Michael Bloomberg: Against Obamacare Before He Was For It

Last week, old footage emerged of former New York City mayor, and current Democratic presidential candidate, Michael Bloomberg talking about health care rationing. In his comments from 2011, he advocated denying costly care to older patients:

If you’re bleeding, they’ll stop the bleeding—if you need an X-ray, you’re going to have to wait. That’s just…All of these costs keep going up, nobody wants to pay any more money, and at the rate we’re going, health care is going to bankrupt us….You know, if you show up with prostate cancer, you’re 95 years old, we should say, ‘Go and enjoy. Have a nice life. Live a long life. There’s no cure, and we can’t do anything.’ If you’re a young person, we should do something about it.

Perhaps more important is why Bloomberg made those particular comments. At the time, in February 2011, he was paying condolences to a Jewish family that had lost a loved one. One of the deceased man’s family noted that the man “was in the emergency room for 73 hours before he died and…that overcrowding in emergency rooms in New York had become out of control.”

This entire episode undermines the message of Bloomberg’s current ad blitz claiming that as mayor, he expanded access to health care in New York City. Plus, what did the mayor say about ER overcrowding back in 2011? “It’s going to get worse with the health care bill [i.e., Obamacare].” He also predicted that hospitals would close as a result.

Obamacare a ‘Disgrace’

During last week’s Democrat primary debate in Las Vegas, former Vice President Joe Biden brought up some of Bloomberg’s other comments about Obamacare. Biden correctly noted that Bloomberg had called Obamacare a “disgrace.” In a June 2010 speech at Dartmouth University just after the law’s enactment, Bloomberg said “We passed a health care bill that does absolutely nothing to fix the big health care problems in this country. It is just a disgrace.”

Reporters in the past several days have highlighted some of Bloomberg’s prior comments about the law:

  • In his Dartmouth speech, Bloomberg also pointed out that Democrats “say they’ve insured or provided coverage for another 45 million people…except there’s no more doctors for 45 million people.”
  • In a 2011 radio appearance, Bloomberg said that Obamacare “did not solve the basic problems, two basic problems with health care, which…got lost in all of the negotiations as every special interest in Congress got a piece or lost a piece or negotiated about a piece.”
  • In a December 2009 appearance on “Meet the Press,” Bloomberg criticized Democrats for not reading or understanding the legislation: “I have asked congressperson after congressperson, not one can explain to me what’s in the bill, even in the House version, certainly not in the other version. And so for them to vote on a bill that they don’t understand whatsoever, really, you’ve got to question the kind of government we have.”

It’s notable that Biden didn’t mention Bloomberg’s last quote—about members of Congress not reading or understanding the legislation—in Wednesday’s debate. Of course, that might have something to do with Biden’s own recent admission that “no one did understand Obamacare”—presumably including himself, at the time the vice president of the United States.

Changing His Tune

Now that Bloomberg is running for the Democratic nomination, he’s come around to supporting Obamacare. When asked about his prior comments, a Bloomberg campaign spokesman told CNN Obamacare’s only flaw lay in the fact that it didn’t go far enough. As a result, Bloomberg’s health plan proposes more government spending, funded by higher taxes, and—in a first—price controls on the entire health-care sector, including what you can and cannot pay your doctors.

On the merits of his policy platform, I’ll give the last word to Bloomberg himself, in his June 2010 speech at Dartmouth University. While Bloomberg said President Obama started out with good intentions, he said Congress “didn’t pay attention to any of those big problems and just created another program that’s going to cost a lot of money.”

It’s an apt description of Bloomberg’s own health care plan—to say nothing of his competitors for the Democratic presidential nomination.

This post was originally published at The Federalist.

Why Pete Buttigieg’s Health Plan Might Be More Radical than Bernie Sanders’

During the most recent Democratic primary debate in New Hampshire, former South Bend Mayor Pete Buttigieg claimed that his health-care plan, unlike the single-payer proposal advocated by Vermont Sen. Bernie Sanders, would “not polarize the American people.” But contra the candidate’s claims, Buttigieg’s health plan advocates a policy—government price controls on the entire health-care sector—even more far-reaching than Sanders’s socialist approach.

Others have exposed how Buttigieg’s plan would force people to buy insurance costing thousands of dollars, whether they want it or not. But his proposal for government price controls across a $4 trillion health-care sector represents the most radical idea yet—because, unlike Sanders’s plan, individuals appear to have no way to opt out.

