Consumer Power Report #441
When it comes to making the case for Obamacare’s persistence, few Republicans have been as insistent as Ohio Gov. John Kasich, who is in a bit of hot water after talking it up recently to the Associated Press:
Ohio Gov. John Kasich says he doesn’t think there will be a repeal in Washington, even if Republicans win a Senate majority and consolidate their hold on the House in next month’s election.
“That’s not gonna happen,” the Republican governor told The Associated Press during a recent re-election campaign swing.
Kasich called The Associated Press Monday night to clarify that he was speaking specifically about a repeal of Medicaid expansion and not of the entire Affordable Care Act – although opponents in Washington don’t usually draw such distinctions.
He said he believes the ACA “can and should” be repealed, but that opposition to the Medicaid expansion “was really either political or ideological,” adding, “I don’t think that holds water against real flesh and blood and real improvements in people’s lives.”
He has cast the Medicaid expansion in Ohio as a moral choice to help the poor.
What’s important about the distinction between what Kasich is saying here and what some squishy Republicans have said in other venues is that he is making a case for Obamacare’s Medicaid expansion not merely as something it is politically unfeasible to roll back, but that it will persist as an affirmative good thing. Which is strange, given Obamacare’s overwhelming unpopularity – and it’s one reason why Kasich is insisting the AP got his quote wrong.
Kasich said AP got it wrong, and he called POLITICO Monday night to correct the record. He said he was talking specifically about repeal of the expansion of Medicaid – which Ohio has implemented – and not of the Affordable Care Act more broadly.
“From Day One, and up until today and into tomorrow, I do not support Obamacare,” the Republican governor said on Monday evening. “I never have, and I believe it should be repealed.”
Except for the Medicaid expansion part – which wouldn’t exist without the law. Kasich thinks there ought to be a way to save it.
“I have favored expanding Medicaid, but I don’t really see expanding Medicaid as really connected to Obamacare,” he said.
If Republicans take the Senate, Kasich said, “you better believe they’re gonna repeal Obamacare and I agree with that.” But, he added, “there’s got to be an accommodation” for Medicaid expansion.
Of course, the idea that the Medicaid expansion is divorced from Obamacare is a little odd – albeit an idea the Supreme Court willingly accepted given its methodology. As Jason Millman notes, it actually accounts for half the coverage expansion under Obamacare. At the Washington Examiner, Philip Klein has more:
Kasich, an enthusiastic backer of the law’s Medicaid expansion, has consistently tried to hold the dishonest position that supporting one of the key components of Obamacare was somehow consistent with opposing Obamacare, an untenable distinction I slammed him for last year. But what generated headlines this time was that, as originally quoted by the AP, he appeared to be breaking from his long-held dishonest effectively-pro-Obamacare position into an openly-pro-Obamacare position. One of my first thoughts after reading his initial comments was that he cannot be serious about running for president in 2016, because there’s no way he could win a primary with such a stance.
However, Kasich subsequently took to Twitter to reiterate that, no, he really meant to continue being dishonest about Obamacare and the AP misquoted him by suggesting he now wanted to be open about his support for the law …
The real chance for Republican governors to stand up for limited-government principles was to reject the money coming from Washington to expand the fully government-run Medicaid program. And Kasich embraced the big government position and has defended it strenuously. If he actually supports repeal, it would mean getting rid of the expansion of Medicaid that he still holds is making “real flesh and blood and real improvements in people’s lives.”
Acceptance of the Medicaid expansion places Republicans in the position of embracing a belief that a welfare program ought to put childless able-bodied adults ahead of the truly needy and condemns them to a ghettoized form of health care. It also puts future citizens on the hook for tax increases to fund the state’s share of the program, which is assured to grow. It is unjustifiable as a fiscally conservative idea, and Kasich’s defense of it should render him toxic for anyone who values fiscally responsible government.
— Benjamin Domenech
IN THIS ISSUE:
This is significant. Ideological critics pooh-pooh Halbig v. Burwell and related cases as “nuisance lawsuits … frivolous.” The health-insurance industry is not so sanguine. Amy Lotven of the trade publication Inside Health Reform reports [$] that before insurers agreed to sell coverage through the Patient Protection and Affordable Care Act’s health-insurance Exchanges in 2015, they demanded that the federal Centers for Medicare and Medicaid Services explicitly agree to let them cancel policies if any of the Halbig cases succeed in blocking the subsidies that carriers had been receiving in the 36 states whose ObamaCare Exchanges were not, as the PPACA’s requires before subsidies can flow, “established by the State.” This is the first indication ObamaCare supporters are worried the Halbig cases could actually succeed, and further demonstrates why the Supreme Court should grant certiorari and expedited consideration to the related case King v. Burwell.
