A Bipartisan “What’s Next” for U.S. Health Reform

[This past week, I was one of the co-authors of a consensus policy paper on short-term steps that would stabilize the ACA health insurance marketplaces and address some other urgent health policy priorities such as reauthorization of the Childrens Health Insurance Program (CHIP).  The paper was authored by a group of 9 policy experts (5 on the Republican/conservative side and 4 on the Democratic/progressive side).  While the ideas are not revolutionary, we show that bipartisan consensus is possible and offers hope for saner and more balanced policy — we hope!  Here is the paper below:]

The Congressional effort to repeal and replace the Affordable Care Act (ACA) has stalled, sparking urgent questions about what’s next and whether a bipartisan agreement could be achieved to address important U.S. health reform needs. We believe that critical matters relating to health reform must be addressed quickly and that bipartisan approaches are possible.

We are health policy analysts and advocates who join in this agreement. While we hold diverse political views and policy outlooks, we believe that health reform solutions exist that can transcend partisanship and ideology.

In this commentary, we describe our bipartisan agreement on five health policy matters that should be addressed by the end of the federal fiscal year, September 30. These recommendations are designed to provide stability in markets until a longer-term resolution can be achieved and, most importantly, to protect coverage and health care access for those relying on them now. Continue reading

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Why the Republican Repeal and Replace Plan Collapsed — and Cautions for Dems

[This commentary appeared on July 18 on the WBUR blog page called Cognoscenti.]

As the nation considers the utter collapse of the Better Care Reconciliation Act (BCRA), advanced by Senate Majority Leader Mitch McConnell, to repeal and replace the Affordable Care Act (ACA), some perspective is in order. Since President Trump’s Nov. 8 election, I have heard many people’s distress about the dire threats to the ACA that initially seemed so certain last November.

So, let’s consider…

First, Michael Reich, my colleague at the Harvard T. H. Chan School of Public Health who has worked on national health reforms all over the globe, reminds me that the moment of truth, the acid test, for any health reform happens when the government that created it leaves office and is replaced by a new government, and the new leaders must decide for themselves what will stay or go.

As we have witnessed since November, this is not just a choice for a new administration; it is a choice for Congress and for American society. Since the election, Americans have had to confront a dilemma — namely, what do they care about regarding the Affordable Care Act and what are they prepared to do to defend it?

After the election, with shocking abruptness, polls on the favorability of the Affordable Care Act began to increase after years of being stuck in 40 percent purgatory. Suddenly, Americans began focusing on policies such as banning pre-existing condition exclusions, expanding Medicaid, requiring coverage of essential health benefits such as maternity care, prescription drugs and much more.

Continue reading

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5 Takeaways from Baker’s New Health Reform

[This commentary was published on June 24 on the Commonwealth Magazine website.]

PHASE 2 OF THE BAKER ADMINISTRATION’S ambitious health reform agenda emerged this past week.  It contains good and smart proposals – and worrisome ones needing attention.

Phase 1 is an ambitious effort to transform much of the state’s Medicaid program, known as MassHealth, into “accountable care organizations.” ACOs aim to focus hospitals, physicians, and other providers on improving population health, care integration, and efficiency.  That effort, blessed by the outgoing Obama administration last November, is well underway – unless congressional Republican efforts to repeal the Affordable Care Act throw everything into a tailspin.

Phase 2 came last week, when the Baker administration released a set of proposals to Senate and House leaders, a package of changes to MassHealth and other health programs aiming to save $314 million in fiscal year 2018, which starts July 1, and more beyond. All the proposals need state law changes (to be incorporated in the nearly finished FY 2018 state budget) and/or federal approval. Continue reading

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Finding Health Reform Principles across Party Lines

[This op-ed appeared in today’s Wall Street Journal and was composed by 8 health care experts from across the right-left political divide: Sara Rosenbaum, Gail Wilensky, Ron Pollack, Lanhee Chen, John McDonough, Grace-Marie Turner, Stuart Butler and Joe Antos.