National Price Controls

Buttigieg’s plan, released in September, would “prohibit health care providers from pricing irresponsibly by capping their out-of-network rates at twice what Medicare pays.” (Upon entering the race for the Democratic presidential nomination last November, New York Mayor Michael Bloomberg also adopted this rate-capping provision in his health plan.) Buttigieg admits that, by capping out-of-network rates, his proposal would give insurers leverage to demand lower prices for in-network care, creating a de facto system of national price controls for the entire health-care sector.

Imposing price controls on nearly 20 percent of the American economy, and linking those price controls to Medicare rates, would have substantial distortionary impacts. For starters, Medicare often does not reimburse medical providers at a rate to recover their costs. The Medicare Payment Advisory Commission estimated last March that hospitals would incur a -11 percent margin on their Medicare patients in 2019.

Moreover, because Medicare payment rates reflect the cost of treating the over-65 population—not many Medicare beneficiaries need maternity care, for instance—even supporters of capping rates have questioned the wisdom of linking such caps to Medicare levels.

More broadly, a national system of price controls could create health-care shortages. Facing reductions in pay, doctors could decide to retire early, and aspiring physicians could avoid the profession entirely. With the United States already facing a shortage of up to 121,900 physicians between now and 2032, Buttigieg’s price controls would reduce the physician supply still further.

Pathway to Single Payer—With No Exit

Despite the contrast he attempts to draw with Sanders’s plan, Buttigieg’s price controls would likely lead to a fully government-run system. Buttigieg admits a desire for his plan to provide a “glide path” to single-payer; its price controls provide an easy mechanism for such a transition.

By reducing the payments that private health insurers can offer doctors and hospitals, Buttigieg would slowly sabotage individuals’ existing coverage, throwing all Americans into a government-run health system. Indeed, his price caps provide an easy mechanism to force more and more individuals off their private coverage. While Buttigieg says he wants to cap payments at double Medicare rates, he could lower that cap over time. Of course, capping private health-care reimbursements at less than Medicare rates would all-but-guarantee private health insurance would cease to exist, because few doctors would agree to accept it.

Patients facing long waits for care would have no way to get around queues created by Buttigieg’s socialistic price controls. Sanders’s single-payer legislation allows physicians and patients to contract privately by paying cash for health-care services. But Buttigieg’s plan does not envision a mechanism for Americans to opt out of his price control regime. If Medicare pays $50 for a service, a patient could not pay a physician more than $100 for that service—no matter how experienced or qualified the physician, and no matter how desperate the patient.

The questionable constitutionality of Buttigieg’s plan belies its purportedly moderate nature. On the one hand, he would compel all individuals to pay for health insurance—whether they want it or not, and whether they use it or not. On the other, he would prohibit individuals from engaging in private transactions with their own doctors and hospitals if the amounts of those transactions exceed federally defined limits.

Differences in tone notwithstanding, Sanders and Buttigieg represent two halves of the same general approach to health care, expanding a technocratic leviathan that will attempt to micromanage nearly one-fifth of the economy from Washington. Doctors and patients, take note.

This post was originally published at The Federalist.

Obama Abandons Medicare

President Obama and Democrats claim to be committed to “protecting” seniors.  But their policies fail to protect the essential Medicare program.  It is yet another broken promise by the president.  Once again this week, President Obama ignored a legal requirement to produce a plan to strengthen Medicare – the fourth straight year he has failed to put a plan forward.  And reports indicate Democrats in the Senate have no plans to strengthen Medicare because it would be “giving away the biggest [political] advantage” Democrats have had “in some time.”
The failure of the President’s health care law to strengthen Medicare is a prime example of Democratic hypocrisy.  A close look at provisions in the law reveal how it’s fiscal gimmicks and centralized control undermine the Medicare program, harming seniors in the process.
Millions Lose Their Current Coverage

The Congressional Budget Office (CBO) estimates that the president’s health care law will cut a total of $202.3 billion from Medicare Advantage plans.  These plans deliver a range of health care options to more than 12 million seniors, one-quarter of those enrolled in the Medicare program.  One recent study demonstrated that the law will cause Medicare Advantage plan enrollment to be cut in half by 2017.  In addition to enrollment being cut, seniors’ choice of health care plans will be cut by two-thirds

The Health Care Law Hurts Medicare’s Long-Term Solvency

Obama Administration actuaries have confirmed that the president’s health care law will increase overall health spending by $311 billion.  The increased spending further exacerbates the long-term trends that have placed the Medicare program in financial trouble.

