Fix Health Care Policy

Obamacare Medicaid Expansion: States Should Be Realistic, Not Optimistic

Months since the Supreme Court ruling that made the Obamacare Medicaid expansion optional, the state costs associated with expansion still remain highly uncertain—making expansion a dicey course for states and their budgets.

Indeed, states should not lose sight of the fact that the original Medicaid expansion was coercive for a reason. As Nina Owcharenko, director of Heritage’s Center for Health Policy Studies, points out, “The fact that the authors of Obamacare felt the need to threaten states with total defunding tells you that they knew many states would resist expanding their programs—even with 100 percent federal funding.”

States are still weighing their options. Many of them have commissioned studies to project the state costs of expanding. However, all cost estimates reflect the assumptions used to construct them, and using different assumptions can result in estimates varying wildly between (and sometimes within) states.

Read the rest on The Foundry…

Tags: defunding, different assumptions, Medicaid Expansion, ObamaCare, States, Supreme Court, voluntary

Health Care Spending Remains Stable, but Not for Long

Health care spending actually didn’t skyrocket in 2011–but just wait.

This week, the Centers for Medicare and Medicaid Services (CMS) Office of the Actuary released the National Health Expenditures report for 2011. The report shows that growth in national health spending remained relatively low in 2011, growing at 3.9 percent.

Overall, the U.S. spent $2.7 trillion on health care in 2011, which accounts for 17.9 percent of total gross domestic product (GDP).

There are four major takeaways from the report:

1. A slow economic recovery played a role. The slow growth in health spending correlates with overall slow growth in incomes, jobs, and GDP in 2011. As the report explains, this “raises questions about whether US health care spending will rebound over the next few years as it typically has after past economic downturns.”

Read the rest on The Foundry…

Tags: Centers for Medicare and Medicaid Services, economic downturn, health spending, National Health Expenditures report, ObamaCare, Office of the Actuary, slow growth

Obamacare Exchanges: State of the States

Last week, the Department of Health and Human Services (HHS) gave seven more states “conditional approval” to operate state-run Obamacare exchanges.

The announcement came two days after the deadline for HHS Secretary Kathleen Sebelius to determine which states will be ready to run their own exchanges in 2014. So it appears HHS was dressing up its numbers by granting conditional approval to more states—including ones that, in the end, will likely prove either unwilling or unable to set up state-run exchanges.

A handy summary table compiled by the Kaiser Foundation shows that exactly half (25) of the states are a firm “no.” As for the other half, HHS has so far granted conditional approval to 19 of the 21 states that submitted a blueprint for creating an exchange. The two others are Illinois and Mississippi. Mississippi’s governor wrote Sebelius on December 28 restating his opposition and informing her that Mississippi’s insurance department does not have legal authority to continue pursuing its plan for setting up an exchange on its own. The remaining four states have expressed some interest but have not yet even submitted blueprints.

Read the rest on The Foundry…

Tags: conditional approval, HHS, HHS Secretary Kathleen Sebelius, ObamaCare, opposed, state health insurance exchanges

The Washington Post Agrees: It’s Time to Make a Down Payment on Medicare Reform

The editorial board of The Washington Post, no organ of conservative opinion, is absolutely right: “Medicare as we know it is not sustainable,” and the “ultimate solution” is structural reform. Bingo.

The right structural reform is to expand Medicare’s defined-contribution financing (routinely called “premium support”) as it broadly exists today in Medicare Part D to the entire Medicare program.

As the Post’s editors observe, consensus does not yet exist on Capitol Hill for comprehensive structural reform. However, there are several short-term, bipartisan proposals compatible with structural reform that can improve the program, trim the debt, and reduce the dangerous financial pressures that threaten Medicare’s viability.

The Post’s key recommendations—yielding an estimated 10-year savings of $420 billion—largely track The Heritage Foundation’s proposed changes for traditional Medicare as part of its comprehensive budgetary reform proposal, Saving the American Dream.

Read the rest on The Foundry…

Tags: defined-contribution financing, editorial board, Medicare reform, Saving the American Dream, structural reform, The Washington Post

The Slow Dismantling of Obamacare

Things aren’t going so well for Obamacare.

