Summary: As noted in HJM yesterday, the IRA contains historic advances, including first-ever drug cost controls. Unfortunately, it also perpetuates historic injustices inflicted on people of color by omitting social benefit categories most used by them; in this instance, Medicaid. Single payer would end such discrimination and harm.

The health care coverage concessions made to strike a deal in the latest reconciliation package came at the expense of Black Americans, The Incidental Economist, August 15, 2022, by Gabriella Aboulafia

The recently passed Inflation Reduction Act (IRA) of 2022 is historic and unprecedented. In addition to making the most significant investments in the country’s history to address climate change, it also includes health care provisions that will meaningfully improve the affordability of health insurance and prescription drugs for millions of Americans. But one of the massive health care coverage concessions made during the negotiation process came at the expense of Black Americans; sacrificing certain demographic groups for the sake of political feasibility is not a new feature of the American policymaking process.

In 12 states, an estimated 2.2 million people are uninsured because they have no accessible health insurance options. People in the “Medicaid coverage gap” have incomes that are too high to qualify for Medicaid, but too low to qualify for premium assistance for Affordable Care Act (ACA) marketplace plans. Advocates have been sounding the alarm about this problem since 2014. And researchers have been beating the drum for at least as long, putting out study after study that underscore the positive effects of Medicaid expansion.

Not lost on these advocates and researchers is that states that have not expanded their Medicaid programs, mostly concentrated in the south, have some of the largest shares of Black people. States decisions’ about whether to expand follow a legacy of racialized politics.

Democrats had been trying to get this reconciliation package passed for over a year. To secure Senator Joe Manchin’s (D-WV) vote, they had to prioritize deficit reduction and strike certain provisions. But the health care coverage provisions that they chose to exclude would’ve had an outsized impact on Black people in particular. In addition to excluding a fix for the Medicaid coverage gap, policymakers also dropped the permanent expansion of postpartum Medicaid coverage, which would’ve required all states to extend Medicaid coverage for pregnant people from 60 days postpartum, up to a full year. This provision had the potential to meaningfully improve life outcomes, particularly for Black birthing people, who are three times more likely to die from pregnancy-related causes (52 percent of which occur up to one year after birth) than their white counterparts.

The exclusion of Black Americans from federal policy deals, ostensibly on the basis of political and administrative feasibility, is not new. To reach a deal with southern Democrats, agricultural and domestic workers were excluded from the Social Security and unemployment insurance programs. Many of the key federal policies designed to promote economic opportunity during the New Deal era up until the modern Civil Rights Movement, like the GI Bill, gave white people a leg up and effectively left Black Americans out.

During the debate on the reconciliation bill, Senator Raphael Warnock of Georgia, where over a quarter of a million people do not have health insurance because the state has refused to expand the program, introduced an amendment to address the coverage gap. Only five senators (Baldwin, Collins, Ossoff, Sanders, and Warnock) voted to consider the amendment.

Several Democratic senators came out and said they would be voting no on any and all amendments,  because they would distract, divide, and put the rest of the bill at risk. But choosing to sacrifice the same group of people, time and time again, sends a message about who we value and who we do not. Policy decisions will always entail tradeoffs, and negotiations will always include concessions. But when policy concessions continually come at the expense of the same group of people, it’s not reasonable to conclude it’s a coincidence. It’s reasonable to consider that it’s a defining feature of the political system.

Comment:

By Don McCanne, M.D.

Ouch!  (In contrast, single payer reform would be refreshingly colorblind.)

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Summary: The Inflation Reduction Act, the scaled-down version of “Building Back Better” now headed for presidential signature, has large health insurance provisions. These include multiple first-ever mechanisms for Medicare to control drug costs for CMS and beneficiaries. Let’s use this exciting set of gains as a stepping stone to single payer.

The Inflation Reduction Act is a Milestone Achievement in Lowering Americans’ Health Care Costs, The Commonwealth Fund Controlling Health Care Costs Blog, August 15, 2022, by Lovisa Gustafsson and Sara R. Collins

Increasing Access to Prescription Drugs

Through the IRA, Congress sought to make prescription drugs more affordable through reforms that will reduce the price of drugs and limit out-of-pocket costs for many Medicare patients. Currently, prescription drugs account for about 20 percent of Medicare patients’ out-of-pocket health care costs. Spending on prescription drugs continues to grow as other health spending has decreased.

