House GOP Budget Sets Up Next Healthcare Battle

Image result for house gop budget images

Source: Associated Press

The House on Thursday passed a $4.1 trillion budget plan that promises deep cuts to social programs while paving the way for Republicans to rewrite the tax code later this year.

The 2018 House GOP budget reprises a controversial plan to turn Medicare into a voucher-like program for future retirees as well as the party’s efforts to repeal the “Obamacare” health law. Republicans controlling Congress have no plans to actually implement those cuts while they pursue their tax overhaul.

That’s especially so in the Senate, where the Budget Committee on Thursday gave party-line approval to a companion plan.

Instead, the nonbinding budget’s chief purpose is to set the stage for a tax overhaul plan that is the party’s top political priority as well as a longtime policy dream of key leaders like Speaker Paul Ryan.

The White House issued a statement saying the House plan is a key step toward “Making America Great Again.”

The House measure, passed by a near party-line vote of 219-206, calls for more than $5 trillion in spending cuts over the coming decade, promising to slash Medicaid by about $1 trillion over the next 10 years, cutting other health care costs, and forcing huge cuts to domestic programs funded in future years by Congress.

“It’s a budget that will help grow our economy, and it’s a budget that will help rein in our debt,” said Ryan, R-Wis. “It reforms Medicaid. It strengthens Medicare.”

But Republicans are not actually planning to impose any of those cuts with follow-up legislation that would be required under Washington’s Byzantine budget rules. Instead, those GOP proposals for spending cuts are limited to nonbinding promises, and even a token 10-year, $200 billion spending cut package demanded by tea party House Republicans appears likely to be scrapped in upcoming talks with the Senate.

Instead, the motivating force behind the budget measures is the Republicans’ party-defining drive to cut corporate and individual tax rates and rid the tax code of loopholes. They promise this tax “reform” measure will put the economy in overdrive, driving economic growth to the 3 percent range, and adding a surge of new tax revenues.

“In order to pay for these huge tax breaks for millionaires and billionaires, this Republican budget makes savage cuts to the life and death programs that mean so much to ordinary Americans,” said Sen. Bernie Sanders, I-Vt.

Passing the measure in the House and Senate would provide key procedural help for the tax measure because it sets the stage for follow-on legislation that can’t be filibustered by Senate Democrats. Republicans used the same so-called reconciliation procedure in their failed attempt to kill “Obamacare,” including its tax surcharges on wealthy people.

“Through reconciliation, our budget specifically paves the way for pro-growth tax reform that will reduce taxes for middle-class Americans and free up American businesses to grow and hire,” said Rep. Diane Black, R-Tenn., who chairs the House Budget Committee.

Eighteen Republicans opposed the measure, including several from high-tax states like New York and New Jersey who are concerned that the upcoming tax effort would repeal the deductions for state and local taxes.

Democrats blasted the sweeping spending cuts proposed by Republicans — more than $5 trillion over 10 years in the House plan and somewhat less in the Senate GOP measure — as an assault on middle-class families and the poor.

“Is it a statement of our values to take a half-trillion dollars out of Medicare to give a tax cut to the wealthiest people in our country?” said House Minority Leader Nancy Pelosi, D-Calif.

The Senate Budget Committee’s companion plan approved Thursday differs in key details — but would still result in a deficit of $424 billion in 2027, according to the Congressional Budget Office.

The House measure assumes the upcoming tax bill won’t add to the deficit; the Senate version, however, would permit the measure to add $1.5 trillion to the $20 trillion-plus national debt over the coming 10 years. The final version is likely to stick closely to the Senate measure in key respects. A final House-Senate agreement won’t come until November, Black said, but she anticipated conflict over the Senate plans.

“That is certainly going to be a very lively discussion,” Black said of House-Senate talks. “Our members are concerned about (budget) balance and they’re also concerned about the debt and deficits.”

