What the Sequester Means for Health Care, Education and the Exchanges (In-depth Analysis); Will “Looking Stupid” Motivate Legislators to Compromise? Why the GOP Would Rather Cut Defense than Close Loopholes

Before looking at precisely who will be hurt by of government-wide sequester cuts on health and education, it’s worth considering the possibility—however slim—that legislators still might reach a budget agreement that brings an end to these blind, across-the-board blows to government spending.

Earlier this week Senator Mark Warner told Bloomberg News that he places the odds for a bipartisan debt-reduction deal at better than 50-50.

Why the optimism?  

Warner, who isn’t a political naïf (he served as Virginia’s governor from 2002 to 2006), believes that ultimately law-makers will arrive at a compromise because as he puts it: “looking stupid at some point has got to motivate people.” 

Granted, this is Warner’s first term in the Senate. This could mean that he doesn’t yet understand the ways of Washington. On the other hand, the fact that he’s new to the beltway could mean that he’s still able to think clearly.

As he reminded his Congressional colleagues Wednesday morning: “These cuts were set up to be the stupidest way possible. No rational group of folks would allow them to come to pass.”

Warner is right. NO ONE wanted cuts that Republicans have rightly called “mindless and random.”  That was the point of the Sequester deal forged during a 2011 deficit-reduction agreement. Legislators purposefully chose targets that were so unpopular that everyone assumed that neither party would ever let them occur.  Conservatives wouldn’t countenance slashing military funding by 7.9%, Democrats wouldn’t accept deep cuts to social programs that our most vulnerable citizens need.  They would have to find a compromise. Or, at least, that was the theory.

Instead, Democrats and Republicans deadlocked, and now it seems that they have double-dared themselves into an impossible situation. Sequestration will increase unemployment, weaken the economy, and hurt children, seniors and the military. Even the Border Patrol will take a hit.  More public school teachers will lose their jobs.

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Who is Douglas Holtz-Eakin and why is he saying such terrible things about health reform?

Today, the House Energy and Commerce Committee’s Subcommittee on Health will hold a hearing entitled: Unaffordable: Impact of Obamacare on Americans’ Health Insurance.  (Always nice to know that our elected representatives are keeping an open mind.)

Prominent on the list of witnesses: “Douglas Holtz-Eakin.” Even before reading his testimony, I knew what Holtz-Eakin would say: young, health Americans should brace for “sticker shock.”  Conservatives like Holtz-Eakin tend to stay on script. However stale the rhetoric, they firmly believe that if you repeat a sound-bite often enough, people will believe it.                                     

                                        Who is Douglas Holtz-Eakin?

If you recognize the name, it’s probably because Holtz-Eakin has become a familiar figure in the mainstream media, quoted in the New York Times, writing Op-eds for Reuters and Politico.com, and appearing, not only on Fox Business News, but on CNN and the PBS’ Newshour.

Alternatively, “Holtz-Eakin” may ring a bell because he served as a member of George W. Bush’s Council of Economic Advisers (CEA), and as Director of Bush’s Congressional Budget Office (CBO.)

In a remarkably candid 2011 interview, Holtz Eakin recalled his tour in the Bush administration:

“Going into the summer of 2001, things were getting worse. . . When we first went in and talked to the President, Glenn [Hubbard] and Larry Lindsey said, ‘Mr. President . . . We’re probably not going to run a surplus on budget.  We’re going to run a deficit.”

Bush’s reply: “We’re not going to run a deficit. If you come in here with a deficit, you’re both fired. Go fix it.’”

We ended up running a budget surplus of one billion dollars,” Holtz-Eakin confided, “driven by gimmicks of remarkable proportions.”
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Health Wonk Review Posts Investigate

Nursing Homes, Nurse-Practitioners Developing More  Expertise, Efforts to Block Exchanges, How Patients Respond to Evidence that Some Tests are Unnecessary, and Whether Obamacare “Screws” Young Americans  . . . 

This  time around Peggy Salvatore hosts a Valentine’s Day Edition of  Health Wonk Review –over at Healthcare Talent Transformation . Her round-up of some of the best of recent HealthCare posts includes:

–  A piece on Health Affairs Blog by David Rothman investigating how Americans respond to “evidence that certain medical tests and screenings might be unnecessary, harmful, and not worth the money.”  How do they react to research showing that some drugs are harmful? To find out, you’ll have to read the post.  (You will find the link to this post, and all of the posts discussed below, here )

–  Good news from Louise at Colorado Health Insurance Insider:  A bill that would have repealed the 2011 law that created Colorado’s health insurance exchange/ marketplace, died in committee in a 9-2 vote. “Republicans and Democrats on the Committee on the committee rejected his portrayal of the Exchange– which has already made a lot of progress towards an opening date this fall.”

