This morning, I was listening to NPR—because yeah, I’m an effete pointy-headed liberal and that’s how I roll—and I heard a story about people in California who got insurance cancellation notices, but then wound up getting better coverage and couldn’t be happier about it. And the other day there was this story in The Washington Post about droves of poor people in rural Kentucky getting insurance for the first time in their lives—free, through Medicaid—because of the Affordable Care Act. In other words, after spending weeks telling the tales of people losing their health coverage (who in truth could get other health coverage), the media are finally putting at least some attention on the people who are benefiting from the ACA.
And encouraging news seems to be breaking out all over. Ezra Klein and Evan Soltas ask, “Is Obamacare Turning the Corner?”, noting that Healthcare.gov seems to be working pretty well, at least on the front end. States with well-functioning web sites like New York and California are meeting or exceeding their enrollment targets. Steve Benen concurs on the corner-turning interpretation. Kevin Drum argues that “Getting Obamacare to the end zone wasn’t easy, and Obama almost fumbled the ball at the one-yard line, but he’s finally won. There’s nothing left for conservatives to do. Love it or hate it, Obamacare is here to stay.”
That isn’t to say that there aren’t lots of problems left to be sorted out. Nor is it to say that the media are done with Obamacare “horror” stories. For instance, last night, NBC News aired this story about employers moving to more modest plans to avoid the “Cadillac tax” on high-cost health plans, complete with disgruntled employees. The piece didn’t bother to explore why an employer might choose a plan for 2014 based on a tax that doesn’t take effect until 2018, other than including a quote from a health-industry consultant claiming that employers “are going to have to get ready for it now,” which makes no sense at all. Think there might be a story there about companies making a decision to scale back benefits and save money but just blaming it on Obamacare? Maybe?
Anyhow, it does appear that we’re starting to edge toward a more balanced media discussion of the successes and failures of this law. I’ll stick to the prediction I’ve made for some time, that the law will be fine. When that December 1 deadline for fixing the website comes, reporters will find that it’s not perfect, but it’s pretty good. In the medium term, the law will do a lot of good for a lot of people, but it won’t transform America into a health care paradise, nor will it drag us into a nightmare of communist oppression. It will have problems, most of which will get sorted out. And the political impact? That will probably be something of a wash as well. Republicans will still be able to go to their conservative constituents and say, “I fought against Obamacare!” as proof of their right-wing bona fides. Democrats will still be able to go to their constituents and say they made it so nobody would get rejected for insurance because of a pre-existing condition. Eventually, Republicans will find something else to shout about.
And who knows, maybe these kinds of problems getting fixed will create a new narrative of success around the ACA: Despite terrible obstacles and mistakes, the administration found its way and delivered for the American people, redeeming liberalism in the process! Weirder things have happened.
By: Paul Waldman, Contributing Editor, The American Prospect, November 26, 2013
Obamacare critics on the right think they have a new issue. They are calling it “provider shock.” Thanks to the new health care law, these conservatives say, insurance companies are limiting beneficiaries to small groups of doctors and hospitals. As a result, people who depend on these professionals and institutions will have to seek treatment elsewhere—and, inevitably, get substandard care.
When conservatives make these arguments, I imagine they have in mind stories like this one, from the Los Angeles Times:
In a major shift in health-care benefits likely to be followed by others, PacifiCare Health Systems Inc. today will unveil an HMO that will limit members’ choices to a relatively small network of doctors and hospitals. … members who enroll in the plan, called Value Network, will have available to them about one-third of the hospitals and one-half of the doctors of a standard HMO. Altogether, there are 300 hospitals and 250 medical groups in California. Value Network members who use providers outside the slimmed-down network generally will have to foot the bills.
If you’re a fellow health policy geek, then you may have guessed the punch line. This article isn’t from 2013. It’s from 2002. And it’s a reminder of the essential truth here. Insurance companies have been using limited provider networks for a long time. It’s how they conducted business before Obamacare came along and, for better or worse, it’s how they’ll conduct business now that Obamacare is law.
