Success Of Obamacare Might Translate Into Political Success

The number of people signing up for private insurance coverage under the Affordable Care Act has now reached eight million. While primarily symbolic, it does represent a victory after initial projections of seven million were reduced to six million due to the problems when the exchanges opened. We know that if they failed to meet these projections, Republicans would be making a big deal of them. In addition, late enrollees included a high percentage of young people.

Good news means more positive head lines, such as National Journal writing that Obamacare is on a Winning Streak. The political climate is changing, with some Democrats now being more willing to run on its success.  I think it is essential that they do this to reduce the risk of the loss of a large number of seats this November. The evidence shows that Obamacare is a success but if Democrats don’t defend it, voters will only hear Republican attacks. Hiding from Obamacare will only make Democrats look weaker, and will not protect them from voters who vote against Democrats based upon Republican misinformation.

Ezra Klein writes that the right suffers from Obamacare Derangement Syndrome, being unable to admit that it is working:

Republicans used to talk about Bush Derangement Syndrome. Washington Post columnist Charles Krauthammer defined it as “the acute onset of paranoia in otherwise normal people in reaction to the policies, the presidency — nay — the very existence of George W. Bush.” Republicans like Krauthammer understood that BDS helped the Bush administration in two ways: it fired up their supporters and it distracted liberals from more modest, but effective, critiques.

Today, the right struggles with Obamacare Derangement Syndrome: the acute inability to see Obamacare as anything but a catastrophic failure that the American people will soon reject. For those suffering from ODS, all bad Obamacare news is good news, and all good Obamacare news is spin. In this world, delays of minor provisions in the law prove that the entire structure is collapsing, while surges of millions of people enrolling in insurance don’t prove anything at all…

But it’s coming at a moment when Obamacare’s successes are getting tougher and tougher to deny. The law signed up more than 7.5 million people in the exchanges, more than 3.5 million people in Medicaid, and it led millions more to get health care through their employers or directly through insurers. Premiums are lower than the Congressional Budget Office predicted when the law passed, and insurers are already thinking about how to compete for applicants in 2015. The White House has a much better story to tell than anyone — including me — thought possible in December.

For Republican pundits it might not matter that Obamacare is a success. Republicans show more intensity in their views, and very little concern for the truth. Campaigning against Obamacare might still motivate Republicans to get out and vote.

Andrew Sullivan might be a bit overly optimistic about the political effects of the success of Obamacare, but I hope he is right:

There’s simply no denying that the law has been rescued by an impressive post-fiasco operation that did to ACA-opponents what the Obama campaign did to the Clintons in 2008 and to Romney in 2012. Obama out-muscled the nay-sayers on the ground. I have a feeling that this has yet to fully sink in with the public, and when it does, the politics of this might change. (Since the law was pummeled at the get-go as something beyond the skills of the federal government to implement, its subsequent successful implementation would seem to me to do a lot to reverse the damage.) There are some signs that this is happening. A new Reuters/Ipsos poll finds the following:

Nearly one-third of respondents in the online survey released on Tuesday said they prefer Democrats’ plan, policy or approach to healthcare, compared to just 18 percent for Republicans. This marks both an uptick in support for Democrats and a slide for Republicans since a similar poll in February.

That’s mainly because of renewed confidence and support from previously demoralized Democrats. But it’s also a reflection, it seems to me, of the political vulnerability of Republicans who have failed to present a viable alternative to the law, and indeed seem set, in the eyes of most voters, merely to repeal ACA provisions that are individually popular. And this bad position is very likely to endure because of the intensity of the loathing for Obama/Obamacare among the Medicare recipients in the GOP base. It seems to me that right now, the GOP cannot offer an alternative that keeps the more popular parts of Obamacare without the air fast leaking out of their mid-term election balloon. And so by the fall, the political dynamics of this may shift some more in Obama’s direction. By 2016, that could be even more dramatic. One party – the GOP – will be offering unnerving change back to the status quo ante, and the other will be proposing incremental reform of the ACA. The only thing more likely to propel Hillary Clinton’s candidacy would be a Republican House and Senate next January.

It’s that long game thing again, isn’t it? Like the civil rights revolution of the Obama years, it seemed a close-to-impossible effort to start with, and then was gradually, skillfully ground out. It also seems true to me that the non-event of the ACA for many, many people will likely undermine some of the hysteria on the right. The ACA-opponents may be in danger of seeming to cry wolf over something that isn’t that big a deal. Yes, they may have premium hikes to tout as evidence of the alleged disaster. And every single piece of bad news on the healthcare front will be attributed to the ACA, fairly or not. But the public will still want to know how premiums can go down without people with pre-existing conditions being kicked out of the system, or without kids being kicked off their parents’ plan, and so on. I think, in other words, that the GOP’s position made a lot of short-term political sense in 2010 and even 2012. But it’s a much tougher sell in 2014, let alone 2016. Once again, they have substituted tactics for strategy. Every time they have done that with Obama, they have failed.

