Healthcare

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Why Are Planned Parenthood Offices Not In Low Income Areas?

I was reading Sara Rosenbaum‘s article,
Planned Parenthood, Community Health Centers, And Women’s Health: Getting The Facts Right, in which she made this statement.

For the millions of poor women who depend on Planned Parenthood clinics, this scenario would mean the loss of affordable and accessible contraceptive services and counseling, as well as breast and cervical cancer screenings and testing and treatment for sexually transmitted infections (STIs). The assertion that community health centers could step into a breach of this magnitude is simply wrong and displays a fundamental misunderstanding of how the health care system works.

What bothered me about her statement was that I recently looked up Planned Parenthood locations in the Cincinnati area and was surprised to find that not a single one was located in one of the six highest poverty communities. Since the Planned Parenthood facilities are not in the community they purport to serve, there are several hospitals that are at least as convenient to get to as the Planned Parenthood centers. If you have to get on a bus to see a health care professional then going to a hospital should logically be your first choice. From a policy perspective if our goal is better woman health care then the money going to Planned Parenthood would probably be better spent on improving community health centers which has the advantage of convenience or improving out-patient services at local hospitals which has the advantage of greater medical resources.

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Things That Make Me Go Hmm… Ohio’s Medicaid costs $2 billion less than estimates

Since I had recently researched Ohio’s Medicaid costs in an effort to understand Cato’s critique of Governor Kasich’s budget growth, I was curious where The Columbus Dispatch article, Ohio’s Medicaid costs $2 billion less than estimates, got its numbers. I remembered that Medicaid was over-budget. So I went back and re-read the Budget Footnotes from the Legislative Services Commission for July 2015 and found this statement on page 18.

Medicaid, which comprises close to half of all GRF program expenditures, was $85.2 million above its fiscal year estimate, and FY 2015 GRF Medicaid expenditures were 9.5% above the FY 2014 amounts.

Since the Legislative Services Commission is the score keeper for the Ohio legislature, I wonder where the head of Ohio’s Medicaid got the $2 billion number.

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About 300,000 People Who Paid The Individual Mandate Penalty Probably Did Not Have To

One of the reasons I wrote the post, Affordable Health Insurance And The Individual Mandate, was to point out that if the lowest cost health insurance available on the exchange is greater than 8% of your income then you are exempt from the individual mandate penalty. Although the exemption was not applicable to me I was surprised that I would have been exempt from the penalty. That got me wondering how many people paid the penalty without checking first to see if they were exempt. According to this article, IRS: More paid Obamacare fine than expected, about 300,000 people likely made that mistake. Considering how easy it is to be exempt from the penalty and that 7.5 million people paid the penalty, I am surprised that only 300,000 made that mistake.

The Treasury Department said about 300,000 people who paid the penalty likely qualified for an exemption from having to have health coverage. There are a slew of exemptions from the Obamacare mandate based on income status or certain hardships.

“The IRS will be reaching out to these taxpayers to inform them about available exemptions and note that they may benefit from amending their tax return,” said Mark Mazur, assistant Treasury secretary for tax policy, in a blog post Monday. “This outreach will also help educate taxpayers about the options they have for future years.”

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Small Business Healthcare Relief Act Is Re-introduced

For those who are still interested in Health Reimbursement Accounts Zane Benefits posted an update on the legislation that has been introduced in Congress.

Two weeks ago, a group of legislators re-introduced the Small Business Healthcare Relief Act (S. 1697 and H.R. 2911). The legislation would allow small employers to once again use an HRA to reimburse employees for health insurance premiums and out-of-pocket medical expenses.

I was hopeful that Mr. Boustany  of Louisiana would re-introduce the legislation and that my Representative, Brad Wenstrup,  and my Senators, Rob Portman and Sherrod Brown, would step forward and co-sponsor the bill. This bill is a pretty simple, non-partisan health care reform. Although my representatives did not co-sponsor the bill I am pleased to see more sponsors and a Senate version of the bill. For more information about this bill you can read it at OpenCongress.org.

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Diverging Views On Health Care Reform

Now that the King v. Burwell case is over I was curious whether both sides would find common ground on meaningful health care reforms. I was surprised to hear that Kathleen Sebelius says the law is working as intended and we should use this new opportunity to build on its early success. She is not alone. Sara Rosenbaum provided this list of health care reforms in the article, Post-King: Moving Forward In A New Normal.

  1. Expanding Medicaid To Cover The Poorest People
  2. Making the ACA’s Private Insurance Provisions Work Better For Children, Low- And Moderate-Income Families, And People With Disabilities
  3. Making The ACA A More Potent Force For Cost Containment And Quality Improvement Building Primary Health Care Access For Medically Underserved
  4. Communities And Populations And Addressing The Underlying Social Conditions Of Health

John Goodman thinks there are some serious problems with the Affordable Care Act and lists these problems in the article,

Six Problems With The ACA That Aren’t Going Away.