The president’s health care law uses Medicare savings not to strengthen Medicare, but to fund new entitlements.  The CBO stated the law “would not enhance the ability of the government to pay for future Medicare benefits.”  The non-partisan Medicare actuary confirmed that Medicare reductions in the law “cannot be simultaneously used to finance other federal outlays and to extend the [Medicare] trust fund.”  Even Speaker Pelosi admitted this problem in November, when she said in an interview that “we took half a trillion dollars out of Medicare in…the health care bill,” to pay for other program spending.
Unsustainable Payment Cuts Would Drive Hospitals Out of Business

Medicare payment reductions in the Obama health care law will not improve the solvency of the program.  CBO concluded that the reductions are phantom savings.  They say the largest Medicare reductions—permanent reductions in payments to hospitals and other Part A medical providers—will be “difficult to sustain for a long period.”  The non-partisan Medicare actuary also found that provisions in the health care law “are unlikely to be sustainable on a permanent annual basis.”

 
One analysis conducted by the Medicare actuary found that over the long term, Medicare would pay hospitals only about one-third the rate paid by private health insurance.  These reductions would cause up to 40 percent of hospitals to become unprofitable—meaning medical providers would likely have to stop treating Medicare patients to remain in business, and thus jeopardizing beneficiaries’ access to care. 
Cuts to Doctors Would Lead to Higher Premiums

The president’s health care law did not fix the Medicare formula for physician reimbursement levels.  As a result, physicians will receive a 32 percent cut in payment levels beginning in January 2013 and further reductions thereafter while health costs continue to rise.  The president’s FY 2013 budget does not fix the funding shortfall either – it ignores the $429 billion cost for the fix.  If the president’s proposals become law, seniors would pay higher Part B premiums—more than $100 billion.

Most Seniors Will Pay More
In order to give a select group of beneficiaries richer coverage, the president’s health care law raises seniors’ Part D premiums  CBO estimated that “the law would lead to an average increase in premiums for Part D beneficiaries of about four percent in 2011, rising to about nine percent in 2019.”  That means 17 million seniors enrolled in Part D plans are paying higher premiums so that about 400,000 beneficiaries passing through the so-called “doughnut hole” can receive the full benefit of the law’s drug discount.  Many of these beneficiaries are low-income seniors whose additional costs were already covered before the President’s health care law.
The Law Puts Washington Bureaucrats in Control 
The president’s health care law establishes a new board of 15 unelected, unaccountable bureaucrats empowered to make decisions with the force of law on reductions within Medicare.  Each of these officials, whose salaries will be paid by the federal government, could be in power for well over a decade.  The law mandates that a majority of board members must consist of economists and other similar “experts,” NOT practicing doctors, nurses, or other medical providers.  Its members will make rulings to reduce Medicare spending, and these rulings will be binding unless overturned by a supermajority of both houses of Congress.  Medicare beneficiaries who are harmed by this unaccountable board will have no recourse to appeal its decisions, as the law prohibits both judicial and administrative review of the board’s decisions.  Patients should be concerned that the law inserts bureaucrats between patients and doctors.
Medicare must be strengthened.  CBO projects that the Medicare trust fund will run deficits in the tens of billions of dollars forever.   The president’s former Chief of Staff, Bill Daley, said in July that the program “will run out of money in five years if we don’t do something.”  The president himself acknowledged that “if you look at the numbers, then Medicare in particular will run out of money and we will not be able to sustain that program no matter how much taxes go up.  I mean, it’s not an option for us to just sit by and do nothing.”
Unfortunately, the president’s health care law fails a Medicare program in need of strengthening.  The law imposes budget gimmicks that divert Medicare savings to pay for new programs, and assumes payment reductions that will have to be overridden for seniors to have access to care.  Moreover, the law centralizes control within a government-run system, eliminating choices in Medicare Advantage and ceding massive power to a board of unelected and unaccountable bureaucrats.  While Democrats claim that Republicans want to destroy Medicare, it is Democrats who radically altered the program for the worse as part of President Obama’s massive 2700-page health law.

Obamacare Hits the States (Again)

The website Stateline last week published an analysis of the major issues facing states in 2012, and not surprisingly Medicaid was high on that list.  While the recession hit states hard, Obamacare’s onerous new mandates have combined with the continued economic slowdown to inflict a devastating one-two punch on state budgets:

Two years ago, Medicaid eclipsed K-12 education as the most expensive item in state budgets.  Since then, it has only kept growing.  Medicaid now comprises 24 percent of state budgets, when federal funds are counted.  That’s up from 22 percent last year, according to the National Association of State Budget Officers.  The upward spiral seems to be continuing.  Even as states get ready to write their budgets for fiscal year 2013, which starts in July in most states, half of them expect to be wrestling with Medicaid shortfalls in their 2012 budgets, according to a survey by the Kaiser Family Foundation.

