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The Insider: Trick-or-Treat – Top Three Must-Reads of the Week

Thursday, October 28th, 2010

Community Catalyst’s “Insider” is much in demand this week, traveling from one end of the country to the other to provide policy insights on children’s health (at the New England Children’s Health Summit in New Hampshire) and health reform implementation at the state level (at Utah Health Policy Project’s annual conference). While next week Hub readers can expect a robust Insider chock-full of analysis of the implications of the election on the ACA, today we’d like to steer you to some of the Insider’s must-read recommendations:

witch pumpkin

1. Myth-busting around the ACA: Saturday’s New York Times editorial does an excellent job of dispelling many of the myths and untruths about the new health law that have reared their ugly head during this election season.

2. Rebutting a myth in the making: An excellent retort to claims by Tennessee Gov. Phil Bredesen (and others) that the ACA will cause employers to drop coverage, written by Adam Searing, Director of the Health Access Coalition at the North Carolina Health Justice Center. (This is a two-parter; the second blog links to the first.)

3. Beyond the political rhetoric – why the ACA matters to Floridians: An outstanding “what it means on the ground” op-ed from Laura Goodhue, Executive Director of Florida CHAIN.

We encourage readers to share these with partner organizations, post them on websites and disseminate them via social media.

Happy Halloween!

– Kathy Melley, Director of Communications channeling Michael Miller, Policy Director

Photo credit: Empirically Grounded

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The Insider: ACA Implementation: Partly sunny with a (Supreme) chance of rain

Thursday, October 21st, 2010

This week brought some important developments in ACA implementation. First and foremost is the major win by consumer advocates in the prolonged and multi-pronged struggle to shape NAIC recommendations on Medical Loss Ratios. At the NAIC meeting in Orlando today, consumer advocates beat back attempts by brokers to exclude commissions from the definition of medical expenses, blocked insurers from using high-loss ratios in one state to paper over a failure to meet standards in another, and created a reasonable standard of certainty to establish whether an insurer’s failure to meet the loss ratio was due to under-spending on medical care or unforeseeable random events.

These decisive wins are a case example of the one-two punch that advocates will need in order to influence the numerous federal and state decisions ahead. The consumer victory resulted from the combination of persistent policy advocacy, especially by the NAIC consumer representatives, coupled with a national effort by consumers to reach out to their insurance commissioners and let them know that people were watching (illustrating one of the important axioms of grassroots advocacy: decision makers make different — and better — decisions when they are being watched).

The second key development, while less positive, also contains within it an important strategic dimension. Last week, the Florida District Court issued a decision allowing the case against the individual responsibility clause of the ACA to go forward. Specifically, the Florida court will hear arguments about whether the individual responsibility requirement is legal under the Commerce Clause. The court also will hear arguments about whether the Medicaid expansion under the ACA exceeds Congress’ authority, although Judge Vinson’s decision makes it clear that he considers this argument to be much weaker than the individual responsibility claim. Because Judge Vinson rejected the federal government’s argument that the penalty for not having health insurance constitutes a tax, the focus of the Florida case is squarely on the Commerce Clause argument. Just a week earlier, a District Court in Michigan ruled that the individual responsibility requirement was Constitutional. Whether Florida (and Virginia) ultimately agree with the Michigan ruling, the issue is likely heading for the Supreme Court, which should be enough to give anyone concerned about the sustainability of the ACA a few sleepless nights (especially since the wife of one Justice is actively campaigning for repeal).

But while legal scholars slug it out and try to second guess the next round of rulings, it is important for advocates not to lose sight of the intertwining of the political and legal issues since most advocates will not be able to intervene directly in the legal proceeding.

First, the court cases keep public attention focused on the individual responsibility requirement, which is one of the least popular provisions of the law. The lawsuits also encourage doubt over whether the law will actually be implemented in its current form and potentially give cover for foot-dragging by state administrations inclined to oppose implementation.

The court actions not only affect the political debate, they are also affected by it. The political backdrop against which the Supreme Court makes its final decision is extremely important. To the extent that the law is considered unpopular and there is an active movement for roll back, it will create a context in which a negative legal outcome is considered more palatable.

The key takeaway for supporters of reform is that whether we are looking at how the court cases affect the political debate or how the political debate affects the courts, the response of advocates must be to keep working to create a context of support for the law and expectation that it should and will move forward.

Overall, the events of the past week underscore both the need for and the potential of sustained consumer engagement.

