2017’s headline is the rapid transformation of the American health care system with disruptive hybrid private sector mergers, mega-hospital system mergers creating horizontally and vertically super-sized systems, and major capital expansion investment by academic medical centers to retain national and regional “anchor” supremacy.
And the explanation by pundits of the various competing trajectories.
My approach is to curate an annotated synopsis and let the readers reach their own conclusions.
So get started! (And Happy New Year!)
JMM
“The U.S. health care system is begging for disruption. It costs way too much ($3.3 trillion last year) and delivers too little value. Hundreds of millions of Germans, French, English, Scandinavians, Dutch, Danish, Swiss, Canadians, New Zealanders, and Australians get comparable or better health services for half of what we pay. For most Americans, care is not only expensive but is also fragmented, inconvenient, and physically inaccessible, especially to the sickest and frailest among us.
It should come as no surprise, then, that when titans of our private, for-profit health care sector — like Aetna, CVS, UnitedHealth Group (UHG), and DaVita — strike out in new directions, stakeholders react with fascination and excitement. Could this be it? Is free-market magic finally bringing Amazon-style convenience, quality, and efficiency to health care? Are old-guard institutions, like hospitals and nursing homes, on the verge of extinction?” (A)
“CVS Health said on Sunday that it had agreed to buy Aetna for about $69 billion in a deal that would combine the drugstore giant with one of the biggest health insurers in the United States and has the potential to reshape the nation’s health care industry…
The merger comes at a time of turbulent transformation in health care. Insurers, hospitals and pharmacy companies are bracing for a possible disruption in government programs like Medicare as a result of the Republicans’ plan to cut taxes. Congress remains at an impasse over the future of the Affordable Care Act, while employers and consumers are struggling under the weight of rising medical costs, including the soaring price of prescription drugs. And rapid changes in technology have raised the specter of new competitors — most notably Amazon.
A combined CVS-Aetna could position itself as a formidable figure in this changing landscape. Together, the companies touch most of the basic health services that people regularly use, providing an opportunity to benefit consumers. CVS operates a chain of pharmacies and retail clinics that could be used by Aetna to provide care directly to patients, while the merged company could be better able to offer employers one-stop shopping for health insurance for their workers.
But critics worry that customers could also find their choices sharply limited. The deal risks leaving patients with less choice of where to get care or fill a prescription if those with Aetna insurance are forced to go to CVS for much of their care.” (B)
“Ana Gupte, PhD, a senior healthcare services analyst at Leerink Partners, told CNBC she could see Walmart and health insurer Humana joining forces to compete in the shifting healthcare landscape.
“Humana and Walmart have been in a very tight relationship for six, seven years,” she said, and Humana members already receive deals on prescription copays at Walmart pharmacies. Increasing competition and the threats posed by CVS’ deal with Aetna may be enough to push Walmart to consider buying Humana, according to the report.
Anthem, Cigna and Walgreens may also be among the healthcare companies interested in striking a deal, according to Dr. Gupte.” (C)
“In another example of the blurring boundaries in the health care industry, UnitedHealth Group, one of the nation’s largest insurers, said on Wednesday that it is buying a large physician group to add to its existing roster of 30,000 doctors.
UnitedHealth’s Optum unit will acquire the physician group from DaVita, a large for-profit chain of dialysis centers, for about $4.9 billion in cash, subject to regulatory approval. DaVita operates nearly 300 clinics across a half-dozen states, including California and Florida.
With the purchase, UnitedHealth is increasingly moving into the direct delivery of medical care…
The potential threat of new competitors like Amazon entering the pharmacy business and technology companies delivering medical care through cellphones has led former adversaries to become partners, driving insurers to team up with hospitals and doctors’ groups. They are seeking to deliver care in novel ways, outside the expensive setting of a hospital…
Even if insurers succeed in lowering medical costs as a result of the new ventures, economists and other experts warn that shareholders, not consumers, could benefit unless the lower costs yield lower prices for coverage. There must be sufficient competition among insurers for consumers to benefit, Professor Garthwaite said. (D)
“Health care Goliaths are cutting out the middleman. The American health care system is full of intermediaries chasing after a share of the industry’s profit, often by gaming one another. UnitedHealth’s $4.9 billion purchase of a physicians group from DaVita is the latest example of trying to cut costs by eliminating such links in the chain.
The health care system in the United States is akin to one of Rube Goldberg’s zany cartoon contraptions. America spends far more than other countries on treating or preventing ailments, yet with mediocre outcomes. It also ranks worst among 11 industrialized countries in the percentage allocated to administration, the time doctors need to receive insurer approval for treatments, and how long patients spend disputing costs, according to a 2014 Commonwealth Fund study.
The multiplicity of players — drugmakers, doctors, pharmacies, pharmacy benefit managers, insurers, wholesalers and hospitals — means lots of hands trying to grab money from other participants. (E)
“U.S. health insurer Humana and two private-equity firms agreed to buy home health-care and long-term care operator Kindred Healthcare on Tuesday for about $4 billion, the latest expansion by a U.S. health insurer into patient care….
Humana, the fourth-largest U.S. health insurer, will pay $800 million for a 40 percent stake in Kindred at Home, which will contain Kindred’s 40,000 caregivers that serve about 130,000 patients daily.” (F)
“Catholic Health Initiatives (CHI) and Dignity Health have signed a definitive agreement to combine ministries and create a new, nonprofit Catholic health system. The combination brings together two leading health systems, allowing the organizations to expand their mission of service and create a healthier future for people and communities across 28 states….
The new health system will include more than 700 care sites and 139 hospitals, offering people and communities access to quality care delivered by approximately 159,000 employees and more than 25,000 physicians and other advanced practice clinicians. The organizations are geographically complementary with no overlap across hospital service areas.” (G)
“Two major hospital systems are in talks about a possible merger that would create the largest U.S. owner of hospitals, as a series of deals shape up to further consolidate control of the health-care landscape.
Ascension and Providence St. Joseph Health, both nonprofits, are talking about combining, according to people familiar with the discussions. A deal would create an entity of unprecedented reach, with 191 hospitals in 27 states and annual revenue of $44.8 billion… (H)
“Looking to grow their brands and health services, several Catholic-owned hospital operators have announced or are reportedly involved in merger talks….
The more than 300 Catholic hospitals involved in these deals mean fewer acquisition targets for HCA, Tenet, Community and other for-profits. These investor-owned giants are already seeing their hospital admissions deteriorate in the move to value-based care that emphasizes payments to outpatient providers and doctor’s offices to make sure more care is given upfront before it reaches an inpatient facility. In Tenet’s third quarter, for example, “same hospital patient revenue decreased 2.3%” which “reflects a 2.2% decrease in adjusted admissions,” the company said last month.
Tenet is evaluating options for the entire chain of 77 hospitals and 460 outpatient centers including possible sale. “We have and we will continue to review, analyze and pursue all options to enhance shareholder value,” Tenet’s Ronald Rittenmeyer, executive chairman and CEO said in November. (I)
“Franklin, Tenn.-based Community Health Systems completed its 30-hospital divestiture plan Nov. 1. Now, the company expects to sell another group of its hospitals with combined revenue of $2 billion, Chairman and CEO Wayne Smith said during a third quarter earnings call.
To improve its finances and reduce its heavy debt load, CHS put a turnaround plan into place last year. As part of the initiative, the company announced in early 2017 that it intended to sell off 30 hospitals. In August, CHS extended its divestiture plan. The company said it would sell a group of hospitals with combined revenue of $1.5 billion in addition to the 30 hospitals already announced….
“Our goal is to emerge from this process with a sustainable group of hospitals that are positioned for long-term success and growth,” he said.” (J)
“Carolinas HealthCare System, the Charlotte region’s dominant hospital chain, will partner with UNC Health Care of Chapel Hill to form a medical giant – one that leaders of the two systems predict will expand access to care, improve quality and boost the state’s economy…
It marks a major development for Carolinas HealthCare, Charlotte’s largest employer. The new system would run more than 50 hospitals and employ more than 90,000 people, making it one of the nation’s largest hospital chains.
But experts in hospital consolidation cautioned Thursday that deals like these tend to drive up health care costs. That’s because larger systems have more leverage to negotiate higher payments from insurance companies, which then pass on the higher costs to patients.” (K)
“The University of Pittsburgh Medical Center plans to invest $2 billion to build three “specialty hospitals” that include top-of-the-line technologies, the health system announced.
The $2 billion is in addition to $1 billion already set aside by UPMC for capital improvements, the organization said.
The three new facilities will be built near existing UPMC hospitals in Pittsburgh: UPMC Vision and Rehabilitation Hospital at UPMC Mercy; UPMC Hillman Cancer Hospital at UPMC Shadyside Hospital; UPMC Heart and Transplant Hospital at UPMC Presbyterian. (L)
San Diego-based Scripps Health is planning a $2.6 billion expansion — the largest construction project in the organization’s 125-year history.
