The thing that worries me most about the long term health system outlook

Economic growth in the second quarter was up over expectations, health care inflation remained historically low, and the ACA was rolled out in a reasonably successful manner (remember in December when people were saying no one would sign up, or the uninsured rate would go up?, or whatever doom & gloom was the flavor of the day). I am a charter member of “The ACA was a good step but we need many more to have a sustainable health care system” and there are tons of uncertainties in forecasting long run health care cost growth, overlaid with difficulties in forecasting econcomic growth. But, the passage and implementation of the ACA has put the entire health system in play and I am optimistic that we will muddle through reasonably, helped by a political deal at some point relatively soon.

However, the thing that really worries me about the future of our health care system and country, is long term care.

Even if we manage to continue on the path of lower than average per capita cost growth in the Medicare program, the transition of the baby boomers into retirement still means more workers (adult children) caring for their parents (Medicare beneficiaries) with fewer siblings to help. This is esssentially the demographic definition of the baby boom. Long Term Care (LTC)-which you could define as help and support to enable someone to live with a disability-is easily the most important public policy issue about which we are not discussing.

The experience of my family in caring for my mother-in-law who suffers from a rare form of dementia has been exceedingly difficult.

  • Several years of very close supervision across town, hours spent navigating physicians and health care use, dealing with her financial affairs for the past decade.
  • Her moving into our house (me + my wife and  3 teenagers) for around 6 months, and finally moving to an assisted living facility after 3 hospitalizations related to falls and wandering (hallmarks of dementia) in less than 6 weeks.
  • Navigating the issues related to assisted living placement and monitoring (she is in her second facility, after being thrown out of the first)

There are many types of burdens:

  • Physical in the form of picking my mother in law off the floor when she fell;
  • Missed work and lack of being able to focus at work due to worry;
  • Emotional strain in many forms, especially for my wife who struggled with anger and depression as we tried to do what was best.
  • The hardest thing overall was the uncertainty about what to do to care for her. I am supposed to be an expert in LTC and palliative care, and we were constantly unsure if we were doing the correct thing. Our marriage was actually strengthened by our escalating caregiving responsibilities over the past few years, but it is easy to imagine it having the opposite effect on a marriage.
  • Financial. We have been spared much of this burden because my mother in law has an expansive private LTC insurance policy. Great for her and us, but not a population wide solution.

The ACA of course contained the CLASS provisions that were an attempt to set up a private LTC insurance market to cover low level LTC costs, and these provisions were repealed from the ACA as part of the fiscal cliff deal. I think CLASS as passed was unworkable, and think that Sec Sebelius was correct to say that it should not move ahead in October, 2011. However, one of the worst outcomes of the acrimonious debate about CLASS was to turn the discussion of LTC into nothing more that a deficit accounting debate. Let me assure that it is much more than that, and that our country needs to talk about how we should deal with LTC in a much more forthright manner.

This link has many posts on LTC if you want to read more.

What does it mean for a state to establish an exchange?

I have no idea how the King/Halbig litigation will conclude. If a state wants to ensure that tax credits to purchase private insurance can flow to their citizens, they don’t need to wait for the case. They simply need to establish a state exchange as specified in section 1311 of the ACA to render the litigation moot.

  • Sec 1311(d)(1) of the ACA says in full

(d) REQUIREMENTS.—
(1) IN GENERAL.—An Exchange shall be a governmental
agency or nonprofit entity that is established by a State.

