Helping Sick Americans Now Act

House Republicans are going to vote on this bill today that would siphon ACA money from the Prevention funds to expand coverage in a high risk pool program that is now closed. High risk pools have traditionally been a health policy item some Republicans supported (basically an attempt to defray the cost of insurance for those denied normal coverage due to pre-existing conditions). The fact that such a program was created by the ACA shows that the actual policy content of the ACA had some some ideas that Republicans long supported (until they found their way into the President’s health care plan). As a long term solution, a high risk pool is not a great option. The answer to high risks is putting them into the biggest risk pool possible, not a smaller, sicker one. That is why high risk pools are best though of as transitional vehicles as we move toward exchanges. They do not represent a good long term strategy.

update: revised for clarity

N.C. Medicaid Reform: Dual Eligibles and what is broken

One of the most difficult aspects of reforming Medicaid in any state is answering the question, “what about the dual eligibles?” These are people who are eligible for Medicare due to their age (65+) and Medicaid due to being low income. The dual eligibles constitute about 1 in 10 Medicaid beneficiaries in North Carolina, but consume about one-fourth of the program costs.

Following are three interviews I conducted (in October 2011) with Marsha Gold, a researcher at Mathematica Policy Research, and one of the nation’s foremost experts on the dual eligibles:

• Interview part 1, 10/28/11
• Interview part 2, 10/28/11
• Interview part 3, 10/28/11

The most important thing to remember when discussing Medicaid, is that it is not one, homogenous program in terms of who is covered. For example, the per capita Medicaid expenditures by Medicaid on dual eligible beneficiaries was around $10,600 in 2009; for the far more numerous children covered by the program, it was $2,800, in large part owing the cost of nursing home and other long term care services for the duals. And the number of dual eligibles will inevitably grow due to the movement of baby boomers into eligibility for Medicare. Keep in mind that most of the persons who would be covered by a Medicaid expansion under the ACA in North Carolina are childless and low income adults, not the more complicated (medically) groups of dual eligibles and the long term disabled.

Further, regarding the language used by the Governor to describe Medicaid as broken–and then using administrative costs as the prime example–the figures on administrative costs described in the in the N.C. Audit have been called into question. As noted in the post, some of the administrative costs in other Medicaid programs are contained in the amounts of dollars spent by managed care companies. So, the much discussed N.C. audit did not provide a complete picture of what proportion of other states Medicaid program was spent on administration. This is important only because this administrative “brokenness” was the logic provided by the Governor for not expanding Medicaid. Not only was this not the case, but the expansion would add people who are on average, much better health risks than the anecdotal examples of problems that have been provided in the debate–mostly of problems with dual eligible beneficiaries and the long term disabled (and there are many problems and difficulties, first and foremost about the health of these individuals).

What is broken in Medicaid are many of the beneficiaries, particularly the dual eligibles described above. These are elderly individuals, many living in Nursing Homes, often because they are widows or widowers, and who have many complicated acute and long term care needs. Medicaid provides care for “the least of these” and that will always be very hard and expensive.

N.C. Medicaid bill

Here is the text of the bill to create Gov. McCrory’s Partnership for a Healthy North Carolina (his proposed comprehensive Medicaid reform). It is only two pages long and mostly sets up time lines (final roll out of new system by 2018) and general outlines of the aspirations of the reform effort only. The bill envisions a 1115 Medicaid waiver of some sort (“or other federal authority”), but there are so few details that this is mostly an aspirational document…though the goal seems to be to provide 2-4 “entities” through which beneficiaries would get all of their services, including nursing home coverage for the dual eligibles. It is difficult to evaluate this definitively with so few details.

Reinhart/Rogoff and holy crap!

I don’t consider myself a deficit scold, but did write a book called Balancing the Budget is a Progressive Priority and worry about things like the Debt:GDP ratio more than most who would self identify as progressives. When asked at myriad speeches, presentations and the like the past 3 years how much debt:GDP is too much, I have many times said something like “no one knows for sure, but when you are getting around 100% of public debt:GDP you will harm economic growth.” This diddy was based largely on an influential paper by Carmen Rinehart and Kenneth Rogoff that showed that nations’ whose debt:GDP was above 90% had average economic growth of -0.1% annually. It appears this widely cited (this is an understatement of how influential it has been) conclusion was based on a coding error and the correct rate of growth with the code corrected should be 2.2% GDP growth according to a new paper. As Matt Ygelesias says, this will almost certainly change nothing about the policy debate because most people are so locked into their ideological positions at this point (there were also so questionable exclusions of data for certain countries; the original study is a cross-national look at debt:GDP and economic growth).

