The Climate Change in Insurance Exchanges

A different kind of climate change was in the news this week, as Gallup reported that the percentage of people who are uninsured declined rapidly from 17.1 percent to 15.9 percent in just three months.

That is a pretty substantial drop, and one that began when people started signing up for Obamacare.

According to Gallup and others, it translates into an additional 3 million people who now have health insurance, consistent with the numbers of people signing up for Affordable Care Act coverage.

That’s good news for Obamacare – perhaps. 

One of the more interesting – and sometimes frustrating – things about health policy is that like climate change it unfolds slowly over time, and so it is often difficult to see the change in climate while it is happening.

For one thing, there are always other variables.  For example, the unemployment rate has also gone down during this period, from 7.2 percent last October to 6.7 percent today. It is possible that some of these 3 million newly-insured people obtained insurance through employment, and would have gotten it anyway.

And there’s always the glass-half-empty view to consider.  Both the unemployment rate and the uninsured rate are just about back to where they were in 2008, right around the time that the economy was collapsing.  So most of the progress we’ve made so far amounts to dragging ourselves out of a deep hole.  We’re still just back to where we were before we fell in.

But if we look too closely at this, we miss the bigger picture.

In spite of all of the initial problems with Obamacare exchanges, and despite the unpopularity of the Act itself (54 percent still disapprove of the law, according to the Real Clear Politics average of recent polls), and despite those who believe that they may have lost their insurance because of Obamacare, the trend today is clearly in one direction.

More people are becoming insured.  And that means something in the long run. 

For one thing, it means that health and mental health providers who have been holding out from participating in insurance plans until they are sure that there will be patients there will need to start signing up.  There will be patients there, and they will be looking for providers who accept their insurance.

For another, it means that individuals who can afford insurance but have been choosing not to buy it – betting that the law will go away before they ever have to pay a penalty – are probably not going to win that bet.  As more people pay up to become insured, there will be increasing pressure on everyone else to pay their fair share, too.  Insurance is becoming more of an individual's responsibility.

People may not like their health insurance very much, but once they have it, they never want to lose it again.

So in all probability the fates of the Affordable Care Act and private health insurance are intertwined now and for the foreseeable future.  The structure of our health insurance system is changing before our eyes because of the Affordable Care Act.  But it isn’t going to undermine the idea of insurance – just the way we pay for it. 

Here is a parallel example to explain what I mean.  When IRAs were created, they were like today’s exchanges.  They were a small thing.  Defined benefit plans – or pensions – were the norm for employees (as employer-based insurance is still the norm today).  But IRAs, 401(k)s, and other tax-deferred savings offered a retirement savings option that took a savings burden off of employers and transferred it to workers.   This changed – in a single generation – the nature of how we will pay for our retirement years. 

The same thing could be happening now with health insurance.  The exchanges may seem like a small and controversial thing today – perhaps 5 million or so will be insured through them at the end of the 2014 sign-up period.  But this number is growing every day, and will grow a great deal more in the future. 

And as a result new small employers – the creators of so many new jobs in our society – may increasingly decide not to offer health insurance as workers find deals that are just as good on the open exchange markets. 

Shifting from employer-based insurance to individual insurance does reflect a change in climate.  As we argue over the details, who really knows how significant this change will be?

We've Grown Accustomed to Disgrace

It sometimes seems like policymakers go out of their way these days to pick on people with mental illness.

According to a report released last week by the American Mental Health Counselors Association, 3.7 million people with mental illness will remain uninsured because of the decisions of states not to expand Medicaid. 

And if you believe some earlier data from the Kaiser Family Foundation about the total number of people who will be left uninsured because of states' failures to expand Medicaid, then you can only conclude people with mental illnesses account for nearly 80 percent of all those who are being denied insurance coverage in non-expanding states.

This includes 652,000 in Texas and 535,000 in Florida, and around 200,000 each in Pennsylvania, Indiana, Georgia, North Carolina, South Carolina, Tennessee, and Louisiana.

The association characterizes this as “dashed hopes” and “broken promises.”

You might also call it a national disgrace.

For those of us who live in one of the non-expanding states, we’ve grown accustomed to disgrace.  Our states are often held up as examples of what not to do.  We have poorer health status, and usually spend less on mental health services.   We also have the life expectancies of Libyans.