  1. An Impossible Mandate
  2. Unworkable Subsidies
  3. Perverse Incentives For Insurers
  4. Other Perverse Incentives For Buyers
  5. Lack Of Access To Care
  6. Impossible Burden For The Elderly And The Disabled

It is interesting that neither side talks about the cost of health care for the middle class and the fact that the ACA has made health insurance unaffordable for unsubsidized people. In an ironic twist of fate the Affordable Care Act very existence depends on convincing these healthy, unsubsidized, middle class people to purchase health insurance from the exchange. When you look at the report from Avalere Health, Exchanges Struggle to Enroll Consumers as Income Increases, it is easy to anticipate a death spiral in the exchanges if only 2% of the eligible people with income over 400% over the federal poverty limit are enrolled in the exchanges. The problem for ACA supporters is no longer politics but math. As I wrote in a previous post the cost of health insurance from the exchange versus my grandfathered plan is a very strong incentive for me to keep my existing health insurance. Perversely if my health insurance is not grandfathered for another year, my second best choice is to go without health insurance since I am exempt from the individual mandate because “health insurance from the exchange is not affordable”. Everything is in place for the exchanges to fail and the ACA supporters say the law is working as intended. I guess we have to break it before we can fix it.

 

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Supporting H.R.5860 – Small Business Healthcare Relief Act of 2014

I finally got around to asking my senators and congressional representatives for their support of grandfathered health care plans and H.R.5860 – Small Business Healthcare Relief Act of 2014. This bill which is still in committee looks like it re-instates the Health Reimbursement Accounts for small businesses. The method I chose to ask for their support was to create a letter to representatives and let OpenCongress.org send it to them. The purpose of Open Congress is to:

OpenCongress makes it easy to follow legislation in Congress, from bill introduction to floor vote, as well as profiles for senators and representatives. You can use the site to learn more about issues you care about and connect with others who share similar views.

You can find my letter at the H.R. 5860 page.

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Affordable Health Insurance And The Individual Mandate

2015-06-25 09_54_46-Exemptions Screener _ HealthCare1.govMy biggest financial problem for 2016 is keeping my grandfathered health insurance plan and paying for it with pre-tax money. In 2014 and prior years my health insurance was affordable since it was completely paid for with money from a Health Reimbursement Account(HRA) set up by my employer. Health insurance for healthy people was affordable and the HRA allowed my employer to pay for my health insurance with pre-tax money. Like most health care decisions before the Affordable Care Act it was a no-brainer. Then we passed the Affordable Care Act and everything became complicated and more expensive. In 2015 HRA’s become an inadvertent casualty of the Affordable Care Act. The next casualty I suspect will be my grandfathered health insurance plan. So I have three options:

  1. Convince someone in government to allow me to keep my grandfathered health insurance for another year.
  2. Not carry any health insurance.
  3. Get health insurance from the exchange.

No one should be surprised that health insurance from the exchange is not affordable and the only happy customers are those getting subsidies. According to the HealthCare.gov Exemptions Screener, I should be paying no more than 8% of my income on health insurance. For a couple earning $63,721(400% of the federal poverty level) this is only $425 a month. Last November I looked up the lowest cost bronze plan and it was going to cost me $979 a month or $11,748 a year.  For a couple earning $63,721, health insurance would have taken 18.4% of their income. According to HealthCare.gov a couple like me would have to earn $146,850 a year before a health insurance policy from the exchange became “affordable”. Only the subsidized, wealthy, chronically ill, or naive would choose health insurance from the exchange.

With health insurance from the exchange costing $11,748 or more per year in 2016, self-insurance becomes a financially attractive option.  As a healthy family who has gone without health insurance in the past(1998-2008) and who is exempt from the individual mandate because I cannot purchase “affordable health coverage” from the exchange, the biggest financial risk is a hospitalization that costs more than $12,000. If you have the discipline to have a large enough emergency fund to cover future health costs then this is an attractive, financially efficient second choice. $12,000 per year will buy a lot of health care especially if you are a savvy buyer. If I could get a catastrophic care policy priced at 4% of my income this would be my number one choice since it would be the best of both worlds, encouraging both healthy living and saving for medical expenses.

My first choice is to keep my existing health insurance and to convince the government to reinstate HRA’s for companies with less than 50 employees. My health insurance plan is almost as affordable as the subsidized insurance from the exchanges. As a person who has not filed an insurance claim in the last 15 years, I am by definition the perfect health insurance customer. It is probably in the best interest of the insurance industry to do whatever it takes to keep me as a loyal customer. Although my employer gave me a $500 a month bonus this year to pay for my health insurance I would be financially better off if that money went into a HRA. Taxing a health care bonus is just plain stupid. Once again it is in the best interest of the insurance industry to bring back the HRA before I get comfortable going without health insurance.

