By Harris Meyer
Modern Healthcare, June 13, 2019

Employers will be able to hand their workers a chunk of tax-sheltered health reimbursement money and send them off to buy an individual health plan under a controversial rule issued by the Trump administration Thursday.

The final rule, which takes effect Jan. 1, 2020, will prompt an estimated 800,000 large and small employers to fund individual coverage through health reimbursement accounts (HRAs) for about 10 million workers, nearly 800,000 of whom would be newly insured.

Reversing prior policy, the 497-page rule lets employers dole out HRA funds—previously used to reimburse out-of-pocket medical expenses—to employees to buy individual-market plans.

While the HRA money can be used mostly for buying plans that meet Affordable Care Act requirements, employers under the rule can establish a special type of “excepted benefit” HRA for employees to use in buying cheaper short-term plans that don’t comply with ACA rules such as pre-existing condition protections. These special accounts are capped at $1,800 a year.

The ACA requires that companies with more than 50 full-time workers provide their employees with health insurance. Employers can satisfy the requirement if they provide adequate HRA contributions to employees to buy individual coverage.

A wide range of groups expressed fears about negative effects on the individual market if employers offloaded their sicker, more costly workers from their employer group plans to the individual market.

“If the administration’s estimates are right, this would result in a huge influx into the ACA-regulated individual insurance market,” said Larry Levitt, senior vice president for health reform at the Kaiser Family Foundation. “But these new accounts could shift employer-provided health insurance to a defined-contribution approach, leaving workers at greater risk for premium increases over time.”

In the final rule issued Thursday, the agencies decided that an “individual coverage” HRA can only be used to buy ACA-compliant plans. But this type of HRA will only be available to workers who are not offered a traditional group plan, according to Matthew Fiedler, an economist at the Brookings Institution’s Center for Health Policy.

Employers that provide a traditional group plan can offer workers an “excepted benefit” HRA, capped at $1,800 a year, that they can use to buy a short-term plan but not an ACA-compliant plan.

The final rule retained the proposed rule’s provision that employers cannot offer the same class of employees the choice of either a traditional group plan or an HRA-funded individual-market plan.

But the agencies declined to include specific enforcement guidance to determine whether employers are targeting individual coverage HRAs to high-cost employees.

The agencies also acknowledged the likelihood that employees will find the new HRA benefit system confusing, and that they may not understand the coverage limitations of short-term plans.

Contrary to the agencies’ finding that the rule would have a net beneficial effect, Brookings’ Fiedler argued that it will increase individual-market premiums and federal premium subsidy costs by encouraging larger employers with sicker workforces to shift their workers into the individual market.

He was particularly critical of the provision allowing use of excepted benefit HRAs, which are tax-sheltered, to buy short-term plans.

“At best, it’s a poor use of federal funds,” he said. “At worst, it will give firms a tool to shift costs from their healthier workers onto their sicker ones.”

https://www.modernhealthcare.com…

Final rule (497 pages): Health Reimbursement Arrangements and Other Account-Based Group Health Plans
https://s3.amazonaws.com…

---

Trump’s new rule will give businesses and workers better health care options

By Brian Blase (special assistant to the president at the National Economic Council focused on health care policy)
CNN Business, June 14, 2019

While some recklessly claim that the administration has been sabotaging the individual market, this rule makes clear we have been focused on expanding affordable options through choice and competition in all possible venues. We aim to deliver better results than previous policies centered on mandates and a “Washington-knows-best” mentality. Obamacare’s many mandates still keep individual market premiums too high in many parts of the country, but this rule may spur necessary deregulatory reforms as more stakeholders now stand to benefit from a more competitive and free individual market.

https://www.cnn.com…

---

Comment:

By Don McCanne, M.D.

The Trump administration is once again using the fiction that deregulation and choice and competition in health plans “will give businesses and workers better health care options.” What they are enforcing through the rule-making process is further fragmentation of risk pools, greater administrative complexity and confusion, greater transfer of employees into the deficient individual insurance market (or out of the market altogether), greater use of cruelly inadequate short-term insurance plans, and use of health reimbursement arrangements (HRAs) as a tool to switch employees from guaranteed defined benefit health plans to health plans with ever-diminishing defined contributions, shifting yet more health care costs to the already overburdened employees and their families.

