“Obamacare’s Critical Moment”: It’s Time For Nervous Democrats To Have A Gut Check
At times like this, with the Obama administration weathering yet another controversy regarding the stumbling beginnings of the Affordable Care Act, it’s useful to remind ourselves that this too shall pass. I’ve been plenty critical of how Healthcare.gov has been handled (see here, or here, or here), but eventually it will get fixed, at least to the point at which it works well enough. Likewise, the fears now being experienced by people with individual insurance policies will, by and large, turn out to be unfounded. There will be some who have to pay more than they’ve been paying, but in almost all cases they’ll be getting more too.
But there’s no doubt that this is an escalating problem for the administration. The person who got sold a cheap insurance policy on the individual market because the insurer was confident that either a) they probably wouldn’t get sick any time soon, or b) the policy was so stingy (whether the customer knew it or not) that the insurer wouldn’t have to pay anything even if they did, has now become the victim whom all agree must be made whole. We’re all talking endlessly about Obama’s “If you like your current plan, you can keep it” pledge, but the fact is that if you have one of these junk insurance plans, you only like it if you haven’t had to use it. But no matter—the people on these plans (and not, say, people who are finally getting Medicaid, because they’re poor so who cares) are now the only people that matter. Congress is obsessed with them, the news media is obsessed with them, and Something Must Be Done.
The administration is clearly spooked, and so are Democrats. But everyone needs to take a breath and ask themselves whether what they do in the next couple of weeks is something they’ll be able to live with in a year or five years or twenty years.
No one should be under the illusion that the Republican proposals to “fix” the problem of people on the individual market who want to keep their current plan—one of which could be voted on today in the House—are anything other than an effort to cripple the ACA. Not only would they allow insurers to continue selling junk policies, they would also allow the insurers to deny people coverage because of pre-existing conditions. In other words, the Republicans propose to restore the abysmal status quo ante that led to passage of the ACA in the first place. They’d also have the likely effect of jacking up premiums in the exchange marketplace by allowing the insurers to cherry-pick healthy young people for the now still-legal junk policies, leaving older and sicker people to migrate to the exchanges, where premiums will almost surely skyrocket a year from now once the damage becomes clear. As Igor Volsky puts it, “On the eve of implementing hard fought reforms, lawmakers are essentially considering re-segregating the health care market: healthy uninsured individuals without an offer of employer-sponsored coverage, Medicare or Medicaid will be lured away into subprime policies that include few consumer protections (and probably won’t be there for them should they fall ill); sicker people will find themselves in exchanges that resemble high-risk insurance pools, paying ever-more for coverage.” Any Democrat who votes for something like that should be ashamed of themselves.
There’s a Democratic proposal from Mary Landrieu that’s almost as bad. Meanwhile, House Democrats are threatening the White House that they’ll sign on with the Republican plan if the White House doesn’t come up with some other solution that will allow them to cover their asses. But there may be no way to let people who have junk insurance keep it without undermining the law as a whole. As Ezra Klein says, “Solving a political problem now at the case of worsening a policy problem 10 months from now isn’t a good trade.” And that’s putting it way too mildly. They could easily try to solve a political problem now and give themselves a much worse political problem ten months from now by making it impossible for the law to succeed. If that happens, the fact that they signed on to the measure that all but destroyed the law isn’t going to save them with the voters. Obamacare’s fate is every Democrat’s fate, whether they like it or not.
You can say that Obama made his bed by repeating that “If you like your insurance, you can keep it,” and now he has to sleep in it. I’d have two responses to that. First, plans that were in effect when the ACA passed in 2010 fall under a grandfather clause, so strictly speaking, if you liked the plan you had when the law was passed and you still have it, you can keep it, even if it doesn’t meet the new requirements. But since the individual market is volatile (people move in and out of it frequently) and only plans that haven’t been altered since then fall under the grandfather clause, that’s a small number of people.
