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/

The Top Health Policy Stories of 2013

It has been a busy health policy year.  Here are my choices for the top health policy stories.  They all may not have made big headlines, but all will reverberate for some time. 

The Slowing of Healthcare Inflation

This was on my watch list coming into this year, and I’ll lead with it today because it was the best health policy news of the year.  When healthcare inflation came in low this year, it did all sorts of good things.  It helped balance state budgets, extended the life of the Medicare Trust Fund, and dropped the price tag of the Affordable Care Act.  Inflation is supposed to jump up this year as millions more become insured, but we can at least hope that a more modest trendline continues.

Mental Health Parity

And for some more good news… It took five years and incessant lobbying from heroes like Patrick Kennedy, but the final rule implementing the Mental Health Parity Act of 2008 was finally released this year, coinciding roughly with the 50^th anniversary of President Kennedy’s signing of the Community Mental Health Centers Act of 1963.  This isn’t the end of the fight for fairness and equity for people with mental illnesses. It is just a new beginning. One that will test a new generation of policy leaders. Let us hope – and pray – that these leaders will rise to the occasion and make policy with justice for all.

And now for the not-so-good news….

The Lack of Action in the Aftermath of Sandy Hook

Didn’t you just assume that policymakers would give us much stronger gun laws and much more robust mental health screening and services in the aftermath of the Sandy Hook massacre?  But for most, once the wailing quieted down, so did their commitment to act – just as it did after Tucson, Aurora, Blacksburg, and D.C.  It is a year later now.  What has really changed to prevent such a tragedy from happening again in the future?

The Death of Itzcoatl Ocampo

Itzcoatl Ocampo may not be a household name, but when he died last month in a jail cell while awaiting trial for murder, it was a depressing denouement to the story which probably demonstrated most effectively how our social welfare policies have failed.  Ocampo was accused of killing four homeless men two years ago.  I wrote about this in a column entitled California Screaming. But those victims’ lives had value – to their families and society. And Ocampo was a decorated veteran.  His death was reported to be a suicide; his mental health needs may have been neglected.  I’ve known policymakers who would argue that this was one person gone bad, and no one could have foreseen the outcome.  But they are wrong.  This story is way too familiar, and ties together the way we too often neglect homeless people with chronic mental illness, veterans, and veterans who are both homeless and chronically mentally ill.

Magic Johnson Speaks Out – Again – about AIDS

It was twenty-two years ago when Magic Johnson announced that he was infected with HIV.  At the time, most people saw HIV infection as a death sentence.  But as he and others lived on with the AIDS virus because of advances in pharmaceutical medicine, two things happened.  We grew to understand that people could live with HIV infection.  And we became more complacent about preventing it.  As Johnson and others point out year after year, a quarter million U.S. residents are infected and don’t even know it.

The Tragedy of Allen Daniel Hicks, Sr.

When Allen Daniel Hicks died of a stroke in 2012, he died of an often-silent chronic disease that attacks African American men more frequently than other men and women.  And we know this.  What made Mr. Hick’s death so tragic, and what made it a story in 2013, were the circumstances under which he died.  After suffering his stroke while driving his car in Florida, he was initially brought to jail, instead of a hospital, for resisting an officer – apparently while incapacitated. A settlement was announced this year, making news headlines in Tampa. But the whole story reminded us that race does matter, in the ways diseases attack us, and sometimes in the way we respond to them.

The Obamacare Rollout

If it hadn’t been for the government shutdown and Duck Dynasty, the problems with the Obamacare rollout might have been the only news story of the last three months of the year. In fact, this was such a pervasive story (and, I think, a political winner for the Republicans), that it probably even prevented another budget crisis from happening.  (I bet you didn’t even remember that Congress had originally scheduled one for this month.) Thank goodness for small favors, but with over a million people already insured because of Obamacare the real story of the rollout will not be written until next year.

And so in the meantime, in the words of St. Nick, Happy Christmas to all!

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

Did We Turn the Corner on Mental Health in 2013?

At least thirty-six states increased funding for mental health services during 2013, according to a recent report by the National Alliance on Mental Illness.  And last week, Vice President Biden announced that the federal government was adding $100 million in new funding for mental health services.

So have we turned the corner on our nation’s mental health funding crisis, as many of the accompanying news headlines seemed to imply?  Or are these initiatives more a token gesture aimed at mollifying the mental health advocacy community in the aftermath of the Sandy Hook massacre, as others have suggested? 

I think that – with a couple of notable exceptions in Connecticut and Texas – the initiatives tend more toward tokenism than real change.