Our policymakers often blame Washington for all of our troubles.  But Washington isn’t to blame for this one. Washington’s recent decisions on health policy did not contribute to our current staggering debt.  Fighting two interminable wars on a credit card at the same time our banking industry nearly collapsed took care of that. 

No, these decisions reflect a lack of understanding and empathy on the part of elected officials.   Their decisions have consequences, and cannot always be blamed on someone else.

Perhaps those who live in more progressive states are feeling a little superior right now.  But they should not be.  Legislators in those states also didn’t clamor to expand Medicaid for all these people with mental illness before the federal government stepped in and offered to pay for it. 

So we are really all in this together.

We are all pushing nearly 4 million people even farther out on the fringes of our health care delivery system. 

These are people living with at least one serious, often life-threatening, illness.  They are living near or below the poverty line.   They cannot afford to pay for health care.  And to top it off they are often subjected to stigma and discrimination. 

This is a group of people who are frequently homeless or incarcerated. 

And when they do need medical care, this is what we say to their providers.  Treat them for free.

We ask hospitals to care for them in their emergency rooms for free.  We ask community mental health centers to provide inpatient and outpatient services for nothing.  And we ask clinicians to donate their care.

The solution for this is simple and involves us all.  If we want to do so, we can bypass those non-expanding states entirely.

All we need to do is to ask Congress to amend the Affordable Care Act to allow people living below the poverty level the option of purchasing insurance on the exchanges at the same price as those living at the poverty level. 

Right now, they cannot.  The reason is that the price of insurance for someone living below the poverty level isn’t subsidized.  But it is for everyone between the poverty level and 400 percent of poverty – over $90,000 per year for a family of four. 

There are plenty of people who think we treat people below the poverty level like millionaires with our entitlement programs.  Ironically, in this one instance they happen to be right. 

If Congress were to make this change, the immediate result would be that 3.7 million people living with mental illness could get decent basic health insurance for little or no cost. 

Of course, it would cost the rest of us something.  But Medicaid expansion costs all of us something, too – even those of us living in non-expanding states. 

And the money would be put to good use. It would reimburse providers of necessary health care, stimulating the sector of the economy that accounts for one-sixth of our GDP (and a similar percentage of our jobs).

So everyone would win if we did this.

Who could object to that?

My guess?  Many of the same politicians who don’t favor Medicaid expansion.  Because when you get right down to it, where people with mental illness are concerned, some of these politicians may in fact be our biggest national disgrace.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Why Our Health Policy Matters More Than Ever in 2014

A single health policy issue will decide who controls Congress after the 2014 election.  Here’s why.

You may have noticed the relative dearth of partisanship emanating from Washington over the past couple of months. 

Congress approved a budget with little fanfare and passed a debt ceiling increase with no hint of strings attached.

There is a reason for this newfound spirit of bipartisanship, and it is not what you think. 

Congress isn’t suddenly taking to heart its relentlessly low approval ratings in 2013.  And it hasn’t just become aware of how unproductive it has been.

Barring an unforeseen catastrophe like 9/11, Katrina, or Sandy, it’s just that members of Congress already know which issue will swing the upcoming election.  And they are not interested in muddying the waters at this relatively late date. 

The Democrats know that they have an advantage in the improving economy, their stand on women’s issues, and their strong support among minorities.

The Republicans know that they gain support because of a still-too-high unemployment rate, unbalanced budgets and the increasing national debt, and an unpopular foreign policy.

But the issue that will swing the Congressional elections in November is the one in which the political advantage then is a little less clear today.  It’s Obamacare.  And that’s proof that our health policy matters more than ever in 2014.

The partisan Congressional lines are arguably drawn more sharply over Obamacare than any other public policy.  We all know of the dozens of party-line Obamacare “repeal” votes that have been taken in the House since its equally partisan passage in 2010.  No other issue comes close for purely partisan controversy.

So what might this mean in the fall?

The current generic Congressional ballot reflects a near dead-heat for the 2014 election, which (because of gerrymandering) would keep the make-up of Congress roughly as it is for another two years.  And the parties have been pretty even on the generic ballot since last October.

What happened in October was that the Democrats lost ground quickly when the initial Obamacare web site problems overwhelmed the news cycles for a month.

As a result, recent polling data suggest that Obamacare is less popular now than ever, with an unfavorability rating 12 points higher than its favorability rating as of February 15. 