But much more importantly, we shouldn’t make a terrible policy choice just because it’s the one that we think would line up most precisely with a rhetorical pledge Barack Obama made three years ago. Yes, he should have said, “If you like your plan you can keep it, so long as it’s a plan that gives real coverage and doesn’t leave you vulnerable to bankruptcy if you get sick or have an accident.” But he didn’t. And today, we should make the policy choice that does the most good for the most people.
It would be nice if you could make an enormous policy change without leaving a single American worse off. But that was never possible. There are millions who are going to benefit from the ACA—people who had no insurance who will now be able to get it for free or for a modest cost, people with pre-existing conditions who couldn’t get coverage but now can, and yes, people who thought they were covered but weren’t and now will be, even if they have to pay a little more. Screwing huge numbers of them over for the sake of a small number of people who have been sold a bill of goods by their insurance company and want to keep their junk plans would be unconscionable.
As Josh Marshall says, it’s time for nervous Democrats to have a gut check. Republicans are positively slobbering at the opportunity they think they have to destroy the ACA. After all that’s happened—after a generation of waiting for health reform, after all the effort it took to pass it, after the Supreme Court case and the election and everything else—are there Democrats who want to find themselves telling their grandchildren, “Well, I helped the Republicans subvert the ACA and deprive millions of Americans of health security, because I was afraid somebody might run an ad against me in my next election”?
My confidence that your average member of Congress in either party fully understands the policy implications of what they might be voting for hovers somewhere near zero. But they need to get up to speed, and then find their moral centers. This is among the most critical moments in the already long and tortured history of this law. They’d better not screw it up.
By: Paul Waldman, Contributing Editor, The American Prospect, November 14, 2013
“What Will Republicans Do?”: Here Comes The Real Government Takeover Of Health Care
For the last few weeks, Republicans have been full of schadenfreude over President Obama’s broken “If you like your plan, you can keep it” promise.
Now, this issue is about to blow up in Republicans’ faces.
Sen. Mary Landrieu (D-La.), who faces a tough re-election fight in a red state next year, has introduced a bill to address the president’s broken promise through greater government control over the individual health insurance market. Her bill would obligate insurers to continue offering all the plans they offer today unless they entirely exit the health insurance business in a state.
What will Republicans do with this proposal? Do they really want a federal law that says health insurers can’t enter or exit specific lines of business?
Rep. Fred Upton (R-Mich.) has introduced a bill in the House that would allow insurers to continue offering plans that would have been prohibited under the Affordable Care Act, but his bill is vulnerable to the criticism that it will still lead to a raft of plan cancellations as insurers choose to discontinue plans because the ACA has changed the financial incentives they face.
If Congress really wants to make sure people can take their plans, it will need to use the heavy-handed Landrieu approach; the light-touch Upton approach won’t work. Erick Erickson (of all people!) understands this; he wrote a piece this morning called “It’s a trap“:
The House, with the help of a good number of Democrats, will pass the Upton plan and send it to the Senate. Harry Reid will substitute the Landrieu plan and send it back to the House. The House will be forced to either vote for the Landrieu plan or be characterized as siding with insurance companies against people.
In one fell swoop, the Democrats will have the GOP on record saving Mary Landrieu’s re-election in Louisiana by casting her as the one who saved Americans’ health care plans, and also getting on record as really being in favor of fixing Obamacare with the use of mandates.
Pretty much. And it’s the comeuppance conservatives are getting for (1) having no health care agenda of their own and (2) endorsing the bizarre idea that health reform should not lead to health plan changes. With no health policy guidestar other than they’re against what the president is for, Republicans are liable to walk into traps like demanding more health insurance regulation than the president wants.
By: Josh Barro, Business Insider, November 13, 2013
“A Major Obamacare Success Story”: It’s Increasingly Clear That The Affordable Care Act Is Significantly Bending The Cost Curve
The anger over the botched rollout of the Affordable Care Act’s federal health insurance exchange — and over the conflicting explanations about whether people can keep their coverage — has been bipartisan and well-deserved. The administration needs to make personnel and management changes to get enrollment back on track. But the focus on insurance coverage obscures other parts of the ACA that are working well, even better than expected. It is increasingly clear that the cost curve is bending, and the ACA is a significant part of the reason.
