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

My book at the ACA

A few folks writing me about my book and whether I support the Affordable Care Act after yesterday’s post, and a question about the cost of what I proposed in my book.

• Yes, I am a strong supporter of the ACA. The book makes my support quite clear. However, even if all goes well, it is not the last word. A policy based health reform would likely mean revisiting/tweaking/adding things to the ACA/our health system every Congress for the rest of my life. We will never be done with health reform. Here are the ~30 columns on health reform I wrote for the News and Observer from June 2009 to May 2012.
• I don’t think we will ever do the hardest parts of addressing costs without both political parties bearing responsibility for the effort. To date, Republicans have been the ones who are only clear about what they are against, with no coherence about what they are for. Maybe that is changing, but they are the “side” without a clear negotiating position, at least among elected officials. Their offer is the next step to get to a broader deal that I believe to eventually be inevitable.
• One person asked if I was claiming that ending the tax exclusion of employer provided health insurance would pay for everything I wrote in my book in terms of health policy. Short answer is no. Fuller answer is that my book is really a set of ideas about the direction that I think we would go if Republicans and Democrats actually negotiated what I understand to be their ideological/interest group interests on health reform. My book offers a set of directions and ideas as opposed to costed-out plan, and they are big changes I suggest.
• For example, if we had a universal federally guaranteed catastrophic insurance plan (lets say Medicare part E), the cost of covering the young uninsured with a huge deductible like I suggested ($10,000) would be relatively inexpensive. However, if everyone is covered by such a catastrophic plan, you could expect that employers would alter private coverage to ‘wrap around’ the catastrophic amount. This would result in several things happening over time. (1) the link between employment and health insurance would break down. A huge change that I think would be a good one, as it would actually allow entrepeneurs to innovate and take risks; today there is a Duke employee(s) with a great idea for a business but who remains locked into a job they don’t like simply for the health insurance. (2) Less employer sponsored health insurance would shift compensation from the non-taxable vareity (health insurance) to the taxable variety. (3) I would want to offer private gap insurance in exchanges, with coverage eventually bought with after tax dollars, and therefore remove the hidden subsidy of health insurance via the tax code, and make any income-based (my preference) subsidy be totally transparent. Costing this out is beyond my technical expertise….what I was trying to do is give a sense of where I think we should head next. I think a deal of some sort (whether mine or otherwise) is eventually inevitable, but not sure when. Until then, I am all for implementing the ACA.
• Even if there were a resurgence (or I would say a beginning) of serious conservative proposals on health policy put forth by elected officials, the first step to this outcome will have been the ACA. It broke the logjam that was the status quo.

N.C. Gov. Perdue takes a step ahead on exchanges

Outgoing Governor Bev Perdue today announced that North Carolina will move ahead with a federal/state partnership model for a health insurance exchange under the Affordable Care Act.

Perdue, a Democrat, said she consulted with Republican Gov.-elect Pat McCrory and chose a state-federal partnership to operate the health insurance exchange required by the Affordable Care Act….

This provides flexibility for the Gov. elect Pat McCrory and the General Assembly to keep the partnership, move toward a fully state run exchange, or revert to a federally run one.

“This decision allows him (McCrory) the opportunity to then, in his own good time, make a decision that will be permanent for the state,” Perdue said.

I am writing a series of posts on the move toward implementing the health reform law in North Carolina.

Reinsurance, expanding coverage and the search for a deal

Slammed with project deadlines so light on the blogging….but wanted to point to Reihan Salam’s interesting and useful post about different approaches to reinsurance/federal guarantees to help move toward universal coverage. He points out that there are a fair number of liberal/progressive types who have embraced models of trying to get universal, catastrophic coverage with various mixes of public and private payers. Such a proposal is central to my book. Further, here is a series I did on the federal flood insurance program, that highlights some potential lessons and/or the usefulness of this model to inform the possible use of federal reinsurance/backstopping of some sort.

I see lots of issues in Obamacare that could be improved and addressed within the parameters of the law, and there are lots of alternatives and ideas. I especially want to highlight Reihan’s highlight of Gene Steuerle’s critique of the ACA and of Republican critiques of the law as well. Federalizing the dual eligibles and moving over time to buying low income persons into private insurance is a worthy goal on many fronts,and would remove one of the “tranches” as Gene calls them.