The federal government was prohibited from directly negotiating drug prices in Medicare Part D, the prescription drug coverage program created in 2003. The IRA allows the government, under Medicare Parts B and D, to negotiate prices for 10 drugs with no generic or biosimilar competition starting in 2026, increasing to 20 [additional] drugs by 2029. In addition to lowering drug prices, Medicare negotiations are projected to reduce government spending by approximately $100 billion over 10 years.

The law also institutes inflation caps in Medicare Part D that limit price increases for drugs year over year. They are a response to drug price increases that far exceed inflation. Tax penalties would be levied on drugmakers that increase the prices of their products more than the rate of inflation. The caps are expected to reduce price growth over time.

While these provisions have the potential to help patients who take these specific drugs by lowering their out-of-pocket costs, the 48 million Medicare beneficiaries who get their drug coverage through Medicare Part D may see benefits as well if the lower drug prices translate into reduced Part D premiums.

The IRA also includes several other provisions that directly reduce some Medicare beneficiaries’ out-of-pocket costs. Most notably, it institutes a $2,000 annual cap for beneficiaries’ Part D spending (which currently has no cap), starting in 2025. Once this limit is reached, patients would have no cost-sharing requirement.

How Would the Prescription Drug Provisions in the Senate Reconciliation Proposal Affect Medicare Beneficiaries? Kaiser Family Foundation (KFF), July 27, 2022, by Juliette Cubanski, et al.

The prescription drug provisions in the Senate reconciliation legislation would reduce the federal deficit by $288 billion over 10 years (2022-2031), according to CBO. It would also reduce out-of-pocket spending by Medicare beneficiaries and limit increases in drug prices for Medicare and private insurance.

Requires the federal government to negotiate prices for some high-cost drugs covered under Medicare. Top-spending brands and biologic drugs without generic or biosimilar equivalents that are covered under Medicare Part D (retail prescription drugs) or Part B (administered by physicians) and are nine or more years (small-molecule drugs) or 13 or more years (biologicals) from FDA approval would be eligible for negotiation. The number of negotiated drugs would be limited to 10 Part D drugs in 2026, [plus] 15 Part D drugs in 2027, 15 Part B and Part D drugs in 2028, and 20 Part B and Part D drugs in 2029 …. CBO estimates $101.8 billion in Medicare savings from the drug negotiation provision…

Imposes rebates on drug manufacturers that increase prices faster than inflation to limit annual increases in drug prices for people with Medicare. From 2019 to 2020, half of all drugs covered by Medicare had price increases above the rate of inflation over that period (1%, prior to the recent surge in the annual inflation rate), and among those drugs with price increases above the rate of inflation, one-third had price increases of 7.5% or more, the inflation rate in early 2022. The inflation rebate provision would be implemented beginning in 2023, using 2021 as the base year for determining price changes relative to inflation. CBO estimates a net federal deficit reduction of $100.7 billion over 10 years from the inflation rebate provision due to both reductions in spending and new revenues …

The Senate Finance Committee legislation also includes several provisions that would reduce out-of-pocket spending for Medicare beneficiaries …

Comment:

By Jim Kahn, M.D., M.P.H.

The Inflation Reduction Act (IRA) provisions for drug cost controls are substantial and laudable. The limits on Medicare Part D cost-sharing are a huge help to beneficiaries. The drug price controls (negotiations and limits to growth rate) are a precedent-establishing foot in the door for regulation. These features echo methods long used in universal coverage plans in other wealthy countries, if less comprehensive in scope.

Other IRA elements are also powerful. The extension of ACA subsidies will help millions. And the tax provisions – higher rates and better enforcement – start to mend our tax structure.

A dedicated health reform advocate might wonder – do these admirable changes undermine our campaign for single payer, or whet society’s appetite for comprehensive reform?