Sullivan described how he has benefited from the Affordable Care Act and concluded, “Yes, I am just one tiny, and rare example. But for me, at least, Obamacare has over-delivered and over-performed. If my experience is replicated more widely, then I suspect the polling and politics will shift yet again.”

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Insurance Companies Plan To Increase Policies Offered On Exchanges Following 2014 Success, And Other Health Care News

The first year of enrollment for insurance under the exchanges is largely for first getting our feet wet, with more people projected to sign up in the future. It certainly exposed problems in the computer system and allowed for them to be fixed (although further testing before October was clearly needed). Insurance companies got to see whether this was a profitable market they would want to enter. In the past one or two insurance companies dominated in most areas on the individual market. One of the benefits of selling coverage through the exchanges was the hope that multiple companies would now begin to offer coverage.

Even conservatives who oppose the Affordable Care Act should agree with the benefits of having more companies offer insurance, including the likelihood of competition leading to lower prices. Actually exchanges, along with mandates, were originally supported by Republicans until they opposed the plan when supported by Barack Obama.

So far we are receiving good news following the initial IT problems. The Affordable Care Act now looks like a good policy which just got off to a rocky start. Enrollment is estimated at 7.5 million, exceeding predictions made even before they were adjusted downward with the early computer problems, with more healthy young people signing up at the last minute. Politico reports that insurance companies are happy with what they are seeing and want to get in:

Health insurers got their first taste of Obamacare this year. And they want seconds.

Insurers saw disaster in the fall when Obamacare’s rollout flopped and HealthCare.gov was a mess. But a strong March enrollment surge, along with indications that younger and healthier people had begun signing up, has changed their attitude. Around the country, insurers are considering expanding their stake in the Obamacare exchanges next year, bringing their business to more states and counties. Some health plans that skipped the new marketplaces altogether this year are ready to dive in next year.

At least two major national insurers intend to expand their offerings, although a handful of big players like Aetna, Humana and Cigna, are keeping their cards close for now. None of the big-name insurers have signaled plans to shrink their presence or bail altogether after the first rocky year. And a slew of smaller health plans are already making moves to join more states or get into the Obamacare business for the first time.

“[W]e see 2014 as just the beginning for exchanges,” said Tyler Mason, a spokesman for UnitedHealth Group, one of the nations’ largest insurers. “As the economics, sustainability and dynamics of exchanges continue to become clearer, we believe exchanges have the potential to be a growth market with much to offer UnitedHealthcare and other insurers and consumers.”

Nurturing this growth and health plan participation will be one of the first tasks of Sylvia Mathews Burwell, assuming she is confirmed to succeed Kathleen Sebelius as secretary of Health and Human Services.

The article reviewed plans by many of the larger insurance companies and also noted that several smaller companies now want to start selling insurance. Being able to offer their plans on the same computer site as the larger companies will allow small companies to compete for sales more easily than in the past, further increasing choice for consumers.

It is not only insurance companies which see the Affordable Care Act as succeeding. The latest Reuters/Ipsos poll shows the number of people who prefer Democrats over Republicans on health care has increased:

Americans increasingly think Democrats have a better plan for healthcare than Republicans, according to a Reuters/Ipsos poll conducted after the White House announced that more people than expected had signed up for the “Obamacare” health plan.

Nearly one-third of respondents in the online survey released on Tuesday said they prefer Democrats’ plan, policy or approach to healthcare, compared to just 18 percent for Republicans. This marks both an uptick in support for Democrats and a slide for Republicans since a similar poll in February.

Not surprisingly, Gallup has found a greater decrease in the uninsured in states which have embraced the Affordable Care Act, such as by setting up their own exchanges and taking advantage of the expanded Medicaid program.

Having Gallup survey the number of uninsured is of value as the Census Bureau is changing how it is surveying the uninsured, with Gallup providing a second set of numbers for comparison. Many Republicans see a conspiracy to make Obamacare look good. Actually this looks like a change to get more accurate results, which might actually show a greater number of uninsured. The changes also started with 2013 so we will still be able to compare the year prior to the exchanges to subsequent years. Sarah Kliff explained further at Vox.

