Healthcare Quicksand

July 2, 2017

Last week I looked at the ten year anniversary of the iPhone. This week I’ll take a brief holiday look at a five year anniversary.

In June 2012 the Supreme Court ruled on the constitutionality of Obamacare. As expected, the vote was a close 5-4 decision. Many Republicans expected the five conservative justices to overturn the ACA on the grounds that the Federal government could not force people to buy insurance. John Roberts, the head justice on the court, sided with fellow conservative justices on this position at first, but the arguments of the liberal justices convinced Roberts that, regardless of the language in the ACA, the penalty for not having health insurance was a tax no matter what it was called. Roberts’ vote was the deciding vote in upholding the constitutionality of the act.

This interpretation was not without precedent. In 1937, the cout ruled that the Federal government could force people to pay Social Security insurance premiums. The reasoning was the same. Payments could be called an insurance premium or a penalty or an incentive. No matter the language that legislators used, the payments were a tax and well within the rights of the Federal government.

In 2012, Republicans released a position paper on healthcare legislation. The key features were: Affordable and accessible, no refusal of insurance based on pre-existing conditions, and allow people to keep the plan they have. Five years later, Republicans hold the Presidency, House and Senate, and are discovering the difficulties of implementing those simply stated principles.

Health care is almost 20% of the nation’s economy. There are many stakeholders. They are vocal and well funded. Because Republicans do not have a 60 vote majority in the Senate, the legislation must conform to budget rules that will permit a simple majority vote. In 2009, the Democrats had a 60 seat majority when they began the process of crafting the ACA and found that they had to make a lot of compromises. When Massachusetts Senator Ted Kennedy died in August 2009 and Republican Scott Brown won the special election to replace Kennedy, the Democrats lost their filibuster proof majority and had to make more compromises to get the ACA passed.

For seven years Republicans in both the Senate and House have run quite successfully on repealing Obamacare. Strong and principled opposition to the ACA has become less fervent.  Senators must appeal to a broader constituency than House members.  Some were reluctant to vote for legislation that could jeopardize the availability of health care for vulnerable seniors, children and low income families.

Senate Majority Leader Mitch McConnell had set a deadline for a Senate vote before legislators went to their home districts for the July 4th holiday but could not assemble the votes needed to pass the legislation. McConnell is still committed to the joint task of repeal and replace. He has rejected calls from some in his party to pass a repeal bill now and continue to work on replacement legislation.

There remain more legislative hurdles in the next few months but the most pressing is the raising of the debt limit.  The Treasury is already doing a few accounting tricks to pay bills but has notified Congress that even those tricks will no longer suffice by October.  For now, the market continues to shrug.

Last week I finished up with a teaser and I hope to have that fully developed by next week. For now, Happy Independence Day!

Replace, Beta Version

This week Republicans released their preliminary version of the replacement for the Affordable Care Act, aka Obamacare. Preliminary is the key word. The debate has started. The bill still needs to be scored by the Congressional Budget Office, which will estimate the total cost over the next decade. If the CBO estimate is high, we can expect major revisions in an attempt to rein in the costs.

Democrats and conservative Republicans have both criticized the bill, which is emerging from two committees in the House of Representatives.  The bill will pass through several steps of bargaining before it is voted on in the House. The Senate will have a different version of the bill but will contain some of the same elements. The Republicans have only a three vote majority in the Senate so the bill is likely to undergo revisions if it is to make it through the higher body.

If it does pass the Senate, that po’ little bill will be exhausted, but it will then have to pass through a committee that will reconcile differences in the House and Senate versions. Finally, it will head to the White House for President Trump’s signature.

The Republican version is AHCA.  Obamacare was ACA. We’ll hear these abbreviations a lot in the coming weeks.   People with employer group insurance will see few changes.  About 11 million people pay for their own insurance under a non-group private plan. Lower income enrollees receive subsidies under Obamacare. Many complained of rapidly escalating premiums, and insurance companies have been dropping out of the market, particularly in rural areas. 14.5 million people with really low incomes were added to the insurance rolls via Medicaid expansion under Obamacare (Politifact).