The expansion will include constructing a $1.3 billion replacement hospital for Scripps Mercy Hospital San Diego; a new seven-story patient tower for San Diego-based Scripps Memorial Hospital La Jolla; and a three-story acute care structure at Scripps Memorial Hospital Encinitas (Calif.). In addition, seismic retrofitting construction is planned for Scripps Mercy Chula Vista (Calif.) and Scripps Green Hospital in San Diego. (M)
“Ohio State University intends to build a new hospital tower, which the university calls “the largest single facilities project ever undertaken at Ohio State.”
The university announced requests for qualifications Wednesday, seeking design professionals for two Wexner Medical Center projects anticipated to cost more than $2 billion: the tower and a new ambulatory center.
The envisioned hospital tower will have up to 840 beds in private rooms to elevate patient-centered care, safety and training for future physicians, the university said…
“This is an important moment in time,” said Wexner Medical Center board member Robert H. Schottenstein in a statement. “We are positioned to take a bold step forward by aligning all the operations of the medical center for the delivery of care, research and innovation that will have life-changing, long-term benefits for central Ohio, the State and beyond…. (N)
“Virtua Health can proceed with its plans to build a $1 billion hospital complex in Westampton, Burlington County, as long as it meets 13 conditions, the New Jersey Health Planning Board decided Thursday after reviewing the proposal…
The new hospital, which would have 339 beds and private rooms for all patients, would replace the Virtua Memorial Hospital in Mount Holly, three miles away…
The 399-bed Voorhees hospital, which opened in 2011, also was part of a $1 billion medical complex. A third Virtua hospital is in Marlton. (O)
“Moody’s Investors Service has issued a negative outlook on the nonprofit healthcare and hospital sector. The outlook reflects Moody’s expectation that operating cash flow in this sector will decline by 2 to 4 percent over the next 12 to 18 months.
The outlook revision comes amid uncertainty regarding federal healthcare policy for nonprofit hospitals and after the sector experienced a larger-than-expected drop in cash flow this year….
This marks the first time in several years Moody’s has issued a negative outlook on the nonprofit healthcare and hospital sector. The debt rating agency has maintained a stable outlook on the sector since August 2015. “(P)
Fitch Ratings’ outlook on the nonprofit healthcare sector is negative for 2018, as the sector faces regulatory, political and competitive challenges.
“..Fitch expects nonprofit hospitals and health systems’ profitability to continue to weaken over the next year. “Growth in Medicare and Medicaid volumes are weakening provider payer mixes at a time when providers are moving from volume-based reimbursement in greater numbers,” said Fitch Senior Director Kevin Holloran.” (Q)
“Dr. Peter Pronovost, one of the nation’s top patient safety experts and advocates, is leaving Johns Hopkins Health System for a job at insurance giant UnitedHealthcare, he announced Thursday on Twitter.
In a statement welcoming Pronovost to UnitedHealthcare, the insurer said he “has distinguished himself nationally and internationally with his ground-breaking work around saving lives, improving patient safety, and improving both the quality and value of health care…
“Dr. Pronovost’s patient-centered approach to care and deep clinical expertise will help bring a provider point-of-view deeper into UnitedHealthcare and improve how payers and care providers work together to share best practices, build appropriate value-based incentives, and effectively use data to improve the patient experience.”” (R)
“Rapid changes in the larger health care field are leading hospitals and health systems to explore new ways to enhance quality, reduce costs, and provide more convenient access to care to meet patients’ needs on their terms…hospital mergers can lead to substantial savings and provide needed funds to finance innovations that will enhance quality and convenience.
Benefits apply whether the hospitals involved are nearby, across the state or even across the country. A larger system allows hospitals to share infrastructure costs for expensive IT and reduce overlapping overhead costs.
It also expands the types of services available to patients and communities, and provides a stable foundation on which to deliver more comprehensive, coordinated and convenient care.”
America’s hospitals and health systems continue to build a high-performing, patient-centered system that benefits us all.
In some communities, mergers might be the only practical way to preserve services and enhance quality. In every case, the changes in the hospital field are in the service of providing a strong foundation upon which to build the health care system of the future and to continue to provide communities with the care they need in the consumer-friendly ways they expect.” (S)
“In theory, insurance companies hold down costs by driving hard bargains with providers. In reality, they find it difficult to do so.
UnitedHealth Group is the largest private health insurer, with about 11% of the overall market. Everyone else is less than 10% (though in local and regional markets there is more concentration).
That makes these insurers plenty big enough to beat up on consumers, but too small to take on powerful providers.
The result: In the USA, 18 cents of every dollar spent goes to health care each year. In other developed countries, health care expenditures are much less, in the range of 10 to 12 cents per dollar.
Which makes recent trends in the hospital industry all the more troubling. Two major hospital chains, Ascension and Providence St. Joseph Health, are in talks to merge, a move that would create a 191-hospital colossus operating in 27 states…
These massive businesses run much as their for-profit brethren — and will put pressure on for-profits to merge as well. That won’t be good for consumers, or the ridiculously high premium the American economy pays for a health care system that lacks effective cost controls.
Not all mergers in health care are problematic. The proposed combination of CVS, the owner of drug stores and walk-in clinics, with Aetna, a major insurer, holds intriguing possibilities for efficiencies and more comprehensive tracking of health care decisions.
It could also be argued that there should be more consolidation among insurance companies. This might not be a hugely popular concept, but it would give them more leverage to say no to costly increases demanded by hospitals and other potent health care providers.
At the very least, it’s time to take a critical eye to the mega hospital empires being erected. They could be very hazardous to your health.” (T)
“The CVS-Aetna deal did not come as a surprise to industry leaders who have been keeping their ears to the ground and have paid attention to recent trends. But nevertheless, this merger is a major shake-up that cannot be ignored. Google, Amazon and IBM Watson are all looking to stake out a piece of the healthcare field, and deals such as Optum’s purchase of DaVita Medical Group underscore the ever-evolving nature of the ways people access and pay for care and services. Providers should not view this movement as a threat that must be stopped. Instead, we should spur innovation on our end. We can’t sit still. That’s why, in Northwell Health’s case, we have been forging new partnerships and pursuing ventures that will enable the organization to compete more effectively in this rapidly changing environment.
It will be especially intriguing to see what market segments CVS and Aetna pursue after the merger is finalized. Undoubtedly, they will offer prescriptions, preventive care and other primary services to supplement CVS’ “Minute Clinics,” but it remains to be seen what other health services will be provided as part of this new collaboration. Regardless of what new competitors enter the healthcare market, the seriously ill, elderly patients with chronic conditions and those who have suffered traumatic injuries will still be relying on hospitals to take care of them. It’s highly unlikely that any of the new players will be providing inpatient care. As we all know, the bulk of healthcare funding is spent on long-term care for people at the end of life. The Amazons and Googles of the world are not targeting that population.” (U)
“It’s all about the patient.
Or at least about keeping patients and the revenue generated for their medical care.
As health care is rocked by deals aimed at shattering traditional boundaries between businesses, some of the nation’s biggest hospital groups are doubling down on mergers that seem much more conventional. Skeptics say some of these hospital deals are more of the same: systems seeking to increase their leverage with insurance companies and charge more for care…
But the frenzy of mergers and other alliances taking place also reveals a frantic attempt to court and capture patients as people have more choices about where to go for care. Patients are increasingly relying on walk-in clinics, urgent care centers or an app on their cellphone to check out a nasty rash or monitor their diabetes, and they are looking for places that are both less expensive and more convenient than a hospital emergency room or doctor’s office…
The fundamental question is whether hospital groups have what it takes to use their increased scale to radically change,…
But the challenge cannot be underestimated in asking these massive institutions to come together and change into something radically different. “You’re taking a zebra and a zebra,” Mr. Cassels said. “What they want to become is a unicorn.” (V)
“The $69 billion merger between CVS and Aetna is a powerful example of the “attacker’s advantage,” according to Ram Charan in an op-ed for strategy + business.
Mr. Charan is a business adviser and teacher who has spent 40 years consulting CEOs and executive boards. He defines the attacker’s advantage as “the competitive edge generated by leaders who can detect subtle shifts in consumer behavior, markets, and economic and social systems; who can spot an opportunity before others do; and who can lead their enterprises decisively to execute on that opportunity.” (W)
“….. no one should underestimate the challenge of growing the UnitedHealth acquisition of dispersed physician groups into a national system capable of disrupting our floundering health system. Health care is a very local affair, and the organizations providing it tend to be creatures of their localities and histories. It can take generations for a provider-insurer partnership to develop a culture of trust, collaboration, and value orientation that has made existing examples of these combinations so uniquely effective. If the new entity seeks to grow, it will find that recruiting and training physicians who can leave the fee-for-service mentality behind is a challenge, as is finding leadership that can gain and keep health professionals’ trust. Kaiser has failed in several attempts to spread to new locations. And though UnitedHealth’s Optum division, which will run the partnership, has some limited experience managing selected specialty health services, making this new enterprise work could prove daunting.” (A)
“Many Mayo Clinic doctors, nurses and other employees will be free to roll up their sleeves and show their ink in 2018 with a new policy allowing tattoos to be visible.
