ACA Repeal — the Backdoor Method

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Apparently, the bill to keep the government operating excludes payments to insurance companies that subsidize healthcare for those buying insurance through the Marketplace. The tactic is to force insurers out of the market, thus closing the door on the Affordable Care Act.

In theory, that would cost anyone with a subsidy their healthcare.

We’ll see what happens next.

Equality of Education; Inequality of Teacher Pay

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In theory, the quality of teacher impacts the quality of education students receive. In the Brown v. Board of Education of Topeka decision in 1954, the USSC rejected the argument that students in unequal schools could receive equal education. However, if teachers are important, then how do we reconcile the Court’s decision with these findings:

  • There’s a huge disparity in teacher pay between school systems. Affluent districts pay much higher salaries than others.
  • Charter schools, which are supposed to be the road to improve education, pay much lower salaries than most public school districts.

New Jersey treats teachers as public employees, and their salaries are public information. Without going into detail on all 650 public school districts and charter schools in the state (available at reference 1 below), here’s the outlines of the situation:

  • The median salary in 2016 for a school teacher in NJ was $66,117 per year.
  • Northern Valley Regional district in affluent Bergen County paid the most, with a median salary of $105,650.
  • Teachers in the Edison Township school district in Middlesex County had a median salary of $95,432.
  • At the other end, Milford Township in Hunterdon County had a median salary of $48,007.

New Jersey just isn’t that large geographically. The cost of living is relatively uniform across the state.

Many/most of the charter schools are worse: for example the Jersey City Global and Red Bank charter schools both have median salaries of $42,000. Of course, the charter schools haven’t been around as long. We could expect salaries to increase with teacher seniority. However, the need to generate profits at many of these schools may restrict what goes into the classroom.

If you were a capable teacher, where would you want to teach? Where would you expect the best teachers to go? How does this reconcile with equality of educational opportunity?

By comparison, NJ is one of the best-paying states for teachers in the US. The only states that pay as much or more are Alaska, California, Connecticut, District of Columbia, Massachusetts and New York. Maryland pay is lower than NJ, but close. (2) Conversely, South Dakota and Mississippi are at the low end of teacher pay, paying less than 65% of what New Jersey pays.

Again, where would the best go?


Sources:

  1. Tom Davis, “NJ Median Teacher Salaries, Highest To Lowest: How Much Does Your District Pay?” NJ Patch, 24 April 2017. https://patch.com/new-jersey/princeton/s/g3o6z/n-j-median-teacher-salaries-highest-to-lowest-how-much-does-your-district-pay?utm_source=alert-breakingnews&utm_medium=email&utm_term=weather&utm_campaign=alert
  2. National Center for Education Statistics, 2013. https://nces.ed.gov/programs/digest/d13/tables/dt13_211.60.asp

ACA Repeal, Again

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According to Bloomberg, the White House wants Congress to vote on a revised bill next week.  There are some proposed amendments to the bill that failed in March in an effort to try to unify GOP House members to support the bill, but nothing has been finalized.

One item being considered is a proposal by Representative Tom MacArthur (R, NJ):

The amendment, reported earlier by Huffington Post, would allow insurers to charge higher premiums to people with pre-existing conditions in states that get a waiver. To obtain the waiver, states would have to provide sick people priced out of commercial insurance access to a so-called high-risk pool run by the federal government, or establish their own, and satisfy other conditions. (1)

A separate commentary on the same issue goes further:

According to a draft of the tentative deal obtained by POLITICO, the latest proposal would allow states to apply for “limited waivers” that would undermine Obamacare’s protections for pre-existing conditions. Under these waivers, states could opt out of Obamacare standards setting minimum benefits that health plans must offer and a requirement — called community rating — forbidding insurers from charging different prices to people based on health status. Both are provisions that the GOP’s ultraconservatives have pushed to eliminate as part of the repeal effort, contending that these coverage mandates drive up the cost of insurance.