Even Democrats in Congress aren’t huge fans any more. It seems after passing the law and finding out what’s in it, the allure has faded—so much so that Congress actually repealed part of Obamacare in the fiscal cliff deal last week.

That’s right—part of Obamacare has been completely undone. It was the Community Living Assistance Services and Supports (CLASS) Act, essentially a new entitlement program for long-term care. But this new government program for people who end up needing assisted living or other long-term services was poorly designed and bound to fail,  as Heritage’s Alyene Senger explains.

“CLASS was a bad deal for both taxpayers (who would likely have had to bail out the program) and beneficiaries (who would be better served by choosing among private options),” Senger wrote.

The program was so poorly designed that one of its own administrators warned Congress in 2011 that the program could collapse.

Read the rest on The Foundry…

Tags: bad deal, CLASS Act, entitlement, government program, ObamaCare, taxpayers

Fiscal Cliff Deal Undoes Part of Obamacare

Though the government’s entitlement spending is still spiraling out of control, taxpayers have finally caught a break: The recently passed “fiscal cliff” deal included the repeal of one of Obamacare’s worst provisions, the Community Living Assistance Services and Supports (CLASS) Act.

The CLASS Act was a new entitlement program included in Obamacare. CLASS was created as a voluntary, government-run long-term care (LTC) program. It was supposed to be fully funded from the premiums paid by its beneficiaries and require no federal taxpayer dollars.

But the program was so poorly designed—much like the rest of Obamacare—that even the Obama Administration had to admit it wouldn’t work. A letter to Congress in 2011 from a CLASS administrator warned of extreme adverse selection in the program, stating that “if healthy purchasers are not attracted to the CLASS benefit package, then premiums will increase, which will make it even more unattractive to purchasers who could also obtain policies in the private market. This imbalance in the beneficiary pool would cause the program to quickly collapse.”

Many experts warned that the program would require either a mandate to participate or a permanent taxpayer bailout.

Read the rest on The Foundry…

Tags: CLASS Act, deal, fiscal cliff, ObamaCare, poorly designed, taxpayer dollars

Taxpayer-Backed Pharmaceutical Company Fined for Illegal Kickbacks

A California pharmaceutical company that has received federal subsidies under the Obama Administration agreed to pay $11.4 million last week to settle allegations that it bribed medical professionals to prescribe and sell its drugs.

The allegation was detailed in a civil complaint filed in federal court in March 2009. The following year, the company was awarded hundreds of thousands of dollars in tax credits through an Obamacare grant program.

Last week, the Justice Department announced that Victory Pharma had agreed to forfeit $1.4 million to resolve charges under the Anti-Kickback Statute, and paid another $9,938,310 in penalties under the False Claims Act.

The payments settle allegations by a company whistleblower who claimed that Victory paid “kickbacks” to doctors and pharmacists who agreed to prescribe and sell, respectively, three of the company’s brands: Naprelan, Xodol, and Fexmid.

According to unsealed court documents, Victory’s “payment of illegal kickbacks to physicians…has caused numerous false or fraudulent claims for payment or reimbursement” to be filed with various federal health insurers, including Medicare, Medicaid, and TRICARE.

The court documents, embedded below, claim that Victory “trained its sales representatives to provide physicians with cash payments, alcohol, tickets to sporting events and concerts, golf outings and other trips, and other such personal gifts for the specific purpose of influencing the physicians to prescribe” Victory’s products.

Read the rest on The Foundry…

Tags: grant program, kickbacks, ObamaCare, pharmaceutical company, tax-payer funded

12 Days of Obamacare Surprises: An Optional Medicaid Expansion

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the past 11 days, Heritage has highlighted one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now. This Christmas morning will be the last day in this blog series and will highlight a positive Obamacare surprise.

In 2014, Obamacare expands Medicaid eligibility to able-bodied, childless adults earning up to 138 percent of the federal poverty level (FPL). If a state chose not to expand, the federal government would stop funding their existing Medicaid programs. The Congressional Budget Office (CBO) estimated that by 2016, Obamacare would drive an additional 17 million Americans into Medicaid.