— Michael Miller, Policy Director

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The Insider: Cutting through the Chatter to Focus on What Matters

Thursday, October 7th, 2010

The ACA 6 month check up (the patient seems to be a little under the weather)

This edition of the Insider is devoted to a high level overview of where reform stands politically at the six-month mark. As regular publication resumes, we’ll be digging into specific policy issues in more detail.

Public Opinion

Six months out, public opinion remains essentially stagnant with roughly equal percentages of the population supporting and opposing the new health care law. While there is some month to month fluctuation, no clear trend has been established in either direction.

The good news about public opinion is that much of what the public worries about (death panels, still; or that the ACA will increase the federal deficit) is not really part of or true about the law. People are (or would be) more supportive of the actual ACA than they are of the image of the law that they carry in their mind. More good news—focus groups consistently show that support goes up as people learn more about the law.

The bad news: It’s been extremely hard to break through the well-financed and aggressive disinformation campaign about the law. Certainly in the realm of paid advertizing, supporters are getting outspent by opponents. Furthermore, supporters have yet to come up with an effective counter campaign to match the three-pronged attack of opponents that includes unified messaging from the Republican party, the Fox/ talk-radio 24/7 media barrage and direct paid opposition messaging. Also, while overall public opinion is roughly evenly balanced, that is not necessarily the case among likely 2010 voters in hotly contested electoral races across the country.

All this underscores the importance of the outreach and community education efforts that groups are undertaking across the country. People shouldn’t expect those efforts to show up in short term swings in public opinion, but in the long run they are vitally important – and they work.

Does the public know more than they think?

Most of the public messaging from supporters is about the benefits of reform to the middle class, especially holding insurance companies accountable and eliminating pre-existing condition exclusions. But, when you ask the public who they think benefits from the ACA, the number one answer is low-income people and the uninsured. Actually, the public isn’t wrong about this. Low-income and uninsured people are the population most adversely affected by the current system, and most helped by reform. People with pre-existing conditions, the next most popular response, constitute a much smaller pool of winners.

People are much less likely to identify themselves or the middle class as beneficiaries of reform. Although the ACA takes steps to address people’s #1 concern, which is their own health care cost, they are relatively modest and probably not well known. While politicians are attempting to tout the benefits of the ACA for the middle class, there is a disconnect between the size of the ACA edifice and the benefits it appears to deliver to middle-class voters. Most political leaders and their advisers have concluded that making the case for the ACA based on expanding coverage for low-wage workers won’t help politically. But in failing to highlight the coverage issue, they risk demobilizing a group of voters for whom the ACA’s coverage provisions matter. Going forward, supporters of reform may want to be careful not to overlook the benefits of expanding coverage in their efforts to woo support from the insured middle class.

Interest Group Round Up

Insurers

Insurers are not monolithic. Some have the potential to thrive on a high-road focused on quality improvement and customer service while the bottom feeders whose business model relies primarily on cherry-picking and risk avoidance could lose market share or even go out of (the health insurance) business as the ACA gets phased in. So far, however, it is the lowest common denominator that has dominated industry political action.

Many insurers are working overtime with the NAIC and in states to blunt the potential for the Exchanges to emerge as strong, effective purchasers and to preserve maximum “flexibility” in the market outside the Exchanges, which could result in adverse selection inside. Since the decisions about how the Exchanges will function are made by the states but the cost consequences of failing to do a good job are mainly federal, there is a significant risk that the states will buckle under industry pressure.

At the same time they are working the inside to affect federal and state rules, insurers have increasingly shoveled campaign cash to Republican opponents of reform. While electing candidates committed to repeal (starting with the individual mandate, ostensibly desired by insurers) may seem like a risky strategy, bear in mind that insurers were making money even while they were losing enrollees prior to ACA passage. The conventional wisdom may be overstating insurers reluctance to see reform rolled back.

Business

Business is not monolithic either. To some extent the political stance of employers is skewed by the weight that health insurers and insurance-related businesses (e.g. brokers) have on the policy deliberations of small business associations, not to mention that many business associations may view the Exchanges as a direct competitor in the sale of insurance. In part, it seems that the opposition of some industry groups is driven more by the view that reform (or at least a distorted version of it) is a useful club with which to beat Congressional candidates in order to elect a Congress more in tune with business concerns on issues that have nothing to do with health care.