  • This raises the question of what does it mean to establish an exchange? Following are some policy thoughts (meaning I am not a lawyer but can read the law, the guidance and what states have actually done so far).
  • I wouldn’t be surprised to see further rulemaking focused around what it means to establish a state exchange. However, a state doesn’t need to wait for that either to establish an exchange.
  • This link provides the blueprint and application for a state to establish an exchange. Highlights of my read through this document below:
    • A key part of creating a state exchange is to declare that a state is doing so in letter of declaration (see pp. 6-8) from the Governor (states also must declare they are creating a Partnership exchange, and are requested to say they will use a federal exchange). There are a series of choices states must make regardless of whether they are creating a state exchange, a partnership exchange, or intend to use the federal exchange (FFE). This creates policy overlap in the sense that a state could actually be doing more tasks via a federal exchange than under a state one and vice, versa, based on the choice(s) of the state.
    • There is some variation in the language used in the declaration letter of states who have a state-based exchange [link to all state letters re exchanges]. Most states use the word establish in their declaration letter; for example, Connecticut’s declaration letter has the following phrase “The Connecticut Health Insurance Exchange was established in 2011 by the Connecticut General Assembly”… However, all don’t. Colorado’s declaration letter uses the phrase “creating” and exchange and notes that this decision has been “codified” in Colorado law (see first para in link).  By my read, 13 states say clearly we are establishing an exchange in the declaration letter (CA, CT, HI, ID, MD, NV, NM, NY, OR, VT, WA) while others use words like “create”, “develop and operate” or “run” (CO, DC, MA, MN, RI).
    • Most Governors who filed a notice of establishing (or creating or running) a state-based exchange refer to the passage of a state statute as enabling this. The guidance anticipates non-legislative approvals, and asks for documentation including legal opinions from a Governor’s counsel and the State Attorney General if establishment authority did not come via a statute (see page 19, 1.0 and 1.1; right column).
    • There is a great deal of policy overlap between state-based and FFE exchanges, including partnership models because of the choices available to states regarding what functions will be retained by the state and which ones will be done by the federal government (at the choice of the state;  pp. 2-5 outline the various choices viz: reinsurance, risk adjustment, approving plans, consumer communication, etc). I’d love to a see a Venn diagram by type of exchange and functions being done by: state govt; federal govt; other contractors….but I don’t have the energy to do it.
    • For states not electing a state-based exchange, they must identify the individual(s) who are responsible for working with the federal government in implementing either a partnership, or FFE. I suspect some states will say this act established the exchange for the purposes of tax credits flowing to their residents. This also might be the source of a new rule making round.

As the WSJ noted on Friday, some states are moving to clarify their status per the litigation by saying what they have done has already “established” an exchange. I suspect others will simply write to the Secretary of HHS and say specifically that for the purposes of ensuring that tax credits flow to their residents, they are establishing an exchange while contracting out some tasks to the federal government. Rendering the case moot shouldn’t be too hard for states wanting to do so. The real question is in how many States do the elected officials not want to do so?

Both sides still need a health reform deal

On December 16, 2010 I finished a post entitled, “What would a compromise look like?” in this way:

The Democratic party invested much political capital and time to pass the ACA. The Republicans have talked about many of the ideas above over the years, but it is worth remembering that they passed none of this when they controlled both Houses of Congress and the White House from 2002-2006. No federal bill to expand insurance purchase across state lines; no medical malpractice reform; no changing of the tax treatment of employer paid insurance. Now that they control the House of Representatives, I hope they will work to pass some health reform legislation, and thereby continue the health reform discussion that is needed if we are to ever develop a sustainable health care system.

1,300 days after I wrote the post linked above, Speaker Boehner this week noted that House Republicans were “still working” on that replace bill. The recent reform conservativism policy initiative is welcomed by me, because our country needs an invigorated policy-based debate. However, I found the health policy chapter in the the recent YG Network volume to be lacking in specificity, both as compared to other proposals written by Jim Capretta the author of the chapter, but also as compared to the rest of the topical chapters.* However, this lack of specificity shows that the document wasn’t meant to entice liberals into a deal, but instead is trying to get elected Republicans to inch toward being willing to vote for something on health reform (Ramesh Ponnuru & Yuval Levin pleading with elected Republicans to be for something in health reform). I think that is the distinction that Yuval Levin is making in this piece.

Republicans/Conservatives need a health reform deal because they can get more out of a deal than they could ever get in passing their own plan, precisely because there are very few elected Republicans who are willing to take hard votes on health reform. And in the attempt to reinvigorate reform conservative thought generally, non health policy areas are likely to be easier for them because Republicans have scorched much of the Earth into which they might seek to create a reform plan. And looking ahead to the next Presidential election, a Republican nominee might be lots better off focusing on non health reform issues if a deal could be had.

