Posts Tagged ‘Medicare’

« Older Entries
Newer Entries »

A Tale of Two Deficit Reduction Approaches

Friday, April 15th, 2011

In his speech on Wednesday, President Obama laid out his plan for deficit reduction, and last week, Congressional Republicans released their 2012 budget proposal. Both plans reduce federal expenditures on Medicare and Medicaid, but they take strikingly different approaches. What are the key takeaways for health advocates?

Takeaway #1: The president gets the big picture right on key health care issues. Before the president’s speech, we laid out three key issues health advocates should be listening for. Between his speech and accompanying documents, it’s clear that the president is in a resoundingly good place on all three issues:

1. The president explicitly rejected proposals to turn Medicare into a voucher program and to convert Medicaid into a block grant. These approaches, the backbones of the 2012 Congressional Republican budget, do nothing to tackle the underlying drivers of health care costs. Instead, they shift these costs onto those who can least afford them: seniors, people with disabilities, and low-income families.

2. The president also understands the harm imposed by federal spending caps. While this is less clear from his remarks, follow up with White House officials makes it clear that the administration understands that a global cap is just a back door to turning Medicaid into a block grant and Medicare into a voucher.

3. He articulated an alternative, far more rational approach to cost containment, which builds on foundation of the Affordable Care Act. The president identified key approaches to build on the cost-containment structure laid out in the ACA. For example, he suggests strengthening the mandate of an independent commission of doctors, nurses, medical experts and consumers, created by the ACA, to weed out wasteful spending in Medicare without reducing benefits or increasing seniors’ costs. He also proposes using Medicare’s purchasing power to negotiate lower prescription drug prices for America’s seniors. And he recommends changing the way we reimburse for health care services, moving us away from a system that pays providers for more services and towards one that pays providers for better health outcomes.

(For more on the ACA’s approach to cost containment and how it can be enhanced going forward, see our one page graphic and issue brief.)

Of course there are still many details of the president’s proposal to be filled in, and there are some concerns about specific elements such as the overall size of the proposed Medicaid cut and new limits on states’ ability to tax health care providers to fund Medicaid. But it’s also important to put the President’s proposal in context, which brings us to…

Takeaway #2: The president’s approach presents a stark contrast to the one endorsed by Congressional Republicans. This contrast is most obvious in two key areas:

1. Reducing costs vs. shifting costs. As we laid out above, the president’s approach looks to reduce health care costs primarily by tackling their underlying causes.

Congressional Republicans, on the other hand, treat rising health care expenditures like a game of “hot potato”: they merely toss these costs onto states, seniors, people with disabilities, health care providers, and other vulnerable families. First, they turn Medicaid into a block-grant program that, by design, would not keep up with rising health care costs. This would impose crippling burden on states, leading to rollbacks in health care coverage for millions of nursing home residents, people with disabilities and low-income children and families. It is no exaggeration to say that some would die as a result.

Second, they end Medicare as we know it and replace it with a voucher that seniors would use to buy coverage on the private market. These vouchers, like the block grants above, are designed not to keep up with rising health care costs, leaving seniors to pay an ever-increasing share of their health care costs. According to the nonpartisan Congressional Budget Office, under this plan the average senior would shoulder $6,000 more in annual out-of-pocket costs by 2022.

2. Bank accounts of millionaires vs. health security for seniors, people with disabilities and low-income children. Unlike President Obama, the Congressional Republicans would extend Bush-era tax cuts for the wealthiest Americans. Under this plan, the average person earning at least a million dollars a year would receive an average tax cut of $125,000 per year. Through severe cuts to Medicaid and Medicare outlined above, Congressional Republicans essentially force America’s most vulnerable citizens to finance these tax cuts for its wealthiest citizens.

These contrasting budget proposals offer us a clear choice: We can maintain and improve health security for American families, or we can have tax cuts for the wealthiest people and corporations. We can’t have both and still reduce the deficit. The American people have already indicated their policy preference—for example, three quarters think Medicaid funding should either be kept the same or increased, and 70 percent would prefer shielding the program from cuts to using it for deficit reduction.

The president is clearly listening. Is Congress?

– Katherine Howitt, Policy Analyst and
Michael Miller, Policy Director

Tags: , , ,
Posted in Affordable Care Act implementation, Medicaid | No Comments »

Obama’s Speech Today: A Listeners Guide for Health Care Advocates

Wednesday, April 13th, 2011

Later today when the President speaks about the national debt, what should health care advocates be expecting and hoping to hear? Given that long-term projections of rising public debt rest almost entirely on growth in health spending, we should expect at least some substantial attention will be paid to health care cost containment. However, don’t expect a detailed prescription. 

Since the President is addressing the public at large, he is unlikely to get too deep in the policy weeds, but there are a few key things health care advocates should be listening for (even if only “between the lines”):

Does the President address block grants and vouchers?
We should expect the administration to reject explicitly or implicitly both a Medicare voucher and a Medicaid block grant. It’s notable that two of the President’s top health policy advisors were leading public opponents of Medicaid block grants during previous efforts to transform the program, and it is very unlikely that the President will move off of this position.  This is where we should expect the most clarity as the President works to distinguish his approach from the one laid out by Congressman Ryan in the context of the FY2012 federal budget.