[The 8 of us are working with the Convergence Center for Policy Resolution to explore areas of bipartisan agreement as the U.S. health reform conversation remains intensely divided.  Our agreement on substantive policy matters is, by no means, a “grand bargain” on the plethora of policy controversies surrounding the Affordable Care Act and Republican-proposed successor statutes.  We hope that our process may develop more points of agreement and consensus.]

The current congressional debate about health reform focuses on two closely linked issues: how to structure subsidies and the future of Medicaid. We write to support two propositions that can better serve economically vulnerable families, while also ensuring that public dollars are spent effectively. First, we believe public subsidies for private insurance premiums should be means-adjusted to make coverage affordable for lower-income people. Second, we believe states should be given new flexibility to streamline coverage options in Medicaid, the Children’s Health Insurance Program and other publicly supported insurance, so that families can obtain the coverage that best suits their circumstances and serves their needs.

We, along with Sara Rosenbaum, Gail Wilensky, Joe Antos, John McDonough, Grace-Marie Turner and Stuart Butler—a group of health policy researchers who join in this article—hold diverse political views and policy outlooks. But we believe these propositions transcend partisanship and ideology.

Most Americans receive employer-sponsored health insurance, which is heavily subsidized through the tax system. Many millions of others are enrolled in Medicaid and CHIP, funded jointly by the federal government and the states, and Medicare, funded through federal tax revenue and individual contributions. Until 2014, individuals who were not eligible for employer-sponsored insurance or public programs could buy their own insurance, but most did not receive any financial help. As a result of the Affordable Care Act, millions more people receive subsidies to help pay for their insurance premiums.

Public support for health coverage should be spent as effectively and efficiently as possible. Toward that end, we agree that the existing tax exclusion for employer-sponsored health insurance should have reasonable limits. We also agree that it is prudent to provide subsidies for people who need help to purchase adequate insurance. While hundreds of billions of taxpayer dollars reduce the cost of health coverage and care for most Americans, until recently, those with limited financial means seeking individual coverage were left out. This lack of access to affordable care drove many uninsured Americans to skip medical treatment that would have averted suffering and higher costs over time.

If we expect low-income families to purchase health insurance, we must structure the subsidies to make affordable coverage a realistic possibility. That means providing greater subsidies to those who can least afford the premiums.

While we have differing perspectives about the level and structure of Medicaid funding, we all believe that carefully developed state testing can be a primary engine for reforming Medicaid and providing care to low-income families. The improved use of waivers, for example, can help states develop fiscally sound and affordable coverage options for their most vulnerable citizens.

States should be given greater authority to configure and redirect revenue streams from Medicaid, CHIP and private insurance to improve and strengthen coverage. Integration of funding streams would make it easier for individuals to keep the same coverage and providers when their employment or other life circumstances change. It would also allow all family members to share the same health plan. Experimentation would enable states to integrate health care options better so that families could choose the best plan for their needs.

To ensure cost-effectiveness, states seeking waivers should be required to meet an overall federal budget-neutrality standard. Neutrality should be required for the cumulative budget impact of a proposal involving multiple programs and subsidies, not for each program. States should be allowed to align better the federal subsidies available to their citizens, even if allowing them to do so would require specific changes to one or more forms of coverage.

This additional flexibility, however, must be subject to safeguards. While we differ about the extent of the federal safeguards needed to protect state coverage and benefits, we all agree that flexibility should not allow funds for health-care services to be diverted to other purposes. Furthermore, funding for low-income populations must not be diverted to cover higher-income individuals.

With this new authority, states could simplify their insurance markets and enable children to receive coverage with their parents. This would allow parents to shop for better and more integrated coverage for their children while retaining the protections established by CHIP. Lawmakers should also consider altering Medicaid, CHIP and tax-subsidy rules to ensure that families without employer coverage for their children can receive support to buy affordable child-only plans. Similarly, states could help healthy adults buy private insurance.

We believe that these incremental policies would establish a more equitable health-care system and help families of limited means secure the care they need to remain healthy.

