Senate Tax Bill to Dump Individual Mandate; And What about the Democrats Strategies?

 

 

23559664_1362631910533131_2834022948667323405_nIt seems that the GOP continues their promise to repeal and replace the Affordable Care Act. As Shannon Firth reports, the Senate Republicans introduced a new version of their tax bill that would eliminate the Affordable Care Act’s (ACA) penalty for not enrolling in qualified health plans. They want to sneak it in and to what end?

The Congressional Budget Office (CBO) estimated last week that repealing the individual mandate would raise the number of insured Americans by 4 million by 2019, and by 13 million in 2027 — but also reduce the deficit by $338 billion.

That was a small boon to Republican leaders whose tax bill would otherwise balloon the deficit by $1.5 trillion from 2018-2027. The CBO report estimated that payments to so-called Disproportionate Share Hospitals costs would rise by more than $40 billion.

Robert “Bob”Laszweski, president of Health Policy and Strategy Associates, in a recent blog post wrote that “killing the mandate while simultaneously opening up the market to cheaper stripped-down alternatives would combine to create unintended consequences the Republicans haven’t appeared to comprehend.” He was referring to President Trump’s recent moves to allow partial-coverage health plans with low premiums but that leave enrollees on the hook for potentially huge bills. And this is my main objection, that the health care insurance premiums for those who purchase policies will go up as well as the deductibles. There is no control of the insurance companies who must make up the difference to maximize their profits.

Laszewski said these two factors would create a bifurcated market with a “very expensive Obamacare compliant risk pool” and another “very cheap ‘short-term’ policy risk pool” for healthy people. “In other words, this scheme works much better than what we have today — until you get sick,” and he noted that everyone at some point does get sick. “A health insurance system that works only while you are healthy is not a health insurance system,” he concluded.

The mandate — really more of an incentive, as the penalty is considerably lower than the cost of insurance — was meant to incentivize healthier individuals to buy policies, which would help smooth out risk pools and keep premiums reasonable for the less-healthy.

The numbers are very Cloudy. In fact, David Howard, Ph.D., of Emory University in Atlanta, said everyone he’s spoken with and everything he’s read suggests that the fiscal impact of scrapping the mandate has been overestimated. He called the $338 billion in estimated deficit reduction “fictitious.”

The projected reduction seems “way too high,” echoed Jost. “The people who are going to drop coverage are going to be predominately those who aren’t subsidized,” he said, meaning the government doesn’t save if they become uninsured.

It doesn’t make sense that people who are “heavily subsidized” would drop their insurance, noted Gail Wilensky, PhD, who served as administrator of what is now the Centers for Medicare & Medicaid Services under President George H.W. Bush, who was skeptical of the coverage numbers, calling them “a little excessive.”

Joe Antos Ph.D., of the American Enterprise Institute, speculated that because the CBO numbers were released “relatively quickly” the office likely ignored an important factor in its calculation: how individual states and insurers resolved the issue of not receiving the cost-sharing reduction (CSR) payments.

These are subsidies the government paid to the insurance companies to help them defray out-of-pocket expenses, such as co-pays for low-income beneficiaries, which President Trump withdrew in mid-October. “To sort all that out would have taken more time,” he said. But what bothers Antos most is senators’ reliance on the numbers. “CBO is advisory and they are working in the dark like everybody else,” he said.

Provider Groups Weigh in and we find that among the six provider groups— the American Academy of Family Physicians, the American Academy of Pediatrics, the American College of Physicians, the American Congress of Obstetricians and Gynecologists, the American Osteopathic Association, and the American Psychiatric Association—issued a joint statement opposing repeal of the mandate on the grounds that it would “increase premiums and destabilize the individual and small group markets.”

“Health care coverage is the gateway to prevention and wellness and a guardrail in the event of a major health event,” the provider groups wrote, adding that the current system has driven down healthcare-related bankruptcies and protected those with pre-existing conditions.

