Tuesday, August 15, 2017

Can Democrats afford to stand pat on the ACA?

A while back, I anticipated that Republicans would demand a steep price for passing legislation that would guarantee federal funding for the ACA marketplace's Cost Sharing Reduction (CSR) subsidies and possibly for a reinsurance program. I asked what Democrats should be willing to give up to secure those obviously necessary measures -- the first simply an end to sabotage, the second an individual market essential that Republicans bestowed liberally in their ACA replacement plans.

David Anderson counters that "this model of leverage is wrong" and that Democrats should be willing to give up...nothing.  The rationale is not "if you break it you own it" (i.e., Republicans will be blamed for market collapse),  but rather that forcing insurers to fund (and price for) the CSR subsidies as of 2018 would hand Democrats "an incredible policy victory."

Thursday, August 10, 2017

Compromise maybe a little? Urban Institute's Blumberg and Holahan on what's next for the ACA

In August 2015, Urban Institute healthcare scholars Linda Blumberg and John Holahan acknowledged that ACA marketplace subsidies were too skimpy to do all they were intended to and came up with a comprehensive proposal to enrich them.  In January 2016, staring down the barrel of Republican repeal vows, they remixed those improvements in a compromise package that included several concessions to conservative priorities. These included:
  • Repeal the employer mandate (requiring employers with more than 50 employees to offer insurance or pay a penalty)
  • Repeal and replace the individual mandate  (with a premium penalty for those who did not maintain continuous coverage)
  • Examine the Essential Health Benefits and look for responsible ways to lighten them
  • Allow states to drop the income threshold for Medicaid eligibility to 100% of the Federal Poverty Level (FPL). At present, the threshold is 138% FPL in states that have accepted the ACA Medicaid expansion. 
As I noted recently, these concessions were embedded with offsets: reinsurance to mitigate the premium hikes likely to be triggered by individual mandate replacement, and lower out-of-pocket costs to cushion the substitution for enrollees in the 100-138% FPL range of private insurance for Medicaid (richer subsidies across all income levels would also offset the ill effects of a weaker mandate substitute).

Sunday, August 06, 2017

What price will Republicans extract for CSR funding and reinsurance?

If the current glimmers of bipartisanship in healthcare legislation take on any sustained shine, the primary agenda for Democrats is obvious: appropriate funding for Cost Sharing Reduction payments and for some kind of reinsurance program to replace the program that expired in 2017.

The first is simply a matter of ending sabotage: CSR is integral to the structure of the ACA marketplace and incorporated in its budget baseline. Republicans have simply exploited a drafting error to destabilize the individual market. As for reinsurance, Republicans made its necessity manifest by including generous "stability funding" in the main House and Senate "healthcare" bills -- in fact, overly generous funding designed to compensate for their various disfigurements of the market (e.g., repeal of the individual mandate and measures to reintroduce medical underwriting and non-comprehensive insurance).

To have any real hope of getting these measures passed in a Republican Congress, however, Democrats are going to have to face up to the question: What pound of flesh will they let Republicans extract as payment for these essential, common-sense fixes? It's a foregone conclusion from a progressive point of view that changes Republicans will demand will not improve the market. What concessions might actually win passage and do less harm than the fixes will do good?

Wednesday, August 02, 2017

Are New York's Essential Plan and Minnesota's MinnesotaCare threatened by CSR fund cutoff?

A question hath arisen on Twitter: if federal Cost Sharing Reduction (CSR) reimbursements to insurers are cut off, either by Trump administration fiat or court ruling, would New York and Minnesota's Basic Health Programs formed under the ACA lose the portion of their federal funding derived from CSR payments?

To review, the ACA gives states the option of establishing a Basic Health Program (BHP) for qualifying residents with incomes between 138% and 200% of the Federal Poverty Level -- the very population eligible for strong CSR in the ACA marketplace in a state with no BHP*.   A BHP is designed to have low premiums and high actuarial value -- though not necessarily higher than that provided by CSR. So far, Minnesota and New York are the only states to have formed BHPs.  New York's BHP, the Essential Plan, has minimal cost sharing and a maximum premium of $20 per month (for those in the 150-200% FPL range). MinnesotaCare premiums top out at $80 per month; the actuarial value is 94%, matching CSR for marketplace enrollees with incomes up to 150% FPL.

