Consumer Power Report #457
Supporters of Obamacare have been making noise of late about the fact leading Obamacare opponent Sen. Ted Cruz (R-TX) is going to have to sign up for health coverage under the law. But in obsessing about this issue, these supporters are doing themselves no favors, because Cruz’s situation highlights the wide gap in experience between those whose coverage is subsidized under the law and those who don’t have access to that funding. Chris Jacobs highlights two recent studies that show the gap in experience for people in each of these silos:
On Wednesday, the consulting firm Avalere Health released an analysis of exchange enrollment. As of the end of the 2015 open-enrollment season, Avalere found the exchanges had enrolled 76% of eligible individuals with incomes between 100% and 150% of the federal poverty level – between $24,250 and $36,375 for a family of four. But for all income categories above 150% of poverty, exchanges have enrolled fewer than half of eligible individuals – and those percentages decline further as income rises. For instance, only 16% of individuals with incomes between three and four times poverty have enrolled in exchanges, and among those with incomes above four times poverty – who aren’t eligible for insurance subsidies – only 2% signed up.
The Avalere results closely mirror other data analyzed by the Government Accountability Office in a study released last Monday. GAO noted that three prior surveys covering 2014 enrollment – from Gallup, the Commonwealth Fund, and the Urban Institute – found statistically insignificant differences in the uninsured rate among those with incomes above four times poverty, a group that doesn’t qualify for the new insurance subsidies.
The GAO report provided one possible reason for the lack of enrollment among individuals not eligible for federal insurance subsidies. In 2014, premiums remained unaffordable – costing more than 8% of income – across much of the country for a 60-year-old making five times poverty. These individuals earned too much to qualify for subsidies, but too little to afford the insurance premiums for exchange policies. The GAO data confirm my July analysis, in which I wrote: “Those who do not qualify for federal subsidies appear to find exchange coverage anything but affordable.”
Heritage Foundation microsimulation analysis of the 2015 health insurance offerings on the Affordable Care Act exchanges found that the sharp 2014 price spike was not reversed. The average health insurance premium rose by 5% this year, much higher than the rate of inflation. But that increase is modest compared to the massive increase in non-group health insurance rates in 2014, which was around 50% on average, with some consumers facing much worse rate jumps.
The Heritage Foundation microsimulation is here. The reality of Obamacare is that Cruz’s experience is the exception, not the rule. Far more people on Obamacare are there because of the generous subsidies. [http://www.nationaljournal.com/health-care/obamacare-taxes-surprises-20150329]Assuming they actually qualify for them – if they don’t, tax time will not be very fun.”>
— Benjamin Domenech
IN THIS ISSUE:
- House Provision Offers Doctors Medical Malpractice Protection
- More States Demand Notification on Biosimilars
- Oregon’s Failed Obamacare Exchange
- Supreme Court Rules Providers Can’t Sue for Higher Payments
HOUSE PROVISION OFFERS DOCTORS MEDICAL MALPRACTICE PROTECTION
A little-noticed provision of a bill passed by the House of Representatives with overwhelming bipartisan support would provide doctors new protections against medical malpractice lawsuits.
The bill, which requires the government to measure the quality of care that doctors provide and rate their performance on a scale of 0 to 100, protects doctors by stipulating that the quality-of-care standards used in federal health programs – Medicare, Medicaid, and the Affordable Care Act – cannot be used in malpractice cases.
The provision is nearly identical to legislative language recommended by doctors and their insurance companies. They contend federal standards and guidelines do not accurately reflect the standard of care and should not be used to show negligence by a doctor or a hospital.
Medicare, Medicaid, and private insurers increasingly require doctors to report data that can be used to assess the quality of care. They then evaluate and pay them based on their performance.
Medicare, for example, asks doctors: What percentage of tobacco users receive counseling on how to stop smoking? What percentage of patients develop infections after surgery? What percentage of diabetes patients have blood sugar levels in the normal range?
The government scrutiny of doctors is only expected to increase. Sylvia Mathews Burwell, the secretary of health and human services, recently announced an ambitious goal, calling for “virtually all Medicare fee-for-service payments to be tied to quality and value” within three years.
But doctors are now concerned that the proliferation of quality metrics, some mandated by the Affordable Care Act, poses unintended legal risks to health care providers, and that patients and their lawyers can use such data in court to show that providers were negligent.
That concern is not far-fetched. The website of a New Mexico law firm points consumers to a Medicare list of preventable injuries and illnesses – caused, for example, by transfusions of the wrong blood type or foreign objects left in patients during surgery.
SOURCE: Robert Pear, New York Times
MORE STATES DEMAND NOTIFICATION ON BIOSIMILARS
Without the medicine Rachelle Crow takes for her rheumatoid arthritis, the 29-year-old Michigan woman’s face would frequently feel as if it were engulfed in flames. She would barely be able to crawl out of bed. She would have trouble opening or closing her fists or lifting her 3-year-old daughter.
Crow can do all those things thanks to Cimzia, one of a highly complex, usually expensive class of drugs known as biologics that derive from living organisms. Cimzia is recommended for women, like Crow, who are trying to get pregnant.
