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Trump’s HHS Secretary Nomination and Healthcare Economist Uwe Reinhardt

News Editor Joyce Frieden at Medpage Today offers up an excellent review of President Trump’s head of HHS selection Alex Azar. If you do not read MedPage Today, it is a good site to get information on healthcare and healthcare policy.

Orrin Hatch of Utah: “The leader of HHS will be at the tip of the spear, working to not only right the wrongs of [the Affordable Care Act] but also ensure the long-term sustainability of both Medicare and Medicaid,”

Wow, that is great. Perhaps Hatch will fix things like the skin-in-the-game co-pays and deductibles Congress put in place and reduce them to a reasonable level taking the pressure off the individuals’ market place.

“This candidate has the experience, knowledge and fortitude to take on these daunting challenges. I look forward to learning about his plan to restore our faith in our nation’s healthcare system and get it back on track doing what it does best – saving lives and improving the health and well-being of all Americans. I hope my colleagues on the Finance Committee will work with me in the advancement of a fair and transparent vetting process for this nominee.”

That will be a miracle in itself. Including the president, Republicans have not put anything up legislatively substantial to replace the ACA in Congress. Their only effort has been to repeal, return healthcare back to what it was pre-2010 and disenfranchise 22 -30 million citizens who have healthcare under the ACA. The Republicans are offering up the same old BS which has been on the plate since 2008 only this time it is being offered up by a different waiter.

Arguably this HHS Director candidate is more qualified to lead the HHS than his predecessor. However, Democrats and advocacy groups are not so pleased with Trump’s selection. Here is Public Citizen’s President Robert Weisman’s comment:

“If Alex Azar’s nomination is confirmed, then Big Pharma’s coup d’etat in the healthcare sphere will be virtually complete.”

Public Citizen’s Peter Maybarduk adds;

“As Tweeter-in-Chief, Trump tells us Azar will be a ‘star’ who will lower prescription prices. Maybe he should have asked the 6 million diabetic Americans whose insulin prices have more than tripled under Azar’s watch at Eli Lilly.”

Mr. Alex Azar does have the qualifications. Alex Azar is the former head of pharma giant Eli Lilly’s U.S. division. He was also the HHS general counsel and deputy secretary during the George W. Bush administration. He has received praise for his competence and knowledge about health policy. He is a strong critic of the Affordable Care Act and he has opposed ideas for reducing prescription drug prices such as purchasing drugs from other countries where prices are lower.

Again Peter Maybarduk;

“Eli Lilly is notorious for spiking prices of this century-old isolated hormone. During Azar’s tenure as president and vice president, Eli Lilly raised the price of Humalog by 345%, from $2,657.88 per year to $9,172.80 per year.”

This does not bode well for consumers of healthcare and pharmaceuticals. Of course then, what has been favorable for citizens when taking into consideration Republican’s attitude towards the ACA and erasing what a previous president accomplished in spite of their blockage. Others such as the Bipartisan Policy Center view Azar’s overall healthcare and pharmaceutical experience as a positive as he would bring industry perspective to the healthcare environment today as the head of the HHS. Azar’s overall objectivity remains to be seen and experienced when considering the ACA, pharmaceutical costs, handing over ACA policy to states, and changes to Medicaid and Medicare. Former head Tom Price failed as the head due to a lack of objectivity, his planned sabotage of the ACA, and in taking advantage of supposed HHS perks.

Today, effective healthcare for all advocate Uwe Reinhardt died. His research focused on hospital pricing, healthcare systems around the world, Medicare and healthcare spending. His work appeared in the New England Journal of Medicine, JAMA, Health Affairs, the British Medical Journal, the New York Times and other leading publications. Uwe;

Politically, you cannot legislate what rationally makes perfect sense.”

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Elections November 2017

In Virginia, Gilespie has lost. Trump claims it is because Gilespie did not embrace him. New jersey elected a Democrat for a Governor also. In both Virginia and New Jersey these were not close races as both Democrats won by good margins of 9% and 13%.

The Virginia House of Delegates picked up 14 more Democrats along with selecting the first transgender to be a in a state legislature. This would be enough Delegates to flip the House to the Democrats. Democratic candidates for Lieutenant Governor and Attorney General were also elected in Virginia.

New York City Mayor Bill de Blasio won a second term.

The Maine Medicaid Expansion was approved by a 17% margin. Maine was the first state to put the decision to a vote. In Utah and Idaho, there are efforts to place a similar initiative on next year’s ballot.

It is not on the chart; but, Detroit’s Mayor Mike Duggan won also.

A big evening for nation wide state Democrats.

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Donna Brazile’s Trash Talking HRC

Nancy LeTourneau at Washington Monthly has an article up on HRC and her running for the presidency. It is a worthy read as it refutes Donna Brazile and Elizabeth Warrens accusations using Open Secrets (Hillary Victory Fund) on HRC funding the DNC and the states in addition to when she took control.

