ACA Repeal: The Latest

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The Senate proposal is out. The proposed law is 142 pages of (perhaps unnecessary) complexity, and, given the rushed nature, probable errors. But it’s out.

It’s not out in time to prevent damage for 2018.

  • Withdrawal of insurers: Aetna notified agents that it will be withdrawing from individual markets in 18 states. Notices to policy holders will be sent on or about July 1st. Other firms have announced withdrawals from a few states, most particularly Iowa and Indiana.
  • Heavy rate increases: Insurers in the individual market in Virgina have asked for a 30% rate increase for 2018, based on uncertainty about whether the Federal government will continue subsidies for health insurance. Insurers in NY State have asked for a 16.6% increase. Most other states will be in that range.

The proposal represents a mixed signal for consumers.

  • Pre-existing conditions: The Senate version conforms with the House version in requiring insurers to cover people with pre-existing conditions. HOWEVER . . .
  • Coverage: States can apply for waivers allowing insurers to reduce the coverage they provide. Services required by people with pre-existing conditions may not be covered.
  • Medicaid: The bill supports a contraction of Federal Medicaid funding, but delays the start of cutbacks until 2021. The House version started cuts in 2020, an election year. The Senate version of the cuts are later and deeper.
    • The Medicaid expansion was an increase of the income limit for eligibility from 100% of poverty level to 138%.
    • Under the Senate version people making more than 100% of poverty level would be prevented from enrolling in Medicaid starting in 2020.
    • All Federal funding for the expansion would be limited in 2023.
    • The impact on the Medicaid program for children, CHIP, is unclear at this time.
    • Inflation adjustments for Medicaid funding would be changed from an index based on medical costs to the overall Consumer Price Index (CPI), which would reduce annual increases in funding in all future years. (See graph.) (4) The focus of this change is strictly on reducing Federal spending, not helping consumers. Federal payments would lag behind increases in medical costs — who pays the difference?fredgraph
  • Tax credits to help pay for insurance: The House version based subsidies on age; the Senate version reverts to income as the basis, consistent with the existing ACA rules. However,
    • The Senate version reduces the maximum income eligible for these subsidies, making some people now receiving subsidies ineligible for them in the future. On low low end, the Senate version makes subsidies available for people earning below below poverty level who might not be eligible for Medicaid in their state. The Senate version maintains cost-sharing subsidies for insurers through 2019.
    • The Senate version reduces the amount of subsidy people receive, increasing out of pocket costs for everyone, and especially for those between age 50 and 64.
  • Planned Parenthood: Both House and Senate versions remove funding for Planned Parenthood.
  • Tax reductions for affluent households: The Senate and House versions are in agreement on this; the reductions remain intact.
  • Individual mandate: Penalties for not having insurance are eliminated.

Sticking points:

  • For conservatives: Treating healthcare as a human right. They would rather see the ACA eliminated without replacement.
  • For moderates and those in competitive districts

Collateral damage:

  • Insurance coverage: There’s a debate as to how many people will not have insurance coverage with this law.  Estimates vary between 13 and 23 million.  The reasons for the variance in estimates include:
    • Time frame — loss of coverage will build over time as insurance costs increase and subsidies don’t.
    • Medicaid — how many people will lose coverage under Medicaid. That impacts more people than you would expect. Most people don’t have Long Term Care insurance, and Medicaid has become the prime vehicle for paying for home health aides and nursing home costs. Since nursing home costs average nationally more than $9,000 per month and Medicare pays for only the first 100 days, there are a lot of middle income families that will be in trouble. Even some moderately affluent families will be affected, and the poor . . . forget about it.
  • Tax increases: Healthcare for the uninsured will fall back on emergency rooms, largely of public hospitals. That will drive costs and budget increases and increases in local taxes. Tax savings for the rich will mean tax increases for everyone else.
  • Economic stagnation: The US is a consumer economy. I’ve argued previously that money siphoned from consumers for education, housing and healthcare is money they can’t spend for anything else. One analyst sees 1.1 million jobs disappearing by 2020 with passage of the AHCA. (3)

 


Sources:

  1. M. J. Lee, Tami Luhby, Lauren Fox, Phil Mattingley, “Senate GOP finally unveils secret health care bill; currently lacks votes to pass,” CNN, 22 June 2017. http://www.cnn.com/2017/06/22/politics/senate-health-care-bill/index.html
  2. Stephanie Armour, Kristina Peterson and Louise Radnofsky, “Battle Lines Drawn on Health Care,” The Wall Street Journal, 23 June 2017, P. A1.
  3. Josh Bivens, “Millions of people have a lot to lose under the AHCA,” Economic Policy Institute, 21 June 2017. http://www.epi.org/publication/millions-of-people-have-a-lot-to-lose-under-the-ahca/?utm_source=Economic+Policy+Institute&utm_campaign=50e819bfcb-EMAIL_CAMPAIGN_2017_06_23&utm_medium=email&utm_term=0_e7c5826c50-50e819bfcb-58834721&mc_cid=50e819bfcb&mc_eid=0541ad0f29
  4. Federal Reserve Bank of St. Louis, Economic Research. Chart downloaded 25 June 2017. https://fred.stlouisfed.org/graph/?id=CPIMEDSL,
  5. Bob Bryan, “Unveiled: The Secret Senate Healthcare bill,” Business Insider, 22 June 2017. http://www.businessinsider.com/senate-healthcare-bill-trumpcare-ahca-details-2017-6

A Different Perspective on Mexico

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The monologue on Mexico focuses on those crossing the border into the US. In fact, that’smexico a very narrow view of the relationship between the two countries.

According to the State Department, there are one million US citizens living in Mexico. However,

  • That figure was first reported in 2014. The number has been increasing since. The US government doesn’t  track residents living out of the country as long as they pay their taxes.
    • One US expat realtor reports a 40% increase in home sales in one US expat enclave just in the last year.
    • A commentator in The Guardian estimates the number of Americans living in Mexico as closer  to two million.
  • A number of the US citizens living in Mexico aren’t there legally (estimates vary from 50 to 90 percent). The Mexican government isn’t particularly good about tracking them, and doesn’t deport them. In fact, Mexico abolished a mandatory prison sentence for undocumented immigrants in 2008. Those who have not committed a crime are simply allowed to stay.

CNN reports that there are four reasons that Americans give for moving to Mexico:

  • Climate
  • Culture
  • Cost of living
  • Escaping the US political climate

One American comments that doctors in Mexico are more helpful and enjoyable to visit than are doctors in the US.

It’s cheap. It’s very patient-oriented. It’s like my father practiced in Illinois about 50 years ago, without all the paperwork.

Many Americans, including some in Congress, view Mexico through the prism of an out-dated stereotype. Of course, if that changes, more Americans might move there.


Sources:

  1. Instituto Nacional de Estadística y Geografíca. http://www.inegi.org.mx/\
  2. Adam Taylor, “Mexico has its own immigration problem: American retirees,” The Washington Post, 21 November 2014. https://www.washingtonpost.com/news/worldviews/wp/2014/11/21/mexico-has-its-own-immigration-problem-american-retirees/?utm_term=.dc11626a341f
  3. Leyla Santiago and Traci Tamura, “South of the border, US expats have a different take on Mexico,” CNN 24 June 2017.  http://www.cnn.com/2017/06/24/americas/mexico-american-expats/index.html
  4. “News Report: 91.2% of All Americans Who Live in Mexico Are Living There Illegally,” Latino Rebels, 5 March 2017. http://www.latinorebels.com/2017/03/05/news-report-91-2-of-all-americans-who-live-in-mexico-are-living-there-illegally/
  5. Millions of Americans live in Mexico. Can we continue to coexist?” The Guardian, 23 January 2017. https://www.theguardian.com/commentisfree/2017/jan/23/trump-futures-mexico-us-interlocked-wall-border

How Americans Drive Up Their Own Health Insurance Costs (UPDATE)

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This is not a defense or excuse for the exorbitant pricing or profits in the health insurance industry in the US.  As with most social issues, there is no single cause of a problem. The industry owns part of the issue, Congress owns a major part, but consumers also own a piece. It’s time to recognize that and do what you can do about it.

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I grew up in an advertising era touting “rugged individualism.” The icons of that era included John Wayne, the TV character Palladin, and the advertising “Marlboro Man,” all part of a mythology that people could cut their own path regardless of others.

Unfortunately, that’s not how life works. If your reading this, someone else probably had provided the electricity for  you. If you also write, the court system protects your intellectual property. If you have a retirment account, you depend on financial regulators to protect your assets. If you eat (and you’d better be doing that), there’s the farmers and fishermen who provide what you consume. We are a connected network of people, whether on the grid or not. Whether you like it or not.

That’s blatantly the case in health insurance. There was a time when health insurance didn’t exist and didn’t matter. There were relatively few doctors in the 1850s, medical knowledge was relatively crude, and life expectancy was short.

  • In the Americans, life expectancy from birth was only 35.1 years in 1850. Life expectancy for slaves was less, with estimates ranging from 22 to 30 years of age.
  • The shortness was due to childhood deaths. If one could make it to age 10, there was a reasonable prospect to live to age 60.

ourworldindata_life-expectancy-cumulative-over-200-years-768x548

Life expectancy has  increased dramatically in the last two years, as you can see from the chart above, from an excellent article by Max Roser. (1)

In most geographies, the major gain in life expectancy came after World War II.

Exponential-PHE-Growth-Irfan

However, the increase in life expectancy comes at a substantial cost. One estimate says that each day of additional life expectancy adds $1.6 billion to medical costs just in the US. (2) However, living longer is just one component of the story of rising health costs.

Behavior matters. Certain things some of us do add substantially to medical costs for each and every one of us. How does that work? It’s in built into the concept of insurance as conceived by Benjamin Franklin.

  • People — healthy and sick — pay into a fund that in turn pays people in their time of need.
  • The required size of the fund is determined by the number of claims and the size of claims. The required size of the fund determines what people who participate have to pay.

That might seem unfair to healthy people, but we have to remember that no one stays healthy forever. Everyone dies. Everyone gets a turn with illness, sometimes more than one turn.

What might be considered unfair is when people do things or allow things to happen that cause illness. For example,

  • The CDC estimates that 36.5 million Americans smoke cigarettes, and 16 million currently have a smoking-related illness. Not everyone who smokes gets sick, but a larger percentage do, and that adds $170 billion to total medical expenses in the US. (3, 4)
    • According to a recent Gallup survey, more than 28% of adults in Ft. Smith, Arkansas, Layfayette, Louisiana, Erie, Pennsylvania and Bristol, Tennessee smoke. The national incidence is 18.2%, down from more than 40% in the 1960s. (9)
  • Obesity is estimated to add $147 billion to national healthcare spending (2008 dollars). (5) That figure may be low due to the large number of undiagnosed diabetics in the US.
  • Alcohol and drug abuse adds another $64 billion to healthcare spending (7)
  • Distracted driving (there are no separate estimates of direct medical costs), but medical bills have been rising even as the severity of injuries has been declining. (6)

The medical expenses that result from these behaviors hit every consumer:

  • Rising healthcare charges (remember the principle of “supply and demand”?)
  • Rising insurance premiums to cover the rising healthcare costs
  • Rising taxes to cover the proportion of expenses the government pays

High spending doesn’t mean better medical results.

With development, health outcomes generally improve, but the U.S. is an anomaly. The U.S. and the U.K. are both high-income, highly developed countries. The U.K. spends less per person ($3,749) on health care than the U.S. ($9,237). Despite its high spending, the U.S. does not have the best health outcomes. [Life expectancy, for example, is 79.1 years in the U.S. and 80.9 years in the U.K. And while the U.S. spends more on health care than any country in the world, it ranks 12th in life expectancy among the 12 wealthiest industrialized countries, according to the Kaiser Family Foundation, a non-profit organization focusing on health issues.] (8)

Europeans and the Chinese government understand the impact of individual behavior on costs. Americans have been more reluctant to understand and accept personal responsibility for how their behavior affects themselves and everyone else. It’s time to grow up and put the myth of rugged individualism away.

 


Sources:

