Let’s Get Started. The Drivers of High Prices in Healthcare

15181671_1034193363376989_5637224603249359637_nAs we recover from the Thanksgiving holiday let’s start to come up with some solutions to the health care crisis. In light of the string of federal budget deficits, combined with a U.S. national debt approaching $21 trillion, the largest in the world – it is understandable that observers are scrutinizing health care costs which accounted for 17.9 percent of the nation’s GDP in 2010, or almost $2.6 trillion and presently even more. As the second highest component in national health expenditures at 20% (hospital care is 31 percent), physician/clinical services have captured everyone’s attention. Physician/Clinical services include health care services within the Department of Defense (higher costs in times of war), Indian Health Services, laboratory services, outpatient care centers and the portion of medical laboratory services and physician services in hospitals that are billed independently. Some critics have suggested that physicians’ incomes and the fact that physicians direct most health care spending (80% is a frequently used number) are the real culprits in rising health care costs. But let us look at all of the relevant components that contribute to health care costs. The rising cost of healthcare in the United States is a major concern for both citizens and policy makers.  In order to have a productive conversation about solutions to this cost increase problem and to coming up with a solution to the problems with our present system, it’s important to have an understanding of the drivers of high prices in various parts of the overall healthcare landscape.

Drivers of high prices that will be discussed here include:

  • Moral hazard in insurance markets
  • Adverse selection in insurance markets
  • Lack of price transparency and competition
  • Monopoly pricing in pharmaceutical markets
  • Lack of excludability
  • Technological advances and Telemedicine
  • Malpractice
  • Cost of medical education

This list is most likely not exhaustive, but it still provides a useful starting point in order to understand the problem at hand.

Moral Hazard in Insurance Markets: The term “moral hazard” refers to inefficiency created when a decision maker in insulated from the costs and/or benefits of her decisions.  In many cases, people purchase health insurance in order to help pay (and smooth out) their healthcare expenses.  Once an individual is insured, she often doesn’t have to pay the entire cost of the medical treatments that she undergoes.  This increases the cost of healthcare for two reasons.

First, to the degree that an individual can choose whether to undergo treatment, she might choose more treatment than is efficient.  For example, if an individual had to pay only a $5 co-pay each time she went to the doctor, she might go to the doctor every time she has a hangnail.  (Fortunately, the fact that going to the doctor isn’t an inherently pleasurable experience mitigates this problem to some degree.)  That doctor visit, however, may cost $150 in total, but may not be worth $150 to the individual.  This increases cost because the individual ends up paying for the $150 treatment indirectly via increased insurance premiums but doesn’t get $150 of value.

Second, the sharing of cost reduces the incentive for an individual to shop around to get the best prices for healthcare services.  (If you are going to pay the same $5 regardless of where you go, why not just go where is most convenient?)   This, in turn, reduces the incentive for healthcare providers to offer competitive prices and results in higher prices.

Health insurers and, to some degree, policymakers, try to reduce the amount of moral hazard by introducing high deductibles and increasing the share of the cost that an individual must cover.  Unfortunately, this can cause some individuals to procrastinate on getting valuable healthcare services because they don’t want to have to pay for them.

Adverse Selection in Insurance Markets: In economics, the term “adverse selection” refers to systematically doing business with parties that end up not being profitable to do business with.  Adverse selection is a phenomenon in markets where participants in a market that are at an information disadvantage are more likely to transact with those who will end up being unprofitable to do business with and less likely to transact with those who will end up being profitable to do business with.

For example, adverse selection is a common problem in unregulated markets for insurance.  If a consumer can sign up for health insurance whenever he finds it optimal to do so, he will sign up for health insurance when the cost of the treatments that he expects to need are larger than the premiums he would have to pay for the insurance (with some adjustment for risk aversion).

This of course means that health insurers are likely to have customers that disproportionately cost the company more money than they pay in premiums, thus being unprofitable for the insurer.  This situation arises because the potential customers generally have more information regarding their health and lifestyle habits than the insurance company has about them. To see how this affects markets for health insurance, consider the following example:  A health insurance company offers an insurance policy for $250 per month, and people can sign up at any time.  Unless people are exceedingly risk averse,  they won’t purchase the insurance unless they expect to spend at least somewhere in the neighborhood of $250 on healthcare per month. Risk aversion, as its name would suggest, is a characteristic of an individual who seeks to avoid risk.  More specifically, risk aversion refers to a characteristic where an individual prefers a certain outcome over a risky gamble (i.e. a scenario where the specific outcome is not known in advance).  For example, let’s suppose that an individual was presented with the following two options:

  • Receiving $50 for sure
  • Flipping a coin and receiving $100 if the coin comes up heads and $0 if the coin comes up tails

Both options have an expected value of $50, but a risk-averse individual will strictly prefer the certain $50 to the coin flip.

Risk aversion results when an individual experiences diminishing marginal utility over the outcomes being considered.  In other words, if an individual finds each incremental unit of the outcome to be less useful or happiness inducing than the one before, then the individual will exhibit risk aversion.

Under this system, customers are going to cost insurance companies more than $250 on average, and the insurance company won’t be able to stay afloat.  If they increase price, however, they just further whittle down the pool of health insurance customers into a smaller, sicker group.  When adverse selection is present, insurance premiums are higher than what they would be if everyone bought in, and, if adverse selection is strong enough, private individual insurance markets may not be feasible at all.

For this reason, insurance companies have historically focused on insuring diverse groups of individuals as opposed to taking individual customers one at a time.  (This, of course, can make it impossible to get an individual insurance policy.)  This is also the reason that insurers historically has rules about not covering pre-existing conditions- otherwise people would likely wait until they got sick to start purchasing insurance, which is not how insurance works!  The mandate aspect of the Affordable Care Act is an attempt to overcome adverse selection, and overcoming adverse selection makes it more feasible to relax restrictions on pre-existing conditions.

Given that even the mandate doesn’t result in perfect compliance, health insurance premiums are likely higher than they would be if everyone purchased insurance.

Lack of Price Transparency and Competition: Overall, healthcare providers make it incredibly difficult to discern how much any given medical procedure costs until an individual undergoes the treatment and gets the bill.  this means that, even if an individual cares about price, there is a significant hurdle to shopping around.  This feature leads many (even uninsured) individuals to not even try, and again gives healthcare providers little incentive to offer competitive prices.

The value created for society by a well-functioning unregulated competitive market is equal to the sum of consumer surplus- the amount of value that the market creates for consumers- and producer surplus- the amount of value that the market creates for producers. (This is because, in a well-functioning unregulated market, no one but the consumers and producers in that market are affected by the market’s existence.)

One question that is of interest to many economists is whether a social planner (i.e. someone who has the authority to direct production resources and distribute the output) could create more value than what is generated by the market forces of supply and demand alone. As it turns out, the answer is no, and economists can in fact conclude that the market forces present in well-functioning competitive markets maximize the amount of value that is created for society.

Monopoly Pricing in Pharmaceutical Markets: Patent protection for pharmaceuticals, medical devices, and other related items grants (temporary) monopoly power to producers of these items, and, as a result, causes the prices of such items to be higher than they would be in competitive markets.  Competitive markets sometimes referred to as perfectly competitive markets (or perfect competition), have three specific features.

The first feature is that a competitive market consists of a large number of buyers and sellers that are small relative to the size of the overall market. The exact number of buyers and sellers required for a competitive market is not specified, but a competitive market has enough buyers and sellers that no one buyer or seller can exert any significant influence on the dynamics of the market. You can think of competitive markets as consisting of a bunch of small buyer and seller fish in a relatively big pond.

The second feature of competitive markets is that the sellers in these markets offer reasonably homogenous or similar products. In other words, there isn’t any substantial product differentiation, branding, etc., in competitive markets, and consumers in these markets view all of the products in the market as being, at least to a close approximation, perfect substitutes for one another.

The third and final feature of competitive markets is that firms can freely enter and exit the market. In competitive markets, there are no barriers to entry, either natural or artificial, that would prevent a company from doing business in the market if it decided that it wanted to. Similarly, competitive markets have no restrictions on firms leaving an industry if it is no longer profitable or otherwise beneficial to do business there. While this seems less than ideal from a consumer perspective, there is a fairly widespread belief that these monopoly profits are necessary in order to provide adequate incentives for private firms to undertake costly up-front research and development programs, without which the products wouldn’t be available to consumers at all.

Whether there is a way to mitigate this cost problem depends on whether there is a more cost-efficient way of undertaking and/or financing research and development.

Lack of Excludability-Healthcare providers, especially emergency treatment facilities, don’t generally require customers to pay up front before they receive service- in other words, healthcare providers restrict treatment to paying customers far less than sellers of, say, an iPhone.  This makes sense for both ethical and logistical reasons, since people are likely not always in the proper state to make up-front consumption decisions.

But it also means that a lot of consumption decisions are made by doctors rather than the parties that end up paying, and it’s unclear what priority doctors should place on cost savings rather than focusing on the treatment itself.  Furthermore, these logistics create situations where some customers end up not paying, and these costs can get shifted onto other paying customers in the form of higher prices.

Technological Advances: Lastly, costs tend to increase because increase in technology provide a wider, more sophisticated array of treatments- it shouldn’t be surprising to anyone that providing sophisticated treatment is more expensive than simply saying “sorry, we don’t have any way to deal with that, so just sit tight and deal.”                Medicine in the 21st century is increasingly dependent on technology. Unlike in many other areas, the cost of medical technology is not declining and its increasing use contributes to the spiraling healthcare costs. Many medical professionals equate progress in medicine to increasing use of sophisticated technology that is often expensive and beyond the reach of the average citizen. Pediatric heart care is very technology-intensive and therefore very expensive and beyond the reach of the vast majority of children in the developing world. There is an urgent need to address this situation through development and use of appropriate technology in accordance with the needs and priorities of the society. A number of simple and inexpensive quality measures that have the potential of improving outcomes substantially without the need for expensive equipment should be instituted before embracing high-end technology. Innovations to reduce costs that are commonly used in limited resource environments should be tested systematically. Today, healthcare is increasingly driven by digital technology. Most medical equipment today runs on digital platforms. Hospitals, clinics and many other healthcare facilities are increasingly dependent on hospital information software. Yet, healthcare is becoming increasingly expensive and out-of-reach for the common man. Clearly, there are many other elements that contribute to the spiraling healthcare costs. Digital technology does not seem to empower the average patient. Rather it sometimes does the reverse. It makes them more vulnerable and helpless. Two examples are worth studying, especially because they represent applications in digital technology that have tremendous potential to meet the needs of the common man. However, they have not developed along the lines that would have improved their reach

Telemedicine: Today we have the technology to transfer large amounts of digital information effortlessly at relatively low costs. While telemedicine holds considerable promise we have not done enough to translate this powerful tool to help the common man. Today it is easily possible to listen to a patient’s heart remotely, look at and opine on an electrocardiogram (ECG), X-rays, computed tomography (CT) scans and other imaging data obtained several hundred miles away. While this technology has been available for at least 10 years very little systematic effort has been made to use it to make a real difference in the lives of people in India and much of the developing world.