Cross posted at The Moderate Voice

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Coverage Of The Success of Obamacare And Debunking Republican Lies

Obamacare Winning

Reading liberal versus conservative columnists give entirely different views of the Affordable Care Act. Liberals have been writing about its success while conservatives continue to spread misinformation. Here’s a few examples of liberal views on the topic (which are the fact-based articles):

Tim Dickenson of Rolling Stone (source for the above graphic) writes that Obamacare is working. Instead of the fake conservative horror stories, he linked to stories which show how the Affordable Care Act is helping people. He described the successes, and pointed out that “Republican Party sabotage has also impeded enrollment.” Rather than back away  from calling a lie a lie as many journalists will, Dickenson directly addressed Republican lies as lies as he debunked them:

GOP LIE No. 1: THE NUMBERS DON’T MEAN ANYTHING
Over the course of the open-enrollment period, Republicans labored to argue that Obamacare did far less good than advertised because an estimated 4.7 million Americans received letters in the fall warning that their current policies could not be renewed, as they failed to comply with new coverage requirements. They point to these “cancellations” to argue that few of the folks being counted as ACA enrollees previously lacked insurance.

There are three glaring flaws to this argument. First: Many if not most of those whose plans were canceled were automatically transferred into similar policies that complied with the new law. One of the nation’s largest for-profit insurers told House investigators that it had issued fewer than 2,000 outright cancellations.

Second: Through executive orders, Obama gave roughly half of those who received a letter – 2.35 million – the chance to stay in their existing coverage. CBO estimates suggest that just 1.5 million actually continued in their grandfathered plans, as many could find cheaper and/or better coverage on a subsidized exchange or qualify for Medicaid. It’s telling that the Michigan leukemia patient featured in Koch-funded ads intended to convey the horror of these cancellations has found a compliant poicy on the exchange that still covers her oncologist and cut her monthly premium in half.

Giving the Republican argument every benefit of the doubt, this would leave a potential pool of about 3 million people who changed, rather than gained, insurance. This leads to the third flaw in the argument: Obamacare sign-ups were always going to include millions of people who already had insurance. In its latest estimate, the CBO showed just two-thirds (4 million of 6 million) of exchange enrollments coming from people who were previously uncovered. And the limited hard data available from the states suggests the CBO is closer to the mark than the GOP: In New York, nearly 60 percent of buyers were previously uninsured. In Kentucky, it’s even higher: 75 percent.

GOP LIE No. 2: THEY HAVEN’T PAID THEIR PREMIUMS YET
GOP critics point out that the administration hasn’t tracked how many enrollees are actually paying their insurance bills. The complaint about transparency is fair, but the concern is misplaced. Figures from state exchanges and insurers themselves show that between 80 and 95 percent of enrollees are paying their bills.

GOP LIE No. 3: OBAMACARE WILL COLLAPSE UNDER ITS OWN WEIGHT
One legitimate concern as Obamacare ramped up was that it could enter a “death spiral.” This would happen if the number of older, sicker people on the exchanges far outnumbered the young and the healthy. Premiums would spike, year over year, with each increase driving more healthy folks out of the pool – making the exchange unsustainable. While reaching 7 million enrollees is a huge win politically, it doesn’t ensure Obamacare’s viability as an insurance program. “I do think there’s too much focus on the overall number,” Karen Ignagni, a top insurance-industry lobbyist, told reporters. What matters far more, she said, is the insurance pools’ “distribution of healthy to unhealthy.”

The administration wanted 18- to 34-year-olds to make up nearly 40 percent of enrollees. By March, however, only 25 percent of the mix was under 35. That sounds dire. Yet even pools with just 25 percent of younger people would not create a tailspin, forcing premiums to rise by just 2.4 percent, according to the Kaiser Family Foundation.

Additionally, the convoluted structure of Obamacare eliminates systemic risk. Even the 27 states that relied entirely on the federal exchange will end up with state-specific insurance pools. What this means is that if a death spiral were to develop in, say, Ohio, that failure would not pull down neighboring states. What’s more, safeguards within the ACA mean states don’t have to get the mix right in Year One. For the first three years, ACA has shock absorbers to prevent premium spikes in states with problematic pools. Over that same period, the penalties for not buying insurance step up – which should drive younger, healthier people into the market, balancing the risk profile. We lack hard data to get a clear picture of all state pools. But private insurers are sending optimistic signals to investors that all is well. Case in point: Insurance giant WellPoint just raised its earnings forecast.