From Republicans’ perspective, this is all they can hope for.  Obamacare is the issue that can protect the Republican majority in the House and give the party a fighting chance of picking up the Senate.  Republicans do not want to squander this opportunity by picking new fights they can’t win (and might even cost them their primaries) over deficits and debt ceilings in particular.  So they’ve stopped talking about these for now.

But the Democrats are standing pat because they’re betting that Obamacare will be much more popular in six months than it is today.

The reason is that we’re all beginning to see who is benefiting from the new law – people over the age of 55.

This is a high-voting constituency that went heavily Republican during the 2012 election.  Romney won the 45 to 64 year old demographic by 51-47 percent, and the 65+ demographic by 56-44 percent.

Ever since that election, people on Medicare have been enjoying free annual physicals and improved prescription drug benefits.  And they have not experienced the collapse of the Medicare system that some feared.

As it turns out, baby boomers are flocking to Obamacare, too.  According to one source, 31 percent of the new Obamacare enrollees are 55 years of age or older.  Until now, many of these people had no reason to vote for a Democrat this year.  They had lost their jobs and their insurance during the recession. But now they have insurance again.

Democrats are banking on the fact that they will not risk losing their insurance a second time by voting for a repealing Republican in 2014.

While most people may never understand Obamacare in its entirety, they are just beginning to understand how it affects them personally.  That’s ultimately what matters.

There may still be hand-wringing over fewer than 7 million Obamacare sign-ups this spring or too few young, healthy people in the exchanges, but that will just be background noise to actual voters in the fall. 

What will matter is what this election means for them personally, and that’s why Obamacare may still spring some November surprises.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

For Better Health, Why We Need Integration of Care

I was asked recently why I didn’t actively seek out a specialized school setting many years ago in which to educate my son.

My son has a serious mental illness, one which first manifested when he was a child.  I’ve written about this before in Health Affairsand will write about it again in a book scheduled for publication later this year.

The argument is this.  If you put children with a special condition – such as serious mental illness – into a classroom with other children with the same condition, then you can adjust your educational services to meet the needs of those children all at the same time – and you will get better outcomes.

That’s essentially how our health care delivery system has often been built, too.  Through most of the twentieth century, people with mental illnesses were treated in one set of hospitals (usually state hospitals). And people with most physical conditions were treated in a different set of hospitals.

I wrote “most” above because we even segregated regular health care sometimes.  For example, we had specialized TB hospitals through most of the twentieth century, remnants of which still existed in some places as we turned the page to this century.

But segregating services like this did not lead to better outcomes. 

The best data to support this conclusion come from a study of life expectancy of people who were in state psychiatric hospitals in several different states.  The study found that, on average, the life expectancy of people in those hospitals was reduced by up to twenty-five years or more.

To get a sense of how significant this is, consider this.  It is greater than the overall life expectancy reduction attributable to cancer.

The problem with segregating health care services was this.  When you segregate treatment, you often forget about the rest of the person.  The people with mental illness who died young were not usually dying because of their mental illness, they were dying because they had other medical problems that were undertreated, too.

This is the argument against segregating educational services, too.

When we did move my son into a private school for children with emotional disturbances, it focused almost entirely on managing his emotional disturbance, and he received few, if any, educational services.  He arguably didn’t get a better health outcome, nor did he get a better educational outcome.

This is not to say that we should educate or treat everyone “in the mainstream.”  That’s too simplistic, because it too often implies that a “one size fits all” standard should be the norm, when that is not what children (or adults) with serious chronic conditions, like mental illness, need. 

What people need are services tailored to their own needs that take their “whole person” into account.

There is really only one way to do this – by integrating care and services. 

For everyone, this means that the right thing to do is to integrate general health treatment and services with behavioral health treatment and services. 

It means screening for behavioral health in the annual check-up, just as we screen for weight, vision, hearing, blood pressure, heart, and lung function.  It also means connecting the work of behavioral health specialists to primary care providers in the same way that we want obesity care, cancer care, diabetes care, treatment for hypertension, and pain management connected to primary care.  We want good communication, and each treatment strategy considered in the context of all the others.

This gets meaningful results, as reflected in the chart that accompanies this column.

But it also means making the changes necessary to integrate health and behavioral health services with non-health services.