Health expenditures continue to grow very rapidly in the U.S.  Since 1970, health care spending has grown at an average annual rate of 9.8%, or about 2.5 percentage points faster than the economy as measured by the nominal gross domestic product (GDP).  Annual spending on health care increased from $75 billion in 1970 to $2.0 trillion in 2005, and is estimated to reach $4 trillion in 2015.  As a share of the economy, health care has more than doubled over the past 35 years, rising from 7.2% of GDP in 1970 to 16.0% of GDP in 2005, and is projected to be 20% of GDP in 2015.  Health care spending per capita increased from $356 in 1970 to $6,697 in 2005, and is projected to rise to $12,320 in 2015.1

The particularly rapid increases in health insurance premiums over the last few years have focused the health policy community on the issues of cost containment and health insurance affordability.  A key question from policymakers is why spending on health care consistently rises more rapidly than spending on other goods and services.  Health care experts point to the development and diffusion of medical technology as primary factors in explaining the persistent difference between health spending and overall economic growth, with some arguing that new medical technology may account for about one-half or more of real long-term spending growth.  This paper briefly describes what health policy analysts mean by medical technology and the mechanisms by which it affects the growth in health care costs.


The technology is used on the consumer and not by the consumer: The actual “consumer” is still the patient because it is he or she that eventually pays for the product (and the service). This is particularly true in most of the developing world where healthcare delivery is completely disorganized with a very tiny proportion of the population having health insurance. While the patient (consumer) pays for the product (to the manufacturer) and the service (to the health professionals), the demand is not necessarily created by the consumer. When the demand is artificially created to justify the use of technology, it becomes exploitative. Further, with time the cost of service often increases.

A bottom of the pyramid (BOP) model has not been developed for many medical specialties. While the “Jaipur foot” and “The Aravind eye network” stand out as successful examples of implementation of the BOP model in healthcare, many specialties require complex systems and expensive infrastructure that would challenge the development of a BOP approach. Pediatric cardiac care is perhaps an example where the BOP approach may be difficult with the available technology. Novel approaches will be needed to deliver heart care in large numbers using inexpensive models. This requires the collective will of a large number of committed individuals that includes those developing technology, entrepreneurs and health professionals. Visionary leadership, teamwork and external support (such as from the government) are also vital requirements.

Most multinational companies that manufacture echo machines (and other equivalent digital products) are not convinced about the BOP approach. They do not seem to be inspired by the success story of the cell phone technology. A generous profit margin for every individual item is still the most important strategy used to offset research, development and marketing costs. They are not completely convinced that “economics of scale” with small profit margins for every unit can be applied to their products. They often use similar strategies as they would in developed countries and essentially concentrate on selling their products to select affluent facilities in metros.

Malpractice and the Effect on Health Care costs: Medical malpractice costs are an important and increasing component of physicians’ costs. More than two-thirds of malpractice awards are physician related. Trends indicate that malpractice costs will continue to increase for the near future. The American Medical Association (AMA) (1984-85) describes the problem as reaching “crisis” proportions. Pressures to limit physician costs under Medicare present a concern on how malpractice-related costs will be absorbed.

Physician malpractice costs include two parts—the cost of liability insurance premiums and defensive medicine costs. Malpractice insurance premiums are recognized as a part of physician overhead expenses, and the costs of increased premiums are passed on to patients and their insurers as part of the physician’s fee. A recent study showed that for every 100-percent increase in premiums, physician fees are estimated to increase 9.1 percent. The fear of malpractice lawsuits also provides an incentive for physicians to order medically unnecessary services, such as an increased number of tests or confirming opinions. Such defensive medicine costs are difficult to measure, but the AMA (1984-85) estimates that $15 billion per year is added to the cost of health care. Defensive medicine costs are also passed on to patients and insurers.

Malpractice insurance premiums for physicians have increased at an average rate of over 30 percent per year. This rate is significantly higher than health care cost inflation and the increase in physician costs. Trends indicate that malpractice related costs, both liability insurance and defensive medicine costs, will continue to increase for the near future. Pressures to limit physician costs under Medicare raise a concern about how malpractice costs can be controlled.

Medical Education: I have already reviewed the exorbitant cost of medical education ($150-$340 thousand), which the physician has to find some way of paying back whether they are the bank or parental loans. With the shrinking reimbursements given to physicians, no wonder why less students want to pursue medicine as a career or most graduating doctors become employees of a hospital or health care system.

What about the different views between doctors and health administrators and health care? Most doctors are looking to do better and better for the individual patient who comes to them. They often do not think of those who do not reach them. Progressive improvements in outcomes require increasing resource deployment. The relationship is exponential. Initially, small investments in basic resources result in impressive improvements in outcomes. But after a certain level considerable material (equipment and infrastructure) and human (personnel) resources are required to accomplish small improvements in outcome. In situations where healthcare is not organized in accordance with the needs of the population, health facilities that strive to achieve exceptional results (state-of-the-art) are completely out of reach of the average citizen. Indeed the poorest are seriously intimidated and are completely excluded from the ambit of these facilities. Pediatric cardiologists and cardiac surgeons who spend most of their lives inside hospital environments often completely lose sight of the situation in the community. The fact that only 2-3% of children born with significant congenital heart disease reach hospitals to undergo surgery or interventions has not been internalized by most of us.

We need to rethink about how we should define progress in the healthcare sector. We should find a way to measure the proportion of patients who are excluded from a healthcare facility because of costs of care and this parameter should perhaps be a part of the evaluation process for accreditation of institutions that aspire to meet acceptable standards of healthcare.

A paradigm shift in healthcare delivery is desperately needed. The facts and figures on the actual proportion of patients that are being excluded from access to available technology will need to figure in the collective consciousness of doctors, entrepreneurs, policymakers and members of the healthcare industry. Realistic business models that are aimed at least at a part of the population that is completely excluded and marginalized will need to be pursued recognizing that there are vast numbers that can allow the economics of scale to become operational.

Are there any realistic solutions? Stay tuned!

The 4 Ways Republicans Can Dismantle Obamacare, explained. But does He and the GOP Really Want to Do It?


Republicans have been vowing for six years now to repeal the Affordable Care Act. They have voted to do so dozens of times, despite knowing any measures would be vetoed by President Obama. But the election of Donald Trump as president means Republican lawmakers wouldn’t even have to pass repeal legislation to stop the health law from functioning. Instead, President Trump could do much of it with a stroke of a pen.

Trump “absolutely, through executive action, could have tremendous interference to the point of literally stopping a train on its tracks,” said Sara Rosenbaum, a professor of law and health policy at George Washington University in Washington, D.C.

Trump’s main goal for health care policy is to repeal the Affordable Care Act. That feat will be harder than Trump seems to think, as has been previously reported. To completely repeal and replace the act, he would need 60 votes in the Senate, which is the number needed to overcome a filibuster. Though they’ll make up a majority, there will be only 51 Republican senators come January. He recently signaled in an interview that he may be open to keeping provisions of Obamacare that expand insurance to people with pre-existing conditions and to young people. Trump has also promised to allow tax deductions for child care and elder care and to create tax-free dependent care savings accounts, with matching contributions for low-income families. As was previously reported earlier this year, that would cost the government $25 billion annually.

trumphealthTrump is set to take office at a tricky time for the health law, with many Americans in both parties complaining about rising premiums and other out-of-pocket costs. The Republican-led Congress has refused to make changes to the law that would help it work better — such as offering a fix when insurers cancelled policies that individuals thought they would be able to keep. As staunch opponents of the law, they, of course, have little incentive to improve it.

When problems have arisen, Obama has often used his executive authority to try to solve them. And it’s this very mechanism Trump could use to undermine the law. As president, the Republican “can just reverse” Obama’s actions in many cases, said Nicholas Bagley, a law professor at the University of Michigan who writes about health policy. A president “can’t undo the basic architecture of the law, but you can throw sand into the gears,” he said. Sarah Kiffsarah at Vox.com wrote that Republicans in Congress have a straightforward path to eliminating key pieces of the Affordable Care Act: They can block the planned insurance expansion in 2017, dismantle Medicaid expansion, and eliminate new insurance marketplaces. That could add up to an incredible blow — possibly causing 22 million people to lose their insurance coverage.

But getting rid of the rest of the law wholesale is a lot trickier. Rolling back provisions — including one allowing young adults to stay on their parents’ health plans and another banning lifetime coverage limits or one banning the rejection of people with pre-existing conditions — would be harder under Senate rules.

This is good news for people who get insurance at work and who benefit from these insurance rules. But it’s little comfort for anyone who buys their own insurance, like a contractor, freelancer, or anyone who isn’t part of a group plan through their employer.


” These people could face huge disruptions in their coverage. If Obamacare repeal moves forward without any replacement, they could find themselves facing much higher premiums — or no health insurance plans that want to sell them coverage.

“They have a death blow to the Obamacare health coverage expansion,” says John McDonough, a Harvard University professor who worked in the Senate on the passage of the Affordable Care Act.

We don’t know what, exactly, the future of Obamacare looks like right now or what approach Congressional Republicans will take toward dismantling the law. But after talking to a half-dozen experts over the past few days, it seems likely to me that one of these four scenarios — or some combination of them — will play out.

Which one moves forward matters: Some scenarios allow Republicans to repeal the insurance expansion, but would keep Obamacare rules for the employer market (again, the coverage to age 26 provision and ban on lifetime limits). Some will get rid of everything. The stakes are different depending on what direction Republicans head, and this is a guide to where they most likely will go.

Scenario 1: Trump and a Republican House dismantle major parts of Obamacare via reconciliation, leading to 22 million Americans losing insurance

This is arguably the most plausible outcome at the moments. Republicans unravel Obamacare’s insurance expansion — both the Medicaid expansion and private health insurance marketplaces — which would, according to the Congressional Budget Office, lead to 22 million losing coverage.

Senate Republicans only need 51 votes to get this done. They’d use what is known as the “reconciliation process,” which would allow them to make changes to anything that affects the federal budget. Parts of the law that don’t affect the budget can’t be changed using this process. Last winter, Republicans drafted a bill that would fit the parameters of the reconciliation process. HR 3762 was introduced into the House on October 16, 2015, by Rep. Tom Price (R-GA).

Abbe Gluck, a law professor at Yale University, describes it as “a blueprint for how you might pull the guts out of the Affordable Care Act.” This bill would do a lot to dismantle Obamacare. It would repeal Obamacare’s tax credits for low- and middle-income Americans to purchase insurance at the end of 2017. It would end the individual mandate penalties for not buying coverage. And it would end the Affordable Care Act’s Medicaid expansion at the same time, essentially creating a two-year transition period in which Republicans would presumably consider Obamacare replacement plans.


The bill doesn’t abolish Obamacare entirely through reconciliation. It doesn’t, for example, repeal the provision that allows young adults to stay on their parents’ health plans — that doesn’t cost the federal government anything. Congress also couldn’t repeal the ban on annual or lifetime limits for coverage.

Republicans actually don’t bring back pre-existing conditions through this option either — insurance plans would still be required to offer coverage to anyone who wants it.

That being said, this would not be a good situation for people who buy their own insurance. Quite the opposite, experts expect that the individual market would collapse if this repeal bill passed without a replacement plan.

Here’s why: The repeal bill gets rid of the health care law’s key tools to get people to sign up coverage, insurance subsidies to make plans affordable, and the individual mandate to make carrying coverage the law. Without those, premiums would near certainly spike as only the sickest people buy coverage — and health plans would likely flee the market, no longer finding the population an appealing one to cover.

“I think the market self-destructs if you don’t have the premium tax credits or don’t have the mandate,” says Tim Jost, emeritus professor at William and Mary College of Law.

