Bundled payments are GOOD under Democrats but BAD under Republicans?

It’s been a couple days now since the U.S. Senate released their discussion draft entitled the “Better Care Reconciliation Act of 2017“. And, we’ve all witnessed the predictable hyperbolic, nonsensical, fact-devoid, rhetoric from Democrat Senators like Chuck Schumer and Elizabeth Warren who rile up their base by stating “the Senate health care plan will KILL millions of Americans!” All I can do is Chuckle when I see claims like this because both Chuckles and Fauxcohontas were strident supporters of Obamacare. In fact, other than Barack Obama, I can’t think of two more strident supporters of his “signature legislation“. Yet, when Republicans attempt to adopt one of the key features of Obamacare (albeit on a larger scale) by offering block grant payments to states so that they can better manage their Medicaid population, we are told that this feature will “KILL millions of Americans“. What feature am I referring to? None other than “bundled payments” which were a key feature of the “Pioneer ACO” program under Obamacare.

BUNDLED PAYMENTS WORK

The concept of bundled payments was first attempted during George W. Bush’s administration but it really gained a foothold in the health care industry under Obamacare. There were 32 “Pioneer ACOs” – Accountable Care Organizations – set up under Obamacare in 2012 and the data we are now receiving only a few years later is very encouraging.  In fact after only 3 full years of operation, the end results of the usage of bundled payments and bonuses for participants who meet quality metrics is quite remarkable. This is why our nation’s largest health insurer adopted a value based bundled payment model and saved employers $10,000 per orthopedic procedure.

According to the most recent press release from CMS – Centers for Medicare and Medicaid Services, “Affordable Care Act Accountable Care Organization initiatives put patients at the center of their care while generating more than $1.29 billion in total Medicare savings since 2012″. Equally impressive is the fact that all 12 participants in the Pioneer Accountable Care Organization Model improved their quality scores from 2012 to 2015 by more than 21 percentage points. Overall quality scores for 9 out of 12 Pioneer participants were more than 90 percent in 2015.” Now, I’m not an expert on the English language but that sounds to me like patients are receiving better care whilst taxpayers are saving a lot of money.  The most compelling evidence (including huge savings and improved patient care) comes from the data collected on joint replacements, Cardiac care, outpatient acute care, inpatient rehab and skilled nursing facilities. How is this possible and why would Democrats not want to try this on a larger scale via Medicaid when faced with this encouraging data?

HOW BUNDLED PAYMENTS WORK

Bundled payments or “Value based payments” compel medical providers to increase patient care and control costs by offering them the opportunity to operate under a single fixed payment model for medical services rendered. The amount of the bundled payment to a hospital, hospital group or surgical center for example is based upon the most recent data collected pertaining to how much it should cost to treat a certain condition. The hospital is then given a “bundled” or “fixed” payment and required to operate as efficiently as possible in order to meet the goal of not exceeding the bundled payment amount. If they meet the goal and do not exceed the fixed payment amount and actually improve patient care, they are rewarded with monetary bonuses. If they do not achieve the value metrics outlined when the payment is made, they do not. It’s a simple and efficient concept really.

It’s a concept that is so simple and so efficient that  H.H.S. – Heath & Human Services – launched a $10 billion BPCIBundled Payments for Care Initiative – which is now comprised of over 360 organizations and 1,755 providers nationwide. In the first half of 2016 alone, Medicare spent $1.1 billion on care under bundled payment models. The resulting clinical improvements led to $72 million in overall savingsThe next generation of BPCI is expected to go live in 2018 and it will further advance the value-based care model using bundle payments because it works.

MEDICAID “BLOCK GRANTS” ARE BUNDLED PAYMENTS

A “Block grant” is nothing more than a large payment made from the Federal government to state governments in order to manage their Medicaid population. It is (on a larger scale) exactly what has already been achieved under Value based Bundled payments. So, attempting to replicate the savings and patient care improvements already achieved under the BPCI should not be condemned by Democrats, it should instead be welcomed and encouraged. If something is not done to save Medicaid then there will soon be no Medicaid program left. Medicaid is already the largest line item on nearly every state’s budget and in state’s like Illinois it’s clearly not working. Providers are not being paid and Medicaid recipients are not getting the care they need. So, something has to be done to preserve Medicaid for those who are truly in need and Republicans are leading the way in that effort.

The Republican Senate “Better Care Reconciliation Act” not only provides states with the option of Block Grants but like the BPCI, it incentivizes states to manage their Medicaid population more efficiently by providing an $8 billion reward fund for states that achieve quality performance metrics in improving their Medicaid/CHIP programs. It also eventually caps over all spending so there is a strong impetus for states to start improving care and cutting costs now, not later.