My first thought is WOW, what a big error. As several have said on twitter today, it also gives me a pit in my stomach…..making a mistake like this in a published paper is the professor/analyst version of having the dream in which you have to take the final exam but you never went to the class.

The data and the facts are important. I am sure there will be more post-mortems, but this looks to be a huge case of a false fact having a big impact on an important debate.

update: fixed a typo

Marathon

Obviously a terrible tragedy yesterday in Boston. It is all the more sinister because of what the finish line of a Marathon typically represents: a supportive, celebratory place of individual achievement.

I have finished two Marathons in my life, the 2004 Richmond and 2005 Marine Corps races. For me, these races were culminations of my losing about 60 pounds that I gained during graduate school (a decidedly unhealthy time for me in many ways) and the birth of my kids (my wife lost weight after childbirth, I just kept going!). One of the most beautiful moments of my life was making the left turn at around the 26 mile mark of the Richmond Marathon and seeing the finish line: I knew that I would finish. I began to weep as people shouted Go Don Go, you did it! (I had my name printed on my race bib) and the crowd roared, even for someone like me who finished in the 4 hour 40 something minute time range.

That is the point of the finish line at a Marathon. Long after the race winner has had a meal and a massage, normal people do extraordinary things, cheered on sometimes by family, but always by loving, supportive strangers. The finish line of a Marathon is quite an experience, and one that cannot be ceded to the acts of yesterday.

Interview with Sec Wos and Director Steckel

Rose Hoban interviews N.C. Health and Human Services Secretary Wos and State Medicaid Director Steckely. There is a very revealing, 15 page transcript of the entire interview embedded in the story. More later on this, but quick thoughts:

• The Governor clearly said we could not expand Medicaid because it was broken. Administrative overruns were cited as the main way the system was broken.
• The degree to which NC Medicaid has unusual administrative costs is in some doubt; especially states using more managed care don’t call some of the admin costs admin (more on that next week)
• Medicaid is a counter cyclical program whose beneficiaries rise when the economy is bad; it is impossible to precisely estimate the number of beneficiaries. Medicaid is surely a difficult item for all states to budget for due to this, but at least some of the budget overruns in N.C. the past few years have been related to fighting between a Democratic Governor and a Republican General Assembly. We don’t have that issue now.
• I agree that coordination of care for complicated patients, especially those with mental health and long term care needs leads a lot to be desired. I am ready to cheer on efforts to improve these issues in N.C. Medicaid…but the Medicaid expansion would mostly not add such folks to the eligibility roles, but instead add mostly childless adults, who do not now qualify based on disability.

DSH cut delay surprise in POTUS budget

Sarah Kliff notes the surprising proposal in the President’s budget to delay the scheduled cuts to Disproportionate Share (DSH) payments that Medicare makes to hospitals based on how many uninsured patients they treat. The logic of cutting them in the ACA was that the number of uninsured would decline due to private insurance purchased in exchanges and Medicaid expansions. Of course, the Supreme Court made the Medicaid expansion voluntary and a good number of states are balking. The looming DSH cuts are one of the biggest realpolitik reasons for a skeptical (or downright hostile) state to expand Medicaid. If they don’t, they are essentially voluntarily redistributing money to other states under the default ACA.

The President’s budget proposes delaying these cuts, presumably to lessen the blow on hospitals in states who would otherwise have cuts to DSH payments without reductions in the uninsured.

This is a big surprise in that it it would give away political leverage to expand coverage. Of course, everyone is saying the budget is DOA, but I think there are nuggets of a potential White House/Senate deal in the President’s budget that could result in something passing the Senate that would pressure the House to vote on it. And something has to be done to raise the debt limit.

