We talked about the private insurance market yesterday and how the PCARE proposal would change it compared to the baseline of Obamacare (as that is where we are today.) Today let’s review government programs that provide healthcare.
Section 301 Capitation payments for Medicaid
The most important thing about 301 is it is the implementation of a massive clawback of Medicaid that happened in Section 101 which repealed all of PPACA. This means the Medicaid expansion got rolled back for working age adults who make below 138% of Federal Poverty Line. From here, the Medicaid formula is readjusted to account for lagging population in poverty and it would be limited to the classes of people who were eligible in 2009. Long term care (a major Medicaid expense) would be block granted and the block grant would grow at CPI+1% or in most years, a decrease in real purchasing power.
This section has several significant problems if one believes people should be covered. First, the block granting system creates a strong incentive for states to cherry pick healthy populations for coverage as that would bring in “profitable” federal money that can then be skimmed off for tax cuts for the job creators as having a job makes you healthy (let’s not worry about causality direction here). Secondly, it immediately screws quite a few people who are now covered but lose coverage and the ability to afford coverage.
In West Virginia, the old Medicaid guidelines would not cover a health, childless adult between 18 and 64. Under expansion, that individual can get coverage. Under this proposal, someone 33 years old making $5,200 a year gets a $1,560 tax credit and told to find coverage on their own. The only coverage they can get at their pricing is catastrophic coverage with $15,000 or $20,000 deductibles (and that assumes the individual passes underwriting as a great bet — which is unlikely).
Section 302 Reauthorize Medicaid HSA demonstration program
Minor piece of housekeeping, a demonstration program allowed states to offer high deductible health plans with state/federally funded health savings accounts. This demonstration program would be extended. I don’t think HSAs and high deductible health plans are particularly appropriate for people who don’t have the financial resources to take either an unexpected $2,500 expense or recurring $1,000 expenses, but this is fairly anodyne.
Section 401 Tort Reform
Defund a major Democratic donor class. The Texas system of damage caps and tilting the field in favor of providers did not solve a fundamentally minor problem although it made trial lawyers significantly poorer, and thus the Texas Democrats significantly poorer and weaker.
Section 501 Price transparency
The first few sentences are a de facto brag that your insurance will get worse, cover less and may not even cover you at all. That is how insurance companies can most easily reduce premiums — don’t pay out high cost claims by not covering high cost services or high cost individuals. The second paragraph is a repeat of Obamacare mandates that plan designs are made available in plain English (we’re still working on that as an industry).
The policy meat of this section is the last paragraph which is actually interesting exercises in division:
our proposal would require hospitals who participate in Medicare to provide to consumers the average amount paid by uninsured and insured patients for the most common inpatient and outpatient procedures.
This is not a bad idea. Massachusetts is taking this idea and supersizing it by requiring providers provide accurate pre-service pricing estimates that are customized to the patient. Price transparency is a good thing.
And that is part 2.
Cervantes
I thought we were talking about a Republican plan.
There, that’s more like it.
Southern Beale
Why the rich are freaking out.
Ah yes, fear the masses with their pitchforks and torches …
Ash Can
@Cervantes: And it’s not as though the tax credit bullshit is going to work, either. Anyone making little enough to qualify for it is going to have numerous far more pressing concerns than buying health insurance, and that extra money is virtually guaranteed to end up going toward food, heat, rent, loan sharks, etc. And then when the person falls ill or gets injured, his/her betters can shame him/her about being irresponsible.
…OK, I think I understand now why this tax-credit crap is so appealing to Republicans.
Cervantes
Richard, you write:
About that, there is a new two-part study (out of Northwestern). Here’s the abstract for Part 1:
And the abstract for Part 2:
If you want complete citations, let me know.
Needless to say (or it should be, but you never know), I am not hereby stating a position on the advisability of damage caps (or the legitimacy of “tort reform” in general).
Oh, and thanks for your two-part article also.
Baud
Four Words: Health Care Hunger Games.
Problem solved.
Richard Mayhew
@Cervantes: TY — and this will be a 3 parters as the financing mechanism will make the outcry on the non-grandfathered plans being cancelled in November look like a 2 month old having a gas bubble instead of an 18 month old deciding today is a good day to work out those lungs and assert his independence and autonomy tantrum.
raven
@Richard Mayhew: Did you get my link to the article about Georgia?
Richard Mayhew
@raven: was that you on 1/27? If so, you’re the loyal reader
Cervantes
@Richard Mayhew: Great. I’m looking forward to Part 3. Thanks.
Villago Delenda Est
“Tort Reform” is basically code for “personal responsibility for the poors, none for the rich”.
It’s bullshit.
rikyrah
These two tweets tell you all you need to know about the politics of health reform
January 29, 2014 at 12:30 pm
Austin Frakt
Two of Avik Roy’s tweets yesterday, pertaining to the recently released Senate GOP health reform plan (the Patient CARE Act) and discussion thereof, are very revealing.
…………………………
Matthew Herper ✔ @matthewherper
@Avik it still seems to me that this is going to hit a lot of voters harder. Even if it makes economic sense.
Avik Roy @Avik
Follow
[email protected] By repealing and replacing Ocare, the plan is more disruptive than it needs to be. But repeal needed for Right viability.
4:33 PM – 28 Jan 2014
Avik Roy @Avik
Follow
Good faith policymaking incompatible with political systems. RT @yeselson: @afrakt When to do we finally get to good faith policy making?
5:08 PM – 28 Jan 2014
…………………..
I do not mean “revealing” in a gotcha or gaffe sense. In fact, I largely agree with Avik. Repealing the ACA is not necessary to further a conservative health policy agenda. Therefore, as Avik correctly points out, it’s unnecessarily disruptive to do so. Yet this is what the Patient CARE Act does. And then it, in some ways, replicates some of the structure of the ACA, though in other ways it departs from it. (See Don Taylor’s summary.)
This is precisely why I’ve responded to journalists’ inquiries about the Patient CARE Act by pointing out, among other things, that it’s clearly designed to serve the objectives of the campaign(s)—2014 and then, perhaps, 2016—not as an effort to engage in good faith negotiation with Democrats on health policy.
http://theincidentaleconomist.com/wordpress/these-two-tweets-tell-you-all-you-need-to-know-about-the-politics-of-health-reform/
Fair Economist
One thing you never hear discussed about tort deform is what it does to the medical error rate. By current estimates between 210,000 and 400,000 deaths per year are caused by medical errors. At $1,000,000 per life (probably low), that’s an economic cost of $210 to $400 BILLION per year. By contrast, medical malpractice lawsuits come in at $1 to $1.4 billion.
By any rational analysis, the problem is that we do not have ENOUGH malpractice lawsuits. If a 10-fold increase in lawsuits reduced the error rate by just 10% we would be WAY ahead.