Tag Archives: Obamacare

What Does The CBO Say?

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Last week the Congressional Budget Office released “The Budget and Economic Outlook: 2014-2024.” Conservatives and the right-wing media got an instant woody over Appendix C – Labor Market Effects of the Affordable Care Act: Updated Estimates. The ACA would kill 2.5 million jobs, take away the incentive to work and put millions more on the dole.

The White House, predictably, embraced the report as a victory of sorts for the beleaguered American wage slaves who have been worried they will die chained to their desks.  Meanwhile, Politico accuses both sides of “cherry-picking” the data in the report.

(C) Can Stock Photo

(C) Can Stock Photo

So what to make of all this?  Here’s my take.

First, CBO’s projections are educated guesses about the future based on current data and realities that are likely to change, requiring further analysis and adjustments.  Indeed, the CBO admitted:

“…estimate(s) of the ACA’s impact on labor markets (are) subject to substantial uncertainty, which arises in part because many of the ACA’s provisions have never been implemented on such a broad scale and in part because available estimates of many key responses vary considerably. CBO seeks to provide estimates that lie in the middle of the distribution of potential outcomes, but the actual effects could differ notably from those estimates…”

The claim that there will be 2.5 million fewer jobs by 2024 can be blamed on conservative animosity towards the ACA, aided by the CBO’s authors’ poor choice of words.  The report forecast workers voluntarily reducing their labor by 2.5 million full-time equivalent hours. That will likely happen mostly among low wage workers, amounting to 1.5 percent to 2.0 percent of total hours worked.

“…The estimated reduction stems almost entirely from a net decline in the amount of labor that workers choose to supply, rather than from a net drop in businesses’ demand for labor, so it will appear almost entirely as a reduction in labor force participation and in hours worked relative to what would have occurred otherwise rather than as an increase in unemployment (that is, more workers seeking but not finding jobs) or underemployment (such as part-time workers who would prefer to work more hours per week)…”

Those workers are NOT quitting altogether to go on the dole. Some may go to part-time jobs; others may retire early. There are 10,000 Baby Boomers retiring every day through 2031; their exit from the workplace could potentially create job openings for younger, qualified currently unemployed workers.

However, any potential job changes come with trade-offs.

Full-time employees whose income is more than 400% of the Federal Poverty Level (FPL) or whose employers offer health insurance are not eligible for subsidies for health insurance purchased through the exchanges. So they will either continue to work full-time, switch to a different full-time job, or go to part-time jobs and purchase their own insurance, especially if the net result is working fewer hours while maintaining their desired standard of living.

Employees whose income is less than 400% FLP or whose employer does not offer insurance can obtain insurance through the exchange, and they are eligible for tax credits and subsidies, which decrease as income increases. They might work less to avoid crossing the FLP threshold which means losing their subsidies and credits while effectively hiking their taxes. But then again, they might decide the extra income is worth the tax bite

People living in states that agreed to expand Medicaid are now eligible for Medicaid benefits if their income is less than 138% FLP. If they earn more, they’ll be eligible for insurance subsidies, ensuring they won’t lose coverage. People living in states that did not expand Medicaid, however, can only get insurance subsidies, not Medicaid.

I think the real issue is: conservatives and their corporate overlords hate losing the leverage that health insurance once gave them over workers.  How many people have endured “job lock,” staying in a thankless job, working more hours for less pay, working for condescending employers who’ve made it abundantly clear employees are unimportant, easily replaced, but a necessary evil?  Have you ever been told, “Bend over and like it because there are ten other people out there waiting for your job?”

Employers might be a little more considerate now that health insurance isn’t always tied to the job. I’m not holding my breath.

A Little Perspective, Please (Part 2)

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Since it’s Thanksgiving weekend, I’ll be brief.

4.2.7

34 “Then the King will say to those on his right, ‘Come, you who are blessed by my Father; take your inheritance, the kingdom prepared for you since the creation of the world. 35 For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, 36 I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me.’

37 “Then the righteous will answer him, ‘Lord, when did we see you hungry and feed you, or thirsty and give you something to drink? 38 When did we see you a stranger and invite you in, or needing clothes and clothe you? 39 When did we see you sick or in prison and go to visit you?’

40 “The King will reply, ‘Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.’

Matthew 25:34-40

Affordable Care Act Timeline: 2012-2014

2012 

  • Established Value-Based Purchasing program (VBP) in Traditional Medicare, offering financial incentives to hospitals to improve the quality of care.
  • Provided incentives for physicians to join together to form “Accountable Care Organizations” to better coordinate patient care and improve the quality, help prevent disease and illness and reduce unnecessary hospital admissions. ACOs will get a financial reward for providing high-quality care at lower cost.
  • Instituted changes to standardize billing and requires health plans to begin adopting and implementing rules for the secure, confidential, electronic exchange of health information. Using electronic health records will reduce paperwork and administrative burdens, cut costs, reduce medical errors and most importantly, improve the quality of care.
  • Required any ongoing or new federal health program to collect and report racial, ethnic and language data to help identify and reduce disparities.