THE SENATE ACT IS MUCH MORE FAIR TO THE POOR THAN OBAMACARE

The Republican Senate discussion draft entitled “Better Care Reconciliation Act of 2017” is is not “cruel” nor will it “KILL millions of Americans“. What IS “cruel” is doing nothing to reform Medicaid by leaving it as an open-ended entitlement and a massive unfunded liability. What is also “cruel” is how Obamacare treats our nation’s indigent by relegating them to Medicaid and leaving them with no other option. If you are a single person who lives in a state that expanded Medicaid under Obamacare AND you are unlucky enough to have an annual MAGI – Modified Adjusted Gross Income – of less than $16,248 (138% of FPL – Federal Poverty Level) you are relegated to Medicaid and are left with no other option unless you can afford to pay FULL PRICE for private health insurance. At that income level, such an “option” is not really an option at all.

In contrast, the “Better Care Reconciliation Act of 2017” no longer relegates our nation’s indigent to Medicaid with no other option. Instead, the Act provides a much more compassionate off-ramp for existing Medicaid recipients who may lose Medicaid once Obamacare Medicaid Expansion is eventually repealed. It provides (for the first time in U.S. history) generous Advance Premium Tax Credits to those with incomes below the Federal Poverty Level so that they can purchase private health insurance. Walking into a hospital, doctor or other medical provider’s office with a Blue Cross private health insurance card not only will provide those consumers with a much better chance of actually getting the care they need but it will also ensure that their medical providers will actually get paid. That is not the case with Medicaid which is why so few providers are still willing to accept Medicaid. It’s also why Medicaid is in desperate need of reform.

In addition to this unprecedented act of providing tax credits to those under the Federal Poverty Level, the “Better Care Reconciliation Act” also provides more than $100 billion in assistance to states, health insurers and consumers to better ensure that premiums, co pays and deductibles are more affordable for those that need that assistance. It even continues “Cost Sharing Reduction” subsidies (which help lower deductibles, co pays and coinsurance for those under 250% of FPL) until 2020 even though House Republicans sued the Obama administration for distributing these subsidies without congressional appropriation. If that’s “cruel”, then we all need a new understanding of that word.

THINGS THAT MAKE YOU GO HMMMMM…..

Isn’t it interesting how the American Hospital Association endorsed Bundle Payments and how the American Medical Association ‘applauded Alternative Payment Models‘ just last year but both are now “slamming” the Better Care Reconciliation Act and opposing it in group think mode? Why would they do this when the Act simply uses the same concepts they endorsed only a year ago to reform Medicaid?  Maybe these organization have a financial incentive to continue an open-ended entitlement which rewards states one federal dollar for every state dollar they spend. Or, maybe it’s political? Nah, I’m sure all of them read it and I’m sure all of them have no other agenda. I also have some ocean front property I’d like to sell you in Arizona.

 

 

 

 

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Senate “Better Care Act of 2017” makes important changes to the House American Health Care Act.

The U.S. Senate released their version of a heath care reform act this morning. It is entitled the “Better Care Reconciliation Act of 2017“.  It makes important changes to the “American Health Care Act” passed by the U.S. House of Reps back on May 4, 2017. Some of these changes I predicted, some I did not. Like the American Health Care Act, the Better Care Act does not achieve a full repeal of Obamacare but as I have explained, we cannot achieve a full repeal without 60 votes in the U.S. Senate. The Act is a far cry from a free market health care plan but taken in total, it further advances our flag and God willing will restore the individual health insurance marketplace to some semblance of normalcy via less regulations and billions and billions of your taxpayer dollars.  Below are the highlights of the Better Care Act of 2017.

Health Insurance Tax Credits will be means tested under this Act

The “American Health Care Act” contained a flat tax credit amount based solely on an applicant’s age. While this is a much simpler way to facilitate tax credits and would involve the I.R.S. as little as possible, it would also require those who are just above the income level necessary to qualify for Medicaid (currently 138% above FPL) to pay significantly more for health insurance than they would have under the P.P.A.C.A. (Obamacare). This is true because Obamacare, like the Better Care Act provides means tested health insurance tax credits. So, the lower your income is the larger your tax credit is. This will ensure that the working poor who are struggling to get off of Medicaid and on to private health insurance will be able to do so for a much more affordable premium than they would have had with the age based tax credits which were the only option included in the American Health Care Act.

Individual and Employer mandates REPEALED

The Better Care Act retains the repeal of both the Individual and the Employer mandates that were included in the American Health Care Act. So, the federal government will no longer be able to force you to purchase insurance using the threat of an I.R.S. penalty.

