Despite its name and despite some of the more grandiose claims by its supporters, the Affordable Care Act (ACA) is failing to make healthcare costs more affordable. Indeed, it’s possible that the ACA has achieved less than nothing with respect to health cost affordability — meaning less even than a hypothetical scenario in which it had never been enacted.
It’s well documented that national healthcare cost growth has slowed in recent years relative to longer historical patterns.
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We can estimate the impact of the AHCA per-capita cap on the pre-Obamacare Medicaid population by using data from CMS, which expects that the federal government will spend approximately $6.7 trillion on the legacy Medicaid program from 2017 to 2026. If we apply CBO’s estimate of future medical inflation to the AHCA, we get to a spending reduction of $107 billion from 2017 to 2026. $107 billion represents 13% of the CBO’s estimate of the AHCA’s Medicaid spending cuts. More importantly, it represents a paltry 1.6% of total federal spending on the legacy Medicaid program over that time frame.
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One of the biggest problems health care experts in Washington, D.C. make is that they think the whole world is about health care. If a bill addresses the health policy, they think, it’s a good bill. Well, health policy has a lot of spillover today onto tax policy (there are twenty new or higher taxes in Obamacare, employer provided health insurance is the largest single tax break, etc.), employment law policy, family policy, etc. If the Senate GOP is going to “get it right,” they need to consult with those who have seen the way the sausage has been made under existing laws. Nowhere is that more true than in the area of the crucial individual tax credit.
If they do not, those who fail to learn from history might just be condemned to repeat it.
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The American Health Care Act (AHCA) would establish per capita Medicaid allocation levels, beginning in 2020, as part of changes to give states more flexibility and incentives to improve care delivery and costeffectiveness in their Medicaid programs that now cover an estimated 72 million Americans. Although some have suggested that the allocation levels would produce large reductions in federal Medicaid spending, a comparison of projected per capita Medicaid spending under AHCA with baseline projections prepared by the Centers for Medicare and Medicaid Services (CMS) suggests that these limits would achieve virtually no federal Medicaid savings.
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Most people agree that Medicaid should help the poor, particularly those whose poverty is related to their age and disability. However, the Affordable Care Act requires the federal government to pay a much greater share of the medical bills for nondisabled, nonpregnant adults than it does for elderly individuals, people with disabilities, children, and pregnant women.
The share of state Medicaid spending paid for by the federal government—known as the Federal Medical Assistance Percentage, or FMAP—had remained relatively unchanged throughout the program’s history until Congress and the executive branch changed that share, providing a strong incentive for states to expand Medicaid coverage to this new population of nondisabled, nonpregnant adults.
The new FMAP formula and expansions created two significant problems:
- The federal government rewards states much more generously for providing services to individuals who fit the new criteria than to individuals who arguably are more in need of assistance
- The Medicaid expansion overlooks differences among states in their capacity to fund services for this new population, benefiting states with high per capita income at the expense of low-income states.
As it considers repeal and replace legislation, Congress should reexamine this arrangement. Congress should seek to devise a Medicaid financing structure that treats eligible populations equitably and recognizes the differences in fiscal capacity among states.
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California’s state Senate recently passed a single-payer health-care bill, and we’re warming to the idea as an instructive experiment in progressive government. If Democrats believe the lesson of ObamaCare is that the government should have even more control over health care, then why not show how it would work in the liberal paradise?
The legislation guarantees free government-run health care for California’s 39 million residents—no co-pays, deductibles or insurance premiums—as well as virtually unlimited benefits.
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As Congress works to repeal President Barack Obama’s signature health law, Kentucky Republican Gov. Matt Bevin is already at work unwinding some of its provisions in his state.
Mr. Bevin has dismantled the state’s health-insurance exchange, moving patients to the federal website last year. He has proposed introducing new conditions for recipients of Medicaid, the federal-state health program for the poor, that would require patients to pay premiums of up to $15 a month and perform employment-related or community-service activities, among other provisions
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GOP senators are trying to strike a balance that’s proving difficult: lowering healthcare insurance premiums for young adults while shielding older people from massive price hikes.
At issue is an ObamaCare provision that essentially caps how much insurers can charge older people for premiums.
Republicans want to raise that cap, saying it vastly undercharges older people for their healthcare services, creating higher costs for younger, healthier adults.
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Republican senators on Thursday urged Health and Human Services Secretary Tom Price to reverse an Obama-era regulation that places restrictions on short-term health insurance plans.
The plans do not contain the same comprehensive list of benefits mandated by Obamacare, instead allowing people to choose what they want covered. The greater the number of provisions, the higher the premiums tend to be.
In a letter to Price, 14 senators asked for the plans to go back to being allowed to cover people for 364 days. Customers are not allowed to be enrolled in short-term plans for more than 90 days because of a regulation created by former President Barack Obama.
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Employers and other private purchasers of medical services have played an important role in spurring health care delivery system and payment reform. The development of managed care has been accelerated by federal and state policies over the years but originated with private sector purchasers. Other models, such as accountable care organizations and bundled payments, were initially designed by employers seeking to improve value in the coverage they offered to their employees. These models are now being used to improve quality and lower costs in Medicare and Medicaid.
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