Insurance – Jerry Sturgill

Surprise! Over the Weekend, Graham-Cassidy Went from Bad to Worse!!

It’s hard to believe this Zombie bill could get any worse. But it did.

Last night Politico received a leaked copy of a revised Graham-Cassidy bill. I presume the “leak” was by someone who recognizes this effort as so ill-conceived and harmful that the country should know about it ASAP. In good time, at the eleventh hour, before this terrible legislation is put to a vote.

http://www.politico.com/story/2017/09/24/obamacare-graham-cassidy-repeal-243079

Thank you, dear leaker, whoever you are. You have exposed this last-ditch Republican effort to undo Obamacare. Instead of getting better, Graham-Cassidy has gone from bad to absurd, which might be laughable if it were not so cravenly cruel.

This latest effort amounts “bribery” of the “swing senators” from Arizona, Alaska and Kentucky, with more block grant monies promised to each of their states. However, as the Politico article points out, this masks the overall slash-and-burn assault on Medicaid.

So, promising more money to the “swing states,” is less like a bribe and more like a mugger telling you to be grateful to be mugged because you can keep your watch.

Another retrograde revision tries to win over Senators Cruz and Lee by effectively removing federal regulation of health insurers in favor of the states.

Among other things, this would lift existing caps on out of pocket costs and lead to the unwinding of protections for individuals (like my hard-working diabetic daughter) who have “pre-existing conditions.”

On this point, Politico quotes Larry Levitt of the Kaiser Family Foundation:

“This revised bill is tantamount to federal deregulation of the insurance market. If there were any doubt that people with pre-existing [conditions] are at risk of being priced out of individual insurance, this bill removes them.”

It’s high time to put aside political differences and mend the problems of the Affordable Care Act. While Congress continues to battle over health care, with perennial waste of time and money, people are dying.

Americans should demand congressional collaboration and cooperation and an end to this hyper-partisan nonsense.

[Check out my March 15, 2017 blog post: https://jerrysturgill.blog/2017/03/15/fix-obamacare-stop-wasting-time-and-money-tearing-it-down]

Meanwhile, you have probably seen news of our own Idaho Senators’ willingness to vote for Graham-Cassidy. (Which makes me wonder why they didn’t try to be hold out votes too, to attract more hush-up, block-grant money to Idaho and make the proposed Medicaid mugging less bad. Oh well.)

Whether or not Graham-Cassidy passes, Messrs. Risch and Crapo should be held accountable–now and at future ballot boxes–for their cowardly toeing of the far-right party line and their abject failure to help make health care available and affordable for more Idahoans.

“CSRs, We’re Not Doing That!”

The Affordable Care Act and healthcare for low-income families are held hostage as a Republican-controlled White House and Congress lunge for “victories.”

The newest “repeal and replace” healthcare plan will NOT be voted on today. Hurray! What a relief—for now.

Unfortunately, the Affordable Care Act remains in the hands of its enemies and they have shown they are willing to hold it and its beneficiaries hostage.

littlewhitehead-hostage1

A few days ago, the White House proposed an exchange of payments for President Trump’s wall for continued funding of the Cost-Sharing Reduction payments (CSRs) provided for in the Affordable Care Act. The administration said, in so many words, “For each dollar towards President Trump’s wall, we will not stop a dollar of Obamacare CSR funding.”

Stated otherwise, “we will not make health insurance unaffordable, if you will pay for the wall.”

CSRs are government subsidies provided for in the Affordable Care Act. They are paid to insurance companies to offset the cost of insurance for low-income families. Without CSR payments, health insurance for those families would be unaffordable.

The proposed “deal” (or threat) was met with immediate, negative political and industrial response. As a result, President Trump backed off both wall funding and the withholding of CSR funding—for now.

Republican hostility for the Affordable Care Act remains and the withholding of CSR funding is just one of the several tools in Republican hands to promote their self-fulfilling prophecy of “implosion.”

With the Trump administration, and a Republican-controlled Congress, it is hard to see this ending well for low-income families in need of health insurance. It has been made clear that political victories (and walls) are more important than American lives.

Resistance should remain on high-alert.

“Health Insurance? What Me Worry?”–Trumpcare for Dummies.

The “repeal and replace” debate has created more confusion than clarity. Cutting to the heart of it, the question is: “How do you incentivize young and healthy people to buy health insurance?”

1Sam_thumb_w_580 Health insurance seems so complicated: different plans, deductibles, out-of-pocket costs, premiums, enrollment periods. So many companies, so many options, so little time.

The American Health Care Act (AHCA) will be voted on in the House tomorrow.

Here is an effort to explain in simple terms the essential weakness of the AHCA, which has become known as “Trumpcare.” It is the same weakness that has plagued the Affordable Care Act (“Obamacare”).

In summary, both assume the costs of health insurance and health care will come down over time if more people are incentivized to buy health insurance. The difference is in the form of the incentive. How how do you get more people to participate? Negative incentive or positive? Stick or carrot?

Obamacare uses the stick. Trumpcare, the carrot. Both depend for success on which kind of incentive works best to get the most people to get with the program.

Why is it important to have more people participate? It has to do with the spreading of risk and cost.

Insurance is simply a financial tool to do that–spread risk and cost. Car insurance is a familiar example to those fortunate to have a car. The law requires everyone who drives (good driver or bad) to have car insurance. You may never have an accident, but your premiums go to help share the costs of those who do.

Health insurance plans do the same. They allow us to shift our individual health risk and cost to insurance companies, which then spread the risk to a larger population of participants (so called “risk pools”). Our own risk pool may include fellow workers (through employer-sponsored plans) or fellow citizens who buy on the state sponsored exchanges.

The larger and more diverse the risk pool, the further the risk is spread and the lower the costs of insurance should be to each participant, which brings us back to the central challenge faced by both Obamacare and Trumpcare.

Under Obamacare, if everyone without employer sponsored insurance had bought health insurance on the exchanges, premiums would be lower, mainly because younger and healthier people diversify the risk.

To put it another way, if younger and healthier people do not join the pool, or opt out, aggregate and individual premiums rise, because the risk ends up being shared only among an older, less healthy group.

This, in fact, was the cause of the premium increases in the Obamacare exchanges. Younger and healthier people opted out of the risk pools because it was less expensive to pay penalties than remain in the pools.

This problem also threatens Trumpcare, and it will continue to be a subject of debate. Instead of forcing participation (with the combination of mandates, penalties and subsidies) the AHCA hopes to attract younger, healthier people to participate by providing tax incentives (no mandate or penalty*). Carrots instead of sticks.

[* Trumpcare will have a 30% “penalty” (a premium surcharge) for a lapse in coverage. This will be payable to the insurance companies. They need the money.]

The challenge in both cases (Obamacare and Trumpcare) is that to maintain the now popular features of Obamacare–mandating coverage for those with pre-existing conditions and making health insurance affordable for more people–it is critical to have the participation of the younger and healthier crowd.

Obamacare mandates participation. Trumpcare bets younger, healthier people will opt for health insurance at the right price. This also assumes young and healthy people will be rational about their health care decisions and lose their “what-me-worry” attitudes of invincibility. If they buy health insurance only when they finally get sick, Trumpcare (and the country) will suffer a fate worse than Obamacare.

The what-me-worry attitude is just too familiar and too pervasive. The Trumpcare switch to a “free market,” hold-out-the-carrot set of incentives is bound to fail. Health insurance and healthcare costs will continue to spiral. Tens of millions will lose insurance.

It is no surprise that a senior officer of the American College of Physicians, which represents 148,000 doctors and medical students, on Monday said he had “never seen a bill that will do more harm to health.”