An ACA Damage Assessment: Real, Non-Critical, and TBD

The post below was first published yesterday on the Commonwealth Magazine website:

On one thing all Affordable Care Act watchers can agree: This autumn saw important developments and changes relating to the nation’s health reform law. How much and how serious? Any immediate assessment is incomplete and the full impact only will be evident through the lens of the 2016 presidential and Congressional election results. Until then, some impacts are clear. So let’s consider…

roadrunnerFirst, what has happened?  Here is my list of key developments:

  •  Congress delayed or suspended for one or two years the operation of three taxes that help finance the ACA: the so-called “Cadillac tax” on high-cost employer-sponsored health insurance policies; the medical device industry tax; and the health insurance provider tax.
  •  The House and Senate are close to final agreement (coming in January) to use the budget reconciliation process to repeal major, critical portions of the ACA, legislation that President Obama will veto and will see his veto sustained.
  •  14 of 23 co-op health insurance plans created from the ACA have collapsed; also, UnitedHealthcare is dropping out of the ACA market.
  •  The third Open Enrollment process is proceeding smoothly with larger than expected numbers signing up for coverage – final numbers yet to come.
  • On Medicaid, more holdout states are warming up to accepting the ACA expansion, and Kentucky’s new Tea Party governor has abandoned his campaign commitment to repeal that state’s expansion.
  • More and more experts, from both sides of the ACA divide, are advancing robust and noteworthy proposals for ACA replacement or improvement.

Continue reading “An ACA Damage Assessment: Real, Non-Critical, and TBD”

Will 61 Be the Charm? The New Republican Effort to Gut the ACA

[Note: This post was first published on the Health Affairs Blog.]

For the 61st time since 2011, Congressional Republicans are moving legislation to undermine and dismantle key elements of the Affordable Care Act (ACA). This time, though, will be different.

First, this will be the first time Republicans will use the budget process known as “reconciliation” to advance repeal. Using a budget reconciliation bill prevents Democrats from filibustering the legislation in the Senate, meaning only 51 votes are needed for passage in expedited debate.shampoo

Second, this will be the first time that the House and Senate both pass similar legislation to damage the law. As a result, this will be the first time that anti-ACA legislation will reach President Barack Obama’s desk. The President’s veto of this measure is guaranteed, as are the needed votes in the House and Senate to sustain his veto. So this will be another exercise in ObamaCare-Kabuki Theater with some new twists.

What’s In The Reconciliation Package?

The key elements in the legislation, developed by three House Committees (Ways and Means, Energy and Commerce, Education and the Workforce) including: Continue reading “Will 61 Be the Charm? The New Republican Effort to Gut the ACA”

What Would Republicans Do Instead of the Affordable Care Act?

(This article was published on Friday, September 18 on the Health Affairs Blog.  It was prepared by me and Max Fletcher, a Master of Public Health student at the Harvard TH Chan School of Public Health.)

A new spate of proposals from Republican presidential candidates to repeal and/or replace the Affordable Care Act (ACA) raises the important question: Given an unobstructed opportunity, what would Republicans really do with the Affordable Care Act? Would they repeal the law wholly or just in part? With what might they replace it?

Some suggest that Republican Congressional leaders only advance full repeal to placate their Party’s conservative base, knowing well that repeal cannot survive a certain veto while Barack Obama is President. In January 2017, that obstacle will vanish if Republicans control the White House and both branches of the U.S. Congress. What then?

Unfortunately, the proposals now being advanced by the Presidential candidates are far less than comprehensive, and leave many more issues unanswered than answered.

Though no ACA replacement plan has progressed in either branch (or in any standing committee) of Congress since the law’s 2010 signing, Republican office holders and conservative think tanks have advanced expansive proposals. We identified eight plans offered between 2012 and 2015 that address the ACA’s fate and propose substantive replacement. We examined each in detail to determine the extent of agreement on alternatives to the ACA. We created a chart comparing the eight proposals according to key policies. Table 1 below provides identifying information about the eight plans:


Of the eight proposals, four were advanced by Republican Members of Congress. The most prominent of these is the Patient CARE Act offered by Sens. Richard Burr (R-NC) and Orrin Hatch (R-UT) and Rep. Fred Upton (R-MI); the latter two are the current chairmen of the Senate Finance Committee and the House Committee on Energy and Commerce respectively, both committees with primary ACA jurisdiction. Though narrative versions of Burr-Hatch-Upton were released in 2014 and 2015, the authors have not translated their proposal into legislative language that can be evaluated by the Congressional Budget Office (CBO). While the other Congressional proposals have been introduced as legislation, none have received CBO scores. Continue reading “What Would Republicans Do Instead of the Affordable Care Act?”

