Third time’s a harm

The Huffington Post has the outline of yet another Republican healthcare deal:

he deal, brokered between House Freedom Caucus chairman Mark Meadows (R-N.C.) and Tuesday Group co-chairman Tom MacArthur (R-N.J.), would allow states to get waivers eliminating the so-called community rating provision ― the rule that prohibits insurers from charging higher premiums to people with pre-existing conditions. In order to obtain the waiver, states would have to participate in a federal high-risk pool or establish their own, and satisfy some other conditions.

In exchange for that conservative concession, the amendment would reinstate the Essential Health Benefits that were already taken out of the bill ― though, again, states could waive those provisions as well if they were able to show that doing so would lower premiums, increase the number of people insured, or “advance another benefit to the public interest in the state.”

What does this mean?
Read more



Super Ugly Waiver (It’s back)

The AHCA is not yet dead. It was just resting for a bit before joining the choir invisible.

The New York Times reports that the White House and the House Freedom Caucus (the hard right flank of the House GOP) have been talking and thinking they have the contours of a deal.

The terms, described by Representative Mark Meadows, Republican of North Carolina and the head of the Freedom Caucus, are something like this: States would have the option to jettison two major parts of the Affordable Care Act’s insurance regulations. They could decide to opt out of provisions that require insurers to cover a standard, minimum package of benefits, known as the essential health benefits. And they could decide to do away with a rule that requires insurance companies to charge the same price to everyone who is the same age, a provision called community rating…..

In simple terms, a carrier can’t deny a hemophiliac coverage but they can charge an actuarial fair premium of $90,000 per year. A carrier can’t deny a young woman who either is or intends to become pregnant. They just don’t have to cover the prenatal or labor and delivery costs.

It is effectively a slightly modified option 3 of Cassidy-Collins where states can return to the 2009 status quo if they so actively elect to do so. If we combine a single state choosing this route and sell across state lines, it would lead the entire country’s individual market back to 2009.

I may be reading too much into the conditional language but to me this is a SUPER (ugly) WAIVER provision. It modifies Section 1332 guard rails to basically meaninglessness. States could then choose to do whatever the hell that they want without concern for coverage requirements. Currently Section 1332 and other waivers in health policy have an equality clause where the states’ preferred options must be at least as good for beneficiaries. This rule would render that null. And I don’t think many/any states would actually take the Feds up on this option as the localized consequences are too immediate and real but if the goal was to design a bill that could get 12% support instead of 17% support, this would be it.

Update 1 This sounds about right to me:

I have no idea how the Tuesday Group stays on board. They were a sufficient blocking coalition under AHCA V1 once the flood gates were starting to open up. The politics of health reform are nasty in the best bills and this is a devolution of a very bad bill. The marginal members of a majority sitting in opposite party or break even districts are the first ones to get hit in a wave.



Excellent Read: Is There Nothing J-Kush Can’t Do?

Plenty, according to Elizabeth Spiers, in the Washington Post — “I worked for Jared Kushner. He’s the wrong businessman to reinvent government“:

On my first day of work as the editor in chief of the New York Observer, which had been acquired five years earlier by Jared Kushner, now the son-in-law and senior adviser to President Trump, I inherited an office and a desktop computer, both in fine but used condition. The computer was a recent-model Mac, but when I turned it on, it was inexplicably running Windows. I summoned our beleaguered IT guy to explain, and he informed me that it had belonged to Kushner, who liked the design of Apple products but preferred the Windows OS.

“So he was basically using a $2,500 desktop as a monitor?” I said. The IT guy shrugged…

I worked for Kushner for 18 months as he tried to infuse a much smaller institution than the U.S. government with cost-cutting impulses from the commercial real estate world. And my experience doesn’t bode well for the Office of American Innovation. Not everything that works in the private sector is transferrable to the public sector — and even if it were, Kushner isn’t the best person to transfer it…

When the paper had a profitable quarter for what I was told was the first time, Kushner floated the idea of layoffs to increase the margins, seemingly ignoring the fact that staff reductions would also reduce ad inventory by reducing content. A material part of what had been attractive about the job was the promise of expansion and growth. But we submitted business plans over and over again, and Kushner rejected them. He wanted the Observer to be cheaper to run, usually at the expense of growth and evolution, and he could not see the relationship between scale and profit — between risk and reward. (The White House did not answer a request from The Washington Post to provide Kushner’s perspective for this story.)…

When it became clear in 2012 that Kushner was conflating running lean with starvation, I submitted my resignation and left the Observer mostly on good terms with him, but I was disappointed. The company president resigned a few weeks later. Kushner eventually filled our positions with a family friend and his brother-in-law, the latter of whom had no media experience. He wanted outsiders to run the business — but loyal, compliant outsiders.

