“Obamacare Is For Republicans, Too”: If GOP Governors Think Stonewalling Health Exchanges Hurts Only Democrats, They’re Wrong
Three months from now, Americans will get their first look at whether Obamacare works. The answer will depend a lot on Republican governors and legislatures — and they should want the law’s exchanges to be successful as much as the president does.
The new state insurance exchanges are supposed to start selling health coverage Oct. 1. The idea behind these marketplaces is that allowing apple-to-apple comparisons between health plans will foster competition and lower prices. Most Republican governors and legislatures, however, have resisted running their own exchanges; 19 states have refused to play any role whatsoever.
Continued resistance could hamper an already fraught process. In a report this week, the U.S. Government Accountability Office warned that the federal government is behind schedule in building exchanges in states that have refused to do so. This makes it even more crucial that all states pitch in to help.
Why should Republican opponents of the exchanges change tack now? First, there are the crass politics: Many residents who stand to benefit are their constituents. Federal exchange subsidies are available for people earning between 138 percent and 400 percent of the poverty level, or $32,500 to $94,200 for a family of four. According to 2012 exit polls, 42 percent of people with family incomes between $30,000 and $50,000 voted for Mitt Romney; for those earning between $50,000 and $100,000, the share was 52 percent. If Republican governors think stonewalling exchanges hurts only Democrats, they’re wrong.
Then there are the economic reasons: States with weak exchanges could become less attractive to businesses. John Hickenlooper, the Democratic governor of Colorado, said this week that his state supports its insurance exchange in part to help small businesses, which want healthy and productive workers.
Finally, and most compellingly, there is the human reason – – rather, 25 million human reasons. Well-run exchanges will make getting health insurance easier and more affordable. Even philosophical opponents of the Patient Protection and Affordable Care Act must concede this practical point. Obamacare also happens to be the law of the land.
Some Republican governors have already accepted a role in their exchanges. Iowa and Michigan are partnering with the federal government, while Idaho, Nevada and New Mexico agreed to build their own. It’s too late for other states to follow those courses, but there are still meaningful steps they could take.
One thing they can do is smooth the path for “navigators” – – people or organizations that will help others shop for insurance on the exchanges. Florida requires navigators to register with the state, and Pennsylvania is considering a similar move. This should be fine as long as registration is quick and straightforward.
States should also build solid lines of communication between the exchanges and state-run programs, especially Medicaid. Exchanges can use the information that states keep about people’s income and insurance status to determine whether they’re eligible for subsidies. Easy access to Medicaid databases will mean fewer errors and faster service for people in both programs.
State insurance regulators, who have the authority to approve insurance plans sold on federally run exchanges, can do their part by monitoring the participating insurance plans aggressively enough to keep rates down.
Perhaps the single biggest thing Republican officials could do is simply be ready and willing to address the inevitable hiccups. If states look for ways to stall progress, they’ll find them. Conversely, if governors who oppose the law nonetheless direct their officials to cooperate, the exchanges are more likely to survive those hiccups.
Governors could set a positive tone by reminding their residents that the exchanges are coming. Instead of saying the exchanges “are not going to work,” as Texas Governor Rick Perry did in December, they should encourage their constituents to see whether they’re eligible for subsidies. It doesn’t need to cost the states anything.
By: The Editors, Bloomberg, June 20, 2013
“A Matter Of Life And Death”: Leave It To Scott Walker To Turn Medicaid Expansion Into Medicaid Contraction
Several red states are turning down Medicaid expansion — only Scott Walker (R-WI) is actually using Obamacare as an excuse to cut Medicaid.
Wisconsin’s Badgercare health care plan is one of the best in the country. Families qualify for comprehensive coverage if they earn up to 185 percent of the federal poverty level.
So when the Affordable Care Act offered all 50 states a chance to expand their Medicaid programs to cover all the working poor who earn too much for Medicaid but make up to 133 percent of the poverty level, what did Governor Scott Walker decide to do?
He put forward a plan to drastically cut Badgercare.
If Walker gets his way, his state’s plan will only cover residents who earn 100 percent of the poverty level or below – $11,490 a year for a single adult.
Tens of thousands of Wisconsites will be forced from completely subsidized health care to the federal insurance exchanges, where they can purchase private plans with a subsidy. To do this, Walker has to give up federal funding that would cover 84,7000 residents, which would lead to a $119 million cut to his state budget.
