Health Care Reform - almost a done deal? DONE

[mheslep]

[...]
The popularity of this will continue to rise for many months as the gloom and doom predictions prove to be nonsense. Obama should also take a good bump in the polls. Former President Clinton predicts that he will see a 10 point rise in his approval rating.

Tomorrow will be one month after Sunday March 21st passage. When did Clinton say that bump would kick in?
http://www.realclearpolitics.com/epolls/other/president_obama_job_approval-1044.html

 

[mheslep]

As it has done for the past seven years, Congress http://www.bizjournals.com/houston/stories/2010/04/12/daily65.html" to stop the doctor's Medicare pay cut as scheduled by existing law, and in so doing ended any reasonable debate as to whether or not the recent Health Reform law will reduce the deficit when matched with reality: it will not, as was specifically warned about in the last CBO report before passage.

This issue is commonly referred to as the 'doctor fix' in the media, and it refers to Medicare payments to doctors. As mentioned in an earlier post, the US Social Security Act as modified in the Balanced Budget Act of 1997 http://www.cms.gov/SustainableGRatesConFact/01_Overview.asp#TopOfPage". As these cuts would have doctors dumping Medicare in mass, Congress has at the last minute stopped or delayed those cuts for the last seven years, without ever changing what the law required for the following year.

Yet CBO, which reported a ten year deficit reduction of $143 billion to Sen Reid, was obligated to score based on the existing SGR law, i.e. Medicare doctor spending should drop 21% (this year). CBO specifically warned about this dependency in the first of its http://www.cbo.gov/ftpdocs/113xx/doc11379/Manager%27sAmendmenttoReconciliationProposal.pdf", page 13:

Key Considerations. Those longer-term calculations reflect an assumption that the provisions of the reconciliation proposal and H.R. 3590 are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation. For example, the sustainable growth rate mechanism governing Medicare’s payments to physicians has frequently been modified (either through legislation or administrative action) to avoid reductions in those payments, and legislation to do so again is currently under consideration by the Congress.[...]

Many in the opposition had been vocal about this gimick; Rep Ryan http://www.washingtonpost.com/wp-dyn/content/article/2010/02/25/AR2010022504074.html" (scroll to 'doc fix').

Well Congress acted on April 15th to revoke these cuts, as everyone knew all along that it would, so the CBO dependency is gone and with it any deficit reduction. CBO forecasts that the doc fix alone will cost http://www.cbo.gov/ftpdocs/113xx/doc11376/RyanLtrhr4872.pdf" over the first ten years, meaning the deficit will increase.

CBO estimates that enacting H.R. 3961 [permanent elimination of the doctor pay cuts], by itself, would cost about $208 billion over the 2010–2019 period.

There are several other serious gimicks in the Health Reform law that also forced CBO to play silly games, but this one as of last Thursday was brought into clear view. So much for

I have also pledged that health insurance reform will not add to our deficit over the next decade, and I mean it.

 

[CRGreathouse]

The problem with this reasoning is that major hospitals, emergency response crews, and many of the highly specialized fields of medicine have an effective monopoly at the "point of sale". When someone is dying of a disease/injury, they (often) don't have the option of saying "No thanks, I'll take the next ambulance, they offer better rates." or "Drive me to the hospital 2 counties over, it's cheaper."

I'm talking about insurance companies, not hospitals. The points about pricing do carry over for hospitals but are much more complicated, since the number of buyers is small (it's an oligopsony).

Furthermore, the "monopoly price" is not determined by what individuals can afford, but rather what the insurance companies/medicare can afford.

Again, I'm talking about insurers not hospitals. But if you think that they (or any other company) could increase their profits by charging, say, 10 times more, why wouldn't they?

 

[NeoDevin]

Again, I'm talking about insurers not hospitals. But if you think that they (or any other company) could increase their profits by charging, say, 10 times more, why wouldn't they?

They did, that's why (almost) no individual can afford a major medical procedure without insurance.

 

[CRGreathouse]

They did

Citation, please.

But even if that were true, why not raise them ten-fold again? Or a trillionfold? It just doesn't hold up logically.

 

[CRGreathouse]

(almost) no individual can afford a major medical procedure without insurance.

Are you suggesting the insurance companies are giving out more benefits than they charge their customers?

 

[NeoDevin]

But even if that were true, why not raise them ten-fold again? Or a trillionfold? It just doesn't hold up logically.

Because even with an effective monopoly, there are limits, as you pointed out earlier.

