Senate Version of ACHA a Step in the Wrong Direction

If you’ve ever wondered why Americans hold the President and Congress in low regard, the health care reform legislation currently careening through the halls of Congress provides an answer. On Thursday Senate Republicans revealed their version of Affordable Care Act repeal-and-replace legislation. After working weeks in secrecy, this is what they came up with? It would be embarrassing if it wasn’t so sad.

The Senate Republican health care reform bill, officially entitled the Better Care Reconciliation Act or “BCRA,” is long and I haven’t read it all yet. But it’s clear from those who have that it:

  1. makes changes to the Obamacare health insurance exchanges.
  2. reshapes Medicaid.
  3. substantially reduces taxes, especially for the wealthy.

And it does all this in a manner that, depending on your ideology and level of cynicism, can be described as incompetent, mean, inept, savvy, inadequate, or malpractice. It makes one wonder why Senate Majority Leader Mitch McConnell insisted the bill be drafted in secret. At least if provisions had been debated in public we would have had a chance to get used to some of this foolishness. Seeing it all at once as a cornucopia of bad policy, however, only makes its flaws more prominent.

Why am I so disappointed with the BCRA? ? Why do I believe it will result in Congress (and, due to his support of the legislation, President Donald Trump) to fall further in the public’s regard. First, because meaningful, substantive health care reform is sorely needed. We need to address the ACA’s many shortcomings. We need to address the cost of medical care. We need to create a stable insurance market. There’s a lot that could — and should — be done.

Instead we get proposals that common sense makes clear are dangerous and unworkable. Consider:Republicans repeatedly claim their goal is to lower health insurance premiums. Yet a key provision of the BCRA does away with requiring consumers to buy health insurance coverage (an “individual mandate”), but still insists carriers issue coverage to all applicants regardless of their health conditions (what’s called “guarantee issue”). This out-of-balance approach guarantees the individual market will enter a death spiral in which coverage becomes increasingly affordable and, soon, unavailable.

Back in November, when I first wrote about what health care reform might look like under President Trump, I imagined what would happen if Republicans eliminate the individual mandate but kept guarantee issue of coverage. “Under this situation, few consumers — especially young, healthy consumers — will likely obtain coverage until they get sick or injured. This adverse selection would be cataclysmic and few, if any carriers, would want to participate in such a market. After all, insurers are in the business of spreading risk across a broad population. Guarantee issue without an obligation to buy coverage guarantees a concentration of risk across a narrow population.”

The title of that post was “Republican Health Care Reform: Destruction or Refinement?” Looks like Destruction is in the lead.

Or take the political gamesmanship at play. Many Republicans are expressing concerns regarding the bill in its current form. Some of these appear orchestrated. Senator McConnell will allow them to make certain amendments to the BCRA and add a few billions dollars more in spending to address a worthy cause. These current critics will then find the bill improved sufficiently to earn their vote — and make them look like tough negotiators. There’s nothing inherently wrong with this Kabuki dance, but it does make one skeptical of the process.

Then there’s the reality that much of the Republican health care reform plan (whether the Senate’s BCRA or the House’s American Health Care Act) has nothing to do with the effort to “repeal and replace” Obamacare. Yes, the ACA expanded Medicaid eligibility and whether to reverse that expansion is certainly germane. However, the BCRA and the AHCA go further. They not only refashion how states are reimbursed for Medicaid spending, they reduce the programs growth by hundreds of billions of dollars.That their “health care reform” legislation happens to cut taxes for the richest Americans by a nearly equal number of hundreds of billions of dollars only makes this approach more unseemly.

So is it a coincidence that the Senate health care reform bill delays substantial cuts to Medicaid until 2021? That’s the year, barring a change to the Constitution, in which there can legally be no President Trump — at least not the current President Trump. Or is this a way to reassure some moderate Republicans that a future Administration might support reforming the BCRA to do less harm to their constituents?.

Democrats are also contributing to the mess that is health care reform 2017-style, too. They delight in attacking Republican repeal and replace measures, invariably acknowledging that the ACA needs retooling. Yet Democrats fail to offer any hint of the reforms they believe necessary. This is as bad as President Trump proclaiming that Obamacare is dead while taking steps to kill it by threatening to withhold funds and generally creating uncertainty. When government leaders are consistently trying to have everything both ways it’s hard to respect them or the process.