Does the President endorse a global federal health spending cap a la Bowles-Simpson?
While the Bowles-Simpson debt reduction plan does not call for either a Medicaid block grant or a Medicare voucher, it does call for limiting the growth of federal health spending to the rate of GDP plus one percent. Such an inflexible spending target would fail to allow for growth in the number of elderly or Americans with disabilities, an economic downturn, an epidemic, or changes in health care delivery that bring substantial benefits but also new costs. While we can expect the President to be somewhat clear in rejecting a block grant or voucher, his position on a global spending cap is truly unknown. Since the spending cap approach has garnered some favorable attention from a bipartisan group of Senators working on a debt reduction plan, a signal of Presidential approval or disapproval of this position could be very important. Silence on this point would also be important and would likely be interpreted on Capitol Hill as a green light to continue to negotiate a global spending cap.

Does the President offer a rational framework for reducing health care spending, consistent with the Affordable Care Act?
One of the big lies about the ACA is that it doesn’t tackle health care cost containment.  In fact, the ACA approaches cost containment in a very rational way.  If you look at the sources of excess health care spending in the U.S. relative to the rest of the world, you see that high prices and high administrative costs, particularly in the private sector, are among the main causes. Within public programs, high administrative costs and high prices are much less of an issue (with prescription drug prices for Medicare beneficiaries being a notable exception). Instead, the sources of low-value public health care spending primarily include preventable hospital and nursing home admissions, preventable complications (such as infections and other medical errors) and improper payments. Finally, any long-term cost containment approach must include improvements in the underlying health of the population.

The ACA already tackles all of these issues with: Exchanges, Minimum Medical Loss Ratios, beefed up rate review, enhanced payment oversight for Medicare and Medicaid, new Medicare and Medicaid payment and delivery models, investments in community care and improving transitions between hospital and community, major investments in public health and more. 

Of course more could be done, but generally that would require reopening some of the deals that were negotiated in the context of the ACA debate.  It will be instructive to listen for clues as to whether President Obama stands behind the cost containment path chartered by the ACA and whether he indicates a desire to go further down that road, or if he signals a change in direction—one that would involve placing more of a burden on elders, people with disabilities, and low-income children and families. 

Stay tuned for follow up analysis tomorrow.

- Michael Miller, Policy Director

Tags: , , ,
Posted in Affordable Care Act implementation, Medicaid, Uncategorized | 1 Comment »

Health reform makes for healthier women

Thursday, March 24th, 2011

To mark the first anniversary of the Affordable Care Act this week, Health Policy Hub will be cross posting blogs from our state partners that show how people in their states are benefiting from the law. This blog was originally posted on the Health Care for All New York blog.

Women were among the strongest supporters of health reform in the campaign that led up to President Obama’s signing of the Affordable Care Act (ACA) on March 23, 2010. One year later, women and girls across New York State are experiencing the benefits of the ACA provisions that have gone into effect so far. Raising Women’s Voices, an active member of the HCFANY steering committee, is working to inform women about benefits like these:

  • – Young women can now stay on their family health insurance policies up to age 26. This new provision, which applies to all young adults, is especially important for young women, who are in their prime reproductive health years and need affordable family planning and primary care services. It also provides peace of mind for all those moms worried about how their children will maintain health coverage after graduating from high school or college, when so many entry-level jobs no longer include health insurance. Want to know if this applies to your family’s insurance policy and, if so, how to take advantage of it? Go here.
  • – Women who are insured can now get preventive care – such as mammograms and Pap smears — without having to come up with co-pays or deductibles. Out-of-pocket costs can discourage women from seeking the preventive care they need. Many important women’s health services are covered by this new provision. Wondering which services are included? Go here to see the list. Of course, we still want to see contraception added to the list. Women can sign the Raising Women’s Voices petition asking the U.S. Department Health and Human Services to declare that Contraception is Prevention by going here.
  • – Older women on Medicare now can get annual physicals without co-pays. Also, Medicare enrollees who fall into the Prescription Drug Part D “donut hole” are eligible for 50 percent discounts on brand-name prescription drugs this year, to help hold down their out-of-pocket costs. Yes, these are real women’s health issues! According to the Kaiser Family Foundation, 58 percent of Medicare enrollees in New York State are women. To learn more about how to take advantage of these new provisions, go here.
  • – Health insurance companies can no longer require you to get a referral from your primary care doctor before you can seek obstetric or gynecological services from an ob/gyn who participates in your plan. This new provision means you can get to your ob/gyn quicker, without having to jump through the hoop of obtaining a referral. Learn more about this provision here.
  • – Women who have pre-existing medical conditions and can’t find affordable private health insurance can now get insurance through the New York’s Bridge Plan. Having a medical condition like breast cancer, diabetes or heart disease can make it nearly impossible to find affordable health insurance in the private market in New York State. A woman we know in Queens who has pre-existing medical conditions couldn’t afford the only policy she could find, because the monthly premium was going to be $1,200! Now, she has signed up for New York’s new Bridge Plan and will be getting health insurance for less than $500 a month. The list of pre-existing conditions that qualify you for enrollment in this plan include high-risk pregnancy, complications from pregnancy, uterine fibroids, endometriosis and a number of other conditions specific to women.