Maybe a little history would put this issue in its proper context. Once upon a time, most insurance carriers would pay for care provided by pretty much any person or facility with a license. But that got expensive and, by the 1980s, insurers responded by reducing what they would pay for services—and then limiting beneficiaries to networks of doctors and hospitals willing to accept these lower fees.
The change was not particularly popular. At the time, Americans were not accustomed to such restrictions on where they got their medical care. In response to the consumer and political backlash—a backlash that providers happily supported—insurers started offering plans with looser restrictions. Mostly these were preferred provider organizations (PPOs), which allowed beneficiaries to seek care out of network as long as they were willing to pay more for each visit and service. But provider restrictions never went away entirely and frequently negotiations over the terms led to very public disputes, as Paul Fronstin, from the Employment Benefit Research Institute, pointed out via e-mail:
There have been numerous stories over the last decade of usually health plans dropping a large provider group because the provider group wouldn’t accept the rates, or less-usually a provider group walking away from a health plan because it didn’t like the terms. Often the two would come to terms after some period of continued negotiation once the contract expired and the news hit the fan, so to speak.
More recently insurers have shown renewed interest in tighter networks, sometimes through what’s known as “tiered network” plans that operate as a sort of hybrid between HMOs and PPOs. (These plans allow people to get care out of network, but only at much higher out-of-pocket costs than more traditional PPOs would require.) And it appears the Obamacare exchanges have lots of these plans.
While I haven’t seen definitive nationwide data, a report from the Center for Healthcare Transformation and Research found that, on Michigan’s new exchange, the majority of options are “limited or network plans.” In California, where narrow networks have gotten a great deal of media attention, the plans Blue Shield is offering will allow access to just 36 percent of the physicians available in Blue Cross employer plans, according to the L.A. Times. And when McKinsey and Company surveyed 16 state exchanges earlier in the year, it found that about half the plans had narrow networks, according to an article in Modern Healthcare magazine.
But Obamacare’s relationship to this trend is more complicated than it might seem. On the one hand, the law has introduced volatility into the insurance market, potentially emboldening insurers who were contemplating tightening networks already. As Karen Pollitz, a senior fellow at the Kaiser Family Foundation, explained via e-mail:
Without question, some insurers took this opportunity—when things are changing and so the old ways of doing business could be shaken up—to offer new, tighter, cheaper network designs. And probably without a clear idea as to what impact it might have on patients. Also without question, some hospitals and doctor groups took this opportunity to take a tougher bargaining stance and demand higher payments from insurers to join their networks, betting the insurers couldn’t live without them, and the insurers called their bluff. It’s not obvious providers knew clearly what the patient impact would be, either.
With Obamacare, and its requirement of selling policies to anybody willing to buy them, insurers also worry about adverse selection. Previously, they were willing to offer plans without provider restrictions, but only to people unlikely to use either outpatient or inpatient services much. Now insurers have to sell plans to anybody, regardless of pre-existing conditions or risk of illness. In other words, they can’t restrict wide-open access to the people least likely to use it. Faced with this reality, some insurers are bound to raise premiums for those plans—or to stop offering them altogether. That’s why some people who buy these plans now would have to pay more for them next year. (Basically, this is just another form of rate shock, about which you’ve read so much already.)
Still, according to nearly every source inside and outside the industry I’ve consulted, the primary reason carriers are offering so many small-network plans in the exchanges is that they believe consumers want them. Their marketing research suggests that, when forced to choose between paying higher premiums for wider networks or lower premiums for narrower networks, the majority of people will go for the cheaper insurance. The one survey I’ve seen on this question, by Morning Consult, suggests the carriers may be right: In that survey, nearly 60 percent of respondents said they’d opt for plans with fewer provider choices if it meant saving on premiums.
Larry Levitt, senior vice president of the Kaiser Family Foundation, summarizes the situation this way:
The main way insurers control costs is by negotiating and selectively contracting with doctors and hospitals. That’s been the case for decades. The only real connection to the Affordable Care Act is that the health reform law is making insurers compete for customers more aggressively.