The Internal Revenue Services is currently subsidizing health insurance for about 5 million people in the 36 states that refused or otherwise failed to establish Exchanges themselves. That’s a problem, because the PPACA explicitly, clearly, and repeatedly limits those subsidies to taxpayers who purchase coverage “through an Exchange established by the State.” It’s also a problem because those illegal subsidies end up subjecting some 57 million individuals and employers to illegal penalties under the law’s individual and employer mandates.
The plaintiffs in Halbig and three other cases have challenged those illegal taxes and spending. Two of the three standing judicial opinions (in Halbig and Pruitt) have sided with the plaintiffs. Those courts ruled the Obama administration is breaking the law by taxing, borrowing, and spending billions of dollars contrary to the clear and unambiguous language of the PPACA. Even in the one standing opinion that sided with the government, the Fourth Circuit held in King v. Burwell, “There can be no question that there is a certain sense to the plaintiffs’ position” because “a literal reading of the statute undoubtedly accords more closely with their position,” and the government’s argument was “only slightly” stronger.
As beneficiaries of those illegal subsidies, insurance carriers are spooked. Lotven explains they demanded that CMS change the agreements the agency signs with Exchange-participating carriers for 2015 to include what we might call a Halbig contingency plan.
SOURCE: Michael Cannon, Forbes
The Supreme Court could potentially take up this key question next year, following appellate court rulings this summer. If these lawsuits against the administration are successful, it would result in a “near death spiral” for the individual market, according to a new Rand Corporation analysis. Healthy people would drop out of the individual market, leaving only the highest-need patients in the market and sending premium costs soaring, the Rand analysis found.
So far, the federal courts have been in disagreement. Appellate courts in the District and Virginia this summer split on the legality of these subsidies, though the entire D.C. court will re-hear the case later this year and is expected to side with the Obama administration this time. That would eliminate the circuit court split and could reduce the need for the Supreme Court to take up the challenges. But another federal judge last month ruled against the administration in a similar challenge that is still working its way through the appeals process, and you only need four Supreme Court justices to accept a case. In short, it’s still possible Obamacare winds up before the high court again.
About 87 percent of people who signed up for coverage through federal-run insurance marketplaces, or exchanges, in 2014 received financial assistance to pay for premiums, according to the Department of Health and Human Services. That assistance, HHS said, on average cut the cost of monthly premiums by about three-fourths. So the absence of those federal subsidies would make insurance unaffordable for many of those people.
If you have Obamacare without the subsidies, it would essentially wreak major havoc on the individual insurance market, according to the new Rand analysis. Premiums would be 43.3 percent higher on average in the individual market in 2015, while enrollment – on and off the exchanges – would drop by 68 percent, according to the research firm’s microsimulation model. In all, 11.3 million fewer Americans would have health insurance, according to its analysis.
Since the ACA’s other insurance reforms would remain in effect – like guaranteed coverage and out-of-pocket spending caps – the higher-risk patients would have the greatest incentive to purchase coverage. You wouldn’t get the healthier mix of enrollees to balance out the risk pool to keep insurance costs down. So the individual market would essentially become a high-risk pool on a much smaller scale. That’s hardly what was envisioned by the law’s drafters.
SOURCE: Jason Millman, Washington Post
Patricia Wanderlich got insurance through the Affordable Care Act this year, and with good reason: She suffered a brain hemorrhage in 2011, spending weeks in a hospital intensive care unit, and has a second, smaller aneurysm that needs monitoring.
But her new plan has a $6,000 annual deductible, meaning that Ms. Wanderlich, who works part time at a landscaping company outside Chicago, has to pay for most of her medical services up to that amount. She is skipping this year’s brain scan and hoping for the best.
“To spend thousands of dollars just making sure it hasn’t grown?” said Ms. Wanderlich, 61. “I don’t have that money.”
About 7.3 million Americans are enrolled in private coverage through the Affordable Care Act marketplaces, and more than 80 percent qualified for federal subsidies to help with the cost of their monthly premiums. But many are still on the hook for deductibles that can top $5,000 for individuals and $10,000 for families – the trade-off, insurers say, for keeping premiums for the marketplace plans relatively low. The result is that some people – no firm data exists on how many – say they hesitate to use their new insurance because of the high out-of-pocket costs.
Insurers must cover certain preventive services, like immunizations, cholesterol checks and screening for breast and colon cancer, at no cost to the consumer if the provider is in their network. But for other services and items, like prescription drugs, marketplace customers often have to meet their deductible before insurance starts to help.
While high-deductible plans cover most of the costs of severe illnesses and lengthy hospital stays, protecting against catastrophic debt, those plans may compel people to forgo routine care that could prevent bigger, longer-term health issues, according to experts and research.