Louise adds: “Given the progress that Colorado has made over the past two years in creating the state’s marketplace and implementing various other healthcare reforms (both state-based, like maternity coverage and gender-neutral premiums, and ACA-related, including the recent push to expand Medicaid), I would say that Colorado is on track to greatly improve its overall healthcare outcomes.

She also includes a useful map showing the states that have defaulted on setting up Exchanges. As she notes “this doesn’t mean they will get a pass on Obamacare.”  By law, the federal government will set up Exchanges for them.

–  A post by Disease Management Care Blog’s Dr. Jaan Sidorov pointing out that non-physician professionals and lay-persons are managing to achieve a remarkable degree of medical expertise. This is, as Peggy notes, a controversial subject.

– A report that asks “do non-profit nursing homes really provide better care than their for-profit counterparts”?   Over at Healthcare Economist Jason Shafrin analyzes a study that suggests the answer is  “Yes.”   How do they arrive at that conclusion? Again, you’ll  have to read the post.

– A post that takes on “a recent infamous article on Buzzhead ”  claiming  that Obamacare “screws” young Americans.  Over at California Access Health’s Anthony Wright observes:  “there are some obvious and non-obvious reasons why Obamacare is a boon to young adults. “ The non-obvious reasons are worth thinking about.

These are just a few of the treats in this Valentine’s Day Edition.  I recommend that you read the entire Review here.

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Under the ACA, will YOUR Insurance Premiums Rise or Fall?

Today, many Americans are asking: will my premiums go up in 2014?

There is no simple answer.

According to Families USA ,the Affordable Care Act (ACA) will have a positive effect on the typical family’s budget. Using an economic model that can factor in all provisions of the Act (ACA), Family’s USA estimates that by 2019, when the law is fully implemented, “the average household will be $1,571 better off.”

Even high-income families will save: thanks to rules that limit co-pays, and reward providers for becoming more efficient, “those earning $100,000 to $250,000” will spend $779 less on medical care.” But these are “averages.” They don’t tell you whether your health care costs will rise or fall.

The answer will depend on: your income, your age, your gender, who you work for, what state you live in, whether a past illness or injury has been labeled a “pre-existing condition,”  and what type of insurance you have now: 

If you work for a large company:

–  The ACA will have a “negligible” effect on your premiums says the Congressional Budget Office(CB0). This doesn’t mean that your costs won’t climb at all in 2014. As  long as medical product-makers and providers continue to raise prices, premiums will edge up each year.

But in 2012 average premiums for employer-based insurance rose by just 3% for single coverage and 4% for families, a “modest increase” when compared to 8% to 12% jumps in past years. And on average, employee co-pays and deductibles remained flat.

Granted, a 3% to 4% increase still outpaces growth in workers’ wages (1.7% percent) and general inflation (2.3%) percent).But as reform reins in spending annual increases for large groups could fall to 2%–or less. 

If you work for a small company with more than 50 employees:

Your boss will be more likely to offer affordable benefits, in part because, if he doesn’t, he will have to pay a penalty

Moreover, he will find insurance less expensive. Today, small businesses pay 18% more than large companies because the administrative costs of hand-selling plans to small groups are sky-high. But starting in 2014  businesses with fewer than 100 employees will begin buying insurance in “Exchanges” where they will become part of a large group, and eligible for lower rates.

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Ignore the Hype: Why Health Insurance Premiums Won’t Skyrocket in 2014

Health reform’s critics are sounding the alarm: in 2014, they say, health insurance premiums will climb, both for small businesses and for individuals who purchase their own coverage. “Hold onto your hat,” writes  Bob Laszewski, editor of Health Care Policy and Market Place Review. “There Will Be Sticker Shock!” 

Laszweski’s piece has been cross-posted on popular blogs, and his forecasts have been popping up in mainstream newspapers, including  USA Today Such wide circulation makes Laszewski’s warnings worthy of attention, and compels me to ask an important, if impertinent, question: Is what he says true?

Cherry-picking a CBO report

The Congressional Budget Office expects  that the ACA will have a “negligible” effect on the premiums that large employers pay for insurance, and most experts agree. But in the individual market, Laszewski claims that CBO projections show “10% to 13% premium increases.”

Here is what the CBO actually said:

About 57 percent of people buying [their own] insurance would receive subsidies  via the new insurance exchanges, and those subsidies, on average, would cover nearly two-thirds of the total premium.

“Thus, the amount that subsidized enrollees would pay would be roughly 56 percent to 59 percent lower, on average, than the premiums charged under current law.”

Wait a minute: “56 to 59 percent lower?” Where does Laszweski get “10 percent to 13 percent higher?

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