There is some convergence from right and left on key issues if you focus on the policy, and if we can at least start from a goal of providing everyone with some level of predictable coverage. The stumble is the politics….we have to figure that out. By that I mean I am open to and even prefer large changes to Obamacare as should be clear from my book. However, these steps need to be negotiated and enacted from the basis of the existing law. I just don’t see how it is politically feasible for the first step to be a repeal of Obamacare without clarity of what comes in its place.

The next step is the election. Somehow we have to get to the point after that where good policy also becomes good politics.

update: revised wording.

The Conservative case for the ACA

is the title of an op-ed in the New York Times by J.D. Kleinke of the American Enterprise Institute. If you have read my blogging or my book, you will know that I basically agree with him–the political rhetoric around Obamacare never matched the policy reality.

Some predictable push back from Capretta, and Cannon. I like both of these guys personally, and think they have some good thoughts and ideas. However, the opposition to Obamacare, driven in part by them, has always been oversold on policy terms and has been mostly about politics. What would be useful would be for them to be clearer about what they would do instead. In fairness, Jim Capretta has written a fairly complete vision of what a replace of Obamacare would look like, and Michael and colleagues at Cato have an ebook on reform options.

The biggest problem with their replace plans is the lack of 218 members of the House and 60 in the Senate that will vote for their ideas after voting to repeal Obamacare, presumably after a Republican clean sweep this fall. If the President wins re-election and the hope of repeal becomes a fantasy, I think there will be a deal to move ahead on health reform, wrapped up in an overall deal on the tax code, etc. in the next Congress. My book gives my version of such a deal. Here is the big idea of my proposed deal.

update: fixed a link.

What the flip flops on the individual mandate mean

Governor Mitt Romney is just four years too late. If he had beaten Senator McCain for the 2008 Republican nomination, the individual mandate would  have been front and center in the campaign; a ‘make the trains run on time’ corporatist approach to pooling health insurance risk that could save the country from the wild-eyed liberal schemes that Senator Obama would surely impose, yada yada. I am sure Gov. Romney would have taken tremendous glee in saying something like this over and over: “even Hillary Clinton has embraced the individual mandate that we successfully implemented in Massachusetts; only Senator Obama remains committed to a government takeover of health care that was rejected when Hillarycare was defeated.”

Of course, the ACA (aka Obamacare) with the individual mandate front and center came to not only be called a government takeover, but an assault on liberty and freedom itself. The Supreme Court will have their say in a bit, but it is worth asking what do the flip flops on the individual mandate mean more broadly?

The President did attack the individual mandate during Democratic primary, and it was about the only substantive issue that was different between the President and Sec. Clinton. However, in choosing to support the individual mandate he choose to embrace a practical strategy to pool risk that appeared to have bipartisan support and could therefore be passed. In doing so, the President demonstrated the commitment of progressives and their most closely allied political party to move toward universal coverage, even if it couldn’t be totally achieved in the ACA.

Conservatives, and their most closely allied party, the Republicans, showed that they have no overriding vision for health reform by their widespread flip flop on what had long been the conservative, responsible way to achieve reform. They have many ideas, but they are mostly used to argue against the advances of the other side. In short, they are great on defense, but seem to have no offense. Offense implies having an overall grand vision for health care, and a practical strategy to move toward this vision that includes the willingness to use political capital to achieve large or small victories moving toward an overall goal. The overarching vision for progressives is universal coverage. For conservatives, I have no idea what it is. Do you?

There are two requirements to ever having anything near a balanced budget again: an increase in taxes over historical levels, and some way of slowing health care cost inflation while also dealing with coverage and quality issues. The Democratic party and progressives are not perfect, but they have embraced the first and passed a beginning step toward the second. Without a cogent health reform plan, the Republican party has no plausible route to a sustainable budget. They need a deal on health reform terribly.

My debate with Jim Capretta

On Wednesday night, I debated Jim Capretta of the Ethics and Public Policy Center on the question “What is the best way to provide high quality, affordable health care to all Americans?”