“The private market would collapse, and might no longer exist,” says Nicholas Bagley, an assistant professor of law at the University of Michigan who focuses on health policy.

One other thing to keep in mind about the 2015 reconciliation bill: It’s not the final word on what Republicans could repeal through reconciliation. It is what Republicans came up with in December, when they knew President Obama would veto it.

But now that it has a decent chance at passing, legislators might try and tack on the repeal of other Obamacare provisions — and try to convince the Senate parliamentarian that these pieces also relate to the federal budget.

“The 2015 bill is a floor, but it doesn’t tell us about other sections they might try to include,” says Gluck. “It’s unpredictable what will be judged to have budgetary implications. In 2015, they didn’t need to be careful. They knew their bill wouldn’t pass. Now, they might want to think more carefully about what to include.”

Scenario 2: Trump and the Republican House dismantle major parts of Obamacare through reconciliation — and replace it with something else

Repeal, at this point, feels like political certainty. Republicans have spent six years calling for the end of Obamacare. Now that they have a clear path to make that happen, most experts expect them to follow it.

The remaining question is whether they’re able to follow up with a replacement plan.

“It will be really easy for the GOP to defund the Affordable Care Act and take it away,” says Robert Laszewski, a health care consultant. “The second half of what they need to do is much more difficult. It will be well into fall 2017 at the earliest before a replacement plan might be in effect.”

The clearest outline of what a Republican replacement plan might look like is Speaker Paul Ryan’s Better Way proposal. It includes a refundable tax credit to make individual insurance more affordable and allows insurance plans to sell across state lines.

Better Way would maintain the ban on pre-existing conditions but it would not maintain Obamacare provisions that bar insurers from charging sicker Americans higher rates. So under Better Way, insurance plans would be required to provide coverage, for example, to cancer patients — but could also charge them higher rates.

Better Way does maintain the ban on pre-existing conditions and the provision that allows young adults to stay on their parents’ insurance through age 26.

The Better Way plan is thorough, with a clear vision of what health care might look like under a Trump administration. At the same time, it is still very much an outline — a 37-page document that has broad policy proposals that would need to be hammered out into actual legislation.

“Better Way isn’t in legislative form, and the Senate hasn’t weighed in,” says Chris Condeluci, who worked as tax and benefits counsel for the Senate Finance Committee’s Republicans during the Affordable Care Act debate.

This is why most observers expect it would take at least a year for Republicans to draft and pass an Obamacare replacement plan — and even more than that to write out the regulations and set up the infrastructure in order to implement it.

“The Trump administration, if they like it or not, they’re going to have to run Obamacare for two years,” says Laszewski.

Scenario 3: The Senate eliminates the filibuster and repeals Obamacare outright

Right now, the big thing holding Republicans back from repealing Obamacare outright is the need for 60 votes in the Senate to overcome a filibuster. This pushes them to use the wonky reconciliation process where they can only get rid of the parts that touch the federal budget.

The easy way out of this problem is, of course, to end the filibuster. Democrats already took steps to weaken the filibuster in 2013, and Republicans could decide to eliminate it entirely.

“The ‘right’ to filibuster is fragile: It has never been affirmed in the rules of the Senate, it has always been subject to limitation by precedent, and the 2013 precedent highlighted how easy it is to restrict or eliminate the right,” writes political scientist Gregory Koger.

Without the filibuster, Republicans could pursue complete repeal and replace. Under this scenario, they would be able to end parts of Obamacare that don’t touch the federal budget, like free preventive benefits or the requirement that all people get charged the same premium, regardless of whether they’re healthy or sick.

What comes after repeal, once again, would still be in question — and this scenario, if it does happen, would likely lead to the second scenario in this piece, where Republicans begin to figure out what their replacement plan looks like, and there are questions of whether they pass a replacement at all.

Scenario 4 (possibly concurrent with 1,2, and 3): Trump uses executive action to dismantle certain parts of Obamacare as the Republican Congress needs time to pass repeal

Most of the big parts of the Affordable Care Act need Congressional approval to dismantle. But what President Trump could do unilaterally is re-write some key Obamacare regulations that would alter how the law works.

If you read through the text of the Affordable Care Act, you won’t find any mention of “contraceptives” or “birth control.” That’s because the law doesn’t actually include a mandate to cover contraceptives.

Instead, it says that health insurance must cover preventive health benefits for women — and then punts to a division of Health and Human Services to decide what counts.

It wasn’t always clear that birth control would make the cut. When Obamacare passed, it was a genuine question whether the Obama administration would include birth control in its list. I know because I covered the debate when I was a reporter at Politico at the time. Groups like Planned Parenthood lobbied the White House to include it.

Finally, the administration issued regulations in 2011 announcing that it would include birth control as a preventive benefit for women. A Trump administration could write its own regulation to say birth control isn’t preventive health care for women.

There are other parts of the Affordable Care Act like this. Right now the Affordable Care Act requires insurance plans to cover a set of “essential health benefits.” The law itself contains broad categories, like preventive services and trips to the hospital, but it’s only in regulation where the actual types of care get hammered out. So the Trump administration could write new regulations that significantly reduce what health plans need to cover, and cross a lot of items off the Obama administration’s list.

Formal regulations would take time to undo, because they must follow a lengthy process allowing for public comment. But there are several measures Trump could take on Day One of his presidency to cripple the law’s effectiveness.

Perhaps Trump’s easiest action — and the one that would produce the largest impact — would be to drop the administration’s appeal of a lawsuit filed by Republican House members in 2014. That suit, House v. Burwell, charged that the Obama administration was unconstitutionally spending money that Congress hadn’t formally appropriated, to reimburse health insurers who were providing coverage to working-poor policyholders — those earning between 100 and 250 percent of the federal poverty line.

More than half of people who purchase insurance in the health exchanges get the additional help, which reduces out-of-pocket health spending on deductibles and coinsurance. While that help for consumers is required under the law, the funding was not specifically included. (Tax credits for people with incomes up to four times the poverty level to help defray the cost of premiums are a separate program and were permanently funded in the ACA.)

In April, Federal District Court Judge Rosemary Collyer ruled in favor of the House Republicans. “Such an appropriation cannot be inferred,” she wrote of the payments, and insurer “reimbursements without an appropriation thus violates the Constitution.” However, Collyer declined to enforce her decision, pending an appeal to a higher court. That appeal was filed in July and is still months away from resolution.

If Trump wanted to seriously damage the ACA, he could simply order the appeal dropped, letting the lower court ruling stand, and stop reimbursing insurers who are giving deep discounts to half their customers. That move would wreak havoc, said Michael Cannon of the libertarian Cato Institute, a longtime opponent of the health law. The insurers would still have to provide the discounts, as required by law, he said, “but they’re no longer getting subsidies from the federal government to cover the cost. So they are going to be selling insurance to these people way below the cost of that coverage.”

Even those who support the law say that mismatch would effectively shut down the health exchanges, because insurers would simply drop out. A Trump administration “really could collapse the federal exchange marketplace and the state exchanges if they end cost-sharing” payments to insurers,” said Rosenbaum, who has been a strong backer of the health law. There is already some concern about the continuing viability of the exchanges after several large insurers, including Aetna and United HealthCare, announced they would be dropping out for 2017.

Another way Trump could undermine the health law would be by simply not enforcing its provisions, particularly the individual mandate that requires most people to have insurance. That requirement is supposed to ensure that healthy as well as sick people sign up, thus spreading the costs of people with high bills across a larger population. But “executive branch non-enforcement could make a real difference to the vitality of the exchanges going forward,” Bagley said. If healthy people don’t sign up, sick people would need to pay more money for their insurance.

Aside from inflicting damage to the exchanges, the administration could also affect the law’s operations by refusing to approve states’ changes to their Medicaid programs. States rely on federal regulators to sign off on changes large and small, including which citizens are eligible, to keep their Medicaid programs operating. “There are so many things that an administration that doesn’t want a program to work can do,” Rosenbaum said.

The bigger question, though, is not what Trump could do to cripple the health law — it’s what he would do. He has addressed the issue only rarely — characterizing the health law as, simply, “a disaster” — and his plans for it aren’t clear. “It’s one thing to talk about ripping insurance from 20 million people” who are newly covered, Bagley said. “It’s another to actually do it.”

Health policy analysts on both sides of the aisle also still question where health care fits on Trump’s priority list. “A big unknown is how aggressive Trump would remain in going beyond rhetorically opposing Obamacare,” said Thomas Miller, a resident fellow at the conservative American Enterprise Institute. “His report card as a presidential candidate reads, ‘Donald needs to improve his attention, effort, and study habits. He is easily distracted and seems to prefer just picking fights with others.’ ”

Perhaps most important, Cato’s Cannon says, is not whether Trump could single-handedly undo the health law, but whether he could undermine it enough to force Congress to take action. If Trump were to do just enough to cause the insurance exchanges to fail, he said, “that would put pressure on Congress … to reopen the law.”

But I think that we are now seeing how the GOP and President-elect Trump are re-evaluating their stance on health care. And this is what I have been harping on for many months and many posts. You cannot repeal the Affordable Care Act/Obamacare unless the GOP and President-elect Trump and the Secretary of the HHS have a viable alternative. Otherwise there will be 20-21 million people who had subsidizes under the ACA who will see their coverage disappear. And I believe that this is one of the reasons that our friend Dr. Ben Carson turned down the invitation to take the position to head the HHS.

Just look at Trump’s comments in discussing health care with President Obama in their 90-minute meeting. President-elect Donald Trump said that, after conferring with President Barack Obama, he would consider leaving in place certain parts of the Affordable Care Act, an indication of possible compromise after a campaign in which he pledged repeatedly to repeal the 2010 health law.

In his first interview since his election earlier this week, Mr. Trump said one priority was moving “quickly” on the president’s signature health initiative, which he argued has become so unworkable and expensive that “you can’t use it.”

Yet, Mr. Trump also showed a willingness to preserve at least two provisions of the health law after the president asked him to reconsider repealing it during their meeting at the White House on Thursday

Mr. Trump said he favors keeping the prohibition against insurers denying coverage because of patients’ existing conditions, and a provision that allows parents to provide years of additional coverage for children on their insurance policies.

“I like those very much,” Mr. Trump said in the interview.

Maybe we should give President-elect and the GOP a chance to try to get things right, including health care!

We should all be thankful that we live in this great Country, the terrific people in our lives and opportunities available to all of us.

Happy Thanksgiving!

The Election and Its Effects on Health Care!

14732357_1025154530947539_9027403258216999632_nSo, as the opponents to Mr. Trump dry their tears and the idiot protesters tell us that the elections were not correct and the Electoral College should be disbanded, or that they should not be held to the Constitution and that Mr. Trump is not their president we all need to take a deep breath What effects of this election will come to fruition? What Trump promises will become new laws or cancel other laws?

Jonathan Bush, CEO & president at Athena health stated before the election results shocked us all that this would be a great day for the “peeps”! “No matter who wins today, this election represents the single greatest opportunity for us as a people, bar none. Why? Because the next President, regardless of who takes the helm, will struggle to claim a true popular mandate. Translation: Very little will get done.”

Polls show us more than half of registered voters disliked Clinton and Trump. In fact, never before have two competing candidates incited such ire. For many Americans the choice came down to the least unfavorable candidate. Beyond the populace, Trump lacked the full support of his own party’s Speaker of the House, but that has changed. And Hillary faced a House of Representatives held by the other party. It still seems as though gridlock is ahead!