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The State of Play in the US Senate

[This commentary was just published in the May 31st New England Journal of Medicine.]

The acid test of any nation’s health care reform happens with a change in national administration. Only when a president or minister who instigated reform departs and a new regime assumes power can we judge the durability of any reform law or program. Like it or not, now is that moment for the Affordable Care Act (ACA) in the era of President Donald Trump. Over the coming months, U.S. society will decide, through the Congress, which of President Barack Obama’s reforms will survive and which will not.

On May 4, the U.S. House of Representatives, by a 217-to-213 vote, approved the American Health Care Act (AHCA), legislation formulated to make far-reaching changes to the ACA and Medicaid.1 The AHCA would largely undo the ACA’s Medicaid expansion and subsidies for private health insurance, restructure Medicaid’s financing, permit state governments to waive popular ACA insurance-market reforms, and repeal ACA tax increases, among other changes. The Congressional Budget Office (CBO), in its May 24 analysis of the final House bill,2 estimated that, if enacted into law, it would result in 14 million Americans losing health insurance by 2018 and 23 million by 2026, an $834 billion reduction between 2017 and 2026 in federal outlays for Medicaid, and 10-year deficit reduction of $119 billion.

The fate of the ACA and the AHCA now rest in the U.S. Senate, where prospects are uncertain. Almost certainly, any Senate legislation will differ substantially from the House bill. Although senators may take months or longer to devise and pass a bill, it is possible that members will move quickly or fail to find any compromise at all. As of late May, Senate leaders hope to have a bill approved by the Senate before their August recess and to send a final Senate–House plan to the President’s desk by the end of September.

Like their House counterparts, Senate Republican leaders are working hard to devise a bill negotiated only among the 52 GOP members, involving none of the chamber’s 48 Democratic caucus members. Senate Majority Leader Mitch McConnell (R-KY) empaneled himself and 12 of his white male colleagues to formulate a plan — and then expanded the group after being criticized for the gender imbalance.

Leaders intend to bypass standing committees in passing their plan — Senator Orrin Hatch (R-UT), chair of the Senate Finance Committee, said on May 9, “I don’t think it’s going to go through the committees.”3 In 2009, the Senate Health, Education, Labor, and Pensions Committee and the Senate Finance Committee each held numerous public hearings and monthlong markup sessions in preparing legislation that became the ACA, considering hundreds of Republican-filed amendments.

As in the House, Republican senators will use the budget reconciliation process to approve their bill, which allows it to pass with 51 votes and blocks filibusters that require 60 votes to overcome. Reconciliation rules limit provisions to matters with consequential impact on federal revenues and spending, forbidding extraneous provisions incidental to the federal budget, and placing at risk politically sensitive provisions included in the House-approved AHCA such as the ability of states to waive ACA insurance-market reforms. Republicans can lose only two votes from their 52 members, in which case Vice President Mike Pence may cast the deciding 51st vote; a loss of three or more would block passage if, as expected, all 48 Democrats unite against a Republican plan. Also, any Senate bill cannot reduce the federal deficit by less than the House version’s $119 billion.

Obtaining at least 50 Republican votes requires navigating a perilous set of policies advanced by the House. These address Medicaid, rules and premium subsidies for the private insurance market, tax cuts, and Planned Parenthood funding and abortion, among other issues. These are the essential pieces of the legislative puzzle that leaders must fit into place for any bill to pass.

Twenty Senate Republicans represent states that expanded their Medicaid programs to cover all low-income persons as permitted by the ACA, an expansion that the AHCA would erode substantially. The CBO estimated that 14 million Americans would lose Medicaid under the AHCA. Moreover, the AHCA would revolutionize Medicaid financing by establishing either capped per capita payments to states for each enrolled individual or block grants, ending Medicaid’s status as a federal entitlement. The CBO estimates the AHCA’s 10-year Medicaid spending reductions at $834 billion. Though not going as far as the House plan, Republican senators are exploring similar fundamental changes, outlined in a proposal advanced in March by four Republican governors organized by Ohio’s John Kasich.4