Here is a brief synopsis of what is proposed so far.  Popular provisions of Obamacare will remain. Parents can keep a child on their health care policy till the child is 26. Insurers can not refuse a policy because of a pre-existing condition.

Gone are the penalties for not buying insurance. Gone is the employer mandate to provide insurance and the individual mandate to have insurance. Gone are the formulas that employers must use to determine the number of full-time employees.  Gone are the subsidies for lower income working people, gone is the tax on tanning beds and medical equipment.

Instead of government subsidies based primarily on income, tax credits will be based on age first, and will phase out slowly for individuals with incomes above $75K. The credits are refundable, so that they are available to everyone whether they pay any Federal tax or not. This is similar to the Earned Income Tax Credit (EITC) for low income working families. (This provision has raised objections from the Freedom Caucus, a coalition of conservative Republicans.)

The proposed bill blocks any federal funding for Planned Parenthood, whose revenues consists mostly of Medicaid claims for non-controversial medical procedures. This provision will generate a number of discrimination lawsuits should it remain in the bill.

Medicaid funding will be based on each state’s at risk population – the elderly, the poor, the disabled. Each state can decide how to administer the funds. Several governors, including Republicans, are concerned about this provision. Under the ACA’s Medicaid expansion, hundreds of thousands of people were added onto the program. Governors worry that they will be stuck with some hard decisions in the case of a recession, when many more people lose their jobs, including their employer insurance, and qualify for Medicaid. The federal government can legally borrow money to fund promises when tax revenues are insufficient. States must run balanced budgets.

We can be sure that there will be a flurry of unsubstantiated assertions from politicians and surrogates on both sides of the aisle. We will be bombarded with catch phrases. Each politician hopes that their pithy phrase will make it into the 24 hours news cycle.

Here are just two examples from the floor of the Senate this past Tuesday. Each Senator has some good points but they drown those points in partisan drivel.  Both of these Senators are regarded as moderate voices within their party.

From John Cornyn, Texas Senator and Majority Whip, comes a phrase that all Republicans are required to use to describe Obamacare: “unmitigated disaster.”  Republicans didn’t feel that invading Iraq was an unmitigated disaster. Only Obamacare qualifies for that epithet. Republicans have learned that repeating a phrase over and over and over and over again makes it so. Politics reduced to a slogan, like the Wendy’s commercial “Where’s the beef?” (Here are a few excerpts of the speech. Cornyn’s staff doesn’t provide a full transcript.)

How much of an unmitigated disaster is Obamacare?  The Republican version keeps a number of key features of Obamacare so we can be reasonably certain that this is radical rhetoric, typical of what we hear from either party.

Cornyn uses the phrase “broken promise” to describe Obamacare. Over on the other side of the aisle, Washington Senator Patty Murray uses the same phrase to describe the Republican replacement. Maybe they both share the same speech writers.

Murray declared that millions of people will lose health care under the proposed legislation, which returns control of health care to the states. Here’s what passes for math in the Democratic Party, whose estimates of Obamacare enrollment have been  way above actual enrollment. The big  increase in enrollees have come from the Medicaid expansion, not the appeal of private market Obamacare plans.  Democrats could have passed a 100 page Medicaid expansion Act and have achieved the same results.

So, how does Murray justify the statement that millions will lose health care?    It’s not current enrollees, but future enrollees who will lose health care.  Got that?  These are invisible millions. Based on wildly optimistic estimates of future enrollments if Obamacare was left in place, Democrats then estimated that those exuberant estimates will not be met under the new proposal.  In past years, when enrollment figures did not meet projections, Democrats did not lament the fact that “millions” lost health care.  Democratic politicians only use their special math on programs from the other side.  And yes, Republicans do this as well.  (Murray’s staff made a transcript of the whole speech available.)

Like Cornyn, Murray reaches into her box of assertions, pulls out a few and repeats them. Only Obamacare can protect women’s health. 62% of white women, and 42% of all women, voted for Trump and his promise to repeal Obamacare because they wanted to damage their health? Does Murray think those women are stupid, or suicidal?  Maybe a lot of these women are the deplorables, as Hillary Clinton called them.

