More Byrd droppings

Following on on Betty’s post this morning, keep on calling.

Senator Sanders in his role as the ranking member of the Senate Budget Committee has had his staff arguing hard to the parliamentarian over the past few weeks. They are arguing over every point in the Senate bill(s) that are still be scrawled on napkins in the Senate dining room on whether or not provisions are directly budget related and therefore only need a 50 vote threshold or are primarily policy and need a 60 vote threshold. They’ve won some big fights. It looks like they won an even bigger one this morning.

What that means is the waiver provisions need 60 votes. This is important from a policy perspective as the current waiver system in the ACA allows states to experiment if they can insure as many people, at the same or better actuarial value while protecting the most vulnerable and costing the federal government no more money. The provision that is now subject to a 60 vote threshold would allow the state to do whatever it wanted just as long as it cost the federal government no more money.

Politically this is important because the Senate leadership, Secretary of Health and Human Services Price and CMS Administrator Verma have been promising Republican senators that they’ll issue magical waivers that will give enough flexibility to states to keep everyone or at least enough people whole despite pulling out $750 billion dollars in Medicaid funding and several hundred billion net dollars from the individual market. That is a fantasy of the least interesting tripe but it waivers of unimaginable power are being pushed behind the scene. Those waivers can’t be part of the bill.

And if they are part of the bill, that means the legislative filibuster is dead which should help when we have to clean up this mess.

It’s Baaaaacccckkkk (Sort Of, Maybe)

It is impossible to overstate the Republican commitment to ripping health care from millions, while taking a chainsaw to our medical system.

Rand Paul has just announced that he will vote “Yes” on the Trumpcare motion to proceed as long as he is given a clean vote on his amendment, which would simply repeal the ACA (which, given the CBO evaluation of a similar proposal, would lead to something on the order of 17 million without health care next year, and 32 million Americans left in the cold by 2026).

That’s still not enough to get Trumpcare to the floor if the other declared “Noes” hold out, but each senator McConnell can peel away significantly increases the pressure on those who remain opposed.  And certainly, Paul’s cave reminds us that counting on any Republican to maintain a party-base-unpopular position as a matter of principle is a mug’s game.

This won’t be over until the GOP loses its majority in one house or the other.

Image: Workshop of Lucas Cranach the Elder, Massacre of the Innocents, c. 1515

Recapping the revised Senate bill

The Senate released their revised bill.

The biggest and only important news is that there is fundamentally nothing different with Medicaid. It is still being destroyed. It won’t be destroyed as quickly in Louisiana in this version as it would have in the previous versions, but Medicaid will see a 25% reduction in federal funding by 2025 and 35% reduction in annual federal funding by 2036.

Everything else is a detail. There is an Alaska pay-off for more state stabilization funds. There is a provision for Florida.

There is the Cruz amendment.

Regarding the Cruz amendment, I just can’t deal with it. It is not exasperation, it is an incomprehension as to how this amendment actually works on any level without a fractured market. Maybe that is the entire point of the amendment.

Fundamentally things were tweaked around the edges of a bill that will produce incredible suffering without altering that basic fact.

HDHPs and diabetes control

High deductible health plans (HDHP)s  are supposed to incentivize consumers nee patients to shop more effectively for their care and choose only high value care at good prices.  As we looked at yesterday, there is a significant problem in that most people in the health insurance market sphere aren’t touched by the phase transition from high actuarial value plans with low cost sharing to lower actuarial value plans with higher deductibles.  The amount of money at risk due to the incentive changes of a HDHP regime is not a plurality of total spending.

More importantly, we also need to exclude people from the previous calculation who don’t have resources to actually fund their HDHPs. Academy Health has an interesting poster with the promise of a paper that I want to read as soon as it comes out.  It looks at the conversion of people from low deductible to high deductible plans who have a common chronic condition.  It then sees if there are savings and changes in utilization patterns.  It then splits the sample into “low income” and “high income” groups.

We used a controlled interrupted time series design to examine employer-mandated HDHP transitions, minimizing selection bias. The intervention group comprised 26,674 HDHP members with diabetes age 12-64 included between 2003-2012. HDHP members were enrolled for 1 year in a low deductible (≤$500) plan followed by 1 year in a HDHP (≥$1000) and propensity score matched 1:1 to diabetes patients with low deductibles. Low income HDHP members (n=9641) were a subgroup of interest….