Here is what is in question as written by Nancy Letourneau:

“So it is not unusual for a nominee to exert control over the DNC once they have been chosen. As CNN reported, that transition began in June 2016, when Clinton had secured enough votes to win the nomination. Brazile’s own account of her conversation with Gary Gensler, the chief financial officer of Hillary’s campaign, happened after the Democratic Convention—meaning that the transition had already taken place.

Brazile does, however, suggest that the agreement she reviewed in August 2016 had been signed in August 2015. It has now become apparent that she needs to share what she saw with the public, because in releasing John Podesta’s hacked emails, Wikileaks provided the final template for the 2015 agreement between the Clinton campaign, the DNC and state parties. The emails to which the document were attached include talking points to share with state parties encouraging them to sign up. Nowhere in the text of the agreement is there any reference to the kind of control of the DNC by the Clinton campaign that Brazile wrote about.

As Nancy said, it is time for Donna to release the document she is claiming gives the control in 2015.

The funding as can be found in Open Secrets:

“Amount raised – $529,943,912

Beneficiaries:

Clinton campaign – $158,200,000
DNC – $107,533,318
State parties – 38 states each received between $2,494,000 and $3,423,484”

“Brazile also recounts the concerns raised about the Hillary Victory Fund by Politico in May 2016 about money from the fund not getting to the states that had signed the agreement.” It looks like HRC shared the funding to me.

Again Democrats as led this time by Donna Brazile are investing in self destruction for 2018. During the Kerry campaign I had asked a few “why” questions of Donna via email. Rather than answer the questions, she just resorted to accusations of harassment which was completely off base. Having done the same with Senators and Congressmen, I am used to blunt replies; but, they were in answer to a question. She chose not to answer. I do not find Donna to be genuine.

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Well, it’s not just power that women like Clinton are asking for; it is responsibility

This is just a conversation between two people of a similar age, looking at what happened, and what changed. Worthy of posting.

esmensetoo: There are women who fear a loss of privilege and an increase in expectations, and economic responsibility, for women from “feminist” striving. “If she can do that maybe I’ll be asked and expected to do it too.”

Plus, “working class,” as defined in many polls and studies does not necessarily mean “working women.”
Trump’s support, including his support among white “working class” women, was older and more affluent. These are women less likely to have “had” to work — who, because of the economic realities of their younger adulthood, and the greater ability to maintain a middle class life and even gain affluence on one salary — the husband’s — experienced more economic flexibility to stay home with children and, if and when they did choose to work, it truly was a matter of choice in which adequate, fair pay wasn’t essential. Older, white women are less likely to have a college education than younger women, which defines them as “working class.” But that doesn’t mean their households are less affluent.

They are the women more likely to see the demands of feminism and ambitions for power of women like Clinton as a loss; a loss of the protection of male earnings, with an increase in economic expectation for women like themselves.

In my generation — the eldest cohort of the Baby Boom — even in working class households white women were brought up with the expectation that they wouldn’t work outside the home, at least once their children were born. Even if they trained in traditional occupations, teaching and nursing, they expected that they would take years off to raise children — and outside of those occupations there really wasn’t anything else for women that would provide a lifetime “career.”

Of course, many of us found that expectation was unrealistic; and younger women even more so. We took on more economic responsibility both because we had to and wanted to — and started demanding more rights and resources and opportunities to go along with it.

( I went to an excellent public high school in a New Jersey community that was basically a bedroom community for professors from Rutgers and Princeton, and professionals from surrounding think tanks and research centers — a very highly educated population — in the early 60s. Although the importance of education was stressed for everyone in that community and college admission was a goal for almost everyone, girls were told that their education would be important for their FAMILIES; their children. And, of lesser importance, their communities. Education for women was couched in the language of service, NEVER ambition or earnings.)

Me: We pulled that off with the advent of children. We already had the house, dog, fenced yard, etc. Smaller home but very affordable on a heavily treed lot.

My wife was a Patent and Trademark Paralegal and she made more money than I did initially even though I had the BA, etc. She stayed home with our first and the others. Did all of the school things moms did when they were growing up. We agreed to do it this way. We did not have new cars and stuff and we had our funding issues.

You are right and we were very lucky to have done it the old way. Elizabeth Warren was right, the one income family became extinct unless you were fortunate enough to have money in the beginning. New and young families could not afford what we were able to do on one income. Eventually, she did go back to work and we fund a lot of those things for the offspring.

esmensetoo: That’s pretty typical, and was much more possible, in earlier post-war boom times. And still true for a lot of early Boomers when they entered the work force. Living on one income might require some belt tightening in the beginning but it was doable and as time went on economic prospects improved. And, often, once children were older, women went back to work, or school and work (my mom went to college at 50).