Making the job for fiscal 2013 even more difficult for states are new federal restrictions and an increasing number of court rulings that limit states’ options for trimming their programs….Other restrictions on states come from [Obamacare], which prevents states from doing anything that would lower enrollment.  In addition, a new federal rule proposed late last year would require states to produce data showing that cuts to hospital and doctor fees won’t make it harder for Medicaid patients to get the care they need….[Under Obamacare,] states are barred from doing anything that would lower Medicaid enrollment below the income levels called for in the national health law’s 2014 Medicaid expansion.  That includes raising premiums and co-pays to levels the federal government considers unaffordable for low-income patients.  That leaves states with relatively few options when it comes to controlling Medicaid costs.  They can reduce provider fees and eliminate optional benefits.

As the article demonstrates, Medicaid is a large – and growing – share of state budgets, and has increasingly begun to crowd out other potential priorities like education, corrections, transportation, etc.  Yet Obamacare only makes this budgetary mess worse, imposing new unfunded mandates of at least $118 billion.  Thus, even as the states (slowly) start to recover from the budgetary effects of the recession, the budgetary effects of Obamacare will have consequences for years – even decades – to come.

Setting the Facts Straight on Medicaid Costs

The Center for Budget and Policy Priorities is out this morning with a report claiming that last month’s Hatch/Upton report estimating new unfunded mandates of at least $118 billion is inflated.  The CBPP report criticizes the $118 billion finding on several grounds.  It attacks the Republican compilation of state-based estimates for assuming most or all individuals eligible for Medicaid will enroll in the program – raising questions about why a liberal group wants to assume people will NOT obtain health coverage.  And it also criticizes state-based estimates for assuming Medicaid physician reimbursements will increase due to the law – even though many Medicaid beneficiaries have access problems already, and most programs are not equipped to handle 15-25 million newly enrolled at current payment levels, and even though CMS could be on the cusp of REQUIRING state programs to meet minimum reimbursement levels (See below.).

What’s most interesting though is what the CBPP report OMITS about states’ Medicaid costs – namely, two important ways in which most reports have UNDER-estimated state obligations under the health care law:

CBO May Have Underestimated Medicaid Enrollment Due to An Incorrect Definition of Income

Medicare actuary Rick Foster’s testimony to the House Budget Committee hearing raised this issue, in a significant footnote on page 10:

In addition to the higher level of allowable income, the Affordable Care Act expands eligibility to people under age 65 who have no other qualifying factors that would have made them eligible for Medicaid under prior law, such as being under age 18, disabled, pregnant, or parents of eligible children.  The estimated increase in Medicaid enrollment is based on an assumption that Social Security benefits would continue to be included in the definition of income for determining Medicaid eligibility.  If a strict application of the modified adjusted gross income definition is instead applied, as may be intended by the Act, then an additional 5 million or more Social Security early retirees would be potentially eligible for Medicaid coverage.

In other words, if the new definition of income introduced in the law excludes Social Security benefits – and the actuary believes it may – upwards of an additional 5 million early retirees (along with some Social Security disability recipients) would be forced on to the Medicaid rolls.  While officials at the Centers for Medicare and Medicaid Services have yet to opine on the official interpretation of “income” as defined by the law, it’s difficult to see how CMS could change in regulations definitions of income that are based in statute (i.e., the health care law and the Internal Revenue Code), meaning the actuary’s footnote is actually a possible, even likely, scenario.

Staff have confirmed that the Congressional Budget Office did NOT consider this possibility when scoring the bill last March – meaning that this one definitional interpretation could have a significant budgetary impact.  (Likewise, the Urban Institute study cited by CBPP did not assume that Social Security early retirees would be forced into Medicaid, meaning its estimates could well be understated also – see the footnote on page 34.)  An additional 5 million individuals added to the Medicaid rolls would increase by nearly one-third the CBO’s estimate of 16 million individuals covered under the Medicaid expansion.  Moreover, because many of these 5 million additional enrollees would be early retirees (and therefore older and sicker than the population as a whole), CBO’s estimated $60 billion cost to states for the Medicaid expansion could skyrocket.