Consider the national initiative.  On the face of it, $100 million sounds like a lot of money.  But it still represents only around 3 percent of the Substance Abuse and Mental Health Services Administration (SAMHSA) budget, the agency which provides most of the direct federal funding to state and local mental health programs.

If the $100 million were distributed equally throughout the country through SAMHSA, it would provide for only a modest increase in community mental health budgets.  But this is not what the Administration has in mind. 

Instead, half of the money has been promised to community health centers through the Affordable Care Act to help them support the mental health services they have been required by law to provide for the past generation.  And the other half will be given to the Department of Agriculture (yes, Agriculture) to provide loans to rural community mental health centers and for telemedicine and other programs through the USDA community facilities direct loan program.

So the “$100 million for mental health” doesn’t look quite so impressive anymore.

But the truth is that funding mental health services has always been more the responsibility of the states than the federal government.  In fact, the total SAMHSA budget is still one-third less than the amount states cut from mental health services - $4.6 billion – between 2009 and 2013.   

So did the state increases this year actually restore the dollars that were cut?

Not exactly.

First of all, there are the fourteen states – including Florida (48th in spending coming into the year), which has developed an unflattering reputation in recent years for both vigilante violence and lack of compassion toward people with behavioral health needs – that either reduced mental health funding or held it level, in spite of overwhelming popular support for better mental health services.  And of the states that did increase funding, the increases were often modest ones. 

For example, Ohio cut $93 million over four years, and then added back only $50 million this year.  The $50 million made for a good headline, but Ohio’s funding is still far behind where it was five years ago.  And in Idaho – the lowest per capita spending state – Governor Butch Otter promised millions in new funding for mental health in early 2013.  But when the legislative dust settled, the increase was only 3.6 percent for community mental health services and 2.3 percent for psychiatric hospital services. There was no change in the funding for community psychiatric hospitalization. 

And looking forward, some lower-spending states are still not looking to do too much.  Utah, for example, has always put a premium on health, but does not spend highly on mental health. Utah’s Governor is recommending only a one-time, $1.5 million increase in FY2015 for mental health promotion and mental illness prevention.  This is better than nothing, but not enough to make a significant difference – especially if the commitment lasts for only one year.

And as NAMI noted in its report, when the issues became a little more controversial or complicated, fewer and fewer states took them on.

Only twenty-five states plus the District of Columbia decided to move forward with Medicaid expansion this year – an expansion that will help adults with mental illnesses in particular.  Only thirteen states made significant improvements to their mental health systems.  Just ten improved school-based mental health training and/or services.  And only five enacted legislation to improve early identification and childhood mental health screening. 

On the plus side, there are the two exceptions.  Connecticut – which felt most keenly the impact of the Sandy Hook shooting – led the way in passing comprehensive legislation to improve mental health service systems.  And Texas – which has long been near the bottom of states in funding mental health services – led the way in providing new funding for mental health services.

But we still have such a long way to go.  And for most of us around the country, we have not really made much progress in the past year.

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

Obamacare Crashes Again?

There are bad reviews and then there are bad reviews.  But it would be difficult to imagine some worse headlines than the ones Obamacare has received during the past month.

My favorite for over-the-top headline?  How about this gem from the National Journal: “Why Obamacare May Be Obama’s Katrina, Iraq.” That’s right.  An initiative to insure millions of Americans has been equated with the most frightening American natural and man-made disasters of the 21^st century. 

In a world in which we have come to expect tight plotlines, heroic successes, and quick and satisfying endings, I imagine that a blockbuster like Obamacare was never going appeal to critics.

The Obamacare story is being reported this month as if it were a classic disaster movie, with millions of people about to be left out in the cold to fend for themselves in a chaotic healthcare system as Obamacare exchanges crash and burn around them.

But that’s not close to reality.

This week’s announcement that the Obamacare website will work 90 percent of the time (which is another way of saying it still could be down over two hours per day) is hardly worth celebrating.  But the truth is that Obamacare itself is unfolding pretty much as expected.  The changes to the system that have been in place are for the most part popular and glitch-free.

And in another thirty days, people with pre-existing conditions will be guaranteed insurance at the same price as everyone else.  In roughly half the country, people with incomes below 138 percent of poverty will start to receive Medicaid benefits.  And nearly everyone with incomes up to 400 percent of poverty who purchase insurance through the exchanges will be given tax credits that make it more affordable.

But one big number – seven million – is already setting up Obamacare for a disaster sequel in the spring.