As it happens, the narrower networks might be a good fit for many consumers, both financially and medically. Totally lost in this debate is the fact that many experts believe our health care system pays the providers of medical care way too much money. That’s particularly true of hospitals, whose obtuse and frequently unjustified prices were the subject of Steve Brill’s celebrated Time magazine article earlier this year. Sometimes high prices correlate with high quality, but sometimes they don’t. And particularly when it comes to more routine care, a community hospital is not just adequate but maybe even preferable to a teaching hospital that specializes in the hardest-to-treat cases.
Of course, the converse is also true. A few people have those hardest-to-treat cases. They are the ones who are better off at a place like Cedars-Sinai or the Mayo Clinic—or who need to maintain long-term relationships with professionals, rather than switching every time plans alter their networks. They are also the people whom, ideally, health insurance should do the most to assist.
But it’s not as if most people in this situation have unfettered access to such doctors and hospitals today. And Obamacare has provisions designed to help them. Most of the exchanges seem to include more traditional PPOs. They are expensive, but they are available to anybody—including people who, because of pre-existing conditions, previously had absolutely no way to buy them. (There are also subsidies that some people can use to offset the cost.) In addition, the Affordable Care Act has a “network adequacy” requirement that, in theory, requires all plans to include hospitals that provide specialty services like pediatric cancer treatment. The law even creates an external appeals process, through which people with private insurance can seek medically appropriate care they believe their carriers cannot (or will not) provide.
There’s a good case for strengthening these two provisions, which are relatively weak, or for taking other steps to help people who depend upon the most advanced hospitals and/or a set of familiar providers. The federal government could, for example, offer more financial incentives for the creation of Accountable Care Organizations, which are closed-network groups of providers designed to deliver the same kind of high-quality, low-cost care you find today at places like Kaiser Permanente, Geisinger Health System, and Group Health of Puget Sound. More states could set hospital rates, as Maryland already does, effectively taking price negotiation out of the market and subjecting it instead to regulation. Or there’s the most radical solution of all: Simply junking private insurance and creating a single-payer system, which would operate more or less like Medicare and would, in practice, mean access to most physicians and virtually every hospital.
None of these things are likely to happen anytime soon. They involve greater government regulation of health insurance, which would be fine with most Obamacare supporters but anathema to the law’s critics. That’s one irony of this latest controversy, as Jonathan Chait pointed out on Monday. Market forces, not government, and the main reason insurers are introducing tighter networks. Yet the people objecting to the result are the same ones who say they love markets.
By: Jonathan Cohn, The New Republic, November 26, 2013
When pressed for specifics, the Affordable Care Act’s detractors tend to focus on two main areas of concern: the website and the cancelation notices. The website is obviously important and administration officials are doing what they can. Maybe it’ll be fixed quickly, maybe it won’t – we’ll find out soon enough.
But the cancelation notices are a different kind of concern. As we’ve discussed, we’re talking about a very small percentage of the population that has coverage through the individual, non-group market and are now finding that their plans are being scrapped. When the House Republican “playbook” looks for people saying, “Because of Obamacare, I lost my insurance,” these are the folks they’re talking about.
But the story about these “victims” of reform is coming into sharper focus all the time.
Only a small sliver of the Americans who buy their own health insurance plans and may be seeing them canceled under Obamacare will pay higher premiums, according to an analysis released Thursday.
More than seven in 10 Americans who purchase health plans directly will get subsidies to help pay for coverage under the Affordable Care Act, according to the report by Families USA, a Washington-based organization that supports the health care reform law.
“It is important to keep a perspective about the small portion of the population that might be adversely affected,” said Ron Pollack, executive director of Families USA. “That number is a tiny fraction of the 65 million non-elderly people with pre-existing health conditions who will gain new protections through the Affordable Care Act. It is also a small fraction of the tens of millions of uninsured Americans who can also get help.”
Let’s put this another way. A tiny percentage of consumers will receive cancelation notices, and of them, more than 70% will get new, more secure coverage that ends up costing them less.
They’re not, in other words, victims. They’re beneficiaries.
In fairness, many of them won’t know this for a while because they can’t yet go to healthcare.gov and see how much they’ll benefit, but we’re talking about the health care system itself – for all the talk about the cancelations, by a 2-to-1 margin, these folks are going to be better off, including receiving subsidies through the Affordable Care Act.