The law has two overarching goals: Cover almost everyone, and slow the growth of medical care costs. The goals are equally important. Too little coverage, and premiums in the exchanges will be unaffordable; too rapid a cost increase, and the federal government will not be able to afford the subsidies.
Even as coverage efforts are sputtering, success on the cost front is becoming more noticeable. Since 2010, the average rate of health-care cost increases has been less than half the average in the prior 40 years. The first wave of the cost slowdown emerged just after the recession and was attributed to the economic hangover. Three years later, the economy is growing, and costs show no sign of rising. Something deeper is at work.
The Affordable Care Act is a key to the underlying change. Starting in 2010, the ACA lowered the annual increases that Medicare pays to hospitals, home health agencies and private insurance plans. Together, these account for 5 percent of the post-2010 cost slowdown. Medicare payment changes always provoke fears — in this case, that private plans would flee the program and that the quality of care in hospitals would suffer. Neither of these fears has materialized, however. Enrollment in private plans is up since the ACA changes.
The law also emphasized that payments should be based on the value, not the volume, of medical care. In a value-based system, compensation is made for the patient as a whole, not for specific services provided. As a result, eliminating services that are not needed is financially rewarded. The reaction to this change has been rapid: Hospital readmissions, which used to bring in substantial dollars, are now penalized.
Unsurprisingly, the readmission rate in Medicare is down 10 percent since 2011. Similarly, hospital-acquired infections used to bring in additional dollars, but now they do not. One program to cut infections, encompassing only 333 hospitals, saved more than $9 billion. Both of these changes improve patient health even as they reduce spending.
The accountable-care movement — which aims to make providers more accountable for the cost and quality of care — has blossomed far beyond expectations. There are nearly 500 Accountable Care Organizations (ACOs) nationwide, half in Medicare. Ten percent of Medicare beneficiaries are in ACOs, and many others are in payment systems that put together all reimbursements for a procedure, such as a hip replacement or cardiac stent insertion. Leaders of medical systems routinely report that they expect, and are preparing for, a move to value-based payments.
Evaluations of recent ACO programs show quality improvements among all participating organizations and financial savings for many. This is not a surprise. The Institute of Medicine has been reporting for more than a decade that a third or more of medical spending could be eliminated while increasing patient health. The only surprise is how fast the system has moved in this direction.
The ACA does not account for all of the recent cost slowdown. New medical technologies are coming online more slowly than they used to; none of the 10 best-selling drugs on the market today were developed in the past decade. Similarly, patients with high deductibles are deferring elective procedures. Many insured families today owe more from a hospital visit than they have in the bank. Each of these factors is contributing to the reduction in health-care spending. But noting that factors beyond the ACA are important does not deny the importance of the law.
Cost savings induced by the ACA are particularly beneficial because they could increase quality while they lower spending. The reduction in technology development means lower costs but also fewer ways to treat sick people. People with high deductibles use fewer valuable services as well as fewer less-valuable ones. Only by eliminating unnecessary care can we ensure that everyone benefits from saving money in health care.
Governors and legislators in red states are almost universally opposed to the ACA. But these states are still seeing cost savings from the law — and they are participating in other ways.
Six states, including places as diverse as Arkansas, Massachusetts and Oregon, are using ACA-appropriated funds to help shift medical care to a higher-quality, lower-cost system . Nineteen other states are planning similar changes. And many of these states are solidly red.
States’ successes can feed back to federal policy. A recent Senate proposal, for example, calls for replacing the broken payment system that Medicare uses to compensate physicians with a system of payments based on value.