Like most Democrats, Murray can not understand that people resent the dictates of the Washington crowd and want more local control of their lives, even if it is only an opportunity to make their own mistakes. Politicians in Washington, those of both parties, have made a lot of mistakes. Voters in many states think that their legislatures and governors can’t do any worse.

Whenever we talk health care reform in the U.S., the discussion inevitably turns toward the single payer option, similar to the Canadian and British systems. One of the arguments against single payer systems is that the government rations care with long waiting times for appointments, particularly those for specialists, operations and hospital beds. Proponents of the U.S. system argue that the U.S. is far more responsive to the needs of patients.

Is that true? Several researchers studied {PDF} the waiting time statistics provided by governments in developed countries and found that comparisons of wait times are largely invalid. Why? Because different countries use different start times. From the paper:

“Current national waiting time statistics are of limited use for comparing health care availability among the various countries due to the differences in measurements and data collection.”

In some countries, the wait time to see a specialist might not start till the specialist makes an appointment with the patient. In other countries, the clock starts when the primary care physician writes the referral order that the patient needs to see a specialist. Some start the clock when the specialist receives the referral. Some countries distinguish between ongoing and completed care, while others don’t. The lack of consistency explains the contradictory results when comparisons of wait times are taken at face value.

After six years of stamping their feet and saying “No, no, no, no, no” like a four year old, Republicans have finally put some ideas on the table. We hope for some rational discussion of principles and likely outcomes, but, as each party has drifted to the extremes in the last two to three decades, the voices of moderation have been drowned out by impassioned pleas and slogans.  Moderation is a difficult political position to defend because it requires more than a catch phrase and a belligerent tone.

In the 24 hour media circus, politicians must posture and polemicize for the camera, for their constituents, and most importantly, for their contributors. Have your shovels ready for we shall soon be buried in the muck of debate!

Health Reform Republican Plan

Republican politicians and conservative talk show hosts have devoted plenty of time slinging arrows at Democratic health insurance reform proposals. Occasionally, I hear a talk show host or a Republican politician on a Sunday morning talk show mention the Republican health care plan but few or no details. Instead they continue to heap scorn on “Obamacare”.

When someone prefers to attack rather than explain their alternative, I get suspicious. Maybe the Republican plan sucks, I thought, and that’s why conservatives don’t offer summaries of the plan. If you, like me, would like to know what the Republican health care plan is, you can check out a Roll Call summary here on the Real Clear Politics website. It has some good features, notably the reduced government “footprint.”

As a small employer with several experiences with state insurance agencies, I am leery of government insurance solutions. In Colorado, Labor Dept employees seem to assume that the employer is at fault or lying, although a spokesman for the Labor Department would probably deny it.

An employee is taken at his or her word and it is up to the employer to prove that the employee is mistaken. Conversations with several other small employers in this state have confirmed this attitude on the part of state agency employees.

While there have been court decisions to clarify “reasonable grounds” or “reasonable suspicion” in criminal cases, there seems to be little precedent to stipulate what “reasonable grounds” are in civil and regulatory matters. If a state auditor feels they have reasonable grounds to believe that an employer is guilty of breaking one of the hundreds of state laws affecting employers, then, unlike criminal cases, the employer must prove their innocence.

I am afraid that this same attitude will prevail when the Federal government injects itself even deeper into health care and insurance in the U.S. Doctors and health care providers will be in the same position as employers, needing to prove their innocence. As patients, we might think that such a presumption of fault on health care providers is a good thing. Such a presumption will only cause more doctors and health care providers to leave the medical field. After all, who needs the aggravation?

Even without health care/insurance reform, there will not be enough doctors and health care providers for the juggernaut of the aging baby boomers. With or without reform, there will be delays in getting medical appointments with primary care physicians and specialists. We need reform and this is the time to do it. I can only hope that our politicans will use some care and sober judgment as they craft a reform bill.