Most businesses will be unaffected by the employer responsibility requirements in the law and do not seem heavily invested in either supporting or opposing the coverage expansion per se, though they seem opposed to many of the specific financing provisions. Their major concern (like everyone else’s) is their own costs and here the business view seems to be that the ACA doesn’t go far enough…

In addition, there is concern that slower growth in Medicare payments will fuel private side cost-shifting. In truth, the ACA still leaves employers with plenty of running room to deploy their traditional cost-containment strategies—benefit buy down and shifting costs to employees.

Providers

Physicians and hospitals are divided on the law and wary of each other. Physicians are concerned about and gearing up for another Medicare Sustainable Growth Rate fight. The current provision blocking a 23% payment cut expires at the end of November. Hospitals are worried about future Medicare cuts, and hospitals and doctors are eyeing each other warily over the issue of who will control new “Accountable Care Organizations.”

Conventional wisdom is that the providers have more to gain than to lose from reform and so constitute a powerful bulwark against the rollback effort, but there is deep ambivalence within the provider community. Disenchanted physicians have become a major funder of tea-party affiliated politicians and should providers find themselves in 2013 sitting across the table from an administration hostile to the ACA, provider support could prove ephemeral.

November election outlook and the future of the ACA

First, where do things stand with respect to November Congressional races? Both the “prediction” trading site Intrade and Political website fivethirtyeight see a Republican takeover of the House as likely, with Democrats retaining a majority in the Senate.

Chance of Republican Control of House

Chance of Republican Control of Senate
InTrade

75%

25%
Fivethirtyeight

66%

22%

Repeal, really?

With this as a working hypothesis, what does it mean for ACA implementation? There is a consensus that even if they took both branches of Congress in November, repeal would be unfeasible for at least the next two years. What is unclear is how far Republicans would be willing to go in an attempt to sabotage the implementation of the law. In particular, the question is whether House Republicans would attempt to shut down government in order to deny the administration funding for implementation. Some Congressional Republicans seem eager for a showdown over health care while others are more circumspect. At minimum, expect multiple legislative and oversight actions aimed at diluting current provisions. Although Obama administration officials profess not to be losing sleep over the prospect, advocates will have no choice but to gear up to respond to the continuing attacks.

– Michael Miller, Policy Director

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The Insider: The Cost of Compromise

Tuesday, August 10th, 2010

FMAP: Victory at a Price

SNAP Offset Graphic FinalThe Senate voted on Thursday to provide additional federal assistance to state Medicaid programs (and additional support for teachers to avoid layoffs) and the House followed suit today, but the price was high. After several attempts to pass an FMAP extension on an emergency basis (meaning no tax increase or spending cut to offset the new spending) were blocked by a united Republican Senate caucus, the leadership decided to pay for the financial assistance to states by rolling back a temporary increase in food stamps (SNAP). The SNAP increase, part of the American Reinvestment and Recovery Acct (ARRA), was originally projected to phase out in 2014, however, the slow growth in food prices would have extended the increase until 2018. The FMAP legislation means that the increase will indeed end in 2014, creating a cliff that at that time will cause a drop in SNAP benefits.

Senate leaders (supported by the administration) faced with the specter of failure on the fiscal relief legislation and the resulting layoffs of teachers and other state workers plus the scaling back of Medicaid benefits, decided that avoiding the harm now was the lesser of two evils. With luck there will be a chance to restore the SNAP benefit before the cut actually goes into effect in 2014.

The really sorry thing is what the FMAP/ SNAP trade says about the balance of power in the US Senate today. As much as we decry the use of SNAP as one of the funding sources, it is a sad fact that a more progressive source would have been unable to clear the Senate. Unfortunately, things are only likely to get worse in the short run. Republicans, aided by conservative Democrats, will continue to block important legislation (such as FMAP, or an extension of unemployment benefits or the energy bill) and then benefit from it electorally because the problem isn’t solved and people vent their bad mood on the party in power (see example here). With the electoral winds at their back – projections are for gains in the House, Senate and governorships – what’s the incentive for Republicans to change? The prototype for this behavior was health reform under Clinton which the Republicans were able to sabotage and then ride to victory in 1994. Running the same play in 2010 is likely to create new obstacles to ACA implementation in 2011. With a more closely divided Senate ahead, we can expect more replays of the FMAP dynamic until at least 2013.

What does the MO vote really mean? Not much, but VA decision more troubling

While ACA opponents are trumpeting the passage of Proposition C in Missouri, there really isn’t much ‘there’. The voter turnout was heavily weighted to GOP voters, making it more of a straw poll of Republican sentiment than a true test of public opinion. For example, in the Senate primary race 578,582 voted in the Republican primary while only 316,107 or 35 percent of the total voted in the Democratic primary – not too different from the 70-30 split on Prop C.

