Patient CARE Act Posts

On Monday, January 27, 2014 Republican Senators Richard Burr (N.C.), Tom Coburn (OK) and Orrin Hatch (UT) released a fairly detailed outline of a new health reform plan: (The Patient Choice, Affordability, Responsibility, and Empowerment Act, or PCARE). I will aggregate my posts on this proposal in this post:

Senators Burr and Coburn (and Rep Paul Ryan and Devin Nunes) introduced the Patients’ Choice Act in May, 2009. Here are several links to that proposal (that differs in important ways from the most recent proposal)

In February, 2012 Senators Burr and Coburn introduced the Seniors Choice Act, that focuses on Medicare. The most recent proposal does not mention Medicare, nor SCA

Still Seeking Clarity on Private Score

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.

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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 (contact@healthandeconomy.org and press@healthandeconomy.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):

ScreenHunter_01 Jan. 31 09.30

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.

Repeal ACA, RIP

Someone on twitter (I don’t remember who) last night said RIP ACA repeal, 1/29/14. I agree. That is over.

The release of the Burr, Coburn, Hatch reform plan the day before–that is not a repeal except in the sense of using the word–plus the responses to the SOTU is the elected portion of the Republican party acknowledging that the primary unifying theme of the party for nearly four years (repeal, no clue what after that) is dead. The Burr, Coburn, Hatch plan represents a plausible approach (of course there are many details missing, etc), but, their offer is best understood as an opening bid in a negotiation that will someday ensue. And make no mistake, their offer contains serious policy in the sense that the outrage machine that the Republican party has perfected against the ACA, could be riled by the details necessary to bring about what they propose.

I suspect there are 65-70 votes in the Senate for a plausible reform/modification of the ACA. I am sure I would like some of it and not other parts, but I definitely don’t like the status quo that is an uneven roll out of the ACA in which much of the South is about to be left behind. So, liberals and progressives who deeply care about health policy/reform need a deal that finds the policy that the laggard states will carry out, just as the Republican party needs a deal since they will have great difficulty providing all or most of the votes for any plausible health reform in the near future. As I wrote in 2010, a deal is necessary to do the hardest things, and to the benefit of both sides.

When could it happen? Speaking of fantasies, there seems no way the 65-70 vote Senate block that I think exists could get the House of Representatives to bring such a vote to the floor, unless Speaker Boehner decided that would be his last hurrah. Still, I don’t think it is improbable as was the passage of the ACA in the first place on January 29, 2010. I vividly remember a House staffer telling me in February, 2010 that the only thing they (House Dems) hated more than the Republicans was the entire Senate, and that there was no way the House would pass the Senate bill (but they did, because there was no other choice).

If the Republican Party barely took the Senate in 2014, then the odds of a deal would go up. Post election 2014 is likely the best time for a first deal to occur regardless of Congressional control, so that President Obama himself can provide his approval. Just as there are some who have been reflexively opposed because of him, there are those who support for the same reason and will view any change as a personal insult. It is not. Every health policy person knows there are things that need to be changed and that we will never be done with health reform. For the Republican party, the incentive for a post-2014 election but before 2016 deal are great. If their Presidential primary is driven by a race to the crazy on health reform it will greatly harm their chances in the 2016 general election. And post-tweak, the Dems could run on the mantle of having taken the hard steps, then tweaking the same and preparing to move to the future. May the best man or woman win.

Lots of uncertainty. However, there is one thing of which I am fairly certain. When history views the words spilled against the ACA the past 5 years, there will be a great puzzle when viewed through the lens of what the repeatedly tweak (I hope) health system is likely to look like in 15-20 years.