Quote:

 

http://www.bloombergview.com/articles/2015-05-26/obamacare-s-intent-just-read-the-law

Obamacare's Intent? Just Read the Law
By Megan McArdle

By the end of next month, the Supreme Court will have released its decision in King v. Burwell, the case that will determine whether subsidies will be available for insurance purchased through a federally operated exchange. The plaintiffs say this is impermissible, because the law provides for subsidies only for policies purchased on exchanges "established by the state", probably inserted in the law as an inducement to states to set up exchanges. The defenders of the status quo argue that this is insane, because they'd never structure the system so as to risk having needy people lose subsidies, and because no one who actually worked on the law remembers having any such intention.

Robert Pear airs both of the defender's points for the New York Times, interviewing political folks who were there during the negotiations, and staffers who helped draft the legislative language. Naturally, given my continuing opposition to Obamacare, a number of Obamacare supporters have asked me what I thought of this, with veiled hints that I should find this totally devastating to the arguments in the King case. My actual reaction is as follows:

1. This is not new.

2. This is incomplete.

3. This is not legally relevant, for good reason.

4. If it were legally relevant, it would not be as helpful to the case as liberals think.

This is not the first time a media outlet has talked to folks who were involved in the process, and recorded them saying that they never, no way and no how, intended to deny subsidies to states--or reasoning, like Olympia Snowe in Pear's article, that they couldn't have set it up this way, because it would be crazy to choose a structure that threatened subsidies for people in states that didn't set up exchanges.

These articles, however, often don't provide important counterarguments. For example: Congress indisputably chose exactly that crazy, insane, totally inconceivable structure for the Medicaid expansion passed in the same law. In fact, it was considerably more coercive: if you didn't expand, you lost all your Medicaid funding, not just the new stuff. Why would Congress choose a structure that might result in a net loss of insurance coverage? We can sit around and speculate, but ultimately the correct answer is "Who cares? They did."

[...]

• 
  
• “Why would we have wanted to deny people subsidies? It was not their fault if their state did not set up an exchange.”
  Olympia J. Snowe

Quote:

 

http://www.vox.com/2015/5/27/8667813/king-burwell-obamacare-new-york-times

The New York Times blows a hole in the case against Obamacare

There are basically two versions of the looming Supreme Court case against Obamacare . One of them makes sense but doesn't pose enough of a threat to Obamacare to satisfy Republicans. The other poses a real threat to Obamacare, but it's never made much sense — and the New York Times just blew a hole right through the middle of it.

[...]

This argument has baffled pretty much everyone who covered Obamacare's passage. Withholding subsidies from federal exchanges would have sparked a huge debate, because it is an absolutely insane policy idea, but there is no record of any member of Congress on either side of the aisle ever mentioning it.

Moreover, the Congressional Budget Office, which worked with Congress to produce the official cost estimates for Obamacare, always assumed that all exchanges received subsidies.

[...]

LTC8K6

May 27 2015, 09:54 PM

Overhead costs exploding under ObamaCare, study finds
http://thehill.com/policy/healthcare/243188-overhead-costs-exploding-under-obamacare

Quote:

 

...the study's other author, Steffie Woolhandler ... said private insurers have been expanding their administrative overhead despite some regulations from the Obama administration to control those costs, such as the medical loss ratio, which requires a certain amount of premium dollars to be spent directly on healthcare. She argues that a better approach would be a type of Medicare-for-all system.

Quote:

 

http://www.cnbc.com/id/102707721

Obamacare's big overhead costs to top $270B

That sure is a lot of paper clips.

Obamacare is set to add more than a quarter-of-a-trillion—that's trillion—dollars in extra insurance administrative costs to the U.S. health-care system, according to a new report out Wednesday. (Tweet this)

The $273.6 billion in additional insurance overhead represents an average of $1,375 per newly insured person, per year, from 2012 through 2022.

The overhead cost equals a whopping 22.5 percent of the total estimated $2.76 trillion in all federal government spending for the Affordable Care Act programs during that time, according to the authors of the online report on the Health Affairs blog.

[...]

Quote:

 

http://blogs.rollcall.com/wgdb/cruz-threatens-to-subpoena-treasury-officials-to-testify-about-obamacare-rules/

Cruz Threatens to Subpoena Treasury Officials to Testify About Obamacare Rules

Sen. Ted Cruz is warning he might seek to compel testimony from the Treasury Department about the Affordable Care Act.

The Texas Republican presidential candidate, who has the gavel of the Judiciary Subcommittee on Oversight, Agency Action, Federal Rights and Federal Courts, said his staff had been informed by the Obama administration that witnesses would not be available to testify about the rule-making process for providing subsidies under Obamacare because of ongoing litigation.

“For two main reasons, this excuse is entirely invalid,” Cruz wrote in a new letter to Treasury Secretary Jacob J. Lew. “First, Congress retains its right to conduct oversight of the executive branch at all times, regardless of any perceptions of poor timing by, or inconvenience to, the executive branch. The Senate Judiciary Committee has obligations to ensure the proper functioning of the federal government at all times, and not just during windows of convenience for political officials. Second, your Department’s pending litigation justification is without basis, particularly given how you have provided at least one Department witness for the exact same topic during the pendency of other litigation over the last few years.”

In the letter, Cruz said if three tax policy officials at the Treasury Department are not made available on a voluntary basis, he may pursue other methods to get them to appear. The subcommittee had been planning to hold the hearing on June 4.

The Senate Finance Committee has primary jurisdiction over tax issues, but other committees have been holding hearings about the health care law’s implementation.

“If you do not opt to assist Congress and make all three individuals available voluntarily, I may have no choice but to pursue other options, including compulsory process, to make them available for testimony,” Cruz wrote in the missive to Lew. “Please note, in the event we are compelled to use compulsory process to ensure the attendance of these witnesses, the two-week courtesy notice prior to testimony is no longer applicable, and these individuals can be summoned for testimony at any time deemed convenient for the Committee.”

LTC8K6

May 27 2015, 09:54 PM

Overhead costs exploding under ObamaCare, study finds
http://thehill.com/policy/healthcare/243188-overhead-costs-exploding-under-obamacare

Quote:

 

http://healthaffairs.org/blog/2015/05/27/the-post-launch-problem-the-affordable-care-acts-persistently-high-administrative-costs/

The Post-Launch Problem: The Affordable Care Act’s Persistently High Administrative Costs

Last year we, and many others, drew attention to the chaotic and costly roll out of the Affordable Care Act’s (ACA) exchanges. The chaos is mostly over (unless King prevails over Burwell), but the costs will linger on. The roughly $6 billion in exchange start-up costs pale in comparison to the ongoing insurance overhead that the ACA has added to our health care system — more than a quarter of a trillion dollars through 2022.

Bloated Administrative Costs

We calculated these new overhead costs from the official National Health Expenditure Projections for 2012-2022 released by the Centers for Medicare and Medicaid Services (CMS)’ Office of the Actuary in July 2014. The projections included separate tables projecting costs with, and without, the effects of the ACA, allowing calculation of the incremental insurance overhead costs directly attributable to the reform.

We use the July 2014 release of projected figures because the projections released subsequently no longer included any “without ACA” figures. Although the latest projections forecast slightly lower health care cost growth in the coming decade—5.7 percent annually vs. 5.8 percent in the earlier release—this change would only minimally affect our estimates.

The table below shows the CMS actuaries’ estimates for private insurance overhead and government program administration with and without the ACA. It also shows our estimates of the administrative cost increases attributable to the ACA, and the administrative cost per newly-insured person and as percent of federal government expenditures under the ACA (calculated using the CBO’s estimates of coverage and cost).

Between 2014 and 2022, CMS projects $2.757 trillion in spending for private insurance overhead and administering government health programs (mostly Medicare and Medicaid), including $273.6 billion in new administrative costs attributable to the ACA. Nearly two-thirds of this new overhead—$172.2 billion—will go for increased private insurance overhead (data not shown in table).

Most of this soaring private insurance overhead is attributable to rising enrollment in private plans which carry high costs for administration and profits. The rest reflects the costs of running the exchanges, which serve as brokers for the new private coverage and will be funded (after initial startup costs) by surcharges on exchange plans’ premiums.

Government programs—primarily Medicaid—account for the remaining $101.4 billion increase in overhead. But even the added dollars to administer Medicaid will flow mostly to private Medicaid HMOs, which will account for 59 percent of total Medicaid administrative costs in 2022. (The subcontracting of Medicaid coverage to private HMOs has nearly doubled Medicaid’s administrative overhead, which has risen from 5.1 percent of total Medicaid expenditures in 1980 to 9.2 percent this year).

The $273.6 billion in added insurance overhead under the ACA averages out to $1,375 per newly insured person per year, or 22.5 percent of the total federal government expenditures for the program.

Better Options

Insuring 25 million additional Americans, as the CBO projects the ACA will do, is surely worthwhile. But the administrative cost of doing so seems awfully steep, particularly when much cheaper alternatives are available.

Traditional Medicare runs for 2 percent overhead, somewhat higher than insurance overhead in universal single payer systems like Taiwan’s or Canada’s. Yet traditional Medicare is a bargain compared to the ACA strategy of filtering most of the new dollars through private insurers and private HMOs that subcontract for much of the new Medicaid coverage. Indeed, dropping the overhead figure from 22.5 percent to traditional Medicare’s 2 percent would save $249.3 billion by 2022.

The ACA isn’t the first time we’ve seen bloated administrative costs from a federal program that subcontracts for coverage through private insurers. Medicare Advantage plans’ overhead averaged 13.7 percent in 2011, about $1,355 per enrollee. But rather than learn from that mistake, both Democrats and Republicans seem intent on tossing more federal dollars to private insurers. Indeed, the House Republican’s initial budget proposal would have voucherized Medicare, eventually diverting almost the entire Medicare budget to private insurers (the measure passed by the House on April 30 dropped the “premium support” voucher scheme).

In contrast, a universal single payer system would pare down both insurers’ and providers’ overhead, yielding huge administrative savings — $375 billion in 2012 according to one recent estimate.

In health care, public insurance gives much more bang for each buck.

• Jonathan Ingram @ingramlaw
  .@jadler1969 We polled voters in federal exchange states. Most will blame IRS & Dem Congress. http://thefga.org/wp-content/uploads/2015/03/KvBMemoPoll-final.pdf

kbp

May 27 2015, 04:14 PM

Well, Ezra Klein had to jump in!!!

Quote:

 

http://www.vox.com/2015/5/27/8667813/king-burwell-obamacare-new-york-times

The New York Times blows a hole in the case against Obamacare

There are basically two versions of the looming Supreme Court case against Obamacare . One of them makes sense but doesn't pose enough of a threat to Obamacare to satisfy Republicans. The other poses a real threat to Obamacare, but it's never made much sense — and the New York Times just blew a hole right through the middle of it.

[...]

This argument has baffled pretty much everyone who covered Obamacare's passage. Withholding subsidies from federal exchanges would have sparked a huge debate, because it is an absolutely insane policy idea, but there is no record of any member of Congress on either side of the aisle ever mentioning it.

Moreover, the Congressional Budget Office, which worked with Congress to produce the official cost estimates for Obamacare, always assumed that all exchanges received subsidies.

[...]

Not much in the way of specific details to support his argument.

He ignores that Medicaid expansion was written using a much worse "absolutely insane policy idea," if withholding free health care access is insane.

As for the CBO, they just used the limits the Democrats told them to use ...ALL the states cooperating.

DukieInKansas

May 28 2015, 09:15 AM

kbp

May 27 2015, 04:14 PM

Well, Ezra Klein had to jump in!!!

Quote:

 

http://www.vox.com/2015/5/27/8667813/king-burwell-obamacare-new-york-times

The New York Times blows a hole in the case against Obamacare

There are basically two versions of the looming Supreme Court case against Obamacare . One of them makes sense but doesn't pose enough of a threat to Obamacare to satisfy Republicans. The other poses a real threat to Obamacare, but it's never made much sense — and the New York Times just blew a hole right through the middle of it.

[...]

This argument has baffled pretty much everyone who covered Obamacare's passage. Withholding subsidies from federal exchanges would have sparked a huge debate, because it is an absolutely insane policy idea, but there is no record of any member of Congress on either side of the aisle ever mentioning it.

Moreover, the Congressional Budget Office, which worked with Congress to produce the official cost estimates for Obamacare, always assumed that all exchanges received subsidies.

[...]

Not much in the way of specific details to support his argument.

He ignores that Medicaid expansion was written using a much worse "absolutely insane policy idea," if withholding free health care access is insane.

As for the CBO, they just used the limits the Democrats told them to use ...ALL the states cooperating.

Who had time to question or discuss it? As I recall, there wasn't much time between the bill being written and being passed. How much time was there between bills being passed in both houses of Congress and when it was presented to be signed? For such a massive piece of legislature, I don't think there was as much thought into writing it as people think.

Quote:

 

Citing higher-than-expected costs, Blue Cross and Blue Shield of New Mexico wants to raise premiums by an average of 51.6 percent on individual Affordable Care Act plans in 2016.

The company made the request in a preliminary rate proposal filed with New Mexico Insurance Superintendent John Franchini. Blue Cross and Blue Shield – which insures an estimated 600,000 people statewide – said the proposal affects an estimated 35,000 customers who signed up for qualified individual health plans through the New Mexico Health Insurance Exchange, but also those who bought the same plans off the exchange.

Franchini has the final authority to approve or not approve Blue Cross and Blue Shield’s request.

His office – including an in-house actuary and a contracted actuary – also will consider rate increase proposals from Presbyterian Health Plan and New Mexico Health Connections. Franchini said Presbyterian wants an average increase of 6 percent on its individual plan premiums, while New Mexico Health Connections seeks a bump of 4 to 5 percent on its individual plans.

Franchini said the other two companies selling through the exchange – Molina and Christus – did not ask for premium hikes in their preliminary proposals, though final requests are not due until June 15.

The new rates would go into effect Jan. 1.

Customers will have had a chance to shop around for coverage during an open enrollment period that begins Nov. 1.

Kurt Shipley, president of Blue Cross and Blue Shield of New Mexico, told the Journal this week the requested increase reflects the real costs of coverage rather than the projections the company used when setting initial rates. He said those who bought the individual plans tended to be older and in poorer health than expected. Others came to the company having not previously had health coverage.

“The rates we thought would be adequate were not enough,” Shipley said in a Journal interview. “As we obtained more information and paid claims and have gotten that additional experience, it’s clear to us that rates need to be higher in order to cover the costs associated with those plans.”

He said Blue Cross and Blue Shield lost money on such plans in 2014 and in 2015, but he would not provide an exact figure. Shipley did say “we’ve seen some very large and significant claims with this block of business.”