Publius Speaks

Publius Speaks
Become A Follower

Tuesday, March 7, 2017

ACA REPLACEMENT with DEBASEMENT

In the midst of Trump's twittering of false charges against President Obama for “wire-tapping” Trump Towers, it almost seems that addressing something of import is somehow off-center. All the hype from our Pretend-President Trump has served his purpose to distract us from the main business-at-hand which is the repeal of the ACA or “Obamacare” and all that such action would portend for millions of people.   
According to Donald J. Trump, in his toned-down speech read to Congress on Tuesday, February 28th, “Obamacare” is crumbling from within and dying.  This is “bumper sticker” talk, and is not supported by details or by documentation.  The only charges he made that might have a scintilla of truth relate to the rising cost of some insurance plans and that some insurers have pulled out of certain areas.  However, the real truth behind those incidents has not been widely told.
These Radical Republicans will never tell you the full truth that THEY bear much of the blame for these two problems because of their votes on budget items related to the ACA legislation.  Too bad we are so willing to accept bumper-sticker mentality and distortions of truth instead of trying to dig out the real truth.
Since I’ve covered some of this story in the recent past, let me simply quote from my post of Nov. 3, 2016:
Republicans in Congress must share the blame for higher rates and loss of insurers.

Provisions in ACA known as the “three R’s” were placed in the ACA to protect insurance providers, designed to alleviate expected losses in the first two years of Obamacare operation.  Two of those provisions were to expire by the end of 2015, but while in existence, paid out substantial amounts to help cover the losses to initial providers.  The first “R” was a “reinsurance” provision that paid out federal funds of over $15 billion dollars in the first two years of exchange operations to insurers who attracted individual consumers who racked up particularly high medical bills.  The second “R” – “risk adjustment” – was intended to help small insurers by requiring insurers with low-cost patients to make payments to plans that insured higher cost customers. Small companies complained that bigger companies were favored in this, and that this second “R” was too unpredictable.
But it is the third provision – “Risk Corridors”-that ended up on the trash heap of a Republican Congress’s dedication to the dismemberment of Obamacare.  This action by Republican saboteur-legislators has surely contributed to the current situation of higher premiums and loss of providers in some exchanges.  They won’t admit it, and Donald Trump will never speak truth to you about it if he even knows what that is!

“Risk Corridors” was a provision intended to subsidize health plan providers whose total medical expenses for all their ACA customers exceeded a certain set amount.  With this “insurance for insurers,” many companies were willing to risk trying low premiums at first.  Providers could then submit claims seeking federal payments for expenses that overshot the allowed target.  Insurers submitted claims for $2.9 billion under this provision of the Law, but ended up getting only 12.6 cents for each dollar they had counted on because once Congress passed a spending restriction, there was just $400 million available to make good on some of those payments.  What exactly happened?
“in December of 2014, the Republican Congress voted to prohibit the Obama administration from spending any money on the program, decrying it as a bailout for the insurance companies.  Unlike all those symbolic ‘repeal Obamacare’ votes, Congress succeeded in blocking any further risk corridor payments. The end result: many of the new Obamacare co-op plans that went out-of-business blamed their collapse in part on the fact that they’d been counting on the full (corridor) payments to keep them solvent.” (Politico)
This is one large causal factor for why premium rates are going up and insurers are withdrawing for 2017.  “Across 36 states analyzed by the Council for Affordable Health Coverage, the average requested increase for 2017 is 19.2 percent.  But in some states like Arizona, Oklahoma and Tennessee, proposed average rate hikes exceed 50%: Texas is asking for a 60% premium hike.”

So there you have it.  The main reason Trump and his Alt Right Trumpets give for the supposed denouement of the ACA is mostly their fault.  It follows that you can’t trust anything the Trump people and the Alt Right say about ‘Obamacare’; nor can you trust anything they now propose as a “replacement” for the ACA because their legislation is nothing more than a concoction of ideologically-correct separate programs and policies that have no coherent mechanisms connecting them together to form a system of reform of our health care system. As they have demonstrated so vividly on other issues (such as immigration), they cannot make connections between policies and mechanisms that depend on each other.  They simply fail to understand the connections that are needed to make policies work, and to make complicated major legislation viable in the real world. As Trump reminded us recently: "Health care is very complicated."
 Forming a coherent system for insuring those who cannot afford to do so for themselves also seems beyond their abilities.  Tax credits involve a system that must operate almost separately from the tax refund system because the credits must be available when people are ready to purchase insurance. Those people who do not pay taxes will be unable to collect their credits unless a separate mechanism is worked out for that transaction. 