Mayo Clinic is loosening up its “Dress and Decorum Policy.” Currently, employees with tattoos are supposed to keep them covered at work or face discipline.” (X)
“New Hyde Park, N.Y.-based Northwell Health named Michelin Star chef Bruno Tison assistant vice president for food services and the corporate executive chef.
In his new role, Mr. Tison will oversee food quality, culinary training, menu and recipe development for the entire health system. His responsibilities will include teaching the health system’s cooks to make healthier and tastier food.” (Y)
(A) Is M&A the Cure for a Failing Health Care System?, David Blumenthal, https://hbr.org/2017/12/is-ma-the-cure-for-a-failing-health-care-system
(B) CVS to Buy Aetna for $69 Billion in a Deal That May Reshape the Health Industry, By MICHAEL J. de la MERCED and REED ABELSON, https://www.nytimes.com/2017/12/03/business/dealbook/cvs-is-said-to-agree-to-buy-aetna-reshaping-health-care-industry.html
(C) Why the CVS-Aetna deal could push Walmart to buy Humana, by Ayla Ellison, https://www.beckershospitalreview.com/payer-issues/why-the-cvs-aetna-deal-could-push-walmart-to-buy-humana.html
(D) UnitedHealth Buys Large Doctors Group as Lines Blur in Health Care, by REED ABELSON, https://www.nytimes.com/2017/12/06/health/unitedhealth-doctors-insurance.html?_r=0
(E) UnitedHealth’s Deal May Point to Health Care’s Future, by ROBERT CYRAN, https://www.nytimes.com/2017/12/06/business/dealbook/unitedhealth-davita.html
(F) Humana, private-equity firms buy Kindred Healthcare for $4 billion, by Ty Wright, https://www.cnbc.com/2017/12/19/humana-private-equity-firms-buy-kindred-healthcare-for-4-billion.html
(G) Dignity Health and Catholic Health Initiatives to Combine to Form New Catholic Health System Focused on Creating Healthier Communities, https://www.dignityhealth.org/about-us/press-center/press-releases/dignity-health-and-catholic-health-initiatives-announcement
(H) Hospital Giants in Talks to Merge to Create Nation’s Largest Operator, by Melanie Evans and Anna Wilde Mathews, https://www.wsj.com/articles/hospital-giants-in-talks-to-merge-to-create-nations-largest-operator-1512921420
(I) Catholic Hospital Mega-Deals Pressure For-Profits Like Tenet And HCA, Bruce Japsen, https://www.forbes.com/sites/brucejapsen/2017/12/12/catholic-hospital-mega-deals-pressure-for-profits-like-tenet-and-hca/#41a1d7844c08
(J) CHS to sell additional hospitals worth $2B in revenue, by Ayla Ellison, https://www.beckershospitalreview.com/hospital-transactions-and-valuation/chs-to-sell-additional-hospitals-worth-2b-in-revenue.html
(K) CEOs describe health care partnership as a ‘marriage’, by Ames Alexander, Deon Roberts and Ann Doss Helms, http://www.charlotteobserver.com/news/business/article170440017.html
(L) UPMC will invest $2B to build 3 specialty hospitals, by Paige Minemyer, https://www.fiercehealthcare.com/finance/upmc-capital-investment-allegheny-health-network-hospital-expansion
(M) Scripps Health to launch $2.6B expansion, by Alia Paavola, https://www.beckershospitalreview.com/facilities-management/scripps-health-to-launch-2-6b-expansion.html
(N) New hospital tower would be Ohio State’s largest single project, by Jennifer Smola, http://www.dispatch.com/news/20171129/new-hospital-tower-would-be-ohio-states-largest-single-project
(O) Virtua wins health planning board OK to build a $1 billion medical campus in Westampton, by Jan Hefler, http://www.philly.com/philly/news/new_jersey/Virtua-Health-Westampton-hospital-Mount-Holly-medical-project.html
(P) Moody’s: Outlook is negative for nonprofit hospital sector, by Ayla Ellison, https://www.beckershospitalreview.com/finance/moody-s-outlook-is-negative-for-nonprofit-hospital-sector.html
(Q) Fitch issues negative outlook for nonprofit hospitals: 4 things to know, by Ayla Ellison, https://www.beckershospitalreview.com/finance/fitch-issues-negative-outlook-for-nonprofit-hospitals-4-things-to-know.html
(R) Top patient safety expert, innovator of checklists, departs Johns Hopkins, by Meredith Cohn, http://www.baltimoresun.com/health/bs-hs-peter-pronovost-leaves-hopkins-20171214-story.html
(S) Health care mergers benefit patients, by Rick Pollack, https://www.usatoday.com/story/opinion/2017/12/17/health-care-mergers-benefit-patients-editorials-debates/108704794/
(T) When hospitals merge, you pay the bill, https://www.usatoday.com/story/opinion/2017/12/17/when-hospitals-merge-you-pay-editorials-debates/953998001/
(U) Michael Dowling: 4 most important healthcare trends in 2018, by Written by Michael J. Dowling, https://www.beckershospitalreview.com/hospital-management-administration/michael-dowling-4-most-important-healthcare-trends-in-2018.html
(V) Hospital Giants Vie for Patients in Effort to Fend Off New Rivals, by REED ABELSON, https://www.nytimes.com/2017/12/18/health/hospitals-mergers-patients.html?_r=0
(W) Why the Aetna–CVS Deal Is a Lesson for Leaders, by Leo Vartorella, https://www.strategy-business.com/blog/Why-the-Aetna-CVS-Deal-Is-a-Lesson-for-Leaders
(X) Mayo to allow visible body art, with some exceptions, by Jeff Kiger, http://www.postbulletin.com/news/local/mayo-to-allow-visible-body-art-with-some-exceptions/article_4b0c7713-633b-5230-86d7-5468901bcf3c.html
(Y) Northwell first health system in nation to hire Michelin Star chef, by Anuja Vaidya, https://www.beckershospitalreview.com/hospital-executive-moves/northwell-health-appoints-assistant-vp-of-food-services-corporate-executive-chef-3-takeaways.html
“About 8.8 million Americans enrolled in health coverage through Healthcare.gov, the Trump administration announced Thursday, a slight dip from last year after the Trump administration cut spending and outreach but far from a dramatic drop.
Last year, about 9.2 million people signed up through Healthcare.gov, which serves more than 30 states. A dozen states run their own marketplaces and several of those states have not yet closed their open enrollment.
Seema Verma, the head of the Centers for Medicare and Medicaid Services, which oversees the federal marketplace, tweeted next year’s Obamacare enrollment numbers a week after the open enrollment period for 2018 coverage ended.
There are two ways to look at the numbers: On the one hand, in a thriving marketplace, you would expect enrollment to grow every year. On the other hand, given the deep cuts that the Trump administration made to Obamacare advertising and the decision to have the sign-up window, the law has proven pretty resilient.” (A)
“The numbers essentially defied President Trump’s assertion that “Obamacare is imploding.” They suggested that consumers want and need the coverage and subsidies available under the Affordable Care Act, even though political battles over the law, President Barack Obama’s signature domestic achievement, are sure to continue in Congress and in next year’s midterm election campaigns.
Seema Verma, the administrator of the federal Centers for Medicare and Medicaid Services, reported the total in a Twitter post on Thursday. She said her agency had done a great job to “make this the smoothest experience for consumers to date.”
Republican efforts to dismantle the Affordable Care Act this year had an unintended effect: They heightened public awareness of the law and, according to opinion polls, galvanized support for it among consumers who feared that it might be taken away….
Ms. Verma tried over the summer to persuade Congress to repeal the Affordable Care Act, but on Thursday, she boasted about how well the law’s insurance marketplace — under new management — was meeting the needs of consumers.” (B)
“After Trump signs the tax bill into law, enrollment could drop precipitously now that people are not financially pressured to buy health insurance. Health policy experts predict a sizable number of healthy people likely won’t enroll.
That could two do things, say health-care experts: Drive enrollment down further and raise premiums even higher, since insurance companies will be spending more money on sick people without balancing it with healthy people.
That means that in places where there aren’t wide swaths of insured Americans — such as rural areas in Iowa or New Hampshire — insurance companies could have incentive to pull out of Obamacare exchanges, further weakening the law. In a sense, Republicans are creating a self-fulfilling prophecy.
Some health experts warn it could be a prophecy Republicans could come to regret, since residents of less-populated areas and the self-employed, who are also often uninsured, tend to be Republican.” (C)
“Senate Majority Leader Mitch McConnell on Thursday said he wants the Senate to move past Obamacare repeal in 2018 in favor of stabilizing insurance markets and to other issues, prompting a backlash from one of the Senate’s most prominent advocates of repeal and an ally of President Trump….