As Matthew Fiedler of Brookings states, “At best, it’s a poor use of federal funds; at worst, it will give firms a tool to shift costs from their healthier workers onto their sicker ones.”

The good news is, once we have enacted and implemented a single payer Medicare for All program, this 496 page rule can be dumped into the electronic trash bin along with billions of other pages from the private insurers and from the administrative-procedures electronic files of the health care professionals and institutions, finally allowing us to use our resources for the benefit of patients in an affordable and equitable health care financing system that benefits all.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Testimony by Donald M. Berwick, M.D., M.P.P.
U.S. House of Representatives, Ways and Means Committee, June 12, 2019

Serving as CMS Administrator was the greatest privilege of my professional career. My duties included helping to implement the coverage expansions, quality improvement, and program integrity provisions of the Affordable Care Act, which was passed three months before my arrival.

In effect, I had the honor to help lead “Medicare for Some,” and the successes and potential of that program have given me confidence that a wise choice for this nation would be Medicare for All.

If anyone can show me a payment model that beats Medicare for All in achieving the Triple Aim and universal coverage, I am all ears. But I have as yet seen none. And the nation’s experience with Medicare for Some – as it exists now, and as endorsed by the overwhelming popularity of Medicare in our nation – suggests that we may, indeed, already have an answer in our hands.

I do not wish to minimize or disregard the many obstacles and objections to Medicare for All as a pathway for our nation. But, whereas some others find the obstacles to be insurmountable, I do not. I believe that we have the wits, experience, wealth, and agility to overcome every one, as we have for Medicare as we know it today. To be specific, here are some of the objections:

• That Medicare for All is unaffordable. I think the opposite may be true; that is, without Medicare for All, health care in our nation may be bound to head, as it is now heading, for true unaffordability. Medicare for All is a positive way out. As I noted above, the level of waste in our health care system is enormous. A publicly accountable, transparent, and mission-oriented payer would offer us as a nation leverage against wasteful health care expenditures that is not achievable in the current, chaotic payment environment.
• That Medicare for All is a governmental takeover of health care. It is not. Not one single bill that I know of proposes under any form of expanded governmental coverage that government should become the provider of health care for all Americans. Medicare for All is about paying for care – consolidating payment in a public program. It is not about providing care. Care provision, through today’s array of hospitals, clinicians, nursing homes, and so on, would remain as it is – largely private sector and entrepreneurial.
• That Medicare for All would severely underpay hospitals and clinicians. That would be neither wise nor inevitable. When government becomes the payer for any good or service, and is subject to oversight from Congress, it is and should be held accountable for responsible practices. That is how Medicare works today; and it is how Medicare for All should and would work in the future.
• That Medicare for All implies a financially unrealistic package of health care services. Any insurer – government or commercial – has to end up implementing a defined benefit package, and the content and comprehensiveness of that coverage will always be subject to debate and negotiation. What Medicare for All does do is to move that dialogue into daylight, as we can consider as a nation what we wish to include in universal coverage and what not. That is exactly what happened, for example, when the ACA extended coverage for clinical prevention services, and when Congress took steps toward assuring mental health care parity. The current commercial insurance system does the same – deciding what is and is not covered – but it does that largely out of sight and without any real form of pubic accountability.
• That Medicare for All would unacceptably disrupt people’s current relationships with their health care insurers. Indeed, Medicare for All would give every American not now covered by Medicare a new insurer – a public insurer. Whether this threat to existing bonds between people and commercial insurers in fact troubles Americans I find doubtful. I suspect that what most Americans value is their bond with clinicians, not with insurers.
• That the tax increases implied by Medicare for All are massive. This represents a negative framing of a positive result. Yes, indeed, the fund flows for health care under Medicare for All would become public, as opposed to the private payment now channeled through payroll check deductions and employer contributions to commercial health insurance. These are existing fees – “taxes” really – through private channels. What the American worker cares most about financially is how much he or she takes home at the end of the day. Under Medicare for All, properly designed, that amount – take home pay – goes up, not down.

I end where I began: Medicare for All is not an end in itself. It is a means to achieve what we care about: better care, better health, lower cost, and leaving no one out. I am open to considering any proposal that moves our nation fast and well toward those goals. Compared with Medicare for All, I see none better.

https://waysandmeans.house.gov…

Ways and Means Hearing:
https://waysandmeans.house.gov…

---

Comment:

By Don McCanne, M.D.