Thankfully, the Supreme Court ruled that Obamacare’s Medicaid expansion was unconstitutionally coercive, ensuring state that chose not to expand would not lose existing federal assistance. Due to the Court’s ruling, the CBO now estimates that 6 million less Americans will be enrolled in the failing Medicaid program in 2022.

Surprise: While additional federal funding is available to those states that expand, the states will be burdened with the true cost. At least 20 states are planning to not expand or are unlikely to expand their Medicaid programs, according to Politico. The Supreme Court’s decision dealt a major blow to Obamacare and shifted a great deal of power to the states. This Christmas, in light of Obamacare’s many other mandates and requirements, this optional part of the law is certainly something to be thankful for.

12 Days of Obamacare Surprises:

11. Unlikely deficit reduction…

10. Unelected bureaucrats on IPAB…

9. Increased employer penalties…

8. More cuts to Medicare…

7. Loss of employer-sponsored insurance…

6. A 50/50 split on enrollment estimates…

5. More uninsured Americans…

4. Increased exchange subsidies…

3. Big tax increases…

2. The small business tax credit…

1. And the individual mandate.

Tags: federal funding, mandates, Medicaid, Obamacare surprise, requirements, States, true costs

12 Days of Obamacare Surprises: Deficit Reduction?

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next two days, Heritage is going to highlight one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now.

Obamacare was passed into law under the guise that it would expand access to health coverage while simultaneously reducing the federal deficit.

In 2010, the Congressional Budget Office (CBO) estimated that Obamacare would result in deficit reduction totaling $143 billion from 2010–2019.

In 2012, the CBO estimated that Obamacare would result in deficit reduction totaling only $109 billion from 2013–2022, $34 billion less than in 2010. Among other updates, this is due to the rising costs of subsidies in the exchanges.

Surprise: The CBO lowered its deficit reduction projection by 24 percent, revealing that Obamacare will cost the American public far more than anticipated. Turns out, the best things don’t come in big, Obamacare-sized packages.

12 Days of Obamacare Surprises:

10. Unelected bureaucrats on IPAB…

9. Increased employer penalties…

8. More cuts to Medicare…

7. Loss of employer-sponsored insurance…

6. A 50/50 split on enrollment estimates…

5. More uninsured Americans…

4. Increased exchange subsidies…

3. Big tax increases…

2. The small business tax credit…

1. And the individual mandate.

Tags: "deficit reduction", CBO, Medicaid Expansion, Obamacare surprise, rising costs, subsidies

12 Days of Obamacare Surprises: The Independent Payment Advisory Board

Not all surprises are good. When it comes to Obamacare, the original projections are turning into unfortunately different realities. For the next three days, Heritage is going to highlight one of the various changes in Obamacare projections (e.g., cost, enrollment, etc.) from when the law first passed until now.

Obamacare created the Independent Payment Advisory Board (IPAB), which consists of 15 unelected bureaucrats who are tasked with finding savings within Medicare to meet a new, fixed target for spending growth in the program. The board’s recommendations will be implemented unless Congress enacts an alternative proposal that amounts to the same level of savings.

In 2010, the Congressional Budget Office (CBO) projected that IPAB would result in Medicare savings of $15.5 billion from 2010–2019.

In 2012, the CBO projected that the IPAB would result in zero savings for the years 2015–2019.  According to the CBO, “…the IPAB mechanism will not affect Medicare spending during the 2011-2022 period.” Later, in a letter regarding the repeal of Obamacare, CBO estimated that the IPAB could save $3.1 billion over the 2013–2022 period, but cautioned “That estimate is extremely uncertain because it is not clear whether the mechanism for spending reductions under the IPAB authority will be triggered under current law over the next 10 years.”

Surprise: The IPAB is yet another Obamacare plan that not only sounds like a bad idea, it is a bad idea. The IPAB is like a fruit cake—and it’s time to regift.

12 Days of Obamacare Surprises:

9. Increased employer penalties…

8. More cuts to Medicare…

7. Loss of employer-sponsored insurance…

6. A 50/50 split on enrollment estimates…

5. More uninsured Americans…

4. Increased exchange subsidies…

3. Big tax increases…

2. The small business tax credit…

1. And the individual mandate.

Tags: cost control, Independent Payment Advisory Board, IPAB, Medicare, Obamacare surprise