In reference to the remaining folks who’ll pay more, Pollack told the Huffington Post, “That’s approximately 1.5 million people, and that’s not trivial and I don’t in any way suggest that we shouldn’t be concerned about that group. But … the number of people at risk of this becoming a problem is considerably smaller than the tens of millions of people who are going to get substantial help.”
And here’s the larger question: if the evidence had pointed in the other direction, and 71% of these folks were poised to pay more, not less, would the story have gotten more attention? Would the coverage be dominated by “More bad news for Obamacare”?
This week, after years in which Obamacare critics said the law would fail to control costs, we saw remarkable evidence that the law is succeeding in controlling costs. Didn’t hear much about that? Neither did I.
I’m starting to get the sense that there’s an approved narrative – the Affordable Care Act is failing and is in deep trouble – and developments that point in the opposite direction are filtered out, while developments that reinforce the thesis are trumpeted.
The debate is often confusing enough, but this isn’t helping.
By: Steve Benen, The Maddow Blog, November 22, 2013
“A Right Wing Non-Plan”: Ted Cruz Reveals He’s A Thin-Skinned Wuss, Hypocrite And Policy Lightweight
Sen. Ted Cruz pretends to be a tough guy, but mostly he spends his time trashing Democrats in front of adoring right-wing crowds and conservative journalists. On Wednesday he sat down with CNN’s Chris Cuomo – you didn’t expect him to go to MSNBC, did you? – and showed himself to be incredibly thin-skinned when pressed just a little on how he would replace the Affordable Care Act he wants to repeal. It was an interesting window on Cruz’s temperament as well as his cynical, threadbare “policy” agenda.
Cuomo asked Cruz how he would replace the law he inveighs against, and as usual, Cruz dodged the question and kept on inveighing instead. Cuomo followed up. “You don’t think that you have a responsibility as a U.S. senator to do better than that, in terms of offering a solution for what to do next?” he asked.
And Cruz shot back: “Well, I appreciate your trying to lecture me in the morning.”
Cuomo didn’t leave it there.
“No, no, no, not at all, Senator. I’m worried, same as you, anybody who looks at the situation has worries.”
So Cruz tried to turn the tables. “If you’re worried, did you speak out for the 5 million people who have lost their health insurance?”
Cuomo had an answer: “Absolutely — we’ve been covering it doggedly. The problem is, I don’t have the power to fix it. You do. That’s what a U.S. senator does, is you sponsor law. You know this. It’s not a lecture, it’s a concern; I’m asking, what are you going to do about it?”
Apparently Cruz isn’t used to being grilled. Cuomo got him to share what passes for an answer from conservatives these days: “Let people purchase health insurance across state lines.”
Wow. That’s what Princeton and Harvard Law degrees get you: a warmed-over right wing non-plan that’s been around forever. As Ezra Klein reported back in 2010, the Congressional Budget Office looked at it in 2005 and found it didn’t reduce the number of uninsured and would only save the federal government $12 billion over the next eight years. (By contrast, the CBO says the ACA will reduce the deficit by $41 billion in 2013 alone.)
The CBO also found that allowing people to buy insurance plans across state lines would “make insurance more expensive for the sick and cheaper for the healthy, and lead to more healthy people with insurance and fewer sick people with insurance.” Other than that, it’s a terrific idea.
Of course, insurers like Cruz’s non-plan because it would mean a boon for the states that provide the least regulation and thus encourage the “cheapest” but least protective insurance policies. Rather than insuring states’ rights and competition, which conservatives pretend to like, it would, in effect, create a national insurance-regulation standard, as states then raced to the bottom to compete. Of course, a state’s “rights” usually diminish, for conservatives, whenever that state decides to give its citizens more power and its corporations less.
So in just one morning, Ted Cruz was revealed as a wuss, a hypocrite and a policy lightweight. The last one doesn’t matter on the right, but the first two won’t wear well in a presidential race. Kudos to Cuomo for not accepting Tea Party platitudes as a substitute for governing proposals.
By: Joan Walsh, Editor at Large, Salon, November 20, 2013