McConnell, the GOP and Trumpcare: We care about lowering taxes for the rich, not your health care!

“Mr. McConnell has always taken pride in protecting his members.”  -- NY Times, June 23, 2017

First, let’s start with a reminder about how insurance works. Money (“premiums”) is collected from everyone, or as many people as possible, and when the bad thing happens (insurance is almost always about protecting against bad things, like car accidents, or fires, or death, or illness), the victims are compensated. If it pays out more than it collects, then the insurance company goes bankrupt and can no longer pay out. This works for all types of insurance, whether for-profit (as most is in the US), not-for-profit (like many health-insurance companies in other countries), or social insurance where everyone is a client and government is the insurer. Insurance companies, especially for-profit insurance companies, have to build in a profit margin as well. In addition, they prefer insure people who are at low risk of requiring payout, and not to insure or charge higher premiums to those who are at higher risk (e.g., younger drivers, for car insurance). This process is known as “underwriting”.

If an insurance company is forced to insure a lot of high-risk people (as they were under ACA) and can’t charge them really a lot (under ACA they could charge 3 times as much), they need a lot of low-risk people to pay premiums to be able to fund their probable payouts; thus the “individual mandate”. For social insurance, such as government financed health insurance programs (as in many other developed countries, or Medicare and Federal employee and military programs in the US), it is actually not necessary that more money come in from premiums than is paid out, because the government can (if it wishes) subsidize the loss from other funds. This is, of course, a political decision on how to allocate tax dollars and how many tax dollars to collect.

The Senate Republican leadership has made its position on this completely clear with its recently unveiled “health care” bill, the “Better Health Care Act” (BHCA). Crafted by Majority Leader McConnell and a small group of white men from a small group of places (for example, 2 senators each from Utah, Wyoming, and Texas). It will and should be called #Trumpcare; while the President didn’t write it, he has endorsed it and will sign it if it passes the Senate and the House reconciliation. It is clearly a tax-cut-for-the-wealthy bill that derives funding from the reduction (and sometimes elimination) of health care coverage for a very large percent of Americans; this is detailed by the NY Times’ Margot Sanger-Katz in “Shifting Dollars From Poor to Rich Is a Key Part of the Senate Health Bill”, June 22, 2017. The Times also has a piece by Sanger-Katz and Haeyoun Park that contains a clear listing of what will be cut from the ACA in order to fund these tax cuts, “How Senate Republicans plan to dismantle Obamacare”, summarized in the graphic. However, the details are important; even the parts of the ACA that the BHCA “keeps” are largely undercut by other parts of the bill. For example, it keeps the requirement that insurers must issue policies to people with pre-existing conditions (which can range from heart disease and cancer to endometriosis and broken bones and everything else), which is good. But it raises the amount that insurers can charge these people from 3 times as much under ACA to 5 times as much. This is a big deal, and a bad deal, for people with disabilities and for older people who are, (surprise!), much more likely to have pre-existing conditions.

While BHCA (Trumpcare) repeals the individual mandate, which will make some people happy (until they get sick) and the employer mandate (which will make employers happy), it also repeals the subsidies for out-of-pocket costs and decreases funding for subsidies to make policies on the exchanges affordable. The new bill would make either premiums or deductibles (or both) unaffordable for many Americans. It limits and sometimes eliminates the requirement that insurers provide “essential health benefits”, like preventive care and contraception, allows insurers to set annual and lifetime limits on how much they have to pay, and makes major negative changes to Medicaid. Medicaid is currently largely paid for by the federal government, 50%-80+% depending on the average state income, and 90-100% for people covered by Medicaid expansion. The “changes” include (gradually, so the impact won’t be seen for the 2018 election) cutting and capping the amount the federal government pays, shifting costs to the states, which often will not be able (or willing) to cover them.

This will affect a lot of people. Medicaid is now the largest insurer in the US, covering 69 million Americans, even though many states did not expand it under the ACA to cover poor adults. What it does is summarized in “How Medicaid works and who it covers” by Abby Goodnough and Kate Zernike. It covers, as seen in the accompanying chart, 79% of poor children (and more than a third of ALL children), 64% of nursing home patients (many of whom were middle class before the NH wiped out their savings!), 60% of children with disabilities, 49% of births, 30% of adults with disabilities. The people who will suffer from Medicaid cuts are old people in nursing homes, children, and disabled people (many of whom are able to stay in the community and even keep jobs rather than being in nursing homes because of this support). With the caps on lifetime benefits, it means, as Dr. Eve Shapiro points out in an Op-Ed in the Arizona Daily Star, “that a premature baby on private insurance could exceed her lifetime limit on coverage before she even leaves the hospital”! And, with the right convergence of decisions by the state, the same could happen to an infant with Medicaid.