“But a detailed analysis of the plan by the Legislative Fiscal Bureau finds that many of the people now receiving state Medicaid coverage would likely not buy the more costly insurance through the federal program,” The Milwaukee Journal Sentinel reports.
“As a general rule, they’re going to be really strapped to do it,” Jon Peacock, research director of the Wisconsin Council on Children and Families, told the Journal Sentinel. “They won’t scrape together the money unless they really need it.”
The Bureau estimates that 7 percent will not buy the coverage. Peacock thinks that’s overly optimistic.
A new UW Madison study shows that Badgercare – which was expanded in 2009 — reduces hospitalization and improves management of chronic disease.
Even Senate Majority Leader Scott Fitzgerald (R-Juneau) admits that Walker’s plan could send thousands to emergency rooms for care, driving up the cost of care for all residents. The legislature is considering additional payments to hospitals to make up for the costs of the uninsured.
Medicaid expansion is a great deal for the states. The federal government will fund 100 percent of the initial expense; that decreases to 90 percent over the next decade.
Rand Corporation just released a study that underlines the cruelty of rejecting expansion. “States rejecting the expansion will spend much more, get much, much less, and leave millions of their residents uninsured. That’s a lot of self-inflicted pain to make a political point,” according to The Washington Post‘s Ezra Klein and Evan Soltas.
“This is not a small issue,” writes The Guardian‘s Michael Cohen. “In fact, it is a matter of life and death.”
Cohen points to a New England Journal of Medicine study that shows increased access to Medicaid results in fewer deaths. A recent study in Oregon found that Medicaid eliminated economic hardships brought on by health problems and dramatically improved mental health.
What Walker is doing is even worse than his more than two dozen Republican colleagues who are rejecting expansion. He’s taking health care away from the working poor, knowing that doing so will cost his state money, well-being and even lives.
By: Jason Sattler, The National Memo, June 4, 2013
“Affordable And Accessable”: The Shocking Truth About Obamacare’s Rate Shock
Imagine you went to Best Buy and found a great deal on a plasma television set. I want to be clear here: You didn’t find a great television set. This television set is actually a bit crummy. The picture is fuzzy. Consumer Reports says it breaks down a lot and it’s expensive to fix. But it’s really cheap. The price tag reads $109.
When you take it to the counter, the saleswoman tells you that the set will actually cost you $199. And count yourself lucky, she confides in a conspiratorial whisper. There are customers whom Best Buy won’t sell it to at any price. You ask her which customers those are. The ones who need the TV most, she replies.
So here’s the question: Does that television really cost $109?
Best Buy, of course, would never do this to you. If they say you can buy a television set for $109, you can buy it for $109. Plus, they’re handsome, and their customer service is great, and I hope they advertise in The Washington Post forevermore, amen.
But this is actually how the individual health-insurance market works. And understanding why is crucial to understanding a lot of what you’re going to read about health reform in the next year.
Last week, California released early information on the rates insurers intend to charge on the new insurance marketplaces — known as “exchanges” — that the state is setting up under Obamacare. They were far lower than anyone expected. Where analysts had anticipated average premiums of $400 to $500, insurers were actually charging $200 to $300. “This is a home run for consumers in every region of California,” crowed Peter Lee, director of the state’s exchanges.
The Affordable Care Act’s critics saw it differently. Avik Roy, a conservative health writer at Forbes, said Lee was being “misleading” and that “Obamacare, in fact, will increase individual-market premiums in California by as much as 146 percent.” Obamacare, he said, would trigger “rate shock,” the jolt people feel when they see higher rates. That doesn’t sound like a home run at all.
Who’s right? In typical columnist fashion, I’m not going to tell you just yet. But stick with me, and you’ll be able to parse the next year of confused and confusing Obamacare arguments with ease.
Here’s the first thing to know: We’re talking about a small fraction of the American health-care system. This isn’t about people on Medicare or Medicaid or employer-based insurance. It’s about people joining Obamacare’s insurance exchanges. That’s people who buy insurance on their own now, as well as some of the uninsured. In 2014, 7 million people, or 2.5 percent of the population, is expected to buy insurance through the exchanges. By 2023, that will rise to 24 million people, or 8 percent.
So we’re talking about a small portion of the market. Worse, we’re talking about that small portion of the market all wrong.
Roy got his 146 percent by heading to eHealthInsurance.com, running a search for insurance plans in California and comparing the cost of the cheapest plans to the cost of the plans being offered in the exchanges. That’s not just comparing apples to oranges. It’s comparing apples to oranges that the fruit guy may not even let you buy.