To satisfy conservatives in the House Freedom Caucus, House leaders amended the AHCA to permit states to waive popular ACA insurance-market reforms such as banning preexisting-condition exclusions and lifetime or annual benefit caps. States could also eliminate or downgrade the ACA’s 10 “essential health benefits” in ways that could degrade employer-sponsored insurance coverage as well. The AHCA would permit insurance companies to price older enrollees’ premiums at five times the rate for younger enrollees (the ACA allows up to 3:1 variation), mobilizing opposition from senior organizations such as AARP. Though experts on budget reconciliation question the viability of these changes under Senate rules, some senators advocate going further than the AHCA.

The AHCA also repeals ACA tax increases that finance the Medicaid and private-insurance expansions, including taxes affecting the insurance, pharmaceutical, and medical device industries and taxes on wealthy households making more than $200,000 annually (0.9% on earned income and 3.8% on unearned income). Trump and House Speaker Paul Ryan (R-WI) have emphasized links between repealing ACA taxes and their emerging tax-reform agenda. If Senate Republicans soften the House bill’s cuts in Medicaid coverage, private insurance coverage, or both, they may also need to lessen or delay the AHCA tax cuts to achieve the minimum budget-deficit savings required under Senate reconciliation rules. This trade-off highlights the essential tension in both the ACA and the AHCA between taxes and health insurance coverage.

The AHCA also bans all federal payments to Planned Parenthood for non–abortion-related services (payments for abortions are already prohibited) — a provision that, if included in a Senate bill, would cause Senators Susan Collins (R-ME) and Lisa Murkowski (R-AK) to vote no. The AHCA also prohibits subsidies for any health insurance policy that includes abortion coverage (federal payments for those services are prohibited under the ACA); this provision would prohibit any subsidies to otherwise eligible families in states such as New York and California, where abortion coverage is a mandated benefit. In 2010, disagreements among Democrats over abortion-related language nearly blocked the ACA’s passage.

Three conservative senators — Ted Cruz (R-TX), Mike Lee (R-UT), and Rand Paul (R-KY) — have declared their opposition to any Senate bill less conservative than the AHCA. Also, Senators Bill Cassidy (R-LA) and Maine’s Collins have four additional cosponsors for their Patient Freedom Act, which would allow states to retain the ACA or construct alternatives, and have been hosting health care reform conversations with moderate senators from both parties, including Senators Joe Manchin (D-WV) and Heidi Heitkamp (D-ND) and a bloc of Republicans including Shelley Moore Capito (R-WV), Murkowski, Rob Portman (R-OH), John McCain (R-AZ), and others who are especially concerned about the AHCA’s Medicaid cuts.

As this Senate drama unfolds, health insurers and consumers express worries about the Trump administration’s commitment to keeping the ACA’s insurance marketplaces functioning. Administration figures have offered varying statements regarding continuation of ACA “cost-sharing reduction” (CSR) payments to insurers that keep deductibles and coinsurance affordable for lower-middle-income families; on May 22, administration and House leaders agreed to postpone a hearing on a lawsuit brought by House Republicans to end CSR payments. Trump has stated repeatedly that ACA marketplaces are “failing,” despite counterindications from sources such as the CBO and Standard & Poor’s.5 With deliberate neglect of state individual insurance markets (ACA and private) covering approximately 20 million Americans, the prospects for massive instability are real and worrisome.

Some observers expect a drawn-out Senate process that could last into 2018 or beyond. Yet after the May 4 House passage of the AHCA, Republican senators began working quickly on alternatives, seeking less aggressive but still far-reaching changes to the ACA and Medicaid. After failed attempts to pass the AHCA in the House in March and April, many assumed the legislation was dead, only to see it reemerge suddenly in early May. Citizens and medical professionals should pay close attention to this urgent matter affecting American society.

References

    1. H.R. 1628, 115th Cong., American Health Care Act. (2017-2018) (https://www.congress.gov/bill/115th-congress/house-bill/1628).