In the case of children, this means integrating them with educational services, and actually making community-based care a part of the overall instructional plan.  The million dollar question (literally) is “who should pay for this – the educational or the health care system?”

In the case of adults, this means integrating health and behavioral healthcare services with housing, employment, and social and peer support services, and recognizing that recovery is only possible through integration, and only meaningful if it can be measured by an increase in life expectancy.

Otherwise we’re just spinning our wheels and repeating our past mistakes.  

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

A CBO Full of Surprises: Obamacare Will Insure 2 Million Fewer in 2014

Obamacare will insure 2 million fewer people in 2014 than previously reported.  That number is in a new report just released by the Congressional Budget Office (CBO).

That may come as a surprise to you.  But it isn’t the biggest surprise in the report for me.  I’ll explain why later. 

First, let’s review the new numbers.

Last May, the CBO estimated that seven million people would sign up for insurance through exchanges this year.  That number is not a surprise – it has been reported widely in the media.

It also estimated that nine million previously uninsured people would be enrolled in Medicaid or CHIP.  In other words, a total of 16 million people would obtain coverage this year through Obamacare.

But last week, CBO released updated estimates.  It now says that only 6 million will sign up through the exchanges this year, and only 8 million will enroll in Medicaid or CHIP. 

Because some of the people who would have signed up are already insured, that means that the number of uninsured people will grow by 1 million over the CBO’s previous estimate.

Is that really a surprise?

It has been evident for some time that getting 7 million people to sign up for insurance through the exchanges was an ambitious target.  And the early glitches sure didn’t help.  But enrollments have been going much more smoothly lately, and reaching 6 million would still be impressive.

Also, taking into account the new enrollments in Medicaid and CHIP, the overall number of uninsured would still be reduced this year by 13 million.  That would reduce the total number of uninsured people from 58 million in 2013 to 45 million – halfway to Obamacare’s 2016 full-implementation target of 31 million.

That is still a pretty good result, and about what could have been expected.

And there is a little more good news on the fiscal side.  Lower enrollment numbers mean a little less spending for ACA each year, and in a program this big, that comes to $18 billion saved over ten years.

That would be enough to fund the prevention fund again, but I guess we shouldn’t go there.

So where’s the surprise?

The first is, of course, could be in the perception.  Much as the headline from the CBO report last week that Obamacare would cause the loss of over 2 million jobs was pretty surprising, another headline that it has fallen 2 million people short of its 2014 insured targets could be just as shocking. 

Of course, last week’s headline didn’t mention that the jobs “lost“ come about largely from among people who feel too sick to work, and who hold onto a job solely because they need the health insurance that comes with it.   The next headline may also not mention that the newly insured people also will come from among those who perceive that they need health insurance the most.

The second is also in the perception.  If Obamacare falls short of its targets, and those targets are recast as promises, then this will be perceived as another Obamacare promise broken.  People always seem surprised when they hear about politicians breaking promises, and they often make them pay at the polls.

But what may be the biggest surprise of all in the new numbers? 

It is this: that Obamacare is working almost exactly as it was intended, and appears to be having almost exactly the result that was intended. 

We are actually getting from the Affordable Care Act almost exactly what the President and Congress said we’d be getting way back in 2010.  And whether you like the law or not, this does suggest that members of Congress were a whole lot more knowledgeable about what they were voting for back in 2010 than most people give them credit for.

In other words, this law was put together out in the open.  The provisions in it were put together in a thoughtful way.  And those who made promises about what it would do were, in fact, telling the truth.  

And while a few of us may be surprised by how it has affected us personally, as a whole we all do know where we stand with this program.

I wish that were the case with all public policy initiatives. 

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Policymakers Cannot Deny What Medicaid Expansion Means to Survival

It is never easy to absorb unpleasant information.

And when I was a policymaker, if someone told me that my decisions were going to cost innocent people their lives, then I usually chalked it up either to hyper-sensationalism or hyperbole. 

After all, would passing a small increase in a business tax really force an employer to imperil workers by cutting corners on safety?  Would gun registration really leave a homeowner defenseless in the case of a break-in? Would cutting back welfare a few dollars actually result in a choice between eating or heating in the winter?

In most instances, it was hard to see the direct connection.