Washington Is Planning to Impose NEW Reimbursement Mandates on State Medicaid Programs Later This Year

In a filing with the Supreme Court dated December 2010, the Justice Department petitioned (unsuccessfully) for the Court NOT to hear a case from California in which several patient advocate and provider groups had sued the state regarding what they view as improperly low Medicaid physician reimbursement levels.  The filing merits particular attention because of the reasons the government asked the Court not to take the case: The government will be issuing rules on Medicaid physician reimbursement levels shortly: “HHS is committed to promulgating a notice of proposed rulemaking in April 2011 and a final rule by December 2011.”  Page 20 of the filing provided a sense of what the rulemaking process might entail, and it sounds as though the rulemaking process will take a comprehensive look at Medicaid provider reimbursement issues:

The rulemaking may include a determination whether Section 1396a(a)(30)(A) protects interests of providers at all following repeal of the Boren Amendment (note 3, supra); what procedural or substantive requirements the statute imposes on States with respect to beneficiaries; and how the various provisions of Section 1396a(a)(30)(A) and other Medicaid requirements interact.  Insofar as the question petitioner raises implicates concerns about the standards applicable under Section 1396a(a)(30)(A), Pet. 16, the outcome of the rulemaking process may affect the appropriate analysis.

In other words, it’s possible – perhaps even likely – that on top of the mandates on states not to constrain eligibility standards, HHS will now pile on another federal mandate when it comes to reimbursement levels.  To be sure, Medicaid’s poor reimbursement levels create access problems for low-income beneficiaries in many states.  But one of the reasons why states are looking to reduce reimbursement rates in the first place is because the mandate to maintain eligibility levels prevents them from taking other actions to trim their budget deficits.  So it would appear that the Administration’s solution to a failed government mandate (i.e., Medicaid maintenance of effort requirements) is yet another government mandate on states, this one requiring certain reimbursement levels for states’ Medicaid programs.

Speaker Pelosi famously said we had to pass the bill to find out what’s in it.  Unfortunately, states may soon find out what CBPP omitted from its report – there are as-yet undiscovered ways in which the unpopular measure will place an impossible burden on their already unsustainable Medicaid programs.

More Medicaid Mandates Ahead…?

Ahead of the National Governors Association conference in town this weekend, the Washington Post just published an article highlighting the ways in which the Obama Administration is looking to “help” states manage their Medicaid programs.  The article includes several examples of how HHS staff are meeting with state officials to provide planning assistance – before closing with on a potentially ominous note:

In another effort to smooth things over with states, [HHS Secretary] Sebelius also will soon provide guidance to states on Medicaid reimbursement rates for doctors and hospitals.  Several states are considering reducing Medicaid payments to providers, but there’s concern that slicing rates too deeply could cause some doctors to close their doors to Medicaid patients.  The HHS guidance is intended to help states decide which cuts go too far.

In other words, it’s possible – perhaps even likely – that on top of the mandates on states not to constrain eligibility standards, HHS will now pile on another federal mandate when it comes to reimbursement levels.  To be sure, Medicaid’s poor reimbursement levels create access problems for low-income beneficiaries in many states.  But one of the reasons why states are looking to reduce reimbursement rates in the first place is because the mandate to maintain eligibility levels prevents them from taking other actions to trim their budget deficits.  So it would appear that the Administration’s solution to a failed government mandate (i.e., the Medicaid maintenance of effort requirements) is yet another government mandate on states, this one requiring certain reimbursement levels for states’ Medicaid programs.

On a related note, last Friday the Congressional Budget Office (CBO) released a score estimating the Medicaid unfunded mandates as costing states $60 billion from 2012-2021, up from only $20 billion during the years 2010-2019.  That means state unfunded mandates will total $40 billion in 2020 and 2021 – showing the HUGE jump in state obligations once the federal matching payments for the Medicaid expansion costs are reduced in 2020.  At a time when states face myriad obstacles in maintaining their current Medicaid programs, it’s worth asking why Democrats passed a law that will only increase their burdens further – and what Washington will do when states can no longer support these crushing pressures being placed on their budgets.

Why Health Care Reform Was NOT Entitlement Reform

Late yesterday the Urban Institute released its updated estimates about the Social Security benefits and taxes recipients will receive (and pay) over their lifetimes.  (The Associated Press did a story on the report last week; however, the paper itself was not available on the Urban website until very recently.)  The study found that while Social Security’s financial condition is far from sterling, Medicare’s fiscal situation is much worse.  In every single age, income, and demographic group examined, lifetime Medicare benefits received exceeded taxes paid – in all cases by tens of thousands of dollars, and in most cases by hundreds of thousands of dollars.  In fact, male would-be beneficiaries turning 65 this year will receive an average $110,000 more in benefits than in taxes paid, and women turning 65 this year will receive a net average lifetime benefit of $131,000.

