Consumer Power Report #426
On Tuesday the Supreme Court delivered another rebuttal of the Obama administration’s implementation of Obamacare by ruling against the controversial contraception mandate. Ilya Shapiro of the Cato Institute explains the case here:
This case began when the Department of Health and Human Services included 20 contraceptives as part of the “minimum essential coverage” that all health insurance plans had to satisfy to comply with Obamacare’s employer mandate. A host of employers objected on religious grounds to four of the items on that list because these particular methods of contraception prevent a fertilized egg from implanting in the uterus.
Now, whether you call such devices and pills “abortifacients” or not is a question of semantics. I don’t have a problem with them, but David and Barbara Green, the founders and owners of the arts-and-crafts emporium Hobby Lobby Inc.–who consider it part of their Christian duties to provide good healthcare to their employees–hold that preventing embryonic implantation violates their religious beliefs. Yet not complying with the mandate would mean paying $1.3 million in daily fines …
When someone makes a RFRA [Religious Freedom Restoration Act of 1993] claim, courts look first at whether the government action at issue imposes a “significant burden” on religious exercise. If it does, then the government must show that it nevertheless is pursuing a “compelling interest” and uses the “least restrictive means” of serving that interest. The burden here was quite clear (see above; even the government didn’t contest the sincerity of the Greens’ beliefs), and the Court ultimately assumed that the government’s asserted interests in “public health” and “gender equality” were compelling–as vague as those are, and whose importance is undermined by Obamacare’s exemptions and grandfather clauses. So the case came down to the “least restrictive means” (sometimes called “narrowly tailored”) prong.
And that’s where the government lost. It simply didn’t show–couldn’t show–there was no way to provide free or cheap birth control without burdening believers. For example, the government could pay for the four disputed contraceptives itself, or provide a tax credit, or indeed make the kind of regulatory accommodation that it has for certain nonprofits. … Instead, HHS chose to continue forcing folks to do its bidding.
That’s it. Nobody has been denied access to contraceptives, and there’s now more freedom for all Americans to live their lives how they want, without checking their conscience at the office door. The mandate fell because it was a rights-busting government compulsion that lacked sufficient justification.
In the aftermath of the decision, the left is talking up possible methods to push back against Hobby Lobby and other employers or do an end-run around the policy issues involved. But what may become a possible solution on the right is a broader embrace of Louisiana Gov. Bobby Jindal’s advocacy for the sale of birth control pills over the counter to adults. James Antle and Philip Klein and others on the right and on the left are embracing the idea. I make the case here for the idea:
There are a number of objections to this, but I find them to largely amount to unconvincing paternalism. The chief argument advanced is that standard oral contraceptives mess with hormones and have all sorts of side effects. This is, of course, true! But: dangerous side effects are rampant within all sorts of other over the counter drugs. Women can think for themselves and make decisions with their doctor and pharmacist about what drugs they want to take – and the evidence shows they are good at self-screening. In fact, it would actually increase the ability to mitigate and respond to unanticipated side effects, since changing tracks will no longer require a doctor’s visit and getting a new prescription. Assuming that women won’t or can’t take responsibility for themselves to consult with a doctor unless required to by arbitrary government policy is absurd.
It’s obvious why libertarians like the idea of OTC birth control. Conservatives should like it because it removes the responsibility for redistributive payment from themselves while demonstrating that yes, they really aren’t about banning things or preventing access to birth control. And liberals should like it because it will lower the drop-out rate, which is currently largely driven by the requirement to re-up the prescription as much as every few months. The American College of OB-GYNs supports it, Louisiana Gov. Bobby Jindal and Colorado Rep. Cory Gardner support it, most of the world already has it, and making it official policy would lower prices, lower health care costs, and make consumers more cost conscious. All of these are good things.
A recent Reason-Rupe poll found that 66% of those surveyed supported the idea, versus 30% opposed. We’ll see if more politicians take up this cause in the future as a way to shift responsibility to individuals and to remove divisive birth control fights from the political sphere.
— Benjamin Domenech
IN THIS ISSUE:
OBAMACARE EXCHANGES FRAUGHT WITH DATA PROBLEMS
The Obama administration is struggling to resolve data discrepancies that could jeopardize coverage for millions who sought health insurance on the federal exchange HealthCare.gov, according to a watchdog report on the still-rocky implementation of ObamaCare.
Though the system’s troubles have faded from the headlines since the problem-plagued launch last October, a report from the health department inspector general provided the first independent look at widespread issues the government is having effectively fact-checking the information applicants are putting in the system.
According to the report, the administration was unable to resolve 2.6 million so-called “inconsistencies” out of a total of 2.9 million such problems from October through December 2013.