For much of his career, Donald Berwick has been an outspoken supporter of improving quality in health care and, more recently, a supporter of Medicare for All. Until we can enact Medicare for All he does support making improvements in the Affordable Care Act. He supports accountable care organizations (ACOs) and value-based care (VBC) as he believes that they are a means to improve quality.

Because of uncertainties about the benefits and deficiencies of ACOs and VBC, some fear that he may have strayed as a supporter of single payer Medicare for All as he pursues these dubious solutions. His testimony before the House Ways and Means Committee should allay those fears. We can continue our efforts to educate our colleagues and the public on the refinements of an ideal single payer model, such as excluding ACOs, but the fundamentals are solid – comprehensive, high quality, affordable, equitable health care for all – and Donald Berwick clearly supports that.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Steven Ross Johnson
Modern Healthcare, June 11, 2019

The American Medical Association will remain opposed to proposals for the U.S. to create a single-payer healthcare system. The group voted narrowly to maintain its stance on Tuesday at its annual House of Delegates meeting.

Delegates of the largest physicians’ organization voted 53% to 47% against adopting an amendment to remove the AMA’s formal opposition to a single-payer healthcare system, ending days of contentious debate that pitted the organization’s leadership against a contingent represented largely by medical students.

“As long as we maintain our blanket opposition our AMA cannot ensure we are a part of every conversation,” said Dan Pfeifle, a fourth-year medical student at the University of South Dakota Sanford School of Medicine and an alternate delegate of the AMA’s Medical Student Section.

Delegates ended up voting overwhelming in favor of adopting a report from the AMA’s Council on Medical Service that reaffirmed efforts to improve upon the Affordable Care Act instead of “nationalized” healthcare coverage.

Some of the report’s recommendations included expanding eligibility for tax credits on insurance premiums beyond 400% of the federal poverty level, as well as to expand eligibility for and increase the size of cost-sharing reductions.

“The AMA proposal for reform, based on AMA policy, is still the right direction … to cover the uninsured, and is cognizant that, in this environment, the ACA is the vehicle through … which the AMA proposal for reform can be realized,” the report stated.

The debate over whether the country should adopt a Medicare for All type of system has gotten increased attention in recent months as it has become a key policy issue among several of the Democratic presidential candidates.

The AMA has long opposed single-payer efforts out of concerns that it would lower provider reimbursement rates and limit patient choice on healthcare coverage and services they can access.

But support for a single-payer system has grown among physicians. At the AMA annual delegates meeting last year, supporters got the body to at least study the impact of changing its policy.

This year, the issue sparked a protest outside of the AMA’s meeting on its first day when medical students joined nurses and advocates to call on the organization to drop its fight against Medicare for All.

More broadly, public opinion for single payer has grown over the years so that a majority of Americans now support such a system. According to a survey conducted by the Kaiser Family Foundation in April, 56% of Americans favor a national health plan in which all individuals got their insurance from a single government plan.

https://www.modernhealthcare.com…

---

Comment:

By Don McCanne, M.D.

The Medical Student Section of the AMA and the medical students who helped organize the protest outside of the Chicago meeting of the AMA House of Delegates may be disappointed because the AMA decided to continue its opposition to single payer reform. But actually it was a phenomenal success in that single payer was defeated by the slim margin of 53% to 47% – a remarkable shift from its previous overwhelming opposition to single payer. As the rationale of the single payer model is better understood, and the ice has been broken by almost half of the delegates, just maybe the AMA might be able to shift to a position of support next June, in plenty of time before the November election.

At any rate, we certainly have the medical students to thank, along with the nurses and other health care professionals and activists. One way we can show our appreciation to the students is to donate to the Nicholas Skala Student Activist Scholarship Fund to provide student scholarships for the Annual PNHP Meeting and Leadership Training and for other student outreach programs:

https://pnhp.salsalabs.org/skalastudentactivistfund

Thankfully, the future of our health care is in their hands.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By James G. Kahn
New Labor Forum, 2019, Vol. 28(2)

Public support for single-payer insurance is astoundingly high, with 68 percent in a recent poll placing high importance on achieving it. The most vociferous supporters are progressives and minorities, but single payer garners support from across the political spectrum. Single payer insurance is not just a policy tweak, nor another layer of complexity on our health-care non-system. It’s revolutionary and transformative and has the potential to both benefit from and build powerful coalitions.