Further complicating the interpretation of Proposition C was the confusing wording of the multi-part question which addressed the mandate, the right to pay for health services and the ability to make changes to the rules for liquidating certain insurance companies. As a result, Proposition C is a much less accurate barometer of public opinion than the polling which is showing that public support for the ACA is growing (albeit slowly), opposition is declining and the “intensity gap is almost inside the margin of error.” However, the Missouri vote is likely to encourage continued ACA nullification efforts, which got something of a bigger boost from the Virginia court decision last week.

Essentially, the judge hearing the case ruled that, notwithstanding the supremacy clause of the Constitution, a state can pass a law that conflicts with federal statute and then sue to enforce it. To be sure, this is just a procedural decision and a number of legal experts believe the judge has erred and that the case will ultimately be resolved in favor of the ACA, but reading the judge’s reasoning can’t give supporters of the ACA great comfort; nor does the possibility of sending a case all the way to the current Supreme Court.

Be careful what you wish for

If ACA saboteurs really got their way, what would it mean?  Two new reports shed light on that question. A new analysis from economist Jonathan Gruber estimates that implementing the ACA without the Individual Mandate would increase premiums by 27 percent while Medicare Trustees say that total repeal would shift the Medicare trust fund into a deficit a dozen years earlier than current predictions (2017 vs. 2029). But then again, if your goal is to destroy Medicare and you don’t care about expanding coverage, maybe that doesn’t matter.

Is Howard Dean right about the Individual Mandate?

Criticism of the Individual Mandate does not only come from the right. Howard Dean recently was quoted as saying not only that the mandate would be repealed but that it wasn’t necessary. As evidence he cites his own state’s experience with providing near-universal coverage to children without a mandate. Actually Vermont, while offering good coverage for kids, is not unique. The state ranks 14 in the country with respect to the rate of children’s coverage according to Kaiser State Health facts, but even the state that ranks best – Massachusetts – lacks a mandate on kids coverage. The Massachusetts mandate applies only to adults. Does this prove Dean right? Not really.

Hypothetically a similar coverage result could be achieved without the Individual Mandate if Congress could be persuaded to make insurance subsidies sufficiently robust and accept a large migration of moderate-income workers from private to public coverage. However, the outcome of the Congressional debate over the ACA, when there were 60 Democratic Senators and a large majority in the House does not auger well for a large increase in publicly financed health insurance subsidies in the near future. Gruber’s analysis shows that only about 7 million people would gain coverage at current ACA subsidy rates without the Individual Mandate, as opposed to 32 million with the mandate.

The other alternative to the Individual Mandate often mentioned – late enrollment penalties – could work from the insurance industry’s point of view. Late enrollment penalties would protect against adverse selection by charging higher premiums to people who did not obtain coverage when it was available. It’s the method used to guard against adverse selection in Medicare Part D, but it is more likely to create insurmountable barriers to coverage for low-wage workers than it is to produce something approaching universal coverage.

– Michael Miller, policy director

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The Insider: All this could be yours someday

Monday, June 14th, 2010

Fuzzy logic
As the “tax extenders” bill makes its way through the Senate, a provision to extend COBRA premium subsidies for the unemployed is in jeopardy. Opponents in the Senate and the Blue Dogs in the House who stripped the provision from legislation two weeks ago argue that it’s unfair to help people who are unemployed when other, equally needy people are getting no assistance.

Just stop and think about that for a minute: It’s not like they’re identifying an alternative beneficiary for assistance, or arguing to accelerate implementation of the Affordable Care Act. They are basically saying, “Because we can’t help everybody, we won’t help anybody.” If you apply that reasoning more broadly it leads you to advocate the repeal, or at least the suspension, of Medicare and Medicaid until 2014, when financial assistance to obtain coverage becomes more generally available–a move few Congressmembers would dare consider, even in a non-election year.

With unemployment remaining high, the COBRA premium subsidies in limbo are badly needed. They are good for the economy, the health care system, and mostly for the thousands of struggling families who will be able to retain their coverage. Find out more at Community Catalyst’s implementation headquarters.

Faulkner on health care
When William Faulkner wrote, “The past is never dead. It’s not even past,” he could have been talking about the politics of health care more than a half-century into the future. Congressional Republicans’ challenge of the White House public education campaign on Medicare changes as misuse of government funds for partisan advantage hearkens back to Democrats’ attacks on the Bush administration over the original Medicare Part D roll-out.

