Conservatives vs Pre-Existing Conditions

 

The CBO score for the House Republican health bill came out last week and the news is “unexpectedly” bad: 14 million more people uninsured next year and 26 million by 2026.  These numbers are crap of course.  Not just because the CBO is notoriously wrong (remember their rosy predictions about Obamacare?) but because their comparisons are not based on reality.  As the Legal Insurrection site notes, the CBO used a March 2016 baseline that they had previously acknowledged was wildly inaccurate. With health plans dropping like flies from Obamacare exchanges all over the country, if you do nothing, you’re likely to get a similar result of increase in uninsured by 2026.

But the purpose of the CBO report wasn’t to provide a statistical analysis of the possible effects of a healthcare replacement plan, it was to provide talking points to the Democrats, and on that basis, mission accomplished.  And that’s why Mitch McConnell is trying to stall bringing up the healthcare bill in the Senate for as long as possible.  It’s a policy, political, and PR nightmare.

But the real nightmare in the health care debate boils down to the one issue that actually frightens people, stirs them to show up to town halls, and dominates the cable news coverage of health care policy is pre-existing conditions.  How to handle pre-existing conditions occupied the majority of debate on the House plan, and ultimately failed to satisfy.  The AHCA has planned to handle pre-existing conditions through high risk pools.  The way they are supposed to work is that people with pre-existing conditions would sign up for their health plans like normal, but money set aside in high risk pools in each state would go to subsidize the insurance companies directly for each customer with pre-existing conditions.  This was based on a highly successful program in Maine. The problem with rolling that out nationwide is that we have no good way to estimate either the costs per person or the number of people involved.

Our guide to how little we know about the pre-existing population lies in an Obamacare program called the Pre-Existing Condition Insurance Plan (called either PPACA or PCIP). PCIP was set up to provide health insurance as a bridge until the requirement for individual health plans to accept everyone, regardless of pre-existing conditions, kicked in. The assumptions were wrong both in number of enrollees and how much they would cost.  The original cost estimate per enrollee was $13,026.00 and in only 11 months was upgraded to $ 28,994.00 per enrollee. And how many people are affected by pre-existing conditions?  Up to 130 million people according to most government estimates. So how many were actually enrolled in the PCIP program?  At its peak, there were never more than 114, 959 enrollees.  So the entire US health system was re-arranged to accommodate a little more than 100,000 people.  Interestingly 78% of PCIP spending went to only four conditions, cancer, heart and circulatory diseases, post-surgical care, and joint diseases.

So there is a major gap between pre-existing conditions, the propaganda talking point, and pre-existing conditions, the actual policy issue.  And these lead me to notice some curious conservative commentary on the issue.  Prior to the House vote, columnist Anne Coulter wrote a column about the House bill in which she made the remark, “Until the welfare program is decoupled from the insurance market, nothing will work.”  But the biggest player in the conservative pundit class is radio host Rush Limbaugh.  With a 20 million person radio audience, he can move or set the agenda among the right. So what are Rush’s views on pre-existing conditions? He spent quite a bit of time discussing the issue on his show after the House vote, but what caught my eye was this:

“What ought to really happen here is, the simplest way, is to take whatever the percent, 4% who have preexisting conditions and designate them as a special class who are going to have medical expenses covered by some funding mechanism that may be part of the overall bill or not, but don’t commingle these people with the genuine insurance that’s going on elsewhere. ‘Cause then we’re not talking insurance. And it does matter because that’s the way they’re able to convert this into a massive welfare bill while everybody thinks it’s insurance. It’s another sleight of hand.”

To me, it sounds like both commentators are arguing that pre-existing conditions should be handled outside the normal insurance system and covered by a government program.  I think this shows a movement that’s removed from where the House Freedom Caucus is on the issue.  The problem is that no one in the Republican Congress will squarely address the issue.  Putting together a bill to replace Obamacare would be much simpler if they just came out and admitted that people with pre-existing conditions should be served outside of the insurance market.

In other words, a government program.

I had addressed various health reform proposals in general and pre-existing conditions in particular 5 years ago during the Obamacare court fight. At the time I addressed two major issues that needed to be in a future health reform bill:

  1. Tax Credits and deductions to cover the costs of insurance premiums in the individual insurance market.
  2. Some manner of dealing with pre-existing conditions, preferably by some sort of 2nd payer coverage.

I thought I would expand on just how I would cover pre-existing conditions if I were writing the bill.  As stated I would pay charges related to pre-existing conditions with a second payer plan; I’m thinking Medicaid.  But first, some background:

Second payers are plans that pay in addition to regular insurance plans.  People most commonly run across them in Workers Comp and Auto accident issues.  For example, you’re in a car accident, and are taken to the emergency room.  Normally an emergency room visit and associated treatment and tests would be paid by your regular health insurance, but because you have auto insurance and in an auto accident, your auto insurance would be billed first.  The auto insurance pays whatever they are contracted to pay in those circumstances, and the bill goes to your health insurance, which pays whatever it’s contracted to pay minus what was paid by the auto insurance.

Now years ago, some HMO plans would pay for pre-existing conditions, but not right away.  You are a new member on an HMO plan, but you have diabetes.  You could use your insurance for any medical condition except the procedure codes and diagnosis’s associated with diabetes for a period of time, either a year or two years depending on the plan.  After that period was over the HMO would start picking up the costs of diabetic treatment.  This way, the health plan didn’t immediately go into the hole over a brand new member who brings expensive health issues to the plan.  Obviously, this isn’t great at all if you have diabetes because it means you are paying for all of your diabetic treatment and medicines out of pocket until your waiting period was over.  For many however, it was better than no insurance at all.

So how would my plan work?

When you sign up for a health plan on the individual health insurance market in your state, part of the application process is identifying if you have a pre-existing condition.  If so, you are automatically signed up in your state’s Pre-existing Medicaid plan.  This is a secondary payer that only pays if during your first two years in your health plan (or whatever time period is arrived at) you have charges related to your pre-existing condition.  So, let’s say you have heart disease as a pre-existing condition, you go to the doctor for some issue related to that, the doctor files insurance like normal, and it goes to your insurance company.

Since you’re in the first two years of your health plan with this insurance company, and the procedure codes and diagnosis codes are related to your known pre-existing condition, your insurance company denies the claim but then sends it to your state Medicaid, which processes and pays the claim.  For you, the process is seamless, your insurance company gets out of paying charges, and Medicaid pays the doctor.

So, why do I think this is better than the currently proposed high risk pools in the AHCA?

First, we don’t know what the costs are going to be and who is going to need help.  That was the problem with the Obamacare PCIP; far fewer people signed up than expected, but it cost way more per person than expected when they did sign up. So there are a lot of unknown costs associated with this.

Secondly, under high risk pools there seems to me a thin line between subsidizing patients with pre-existing conditions and subsidizing health insurance company profits.  Are the insurance companies just going to present a bill to the high risk pools and they will just pay no matter what?  Who knows?  There isn’t any transparency in knowing what you’re paying for so you can never predict what the costs are.

Third, Medicaid pays out under the cheapest rates available, cheaper than Medicare and far cheaper than private insurance rates.  If the government is going to subsidize pre-existing conditions somehow, why not do it in the way that provides the cheapest rates, and the most transparency? Medicaid will be able to grow a database of all pre-existing conditions, their frequency, and their costs for the private insurance market.

One way or the other, the government will be paying for this. Either the Senate puts together a plan that the President signs, or Obamacare continues to fall apart and a new Democratic Congress will be elected to fix healthcare, and if they do it, given previous experience, it won’t be cheap, transparent, or voluntary.

 

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Is Demography Still Destiny?

A friend who is aware of my interest in the link between demographic change and political change slipped me this article, Why Demography Does Not Equal Destiny.  You don’t hear much these days about demographics in politics since last November 9th, other than the talk about that new group that politicos recently discovered; the white working class.  Who are these guys and where did they come from?

So it’s no surprise there is a lot of handwringing among the Demographics=Destiny crowd.  The article summarizes its main points:

  1. Demographic change is not evenly dispersed in states and voting districts throughout the country.
  2. Voting behavior is not static. Voters more readily change which party they support than the demography-is-destiny models anticipated.
  3. Despite the large change in the demographic composition of the electorate, most voters still do not self-identify as liberals. In fact, liberals remain bronze medalists in the ideological breakdown of the electorate—ever since the question was first asked decades ago.

I don’t disagree with the generalities of these points.  In fact I share them to a degree and wrote about the snags and hiccups on the way to permanent Democratic rule over two years ago. Most voters are not liberal, at least they are not self-identified ones, and the purging of the moderate wing that began in 2010 has left the Democratic Party with few moderates for mainstream Americans to identify with.  Political decisions matter too, and President Obama’s decision to go make Obamacare, rather than “comprehensive immigration reform” his first massive push doomed his party to an easy opening for attack.  The Tea Party sprang up to fight Obamacare and the political cost for moderate blue dog Democrats to vote for it was the loss of their seats, leaving a smaller, and more left leaning Democratic Party in its wake.

So for the past few years, the Democratic Party has been hurt more by stupid political decisions than helped by Demographic change.  Nobody told them that they had to make a granny with 30 years of criminal investigations and corruption behind her the party’s nominee.

However…

Even though the Democrats nominated the worst candidate possible she still won the popular vote by 3 million votes.  That really brings truth to the old saying about yellow dog Democrats; they would vote for a dog if it was running on the Democratic ticket. But that goes to Point One; demographic change is not evenly dispersed.  No it isn’t.  Particularly when you consider that the Hillary’s popular vote lead is entirely attributable to California.  Without California, Trump won the popular vote by 1.4 million votes.  That’s the power of demographics.