The real-world trajectory of Washington, however, is for higher deficits as Republicans focus on tax cuts, a huge hike in the defense budget, and a growing disaster aid tally that is about to hit $45 billion.

“The train’s left the station, and if you’re a budget hawk, you were left at the station,” said Rep. Mark Sanford, R-S.C.

Sanders Slams GOP, Touts Universal Health Care in California

Image result for sanders and Medicare for all imagesSource: The New York Times

Sen. Bernie Sanders pilloried Republican efforts to overhaul the health care system and touted his own Medicare for all plan Friday before an effusive California audience that welcomed him on stage with chants of “Run, Bernie, Run!”

Sanders’ speech to the influential California nurses’ union in San Francisco came shortly after Republican Sen. John McCain announced he would vote “no” on the latest GOP effort to roll back President Barack Obama’s health care overhaul law. Sanders praised McCain for following his conscience, but he said the fight to preserve — and expand — access to health care is far from over.

“Tell (Republicans) they will pay a heavy political price,” he said. “While we have got to wage an all-out battle to defeat this horrific legislation, we have also got to understand, in terms of health care maintaining the status quo is not enough.”

The California Nurses Association was a particularly receptive audience for Sanders’ calls for a government-funded universal health care system. The union pushed aggressively this year to create such a system in California, only to see it shelved by Democratic Assembly Speaker Anthony Rendon who called it “woefully incomplete.”

Rendon’s move spurred marches and rallies at the Capitol. He has since pledged to study the issue and revisit it next year.

Sanders made no mention of the California bill, but his national legislation mirrors the California plan in many ways. His bill has attracted 16 co-sponsors, including California Sen. Kamala Harris, in a nod to the increasing openness of Democrats to get behind a single-payer system.

“Brothers and sisters, we understand that the fight for a Medicare for all, single-payer system is not going to be easy,” he said. “We’re going to be taking on the drug companies, the insurance companies. We’re going to be taking on the medical devices companies. But you understand and I understand that when the American people stand up together, we’re gonna win this fight.”

Earlier in the day Lt. Gov. Gavin Newsom, a candidate for governor, gave a full-throated endorsement for California’s bill and pledged to make universal health care a reality in the state if he wins the governorship in 2018. The nurses’ union endorsed his candidacy early.

“Because of your leadership, this state has never been closer to universal health care,” Newsom said. “I’ll make this crystal clear: If we can’t get it done next year, you have my firm and absolute commitment as your next governor I will lead the effort to get it done.”

Sanders’ proposal would hand government the responsibility of ensuring most Americans, with people no longer owing premiums and co-payments. Like the California proposal, it so far provides no details on how the plan would be financed. A single-payer system in California is estimated to cost $400 billion annually, and Rendon shelved the bill in part because it outlined no way to cover those costs. Sanders hasn’t provided details about what his plan would cost, but a similar measure he introduced during the 2016 campaign boasted a $1.4 trillion annual price tag.

Sanders remains a favorable choice among party activists to be the 2020 Democratic presidential nominee. He campaigned aggressively in California in 2016, but he lost the state to Democratic nominee Hillary Clinton by six percentage points.

He faced a more adoring reception Friday than top California Democrats have received lately in San Francisco. Sen. Dianne Feinstein took heat last month for calling for patience in dealing with President Donald Trump, while young immigrants shouted over House Speaker Nancy Pelosi last week for not pushing hard enough for comprehensive immigration reform. The criticism displayed continued angst among the Democratic party’s base about its direction as it tries to win back a Congress and White House controlled by Republicans.

The nurses’ union hasn’t shied away from criticizing the Democratic establishment. After Rendon shelved the single-payer bill, they displayed signs with a knife reading “Rendon” stabbed in the back of California’s grizzly bear.

Sanders Will Offer “Medicare for All” Bill Soon

Image result for bernie sanders photosSource: US News

 U.S. Sen. Bernie Sanders told a group of seniors that the solution to the country’s health care crisis is to make Medicare available to all, a proposal he plans to introduce shortly after Congress reconvenes in September.