Obamacare taxes REPEALED and Cadillac Tax “delayed” until 2026

Let’s just be honest. The Cadillac Tax is never going to happen. The employer sponsored health insurance lobbying groups are just too powerful. Can we finally just admit this? That stated, repealing other Obamacare taxes is a great start. Here’s what goes bye-bye:

Tax on health insurance REPEALED
Tax on employee health insurance premiums REPEALED
Tax on health insurance plan benefits REPEALED
Tax on prescription medications REPEALED
Tax on OTC – Over The Counter – medications REPEALED
Tax on Medical Devices REPEALED
Tax on Chronic Care REPEALED
Tax increase on Medicare REPEALED
Tax on tanning REPEALED
Tax on net investment REPEALED
Tax on Health Savings Accounts REPEALED
Tax on Flexible Spending Accounts (where contributions are limited) REPEALED

Preexisting conditions COVERED but WHERE is the 30% penalty for system gamers?

The American Health Care Act allowed health insurers to apply a 30% underwriting load to those who attempt to wait until they are sick to buy health insurance. This was designed to prevent system gaming which increases the cost for everyone. Whilst the Better Care Act is clear on the fact that preexisting conditions are covered, it is not clear on whether or not insurers will be allowed to apply an underwriting load to system gamers. If this load or something like it is not added to the final legislation during conference you can kiss the entire individual health insurance market goodbye because there will be no reason for anyone to maintain health insurance on a consistent basis. Instead they will jump on an off plans when they “need” them and you can sayonara to the few remaining health insurers left in America. Hello Senators! Hello! McFly??!!!

June 26, 2017 UPDATE: Kudos to Senate Republicans for echoing 1996 HIPAA law and longer standing Department of Labor COBRA rules by adding a 6 month waiting period for coverage of preexisting conditions for those who have a lapse in coverage of more than 63 days. This should significantly curb adverse selection by ensuring that Americans keep consistent health insurance coverage. Some sort of penalty for system gamers who wait until they are sick to buy health insurance had to be included.

Advance Premium Tax Credit eligibility threshold reduced to 350% above FPL

Under Obamacare, an individual with MAGI – Modified Adjusted Gross Income – higher than 400% of FPL – Federal Poverty Level – ($47,520 annually) would not qualify for an APTC – Advance Premium Tax Credit. Under the Better Care Act, that eligibility threshold is reduced to 350% of FPL or $42,300 annually. Below are charts on how APTC eligibility cut-offs will change based on your family size:

APTC eligibility cut-off under Obamacare

$47,520 for an individual
$64,080 for a couple or family of two
$80,640 for a family of three
$97,200 for a family of four
$113,760 for a family of five
$130,320 for a family of six

APTC eligibility cut-off under Better Care Act 

$42,300 for an individual
$57,000 for a couple or family of two
$71,500 for a family of three
$86,300 for a family of four
$101,000 for a family of five
$115,600 for a family of six
You can also use this convenient Federal Poverty Level calculator here.

Advance Premium Tax Credits will now be available to those UNDER poverty line

The Better Care Act will dramatically improve options for more than 2 million Americans who are stuck in a difficult situation in the 19 states that did not expand Medicaid under Obamacare.  These people have incomes that are too small to be eligible for Advance Premium Tax Credits used to buy private health insurance while also having income too high to qualify for Medicaid (incomes between 100% and 138% of Federal Poverty Level). So, they’re stuck between a rock and a hard place. The Better Care Act ensures they will now qualify for Advance Premium Tax Credits to purchase private health insurance. This should lead to a significant improvement in health outcomes for these people.

Cost Sharing Reduction subsidies to continue all the way to 2020

Cost Sharing Reduction subsidies are an additional health insurance subsidy available to those with a MAGI lower than 250% of FPL. These subsidies lower deductibles, co pays, coinsurance and other out-of-pocket expenses the policy holder otherwise would incur. Continuation of these subsidies until 2020 may be the biggest bone of contention between the House and the Senate when the Better Care Act gets to the conference committee. This is because House Republicans sued to stop billions in Cost Sharing Reduction subsidies in 2014 since the money was never appropriated by congress, making those expenditures unconstitutional. A federal district court judge ruled in favor of House Republicans and thus far even though he has the power to stop them, President Trump has continued these subsidies tentatively. The Better Care Act ensures they will continue until the year 2020. The continuation of CSR’s will most likely induce some of the 83 health insurers who have left the individual market to return since the CBO estimates that H.H.S. will pay $7 billion in subsidies to health insurers and that total could rise to $16 billion by 2027 which is why the Better Care Act ends Cost Sharing Reduction subsidies permanently in 2020. That end date could result in a compromise.

Benchmark health plan changed from a “Silver” plan to a “Bronze” plan.

This action alone should be responsible for 15% or more in premium reductions across the board. Heretofore, states have being required to use a more expensive “Silver” plan as their benchmark plan resulting in higher premiums for millions of Americans.