June 22nd was a bad day for health care reform and American politics. Senate Republicans introduced a bill that does more harm than good, Democrats remain silent on alternatives, and the President adds chaos to the mix.

Still wondering why the public holds its leaders in such low regard?

This post was also published on LinkedIn. Please subscribe to my Flipboard magazine for curated articles on the issue: Alan Katz Health Care Reform Magazine on Flipboard.

 

Health Care Reform Math Adds Up To Compromise

When it comes to health care reform, it’s all about the math.

The First Element: Trump and Winning

President Donald Trump hates to lose. He’s about winning until we’re all sick of winning. (His words, not mine). The American Health Care Act, Republican’s attempt to replace the Affordable Care Act, also known as Obamacare, failed. Support was so scarce House Speaker Paul Ryan and the President didn’t even bring it to a floor vote in March.

The press said President Trump lost. Given his vocal support and strong lobbying for the bill, this assessment was accurate, but one the President cannot, and, apparently, will not accept. He sent his team to try to salvage the bill before the April recess. They failed. Which was a bit surprising given that President Trump seems more focused on passing a bill – any bill – than on the substance of legislation.

This is the first number in our health care reform equation: President Trump wants to win and doesn’t care how.

The Second Element: Divided Republicans

It takes a simple majority to pass a bill out of the House. With 434 current members (the elevation of Jim Price to Secretary of Health and Human Services leaves one seat vacant) 218 votes are required to pass legislation.  There are currently 246 Republicans in Congress. Having already shut Democrats out of the process, all but 28 members of the GOP caucus are needed to pass a bill; a 29th Republican “No ” vote and the bill fails.

There are about 40 members of the House Freedom Caucus, a group of the chamber’s most conservative lawmakers. The majority of the caucus were united in opposition to the AHCA. In March President Trump blamed them for the bills defeat. In April he sent his emissaries to get their votes.

The Freedom Caucus demanded elimination of some of the ACA’s most popular provisions as the price of their support. These provisions prevent carriers from excluding coverage for pre-existing and requiring health plans include certain essential benefits like maternity coverage. The White House reportedly considered acquiescing to these demands.

The problem, however, was that accepting the Freedom Caucus demands resulted in (relatively) moderate GOP Members abandoning the AHCA. Gaining conservatives votes doesn’t help if the cost is an equal number of moderate votes. There may be a path to pass the AHCA solely relying on solely on Republican votes, but given the divide between conservative and mainstream Republicans, it’s hard to find it.

Which provides the second number for our equation: Republican can’t pass health care reform on their own.

The Third Element: Democrats Want Repair

Democrats, believe the ACA has been good for America, especially for those who, but for the ACA, would have no health care coverage. Most liberal Democrats think the ACA doesn’t go far enough. They won’t be satisfied with anything less than a single-payer system.

Many Democrats, however, think the ACA is generally fine, but in need of critical tweaking to keep it working. Some liberals will hold out for their dream of “Medicare for All,” but even many in their ranks will take a repaired ACA over a broken system or what Republicans are offering.

Which is why Democrats united against the Republican plan. Not that it mattered. Republicans never sought Democratic votes for the ACA.

Democrats want to fix the ACA. That’s the third number and final number in our health care reform equation.

The Math of Health Care Reform Compromise

If President Trump wants to win he needs to move beyond a purely Republican formulation. Otherwise, as shown above, the math doesn’t work. Republicans need the larger numbers Democrats provide to pass health care reform legislation.

How does this math work? Let’s say a health care reform package reaches the floor of the House that attracts 164 Republicans – just two-thirds of their caucus. However, it gains support from 54 Democrats – only one-third of their caucus. The bill moves on to the Senate. In short, it’s easier to find 218 votes among 434 Members than from among 246.

This path makes the challenge before the President straightforward, if difficult: find a legislative package that attracts enough Democratic votes to offset the Republican votes it loses. In the old days (before Washington because hyper-partisan) pragmatists from both parties would meet and hammer out a compromise. That’s what’s needed now. Significantly, there’s plenty of common ground to be found.

There are ACA taxes neither Republicans and Democrats like. Eliminate them. The Shared Responsibility Payments that penalize Americans for going without coverage is universally acknowledged to be ineffective. Fix it. Both Democrats and many Republican want to keep the ACA’s Medicaid expansion. Preserve it.