This surprise move (at least to me) implies to me that it is part of something that has already been discussed in the nascient White House/Senate negotiations and that along with chained CPI and more means-tested Medicare being put forth by the President in his budget, this item makes me think there is a chance of a ‘mini grand bargain’ of sorts. And I would think a whole lotta Republicans would love to vote for this, as they could then say ‘see we delayed Obamacare.’ The Speaker will say lets do it now and of course the President will say no, it is part of a bigger deal only.

Bottom line, I think there is a reasonable chance that between now and Labor Day that House Republicans come to regret pushing the Senate back into “normal order” and saying they no longer wanted to deal with the President directly.

Quick budget note

The President has released his budget which as all Presidential budgets is dead on arrival per se (or dead before arrival as Stan Collender says). However, I think this budget is likely to be more consequential than most, because I think it contains the seeds of a ‘mini grand bargain’ of sorts that is likely to emerge between the White House and the Senate, and which has been emerging based on White House/Senate discussions. As I wrote on Jan 18, 2013 when talking about a return to ‘normal order’ (why it went away)

My guess is that they pop something out of the Senate with ~70 votes and then we see what happens in the House and they have a conference committee and the various committees get to work on the policy details. It is a big moment for the Senate, and a chance for them to be the grown ups. We will see if they can take the opportunity.

The chained CPI, increased means testing for Medicare, and a place holder for new revenue via tax reform are ideas around which a yea vote of about 65-70 Senators could take place as part of the debt limit lift coming up for the Summer. Much like the 88 yea votes in favor of the New Year’s Day fiscal cliff deal forced Speaker Boehner to break the Hastert rule (don’t bring up something without the majority of the majority being in favor), I am betting this level of support will lead to the same outcome again, meaning Boehner allows it to be voted on and the Dems have to carry most of the water. A whip operation to behold for sure….

Thinking long term, deficits are already coming down and the debt-to-GDP ratio stabilizes in the short run, but starts back up in the second decade due to health care costs. The key for long run sustainable budgets are the next steps on health reform, building on/modifying the ACA. I don’t believe the needed deal on health reform (reform needs to go back burner politically a bit, so we can implement; its hard enough without every new study or finding being a partisan bicker match) can occur until elected Republicans actually embrace a proposal, mark it up in the Commerce committee in the House, get a CBO score, etc. Conservative public intellectuals have started getting more serious about health reform plans, but as of yet, not elected ones.

How to think about North Carolina’s emerging Medicaid plan

The key thing to remember about Medicaid is that it is not one program, but disparate groups of people with different medical needs, but who all have incomes below a given line. The figure below illustrates nicely:

Gov McCrory announced the outline of a plan (I can find not written text) that he calls Partnership for a Healthy North Carolina. He intends to seek a 1115 Medicaid waiver, and to move toward ’3ish’ (his words) ‘entities’ that will be responsible for coordinating all the care of Medicaid beneficiaries,  and that will competitively bid for the right to provide beneficiary care on an ‘at risk’ basis for those in Medicaid. This would mean any cost overruns not covered by the premiums these ‘entities’ receive will result in financial losses for the ‘entity’. Lots could be said, but I want to focus on who is covered by Medicaid and quick thoughts I have about those groups being in such a system.