This is a big deal. Ideologues and pundits and politicians like to debate theoretical issue to see who scores the most points. They want to be the “most conservative”, the most “anti-abortion”, the most “pro-industry”, the most “anti-tax”. If they are articulate they may think that making their smarmy points makes them win. And I guess it does. Except the losers are not those on the other side of a debate podium, they are the majority of the American people, the politicians’ constituents, who don’t get treatments, don’t get diagnosed, do get sick and die. Lives, not ideologies, are at stake.

Except, of course, it is about ideology. This is made clear in “A debate that shows what each party cares about” by Neil Irwin the Times. No one, certainly not a senator who has to run for re-election, wants to say that they are about making it harder or impossible for many (often the majority) of their constituents to be able to access health care, or to pay for it, or to get the treatments and therapies they need. But make no mistake: every senator who votes for this bill is saying exactly that, that they value tax cuts for the most privileged above basic health care for the rest of us. “This plan will improve the affordability of health insurance,” lied Sen. McConnell in a recent opinion piece in the Cincinnati paper.

Yes, “Mr. McConnell has always taken pride in protecting his members.” And his donors. It is too bad that he has no interest in protecting the rest of us.

What is right about the ACA, and how to address what is not

There has been much criticism of the Affordable Care Act (ACA, Obamacare) both from the Right, which is apparently horrified that public funds are actually being used to help needy people rather than bail out banks, and from the Left, which thinks it hasn’t gone far enough to help meet people’s healthcare needs. Count me in the latter camp, for reasons I will address soon.

However, first to address the criticisms from the Right.  On the whole they are wrong (no pun intended). The fact is that the ACA has done good. About 10,000,000 people who were previously uninsured have now gained health insurance coverage, both from the health insurance exchanges (that include subsidies for the low income) and through expansion of Medicaid, in those states that have opted to do so. This is a GOOD THING. One of the major reasons that the ACA has not done more good is a result of the specific actions that the Right has taken. The most obvious is the failure to expand Medicaid in states that they control, a fiscally unwise decision that is based entirely on a combination of ideology (Malthus as seen through the fantasy novels of Ayn Rand) that is about helping the wealthiest become even wealthier, and the politics of meanness (we will get votes by appealing to folks who don’t want to help them, usually code for racial and ethnic minorities). It is fiscally unwise because, in contrast to traditional Medicaid in which the federal government pays 60-80% of the cost (based upon the income levels of the state), under expansion it pays 100% of the cost for 4 years and then 90%. Medicaid expansion covers everyone under 137% of the poverty line. In contrast, in Kansas, for example, it only covers people who are BOTH very poor (under 30% of poverty) AND have another “qualifying” condition – most commonly mothers of young children and those children, and the disabled. Obviously, this excludes many people in Kansas, and millions across all of the states that have not expanded Medicaid.

There have been many other efforts to limit people benefiting from ACA. Many states (like Kansas) refused to open state-sponsored exchanges, and have tried to obstruct the federal exchanges, even trying to intimidate those working to sign people up. It tried to block passage of the ACA in Congress, and when it gained majorities has blocked every effort to expand funding, and blocked the creation of a “public option” to compete with private insurance companies. The entire series of efforts on the Right to block, limit, and try to kill ACA make its criticisms reminiscent of the person who killed his parents and asks for mercy from the court on the grounds that he is an orphan!

And yet, although it is largely their fault, some of the criticisms of ACA are spot on. Premiums have continued to go up in many places, making the policies available on the exchanges unaffordable to many. Combined with the fact that, despite the “individual mandate”, the penalties for not participating are far less than the cost of insurance, people are not buying it. Or they are buying terrible policies, also permitted by the ACA, that turn out to be worth very little when their purchasers actually get sick. In some places, major insurance companies (like Aetna and Humana) are pulling out of the exchange marketplaces altogether because, even with such high premiums, they are losing money.

The reason for this phenomenon is well-described in Health Care Law’s Beneficiaries Reflect Its Strengths, and Its Faults by Abby Goodnough and Reed Abelson in the New York Times of October 14, 2016. People with chronic diseases, many of whom had been previously uninsurable because of these pre-existing conditions, have flocked to buy insurance on the exchanges. They now have coverage, and are using it; they are among the 5% of people who cost 50% of health dollars (described by me in Red, Blue, and Purple: The Math of Health Care Spending, October 20, 2009), or 75% under the exchanges (per an official of Blue Cross/Blue Shield of Tennessee cited in the article). The difference is because the first estimate is based on all people in the country, and the BC/BS experience in Tennessee and elsewhere is based upon people who have actually signed up for coverage in the exchanges. In a vicious circle, low-income but (currently) healthy people, especially the young, have chosen to not sign up; this leaves the pool of those covered disproportionately ill and thus costly. Without premiums coming in from the people who would cost little or nothing, insurance companies’ outlay for care (the “medical loss ratio”) is too high for them to make a profit (or, at least, as much profit as they want to), and so premiums continue to rise, driving more people (and insurers) out of the marketplace. In addition, the competing demands of survival among low-income people are tremendous, as documented in the October 31, 2016 issue of The Nation, by Monica Potts in “The American social safety net does not exist”. (H/t Bob Bowman, on the Medicine and Social Justice Facebook page.)