Given this very dire fiscal predicament, what did health care “reform” accomplish for Medicare?  In a word, nothing – actually, worse than nothing.  Because Medicare savings will be re-directed to finance new entitlements, the Medicare actuary noted that these provisions “cannot be simultaneously used to finance other Federal outlays (such as the coverage expansions under the PPACA) and to extend the [Medicare] trust fund, despite the appearance of this result from the respective accounting conventions.”  So while Medicare beneficiaries will suffer reduced access, with up to 40 percent of facilities becoming unprofitable thanks to planned spending reductions, and Medicare taxes will go up on middle-class Americans (a planned 3.8% payroll tax increase is NOT indexed for inflation, so it will hit more and more working families over time), these provisions will not solve the fundamental structural flaws in Medicare that the paper released by the Urban Institute (a distinctly left-of-center organization) highlighted.  It’s also why some might find the President’s purported new focus on deficit reduction a bit rich – because the health care law he insisted Congress pass made America’s fiscal situation poorer.

Three Quick Medicare Hits

Ripped from the headlines today…

  1. No Democrat Victory on Medicare Advantage:  The White House released a blog posting trumpeting this morning’s Washington Post story on Medicare Advantage to claim that “Medicare Advantage is going strong.”  But dig deeper and you’ll find another story.  The Post article also quoted AARP – a staunch supporter of the law – to say “it may be a little early” for Democrats to be claiming that Medicare Advantage won’t be adversely affected by more than $200 billion in cuts, because “a lot of these changes [to Medicare Advantage] don’t kick in until next time around” in 2012.  Indeed, the CBO score of the law found that Medicare Advantage plans would be cut by only $1.8 billion in 2011, but $6 billion in 2012 – a nearly fourfold increase next year.  So the real story on Medicare Advantage is that plans are already dropping out – and with cuts scheduled to accelerate, the bad news for seniors can only get worse.
  2. If the Health Care Law Made Medicare “Stronger,” Why Are Doctors Being Driven Out of the Program?  AARP has also released a new ad campaign regarding scheduled cuts in Medicare physician payments scheduled to take effect on January 1.  The headline of the ad: “Don’t let Congress drive your doctor out of Medicare.”  Of course, Medicare physician payments are on the chopping block only because Democrats did not address it in the health care law, choosing to re-direct Medicare savings that would have financed a permanent “doc fix” to fund new entitlements instead.  But why is the Administration placing taxpayer-funded advertisements claiming that “Medicare just got stronger” thanks to the health care law if its allies like AARP are claiming that Congress is driving doctors out of Medicare due to looming reimbursement cuts?
  3. Hypocrisy Much on Insurance Competition?  The Center for Budget and Policy Priorities released an analysis of deficit reduction proposals that once again illustrates Democrat double-standards when it comes to private insurers competing against government.  Specifically, the report analyzed the Rivlin-Domenici plan’s concept of a premium support system, whereby private Medicare Advantage plans would compete on a level playing field with traditional, government-run Medicare. (Right now, Medicare Advantage plans only bid against a benchmark set in statute, and do not directly compete against traditional Medicare.)  Here’s what CBPP said about constructing a premium support mechanism:

It may be possible in theory to structure a premium support system to assure that traditional Medicare and the private plans compete on a level playing field and that private plans do not enroll healthier beneficiaries, on average.  Traditional Medicare would need authority to offer an integrated benefit package, including drug and supplemental coverage, and to update that package in response to changes in the health care system and the insurance market.  In addition, the private plans would have to be subject to substantial regulation; it would be necessary to limit those plans to offering standardized benefit packages (to ensure that benefit packages were not designed to deter sicker individuals) and to preclude them from offering additional services designed to entice healthier enrollees.  In practice, securing congressional approval for legislation allowing or requiring such regulation would be extremely difficult, as would monitoring and enforcing such regulations adequately and effectively.

In other words, creating a government-run health plan to siphon individuals away from private insurance for individuals under age 65 “would likely spur competition” and should be implemented, but allowing private Medicare Advantage plans to compete head-to-head against government-run Medicare is so difficult that Congress shouldn’t even bother considering it.  Slightly contradictory?  You decide…

Six Months Later, Where Is the Oversight?

Tomorrow marks six months since the health care law passed – a milestone the President acknowledged this morning in Virginia.  But while Americans may be asking “Where are the jobs?” when it comes to the economy, they could also be asking “Where is the oversight?” when it comes to the implementation of the massive, 2,700-page health care law.  Consider the following:

  • Exactly six months after the Medicare Modernization Act (MMA) was signed into law (on December 8, 2003), the Finance Committee held a hearing on the prescription drug card program.  Six months after the health care law was signed, the only Members of Congress meeting to investigate the law’s impacts are Senate Republicans – at a forum to be held tomorrow.
  • In the six months following the MMA’s passage, the Finance Committee also held other hearings regarding Medicare provisions in the law – as well as confirmation hearings for Dr. Mark McClellan to head the Centers for Medicare and Medicaid Services (CMS).  Six months after the health care law was signed, the Finance Committee has yet to hold a single hearing on the law, and Dr. Donald Berwick was recess appointed by President Obama to head CMS, as Chairman Baucus declined to hold hearings on his nomination – and has thus far also declined requests from Republicans to have Dr. Berwick testify before Congress after his appointment.
  • Likewise, the House Ways and Means Committee held four days of hearings on the MMA in the six months following its passage – including a two day, full Committee hearing on the 2004 Medicare trustees report.  Conversely, in the six months following the health care law’s passage, Ways and Means Democrats refused Republican requests to have the Medicare actuaries testify at a hearing about the health care law’s impact on Medicare patients’ access to care.
  • In the six months following the MMA’s passage, the House Energy and Commerce Committee held hearings on the new Medicare prescription drug card program and the Medicare physician fee schedule.  In the six months following the health care law’s enactment, the Energy and Commerce Committee has held a whopping 18 health-related hearings, on topics ranging from synthetic genomics to smokeless tobacco in major league baseball.  Not a single hearing has focused on the health care law.

A total of five Congressional Committees* hold jurisdiction over the massive new health care law.  Even though Speaker Pelosi said in March that Democrats had to pass the health care bill “so that you can find out what is in it,” oversight of the sprawling, 2,700-page measure has been largely nonexistent.  The American people deserve to know exactly how the $2.6 trillion health care law is being implemented, and how their hard-earned taxpayer dollars are being spent.

 

* The Senate HELP and House Education and Labor Committees have jurisdiction over PPACA, but do not have jurisdiction over Medicare and thus did not call MMA-related hearings.

What You Missed Over the August Recess

In case you were out for some or all of the August recess, I’ve compiled a “Dirty Dozen” list of seven important stories you may have missed since the Senate adjourned in August – followed by five stories that I didn’t have a chance to send around over the break:

What You Missed Over Recess

Health Care Law Raising Costs; White House Response “Misleading”:  Last week the Medicare actuaries released their updated projections for future health care costs through 2019 that reflect the changes made in the health care law.  The Health Affairs article (subscription required) found that health costs would RISE about 0.2 percentage points per year more than they would if the law had not passed, leading health care spending to consume nearly one-fifth of GDP by 2019.  When asked about the report at his news conference Friday, the President responded that “we knew that” costs would go up as a result of more individuals obtaining insurance – claims that an Associated Press fact check piece noted “were rarely heard” during the health care debate, when Democrats asserted their bill would reduce costs.  A separate AP fact check piece released this morning called the Administration’s claims that spending per insured person would decline under the law “fuzzy math;” one math professor called the metric “a little misleading,” and Medicare actuary Rick Foster called the White House’s statistics “not meaningful.”

Impact on Premiums:  The Kaiser Family Foundation’s annual survey of employer-provided insurance found that premiums rose by 5 percent for individuals and 3 percent for families last year.  However, because firms are requiring their employees to contribute a greater percentage of premium costs, net premiums paid by employees rose by nearly 13% for families and 15% for individuals.  Last week a Wall Street Journal report found that some carriers are raising their premiums by 5-7% to reflect the new mandates and costs imposed by the health care law.  The Journal’s findings comport with a similar study of employers conducted by Mercer and released last week, which similarly found that the law’s many mandates will raise premiums by more than the 1-2 percent Administration officials have been claiming.  However, the Journal article prompted Secretary Sebelius to send a letter to insurers attacking their “misinformation and unjustified rate increases.”  In this context, it’s worth pointing out that during his presidential campaign, then-Senator Obama promised his health care plan would reduce premiums for family coverage by $2,500 – a claim the Administration has not made about the law in recent months.

Effects on Work:  In its annual August update to the budget, CBO included a section (pages 66-67 of the PDF) outlining the health care law’s effects on the labor supply.  Most notable was the conclusion that “the legislation, on net, will reduce the amount of labor used in the economy by…roughly half a percent, primarily by reducing the amount of labor that workers choose to supply.”  At a time when economic growth remains weak, some may question the impact of policies in the health legislation that will discourage work – and according to CBO, will lead to about 750,000 individuals to stop working.

Liberal Groups Recalibrate their Health Care Pitch:  A Powerpoint presentation prepared for Families USA and other affiliated liberal groups, and obtained by Politico, found that “straightforward ‘policy’ defenses fail to be moving voters’ opinions about the law,” and that voters were skeptical that the law will either reduce the deficit or help the economy.  As a separate article noted, the slide show “stresses repeatedly [that] many are unaware that the reform has passed, an astonishing shortcoming in the White House’s all-out communications effort….The presentation also concedes that the fiscal and economic arguments that were the White House’s first and most aggressive pitch have essentially failed.”