And Senators who opposed PPACA seem intent on re-debating the legislation at every opportunity: first, in the context of Don Berwick’s nomination to head CMS, and now in the debate over the Medicare physician payment fix. Republicans have offered an alternative that does more for the physicians but partially pays for it by eliminating desperately-needed financial assistance for state Medicaid programs—while slipping in a “poison pill” that would roll back the individual responsibility provisions in PPACA. Such a move could appeal to many on the left who are concerned that the affordability provisions don’t go far enough.

Someday, all this could be yours
As the “repeal and replace” drumbeat goes on, a third ‘r’ should be added to the sequence: Recycle. Congressional Republicans are recycling ideas from the debate that were shown to fail to reduce the number of uninsured or eliminate insurance discrimination.

But as several states move forward with anti-Affordable Care Act ballot measures, new research from Massachusetts shows just how wrongheaded such opposition is. Until the coverage provisions of the Affordable Care Act kick in in 2014, Massachusetts provides the closest thing we have to a “beta site” for what the health care system of tomorrow will look like. While critics focus on the continuing cost challenges (problems that pre-dated health reform in Massachusetts  and were not really addressed in the landmark law in 2006) new reports published by the Urban Institute and the National Bureau of Economic Research underscore just what other states can gain as they move forward with implementing the law.

Urban’s latest report shows that the coverage gap between racial and ethnic minorities and non-Hispanic whites has been closed—the only place in the country where this is true. Additional findings show:

  • –high rates of coverage in Massachusetts persist despite continued high unemployment
  • –economic barriers to obtaining care remain low and have declined further for some populations since the inception of the law
  • –four years into implementation, there is still no evidence of ‘crowd-out’ of private coverage, and public support for the Massachusetts system remains high.

Get the details here (pdf).

The NBER paper found that since reform in Massachusetts, there have been fewer preventable hospitalizations and emergency room-generated admissions, and length of hospital stays has been reduced, most likely due to improvements in access to ambulatory care.

Sure makes implementation look like a lot better idea than repeal.

–Michael Miller, director of strategic policy

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The Insider: A broken record

Tuesday, June 8th, 2010

Health Care Reform = Rationing has been a favorite theme of opponents throughout the debate.  While the circumstances and details change over time, this theme remains constant.  In the past week, opponents have stepped up their attacks on the nomination of Don Berwick to head CMS, citing again his positive statements about the British National Health Service. They also seized on a New York Times article that has largely taken the work of the “Dartmouth Atlas” out of context to continue their scare campaign.  (The Times feeds the Berwick/reform/rationing storyline by quoting Berwick as one of the defenders of the Dartmouth work.)

The Dartmouth researchers have shown that there is no necessary correlation–and at times a negative correlation–between high health care spending and high quality. And though the Times story attacks the Dartmouth work and researchers, it fails to refute their conclusion. The piece has generated vigorous pushback against the piece—not only by the Dartmouth researchers themselves, but by sources for the story who say their words were used out of context to criticize the project.

The problem isn’t that there aren’t limitations and ambiguities in the Dartmouth work. It’s that in the game of telephone from sources to the Times reporters to opportunists who picked up the Times story as another club to beat reform with on the airwaves, all of the nuance gets lost.

–Michael Miller, director of strategic policy

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The Insider: Last minute collapse on doc payments, Medicaid and COBRA subsidies a bad omen?

Tuesday, June 1st, 2010

In the lead-up to passing the health reform law, Congress debated what to do about the Medicare physician payment problem.  Under current law, the formula for setting Medicare physician payment rates, known as the Sustainable Growth Rate, or SGR, will impose large and escalating annual cuts on physician reimbursement.  The SGR issue was ultimately separated out from health care reform, and doctors were assured that the issue would be addressed before the scheduled payment cut June 1.  Physicians pressed for a permanent solution to the problem but because of the price tag, Congress scaled back, first to a 5-year patch and then to a 19-month fix.  The scaled-back SGR patch passed the House just before the Memorial Day recess, but without enough time for the Senate to act.  Theoretically that means that a Medicare payment cut of over 20 percent kicks in today, but CMS is holding onto claims for a couple of weeks assuming that when the Senate comes back they will enact a retroactive payment increase.