I worked through school and in the years before my son was born, but, while I was doing things I enjoyed, I didn’t really think of it as a “career.” I stayed home with my son for the first two and a half years of his life. But then BOTH my parents became terminally ill. My Mom was only 56 — years away from Medicare. Their illnesses were galloping through the lifetime limits on my father’s good union health insurance, which would not be available to her if he died first anyway, and neither would any accumulated pension. Plus inflation and recession were both raging and negatively affecting my husband’s business. And housing and health care costs were going through the roof. Faced with a lot of conflicting needs — from all the people I loved and cared about — I decided that I could best meet them by going back to work to provide some additional stability, and extra economic resources that might end up being crucial to my Mom’s care.

I always say I didn’t get ambition until AFTER I had a child — but it was really not just about wanting to help secure his future; my parent’s challenges, and the fragility of the “stagflation” economy, made me realize I had to be prepared to provide serious economic support when needed. And that made me much more willing to confront the inequalities that could limit my ability to do so. I was newly ambitious in this sense; I wanted the work I did to PAY, and I wanted the people I did work for to take me and my work as seriously as I took them and the work they needed done. I was empowered to speak up.

I still feel lucky that I had the “choice” to spend those early years with my son — years when he got my entire attention. But I also feel lucky that I had the opportunity and ability to contribute to my parent’s needs and peace of mind at the end of their lives, to our family business, and provide resources for my son’s future.

Being economic providers as well as caretakers got even more important for women younger than me. Inflation meant a second income became essential for just qualifying for a mortgage; but their paychecks often covered the house payment and day care, and little more. But those paychecks didn’t come with benefits like family leave.

I was inspired as a feminist in my early years in the workplace by older women; working or once middle class white women who returned to the workplace as widows, or with ill and disabled husbands whose needs had devastated family income and resources, or with elders or children with serious needs that demanded their support, or after divorce, or after freeing themselves and their children from abuse; and minority women who had always worked and expected to work to help stabilize and support families challenged by the instability, lesser wages and lesser opportunity that challenged their community and their partner’s work lives — women with big responsibilities, for themselves and others, in an economy and work places that offered them little pay and benefit, and, even less respect.

When I returned to work my feminism was further inspired by women younger than me — whose gains were not yet adequate to their needs, and yet were being constantly undermined by on-going economic weakness. Both young men and young women needed full-time work to afford to buy homes and have children — for instance — but the expectations and demands of the workplace, losses in worker protections and rights, growing job insecurity and economic instability, constant inflation in the basics of housing, education and healthcare, were all undermining all their gains. Leaving them further behind, rather than ahead.

In the early 90s I attended a retirement party for a woman who had worked in the advertising department of a large retailer since she was a young student at the University of Washington. She recounted her more than 30 year career, with gratitude, to the mostly much younger women who were there to honor her. She had worked for the company to help pay for her education in the summers and on special projects. Had joined the staff full time after graduation; working to help her husband finish his schooling and get established in his career, to help them save for house, etc. She left when her first child was born and returned, part time, when her youngest child started school. And then, as they grew older and more independent, she came back to work full time; to help provide resources for their education and help enhance their opportunities in other ways, and to contribute to her and her husbands’ retirements, and out of the pure satisfaction of work she loved and was good doing it.

She had “had it all.” It was such a contrast to what the young women in that room, doing the same work she had always done, pursuing the same careers, were struggling with and could expect. Was this progress, or were we going backward?

I’ve read that studies have shown that women’s economic progress peaked in the early 80s and they’ve been losing ground ever since.

That certainly feels true.

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Similar to “Alexander – Murray,” CMS Proposal Gives States Authority to Redefine ACA Minimum Benefits

I have been getting quite a few alerts on proposed changes happening behind the scenes with the ACA. I also found a couple of new places with some intelligent writers who have explained things in greater depth than what I knew. The CMS is proposing a rule allowing states greater authority in defining the ACA. This comes in addition to Trump’s EO. The new rule would give states greater flexibility in:

– Defining the ACA’s minimum essential benefits to increase affordability of coverage,

– a larger role in the certification of qualified health plans offered on the federal insurance exchange,

– and more leeway in setting medical loss ratios for individual-market plans.

If a state redefines the minimum benefits in the ACA, what we can expect to see is emerging trash plans or mini-plans, which were sold by McDonalds and other companies and are useless in many cases. Granting states a larger role in qualifying healthcare plans on the healthcare exchanges gets back to what I have pointed out before; states failed miserably in defining healthcare requirements and in providing healthcare to citizenry in many cases. Before the ACA, healthcare was the ER due to a lack of insured coverage. Patients were paying Chargemaster rates and often times paid little of the bill due to extremely high bills or low income.

Does the CMS proposal force states to adequately protect the vulnerable as called out in Section 1332 of the ACA? The same as the Senate Bill Alexander-Murray; without a change in Section 1332 of the ACA, underfunded states will have to provide similar coverage. Under Section 1332 States can:

“propose a change or eliminate almost all core ACA features, the individual and employer mandates, plan design including the Essential Health Benefits, and the subsidy basis and schedule. For a waiver to be allowed; however, the state must demonstrate that it will cover as many people, with coverage as affordable and comprehensive as the default structure and must not increase the deficit.”