States can opt out of EHBs but not Community Rating or Preexisting Conditions

The American Health Care Act allowed states to file for a waiver from the requirement to include EHBs – Essential Health Benefits – as defined by Obamacare and it also allowed them to file a waiver from the Community Rating requirement. The Better Care Act also allows states to file a waiver from EHBs but it does not allow them to file a waiver from the Community Rating requirement. While Community Rating does allow health insurers to vary the premium rate charged for an individual or small group plan based on family size, geography, age and tobacco use. It does not allow health insurers to vary premium rates based on an applicant’s expected health status or claims experience. So, preexisting conditions will continue to be covered in all states regardless of any waivers.

Hyde amendment wording is followed when restricting funding for abortion

Health insurance purchased using funding from the Better Care Act cannot cover abortions unless they are performed to save the life of the mother or for victims of rape and incest as originally outlined in the Hyde amendment.  Medical providers are also prohibited from using any funds allocated under this Act for abortions that are not specifically referred to in the Hyde amendment.

Medical Loss Ratios to be determined by the states NOT the Federal government.

Beginning in 2019 the Better Care Act will allow states to design their own MLR calculations. This action may also spur smaller health insurers to return to the individual market since (depending on the state) they may no longer be restricted to a 15% or 20% operating margin. This will also allow states to determine if Broker/Agent commissions should be included in MLR calculations. Just imagine if we had more licensed and experienced broker/agents and less inexperienced, unlicensed Obamacare “Navigators”. Excluding broker/agent commissions from the MLR calculation will once again entice broker/agents to return to the individual marketplace (there are very few of us left who cater to the individual marketplace). This action would save consumers hours and hours of frustrating time on the phone at Healthcare.gov. Time that is far too often spent without resolving issues and sometimes even exacerbating them.

Age based Community Rating restored to a 5 to 1 ratio

The American Health Care Act restored Age Based Community Rating from 3 to 1 as it was mandated under Obamacare to 5 to 1 which should entice the all important young invincibles to reenter the individual health insurance market place. The Better Care Act keeps this 5 to 1 ratio in place. Obamacare placed a heavy burden on younger people by requiring them to pay much more for health insurance in order to subsidize older people. With the Better Care Act, young people should see a significant drop in premiums because the amount they pay for health insurance will no longer be dramatically increased in order to provide a small reduction in premium for Americans in their 50s and 60s. Increasing premiums for young people does nothing but drive them out of the individual marketplace and when they leave, premiums increase for everyone which is exactly what we witnessed under Obamacare.

ERISA amended so states can cooperate with Fed on Small Business Health Plans

The language is a bit vague here but if this Act allows independent contractors or even members of certain trade associations to band together and share risk I am all for it. I do believe that is the intent behind the ERISA amendment in the Better Care Act.

Medicaid Expansion gone by 2020. States have Block Grants or Per Capita options.

Medicaid is unsustainable by all assessments. So, something has to be done to improve it. Throughout the Better Care Act, states are allowed the option to pursue new ways of improving care and controlling costs via flexible design and quality improvement metrics. If states meet those metrics there is an $8 billion fund they can tap into. In addition, the states have the option to design work requirements, none of which can apply to pregnant women, the blind, those attending school or the disabled. But those who can help themselves, should at least try to help themselves so that more money is left for those who are truly in need. The Better Care Act phases out Obamacare Medicaid expansion over the next four years with 90% of current federal funding for the year 2020 and then a reduction in that federal funding by 5% a year until 2023 when Obamacare Medicaid expansion will end for good. Also, single individuals without dependent children will not be allowed to join Medicaid under Obamacare Medicaid expansion after the year 2020. Advance Premium Tax Credits for private health insurance will however be available to those who lose eligibility for Obamacare Medicaid expansion as the program is slowly eliminated. In addition by 2025 Medicaid will be capped at the rate of growth for all goods, not just the inflation rate in medical prices. So, there is a strong impetus for states to start reforming their Medicaid programs now, not later.

HSA deposit amounts will now match your total health plan out-of-pocket risk.

This is a no brainer which is why it was also included in the American Health Care Act. In addition, a 60 day grace period will be allotted for those who purchase an HSA – Health Savings Account – qualified HDHP – High Deductible Health Plan – and incur claims before they have a change to set up their HSA. Those claims incurred before the HSA is set up (and after the HDHP is effective) will also be counted as Qualified Medical Expenses under IRS section 502. In addition, both spouses can now make additional make up contributions providing of course that they are both over the age of 55.

AND NOW FOR THE SPENDING

$62 billion appropriated for Long-Term state stability & innovation through 2026 

The following appropriations are made in the Better Care Act to establish or maintain a program or mechanism to provide financial assistance to help high-risk individuals, including by reducing premium costs for such individuals, who have or are projected
to have a high rate of utilization of health services, as measured by cost, and who do not have access to health insurance coverage offered through an employer, enroll
in health insurance coverage under a plan offered in the individual market.