The same cannot be said for all approaches offered by Democrats. They have also proposed several bills for Medicare expansions—mechanisms for individuals to “buy in” to Medicare coverage. At first, they sound attractive, an incremental insurance expansion in the direction of Medicare for All. But close consideration reveals fundamental flaws. There is a long list of reasons that all of us—and especially the labor movement—should oppose these Medicare-for-All impostors in favor of the real deal.

Where should labor position itself? Supportive of any “Medicare” expansion? Or resolutely committed to Medicare for all? After 25 years researching, writing, educating, and advocating in this arena, I propose that single payer is the only solution consistent with universal, affordable health care and with the solidarity values long supported by the labor movement.

Why? There are 13 reasons that Medicare for All is superior to Medicare buy-ins:

1. Medicare for All insures everyone.
2. Medicare for All insures everyone well.
3. Medicare for All keeps everyone in the same game.
4. Medicare for All removes health care as a bargaining burden.
5. Medicare for All delinks health care and employment.
6. Medicare for All enhances administrative efficiency.
7. Medicare for All controls health-care costs in other ways.
8. Medicare for All enhances quality.
9. Medicare for All reduces clinical waste and fraud.
10. Medicare for All empowers patients.
11. Medicare for All empowers doctors (and other providers).
12. Medicare for All fosters a comfortable and lasting patient-doctor relationship.
13. Medicare for All ends battles to protect myriad pieces of the current health system.

For complicated reasons, largely centered on employer-based health-care plans, some unions have opposed single payer. This misses larger considerations: single payer is about supporting working people (and the unemployed, and the rich) with the resources needed for a comfortable, secure life. The labor movement did as much as any great social reform to foster health and security. Single payer is the next great step in this tradition.

Let coworkers know what the real Medicare for All is: Everyone is covered, with the same comprehensive benefits package, from cradle to grave. This is critical to reduce the opposition of some unions, which represent a large portion of workers with employer-provided health care, but a small portion of working people overall. Everyone needs to understand that true Medicare for All is the only way to assure excellent access to health care, regardless of income and employment, and to empower providers and patients to focus on quality care and on each other, not on insurance glitches and administrative paperwork.

James G. Kahn, MD, MPH, has been a professor of health economics at the University of California San Francisco for 30 years and has been active in Physicians for a National Health Program, including president of the California chapter, since 1994.

(This article appears in the spring 2019 issue of New Labor Forum, published by the CUNY School of Labor and Urban Studies. The journal appears three times a year and includes articles on issues relevant to organized labor and working-class communities.)

https://healthpolicy.ucsf.edu…

For the full article:
http://bit.ly/2I7hvvz

---

Comment:

By Don McCanne, M.D.

Labor would benefit greatly from enactment and implementation of Single Payer Medicare for All, yet some in the labor movement remain reluctant to give up health plans they have won through labor negotiations. This article explains why labor should welcome the change to a program that is truly universal – including all labor, that is fully prepaid, that is permanent and will always be there, and that expresses the solidarity that has long been supported by the labor movement.

The link (above) to the full four-page article should be distributed widely to be used to explain to labor why Single Payer Medicare for All deserves their strong support, not to mention using it to bring the entire nation into solidarity behind this truly egalitarian proposal.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Jonathan Gruber and Benjamin D. Sommers
National Bureau of Economic Research, June 2019

Abstract

As we approach the tenth anniversary of the passage of the Affordable Care Act, it is important to reflect on what has been learned about the impacts of this major reform. In this paper we review the literature on the impacts of the ACA on patients, providers and the economy. We find strong evidence that the ACA’s provisions have increased insurance coverage. There is also a clearly positive effect on access to and consumption of health care, with suggestive but more limited evidence on improved health outcomes. There is no evidence of significant reductions in provider access, changes in labor supply, or increased budgetary pressures on state governments, and the law’s total federal cost through 2018 has been less than predicted. We conclude by describing key policy implications and future areas for research.