“Our health care system needs improvements, and our organizations stand ready to work with the Senate to identify bipartisan and impactful reforms that will ensure a robust and competitive healthcare market,” the statement said. “However, according to the Congressional Budget Office, repeal of the individual mandate in this form, absent additional reforms that would stabilize the insurance market, has the potential to raise health insurance premiums by a projected 20% and increase the number of uninsured Americans.”

Darrell Kirch, MD, president of the Association of American Medical Colleges, said the group was “deeply disappointed” that the tax package could repeal the individual mandate, threatening hospital finances as well as people’s access to care.

“The nation’s medical schools and teaching hospitals know first-hand that patients without insurance are more likely to forgo preventive care, leading to potentially more complex and costlier treatment when they do eventually seek out care,” Kirch said in a press statement.

“America’s teaching hospitals will continue to provide care for all Americans, regardless of their level of coverage. However, increasing the numbers of uninsured patients without corresponding support for the safety net will threaten both urban and rural providers, creating a ripple effect on regional healthcare networks.”

The question is can it Pass? It’s unclear how many votes will be needed to pass the bill in the Senate. Republicans have talked of using the reconciliation process, under which only 51 votes are needed, but the so-called Byrd rule puts that out of reach for bills that would still add to the deficit more than 10 years out — in which case 60 votes would be needed to overcome a filibuster.

If reconciliation becomes possible, then head-counting among Republicans, of whom there are 52, becomes critical. Joe Antos said Sens. Susan Collins (R-Maine), Lisa Murkowski (R-Alaska), and John McCain (R-Ariz.) would be unlikely to vote for a bill that repeals the individual mandate. But other experts didn’t think they would find it that objectionable. “I don’t know that this would stop somebody who was otherwise going to support the bill among the Republicans,” said Wilensky.

Jost isn’t sure whether the mandate will pass in a final vote, but he hopes it doesn’t. “I’m in Virginia, and I think we sent a pretty clear message to somebody last week that trying to reduce or eliminate health care coverage is not popular with voters, but the message may not have gotten through,” he said.

And what are the Democrats doing about the problems of the ACA? Christopher Wilson wrote that the Democrats have a problem: Despite the historic unpopularity of the White House’s current occupant, their own favorability ratings are not much higher. But a series of health care proposals laid out during the past month might provide a more popular path forward, building off the momentum of the campaign to protect Obamacare that has raged all year.

The most recent proposal put forth in Congress is the State Public Option Act, which would allow citizens to buy into Medicaid, the decades-old program that provides health care for Americans with low incomes and disabilities. The plan would give states the option of offering Medicaid to all residents regardless of income. A majority of states expanded their Medicaid rolls after Obamacare, but this legislation would give the option of allowing anyone to buy into the program.

Coming just days before the proposed Medicaid expansion was the equally ambitious Medicare-X Act, which would offer all Americans the ability to purchase the government health care plan now available for people 65 and older. The legislation would initially target areas where health care choices are limited to expanding to cover the entire country, building on the existing Medicare network. Americans who wanted to keep their current plans would be able to, with the public Medicare option, in theory, lowering the costs of health care plans in the market. According to a Kaiser study, 26.2 million Americans were uninsured in 2016, with per capita spending double the cost in the United States versus other developed nations.

Those bills come on the heels of two measures introduced this summer. In August, Sen. Debbie Stabenow, D-Mich., introduced the Medicare at 55 Act, which would allow Americans to buy into Medicare at age 55, down from the current qualifying age of 65. (A similar bill introduced in the House would lower the eligibility age to 50.) In September, Sen. Bernie Sanders, I-Vt., proposed a single-payer plan, which would set up a national health insurance system run by the federal government. (Rep. John Conyers, D-Mich., has introduced similar bills in the House since 2003.)