Before he was criticized for his statements about insurance continuity, President Obama was lambasted for his forecasts of cost savings. In 2007, Obama asserted that his health-care reform plan would save $2,500 per family relative to the trends at the time. The criticism was harsh; I know because I helped the then-senator make this forecast. Yet events have shown him to be right. Between early 2009 and now, the Office of the Actuaries at the Centers for Medicare & Medicaid Services has lowered its forecast of medical spending in 2016 by 1 percentage point of GDP. In dollar terms, this is $2,500 for a family of four.
Looking ahead, there is every reason to believe that costs will continue to grow slowly, maybe even more slowly. A study in Massachusetts showed that ACO savings increase over time as organizations move into more areas that can slow cost growth. An analysis of exchange premiums estimated that insurance costs in the exchanges are 16 percent below what was forecast two years ago; the lower costs were attributed to competition from new entrants in the market.
If cost growth continues at its low pace, the cumulative savings to the federal government would be more than $750 billion over the next decade. Such savings are likely to dwarf anything that comes out of Congress this year.
Many Americans are rightly upset with the Obama administration’s rocky rollout of the insurance exchange. Failing at such a major project is inexcusable. But if the early indications are any guide, we should be pleased with how the new health law is affecting what we pay for care. If the Web site is fixed and enrollment can catch up to expectations, the ACA could yet become a major policy success.
By: David Cutler, The Washington Post, Opinions, November 8, 2013
“End Times For Obama?”: Just Another Round Of The Media’s Trumped-Up Crises That Turn Out To Be Wrong And Overheated
It’s damn near end times for Barack Obama, to hear some tell it.
There’s a new Pew poll that has him at 41 percent approval, 53 disapproval, which Pew notes ominously is only five percentage points better than George W. Bush’s at this point in his term. (Hurricane Katrina had happened in August of Bush’s fifth year.) Conservative columnists are chuckling and clucking and tweeting to beat the band. Centrist journalist Mark Halperin, on MSNBC yesterday, declared that Obama had lost the media, which was now cheering against the success of the Affordable Care Act and just wants to see… well, people go without insurance, I guess. If everything—everything!—isn’t fixed by Nov. 30, we’re looking at a presidency that is going to collapse into utter disaster.
It’s obvious enough why conservatives would be saying this. They’ve wanted Obama to fail from the start, and they’ve certainly wanted the health-care bill to fail from the moment of its passage. Journalists like Halperin say these things not for ideological reasons, but temperamental ones: In this Halperinesque/Politico-esque world view, politics is less about people’s lives than it is about who is displaying mastery of the game and who is being mastered at any given moment (of course, seeing politics so insistently through that lens is a kind of ideology of its own, but we’ll let that pass). To that group of mainstream journalists, how Obama handles the current crisis will determine whether the administration will survive or whether he might as well just resign now.
I don’t deny that the current situation is a crisis, and one of the administration’s own making. Obama misled people. It’s a small percentage of people. They’re at the mercy of the most horrible end of the private-insurance market, and the vast majority of them are going to be better off after everything shakes out and they see that their new plans are largely better than their old ones were. But even so, they’re people, and they’re getting termination notices, and he misled them. Combine it with the website chaos, and it’s bad, there’s no sense in denying it.
What I do deny, vigorously, is that this is a make-or-break moment. Yes, I know that Obamacare is his signature initiative and all that. And I know that if problems persist after Nov. 30, pressure will mount on Harry Reid to let some kind of tinkering legislation be debated. This is a very important three weeks for the administration, and the 30th is an extremely important deadline.
But there’s a certain type of political journalism that so exists in the moment that numerous such moments have been declared to be disasters for Obama, going back to Jeremiah Wright. This kind of hyperventilating approach always turns out to be wrong and overheated. It turned out that all those things were pretty bad, but it also turned out that Obama survived them. And he’ll survive this, too.