GOP LIE No. 4: “OBAMACARE IS THE NUMBER-ONE JOB KILLER IN AMERICA”
That’s what Texas Sen. Ted Cruz told a Tea Party convention in Dallas last summer. Since then, the GOP has been making two ACA-connected job-loss claims, both demonstrably false. First, they twisted a February CBO report to claim that Obamacare will cause 2.5 million Americans to lose their jobs. What the CBO actually found is that Americans will be able to work a little less thanks to lower health-care costs, voluntarily scaling back work hours between 1.5 and 2 percent through 2024, or the output of 2.5 million full-time workers. The other GOP lie is that Obamacare is causing employers – who will be responsible for insuring employees who work more than 30 hours a week – to either scale back the hours of full-time employees or hire only part-time workers. This, too, is hogwash. While the share of part-time employment remains historically high, it has actually been in decline since 2010, when Obama­care became law.

I have discussed many of the above points, with links to the evidence, in previous posts on health care reform.

I was also happy to see that he concluded with the same opinion I have expressed that Democrats must take the offensive on health care:

House Republicans have learned the hard way that even nibbling around the edges of Obamacare can backfire. In February, the GOP pushed a bill to tweak the mandate that businesses offer health care to all employees working more than 30 hours. Switching to the GOP’s preferred 40-hour standard, it turns out, would add $74 billion to the deficit by 2024 and cause nearly 1 million Americans to lose coverage. That’s the kind of move that would play right into Democratic hands. Says Greenberg, “Democrats do very well when they hit back at Republicans on what people lose.”

Until recently, Greenberg had been advising Democrats to move beyond Obamacare and turn to bread-and-butter issues like jobs and the minimum wage. “The strongest attack on Republicans,” he says, “is that they’re obsessed with Obamacare instead of critical issues like dealing with the economy.” But his new poll has Greenberg rethinking that counsel. “Until now, this is an issue where the intensity has been on the other side,” he says. But defending Obamacare, he adds, has emerged as “a values argument for our base.” Greenberg now believes Democrats “ought to lean much more strongly” to campaign on the virtues of Obamacare as a means of boosting progressive turnout. “Not apologizing for Obamacare and embracing it actually wins the argument nationally,” he says. “And it produces much more engagement of Democratic voters. That’s a critical thing in off-year elections.”

Eugene Robinson also wrote about the success of Obamacare:

A new report by the nonpartisan Congressional Budget Office estimates that, despite all the problems with the HealthCare.gov Web site launch, 12 million people who previously lacked insurance will obtain coverage this year. By 2017, the year Obama leaves office, the CBO predicts that an additional 14 million uninsured will have managed to get coverage .

Why was the Affordable Care Act so desperately needed? Because without it, 54 million Americans would currently have no health insurance. Within three years, according to the CBO, Obamacare will have slashed the problem nearly in half.

We should do better, and perhaps someday we will. Most industrialized countries have some kind of single-payer system offering truly universal coverage. But if you have to work within the framework of the existing U.S. health-care system — which involves private health insurance companies and fee-for-service care — the Affordable Care Act reforms are a tremendous advance.

Many Republican critics of Obamacare know, but refuse to acknowledge, that the reforms are here to stay. Does the GOP propose to let insurance companies deny coverage because of preexisting conditions, as they could before the ACA? Does the party want to reimpose lifetime caps on the amount an insurer will pay? Tell young adults they can no longer be covered under their parents’ policies?

He concluded by also recommending that Democratic candidates take advantage of the success of Obamacare:

To do well in the fall, Democrats have to infuse their most loyal voters with similar enthusiasm. The success of Obamacare will help. Already, polls are showing upticks in support for embattled Democratic incumbent senators in Louisiana, Arkansas and Alaska. Democrats control their own destiny in November: If they can get their voters to the polls, they’ll win.

In the long run, no matter what happens in the election, I’m more convinced than ever that the Affordable Care Act will be seen as landmark legislation. With minimal immediate impact, the ACA does two tremendously important things.

First, it shifts the incentive structure in the health-care industry in ways that promise to hold down rising costs. And second, it establishes the principle that health care should be considered a right, not a privilege.

Of course it’s not perfect. It’s a thing of beauty anyway. We have liftoff. It’s working.

Paul Krugman described Obamacare as the unknown ideal:

The current state of public opinion on health reform is really peculiar. If you’ve been following the issue at all closely, you know that the Affordable Care Act is one of the great comeback stories of public policy: after a terrible start, it has dramatically exceeded expectations. But hardly anyone seems to know that.