Section 1331 of the ACA provides for federal funding of BHPs according to this formula:
The amount determined under this paragraph for any fiscal year is the amount the Secretary determines is equal to 85 percent [amended to 95%] of the premium tax credits under section 36B of the Internal Revenue Code of 1986, and the cost-sharing reductions under section 1402, that would have been provided for the fiscal year to eligible individuals enrolled in standard health plans in the State if such eligible individuals were allowed to enroll in qualified health plans through an Exchange established under this subtitle.

Tuesday, August 01, 2017

Peter Lee to HHS: Marketing makes the risk pool

Covered California, the golden state's ACA marketplace, released preliminary health plan rates for 2018 today. In a marketplace supported by political stability, the top line would be nothing to write home about -- a 12.5% average weighted increase, discounting a surcharge to be added to silver plans if the Trump administration or Congress does not guarantee CSR payments through 2018. 

But given the "unprecedented uncertainty" generated by active administration sabotage and a seven- month effort to repeal core parts of the ACA, those results are impressive. CoveredCA further claims that "If a consumer shops and switches to the lowest-priced plan in their same metal tier, they can reduce their 2018 rate change to an average increase of less than 3.3 percent." More on that in a bit.

In a telephone press conference, CoveredCA's executive director Peter Lee made a striking claim that speaks not only to the current market uncertainty but to the effects of seven years of unrelenting sabotage of the ACA marketplace by Republican senators, congressional reps, governors, state legislators and insurance commissioners. Asked how central marketing would be to enrollment in the coming year, Lee said (paraphrasing here):
If you don't sell, those who knock on the door are sick people.

Thursday, July 27, 2017

Managed Medicaid for all? A compendium

In an illuminating string about what she's learned from ACA enrollees, Sarah Kliff highlights a point that's come sharply into focus in the last year:
Medicaid is *way* more popular than marketplace plans. No deductibles or co-pays! (6/15)
This point has been driven home by enrollee surveys and focus groups as well as by good reporting from many, including Kliff. The negative counterpoint to Medicaid enrollees' satisfaction is Medicaid envy among those forced to pay more than they consider affordable in premiums and out-of-pocket costs -- particularly those on the wrong side of the ACA's deductible cliff.

Sunday, July 23, 2017

"Not losing, choosing"? - Avik Roy turns up the gaslight on the BCRA

Two weeks ago, I took on the argument of various BCRA proponents that most of the 22 million people forecast by CBO to lose insurance coverage should the bill become law would be "choosing, not losing." That write-off of legions of uninsured was founded on CBO's assertion that most of the first-year coverage loss of 15 million would occur "primarily because the penalty for not having insurance would be eliminated."  Expect to hear more of this, I forecast.

In brief, I suggested that argument depended on  1) conflating the forecast immediate effect of mandate repeal in 2018 with the ten-year effect; 2) ignoring the extent to which, in CBO's own telling, the mandate interacts with other changes in the marketplace and Medicaid; and 3) pooh-poohing the obvious and stated purpose of the mandate, which is to boost the ranks of the insured and reduce premiums by improving the risk pool -- which CBO clearly assumes it has accomplished in some measure.

Now here cometh Avik Roy, chief healthcare apologist for the Republican establishment, making the "choosing not losing" argument in detail.  Roy's addition to the argument hinges mainly on a rather breathlessly presented look at CBO's unpublished estimate of 10-year coverage losses attributable to mandate repeal under the BCRA (provided to Roy by a Congressional staffer). This estimate closely tracks CBO's published December 2016 analysis of the effects of repeal of the mandate alone, with the ACA left otherwise intact. CBO forecast that straight mandate repeal under the ACA would result in a ten-year coverage loss of 15 million, as compared to CBO's forecast that 22 million will lose coverage under the BCRA. Here's CBO's breakout of the losses under straight mandate repeal: