What Should Trump Do Next About Healthcare?

For those of you who were really expecting John McCain to come through and vote for the “skinny repeal” senate GOP healthcare bill…

Otter’s wise words ring true.  But it’s not like McCain didn’t warn you. He stated he opposed the bill when he voted to allow it to go up for debate.  So I’m not mad at McCain. He did exactly what I expected him to do, preen for the cameras, virtual signal for his media friends, and toss a big FU to the Republican Party.  It’s the same thing he’s been doing for years.  So why the surprise?

In fact, I think McCain did the GOP, and Trump, a favor. The various GOP “repeal and replace” bills were all terrible anyway as I recounted here.  None of them fixed the real problems with the individual insurance market or the exchanges.  So why should Republicans get their hands dirty in a rush to get anything passed when they will own the results?  And since none of their bills fixed the problem, the results will be pretty bad.

And of course, as time goes on, I’m less and less sure that the House and Senate leadership really wanted any bill to pass.  It seems like it would have been fairly easy to buy off most of the dissenting senators by simply allowing the people on the Medicaid Expansion to keep their plans, as I suggested back in June.  Did Mitch McConnell really think Lisa Murkowski was going to vote get rid of Medicaid expansion and reduce the federal contribution to Medicaid, when half of her state is on some version of Medicaid?  How did he think she and the other senators who are from states that have a large dependency on Medicaid would vote?  But if your real goal is to deliver Trump a failure, what better way than provide a sure fire failure of a bill that’s doomed to fail?  Admittedly I don’t have any evidence that they sunk the bill on purpose, but if not, they truly are incompetents.

So what now?  I think at this point, Trump should recognize that of the many enemies he has in DC, the Republican lead Congress is definitely part of them. And to that end, he should remove the healthcare issue from their hands.  And how to do this?  Form a Presidential commission to put together a health care plan, a “terrific” one which meets Trump’s criteria for a healthcare replacement bill.  Nothing of Trump was reflected in the Congressional bills but this is being viewed as Trump’s failure.  Taking the issue from Congress and giving it a Presidential commission removes the issue for this year, and allows both Trump and the Congress to move onto other issues.  What happens when the commission finishes a Trump approved health care plan is another story, but it moves the issue from the failed column to “pending.”

 

 

 

 

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A Quick Fix to the Senate Health Bill

I had hoped that the Senate, toiling away in secrecy, would toss out the crap sandwich of the House bill and replace it with something shiny and new that I could really get behind.

No such luck.  The “Better Care Reconciliation Act of 2017” is mostly the same crap sandwich, with some of the crust trimmed off.  As I wrote about the House bill last month, this bill, or something like it, would wreck healthcare and ensure Democratic ascendency, in the same way that Obamacare strip mined the Democratic majority in the House and Senate.

It’s not quite a total loss.  It did move in the right direction to fix some of the problems I had pointed out in the House bill, such as restoring tax credits based on income rather than age (I never got an explanation for that).  But of course it fell far short of providing reasonable tax credits.

As for pre-existing conditions, the main issue that tortured the public discussion of the House bill, the Senate appears to have just given up and is keeping the Obamacare requirement.  So after all the trouble, when it comes to pre-existing conditions, it’s Obamacare after all.

Although there’s no CBO score on the bill yet, it will probably come out similarly to the House Bill since it keeps much of the same structure for slowing Medicaid Expansion and although I’ve already criticized the way the CBO score was arrived at, it won’t matter in terms of a Democratic talking point; 26 million will lose their healthcare.  You’ll hear it all over cable news until the vote, then in campaign ads for the 2018 election.

How to solve this issue?  Here is the difference between politicians and regular people; I can conceive of a fairly simple answer that would never occur to a professional, and it’s not one I’ve yet heard either in public policy articles or blathering about on cable news.

Consider: There are about 14 and a half million people covered under the Medicaid expansion from Obamacare.  You can criticize Medicaid all you want in terms of studies on health outcomes or availability of providers, but if you’re on it, it’s free (to you).  There are no premiums, deductibles, or copays.  So even if you provide market alternatives to that, none of them are going to be as cheap to the patient as free Medicaid is.  People being kicked off Medicaid will generate stories for years for the Democrats.  There will be no end to the number of hard luck stories (and the children! Think of the children!).  That will fill nightly news and newspaper stories for years to come.

So just let those people keep Medicaid.

That’s it.  No complicated policy issue or complicated public/private program.  Just allow the people who are currently covered by the Medicaid expansion, as long as they meet their income eligibility, keep their Medicaid healthcare.  It’s not a new entitlement since it won’t be open to any new applicants; it will just cover those who currently have it.  Eventually those numbers will shrink, either by people improving their lot and exceeding the income eligibility, or worst case, aging into Medicare.

Will it cost money?  Yes, but frankly, the Republicans seem to be under some sort of delusion that they can turn health care into a tax cutting bill.  I don’t see how that’s realistic.  At some point they are going to have to realize that the bill is going to have to be revenue neutral.

More importantly, this buys time to fix what’s ailing in the individual insurance market.  Obamacare has wrecked and nearly destroyed the individual insurance market and I don’t think that’s going to be fixed on the day of a bill signing.  This will probably take years, so the fewer people in that market, to buy time and give reforms time to work, the better

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.