Democrats/Liberals/Progressives need a deal because of the uneven roll out of the post-SCOTUS ACA in which the poorest states are sitting out Medicaid expansion. I have no idea what the final result of the Halbig/King litigation will be, but even if SCOTUS ruled that tax credits could only flow to people purchasing insurance via an exchange established by a state, setting one up is simple enough, and it should be fairly straightforward for any state to establish an exchange while outsourcing most functions to the federal government. The worry for Dems/Libs/Progs of course is that the poorest Southern states will not make this move, and we will land in a perverse outcome whereby the poorest states essentially sit out the ACA’s coverage expansions, via both Medicaid and private insurance.

So, if Republicans need a deal because it is very difficult to imagine them passing a health reform plan on their own any time soon, Democrats need one because the holy grail of public policy for them (universal health insurance coverage) is particularly thwarted by the uneven roll out of the law, and the law even if perfectly implemented would not get to universal coverage in any event. Another step (and another, and so on; we will never be done seeking to improve value for money spent in health care), was always going to be needed, and indeed is needed.

1,300 days later, both sides still need a health reform deal.

*this may be how everyone sees their area–too simplified, and things they don’t know as well seem newer/fresher/more interesting.

End of the session Medicaid stuff

The N.C. Senate passed their Medicaid reform last night, and it is virtually identical to what I didn’t like much last week. Things haven’t changed much in terms of the House v the Senate since I wrote this, but they will have to work out some sort of deal over the next week or so on this. They are putting together an omnibus technical correction bill and who knows what ends up in that.

However, sometimes decent things can come about in the middle of the night (did you know that the Medicare hospice benefit and the direct precursor to the current Medicare Advantage program were jammed into TEFRA 1982 at the last minute?). Anyway, let me suggest one thing that might be a good thing to stick in while no one is looking–a technical planning grant under section 1311(a) of the ACA. Regardless of what the honorables decide to do about Medicaid, there will a great need for as much information as possible to guide the development of the new plan, and the ongoing functioning of the health care exchange in our state (~350,000 North Carolinians have private insurance purchased with subsidies).

We initially had such a grant as requested by Governor Perdue, that the Republicans sent back with great fanfare once they took over both Houses of the General Assembly and the Governor’s mansion in January, 2013. We could still get such a grant, but must do so prior to January 1, 2015 (here is sec. 1311(a)(4)(B)*

(B) LIMITATION.—No grant shall be awarded under
this subsection after January 1, 2015.

Republicans can pass anything they want simply by agreeing amongst themselves, but of course that means they also own it a la the Pottery Barn rule. Let me humbly suggest there is some chance that they haven’t thought through their health reform plan as much as they might have, that it will be hard to pull it off if the docs and hospitals are opposed to it, and that it would help us all to have more information and data, and not less.

*Bonus. If you want to impress your friends, the sections in dispute in the court cases this week are sec 1311 and 1321. They are quite short; you can print it out and impress your friends (also sec 1401)

Halbig case

Three judges from the D.C. Circuit court of Appeals today ruled that subsidies cannot legally flow to residents who live in States that did not set up their own health care insurance exchange (marketplace) under the auspices of the ACA. And since I started writing this post, the Fourth Circuit court of appeals reached the opposite conclusion. The litigation grinds on, and there will be no practical impact of the rulings on the functioning of exchanges or the flow of subsidies while the litigation continues, perhaps all the way to the Supreme Court.

Callie Gable, (a Duke undergrad whom I have taught is interning with Reihan Salam) has a post from last week on what might come next if the ruling that occurred today was issued. In it, I say that some states will move to set up a federal State exchange via the easiest way possible (meaning that they will largely rely upon the federal website, but will either pass legislation or issue an executive order to ensure the flow of subsidies to their residents who got them to purchase private health insurance). The federal government will have lots of incentives to make this as easy as possible. Once a state has a state-based exchange, the subsidy question is no longer in doubt. It is a very technical enterprise determining exactly what constitutes a federal exchange and you can go elsewhere for detailed legal arguments, but they could include largely pointing people to the website used by the federal exchange. However, the states will have to act.