This money can also be used to establish or maintain a program to enter into arrangements with health insurers to help stabilize premiums and promote state health insurance market participation and choice in plans offered in the individual health insurance market place.

It can also be used to provide payments for health care providers for the provision of health care services, as specified by the administrator. To provide assistance to reduce out-of-pocket costs, such as copayments, coinsurance, and deductibles, of individuals enrolled in plans offered in the individual market place.

$8 billion for year 2019
$14 billion for year 2020
$14 billion for year 2021
$6 billion for year 2022
$6 billion for year 2023
$5 billion for year 2024
$5 billion for year 2025
$4 billion for year 2026

$50 billion Short-Term assistance to repair coverage access disruption through 2021

The following appropriations are made to fund arrangements with health insurers to address coverage and access disruption and respond to urgent health care needs
within States:

$15 billion for year 2018
$15 billion for year 2019 
$10 billion for year 2020
$10 billion for year 2021

$15 billion individual market stabilization fund for years 2019 through 2021

$5 billion per year is appropriated in order to stabilize premiums and incentivize health insurers to return to the individual marketplace during years 2019, 2020 and 2021.

Additional appropriations also included in the Better Care Act

Additional $422 million appropriated in 2017 for Community Health Centers
$2 billion to combat the opioid crisis.
$8 billion for states achieving quality performance metrics in improving Medicaid/CHIP
$500,000,000 appropriated to implement the Better Care Act.

You can read the entire Better Health Care Reconciliation Act of 2017 by clicking below:
https://www.budget.senate.gov/imo/media/doc/SENATEHEALTHCARE.pdf

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The CBO scores the American Health Care Act and gets it wrong again, really wrong.

The CBO has a 24 year history of misleading the American people on health care policy. The latest example is their most recent assessment of the American Health Care Act which assumes incorrectly (again) that “23 million more people will be uninsured” by 2026 if we repeal and replace the PPACA (Obamacare). They believe this to be true in part because they believe repealing the individual mandate will lead to millions of people not purchasing health insurance because they would no longer face the threat of an IRS penalty for not doing so.

To believe this requires one to ignore evidence, basic math and human nature. For example in 2015, the IRS reported that 6.5 million uninsured filers paid the penalty for not purchasing a “Qualified Health Plan”. 12.7 million more got an exemption from the penalty and an additional 4.2 million were scofflaws and simply ignored it. That equates to 23.4 million people out of an estimated 28.8 million uninsured. That does not prove that the individual mandate compelled these people to purchase health insurance. It simply reinforces what we know about basic math and human nature.

Basic Math and Human Nature

If you understand basic math you understand that the cost of the IRS penalty for not purchasing health insurance (which is 2.5% of your AGI) is still much less expensive than the cost of actually purchasing health insurance. This is especially true since the cost of health insurance in the individual market has increased as high as 105% in some states and more than 200% in others since 2013.

If you understand human nature you understand that when faced with a decision, especially an economic one, people will typically act in their own self-interest. What we predicted in 2009 remains true today. Because the penalty is much smaller than the cost of health insurance, millions will pay the penalty instead, or as recent evidence proves millions more don’t have to and millions more simply refuse to. So, assuming that repealing the individual mandate will lead to “23 million more people being uninsured by 2023” is a false premise. Repealing the individual mandate will do nothing but ensure that those who do not purchase health insurance already will simply no longer be required to pay a penalty to the IRS for continuing to remain uninsured.

AHCA Medicaid reforms make the program more efficient and fair.

In 1965 Medicaid was enacted under President Lyndon Baines Johnson. He signed into law Title XVIII and Title XIX of the Social Security Act. These acts in part provided states with the option of receiving federal funding for providing health care services to low income children, their caretaker relatives, the blind, and individuals with disabilities. Most Americans on both sides of the aisle still believe today that this segment of society should be properly cared for in a system that works fairly and equitably for all recipients. Obamacare massively expanded Medicaid to millions of single, able-bodied adults which not only exploded Medicaid costs (another prediction the CBO got wrong) but in doing so robbed finite resources from those whom the original Medicaid program were designed to help. Namely, those who cannot help themselves. Worse yet, the Obamacare Medicaid expansion population receives a 90% reimbursement rate whilst those who Medicaid was originally designed to help receive only a 50% to 75% reimbursement rate. And this doesn’t even address the billions our Medicaid system pays out to illegal immigrants. How is that fair and equitable? It is not.