The Vermont independent visited the Franklin County Senior Center in St. Albans on Monday answering questions about health care, social security and President Donald Trump’s budget before heading to an East Fairfield dairy farm to hear from several dairy farmers about the challenges facing the industry, as well their health care concerns.

“Well, we kept the affordable care act alive by the slimmest of margins. Some of us worked very, very hard on that,” said Sanders.

He acknowledged that a “Medicare for all” bill likely won’t pass in the Republican-controlled Congress and with Trump as president. But he said change takes time, and would involve organizing effectively in every state to make it happen.

“If we pass this thing, it’s not going to be tomorrow, it would be the most significant step forward legislatively since I suspect the creation of Social Security in the 1930s. It’s a big deal,” he said.

After meeting with seniors, he told reporters that a white supremacist rally in Charlottesville, Virginia, on Saturday in which a counter-protester was killed, was “a very, very sad moment in American history.”

The former presidential hopeful said Trump bore some responsibility for giving rise to hate groups by not previously condemning them.

Facing increased pressure, Trump on Monday named and condemned hate groups as “repugnant,” and declared “racism is evil” after his previous remarks about violence on “many sides” prompted criticism. Trump called members of the Ku Klux Klan, neo-Nazis and white supremacists who take part in violence “criminals and thugs” in a prepared statement.

Medicare Advantage: Perfect Insurer Profit Center

Image of Medicare Advantage Rubber Stamp Grunge Design with Dust

Source: Bloomberg

The turmoil around the Affordable Care Act has created heartburn for health insurers. The industry is betting that a different government program will soothe its ills.

Big insurers have retreated from Obamacare’s individual market, where fighting over the future of the health law has contributed to financial losses. They’re focusing instead on Medicare Advantage, a politically popular program that’s being embraced by a growing population of older Americans.

The market is dominated by two large players: No. 1 UnitedHealth Group Inc. has seen the number of people enrolled in its Medicare Advantage plans climb by 23 percent over the past year to 4.8 million, while No. 2 Humana has held steady at 3.3 million.

Both Obamacare and Medicare Advantage give consumers assistance to buy a health plan of their choosing. But under Medicare Advantage the government picks up much of the cost, ensuring a steady revenue stream for insurers. Plan premiums, which are largely paid by the government, average almost $1,000 a month.

Obamacare has been a much more mixed proposition. The relatively young law has come with an unending political headache, as Republicans have vowed to tear it out by the roots and President Donald Trump made its repeal a centerpiece of his presidential campaign. That opposition to the law culminated this month with Republican’s failed repeal effort, yet the administration still has options to sabotage the law — and has threatened to do so.

Aging Americans

Medicare Advantage is the private version of the U.S. government’s Medicare program for the elderly. It’s also open to some disabled individuals. As the U.S. population ages, more retirees are opting for such plans over traditional Medicare. About a third of Medicare beneficiaries, or roughly 20 million people, were covered by the private plans as of June, according to the Centers for Medicare & Medicaid Services.

That makes Medicare Advantage one of the few areas of expansion in an otherwise stagnant industry. And its popularity could insulate it from Washington caprice: Seniors are a powerful voting bloc, so margin-threatening political changes are less likely than in businesses like Obamacare.

“It’s both fundamentals and it’s policies,” said Ana Gupte, an analyst at Leerink Partners. “There’s bipartisan support, but fundamentally also it’s a large, growing and profitable market.”

Medicare Advantage enrollees are insurers’ favorite kind of customers — they stick around. Once they select a plan, they tend to stay enrolled for years. Obamacare users by contrast are often in and out of the market, and tend to shop every year for the lowest price. A UBS survey found that 12 percent of Medicare enrollees changed plans for 2017, compared with 39 percent in Affordable Care Act plans.