SOURCE: Robert Pear, New York Times
They have health insurance, but still no peace of mind. Overall, 1 in 4 privately insured adults say they doubt they could pay for a major unexpected illness or injury.
A new poll from The Associated Press-NORC Center for Public Affairs Research may help explain why President Barack Obama faces such strong headwinds in trying to persuade the public that his health care law is holding down costs.
The survey found the biggest financial worries among people with so-called high-deductible plans that require patients to pay a big chunk of their medical bills each year before insurance kicks in.
Such plans already represented a growing share of employer-sponsored coverage. Now, they’re also the mainstay of the new health insurance exchanges created by Obama’s law.
Edward Frank of Reynoldsville, Pennsylvania, said he bought a plan with a $6,000 deductible last year through HealthCare.gov. That’s in the high range, since deductibles for popular silver plans on the insurance exchanges average about $3,100 – still a lot.
“Unless you get desperately ill and in the hospital for weeks, it’s going to cost you more to have this plan and pay the premiums than to pay the bill just outright,” said Frank, who ended up paying $4,000 of his own money for treatment of shoulder pain.
“The deductibles are so high, you don’t get much of anything out of it,” said Frank, who is in 50s and looking for a new job.
SOURCE: Associated Press
ObamaCare shoppers in search of the lowest-cost plan may come down with a mild case of rate shock when 2015 exchange enrollment begins next month.
An examination of next year’s rates in the biggest city in 15 states and Washington, D.C., reveals that the cost of the cheapest bronze plan will jump an average of 13.9% for 40-year-old non-smokers earning 225% of the poverty level ($26,260).
In Seattle, the cost of the cheapest bronze plan, after subsidies, will soar 64%, from $60 to $98 per month, for individuals at this income level. Some other cities seeing notable gains include Providence (up 38%, from $72 to $99 per month); Los Angeles (up 27%, from $88 to $111); Las Vegas (up 22%, from $100 to $122); and New York (up 18%, from $97 to $114).
The surge in the cost of the cheapest subsidized bronze policy could negatively impact enrollment in 2015. This year, 39% of bronze plan choosers picked the lowest-price option. One might expect that share to rise in 2015, when millions of people who passed on ObamaCare exchanges this year are expected to enroll.
While some potential enrollees may opt out because of the higher cost of bronze, some young adults may instead pick catastrophic plans available to those under 30. The latter scenario is also not great news for ObamaCare exchanges, since catastrophic plan members are grouped separately, leaving the main risk pool relatively older and more costly.
Thirty years of experience in private medical practice uncovers many ironies. For example, recently several of my patients who had been paying for their own individual health insurance informed me that they were forced off private insurance and placed into Medicaid when they signed up for health care at Healthcare.gov. This unwanted change – built into ObamaCare with the intention of helping patients – has harmed them by taking away their freedom to choose a health-care plan that works best for them.
This is not an unusual phenomenon. A recent Boston University/Harvard Medical School study suggests that up to 80% of people participating in ObamaCare’s Medicaid expansion have been shifted off their private insurance. These patients’ plans – that they liked, and were told they could keep – did not meet Affordable Care Act requirements, and were wiped out. Healthcare.gov offered them Medicaid.
But the irony doesn’t stop there. Even if my patients save money by no longer paying premiums, they suffer in the long run by being trapped in a subpar health-care system. A Medicaid card does not translate into quality medical care. In some cases, it does not translate into medical care at all.
Only 45% of doctors are now accepting new Medicaid patients, according to a recent survey by the health-care company Merritt Hawkins. This number has dropped from 55% in the past five years. In some cities – Dallas and Minneapolis, for example – as few as 23% of doctors are seeing new Medicaid patients. As ObamaCare vastly expands the number of patients on the Medicaid rolls – three million new patients, by last count – this threatens these patients’ well-being.
Fewer doctors means long waits to see primary-care providers and even longer waits to see specialists. This invariably leads to worse health outcomes for those patients; that’s why numerous studies have shown Medicaid patients have significantly worse outcomes than those with private insurance. Medicaid patients were twice as likely to die in the hospital after undergoing major surgery than those on private insurance, according to a 2010 study from the University of Virginia published in the Annals of Surgery. The research also showed that patients who had no insurance at all were 25% less likely than those on Medicaid to have an “in-hospital death,” and that Medicaid patients have the longest stays and highest hospital costs.
It would be one thing if these patients previously had no insurance – subpar health care is after all better than no care. Yet up to 80% of these new Medicaid patients previously had private insurance. Thanks to ObamaCare, they have been shunted into a second-class health-care system.