Here is a link to the video of the debate (about 90 minutes long). I am not so experienced in this format, but had fun doing it, and enjoyed meeting Jim, who is a nice guy. My main goal was to give my version of how we got to where we are, 10 days from the Supreme Court oral arguments on the constitutionality of the individual mandate and the Medicaid expansions as part of the ACA, to point out that Conservatives and the Republican party do not have a coherent vision and certainly not a practical replace plan, and to then to paint a vision of where we next need to go as a country on health policy.

• For progressives, achieving universal health insurance coverage of some sort is the holy grail of public policy. The degree to which it is a priority was demonstrated by the use of “the other sides” individual mandate along with a Medicaid expansion to expand coverage. Plenty of progressives held their nose, because they knew this pushed the ball down the field toward their broader goals. The ACA is simply what could get 218 votes in the House, 60 in the Senate and 1 in the White House. Any replace bill or modification will have to do the same.
• The ACA is a good step, in large part because it was a step toward universal coverage and it has some aspects that could allow us to address costs and quality. We need more steps, but repeal without having a clearly defined modification or replacement strategy is a move backwards, in large part because there is no reason to believe that conservatives would be able to marshall 218 votes in the House, 60 in the Senate and 1 in the White House on any reasonably comprehensive health bill.
• We need a political deal, with the ACA as the basis, because that is what we now have.
• I laid out my suggestions for what this deal should like in terms of the next steps after ACA. These ideas are a central part of my book, Balancing the Budget is a Progressive Priority (coming out in April 2012).
• What was most striking to me in listening to Jim talk about his ideas for reform was how similar many of them are to what is contained in the ACA; not the same, but the ideas are cousins. The reality is that if you are against government insurance expansion and an employer mandate, then some form of an individual mandate is the only option if you are going to claim to have a goal of addressing cost and quality while moving towards covering everyone. You have to pool risk somehow. The rhetoric that has been used against the ACA has never made sense in light of its policy realities, or the reality of what is possible if it goes away.  As I said in the debate, I would to see CBO score the Patients’ Choice Act, after it were marked up by one of the House committees. Then the Republican Party would have some credibility on replace. Now they have none. It is much easier to say what you are against than it is to do better.

CBO on effect of defunding ACA implementation

CBO has sent a letter to Rep. Waxman addressing his question about

…budgetary effects of legislation that would permanently prevent the use of appropriated funds to implement the Patient Protection and Affordable Care Act of 2010 (PPACA) and provisions related to health care in the Health Care and Education Reconciliation Act of 2010, Public Laws 111-148 and 111-152, respectively.

In short, CBO is addressing what could happen if we permanently defund implementation of the PPACA? CBO notes a great deal of uncertainty in assessing the effects of permanent defunding because some aspects of the law have been implemented, others will be implemented absent any more action, while others will be implemented but need adminstrative oversight to function properly. They are even unsure of whether it would on net increase or decrease the deficit. CBO does provide some guidance on the types of things that could occur with a permanent defunding of PPACA implementation:

A permanent prohibition on the use of discretionary funding to implement PPACA and the Reconciliation Act would have some effects that would reduce the federal deficit and others that would increase the federal deficit. For example, such a prohibition could:
• Prevent CMS from modifying Medicare’s payment rates on an annual basis;
• Preclude CMS from engaging in the rate-setting process and signing contracts with the private insurers that offer Medicare Advantage and Part D (prescription drug) plans;
• Preclude the Secretary of HHS from implementing recommendations of the Independent Payment Advisory Board (IPAB), aimed at limiting Medicare costs;
• Prevent enforcement of the mandate for U.S. residents to obtain health insurance;
• Prevent the federal government from setting up insurance exchanges if states chose not to establish them;
• Preclude CMS from issuing guidance or offering technical assistance to states on expanding their Medicaid programs to newly eligible people;
• Prevent CMS from assessing and collecting its share of higher rebates from pharmaceutical manufacturers for drugs dispensed to Medicaid beneficiaries; and
• Bar the IRS from modifying forms, instructions, and publications to reflect changes in tax law.

Opponents are of course welcome to be opposed, and to repeal the law outright, or replace it with something else. Or even to modify the existing law. To let it stand yet defund it is likely to have many unintended consequences and doesn’t make much sense.

Is the individual mandate constitutional?

Great post by Jim Hufford on the Fourth Circuit’s hearing this week.