I ran the same search Roy did. I looked for insurance in Irvine, Calif. — my home town. The average monthly premiums of the five cheapest plans is $114. So I took the middle plan, HealthNet’s IFP PPO Value 4500. It’s got a $4,500 deductible, a $2,500 deductible for brand-name medications, huge co-pays and a little “bestseller” icon next to it. And it’s only $109 a month — if they’ll sell it to you for that price.
That’s the catch, and it’s a big one. Click to buy the plan and eventually you’ll have to answer pages and pages of questions about your health history. Ever had cancer? How about an ulcer? How about a headache? Do you feel sad when it rains? When it doesn’t rain? Is there a history of cardiovascular disease in your family? Have you ever known anyone who had the flu? The actual cost of the plan will depend on how you answer those questions.
According to HealthCare.gov, 14 percent of people who try to buy that plan are turned away outright. Another 12 percent are told they’ll have to pay more than $109. So a quarter of the people who try to buy this insurance product for $109 a month are told they can’t. Those are the people who need insurance most — they are sick, or were sick, or are likely to get sick. So, again, is $109 really the price of this plan?
Comparing the pre-underwriting price of this plan to those in Obamacare’s exchanges is ridiculous. The plans in Obamacare’s exchanges have to include those people. They can’t turn anyone away or jack up rates because of a history of arthritis or heart disease.
They also have to offer insurance that meets a certain minimum standard. Under Obamacare, for instance, the out-of-pocket limit for someone making 100 to 200 percent of the poverty line is $1,983. Under the Value 4500, you could spend up to $9,500 before the out-of-pocket limit kicked in. Obamacare also has subsidies for people making up to four times the poverty line. The poor pay next to nothing. The rich pay full freight.
“We as a society have never really said here’s what reasonable insurance is,” says Larry Levitt of the Kaiser Family Foundation. “It’s just been anything goes. For the first time they’re setting a minimum about what reasonable insurance should be.” They’re also setting a minimum about who should be able to get it, and at what cost. Now it really will work like Best Buy, where the price on the tag is the price everyone actually pays.
Some people will find the new rules make insurance more expensive. That’s in part because their health insurance was made cheap by turning away sick people. The new rules also won’t allow for as much discrimination based on age or gender. The flip side of that, of course, is that many will suddenly find their health insurance is much cheaper, or they will find that, for the first time, they’re not turned away when they try to buy health insurance.
That’s why the law is expected to insure almost 25 million people in the first decade: It makes health insurance affordable and accessible to millions who couldn’t get it before. To judge it from a baseline that leaves them out — a baseline that asks only what the wealthy and healthy will pay and ignores the benefits to the poor, the sick, the old, and women — well, that is a bit shocking.
By: Ezra Klein, Wonkblog, The Washington Post, June 1, 2013
“Between A Rock And A Stupid Place”: The Medicaid Scandal Of State Level Republicans
As the reality of states refusing the insanely generous terms of the Affordable Care Act’s Medicaid expansion (viz., the Texas legislature’s proactive legislation prohibiting the state from participating), begin to sink in, with it comes the realization that a completely perverse situation will now prevail in these states. The New York Times‘ Robert Pear explains for anyone who hasn’t heard:
More than half of all people without health insurance live in states that are not planning to expand Medicaid.
People in those states who have incomes from the poverty level up to four times that amount ($11,490 to $45,960 a year for an individual) can get federal tax credits to subsidize the purchase of private health insurance. But many people below the poverty line will be unable to get tax credits, Medicaid or other help with health insurance.
You will occasionally hear that people left exposed by states refusing to expand Medicaid are “covered” by Obamacare health insurances exchanges, and that’s true for what little it’s worth. The subsidies designed to make coverage affordable for the working poor (and a big chunk of the middle class), however, don’t kick in until a beneficiary’s income is above the federal poverty line. That’s because it did not occur to the Affordable Care Act’s sponsors that the Medicaid expansion provisions covering all Americans up to the poverty line would become voluntary for the states. And you know what? Had they known the Supreme Court was going to so rule, they probably would have thought no state would hate its own poor people enough to turn down the fiscal deal represented by the expansion (that was certainly the assumption a lot of otherwise smart observers made when the Court’s decision came down). Turns out as many as 25 states may in fact go in that stupid and malevolent direction, leaving up to 5.7 million Americans at the very heart of Obamacare’s intended coverage population without meaningful access to health insurance.