“Well, we obviously were unable to completely repeal and replace with a 52-48 Senate,” McConnell said referring to the partisan split in the chamber. “We’ll have to take a look at what that looks like with a 51-49 Senate [once Alabama Democratic Sen.-elect Doug Jones is seated]. But I think we’ll probably move on to other issues.”
McConnell’s comment drew a sharp rebuke from Sen. Lindsey Graham (R-S.C.), who is hoping to revive a bill next year repealing Obamacare in favor of block grants to states. He and Sen. Bill Cassidy – who authored the last GOP attempt to repeal the health care law in 2017 – met this week to strategize about how to bring back the effort in the new year.
“I think that’s a huge mistake,” Graham told reporters. “We should do everything we can to replace it, as much as [Democrats] did to pass it. We own it now.”” (D)
“Republican Sen. Lindsey Graham of South Carolina immediately pushed back on McConnell’s comments. “To those who believe — including Senate Republican leadership — that in 2018 there will not be another effort to Repeal and Replace Obamacare — you are sadly mistaken,” Graham said in a statement and on Twitter.
Obamacare is still the law of the land and will continue to crumble which will drive up insurance costs for hard-working Americans and eventually pave the path to single-payer health care.
I’m fully committed to Repealing and Replacing Obamacare in 2018 by block-granting the money back to the states and away from Washington bureaucrats who are completely unaccountable to the patients of America.”” (E)
“With President Donald Trump poised to sign a tax bill that would effectively kill off the mandate requiring most Americans to buy health insurance coverage or pay a fine, calls for federal legislation to stabilize the individual insurance market are intensifying. But some experts doubt that federal help for 2018 is on the way, and wonder if states would be better off taking action on their own to prop up their markets….
States may be better able to keep their individual markets afloat by taking matters into their own hands. States could implement their own individual mandate penalties. Massachusetts has had one for the past 10 years. However, implementing the ACA’s most unpopular provision would be politically tricky. Officials in states including California, Connecticut, Maryland and others are considering their own mandates.
States could also set up state-based reinsurance programs and apply for federal funding under a 1332 waiver. Alaska, Minnesota and Oregon have lowered premiums in their marketplaces by taking that route. Most states don’t have enough money to run a reinsurance program independently… (F)
“In practice, the precise effect of the provision has been unclear. The Obama administration had made the mandate somewhat porous, with a long list of life circumstances that would exempt people from having to pay a penalty. Some economists have argued that the penalties are too small to encourage the truly reluctant to enroll. The C.B.O. said it was re-evaluating its own assumption but thought it had probably overestimated the provision’s impact on premiums and insurance enrollment. Still, some mandate enthusiasts continue to argue that the provision’s disappearance will lead to a death spiral of ever-escalating insurance premiums and eventual market collapses.
Those questions, once largely academic, will get real-life answers in coming months and years. The end of the mandate will establish a sort of natural experiment, in which its influence will become much more clear. Some states may not wait to find out. Policymakers in several blue states are weighing state-level insurance mandates. Those policy descendants may help settle the question of the importance of the mandate to the design of Obamacare, with its market-based system for expanding insurance coverage.” (G)
“While young and healthy individuals may very well rejoice at the repeal of the individual mandate, nobody stays young and healthy forever. Just as Social Security relies upon a younger generation of workers to fund the retirement income of the elderly, so too does ObamaCare rely on the healthy to take care of the sick. We all eventually retire and we all eventually get sick. It is just a basic fact of life that every single one of us will have our time of need.
But now Republicans are appealing to our selfish, short-term instincts to make us lose sight of our long-term future as a nation. Throughout all the ObamaCare repeal attempts, from the skinny repeal to Graham-Cassidy bill to the elimination of cost share reductions, Republicans have tried so hard in so many ways to make America sick again. This time they may have very well succeeded.” (H)
“A new poll by The Associated Press-NORC Center for Public Affairs Research finds that 48 percent named health care as a top problem for the government to focus on in the next year, up 17 points in the past two years.
The poll allows Americans to name up to five priorities and found a wide range of top concerns, including taxes, immigration, and the environment. But aside from health care, no single issue was named by more than 31 percent.
And 7 in 10 of those who named health care as a top problem said they had little to no confidence that government can improve matters. The public was less pessimistic in last year’s edition of the poll, when just over half said they lacked confidence in the problem-solving ability of lawmakers and government institutions.” (I)
“First, the just-passed Republican tax plan eliminates the penalty on people who don’t have ACA-approved health coverage. So people will soon be able to buy short-term insurance without worrying about that penalty….
But short-term plans don’t have to meet standards set by the ACA, so they often come with limitations that can leave people with huge medical bills if they get seriously ill. These plans can be cheap,…“but they also don’t cover very much.”
For example, insurers can exclude coverage or charge extra for everything from maternity care and prescription drugs to mental health care. They also don’t have to cover pre-existing conditions—that is, any condition for which you have experienced symptoms or sought treatment for up to five years before enrolling. And if you get seriously ill after the policy starts, the company can refuse to later renew your plan.
Short-term plans can also have higher deductibles than what’s allowed by the ACA…. By contrast, ACA plans are prevented by law from putting a dollar limit on any of these essential health benefits.” (J)
“Take, for example, the poor Maine Warden Service pilot who landed Wednesday morning on Eagle Lake in northern Maine. While taxiing to the state’s airplane base, he hit a soft spot and, well, all you can see now is the Cessna’s tail poking through a hole in the surface.
Which brings us to Sen. Susan Collins. “I’m not pretending that I’m not disappointed and annoyed,” Maine’s senior senator said in a telephone interview late Wednesday, shortly after her much-ballyhooed bargain with Senate Majority Leader Mitch McConnell sank like a plane on thin ice.
The deal went like this: In exchange for Collins’ vote for the Republicans’ tax giveaway to corporations and the wealthiest among us, McConnell promised – promised – that two bipartisan bills aimed at rescuing the Affordable Care Act, or Obamacare, would pass by the end of the year.
Uh-huh.
Wednesday afternoon, while President Trump and a herd of happy Republicans gathered at the White House to bask in the glow of their newly minted tax “reform,” Collins and Sen. Lamar Alexander, R-Tennessee, announced that, alas, their two Obamacare bills will have to wait until next year.
Deadline? What deadline? Promise? What promise?..
She blamed Senate Minority Leader Chuck Schumer, D-New York, who announced last week that Democrats in the Senate would not support the Obamacare rescue legislation as part of a year-end stopgap spending bill.
If that’s not a warning sign of danger ahead, what is?…
Little wonder that much of Washington, D.C., not to mention Maine, now snickers about how Collins got played. “If I get the bills that I’ve been advocating for passed, but they’re passed six to eight weeks later than I expected, how does that mean I’ve been played?” she asked. “How do you know you’re going to get them in six to eight weeks?” I countered. “How do you know I’m not?” she replied. I don’t.
But like most common-sense Mainers, I know enough to stay off thin ice.” (K)
“In a larger sense, the Republicans’ rhetorical victory of cutting out the individual mandate will make the ACA — which is increasingly popular — even more popular. The individual mandate was the only aspect of the law that didn’t enjoy wide support among the public. The other components of the law — protecting preexisting conditions, ending lifetime caps, ensuring that certain benefits such as chemotherapy and mental health are covered by law — enjoy widespread popularity.
A more popular law will be a more challenging target to repeal. And already Senate Majority Leader Mitch McConnell (R-Ky.), with an even narrower majority after the Alabama Senate race, is signaling that repeal may be a bridge too far.
So where does this leave us? It leaves us with two laws.
Call the first one Obamacare. It provides preexisting condition protections and other safeguards to American families. And for the millions covered under the Medicaid expansion or who have family incomes less than $100,000, it delivers affordable health-care coverage.