Not Ready for Primetime: Republican Presidential Candidates on Health Reform

If you were among the few looking closely, you may have noticed buzz and hoopla this past week on the release of two health reform proposals from Republican presidential candidates Gov. Scott Walker (R-WI) and Sen. Marco Rubio (R-FL). Not surprisingly, while Affordable Care Act supporters were quick to criticize, ACA detractors were complimentary: “serious plans” and “the opening theme music of health policy reform for Republican presidential primary voters.”

So, how do these two plans stack up? Not well.  Here’s a handy table with which you can compare – and I’ve left nothing of out:

Category Gov. Scott Walker Sen. Marco Rubio
Title The Day One Patient Freedom Plan: My Plan to Repeal and Replace Obamacare Real Reform in the Post-Obamacare Era
ACA/Obamacare “Repeal … in its entirety” “Demand that we repeal Obamacare and replace it with a conservative solution.” (website)
Tax Credits to Purchase Health Insurance “Available to anyone without employer coverage based coverage” – the amount based on age only:

0-17: $900

18-34: $1200

35-49: $2100

50-64: $3,000

“… advanceable, refundable tax credit that all Americans can use to purchase health insurance…”
Access to Health Savings Accounts (HSAs) Anyone signing up for an HSA gets a $1000 refundable tax credit “…should be expanded.”
Sale of Health Insurance across State Lines Allow individuals to shop in any state for insurance N/A
Pre-Existing Conditions Banned for individuals who “maintain continuous creditable coverage” “Those with pre-existing conditions should have access to affordable care through mechanisms such as federal-supported, actuarially-sound and state-based high risk pools.”
State High-Risk Pools “…make it easier for states to expand these pools” See above.
Mandated Essential Health Benefits, including for Young Adults <26 “…return regulatory authority to states” N/A
Medicaid Capped state allotment for: 1. Low-income families 2. Non-disabled adults; 3. Long term services & support “… move … into a per capita system preserving funding for Medicaid’s unique populations while freeing states from Washington mandates.”
Insurance Pooling “… allow for new purchasing arrangements so farmers, small business, religious groups, individual membership associations and others could join together…” N/A
Long Term Care Insurance Deregulate the current market N/A
Medical Malpractice “… incentivize states to pass meaningful lawsuit reform…” N/A
Financing “… repeal all of ObamaCare’s $1 trillion in new taxes…” No specifics on substitute financing. N/A
Tax treatment of employer provided health insurance N/A “Glide path” downward to match the value of individual tax credits within a decade
Medicare N/A “A premium support system, empowering seniors with choice and market competition, just like Medicare Advantage and Part D already do.”

Some observations:

First, even for a campaign document, these plans are wafer thin, raising far more questions than providing answers. Walker’s plan has just seven pages of substance, and Rubio’s is based on two short op-eds for Fox News and Politico. Continue reading “Not Ready for Primetime: Republican Presidential Candidates on Health Reform”

Financing the ACA — Explained, Updated, and Revealed!

Now that King v. Burwell has been relegated to history’s dustbin, let’s return for a deeper dive into the June 2015 report from the Congressional Budget Office (CBO), “The Budgetary and Economic Effects of Repealing the Affordable Care Care Act,” because much juicy and compelling detail has been ignored.  See my original article here.  Let’s start with this table, an earlier version of which (without 2016-25 numbers) I created for my 2011 book, “Inside National Health Reform.”


The table contrasts ACA spending and revenues as calculated by CBO in March 2010 (when the law was signed) for the period 2010-2019 with brand new CBO estimates released last month for 2016-2025 (in bold).  Not all items in the 2010 analysis were included in the 2015 version, though the biggies are.  The table shows costs/spending and revenues/savings according to each respective ACA title — I created both versions using CBO data.

What can we see?  Lots!

First, look at the projected reductions in numbers of uninsured Americans because of the ACA.  In 2010, CBO expected the ACA would lower the nation’s uninsured by 32 million by 2019, half from private insurance/exchanges and half from Medicaid.  In the 2015 report, that number is 24 million.  Eight million fewer insured Americans — a 25% drop(!), and I’ve seen no comment on this.

Second, look at the “$ Spent” column to see what the ACA actually buys — health insurance, private and Medicaid.  All over this chart, by the way, the 2016-25 money figures are much higher than the 2010-19 ones because the ACA’s big parts did not take effect until 2013 and 2014, while 2010-2012 had little spending or revenue, and while the 2020-2025 costs are high.  The $54B in Title 3, by the way, pays for closing the Medicare Part D prescription drug “doughnut hole” or coverage gap.

Third, let’s look at the final column that includes ACA financing in the form of: 1. Title 3’s Medicare spending reductions/savings ($879B); 2. Title 9’s new taxes on high income wage earners, and on drug, medical device, and insurance companies ($718B); and 3. Title 1’s employer and individual mandates ($210B), plus others.  The chart shows that Title 3’s Medicare cuts and Title 9’s new taxes pay for the Title 1 and 2’s insurance coverage expansions.  If you understand this, you get the ACA’s essential financing formula.