In other words, the state can get a waiver to the ACA requirements as long as the state can show it covers the same numbers of people with just as affordable and comprehensive state coverage as the ACA while not increasing the deficit (to be redundant in stating such in all three cases). I do not see the CMS getting past this part of the ACA law and Alexander-Murray Republican-Democrat alliance proposes to change Section 1332 and the subsequent 2015 guidance.

In 2015, HHS had issued guidance on Section 1332 of the ACA stating a wavier:

Shall not disadvantage “vulnerable (low income, elderly, disabled), etc. residents.”

“Assessment of whether the proposal covers a comparable number of individuals also takes into account the effects across different groups of state residents, and, in particular, vulnerable residents, including low-income individuals, elderly individuals, and those with serious health issues or who have a greater risk of developing serious health issues. Reducing coverage for these types of vulnerable groups would cause a waiver application to fail this requirement, even if the waiver would provide coverage to a comparable number of residents overall.”

Shall not disadvantage residents by affordability.

(The CSR subsidies President Trump stopped with his Executive order will cause increased 2018 healthcare insurance premiums which will be picked up by premium subsidies for anyone who was eligible for a CSR subsidy. What makes it interesting is how the states apply this increase and their application of it could favorably impact all people who are on the healthcare exchanges [more on this later] ).

“Waivers are evaluated not only based on how they affect affordability on average, but also on how they affect the number of individuals with large health care spending burdens relative to their incomes. Increasing the number of state residents with large health care spending burdens would cause a waiver to fail the affordability requirement, even if the waiver would increase affordability for many other state residents. Assessment of whether the proposal meets the affordability requirement also takes into account the effects across different groups of state residents, and, in particular, vulnerable residents, including low-income individuals, elderly individuals, and those with serious health issues or who have a greater risk of developing serious health issues. Reducing affordability for these types of vulnerable groups would cause a waiver to fail this requirement, even if the waiver maintained affordability in the aggregate.”

The Alexander-Murray bill removes both guiding regulations and substitutes a much weaker one for affordability. Both the Alexander-Murray bill and the CMS proposals surrender control of providing healthcare to states with less federal funding and the same attitude of providing healthcare as experienced in the past. It leaves those who are uninsured or under insured vulnerable to state politics and includes the low-income individuals, elderly individuals, those with serious health issues, and those who have a greater risk of developing serious health issues now protected by the ACA.

While not Medicare-for-all, single payer, or something mimicking European healthcare; the ACA was still a huge step forward in comparison to what existed before it. It eliminated an attitude as expressed by Michigan State Senator Joseph Hune’s upon the passage of the Medicaid expansion; “I am sick to my stomach with the expansion of Medicaid.” An embarrassment of the same magnitude as Trump’s in his public comments and ignorance.

Alexander-Murray also calls for the HHS to issue guidance by providing examples of model state plans that meet the requirements for approval or what has been called cookie-cutter waivers. When asked by one blogger whether Alexander-Murray whether the amendment to Section 1332 effectively protects the vulnerable now protected in the ACA Timothy Jost had this to say:

“If administered by the Obama administration probably yes; if administered by the Trump administration, who knows? (sounds like a “no” to me) I think the intent of the provision is clear, that affordability not be decreased for vulnerable populations; but, the repeal of the guidance and of the procedural rule are to me, the most troubling parts of the bill.”

Given the attitude displayed by this administration now and in many state legislatures pre-ACA, it is hard to believe either would take an approach to protect the vulnerable over providing tax incentives to the 1% of the population making >$500,000 annually and their own re-election in 2018. It is pretty clear what the political priorities are today.

Both Michigan Senators Peters and Stabenow have come out in support of the Alexander-Murray bill repealing the 2015 HHS guidance including the detailed regulations governing waiver submission and assessment issued in 2012. An exception is being made for affordability if approved. I believe it is critical the ACA not be tampered with beyond taking it to the next level of healthcare which might be a form of European and a two tiered system. At this point in time with a lunatic as the president, I have no reason to support a legislature bent on cutting taxes for the 1% of the housholds making >$500,000 annually. That revenue to support such a tax cut will partially come from healthcare cuts.

I have emailed both Senators asking them to withdraw their support of the Alexander-Murray bill with no reply. It is time to go to pen and paper.

Does the Alexander-Murray bill adequately protect vulnerable groups?” Andrew Sprung, xpostfactoid blog

CMS to allow states to define essential health benefits” Harris Meyer , Shelby Livingston and Virgil Dickson; Modern Healthcare

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House Passes Senate Tax Reform Budget Resolution and Creates 2018 Budget

Everyone is reporting a 2018 Budget has been passed. Tucked away inside the 2018 Budget is a Tax Reform Resolution which allows the House to write the bill.

