I don't understand. Why don't Republicans like ObamaCare?
During an interview with Judy Woodruff on the PBS News Hour, Sen. John Cornyn (R, TX) paused in his criticism of ObamaCare long enough to praise the Medicare drug program: "We have also seen in the Medicare program with the prescription drug program this has really been one of the few successes we have seen in a government program like Medicare, where we actually have competition and transparency, and providers compete based on price and the quality of service."
Apparently it is lost on the Senator that the Medicare drug program and the ObamaCare exchange-based health plans are strikingly similar. Both include government subsidies, government definition of basic benefit standards, government oversight of marketing and performance, and competition among private insurance plans. The exchanges differ by phasing out subsidies as income rises, and by devolving much of the regulation oversight to states, should states chose to exercise the oversight. It seems to this blogger that those two differences make ObamaCare more "Republican" than George Bush's drug plan.
Meanwhile, 17% of Americans are uninsured. Those folks will continue to get sick, and continue to get at least a modicum of care. Much of that care will be very expensive, reactive, urgent, dramatic, and avoidable had those uninsured patients been able to obtain preventive and maintenance care. Someone still pays for this care. But the subsidies are hidden in the costs the remaining 83% pay through premiums and taxes. The current approach to financing care for the 17% is not transparent, and there is no competitive market place. But ObamaCare, which is as transparent and competitive as the drug plan, and which seems at its core to be a very "Republican" approach, has one irreparable flaw in the eyes of its opponents: it was enacted by Democrats.
The Supremes Say the Mandate is Constitutional. But Voters Get the Final Word.
Washington's best-kept secret since JFK and Marilyn Monroe came out today: the Supreme Court upheld the individual mandate in the ACA in a 5-4 decision made by Chief Justice John Roberts. The President ducked a bullet in the ruling and comes out strong heading into the election on this issue; the decision will galvanize the right and embolden the left; and Chief Roberts finessed the issue by calling the mandate a tax, avoiding new precedent and getting the Supremes out of the nastiest domestic squabble since Bush v. Gore. But the Supremes didn't get the last word on the ACA: that rests with the voters in November. Making Obama a one-termer is now the GOP's only hope to stop health reform.
The Supremes' decision means reform moves forward without delay. That means most of the 26 Red States that brought the case to the Court, and a handful of others, are now WAY behind in implementation and will likely have the Federal Exchange jammed down their throats in January 2014 for their intransigence. That's the Supreme irony of the case: for all their bitching about a government takeover, that's exactly what those states will get for having done nothing while the case worked its way through the Courts.
The decision also means there is no impact whatsoever to Medicare. The cuts to Medicare Advantage (MA) remain and will continue to be phased in. The Star Ratings bonuses and rebates remain untouched. The new Part D coverage expansions -- the "jelly" in the donut hole -- are as sweet as ever. Accountable Care Organizations (ACOs) move forward. Minimum medical loss ratios (MLRs) take effect in Medicare Advantage in 2014. The coding intensity adjustment in MA remains. The Retiree Drug Subsidy (RDS) continues to phase down by 2016, compelling more employers to push their retirees into MA and Prescription Drug-only Plans. Insurer and provider taxes stay put. And 9 Million Dual Eligibles continue their march into health plans. It's as if the case never happened. And that means, as we've said many times here, it's still all about Star Ratings, Risk Adjustment, and chronic care management as keys to survival in Medicare this decade.
Now the only thing standing in the way of ACA implementation in January 2014 is if Obama is deposed in November and the GOP can get enough votes for "repeal and replace". Republican nominee Mitt Romney -- the original baby-daddy of the individual mandate in Massachusetts -- said he raised over $1M in campaign contributions in the first two hours after the decision came down. Obama will use the decision to try to reboot his health reform message. And the election becomes a referendum on the ACA.
Strap on your crash helmet and hold onto your butt -- the next 4 months will be the nastiest campaign cycle this country has ever seen. But for now, the ACA lives. And if you're in health care, you should be turning cartwheels today.
Supreme Court upholds Romneycare
As you have likely heard, Romneycare no, Obamacare, no, the ACA has been upheld by the Supreme Court, with Chief Justice Roberts casting the deciding vote with the liberal block. Health policy implications aside, there are some truly delicious politics here:
Obama did not support the mandate in the ‘08 primary. In fact, he was the one Democrat to oppose single-payer or mandated health insurance (for which he took much heat from the left). He got behind the model, famously developed by the conservative Heritage Foundation, when it became clear that it was the model with the best chance of passing Congress. But, remember how absent he was from that legislative action (for which he took much heat from the left). But one thing he made it clear in the run up to the fight: don't call the mandate a tax! Then, the last two years happened….