He blamed Fox and Rush Limbaugh for all the misinformation they have spread, the Obama administration for doing a “lackluster job so far in getting the word out,” and “a persistent anti-ACA tilt in news coverage.” He pointed out how factual stories on the success of Obamacare are often buried in the back pages of newspapers.

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Fact Checking Valuable, But Not Always Right

Pinoccio

The Moderate Voice has a post yesterday on the increase in fact-checking in journalism. Fact-checking is preferable to the standard media practice of quoting both sides as if they are equally valid, generally with an implied assumption that the truth is somewhere in the middle. This leads to erroneous reporting when one side is intentionally using misinformation and lying far more than the other. However labeling something fact checking doesn’t necessarily mean it is immune from journalistic problems. Paul Krugman pointed out one problem:

“The people at PolitiFact are terrified of being considered partisan if they acknowledge the clear fact that there’s a lot more lying on one side of the political divide than on the other,” Krugman wrote in 2011.

“So they’ve bent over backwards to appear ‘balanced’ — and in the process made themselves useless and irrelevant.”

As Krugman pointed out, there are fact checkers which label an equal number of statements from Democrats and Republicans as being wrong in order to give the appearance of being impartial. That typically means that outrageous lies from Republicans are called lies but to provide a sense of balance,  statements from Democrats which are generally true but in which there is an exception are also called lies.

The entire idea of calling something true or a lie is often a poor way to handle complex issues which are stated by politicians in brief statements. Sometimes politicians are trying to be truthful, but boiling down a complex issue into a brief statement, or commercial, will result in exceptions where the statement is false. Often it is preferable to look at what is true in what is being said and where it isn’t entirely true and explain the issue rather than just calling it truth or a lie.

While Republicans have been hit far more with big lies on health care, Democrats have been harmed by the problems in how some fact checkers declare something either true or a lie (being a lie if not 100% true in every case). There have been two big examples of this. The first is Democrats saying that the Medicare proposals in the Ryan budget would destroy Medicare. Technically this is untrue as Ryan would replace Medicare with something named Medicare. On the other hand, it is true because the Republican proposals would change Medicare into something fundamentally different with far less protection for seniors. Rather than just calling it a lie, fact checkers would have done more good by explaining why Democrats consider these changes to be destroying Medicare.

The other is the greatly exaggerated “lie of the year” when Obama said people could keep their own doctor under the Affordable Care Act. This was an absurd statement on one level because every year insurance companies and doctors make decisions which can affect this which the government has no  power over. On the other hand, Obama was right in the context where he was speaking, even if worded poorly. Republicans were lying when they claimed that Obamacare would make people join some sort of government run program which would tell them which doctors they can see. The Affordable Care Act actually makes it more likely that people could have insurance which would allow them to keep their doctor than had been the case in the past and does nothing to force people to lose their doctor. People have a better chance of keeping their doctor when protected from losing their insurance. Frequently people are forced to change doctors because of employers changing insurance plans. Employees have a better chance of keeping their own doctor when provided more choice in plans, as under the Affordable Care Act.  Where Obama got it wrong was that the same forces already present which lead to people having to change doctors, while diminished, would still exist. It would be far better to explain this complex issue, where Obama was mostly right, than to just declare it a lie because it is not true one hundred percent of the time.

Cross posted at The Moderate Voice

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Obama Warns Of Threats To Right To Vote

Protect Vote

If one followed politics superficially from the mainstream media, they might come to the incorrect view that we have a two party system in which the two parties differ on some issues but are essentially mirror images of each other. Looking more closely, it becomes apparent that instead we have a centrist party which has been struggling to continue our system of self-government and an extreme right wing party which seeks the destroy the vision of America held by our founding fathers. Among those who have bucked the usual media narrative and have reported on this are Thomas Mann and Norman Ornstein. This pair of centrists who have pointed this out in an essay, Let’s just say it: The Republicans are the problem, and in their book  It’s Even Worse Than It Looks: How the American Constitutional System Collided With the New Politics of Extremism, which clearly laid out the extremism of the current Republican Party. They have explained that the mainstream media missed the big story of the 2012 campaign–the dishonesty and extremism of the Republican Party.

Republicans benefit by rigging the system in their favor as much as possible. Some of this is built in to the structure of our government, such as giving small Republican states the same number of Senators as larger, Democratic states. Gerrymandering, as well as the tendency of Democrats to concentrate more in urban areas, give Republican an advantage in the House, even in elections such as in 2012 when more people voted for Democratic representatives than Republicans. Republicans take advantage of control over large segments of the mainstream media, including Fox which operates essentially as a house propaganda organ, and then “play the refs” by complaining of fictitious liberal media bias. If this isn’t enough, they try to rig election laws to make it harder for Democrats to vote.

