Fix Health Care Policy

Last week, the Senate Budget Committee Republican staff released a report revealing that, over the next 75 years, Obamacare will add an additional $17 trillion in unfunded obligations—i.e., the benefits promised by the federal government that haven’t yet been paid for.

Before Obamacare, federal programs were already responsible for racking up 75-year unfunded obligations of an astounding $65 trillion. According to the report, Medicare accounted for $38 trillion, Medicaid was responsible for over $20 trillion, and Social Security added $7 trillion.

With the enactment of Obamacare, projected federal unfunded obligations have increased by $17 trillion, now totaling $82 trillion. Obamacare’s massive Medicaid expansion and new exchange subsidies are largely to blame.

Read the rest on The Foundry…

Tags: $17 trillion, entitlements, Medicaid, Medicare, ObamaCare, Senate Budget Committee, unfunded obligations

One especially peculiar side effect of Obamacare will cause the federal government to begin taxing itself and state governments. This begins in 2014 as the result of the new annual fee imposed on the health insurance industry.

The health insurer fee was created to fund new spending under Obamacare. The new tax hits not only private insurance but state Medicaid managed care programs that are contracted to insurers as well.

Many states contract with private insurers to provide care to their Medicaid beneficiaries. States pay these managed care organizations a fixed premium per member per month. The new tax will increase these premiums, because they will now have to include an allowance to offset the Obamacare fee and to cover the federal income tax impact on the additional revenue added to the premiums to cover the fee.   (Read the rest on The Foundry…)

Tags: federal income tax, managed care, Medicaid, ObamaCare, premiums, taxes

Florida’s Medicaid Reform Pilot is pro-patient and pro-taxpayer, and the Obama Administration agrees.

In original research published by The Heritage Foundation and also submitted to the Centers for Medicare and Medicaid Services (CMS) during the agency’s deliberations, I showed that the program’s patients are healthier and happier with their care and that Florida taxpayers saved more than $100 million each year of the program.

The Florida reforms work by giving patients a choice of the private health plan that works best for them. Enrollees can choose from plans with varied benefits and provider networks, and a monetary rewards system creates incentives for healthy, responsible behavior. By shifting away from failed policies of central planning toward a consumer-driven program, the program has been successful on a number of levels.

The waiver extension of Florida’s patient-centered Medicaid reform preserves the expanded choices, incentives for healthy behavior, and increased health services that pilot patients have enjoyed for years. Pilot patients have better health outcomes and report higher satisfaction rates with their plans, their care, and their access to specialists than their counterparts who are confined to traditional Medicaid and commercial HMOs.

The bottom line with Florida’s Medicaid Reform is that when the patient is the priority, government and HMO bureaucrats are finally held accountable. Costs flatten and patient health and satisfaction improves.

(Read the rest on The Foundry…)

Tags: Florida, Medicaid, ObamaCare, private health plan, reform, repeal the law

Today, the Supreme Court released the oral argument schedule for the consolidated Obamacare challenges. The Court will hear oral argument on March 26, 27 and 28, 2012, with a nearly unprecedented amount of time allotted for argument.

First up on March 26, the Court will hear argument on the Anti-Injunction Act, which bars suits to stop a tax before it has been imposed. The second day, the Court will hear two hours of argument on the minimum coverage provision, also known as the individual mandate. On the third and final day, the Court will hear 90 minutes of argument on severability (whether and how much of the law will remain in force if other provisions, like the individual mandate, are struck down by the Court) and then one hour on whether Congress exceeds its powers by coercing the States through its massive expansion of the state Medicaid program.  (Read the rest on The Foundry…)

Tags: Anit-Injunction Act, Individual Mandate, March 2012, Medicaid, ObamaCare, repeal the law, severability, Supreme Court

Americans knew the negative impact Obamacare would have on the nation before the law even passed. Millions of Americans will be added to Medicaid, which already provides low-quality coverage and patchy access to care. The new law will not result in universal coverage, despite its $1 trillion+ price tag. Premiums will go up. And Americans who like their current health plans will not be able to keep them.

Now, states are beginning to better understand the impact of Obamacare. Earlier this month, Gorman Actuarial and Jonathan Gruber reported on Wisconsin residents’ moving out of existing coverage and experiencing premium hikes.