2013 

  • Provided new funding to state Medicaid programs that choose to cover preventive services for patients at little or no cost.
  • Established a national pilot program to encourage hospitals, doctors, and other providers to work together to improve the coordination and quality of patient care.
  • Required states to pay primary care physicians no less than 100% of Medicare payment rates in 2013 and 2014 for primary care services, with the feds picking up the tab.
  • The Health Insurance Marketplace for individuals and small businesses opened October 1, 2013.

January 1, 2014 

  • Prohibits insurance companies from refusing to sell coverage or renew policies because of an individual’s pre-existing conditions
  • Eliminates the ability of insurance companies to charge higher rates due to gender or health status in the individual and small group markets.
  • Phased out annual limits on insurance coverage starting September 23, 2011 and eliminates them entirely January 1, 2014
  • Prohibits insurers from dropping or limiting coverage of individuals participating in clinical trials.
  • Provides tax credits for insurance for people with income between 100% and 400% of the poverty line—about $43,000 or less in 2010—who are not eligible for other affordable coverage.
  • Opens the Health Insurance Marketplace to people whose employers don’t provide benefits.
  • Increases the Small Business Tax Credit up to 50% for “qualified” small businesses and up to 35% for small non-profit organizations.
  • Allows anyone earning less than 133% of the poverty level (about $14,000 for an individual and $29,000 for a family of four) to enroll in Medicaid, with 100% federal funding for three years and then no less than 90% federal funding for subsequent years.
  • The individual mandate becomes effective January 1, 2014.  Everyone who can must purchase insurance or pay a fine.

 

“New Rule: the Republicans have to stop saying that if the Obamacare website doesn’t work that must mean Obamacare itself doesn’t work.  That is like saying the ice cream’s no good because you can’t find a spoon.  And the ice cream is good!  That’s why you can’t find any spoons; they’re all in the dishwasher.”

Bill Maher – November 15, 2013

obamacare_Republican sledgehammer

Conservatives and the media are gleefully focusing on the Health Insurance Marketplace’s rocky rollout while ignoring the rest of the Affordable Care Act’s provisions.  They’re also hypocrites for condemning the $70 million “wasted” on the Marketplace’s computer system, which is only 3% of the $24 BILLION Congressional Republicans wasted by shutting down the government for 16 days.

I edited the Health and Human Services’ overview, Key Features of the Affordable Care Act by Year , for easier reading.  Here’s what we will give up if “Obamacare” is repealed.

2010

  • Insurers can’t deny coverage for children under 19 because of pre-existing conditions
  • Insurers can’t rescind coverage because of a “technical mistake” on an application.
  • Lifetime coverage limits  have been eliminated.
  • Annual coverage limits have been restricted.
  • Provided for an external review mechanism for denied claims.
  • Provided a one-time, tax-free $250 rebate check to seniors in the Medicare D “donut hole.”
  • New health plans have to provide preventive care services without charging a deductible, co-pay or coinsurance,
  • Gave a tax credit for up to 35% of the premium costs for small employers and up to 25% for small non-profits.
  • Allocated more money and staff to combat fraud and waste in Medicare, Medicaid and CHIP.
  • Awarded grants for the state insurance navigators program (October 2010).
  • People with pre-existing conditions who were uninsured for >6 months got access to state or DHHS insurance coverage.
  • Allowed adult children to stay on their parents’ insurance until they turned 26.
  • Created a $5 billion dollar program to continue employee coverage for early retirees.
  • Created incentives to increase the number of primary care physicians, nurses and physician assistants.
  • Allocated $250 million in grants to states plans to require insurance companies in the individual and small business markets to justify rate hikes of >10%.
  • Banned companies with excessive or unjustified rate hikes from participating in the new exchanges in 2014.
  • Provided federal funds for states expanding Medicaid coverage.
  • Increased payments to rural health care providers.
  • Allocated funds to support construction and expansion of community health centers.

2011 

  • Provided 50% discount on brand-name drugs for seniors reaching the “donut hole”
  • Provides additional savings on brand-name and generic drugs through 2020 when the “donut hole” will close.
  • Provided for certain free preventive services for seniors on Medicare.
  • Created Center for Medicare and Medicaid Innovation to test new care delivery models, improve care quality and slow the rate of growth of health care costs.
  • Established the Community Care Transitions Program to coordinate care for high-risk Medicare patients after hospital discharge.
  • Established the Independent Payment Advisory Board to recommend ways to target waste, reduce costs, improve health outcomes, expand care access and extend the life of the Medicare Trust Fund.
  • Allowed states to offer home and community based services to disabled individuals through Medicaid rather than institutional care in nursing homes through the Community First Choice Option.
  • Required insurers for large employers to spend at least 85% and individual and small employer plans to spend at least 80% of all premium dollars on health care services and health care quality improvement and provide rebates if profits or administrative costs are too high.
  • Gradually eliminates overpayment to Medicare Advantage plan insurers; will give bonuses to Medicaid Advantage plans providing “high-quality care.”