Furthermore, due to the “personal nature” of the campaign, neither candidate was able to put forward or debate, let alone build popular support behind…anything. I suppose a “wall” is an idea but its absurdity as an idea makes this point even more, but again if you listened to this Sunday’s “60 Minutes” show he backed off a bit and said that there could be a fence and maybe some walls.

So why is this an opportunity you ask? While federal mandates of past administrations will carryover no matter who takes office, it will take close to a miracle for more mandates to squeak out. This means we can become masters of the current federal minutia – which we’re well on our way to doing in healthcare – and rush the green-field where opportunity calls. While government sits still and bickers, we must raise well above the bars that federal government has inadvertently over-architected and/or set too low and remember this President and the House and Senate majority only has 2 years to make something positive happen or the majority will disappear in the next important election year and Mr. Trump will inherent a “Lame Duck” end to his term.

Mr. Bush further stated, “In my world (healthcare), innovation has been paralyzed by a six-year-long race to comply with mandates from Washington. As importantly, because they were mandates, all of the other companies in my space were working on the same things.  Competitive advantage – and the thousand incredible, esoteric inventions we might have produced to accomplish it – was neutralized. The same is true of health insurance companies who were mandated to sell the exact same set of benefits as one another. In fact, as I think about it, from energy to education to religion to sexuality, one giant voice in all of our communities has been our federal government. But aren’t we more interesting than that? More diverse? Is driving everyone by force to some centrally defined least common denominator really the best use of our collective energy? Aren’t we a nation capable of many right answers? Isn’t biodiversity – of economies and social orders as well as lakes and forests – essential to long-term survival? If so, this is our chance!

It’s just us now! It’s our states and cities, which will make the laws for a while. It’s our churches and community groups and businesses which get to have a chance to lead, to try things to shape society not by dint of force but by doing things so well that people will follow willingly. For our part, we at Athena health are going to take our post-federal energies to build a unified patient portal that works at every doctor office and hospital in the nation…even if it’s served by our competitors. We are going to help our clients follow patients and engage with them more easily and consistently than through old-school office visits. We are going to help them hire care managers that don’t have medical degrees, but can affordably be deployed to home and work. We will hack API level connections to companies like Uber and Pillpack so that these innovators can participate more fully in healthcare—whether it’s getting the chronically ill in for an appointment or ensuring that prescriptions are not just filled, but taken. Most of all, we will allow our product managers to come up with THEIR OWN IDEAS AND DO THEM. We are going to help our clients shoot for a spot on Apple’s “crazy ones” wall. “

The American Society of Plastic Surgery sent out a note pointing out that improving healthcare is about making better decisions as patients and care teams. It’s about expecting technology to delight us while improving our access to one another, to information and the results we desire. It’s about the best in healthcare doing well, and the worse ceasing to exist. It’s about knowledge sharing. It’s about being proud of what we spend on healthcare and how efficient we can be, not embarrassed by how much we spend or profiting through glut. It’s about volunteers donating their time in free clinics to serve the thousands of Americans who still fall through the cracks, or spending time with a wounded veteran dealing with PTSD. Fixing healthcare shouldn’t be a political issue, and it’s not something that’s going to happen because of the perfect government mandate, or the lack of one.

The outcome of the 2016 elections presents an opportunity for President-Elect Trump and a Republican Congress to break through the gridlock and advance legislative initiatives, especially in health care. While we can expect a period of transition to identify priorities, agendas and paths forward, we anticipate a very active 115th Congress as the Republicans work to pass legislation before the next election. The upcoming sessions may create an opportunity for the White House and Capitol Hill to take a fresh look at legislative prospects, reassess strategies, and broaden approaches to think outside the box. In particular, over the next two years we can expect to see major shifts in health policy, including numerous provisions in the Affordable Care Act being repealed or altered through regulatory actions, changes to MACRA, a new regulation to go into effect in January, and the elimination of red tape to allow for greater medical innovation.

Affordable Care Act (ACA)- Mr. Trump did not take a position on most health care issues during the campaign. Yet he was very clear in his commitment to repeal and replace Obamacare, citing higher premiums, less competition and fewer choices. As a candidate, Mr. Trump called for Congress to repeal Obamacare and:

  • Eliminate the individual mandate
  • Allow the sale of health insurance across state lines
  • Permit individuals to fully deduct health insurance premium payments the individual mandate
  • Allow individuals to use Health Savings Accounts (HSAs)
  • Require price transparency from all healthcare providers
  • Create block-grants to replace Medicaid expansion funding, and
  • Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products

We can also expect changes to Medicaid benefits and eligibility, the elimination of the Cadillac tax and the end of the employer mandate. It’s unlikely that the Affordable Care Act will be completely repealed. Democrats hold enough seats in the Senate to mount a filibuster, and the only detailed replacement proposals offered by Republicans would increase the number of uninsured Americans by at least 20 million and the federal budget deficit by tens of billions of dollars. Yet Republicans in the Senate can circumvent Democratic opposition by incorporating the repeal measures in the highly complex budget reconciliation process, which only requires 51 votes and cannot be filibustered. The Trump Administration will also have discretion to impact the law through the regulatory process and Executive orders. For instance, the Trump Administration can terminate the existing lawsuit that would end certain subsidies, which could lead to the collapse of the Obamacare insurance exchanges. A Trump Department of Health and Human Services (HHS) could also redirect the implementation of the ACA as the HHS Secretary was granted discretion on a host of key provisions.

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA)- MACRA, which transitions Medicare fee-for-service payment to value-driven and outcomes-based arrangements, was crafted in a bipartisan manner, through regular committee order, and passed with overwhelming support (392-37 in the House; 92-8 in the Senate). This effort is not expected to be repealed. However, there may be opportunities to improve the implementation of the law, which has been executed by the Obama Administration. ASPS has been very vocal in its opposition to MACRA and its concerns with the manner in which the law has been implemented by the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services.

A component of MACRA, rooted in the ACA, is the “meaningful use” of certified electronic health records (EHRs). Requirements for positive payment adjustments is linked to providers’ use of EHRS, and the requirements continue to increase annually. Interoperability would likely help decrease some of these burdens. While there has been a bipartisan push to achieve interoperability of these health information technology (IT) systems, Republicans have raised concerns with the current state of EHR usability and connectivity. The medical community has urged for the development and adoption of standards to enable bidirectional exchange of health information across disparate health IT systems, including clinical data registries (CDRs). Under this new Congress and Trump Administration, efforts to address these long-standing issues could move forward at a more rapid pace.

The FDA and 21st Century Cures-The Prescription Drug User Fee Act (PDUFA) VI, which provides the Food and Drug Administration (FDA) with the authority to impose user fees to fund agency activities, must be reauthorized by September 30, 2017. Since user fees account for about half of the FDA’s total budget, Congress will work to finalize this legislation by summer 2017 to meet the deadline. This legislation is expected to include the reauthorization of the user fees for medical devices, biosimilars, generic drugs, and others. It will likely also serve as a vehicle for other related initiatives, including provisions in the 21st Century Cures legislation and efforts to address drug pricing or other FDA-related initiatives.

This medical society as well as others have been  strong advocates of the 21st Century Cures package, which:

  • Impacts the collection of registry data
  • Creates a new category for covered durable medical equipment
  • Provides Medicare beneficiaries with immediate access to new FDA-approved medical devices not currently covered by Medicare
  • Relieves regulatory burdens that can inhibit access to innovative new products
  • Repeals the Sunshine Act requirements to report on medical textbooks, peer-reviewed journals, journal reprints and journal supplements

After months of negotiations over the funding of the National Institutes of Health, Congress intended to pass this package during the 2016 lame-duck session. However, there has been a recent swell of opposition for moving the bill before the next Congress so that provisions can be included that address the affordability of pharmaceutical products. Give the Republican majority, congressional leadership may choose to hold this bill until the 115th Congress.

Can President Trump actually repeal the Affordable Care Act?? Or more important will he want to repeal the ACA?

As I have mentioned many times before, in order to repeal the ACA the Republicans and others who dislike the ACA have to have an alternative to the ACA to do all that it accomplishes but improve on the failings of the ACA. Remember, the ACA now gives 21 million people health care coverage, which they didn’t have with the alternate system that we all had before the ACA.

Remember the importance of the ACA:

Laurel Raymond wrote that “six years after passing through the House and Senate without receiving a single Republican vote, the Affordable Care Act (popularly known as Obamacare) remains a hotly contested piece of legislation. But outside of the political arena, there’s much less debate.

A mountain of evidence confirms the law’s effectiveness — particularly in its primary goal of expanding health care coverage to some of America’s neediest populations. Several recent studies have confirmed that Obamacare is positively affecting Americans, particularly those who previously couldn’t obtain health insurance or who struggled to pay their medical bills.”

Here’s how Obamacare is making a real difference in Americans’ lives:

America’s most vulnerable now have health insurance- In the years since Obamacare passed, many of the largest gains in coverage rates have been in communities that have previously faced barriers to health care access — such as low-wage workers, immigrants, people of color, and people with pre-existing medical conditions.

Between 2013 and 2014, when the law went into full effect, every minority group saw large gains in coverage. According to an analysis by the New York Times. Now, 7.2 more Hispanics, 6.1 percent more Native Americans, 5.1 percent more blacks and 5.4 percent more Asians have health insurance.

Legal immigrants and naturalized citizens also saw large increases in coverage, as did groups that are more likely to be working low-wage jobs, such as high-school graduates and Americans living in non-traditional households, which can be a sign of economic distress.

Indeed, the law was so successful in lifting up undeserved populations that it stopped a decades-long expansion of the health-insurance gap between low-income and wealthier Americans.

And the people gaining coverage under the Affordable Care Act are among America’s sickest, according to a different report from Blue Cross and Blue Shield that analyzed the claims for 4.7 million Americans newly enrolled in insurance plans. New policyholders are more likely to have significant health problems, such as diabetes or HIV, which previously would have locked them out of coverage that they desperately needed.

“It’s no surprise that people who newly gained access to coverage under the Affordable Care Act needed health care. That’s why they were locked out of coverage before,” said Ben Wakana, a spokesman for the Department of Health and Human Services.

According to a report from the Urban Institute’s Health Policy Center, Americans who have new health insurance through Obamacare — either through its state-level insurance marketplaces or through its expansion of Medicaid — are better off than the uninsured and in many areas comparable to those with employer-sponsored insurance plans.

Low and moderate-income Americans with marketplace and Medicaid coverage are more likely than the uninsured to have a source of medical care and to have had a checkup in the past year. They are also less likely than the uninsured to report unmet health needs, such as visits to specialists they haven’t been able to make it to.

The research also found that in most cases, marketplace plans were comparable to the employer-sponsored plans that existed before health reform. People insured through Obamacare didn’t struggle more to find new doctors or get timely appointments compared to people insured through their employers. Those with Obamacare’s marketplace plans were also no more likely to report problems paying medical bills or having high out-of-pocket expenses, and were just as satisfied with their premiums.

Those with employer plans were, however, more likely to be satisfied with their choice of providers and their protection against high deductibles, likely because employer plans usually resemble the highest level of marketplace plan.

And while those with Medicaid did report more difficulty getting doctors appointments than those with other types of plans, all groups with insurance were significantly better off than the uninsured — and were likely to have both regular care and lower levels of unmet need due to costs.