The government needs to determine applicants’ eligibility in order to verify they can enroll and, in some cases, get government subsidies. Without that step, coverage could be jeopardized. Critics fear these issues also could cause chaos during the 2015 tax-filing season, as many would have to pay back subsidy money they were not entitled to.
According to the report, those running the federal marketplace are having trouble resolving problems “even if applicants submitted appropriate documentation.”
“The federal marketplace was generally incapable of resolving most inconsistencies,” the report said, claiming the government could not resolve 89 percent of the problems.
And of the roughly 330,000 cases that could be straightened out, the administration had only actually resolved about 10,000 during the period of the inspector general’s audit. That worked out to less than 1 percent of the total.
The report said that most of the problems dealt with citizenship and income information supplied by consumers that conflicted with what the federal government had on record. The report said the government’s eligibility system was not fully functional.
The data above doesn’t even reflect what’s happening with the state-run exchanges. According to the same report, four of the 15 state marketplaces reported they were “unable to resolve inconsistencies.” They are: Massachusetts, Nevada, Oregon and Vermont.
SOURCE: Fox News
HOW AFFORDABLE IS THE AFFORDABLE CARE ACT?
The Department of Health and Human Services recently released a report making the case for how Obamacare’s premium subsidies have made health insurance more affordable for individuals. But those who do not qualify for federal subsidies appear to find exchange coverage anything but affordable.
As some have noted, a separate HHS report released in May highlighted the fact that during the 2014 open-enrollment period, 13.5 million individuals were found eligible to purchase coverage on state or federal exchanges. Of these, about 8.7 million qualified for federal insurance subsidies. That means nearly 4.8 million individuals were not eligible for subsidies. And while more than three-quarters of the 8.7 million who did qualify for subsidies (or 6.6 million) selected an insurance plan, only 1.2 million of those who did not qualify for subsidies selected a plan.
In other words, only about one-quarter of those not receiving federal insurance subsidies decided that the options offered were worth selecting a plan. It’s possible that even fewer decided to pay their first month’s premium. (Worth monitoring as more data become available: Are unsubsidized individuals not paying insurance premiums at greater rates than those receiving federal subsidies?)
Several studies suggest that Obamacare’s package of mandated benefits and other regulations have increased premium levels substantially. Advocates of the Affordable Care Act say that federal subsidies have made coverage more affordable, but others have argued that using government spending – more than $1 trillion in exchange subsidies and $1.8 trillion in spending on new coverage overall – to mitigate the effects of regulation presents a solution in search of a problem.
SOURCE: Wall Street Journal
PRIMARY CARE SHORTAGE PROBLEMS CONTINUE
Federally funded programs will add at least 2,300 new primary care practitioners by the end of 2015, but the funding for at least one of those programs is set to expire at the same time, contributing to a massive shortage of doctors available to treat patients — including those newly insured through the Affordable Care Act and Medicare.
The U.S. is expected to need 52,000 more primary care physicians by 2025, according to a study by the Robert Graham Center, which does family medicine policy research. But funding for teaching hospitals that could train thousands more of these doctors expires in late 2015.
Population growth will drive most of the need for family care doctors, accounting for 33,000 additional physicians, the study says. The aging population will require about 10,000 more. The Affordable Care Act is expected to increase the number of family doctors needed by more than 8,000, the study says.
Farzan Bharucha, a health care strategist with consulting firm Kurt Salmon, says the ACA should have focused more on the primary care shortage “because we already knew there was a problem — and we knew implementation of ACA would potentially make it worse.”
Health and Human Services spokeswoman Erin Shields Britt says continuing to build the primary care workforce will take time, but she notes President Obama’s budget working its way through Congress has several new ways to expand the primary care workforce, which includes nurse practitioners and pediatricians. The ACA, she says, significantly increases the number of primary care providers in underserved areas and increases Medicare and Medicaid payment for services delivered by primary care practitioners.
ACA funding that added 600 new primary care residencies was part of a five-year investment that expires at the end of 2015, eliminating the chance to produce hundreds more doctors each year.
SOURCE: USA Today
PROGRESSIVES FAUSTIAN BARGAIN ON NARROW NETWORKS
In 2001, progressives led the fight against restrictive health plan networks and drug formularies that were being introduced by managed care as a way to tamp down on costs. In 2010 they embraced these schemes as a Faustian bargain with insurers.
The compromise liberals struck was to pursue a mandate-heavy template on which all of the ACA health plans had to be modeled, and to embrace the narrow doctor networks and drug formularies as a way to pay for the costs of this regulation.
That compromise has implications across the entire healthcare market.
Progressives have made the concept of narrow networks and closed drug formularies politically tolerable, if not trendy. Having garnered this political sanction to proceed with these restrictive plans, insurers are rolling out the same schemes market-wide.
