Category Archives: Health Reform

Repealing Federal Health Reform: Economic and Employment Consequences for States

Source: Leighton Ku, Erika Steinmetz, Erin Brantley, Brian K. Bruen, Commonwealth Fund, Issue Brief, January 2017

From the abstract:
Issue: The incoming Trump administration and Republicans in Congress are seeking to repeal the Affordable Care Act (ACA), likely beginning with the law’s insurance premium tax credits and expansion of Medicaid eligibility. Research shows that the loss of these two provisions would lead to a doubling of the number of uninsured, higher uncompensated care costs for providers, and higher taxes for low-income Americans.
Goal: To determine the state-by-state effect of repeal on employment and economic activity. Methods: A multistate economic forecasting model (PI+ from Regional Economic Models, Inc.) was used to quantify for each state the effects of the federal spending cuts.
Findings and Conclusions: Repeal results in a $140 billion loss in federal funding for health care in 2019, leading to the loss of 2.6 million jobs (mostly in the private sector) that year across all states. A third of lost jobs are in health care, with the majority in other industries. If replacement policies are not in place, there will be a cumulative $1.5 trillion loss in gross state products and a $2.6 trillion reduction in business output from 2019 to 2023. States and health care providers will be particularly hard hit by the funding cuts.
View job loss by state
State Fact Sheets
Appendix Tables
Press Release

As Republicans ready to dismantle ACA, insurers likely to bolt

Source: J.B. Silvers, The Conversation, December 29, 2016

….To entice insurers into the market, the ACA also offered well-established methods to reduce risk. For example, it built in protections for insurers who enrolled especially sick people. It also provided back-up payments for very high-cost cases and protected against big losses and limited big gains in the first three years.

These steps worked well in establishing a stable market for Medicare drug plans when this program started under President Bush in 2006. Competition there is vigorous, rates are lower than estimated and enrollees are satisfied. In other words, the market works well…..

…..But when the time came to pay up for risk reduction in the Obamacare exchanges, Congress reneged and paid only 12 percent of what was owed to the insurers. So, on top of the fact that the companies had to bear the risk of unknown costs and utilization in the start-up years, which turned out to be higher than they expected, insurers had to absorb legislative uncertainty of whether the rules would be rewritten.

It is no wonder that this year they have dramatically increased premiums, averaging 20 percent, to compensate for the extra risk they didn’t factor into the original lower rates. In contrast, underlying health costs are rising at about 5 percent…..

Impact of Affordable Care Act Repeal

Source: Center on Budget and Policy Priorities, December 7, 2016

Some 29.8 million people would lose health insurance coverage if the Affordable Care Act is repealed, data from the Urban Institute show. These fact sheets provide state-by-state data on the number of people who would lose coverage and the loss of related federal funding.
Republican Health Reform Repeal Plan Would Leave 30 Million More Uninsured
Source: Center on Budget and Policy Priorities, December 7, 2016

Commentary: GOP’s Health Reform Strategy Amounts to Repeal Without Replacement
Source: Center on Budget and Policy Priorities, December 5, 2016

Three reasons the US doesn’t have universal health coverage

Source: Timothy Callaghan, The Conversation, October 25, 2016

….Given these facts, it is important to ask: Why isn’t universal coverage through a national health insurance system even being considered in America? Research in health policy points to three explanations.

No. 1: We don’t want it
….In other words, Americans, and conservatives in particular, have a strong belief in classical liberalism and the idea that the government should play a limited role in society……

No. 2: Interest groups don’t want it
….The insurance industry was a key player in this process, spending over $100 million to help shape the ACA and keep private insurers, as opposed to the government, as the key cog in American health care……

No. 3: Entitlement programs are hard in general to enact
….The political system is prone to inertia and any attempt at comprehensive reform must pass through the obstacle course of congressional committees, budget estimates, conference committees, amendments and a potential veto while opponents of reform publicly bash the bill……