Poor Americans are more financially secure- The law has also helped people pay down their bills and slash the amount of debt they carry, according to another paper from the National Bureau of Economic Research.

Americans who signed up for the Medicaid program under Obamacare’s expansion reduced their collection balances by $600 to $1000, according to the researchers. The report also shows that the people who benefited from Medicaid expansion then used that extra money to pay down other debts.

“Health insurance, like any type of insurance, is first and foremost a form of financial protection,” economist Robert Kaestner, one of the study’s authors, told The Washington Post. “It is a real benefit.”

According to federal data, medical bills count for more than half of Americans’ unpaid bills, which can drag down people’s credit scores and in the long run, cost them both money and opportunity. Reducing debt can thus have a ripple effect on financial well being for years into the future.

Of course, the effect of health reform varies widely across the country. The most marked improvements are evident in states that fully implemented Obamacare, including its expansion of Medicaid to cover more low-income people.

Nineteen states opted not to expand their Medicaid programs — even though the federal government would cover the majority of the cost — after a 2012 Supreme Court case made the expansion optional. States that fully implemented the health care reform law saw an increase in residents with health insurance at nearly double the rate of the GOP-controlled states that didn’t.

So, let’s explore, next week, how the new President Trump and the majority GOP can repeal the ACA and possibly keep the good parts of the health care system know as the ACA.

In the following weeks I will explore possible suggestions for a sustainable solution to the health care system. More to come.


Is This the Beginning of the End for Obamacare?-But They Have said That Before!!

14639586_1007358592727133_6613325480883028458_nMinnesota’s Democratic governor said Wednesday that the Affordable Care Act is “no longer affordable,” a stinging critique from a state leader who strongly embraced the law just a few years ago. Gov. Mark Dayton made the comments while addressing questions about Minnesota’s fragile health insurance market, where individual plans are facing double-digit increases after all insurers threatened to exit the market entirely in 2017.

They follow cost concerns and criticism nationwide, including President Bill Clinton saying last week that the law was “the craziest thing in the world” before he backtracked. “The reality is the Affordable Care Act is no longer affordable for increasing numbers of people,” Dayton said, calling on Congress to fix the law to address rising costs and market stability.

The Democrat-driven criticism has emboldened Republicans in Minnesota and nationwide to try to scrap President Barack Obama’s 2009 law. Clinton faced backlash for his comments during a Michigan rally for his wife last week, and he later clarified his support for the law and called for fixes to address gaps in coverage.

Few states embraced the health care law stronger than Minnesota under Dayton, where lawmakers created a state-run online market exchange for shoppers who aren’t covered by employers or public programs to buy individual coverage. When those policies first went on sale in 2013, Dayton and state officials proudly touted the lowest health insurance rates in the nation.

But after several years of steadily increasing premiums, top state regulators said this fall that Minnesota’s individual market is in “a state of emergency.” The state scrambled to stop all seven companies that sell insurance directly to consumers or through the state exchange, MNsure, from fleeing for 2017, but the state’s largest insurer is still exiting.

Health care insurance shoppers will see premium increases that range from 50 percent to 67 percent on their plans for next year.

Across the nation, insurers have sought double-digit premium increases while major companies — including Aetna and UnitedHealth — have pulled out of many state-based exchanges for 2017, after forecasting heavy financial losses. The Obama administration portrays the premium increases as a one-year market correction that can be absorbed or offset by larger financial help through tax credits.

Minnesota lawmakers are mulling potential fixes to get costs under control and ensure the individual market can survive. While Dayton said that’s worth considering, he said the bulk of the problem lies at the federal level. “It’s got some serious blemishes right now and serious deficiencies,” he said.

As I just mentioned, Bill Clinton criticized President Barack Obama’s signature policy reform Monday while on the stump for his wife, Democratic presidential nominee Hillary Clinton, calling Obamacare “the craziest thing in the world.” But he attempted to temper his criticism at a Tuesday rally. Speaking at a Democratic rally in Flint, Michigan, the former president ripped into the Affordable Care Act (ACA) for flooding the health care insurance market and causing premiums to rise for middle-class Americans who do not qualify for subsidies.

“So you’ve got this crazy system where all of a sudden 25 million more people have health care and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world,” Clinton said.

On Tuesday, he tried to clean up his criticism. “Look, the Affordable Health Care Act did a world of good, and the 50-something efforts to repeal it that the Republicans have staged were a terrible mistake,” Clinton said at a rally in Athens, Ohio. “We, for the first time in our history, at least are providing insurance to more than 90% of our people.”

“But there is a group of people — mostly small business owners and employees — who make just a little too much money to qualify for Medicaid expansion or for the tax incentives who can’t get affordable health insurance premiums in a lot of places. And the reason is they’re not in big pools,” Clinton said. “So they have no bargaining power.”

Republican presidential nominee Donald Trump said Tuesday he bet Clinton “went through hell last night” with his wife, then added: “Honestly, there have been many nights when he’s gone through hell with Hillary.” Bill Clinton, whose efforts with his wife to overhaul health care in the 1990s were stymied by a recalcitrant Congress and the insurance lobby, told the crowd the insurance model “doesn’t make sense” and “doesn’t work here.”

Touting his wife’s proposal to allow people without access to subsidies to buy into Medicare and Medicaid, he also acknowledged that market-based solutions would not solve the country’s problems with insurance costs and coverage.

“On the other hand, the current system works fine if you’re eligible for Medicaid, if you’re a lower-income working person; if you’re already on Medicare, or if you get enough subsidies on a modest income that you can afford your health care,” Clinton said. “But the people that are getting killed in this deal are small business people and individuals who make just a little too much to get any of these subsidies.”

Angel Urena, Clinton’s press secretary, defended the former president’s stance on Obamacare on Tuesday, saying he had consistently supported the legislation since it was enacted in 2010. “President Clinton spoke about the importance of the ACA and the good it has done to expand coverage for millions of Americans. And while he was slightly short-handed, it’s clear to everyone, including President Obama, that improvements are needed,” Urena said in a statement.

The White House said again Tuesday there were changes they would like to see made to the ACA. “President Obama has of course acknowledged that with cooperation from Democrats and Republicans in Congress, there are some things that could be done to further strengthen the law. That’s something that Sec. Clinton has vowed to pursue if she is elected President of the United States,” press secretary Josh Earnest said in a briefing. But he insisted Obamacare remains a top accomplishment of the president’s tenure.

“The Affordable Care Act continues to be a source of pride for people who work here in the administration in terms of that significant legislative accomplishment. That’s essentially our position,” Earnest said. “You’d have to talk to President Clinton about exactly what message he was trying to send.” When asked whether the former president went too far in his criticism against the ACA, Earnest responded he’s “not sure what argument (Clinton) was making.” And when asked if he wished Clinton hadn’t used “crazy” or “craziest” to describe Obamacare, Earnest said, “Of course.”

CNN’s Athena Jones, Kevin Liptak, Michelle Kosinski, Daniella Diaz and Allie Malloy contributed to this report.The Affordable Care Act, which you likely know better as Obamacare, should really come with a whiplash warning, because it’s been a roller coaster ride since it was fully implemented on Jan. 1, 2014. Some things went right, but many went wrong

On one hand, we recently found out from well-known pollster Gallup that the national rate of uninsured Americans is at a new eight-year low of 11%. In all fairness, Gallup and Healthways only began keeping track of the rate of uninsured Americans on a quarterly basis eight years ago, so there are no comparable records before Q1 2008. But since the individual mandate took effect, the rate of uninsured adults has dropped by 6.1%. Presumably, the fewer Americans that are uninsured, the more efficient the healthcare system should be, with medical costs spread over a greater number of people and Americans more likely to receive covered medical and preventive care when they need it.

But things haven’t always gone as planned. The Congressional Budget Office initially projected that Obamacare would have more than 20 million enrollees by 2016. As of the end of the 2016 calendar year enrollment period, there were “about 12.7 million” enrollees, per the Centers for Medicare and Medicaid Services. This massive shortfall in expected enrollees has left insurers, both national and regional, working with fewer enrolled patients, many of which have been shown to be costlier and sicker compared to consumers who are covered by employer-based health plans.

Making matters worse, many of the dynamics that insurers had been counting on (aside from higher enrollment totals) haven’t played out. For instance, in 2013 The Washington Post said that of the 7 million enrollees targeted in 2014, 2.7 million young adults would need to enroll to make Obamacare sustainable. Young adults are often healthier and less likely to seek medical care, meaning their premium payments can more than offset the higher costs of treating older and/or sicker members. Federally run Healthcare.gov did indeed enroll 2.7 million young adults in 2016, but there was a total of more than 9.6 million enrollees. In other words, far too few young people are enrolling, meaning the program is stuck with an older, sicker group of people.

The failure of the “risk corridor” has also been a disappointment. In simple terms, the risk corridor was a fund that profitable insurers on Obamacare’s exchanges were expected to pay into. This cash would then be distributed to struggling and/or new Obamacare plan insurers to help prevent excessive losses from mispriced premiums. In 2016, the risk corridor wound up being underfunded by more than $2 billion, leading more than half of Obamacare’s approved healthcare cooperatives to shut their doors.

But the biggest challenge may be yet to come

Does this action represent the beginning of the end for Obamacare?
UnitedHealth Group (NYSE:UNH), the nation’s largest health insurer and a representative insurer in about half of all Obamacare exchanges, has confirmed via its spokesperson Tyler Mason that it is indeed pulling out of Georgia and Arkansas in 2017.

For those who may not recall, late last year UnitedHealth CEO Stephen Hemsley didn’t mince words during an investor conference when describing how bad Obamacare had been for his company. Though he took some blame for rushing into a perceived opportunity to gain new members, Hemsley attributed the exorbitant losses tied to Obamacare plans to two factors: the ease with which consumers can switch plans on a year-to-year basis and higher medical utilization costs for members. More recently, UnitedHealth has implied that it suffered nearly $1 billion in cumulative Obamacare-related losses between 2015 and 2016. This gloomy forecast led Hemsley and his team to the conclusion that pulling out of Obamacare might be a genuinely smart solution.

But here’s the crux: If the largest health insurer in the country pulls out of Obamacare because it can’t turn a profit, then what sort of sustainable future does the program really have?

At the time of Hemsley’s comments, and the company’s subsequent fourth-quarter conference call, no determination had been made as to whether or not UnitedHealth would actually make good on its threat to pull out of some (or all) markets. However, UnitedHealth’s exit from Georgia and Arkansas, two states where the company was losing significant sums in its Obamacare plans, could mark the beginning of a complete exit from Obamacare’s exchanges.

Some say that the transparency of side-by-side comparisons offered by Obamacare exchanges is enough to drive down premiums, but I strongly believe that competition among insurers puts greater pressure on premium prices. If UnitedHealth goes through with a complete exit, and other insurers follow — Humana, for example, has threatened to exit Obamacare exchanges as well — there won’t be much to halt premium inflation in less competitive states. If this happens, the first “A” of the ACA, affordability, could be thrown out the window.

What’s next? 
Maybe the question we should really be asking is whether Obamacare can survive much beyond the 2016 presidential election. With two candidates remaining, only Democratic front-runner Hillary Clinton would leave Obamacare in place and build around it. The remaining candidate would prefer to repeal Obamacare and start anew. Thus the upcoming election will be very telling in terms of what happens to healthcare in this country.