Gupte estimates that by 2020, half of the growing number of Medicare beneficiaries will be in Advantage plans — some 38 million people in all. UnitedHealth has a similar outlook.

“There’s just a real strong overall value proposition with Medicare Advantage,” Steven Nelson, the CEO of UnitedHealth’s insurance operation, told investors on July 18. “We’re seeing that not only just with the folks that we serve, but as we talk to policymakers, too, there’s really strong support for it.”

Humana’s Medicare membership stagnated this year as the insurer pulled back from some markets and held benefits steady in an effort to improve profits. The effort succeeded in boosting earnings, and Humana said on Wednesday it plans to improve the appeal of its products for next year, boosting membership growth.

Major health insurers have benefited from minimizing their exposure to Obamacare. All six for-profit health plans in the Standard & Poor’s 500 Index reported second-quarter earnings that beat analysts’ estimates, and the S&P Managed Health Care Index of insurer stocks is up more than twice as much as the broader index this year.

Startups Circling

As big insurers aim to expand their share of the market, investors have poured money into startups targeting Medicare Advantage. Clover Health, which offers the plans in New Jersey, raised $130 million at a $1.2 billion valuation in a recent funding roundBright Health, which is making a big push into Medicare plans by teaming up with hospital systems, has raised a total of $240 million from investors.

Vivek Garipalli, Clover’s CEO, says the Medicare Advantage business model lets his insurer profit by taking better care of customers.

“You have a direct correlation with improving someone’s long-term outcomes and generating higher margins,” he said. “Our customers are with us for a long time.”

Garipalli said that his company won’t be selling Obamacare plans anytime soon. That’s in part because of the political threats the program faces, and because Obamacare customers switch plans so frequently.

“The exchange market, at least for Clover and the way we think about building our business, the churn is just really really high in individual insurance,” he said. “It didn’t really fit our model because it’s hard to build an outcomes-focused business.”

Despite the potential for growth and profits nationally, insurers have avoided offering Medicare Advantage plans in 147 counties across 14 states, according to an analysisfrom the Kaiser Family Foundation. Obamacare offerings are far more comprehensive — 19 counties are at risk of having no insurer options next year.

Playing Catch-Up

Cigna Corp.Aetna Inc. and Anthem Inc. all say that growing in Medicare Advantage is a top priority, either by building their businesses on their own or by acquiring smaller firms that have been racing to grab a slice of the market.

Anthem said last week that it’s looking at deals for Medicare Advantage firms to “augment our growth profile.” Cigna told investors on June 21 that making deals to increase sales to the U.S. senior population was among its top M&A priorities. Medicaid specialist Centene Corp. is expanding in six new markets next year for Medicare Advantage plans, with a focus on low-income seniors.

Aetna, after being forced to scuttle a deal for Medicare specialist Humana, is working to expand its footprint, with a goal of eventually reaching 75 percent to 80 percent of seniors, up from 60 percent next year. Aetna’s overall government business, which includes Medicare and the Medicaid program for the poor, already accounts for half the company’s revenues, and Aetna says Medicare will keep growing quickly.

“We’re trying to grow as fast as we reasonably can in Medicare.” Aetna Chief Financial Officer Shawn Guertin said in an interview. “I’m optimistic about the competitive positioning that we’ll have in the market” next year.

U.S. Appeals Court Says Medi-Cal Cut to Hospitals Was Illegal

Dr. Leonid Basovich, left, examines Medi-Cal patient Michael Epps, at the Wel...

Source: Los Angeles Times

A U.S. appeals court decided Monday that the federal government wrongly approved California’s request to temporarily cut Medi-Cal reimbursement by 10% during the recession for hospital outpatient care.

The ruling by a three-judge panel of the U.S. 9th Circuit Court of Appeals said the federal government can approve such cuts only if evidence shows that the recipients of aid will have access to the same services as the general population.