Raising Women’s Voices has prepared a fact sheet of the top 10 benefits women and our families are already getting from the Affordable Care Act. You can find it here.

Click here to view HCFANY’s policy brief, “Health Reform: What’s in it for women?”

Other great sources of information about how the Affordable Care Act helps women include:

— Lois Uttley, Director Merger Watch Project
Co-Founder, Raising Women’s Voices

Tags: , ,
Posted in Affordable Care Act implementation | No Comments »

Yea ACA!

Tuesday, March 22nd, 2011

To mark the first anniversary of the Affordable Care Act this week, Health Policy Hub will be cross posting blogs from our state partners that show how people in their states are benefitting from the law. This blog was originally posted on the Pennsylvania Consumer Health Coalition blog.

You’ve heard the old adage, “An ounce of prevention is worth a pound of cure.” Perhaps this is most true in regard to the free preventive screenings and wellness visits made available to Medicare beneficiaries through the Affordable Care Act (ACA).

Knowing that it’s both cost-effective and a component of good health to do preventive testing (mammograms, colonoscopies, flu shots, etc.) the ACA provides these services and an annual wellness visit to persons enrolled in Medicare.

According to the recently released data from “Families USA,” in Pennsylvania 2.26 million persons have access to these services.

It’s a wise move to receive preventive screenings — one’s health depends upon it.

It’s an even wiser move for our nation to support and continue moving forward in the implementation of the ACA — the health and well-being of our citizenry depends upon it.

— Sally Jo Snyder, Director of Advocacy and Consumer Health Engagement
Pennsylvania Consumer Health Coalition

Tags: , ,
Posted in Affordable Care Act implementation, Lessons Learned from the Field | No Comments »

The Insider: The Politics of State Flexibility

Monday, March 7th, 2011

What’s behind the President’s embrace of state flexibility?
President Obama surprised a lot of people, including, apparently, Congressional Democrats, when he came out in favor of moving up the date when states could seek “global waivers” under the Affordable Care Act to craft their own health policy solutions. The waiver provision in the ACA, which would let states opt out of the Individual Responsibility Requirement (IRR), the Exchange and other provisions of the law as long as they can provide coverage that is equally comprehensive, equally affordable and doesn’t add to the federal deficit, goes into effect in 2017. The President announced his support for moving that date up to 2014. Republicans lost no time in trashing the President’s announcement. At the same time, there was conspicuous silence from Congressional Democrats, suggesting there is little chance a waiver date change could move through Congress.

There are also some technical challenges to implementing a waiver in advance of establishing any baseline for coverage or spending, but the President’s support for changing the date should be viewed through a political rather than policy lens. It was more designed to change the conversation about health care reform than to change policy.

Republicans have generally concentrated their fire against the means in the ACA rather than the ends. By declaring his support for greater flexibility over the means, President Obama is challenging Republicans to come up with an alternative that will work as well as the ACA or, failing that, forcing them to admit that they do not support comprehensive affordable coverage for all Americans.

Support for greater state flexibility also creates some daylight between the President and the IRR, which is probably the least popular provision in the ACA. At the same time, it creates some tension between Congressional Republicans and Republican governors. While the governors have been largely on board with the Congressional repeal strategy, if push comes to shove and they really do have to implement the ACA, they’d rather have more flexibility. For Congressional Republicans, however, any move to “fix” the ACA would blunt their attack messages and so must be rejected out of hand.

Since there is no sign that Democrats in either branch are interested in pursuing the idea, “state flexibility” could be a one-day blip in the 24/7 news cycle, but don’t be surprised to see it return as a talking point as the Presidential election gets closer.

That Settles That (for the moment)
For all those wondering whether Judge Vinson’s ruling that the entire ACA must be struck down because the IRR is unconstitutional halts implementation of the law pending appeal, the answer came down last week—it doesn’t. However, in an effort to speed final resolution, the Judge demanded that the Justice Department speed its appeal to either the 11th circuit or directly to the Supreme Court. The main effect of the judge’s ruling is that is should tamp down state resistance to implementation. For a scary look at the legal reasoning that underpins the challenges to the ACA and the consequences if that reasoning was widely applied, check out this issue brief by Simon Lazarus at the American Constitutional Society for Law and Policy.

Good news for beneficiaries/ bad news for millionaires
New poll results show the American people do not want to see cuts to Medicare and Medicaid and generally do not believe that such cuts are necessary. In fact, cutting Medicare and Medicaid are among the least popular options for dealing with the budget deficit. Most popular approaches are raising taxes on the wealthy, eliminating unnecessary weapons systems and reducing tax subsidies for the oil industry.

– Michael Miller, Policy Director

Tags: , , , ,
Posted in Affordable Care Act implementation | No Comments »

Less pain, more gain: defining an alternative to harmful Medicaid cuts

Monday, February 28th, 2011

(please note most links below are pdfs)

On Friday, Community Catalyst sent a letter to Secretary Sebelius, outlining eight policies states could implement to cut Medicaid costs. We were inspired to weigh in by a series of letters between the Secretary and Republican Governors that contrasted two very different approaches to reducing Medicaid expenditures.