The Sanders proposal has received some high-profile co-sponsors from the Democratic caucus, all of whom also supported the State Public Option Act: Cory Booker of New Jersey, Kirsten Gillibrand of New York, Kamala Harris of California and Elizabeth Warren of Massachusetts, all senators whose names are often floated as potential contenders in the 2020 Democratic presidential primary. That’s in addition to Sanders himself, the runner-up from the 2016 primary who could re-enter the fray in the next cycle. Sponsoring a bill is obviously not the same thing as making something a campaign focus, but it seems safe to assume that potential presidential contenders would not align themselves with something they thought would hurt their position with voters down the line.                                                                                                                                     Significantly, the congressman who introduced the State Public Option Act is Rep. Ben Ray Lujan, D-N.M., who also serves as the chairman of Democratic Congressional Campaign Committee. In that role, Lujan will help coordinate the party’s 2018 electoral strategy, seeking to ride the low approval ratings of President Trump and the GOP to retake the House for the first time since 2010.

The next question is whether Trump’s pick to lead HHS to navigate the churning political waters of healthcare? Harris Meyer reported that former pharmaceutical executive Alex Azar will face daunting management and policy challenges if he’s confirmed as President Donald Trump’s nominee to lead HHS.
Trump on Monday announced Azar as his choice to succeed Dr. Tom Price, who resigned in September following reports of his extensive use of government and charter air travel. Azar “will be a star for better healthcare and lower drug prices!” Trump tweeted.
Azar would inherit a huge, sprawling agency currently torn by political and policy divisions in the wake of Price’s leadership. He will have to make key decisions to avoid further disruption in the individual health insurance market while navigating around fierce partisan schisms. In addition, he will have to decide how much leeway to give states to make big changes in their Medicaid expansion programs.
And he’ll face pressure to address rising prescription drug costs.
Azar formerly headed pharmaceutical giant Eli Lilly & Co.’s U.S. division. Before that, he served as HHS general counsel and deputy secretary during the George W. Bush administration. During that stint, he received praise for his management competence. He did not have a healthcare background prior to his HHS work.
“I worked with Alex every day for the whole time I was at the CMS, and he’s a very nice human being and a smart lawyer,” said Tom Scully, who served as CMS administrator in the Bush administration.
“He’s a great listener, he’s smart enough to know what he doesn’t know,” added Scully, now a general partner with private equity firm Welsh, Carson, Anderson & Stowe. “He won’t come in with strong policy views. He will talk to people in the department and on the Hill and see what they think.”
Andy Slavitt, the CMS administrator under the Obama administration, offered cautious praise for Azar as the choice to head the $1.15 trillion, 80,000-employee agency that oversees the CMS, the Food and Drug Administration, the National Institutes of Health, and the Centers for Disease Control and Prevention.
“I have reason to hope he would make a good HHS secretary,” Slavitt said in a written statement. “He … has real-world experience enough to be pragmatic, and will hopefully avoid repeating the mistakes of his predecessor in over-politicizing Americans’ access to healthcare.”
“It’s good to have somebody who has the perspective of the industry that plays the most important part of drug development,” said Dr. David Spigel, chief scientific officer and director of the lung cancer research program at HCA’s Sarah Cannon Research Institute.
Still, Azar has been a sharp critic of the Affordable Care Act, saying in May that the ACA is “fundamentally broken” and “circling the drain.” In June, he envisioned the Trump administration shifting the ACA in a more conservative direction even without repeal and replacement of the law.
He previously has opposed ideas for reducing prescription drug prices such as purchasing drugs from other countries where prices are lower.
Azar went to work for Lilly in 2007 as senior vice president of corporate affairs and communications, and later became chief of Lilly’s U.S. operations, a position he held until this past January. He also served on the board of BIO, which represents biotechnology companies.
In his confirmation hearings, Senate Democrats are expected to probe Azar’s close ties to the drug industry and whether he has the independence to take strong steps to curb drug prices, an issue on which Trump has urged action. They also are likely to question him on his approach to implementing the ACA.
“This confirmation process will be a referendum on the Trump administration’s repeated efforts to sabotage our healthcare system and raise premiums on millions of Americans,” Senate Democratic leader Chuck Schumer of New York said in a written statement on Azar’s nomination. “It’s time to turn over a new leaf at HHS.”