This is the basis of the criticism from the Left – that the private insurance-based model of the ACA was designed to benefit the insurance companies (which is now sometimes failing). This was the purpose of the individual mandate, to get everyone, healthy or not, to buy in. But the solution is not to raise the penalty for not signing up, which is obviously counterproductive, but to automatically put everyone in the same pool, regardless of income, pre-existing conditions, age, or the state that they live in. This is what would happen in a national health insurance program, as advocated by Senator Bernie Sanders. Conceptually, it can be seen as putting everyone in the federally-run Medicare program (which already has, by virtue of insuring the old and disabled, the highest risk people). All of us are in, whether we need medical care or not. It is “insurance” only in the broadest sense, because everyone is in the pool, and the public sector – all of us, from our taxes and income-based premiums, pays for it.

Some people know that they are sick. They have one, or often more, chronic diseases. They may have cancer. They may have had trauma requiring multiple surgeries. These are the people who cost the most today. But all of us are at risk for joining that group, when we find out tomorrow that we have cancer, or are in an accident, or have a premature baby, or just gradually gather more chronic conditions as we age. These are those of us who find ourselves without coverage because, when we were healthy, it was too expensive. But it doesn’t have to be that way; a single-payer national health program covers all of us all the time.

The core concept of most insurance is that you only “win” by losing; you collect when your house burns down, or you are in a car accident, or you die. Health care should not be that way. We all should get preventive care, acute care, and care for our chronic conditions, physical and mental.

We can do this. We should. Now is the time. Now is way past time.

Who is left out of ACA, and how does this affect Health for All?

The Affordable Care Act (ACA, Obamacare) has been very successful, despite the pronouncements of doomsayers (mostly Republicans). More than 10 million people who were previously uninsured have received coverage, and this has dramatically increased their access to health care. However, many people remain without health insurance, and many more are barely able to afford their premiums or can afford only the most basic plans. These people fall largely into three groups: those who the law was never planned to make eligible (mainly those people who are living in this country without documents), those people who make less than 133% of the poverty level but were not previously eligible for Medicaid and live in states that have not opted for Medicaid expansion, and lower-income people above 133% of poverty who have either not bought insurance on the exchanges or bought it and have since dropped it.

The first group, those without papers, comprise over 11 million real human beings in this country, people who work and go to school and get sick and visit our emergency rooms. That they are not even considered in ACA or any other proposal considered politically viable is a head-in-the-sand approach that ignores both human suffering and the cost of providing care to them. This cost is often shifted to hospitals, doctors, and volunteer organizations, such as the student-run Jaydoc Free Clinic in Kansas City, KS. The work that volunteers do is admirable, like that of the people celebrated by the first President Bush as “1000 points of light”, but it is not the way a wealthy country should have to provide care to people.

The second group is composed of those that the ACA intended to be covered by Medicaid expansion, but who live in states that have opted not to expand Medicaid. Given that the federal government would have picked up 100% of the bill for the first 4 years and then 90% thereafter, it is financially a good deal for the states. The reason that states like Kansas have not done so is entirely political; these are all states with Republican governors and/or Republican-controlled legislatures (although it does not include all of those!) whose core political position is opposition to anything coming from President Obama. Their proposed health plan is -- well, nothing, but they are against Obamacare, and against expanding Medicaid, and if this seems not only mean but economically stupid, so be it. People who in other states can access care when they need it are going without care or showing up in extremis in ERs. Hospitals end up footing the costs for people who could have been insured..

In Kansas, the first hospital closure that might have been forestalled with Medicaid expansion has occurred. Closing of Kansas hospital adds to Medicaid expansion debate (Kansas City Star, October 18, 2015) describes the closure of Mercy Hospital in Independence, KS. Doctors from relatively nearby towns that still have a hospital report increases in ER visits from people from Independence.There are many reasons that contributed to this closing, including the fact that residents of rural areas such as Independence are older and sicker than the national or state average, but a large proportion of them would have been eligible for expanded Medicaid had the state implemented it. The article makes clear that “While Medicaid expansion may not have saved Mercy Hospital, there are some in Montgomery County who say it could save many individuals.”