Resurrecting Health Care Rate Regulation

Source: Erin C. Fuse Brown, Hastings Law Journal, Vol. 67 No. 1, 2015

From the abstract:
Our excess health care spending in the United States is driven largely by our high health care prices. Our prices are so high because they are undisciplined by market forces, in a health care system rife with market failures, which include information asymmetries, noncompetitive levels of provider market concentration, moral hazard created by health insurance, multiple principal-agent relationships with misaligned incentives, and externalities from unwarranted price variation and discrimination. These health care market failures invite a regulatory solution. An array of legal and policy solutions are typically advanced to control our health care prices and spending, including: (1) market solutions that focus on transparency and consumerism to discipline health care prices; (2) antitrust enforcement to promote competition in the provider market; (3) consumer protections that protect individual uninsured or underinsured patients from unfair prices; (4) health care payment and delivery reforms that alter financial incentives of health care providers to reduce overutilization and improve efficiency; and (5) direct regulation of provider payment rates. The literature on these health care policy approaches reflects the fragmentation of the U.S. health care system, typically considering each approach in isolation, and it is difficult to make sense of an a la carte menu of approaches. This article sets forth an analytic framework to simultaneously and comprehensively evaluate all the policy solutions to discipline health care prices by measuring each solution for its ability to address the health care market failures. Applying this policy-against-market failure analysis leads to the following conclusion: only one solution – direct rate regulation – is capable of addressing the widespread and growing provider monopoly problem. More politically popular market approaches such as price transparency and payment and delivery reforms can correct the market failures from information asymmetries and principal-agent problems, but because they do not address the market power of providers, they will be ineffective to control health care prices and spending without accompanying direct rate regulation. It is time to resurrect rate regulation and place it squarely in the center of any policy strategy to control health care prices and spending.

Kansas: Baseline Report – State-Level Field Network Study of the Implementation of the Affordable Care Act

Source: Rockefeller Institute of Government, Brookings Institution, Fels Institute of Government, ACA Implementation Research Network, December 2014

Researchers at the Kansas Health Institute have just released their baseline report from Kansas and are highlighting the diverse approaches to ACA implementation taken by Kansas state elected officials to the level of the governor. The Kansas report is the 19th baseline study to come out of the 36-state network established by the Rockefeller Institute, in conjunction with the Brookings Institution and the Fels Institute of Government at the University of Pennsylvania, to examine the implementation of the ACA.

Michigan: Baseline Report – State-Level Field Network Study of the Implementation of the Affordable Care Act

Source: Center for Healthcare Research & Transformation (CHRT) at the University of Michigan, Rockefeller Institute of Government, Brookings Institution, Fels Institute of Government, ACA Implementation Research Network, December 2014

The Center for Healthcare Research & Transformation (CHRT) at the University of Michigan has released a baseline report on Michigan’s implementation of the Affordable Care Act (ACA), which shows that the alternative approach to passing and implementing Medicaid expansion in Michigan — a state led by a Republican governor — can be a model for other states with bipartisan or Republican-led governments seeking Medicaid expansion. This is the most recent of the state reports of the 36-state ACA implementation network, a collaborative endeavor of the Nelson A. Rockefeller Institute of Government, the Brookings Institution, and the Fels Institute of Government at the University of Pennsylvania.
Press release

The Impact of Massachusetts Health Care Reform on Access, Quality, and Costs of Care for the Already-Insured

Source: Karen E. Joynt, David C. Chan, Jie Zheng, E. John Orav and Ashish K. Jha,Health Services Research, Early View, September 14, 2014
(subscription required)

From the abstract:
Objective: To assess the impact of Massachusetts Health Reform (MHR) on access, quality, and costs of outpatient care for the already-insured. …

Study Design: We performed a retrospective difference-in-differences analysis of quantity of outpatient visits, proportion of outpatient quality metrics met, and costs of care for Medicare patients with ≥1 chronic disease in 2006 versus 2009. We used the remaining states in New England as controls.

Principal Findings: MHR was not associated with a decrease in outpatient visits per year compared to controls. Quality of care in MA improved more than controls for hemoglobin A1c monitoring, mammography, and influenza vaccination, and similarly to controls for diabetic eye examination, colon cancer screening, and pneumococcal vaccination. Average costs for patients in Massachusetts increased from $9,389 to $10,668, versus $8,375 to $9,114 in control states.

Conclusions: MHR was not associated with worsening in access or quality of outpatient care for the already-insured, and it had modest effects on costs. This has implications for other states expanding insurance coverage under the Affordable Care Act.