Senate Republicans said Tuesday that President Donald Trump was open to their suggestions about how to stabilize the Obamacare exchanges, but did not give any clear policy updates, leaving insurers hanging.
Health and Human Services Secretary Tom Price also highlighted the individual and small group markets as one of the “toughest challenges” for his employees, without providing specific steps that HHS would take. The focus on stabilizing the Affordable Care Act’s individual marketplace comes even as Senate Republicans are struggling to reach consensus on a bill that would overhaul major parts of the ACA.
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From the earliest days of Obamacare, a great many Democrats and others on the left have wanted a “public option.” At least one plan offered in the Obamacare exchanges should be a government plan, they proclaimed. The state of Nevada may make that wish a reality, if the governor signs a bill just passed by the legislature – allowing everyone who resides there to buy into the state’s Medicaid program.
Why does the left like this idea? Because they are ideologically committed to the propositions that when it comes to health care (1) non-profit is always better than for-profit and (2) public is always better than private.
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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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