Health Care Measure Remains Unpopular:  The Kaiser tracking poll released in late August showed a significant uptick in opposition to the health care law, with approval falling by seven points and disapproval rising by ten points.  Fewer than three in ten Americans (29%) believe the law will benefit them personally – a near-record low on that measure – and seven in ten (70%) Americans disapprove of the individual mandate, 52% strongly.  For all these reasons, a Politico article last week noted that the only ads being run by Democrats regarding the health care law come from those House Members who opposed the measure – defying earlier predictions by Democrats that “those who voted against health care will find it a liability” by this November’s elections.

The “Stigma” of Enrolling Poor Americans in Medicaid:  In a press release, Sen. Ben Nelson questioned budget estimates released by Nebraska’s Governor that assumed poor Nebraskans would drop their private coverage to enroll in Medicaid, because, in Sen. Nelson’s view, “private insurance generally is better than Medicaid, which also comes with a stigma for some.”  According to the Medicare actuary, more than half of the individuals obtaining coverage as a result of the law – 18 million out of 34 million newly insured – will be enrolled in Medicaid.  It’s also worth noting that individuals newly eligible for Medicaid under the law will be automatically enrolled in that government-run program, and will NOT be given subsidies to choose their own plan on the insurance Exchanges.

Reading the Bill a “Waste of Time”:  At a town hall meeting in Libby, Montana, Finance Committee Chairman Baucus told his constituents “I don’t think you want me to waste my time to read every single word in that health care bill….It takes a real…real…expert to know what the heck it is.  We hire experts.”

What I Missed Over Recess

Budget Chairman Dubious About Deficit Savings:  At a debate in South Carolina last week, House Budget Committee Chairman Spratt acknowledged that the health care law’s supposed savings “may still be in doubt.  ‘That may or may not happen, but those are the projections from CBO,’ he said.”

A “Complicated and Bewildering” System for Consumers to Navigate?  In a New York Times blog posting, noted liberal economist Uwe Reinhardt said insurance brokers shouldn’t worry about losing their jobs as a result of the health care law, because “it’s a pretty safe bet that the state-based exchanges…will be so complicated and bewildering that the services of brokers will still be needed.”  Remember however that CBO predicted administrative savings in the Exchanges would actually mitigate some of the law’s increases in premiums elsewhere – so if Reinhardt’s prediction is accurate, and the exchanges are administratively complex, consumers in the individual market could end up paying even more than the $2,100 increase in premiums CBO projected last November.

Primary Care Doesn’t Equal Better Care:  The Dartmouth Atlas released a report last week that examined whether seniors in areas where more Medicare beneficiaries have at least one primary care visit per year received better care (e.g. mammogram every two years, eye exam for diabetics, etc.)  The researchers ended up finding…nothing: There was virtually no correlation between increased primary care visits and better patient care.  It’s an interesting finding, and one that casts doubt on whether programs like medical homes and accountable care organizations will automatically lead to improved patient care and outcomes.

Medicaid and the Emergency Room:  A Health Affairs article (subscription required) examined the stresses on America’s emergency personnel: Emergency departments comprise only 4% of the American physician workforce, yet handle 11% of all ambulatory visits.  One primary reason for this disparity can be found among Medicaid patients – more than half of all Medicaid patients’ acute care visits took place in the emergency room, with only about 5% taking place with specialist physicians.  The lack of access to physician care (particularly medical specialists), and the reliance on the emergency room as a primary source of health care access, due to Medicaid’s low reimbursement rates was further emphasized by a paper released by the American Action Forum last week.  Former CBO Director Doug Holtz-Eakin found that, because the health care law dumps another 18 million individuals into Medicaid without reforming that troubled program, more new Medicaid patients will flock to emergency rooms – resulting in an estimated 68 million emergency room visits (nearly 13 million annually), and increased costs to hospitals of $35.8 billion.

Patient Choice Improves Health Care Outcomes—Even in Britain:  A National Bureau of Economic Research paper released last month (subscription required for off-Hill users) examined the impact of changes made several years ago to Britain’s National Health Service (NHS) that allowed patients to choose their own hospital.  The results: “We find that the introduction of competition led to an increase in quality without a commensurate increase in expenditure” – because better hospitals attracted more patients, and “the increased competitive pressure led to improvements in quality.”  The study calculated the changes creating patient choice and competition in the NHS saved an estimated 3,354 life-years and £227 million (about $350 million at current exchange rates).  The study may come as a surprise to CMS Administrator Donald Berwick, who previously warned NHS officials: “Please don’t put your faith in market forces.”