What this means in practice is a two-tiered health system based on where people live. People in places like Mississippi and Kentucky that have relatively poor healthcare now, will have less access to healthcare and higher costs in the future. Conversely, states that offer better healthcare will maintain existing benefits. That’s a compromise that could pass, or could just make everyone unhappy.

Overall, this attempt keeps the negatives associated with the bill, and adds one more. Historically, risk pools haven’t worked. They’ve been budget-breakers when they’ve been tried for auto and health insurance in several states. If anything, more people will lose health coverage and costs will escalate as predicted by the CBO.


Sources:

  1. Billy House, Jennifer Jacobs, “White House, GOP leaders at odds over plans for Obamacare vote,” BenefitsPro, 20 April 2017. http://www.benefitspro.com/2017/04/20/white-house-gop-leaders-at-odds-over-plans-for-oba?kw=White%20House%2C%20GOP%20leaders%20at%20odds%20over%20plans%20for%20Obamacare%20vote&et=editorial&bu=BenefitsPRO&cn=20170420&src=EMC-Email_editorial&pt=News%20Alert
  2. Adam Cancryn and Josh Dawsey, “White House plans Obamacare showdown next week,” Politico, 20 April 2017. http://www.politico.com/story/2017/04/20/obamacare-repeal-republicans-new-deal-237397

 

Political Polarization

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If you think political dialog is becoming nastier, you’re right. A recent survey by Pew documents that differences between liberals and conservatives regarding the current president are more extreme than at any time in recent US history.

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Democrats  disapprove of Trump more than they disapproved of any other Republican president. Further, they disapprove of Trump more than Republicans ever disapproved of either Obama or Clinton, at the comparable point in their term in office. Conversely, the Republican base is still strongly behind Trump.

That’s probably bad news for Trump. While there’s not much more he can do to alienate Democrats, he can lose independents who “lean Republican”, and that would affect the 2018 midterm elections. Percent approval among those who “lean Republican” may never change, but the number of people who “lean Republican” may shrink. Based on the history of other presidents, it probably will.

 

ACA Rule Changes

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If you were waiting for changes that would actually help consumers, don’t hold your breath.

Absent the actual repeal the administration sought, it announced rule changes late yesterday affecting consumer access to healthcare and the percent of costs health insurance will cover under marketplace plans. The point of the changes is to incent insurers to continue offering health insurance on the ACA marketplaces. The technical term for this is “market stabilization.”

A cynic might wonder why these changes come out on the even of holidays when most people will be distracted and might not notice.

The rule changes focus on what the insurance industry calls “adverse selection.” Insurers are concerned about people buying coverage only when they expect they will use it, and then dropping it immediately — which forces the insurer to take a loss on the policy.  The rule changes are designed to prevent that.

Here’s the basics:

  • Silver level plans will cover 66% of consumer medical costs, down from the original 70% requirement.
  • The new rules increase also increase subsidies to consumers buying these plans — provided the administration actually commits to making these payments.

At issue are cost-sharing payments that low-income people enrolled under the healthcare law receive to help cover out-of-pocket expenses. Trump has threatened to withhold the payments as a means to force Democrats to negotiate on healthcare legislation.(2)

[Actually, these subsidies can help people making up to $60,000 per year, which is more than “low income.” Half of US households earn less than that.]

  • As previously noted, the enrollment period is being shortened from three months to six weeks, starting November 1st.  Given the problem that CMS has had in handling the volume of people applying for coverage in the longer period in the past, it’s essential for consumers to apply as early as possible.
  • The administration is making it harder for consumers to qualify for special enrollment periods (SEPs). More people will be required to submit supporting documentation than in the past, which will extend the time required for enrollment. If approval is delayed by three months, the consumer will be required to pay for coverage for two of those months.
  • Consumers are being restricted in terms of their ability to change levels of coverage using a SEP.
  • Insurers can refuse to cover people who have failed to pay premiums for this insurance in the past. If you’ve had coverage and dropped it, you may have to wait a year or more before being able to get coverage again.
  • The determination of whether an insurer has an adequate network of doctors and hospitals in a state will be turned over to the state. Some states are much more rigorous than others.