Because of missing data, all these numbers don’t add up to the deficit reduction number at the bottom of the table, though there’s enough to show the essential picture.  As detailed in my June CBO post, in 2010 the CBO projected that the ACA over 10 years would reduce the federal deficit by $124 billion; an apples to apples comparison now shows deficit reduction at $353 billion (2016-25); when including the Republicans’ voodoo economics “dynamic scoring,” this reduction drops to $137 (with a ridiculously wide variance).

There’s so much more compelling detail; here are a few important nuggets:

  • Title 1’s $210B revenue comes entirely from the employer and individual mandates, $167B from the former, and $43B from the latter.  Big lift to repeal — especially the employer mandate.
  • Title 9’s new taxes on the pharmaceutical, medical device, and insurance industries have new numbers.  And the winner is:
    • Health Insurance — $142B
    • Pharmaceutical — $30B
    • Medical Device — $24B
  • Title 9’s so-called “Cadillac Tax,” a new 40% excise on expensive health insurance policies scheduled to take effect in 2018, had estimated revenue at $32B (2010-19) and now comes in at $87B (2016-25), almost a tripling as business and labor groups begin pushing hard for repeal. Another big lift.
  • The savings from Title 3’s reductions in Medicare payments to hospitals, health insurers, home health agencies, and other providers has risen from $449B (2010-19) to $879B (2016-25).  This is perhaps most important to understand.  Except for insurers, hospitals and other providers agreed to these reductions to help finance expanded coverage. During the 2010, ’12 and ’14 elections, Republicans incessantly kicked Democrats for these reductions, charging them with cutting grandma’s Medicare to pay for Obamacare!  (Simplified, but true.) But then, in their subsequent budget proposals, House Republicans led by then Budget Chair Paul Ryan (R-WI) always included complete repeal of the ACA except for the Title 3 Medicare reductions!

Some wonder, how could Republicans, given the chance, ever finance repealing the ACA?  Here is the answer.  If you repeal the entire ACA, except for the the $879 billion in Medicare reductions, that bill would reduce the deficit.  A Republican President, working with a Republican-controlled Senate and House, using budget reconciliation rules which cannot be filibustered and only require 51 votes, could make that happen.

Inconceivable?  Consider this.  Twice, US Senate Finance Committee Chair Orrin Hatch (R-UT) and US House Commerce and Energy Chair Fred Upton (R-MI) have released the “Patient Choice, Affordability, Responsibility, and Empowerment Act” (Patient CARE) as their plan to repeal the ACA.  Read their release and then click on the full description and read footnote 3 on page two and here’s what you will find:

“All provisions of PPACA and HCERA are repealed except for the changes to Medicare. Medicare reforms should be considered in the context of reforms to improve Medicare and prevent its insolvency.”

[PPACA and HCERA are the two statutes that, together, constitute the ACA.]  The “changes to Medicare” — that’s the $879 billion.  If you don’t think Republicans have a strategy to repeal the ACA if they win the White House and hold the Senate in 2016, think again.

CBO Says ACA Repeal Will Increase Uninsured and Federal Deficits (by a lot)

My favored definition of “health policy wonk” is someone who reads health reports from the Congressional Budget Office AND enjoys it.  Guilty as charged.  Last Friday’s new report, “Budgetary and Economic Effects of Repealing the Affordable Care Act,” was enlightening and fascinating.  It will be a benchmark document during the coming two years of debates over the ACA’s future — and required reading for my students this fall.  Lucky them!

This report is already a fountain of numbers thrown around by both parties — and it reflects the changing politics at CBO under Republican control of the U.S. House of Representatives and the Senate.  What are the key numbers?

  • Repeal on 1/1/2016 would increase the federal deficit by $353 billion between 2016-2025, or by $137B using the CBO’s new “voodoo” macroeconomic analysis;
  • Repeal would cause “federal budget deficits to increase by growing amounts after 2025, whether or not the budgetary effects of macroeconomic feedback are included.”
  • Repeal would increase the number of uninsured Americans by 19 million in 2016 and by 24 million in 2020;
  • Repeal would increase the US gross domestic product (GDP) by 0.7% between 2021-25, with “substantial uncertainty” regarding this estimate in both directions.cbo 2015 2

So there you have it.  Repealing the ACA, the premiere policy goal of just about every Republican House and Senate member, will dramatically increase both federal deficits and the numbers of uninsured Americans in a report signed, sealed, and delivered to Capitol Hill by Republicans’ newly appointed CBO Director Keith Hall. Hall replaced the prior highly respected CBO Director Doug Elmendorf (who was just announced as the new Dean of the Kennedy School of Government at Harvard beginning next January). Continue reading “CBO Says ACA Repeal Will Increase Uninsured and Federal Deficits (by a lot)”