The Kansas Hospital Association (KHA) has been lobbying hard for Medicaid expansion because their members are losing money caring for uninsured people who are covered in the states that have expanded Medicaid. These hospitals are absorbing the impact of cuts to MediCARE which were supposed to be offset by the decrease in the uninsured resulting from the expansion of MediCAID, which is of course not happening in states such as Kansas, and it sees Mercy as the first domino to fall. KHA has a lot of influence in the state capital, Topeka, and rarely loses battles that it engages as strongly as it has this one, but so far there has been no movement from the Governor or legislature. While some legislators are beginning to rethink the issue: “ ‘My sense is a lot of legislators are saying we need to have that discussion (about Medicaid expansion). We need to take a hard look at that issue,’ said Rep. Linda Gallagher, a Lenexa Republican. ‘I do support that myself’”, others are adamantly opposed: “’I know that’s on the table. I don’t think any decision has been made on that,’ said Rep. Tony Barton, a Leavenworth Republican. ‘I think it would be moving in the wrong direction. I’ll leave it at that.’” And well he might leave it at that, as there is really nothing he can say that makes economic or social sense. It is a quintessential statement of opposition, being against something because, well, he is against it.

The Star article makes clear that Independence, KS has had, like many small towns, difficulty in recruiting and retaining physicians, but even those towns with doctors have hospitals with major financial challenges that could be helped by Medicaid expansion. Dr. Doug Gruenbacher, board chair of the Kansas Academy of Family Physicians (KAFP), an organization representing the family doctors who are the mainstay of rural health care, practices in Quinter, KS. While Quinter has fewer than 1000 residents (compared to Independence’s 9300), its group of family doctors cares for people from perhaps a dozen surrounding counties. Dr. Gruenbacher wrote a letter to the Salina Journal (October 10, 2015) calling for Medicaid expansion. He says “I know that my hospital [Gove County Medical Center] and more importantly, my patients, would benefit from the expansion.”

This leaves the third group of people who have had little or no benefit from the ACA: those who have  either not been able to afford to purchase insurance on exchanges, despite subsidies, or have dropped it as a result of rate increases by insurance companies. In “Insurance Dropouts Present a Challenge for Health Law” (NY Times, October 11, 2015), Abby Goodnough focuses on people in Mississippi, another states that has not expanded Medicaid. She observes that many of those who are working and making more than 133% of poverty are eligible for subsidies on the exchanges – indeed, 95% of Mississippians receiving coverage this way have subsidies, the highest percentage in the nation – but increasingly are finding the premiums more than they can afford on their tight budgets. Sometimes people were dropped from their insurance companies simply because they did not provide some information that the law requires to prevent undocumented people from signing up. Sometimes they just couldn’t afford it.

The ACA prohibits insurers from denying coverage for those with pre-existing conditions, but does not prohibit them from charging more for that coverage. And they do. “Walter Whitlow, 56, a remodeling contractor in Volente, Tex., said he had never seen the emails the federal marketplace sent him asking for additional proof of income after he signed up for a Humana plan in January. Doctors diagnosed throat cancer in February, and in June he learned from his oncologist’s office that his monthly premium had gone to $439 from $103 and his deductible to $4,600 from $900.” Whoops. Glitch.

Or not. The ACA was an attempt to accommodate many political interests, and thus is a conglomeration of different programs. Its commitment to insurance companies, whose support seemed to be necessary to pass the bill, was to have the “individual mandate”, so that the insurers, now required to cover everyone, would have everyone, not just the sickest, in their risk pool. However, beyond this, the ability of insurers to increase premiums for the sick was projected to be a problem, but the advantages of passing the program outweighed it. ACA is not intended to ensure health for all, but coverage for most (except those noted above). In the aggregate, it has been of great benefit. But for individuals, like Mr. Whitlow, the impact has been disastrous.

It is important to remember that this impact is not because we passed a bill that tried to cover as many people as possible, as opponents of ACA maintain without any data. It is because that bill did not go far enough, did not cover everyone, did not provide sufficient protection for people from the predatory practices of insurance companies. These are not the reasons that most ACA opponents want to fix, although they should be fixed. Dismantling ACA will not help the people who are described above, suffering despite this program; it would only vastly increase their number.

But change is necessary. We do, in fact, need a comprehensive national health program that simply, like those of most countries, covers everyone. Like Medicare for all. This will not solve all problems. It will not necessarily bring doctors to rural Kansas. It will not insure quality. It will not, in itself, completely control costs. But it is a necessary, if not sufficient, step.

“Our mission as family physicians is to provide care to all Kansans, not just the insured,” Dr. Gruenbacher writes. The next step is to make sure that there are no Kansans, or Americans, left out.