Should Clinton become the 45th president, then our eyes as consumers and investors should be turned to Obamacare’s long-term future. If insurers can’t figure out a way to turn a profit, then big premium hikes may be in order, which in turn could drive consumers back to the sidelines. Conversely, if insurers grow weary of waiting things out, they may simply leave Obamacare’s exchanges altogether. If that happens, a lack of competition could drive premiums up as well.

The only near-certainty at the moment is that Obamacare’s long-term future looks as shaky as ever.

But what are the alternatives and what do we do with the 21 million people who receive healthcare coverage and subsidies under Obamacare after you repeal or try to change the system? Where do they fit in? This is one of the biggest problems that we face if we don’t support some type of public option or Medicare for All. Also, who pays for this set of programs and we know what happens when the government runs a health care program….Just look at the Veterans Administration and how broken this health care delivery system has been and still is. I’m frustrated that with Veterans’ day approaching we still can’t find a way to take care of those that have given and given up so much for our Country and yet we ignore there needs for good health care and more.

The Republican Party has no concrete answers except to repeal Obamacare. Trump and the other Republican politicians have no idea how to create or modify the healthcare system to “make it work.”

Stop the rhetoric I say and let’s get together and come up with solutions and not complaints and accusations. What a sorry state that we are in!

And how do we vote for with two horribly flawed candidates? Hold your nose and pick who you figure will do the least damage to our wonderful Country and to our healthcare system and also remember that one real concern is the 3 Supreme Court Judges that will be replaced in the next 4 year term. Scary!!


After Election Day, access to marijuana likely to reach all-time high across nation


Trevor Hughes wrote that California voters will decide Nov. 8 whether to legalize marijuana for recreational use. Many pot farmers have yearned for the legitimacy and respectability of legalization. But they also fear Proposition 64 could put them out of business. (Oct. 27) AP. Nearly 60 million Americans may wake up Nov. 9 to find voters in their states have abolished long-standing marijuana prohibitions, a three-fold expansion for legal cannabis across the country.

Another 24 million Americans could find themselves in states with newly legal medical marijuana use, a smaller but still significant expansion of legalized pot around the United States. Already, half of the states permit some form of medical marijuana use, and more than half of all Americans live in a state that has approved medical marijuana.

California, experts say, will likely play the most significant role in cannabis legalization on Nov. 8. Voters in our most populous state are widely expected to approve the “Adult Use of Marijuana Act,” adding nearly 40 million names to the list of people who live in a state with legal pot.

Lawmakers see marijuana taxes as a source of new revenue to close budget gaps, while entrepreneurs are considering the business case, with potentially billions of dollars in profits possible from this fast-growing Made-In-America industry.

Arizona, California, Maine, Massachusetts and Nevada are considering legalizing recreational marijuana. Voters in Arkansas, Florida, Montana and North Dakota are asking voters whether to permit medical use for certain conditions, like cancer or chronic pain. None of those votes will change the federal ban on marijuana use, although legalization advocates say it may further pressure Congress, the DEA and the FDA to act.

Four states — Colorado, Oregon, Washington and Alaska, plus the District of Columbia — have already legalized recreational marijuana. Another 25 permit medical use. But this election has the potential to dramatically shift the conversation because so many Americans live in the nine states where relaxation measures are being considered. If it were its own country, California alone would have the world’s sixth-largest economy, and what happens there almost inevitably spreads east.

Polls nationally show growing support for marijuana legalization. A poll released earlier this month by the Pew Research Center found 57% of adults think marijuana use should be legal, up from 53% last year and 32% in 2006. That despite the fact that marijuana remains a Schedule 1 controlled substance and is illegal at the federal level. A Gallup poll released Oct. 19 showed even stronger support: 60%, up from 58% last year and 50% in 2011.

“There’s been an enormous shift in public opinion on this issue, and I think that has directly led to why it is appearing on so many state’s (ballots) this year,” said John Kagia, executive vice president of industry analytics for New Frontier Data. “This is going to be an enormous industry, no matter how you slice it.”

Colorado was the first state to legalize recreational marijuana, with voters approving the measure in 2012 and sales launching in January 2014. That vote came after the country already had more than a decade of experience with medical marijuana, a deliberate strategy on the part of backers who say they started with medical marijuana first before seeking to broaden it. No state has yet legalized recreational marijuana via its legislature.

Critics say there’s insufficient evidence to back the health claims made by medical marijuana supporters. They worry widespread legalization opens the door to Big Tobacco-style companies interested in selling drugs to the public, especially kids, without regard for the public health consequences.

New Frontier, which doesn’t take a position on legalization, estimates the legal cannabis market could be worth more than $8 billion extra by 2020 if all the initiatives pass.

Still, and particularly in California, entrepreneurs are rushing to fund greenhouses, invest in growing and harvesting technology and create social media platforms to connect buyers with cannabis recommendations. Those investments are targeted at medical marijuana, which is already legal, but the rush shows how investors are positioning themselves for what’s widely considered a slam-dunk recreational legalization vote in California.

“People are beginning to understand that this isn’t just about not putting people in prison, but about making a lot of money,” said Jeffrey Zinsmeister, the executive vice president of the anti-legalization group Smart Approaches to Marijuana, which has funded opposition campaigns in several states.



Arizona-Prop. 205 would legalize adult recreational marijuana use, cultivation and sales, with a 15% sales tax to fund new state regulation, enforcement and education efforts. A recent Arizona Republic/Morrison/Cronkite News poll found 50% of registered voters favor legalization, 40% oppose it and 10% were undecided. The poll surveyed 784 registered voters between Aug. 17 and Aug. 31, with a margin of error of 3.4 percentage points.

Since that poll, however, voters have been bombarded with ads. Polling expert Mike O’Neil said he expects the “No on Prop 205″ ads will draw undecided voters to their side.

“At a very simplistic level, it’s ‘Drugs are bad’ against ‘Gee, we’re overkill with respect to marijuana,’ ” O’Neil said. “Anytime you’re proposing something new, it’s easy to scare people, and when in doubt … (people) just vote no.”

California –The California plan, known as the Adult Use of Marijuana Act, allows residents to grow up to six plants at home and gives municipalities the power to allow or ban outdoor grows and marijuana stores. It requires commercial growers to comply with environmental regulations — many illegal growers today ignore laws governing water, pesticide and fertilizer use — and gives existing medical-marijuana providers a head start in getting business licenses.

The measure also maintains existing prohibitions on youth use and driving while high. Critics worry it will open up television advertising to marijuana companies and goes too far in permitting people previously convicted of violent drug offenses to join the industry. Medical marijuana is widely available in California, and a large portion of the economies of Humboldt County and the far northern portions of California are heavily dependent on illegal growing.

“AUMA is not the best initiative, but it’s way better than the status quo,” said Lanny Swerdlow, a registered nurse and director of the Palm Springs-based Marijuana Anti-Prohibition Project. “It’s a template, something to build on.” Polls show it’s likely to pass.

Maine-The ballot measure expands the state’s well-regarded medical marijuana program to recreational use, but it also permits the creation of “marijuana social clubs,” where people would be able to consume marijuana. Critics worry that might increase the amount of impaired driving, in the way that bars can lead to more drunken drivers on the road.

There’s also concern that the measure requires marijuana-focused publications to be sold from behind store counters, a proposal that was struck down as unconstitutional in Colorado. Gov. Paul LePage signed Maine’s medical marijuana law in 2011, but he opposes this recreational legalization effort.

Massachusetts-Most of the state’s political establishment opposes the measure to legalize recreational marijuana, with former governor Bill Weld one notable exception. Weld, a Republican, is running on the Libertarian presidential ticket with Gary Johnson.

Current Gov. Charlie Baker argues legalizing marijuana in the Bay State could increase youth use and distract regulators and public health officials wrestling with an epidemic of opioid abuse and overdoses. Despite that top-level opposition, voters appear poised to approve the measure: Fifty-five percent of likely voters now say they favor legalization for recreation, WBUR radio reported. That poll found that half the people surveyed had tried marijuana at some point in their lives.

Nevada –A year after its medical-marijuana program launched, Nevada’s voters are now considering whether to legalize recreational growing and use. Nevada’s program would be open to anyone visiting the state, and supporters say the tourist-heavy market could be worth $390 million, with up to $1.1 billion in economic impact.

Medical dispensaries would be granted an 18-month monopoly on recreational sales, and alcohol distributors would also have an 18-month monopoly on distribution. Home growing would be banned anywhere within 25 miles of a licensed dispensary, which could make home cultivation illegal for up to 90% of the state. The latest polling showed more than 55% of people approved of the measure.

Critics complain that the ballot measure was largely written and funded by those who stand to benefit the most from legalization.

“What we have in Nevada are people who are offering this initiative are exactly analogous to somebody from Phillip Morris writing the tobacco laws for the state of Nevada,” said Jim Hartman, the president of Nevadans for Responsible Drug Policy.


Arkansas-Arkansas voters in 2012 nearly legalized medical marijuana, rejecting the measure 51% to 49%, and this year they’re considering two competing measures, both of which are opposed by the state’s Republican-dominated political establishment. As in many states, Arkansas voters who are personally familiar with medical marijuana use are more likely to support legalization, especially if they have experience with people who have struggled with opioid use or abuse.

Medical marijuana advocates say cannabis is a safer alternative to potentially deadly and physically addictive prescription drugs like OxyContin.

“I have a cousin who suffers from Lupus,” said Deb Sanders, a grandmother from Mountain Home who supports legalization. “She smoked some marijuana. She said she could not believe how much better she felt … She’s been able to get off some of her synthetic medications.”

Florida-Florida’s proposed Amendment 2 would allow patients to obtain marijuana if they have “debilitating” illnesses, such as cancer, HIV, post-traumatic stress disorder, Parkinson’s disease and epilepsy. Under existing state law, only patients with certain medical conditions that benefit from non-euphoric strains of cannabis and patients with irreversible “terminal” illness may access the drug through state-approved doctors and growers.

A proposal in 2014 to broadly legalize medical marijuana won nearly 58% of the vote but fell short of the required 60% needed for adoption. Polls indicate the measure may have enough support this time around.

“Most of the polls, in most of the states, most of the time, show more people in favor than against, but in none of the states are the margins so significant that we feel comfortable,” said Ethan Nadelmann, the executive director of the Drug Policy Alliance, an advocacy group backing marijuana legalization throughout the country. “And there’s opposition money that’s starting to emerge.”

Florida attorney John Morgan has kicked in about $3 million in support of Amendment 2 this year. Las Vegas casino mogul Sheldon Adelson spent $5.5 million to oppose medical marijuana two years ago and has, so far, contributed $1.5 million to oppose the 2016 effort.

Montana-This may be the second time voters here approve a medical marijuana plan. They approved one in 2004, but lawmakers in 2011 repealed it and replaced it with a far more restrictive system — a move that was upheld by the Montana Supreme Court earlier this year.

Now, Initiative 183 aims to restore much of the original system, including allowing providers to hire employees to cultivate, dispense and transport medical marijuana. The initiative also repeals the requirement that physicians who provide certifications for 25 or more patients annually be referred to the board of medical examiners, and bars law enforcement from making unannounced inspections of medical marijuana facilities.

North Dakota –North Dakotans are considering permitting medical marijuana for certain conditions, such as cancer or PTSD. Acknowledging the state’s rural nature, patients who live more than 40 miles from a “compassionate care center” would be allowed to grow up to eight plants as long as they notified local law enforcement in advance.