Call the second one Trumpcare. It exposes many — especially in rural areas and those who make too much for subsidies — to significantly increasing premiums, driven by the calculated decision from Republicans to get rid of the mandate.” (L)
(A) 8.8 million people signed up for Obamacare coverage despite Trump’s sabotage, by Dylan Scott, https://www.vox.com/policy-and-politics/2017/12/21/16807348/obamacare-enrollment-2018
(B) Obamacare Sign-ups at High Levels Despite Trump Saying It’s ‘Imploding’, by ROBERT PEAR, https://www.nytimes.com/2017/12/21/us/politics/health-obama-care-affordable-care-act.html?_r=0
(C) No, Trump didn’t repeal Obamacare. But he may regret claiming as much, by Amber Phillips, https://www.washingtonpost.com/news/the-fix/wp/2017/12/21/no-trump-didnt-repeal-obamacare-but-he-may-regret-claiming-as-much/?utm_term=.0f6897582a8e
(D) McConnell: ‘We’ll probably move on’ from Obamacare repeal in 2018, by CRISTIANO LIMA and JENNIFER HABERKORN, https://www.politico.com/story/2017/12/21/mcconnell-well-probably-move-on-from-obamacare-312407
(E) McConnell Ready To ‘Move On’ From Obamacare Repeal, Others In GOP Say Not So Fast, by KELSEY SNELL, https://www.npr.org/2017/12/21/572588692/mcconnell-wants-bipartisanship-in-2018-on-entitlements-immigration-and-more
(F) Calls for Obamacare market stabilization intensify as individual mandate penalty is axed, by Shelby Livingston, http://www.modernhealthcare.com/article/20171221/NEWS/171229980
(G) Requiem for the Individual Mandate, by Margot Sanger-Katz, https://www.nytimes.com/2017/12/21/upshot/individual-health-insurance-mandate-end-impact.html
(H) Repeal of the ObamaCare mandate is a selfish and short-term plan, by DR. EUGENE GU, http://thehill.com/opinion/healthcare/366046-repeal-of-the-obamacare-mandate-is-a-selfish-and-short-term-plan
(I) Poll says US citizens worry most about health care, by Emily Swanson and Ricardo Alsonso-Zaldivar, https://www.csmonitor.com/USA/2017/1221/Poll-says-US-citizens-worry-most-about-health-care
(J) Is ‘Short-Term’ Health Insurance a Good Deal?, by Nancy Metcalf, https://www.consumerreports.org/health-insurance/is-short-term-health-insurance-a-good-deal/
(K) With raised ax in plain sight, Collins went out on a limb, by Bill Nemitz, http://www.pressherald.com/2017/12/22/bill-nemitz-with-raised-ax-in-plain-sight-collins-went-out-on-a-limb/
(L) Republicans didn’t repeal Obamacare. They solidified it, by Andy Slavitt, https://www.washingtonpost.com/opinions/republicans-didnt-repeal-obamacare-they-solidified-it/2017/12/22/c2eec7e2-e72d-11e7-a65d-1ac0fd7f097e_story.html?utm_term=.ab60c9066378
“Just like the health care vote, there were a small number of Republican senators who seemed like they might hold out. But unlike last time, Senate leadership managed to successfully cut deals with these senators to secure “yes” votes.
…Collins was most concerned about the provision in the tax bill that would kill Obamacare’s individual mandate and cause millions to lose their health insurance, according to the nonpartisan Congressional Budget Office….. Collins got Senate leadership to commit to Obamacare stabilization. This ultimately ensures the federal government keeps paying for cost-sharing subsidies to help lower the cost of health insurance, but it won’t do much to mitigate the loss of the individual mandate….
Collins’s health insurance deal has a rocky path forward…
But there’s a major roadblock to Collins’s health care goals: House Republicans.
Republicans in the House have said that Collins made her negotiations with Senate leadership, not them. And they’re clearly feeling no obligation to play by her rules.” (A)
A major obstacle to passing a short-term spending bill by the end of the week was eliminated Wednesday when two key Republican senators asked GOP leaders not to consider health-care legislation as part of the legislation.
Senate Republican leaders had considered attaching the health-care proposal to the short-term spending bill to keep the government running through mid-January. But that approach ran into resistance from hardline conservatives in the House, who balked at approving what they consider a giveaway to insurance companies.
“Rather than considering a broad year-end funding agreement as we expected, it has become clear that Congress will only be able to pass another short-term extension to prevent a government shutdown and to continue a few essential programs,” Sens. Lamar Alexander of Tennessee and Susan Collins of Maine said in a joint statement.
For that reason, Alexander and Collins said, they asked Senate Majority Leader Mitch McConnell not to offer the health care legislation this week. The senators said they would offer the bill early next year.” (B)
““When the individual mandate is being repealed that means ObamaCare is being repealed,” Trump said during a Cabinet meeting at the White House on Wednesday.
“We have essentially repealed ObamaCare, and we will come up with something much better,” Trump added, saying block grants might be one approach.
During a House floor speech Tuesday, Speaker Paul Ryan (R-Wis.) cast the mandate repeal as “finally restoring the freedom to make your own health-care choices.”
“By repealing the individual mandate at the heart of ObamaCare, we are giving back the freedom and the flexibility to buy the health care that’s right for you and your family,” he said….
Sen. Susan Collins (R-Maine) has aired concerns about repealing the mandate, saying she wished the tax bill left health care alone, while reiterating that she has never actually supported imposing the tax penalty for those going uninsured.
“Repealing the individual mandate without other health-care reforms will almost certainly lead to further increases in the cost of health insurance — premiums that are already too expensive under the [Affordable Care Act],” Collins said in a floor speech Monday where she announced her support for the tax bill.” (C)
“The mandate, which requires most Americans to get health insurance or pay a fine, is repealed in the GOP tax bill. But that does not mean the entire law is being repealed.
The infrastructure for the individual insurance exchanges, such as Healthcare.gov, remain in place.
The expansion of Medicaid under the ACA, which helped cover an additional 15 million people, remains in place in the states that have opted to expand the program.
Other policy changes from the law, such as insurance companies’ inability to reject a patient due to a preexisting condition and mandatory coverage of basic health needs like prescriptions, remain in place.
In fact, according to the Congressional Budget Office, the Obamacare individual insurance markets are likely to remain relatively stable — albeit with a lower enrollment total — even without the mandate.
But the mandate repeal could still bring about adverse affects on the healthcare market.
The CBO estimated that 13 million more people would go without insurance by 2027 without the mandate than if it remained in place. It also estimated that premiums in Obamacare markets would jump 10% over the current baseline.
Most consumers will be shielded from the increase due to subsidies from the federal government, but as many as 2 million Americans could be priced out of insurance, according to the CBO.” (D)
“Ultimately, repealing Obamacare’s individual mandate would cause 13 million fewer Americans to be insured in 2027 compared with current law, according to the nonpartisan Congressional Budget Office (CBO). Healthier and wealthier people may choose to forgo coverage, and even poorer, medically needy people may not sign up for insurance because they don’t know which options are available and there may not be the same sense of urgency to enroll without the mandate. The CBO also predicts that premiums in the markets would spike 10% without Obamacare’s individual mandate as the exchanges are left with a sicker consumer pool. However, for most Obamacare enrollees (those making between 100% and 400% of the Federal Poverty Level), an accompanying increase in federal subsidies will make up for higher premiums. Those making above that income level (about $48,000 for an individual or $98,000 for a family of four) will have to face the brunt of premium increases, though. (E)
(A) Key senators sold their votes on the tax bill for some high-risk deals, by Ella Nilsen, https://www.vox.com/2017/12/20/16796670/gop-tax-bill-flake-collins-immigration-health-care
(B) Alexander-Murray health care proposal delayed, removing obstacle to avoiding government shutdown, by Michael Collins, http://www.tennessean.com/story/news/politics/2017/12/20/alexander-murray-health-care-proposal-delayed-removing-obstacle-avoiding-government-shutdown/970413001/
(C) Congress repeals ObamaCare mandate, fulfilling longtime GOP goal, RACHEL ROUBEIN, http://thehill.com/policy/healthcare/365785-congress-repeals-obamacare-mandate-fulfilling-longtime-gop-goal
(D) Trump applauds ‘Obamacare repeal’ in the tax bill — but there’s a big problem with that claim, by Bob Bryan, http://www.businessinsider.com/trump-obamacare-individual-mandate-repeal-in-tax-reform-bill-2017-12
(E) The GOP Tax Bill Repeals Obamacare’s Individual Mandate. Here’s What That Means for You, by SY MUKHERJEE, http://fortune.com/2017/12/20/tax-bill-individual-mandate-obamacare/
“Some conservative health policy experts don’t think Congress and Trump have gone far enough. They fear scrapping the mandate but leaving many rules intact would prove disastrous, possibly setting in motion an inevitable “bailout” from Congress that would let Obamacare live to see another day. Conservative thinker Chris Jacobs, for instance, wrote in The Federalist recently that lawmakers need to get the rest of the job done. Mandate repeal, he wrote, is like “pruning back the fruit of the poisonous tree” when what’s needed is an attack on its roots.
Yet the end of the individual mandate, combined with these other Trump policies, are likely to make comprehensive health insurance even more expensive. And if fewer people are covered, its constituency may be diluted. Yet if there’s one thing that Obamacare has proven since its enactment in 2010, it is that it is resilient, despite perpetual attack. Its protections for people with pre-existing conditions and the working poor earned it a late-blooming popularity.” (A)
The Individual Mandate is “the aspect of Obamacare that basically makes the rest of the system work — and it does work, regardless of the lies conservative politicians tell to dupe followers into thinking the healthcare reform law is a “disaster” and a “catastrophe.”