• Elderly, which are the so-called dual eligibles. This group is among the most expensive parts of the Medicaid program (per capita costs in N.C. about $10,600/year v. $2,800/year for children). Lots of the cost is Nursing Home expenses. Will the entities competitively bid for daily NH payments? If yes, will they be allowed to consider assisted living? If yes to either of these, this is a huge change. Medicaid has long set the floor payment for a NH bed, and if entities are aggressively bidding for beds this will be quite dislocating to the NH market in N.C. (for good and bad, most likely). If this group (duals) is not included, then it doesn’t address one of the most expensive groups of Medicaid beneficiaries
• Disabled. This is a disparate group of folks; everything from spinal cord injury to someone born with profound intellectual disability. The per capita cost in N.C. of this group is around $16,000, the most expensive group. Both the elderly and disabled definitely suffer from silos of care and lack of coordination that the Governor noted, the fixing of which he said was a key part of his proposal. Sadly, it is not just the Medicaid program that has these troubles; our entire system is fragmented and overly focused on acute care at the expense of long term care.
• If you look at the groups of adults, you see that you must have very low income to quality for Medicaid now, and childless adults can never qualify (pregnant women are the main persons producing the adults per capita cost of $4,100 in this post). Adults are the groups that would mostly benefit from the Medicaid expansion that is available via the ACA. Not to belabor the obvious, but since childless adults with low income only (eg not disabled) can never be covered by Medicaid now, the care of this group is not the source of the problem discussed by Gov. McCrory today. Much of the populations that would be covered by an expansion will not be the complicated cases that suffer from the lack of coordination issues Governor McCrory decried today.
• Big picture, the announcement today focused on the real coordination problems of persons with complicated illness, especially those requiring both acute and long term care services and those joining medical and mental health problems. A new model or approach here could be quite beneficial to patients and the state. Politically, it will allow the Governor to say he has ‘fixed’ or is ‘fixing’ the broken Medicaid system allowing the state to move toward a Medicaid expansion along the ‘private option’ being discussed in Arkansas and other places. My guess is that this happens sooner rather than later, with lots of whispers of the expansion coming after the 2014 Republican primary. The most telling sign that it is only a matter of time on the expansion are the very powerful interests who want the Medicaid expansion, and yet are saying almost nothing publicly about it not being done at this point.
• The details to the new plan are key, and at this point are non existent. Also, imagine if a liberal Gov got up and said ’3ish entities’ will revolutionize health care via (fill in the blank) and didn’t even have a written fact sheet? This shows how little it takes for a Republican Governor to be given the benefit of the doubt on moving ahead on health reform.

Gov. McCrory to announce Medicaid plan

later this morning in a speech/press conference at 10am Eastern (an intro vid is down this link; no specifics, but nice music). Here is a livestream link that will allow you to watch the press conference live.

I have written lots about North Carolina’s Medicaid program and potential expansion under the ACA. You can see these posts by using the Medicaid tag.

I have been sticking with my prediction that North Carolina will eventually expand Medicaid via the ACA. The Governor will have to declare a victory of some sort to have a chance to pull that off politically. Today’s announcement is a part of that political dance regardless of the details, but I don’t know what will be announced. No need to do tea leaves now, the presser is in 30 minutes.

The most important thing to remember where you hear Medicaid, is that it is not one monolithic program. The expansions available through the ACA are focused on the young, and particularly childless adults. However, the most expensive part of the Medicaid population are elderly persons (dual eligibles because they have Medicare and Medicaid) and the long term disabled.

Update after watching the press conference (10:55am)

• I give them credit or doing something
• Details were scant; that should change. No word on expansion, but this is the start of being able to declare victory that will lead to that
• Plan to ask for a 1115 waiver from Medicaid; Sec Sebelius has offered help in developing the plan, and the State is accepting this offer. 1115 waivers are typically used when you want to offer a pared down benefit package and/or changes in choice of provider, etc. Such waivers (1115)  have to be cost neutral
• Aspiration seems to be a bidding process whereby there will be “3 entities” that will have contracts to deliver Medicaid services. Entities were described as next generation provider networks (State version of ACOs?, but much larger; first thing I thought of was the health care cooperatives proposed in the Clinton plan, which were to be about the size of congressional districts in terms of population covered; sure that is not how they will message it). Key stated goal is to better coordinated services (physical, mental, substance abuse) which were described as silos now. This is true, but not just for Medicaid. It is a hallmark of the entire system. Medicaid is just a payer into a fragmented system, but it is true that it disproportionately covers those with complicated “long term care meets acute care” needs, both in the young due to lack of other coverage and in the elderly due to low wealth levels, often due to paying for LTC.
• Wants the 3 entities to bid for care provision of Medicaid beneficiaries and put these 3 at full financial risk.
• Info System improvements, saying there will be one IT and one financial system required
• My biggest question goes back to the basic Medicaid reality that it is not one program. Do they intend to bid the Medicaid part of dual eligibles out and long term disabled? This includes massive Nursing Home costs. The concept of improving health for many such persons is difficult to discern, and so to put providers ‘at risk.’ If duals will be included, that is going to difficult, and if no, they are exempting the most expensive part of the system.
• Need more details to be able to say much more. Bottom line: credit for doing something, it is quite vague at this point, but they fact that they are working with Sec. Sebelius and HHS is a positive sign politically.

I have nothing written on the plan, and can get nothing from sources that often have such info early.

Coverage: WRAL