Revisiting Graham-Cassidy

President Trump has stated that he wants a new healthcare proposal. His budget called from major Medicaid and exchange cuts as well as the Graham-Cassidy framework of state blockgrants to cover far fewer people in the exchange and Medicaid expansion populations.

In the short run this is irrelevant. There probably are fifty one votes in the Senate for something like Graham-Cassidy to pass. The Majority Leader would be willing to schedule that vote.

There are not 218 votes in the House to pass Graham-Cassidy. Nor is there a Speaker willing to schedule a vote on Graham-Cassidy if it was likely to pass.

However, it is worthwhile to look at the logic of the plan. It is a major cut to federal spending and a major redistribution of federal spending. Right now, more federal money goes to states that aggressively implement the Affordable Care Act or have very high cost markets. That means states like California which aggressively outreach for every single possible enrollment and expanded Medicaid will get more federal ACA money than states like Mississippi or South Dakota which have not expanded Medicaid and have not aggressively pushed enrollment on the Exchanges.

Graham-Cassidy wants to give block grants to states that over time converge to a narrow band on a per-capita basis. It reduces the overall pool of money available and then shifts the remaining funds to states that have done opposed the ACA’s implementation. There were variants where money would be freed up to throw at Senators from states that had implemented the ACA and Medicaid Expansion aggressively but whose votes might be needed to pass the bill.

During the summer of 2017, I tracked the outside evaluation of federal fund flows to states in 2026 under the counter-factual of Graham-Cassidy being implemented and current law of the ACA with CSR funding as the baseline. The coastal states got hammered while the Great Plains, Mountain West and the Deep Confederacy did well.

Circumstances have changed. The three major changes are more states have expanded Medicaid since September 2017, the termination of CSR payments increased effective net subsidies for more people and the elimination of the individual mandate probably depressed enrollment. The 2017 scores will need to be updated, but I think a 2019 score of Graham-Cassidy would be similar.

Idaho, Partial Medicaid Expansion and the 400% FPLers

Medicaid is primarily health insurance for poor people or very sick people.

Idaho’s legislature is monkeying around with the voter approved straight-up Medicaid expansion to 138% of the Federal Poverty Level (FPL).


This will harm middle class Idaho families who need community rated, guaranteed issue insurance from the individual market.

How does that work if Medicaid is health insurance for poor people?

Cost Sharing Reduction (CSR) work-arounds of Silverloading and differential morbidity matter.

Adrianna MacIntyre and I argued in a Health Affairs blog that full expansion has two paths to decreasing premiums for people earning over 400% FPL that are not available if a state elects and receives a waiver for a partial expansion to only 100% FPL.

 evidence found that Medicaid expansion improved the risk pool of state individual markets, suggesting that the population between 100 and 138 percent FPL is sicker and more expensive, on average, than other exchange enrollees. Insuring this cohort through Medicaid is associated with a seven to eleven percentage point decrease in individual market premiums. …

household incomes between 100 percent and 150 percent FPL, those that would be eligible for 94 percent AV silver plans.  This income bracket overlaps the Medicaid expansion income group significantly.  States that fully expand Medicaid end up with far fewer people in the most generous CSR bucket, as they have moved the 100-138 percent population to Medicaid

CSR 94 Enrollment by all APTC receiving enrollees 2018

Keeping a cohort that is more expensive than the rest of the ACA individual market risk pool in the risk pool raises premiums. Pulling the 100-138% population out of the ACA risk pool lowers market premiums as long as this group is more expensive than average. Furthermore while Idaho has engaged in the Silver Switcheroo, Silverloading increases premiums for folks who want a Silver plan and buy it on Exchange either because they don’t know if they will be just over or just under the subsidy cut-off point of 400% FPL or they can’t access an off-Exchange plan that meets their requirements.

Full Medicaid expansion reduces the premium pain of the middle class. Partial expansion continues the pricing pain for the middle class.

Pay Or Die

It turns out that some of the Sackler family were pressing hard to get more people addicted to the opioids Purdue Pharma was selling, even as they were trying to avoid media coverage for their drug connections and donating to museums, which should now be removing the Sackler name from their halls.

But that’s only secondarily what this post is about. It turns out that manufacturers of insulin, which many people need to stay alive, have been gaming the system to make things more profitable for them and much more inconvenient for patients and doctors. But what’s human suffering compared to profit, hey Ray Sackler?

The exorbitant prices confound patients and doctors alike since insulin is nearly a century old now. The pricing is all the more infuriating when one considers that the discoverers of insulin sold the patent for $1 each to ensure that the medication would be affordable. Today the three main manufacturers of insulin are facing a lawsuit accusing them of deceptive pricing schemes, but it could be years before this yields any changes.

There are several reasons that insulin is so expensive. It is a biologic drug, meaning that it’s produced in living cells, which is a difficult manufacturing process. The bigger issue, however, is that companies tweak their formulations so they can get new patents, instead of working to create cheaper generic versions. This keeps insulin firmly in brand-name territory, with prices to match.

This is why we need a different healthcare system. I’m not well enough informed to know whether it’s single payer or Medicare for All, or something else. But this profiting off human suffering has to end.

Open thread.

Texas vs Azar : stay calm

The district Court decision in the trolling lawsuit Texas vs HHS is out. The district Court judge just decided to toss several centuries of precedent.

This decision will be slapped around on appeal.

Keep on signing up. This will get quickly stayed and the judge will get bench-slapped.

update 1one of the conservative legal minds behind King v Burwell<\i> has this comment

update 2

Just a reminder of the stakes

Go vote early if your state allows you to do so.

Open thread