The House has passed the Senate Tax Reform Budget Resolution creating a $1.5 trillion deficit with a 216-212 vote. What this means in the Senate is a majority vote is only necessary to pass the Tax Reform bill which Trump has been campaigning and tweeting silly comments. Unless the House and Senate can provide the necessary revenue generation in the Tax Reform bill at 10 years out, it will be subject to a sunset the same as the Bush’s 2001-2003 tax breaks were. The key to this budget is the resolution for tax reform which will be looking at state income and property tax deductions on federal income tax returns, 401k tax exemptions, capping 401k contributions, Medicare and Medicaid cuts, and the old standby cuts to the ACA.

Tax reductions for the 1% of tax paying households making >$500,000 annually as funded by everyone else.

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What is the Matter With the Iowa ACA?

The story as it is told is “Iowa’s Healthcare Market has imploded.” Companies have gone out of business, lost money, premiums increased, policies canceled, etc. “ With Obamacare’s fifth open-enrollment season kicking off on Nov. 1, the consequences are playing out across one of America’s most politically influential states as residents struggle to maintain coverage.” It has been difficult to implement the ACA with the issues in the healthcare exchanges, Republicans badmouthing the ACA, and its first attempt at a US healthcare policy. Just one insurer is willing to sell policies in 2018 in Iowa. Why did it end up this way and what caused it?

Gov. Kim Reynolds: “Obamacare is unaffordable, unsustainable and unworkable and Obamacare has driven out consumer choice and competition.”

Trump: “Obamacare is finished. It’s dead. It’s gone. There is no such thing as Obamacare anymore.”

Vanessa Beauregard a resident of Iowa: “I cannot believe our politicians and government have put us in this situation. It’s just not right when you’re not a deadbeat.”

Dave Anderson, a health insurance expert at Duke University. “It’s hard to build inexpensive networks when the only hospital within 30 miles has you over a barrel.”

Aaron Todd, chief strategy officer for the Iowa Primary Care Association.: “There wasn’t a political will to make hard decisions or move people. They basically saw [keeping the noncompliant plans] the ACA as a relief valve.”

Nick Gerhart, who authorized the noncompliant plans to remain in the market as the state’s insurance commissioner. : “Why would I stand in the way of people keeping their insurance? It was a viable option. What does it look like if they’re in? The [premium] increases still would have been significant.” Disagreeing with these being a destabilizing factor.

Here is the story as I know it, a half commitment to the ACA with a lot of resistance from Republicans, and negativism from pundits.

CoOportunity turned out to be the canary in the co-op coal mine.” In the three years previous, 19 of the 23 nonprofit coop startups across the country, seeded with $2 billion in loans, had collapsed after piling up huge financial losses. One Republican appointee, Gerhart blames the disastrous performance in part to a lack of effective oversight from federal officials at the Center for Medicare & Medicaid Services. However, this is not the complete story as told.

“Effectively you’re running a venture capital firm out of CMS with nobody who understands insurance.”

.

After three years of procrastinating, Wellmark entered Iowa’s exchange. It too did not go well for reasons I will explain. Its troubles were attributed to a single patient who was costing the company $1 million a month in claims, a 17-year-old boy with hemophilia.

One would think the designers and legislators of the ACA would have put in place some protections for experienced insurance companies just entering the new market and the new startup Coops which were sponsored to compete with for-profit insurance companies. Install something akin to the Risk Corridor and the Reissuance programs which exist in the Medicare Part D drug program to protect insurers for exactly these reasons. Ahhhh, but they did do so.

If one could look to one or two things which plagued the ACA in Iowa, one would look to the Risk Corridor Program and Reissuance Program. Both were put in place to:

– Compensate insurance companies for startup losses whether nonprofit or for-profit.

– Cover those instances when an insurance company would end up with one, two, or a few of the $1 million dollar or the high insured a company had to cover, could not deny because of pre-existing conditions, or cancel a policy or change a item coverage due to illness or disorder (which by-the-way exists in Advantage programs).

So what happened?

The Risk Corridor program in the PPACA protects insurance companies from losses during the first three years if they did not estimate premiums properly which can happen in new markets with new different characteristics. With the mandate to insure all with pre-existing conditions, keeping children on parents plans, the exchanges, etc.; the Risk Corridor program was put in place (besides two other safe guards) giving insurance companies and Co-ops a three year window to get it right. Besides looking at losses, the Risk Corridor also looked at the profits of companies who had estimated accurately, had excess profits as a result, and required them to pay a ratio of excess profits into the Risk Corridor fund to help underwrite the losses of other companies. Outside of a plus or minus 3% was the basis for whether you gave up a ratio of profits or received a ratio of funding from the Risk Corridor program. The Risk Corridor program is nothing new and was used successfully with Medicare Part D forcing the evil and low profit insurance companies to share profits with the government. It still is in place for Part D and “still” generates additional revenue for the government. I do not recall any Republicans complaining about funding for drug insurance companies then; but then too, Part D was Bush’s legislature while the PPACA legislation was Obama’s. Strictly politics and constituents have paid the price of it.

