexibility in how they manage them. Over time, the changes are likely to shift an increasing share of Medicaid costs onto states.

Hospitals: The Congresional Budget Office estimates that some 24 million fewer peoplewould have health insurance in a decade if an earlier version of the bill became law. Some of those people will still have medical emergencies and require hospital care. Obamacare made substantial cuts in how much Medicare pays hospitals, on the theory that they would make up the difference with more paying customers. The Republican bill would not restore any of the Medicare cuts. Hospitals in poor communities where a lot of people signed up for Medicaid are likely to experience the biggest hit.

The Upshot provides news, analysis and graphics about politics, policy and everyday life. Follow us on Facebook and Twitter. Sign up for our newsletter.

Trump Pushes Senate Republicans to Act on Health Care Bill

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Source: The New York Times

President Donald Trump urged Senate Republicans on Sunday to “not let the American people down,” as the contentious debate over overhauling the U.S. health care systems shifts to Congress’ upper chamber, where a vote is potentially weeks, if not months, away.

Some senators have already voiced displeasure with the health care bill that cleared the House last week, with Republicans providing all the “yes” votes in the 217-213 count. They cited concerns about potential higher costs for older people and those with pre-existing conditions, along with cuts to Medicaid.

Sen. Susan Collins of Maine, a moderate Republican whose vote will be critical to getting a bill to Trump’s desk and who voiced similar concerns, said the Senate would not take up the House bill.

“The Senate is starting from scratch. We’re going to draft our bill, and I’m convinced we will take the time to do it right,” she said.

Mick Mulvaney, Trump’s budget director, also said the version that gets to the president will likely differ from the House measure. Such a scenario would then force the House and Senate to work together to forge a compromise bill that both houses can support.

Collins also complained that the House rushed a vote before the Congressional Budget Office could complete its cost-benefit analysis.

Eager to check off a top campaign promise, Trump sought Sunday to pressure Senate Republicans on the issue.

“Republican senators will not let the American people down!” Trump tweeted from his private golf course in central New Jersey, where he has stayed since late Thursday. “ObamaCare premiums and deductibles are way up — it was a lie and it is dead!”

Trump has said the current system is failing as insurers pull out of markets, forcing costs and deductibles to rise.

The White House on Sunday scoffed at Democratic claims that voters will punish the GOP in the 2018 elections for upending former President Barack Obama’s law. “I think that the Republican Party will be rewarded,” said Reince Priebus, Trump’s chief of staff. House Democratic leader Nancy Pelosi of California has threatened that GOP lawmakers will “glow in the dark” over their vote.

The House bill would end the health care law‘s fines on people who don’t buy policies and erase its taxes on health industry businesses and higher earners. It would dilute consumer-friendly insurance coverage requirements, like prohibiting higher premiums for customers with pre-existing medical conditions and watering down the subsidies that help consumers afford health insurance.

Obama defended his signature achievement in Boston Sunday night while accepting the John F. Kennedy Profile in Courage Award.

“I hope that current members of Congress recall that it actually doesn’t take a lot of courage to aid those who are already powerful, already comfortable, already influential,” he said. “But it does require some courage to champion the vulnerable, and the sick and the infirm.”

Major medical and other groups, including the American Medical Association, opposed the House bill. Democrats are also refusing to participate in any effort to dismantle Obama’s law, while some Republican senators — Rob Portman of Ohio, Shelley Moore Capito of West Virginia, Cory Gardner of Colorado and Lisa Murkowski of Alaska — object to cutting Medicaid, the federal-state health care program for the poor and disabled.

The ACA expanded Medicaid with extra payments to 31 states to cover more people. The House bill halts the expansion, in addition to cutting federal spending on the program, which Trump’s health chief argued is flawed and dictates too much from Washington.

Health and Human Services Secretary Tom Price argued that states will get more freedom to experiment with the program and make sure that people who rely on Medicaid get the care and coverage they need.

“There are no cuts to the Medicaid program,” Price insisted Sunday, adding that resources are being doled out to allow states greater flexibility.

Gov. John Kasich of Ohio questioned what would happen to the mentally ill, drug addicts and people with chronic illnesses under the changes proposed for Medicaid.

“They are going to be living in the emergency rooms again,” potentially driving up health care costs, Kasich predicted.

Senate Majority Leader Mitch McConnell, R-Ky., plans to move forward under special procedures that allow legislation to pass with a simple majority vote, instead of the 60 usually required for major bills in the Senate. That means McConnell can afford to lose just two senators; Vice President Mike Pence would vote to break a 50-50 tie in his constitutional role as vice president of the Senate.

House Speaker Paul Ryan, R-Wis., appeared resigned to the legislative reality that the bill he unveiled with great fanfare, after years of Republican pledges to replace what’s become known as “Obamacare,” will be altered as part of a “multistage process.”

“We think we need to do even more support for people who are older and also more support for people with pre-existing conditions,” Ryan acknowledged. “The Senate will complete the job.”

A political group with ties to House Republican leadership, American Action Network, said Sunday it was buying $500,000 in television time to promote the Republican health care bill. The ad will focus on key elements of the American Health Care Act and thank Ryan and fellow Republicans for “keeping their promise” on the health care issue, the group said.

On the other side, a health advocacy group is launching a six-figure advertising campaign this week targeting 24 Republican House members who voted to repeal Barack Obama’s health care law. Save My Care says the campaign will include a mix of TV and digital advertising, costing more than a half million dollars.

Among those being targeted: Tom MacArthur of New Jersey, the moderate Republican who helped revive the bill by authoring an amendment on pre-existing conditions.

Some House lawmakers have been challenged by the public over the House vote.

Conservative Rep. Raul Labrador, R-Idaho, drew boos Friday at a public meeting for his response to a constituent who said the House bill tells people on Medicaid to “accept dying.

Labrador responded: “That line is so indefensible. Nobody dies because they don’t have access to health care.” The comment traveled quickly on social media.

Collins and Ryan appeared on ABC’s “This Week,” Price was on NBC’s “Meet the Press” and on CNN’s “State of the Union” with Kasich, while Mulvaney was interviewed on CBS’ “Face the Nation.” Priebus was on “Fox News Sunday.”

Last Updated 6/4/2017

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