Cutting Coverage vs. Cutting Waste
Republican Governors wrote a letter to Congress and the Administration in January, asking them to lift the Maintenance of Effort (MOE) requirement – the provision in the Affordable Care Act (ACA) that prevents most states from reducing Medicaid eligibility between now and 2014. The basic premise of their letter was that states need to cut low-income children, parents, seniors, and/or people with disabilities off coverage in order to “responsibly manage [their] state budgets.” We anticipate Republican Governors will reiterate this argument at the Energy and Commerce hearing Tuesday about the impact of the ACA on Medicaid.

Secretary Sebelius responded with a letter explaining why that basic premise simply isn’t true (see our blog and summary of her letter.) She outlined dozens of ways states can trim costs in their Medicaid programs without eliminating coverage for vulnerable families. By tackling the inefficiencies in our fragmented health care delivery system, many of the policies she suggested not only cut costs but they also have the potential to improve care for beneficiaries in the process. Sebelius also made it clear that her department remains open to suggestions of additional policies states can pursue to accomplish those dual goals.

When Secretary Sebelius Calls, We Answer
We took the Secretary up on that challenge. Our letter to the Secretary highlights eight additional policies states can pursue to lower Medicaid costs and maintain or improve care. More details about these options can be found in the text of our letter, but here are the highlights:

  • Recalibrate provider payment rates, shifting dollars from inpatient care to outpatient care, to give providers an incentive to treat patients in the lowest-cost settings.
  • Rebalance long-term care dollars away from institutions and towards home- and community-based settings by taking advantage of more funding opportunities created by the ACA to help states front the cost of this readjustment.
  • Better integrate care for those who are eligible for both Medicaid and Medicare by expanding existing programs such as the Program for All-Inclusive Care for the Elderly (PACE) and fully-integrated Special Needs Plans (SNPs) that provide a comprehensive and patient-centered model of care.
  • Reduce preventable hospital readmissions and complications by tying hospitals’ payment levels to their preventable complication and readmission rates.
  • Increase the use of generic drugs by making it easier for pharmacists to substitute equivalent generics when the patient was prescribed a brand name drug.
  • Improve evidence-based drug selection and purchasing by expanding utilization management and the use of state Preferred Drug Lists (PDLs) created by an evidence-based evaluation of available therapies. It’s important to include measures to protect access and quality, especially when applied to classes of drugs or medical conditions that have traditionally been excluded from PDLs (such as mental health, HIV/AIDS and cancer).
  • Improve prescriber education by creating an “academic detailing” program that provides prescribers with up-to-date information about the effectiveness of different medications and alternative treatments, serving as an unbiased alternative to pharmaceutical industry promotion.
  • Combat off-label drug promotion and inappropriate prescribing by requiring that physicians inform their Medicaid beneficiary patients whenever the physician prescribes a drug for an unapproved use, and that the patient consents to the treatment.

A Better Path to Savings
These policies — coupled with the consumer-friendly options offered in Sebelius’ letter — offer a clear alternative to cutting low-income children, parents, seniors and people with disabilities off Medicaid; they illustrate why Congress does not need to lift the Maintenance of Effort requirement for states to make their Medicaid programs more efficient.

They also offer clear alternatives to some of the more harmful cost-cutting tools that states already have at their disposal: imposing higher cost-sharing and eliminating or restricting “optional” benefits such as prescription drugs. Those tools just shift costs onto vulnerable beneficiaries, and risk harming their health. And research suggests they result in fewer savings than states might assume: when patients delay or forgo certain services because of cost-sharing or benefit restrictions, their illnesses can worsen and eventually require more expensive care, canceling out some of the state’s savings.

Our letter lays out a better path — one that not only saves money but also can improve the lives of vulnerable Americans. If Governors are serious about fiscal responsibility, they should jump at these opportunities to cut waste and improve the sustainability of the Medicaid program.

-Katherine Howitt, Policy Analyst

Tags: , , , , , , ,
Posted in Affordable Care Act implementation, care coordination/quality, Medicaid | No Comments »

The Insider: Putting Things in Perspective

Tuesday, February 1st, 2011

Putting the Florida Legal Ruling in Perspective
The media is full of stories this morning about the ruling yesterday of Judge Vinson, not only that the Individual Responsibility Requirement (IRR) of the ACA is unconstitutional, but also that the entire law must fall as a result. While this sounds dramatic, there is rather less than meets the eye.

Essentially the ruling has no immediate practical significance other than providing fresh ammunition for the attack dogs who were quick to seize on it. It doesn’t really change the calculus with regard to implementation. Federal regulators will certainly move ahead and the situation is not much different in the states. Since all or most of the ACA that pertains to states is likely to survive the legal challenges, the consequences of inaction are too significant for state government to sit back and do nothing while the court cases play out. For example, state administrations politically opposed to the ACA who want to use this ruling as an excuse for inaction risk turning over the operation of the Exchange (and the keys to Medicaid eligibility) in their state to the federal government.

The main concern about the ruling is that it opens up new ground on the far right, moving the Virginia ruling — which struck the IRR while upholding the rest of the law — into the center. This could create cover for the Supreme Court to follow suit in dumping the IRR while upholding the rest of the law.

If it comes, a Supreme Court ruling along the lines of the Virginia decision would create a major challenge for ACA backers. If the law, minus the IRR, remains intact, there could be significant adverse selection in private insurance pools. Technically, there are a number of alternatives that could be put in place to allow ACA implementation to move forward without major disruption.

The challenge is political. Bipartisan cooperation would be needed to enact an alternative. Republican opponents of the ACA could demand other major changes in return for an agreement to enact an alternative mechanism to prevent adverse selection.

During the debate on expiring tax cuts, Congressional Republicans showed themselves willing and able to avail themselves of this type of “hostage taking” opportunity to preserve tax breaks for the wealthy. They seem likely to attempt a similar strategy both with regard to completing the work on the FY’11 budget and the upcoming vote to raise the federal debt ceiling (see below). During the tax debate, neither the Obama administration nor Democrats in Congress were willing to play hardball. It remains to be seen whether the same dynamic plays out with respect to health care.

Stay tuned for more detail on the Vinson ruling.

The Next Dragon in the Road
The much-hyped House vote on ACA repeal is already fading into the rearview mirror. While Senators Reid and McConnell jockey over scheduling a similarly symbolic Senate vote, far more significant threats loom ahead that advocates must be prepared to meet. One critical fight that is rapidly approaching is a likely vote on whether to amend or repeal the Medicaid Maintenance of Effort (MoE) requirement contained in the ACA.

The ACA prohibits states from reducing Medicaid eligibility or putting in place new administrative enrollment barriers for most adults prior to 2014 and for kids until 2019. Recently, Republican Governors sent a letter to President Obama and Congressional leaders calling for repeal of the MoE. Even more recently, the National Governors Association (which includes all of the nation’s governors — Democrats as well as Republicans) sent another letter that, while less explicit in calling for repeal, also took a stance in opposition to the MoE requirement.

Medicaid is the foundation on which the ACA rests. The repeal attempt on the MoE is the opening move in what will be a sustained effort to undermine both the ACA coverage expansion and the entitlement nature of Medicaid itself, which is why we can be sure that Congressional opponents of the ACA will push it.

MoE repeal would not only lead to an increase in the number of uninsured, it would also create new barriers to full expansion in 2014. States that rolled back coverage would have to reinstate that coverage at their regular Medicaid match rate, making the 2014 expansion more difficult. Politically, moderate Senate Democrats, especially those up for reelection in 2012, may be reluctant to hold the line on eligibility given the poor fiscal condition of states and the looming expiration of enhanced federal Medicaid matching dollars. MoE is an especially hard vote for ACA supporters because, unlike total repeal, MoE repeal, will be scored by CBO as a budget saver, making it attractive to Senators eager to burnish their credentials as deficit cutters or for use as a “pay for” for another priority that has a price tag attached.

They just can’t help themselves
Although posing as defenders of Medicare helped Republican candidates rack up positive vote margins with older voters, some members of the House GOP caucus seem eager to cough up those gains. Republican House leaders are considering a measure to convert the Medicare program into a voucher system as part of the House budget proposal, which could take shape within a month. The proposal being considered would convert Medicare into a voucher by 2021 and would also raise the eligibility age for Medicare to 69 (a change that would add substantially to employer health costs). The same idea is likely to be advanced during the debate over an increase in the debt ceiling expected to occur this spring.

Eyes of the Beholder
Did CMS Actuary Richard Foster validate the supporters or opponents of the ACA (or some of both)? Both Democrats and Republicans claim that Foster’s testimony before the House Budget Committee bolstered their views of the ACA. Democrats say that Foster agreed that the ACA would reduce the budget deficit. Republicans point to his statements relating to overall health costs and whether people could stay on their current plans as support for their criticism of the ACA. Let’s take a closer look at these two latter statements.

First, Foster said the claim “if you like what you have, you can keep it” is not true in all cases. Given the way he qualified his statement, on this point, he seems obviously correct. Although Foster may have had changes to Medicare Advantage in mind, conceding that the ACA will force junk insurance off the market isn’t anything that ACA supporters should apologize for. Sooner or later (and generally speaking the sooner, the better) plans that take subscribers money without offering them either reasonable value or adequate financial protection in the event of a serious illness will be forced off the market. People who have them now and like them only like them because they are cheap, and will only like them as long as they don’t get really sick. Just because it’s cheaper to have cars without working brakes or airbags does not mean they should be allowed on the streets.

The more serious contention is that the ACA will not contain health care costs. The statement rests on the Office of the Actuary’s (OACT) projection of total health spending under the ACA and whether the Medicare cost containment provisions will actually be implemented.

The OACT is quite pessimistic about the cost containment potential of the ACA relative to other analysts like the CBO or Council of Economic Advisors. This is a general tendency of the office, not unique to the ACA. For example, the OACT overestimated the cost of Medicare Part D by 25 percent. Nonetheless, their analysis concludes that the ACA will expand coverage to over 30 million uninsured people with virtually no net increase in health spending. Since uninsured people get only about half the care of the insured, this large coverage expansion with a negligible increase in cost is actually an endorsement, rather than a rejection of the ACA’s cost containment effect.

Most importantly, Foster is making a political rather than analytic judgment that the Medicare cost containment provisions won’t be sustained. The endless replay of the drama around how to prevent the cuts in physician fees mandated by the Medicare Sustainable Growth Rate would seem to bolster his view, but, as Paul Van de Water of CBPP points out, the SGR is the exception rather than the rule when it comes to Medicare cost containment efforts. Notwithstanding the routine fee increases approved by Congress, savings from reductions in Medicare physician fees still exceed the levels projected at the time of SGR passage.

Don’t hold your breath
While the repeal and harass parts of the repeal, replace and harass strategy seem well underway, replace seems to be lagging and the likelihood of a coherent replace strategy emerging is much lower. The problem is that most of the ideas previously advanced by House Republicans don’t actually work—having at most a modest effect on health spending and even less on coverage, while failing to adequately protect those with preexisting condition exclusions. Even McCain advisor Douglas Holtz-Eakin, a vociferous critic of the ACA says, “If it’s all they do, it’s not a serious effort.”

Nonetheless the old Boehner bill constitutes too much government intervention for some in the incoming class of freshman Republicans. As a result, coming up with an alternative to the ACA is likely to prove much harder than trying to unravel it by picking at the less popular provisions. In addition, an alternative acceptable to the House majority may not be very popular with the American people who like most of the provisions of the ACA.

In their own little corner
The health care debate in the rest of the country may be focused on repeal, replace, defund and harass or on the fiscal challenges facing state budgets, but a different story is unfolding in Vermont. Newly elected Governor Shumlin campaigned on single payer, and he is taking the issue seriously. Shumlin contracted with William Hsiao, who, among other things, helped design the national health system in Taiwan, and Jonathan Gruber, who modeled coverage expansion costs in Massachusetts and for Congress during the ACA debate, to help design a single payer plan for Vermont. Their report, released a week ago, showed that a single payer system would significantly lower health care costs and create jobs while covering more people with coverage at least as good as offered by the ACA. (They also modeled the ACA and found that it too would create jobs and lower health care costs relative to the status quo, but not as much.)

Even with a supportive governor and a Democratic legislature, there are still many legal, operational and political challenges ahead. How the plan is received by the provider community, whether there would be a role for the state’s Blue Cross plan (which now has a 75 percent market share), and the distribution and reaction of winners and losers among employers in the proposed shift from premiums to payroll taxes, are all likely to play a large role in the ultimate fate of the effort. To date, the national news media have paid relatively little attention to the Vermont effort, but if the state succeeds in establishing a single payer plan, VT could become the mouse that roared in health policy terms.

– Michael Miller, Policy Director

Tags: , , , , ,
Posted in Affordable Care Act implementation, Health Reform Insider | 1 Comment »

A Health Advocate’s Guide to the Debate on Deficit and Debt Reduction

Monday, December 13th, 2010

Recently, a blizzard of deficit and federal debt reduction plans has emerged from across the political spectrum. Many of them—especially those coming from the center/right—propose major changes in the benefits and/or financing of Medicare and Medicaid in the name of getting the nation’s “fiscal house in order” and restoring economic growth.

For different reasons and in different contexts, these public insurance programs already have been getting some rough treatment in public debate.

For Medicare, the recent context has included continuing debate over cost containment provisions in the Affordable Care Act—a debate that includes allegations of death panels, rationing, and the forcing of seniors onto “government-controlled” health care. (Note: It doesn’t have to make sense; it’s just a sound bite.)

For Medicaid, the challenge has rested mainly at the state level. Cash-strapped states have struggled to keep up with increased demand for Medicaid amidst falling revenue streams and other realities arising from the recession. Many states have filed suits to block the ACA-mandated expansion of Medicaid eligibility. Some have gone so far as to threaten withdrawal from the Medicaid program.

However, as a new political alignment prepares to take the reins in Washington, new federal level threats are aimed against Medicare and Medicaid, which form the foundation of our nation’s health care safety net, particularly for older adults, people with disabilities and children. The deliberations of the official Deficit Reduction Commission (DRC) appointed by President Obama, along with related policy proposals, such as the one released by the Bipartisan Policy Center (an organization financed by Peter G. Peterson – a long-term proponent of reduced federal spending on entitlement programs), bring these threats into focus.

Putting the Deficit Debate into Context
As Henry Aaron of the Brookings Institution observed in the New York Times, the various official and unofficial “commission” reports aim at three distinct problems: the short-term increase in the national debt, a projected shortfall in Social Security funds, and a projected long-term rise in the national debt. Let’s look at the short- and long-term issues in turn.

It’s the economy, stupid (and the wars and the Bush tax cuts)
Most economists agree that the current short-term increase in public debt is attributable almost entirely to the wars in Afghanistan and Iraq, the Bush tax cuts (mainly benefiting the wealthy) and the recession. Also, lingering effects of the recession, not health spending or the debt, pose the most immediate and serious threat to our health security and general well-being. Persistent high unemployment rates reduce the proportion of people who have employer-sponsored health insurance, and also reduce the revenue to fund Medicare, Medicaid and Social Security while driving Medicaid enrollment up. With enhanced federal support for Medicaid slated to expire in June even while states face continued significant revenue shortfalls, pressures on Medicaid will be greater than ever.

Meanwhile, the actions and words of President Obama’s financial advisors make it clear that they do not regard the possibility of a “double dip” recession as being out of the question, especially without additional fiscal stimulus. By spurring job growth, additional stimulus would support the economic recovery and restore growth, creating the conditions necessary to bring down the short-term debt. Reducing unnecessary military spending and restoring more progressivity to the tax code also would help. However, the type of stimulus that would include additional federal funds for state Medicaid programs appears to be off the table.

Medicare and Medicaid in the crosshairs
Finally, and most significantly for health care advocates, the various commission reports all addressed the issue of long-term projected increases in Medicare and Medicaid spending. The CBO has projected that the growth of federal debt long-term is attributable almost entirely to the growth of health care spending, particularly Medicare and Medicaid. Based on this, various debt-buster report recommendations to reduce health care spending in Medicare and Medicaid vary from the benign (increasing funds for fiscal oversight, reducing fraud and payment errors, and collecting the Medicaid drug rebate for all dual-eligibles) to the alarming (increasing Medicare cost-sharing, setting a global cap on federal health spending equal to GDP growth plus one percent, turning Medicare into a voucher program, and eliminating the federal commitment to matching state Medicaid spending on no less than a dollar for dollar basis).

Beware of GIGO (Garbage In Garbage Out)
Before entertaining any drastic action to cut Medicare and Medicaid, policymakers should subject the assumptions underlying the Deficit Reduction Commission and similar reports to careful scrutiny. First, although you would never know it from any of these reports, there is actually very little evidence to support any particular debt-to-GNP ratio as a target that we must adhere to or risk financial disaster. (See this and this for discussions that call into question the basic premises of the deficit commission. An opposing view is here.)

Policymakers also should closely examine underlying assumptions in the CBO forecast. Projections of explosive debt growth are very sensitive, both to assumptions and to policy change. (See, for example, the difference between the 2009 and 2010 CBO forecasts.) James Galbraith and others have pointed out that the CBO baseline assumes an unlikely combination of circumstances that includes low inflation (except in health care) and, notwithstanding that low inflation rate, significantly higher interest rates. CBO also assumes that there are no long-term cost savings effects from the ACA. While it may be prudent not to assume a continuing cost-containment effect from the ACA, it also would be prudent to give the law a chance to work before performing radical surgery on the core of our health care safety net.

Finally, neither the assumed need for debt reduction nor the use of arbitrary caps to reduce the percentage of our economy devoted to Medicare and Medicaid are helpful lenses through which to consider the question of health care cost containment. On the one hand, reduction of the debt is taken as a primary good, with benefits assumed but not demonstrated. On the other hand, discussion of the impact of proposed cuts on health programs serving older adults and others served by Medicare and Medicaid is nowhere in evidence. It is impossible to judge the reasonableness of proffered recommendations without looking at their costs, as well as any alleged benefits.

A few facts are important to keep in mind:

– Medicare already offers coverage benefits that are less generous than those typically available through employer-sponsored insurance.
– Older adults already devote a substantial share of their income to health care –well above what younger groups spend.
– Medicaid beneficiaries are both the poorest and sickest members of society. A retrenchment in Medicaid is therefore likely to create substantial hardship both for the low-income frail seniors and younger adults and children with chronic illnesses and disabilities on whom most Medicaid dollars are spent.
– The same proposals that envision reducing the value of Medicare also envision reducing Social Security benefits, creating a double whammy for all who do not participate fully in the labor force because of old age, disability or other categorical dependency.

The cost of public programs providing health coverage and services is tied to the overall growth in health care costs. Focusing only on public spending in this equation obscures this link and leads toward draconian solutions that harm vulnerable populations rather than smarter, more system-wide approaches. Arbitrary cuts in public spending for health care would be a cure worse than the disease. What we need is not an arbitrary cap on health spending, but long-term integrated approaches to reducing the rate of growth in health care costs that also improve quality and value. The Affordable Care Act plants the seeds of such a program. More could be done, but that will require less demagoguery and ideological rigidity than was on display during the debate on passage.

Is the threat real?
For now, the debt reduction juggernaut may be temporarily stalled. Even Congress might blush before recommending major cuts to popular programs immediately after voting to increase the deficit by $900 billion, as they are now considering doing. But it is not dead. When the debate turns again to debt reduction, it is critically important for advocates of quality affordable health care for all to block a stampede caused by debt-phobia that would undermine health security for millions of Americans.

– Michael Miller, Policy Director

Tags: , , ,
Posted in Health Reform Insider | 1 Comment »

Doc-Fix Dips Into Affordable Care Act Funding: The First Step on a Slippery Slope?

Thursday, December 9th, 2010

Earlier today, Congress passed a law to avert a scheduled 25 percent cut in Medicare reimbursement rates for doctors. While preventing those cuts is critical to ensuring access to needed care for America’s seniors, the way Congress paid for the “doc-fix” weakens the Affordable Care Act and imposes financial hardship on low- and moderate-income families.

How did Congress pay for the doc-fix?
Starting in 2014, the Affordable Care Act provides sliding-scale tax credits to help lower the costs of premiums and cost-sharing for people earning up to 400 percent of the Federal Poverty Level (around $73,000 for a family of three.) The law allows the federal government to pay these tax credits directly to your insurer each month, so you’ll only be billed for the amount of the premium you owe in excess of your tax credit. Congress paid for the “doc-fix” by increasing the amount you will have to repay if it turns out, when you file taxes at the end of the year, your income was higher than expected and as a result you got a larger tax credit throughout the year.