The new rules don’t address some of the key issues challenging insurers:

  • Will the government continue to pay subsidies to help people afford insurance?
  • Will the government use financial penalties to force consumers to carry insurance?

Trump has said that he would eliminate the penalties and the subsidy, but his bill didn’t pass and no one knows about  his current thinking. A negative on the first question will drive insurers out of the market. A negative on the second will raise costs for everyone who needs insurance.

There’s speculation that the reduction in benefits for the silver policy might allow insurers to reduce the cost of these policies. However, any reduction will be subject to higher out-of-pocket costs for consumers who do incur expenses. The net impact isn’t clear.

Are these rule changes even needed? The Congressional Budget Office has stated that it expected the insurance markets to be stable in 2017 without these changes.  So, what is the point?


Sources:

  1. Virgil Dickson, “White House finalizes ACA rule to strengthen individual market,” Modern Healthcare, 13 April 2017. http://www.modernhealthcare.com/article/20170413/NEWS/170419936?utm_source=modernhealthcare&utm_medium=email&utm_content=20170413-NEWS-170419936&utm_campaign=am
  2. Associated Press, “Democrats seek to resolve health payments on spending bill,” 14 April 2017.
  3. Timothy Jost, “Examining The Final Market Stabilization Rule: What’s There, What’s Not, And How Might It Work?” Health Affairs Blog, 14 April 2017. http://healthaffairs.org/blog/2017/04/14/examining-the-final-market-stabilization-rule-whats-there-whats-not-and-how-might-it-work/

ACA Repeal: Here we go again

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According to one report, VP Pence has offered three changes to the repeal bill to win Freedom Caucus support for the Trumpcare bill:

  • Elimination of requirements for what insurers must cover
  • Eliminating coverage for pre-existing medical conditions
  • Eliminating limits on what insurers can charge people with medical conditions

Whether the bill can retain any support among moderates in the GOP with these changes is questionable. These provisions will cause problems for hospitals and healthcare providers, and result in more people having no health insurance coverage, and may allow a sharp increase in insurance prices for consumers, as the Congressional Budget Office has predicted.

This simply makes a terrible bill worse.


Sources:

  1. Marlene Satter, “Freedom Caucus would support health care bill that kills 3 ACA provisions,” BenefitsPro, 10 April, 2017. http://www.benefitspro.com/2017/04/10/freedom-caucus-would-support-health-care-bill-that?kw=Freedom%20Caucus%20would%20support%20health%20care%20bill%20that%20kills%203%20ACA%20provisions&et=editorial&bu=BenefitsPRO&cn=20170413&src=EMC-Email_editorial&pt=Consumer%20Driven%20PRO

Environmental Causes of Illness

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The battle about whether environmental pollution causes cancer seems to mirror the long fight to establish acceptance of the link between cigarettes and lung cancer.   It wasn’t accepted  until we had documentation of the specific mechanics of cell transformation into cancer. Even with that documentation, there remain a few skeptics.

A new study from Lehigh university links birth defects and low birth weight babies to emissions from coal-powered power plants. The plant in question is now partially closed and has been converted to run on other fuels. However, the emissions from that plant appear to have injured newborns in four NJ counties. That is another demonstration of the broad reach of pollution from a single plant.

This raises an interesting quandary. Can one be pro-life and pro-coal?


Sources:

  1. Muzhe Yang et. al. “The Impact of Prenatal Exposure to Power Plant Emissions on Birth Weight: Evidence from a Pennsylvania Power Plant Located Upwind of New Jersey,” Journal of Policy Analysis and Management, 4 April 2017, DOI: 10.1002/pam.21989. http://onlinelibrary.wiley.com/doi/10.1002/pam.21989/full