That’s the number of people who are supposed to get insurance through Obamacare exchanges by March.  And when the October and November numbers were slower than desired, another Obamacare disaster narrative began to take shape.

But no one ever thought that signing up seven million people would be effortless.

In fact, way back in March, Phil Galewicz wrote an insightful and prescient article for Kaiser Health News in collaboration with the Washington Post.  He quoted several people who are familiar with the challenges of enrolling people in health insurance programs.  He and they highlighted some of the issues that would confront the Obamacare exchanges.  The article’s conclusion?  People should be prepared for a “slow ramp up.”

In this context, some of the early numbers don’t look so bad after all.

Californians alone had completed over 360,000 insurance applications as of November 19.  Covered California - the state’s exchange – reported that 135,000 would qualify for the state Medicaid program and 80,000 others had already selected a health plan. 

And, according to the exchange, sufficient numbers of those people appeared to be young enough that the California program wouldn’t sink into the sea.

In New York, the reality was similar. As of November 24, according to its marketplace, NY State of Health, over 257,000 people had completed applications, and over 57,000 people were enrolled in insurance plans.

And in Kentucky, 60,000 people have already obtained either Medicaid or private insurance through its exchange.  And of those signing up for private insurance, 41 percent are in the 18-34 year old group.

CNN also reported in mid-November that the Washington and Connecticut exchanges were generating healthy enrollment numbers.  And the federal exchange numbers were not as bad as one might expect.  The November numbers included over 100,000 sign-ups despite the balky website, and according to HHS and CNN over 900,000 more people had completed applications. 

So how did CNN headine this good news?  “Obamacare success story sours.”

What will it mean if 4 or 5 million, not seven million, people enroll by next spring?  That will be enough to drop the uninsured percentage nationally from 15.4 percent to around 14 percent.

That might warrant some favorable reviews.

But if the reporting of the Obamacare story next spring is anything like it has been over the past month, the headline you will be reading may well be “Obamacare Crashes Again.”

So stay tuned.  And in the meantime, imagine what things would be like if the alternative to Obamacare had passed.  And believe it or not, there is one – from 2009.  In my next column, I’ll take a look at how it might be faring today.  You’ll be surprised.  

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

Mental Health Parity At Last

At long last, the Administration has released the final rule implementing the Mental Health Parity and Addiction Equity Act of 2008.

This will extend mental health insurance benefits on a par with medical/surgical benefits to at least 30 million more people. 

And, more importantly, we have finally ushered in a 21^stCentury response to a set of diseases for which we still often employ 19^thCentury treatments – locking the door and throwing away the key.

The Mental Health Parity Act (MHPA) was passed in 2008.  Its purpose was to end insurance discrimination against people with mental illness.  

For larger group health plans, it outlawed annual and lifetime limits on mental health or substance use disorder benefits when there are no annual or lifetime limits on medical/surgical benefits. And it required that co-insurance and co-payments be substantially the same for both mental health and regular medical/surgical procedures.

As it turned out, the MHPA needed the Affordable Care Act (ACA) for it to work most effectively.  And vice-versa.

ACA extended MHPA protections to the small group and individual markets, and made mental health and substance use disorder benefits “essential benefits” that all marketplace insurers (i.e., non-grandfathered plans) had to cover.

But ACA also relied on state benchmark plans to determine how the essential mental health benefits were defined.  This opened the door to the possibility that a state might use its own definition of parity – one less strict that the federal government’s – in defining those benefits, even though the MHPA set a standard federal approach.

For years, we have wondered how the final rule would reconcile the two laws.

Good news – the final rule makes the uniform, minimum parity standard come to life.

According to the final rule, states can require better parity coverage than is required by the federal law.   

But they cannot set minimum levels of coverage that are less than those demanded by the MHPA.  And if there is a dispute about this, the rule’s preamble clearly spells out how such a dispute should be resolved: “An insurer subject to MHPAEA may be required to provide mental health or substance use disorder benefits beyond the state law minimum in order to comply with MHPAEA.” (p. 46)

Still, there are limitations to the law and the rule.

For one thing, the MHPA does not by itself mandate that all insurance products include behavioral health coverage – we need ACA for this. As the rule notes, while treatment limitations are not permitted under the MHPA, “a permanent exclusion of all benefits for a particular condition or disorder… is not a treatment limitation for purposes of this definition.”  (Sec. 54-9812-1, p.103)  

Also, it does not establish uniform co-pays for providers.  The co-pay for a behavioral health provider’s service may still be different from, say, the co-pay for a primary care provider’s service.  Instead, the co-pays are calculated based on the co-pays set for all similar medical/surgical services covered in the plan.