      2.  Congressional Budget Office. Letter to House Speaker Paul Ryan. March 23, 2017 (https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/hr1628.pdf).

      3.  Hellman J. Hatch: Senate’s ObamaCare repeal unlikely to go through committees. The Hill. May 9, 2017 (http://thehill.com/policy/healthcare/332596-hatch-senates-obamacare-repeal-unlikely-to-go-through-committees).

      4.  Kasich J, Snyder M, Sandoval B, Hutchinson A. Letter to Sen. Mitch McConnell and Rep. Paul Ryan. March 16, 2017 (https://assets.documentcloud.org/documents/3519424/Governors-Letter-3-16-2017.pdf).

      5.  The U.S. ACA individual market showed progress in 2016, but still needs time to mature. S&P Global Market Intelligence. April 7, 2017 (https://www.globalcreditportal.com/ratingsdirect/renderArticle.do?articleId=1828594&SctArtId=421970&from=CM&nsl_code=LIME&sourceObjectId=10047007&sourceRevId=5&fee_ind=N&exp_date=20270408-00:16:31).

 

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MayDay! The ACA Is Still Alive and Still in Danger

Today is May Day and the ACA is still alive.  Donald Trump’s campaign boast that he would sign a bill repealing the Affordable Care Act (ACA/ObamaCare) on his inauguration day is long gone and forgotten.  House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell’s gamble that by April 28th the ACA would be effectively decimated using the expedited budget reconciliation process proved to be a sucker’s bet.

Undeterred, White House and House operatives are trying by Wednesday to line up 216 votes—not to pass the Republicans’ American Health Care Act (AHCA) but to feign signs of progress to dampen the white-hot anger of the Republican base at their Party leaders’ inability to enact the ACA repeal promised since the law’s signing on March 23, 2010.  They want to take a third run at it this week and perhaps succeed after two prior failures.  Senate Republicans, meanwhile, are crossing their fingers hoping that the House fails, sparing the upper chamber the funerary duties.  For the Senate to advance ACA repeal now, a new and wholly unimagined bill would need to be constructed.

The level of legislative malpractice evidenced by Speaker Ryan and his team since January is staggering and perplexing.  They designed a bill that the Congressional Budget Office estimated would cause 24 million Americans to lose health insurance.  They advanced a proposal that provoked public opposition from the American Hospital Association, the American Medical Association, the American Nurses Association, AARP, and hundreds of other national organizations representing Americans with serious stakes in our health care system.  They invented a plan that generated unprecedented grassroots support for the ACA and fierce opposition aimed at them. For the first time, Ryan’s plan turned most Americans into ACA supporters. His legislation generated support from only 17% of Americans, an unheard of level of non-support.

Why did they do this and why do they persist?

Trump and Ryan both showed their hands in recent public statements linking ACA repeal with their tax cut agenda; Trump’s tax plan was released in one-page outline form this past week.  To Republicans, the ACA’s poison is not the insurance expansion that bears remarkable resemblance to the two public health insurance programs they have always loved: Medicare Part C or Medicare Advantage, and Medicare Part D, the outpatient prescription drug benefit. Continue reading

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A Republican Path to ACA Reform

[This commentary, written by me and Dr. William Seligman of the Harvard Chan School, was published today on the Commonwealth Magazine website.]

IF PRESIDENT DONALD TRUMP and Congressional Republicans were to decide that fixing rather than destroying the Affordable Care Act, especially its private health insurance marketplaces, was in their self-interest, could they do it?  And, could they do it in a way that aligns with Republican policy preferences?

The answer to both questions is “yes” – if Republicans heed lessons from their two favorite public health insurance programs. The programs are Medicare Part C, called Medicare Advantage, in which enrollees join private health insurance plans, and Medicare Part D, in which enrollees join private outpatient prescription drug plans.

While Republicans defend and brag about both of these reasonably successful programs, they may be surprised to learn that features of both point the way to successful stabilization and growth of the ACA’s private health insurance marketplaces.  Here’s how.