A recent report from the Commonwealth Fund found that “the Affordable Care Act has put access to healthcare in reach for millions of Americans.” It said fewer people are putting off doctor visits or struggling with medical bills.
In California alone, the percentage of uninsured working-age adults has plunged to 10% from 24%, according to the report. Nationwide, the uninsured rate fell to a record low 8.8% last year.
After President Trump took office and cast uncertainty over insurance markets, the uninsured rate rose this year to a three-year high. Which means the only disaster for Obamacare has been Trump calling it a disaster.
And now Republicans are all but ensuring failure of the law by eliminating the requirement that most people have health insurance. They say they’re protecting personal freedom, giving people the choice of whether or not to buy coverage.
All they’re really doing is showing they have no clue how insurance works.” (B)
“Of all the reasons the Republican tax bill will be a mugging of the majority of non-wealthy Americans, one reason stands out above all else — the bill will seriously set back everyone who has struggled to pay for health insurance and medical expenses.
Repealing the Obamacare coverage mandate is likely to prompt insurers to raise premiums by an estimated 10 percent annually into the foreseeable future, according to the nonpartisan Congressional Budget Office. Why? Because as up to 13 million people drop their policies — CBO’s estimate — the remaining policy holders will end up paying more. (Those dropping coverage will revert to pre-Obamacare days of postponing treatments and hoping for the best.)
That’s just the start of the dire news affecting health care costs, as anticipated increases will more than offset any tax break. Not that most Americans were going to see tax cuts anyway — the bottom 50 percent of wage earners will see their after-tax incomes shrink by 2 percent; the middle 40 percent’s after-tax incomes will shrink by 0.6 percent; while the top 10 percent will see their incomes grow by 1.5 percent or more, the New York Times noted Monday.
There’s more bad health care news. The tax bill’s $1.5 trillion cost also preys on seniors, triggering spending cuts of 4 percent annually for Medicare, the federal health program for those 65 and older.” (C)
“In a speech on the Senate floor Monday, Collins announced her support of the tax legislation, saying that the bill would create more jobs and allow for higher wages. Collins also said she would have preferred that the bill not include repeal of the Obamacare individual mandate penalties that require Americans buy health insurance or pay a fine.
“I have never supported the individual mandate,” she said. “There is a big difference between fining people who choose people who choose go without health insurance, versus the bills considered last summer and fall that would have taken away insurance coverage from people who have it and want it. Those bills also would have made sweeping cuts in the Medicaid program.”
She also touted the Obamacare bills she negotiated to be brought to the floor for passage, which include funding for cost-sharing reduction subsidies as well as funding for reinsurance.” (D)
“Collins announced Monday that she would vote for the tax bill based on promises from President Trump and Senate Majority Leader Mitch McConnell (R-KY) to support two health care bills aimed at mitigating the expected damage from the tax bill’s provision killing Obamacare’s individual mandate…
Still, many Republicans, including Rep. Tom Cole (R-OK), said there is widespread opposition in the House to these policies, which they see as propping up Obamacare.
“Our guys do not want to be in the position of upholding a system that we all oppose and that we tried to repeal and did repeal in this chamber. That’s a real problem,” Cole said, before taking aim at Collins. “We’re not going to let ourselves be blackmailed by one senator for one vote in the United States Senate. I don’t think so.”
McConnell promised Monday that Collins’ health care bills will be attached to the continuing resolution that must pass before midnight on Friday to avoid a government shutdown, along with a host of other bills including natural disaster aid for hurricane ravaged states and the reauthorization of a lapsed health insurance program that covers millions of children.
But House Republicans say it is likely they will vote to strip out the health care bill and kick the bill back to the Senate, setting up a bicameral showdown….
As she strode through the basement of the Senate on her way to a vote on another matter Tuesday afternoon, reporters swarmed around a stony-faced Susan Collins to ask if she still felt comfortable voting for the tax bill if her health care policies’ prospects in the House are in danger.
“We’re a long ways to the end of this,” she said. “I’m not going to comment on the stories you all are trying to write.” (E)
(A) The stealth repeal of Obamacare, by JOANNE KENEN, https://www.politico.com/story/2017/12/19/obamacare-repeal-tax-bill-trump-243912
(B) GOP tax bill also manages to needlessly screw up the healthcare system, by David Lazarus, http://www.latimes.com/business/lazarus/la-fi-lazarus-republican-tax-bill-individual-mandate-20171219-story.html
(C) The main reason the GOP tax plan is a catastrophe: It will send health care costs through the roof, by STEVEN ROSENFELD, https://www.salon.com/2017/12/19/the-1-reason-the-gop-tax-plan-is-a-catastrophe-it-will-send-health-care-costs-through-the-roof_partner/
(D) Susan Collins accuses media of being sexist in coverage of tax bill, by Kimberly Leonard, http://www.washingtonexaminer.com/susan-collins-accuses-media-of-being-sexist-in-coverage-of-tax-bill/article/2643969
(E) House GOPers Say Susan Collins’ Health Care Demands Are Dead On Arrival, by ALICE OLLSTEIN, http://talkingpointsmemo.com/dc/house-gopers-say-susan-collins-health-care-demands-are-dead-on-arrival
Reflect on those numbers for a moment. Republicans have managed to make tax cuts less popular than Obamacare. It’s impressive.
And yet last week, given an opportunity to tweak their bill before final passage, to make it something the American people might like a little better, the main change Republicans made was to lower the top tax rate — the rate paid by the richest Americans — even more.” (A)
“Doctors, hospitals, patient advocates and others who work in the nation’s healthcare system are growing increasingly alarmed at the Republican tax bill, warning that it threatens care for millions of sick Americans.
The legislation – which GOP leaders are rushing to pass this week – will eliminate beginning in 2019 the Affordable Care Act penalty on consumers without health coverage, a move many experts warn will weaken insurance markets in parts of the country.
The tax bill, which includes huge tax cuts for corporations, may also force tens of millions of dollars in cuts to the Medicare program under federal budget rules, though congressional leaders say they are confident they can waive the rules as they have in the past.
Most worrisome to many, the bill will open a $1.5-trillion hole in the federal deficit over the next decade. That will put substantial new pressure on government healthcare programs such as Medicare and Medicaid and has already ignited a renewed Republican campaign to cut them back.” (B)
“House Democrats are threatening to allow automatic spending cuts triggered by the Republican tax bill to take effect next year unless Speaker Paul Ryan ends an attempt to cripple Obamacare.
Under a 2010 law known as PAYGO, the $1.5 trillion reduction in government revenue caused by the Republican tax cut legislation would trigger years of across-the-board cuts to programs including Medicare starting next year. Ryan and Senate Majority Leader Mitch McConnell have vowed the cuts won’t be imposed, but they would need Democratic votes to waive the law.
Part of the price the Democrats want to extract is keeping the Obamacare mandate that individuals buy health insurance, which would be eliminated in the Republican tax bill heading toward final passage next week.
“Should you enact a tax bill by the end of the year that adds $1.5 trillion to the deficit and, as a result, triggers PAYGO cuts next month, any effort to mitigate those cuts must also remove these other catalysts of uncertainty,” the Democrats’ letter to Ryan said Friday. “At a minimum, that must include rejecting the elimination of the individual mandate as well as the use of reconciliation procedures next year for Medicare benefit cuts in order to fill the fiscal gap left by your tax bill.”” (C)
“Sen. Lamar Alexander acknowledges that the final tax bill set to pass this week will increase health insurance costs for those who use the federal exchanges. But he says his bipartisan bill to stabilize the insurance marketplace will offset the cost increase.
The tax bill ends the individual mandate for everyone to buy insurance, which would likely mean many healthy people would drop their coverage, making marketplace customers a sicker bunch more costly to insure.
Still, the Republican chair of the Senate’s health committee is glad to see the mandate go.
“That’s good news for most Tennesseans because it means you don’t have to pay a penalty for insurance you don’t want to buy. But it will also slightly create upward pressure on premiums,” Alexander said Friday after speaking to the Brentwood Rotary Club. “But the Alexander-Murray legislation will push rates down a lot further than repeal of the individual mandate will push them up.
According to Alexander, Senate Majority Leader Mitch McConnell has “pledged” to put the Alexander-Murray compromise into the spending bill that should be voted on later this week. Alexander believes he also now has support from President Trump, even though the president has previously called it a “bailout” for insurance companies.” (D)
“In other words, Senator Collins plans to vote for the Tax Cuts and Jobs Act when it reaches the Senate floor, probably tomorrow. But Collins is no dupe. Her support for the legislation is clearly the right position for any member of Congress purporting to represent the best interests of Maine’s 1.3 million residents. That the bill repeals Obamacare’s individual mandate is not a betrayal of her constituents, as some have suggested. It will instead remove a significant tax burden that falls disproportionately on the shoulders of Maine voters. As the Bangor Daily News reports, Mainers pay a larger than average share of the individual mandate’s tax penalty:Maine tax filers paid nearly $15.5 million in the ACA tax penalty in 2015, the most recent year for which the data are available. That’s about 5.25 percent of all tax filers in the state that year, a high share compared to other states. Nationwide, 4.5 percent of all tax filers paid the penalty in 2015.”….