I’m betting on the latter. It’s easier to sell “Medicare for All” if Medicare is working well — conveying what properly designed health coverage looks and feels like. There are still SO many problems in our health care financing system, especially with private insurance and for the un- and under-insured. There is also much more to do within Medicare, outside of the drug realm, eg lowered cost sharing on all services. Thus, there is SO much to gain via single payer.

The reforms offered by the IRA – most notably the mechanisms for controlling drug costs – provide an enticing hint of the broad protections available for individuals and society with a comprehensive universal health insurance system. Let’s build on this success!

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Summary: The newly elected president of the American Medical Association is an accomplished physician, both civilian and military, a philanthropic leader, and a gay parent. He also has a history of opposing even consideration of single payer within the AMA. It behooves him to open his perspective to single payer, just as society has opened to accepting gay relationships.

Jesse M. Ehrenfeld, M.D., M.P.H., wins office of AMA president-elect, AMA, June 14, 2022

Jesse M. Ehrenfeld, M.D., M.P.H., an anesthesiologist in Wisconsin, was voted president-elect of the American Medical Association by the physicians and medical students gathered at the 2022 AMA Annual Meeting of the House of Delegates.

Following a year-long term as president-elect, Dr. Ehrenfeld will be installed as AMA president in June 2023. Dr. Ehrenfeld will be the first openly gay person to hold the office of president-elect, and also will be the first as AMA president.

Service to country and community, Jesse M. Ehrenfeld, M.D. ’04, M.P.H., advocates for impact, Medicine on the Midway, Spring 2021, by Kate Dohner

When Jesse Ehrenfeld began his education at the Pritzker School of Medicine, he expected he would return to his home state of Delaware to be “your average country doctor.” Yet, he has become much more—and far from “average.” …

Ehrenfeld divides his time between advocacy work, clinical practice and research. He is the immediate past chair of the American Medical Association and director of Advancing a Healthier Wisconsin Endowment, a $511 million endowment at the Medical College of Wisconsin. In this role, Ehrenfeld serves as a strategic investor in health, allocating grants to support research, education and community initiatives across Wisconsin. …

Despite his busy schedule, Ehrenfeld, 42, still finds time to dedicate to what is most important to him: family, including his husband, their 2-year-old son, and two rescue dogs.

Subject: Redefining AMA’s Position on ACA and Healthcare Reform, 2013 REPORT OF THE AMA BOARD OF TRUSTEES, presented by Jesse M. Ehrenfeld, M.D., M.P.H., Chair

Much of the current attention has been focused on single payer plans put forth in both the House and the Senate. The AMA continues to oppose this approach and remains focused on strengthening what works and expanding access to and choice of affordable, quality health insurance. Despite pressure from many members of the Democratic caucus, House leadership remains reluctant to take up single payer proposals. Polling has shown that while the concept of single payer, or “Medicare for All” proposals is popular, support falls off sharply when the implications of doing away with current coverage pathways is more closely examined. The AMA continues to support health insurance coverage for all Americans that is focused on pluralism, freedom of choice, freedom of practice and universal access for patients and will direct our advocacy efforts toward these goals.

Comment:

By Don McCanne, M.D. and Jim Kahn, M.D., M.P.H.

There are so many problems in health care in the United States today, that you would hope that the American Medical Association would select as their president-elect an individual who would be dedicated to addressing those problems. Although Jesse Ehrenfeld is highly qualified, the fact that he chaired the governing committee that rejected consideration of a truly effective method of ensuring affordable health care for everyone – single payer – does raise the question whether he is a good choice to be AMA president at this time.

Society has also been struggling with defining sexual roles and the family unit. Enlightened opinion provides for flexibility in relationships between consenting adults, and responsible parenting by two men is widely accepted. Kudos to the AMA for selecting a leader so openly in a non-traditional family structure. Social understanding, attitudes, and policies have changed, for the better.

Similarly, support for broad healthcare financing reform has strengthened. We certainly hope that Dr. Ehrenfeld has evolved in his thinking in the 9 years since the AMA reform policy report, with the continued deterioration of the healthcare system and growing AMA membership support for single payer.