Depicting the Risk Corridor particulars rather than attempting to explain it in writing will give a better explanation. Click on the image to better read the chart. Please note the plus or minus 3% and then the different ratios of revenue sharing or funding from and to healthcare companies and Co-ops. Besides being extra cash for the government, this fund was used to cover losses experienced by the drug insurance companies for the same reasons depicted above which occurred in the ACA.

invisible hand Again, what happened? The Risk Corridor program worked well for Part D, brings in revenue for the government, and is still in place. February 2014 found Rubio testifying to the House Committee on Oversight and Government Reform on behalf of his bill. At the same time the CBO released their evaluation of the ACA Risk Corridor program. Instead of being detrimental to the economy and a fiscal drag, the CBO projected the federal government would collect $8 to 16 billion from ACA healthcare insurers. Premiums would outpace claims, $8 billion would be distributed to the plans losing money, and $8 billion in additional revenue would be left for the federal government. Another and a House probe suggested initially there would be a shortfall with claims exceeding premiums.

The Republicans were not sitting idle and were investigating ways to derail the PPACA. As the ranking member of the Senate Budget Committee, Senator Jeff Sessions and the chairman of the House Energy and Commerce Committee, Michigan Representative Fred Upton came up with a plan to attack the legality of the Risk Corridor payments. They joined forces with the Appropriations Panel Chairman Colorado Representative Jack Kingston whose panel funds the Department of Health and Human Services and the Labor Department. Kind of get the picture of where this is going so far?

Senator Jeff Sessions wrote a letter to the GAO questioning whether the Risk Corridor payments were being appropriated correctly. Eventually the Appropriations Panel forced the HHS to make changes in how they appropriated funds allowing Congress to stop all appropriations. The PPACA could no longer appropriate the funds as they were subject to the discretion of Congress. The GAO issued an opinion on the legality of what the HHS was doing with funds.

GAO Letter to Senator Jeff Sessions. September 30, 2014:

Discussion; “At issue here is whether appropriations are available to the Secretary of HHS to make the payments specified in section 1342(b)(1). Agencies may incur obligations and make expenditures only as permitted by an appropriation. U.S. Const., art. I, § 9, cl. 7; 31 U.S.C. § 1341(a)(1); B-300192, Nov. 13, 2002, at 5. Appropriations may be provided through annual appropriations acts as well as through permanent legislation. See, e.g., 63 Comp. Gen. 331 (1984). The making of an appropriation must be expressly stated in law. 31 U.S.C. § 1301(d). It is not enough for a statute to simply require an agency to make a payment. B-114808, Aug. 7, 1979. Section 1342, by its terms, did not enact an appropriation to make the payments specified in section 1342(b)(1). In such cases, we next determine whether there are other appropriations available to an agency for this purpose.”

Further down in the GAO letter, the GAO did leave the HHS an out of using other already available appropriations for the Risk Corridor payments to insurance companies. Classifying the payments as “user fees” was another way to retain the authority to spend other appropriations already made by Congress. Otherwise if revenue from the Risk Corridor program fell short, the administration would need approval for addition appropriations from Congress. As it was, the HHS could no longer appropriate funds to make Risk Corridor payments unless the funds were already appropriated by Congress or Congress approved new funds which was not going to happen with a Republican controlled House.

Appropriations Panel Chairman Rep. Jack Kingston put the final nail in the coffin by inserting one legislative sentence in Section 227 of the 2015 Appropriations Act (dated December 16, 2014) which escaped notice. In the 2015 Appropriations Act, the sentence inserted said no “other” funds in this bill could be used for Risk Corridor payments.

Sec. 227.

None of the funds made available by this Act from the Federal Hospital Insurance Trust Fund or the Federal Supplemental Medical Insurance Trust Fund, or transferred from other accounts funded by this Act to the “Centers for Medicare and Medicaid Services–Program Management” account, may be used for payments under section 1342(b)(1) of Public Law 111-148 (relating to risk corridors).

This action blocked the HHS from obtaining any of the necessary Risk Corridor funds from other Congressional appropriated program funds identified in the 2015 Appropriations Act.

Nothing was said by Senator Sessions, Representatives Upton or Kingston before passage on what they had managed to do. It was Senator Rubio who issued a news release saying the provision was appropriate even though he had little to do with it. In the end, Colorado Rep. Jack Kingston’s one sentence purposely created a $2.5 billion shortfall in the Risk-Corridor program in 2015 as the HHS had collected $362 million in fees. Insurers who had misjudged the market sought nearly $2.9 billion in payments. Gerhart’ canary in a coal mine played out with many nonprofit insurance Co-ops failing due to a lack of reimbursements for losses, for-profit healthcare insurance companies lost money, healthcare insurance companies began to raise premiums to compensate, and some healthcare insurance companies recognizing an untenable environment created by Republicans took their losses and left the healthcare exchange market.

If you wish to know why there are few insurance companies and no Coops issuing healthcare policies on the healthcare exchanges, why the policies are arbitrarily expensive by default, and why companies are leaving or going bankrupt, etc. Ask your Republican Senators and Representatives why they sabotaged the Risk Corridor and Reissuance Programs. It is all politics with little regard for constituents.