While the physician payment fix is likely to get sorted out, two other critical provisions face a more uncertain future.  With unemployment still high and state budgets still in trouble, House and Senate leaders attempted to extend enhanced federal Medicaid payments to states through the end of state fiscal year 2011 (the enhanced payments are currently scheduled to end halfway through the year) and to continue the subsidy of COBRA premiums created by ARRA last year.  But in what’s being described as victory for House fiscal conservatives, both of these measures were struck from the House legislation late last week, and whether the Senate will restore them remains uncertain.  Roughly 20 states are already counting on the extra Medicaid help in their state budgets.

However, that victory may prove short-lived. Both the COBRA and Medicaid provisions themselves are popular with core Democratic constituencies, and it’s entirely possible that the Democratic Blue Dogs who have drawn a line in the sand in the name of controlling federal spending will be punished at the polls, not rewarded, if the Medicaid and COBRA funding is not restored. They could lose support from the Democratic base without picking up any offsetting support from more conservative voters.

If funding is not restored there are several implications that go beyond politics.  The first is harm these cuts do to low- and moderate-income families who will lose coverage or services as a result. Second, the loss of COBRA subsidies is a blow to the drive to provide health security for all, while the loss of Medicaid funding will certainly turn up the heat on the already charged debate over the role of Medicaid in reform.  Finally, if there is a more conservative Congress in 2011 as anticipated, future debates over federal health care funding and implementation could become similarly difficult, with Congress unable to agree on funding for provisions in PPACA that are authorized but lack an appropriation.

The immediate implication for health care reform advocates is that we need to redouble our efforts to persuade the Senate to revive the COBRA and Medicaid funding.  It’s time to step in to keep reform on the right track.

More on Living in Chicken Little Land

You know it’s Chicken Little time when people can (and do) go on about how awful health reform is without any regard to the available facts.

Exhibit A:  Public opinion. The most recent Kaiser tracking poll (pdf) shows that the top concerns opponents have about health care reform is that it will increase health care spending and is not paid for.

Both the Congressional Budget Office and the CMS Office of the Actuary have refuted these claims in the past.  CBO has found that health reform will reduce the deficit (pdf) while the CMS actuary projects that reform will provide coverage to over 30 million people with a negligible increase in costs.  Recently, a Commonwealth Fund/Center American Progress analysis has suggested that both CBO and CMS are being too conservative in their projections.  Essentially both agencies assume no savings at all from efficiency gains, quality improvements and delivery system changes–sources that could, by moderate estimates, generate a potential $600 billion savings over 10 years.

Exhibit B: state government.  Numerous states have vociferously complained about the burden the Medicaid expansion, a core component of health reform, will impose on them; many going so far as to file a lawsuit to block the expansion.

The facts? A new paper released by the Kaiser Commission and the Urban Institute tells a different story (pdf).  The study shows that on average health reform will add only 1.4 percent to state Medicaid spending between now and 2019.  This is very similar to the 1.25 percent estimate developed by the Center on Budget and Policy Priorities.  And neither of these forecasts take into account savings to states from changes in the delivery system or from reductions in spending on services that are now 100 percent state funded but will be covered by Medicaid in the future.  Although state by state estimates vary, in no state does the federal government contribute less than 94 percent of the cost of the expansion.

Unfortunately, it isn’t much use telling the truth to people whose minds are already made up. Facts don’t matter to Chicken Little, who gets all his information from the Fox (news).  As we noted in the last post, the only thing that will persuade these folks is when the sky doesn’t fall in 2014 and, at least for some, they start receiving benefits under the law.  Then they’ll probably join the “keep government out of my Medicare” crowd.

DoJ presents its case
The Department of Justice has, in several legal briefs, laid out its basic arguments against the lawsuits seeking to undermine health reform.  Here’s a CliffsNotes version of the arguments:

•    States have no standing relative to the individual coverage requirement, which applies to individuals, not states (duh).
•    There is no need to block the law from going forward now since there is no possible injury until April 2015, when penalties for failure to purchase coverage would be due.
•    Individuals who now claim the law would require them to purchase coverage can’t know their circumstances in 2014, so the “injury” is purely speculative.
•    State residents cannot vote to exempt themselves from federal law they don’t happen to like.
•    The minimum coverage requirement is a reasonable part of the regulatory scheme that governs economic activity related to health care and health insurance, and thus falls within the Commerce Clause,
•    Tax penalties associated with the requirement to purchase coverage fall within Congress’ power to tax and spend for the general welfare.