This is why the American Health Care Act REFORMS Medicaid by allow states the option to implement intelligent reforms like Indiana and Rhode Island already have and reforms Pennsylvania is trying to implement. The AHCA does not “repeal Medicaid expansion“. It simply ends this unfair reimbursement disparity between those who Medicaid was originally designed to help and those who were added to Medicaid under Obamacare. These reforms are desperately needed since only 20 to 40 cents of each Medicaid dollar actually goes towards patient’s welfare. Surely, we can do better. The American Health Care Act is a good start if we can get the U.S. Senate to pass it. We are rapidly running out of time.

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H.H.S. Director Dr. Tom Price continues implementing “Phase 2” of the AHCA before the bill even passes the U.S. Senate

H.H.S. director Dr. Tom Price continues implementing “Phase 2” of the American Health Care Act even before it passes the U.S. Senate. You know, that “Phase 2” that so many naysayers said would “never happen“. Yeah, that one. Dr. Price is allowing any state who wants a 1332 waiver to apply for one now, even before the American Health Care Act is voted on in the U.S. Senate. 1332 waivers allow states to implement risk mitigation programs like high risk pools so consumers experience immediate premium reduction.

Recent empirical evidence proves that 1332 waivers actually DO reduce premiums

The state of Alaska used a 1332 waiver last year to create their own high risk health insurance pool and saw premium reductions of 33% in their individual health insurance marketplace. A 33% premium decrease is a much better outlook for 2018 than yet another double digit premium increase that states like Virginia, Maryland and Connecticut are facing for 2018 right now, some as high as 60%! Why so high? Because the PPACA (Obamacare) destroyed healthy competition by causing 83 health insurers to leave the marketplace last year. This has left states like Virginia with only two health insurers left and states like Iowa with only one carrier left and possibly no carrier for 2018 if Medica follows through on their threat to throw in the towel after losing $100 million under Obamacare. My home state of Illinois just lost one of only four insurers left that offer individual products when Harken Health called it quits this week after losing $64 million just last year.

This isn’t the first time our H.H.S. & C.M.S. directors have taken corrective action

Last month, Dr. Price and our new C.M.S. director Seema Veerma stopped the reckless practice of Healthcare gov jet issuing policies to Special Enrollment applicants who claimed a ‘loss of income’ without requiring any proof that they actually did lose income before issuing the policy. Now, these Special Enrollment applicants have to prove a ‘loss of income’ before they get a policy. This action alone by Dr. Price and Seema Veerma stopped consumers from attempting to “game the system” by waiting to buy a health plan until they have scheduled medical treatment and then canceling that health plan shortly thereafter which drives up premiums for everyone.

Maybe, just maybe U.S. Senators can take a lesson from Dr. Price and Seema Veerma’s work ethic and pass the American Health Care Act now.  Why now? Because health insurers are required to submit their 2018 plans and premium rates for review by C.M.S. no LATER than June 21, 2017. Time is of the essence here if consumers want to experience premium relief and desperately needed restoration of competition in the individual marketplace before the next open enrollment period begins on Nov. 1, 2017.

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President Trump’s C.M.S. implements common sense reforms to Obamacare Open and Special enrollment periods.

Our new H.H.S. director Dr. Tom Price and our new C.M.S. director Seema Veerma are wasting no time in improving how both the Open and Special enrollment periods work under the PPACA (Obamacare). There will be no more “gaming of the system”. Below are the changes that will both lower premiums and restore desperately needed competition.

1.) The Open Enrollment period will be shortened from 90 days to 45 days. 2018 open enrollment begins on 11/1/2017 and will end on on 12/15/2017 (not January 31, 2018 as has been the rule). This will lead to less adverse selection and lower premiums.

2.) If you are eligible for “Special Enrollment” you now must prove you are before the health insurance policy will be issued. This will also lead to less adverse selection and lower premiums.

3.) If you try to dump a health insurance policy in the middle of the year by stopping payment and then attempt to reapply with the same insurer later in the year, that insurer can now require you to pay up to 3 months of back premiums that you would have owed had you kept your policy in place like you should have all year. This too will lead to less adverse selection and lower premiums.

 

4.) Health Insurers will finally be allowed some actuarial flexibility when designing new health insurance plans. This will lead to more health plan options with lower premiums. Most importantly it will provide an impetus for some of the 40 health insurers who left the marketplace since 2014 to re-enter and thereby restore some of the desperately needed competition that Obamacare destroyed.

With the new found endorsements of the American Health Care Act – AHCA – by the House Freedom Caucus and Club For Growth we may be getting much more relief from Obamacare very soon. Until then, these two brilliant appointees by President Trump are wasting no time ensuring that Americans get as much relief as possible before the 2018 Obamacare open enrollment period begins. For the 19 million Americans who purchase their own individual health insurance these reliefs can not come soon enough.

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Conservatives must learn Senate rules or Obamacare will never be repealed.