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The Irony of 6.4 Million People Learning That They Cannot Afford Health Insurance From The Federal Exchange

The greatest failure of the Affordable Care Act is that it did not make health care more affordable. It is ironic that the 6.4 million people the Affordable Care Act tried to help the most may now be personally affected by this failure. If the Supreme Court decides that it is the responsibility of Congress to fix the bill and not the IRS, these 6.4 million people will wake up to learn that their health insurance is much greater than 9.56% of their income. However uncomfortable it may seem for these 6.4 million people health insurance is neither affordable or a wise use of their limited funds. Although misery likes company I doubt they will derive any enjoyment from being in the same unenviable position as the rest of the people who did not get a subsidy from buying health insurance from the exchanges.

Affordability was the one issue that had the potential of making the Affordable Care Act a great legislative achievement. So the health insurance rates in the exchanges is proof that the supporters either ignored the issue or are so incompetent that they should not be managing health care policy. Recently I completed some affordability calculations using the lowest bronze 2015 health insurance quote for a two person family. Using the $979 per month premium from last November health insurance from the exchange health insurance would be 18.4% of the income for a couple earning 400% of the federal poverty level. This couple would have to earn $122,887 before their health insurance premiums would be 9.56% of their income. It is highly likely that health insurance rates will be much higher for me this Fall so the decision for me is simple. Just like signing up for health insurance as recently as 2008 was a no-brainer, it is a no-brainer in 2015 for me to not purchase 2016 health insurance from the exchange. The Affordable Care Act has made our dysfunctional health care system more dysfunctional.

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Why Is Increased Health Care Spending “bad” And Increased Spending At Wal-mart “good”?

For those folks fascinated by increased health care spending in a stalled economy there is a nice article, Health Spending Unscathed In Shrinking Economy, at the NCPA Health Policy Blog. John Fembup asked the question why is increased health care spending “bad” and increased spending at Wal-mart “good”? Here is my reply.

Historically only a few sectors of the economy have a multiplier effect on the rest of the economy. The two best examples of this is housing construction and the growth of the Goods sector. Most economic recoveries have been led by one or both of these sectors. So when major companies in these sectors report increased sales, this is important economic news. The logic is that if GM, Target, Costco, and Wal-Mart are having good years then it is possible that a broad based expansion is underway.

Historically health care spending had a weak correlation with Personal consumption expenditures(PCE) growth. Until 2014 the Goods sector had a strong correlation with PCE growth. In 2014 the positions changed. Health care spending became the leading contributor to PCE growth and the rest of the PCE sectors look like they were in a stalled economy. Based on this limited data you would have to conclude that increased health care spending does not have a multiplier effect on the economy.

Finally most of the increases in our standard of living can be attributed to innovation and productivity gains in the Goods sector. Health care has a poor record for innovation and productivity gains. The most interesting productivity gain that I have seen in health care was a county project to manage diabetes. It provided better care and lowered costs. If health care acted more like a business then they would adopt a more distributed decision-making organization structure to encourage this type of productivity gain. Health care is inherently a local service requiring local decisions. Instead the government and industry have embraced a more command and control organizational structure that generally gets its productivity gains from economies of scale. Since the Affordable Care Act has not generated any cost savings and has blown every budget, it looks like we got the worst of both worlds, increased centralization with no cost savings. We tried, we failed! It is both sad and exciting to think that if we want to increase our standard of living then it has become imperative that the health care industry innovate and focus on productivity gains. If we want to grow the economy then we have to be smarter about our down health care spending so the sectors that have a multiplier effect can grow.

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Roberts Choice

Once again the Supreme Court will rely on Chief Justice Roberts to craft a political decision in the King v. Burwell case that no one likes but allows the federal government to subsidize health insurance in states that did not set up exchanges. In this case I would not be surprised that he leans with the conservative side. It is obvious that this bill needs to go back to Congress to fix and deferring to the IRS to authorize billions of dollars of subsidies without the very, very clear intention of Congress is just too big a step. Somewhere along the way the judicial system is going to remind Congress that there are consequences in writing ambiguous laws. The obvious choice is to make a Sophie’s Choice type decision and allow the people in those states that did not setup exchanges to avoid the individual mandate penalty and for companies to avoid the employer mandate penalty.  That is what the plaintiffs want. This decision would be the natural sequel to Roberts’ previous political decision on the Affordable Care Act. Like Sophie who had to send one of her children to the gas chamber, Justice Roberts may choose to send the subsidized exchange system to the gas chamber so that the subsidized health insurance lives. This decision has political value in that it allows each side to claim they won something. For the Affordable Care Act supporters they get federal subsidies for health insurance. For the Affordable Care Act critics they get out of the hated mandates and America gets another chance to see if exchanges are sustainable or just the most recent example of cronyism in health care leading to higher costs. If the Affordable Care Act supporters are right that both the individual and employer mandates are necessary for sustainable exchanges then they can make their case to the American people. If the critics are right then they can make the case that we should replace the exchanges with something that is more efficient and sustainable. The exchanges are dead! Long live the exchanges!