This is primarily a political question, and that is how I answered Callie, and that is how it will eventually be resolved. Here are some thoughts about what could happen:

  • While this was heralded as a political win for Republicans (I guess until the fourth circuit ruling), the reality of the DC Circuit ruling if carried out fully would mean that people in 36 states would lose private health insurance that was purchased in a market place using an income based subsidy. This won’t be a political winner for Republicans for long, and I would expect Democratic candidates for Senate to use this ruling to good effect in campaigning. Something like this in North Carolina: —>”The ACA was step one, but it needs to be revised and improved. I want to make clear that North Carolinians who are newly insured with private health insurance don’t lose that coverage and I have a one paragraph bill that will do just that. My opponent is opposed to Medicaid expansion AND private insurance expansion….” That sort of thing.
  • The two sides could actually have some sort of deal that included making it clear that tax credits could flow to residents in any state. Presumably there could be other changes, like getting rid of the employer mandate that no one wants, replacing the individual mandate with a variety of other risk pooling mechanisms that would be stronger than the weak mandate, altering the structure of tax credits, revising the Medicaid expansion, etc. Hard to imagine this happening prior to the 2014 election. In North Carolina, there are something like 350,000 persons who got a subsidy to purchase private health insurance, so it is not a trivial number. I have prattled on for years about how both sides need a health reform deal, there are many deals that are obvious in policy terms, etc. Eventually it has to happen…..I think.
  • Some states will move ahead to set up their own exchange in a manner that heavily uses the federal website and infrastructure, while identifying those items that must be deal with by states to be a state exchange (likely related to approval of plans able to be sold on the exchange in a given state). The Fourth Circuit ruling on the same day may slow the flow of States making this move.
  • Some states will hold out, with opposition to President Obama’s main policy initiative trumping all other considerations. How many is unclear. What if you played this out and imagined the ACA goes on unchanged, and this ruling held up by the Supreme Court, then it would be up to states to decide whether to set up an exchange or not. The states undertaking the current voluntary redistribution from Red to Blue states via not taking the Medicaid expansion, would have another way to couple their rhetorical disdain for the federal government, with actually saying no to the money.

Played out over many years with no revisiting of the ACA, the DC Circuit’s ruling when coupled with the Medicaid SCOTUS ruling would represent a profound calling of the bluff of the South (this is where the long term holdouts would be). Historically, we screamed about the federal government, all the way to the bank. Under this new regime, we could actually commit economic suicide if we really want to do so.

CMS Revises Part D/Hospice Guidance

CMS today revised its guidance on procedures related to determining who pays for pharmaceuticals used by Medicare beneficiaries who elect hospice care. A hospice is responsible for paying for all drugs related to the terminal illness under Medicare regulations, a fact that was never in disupute conceptually. However, the March 2014 guidance that was aimed at ensuring that Medicare was not “double paying” for drugs (which would occur if Part D plans were billed for drugs that should be financed via Medicare’s per diem payment to hospice providers), had lead to gaps in the prescription for pain and other medications as patients trasnitioned from normal care into hospice, leading some patients to disenroll form hospice, or to needlessly suffer.

Specifically, the new guidance reduces the classes of pharmaceuticals that Part D plans must require prior authorization prior to filling once patients elect the hospice benefit in Medicare. These drugs groups: pain, anti-nauseants, anti-anxiety and anti-consitpation medications are they are groups of drugs that are almost always  a part of a hospice patients care regimen due to the common end of life symptom of pain, and dealing with the side effects of addressing pain using pharmaceuticals.

This is a common sense tweak to of a rule to address an unintended consequence of a legtitmate effort to ensure that Medicare does not double pay for drugs.

N.C. House v Senate Medicaid proposal

I am not opposed to managed care in Medicaid. In fact, in January 2014, I proposed an approach to both expand insurance coverage and reform Medicaid by using private insurance to cover newly eligible persons via Sec 1331 (Basic Health Plan) of the ACA that would have insurance companies and integrated delivery systems compete for the newly eligible beneificiaries. Down the road, the state could opt to place a large proportion of Medicaid beneficiaires into private insurance.

The move toward capitation throughout the health care system and for payers to insist on improved or at least steady quality per cost is inevitable and generally a necessary and good thing. My problem with the Senate Medicaid proposal is that it is too much, too fast. A few points on the two plans (both of which are quite incomplete because they don’t address expanding insurance coverage, and don’t address other things that I did, like the patient safety/medical malpractice situation and scope of practice laws): Read more of this post

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