So why is this such a big deal. We all should have watched 60 Minutes where a pediatric physician outlined the real problems with mothers smoking or partaking in pot/ marijuana and how long it stays in our body and especially our brain.

Consider a paper that my own college student daughter wrote about at the University of South Carolina during her freshman year and the following article-the author must have read my daughter’s paper. It is about the Difficulty Of Enforcing Laws Against Driving While High.

The story depicted in this article starts with a stay-at-home-mom from the Denver suburbs. Her name is Abby McLean. She’s 30 and lives in Northglenn, Colo. She was driving home from a late dinner with a friend two years ago when she came upon a DUI roadside checkpoint.

“I hadn’t drank or smoked anything, so I was like, ‘Let’s go through the checkpoint,’ ” she recalls.

McLean is a regular marijuana user but she insists she never drives while high.

Still, the cop at the checkpoint tells her he smells marijuana and that her eyes are bloodshot. Eventually he whips out handcuffs and McClean freaks.

“Like, massive panic attack. And, ‘Oh, my God, I have babies at home. I need to get home. I can’t go to jail!’ ”

She didn’t go to jail that night, but she got home hours late. A blood test later revealed McClean had 5 times the legal limit of THC, the mind-altering compound in marijuana.

Colorado’s marijuana DUI law is modeled on the one for alcohol, which sets a number to determine when someone is too intoxicated to drive. For pot, that number is five nanograms of THC per milliliter of blood. Anything above that and the law says you shouldn’t be driving.

It may sound like an open and shut case that could have resulted in any number of penalties. But McLean’s attorney, Nadav Aschner, had a field day in court with Colorado’s marijuana intoxication limit. “Even the state’s experts will say that number alone is something, but generally not enough, and we really hammered that home,” he says.

Aschner got a hung jury and McLean pleaded to a lesser offense. Still, McLean’s trip through the criminal justice system is emblematic of numbers that suggest a sharp increase in marijuana DUI arrests in Colorado. So far this year, State Patrol data show that total DUI citations this year rose to 398 through early July, compared with 316 in for the same period 2015.

More states may come up with their own marijuana DUI guidelines. Voters in five states from California to Maine are deciding this November whether to legalize recreational marijuana. They’re weighing the good, the bad and the still unknown. Issues like driving while stoned are still in the “unknown” category.

It turns out, measuring a person’s THC is actually a poor indicator of intoxication. Unlike alcohol, THC gets stored in your fat cells, and isn’t water-soluble like alcohol, says Thomas Marcotte, co-director of The Center for Medicinal Cannabis Research at the University of California, San Diego.

“Unlike alcohol, which has a generally linear relationship between the amount of alcohol you consume, your breath alcohol content and driving performance, the THC route of metabolism is very different,” he explains.

That’s why adapting drunk driving laws to marijuana makes for bad policy, says Mark Kleiman, a professor of public policy at New York University. “You can be positive for THC a week after the last time you used cannabis,” he says. “Not subjectively impaired at all, not impaired at all by any objective measure, but still positive.”

Still, Colorado and five other states have such laws on the books because pretty much everyone agrees that driving stoned can be dangerous, especially when combined with alcohol.

What cops really need is a simple roadside sobriety test. Scientists at UCSD are among researchers working on several apps that could measure how impaired one is behind the wheel. One has a person follow a square moving around a tablet screen with a finger, which measures something called “critical tracking.” Another app measures time distortion, because things can slow way down when a person is high. Those tests are still experimental.

Denver District Attorney Mitch Morrissey says the uncertainty doesn’t mean Colorado should throw out its THC limit. He says it may not be perfect, but it gives juries another piece of evidence to consider at trial. “I think that putting in a nanogram level makes sense,” says Morrissey. “I can’t tell you what level it should be. I don’t think Colorado’s is right. I don’t think it should be as high as it is. I think it should be lower.”

Morrissey remembers trying alcohol DUI cases as a young prosecutor. The science wasn’t settled then either, the blood alcohol standard was about twice as high as it is now, and it took years for it to be lowered. “I think that has to do with better testing better technology,” which Morrissey says will get improve for marijuana too.

In the meantime, some regular marijuana users, like Abby McLean, are scared to drive for fear of failed blood tests. “I haven’t gone out really since then, because I’m paranoid to run into the same surprise, ‘Oh oh, there’s a DUI checkpoint.’ ” A checkpoint that could mean potentially thousands more dollars in attorneys fees to defend herself.

The real issue is the safety issue. The date shows that THC in infants, children and teens impair brain development. Those that support legalizing recreational marijuana use point to the fact that its use is not any more dangerous that alcohol use. However, the active ingredient, THC, in marijuana is stored in the body for days or weeks in fat cells and the brain. Their effects seen far after alcohol is eliminated fro our bodies.

We need more data as the Governor of Colorado pointed out in the “60 minute” piece.

Good advice before it is federally legalized or before the cat is out of the bag.

Happy Halloween!!


The Obamacare problem that Democrats don’t want to talk about and Republicans don’t know how to talk about!

14702444_1001294410000218_7240752846434689031_nBill Clinton criticized President Barack Obama’s signature policy reform a few Mondays ago while on the stump for his wife, Democratic presidential nominee Hillary Clinton, calling Obamacare “the craziest thing in the world.” But he attempted to temper his criticism the next day at a Tuesday rally.

Speaking at a Democratic rally in Flint, Michigan, the former president ripped into the Affordable Care Act (ACA) for flooding the health care insurance market and causing premiums to rise for middle-class Americans who do not qualify for subsidies.

“So you’ve got this crazy system where all of a sudden 25 million more people have health care and then the people who are out there busting it, sometimes 60 hours a week, wind up with their premiums doubled and their coverage cut in half. It’s the craziest thing in the world,” Clinton said.

On Tuesday, he tried to clean up his criticism. “Look, the Affordable Health Care Act did a world of good, and the 50-something efforts to repeal it that the Republicans have staged were a terrible mistake,” Clinton said at a rally in Athens, Ohio. “We, for the first time in our history, at least are providing insurance to more than 90% of our people.”

“But there is a group of people — mostly small business owners and employees — who make just a little too much money to qualify for Medicaid expansion or for the tax incentives who can’t get affordable health insurance premiums in a lot of places. And the reason is they’re not in big pools,” Clinton said. “So they have no bargaining power.”

Sarah Kliff wrote that Bill Clinton’s very specific critique of Obamacare a few week s ago is one that most Democrats won’t. discuss. “The people that are getting killed in this deal are … individuals who make just a little too much to get any of these subsidies,” Clinton said while campaigning in Flint, Michigan. “People are out there busting it [and] wind up with their premiums doubled and their coverage cut in half.” This was not just some off-the-cuff riff. Clinton was addressing a serious problem with Obamacare. It’s one that people like Julianna Pieknik know all too well.

Pieknik is a 37-year-old PhD student in Maryland, who shares a house with four roommates. She earns $42,000, which is just slightly too much to qualify for tax credits where she lives. This year, she paid a $250 premium for a plan with no deductible. Next year, to keep same level of coverage, she needs to pay $450 — and she doesn’t think she can afford that.

So right now she’s facing a choice: Pay a lot more money, or scale back her level of coverage. “I am still in panic mode,” Pieknik says. “I haven’t decided whether to switch to an ultra-risky plan and hope for the best.”

The Obama administration often describes unsubsidized enrollees like Pieknik as a relatively small part of the individual market. Health and Human Services Secretary Sylvia Mathews Burwell recently told reporters that in the marketplace, “85 percent of folks receive subsidies.”

This is true, but it also leaves out something important: that there are millions of people buying their own coverage outside of the marketplace. And none of them receive subsidies. So they don’t have any financial cushion to protect against the larger premium increases most observers expect to see in 2017.

“They are the red-haired stepchildren of American health reform,” says Kevin Coleman, head of research and data at HealthPocket. “They don’t have strong sympathy within the government and have typically been ignored.”

We don’t know exactly how many people buy unsubsidized coverage off the marketplaces — estimates range from about 7 million to 12 million — but we do know it’s a large group that, when open enrollment begins in a few years, is likely to face bigger premium increases than ever before.

He pointed out that millions of Americans don’t get subsidized coverage through Obamacare Much of Clinton’s remarks centered on a very specific group of Americans: those who are uninsured and earn too much money to qualify for subsidized coverage — and who are exposed to double-digit premium increases.

“The people that are getting killed in this deal are small-business people and individuals who make just a little too much to get any of these subsidies,” Clinton remarked in Flint.

A bit of background is helpful here. The Affordable Care Act provides subsidies to purchase health insurance to people who earn less than 400 percent of the poverty line — $47,520 for an individual or $97,200 for a family of four.

These subsidies limit how much an individual has to pay for coverage. For example, someone earning $47,000 won’t have to spend more than 9.6 percent of her income on midlevel coverage. The government will kick in subsidies to cover the rest.


(The reason that Pieknik, who earns $42,000, does not qualify for subsidies is that a midlevel plan where she lives only costs 8.6 percent of her income. So the government considers her under the affordability threshold and doesn’t provide a subsidy. But committing 8.6 percent of income to premiums, as Pieknik has found, can still be a pretty big strain on a budget.)

There are many people who earn too much to qualify for subsidies, and they don’t have any sort of protection against high premiums.

This is becoming especially important this year, with premiums expected to rise, on average, by 9 percent — significantly higher than prior years. Last year, for example, the average increase was just 2 percent. And many increases are much higher. If an insurance plan jacks up rates by 25 percent (the average in Connecticut this year) or 62 percent (Blue Cross Blue Shield’s approved increase in Tennessee) — as many are this year, after losing money on the marketplaces — then a person who doesn’t qualify for subsidies will have to pay that full increase.

How bad is the problem? Nobody really knows.

We have really great data on who has health insurance through the marketplaces because those are government-run entities that keep track of each and every sign-up. So the government knows, for example, that 8.5 million people bought coverage through the Healthcare.gov marketplace in 2016 — and 7.1 million of those people got a subsidy.

But finding data on people who sign up outside of the marketplace is actually pretty tough. These people don’t go through one central clearinghouse to buy plans. Instead, they might be going to a local insurance broker’s office or signing up through an individual insurance plan’s website. So the best we have is a handful of estimates on how big this market is. The Obama administration thinks there are 6.9 million people buying coverage off the marketplace. It thinks 2.5 million of those people would be eligible for subsidies if they switched to the marketplace.


Charles Gaba of ACA Signups estimates it to be 9.1 million. And a survey of Blue Cross Blue Shield plans — which dominate the Obamacare marketplaces — shows that about half of the enrollees aren’t subsidized. Among those on the marketplace, only 17 percent did not receive a subsidy in 2016. But when you include all these people estimated to be buying outside the marketplace, that figure jumps to 31 percent, according to a report from the consulting firm McKinsey.

The premiums off marketplace can be expensive, particularly for those who earn just a little too much to qualify for any subsidies. But expensive, some enrollees argue, is better than not having any coverage at all.

Rebecca Barston, a 39-year-old consultant in Washington, DC, says her unsubsidized premium is “probably my second biggest cost after housing.” She pays $420 per month for her plan, and that’s a big line in her budget. And she’s a bit worried about how that rate might change next year. But $420 doesn’t seem that expensive to Barston — because when she shopped for insurance before the health care law, in 2008, insurance plans wanted to charge her premiums over $1,000 due to a preexisting condition. “It’s a concern, that my rate will be going up,” Barston says. “But at least I know it won’t be going up to $1,000.”

