Monthly Archives: July 2016

Last week, the GOP kept a promise to the American people by delivering a replacement plan for Obamacare.

The plan — part of the party’s “A Better Way” campaign — was unveiled by House Speaker Paul Ryan, R-Wisc. “What we are laying out today is a first-time-in-six-years consensus by the Republicans in the House on what we replace Obamacare with,” he said.

The plan is a good one. House Republicans have laid out several core reform proposals their party can rally around. As I note in my new book The Way Out of Obamacare, a plan like this one would be a vast improvement over the unmitigated disaster that is Obamacare.

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Graduate students have long relied on health insurance subsidies awarded as part of financial-aid packages as they try to earn a living and a degree.

But the future of that benefit could be jeopardized by the Internal Revenue Service’s interpretation of a provision of the Affordable Care Act that casts the subsidies as an attempt to elude ACA’s employer mandate.

Seventeen U.S. senators, including Virginia Sens. Mark R. Warner and Timothy M. Kaine, both Democrats, wrote a letter last month urging the Obama administration to clarify the IRS language and warning that it runs counter to ACA’s primary goal to expand insurance coverage.

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A while back, I explained how the ACA’s Medicare Shared Savings Program (MSSP) uses Accountable Care Organizations (ACOs) to encourage healthcare providers to deny healthcare to seniors and disabled Medicare beneficiaries. To summarize: ACOs are paid bonuses if they “reduce costs” in the fee-for-service system, which they can do only by providing fewer services. The system encourages hospitals, physicians and potentially other providers to merge, to make it easier to “make sure” that patients don’t get “extra” healthcare from unaffiliated providers.

This week, in a National Bureau of Economic Research working paper with the clever title, “Moneyball in Medicare,” authors Edward C. Norton, Jun Li, Anup Das and Lena M. Chen reveal yet another ACA Medicare provision which encourages providers to merge in order to reduce healthcare services provided to patients.

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Friday, the U.S. Court of Appeals for the D.C. Circuit released two opinions in Patient Protection and Affordable Care Act (PPACA) cases.  In one case, the federal government prevailed. In the other, it did not.

In the first case, West Virginia v. Department of Health and Human Services, a unanimous panel concluded that the state of West Virginia lacks Article III standing to challenge the Obama administration’s decision to waive some of the PPACA’s requirements governing minimum coverage requirements. This litigation responds to the Obama administration’s response to outrage over insurance plan cancellations — cancellations that were politically problematic because they revealed that the president’s promise that “if you like your health insurance plan, you can keep it” was a lie. (Indeed, it was Politifact’s “Lie of the Year” for 2013.)

In a second case decided Friday, the administration did not fare so well.  In Central United Life Insurance, Co. v. Burwell, another unanimous panel invalidated an HHS regulation for exceeding the scope of its delegated powers under the Public Health Service Act (PHSA), as amended by the PPACA. Specifically, HHS had adopted regulations seeking to prevent consumers from obtaining fixed indemnity policies that fail to satisfy the PPACA’s minimum essential coverage requirements, despite the PHSA’s exemption of such plans from such requirements.

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Out-of-pocket spending is a controversial topic in healthcare. On the one hand, the purpose of insurance is to reduce the financial impact of adverse events, like illness and injury, so higher out-of-pocket costs mean insurance is providing less protection. On the other hand, with little or no exposure to costs, a patient might over-consume healthcare, going to doctors for minor illnesses that could be self-treated, or getting screening tests – or even surgical procedures – that aren’t really necessary. In the latter case, the incentive effects of out-of-pocket payments might reduce wasteful healthcare spending and leave spending that is truly necessary mostly unaffected. The result would be a reduction in overall healthcare spending.

When exposure to out-of-pocket costs rises, which effect actually dominates? A recent study in JAMA Internal Medicine gives a hint of what happens, and it’s not looking good for incentive effects in the world of the Affordable Care Act (ACA).

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When he was chairman of the Ways and Means Committee, Paul Ryan was frustrated when decisions about tax and other legislation under his committee’s jurisdiction emanated from the House leadership offices rather than from his committee.  When he was elected Speaker last fall, he promised to change that, and, in the “Better Way” package of policy proposals, he has delivered.

House committee chairmen drove the process, and their staffers have been working intensely with their bosses and with members for months to put ideas to paper for each of the six task forces—poverty, health care, national security, the Constitution, the economy, and of course, tax reform. In the separate events releasing each of the reports, Ryan put the committee chairmen forward to give them credit for the work they had done in developing the proposals.

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The House Republican’s health plan represents a real milestone. It is the first proposal released since the enactment of the ACA in 2010 that legitimately can be called the Republican alternative. If Congress were to take up legislation in 2017 to roll back the ACA and replace it with something different, the starting point for drafting the legislation would be this plan.  It builds on plans authored by Sen. Richard Burr, Sen. Orrin Hatch, and Rep. Fred Upton as well as the plan introduced by Rep. Tom Price. These precursors were built on the same set of common principles and objectives: repeal and replacement of the ACA; more choices, lower costs, and greater flexibility for consumers; protection of the most vulnerable Americans; incentives for innovation and high quality medical care; and preservation and protection of Medicare.

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Small, regional health insurers and upstart co-op plans again incurred large charges under the Affordable Care Act’s risk-adjustment program, according to new data the CMS released Thursday. Calendar year 2015 marks the second year of risk adjustment, and many smaller insurers have had to pay into the program both years.

The data also show payouts for the ACA’s reinsurance program. For ACA plans sold in 2015, the reinsurance payments total $7.8 billion. The temporary reinsurance program, which expires at the end of this year, protects health insurers against costly claims.

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Insurers helped cheerlead the creation of Obamacare, with plenty of encouragement – and pressure – from Democrats and the Obama administration. As long as the Affordable Care Act included an individual mandate that forced Americans to buy its product, insurers offered political cover for the government takeover of the individual-plan marketplaces. With the prospect of tens of millions of new customers forced into the market for comprehensive health-insurance plans, whether they needed that coverage or not, underwriters saw potential for a massive windfall of profits.

Six years later, those dreams have failed to materialize. Now some insurers want taxpayers to provide them the profits to which they feel entitled — not through superior products and services, but through lawsuits.

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ObamaCare enrollment dropped to about 11.1 million people at the end of March, according to new figures released by the administration.