Principal Findings:

HDHP members experienced small pre-to-post reductions in ED visits (-3.1% [-3.9,-2.3]), hospitalizations (- 4.2% [-5.5,-2.8]), and total healthcare expenditures (-3.6% [-4.3,-3.0]) relative to controls, and no changes in measures of adverse outcomes. However, low income HDHP members experienced relative increases in high severity ED visit expenditures (8.1% [3.0,13.2]) and high severity hospitalization days (26.1% [19.7,32.5]) at follow-up compared to baseline.

People with higher incomes seem to have had very good results.  They shifted consumption dollars towards out of pocket spending.  Here they were price sensitive with no adverse impacts.  However people with low incomes but employer sponsored insurance saw dramatic adverse events.  My theory and speculation is that they did not have the readily available resources that could easily be shifted.  They are resource constrained and the implied income of health insurance covering maintenance medication was an important part of the family budget.

There are a couple of important policy caveats that we have to take from this study as we think through current legislation.  The first is the size of the deductible shift.  Here the researchers are defining a large deductible as more than $1,000.  In ACA terms, a $1,000 deductible plan is a 2018 Platinum plan assuming no other cost sharing.  When this study was started, a $1,000 deductible was probably a weak Gold plan.  That is not the type of plan under discussion.

A 2018 58% AV plan has a deductible of $7,000 before any claims are paid.  This is, in my opinion, a significant difference past that of degree and towards a difference in kind.  People who could absorb an additional $500 or $1,000 annual net income shock as they transitioned from a low deductible plan to a $1,000 deductible plan will find it far more difficult to come up with several thousand more dollars for their maintenance medications.

The second policy caveat that we have to draw out is the population.  This is a population that received their insurance through work.  We know that the employer sponsored insurance (ESI) covered population tends to be healthier than the general population and also tends to have more income.  They have fewer complex co-morbidities and a greater ability to absorb a fiscal shock. And yet, even the low income segment of  this subgroup is in trouble in a shift from small to still fairly small deductibles in the context of the BCRA.

How does this generalize to the Medicaid population?  We know that the Medicaid population is income and asset constrained by eligibility requirements. We know that the Medicaid population tends to have more complex care needs for the same diagnosis for a variety of reasons. So how does this generalize?

My bet is that we would see the same negative impacts of increased adverse events and lower adherence to care plans because adhering to the care plan and avoiding adverse events requires resources that people on Medicaid are far less likely to have compared to people who have ESI insurance.

The BCRA even in its most generous potential implementation with states fully funding their portion of the stability funds and then dedictating the entire pool to enhanced cost sharing subsidies that match the ACA in actuarial value bumps (24% for people under 150% FPL for example) will still move people from Medicaid with de minimas deductibles to plans with $1,850 deductibles or higher.  If the Medicaid population is anything like the low income ESI population, we should expect more adverse events from this financing regime change.

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Time to call the Senate re: Medicaid

Delaying massive cuts and eligibility restrictions is still voting for massive cuts and suffering.

Call the Senate

ACHA review

Here are a few lowlights of the AHCA Congressional Budget Office score. I’ll try to keep this non-technical.

  • Medicaid is still getting changed from an entitlement that is responsive to changing needs to a block grant
  • 23 million people will lose coverage compared to current law projections
  • The MacArthur/Upton waivers are expected to destroy the individual markets that cover 15% of the country
  • Most of the premium decreases are due to older and sicker people being priced out of the market
    • Real easy to have low premiums when you don’t cover anyone who is likely to need services
  • Pre-existing condition protection is effectively destroyed by splitting the risk pool.

Relevant tweets below the fold:
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Medicaid in the President’s budget request

The Department of Health and Human Services accidentally leaked their own budget this evening. Bob Herman at Axios saved a copy. The biggest aspect of the budget is it laid out another $600 billion dollars in cuts to Medicaid and CHIP over ten years in addition to the $820 billion in Medicaid cuts in the AHCA.

Between these two documents Medicaid would lose 47% of its federal funding over a decade.

Loren Adler at Brookings thinks the cuts would be to tie the AHCA block grants to no more than inflation rate growth without regard to population or case mixture. As the Baby Boomers retire, more of them will require nursing home care that is currently paid for by Medicaid but there would be no federal money.

This is a budget wishlist that pits old people versus kids, the disabled against the pregnant and state budgets against upper income tax cuts in the federal budget.

Call Congress and give them an earful.