The subsidized Obamacare population is guaranteed affordable premiums. But that’s not the case in the unsubsidized market, which means the unsubsidized market creates winners and losers. It’s true that there are more people buying coverage outside the marketplace than we usually acknowledge — and that their premiums are higher than the people in the subsidized markets. But whether that feels affordable can hinge a lot on what the marketplace looked like before Obamacare launched — and that will vary a lot from person to person.

For some, like Pieknik, it’s creating tough decisions. Pieknik doesn’t use much health care — she estimates that she goes to the doctor about three times a year or so — but she prefers buying the protection against a catastrophe. This year, she might not get that option. “It only takes one thing to happen to you, unless you have decent coverage, to go thousands of dollars in debt,” Pieknik says. “It’s hard to think how I would come up with that money, if my coverage weren’t as good and something did happen.”

Look at Kate Ashford’s review of Out-Of-Pocket Hospital costs-up 37% in the study that she reviewed. She stated that if you think you’re spending more on healthcare costs, you’re right. And if you’ve been hospitalized in the past few years, you’ve definitely felt the burn. The average patient with private health insurance paid more than $1,000 in out-of-pocket costs for an inpatient hospitalization in 2013, according to research from the University of Michigan. That’s a rise of 37% since 2009—from $738 to $1,013. Most of this increase was due to a jump in the amount applied to deductibles, which rose 86% from 2009 to 2013, and secondly by increases in coinsurance, which went up by 33% in the same period.

“There’s not a lot out there about how much people with private insurance are spending on hospitalizations or out of pocket generally,” says Emily Adrion, a research fellow at the University of Michigan and lead author of the study. “It was really a black box. We didn’t have any idea whether it would be really high or really low.”

As it turned out, it was really high. “We were really surprised,” Adrion says. “It was pretty surprising that it was that much higher and that it was also higher than premium growth.” Premiums, according to a recent Kaiser Family Foundation survey, rose by about 4% in the previous year, while this study’s findings point to a 6.5% annual increase in out-of-pocket costs.

“There definitely seem to be more high-deductible plans available,” Adrion says. “Whether that’s what’s driving this or whether there’s a general trend toward greater percentages of coinsurance and patients being responsible for more coinsurance, it’s hard to say.”

Since 2010, deductibles have risen a whopping 67% for employer-sponsored health plans, according to the Kaiser Family Foundation. And more people are enrolled in high-deductible health plans—24% of all workers 2015, compared to 8% in 2009. The deductible is the amount a consumer must pay out of pocket before an insurance company will start covering anything. One issue may be that despite the rise in high-deductible plans, consumers focus on a health insurance plan’s premium without understanding what other costs they may be responsible for.

“Patient education is a huge issue,” Adrion says. She pointed to a 2013 study that found that only 14% of people surveyed understood the concepts of coinsurance, copayments, deductibles and maximum out-of-pocket costs. “People don’t have a good understanding of different forms of coinsurance and what they’ll owe.”

Another survey found that 51% of U.S. adults couldn’t accurately identify at least one of the following terms: premium, deductible or copay. One in eight didn’t realize a deductible is the money a consumer owes before an insurance company will start making payments.

This is particularly frightening at a time when a recent Federal Reserve report found that 46% of Americans would struggle to meet an emergency expense of $400. The University of Michigan’s study analyzed medical claims for 7.3 million hospitalizations using 2009-2013 data from Aetna, UnitedHealthcare and Humana insurance companies.

These last studies are a few years old but the recent data supports the same analysis, concerns, and conclusions. And the other part of the problem or equation is that due to the cost of care, huge deductibles and the large outlay of personal funds for their care we are finding more and more patients delaying their diagnoses and therefore care. Sometimes this leads to even larger cost to the patient, now including expensive chemo or immunotherapy, where if the patients were seen at an earlier stage of disease health care would be less costly and there would be a higher success rate of treatment and cure.

There must be a better system where we can actually care for our patients and improve long-term survival and the quality of care that we give to each and every patient, present and in future.

Colleges Open Food Pantries To Address Campus Hunger and Community Food Banks Address Community Needs



14657323_990803671049292_5706119886531990609_nAfter listening to the continual media garbage in this horrid election campaign I thought that I would post something “nice.” I predict that the campaign will only get worse and that the mud will fly fast and furiously. It has become one of the worst and dirtiest on both sides from both parties. I hope that we all can recover.

But now about the good in the world, at $68,000 per year, George Washington University in Washington, D.C., is one of the most expensive schools in the country, and yet some students — most of whom receive financial aid — still don’t have enough to eat every week.

William Atkins/Courtesy of The George Washington University

The university, bolstered by a national survey by the College and University Food Bank Alliance, discovered that nearly half of its student population matched the national rate of 48 percent of respondents who experienced food insecurity.

So the school opened a food pantry for students, joining over 300 other schools across the nation that have done the same.

College meal plans vary throughout the country, from traditional dining hall settings to a la carte combinations. And some plans focus on options all around the city, says Tim Miller, associate dean of students at George Washington, which is embedded in a well-to-do neighborhood of the nation’s capital.

“The population at GW does a lot in the city,” Miller says. “They intern a great deal. So we have a plan that allows students to meet that need.” He adds that many of the university’s students also cook for themselves.

The school’s food pantry is unmarked. Students fill out forms that list their email addresses and student ID numbers, but they do not have to give their names or discuss their finances.

“One of the things that we learned from talking to all the other universities that we spoke to this summer was one of the concerns for students is anonymity around this and being able to feel like they can use us without having any judgment,” Miller says.

He describes one student who walked in terrified of not knowing what the pantry would be like and was overjoyed and brought to tears when she saw it was like a grocery store.

“She felt like she could go to every shelf and take what she most needed versus being directed you have to take this, this and this. But the fact that there’s an empowering part of this is really something we’ve heard a lot about from the students who’ve used it so far,” he says.

And students are using it. In September, the university did a soft-launch of the food pantry, without any advertising, and 21 students signed up immediately. Now, 147 students are enrolled in the program.

“We have gotten amazing notes back from students about how this has been a blessing to them and how this really has helped them focus on what they thought they could be able to do here,” says Miller.

Because of George Washington University’s sticker price, Miller says it’s important to listen to students.

“We want to have faith in our students that if they say they need this, that they do and trust them to take what they need,” he says, adding that the school has focused a lot on affordability and tries to do everything possible, including partnering with other organizations, to provide support.

But the growing number of food pantries on college campuses may well be taken as yet another sign that a college education in general is just too expensive.

Miller says the idea is a positive response to a really challenging situation, but it’s not the ultimate solution.

“I think we have to look at, how do we help our students afford it? And how do we manage the cost of higher education for all students? We’re also looking for what that final solution is.”

And yet another wonderful positive thing done for a community- Laura Benshoff is a reporter with member station WHYY wrote that for 12 years, Chester, Pa., had no supermarket. In an effort to end this so-called food desert, a local food bank plunked down a nonprofit grocery store in the impoverished Delaware County city in October 2013.

Area food bank Philabundance opened the new store, called Fare & Square, in the same footprint as a former supermarket at the corner of Trainer and 9th streets.

When it opened, the store was touted as a philanthropic venture and a boon to Chester, a city of about 34,000. A third of the population lives below the poverty level.

After raising $7 million in startup funds through grants, donations and loans, Fare & Square launched with a two-pronged mission: become a sustainable business and make people in Chester healthier.

But when Fare & Square first opened its doors, a lot of the stock wasn’t winning over customers.

“Watercress lettuce — that didn’t sell too well. Leeks — that didn’t go too well. Rutabagas, parsnips — that didn’t go over well,” says produce manager Nate Sumpter, a self-proclaimed carnivore.

On first glance, Fare & Square is intentionally laid out like an upscale grocery store, with produce front and center.

“Our model is, we want to have all kinds of healthy stuff, so when people walk in they’re like, ‘Wow, what’s all this?’ ” says operations manager Mike Basher.

But the store also wants people to see what they’re used to seeing in grocers — and that includes processed and junk food. TastyKake displays line the checkout aisles. Cases of soda lurk below eye level, behind displays of fruits and vegetables.

The supermarket business is notoriously tough: razor-thin margins on a product that can quite literally rot on the shelves if it doesn’t sell. Big chains rely on high volume to get the lowest prices on what they sell, and the returns from a successful store may prop up new or underperforming locations. A one-off grocer has neither advantage.

Those chains also average profit margins of only 1 or 2 percent and generally take three to five years to get back into the black.

To get and keep customers, Basher and his crew started tinkering with what they carried. They cleared products that weren’t selling from the shelves and replaced them with goods customers asked for, like Caribbean and Latin American food.

On a recent visit, a lot of people in Fare & Square’s checkout line were buying packaged foods and fresh foods together. Sales have grown year over year, but Fare & Square needs to take in 20 percent more to break even. For now, it it is subsidized by Philabundance.

Making money presents one challenge. Changing people’s eating habits is another tall order.

Fare & Square has been experimenting with incentives to get customers to spend more of their food dollars on healthful and fresh food by lowering the cost of things like produce.

Customers who self-declare as living on less than 200 percent of the poverty level receive 7 percent back on all of their all purchases through a program called Carrot Cash — but they get back more for each dollar they spend on fruits and vegetables.

Anne Palmer, a food researcher at Johns Hopkins University, says research into food deserts shows that just because more healthful food is on shelves doesn’t guarantee customers will buy it.

“If you’re on a budget, you’re not purchasing food with the intent of improving your health. You’re purchasing food to satisfy hunger,” she says. “You make choices you can afford on things you know your family will eat.”

Food that is unfamiliar or difficult to make therefore constitutes a risk: If your family doesn’t eat it, that’s money down the drain. At the same time, restricting what people can buy to only healthful food is unrealistic, says Palmer.

“We have to recognize everybody wants a wide range of foods. … [Packaged goods] might be what it takes to bring people in, recognizing that if you don’t do that, they’re going to go somewhere for that food,” she says.

The relationship between incentives like Carrot Cash and more healthful eating hasn’t been studied long enough to determine whether there is a link, according to Palmer. Researchers at Swarthmore College did conduct a field study at Fare & Square, pending publication, that showed giving customers a coupon for produce led them to spend more total food dollars on fresh food, whereas receiving a coupon for any food in the store did not.

Employees at Fare & Square say one of the company’s goals for the next year is to use more of its customer-level data to learn more about how promotions and incentives affect healthy eating habits.

No matter what they’re buying, people shopping in the store say they are grateful to have an affordable option in Chester.

When asked how often they shop at Fare & Square, Chris and Kyisha Smith, a young married couple perusing the meat case, answer in unison: “Every week.”

“They got everything, chicken, steak. … They the best though, I ain’t even gonna lie to you,” says Chris Smith.

In recent years, Chester has seen both a deep-discount grocer and a members-only food co-op come and go. The folks behind Fare & Square hope they’ve found a sweet spot that is viable, somewhere in the middle.

Aren’t thee positive strategies refreshing and a change for the better? Wouldn’t it be nice if more programs like these could provide additional services?

But maybe we should be concerned regarding why services such as these are needed and what are the real solutions?

Then back to what is scaring me most, do either of our candidates running for the highest office in our country have solutions for what really ails our country and are their solutions sustainable and effective?