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Odds and Ends October 23, 2017

Hurricane Relief: Interesting developments going on in the Senate. Senator John Cornyn (R-TX) is taking to task administration officials and conservative movement leaders by holding up the confirmation of Russ Vought as the right hand man to Mick Mulvaney’s at the Office of Management and Budget.

Wonder why he would do this? Apparently Senator Coryn believes there should be more funding for Texas’ hurricane relief. He has made it clear that Vought will be held up until he gets more funding for Texas.

Congress has already approved two emergency supplemental appropriations without corresponding revenue/budget offsets. Did anyone hear lately, what is going on in Puerto Rico? Same here, nada. I did not hear anything either even after a couple of notes sent to my Senators Stabenow and Peters. I guess Puerto Ricans as US citizens are not white enough.

Tax Reform Budget Resolution: If the Senate gets its way and it probably will, the Tax Reform Budget Resolution just passed by the Senate will create a $1.5 Trillion deficit. The Senate and the House now have to agree upon what will go forward as a Budget Resolution so they can do their magic and prevent Democrats and the majority of the nation any voice in giving aid to the wealthiest and richest in income 1% of the taxpaying households. On the table to pay for all of this give away is a $1 trillion cut in Medicaid and a $400 billion cut in Medicare. Two of the heroes who killed the ACA repeal-and-replace, etc. bills, Senators McCain and Collins, can be seen yukking it up as they leave the Senate. I wrote on this earlier. Gotta look good for those wealthy donors in the 2018 elections.

CSR Rescue: Another surprise ACA Bill to rescue the CSR where if nothing happened, those who received the CSR and anyone up to 400% FPL might and probably would be better off. Senate Health Committee Chairman Lamar Alexander (R-TN)

“If they don’t, there will be chaos in this country and millions of Americans will be hurt.”

As if concern for constituents being hurt and running around confused due to all the chaos created by supposition, conjecture, and innuendo was ever a concern for Trump or Republicans? The elimination of the CSR subsidy would be included in premium subsidy increases. The only issue here is the confusion which has been created by Trump and Republicans attacking the ACA. The CBO has estimated this confusion would smooth out over a couple of years if other factors do not disrupt the market place exchanges.

Twelve Republicans and 12 Democrats initially signed on to the bill, which would continue ObamaCare’s insurer subsidies for two years and give states more flexibility to waive ObamaCare rules. The giving of states greater flexibility is a mistake as history has shown states tend to punish those who can not find jobs and the low in income by cutting their healthcare. Here again McCain and Collins are in support.

Reported today, Schumer and the rest of the Democrats have rolled in support of Alexander’s bill. We are going back to 2010 when garbage healthcare policies which covered little will be put in place.

More on this later.

Going to Bat for Trump: I am lost in this one. Trump’s personal handler John Kelly took Representative Frederica S. Wilson (D – FL) to task for publicizing the call between Mr. Trump and Myeshia Johnson, whose husband, Sgt. La David T. Johnson was killed in an ambush in Niger. I am sorry; but, this sounds to me like an excuse for DT for getting it wrong in what he said to Mrs. Johnson. Donald Trump has problms saying “good morning” in passing.

This was a mistake. “ Every morning, I wake up in my office and scroll Twitter to see which tweets I will have to pretend that I didn’t see later,” said Representative Paul Ryan, who is often asked what he thinks about Trump’s controversial tweets. For months, he responded by saying he didn’t respond to the president’s tweets.”

“A handful of armchair psychoanalysts — reporters for major news organizations, no less — have decided that it all began at the 2011 White House Correspondents’ Association dinner, where Trump was the butt of jokes by President Obama and “Saturday Night Live” comedian Seth Meyers.

Trump was so humiliated by the experience, they say, that it triggered some deep, previously hidden yearning for revenge.”

We can see this in Trump’s efforts to erase Obama’s legacy whether it hurts people or not. This is not about politics, it is revenge. Paul Ryan should watch his step.

Calling out President Trump: “We’ve seen our discourse degraded by casual cruelty,” former President Bush said during a 16-minute address at “The Spirit of Liberty” event. “Bullying and prejudice in our public life sets a national tone and provides permission for cruelty and bigotry. The only way to pass along civic values is to first live up to them.”

Bush started two wars, at least one under false pretenses, and never suffered any consequences for the hundreds of thousands of lives lost in the process, Bush was responsible for the lacking response to Hurricane Katrina and the suffering, deaths, and displacement that resulted from it, Bush savaged the environment by backing out of the Kyoto Protocol and weakening the Clean Water Act, Bush ginned up homophobia by pushing in 2004 for a constitutional amendment banning same-sex marriage, Debt held by the public increased from $3.5 trillion to nearly $6 trillion and gross federal debt rose from $5.6 trillion to nearly $10 trillion, the financial crisis in 2007/8.

Is this the best we can find to speak for us?