 

[NeoDevin]

Are you suggesting the insurance companies are giving out more benefits than they charge their customers?

No, I'm suggesting exactly what I said.

 

[mheslep]

They did, that's why (almost) no individual can afford a major medical procedure without insurance.

I expect most could afford one every 5-10 years. Certainly insurance is required to cover the most expensive of them, but many major medical procedures are about the cost of nice new car - http://www.costhelper.com/cost/health/knee-replacement.html" .

 

[turbo]

I expect most could afford one every 5-10 years. Certainly insurance is required to cover the most expensive of them, but many major medical procedures are about the cost of nice new car - http://www.costhelper.com/cost/health/knee-replacement.html" .

Need a bone marrow transplant? Probably $50-250K. Need a liver transplant? Probably >$300K plus ongoing anti-rejection treatments that can run $1500-2500/month or more. Few people could afford that without insurance.

There are some types of cancer that are very expensive to treat, and dialysis for kidney failure is costly and the cost never goes away without a transplant. Treatment and follow-up for bladder cancer could easily run $100K+

 

[mheslep]

Need a bone marrow transplant? Probably $50-250K. [...]

Along with the common course of treatment that eventually ends with a bone marrow transplant, it's closer $1 million total. As I said: Certainly insurance is required to cover the most expensive of them

 

[CRGreathouse]

No, I'm suggesting exactly what I said.

What you said was this (bracketed text mine):

[Insurance companies] did [charge 10 times more], that's why (almost) no individual can afford a major medical procedure without insurance.

So because insurance companies charge 10 times more, almost no individual can afford a major medical procedure without insurance.

That seems indefensible. If people can afford insurance now (a large majority of Americans are insured), and insurance companies have increased their rates tenfold, then you're saying that
1. People can afford 10 times the old cost of insurance
2. People can't afford the medical procedures provided by insurance

So for #1 and #2 to hold, insurance companies must be providing more benefits than costs (and more than 10 times the old cost in benefits).

 

[CRGreathouse]

Because even with an effective monopoly, there are limits, as you pointed out earlier.

Ah, so we agree that this is false:

The problem is, they don't compete for your business. They put prices as high as they want, because they know that eventually, you'll come to them.

No problem then.

 

[mheslep]

Medicare's chief actuary released a memorandum that confirms the increased deficits due to health care reform law (PPACA). The actuary forecasts "Federal expenditures would increase by a net total of $251 billion [2010-2019] as a result of the selected PPACA provisions"
Summary page 2:
http://www.politico.com/static/PPM130_oact_memorandum_on_financial_impact_of_ppaca_as_enacted.html

I predict the actual costs will be worse yet when they come in years ahead. None of this is affordable. What a waste.

 

[CRGreathouse]

I predict the actual costs will be worse yet when they come in years ahead. None of this is affordable. What a waste.

I agree that costs are probably understated even now. But what, specifically, do you mean when you say, "What a waste"?

 

[mheslep]

I agree that costs are probably understated even now. But what, specifically, do you mean when you say, "What a waste"?

We had some good market oriented reforms on the table. The plan from McCain's advisor Douglas Holtz-Eakin that Obama-Biden demagogued to death during the campaign, and even better was http://www.roadmap.republicans.budget.house.gov/plan/#Healthsecurity" .

 

[mheslep]

On the topic of "keeping the coverage you have", I see in the same actuaries report (page 7):

We estimate that such actions [employers dropping coverage despite penalties] would collectively reduce the number of people with employer-sponsored health coverage by 14 million

brackets mine

 

[Char. Limit]

Ah, so we agree that this is false:



No problem then.

Are you calling me wrong? Listen, just because I have absolutely no experience with either health care, or insurance, or even economics, doesn't mean that my opinions are not always right!

(LOL, parody)

 

[CRGreathouse]

Are you calling me wrong?

Well, technically, in that post I was merely seeing if NeoDevin was calling you wrong.

 

[NeoDevin]

What you said was this (bracketed text mine):So because insurance companies charge 10 times more, almost no individual can afford a major medical procedure without insurance.

That seems indefensible. If people can afford insurance now (a large majority of Americans are insured), and insurance companies have increased their rates tenfold, then you're saying that
1. People can afford 10 times the old cost of insurance
2. People can't afford the medical procedures provided by insurance

So for #1 and #2 to hold, insurance companies must be providing more benefits than costs (and more than 10 times the old cost in benefits).