Back in 2001, it wasn’t just liberals that rejected these same constructs, through political efforts that culminated with the introduction of a Patients Bill of Rights in Congress, that sought to prevent insurers from pursuing some of these restrictive practices. Consumers also firmly rejected these narrow provider networks, favoring Preferred Provider Organizations over more restrictive Health Maintenance Organizations. In choosing the PPOs over HMOs, consumers were trading away first dollar coverage for a lot of routine care in favor of more flexibility on which doctors they could choose. Under the ACA, they are forced to make the opposite bargain.
Some observers argue the insurance business tactics resulting in these narrow benefits are not unique to the ACA plans. In 2007, 15% of employer sponsored health plans also had narrow networks. But the rules embedded in the ACA made these very restrictive drug formularies and narrow provider networks almost an inevitable part of the ACA. And the embrace of these constructs as a part of the ACA will make these same arrangements far more prevalent across the entire market.
SOURCE: Morning Consult
CALIFORNIANS STRUGGLE WITH NARROW NETWORKS
Limiting the number of medical providers was part of an effort by insurers to hold down premiums. But confusion over the new plans has led to unforeseen medical bills for some patients and prompted a state investigation.
More complaints are surfacing as patients start to use their new coverage bought through Covered California, the state’s health insurance exchange.
“I thought I had done everything right, and it’s been awful,” said Jean Buchanan, 56. The Fullerton resident found herself stuck with an $8,000 bill for cancer treatment after receiving conflicting information on whether it was covered. “How am I going to come up with that much money?”
Insurers insist that pruning the network of doctors is a crucial cost-cutting measure and a major reason that so many Californians could find affordable coverage in the health law’s first year.
“These narrow networks are making a huge difference in terms of affordability,” said Mark Morgan, president of Anthem Blue Cross, a unit of industry giant WellPoint Inc. “We found in convincing numbers that people value price above all else.”
But regulators, lawmakers and consumer advocates are pushing back to ensure patients know what they’re giving up in return for lower rates — and don’t run into unnecessary roadblocks to care.
This month, the California Department of Managed Health Care began investigating whether two major insurers, Anthem Blue Cross and Blue Shield of California, are violating state law related to inaccurate provider lists and offering timely access to treatment.
Regulators say customers of those two companies, which account for nearly 60% of Covered California’s enrollment of 1.4 million people, have complained the most about provider-related issues.
Consider Buchanan, who lost her previous coverage when her insurer dropped out of the individual market last year. She was diagnosed with breast cancer in July, so she opted last fall for a Platinum plan, the highest level of benefits on the state exchange, from Blue Shield.
Buchanan started treatment at UC Irvine Medical Center in the fall, and her oncologist there took her new Blue Shield insurance in January and February. Then the day before her lumpectomy, UC Irvine called to say her insurance wasn’t accepted after all. She initially canceled the surgery, but her family and friends told her she shouldn’t risk waiting.
Buchanan is paying $200 a month on her $8,000 surgery bill. UC Irvine said there’s been considerable confusion among Blue Shield customers with exchange plans.
SOURCE: Los Angeles Times
MEDICAID EXPANSION IN PENNSYLVANIA
In 2014 only one state (NH) has expanded Medicaid, contrary to the media narrative. Yet a handful of red-state governors are still toying with the idea, mostly calling them Healthy [insert state abbreviated name]. Contrary to the rhetoric, the plans are not state specific as they borrow heavily from Arkansas’ Private Option and the Medicaid expansion in Iowa. Pennsylvania Governor Tom Corbett is guilty of this. He should walk away from “Healthy PA” Medicaid expansion in order to focus on patient-centered reform.
Governor Corbett has previously spoken persuasively about the unsustainability of the current Medicaid program in his state. It is clear he understands the failings of the broken status quo, and that the program is set to grow to $41 billion a year by 2022 without Medicaid expansion. That is why it is so head scratching that he is championing his own version of Medicaid expansion.
His staff should examine the final terms and conditions for Medicaid expansions in both Arkansas and Iowa, as they would learn how weak those waivers really are. They would inform the Governor that refocusing on reform rather than expansion would not only benefit the most vulnerable citizens in his state, but aid his electoral prospects as well.
Just last month, the Washington Times editorial page slammed the Arkansas experiment, which has run over budget in every month of its operation, leading state bureaucrats to pursue a federal bailout. Pennsylvania cannot afford this same fate. It has also resulted in the architect of the plan being defeated in a primary by a political novice.
Expanding an unsustainable entitlement program to working-age, able-bodied, mostly childless adults is not how you reform Medicaid. The Governor has already publically [sic] expressed his frustration with federal negotiations over his waiver request, which serves to highlight how inflexible federal officials are and reveals their true priority of expansion over reform.
SOURCE: Forbes
Benjamin Domenech is the founder and publisher of The Federalist and a senior fellow at The Heartland Institute.