From the Conclusion

Disentangling which aspects of the ACA have the largest impacts will be critical as policymakers consider both selective restrictions and expansions of the law’s provisions. The effect of the individual mandate repeal and potential barriers to coverage such as Medicaid work requirements have been the focus of recent political discussions, while early forays into health policy among Democratic presidential contenders often focus on making exchange plans more affordable. Understanding the effects not just of having any health insurance but the particular type of coverage also has important implications for health care quality, costs, and patient outcomes. A better understanding of coverage heterogeneity is particularly critical as state and federal policymakers propose a wide range of solutions, such as a public option on the insurance marketplace, moving more Medicaid beneficiaries to private coverage, and – most dramatically – “Medicare-for-All” in various configurations. Ongoing studies of these issues are warranted to continue to inform changes to the ACA and the U.S.’s health insurance system more broadly in the coming years.

https://www.nber.org…

---

Comment:

By Don McCanne, M.D.

Jonathan Gruber and Benjamin Sommers are certainly highly qualified to describe what a decade of the Affordable Care Act has done for health care in the United States. The most important change has been to increase the numbers of Americans who are insured, predominantly through the Medicaid program, along with an improvement in health care access that being insured provides. The remaining improvements are fairly negligible when compared to the need that existed ten years ago and the need that still exists.

The authors tell us that we need ongoing studies of potential solutions such as “a public option on the insurance marketplace, moving more Medicaid beneficiaries to private coverage, and – most dramatically – ‘Medicare-for-All’ in various configurations.” So just what studies do we need?

• Presumably we want everyone to be included. Current studies have shown that, in spite of the increase, we have fallen far short of universality. So when we set up a system that automatically includes everyone, what study do you need to find out if everyone ends up being included? Well, the health policy academics don’t have to do a study of that one since anyone who is discovered to not be enrolled is automatically enrolled on the spot.
• The financial burden of underinsurance has grown worse since deductibles are increasing. So what study do you need to find out how much of a financial burden the patients would face when out-of-pocket health care spending is eliminated (as with HR 1384, Jayapal)? Well, that lets the policy academics off the hook again since there is no underinsurance if there are no medical bills for cost-sharing that has already been eliminated.
• Insurance premiums are a burden for working families who do not qualify for government subsidies. Single payer Medicare for All legislation would eliminate regressive insurance premiums and replace them with progressive taxes that would make health care affordable for everyone. What study do you need to show paying less in taxes would cost the family less than paying more in insurance premiums and other out-of-pocket costs? Do we really even need to ask that question?
• Provider networks, which are a tool to benefit the private insurers, take away from patients choices in their health care while potentially exposing them to higher costs because of surprise bills and out-of-network care. What study do we need of out-of-network care when there is only one universal network for the entire nation, and everyone is automatically included in the network?
• Our unique American health care financing system has already been demonstrated to waste a tremendous amount of funds on administrative excesses, and the Affordable Care Act added even more administrative requirements. It has been shown in other nations that these administrative excesses are not necessary, and, by design, would be dramatically reduced by enacting and implementing single payer Medicare for All. We wouldn’t need the academic policy community to tell us that waste would be drastically reduced, but it might be informative for them to do another study showing us how many hundreds of billions of dollars we would be saving by recovering that waste – savings that could be spent on health care instead.
• With regional planning and separate capital budgets we could improve capacity in regions of need thereby improving access to care in areas that are currently underserved, while avoiding excess capacity that can result in overutilization. Do we really need a study to show us that spending money where it is needed better meets the need?

“Ongoing studies of these issues are warranted to continue to inform changes to the ACA…” Really? The overwhelming evidence is that this decade with the Affordable Care Act has demonstrated that it has largely been a failure in achieving universality, elimination of financial hardship from medical bills, affordability for individuals and society, equity, portability, accessibility, administrative efficiency, and a failure of our health policy community to advance reform that would clearly benefit all of America.

That doesn’t mean that Gruber, Sommers and their colleagues in health policy should be out of a job. Look at price and volume in health care – the two mathematical determinants of spending. For instance, when a new drug comes on the market with a $2 million price tag for a single dose, wouldn’t it be helpful to know if it is priced properly? When a preventive measure is being used by millions of individuals, wouldn’t it be helpful to know if it is really effective in preventing what it is alleged to prevent? Surely they can devise a multitude of studies that are designed to help… guess what… the patient!

We’ve had enough studies that are designed to help insurers and passive investors in the medical-industrial complex when they shouldn’t even be in the picture anymore. Kenneth Arrow, who showed that health care markets do not work for patients, was awarded the Nobel Prize. Maybe there are more Nobels for the health policy community if they will only apply their science to the betterment of health for all of us.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.