Today, we learned that Chief Justice John Roberts (appointed by noted left wing activist George W. Bush) disagrees with that. He called the mandate penalty a tax, and on that basis voted with the liberal block to uphold. No one questions the Government's power to tax. Well, except this guy.
The significance of his vote is that it expands the Government's power, in functional terms, to tax. That's pretty darn important. However, my friend who clerked for the Chief a few years back noted in a call this morning that Roberts tends to give with one hand and take with the other in big decisions--- perhaps reflective of the instinct towards balance and conservatism. In this case, it should be noted that five justices ruled that the Government did NOT have this power under the commerce clause--- which is a big victory for conservatism.
Mitt Romney, on whose Massachusetts model the law is clearly based, has some extraordinary days of spin ahead, particularly given that it was the staunchly conservative Roberts (and not the fence-riding Kennedy) who cast the deciding vote. Romney's job is made harder by stuff like this. So here's a tip from a "Washington Insider:" look at how much money Mitt raises online in next 48 hours. If it's more than $10MM, then we'll have a great race this fall. If less, it means serious problems for the campaign.
But the GOP should not be too dejected. If the mandate penalties are indeed a tax, then it only takes 51 votes to overturn. If you thought the mid-term elections were distressingly nasty… get ready to lose your innocence for good this fall when the GOP aims its sights at the Senate. Truly.
Medicare Advantage Enrollment Grows by 10 Percent
Kaiser Family Foundation just released a Data Spotlight on 2012 Medicare Advantage Enrollment. The report shows that 2012 MA enrollment increased 10 percent from 2011 levels with the addition of 1 million new enrollees. The report also noted that MA enrollment has doubled since 2005. Given the payment cuts in the Medicare Modernization Act and Affordable Care Act, this market penetration is surprising. And MA is poised for even more growth in the next several years with the shift of retirees from employer drug coverage due to the loss of the Retiree Drug Subsidy tax benefits, state initiatives that are shifting dual eligibles into managed care, and the arrival of the baby boomers who are familiar with PPO products. It not unrealistic to imagine that MA plans could cover one-third of all Medicare beneficiaries. Some of the 2012 growth is probably due to the fact that premiums in all plans except Regional PPOs decined in 2012. This trend cannot continues since the ACA payment cuts are still being phased in and the quality demonstration providing higher bonuses will end after 2014. Plans are expected to increase premiums and reduce benefits beginning next year. As long as MA remains a better value than Medigap, we should expect to see enrollment continue to increase.
The Part D Experience: What are the Lessons for Broader Medicare Reform?
The Kaiser Family Foundation sponsored a forum on the Part D program which was enacted in 2003, almost ten years ago. At the time of passage, there were many uncertainties about how the program would fare, e.g. would plans participate, would beneficiaries enroll. The Part D program has had much success in many areas. The following slides highlight the Part D program in 2012 and trends since 2006.
http://www.kff.org/medicare/upload/Overview-of-Medicare-Part-D-in-2012-Slides.pdf
Jack Hoadley summarized the following findings from his Issue Brief "Medicare Part D Spending Trends: Understanding Key Drivers and the Role of Competition" http://www.kff.org/medicare/upload/8308.pdf
• Part D enrollment is significantly below projected levels — Enrollment is 73 percent in 2012 which is below the projected enrollment of 87 percent. (Note — this includes RDS enrollees). 10 percent of beneficiaries have no equivalent coverage and are assumed to have made a decision not to enroll or are not aware of their drug coverage options.
• Benefit costs are lower than projected — Part D spending is 68 percent of the projected costs. This is due to a variety of factors including the shift to generics, lower overall drug pricing trends, slower drug pipelines, lower enrollment, impact of competition and informed consumer shopping.
• Generic drugs — Generic drug use increased from 60 percent to 75 percent thus significantly impacting lower program costs.
• MA-PD enrollment is higher and premiums are lower than PDPs — MA-PD premiums are lower than PDPs even after taking into account the use of savings from the medical side.
• Average utilization has increased however this is consistent with projections.
• Rebates have been higher than expectations but there is no publicly available information on the trends.
• There is evidence that competition has influenced Part D spending — The Part D market is robust (national average of 31 plans although there has been some consolidation) and bidding has affected premiums and availability of low income subsidies. However over half of enrollment is concentrated in a five plans and. Consumer tools have improved over the course of the program and have influenced plan selection, however only six percent of beneficiaries switch plans from year to year.