As the Affordable Care Act was originally passed: if your income was above 400 percent FPL, then you would have to pay back the entire amount of the tax credit you received. But if your income was below 400 percent FPL, you would only have to pay back up to $250 for an individual or $400 for a family. Essentially, the law protected low- and moderate-income people from facing too harsh a penalty for having found a better job or gotten a raise.

As the Affordable Care Act was amended to pay for the “doc-fix”: the repayment caps are higher, and on a sliding-scale. If your income is below 200 percent FPL, you will have to pay back up to $300 as an individual or $600 as a family. The caps rise quickly as your income goes up, so that at 400 percent FPL you could have to pay back up to $1,500 as an individual or $3,000 as a family. The amendment also extends the caps up to 499 percent FPL, where families would have to repay up to $3,500 and individuals up to $1,750.

What’s the bottom line?
Preventing the 25 percent payment cut for Medicare doctors is critically important. However, the way Congress paid for that “doc-fix” is harmful because it:

– Imposes a financial hardship on thousands of low- and moderate-income families, and threatens to undermine support for the Affordable Care Act. For a moderate-income family, suddenly discovering that they owe $3,000 could be financially devastating. Stories of families experiencing this type of financial harm could lead to further decline in public support for the Affordable Care Act.

– Risks reducing the number of people who will enroll in the advanced tax credits, since they will fear this type of unexpected financial penalty. This means fewer people will get the coverage they need.

– Sets a bad precedent that the Affordable Care Act can be raided to pay for other Congressional priorities. Supporters of the Affordable Care Act have already had to fight back attempts to gut the law’s $15 billion Prevention and Public Health Fund to pay for a provision to reduce paperwork burdens on small businesses. No doubt, policymakers will continue turning to cuts in the Affordable Care Act to finance other priorities. By paying for the “doc-fix” by weakening the Affordable Care Act’s protections for low- and moderate-income families, Congress took the first step down a dangerous path.

– Katherine Howitt, policy analyst

Tags: , ,
Posted in Affordable Care Act implementation | 2 Comments »

Stuck in the Middle with You

Tuesday, November 16th, 2010

A few weeks ago, Time magazine included a short essay that caught the eye of several of us here at Community Catalyst. In “The Coping Conundrum,” author Nancy Gibbs gently, but insistently, spotlights the unique issues faced by Americans in the sandwich generation — those among us who are simultaneously raising kids even as they are pulled deeper into caring for our aging parents.

“As they age, our parents need constraints, but the context shifts,” writes Gibbs. “Just as with teenagers, we put limits on their freedoms: No, you can’t wear those heels, drive at night, explore that city alone. But this involves taking away freedoms they’ve had, not preparing them for new ones. […]If you are a wife, mother and daughter or son, father and husband and all those ties are pulled taut, you are no longer a net. You are a sieve, and the first thing to slip through is peace of mind.”

Gibbs points to statistics from just one illness — Alzheimer’s — to illustrate the impact care giving has on family members’ lifestyles, relationships, and even career opportunities. Citing the Shriver Report, she states that one in every three caregivers reports being “responsible [for providing care] around the clock — and four in ten say they had no choice about taking on the role.” Over a third of family caregivers struggle with depression, and 40 percent say care giving strains their marriage.

This is troubling, and it speaks volumes about the way our current health care system works — or doesn’t — for the frail elderly, many of whom have one or more chronic illnesses, and the people who love them. Ironically, incentives in many states actually work against keeping people in their homes and communities, pushing them into institutions like nursing homes. Not that nursing home care is an easy solution. As Gibbs notes, Medicare doesn’t cover long-term care services, and “you have to burn through your savings to qualify for Medicaid [which may cover long-term care].” In addition, many providers don’t routinely coordinate patient care with one another. That burden falls to patients and family caregivers, who may get conflicting diagnoses and treatment plans without the benefit of a point person to help them make sense of it all.

All of this makes for a system that’s disjointed, confusing, and frustratingly complex. None of it makes for easy care giving.

That’s not to say there are no bright lights shining. Tomorrow, November 17 marks the launch of the “Year of the Family Caregiver” — a year-long celebration that will recognize family caregivers for all that they give, and all that we ask of them. (It’s also the 10th anniversary of the National Family Caregiver Support Program, created by the Older Americans Act to support family caregivers.) And, the Affordable Care Act (ACA) includes a number of provisions intended to improve the way patients — and their family caregivers — experience care.

Despite politicians’ midterm posturing on the ACA, there’s no question that we need to take advantage of the opportunities it presents to address what’s not working well for patients and family caregivers. Red state, blue state, purple, green — no matter what the political landscape looks like, focusing on what’s not working for our ever-aging population and the people who care for them is one issue that should cross party lines. To quote Nancy Gibbs, “If anything should be a postpartisan issue, this is it. Liberal or conservative, we all get old; we all care about the people we love; and in the years ahead, the support needs to come without being summoned if our families are going to stay strong.”

After all, we’ll all be there, someday.

– Jessica Curtis, Integrated Care Advocacy Project and the Campaign for Better Care

Tags: , , ,
Posted in care coordination/quality | No Comments »

« Older Entries
Newer Entries »