While Republicans use their influence over the mainstream media to promote misinformation to further their cause, Democrats have done a poor job of promoting a message or even of exposing what their opponents are doing. I was therefore happy to see that Barack Obama has spoken out against Republican restriction of voting rights.

“The right to vote is threatened today in a way that it has not been since the Voting Rights Act became law nearly five decades ago,” Mr. Obama said in a hotel ballroom filled with cheering supporters, most of them African-American. “Across the country, Republicans have led efforts to pass laws making it harder, not easier, for people to vote.”

Speaking a day after a conference in Texas commemorating the 50th anniversary of the Civil Rights Act, Mr. Obama linked the issue to the movement that helped pave the way for him to become the nation’s first black president.

“America did not stand up and did not march and did not sacrifice to gain the right to vote for themselves and for others only to see it denied to their kids and their grandchildren,” he said.

Republicans in some swing states have advanced new laws that go beyond the voter identification requirements of recent years. Among other things, state lawmakers are pushing measures to limit the time polls are open and to cut back early voting, particularly weekend balloting that makes it easier for lower-income voters to participate. Other measures would eliminate same-day registration, make it more difficult to cast provisional ballots or curb the mailing of absentee ballots.

Over the last 15 months, at least nine states have enacted voting changes making it harder to cast ballots. A federal judge last month upheld laws in Arizona and Kansas requiring proof of citizenship, like a birth certificate or a passport, leading other states to explore following suit.

I hope we see more of this. Warnings about the Republican threat to freedom and democracy should not be limited to a single date commemorating a past event. This should be an important part of the political debate between the parties every day. Hopefully people will then realize that they should be wary of a political party which finds that its success depends upon keeping people from voting.

Cross posted at The Moderate Voice

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Quote of the Day: Bill Maher on The Ryan Budget And Obamacare

“Game of Thrones returns this weekend on HBO. I’m sure you know it as a magical fantasy where you’re never quite sure who’s going to live or die. Or maybe I’m thinking of Paul Ryan’s budget.” –Bill Maher

Bonus Quote:

“Obamacare hit its numbers. Despite all the initial problems, Healthcare.gov surpassed the enrollment goal, over 7 million. Now the Republicans are saying that they’re going to repeal the Internet.” –Bill Maher

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Obama Administration Announces Increase In Payments To Medicare Advantage Plans

Presumably in response to Republican scare stories about Medicare cuts to Medicare Advantage plans and insurance company lobbying, CMS has announced an increase in payments of  0.4% in 2015, in place of the expected 1.9% rate cut as of February. This negates a distorted Republican attack that Obama is cutting payments to Medicare.

The proposed cuts were to what is essentially corporate welfare for insurance companies running  Medicare Advantage plans. The plans increased payment compared to what it costs to care for similar patients in the government Medicare plan. Republicans have included the same cuts which were previously proposed by the Obama administration in their proposed budgets despite faux attacks against Democrats for cutting Medicare.

Update: Full Text of Press Release from CMS

CMS Ensures Higher Value and Quality for Medicare Health and Drug Plans

Rate Announcement Details Plan Payments and Other Program Updates for 2015

Today, the Centers for Medicare & Medicaid Services (CMS) issued the 2015 rate announcement and final call letter for Medicare Advantage and prescription drug benefit (Part D) programs. The announcement sets a stable path for Medicare Advantage and implements a number of policies that ensure beneficiaries will continue to have access to a wide array of high quality, high value, and low cost options while making certain that plans are providing value to Medicare and taxpayers.

Since the Affordable Care Act was passed in 2010, Medicare Advantage premiums have fallen by 10 percent and enrollment has increased by 38 percent to an all-time high of more than 15 million beneficiaries. Today, nearly 30 percent of Medicare beneficiaries are enrolled in a Medicare Advantage plan. Furthermore, enrollees are benefiting from greater quality as over half of enrollees are now in plans with 4 or more stars, a significant increase from 37 percent of enrollees in such plans in 2013.

 “The policies announced today will provide improved benefits in Medicare Advantage and the Prescription Drug Plans while keeping costs low for Medicare beneficiaries,” said Jonathan Blum, CMS principal deputy administrator. “We believe that plans will continue their strong participation in the Medicare Advantage program in 2015 and beneficiaries will continue to have access to a wide array of high quality and affordable Medicare health and drug plans.”