Here’s the unbridled truth. The “American Health Care Act” – AHCA – failed because the “Freedom Caucus” blocked it in the House last Friday ensuring that it never reached the Senate so we could at least TRY to get it through. And, as I have stated earlier there is NOTHING in the AHCA that Conservatives should have disagreed with if they would have actually taken the time to READ it. Every one of them has an opinion of it but very few if any can honestly say they actually READ it. You can read my assessment of the incredible RELIEF we could have provided millions of Americans just by passing “Phase one” here.  Instead, we’re all now STUCK with Obamacare until at least 2019 because we can only use the Budget reconciliation process once each fiscal year and our current fiscal year ends in May. So, that means even if we COULD get the “Freedom Caucus” to work with us and pass a Budget Reconcilation bill in 2018, we will get NO relief from Obamacare now until 2019. Unless of course we can convince 8 Democrat Senators to vote with us to reach the 60 vote threshold in the U.S. Senate. That’s about as likely as using FACTS to convince Democrats that Putin DIDN’T ruin Hillary’s rightful coronation.

“Republicans got a full repeal bill through in 2015! Why can’t they do the same thing now?”

No, they didn’t. Those who argue that they did need to understand that the 2015 supposed ‘full repeal’ legislation DID NOT PASS the Senate as it was written. Why? Because the Senate Parliamentarian (Elizabeth McDonough) blocked repeal of IPAB and other non budgetary items because they were considered non budgetary in nature and as such stricken by her as extraneous. Why was Senator Cruz forced to follow the Byrd Rule via Budget Reconciliation in 2015? Because a FULL repeal vote would have required 60 votes in the U.S. Senate under Rule 22 which would require 8 senate Democrat votes which we DID NOT HAVE THEN and we DO NOT HAVE NOW.  This was the necessity of following the same rules in our recent attempt (foiled by the “Freedom Caucus”) to pass the American Health Care Act.

” Just shove it through using the Nuclear Option!” Fantasy versus REALITY.

The other bogus argument being made by Conservatives is that we can just “use the Nuclear Option” to “shove it through“.  This is NOT possible because the “Nuclear Option” used most recently by Harry Reid to shove through former President Obama’s judicial appointees IS NOT USED to pass LEGISLATION. A SEPARATE senate rule was created to pass legislation passed with only a 51 vote simple majority. It’s called the Byrd Rule (mentioned earlier) which is how we were going to attempt to pass the American Health Care act. This brings us to the next fantasy “well let’s just change the Senate rules then!Changing a Senate rule requires 67 votes which would require 15 Democrat votes in the Senate which we also DO NOT HAVE.

And lastly, the total fantasy argument being made which says Mitch McConnell should just render the 60 vote majority rule or the 67 vote rule to change Senate rules “unconstitutional” which according to this fantasy requires only a simple majority vote (at least 51 Republican senators). In order to make this fantasy a reality, those who propose it actually BELIEVE that we would somehow get the support of John McCain and his life partner Lindsey, Jeff Flake, Susan Collins, Lisa Murkowski, Rob Portman, Shelley Moore Capito and Cory Gardner (the last four want to KEEP Medicaid expansion under Obamacare). If you REALLY believe that’s possible, I have some ocean front property in Arizona to sell you.

So, we have to live within the REALITY of how the U.S. Senate works. That’s WHY the Budget Reconciliation process was used to attempt to pass the American Health Care Act which would have provided desperately needed relief to millions of Americans who are suffering under Obamacare, even though it wasn’t a ‘full repeal’ bill.

Why can’t we just shove it through like the Democrats did in 2009 via Reconciliation? 

Because that didn’t happen. The Democrats had 60 votes to pass the Patient Protection and Affordable Care Act (Obamacare). They met the 60 vote threshold. That bill passed with 60 votes. It was sent back from the Senate to the House and it was signed by President Obama on March 23, 2010. Where they used reconciliation was shortly thereafter to add things to the PPACA and that bill was also restricted to budgetary items and they had more than a simple majority to pass it at the time. So they were restricted by the same Senate rules as we are today. The difference is they simply had larger majorities in the Senate at that time than we do now.

The saddest part about the “Freedom Caucus” blocking passage of the AHCA in the House

There was one idea that MIGHT have actually WORKED and it came from the brilliant legal mind of Senator Ted Cruz. After tangling with the Senate Parliamentarian back in 2015 when she stripped non budgetary items from what was originally a ‘full repeal’ bill, Senator Cruz came up with the idea of REPLACING Elizabeth McDonough (Senate Parliamentarian) with Vice President Mike Pence so that items that were non budgetary in nature may have actually passed since they would now have to pass the muster of Mike Pence and not her. You know what the saddest part is? We’ll NEVER know if that would have actually worked thanks to the “Freedom Caucus” blocking passage of the AHCA in the U.S. House of Representatives.

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What parts of the American Health Care Act did Conservatives disagree with?