The path to a compromise won’t be easy, but the equation is simple addition: President Trump wants to win and doesn’t care how PLUS Republicans can’t pass health care reform on their own PLUS Democrats’ want to fix the ACA. The result: compromise.

Political Cover

The biggest obstacle to achieving health care reform is not the math, it’s the politics. Incumbents in both parties dread being “primaried” – Republicans fear being challenged from the right; Democrats from the left.

This is not paranoia. The extremes of both parties will seek vengeance on their less pure teammates. Party leaders and the Administration will need to give these members extensive cover in terms of messaging, campaign money and resources to beat back these attacks. Or they will need to convince the public that failing to achieve health care reform is a worse outcome than the compromise.

This is where President Trump proves he deserves to win. He must demonstrate his self-proclaimed negotiating prowess and his proven marketing acumen can create a political environment where compromise on health care reform doesn’t doom incumbents.

In other words, for President Trump to win he needs to make sure that members of Congress win, too.  Otherwise, he loses. That’s politics—and math.

For curated articles on health care reform, please checkout the Alan Katz Health Care Reform Magazine on Flipboard.

Democrats Need an ACA Retain and Repair Plan

Even before President Barack Obama signed the Affordable Care Act into law, Republicans in Congress have sworn to repeal it. “Repeal and Replace” became a rallying cry that helped switch 63 House and six Senate seats to the GOP side of the aisle in 2010. Today Republicans have the majority in both chambers of Congress and occupy the White House. the GOP opposition to the ACA is not the only explanation for this pendulum swing, but that opposition was certainly a factor.

Republican votes to repeal the ACA became a Washington staple in the six years after the law’s passage. There’s no official count, but House Republicans may have voted 60 times or more to do away with Obamacare. And why not? With President Obama in the White House they knew their repeal legislation would never become law. Votes to repeal the law were an easy political statement.

Now Republicans hold the power to make repeal real and thing aren’t so easy. The House Republican Leadership, reputedly with input from the White House and Senate Republicans, drafted and put forward the American Health Care Act as the first step in the repeal and replace effort. The AHCA faces an uncertain fate in even in the House of Representatives. And a report by the Congressional Budget Office of the AHCA’s impact on the uninsured, the federal budget, premiums and the affordability of coverage has only narrowed the bill’s path to passage.

Republicans want to keep their promise to repeal Obamacare and fear the political payback if they fail to do so. They know they will own the results of any health care reform they pass. f that result includes higher premiums and fewer insureds, the political price could be both high and painful.

Thus the current Republican civil war. More moderate Republicans worry the AHCA doesn’t do enough to support Medicaid and keep Americans insured. Their conservative counterparts are lining up against the AHCA because they see the bill as creating new entitlements and failing to cut back on Medicaid fast enough. Whether the two sides can be brought together is unknown (although I’m skeptical).

Which leaves Democrats sitting back and enjoying the spectacle of Republican-on-Republican political violence. They’ll occasionally throw a sound bite over the transom keep things interesting and to remind their base that they’re fighting the good fight. Generally, however, Democrats are adhering to adage of avoiding interfering with the enemy when they are in the process of destroying themselves.

This is a dangerous strategy. Politics can take sudden turns and, if they’re not careful, Democrats could find themselves in the same predicament that Republicans are in today.

When attacking the GOP health care proposal, Democrats often recite a mantra along the lines of “Sure, the ACA has some problems. But we shouldn’t repeal the ACA, we should fix it.”  But what does that mean? Democrats are as shy about detailing what “retain and repair” means as Republicans have been about defining “repeal and replace.”

History may show Republican’s failure to devise an ACA alternative in the six years following its passage as political malpractice. Their civil war over the AHCA provides Democrats with a window of opportunity to avoid a similar judgment..

Republicans want Democrats to do more than gloat. The Hill reported that Senator John Cornyn challenged Democrats to offer an alternative to the AHCA. Senate Minority Leader Chuck Schumer response: we have and it’s called the Affordable Care Act.

That’s a good line, but that’s all it is. If Republicans fail to pass health care reform, things as they are remains. That status quo is the ACA, a law Democrats admit is flawed and should be fixed. Democrats can claim the high ground by identifying those flaws and offering remedies. Even if Democrats fail to gain Republican support for retain and repair, there’s a value to building a party consensus around a proposal now.

After all, President Donald Trump prides himself as a deal maker. It’s extremely unlikely, but if the AHCA fails, President Trump might look for an alternative and the Democrats should be ready with one. Again, a deal with President Trump is highly unlikely, but these are not likely political times.