But the more I learned about health issues, the more I understood that there really were some decisions that were a matter of life and death.  These were the issues that taught me humility.  These were the issues that taught me that I needed to set aside my political ideology and embrace both theology and hard data whenever they stared me in the face together.

One of those issues was Medicaid. 

Back in the late 1970s, I saw Medicaid as a safety net program for seniors and people with developmental disabilities to help pay for skilled nursing or intermediate care.

And so when Ronald Reagan and, later, George Bush agreed to expand the program to cover children and families, I admit I was skeptical.  Wouldn’t it burden taxpayers who were already paying far more for Medicaid than they ever expected?  Wasn’t private insurance enough? And what would happen if we did not go along – would anyone die without the expansion?

That was always the billion dollar question – who dies without the help of government?

We knew that people caught in fires, victimized by criminals, or trapped by natural disasters died.  We also knew that those who couldn’t get into hospitals, who couldn’t get emergency services, and who were given substandard care in institutions also died as a result.  But we did not know how Medicaid fit into this.

Fortunately, we voted to expand Medicaid anyway, taking it mostly on faith that it was the humanitarian thing to do.  And now we know the result.  We saved a lot of lives, just as if we had disarmed potential killers or rescued people from fires burning out of control,

We do not have to assert this as a matter of faith anymore.  We also have compelling hard data.

I wrote about this in February 2013 in a column I provocatively entitled Failure to Expand Medicaid: Just another Death Penalty?   If you are interested, you can read the full column by clicking on the title, but the essential point was this: Based on a study published in the highly-respected New England Journal of Medicine, it did not take a rocket scientist to calculate that as many as 36,000 lives nationwide hung in the balance of the Medicaid expansion. 

It may not be hard for a policymaker to dismiss the results of a single study; I did it myself in my day.

But it is not quite so easy to dismiss two.  

And there was a second study, conducted by the prestigious RAND Corporation, published by the equally reputable Health Affairs in June of 2013.  I wrote about it in another column entitled Grim Numbers Result from Failure to Expand Medicaid.  By then, we could all come up with a first set of estimates of the numbers of people who would die in just those states that failed to expand Medicaid last year – up to 19,000.

But last year’s sessions were over by the time people saw the report.  And so they likely threw it into the bottom of the circular file and forgot about it.

But can similar evidence be denied a third time – much as Peter denied knowing Christ?

Health Affairs blog published a new report just days ago, entitled Opting Out of Medicaid Expansion: The Health and Financial Impacts.  It found that up to 17,000 lives still hang in the balance in states that have refused to expand Medicaid.

As Health News Florida pointed out: “More than 1,100 Floridians will die prematurely if the state Legislature continues to refuse to expand Medicaid.” As will more than 1,800 in Texas, 500 in Georgia, 400 in North Carolina, 350 in Pennsylvania, and 200 in Missouri, Alabama, Virginia, Louisiana, Tennessee, South Carolina, and Indiana.

Policymakers in those states – and others – can continue to vote against Medicaid expansion, but they had better be willing to embrace what they are doing.  They are sentencing innocent people to death, and they will own this forever.   

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Income Inequality, the State of the Union, and the Affordable Care Act

The President focused on income inequality in his State of the Union speech.  This is an important issue; as the gap widens between those rich and poor.

But income inequality is built into our public policy at so many levels – and even at the lowest ends of the economic spectrum sometimes the “wealthier” individuals receive better benefits than those who may need them even more. 

A case in point is how the insurance subsidies work in the Affordable Care Act in the aftermath of the Supreme Court ruling of 2012.

In these, the poorest individuals and families – those living below poverty level – fare the worst.

This is an inequality that could be repaired easily and immediately.

Here’s how this particular inequality works.  If you are a single person earning $11,375 per year, you pay the highest percentage of your income for insurance as anyone in any income bracket. 

An example:  If you want to buy “silver plan” health insurance on the open market, it will cost you $2,535 per year – or almost one quarter of your annual income.  Or you can purchase a bronze plan for $2,101.  That is still over 18 percent of your income.

In other words, you can’t afford it.

But if you earn just $230 more per year, or $11,605, then the result is almost magical.  The cost of a silver plan goes down to $232 per year – just two percent of your income.  And if you opt for a bronze plan, it will cost you nothing.

It may seem hard to believe, but it’s true.

