Senator Hatch’s health policy proposal

Senator Hatch has released a set of 5 health policy proposals that I want to acknowledge. I have been pretty harsh on Republicans for not offering clear legislative details of what they are for in health reform/policy. This list doesn’t even mention Obamacare and focuses instead on Medicare and Medicaid; all these ideas could all work alongside the ACA, and the ideas range from pretty good to bad, but at least he identified something that he is for. A brief rundown of 5 policy ideas:

  • Bad. Raise the Medicare age. A bad policy that I have written is virtually inevitable because it sounds consequential.
  • Not so good. Limit what private Medigap plans can cover. Essentially he is saying that many Medicare beneficiaries have too much private insurance, and he doesn’t want people to  have first dollar cover for anything. Here is a brief report on out of pocket Medicare spending; this is not a particularly consequential policy, as the real costs are after deductibles and co-pays are met, and the problem with this approach is that it doesn’t distinguish good from bad spending.
  • Good. Simplify Medicare cost sharing across Parts (A, B, D) and implement a catatstrophic out of pocket maximum. This is an excellent idea, and the deductible and co-pay structure across the hospital, physician and pharmaceutical “parts” of Medicare should be simplified. This seems to work a bit against item #2. I’d focus my efforts on idea #3.
  • Good if part of a deal to move ahead on ACA. Competitive bidding in Medicare. This is the part where a Republican says Obamacare exchanges are terrible, but if we had them in Medicare it would be great! In fairness, there are some Dems who say the opposite. The obvious deal is as follows: for any state doing the Medicaid expansion/setting up an exchange, then we do true competitive bidding starting 2 years later and move to learn from/unify the exchanges. I have written how this might go even further if we got started down this path. And if we need this, we don’t need to wait 10 years to start (the least brave proposal ever).
  • Need more information; withholding fire. Per capita caps/modified block granting of Medicaid. The details of this are the most important. In my book I propose federalizing the dual eligibles, and moving over time to buy low income Medicaid beneficiaries into private insurance bought on exchanges. I am opposed to the type of block granting contained in the House 2012 budget which is essentially saying to the states “tag, you’re it” but I can imagine supporting an approach that does Medicaid very differently from how we now do it. The key is understanding that Medicaid is essentially 3 programs, and then moving ahead in that policy reality, understanding that the 9.5 Million dual eligibles and the 5.5 Million long term disabled Medicaid beneficiaries are some of the most vulnerable citizens in our nation.

The most interesting thing to me is that Sen. Hatch’s proposal includes nothing on medical malpractice reform. Here is a letter to Sen. Hatch in October, 2009 from CBO on medmal reform outlining 10 year deficit reduction of $54 Billion (~$41 billion in direct cost reduction, mostly medmal premiums; $13 billion in higher tax receipts as private premiums reduce slightly). As ranking member of finance and someone who tended to pay attention to health policy, this used to be standard fare for him to always bring medmal up as the fix all panacea. Now he leaves out a proposal he asked CBO to score in 2009. That talking point seems to have disappeared from the Conservatives/Republican play book on health reform. When was the last time anyone heard a Republican talking about medmal reform?

update: Sen Hatch is ranking member of the Finance committee; he was chair of Judiciary in the past.

About Don Taylor
Professor of Public Policy (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute), and Chair of the Academic Council at Duke University . I am one of the founding faculty of the Margolis Center for Health Policy. My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

6 Responses to Senator Hatch’s health policy proposal

  1. Dennis Byron says:

    Happy new year to North Carolina

    It seems strange on your part to claim that it is good to finally see Republicans “offering clear legislative details” when most of the above Medicare-related proposals have been around for years, proposed by Republicans (and even some Democrats). .In fact the seminal analysis by Democrats Aaron and Reischauer in Health Affairs in 1996 describing the “real Medicare market” (as opposed to the Democratic party’s idea of Medicare) sets the stage for all these ideas.

    As to the details, what could be the conflict between limiting first dollar coverage in private insurance for seniors and adding catastrophic coverage to public insurance for seniors? I’m against limiting what Medigap can cover simply because it’s private insurance and the government should not limit what I can buy privately. But my point is that the two ideas don’t conflict. In fact, the most important feature of some Medigap policies and all Part C Medicare Advantage polices (the public Medigap option if you will) is catastrophic coverage, included because Original Democratic-party Medicare lacks this fundamental insurance ingredient.

    As for your commentary on competitive bidding in Medicare, I’m confused. You seem to be tying exchanges illogically to competitive bidding in some manner. I followed the link to your post back in November and I still don’t get your proposition. Why is one dependent on the other? That’s not to say a good online marketplace isn’t the way to go (they have been around for 20 years after all, long before Obamacare or RomneyCare, and if there good enough to sell books…). And you certainly couldn’t do competitive bidding as proposed by Wyden/Ryan without enormous IT support. But exchanges are not dependent on competitive bidding or vice versa. Everyone on Medicare or about to go on Medicare receives a listing of the Part C Medicare Advantage and Part D “competitive bids” in his or her state or county today in Medicare and never has to go near an exchange to make a choice from the list of competitive bids.

    • Don Taylor says:

      on competitive bidding, it is a mix of politics and policy. I am personally in favor of a well done compeititive bidding in medicare to reduce Med Advantage overpay, but most progressives/liberals are not (you are of course correct you can have an exchange sans competitive bidding, as in current Med Advantage). And I want to get away from employer based heatlh insurance, but you need stable source of insurance. If we are going to try exchanges on broader basis, we need to try it. Basically give Rs what they want in Medicare, but in return, they have to put their fingerprints on the ACA exchanges…..they can claim they changed things, etc. and we move ahead with implementation.

      And fair enough that ideas Hatch notes are old ones, but at least he didn’t just say lets repeal Obamacare (standard for elected R constructive engagement on health policy low).

      • Dennis Byron says:

        thanks for the answer but it introduces more questions

        1. Hasn’t the Medicare Advantage “overpay” been eliminated already by PPACA? In fact, Part C plans will soon cost more than equivalent Original Medicare because their premiums are taxed by PPACA and Medicare premiums are not. What more do you want to see reduced? (I’ll just avoid the whole issue that the “overpay” you were apparently once concerned about mostly related to rural and urban poor Part C plans (I’m not objecting — that’s a fair and legitimate attempt to help the poor along with MSP for B and LIS/Extra Help for D) and does not come to middle class seniors (TIA: like me) in a vanilla Part C HMO.

        2. I don’t think your feeling that Republicans will put their fingerprints on ACA by embracing exchanges is historically accurate. I can’t see any way that an exchange is even partisan; it’s just a web site. And healthcare insurance web sites far predate the government doing anything with them (actually I’m not sure of the FEHP history), probably run by business people that voted both Democratic and Republican and never gave any thought to their voting history when they launched their sites. It’s like saying there are Democratic and Republican insurance brokers.

      • Don Taylor says:

        On #1 it started this process. And if you had true competitive bidding, I could be wrong meaning they might not be overpaid if they bid v. traditional on straight up basis. On #2, I guess I sort of agree it is just that Republicans act as though all things ACA are the end of the republic, etc. so if moving to true comp bidding in Medicare is what it takes for the country to roughly say “now we are going to try exchange based insurance and start moving away from employer provided insurance” then I am for that.

  2. Pingback: Senator Hatch’s health policy proposal « freeforall « JHPPL News and Notes

  3. Pingback: Burr, Coburn, Hatch Reform Plan | freeforall

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