 In other words, this replacement for ACA subsidies has no methods to do what Obamacare has done all along: reform healthcare so that those who have had inadequate or no coverage at all, can be covered at a reasonable cost including readily available federal subsidies that assure enrollees of coverage unrestricted by spending caps, pre-existent conditions, or gender-related health needs.

To put it another way:  Obamacare has accomplished several of its main objectives; the disconnected plans for ’Trumped-up-care’ are not going to accomplish anything but the destruction of health care reform, and the destruction of health care insurance coverage for many of the 20 million people who could not afford such coverage before, and who will again be under-insured, or not insured at all.  They will be lucky even to afford ‘junk plans’ that will be worse than they were before Obamacare made them conform to more-than-adequate standards.
ONE MORE THING that Republicans are not going to tell you is that the insurance companies themselves erred in their initial estimates of “break-even points”, and thereby contributed to their own failures to turn enough profit from all the new ACA enrollees. Thus, several companies have now withdrawn from the exchanges because they can no longer afford to participate due to their miscalculations and to the lack of funding from those “corridor” payments.  Here is more of that story from my blog post of Nov. 3rd, 2016.

The larger premium increases are not a surprise. Despite Republican rhetoric to the contrary, there are several cogent reasons why the rise in rates is not surprising.   
a.       The insurers initially guessed wrong as to how much their new customers’ health care was going to cost in the long run.  After two and one-half years of operation and data-collection, it became quite clear that the ratio of premiums charged to costs paid out was in dire need of adjustment, especially in states where initial estimates were far off the mark, like Texas and North Carolina, and at least 10 others.  A POLITICO review of 2015 filings from nearly 100 health plans across a dozen geographically and politically diverse states found that less than a quarter of them hit the standard break-even point for insurers at which payouts are kept to about 85% of premiums taken in.  Many of those insurers lost “tens of millions of dollars on their Obamacare policies last year.”