As Sandy (she, her) and Don (he, his) celebrate a 62nd wedding anniversary on August 13^th, and Rani (she, her) and Jim (he, his) celebrate 28 years on August 14th, our primary concern is about the social injustices in our nation, led by health care injustice. The AMA should be assuming a leadership role in ensuring health care justice for all, which they could do by advocating for single payer reform.

Don is a Life Member of the AMA (a special category no longer available), and certainly does not intend to resign because of Dr. Ehrenfeld’s position on Medicare for All, but does intend to speak up loud and clear. As will Jim (albeit from a non-AMA perch). We need comprehensive, accessible, affordable, equitable, quality health care for all, and the AMA needs to help pave the way.

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Summary: Western Europe and other wealthy countries are thriving with social democracy. The US is struggling with social problems and threats to our democratic integrity. A critical part of the difference is the approach to health coverage.

State Legislatures Are Torching Democracy, The New Yorker, August 6, 2022, by Jane Mayer

The vast majority of Ohio residents clearly want legislative districts that are drawn more fairly [than done by GOP legislators]. By 2015, the state’s gerrymandering problem had become so notorious that seventy-one per cent of Ohioans voted to pass an amendment to the state constitution demanding reforms. As a result, the Ohio constitution now requires that districts be shaped so that the makeup of the General Assembly is proportional to the political makeup of the state. In 2018, an even larger bipartisan majority—seventy-five per cent of Ohio voters—passed a similar resolution for the state’s congressional districts. …

This past spring, an extraordinary series of legal fights were playing out. The Ohio Supreme Court struck down the [new, still biased] map—and then struck down four more, after the Republican majority on the redistricting commission continued submitting maps that defied the spirit of the court’s orders. The chief justice of the Ohio Supreme Court was herself a Republican. Russo told me, “If norms were being obeyed, we would expect that there would have been an effort to follow the first Ohio Supreme Court decision. But that simply didn’t happen.”

[Two Trump-appointed federal judges permitted] the 2022 elections to proceed with a map so rigged that Ohio’s top judicial body had rejected it as unconstitutional.

Inside the War Between Trump and His Generals, The New Yorker, August 8, 2022, by Susan B. Glasser and Peter Baker

How Mark Milley and others in the Pentagon handled the national-security threat posed by their own Commander-in-Chief.

Letters from an American, August 9, 2022, by Heather Cox Richardson

[In a week with several major legislative victories] Biden said: “[D]ecades from now, people are going to look back at this week, with all we’ve passed and all we’ve moved on, that we met the moment at this inflection point in history—a moment when we bet on ourselves, believed in ourselves, and recaptured the story, the spirit, and the soul of this nation. We are the United States of America, a singular place of possibilities. … I promise you, we’re leading the world again for the next decades.”

Comment:

By Jim Kahn, M.D.

I just spent two weeks in Switzerland and Germany, for the 110th anniversary of my grandfather’s opening a factory in Heilbronn. My family mostly escaped the Nazi effort to exterminate the Jews. I entered Europe easily with my new German passport, granted under a provision of the post-WWII German constitution guaranteeing those who fled and their descendants the right to German citizenship, without renouncing US citizenship. I am now of two countries, and of two democratic systems with stark differences.

In Europe I saw many benefits of strong social democracy – a free political system committed to providing sound social support to all of its residents. I used the excellent (ample, timely, clean, affordable) mass transit, both local and inter-city. There are cars, but few and no traffic jams that we saw. I noted the clean streets, and low crime permitting unlocked or minimally locked bicycles. I didn’t fear gunshots when I saw two railway employees subduing an inebriated and combative man. I saw one homeless person (actually, a beggar, unsure if he was homeless). I know from my research that there is universal coverage with a standard medical plan.

At home, I experience something quite different. Mass transit is spotty, widely used in a few cities, if ragged and poorly maintained, and sparse in other cities. People resort to cars, en masse, and hence crowded roads. The streets are often poorly maintained and dirty. The rich live in separate compounds. Guns are pervasive. As is homelessness. As is un- and under-insurance for medical care.