Even if the Democratic retain and repair proposal goes nowhere in 2017, it could be useful later. Democrats will need something to run on in 2018. A consensus retain and repair platform might be helpful.

Then there’s the possibility that Democrats are in control of Congress and the White House come 2020. If so, today’s Republicans offer an important lesson. The year you take control of Washington is not the time to start debating a health care reform plan; it’s the time to present one.

 

Is All Payer Ready for a Comeback?

Congress is debating the American Health Care Act, the first of three steps in Republicans’ march toward repealing and replacing the Affordable Care Act. Things are not going smoothly. GOP conservatives, which have considerable clout in the House of Representatives, want the bill to repeal more and replace less. More moderate Republican Senators, of which there are enough to block any legislation, argue the legislation goes too far in some respects. Attempts to mollify one side hardens opposition on the other. And so far, no real effort has been made to entice Democrats to do more than watch Republicans fight one another.

It’s possible President Donald Trump, Speaker Paul Ryan and Senate Majority Leader Mitch McConnell can corral enough votes in each chamber to push the AHCA through Congress. It’s possible, but I’m skeptical. And what if they can’t?

Well, they could do nothing, leaving enough uncertainty laying about that the individual market, at least, collapses. That could make 2018 a tough election year for Republicans. Or they could offer AHCA version 2.0 and hope for better results. Wishful thinking is a great past time, but hardly a vehicle for making public policy.

All of which argues for doing something outside the proverbial box. Maybe Congress could even address the core problem facing America’s health care system: the cost of medical care. What might that look like? One option would be to look at an idea that’s been around since the 1990s if not longer: an all payer system. It would certainly be an interesting debate.

One idea that fits that bill is an all payer system. To oversimplify, under this arrangement providers and payers (usually the government) establish a price for each medical treatment and service. Every provider accepts this rate as payment in full and every payer (government, private insurance, self-funded plans and individuals) pays this rate.

As noted by The Hill, several states experimented with one version or another of all payer systems in the 1990s, although today only Maryland’s remains. As recently as 2014, academics at Dartmouth proposed using 125 percent of Medicare reimbursement rates for a national all payer program. Pricing transparency advocates like all payer systems because everyone knows the cost of care – the ultimate transparency. And this system eliminates the wide variance in pricing for identical treatment so prominent today.

A pure all payer system would be difficult to pass, however. Free market Republicans will not accept the government setting the price for all medical care payments. And pharmaceutical companies, doctors, hospitals and other providers are not going to take kindly to having anyone set a one-size fits all cost structure. There are variations on the all payer theme that might make such a system more palatable — and allow for a healthy (and entertaining) debate..

For example, consider an all-payer system in which Medicare reimbursement rates are simply a starting point; the benchmark used by all providers in setting their costs and all payers in determining their reimbursement levels. No more Alice in Wonderland pricing by hospitals and other providers. Each service provider would describe their fees as a multiple of Medicare. Insurers would offer plans that cap reimbursements at different multiples of Medicare.If the doctor’s charges are at a lower or the same multiple as an insurance policy’s, that provider would be fully reimbursed by the carrier and no charges beyond co-payments, deductibles and co-insurance (if any) would be required of the patient. If the practice has set a higher Medicare multiple than a patient’s policy covers then the patient is liable for the additional cost. The key, however, is that the consumer would know this before incurring the charge. (Which is why emergency care would be treated somewhat differently).

An all payer system requires higher cost providers to justify the extra expense. It eliminates the helter skelter of ever-changing networks. Health insurance premiums would reflect reimbursement rates and would correlate with the number of providers whose services would be covered in full.

Conservatives can’t claim all payer systems is a government takeover of health care. On the contrary, the only role Medicare plays is providing the baseline for reimbursement … a common language all providers and payers speak.  What they do with that baseline is up to them. Liberals won’t like that insurance companies remain in the health care system and will object to limiting, as a practical matter, poorer Americans to low reimbursement policies.

Right now, all attention is on the American Health Care Act. That’s as it should be. After all, it’s not dead yet. Given there’s a good chance the legislation will crash and burn, there’s no harm in thinking about what could come next. I’m rooting for something that isn’t just a rehash of the 2009 debate, but rather something bolder. An all payer proposal is just one idea and there are no doubt many better ones.

What’s your favorite?