The reason is that the first person earns just below poverty level (99 percent of poverty) and the second just above (101 percent of poverty).  And insurance subsidies begin at 100 percent of poverty.

Congress was aware that it was building this severe inequity into the law in 2010, but it was not worried about it. 

That was because it also passed a fix.

It mandated the expansion of Medicaid in all fifty states to people earning 138 percent of poverty.  With Medicaid as an option, few people living near the poverty level would need or want private insurance through an exchange.

But then the Supreme Court created a new problem.  Without acknowledging the inequality in the subsidy, it ruled in 2012 that Medicaid expansion was optional, effectively undermining the fix.

In spite of the eighteen months of political chaos that has resulted from this ruling, many states – and we can now say a majority of them – have moved to remedy the inequality in the only way they can. 

They have chosen to expand Medicaid, taking up the federal government on its offer to pay nearly one hundred percent of the cost.  And over the next several years, most of the remaining states will probably follow, but only after they’ve wasted billions of dollars of their own resources during the delay.

But remedying the inequality isn’t the same as eliminating it.  In states like Connecticut, which have embraced expansion – it just covers it over.

And in states like Florida that have not embraced expansion, it still leaves millions of people out in the cold.

There is a solution for everyone, and the federal government could move forward on it – if it is as serious about reducing inequalities as the President is.

Right now, the federal government exempts people living below poverty in states that have not expanded Medicaid from the mandate that they buy insurance.

But there is a better alternative.  It could offer everyone living below poverty the option of “purchasing” a bronze plan at no cost.  In other words, it could extend the same subsidy to them (when they are not otherwise eligible for Medicaid) as is available to those earning just above poverty.  It would probably also have to waive the deductibles in those plans for this group, and there are ways it could do this.

This would cost the federal government no more than paying for Medicaid expansion.  It would get millions more people covered – many of them adults, and many with chronic conditions.  And it would spare us endless debates in reluctant states.

There are legislators in some of these states who have proposed using new federal Medicaid dollars to purchase private insurance for low-income individuals.  That’s an idea, but expanding subsidies would be a simpler solution.

It would cut out the reluctant state middle man, and reduce inequality directly.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

A Billion More Reasons to be Disappointed in this Congress

It was good news when Congress recently agreed on a budget for the first time in forever.  It was the product of compromise, and everyone expected to give at least a little. 

But when the details came out last week, it turned out that some had to give more than others.  And the ones who probably gave up the most were the people who have saved the greatest number of lives over the past century – the public health and prevention community.

Last week, the House introduced the FY2014 Omnibus Labor, Health, Human Services, and Education bill – one of twelve appropriations bills that will implement the FY2014 budget.  As the bill summary noted, the legislation includes $156.8 billion in discretionary federal spending for all these important areas combined. That is a big number, and comes to around $500 per person.  By comparison, Defense– which is often considered to be the other “big” area of discretionary spending – will get around $1500 per person.

But the disappointing number wasn’t the bottom line, which is $100 million below the FY2013 level.

It was that – to get to the bottom line – Congress has proposed to cut $1 billion from already-promised public health and prevention funding.

When the Affordable Care Act was passed in 2010, it had a price tag of around $1 trillion over ten years.  This wasn’t all new spending.  We were going to spend at least that much on health care programs whether the law passed or not.  What ACA did was to re-structure that spending.

Historically, public health and prevention have gotten about 3 percent of our health dollars.  And if ACA had continued to provide that share, then $30 billion would have been dedicated to public health and prevention.

But when the dust settled in 2010, the new Prevention Fund (which was once targeted for as much as $80 billion) was promised only $15 billion, or an average of $1.5 billion per year for ten years.  And even this more modest amount was described by Senator Tom Coburn (a physician) as “a slush fund” within two weeks of its passage. 

Congress has hacked away at this fund ever since.  Two years ago, it slashed $5 billion from it.  As I wrote at the time, this represented 6 percent of total public health spending in 2010, and would cost us over 13,000 lives.

This was beyond disappointing for anyone who cares as much about the health of the population as he or she does about health care.

But it did not stop Congress was disappointing us again this year.  Or from using some of the same hypocritical reasons for cutting prevention programs today as it has in the past.

The bill summary claims that the legislation “seeks to focus tax dollars on programs that are critical to the health and well-being of Americans, including disease prevention and research programs.”  But it appropriates a total of only $160 million of the bill’s $156.8 billion to the Prevention Block Grant.