This is why Senator Collins insisted on an amendment to the tax bill that would permit taxpayers to itemize deductions up to $10,000. The Wall Street Journal outlines the deal thus, “The House and Senate bills each allowed only property taxes to be used toward that cap. But under the agreement … that total could be used for property taxes and for either income or sales taxes.” Collins also extracted an amendment that would reduce the threshold for medical expense deductions from 10 percent to 7.5 percent of gross adjusted income, and a commitment from the Republican leadership to forestall any cuts to Medicare that would be automatically triggered by deficits.” (E)
“The expected repeal of the ObamaCare mandate to buy health insurance means that states will soon have to step in and decide whether to create their own mandates….
Outside experts and supporters of ObamaCare predict chaos in the insurance markets if the tax bill passes and the mandate is repealed.
Premiums are expected to rise significantly and insurers could leave the marketplace. The Congressional Budget Office estimated that about 13 million more people would be without insurance in 10 years.
States have the power to potentially blunt the damage if they choose to enact their own mandate penalties, but even officials in the most liberal states could face a bruising political battle.” (F)
“New rules from the Donald Trump administration that would allow cheaper, less regulated health plans into the individual insurance market have alarmed healthcare providers, insurance companies and consumer groups….
In addition, Trump wants “short-term, limited duration health plans” that may be cheaper but will cover less and attract healthy, younger purchasers away from individual health plans with richer benefits. By siphoning off healthier Americans to cheap plans Trump wants, those sold on public exchanges under the Affordable Care Act could become more expensive if a higher concentration of older and sick patients are enrolled.
“Expanding and extending short-term, limited-duration health plans, increasing enrollment in association health plans (AHPs), and relaxing rules for employer health reimbursement arrangements (HRAs) all increase adverse selection in insurance markets that serve millions of individuals and employers,” the health groups wrote to insurance regulators.
Given such concerns, it’s unclear if there will be any insurance carriers that want to sell Trump’s plans , which likely wouldn’t be available to buy until late next year for 2019 at the earliest. And analysts worry those policies that do reach the market won’t provide adequate benefits.” (G)
(A) The Republican tax bill is an American betrayal, by Ezra Klein, The Republican tax bill is an American betrayal, https://www.vox.com/policy-and-politics/2017/12/18/16782484/gop-tax-bill-cuts-reform-republican
(B) Republican tax bill fuels anxiety across the nation’s healthcare system by Noam N. Levey, http://www.latimes.com/politics/la-na-pol-tax-bill-healthcare-20171218-story.html
(C) Democrats Threaten to Allow Medicare Cuts to Save Obamacare, by Erik Wasson, https://www.bloomberg.com/news/articles/2017-12-16/democrats-threaten-to-allow-medicare-cuts-to-save-obamacare
(D) Alexander Expects His Bipartisan Obamacare Fix Will Be Passed This Week, by BLAKE FARMER, http://nashvillepublicradio.org/post/alexander-expects-his-bipartisan-obamacare-fix-will-be-passed-week#stream/0
(E) Why Susan Collins Will Vote to Kill Obamacare’s Insurance Mandate, by DAVID CATRON, https://spectator.org/we-interrupt-this-broadcast-who-speaks-for-america/
(F) ObamaCare mandate repeal would put pressure on states, by NATHANIEL WEIXEL, http://thehill.com/policy/healthcare/365182-obamacare-mandate-repeal-would-put-pressure-on-states
(G) Concerns Grow About Cheaper Trumpcare Plans, by Bruce Japsen, https://www.forbes.com/sites/brucejapsen/2017/12/17/concerns-grow-about-cheaper-trumpcare-plans/#135bc13557e4
“With the bill finally headed to a vote this coming week, taxpayers are scrambling to determine whether the legislation renders them winners or losers.
WINNERS
PRESIDENT TRUMP AND HIS FAMILY. Numerous industries will benefit from the Republican tax overhaul, but perhaps none as dramatically as the industry where Mr. Trump earned his riches: commercial real estate. Mr. Trump, along with his son-in-law Jared Kushner, who is part owner of his own real estate firm, will benefit from lower taxes on so-called “pass through” income, which is money earned by partnerships and other types of businesses whose income is passed through to its owner and taxed at the individual tax rate. Mr. Trump and Mr. Kushner benefit since they own properties through limited liability companies and other similar vehicles.
LOSERS
PEOPLE BUYING HEALTH INSURANCE. With the repeal of the individual mandate, some people who currently buy health insurance because they are required by law to do so are expected to go without coverage. According to the Congressional Budget Office, healthier people are more likely to drop their insurance, leaving insurers stuck with more people who are older and ailing. This is expected to make average insurance premiums on the individual market go up by about 10 percent. All told, 13 million fewer Americans are projected to have health coverage, according to the Congressional Budget Office.” (A)
“The tax bill barreling toward a final vote in Congress guts the most unpopular “Obamacare” provision, its requirement that virtually all Americans carry health insurance or face fines.
Politically, the move is a winner for Republicans, who otherwise would have little to show for seven years of rhetoric and repeated legislative efforts to kill the Affordable Care Act.
But if estimates by the nonpartisan Congressional Budget Office are right, it will lead to more uninsured people and higher premiums for those buying individual health insurance policies.
Congress may then find itself considering other ways to nudge people to get health insurance.
Other popular parts of the Affordable Care Act would remain in place, including subsidized premiums, “essential” benefits and protections for people with pre-existing medical conditions.” (B)
“The severity of the impact is a matter of debate among health policy experts.
The Congressional Budget Office predicts that four million fewer people would be covered in the first year the repeal would take effect. That number would rise to 13 million by 2027, as compared to current law. Meanwhile, premiums would rise by about 10% in most years of the decade.
But the agency also said it is reviewing its methodology. Others say fewer people would be left uninsured. S&P Global Ratings, for instance, projects that only three to five million more consumers would lack coverage over a decade because the mandate is not a key driver for obtaining insurance.
Still, many experts feel that removing the mandate would cause the individual market to tilt even more towards sicker and older consumers. That’s because the mandate serves as a stick to prod some younger and healthier Americans to sign up for coverage.
That shift may prompt some insurers to drop out of the market, especially since they would still be required to cover those with pre-existing conditions but would not be able to charge them more based on their medical history.
If a wave of insurers exit Obamacare, some consumers could be left without any providers on their exchanges in 2019. Already, 29% of current enrollees on the federal exchange have only one option in 2018, according to federal data. Residents in eight states — Alaska, Delaware, Iowa, Mississippi, Nebraska, Oklahoma, South Carolina and Wyoming — have only one insurer next year.” (C)
“The nongroup market refers to people who buy their own health insurance. Most Americans are covered by an employer. Many are covered by Medicare or Medicaid, a few get military health benefits and the so-called Obamacare markets were meant to help the rest get “nongroup” health insurance.
Health insurance premiums in this nongroup market will go up by 10 percent, the CBO predicted.
This will hit one group in particular, according to the Commonwealth Fund, which conducts studies in health policy and released a report Thursday on the Affordable Care Act.
“People who buy their own coverage on the individual market and who have incomes above 400 percent of the federal poverty level (about $48,200 for an individual and $98,400 for a family of four) — the threshold for ACA premium subsidies — would face the brunt of the premium increase,” it said.
A 40-year-old customer buying health insurance on one of the federal exchanges would pay $556 more in premiums in North Dakota and $1,264 more in Nebraska, the group calculated.” (D)
“The election of Doug Jones as the first Democratic senator from Alabama in a generation did many things: It opened a realistic, although still difficult, path for Democrats to capture a Senate majority in 2018, it deepened the divide between the GOP establishment and the self-styled insurgents led by Stephen K. Bannon, the former White House strategist.
And it probably ended GOP hopes of repealing the Affordable Care Act…
Throughout the past year, the Trump administration has taken one swing after another at the healthcare law, and seemingly each one has generated a chorus of predictions about the “death of Obamacare.”
That hasn’t happened….
The latest data on sign-ups came as a new study from the Commonwealth Fund, comparing data across states, showed that the law has, indeed, helped patients get to the doctor and pay their medical bills, contrary to the assertions from President Trump and others in his administration that the law was providing coverage that didn’t actually help people….
The only way to truly undo what the law has accomplished would be to cut off the billions of dollars that currently go to help more than 20 million people pay medical bills. Republicans tried repeatedly this year to cut back on that flow of funds with their various efforts to repeal Obamacare. They were poised to repeat that effort in 2018. But Jones’ upset victory now will likely put that prospect out of reach in the Senate.