What keeps her up at night is her fear that a pharmacy could substitute a cheaper, not-quite identical drug for Cimzia without her or her doctor’s knowledge. It’s not only a return of her worst symptoms that she worries about. “If another medicine were substituted without telling me or my doctor, it could put my pregnancy at risk,” Crow said.
Fears like Crow’s have helped propel legislative attempts in many states this year to make sure that patients and doctors are notified whenever imitations deemed “interchangeable” by the U.S. Food and Drug Administration are substituted for brand-name biologics. Already, Colorado has passed a notification law, and Utah has revised its earlier law. More than a dozen states are considering comparable measures.
Notification bills began popping up in states two years ago, but most were defeated in the face of opposition from manufacturers of biologic copies, which are called biosimilars, and from organizations representing pharmacists, who objected to the extra workload notification requirements might entail.
Thirteen states killed or tabled bills the last two years. Only eight states (Delaware, Florida, Indiana, Massachusetts, North Dakota, Oregon, Virginia, and Utah) ended up enacting laws. A ninth, California, passed a bill through the legislature only to see it vetoed by Democratic Gov. Jerry Brown.
But the legislative climate for enacting notification law is different now that biosimilars are finally coming on the market.
SOURCE: Michael Ollove, Stateline
OREGON’S FAILED OBAMACARE EXCHANGE
Governors in 37 states are weighing their options should the Supreme Court conclude the IRS acted illegally in allowing their citizens to receive tax subsidies for health insurance through the federal government’s Healthcare.gov website.
The Supreme Court will decide, likely by late June, in King v Burwell whether the subsidies are allowed through exchanges established by the federal government after the states either declined or failed to create their own state portals.
Some states are considering setting up their own exchanges so billions of dollars in tax subsidies can continue to flow to their citizens, even though leaders in Congress have pledged to provide them other options.
These states might want to study Oregon’s experience with its state exchange before taking further action to establish an exchange.
Oregon, under then-Gov. John Kitzhaber, aspired to create a shining model for other ObamaCare exchanges, but instead, it became its poster child of dysfunction. After spending more than $300 million in federal taxpayer dollars, Oregon pulled the plug last year and decided to default to the federal exchange.
The state is now embroiled in lawsuits with its primary vendor, Oracle, and current and former Oregon officials are the subject of congressional and other federal investigations. Depending upon the outcome of those investigations, Congress could demand that the state to pay back the $300 million it spent on a project that numerous reports show was fraught with mismanagement and political maneuverings.
Oregon began with an ambitious agenda: Flush with federal grants, it not only planned to create its own state health care exchange – the “Cover Oregon” portal through which people could shop for and purchase subsidized health insurance – but also to fully modernize the information technology infrastructure for all of its health care programs.
But the scope of the management project overwhelmed state officials from the beginning. Partly to blame: The Kitzhaber administration put health policy experts rather than IT specialists in charge of the complex technology project. Further, there were poisonous internal bureaucratic battles over control of the high-profile project.
SOURCE: Grace-Marie Turner, Forbes
SUPREME COURT RULES PROVIDERS CAN’T SUE FOR HIGHER PAYMENTS
A landmark Supreme Court ruling Tuesday made it clear that private medical providers cannot sue individual states in an attempt to raise Medicaid reimbursement rates.
In the case, Armstrong v. Exceptional Child Center, justices ruled 5–4 in favor of the state of Idaho, which a group of residential care service providers alleged had unfairly kept Medicaid reimbursement rates at 2006 levels despite studies showing that the cost of care had gone up. Lower courts had sided with the plaintiffs and required Idaho to increase reimbursements by $12 million in 2013.
But the highest court disagreed with the plaintiffs’ argument that the Constitution’s Supremacy Clause allows federal law to supersede contradictory state laws. The clause “instructs courts what to do when state and federal law clash, but is silent regarding who may enforce federal laws in court, and in what circumstances they may do so,” Justice Antonin Scalia wrote in the majority opinion.
In a dissenting opinion, Justice Sonia Sotomayor argued that Medicaid law was not intended to prevent private lawsuits.
The majority opinion states that providers must ask the federal government to intervene on their behalf if they feel Medicaid reimbursement rates are too low, a ruling that the Associated Press wrote strikes “a blow to many doctors and healthcare companies that complain Medicaid reimbursement rates are so low, they often lose money seeing patients participating in the program.”
Indeed, in a court brief filed in support of the plaintiffs, the American Hospital Association and the Federation of American Hospitals noted that the cost of providing care to Medicaid beneficiaries in 2012 exceeded reimbursements by $13.7 billion. Furthermore, Medicaid payments to primary care physicians were expected to drop more than 40 percent in 2015, FiercePracticeManagement reported, and providers in states that have refused to expand Medicaid are likely to fare the worst.
SOURCE: Leslie Small, FierceHealthFinance
Benjamin Domenech is the founder and publisher of The Federalist and a senior fellow at The Heartland Institute.