Jim Capretta emphasized the remarkable success of Part D in controlling costs especially when factoring in MA-PD premiums which result in an overall Part D average premium of $30 and average increase of $1 per year. Karen Ignagni mentioned high consumer satisfaction with Part D plans and plan tools to manage costs such as tiering, Medication Therapy Management and utilization management. Ignagni also reported that Part D plans are working with specialty societies on clinical pathways to assist with bundling and management of chronic diseases. Marilyn Moon pointed out that reinsurance, risk adjustment and risk corridors have reduced the risk for insurance companies in Part D thus ensuring plan participation.
Panelists noted that the Part D program has several lessons for Medicare reform and discussion of premium support models. Jim Capretta stated that while there is more complexity on the medical side than on the drug side, that Part D should provide lessons in who should do what, for example, the plans are better at negotiating drug prices and avoiding the FFS problems when the government regulates prices. He also noted that the government has been effective in overseeing the marketplace. Marilyn Moon noted that Part D has more controls and protections than are being discussed in the premium support models, that much of the Part D success has been in riding the generic wave, and that MA subsidies will be going away. Ignagni noted that MA plans are doing better in controlling diabetes and preventing readmissions. Jack Hoadley observed that the plan finder would be much more complicated when adding cost sharing and quality information on medical services.
Health Affairs Briefing on the June 2012 Issue
Health Affairs sponsored a briefing on the major articles in their June 2012 Issue entitled "Focus on the Care Span for the Elderly and Disabled". "Care Span" is a new term for the full spectrum of services used by the elderly and disabled including acute care, chronic care and long term care services and supports up to and including death. The focus of the articles is on delivery system reform — i.e. how to reduce the fragmentation in these care systems, putting the patient at the center and improving transitions with the goals of improving the quality and outcomes of care while reducing costs. http://content.healthaffairs.org/content/31/6.toc
Several of the articles highlight efforts to improve care for a subset of the population that are the
most frequent users of the Care Span. Dual eligibles have coverage under both the Medicare and Medicaid programs but still face daunting challenges in accessing care that is efficient and meets their needs. The researchers emphasized that the interventions need to focus on integration of the financing and the two benefit packages while tailoring the interventions to very distinct subsets, e.g. the disabled and the frail elderly. Barbara Edwards from CMS discussed the many new programs and demonstration projects that CMS is supporting to provide funding to encourage change at the state and community levels including the state dual integration demonstrations, Alignment Initiatives, Money follows the Person, Independence at Home, Health Homes, Partnership and Transition initiatives, programs to strengthen primary care. The laundry list of new programs caused Susan Dentzer to ask if states were getting "demonstration fatigue", something that I have wondered about while trying to remember the differences among the programs which often have same goals and objectives and similar focus to accomplishing the triple aim. Marsha Gold pointed out that while dual eligibles are of great policy interest, there isn't a lot of timely data and there are only a small number of states and health plans that have a track record of successfully serving these high need populations. The article by Tricia Neuman and colleagues from the Kaiser Family Foundation recommends that initiatives to shift the duals into managed care plans need to be cautious and give time to develop infrastructure to serve patients with complex needs. State budgetary pressures are currently focused on a much more aggressive timetable.
Two other presentations caught my attention. Randy Brown revisited the Medicare Care Coordination demonstrations which were declared unsuccessful during the initial evaluation and found that 4 demonstrations were successful in reducing costs for high risk enrollees. The high risk enrollees had congestive heart failure, COPD, and coronary artery disease and one hospitalization in the prior year as a severity proxy and two or more hospitalizations with one or more of 12 chronic conditions. The study found that savings were only $123 per patient per month and thus case management fees must be below this level to produce net savings. Deborah Peikes looked at another Coordinated Care demonstration at Washington University and found that care coordination was successful after a major redesign eliminated the telephonic care management and focused in-person care management. Other successful ingredients were focus on managing transitions post hospital discharge, use of structured care plans, aggressive medication management and focus on higher-risk enrollees.
If Mandate Survives SCOTUS, Will GOP States Be Caught Flat-Footed on Exchanges?
I keynoted the Opal Events Medicare Executive Forum last week and stated there -- as I have here -- that I think there's slightly more than an even chance that SCOTUS will overturn the individual mandate in its ACA ruling later this month. The presentation raised an interesting question: if the mandate survives the Court, will the 26 GOP governors who filed suit be caught flat-footed on exchanges, and have a Federal fallback exchange jammed down their throats in 2014 for their inaction? Remember that the states must demonstrate to HHS this fall that they'll be ready to launch their exchanges by January 1, 2014, and that there are dozens of states waiting to see what the Court will decide before taking any action. Politico held a policy briefing Friday with a couple influential state regulators that argued at least a few of those red states are moving forward on exchanges.