Milliman, an independent consulting firm, recently released its findings on the law’s effects in Ohio.  (Read the rest on The Foundry…)

Tags: low-quality coverage, Medicaid, Milliman, ObamaCare, premiums

In a recent article in Health Affairs, health economist James Robinson reveals that in areas where hospitals consolidate and enjoy a larger market share, providers are more likely to charge higher prices, as low competition gives them a monopoly in delivering patient care in the region.

The lack of competition allows hospitals and other providers to raise the sticker price for the privately insured as reimbursements from Medicare and Medicaid fall. Economists call this “cost shifting,” when a lower payment from one group is made up for by a higher payment from another group. The study finds that the growing trend in hospital consolidation is to charge private payers more to make up for public payers’ lower reimbursement levels.  (Read the rest on The Foundry…)

Tags: Medicaid, ObamaCare, private payers, shifting costs

Yesterday, the Centers for Medicare and Medicaid Services (CMS) released its new projections of national health spending trends through 2020. The findings, which estimate health care spending to reach more than $4 trillion by 2020, come as no surprise: Runaway spending has overtaken the United States health care system and is on the rise. More notably, the study confirms Obamacare does not “bend the cost curve” but only increases government’s share of spending in the health care system instead.

Already, the White House has tried to spin the report as a victory for its health care legislation. Writing for the White House Blog, White House Deputy Chief of Staff Nancy-Ann DeParle touted the all-time low growth rates of the past two years. Indeed, in 2010, health care spending remained an unchanged (yet still breathtakingly large) 17.6 percent of gross domestic product (GDP).

In dollars, the nation was estimated to have spent $2.6 trillion, growing by a new historic low of 3.9 percent from the previous year. But as the authors explain, the reason for decelerated spending was the economic downturn and the impact high unemployment had on reducing private coverage—nothing to cheer about. Reduced payments to private plans under Medicare Advantage also contributed to a decrease in Medicare spending.  (Read the rest on The Foundry…)

Tags: 2020, CMS, health care spending, Medicaid, Medicare, ObamaCare, repeal the law, runaway deficits, taxpayers

States are desperate for ways to make their budgets more cost-effective. Illinois found a way—but the federal government won’t let the state implement a requirement that would help repair its faulty Medicaid system.

Federal government health care laws are preventing a new Medicaid ID requirement—passed by bipartisan majorities in the state—from going into effect. The legislation gained the support of Republican and Democratic caucuses in the state with Rep. Patti Bellock (R-Westmont) and Rep. Barbara Flynn Currie (D-Chicago) moving the bill forth. Gov. Pat Quinn (D) signed it into law.   (Read the rest on The Foundry…)

Tags: federal government, ID requirement, Illinois, Medicaid

Conservatives should beware of policies that simply meet a budget target number without considering whether the underlying policy changes move a program in the right direction. Case in point: the Medicaid blend rate, which would replace the various federal matching rates for different categories of enrollees with one unified federal rate.

Yes, those on the left are attacking the blend rate proposal that would set one federal match rate in Medicaid and the Children’s Health Insurance Program (CHIP). That could lead conservatives to think it must be a good idea. But this misses the point. Conservatives need to judge these proposals based on whether they advance conservative principles for fundamental Medicaid reform. This proposal has several problems:  (Read the rest on The Foundry…)

Tags: blend rate proposal, Children's Health Insurance Program, federal matching rate, Medicaid

Yesterday, the Department of Health and Human Services (HHS) released its proposed regulations for the Obamacare version of health insurance exchanges. State lawmakers are a key audience for these regulations, which is why HHS wrapped its announcement in talk of “state flexibility.”

In truth, the proposed regulations don’t give states any additional flexibility beyond what they are permitted under Obamacare anyway, and in some places they may further limit state lawmakers’ options.

For example, state lawmakers are particularly concerned about how Obamacare gives the exchanges control over Medicaid eligibility. Some are considering establishing an exchange mainly to retain state control over Medicaid by requiring the exchange to contract with their states’ Medicaid offices to determine eligibility—something explicitly provided for in the Obamacare statute. (Read the rest on The Foundry…)

Tags: flexibility, HHS Sec. Kathleen Sebelius, Medicaid, ObamaCare, regulations, state health insurance exchanges