  1. Max Roser, “Life Expectancy,” Our World in Data, undated. https://ourworldindata.org/life-expectancy/
  2. Sean Davis, “8 Charts that Explain the Explosive Growth of U. S. Health Care Costs,” Media Trackers, 1 October 2013. http://mediatrackers.org/national/2013/10/01/8-charts-explain-explosive-growth-u-s-health-care-costs
  3. US Centers for Disease Control and Prevention, “Economic Trends in Tobacco,” last updated 17 June 2017. https://www.cdc.gov/tobacco/data_statistics/fact_sheets/economics/econ_facts/index.htm
  4. US Centers for Disease Control and Prevention, “Current Cigarette Smoking Among Adults in the United States,” last updated 1 December 2016. https://www.cdc.gov/tobacco/data_statistics/fact_sheets/adult_data/cig_smoking/index.htm
  5. US Centers for Disease Control and Prevention, “Adult Obesity Causes and Consequences,” last updated 15 August 2016. https://www.cdc.gov/obesity/adult/causes.html
  6. Rocky Mountain Insurance Information Association, “Cost of Auto Crashes and Statistics,” undated. http://www.rmiia.org/auto/traffic_safety/Cost_of_crashes.asp
  7. National Institute of Drug Abuse, “Trends and Statistics,” last updated April 2017. https://www.drugabuse.gov/related-topics/trends-statistics
  8. NPR, “What Country Spends The Most (And Least) On Health Care Per Person?” 20 April 2017. http://www.npr.org/sections/goatsandsoda/2017/04/20/524774195/what-country-spends-the-most-and-least-on-health-care-per-person
  9. Samuel Stebbins, “Cities with the Most Smokers,” 24/7 Wall Street, 22 JUne 2017. http://247wallst.com/special-report/2017/06/22/cities-with-the-highest-smoking-rates/?utm_source=247WallStDailyNewsletter&utm_medium=email&utm_content=JUN232017A&utm_campaign=DailyNewsletter

Emergency Pain Management

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A newly reported study from Australia finds that

  1. Acupuncture is a viable alternative to drugs such as opioids for pain management for patients coming into ERs in severe pain. The researchers believe that ER personnel should be trained in acupuncture and have this available as a resource.
  2. However, the authors report that neither drugs nor acupuncture provide immediate, adequate pain relief. They urge the need for research into development of tools for immediate pain management.

In a previous post, I talked about tai chi as a recommended treatment for depression for individuals resistant to Western psychotherapy. Now we have a recommendation for incorporating  acupuncture with Western medicine. Taking the best elements from different traditions seems to make sense.


Marc M Cohen, De Villiers Smit, Nick Andrianopoulos, Michael Ben-Meir, David McD Taylor, Shefton J Parker, Chalie C Xue, Peter A Cameron. Acupuncture for analgesia in the emergency department: a multicentre, randomised, equivalence and non-inferiority trial. The Medical Journal of Australia, 2017; 206 (11): 494 DOI: 10.5694/mja16.00771

The Mechanics of Concussion

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A new study from a research team at Ohio State University provides insight into how concussions work. The research is based on a laboratory experiment with mouse tissue, but the effects are quite similar to what is seen with human patients with neurological disorders.

bign

Source: Washington Univ.

Cells contain axons, which transmit signals (messages) to other parts of the body and brain through the nerve system.

Concussions activate a protein “called TRPV4, which causes a chain reaction that prompts a pause in content exchange along the axon.” (1) When the pause occurs, the axon swells, which is the physical sign of the problem. Similar swelling occurs in patients with Alzheimer’s and Parkinson’s.

This research also indicates that the swelling can be reversed with prompt reduction of stress to the brain. Further, if the protein is suppressed, the swelling does not occur. However, we don’t know exactly what that means for humans, at least not yet.

Knowing how something works is key to developing fixes for problems.


Sources:

  1. Yuanzheng Gu, Peter Jukkola, Qian Wang, Thomas Esparza, Yi Zhao, David Brody, Chen Gu. Polarity of varicosity initiation in central neuron mechanosensation. The Journal of Cell Biology, 2017; jcb.201606065 DOI: 10.1083/jcb.201606065
  2. Picture source: https://faculty.washington.edu/chudler/cells.html

The [State] Politics of Health Insurance

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In the rush to repeal the Affordable Care Act, the Trump Administration has been repeating the mantra that the individual insurance marketplaces are “failing.” Like most statements made by politicians these days, the facts seem to be a little different.

Clearly, Iowa is in crisis. With the withdrawal of Aetna from the individual marketplace, there is a real risk they may have no insurers offering individual coverage through the marketplace in 2018.

My suspicion is that Aetna’s withdrawal has more to do with its stock price and financial liabilities after a failed merger attempt than with the ACA itself. Aetna has also stopped writing small group insurance in some states.

However, Pennsylvania has six carriers committed to the marketplace for 2018. The only concern is what the Trump administration might do the mess things up.

Further, another insurer, Centene, has announced that it is expanding individual marketplace coverage into three new states — Kansas, Missouri and Nevada.

So what’s the real story with Iowa? If the fault were with ACA, it would be impacting every state and every carrier, and that’s not the case. What have state officials done to mess things up?

If you know the story, please reply. I’d like to know, both about Iowa and about other states where local officials are whining about Obamacare. Let’s get the full story out into the open.