Medicare Advantage: From Bust to Boom

Consider these two quotes:

“People’s premiums are going up 35, 45, 55 percent … The market is disastrous, insurers are leaving day by day, it’s going to absolutely implode.”

“They’re anguished, upset, frustrated and angry by the demise of their plans. … They’re facing increasing premiums and…plans are leaving the market.”

The first quote is President Trump talking recently about the instability of the ACA’s marketplaces.  While most non-partisan observers disagree with the severity of his characterization, most – not all – of the federal, and some state, marketplaces are experiencing undeniable distress.

The second quote is from former congresswoman Nancy Johnson, a Connecticut Republican, talking in 2001 about the “Medicare + Choice” marketplace in which Medicare enrollees join a private health plan instead of participating in traditional fee-for-service Medicare (Parts A & B). Continue reading

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MassHealth Dives into Accountable Care

[I wrote this commentary for the Spring Issue of Commonwealth Magazine to profile Massachusetts’ new move into accountable care organizations, an experiment that deserves watching.  Dr. William Seligman co-wrote with me.]

IN A WILDLY uncertain national health care environment, something new, audacious, and risky is happening in MassHealth, the Medicaid program that provides health coverage to 1.9 million people who are poor, elderly, and persons with disabilities in Massachusetts. Gov. Charlie Baker’s administration is betting that an emerging health care delivery and payment model, called “accountable care organizations,” can restrain rising costs by keeping enrollees healthy and out of expensive settings, especially hospitals. Positive results will have big consequences for the state, for medical providers, and for hundreds of thousands of MassHealth enrollees who will become part of ACOs this year and into the future.

The ACO scheme is the major part of a massive new federal Medicaid waiver that Team Baker won from the outgoing Obama administration days before the November 8

MassHealth spending 17

election that put Donald Trump in the White House. The Obama administration liked the Baker plan because it fit with their mission to move US health care away from expensive fee-for-service payment and toward value-based financing that rewards quality and efficiency. Though no one knows for sure which way the Trump administration will move, right now it’s full speed ahead at MassHealth on the ACO agenda. Continue reading

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Health and Taxes and the Values at Stake in the ACA Debate

[This commentary was published this week on the website of the Milbank Quarterly.]

One of my favorite political scientists, Deborah Stone, wrote that much of the policy process involves debates about values masquerading as debates about numbers and facts.1 Although her construct is abundantly in evidence, it is being overlooked in the current debate over the future of the Affordable Care Act.

How much are premiums rising? How many plans are operating in the exchanges? How much money are accountable care organizations saving? What impact would a per capita cap financing scheme have on Medicaid? How much has the ACA restrained or propelled health cost growth? What do opinion polls show?

Each side furiously hurls data and anecdotes at each other as if by identifying the killer data point, the other side would throw up its hands in surrender and declare: “How could we have been so dumb?” Of course, this never happens in public policy debates. It never happens because numbers and anecdotes don’t motivate people on an issue as charged as the ACA. Values do. Continue reading

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The State of Play Post-Trump/RyanCare

[This column is reprinted from the Commonwealth Magazine website.]

GLOBAL HEALTH EXPERT Michael Reich says that the acid test of any national health reform comes when a new national administration takes over. Only when a new president or prime minister assumes power can we judge the stability and staying power of any health system reform. In the US, that’s this moment. Since November 8, we’ve been learning what parts of the Affordable Care Act (ACA) have staying power, which do not, and what’s uncertain.

Right now, after Friday’s demise of the Republican repeal and replace plan, the American Health Care Act (AHCA), we know that Medicare, Medicaid, insurance market reforms such as guaranteed issue, and delivery system reforms such as accountable care organizations look TrumpCare3

safe. We know that the private insurance coverage reforms – insurance exchanges, premium and cost-sharing subsidies, the individual mandate – are at risk and in danger even though they dodged full repeal with the AHCA’s demise. And we don’t know the fate of the ACA’s many tax increases. Let’s view these systematically. Continue reading

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