Still Seeking Clarity on Private Score
January 31, 2014 9 Comments
Update Sunday, Feb. 2, 2014, 3:20pm: Still no response for more information/clarity about the private score from the Center for Health and Economy (see key items below from Friday). The change in the language used by the sponsors to describe the capping of the tax treatment of employer sponsored insurance, and discussion with several Republican policy types makes it fairly clear that: (1) either the sponsors didn’t support what was scored by the Center for Health and Economy in the first place (amount of premiums above $5,400 taxable for individual policies, $11,250 for family ones), or (2) they have changed their mind due to criticism from Republicans about increasing taxes.
I should note that I think the capping of the tax exclusion at the levels scored by H & E is a good policy. In any event, the private score of a $1.4 Trillion reduction in the deficit over 10 years hinges largely on raising $1.05 Trillion more in taxes over 10 years from the cap of the ESI exclusion described by the numbers above. If the capping at that level is gone, then so is that overall score bottom line (with the proviso that the other questions below need to be answered to allow for full consideration of the score, and therefore the proposal).
Turns out this health reform thing is hard.
I am still seeking to better understand the assumptions of the private score of the health policy proposal put forth by Republican Senators Burr, Coburn and Hatch. Yesterday (Thursday, Jan 20, 2014) , around 11:20am EST, I emailed the following addresses at the organization that put out the private score of the PCARE proposal, Center for Health and Economy (email@example.com and firstname.lastname@example.org) seeking more information. I have still not gotten a reply.
I traded emails with Steve Parente (I am not putting out his email response because it was rushed and I didn’t tell him I was going to do that; I will publish verbatim any clarifications that he and/or Health and Economy want to offer), whose peer reviewed work is the basis of the model. He has offered to talk by phone but we haven’t worked that out yet. Here is pdf of his HSR paper Parente.hesr_12036 that models ACA uptake after SCOTUS case using the underlying model used in the private score. Steve told me the out of pocket modelling of PCARE follows the trends shown in this Health Care Cost Institute report. He did say that that the biggest impact of modelling the changes of PCARE as compared to the ACA same from moving away from a maximum 3:1 age banding (unclear if they modeled 5:1, or no limit), and “relaxing” the OOP cost limits in the ACA. He said that the out-of-pocket cost assumptions were that trends would stay pre-ACA (meaning slowing lots) as outlined in this report.
Finally (and crucially for understanding this plan), there has been a change in the way the tax treatment of employer sponsored insurance modification is described by the Senators. It is unclear if this is simply a change in the language used to describe something that is difficult to do clearly, or if they have changed their proposal (screen shot of language difference from TPM):
Some of the questions that need to be answered to understand the private score:
- Does the private score represent the current proposal by the Senators to alter the tax treatment of ESI? Did the language used to describe it only change, or the policy itself? update: what limitation on ESI does the private score include (what is the dollar amount above which is subjected to taxes)?
- What was assumed about benefits in the modelling exercise? Was it a less generous package than the mandated ACA benefits? If yes, in what ways?
- Did the analysis assume a 5:1 max difference allowed for premiums by age (as compared to 3:1 in ACA)?
- Did the analysis impose a maximum out of pocket spending cap on plans? Can you please provide the out of pocket spending distribution in your analysis, by age?
- Will you provide an age-based distribution of the insured/uninsured as compared to the ACA?
- Loren Adler raises a series of important questions on twitter; some relate to seeming errors, other to desire for clarity
- Note: the private score compares PCARE to their own scoring of ACA. This does not bother me as it shows the impact of different policies given the same uptake model. Of course it is important to understand how CBOs model differs from this one.
Anyone with info on what was done, let me know. I will publish it verbatim.