Azar would take charge of an agency that is still roiled by investigations into Price’s air travel, with senior political appointees reportedly divided into different political factions.
In addition, many career staff are concerned about Trump administration moves to roll back ACA coverage and impose tougher conditions on Medicaid eligibility for low-income adults, said Tim Gronniger, a CMS deputy chief of staff in the Obama administration who’s now senior vice president of strategy at Caravan Health.
Azar will have to decide whether to continue the Obama administration’s aggressive push for the much broader use of value-based payment programs in Medicare. Price had slowed HHS implementation of value-based payment, especially mandatory programs.
Observers predict Azar will be less openly ideological than Price, a former orthopedic surgeon who vocally advocated less regulation of healthcare businesses and medical practices. “I would expect him to be less out there opining on a regular basis,” Scully said. “He’s a lawyer, he’s not going to be out there winging it. It’s not his style. He’s a nice, honest, pleasant guy.”
Gronniger agreed. “I think it’s great he comes in without really strong public policy positions,” he said. “That was a huge weakness for Price.”
One management issue Azar would quickly face is how to deal with Price’s ambitious Reimagine HHS initiative to streamline the department’s operations. That plan accompanied the White House budget proposal to slash the HHS’ budget for 2018 by 18%, a move congressional Republicans do not support.
Azar is considered a skilled manager, but he’ll have his hands full administering the huge agency and coordinating efforts with CMS Administrator Seema Verma.
“As much or more than what he thinks about policy, the manager part is more important than anything else,” Gronniger said. “It’s a hard place to run, and he’ll have to work through a lot of tensions.”As reported today U.S. President Donald Trump stated that he would not insist on including repeal of an Obama-era health insurance mandate in a bill intended to enact the biggest overhaul of the tax code since the 1980s, a senior White House aide said on Sunday.As I mentioned in the beginning of this post the version of tax legislation put forward by Senate Republican leaders would remove a requirement in former President Barack Obama’s signature healthcare law that taxes Americans who decline to buy health insurance.                                                                                                                                           “If we can repeal part of Obamacare as part of a tax bill … that can pass, that’s great,” White House budget director Mick Mulvaney said on CNN’s “State of the Union” on Sunday. “If it becomes an impediment to getting the best tax bill we can, then we are OK with taking it out.”                                                                                                                               It was too soon to say whether eliminating the repeal of the so-called individual mandate would increase the bill’s chances of passing. The provision was not an impediment now, Mulvaney said.                                                                                                                     Republican senators who have been critical of the plan said that some middle-income taxpayers could see any benefits of the tax cuts wiped out by higher health insurance premiums if the repeal of the Obamacare mandate goes through.                                Among them was Senator Susan Collins, one of a handful of Republicans who voted in July to block a broader Republican attempt to dismantle the Affordable Care Act, commonly known as Obamacare.                                                                                                    “I don’t think that provision should be in the bill. I hope the Senate will follow the lead of the House and strike it,” Collins said on CNN’s “State of the Union.”                      Republicans can only afford to lose two votes on the tax bill because of their slim 52-48 majority in the Senate.                                                                                                              Getting rid of the mandate is one of Republican Trump’s main goals. He campaigned for president last year on a promise to repeal and replace Obamacare, but Congress has not agreed so far on how to do that.

I’m not going to debate the tax bill, but there is so much wrong and so much right about this bill. Why is the GOP in such a rush to pass two such important forms of legislation when more research and modification is needed in both healthcare and our tax codes?

To everyone out there, on a better note, enjoy Thanksgiving. Appreciate what we all have, family and friends and the ability to feed our families and celebrate our good fortunes.

 

 

 

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