The most heartening news for ACA supporters were remarks by Bill Hazel, Virginia's secretary of health and human resources. Virginia is in the vanguard of states opposing the law but nonetheless has been busy getting ready to open an exchange if the court doesn't strike down the measure."We've done a lot of the planning," he said, adding that Virginia is in the "weird position" of being in relatively good shape to launch its exchange while opposing the law. "Virginia's done it and we don't want to," he said.
One of the most difficult things for states to pull together even if they are enthusiastic about exchanges is the information technology required. "We are one of the handful of states that could probably pull the IT piece off" if the Court upholds the law, Hazel said. Hazel added that he thinks it's a mistake for states opposed to the law to sit idle and watch the federal government struggle to open exchanges to fill the gap. Amen to that. "There is a group of individuals who believe that the states should just stop all work now, default into a federal plan, and assume that the feds can't get it
done," Hazel said. "That's not a bet that I would recommend yet that the Governor take because there's been a tremendous amount of work at the federal level."
Ron Pollack, executive director of Families USA, a pro-ACA consumer group, also called Virginia an "important lesson" and added that states opposed to the law may be doing more to get ready for exchanges than many realize. The narrative in press coverage is that only a few more than a dozen states will be ready to open exchanges by 2014, an assessment he said is based on the relatively small number of states that have passed laws to open the marketplaces. But, he said, a more telling sign of readiness is the number of states that have gotten the first round of grants to set up exchanges: 34, according to Pollack.
"Behind the scenes there is work being done to set up exchanges," he said. Pollack added that it makes a significant difference that the federal government is willing to share in the work of opening state exchanges by entering into
partnership arrangements. Both Pollack and Joshua Sharfstein, Maryland's secretary of Health and Mental Hygiene, struck an upbeat tone when talking about the health law in sharp contrast to the mostly gloomy talk of late about implementation struggles. Sharfstein downplayed the difficulty of opening an exchange.
It appears — initially at least — that the Maryland and Virginia exchanges would not be markedly different, assuming the health law survives and they both open. Left-leaning states are thought to be more likely to drive a hard bargain with insurers by excluding those that don't offer relatively low rates. But Sharfstein says that's not in the cards right now at least; Maryland officials first want to get their exchange up and running for a while before they think about becoming an "active purchaser."
One state out of 26 doesn't make a trend but the hope is that Pollack is right and that 34 planning grants will be enough to break through GOP gubernatorial intransigence on exchanges. The clock is ticking, almost no matter what happens in the SCOTUS ruling this month.
Boehner's "Circular Firing Squad" on the ACA
Politico is out with an astounding story on conservative infighting on the Accountable Care Act (ACA) as the Supreme Court ruling on the Constitutionality of the ACA nears. The story is further evidence of the fact that House Speaker John Boehner doesn't control a GOP caucus -- he's trying to mollify an unruly coalition while surrounded by a Tea-Party driven "circular firing squad" of conservative activists and opinion leaders. It's impossible for him to control, and will lead to more volatile, dangerous posturing from the Speaker in the months to come.
I'll share the story in its entirety here, it's a rare glimpse into Republican internecine warfare:
Conservative Infighting Over Health Care
By JAKE SHERMAN | 5/17/12 8:13 PM EDT
Brian Worth, a GOP leadership staffer responsible for coordinating with outside groups, shot back that "the House has already passed a full repeal bill."
Berwick Redux? No Confirmation Planned for Tavenner
Senate Finance Committee Chairman Max Baucus told POLITICO that it's "virtually impossible" to see how CMS Acting Administrator Marilyn Tavenner could get 60 votes in the Senate, and therefore he doesn't have plans for a confirmation hearing.
Republicans haven't found anything as controversial in Tavenner's background as they did in former Administrator Don Berwick's (the one comment he made praising the UK's National Health Service, which hysterical Republicans equated to support for rationing healthcare -- a distortion to rival Sarah Palin's "death panels"), but many did not think she had a shot at getting confirmed given the politics of health care reform implementation. They can't very well vote for the person who's expected to implement the ACA.
The stalemate over CMS appointees contrasts with progress made on some other appointments: the Senate confirmed two nominees to the Federal Reserve board last week. It's even more baffling given several GOP members' support of Tavenner, especially from her home state of Virginia. You'll recall Tavenner was appointed weeks before Berwick's controversial recess appointment expired last year. She wasn't a recess appointment, so there's no time limit on her tenure per se, but "Acting Administrator" does diminish the position.
In this environment you'd have to be some kind of self-hater to want the job.