That represents just one dollar for prevention block grants for every one thousand dollars of omnibus bill spending.

And just two sentences later, it announces that it will reduce “the Prevention and Public Health ‘slush’ Fund by $1 billion.”

The reason it gives for slashing the “slush fund” is “to prevent the Secretary of HHS from raiding these funds for Obamacare exchanges.”  That actually happened in 2013, as Sarah Kliff explained in a terrific Washington Post blog on the shrinking fund last April.

But Congress raided these same prevention funds in 2012 to pay for the so-called “Doc Fix” (i.e., to prevent a sudden 30 percent decrease in Medicare payments to physicians that was caused by an error in a reimbursement formula in place since 2002 that Congress has failed at least a dozen times to fix permanently).

Members of Congress, like everyone, expect to have water that is drinkable, food that is edible, air that is breathable, homes that are safe to live in, and outdoor spaces to relax and exercise in.  If they take care of themselves, they hope to avoid cancers, heart disease, and other chronic conditions.

They understand the connection between these things and public health and prevention funds.  They just choose to ignore it.

If you have been disappointed by this Congress in the past, you probably have your reasons. And if you care about prevention and public health, now you have a billion more.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Five Fake "Facts" About Obamacare

Last week, I was talking with a new acquaintance about health and mental health policy.

He was a successful businessperson, smart, very well educated, and well-informed about public policy.  Like most of us, he follows the news about Obamacare closely.  And he has strong opinions about it. 

But I realized as we talked that there were things he thought he knew about Obamacare that were not actually true.  But we both had heard them many times before.

So here are five often-repeated “facts” about Obamacare that you, too, have probably heard, and happen to be wrong.

1.  The Affordable Care Act was supposed to reduce health care costs significantly. 

Untrue – when the Affordable Care Act was passed, the Congressional Budget Office projected that it would cost more than $1.2 trillion over ten years.  After the Supreme Court decision in 2012, CBO lowered its projection to under $1.2 trillion.  (When these numbers were updated in 2013, they did not change dramatically.)

The cost of doing nothing was greater – but not by much.  Repealing the Act would cost around $10 billion a year, or less than ten percent more.  So the Affordable Care Act “savings” were always pretty small.

But even those savings were optimistic.  They were based on an assumption that Medicare would cut doctors’ fees by 30 percent – something no one thought would happen.

So the truth is that while some healthcare system costs may be less under the Affordable Care Act, overall the law was intended to be cost neutral.

2.  The Affordable Care Act has failed because it has not lowered large employer-based group health insurance premiums this year.

Untrue – the Affordable Care Act was never intended to lower the sticker price of any insurance premium.  It was only intended to lower the net cost for individual and small group plans by giving tax credits to individuals who (1) earn between 100 percent and 400 percent of poverty and (2) buy their own insurance. 

What ACA did for everyone else was to make sure that they got more for their money by introducing a new set of consumer protections (including minimum loss ratios, coverage for pre-existing conditions, and no cancellations when people get sick) that were not previously guaranteed by federal law or all state regulators.

3.  Under the Affordable Care Act, many working middle-class individuals are still faced with unaffordable health insurance premiums.

My acquaintance talked about the huge burden faced by workers who are paid $35,000 per year – a decent wage, but not an easy one to live on.  He didn’t believe me when I told him that a family of three earning $35,000 could get a “silver” plan – probably comparable to what many large employers offer – for between $100 and $200 per month.

So here’s a link to prove it.  According to the Kaiser Family Foundation’s insurance subsidy calculator, a family of three earning $35,000 per year in my zip code will pay, on average, $156 per month (net) for a silver plan that costs $6641 on the open market.  And if they choose a bronze plan, it will cost them nothing. And in my county there are over one hundred approved plans from which to choose.

4.  The Affordable Care Act was supposed to prevent insurance companies from ever changing or dropping plans again.

Also untrue – but President Obama did famously declare that you could keep your plan if you liked it.  He apparently assumed that people understood that he was making two assumptions here – that the plan met the minimum standards set by the new law, and that the insurance company was still willing to offer it. 

And that leads to the fifth and final “fact” you’ve heard that isn’t true.