Call it what it is—then change course

When responding to repeal proponents it’s important to:
a) Call the attacks what they are: an attempt to preserve an unsustainable status quo that leaves millions without coverage and millions more who have coverage at risk of financial ruin.

b) Turn to the benefits of the law—reform will:
•    Provide security to millions of working Americans
•    Guarantee people access to the same plans as members of Congress
•    Help women, children and people with serious medical conditions get more affordable and more secure coverage
•    Strengthen oversight of insurance premiums and help people get better value for their premium dollar

–Michael Miller, director of strategic policy

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The Insider: Proxy War

Monday, May 17th, 2010

LINK FIXED

Last week, we likened the low-visibility conflicts over regulatory measures to trench warfare. This week, the military metaphor of choice is proxy war. Republicans in the Senate are using the nomination of Dr. Donald Berwick to head the Centers for Medicare and Medicaid Services to resurrect many of the themes they sounded during the legislative debate–especially the fiction that health care reform will lead to rationing.

Yes, folks, the death panels are back–if not explicitly, then by (heavy) innuendo.

Why? Because Berwick, currently the head of the Institute for Healthcare Improvement, has made the near-treasonous observation the U.S. health care system is not, in every respect, the best in the world (World Health Organization rankings be darned).

And he had the temerity to express admiration for the British National Health Service. Admiration for the NHS means support for comparative effectiveness research, which is akin to endorsing rationing, which is achieved by death panels, which lead to socialism—get it?

But the GOP attack on Berwick is not motivated, at least exclusively, by wounded national pride, sour grapes over the party’s failure to kill health reform, or even by policy differences. Rather, it is a cold political calculation aimed especially at raising the fears of seniors, who (as we repeat almost weekly) will have a major say in which party controls Congress in 2011. Right now, that calculus appears to be working.

Life in Chicken Little Land

Chicken Little

If the election were held today, the picture would look pretty scary for Democrats. Although overall voters seem pretty evenly divided on who should control Congress, the enthusiasm gap definitely favors the Republicans. According to Cook Political Report, of the 30 “toss up” House races, 28 are currently held by Democrats, setting Republicans up for significant gains in the House. In the Senate, Republicans could pick up as many as six or seven seats.

What does this mean for health care reform? Well, we should be prepared to live in Chicken Little Land for quite a while to come, fielding Y2K-style warnings of impending doom until the sky fails to fall in 2014. (Of course, that’s only if we first get past the Mayan calendar end-of-the-world prediction in 2012.)

Of course, a lot could happen between now and then, and most of it is outside of the control of health care advocates. What we can do—and must do—is keep on telling the truth about reform, making special outreach efforts to those who are most vulnerable to misinformation.

Laugh-track

Watch Jimmy Kimmel and T-Pain’s musical spin on some of the President’s health care reform messaging.

–Michael Miller, director of strategic policy

photo credit: ffg on flickr

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The Insider: Trench Warfare

Thursday, May 13th, 2010

While political and legal attempts to repeal the Patient Protection and Affordable Care Act may draw the most attention, the real success or failure of the law will play out in hundreds of regulatory battles that will take place largely out of the public eye.

One of the first such battles is the definition of “medical loss ratio” (MLR).  The MLR is the percentage of premium dollars that a health insurer is required to devote to the medical care of its enrollees.  Under PPACA, individual and small group plans must spend 80 percent of premium dollars on medical care (as opposed to advertising, administration and profit), and larger groups must spend at least 85 percent. Failure to meet these required thresholds would trigger a rebate to policy-holders.   However, PPACA allows expenditures designed to improve quality of care and state and federal taxes to be exempted from the MLR calculation.

Industry representatives are not satisfied with these qualifiers, and are lobbying for special transition rules for those carriers that will have trouble meeting the MLR standard, warning that insurers may choose to exit the market rather than pay rebates.  Some are also arguing for special laxer rules for small carriers or for certain types of insurance.  They claim that small carriers have higher administrative costs but lower premiums for comparable coverage, and could be driven from the market without special consideration.

If it is indeed the case that small carriers have lower premiums (despite higher administrative costs), it is likely because these small insurers are underwriting more aggressively—a practice they will be forced to discontinue in 2014.  There doesn’t seem to be any good reason now to allow them to keep cherry-picking healthy enrollees who they will then be able to hang onto in “grandfathered plans” once reform fully kicks in—making the risk pool worse in the Exchanges.

The National Association of Insurance Commissioners (NAIC) is charged with developing recommendations to HHS to implement the MLR provision.  NAIC recommendations are expected by June 1.  The extent to which the NAIC (and ultimately HHS) gives in to the special pleadings of the industry will be one early indication of the willingness of state and federal regulators to stand up to special interests as implementation proceeds.