And in high-deductible plans certain prevention services, such as screening, may be covered at no cost, while other mental health services may either have a cost or not be covered at all (see the preamble, p. 18-19).

Finally, the rule does not entirely resolve the question of provider rate-setting – a post-MHPA issue that arose in Florida when one insurer singled out mental health providers and reduced their rates in late 2011: “Plans and issuers may consider a wide array of factors in determining provider reimbursement rates for both medical/surgical services and mental health and substance use disorder services.… The NQTL provisions require that these or other factors be applied comparably to and no more stringently than those applied with respect to medical/surgical procedures…. The Departments may provide additional guidance if questions persist with respect to provider reimbursement rates.” (p. 24)

But all in all, this is a good rule.

It extends the parity provisions that have covered most of the 130 million people in large groups under the interim rule to an additional 30 million people (p. 64), and does so at an affordable price.

This expanded coverage will cost an estimated $10.55 per person initially, and up to $1.13 billion over five years (p. 78).  It will result in an insurance premium increase of less than 1 percent in both the individual and small group markets.

The new rule will cover all plans issued, or renewed, after July 1, 2014.  That will be a good day for fairness and equity.

Note:  I started writing Our Health Policy Matters exactly three years ago, in November, 2010.  Since then, I've published at least one new column per week, without a break.  So, for the first time, I'll be taking a couple of weeks off.  I will not publish next Wednesday or the week after, but will return with new columns after Thanksgiving.  If there is breaking news between now and then (and no, I don't consider the low Obamacare enrollment numbers to be newsworthy right now, but about what should have been expected based on the enrollment numbers for the now-put-to-bed PCIP program!), I may publish something off-schedule, and catch you up after vacation if you don't visit the site between now and then.  In the meantime, if you enjoy OHPM, I encourage you to take a look at some of the older columns you might not have had time to read in the past.  And feel free to contact me directly with ideas you may have for future columns! And thanks for reading - I've been averaging 13,000 readers per month lately.  Not huge by some Web standards, but not too bad either for a once-a-week health policy effort.  I thank you, and wish you a very Happy Thanksgiving!

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

The Lost War on Drugs

I admit it.  I have Obamacare fatigue.

I’m tired of endless stories about website glitches and the small numbers of people who rushed to buy health insurance three months before it would even go into effect.  But I am most fatigued by the newest invented controversy about the so-called “health-insurance-you-like” policies that have been outlawed because they do not meet even the bare minimum standards established by the law.  That’s right – the American people just love lousy health insurance!

Source: NSDUH, 2013

So I thought I would write about something less controversial – drugs.  Because some new facts suggest that if we really want to change a useless federal policy, we will end – as quickly as we can – our failed War on Drugs.

President Richard M. Nixon declared “War on Drugs” in June of 1971.  We have been fighting this war for forty-two years now, long enough to determine if it has made any difference in our lives.  It has. 

The War on Drugs has loaded up our jails and prisons, but has resulted in no discernible impact on illicit drug use among children or adults – except, maybe, to increase it.

Please don’t take my word for this.  Just take a look at the data.

According to the 2012 National Survey on Drug Use and Health, released a little over a month ago, only 19 percent of people over the age of 65 have ever used illicit drugs during their lifetime.  This was the last group that entered adulthood before the War on Drugs was declared.

But 47 percent of those born between 1948 and 1952 say they have used illicit drugs.  This was the group entering adulthood when the War on Drugs was declared. 

And for everyone entering adulthood after the declaration of war, lifetime illicit drug use is now greater than 50 percent.

So drug use may be up a little over the last forty years.  Is that enough to declare that the war is a failure? 

Maybe not, but here are some facts that are.  According to the NSDUH:

• An 18 year old (for whom drinking is illegal) is 10 percent more likely to drink than a 65 year old;
• A 16 year old (for whom smoking is illegal) is 36 percent more likely to smoke than a 65 year old;
• A 12 year old is three times more likely to use illicit drugs than a 65 year old.

So we’re losing our children to this war.  And not just compared to that older, pre-drug war generation.  In fact:

• A 15 year old is more likely to use illicit drugs than someone over the age of 40.
• An 18 year old is more likely to drive under the influence of alcohol than someone over the age of 45.
• And more than half of those who start to smoke still do so by age 18 – even though the number of people who first started to smoke after the age of 18 nearly doubled between 2002 and 2012.