After careful consideration of public comments, key changes and updates finalized in the Rate Announcement and final Call Letter include:

Lower Out-of-Pocket Drug Spending: Beneficiaries in the Part D prescription drug coverage gap, or “donut hole,” will benefit from greater savings on prescription drugs. As a result of the Affordable Care Act, in 2015, enrollees who reach the donut hole will receive coverage and discounts of 55 percent on covered brand name drugs and 35 percent on covered generic drugs, an increase from 52.5 percent and 28 percent, respectively, in 2014. The Affordable Care Act’s Coverage Gap Discount Program has provided discounts to more than 7.9 million Medicare beneficiaries, saving $9.9 billion on prescription drugs, or an average of $1,265 per beneficiary.

Greater Protection for Beneficiaries: CMS intends to again use its authority, provided by the health care law, to protect Medicare Advantage enrollees from significant increases in costs or cuts in benefits, and, for the 2015 contract year, finalizing the permissible amount of increase in total beneficiary cost to $32 per member per month (down from $34 per member per month for the 2014 contract year). CMS also continues to require plans to refine their offerings so that beneficiaries can easily identify the differences between their options.

Increased Protections for Beneficiaries Affected by Changes in Medicare Advantage Plan Networks: The final Call Letter strengthens tools used to ensure compliance with established provider access requirements and establishes best practices for Medicare Advantage Organizations to follow when they make significant changes to their provider networks.

Payments to Medicare Advantage Plans:

  • CMS estimates that the overall net change to plan payments between 2014 and 2015 to be +0.4 percent, compared to the estimated overall net change to plan payments of -1.9 percent for the proposals in the Advance Notice   Individual plan payments will vary by plan based on, but not limited to, its location and star rating.
  • Before the Affordable Care Act, Medicare Advantage plans were paid more than 10 percent compared to traditional Medicare, costing the program more than $1,000 per person each year, while quality and health outcomes were similar to those enrolled in traditional Medicare. The changes underway reduce excessive payments to Medicare Advantage plans, while incentivizing quality improvements by basing part of Medicare Advantage payment on plan quality performance.
  • To provide for continued stability in the Medicare Advantage program, CMS will implement a new phase-in schedule for the Part C risk adjustment model introduced in 2014. In addition, to improve payment accuracy, CMS has refined its risk adjustment methodology to account for the impact of the influx of baby boomers. In addition, for 2015, CMS will not finalize the proposal to exclude diagnoses from enrollee risk assessments.

Other policies that are not being finalized as proposed include:

Delayed implementation of new Part D Risk Adjustment Model.

Not implementing some proposed changes to the Star Ratings.

Not implementing the proposal to require additional coverage in the gap for generic and brand drugs in Enhanced Alternative plans.

To view a fact sheet on the 2015 Rate Announcement and final Call Letter, please visit: http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2014-Fact-sheets-items/2014-04-07.html

The 2015 Rate Announcement and final Call Letter may be viewed later today through: http://www.cms.hhs.gov/MedicareAdvtgSpecRateStats/ and selecting “Announcements and Documents.”

Update II: The mainstream media is starting to pick up the news. Here are reports from AP and from The Hill.

Cross posted at The Moderate Voice
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Obama Delivers “The Best Medicine” To Ted Cruz, John Boehner, and Michele Bachmann

CV1_TNY_04_14_14Blitt.indd

Barry Blitt said this about the above cover for The New Yorker: “This whole enterprise was just an elaborate excuse. I enjoyed drawing Ted Cruz, John Boehner, and Michele Bachmann as petulant children—and I especially wanted to draw an open-mouthed Mitch McConnell being spoon-fed his meds.”

Obama is certainly delivering the “medicine” as news comes in showing that enrollment in the Affordable Care Act exceeded projections of seven million, and the number of uninsured is falling to new lows. While good for the United States, this is certainly bitter medicine for Republicans. There is additional bitter medicine for Mitch McConnell as the number signing up in Kentucky exceeded 360,000 with 75 percent previously uninsured.

Cross posted at The Moderate Voice

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Republicans Had To Hide Support For Fix To Affordable Care Act To Limit Attacks From The Right

The “doc fix”  has become a strange legislative tradition as Congress regularly votes to stop the automatic  cuts in physician payment called for under the flawed Sustainable Growth Rate formula. As I discussed in March, this time there were a couple of new twists which were known, but in addition it turns out that another item hidden in the bill reveals a lot about the Republican Party.

First I’ll recap what we had already known. The “doc fix” proposed to block the cuts which would have taken effect in April was for one year and included multiple other measures, including a delay in implementing change to ICD-10 diagnosis codes until at least October 2015. Physician groups actually opposed this bill because a permanent fix was also under consideration and it was feared that passing yet another temporary fix would lead to abandonment of the permanent fix (which does now appear dead).