Now normally you’d think a Court-created “hole” in a legislative plan of this size would lead to a legislative “fix,” wouldn’t you? But that is for sure not happening until such time as Democrats regain control of the House and of 60 Senate seats–the temporary majorities that made enactment of the Affordable Care Act over the united opposition of the GOP possible in the first place.
The scandal of state-level Republicans leaving so much federal money on the table and so many poor people in the lurch may well become a campaign issue in 2014. But while this treachery is very likely to become a long-term political issue for Republicans in the affected states–particularly in the South, where its racial dimensions are impossible to ignore–the overall landscape going into the 2014 midterm election is hardly promising for Democrats there or nationally.
So putting things right and holding the happy architects of this wildly unfair situation may take a good long while. But payback’s hell.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, May 28, 2013
“Managing Expectations”: How Conservatives Are Helping Obamacare
Yuval Levin, among other conservatives, has made an offer to liberals: Let’s delay the implementation of Obamacare for a year and make everybody better off:
Congressional Democrats surely want to avoid being blamed for a meltdown of American health care during a congressional election year, the people implementing this law at every level could certainly use the time, and Republicans believe that more time would not make Obamacare more popular but would allow them to further develop and articulate their alternatives (and allow another election to intervene earlier in the rollout process, making a replacement more plausible).
Liberals, wisely, are saying no. What’s funny about this conversation is that conservatives have been accidentally managing expectations for implementation: By harping constantly on what a disaster the rollout is going to be, they will make what actually happens look good by comparison.
Jonathan Cohn has a good piece in the New Republic arguing that implementation won’t be as bad as people are saying. This is his really important observation:
Notice that the worries about implementation chaos apply strictly to people who would otherwise be uninsured or at the mercy of the existing individual insurance market, in which plans are inconsistently priced, full of coverage holes, and of unpredictable reliability — and in which financial assistance for buying private coverage is not available at all. Even if it takes these people a while to get insurance, and even if finding that coverage is a maddening experience, they’re going to end up with something they don’t have now: Coverage that meets more of their needs and is available to them, with substantial financial assistance. Don’t forget: Today, people with pre-existing medical conditions frequently cannot get any coverage on the individual market.
This is something that has been lost in the discussion of Obamacare implementation difficulties:
Implementation won’t much affect the 78 percent of Americans currently covered through Medicaid, Medicare, or employer group health plans. It will make some people who currently buy individual coverage worse off. But only 5 percent of Americans get insurance through the individual market, which is already hugely dysfunctional. Three times as many Americans are currently uninsured, and they can only stand to gain from Obamacare implementation, even if it does not go smoothly.
For those 5 percent who buy individual coverage now, the new law will be a mixed bag. Some people will probably have frustrating bureaucratic experiences with the new exchanges that they didn’t have buying directly from insurers. And some people (particularly young and healthy people) will see their premiums go up. But others will see their premiums go down, either because they currently pay a lot because of age or health status, or because income-based premium subsidies will more than offset any premium increase.
There will also be people who lose group health coverage, when premium subsidies make it attractive for their employers to send them to shop in the exchanges. (Others will gain group coverage if employers decide it is better to offer it than to pay a penalty for uninsured workers.) But neither this effect nor any problems faced by people with existing individual insurance is likely to create a clamor for repeal that is any more effective than the din of the last three years.
That is because the most obvious way to fix the problem of those who have trouble in the health exchanges will be to fix the exchanges, not repeal them. Let’s say your employer dropped group coverage and you’re having trouble with the exchange. Will you want the whole law repealed in the hope that will lead your employer to reverse course and offer a group plan again? Or will you want the exchange fixed so you are guaranteed access to coverage?
Cohn looks back to Medicare Part D and the Children’s Health Insurance Program and argues that those programs got through their rocky implementations in large part because benefits obtained with bureaucratic difficulty are better than no benefits at all. He’s right, and this is why conservatives are “magnanimously” offering to delay implementation of Obamacare. They realize that once people have guaranteed access to health coverage, they won’t want to give it up, even if there are implementation problems.
The political landscape is already dire for those who still hope to repeal Obamacare, and they’re actually making their position worse by talking constantly about what a nightmare implementation is going to be. This fall, as the exchanges come on line, tens of millions of people are going to find they can get health coverage they never could before. They are likely to be quite happy about that, especially if they’ve been hearing for months in advance that it will be a mess.
By: Josh Barro, Bloomberg, April 29, 2013
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