Jones made healthcare a top issue in his campaign and explicitly told voters he would oppose repeal. “Repeal and replace is a political slogan,” he would say. “It’s not something that’s workable.” (E)
“But won’t the entire Obamacare system collapse without the mandate? Not if the states step into the breach. They’ve got the power to patch the hole that repeal of the mandate would leave in the ACA. The most ambitious states could even take steps to strengthen the law.
Massachusetts had an individual mandate well before the US did.
For starters, the states can adopt their own individual mandates to replace the one that Congress repeals. There’s nothing stopping them. Before the ACA existed, Massachusetts had a mandate; it’s still on the books. And, as Vox’s Sarah Kliff reported last week, a number of states — including California, Maryland, and Washington, as well as the District of Columbia— are toying with creating their own mandates.
Adopting mandates at the state level would help stabilize insurance markets, thereby keeping premiums in check and forestalling coverage losses. It would also provide a welcome source of revenue: Some people will still prefer to pay a penalty than buy insurance. Plus, the states don’t need to stick with the precise terms of the federal mandate, which has been reviled (from different quarters) both for heavy-handedness and its ineffectuality. Stiffer state-level penalties would still be unpopular, but at least they’d work better.” (F)
“Health economist Gail Wilensky said repealing the mandate might take some of the political steam out of the health care debate. It may even point to a path for lawmakers of both major parties to consider measures that would help stabilize insurance markets for people who don’t get coverage on the job.
It “may be enough to take away what has been the single most hated part of the ACA for both Republicans and Democrats,” said Wilensky, who served in a previous Republican administration.
But that won’t solve the problem of providing affordable coverage for people who don’t qualify for subsidies through “Obamacare.”
President Donald Trump’s administration is working on another track: regulations that would allow broader sale of lower-cost plans with limited benefits.
How much consumer appeal that alternative will have remains to be seen.” (G)
“Sen. Susan Collins said Thursday she isn’t concerned that House Republicans didn’t include Obamacare stabilization bills in its short-term funding bill, saying GOP leadership will add them to the Senate version.
The House GOP released a short-term continuing resolution Wednesday that funds the government until Jan. 19. It does not include two bills that the centrist Maine Republican has been pushing to stabilize Obamacare’s exchanges in return for her vote for tax legislation that includes a repeal of Obamacare’s individual mandate penalties.
Collins shrugged off the House snub, saying it didn’t matter if the House passes a spending bill that doesn’t include the legislation.
“That has never been the plan,” she told reporters. “The plan is for the majority leader to add [the bills] in the Senate.”…
Collins said Thursday that the plan is still to pass the bills by the end of the year, and the new continuing resolution would be the only opportunity left.” (H)
(A) The Winners and Losers in the Tax Bill, By JESSE DRUCKER and ALAN RAPPEPORT, https://www.nytimes.com/2017/12/16/business/the-winners-and-losers-in-the-tax-bill.html
(B) Tax Bill Guts Unpopular ‘Obamacare’ Insurance Mandate, https://www.nytimes.com/aponline/2017/12/16/us/politics/ap-us-taxes-health-care.html
(C) Will Obamacare survive the tax bill?, by Tami Luhby, http://money.cnn.com/2017/12/15/news/economy/obamacare-individual-mandate-tax/index.html
(D) Tax bill kills health insurance mandate. Who will pay more?, by MAGGIE FOX, https://www.nbcnews.com/health/health-care/tax-bill-kills-health-insurance-mandate-who-will-pay-more-n829846
(E) How Alabama saved Obamacare and other effects of an upset, by David Lauter, http://www.latimes.com/politics/la-pol-essential-politics-20171215-story.html
(F) The tax bill destroys an important part of Obamacare. The states can save it., by Nicholas Bagley, https://www.vox.com/the-big-idea/2017/12/14/16773294/obamacare-aca-states-protect-coverage-after-tax-bill
(G) Tax Bill Guts Unpopular ‘Obamacare’ Insurance Mandate, by RICARDO ALONSO-ZALDIVAR, https://www.usnews.com/news/politics/articles/2017-12-16/tax-bill-guts-unpopular-obamacare-insurance-mandate
(H) Susan Collins: Senate eyes adding Obamacare bills to short-term funding deal, by Robert King, http://www.washingtonexaminer.com/susan-collins-senate-eyes-adding-obamacare-bills-to-short-term-funding-deal/article/2643551
When a physician prescribes medication I always ask if there is a generic and I watch carefully when a brand name drug becomes available generically, often changing a $50+ co-pay to $5 or less. But if we fill prescriptions on cruise control that is without asking the right questions, we can wind up with much larger co-pays.
These guidelines are typical “there may be cost-sharing implications for choosing non-preferred brand medications when generics are available. Your cost share depends on which of the three generic substitution coverage levels you have — voluntary, mandatory or restrictive. Refer to your benefit summary or enrollment materials for more information.” “ (A)
“Consumers have grown accustomed to being told by insurers — and middlemen known as pharmacy benefit managers — that they must give up their brand-name drugs in favor of cheaper generics. But some are finding the opposite is true, as pharmaceutical companies squeeze the last profits from products that are facing cheaper generic competition.
Out of public view, corporations are cutting deals that give consumers little choice but to buy brand-name drugs — and sometimes pay more at the pharmacy counter than they would for generics.
The practice is not easy to track, and has been going on sporadically for years. But several clues suggest it is becoming more common.
In recent months, some insurers and benefit managers have insisted that patients forgo generics and buy brand-name drugs such as the cholesterol treatment Zetia, the stroke-prevention drug Aggrenox and the pain-relieving gel Voltaren, along with about a dozen others, according to memos and prescription drug claims that pharmacies shared with ProPublica and The New York Times. At the same time, consumers are sounding off on social media. (B)
“Success is when you get doctors selling the product for you,” said former pharmaceutical representative Michael Oldani, now an associate professor of medical anthropology at the University of Wisconsin-Whitewater.
The patients present the card to the pharmacist when they’re having a prescription filled. The card cues the pharmacist to fill the prescription using the brand-name drug, even though it can cost much more than the generic version.
At one Toronto pharmacy, brand-name Lipitor (10mg/90 pills) sold for $168.83 while the generic version, atorvastatin, cost $28.24.
“The pharmaceutical companies are not making a charitable donation when they hand out cards. They’re definitely planning to turn a profit. It’s part of a marketing strategy.”
In theory, the drug company is supposed to pay that cost difference.
But in practice, sometimes the drug company never gets the bill, because some company insurance plans pay the full cost of the more expensive brand-name drug if a doctor specifies its use.
In reaction to the cards, many insurance companies now refuse to reimburse patients for brand-name drugs when there is a generic alternative.
To get around that rule, doctors are encouraged by drug company sales representatives to write “no substitutions” (C)
“Having health insurance is supposed to save you money on your prescriptions. But increasingly, consumers are finding that isn’t the case….
In an era when drug prices have ignited public outrage and insurers are requiring consumers to shoulder more of the costs, people are shocked to discover they can sometimes get better deals than their own insurers. Behind the seemingly simple act of buying a bottle of pills, a host of players — drug companies, pharmacies, insurers and pharmacy benefit managers — are taking a cut of the profits, even as consumers are left to fend for themselves, critics say.
Although there are no nationwide figures to track how often consumers could have gotten a better deal on their own, one industry expert estimated that up to 10 percent of drug transactions involve such situations. If true nationwide, that figure could total as many 400 million prescriptions a year…
Pharmacy benefit managers, the companies that deal with drug benefits on behalf of insurers, often do negotiate better prices for consumers, particularly for brand-name medications, …, but that’s not necessarily true for some generic drugs. Insurers’ clients are frequently employers overseeing large numbers of workers, and the companies are focused on overall costs. So when insurers seek deals for generic drugs, they do so in batches, reaching agreements for groups of different drugs rather than getting the lowest price on every drug.
As a result of these complicated layers of negotiation — which are not made public — different insurers end up paying different prices for individual drugs. Further compounding confusion for consumers, some insurers require a set co-payment for each prescription — say, $15 or $20 — even when the insurer reimburses the pharmacy at a much cheaper rate.” (D)
(A) Is Grassley Concern Over DAW Penalty Much Ado About Nothing?, by Angela Maas, https://aishealth.com/archive/ndbn050117-04
(B) Take the Generic, Patients Are Told. Until They Are Not, by CHARLES ORNSTEIN and KATIE THOMAS, https://www.nytimes.com/2017/08/06/health/prescription-drugs-brand-name-generic.html
(C) ‘Success is when you get doctors selling the product for you’, by Kelly Crowe, http://www.cbc.ca/news/health/drug-companies-using-doctors-discount-cards-to-skirt-generic-substitutions-1.3042773
(D) Prescription Drugs May Cost More With Insurance Than Without It, by CHARLES ORNSTEIN and KATIE THOMAS, https://www.nytimes.com/2017/12/09/health/drug-prices-generics-insurance.html