The “doc fix” regularly passes with bipartisan support because Congress is not going to risk the backlash which would be created if many Medicare patients could no longer find physicians willing to accept them. This time the House passed the “doc fix” on a voice vote, which allows individual members to avoid being held accountable for the vote.

Over the weekend we learned why House Republicans wanted to pass this on a voice vote. Another item in the bill made some changes in the Affordable Care Act which was desired by small business and which Democrats were willing to make:

At the prodding of business organizations, House Republicans quietly secured a recent change in President Barack Obama’s health law to expand coverage choices, a striking, one-of-a-kind departure from dozens of high-decibel attempts to repeal or dismember it.

Democrats describe the change involving small-business coverage options as a straightforward improvement of the type they are eager to make, and Obama signed it into law. Republicans are loath to agree, given the strong sentiment among the rank and file that the only fix the law deserves is a burial.

“Maybe you say it helps (Obamacare), but it really helps the small businessman,” said Rep. Phil Roe, R-Tenn., one of several physician-lawmakers among Republicans and an advocate of repeal.

No member of the House GOP leadership has publicly hailed the fix, which was tucked, at Republicans’ request, into legislation preventing a cut in payments to doctors who treat Medicare patients.

It is unclear how many members of the House rank and file knew of it because the legislation was passed by a highly unusual voice vote without debate.

This shows how dysfunctional Congress has become. Normally both parties would see it as a victory for the system that they passed a measure to make requested changes in the Affordable Care Act. However, Republicans felt compelled to hide this vote because it contradicts their public policy of only supporting repeal (having voted for repeal over fifty times). Since this became public, the Republicans have faced criticism from the right, probably making it even harder for them to vote on improvements in the Affordable Care Act in the future.

The fix which passed allows small businesses to offer policies with higher deductibles. This allows for lower premiums, and the higher deductibles are often handled separately with Medical Savings Accounts. There are also added protections in new insurance policies under the Affordable Care Act such as annual limits on out of pocket expenses and the elimination of annual and lifetime caps on coverage which help offset the problems created by higher deductibles.

If Republicans should attack the Affordable Care Act based upon including high deductible plans, keep in mind that this is exactly the type of plan which Republicans frequently advocate, and that the Republicans voted to increase the allowable deductible levels in response to requests from small business.  Democrats had no objection to the change as the limit on deductions was originally placed in the bill because it was supported by Republican Senator Olympia Snowe. In response to this addition, Snowe voted for the Affordable Care Act when in the Senate Finance Committee but ultimately voted against the bill on the Senate floor, along with every other Republican Senator.

Cross posted at The Moderate Voice

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Paul Ryan Admits Consequences Of Replacing Obamacare With Republican Alternative

Republicans who have been attacking the Affordable Care Act have been unable to provide a specific alternative to replace it with. One problem they face is that, while polls show large numbers of people say they oppose Obamacare, a majority also supports many of the individual components of the law. Paul Ryan admitted what repeal of Obamacare and replacing it with a Republican alternative would mean:

House Budget Committee Chairman Paul Ryan (R-Wis.) says in a new interview that it would be too costly for Republicans to reinstate some of the more popular provisions of Obamacare if and when the law is repealed, but that Republicans should look for alternatives.

The former GOP vice presidential nominee was asked on Bloomberg’s “Political Capital with Al Hunt” about whether Republicans would keep provisions like requiring coverage for pre-existing conditions, keeping kids on their parents’ insurance until they are 26 years old and barring insurance companies from having different rates for those whose jobs include physical labor.

The first two provisions are among the most popular parts of Obamacare, which as a whole is not popular. But Ryan says such provisions would also drive up the cost of insurance too much.

“If you look at these kinds of reforms, where they’ve been tried before — say the state of Kentucky, for example — you basically make it impossible to underwrite insurance,” Ryan said, according to an advance transcript. “You dramatically crank up the cost. And you make it hard for people to get affordable health care.”

Returning to underwriting insurance would mean that insurance companies could once again issue policies based upon who they find the most profitable to cover, denying coverage to those with pre-existing medical conditions and based upon age.

It is less expensive for health insurance companies to sell insurance only to young, healthy people and to revoke coverage when people get sick. However this is not what we need from health insurance, which to be meaningful must be available to everyone and cover people when they become sick. As I’ve pointed out many times in the past, most people going into bankruptcy from medical expenses were insured at the time they first got sick or injured.

Cross posted at The Moderate Voice

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