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New Bill to Restore the ACA CSR

Senate Health Committee Chairman Lamar Alexander (R-TN) “Unless they are replaced with something else temporarily, there will be chaos in this country and millions of Americans will be hurt.”

Twelve Republicans and 12 Democrats signed on to the bill, which would continue ObamaCare’s insurer subsidies for two years and give states more flexibility to waive ObamaCare rules.

Senator Alexander is talking about the impact of Trump canceling the CSR which pays for deducible and co-pays directly to insurance companies for the insured between 138% and 250% FPL. And no, neither the CSR or the Risk Corridor Program bailouts for insurance companies. All of these are lies and misconceptions coming from the mouths of Republicans and the President.

Here is what will happen:

– Premiums for benchmark plans sold on the Affordable Care Act exchanges will rise about 20 percent next year and about 25 percent by 2020. The cost to consumers, however, would stay the same or even decline.
– People with lower incomes who buy insurance on the exchanges get a tax credit (subsidy directly to the insurance company), so their costs remain stable as a share of their income. When premiums rise, those government subsidies rise as well.
– For people with incomes below 200 percent of the federal poverty level, the out-of-pocket cost of insurance would remain about the same because of the bigger tax credits (subsidies offsetting premium increases to the insurance company).
– For those with incomes between 200 percent and 400 percent of the federal poverty level, the cost to buy insurance could actually get cheaper. Some Gold plans may be cheaper than the Silver plans. 85 percent of people who bought Obamacare insurance got a tax credit.

Kaiser Family Foundation Vice president Larry Levitt: “The CBO analysis makes it clear. The ending cost-sharing subsidies would be a perfect example of cutting off your nose to spite your face. Premiums would rise and the government would end up spending more in the end through tax credits that help people pay their premiums.”

The CBO report confirms earlier analyses, including this one by Kaiser and this one from the consulting firm Oliver Wyman suggested eliminating the cost-sharing payments could make policies cheaper for some individuals.

In the end, the elimination of the CSR may cause a cumulative deficit of $194 billion from 2017 through 2026, CBO and JCT estimate. While it may be chaotic in the beginning as people will not know what to do, premium subsidies paid directly to the insurance companies will pickup the difference, and the CBO assumes the chaotic conditions will level out over a period of 2-3 years.

Giving states more control over the ACA in areas such as the 10 essential benefits or cheaper than Bronze plans would spell the end for the ACA and we would be back to garbage healthcare polices.

If you are prone to do so, it would be helpful to write your sponsoring Senator and tell them you are opposed to this bill by Senator Alexander. The  Democratic co-sponsors include Sens. Jeanne Shaheen (D-NH), Joe Donnelly (D-IN), Amy Klobuchar (D-MN.), Heidi Heitkamp (D-ND), Al Franken (D-MN), Joe Manchin (D-WVA.), Tom Carper (D-DE.), Tammy Baldwin (D-WI.), Claire McCaskill (D-MS), and Maggie Hassan (D-NH).

There will be issues; but, the greater issue is with Republicans and states tampering with the ACA offerings.

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Senate to Vote on Budget Resolution

A couple of weeks ago, the House passed a Tax Reform Budget Resolution. Today, the Senate will take a vote on its Tax Reform Budget Resolution. Once passed, the differences will need to be resolved by both legislative bodies. President Trump met with the Senate Committee which included 6 Democratic Senators of which 5 are up for re-election in 2018. Trump impressed upon Senator Wyden the need for support of the Republican Tax Reform measure.

Except the call by President Trump did not get a favorable response. Senator Ron Wyden of Oregon called the President and the Republican’s bill a “con job” stating; there is a Grand Canyon-sized gap between the rhetoric surrounding this plan and reality.”

All the happy talk about helping the middle class and avoiding a giveaway to the wealthy sounds great, but it is not what the White House and Republicans have on offer.”

Going forward, the content of both Resolutions will have to be reconciled and the differences between the House and the Senate’s Tax Reform Budget Resolution assumptions resolved. The House Resolution assumes the tax plan will generate economic growth and calls for $203 billion in miscellaneous spending cuts over a decade, while the Senate Resolution assumes no economic growth and creates a deficit of ~$1.5 trillion over a 10 year period. Most likely, greater importance will be placed on the Senate’s Resolution by Republicans due to their slim majority. Passing Tax Reform before 2018 elections has taken a priority for Republicans after doing so poorly with revising, repealing, and/or replacing the ACA. Little concern is given to its long term impact. In the end and the same as the 2001/2003 tax breaks, any deficits created after 10 years result in a sunset of the bill.

After the House and the Senate agree on a Budget Resolution, the House Ways and Means Committee will release a detailed tax bill and schedule a committee vote. The Tax Reform bill will go to the House and the Senate to be passed under Reconciliation rules (a majority) vote disallowing a filibuster effort by the Dems in the Senate. This will be the same as what occurred with the ACA although the Republican Senators who opposed the ACA legislation such as Collins and McCain will support Tax Reform.

More to come.

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