President Trump posted this tweet this morning calling out the “Freedom Caucus” the Club for Growth (who FAILED at doing everything they could to ensure President Trump lost the election) and Heritage (who published incorrect information about the bill and the Senate process) and I have to say as one of the very few Conservatives who actually read the bill, I am WITH President Trump on this and AGAINST those mentioned in his tweet.

TrumpTweet

What if anything in the American Health Care Act did you disagree with and if so why?

1.) Repealing the Individual Mandate which requires those who do not purchase overpriced Obamacare health insurance to pay a penalty to the IRS.
2.) Repealing the Employer Mandate so that employers can once again offer FULL TIME jobs instead of restricting their job applicants to 29.5 hours in order to avoid paying for overpriced Obamacare health insurance.
3.) Repealing the Obamacare subsidies, which would be the first time in U.S. history that we actually repealed an entitlement.
4.) Placing per capita caps on Medicaid enrollees.
5.) Block granting Medicaid to the states
6.) Reducing the deficit.
7.) Cutting spending by $1.2 trillion.
8.) Repealing $600 billion in Obamacare TAXES.
9.) Re-creating state High Risk Health insurance pools (which is how health insurance risk in the individual marketplace it was managed for 20 years before Obamacare under HIPAA law). By doing so we would have once again removed the sickest 5% (responsible for 50% of costs) from the healthy pool in order to once again lower premiums for those who are healthy. Remember how much lower health insurance premiums were BEFORE Obamacare?
10.) Granting $128 billion over 9 years to the states to ensure that every state has a well funded high risk health insurance pool so that the 5% who are the sickest are guaranteed coverage. Keep in mind that whilst that may seem like a lot of money, it is MUCH less than the $56 billion we will spend just THIS YEAR on Obamacare subsidies.
11.) Repealing “Community Rating” so that young people pay much less for health insurance than they do now, thereby reincentivizing them to REENTER the health insurance pool and lower costs for everyone.
12.) Providing tax CREDITS (not “entitlements”) so that you can KEEP more of your OWN money so that health insurance costs less for you and your family. A tax CREDIT is NOT an “entitlement”. It just means you pay less to the IRS so you keep more of your own money to spend on health insurance. Is a CHILD tax CREDIT an ‘entitlement’?
13.) A one year 30% underwriting load applied to those who do not keep consistent health insurance coverage and instead wait until they are sick to buy health insurance. These “system gamers” increasing premiums for everyone. This also was how risk was managed in the individual health insurance market for 20 years before Obamacare under HIPAA law.

Understanding what could have happened had we come together

Keep in mind that ALL of the aforementioned features of the “First phase” of the American Health Care Act were included in the budget reconciliation bill and would have passed the muster of the Senate Parliamentarian because they were all budgetary in nature. As such, they could have passed with only 51 Republican votes (not the normal 60 votes to pass a bill). In other words without the help of ONE Democrat. As a reminder we need 8 Democrat Senator’s to vote WITH US in the Senate in order to reach the 60 vote threshold for a FULL repeal bill. We don’t have ONE Democrat vote, let alone EIGHT.

What if “PHASE ONE” is all we could get?

Let’s say PHASE TWO “would never really happen” meaning Dr. Price just simply refuses to exercise his power as our new H.H.S. Director and REFUSES to roll back additional mandates and regulations on health insurers thereby lowering premiums even more.

Let’s say “PHASE THREE” (further legislation) “would never really happen” because we will never get 8 Democrats to agree on repealing the rest of Obamacare by reaching the 60 vote threshold in the U.S. Senate necesary to pass a bill. I find that hard to believe by the way after we STARVE Obamacare of it’s primary funding sources which would have been done in ‘PHASE ONE’ (the Individual and Employer mandate repeal, repeal of $600 billion in taxes etc.). Would that not result in Obamacare dying MUCH faster than it already is resulting in more willingness from Democrats to support an alternative?

ISN’T JUST “PHASE ONE” BETTER THAN WHAT WE CURRENTLY HAVE NOW WHICH IS A DISFUNCTIONAL, BANKRUPT MEDICAID PROGRAM, AN ALMOST NONEXISTANT INDIVIDUAL HEALTH INSURANCE MARKET AND THE HIGHEST HEALTH INSURANCE PREMIUMS IN AMERICAN HISTORY?!

Someone PLEASE tell me where I’m wrong!

UPDATE April 26 2017: MacArthur amendment added to allow states to waive both the Essential Health Benefits and Community Rating provision.

UPDATE May 3, 2017: Upton/Long Amendment added to provide an additional $8 billion for states to establish risk mitigation programs for applicants in the individual health insurance market who are otherwise uninsurable and do not keep consistent coverage in place.

See all proposed amendments here. Read the original American Health Care Act here.

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