Archive for the ‘Health Insurance Exchanges’ Category

Exchange Politics – It’s Personal

The latest Republican strategy – cutting off your nose to spite your face.

No, this is not about plastic surgery.

The phrase refers to one who attempts to do harm to another, but in so doing harms themselves

Yep, we are talking about health reform.

The Affordable Care Act as Republican policy

President Obama has rebutted criticism that his health care reform was too radical by arguing that it is modeled after successful legislation that became law in Massachusetts under then Republican Governor, Mitt Romney – and that was based on ideas originally proposed by the Heritage Foundation.

From the perspective of the ivory tower of the Heritage Foundation, or from the myopic world of Republican health care policy, there may actually be some arguable distinction.

But from the perspective of real health care reform, say single payer, it is a distinction without a difference.

The only thing that separates Obama’s Affordable Care Act from Mitt Romney’s Massachusetts imitative is the political affiliation of its author.

As soon as Obama and the Democrats signed on, Romney signed off.

The Affordable Care Act as Democratic policy

But Romney wasn’t the only one to turn and run from an idea they once embraced.

Tim Pawlenty, a Republican contender for president briefly, thought Mitt Romney was on to something in 2006, the year of the Massachusetts healthcare reform law.

He expressed openness to the concept of the individual mandate and support for the idea that everyone should be in a health care plan.

Likewise John Huntsman was an eager proponent of health reform measures that would expand coverage.  He openly supported the individual mandate until it was obviously going nowhere in Utah.  He settled for a more modest version of the insurance exchange concept that distinguished Romney’s legislation.  Utah and Massachusetts are the only working models for the other states trying to implement health care exchanges.

The pickle

Three of the current field of Republican candidates endorsed in some way, the concepts central to what is now derisively referred to as Obamacare – individual responsibility, make the markets work better, allow for profit insurance companies.  Don’t they sound like concepts that are more likely to come from the Republican side of the aisle?

But they have the name of the current President associated with them and for that reason, Republicans will not allow them to succeed.  It’s personal, you see.

State Exchanges

Take the state health insurance exchanges.  Another idea that is more likely to be associated with Republicans than Democrats – allow each state flexibility in setting up their own exchanges.  But if they don’t create their own exchanges, the federal government will do it for them.

This seems to put some Republican governors in a rather curious pickle.  If they do create an exchange for their own state, they would be adopting values traditionally associated with Republicans:  individual responsibility, the growth of a new market for insurance companies, local autonomy.  The alternative is generally not attractive to Republicans – let the federal government do it.

But there is a catch.  It is a catch that some Republican governors just cannot bring themselves to overcome.  By consenting to the creation of their own exchange they would be acquiescing to the will of President Obama.

It’s personal, you see.

Kansas Governor, Sam Brownback (R) turned down federal seed money to start its exchange.  He piously asserts that, given pressure on the federal government to reduce expenditures, states should not rely on the feds in setting up their own exchanges.  But the absence of federal funds has halted Kansas’ progress to create its own exchange, which may prompt a federal takeover.

Oklahoma Governor, Mary Fallin (R), turned down federal money to help it build its own exchange.  Sounds noble enough.  They want to do it themselves.  Or do they?  According to the Governor, she was “pleased to announce this agreement that accomplishes my goal from the very beginning: Stopping the implementation of the President’s federal health care exchange in Oklahoma.”

Florida Governor Rick Scott (R), has declined federal funds to set up an exchange in Florida, an exchange the state has yet to authorize.  Remember Rick Scott? – the guy who made his money as the head of a for profit hospital chain that pleaded guilty to defrauding the federal government and paid almost $2 billion dollars in settlements.

Texas Governor, Rick Perry, (R), presiding over the state with one of the highest rates on uninsured residents,  has vowed to oppose any effort to create an exchange in Texas as long as the legal questions around the Affordable Care Act are unresolved.  That does not mean he cannot accept the grant money handed out by the feds to create the non-existent exchange, not to mention $60 million in Early Retiree Reinsurance program grants – also a part of the Affordable Care Act.

Louisiana Governor Bobby Jindal (R), has also refused to set health care insurance exchange in his state because it would advance Obamacare regulations.

It’s personal, you see.

It doesn’t have to be rational.

Photo Credit:     FLICKR  Sara_Mc
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Vermont Reform: A Giant Step by a Small State

Has Vermont carved a path toward single payer health care or caved into powerful insurance company lobbies?

Maybe just a little bit of both.

Has Vermont drawn a new line in the sand for health care reform or outlined a sketchy drawing towards the future?

Yes to that as well.

On May 27th, 2011 Governor Peter Shumlin fulfilled a campaign promise to move the state toward a single payer health care system when he signed H-202.

As the saying goes, you can’t make an omelet without breaking a few eggs.  In this case, the analogy works pretty well.

H-202 outlines a path that takes features from current state and federal realities and blends it with recipes offered by the federal health care reform to take Vermont where previous federal and state lawmakers have feared to tread. Continue reading ‘Vermont Reform: A Giant Step by a Small State’

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Please, Not a Notch

Mr. Nixon came to my office looking for help to see his doctor, a doctor who could confirm his cure from a debilitating bout with depression, a doctor who could affirm his fitness to return to his old occupation.  But Mr. Nixon had another problem.  He had no health insurance and he had no money.  We couldn’t help him. Our office offered health insurance to employees, not would-be employees.

Almost a half year later he showed up again to enroll in his health insurance program.  He had his old job back after finally navigating the public welfare system to get the physician certification he needed to return to work.

A different kind of Notch

He couldn’t work because he was sick.  He couldn’t get the treatment he needed because he didn’t have health insurance.  He didn’t have health insurance because he couldn’t work.  He couldn’t work because he was sick.  Am I talking in circles?

For all of its faults, the Affordable Care Act will make it a little bit easier for people like Mr. Nixon to spend less time battling bureaucracies and more time getting cured and consequently more time as a productive, working member of society.

Professor Kessler opines

But Daniel P. Kessler, Senior Fellow at the Hoover Institution and Professor in the Graduate School of Business, Stanford University, thinks otherwise.

In Monday’s Wall Street Journal, Professor Kessler argues that the subsidies available in the Affordable Care Act (ACA) health insurance exchanges will

“introduce far-reaching negative effects on rewards to work and bizarre new inequities into American life.”

To Mr. Kessler’s credit, he calls attention to one of the peculiar incongruities of the ACA, the notch.  To again quote Mr. Kessler:

“A similar family earning $93,699 (400% of poverty) gets a subsidy of $14,799. But a family earning $1 more—$93,700—gets no subsidy”

The “notch” is the dramatic drop in subsidy when one crosses that boundary between subsidy and no subsidy.  Professor Kessler fears this “notch” will be the source of “unfairness” that will “induce sharp reductions in labor supply.”

The problem with Professor Kessler’s analysis is two fold:  his one sided presentation of the facts; and his conclusion.

First the facts

This alleged “unfairness” exists in all kinds of ways under the current system.    Professor Kessler worries that two neighbors with a dollar separating their incomes will have very different levels of government subsidies.

But subsidies exist today in the form of employer support for employment-based insurance.  That these subsidies come from employers, does not make them any less a subsidy.  Yet less than half of private sector employees get their health care coverage from their employers.  So what about the two neighbors who earn identical incomes, one whose health insurance is subsidized by his employer and the other, perhaps a self-employed entrepreneur, who cannot buy health insurance at all because of a pre-existing condition or some other reason.   Where is Professor Kessler’s concern for “fairness” in that situation?

And what is this about a “sharp reductions in labor supply”?  What about the Mr. Nixon’s of the world?  His story is far from unique. I would invite Professor Kessler to spend some time in my chair and lecture the next Mr. Nixon who comes to my office about “fairness.”

And the conclusion?

Professor Kessler suggests that “the only fix is to drastically reduce or eliminate the premium subsidies.”   Does that sound like someone with a clear understanding of what it is like to live on $30,000 or even $90,000 per year?

The notch is indeed a flaw in the law.  It is the product of an assumption that people should pay the “price” of insurance instead of sharing the cost as well as the medical risk.  If everyone pays a flat percentage of all income, there is no “notch” and there is no “unfairness”.

And there is no negative effect on the reward to work, because health insurance would be removed as factor in employment decisions.

Employers who now cannot afford health insurance cannot hire workers who need health insurance.  That concern will disappear in a single payer health care system funded by a flat percentage of all income.

We need a system that allows people to pay when they are working so they have coverage when they can’t.

Photo credit:    walknboston
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The Employer Mandate and Individual Insurance

Some people conjure theories about health care reform as a grand conspiracy.

They fall into two camps.  The first – represented by the truculent posturing of the tea party – argues that health care reform is a plot by the government to take over health care.  The second sees, some even hope, that health care reform will set up the demise of the employer based system and force everyone into an individual market.

The government takeover talk is little more that the paranoid rantings of the fact and logic challenged.  Would that health care reform were a government takeover.  We would all be better off.

The threat to the employer based system is more real.  The employer based system is flawed.  No question about it.  But its alternative, the individual health insurance market, is based on a premise that is even more misguided.

That premise – people who don’t have insurance should pay for it.

Pay the full freight?

“What!” you ask, “What’s wrong with people paying for health care insurance?”

Simply put, most Americans do not do that now. Continue reading ‘The Employer Mandate and Individual Insurance’

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ACA and The Employer Mandate – Can It Work?

Much fuss has been made of health reform’s “individual mandate”.  It is the favorite target of tea baggers.  Several states have filed suit against the federal government to block its implementation.

There are debates about whether the individual mandate is legal, and more important, whether it will be effective.

These questions may take on even more significance if employer-sponsored health insurance (ESI) does not survive.   There are some, including this author, who question whether it will survive?

Shamrock on First Day of Spring

Confusing Incentives

What will be the incentives under ACA (the Affordable Care Act) for employers to continue to provide health insurance?  During the debate leading up to its passage a year ago, employers clung to the promise that if more people paid for their coverage it would lower the costs to employers. Continue reading ‘ACA and The Employer Mandate – Can It Work?’

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