A few days after Trump won the election, Kushner folded the now attenuated print newspaper and subsequently announced that the Observer, in its digital incarnation, was for sale. He probably would refer to it as a “lean” operation. I would say in his zeal to trim the fat, he began eliminating muscle and hacked into a few bones. I realize also, in retrospect, that he may never have intended to grow it or improve it. It was for him, in essence, another vanity object — like the beautiful, expensive desktop computer he used as a monitor.

I worry that this new office will be more of the same: a vanity project, one that exists primarily to put Kushner in the same room with people he admires whom he wouldn’t have had access to before, glossing government agencies in the process with a thin veneer of what appears to be capitalism but is really just nihilistic cost-cutting designed to project the optics of efficiency…



Newsworthy Items That Have Slipped Through the Cracks: We’re Doomed

I don’t mean to panic anyone, but the US breached the debt ceiling on March 16th and the current extension on the Fiscal Year 2017 continuing budget resolution runs out on April 28th. Given the dysfunction within the majority caucuses in the House and the Senate, the fact that the new Administration’s skinny budget has been declared DOA upon its arrival in Congress, and the fact that NO ONE ANYWHERE – INCLUDING THE WHITE HOUSE, CONGRESS, MOST OF THE NEWS MEDIA, AND APPARENTLY MOST AMERICANS!!!!!!! – seems to be paying any attention or talking about this, perhaps we should be just a wee bit concerned.

Have a nice evening!



ACHA EHB CBO state of play

Right now there are three primary possibilities for the ACHA tomorrow:

1) No vote is taken as more wrangling and tweaking occurs
2) Vote fails as the combination of Tuesday Morning Group Republicans and the House Freedom Caucus vote against the bill from both ends of the Republican caucus. This is where we were most likely to have been at at 1800 EST on March 22, 2017
3) ACHA advances as the House Freedom Caucus gets a major policy concession, the elimination of Essential Health Benefit requirements.

#3 is what I want to discuss. It would produce a massive cluster. The bill needs to go through the Senate as a reconciliation bill with several significant requirements. One of those requirements is the items are germane to the budget. Since the other parts of the bill have stripped the link between premiums and subsidies, lower premiums are not germane to the budget. It will get stripped.

More importantly, the optics will look ugly. The Congressional Budget Office

If there were no clear definition of what type of insurance product people could use their tax credit to purchase, some of those insurance products would probably not provide enough financial protection against high medical costs to meet the broad definition of coverage that CBO and JCT have typically used in the past—that is, a comprehensive major medical policy that, at a minimum, covers high-cost medical events and various services, including those provided by physicians and hospitals.

IF Essential Health Benefits are dropped from the bill, the CBO will project that insurers will respond by offering very skinny benefit packages (no maternity or substance abuse inpatient services for instance as both qualify as high cost events) that are targeted to be priced at precisely the subsidy value. If there is no regulation as to what a carrier needs to include with a given maximum out of pocket requirement, two things will happen. A lot of people who otherwise would not use their subsidy would use their subsidy. And most people who are buying mostly on price will be buying policies that the CBO does not deem to be insurance.

Jed Graham has been bird-dogging this angle hard:

Because the GOP bill would mostly retain ObamaCare coverage rules, insurance would be unaffordable for lower-income and older adults with the new, smaller tax credits on offer, so some 30 million people wouldn’t claim the GOP tax credit averaging $3,000 in 2020 and rising with inflation. That would add up to more than $600 billion in unclaimed subsidies through 2026, or roughly the same $600 billion amount by which House Speaker Paul Ryan’s plan cuts taxes. Those unspent subsidies go a long way to explaining why CBO found that the American Health Care Act would reduce deficits by $323 billion over a decade.