I thought we were still talking about hospitals, not insurance. Sorry for the confusion.

 

[CRGreathouse]

I thought we were still talking about hospitals, not insurance. Sorry for the confusion.

Oh. Yeah, sorry `bout that.

 

[mheslep]

CBO just bumped the cost of the health care bill another $115B over ten years, that is in addition to the doc fix increases; total cost now ~$1 trillion.
http://www.politico.com/news/stories/0510/37081.html

 

[Zefram]

CBO just bumped the cost of the health care bill another $115B over ten years, that is in addition to the doc fix increases; total cost now ~$1 trillion.
http://www.politico.com/news/stories/0510/37081.html

This is misleading at best. According to the http://www.cbo.gov/ftpdocs/114xx/doc11493/Additional_Information_PPACA_Discretionary.pdf on the subject:

The potential discretionary costs identified in both CBO’s earlier analysis and the letters provided on May 11 include many items whose funding would be a continuation of recent funding levels for health-related programs or that were previously authorized and that PPACA would authorize for future years. Some of those items include:

• Section 3129 – Extension of Medicare rural hospital flexibility program ($0.1 billion over the 2010–2019 period)
• Section 5207 – Funding for the National Health Service Corp ($9.1 billion over the 2010–2019 period)
• Section 5312 – Funding for Parts B-D of Title VIII of the Public Health Service Act (relating to nursing workforce development) ($2.7 billion over the 2010–2019 period)
• Section 5401 – Centers of Excellence ($0.5 billion over the 2010–2019 period)
• Section 5402 – Scholarships, loans and educational assistance relating to students from disadvantaged backgrounds ($0.6 billion over the 2010–2019 period)
• Section 5601 – Federally qualified health center grants ($33.6 billion over the 2010–2019 period)
• Section 5603 – Wakefield emergency medical services program ($0.1 billion over the 2010–2019 period)
• Section 10221 – Indian health improvement act ($39.2 billion over the 2010–2019 period)
• Section 10412 -- Automated defibrillation ($0.25 billion over the 2010–2019 period)

CBO estimates that the amounts authorized for these items exceed $86 billion over the 10-year period (out of the roughly $105 billion total shown in the table that was provided along with the May 11 letter). Thus, CBO’s discretionary baseline, which assumes that 2010 appropriations are extended with adjustments for anticipated inflation, already accounts for much of the potential discretionary spending under PPACA.

In addition, there are a number of other items that could overlap some or even by a considerable amount with current law activities assumed in CBO’s baseline. Title V of PPACA includes many of those items. For example, section 5210 and sections 5301-5303 of PPACA replace provisions of prior law with new provisions offering a great deal more detail. The May 11 letter addresses these potential sources of overlap. The last paragraph on page 3 of that letter states: “Although Tables 1 and 2 provide more information about the discretionary costs associated with PPACA, they do not represent all of the potential budgetary implications of changes to existing discretionary programs—including both potential increases and decreases relative to recent appropriations…”​

The vast majority of the discretionary spending in that estimate would be occurring in the absence of a reform bill and is not a consequence of reform (to review very briefly, reform consists primarily of: 1) instituting a new regulatory framework on insurance markets, 2) extending subsidization of health insurance to the individual market instead of keeping it confined to the group market, and 3) simplifying and expanding Medicaid eligibility thresholds).

In the same way, updating the SGR formula (which isn't even a provision in the reform bill) is something that will eventually have to be done and exists as an issue independently of any reform plan. If you want to tack that on as a cost of reform, you might as well throw in the additional expenses to the VHA associated with injuries sustained by soldiers in the wars in Iraq and Afghanistan. Those costs must somehow be attributable to reform, since we still have to pay for them after the law is implemented, right?

On the topic of "keeping the coverage you have", I see in the same actuaries report (page 7):

We estimate that such actions [employers dropping coverage despite penalties] would collectively reduce the number of people with employer-sponsored health coverage by 14 million

It might be a little more intellectually honest to quote the entire relevant paragraph, which paints a substantially different picture than you imply it does:

Employer-sponsored health insurance has traditionally been the largest source of coverage in the U.S., and we anticipate that it would continue to be so under the PPACA. By 2019, an estimated 13 million workers and family members would become newly covered as a result of additional employers offering health coverage, a greater proportion of workers enrolling in employer plans, and an extension of dependent coverage up to age 26. However, a number of workers who currently have employer coverage would likely become enrolled in the expanded Medicaid program or receive subsidized coverage through the Exchanges. For example, some smaller employers would be inclined to terminate their existing coverage, and companies with low average salaries would find it to their--and their employees'--advantage to end their plans, thereby allowing their workers to qualify for heavily subsidized coverage through the Exchanges. Somewhat similarly, many part-time workers could obtain coverage more inexpensively through the Exchanges or by enrolling in the expanded Medicaid program. Finally, as mentioned previously, the per-worker penalties assessed on nonparticipating employers are relatively low compared to prevailing health insurance costs. As a result, the penalties would not be a substantial deterrent to dropping or forgoing coverage. We estimate that such actions would collectively reduce the number of people with employer-sponsored health coverage by about 14 million, or slightly more than the number newly covered through existing and new employer plans under the PPACA. As indicated in table 2, the total number of persons with employer coverage in 2019 is estimated to be 1 million lower under the reform legislation than under the prior law.​

The first thing to note is that a significant fraction of those "losing" employer-sponsored coverage are doing so voluntarily because they're getting a better deal somewhere else. The second thing to note is that the difference between projected employer-sponsored coverage under current law and under reform is 1 million, not 14 million. The CMS Actuary projects that 165.9 million people would have it under current law but under reform "only" 164.5 million will (by comparison, http://www.census.gov/hhes/www/hlthins/historic/index.html tells us that two years ago more than 176 million people had employer-sponsored coverage). Put another way, the bit you selectively quoted might be amended to say reform will "reduce the number of people with employer-sponsored health coverage by 14 million, while current law will reduce the number of people with employer-sponsored health coverage by 13 million" if you wanted to give an accurate picture of the projections.

It's also worth considering what "if you like your coverage, you can keep it" http://blogs.abcnews.com/politicalpunch/2009/06/what-does-the-presidents-promise-youll-be-able-to-keep-your-health-care-plan-period-really-mean.html:

“When I say if you have your plan and you like it,…or you have a doctor and you like your doctor, that you don't have to change plans, what I'm saying is the government is not going to make you change plans under health reform,” the President said.​

Now that's confusing, because I thought that phrase meant that if I like my doctor and he's set to retire, the government will step in and forbid him from retiring so that I can keep going to him. Ditto for employers voluntarily altering coverage offerings. I mean, that just makes sense, right? Now I find out this law doesn't strip doctors and employers of free will. What other surprises are lurking in there?!

Medicare's chief actuary released a memorandum that confirms the increased deficits due to health care reform law (PPACA). The actuary forecasts "Federal expenditures would increase by a net total of $251 billion [2010-2019] as a result of the selected PPACA provisions"

This is false. What does the report actually say?

The Medicare, Medicaid, growth-trend, CLASS, and immediate reform provisions are estimated to result in net savings of $577 billion, leaving a net overall cost for this period of $251 billion before consideration of additional Federal administrative expenses and the increase in Federal revenues that would result from the excise tax on high-cost employer-sponsored health insurance coverage and other revenue provisions. [...] The Congressional Budget Office and the Joint Committee on Taxation have estimated that the total net amount of Medicare savings and additional tax and other revenues would somewhat more than offset the cost of the national coverage provisions, resulting in an overall reduction in the Federal deficit through 2019.​

So, yes, the CMS Actuary foresees a net $251 billion increase in federal expenditures. But that doesn't "confirm increased deficits" because there are revenue streams in the bill, which the Actuary reminds us JCT has forecast will bring in enough money to pay for that additional spending.

 

[Char. Limit]

Are people still on about this whole bill? Wow.

 

[Al68]

Are people still on about this whole bill? Wow.

Apparently. Someone even resurrected a dead, year old thread about it.

 

[Char. Limit]

Apparently. Someone even resurrected a dead, year old thread about it.

Something gives me the feeling you're mocking me. And right now, in the mood I'm in, I'm not going to tolerate any mocking of me.

 

[mugaliens]

I thought it was done, dead, and gone when a Federal judge declared it unconstitutional...

 

[Ivan Seeking]

I thought it was done, dead, and gone when a Federal judge declared it unconstitutional...

Really? You thought one Fed judge has the final say? That isn't how the law works.

There have now been three district court rulings upholding all of the health-care reform law, and two striking down the individual mandate as unconstitutional.

http://nymag.com/daily/intel/2011/02/another_judge_rules_health-car.html

 

[CAC1001]

The issue will be "done" when the SCOTUS lays down their ruling.