California, struggling with a budget crisis, imposed the cutback for eight months, from July 2008 through February 2009.

If the ruling stands, the state and the federal government will have to pay back California hospitals hundreds of millions of dollars, said Robert Leventhal, who represented more than 50 California hospitals in the challenge.

Before cuts can be made, federal law requires a showing of evidence that beneficiaries will have access to care “at least to the extent that such care and services are available to the general population in the geographic area,’’ the 9th Circuit said, citing a provision in federal law.

Leventhal said previous challenges to the Medi-Cal cuts relied on different legal theories.

Monday’s ruling “will have a major impact on Medi-Cal rates and hopefully bring them up,” he said.

“They are the lowest or next to the lowest in all 50 states for hospital outpatient services,” Leventhal said.

He also said the ruling could be used in future challenges involving Medi-Cal.

It is “impossible” for the government to show that rate cuts would leave recipients with the same access to care as the general public, Leventhal argued.

“It’s clear that the rates aren’t structured to provide the same access to care,” he said.

Jeffrey Eric Sandberg, who argued the case for the U.S. Dept. of Justice, referred questions to the department’s public information office.

A department spokesperson did not immediately respond to a request for comment.

The government could ask the panel to reconsider the decision, request a larger 9th Circuit panel to weigh in or appeal to the U.S. Supreme Court.

Medicare’s Financial Outlook Slightly Improved, Trustees Say

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Source: California Healthline

The Trump administration said Thursday that the financial outlook for Medicare’s hospital insurance trust fund improved in the past year due to health costs rising more slowly than expected and predictions that enrollees will use hospital services less often.

The report said that trust fund would last through 2029, one year later than what was projected last year. Two years ago, 2030 was the projected depletion date.

Medicare Part B premiums — which cover visits to physicians and other outpatient costs — should remain stable next year, the trustees said. About a quarter of Part B costs are paid for by beneficiary premiums with the rest from the federal budget.

In contrast, the Part A hospital trust fund is financed mostly through payroll taxes.

The report, from the trustees of the Medicare program, noted that projected costs of the program assume the Affordable Care Act stays in place. President Donald Trump and Republicans in Congress are trying to overhaul the law, which when enacted in 2010 added several years to the fiscal life of the trust fund.

Health and Human Services Secretary Tom Price, one of four Medicare trustees, also said the hospital trust fund forecast was secure enough that it would not triggeran ACA provision to make automatic cuts to the program. Those cuts are required by the ACA when spending is expected to exceed certain benchmarks.

Despite the slightly improved outlook, the trustees warned that the aging of the baby boom population and rising health care costs will cause Medicare expenses to increase from 3.6 percent of gross domestic product in 2016 to 5.6 percent of GDP in 2041, and then level off somewhat to 5.9 percent by 2091.

As in previous trustee reports, the latest analysis warned that Washington should address the financial challenges of Medicare as soon as possible to avoid having to cut benefits to millions of retirees and seniors.

The trustees said national health expenses have slowed considerably in recent years, although it is uncertain if this is a result of the Great Recession, which ended in 2009, or efforts taken by the federal government and private sector to change doctor and hospital reimbursement programs. Senior administration officials said some of the slowing growth in Medicare was due to Obamacare saving money through its accountable care organizations, which pay doctors and hospitals a lump sum each month to care for senior citizens.

Medicare provides health coverage to nearly 57 million people, including seniors and people with disabilities. It has added 5 million people since 2013.

“For 51 years, Medicare has played a crucial role in providing healthcare for America’s senior citizens,” Price said in a statement. “Unfortunately, on its current trajectory, Medicare’s hospital insurance trust fund will be depleted in just over a decade. … As the Trustees Report says, this means that reform to the program is needed.”

Medicare spending were about $679 billion last year. The hospital insurance trust fund helps pay hospital, home health services, nursing home costs and hospice costs.

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.

Last Updated 10/4/2017

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