So the end result if Title 1 is the price of passage is the following:

  • Guarantee failure in the Senate
  • Adds to the deficit immediately
  • Adds millions more people to the ranks of the uninsured as defined by the CBO over and above the 24 million that is the current score

/Dave Anderson +3

Update 1:
And it looks like Option #3 is on the table

 

Update 2

Dave +3.5



We’re Gonna Party Like It’s 1899

Mind boggling legislation in WV:

State safety inspectors wouldn’t inspect West Virginia’s coal mines anymore. They would conduct “compliance visits and education.”

Violations of health and safety standards wouldn’t produce state citations and fines, either. Mine operators would receive “compliance assistance visit notices.”

And West Virginia regulators wouldn’t have authority to write safety and health regulations. Instead, they could only “adopt policies … [for] improving compliance assistance” in the state’s mines.

Those and other significant changes in a new industry- backed bill would produce a wholesale elimination of most enforcement of longstanding laws and rules put in place over many years — as a result of hundreds of deaths — to protect the health and safety of West Virginia’s coal miners.

And if there was any doubt this was basically written by the mining companies, check out this nugget:

One thing that is clear is that the bill would maintain and encourage the use of “individual personal assessments,” which target specific mine employees — rather than mine operators or coal companies — for violations, fines and, possibly, revocation of certifications or licenses needed to work in the industry. In addition, the requirement for four inspections every year for each underground coal mine would be reduced to one compliance assistance visit for each of those mines.

And, the bill would require that, by Aug. 31, the state rewrite all of its coal mine safety standards so that, instead of longstanding and separate state rules, mine operators would be responsible for following only U.S. Mine Safety and Health Administration regulations. The list of areas covered by this provision includes electrical standards, mine ventilation, roof control, safety examinations, dust control and explosives.

“It completely guts the state law,” said Josh Roberts, international health and safety director for the United Mine Workers union. “You’re taking back decades of laws.”

Basically, they saw what happened to Don Blankenship, shitlord CEO who oversaw the Upper Big Branch mine explosion in 2010 that killed 29 workers. Blankenship was given a ridiculously low prison sentence of one year for basically threatening employees to violate safety standards or lose their jobs. Mine operators saw that one year as terrifying, so now they are working to make sure that only the patsy’s get in trouble.

THIS. IS. FUCKING. INSANE.



Bronze is a great age

I want to look at one element of the CBO score. It is the offered actuarial value of plans. Under the House Bill, out of pocket maximums would be fixed but there would be no age banding. The CBO sees this having an interestingly low effect.

Beginning in 2020, the legislation would repeal those requirements, potentially allowing plans to have an actuarial value below 60 percent. However, plans would still be required to cover 10 categories of health benefits that are defined as “essential” under current law, and the total annual out-of-pocket costs for an enrollee would remain capped. In CBO and JCT’s estimation, complying with those two requirements would significantly limit the ability of insurers to design plans with an actuarial value much below 60 percent.

Mechanically, under the House bill without a follow-on phase 2 or phase 3 bill, insurers can probably design plans that have at least 55% actuarial value (AV) coverage as the minimum level of coverage. Bronze right now is 60% +/-2 points of AV.

It will be very hard for people to buy a non-Bronze plan because insurers won’t offer them except at exorbirant prices. Let’s work through my logic.

Insurers are currently required to offer at least one Silver and one Gold plan if they want to sell on Exchange. Those plans are age rated at 3:1 with subsidies absorbing almost all of the local price increase risk for the Silver plan. Under the AHCA, those requirements are not in place and the subsidy is not tied to local pricing. Young buyers who are healthy will either opt out or buy the lowest actuarial value coverage possible because it will cost them very little.

Insurers then have to look at the people who actually need coverage and cost money to cover. They’ll offer a Bronze plan to get the young people in. But if they see a 58 year old asking for a Silver or Gold plan, they know that this person is going to be hyper expensive to cover as they have just self-identified as being high risk and high expense. Insurers won’t offer actuarial value levels above the minimum requirements because they will lose money on those policies.

So we will quickly see a proliferation of $6,000 to $9,000 deductible plans and very little else. That means the 64 year old who is seeing a $10,000 a year premium increase will also see their deductibles increase by $4,000 to $7,000 a year.