Part 2 will look at 2012-present.

Health Care Expenditures: Show Me The Money!

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Any substantive discussion of health care requires a solid foundation.  So here’s a primer on health care expenditures – where the money came from and where it went – prior to the ACA.

Who provides our insurance: in 2007, a little more than half of us (54%) had employer-provided health insurance. Medicare, Medicaid and SCHIP covered another 26%, and 4% of people purchased their own insurance. Sixteen percent of us had no insurance.

Who provides insurance 2007

Source: Kaiser Family Foundation State Health Facts – 2007

But three years later, things had changed significantly.  Less than half of us got insurance from our employers.  Medicaid and Medicare coverage rose to 16% and 13%; private insurance covered 5%.   The percentage of uninsured remained the same.

Who provides insurance 2010

Source: Kaiser Family Foundation – State Health Facts

Government employees get their insurance with taxpayer dollars, not employer revenue.  The American Federation of State, County and Municipal Employees (AFSCME) has 1.6 million members. The American Federation of Government Employees (AFGE) and the National Federation of Federal Employees (NFFE) together have 700,000 members. There are 1.8 million active duty service men and women, many with dependent families, receiving “government-run health care.”   Add veterans and their families covered by TRICARE and the Civilian Health and Medical Program of the Department of Veterans Affairs (CHAMPVA) and we are much closer to “socialized medicine” than any politician will ever admit.

 Who pays for health care: Government is already the single largest health care purchaser; In Medicare, Medicaid, the State Children’s Health Insurance Program (SCHIP) and other public funds paid 40% of health care costs in 2011.  And just to clear up any misconceptions, two thirds of Medicaid funds go for care of the elderly and disabled.  Yep, Medicaid pays for your grandmother’s nursing home, not Medicare, which only covers skilled nursing care.

Private insurance paid for 33% of expenditures; out-of-pocket spending and other private funds accounted for 11% and 7%, respectively.

Who paid for health care 2011

 

 

 

 

Source: California Health Care Foundation

Where our health care dollars go: Hospitals receive 31.4% of our health care dollars; doctors get 19.9% and drugs consume another 10.1%.  Nursing homes receive 5.5% and we spend 2.7% on home health care. “Other Personal Health Care Spending” includes goods and services such as dental, vision and durable medical equipment. “Other Health Spending” includes administrative costs, research, public health services, buildings and equipment.

KFF NHE 2010

Sources: Kaiser Family Foundation and Centers for Medicare & Medicaid Services

Who do we spend it on? The good news is half of us rarely need medical care, accounting for about 3 percent of all health care spending.  The bad news is 5 percent of us are responsible for almost half of expenditures.  The top 1% of people are “super-utilizers,” whose chronic, poorly managed illnesses account for 22% of our annual bill.

Population Consuming Health Care

Source: Agency for Healthcare Research and Quality

One would expect caring for the elderly to be more expensive, but the United States spends far more than other countries.

Health Care costs by age

I’ll try to explain WHY we spend so much money in my next post.

Freedom’s Just Another Word For Everything To Lose

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September 27, 2013

Ted Cruz’s phony filibuster on September 24, 2013, was ostensibly about “freedom.” Tony Perkins of the Family Research Council said, “… the greatest threat to our faith, our families and our freedom is Obamacare”  And one internet troll complained, “Thanks to Obamacare, I’m losing all my choices?

Oh, really? And what freedoms are you losing?

The freedom to let other people absorb that $79 billion a year in uncompensated care for the uninsured?

The freedom to wait several hours in someone’s emergency room for routine care because you are uninsured and none of the doctors in town will see you?

The freedom to go bankrupt because the cost of the care for your catastrophic illness exceeded your insurance policy’s lifetime cap?

The freedom to be uninsurable because you developed cancer, lost your job and then lost your insurance?

The freedom to put a pickle jar on the local convenience store counter asking for donations for your child’s surgery because you make too much to qualify for Medicaid but can’t afford insurance on the individual market?

The freedom to stay in a soul-crushing job under a boss you hate and you would leave in a heartbeat if it wasn’t for the the health insurance benefits you desperately need?

If you are fortunate enough to have heavily subsidized health insurance through the generosity of your employer you can keep it. Thanks to Obamacare, you have additional proctections – insurance companies can’t drop you because you actually needed your insurance. So stop complaining that 30 million people will now get something you’ve taken for granted.