When drug use leads to drug problems, it leads to jail and prison, but not to comprehensive drug treatment.

Thank goodness for peer support services, about which I have just written for Health Affairs.

Among the 4 million persons who received treatment for alcohol or illicit drug use last year, more than half – or 2.1 million – received that treatment from a self-help group. 

And despite the fact that prison populations have more than quadrupled since 1978 and that up to 75 percent of prisonershave been found to be dependent on alcohol or drugs at some point in their lives, year only 388,000 – a number equal to just 18 percent of the combined prison and jail population – received alcohol or drug treatment while in prison.

As pitiful as that percentage is, it is still better than what we offer in communities. 

Inadequate funding for drug treatment has meant that for the 1 million youths between the ages of 12 and 17 who needed treated for illicit drug use in 2012, only 121,000 – or 11.6 percent – received treatment in a treatment facility.  And of the almost 900,000 more who needed treatment for alcohol dependency, only 76,000 – or 8.9 percent – were treated in a facility.

And for everyone over the age of 12, 65 percent of those who needed treatment did not get it either because they had no coverage for it or no access to it.  

So you tell me - is this a war we won?

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

Obamacare Has Been Compromised Enough

I have never been the biggest fan of the Affordable Care Act. 

I believe that since the government is already paying over 70% of our nation’s health care bill and we’re paying another 12% out of pocket, this colossal effort to preserve the small share financed by privately-funded private insurance without bankrupting the nation may not have been worth the effort.  Medicare-for-all would have been a much better approach.

But now that an emerging group of at-risk Democratic senators have joined the Republican chorus to delay the individual mandate, I want to offer an opposing view to theirs. 

Obamacare has been compromised enough.

Since it was enacted in 2010, Obamacare has undergone the following significant changes:

• The minimum medical loss ratio requirements were delayed in several states.
• The long-term care insurance program has been repealed.
• The prevention fund has been raided.
• The reductions in payments to providers have been put off.
• The mandatory Medicaid expansion has been made optional.
• The employer mandate has been delayed.

These have all occurred before the program was fully implemented.  And this has had more to do with public pressure than public policy.

Now there are at least three more changes gathering steam – a delay in the individual mandate (favored by conservatives), a delay in the reinsurance pool tax (favored by liberals), and a delay in the 2.3% excise tax on medical equipment (favored by both).

The irony is that members of Congress think these changes will make them more popular with their constituents.  But that isn’t going to happen.  The popularity of Congress is at an all-time low.  Obamacare is at least four to five times more popular than Congress.

So enough already.  How about trying leadership for a change?

Democrats reversing course on the Affordable Care Act’s individual mandate is only today’s news.  Even though they now count on short memories, the Republicans and their conservative allies, who for the most part laid the philosophical foundation of the Affordable Care Act, including its individual mandate in the first place, also used to favor the individual mandate.  They reversed their position on it around the time President Obama embraced it.

So here is the question.  Are any of these people capable of staking out a position on this law as a matter of policy and then actually sticking by it – at least until the law is implemented?

When John Kerry said in the 2004 Presidential campaign that he voted for an appropriation for the Iraq War before he voted against it, it became a national joke and added “flip-flopping” to the political lexicon. 

A decade later, flip-flopping on the Affordable Care Act seems to have replaced leadership as a requirement of public office.

And here’s why a little leadership today could go a long way: because most of what is being argued about doesn’t really affect anyone anyway.

All the news this month about both the non-working federal exchange and the individual mandate affects about seven million people this year.  They are all either uninsured or have really lousy employer-based insurance.  That’s a little over 2 percent of the population.

For the rest of us who are not yet eligible for Medicare, the Obamacare consumer protections are what matter – no lifetime caps on benefits, no denial of coverage based on pre-existing conditions, no cancelling of coverage when people get sick, and mandated minimum medical loss ratios.  And these have all been in place, for the most part, for the last couple of years.

And for Medicare beneficiaries, the closing of the donut hole and the new prevention benefits are pretty much all they need to be concerned about, and they, too, have been in place for a couple of years.

No one objects to these.  And so far as I can tell no one is begging the members of Congress to change them.

So why don’t we just wait and see how the other 2 percent make out?  They have until March 31^stto sign up for insurance through the exchange.   And if in February they cannot because of technical problems, there will still be plenty of time to help them out by delaying the March 31^st “individual mandate” deadline.

In the meantime, let’s stop pretending that members of Congress have our interests in mind when they advocate delaying the individual mandate.  Or that they’re showing any leadership at all.

Because pandering and leadership are not the same thing.

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