b.       The “risk pool” is unbalanced.  As with most insurance, profit for the provider depends on having “shared risk.”  The one question influencing provider participation in Obamacare from the start has been the question of just 'who will sign up for Obamacare?' and, 'how sick will they be?'  In the language used by insurance companies, the “risk pool” of Obamacare customers has turned out to be “riskier” than they anticipated.  It is now clear: in several states, fewer people signed up than expected and many turned out to be sicker and thus more costly than anticipated. 
Before ACA, the insurers had several ways to balance their ‘risk pool.’  They used  filters like ‘pre-existing conditions,’ monthly or lifetime caps,’ and “benefit reductions” to avoid covering the people who would most likely have higher medical costs and thus be a drain on their profit margin.  Obamacare, thank goodness, made those tactics illegal.  (Unfortunately, Trumped-up Care does not make all of them illegal!)
Other factors have played into this imbalance of the risk pool all of which are “fixable”, but not by state high-risk pools which have no mechanism for supporting persons of low income:
·         fewer people got shut out of employer plans than anticipated and didn’t end up on Obamacare. 
·         young people (mostly healthy and representing small costs for health care) are allowed to remain on parent policies until age 26, unfortunately keeping many younger healthy potential customers for other plans out of the risk pool.
·          special enrollment periods have tended to produce signers-on looking for immediate care and running up larger medical bills quite quickly.
·          The tax penalty for not having health insurance may be too low and thus a viable means for younger people to avoid signing up because they believe paying the penalty is cheaper than paying premiums  
·          those states that supported ACA and set up their own exchanges were roughly twice as high in enrollment as those states that refused to promote enrollment.
·         For insurance markets to be sustainable under Obamacare, “experts estimate that 35 percent of customers should be between the ages of 18 and 34 but just 28% of customers fall into that group” under Obamacare. (POLITICO)
The final irony of this situation in which we find ourselves is that Republican ideas incorporated into the ACA early on are about to be repealed by Republicans!.  After all, certain provisions of Obamacare came from something called “Romney-care” in Massachusetts.  With the help of Politico, let’s see what similarities appeared in the Romney Plan that became a basic part of Obamacare.
  • State-based exchanges – Both laws create exchange authorities charged with operating health insurance marketplaces:  internet websites where residents may compare and purchase private insurance policies that meet minimum levels of coverage.
  • Guarantee issue -  meaning consumers cannot be denied coverage due to pre-existing health conditions.
  • Subsidies for lower-income households – While the amount of individual subsides vary, and the income levels for eligibility differ, both laws provide financial assistance to lower-income households so that health insurance is affordable.
  • The individual and business mandates – Both laws require individuals who can afford it to purchase insurance or face a financial penalty. The Massachusetts law required businesses with more than 10 employees to provide health benefits to their workers or pay a $295 per employee.  Under the ACA, businesses with 50 or more full-time employees must offer health insurance or pay a $2,000 per employee penalty.
There is more to this story of Republican involvement in ACA concepts in spite of denials like the following from today’s Washington TIMES:
“Republicans didn’t create Obamacare or all the problems that followed—from rising premiums to crumbling exchanges to bankrupt co-ops to lost plans and restricted networks,” House Majority Leader Kevin McCarthy said. “We didn’t create these problems, but we’re going to fix it.” 
In February 1974, Republican President Richard Nixon proposed, in essence, today’s Affordable Care Act. Under Nixon’s plan all but the smallest employers would provide insurance to their workers or pay a penalty, an expanded Medicaid-type program would insure the poor and subsidies would be provided to low-income individuals and small employers.
Thirty years later, Republican governor, Mitt Romney, made Nixon’s plan the law in Massachusetts. Private insurers couldn’t have been happier although many Democrats in the state had hoped for a public system.  When today’s Republicans rage against the individual mandate in the Affordable Care Act, it’s useful to recall this was their idea as well.
In 1989, Stuart M. Butler of the conservative Heritage Foundation came up with a plan that would “mandate all households to obtain adequate insurance.”  Insurance companies loved Butler’s plan so much it found its way into several bills introduced by Republican lawmakers in 1993. Among the supporters were Senators Orrin Hatch (R-UT) and Charles Grassley (R-IA). Both now oppose the mandate under the Affordable Care Act. Newt Gingrich, who became Speaker of the House in 1995, was also a big proponent. (Fox News)
As notedabove, Romney’s heath care plan in Massachusetts included the same mandate to purchase private insurance. “We got the idea of an individual mandate from [Newt Gingrich] and [Newt] got it from the Heritage Foundation,” said Romney, who thought the mandate “essential for bringing  health care costs down for everyone and getting everyone the health insurance they need.”
Not only will today’s radical Right-wing Republicans not tell the truth about Obamacare’s positive impact, or the provisions that reflect their Party’s conceptual contributions to the ACA, they won’t even acknowledge that the GOP has a history of involvement in this issue. 
Bottom line:  you cannot trust the Trump puppets in Congress with anything of substance like a health care replacement Act.  They can’t handle the Truth and they surely can’t handle the rigors of putting together legislation that can come close to the carefully constructed Affordable Care Act.
  What’s worse is that they are not aiming to replace anything; certainly not looking to repair the ACA.  Their intent is to diminish and debase central government and all of its programs, except for a bloated Defense, a devotion to establishing religious beliefs and doctrines that advance their cause (over-turning Roe v. Wade; and restrictions on birth control); creating a Supreme Court that maintains Law and Order (to keep certain groups under strong controls, backed up by a privately run corrections system that punishes inmates in ways that do not pass the test of humane treatment). They are already moving on the destruction of diplomacy, foreign aid, immigrant welcome and support, and soon on “entitlements” like Social Security, Medicare and Medicaid.  And the groundwork is already being laid for the elimination of federal standards for education, civil rights, environmental protection, and the workplace.
One can only wish that those who voted for and still support Trump’s form of authoritarian government, with its agents of doom, would be the first and only ones to reap its cruel and negative consequences.  Votes (and non-votes) do have consequences. Unfortunately, those consequences are broadly cast and widely felt. 
Update: One more thing Republicans won't tell you is that this whole 'repeal and replace' idea has some personal rancor behind it.  In fact, my Alt Right congresswoman happened to brush up against it in her recent TV interview.  The current ACA contains within it another mandate about which little is said, but it rankles within the very souls of those congresspersons who oppose Obamacare.  They wanted to be exempt from Obamacare, but starting Jan. 1st, 2014, were mandated to be covered by the plans that were available on the federal ACA exchange. However, in order to still receive the employer subsidy, they would be required to choose from just 57 gold-tiered plans rather than the 300 or so options available to most federal employees. So, not only did they have to give up several hundred health care plan options that had been available to them before ACA, they would also have to give up the outrageous percentage of employer subsidies on their premiums (for other than gold plans) that were being paid with taxpayer dollars-- an average of about 72%! 
 The repeal of Obamacare will wipe out the mandated ACA coverage for Congress  and the Trumped-up Replacement will not bring it back!  Nonetheless, YOU will be stuck paying 72-75% of their premiums again on any of those 300+ plans (many of them unavailable to YOU) - strange how that works out, don't you think?! (see https://fas.org/sgp/crs/misc/R43194.pdf for more details).