5. The Affordable Care Act is at least in part a government takeover of the health care financing and delivery system.

Untrue again – because if it had been, you probably would have been able to keep your existing plan, because the government could have forced your insurer to continue to offer it.

So what is the truth about the Affordable Care Act? 

It is simply this – Obamacare is a balanced approach to reducing the number of uninsured people through a combination of expanded public welfare programs, subsidies to lower and middle class individuals, and private insurance market regulatory reforms.

That’s all.  And that’s a fact.  And its success will be judged ultimately on how well it accomplishes this goal.

And if you want to know how that’s going, click herefor the January 2014 federal report or take a look at the chart accompanying this column.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

In 2014, the Gap Will Widen between the Health and Mental Health "Haves" and "Have Nots"

Let’s open 2014 with four health policy predictions.  Here are the first three:

• Obamacare enrollments will top 5 million.
• Uninsured rates will come down.
• Health inflation will tick up.

Here’s why you can count on these.  

First, 1.1 million people have already enrolled in Obamacare.  The Administration hopes for 7 million by March.  That may be optimistic, but there will be another burst of enrollments in a couple of months.  And there will be another open enrollment period toward the end of the year. 

So at least 5 million enrollments seems reasonable.  And here is a bonus prediction.  If that many sign up, the politics of Obamacare in the half of the states that have embraced it will probably shift during the 2014 election cycle.  Their people will, too.

Second, the number of people who are uninsured will go down.  A 1 or 2 percent decline will be attributable to Obamacare.  The improving economy will also help.  And this means that the numbers will be better even in the states that did not embrace Obamacare.

Third, because more people will be insured and getting care, health inflation will go up again.  Both the Congressional Budget Office and the Administration have been predicting this for 2014 ever since the passage of Obamacare. 

In fact, if it doesn’t happen, this will probably be the health policy news story of the year.

But the fourth prediction may be most significant of all.  The gap will widen between the states with better health and mental health care and those with worse. 

And this has everything to do with Medicaid money.

As of December, the states were literally divided down the middle between those that decided to expand Medicaid in 2014 and those that did not.  If you compare the 26 states (including the District of Columbia) that decided to expand Medicaid to the 25 states that did not, the expanding states already have a decided advantage in supporting health and mental health care.

And with hundreds of billions more dollars flowing into those states over the next few years, that gap will probably widen.

Consider how these Medicaid dollars could widen the gap in just two areas – the number of nationally-ranked hospital specialty programs in a state and mental health spending. 

First, think about the high-quality hospital specialty services we all want and sometimes need.  Hospitals rely on Medicaid dollars for a significant portion of their revenue.

Medicaid-expanding states already have significantly more nationally-ranked hospitals and specialty programs, according to the U.S. News and World Report 2013-2014 rankings, than states that do not.

Seven of the ten states with the greatest numbers of nationally-ranked specialty programs decided to expand Medicaid.  And consider the advantage already enjoyed by California (ranked #1 in number of nationally-ranked specialty programs) and New York (#3) over the two most-populated states that decided not to expand Medicaid – Texas (#6 in number of nationally-ranked specialty programs) and Florida (#11).

California and New York, with 678 hospitals between them, are home to a total of 28 hospitals with at least one nationally-ranked specialty, with a total of 154 nationally-ranked specialties overall.

Texas and Florida, with 895 hospitals between them, are home to a total of 16 hospitals with at least one nationally-ranked specialty, with a total of 70 nationally-ranked specialties overall.

Texas and Florida are leaving as much as $100 billion on the table over the next ten years, much of which would have ended up on hospitals’ bottom lines.

The same point can be made regarding funding for care for people with mental illnesses – on whose behalf many of those Medicaid expansion dollars will be spent. 

The 26 states expanding Medicaid already spend much more on mental health services than those are not.  And the disparity is striking.  According to the Kaiser Family Foundation, the average state spends $120 per capita on mental health agency programs. 

But the states expanding Medicaid spend $139, on average, compared to $116 by states that refused.

And even these spending numbers look artificially close because of high per capita mental health spending in states like Alaska and Maine, which have small populations.  When population size is taken into consideration, as is clear from the pie chart above, the expanding states account for nearly twice as much of the nation’s per capita mental health spending as do the non-expanding states. 

And that gap – like the gap between the “haves” and “have nots” – will only widen in 2014.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/