What will happen in all likelihood is what usually happens in life and politics—that is, nothing all that dramatic. Nov. 30 will come, and the website will be more or less (though not entirely) fixed up, and life, and Obamacare, will go on. There will be more horror stories, natch, but there will be more success stories too, and sometime between now and next March 31, when the enrollment period ends, the media are going to get a little bored with the whole thing, and it will just go on irresolutely for a while, but eventually it will start becoming clear to the American people that the reform is working pretty well in the states that tried and pretty poorly in the states that didn’t, and people will start to get the point about Republican sabotage.
And then, provided health care survives that initial stage without being altered for the worse by Congress, it’s going to start to work. Well. Resistant insurance companies and even some resistant governors and state legislatures are going to see that it appears to be here to stay, and they will accommodate themselves to that reality.
Obamacare will never be a raging success. This is another error much of journalism is prone to make—looking for it to be an overwhelming success. That won’t happen because at the end of the day we’re still talking about private health insurance, and private health insurance was a pain in the tuchus before Obamacare and will remain one after it. People will always complain about their coverage. But by early 2016, I have little doubt, there will be millions more Americans who’ll be doing the complaining, and they’ll be happy to have the opportunity to do so.
Conservatives are desperate for health care to be Obama’s Katrina. Certain centrist journalists want to see it just for entertainment’s sake or as a test of Obama’s presidential “character.” I won’t say there’s zero chance of it happening. If Nov. 30 comes and the website is an unmitigated disaster, then maybe that’ll be the case. But I will say that I think the chances of it are very slim indeed. The unfortunate thing is the Republicans have just enough power to gum up the works so that even if the administration does fix up everything on its end, the GOP can keep hauling Kathleen Sebelius up to the Hill and taking other steps to make sure things look worse than they are. But Obama will survive, and more importantly, Obamacare will too.
By: Michael Tomasky, The Daily Beast, November 8, 2013
“Obamacare Expansion In The Offing?”: Republicans Crying About People Losing Junk Insurance Should Expand The ACA
Every few days, a new poster child for the horror of Obamacare comes along, the person who just loves their insurance plan but has been told it’s being cancelled. Pretty much every time, their story turns out to be full of holes—the plan they’re on is junk insurance, they’d be able to get better and cheaper coverage through the exchanges, and so on (here’s the latest). But without a doubt, this small group of people (and not, say, the millions who are getting free or low-cost coverage for the first time) have become the momentary face of the Affordable Care Act, at least in the mainstream news media’s eyes.
So now the administration is scrambling to deal with this political problem, and here’s the latest twist:
The most popular idea for a fix on the Hill is legislation that would entitle someone who purchases health insurance coverage through the end of this year to keep that coverage. Other legislative responses may include extending the health exchange enrollment deadline or or delaying the penalty for not purchasing coverage.
Obama is also considering a different approach.
According to the administration source, the White House is “looking at an administrative fix for the population of people in the individual market who may have an increase in premiums, but don’t get subsidies.”
Such a fix would address the issue of “sticker shock” that has been popping up across the country, as individuals are losing their coverage and finding only higher-cost alternatives. Under the ACA, there are tax subsidies to help individuals and families with income between 133 percent and 400 percent above the poverty level purchase insurance. Those with incomes higher than 400 percent above poverty get no such assistance. The proposed administrative fix would address this group.
Allowing the junk insurance plans to continue is a terrible idea, no less terrible because it’s being pushed by some Democrats. But giving more subsidies? That’s got some promise. As a big-government liberal, I’m all for the government helping as many people as possible afford coverage. I’m also very skeptical that the administration can just take this move administratively without an act of Congress, but let’s talk about it. Since for the first time in history Republicans are suddenly so very concerned about people not being able to afford health insurance, perhaps they can be pressured into signing on with something that puts their money where their mouths are.
Fat chance, I know. But as long as we’re going to start proposing fixes, how about we let everyone who got a threatening letter from an insurance company buy in to Medicare? If Republicans are going to take the opportunity to demagogue the issue, why not take the opportunity to expand our extremely popular socialized medicine program?
By: Paul Waldman, Contributing Editor, The American Prospect, November 8, 2013
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