–Michael Miller, director of strategic policy

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The Insider: The Political Ecology of Health Reform Implementation

Wednesday, May 5th, 2010

Throughout the debate on passage, pollsters regularly found that the public wanted a “bipartisan solution” to health reform. Of course, no such solution was forthcoming if by bipartisan we mean something that attracts votes from members of both parties. As implementation moves forward, the partisan divide looks, if anything, to further grow.

The persistence of these bipartisan wishes suggests that many Americans do not fully appreciate the extent of the rightward shift in the Republican Party. This can clearly be seen in the standing of Republican Governor Charlie Crist of Florida, now a candidate for the U.S. Senate who recently decided to run as an independent after he was overtaken in the primary polls by tea-party favorite Marco Rubio. Crist, while less extreme than former governor Jeb Bush, is no liberal. But he finds no home for himself in today’s Republican party. Similarly, Utah Senator Robert Bennett is at risk of losing his party’s nomination to a challenger on his right, even though he has an 84 percent lifetime favorability rating from the American Conservative Union.

Another marker of this shift is the sharp contrast between the support for reform of recent Republican leaders such as former Senate Majority Leader Bill Frist from the pronouncements of today’s party leaders. Even some of the moderate Republican governors who have been more supportive of reform—e.g. Connecticut’s Rell, and Schwarzenegger—are about to exit the political stage.

If the elections were held today, most projections show that the Republican Party, increasingly indistinguishable from the extreme far right, would claim a significant though not decisive victory, bringing into office a new crop of officials publicly committed to repeal of reform.

That’s the bad news.

The good news comes in two parts:
a) Even if there is an electoral tsunami, the repeal strategy faces enormous hurdles and
b) While the repeal torch burns as hot as ever for the true (un)believers, there is some indication of an upswing in support from the general public.

The latest Kaiser poll shows 49 percent of the public supports reform, compared to 40 percent who are opposed. Importantly, all of the early implementation provisions rack up big majorities among Republicans and Independents as well as Democrats.

The popularity of these measures muddies the message of the repealers–but only if people know about them. Educating the public about the early provisions of reform, then, is crucial not only to make sure that people get the new benefits, but to influence the future political environment in which reform will be implemented.

Insurance Rate Regulation and Beyond
When it rains it pours for insurance giant Wellpoint. Last week it was outed for its aggressive policy of trying to dump women with breast cancer from its rolls. Then it withdrew its controversial proposal for a 39 percent premium rate increase in California, admitting that there were errors in its calculations but claiming those miscalculations were inadvertent.  (In related news, the company has announced it will be putting the Brooklyn Bridge on the market to help recoup the revenue from the cancelled rate increase, but so far no buyer has stepped forward).

Even taking the company at its word, Wellpoint’s debacle illustrates the need for stronger rate oversight. Leaders of the Senate HELP committee continue to debate the options for moving the Feinstein rate oversight bill, S.3078, which also picked up an important endorsement from the American Cancer Society/Cancer Action Network. Companion legislation has been filed in the House by Illinois Congresswoman Jan Schakowsky.

At the same time, advocates need to be mindful that strong oversight of insurance premiums is a necessary but not sufficient piece of the cost-containment puzzle. The anti-trust investigation into possible monopoly pricing by Partners Healthcare—the largest hospital system in Massachusetts—illustrates a pervasive problem in the U.S. health system. While it remains to be seen if there was anything actually illegal in Partners’ negotiating strategy, the issue of concentrated provider power is real and not confined to Massachusetts. (See this recent report on the effect of market power on health care costs in California.)

In fact, the high prices that we in the United States pay for health care across the board add much more to our high costs than do the mix or amount of services we use, as Ezra Klein shows here. On a series of charts comparing the prices U.S. insurers pay to those of other countries–regardless of procedure or number of appointments–“the block representing the prices paid by American health-insurance plans [looms] over the others like a New York skyscraper that got lost in downtown Des Moines.”

Sure, it’s fun to pick on the insurers, and certainly they deserve it. But we can’t approach cost-containment like the drunk looking for his keys under the streetlight–not because that’s where he dropped them, but because that’s where the light is. Going after the insurers may represent the low-hanging fruit, but the sustainability of health reform will depend on effective cost-containment–and that means taking a close, hard look at the delivery system.

–Michael Miller, director of strategic policy

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