Most startling is continued revelations of GOP challenges to the integrity of democracy. Jane Mayer writes of how Trump tried to co-opt the military; luckily, the generals stood firm on the proper role of the military – not to defend a particular president, but to defend democracy. Susan Glasser and Peter Baker describe how Wisconsin GOP legislators used advanced filibustering techniques to create a veto-proof super-majority GOP legislature in a Dem-GOP balanced state. Then they shamelessly refused to abide by state constitutional amendments requiring fair representation. Message: in defense of GOP goals, no democratic norm need be honored. The GOP approach threatens “no democracy”. Rising GOP stars articulate visions of dictatorship.

It was a very good week for Joe Biden and the Dems; important legislation passed with minimal or no GOP support. Including a rebranded omnibus bill with climate action, modest support for health (ACA subsidies and a foot in the door on Medicare drug price negotiations), and modest tax increases for the wealthy and corporations. Will this legislative success boost Dem prospects in 2022 and 2024? Maybe.

Single payer is a linchpin of thriving social democracy. Every European country provides universal health coverage with a standard plan, with a single payer or heavily regulated not-for-profit private insurer system. This approach is efficient, health-improving, and social cohesion-enhancing. Here in the US, 73% of young people support it alongside other progressive policies.

Let’s stave off the end of democracy, and also achieve the universal medical coverage that will solidify our version of social democracy for decades and generations to come.

Summary: Canada’s “Medicare” financing system is a leading example for the US of what single payer can accomplish. Yet there are recurring challenges to the law by a few physicians eager to privatize medical care payment. Last month, the BC Court of Appeals dismissed the latest legal challenge, thereby affirming the public financing system and its commitment to quality universal coverage.

Statement from the Minister of Health on the British Columbia Court of Appeal’s decision in the Cambie Surgeries case, Government of Canada, July 15, 2022, The Honourable Jean-Yves Duclos

The British Columbia (BC) Court of Appeal today released its decision, upholding the ruling of the Supreme Court of BC in Cambie Surgeries Corporation et al. v. British Columbia (Attorney General) which dismissed the constitutional challenge to provisions of BC’s Medicare Protection Act. These specific provisions prohibit patient charges for insured services and the purchase of private insurance to cover these services, as well as dual practice, which occurs when physicians work within the publicly funded health care system and privately, at the same time.

While the Canada Health Act (CHA) was not under direct challenge in this case, the federal government joined the proceedings as a party to support BC in its defence of its legislation, a mirror of the fundamental principles of the CHA, which values equity and fairness over profit and preferential access to required care.

This decision validates our belief that any Canadian who requires medically necessary care should be able to receive it based on medical need and not on the ability or willingness to pay. Patient charges — whether they take the form of charges at the point of service or payment for private insurance — undermine equity.

The Government of Canada will continue to defend universally accessible health care for all Canadians.

Comment:

By Don McCanne, M.D.

The Canadian courts in British Columbia have once again rejected the efforts of Dr. Brian Day and his colleagues to privatize their publicly financed health care system, reaffirming the principles of the Canada Health Act that every Canadian who requires health care should receive it based on medical need rather than on the ability or willingness to pay.

Not only has the basic principle of equity been reaffirmed, “The Court has upheld BC Supreme Court Justice Steeves’ conclusions that the evidence at trial showed that duplicative private health care would increase wait times as well as his conclusions about the harm this would cause to vulnerable people who depend upon the public system.

It is interesting that when we tout the advantages of a single payer system as they have in Canada, the most vocal opposition comes in the form of complaints about their prolonged wait times. Yet their court has concluded that if they had a fragmented public and private system such as ours, their wait times would be further increased, not to mention the harm done to their more vulnerable citizens.

But then we don’t really need the Canadian courts to tell us how to fix our system.  All we need is a sense of health care justice. That we can find in the single payer model.

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Check out how improved Medicare for All with progressive financing will affect your household medical costs.

This translates the recent Healthy California for All Commission findings into a net cost for households.

Spoiler alert: The vast majority of families will save money. This is because the tax plan (which replaces premiums and out-of-pocket costs) protects low and middle income families. (More detail in the calculator FAQs.)

California Improved Medicare for All Household Cost Calculator

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