California is the textbook case, and the canary in the coal mine on unbridled Demographic change. The Center for Immigration Studies did a study comparing California from 1970 to 2008. Just a few observations:

Legal and illegal immigrants went from 9 to 27%.

Went from 7th most educated workforce to 50th (that’s dead last for the California educated!).

Went from 25th in income inequality to 6th.

Conclusion?  If you try to replicate Latin America in California, don’t be surprised if you get something that looks very much like…Latin America; high income inequality, with a very wealthy and educated elite with a large poor and uneducated mass of people, and of course, one party rule. California has successfully duplicated the Mexican model. And California, which has for decades been the early adopter of future American trends, shows us what the entire country will look like in a few decades.

So yes, other things matter too, not just demographics, however as California demonstrates, all things being equal, over time demographic change is probably the largest single determinate.  Demographically speaking, as Ann Coulter pointed out, “If the same country that voted in 1980 had voted in 2012, Romney would have won a bigger landslide than Reagan did.”

In the Trump, Black Swan era, it’s easy to dismiss demographic change as having an effect on our politics, but there it is, chugging along, year after year, turning the United States into California.

 

 

 

Liberal Myths: Proposition 187

There are some things that just are not at all true, but are still part of the conventional wisdom, and are repeated with frequency in magazine articles and talking head shows.  Lies often have a useful function and the longevity of the Prop 187 myth is due primarily to just how useful it is, to both sections of the left and right.

And so this story is trotted out once again, in Peter Beinart’s piece in The Atlantic, The Republican Party’s White Strategy.  This time, the purpose is to attempt to discredit Trump’s anti-illegal immigration strategy by arguing that it’s been tried before, to utter failure, and Trump is offering a redo of the same failed strategy that will lead to the same result as it allegedly led to in California, unending Democratic rule as far as the eye can see.

Well there certainly is unending Democratic rule for as far as the eye can see in California.  The gist of Prop 187 myth is as follows:  The 1994 proposition forbade illegal aliens from accessing non emergency medical care, public education, and other California services.  Republican Governor Pete Wilson latched on the proposition to win re-election, but by doing so, he destroyed the Republican Party in California by forever alienating Hispanic voters because of hate, bigotry, or whatever.  Except for celebrity candidate Arnold Schwarzenegger, Republicans have been shut out from power ever since.

That general thesis has been more or less debunked on the right. Anne Coulter broke down the issue here, arguing that supporting Prop 187 won Pete Wilson a 20 point victory in the election. The actual vote totals on the Prop 187 referendum break down this way:

Support for Prop. 187 was strongest among white non Hispanic voters (+28 points), and especially white males (+38 points). Latinos, on the other hand, voted No by a 73% to 27% margin. Blacks and Asians divided about evenly, with 52% voting in favor and 48% opposed.

So in terms of an ethnic breakdown, Prop 187 was popular and won among all ethnic groups except for Hispanics.  Even then, as Coulter points out, Proposition 187 was still more popular among Hispanics than President Bush was in running for re-election just 2 years earlier (14% in California).

So Prop 187 passed and the voters never had contact with it again.  Naturally this proposition went to the courts immediately and was finally struck down in the California courts in 1997.  So how did a wildly popular voter’s referendum that helped a flailing Republican gubernatorial candidate achieve a massive re-electoral victory doom the Republican Party in California?

Beats me.  But that’s the myth.

But the media and conventional wisdom have stuck with that, but actually there is a simpler answer and since it comes from the left in theory it should resonate at least with those more left leaning.  Reliable Lefty writer Kevin Drum of Mother Jones takes another look at the proposition 187 myth and finds it lacking.  Welding the mighty tool of Occam’s razor, a tool that’s useful only as long as you are not trying to confabulate a Rube Goldberg method to get a preferred answer, Drum makes a simple observation:

The greater the share of the non white vote; the greater the share of the Democratic vote.  It’s the demographics…again.  Prop 187 wasn’t even a bump on the road to Republican decline; that marched in lockstep with the share of the nonwhite electorate.  This is now and will be soon replicating itself across the United States.  Of course as I’ve noted, there could be stop sticks along the way, but the general trend, in our tribalistic era, is that the Republican electorate shrinks as the white population shrinks, and it’s shrinking everywhere.

So even though the Prop 187 myth isn’t true doesn’t mean it’s not pointed out real problems.  But the purpose of the myth is to force Republicans into open borders/amnesty types of positions; in other words, to accelerate the shrinking of their own electorate.  It’s clearly obvious why the Democrats would support that, but why do so many Republicans fall for that too?

It’s not called the stupid party for nothing.