Borrowed from internet searches…all copyrights belong to the authors and not to me, use under the common license when available, I guess…there is such wonderful anonymous collage work on the internet…it appears it is the only news which is Not Fake News these days…fake news for fake politicians, indeed, do they deserve anything better…
Now that the AHCA is dead, we can start to have a serious discussions about VIABLE solutions for the health care dilemma Americans are facing. In fact, a minority of American are uninsured, but Medicaid and Medicare are both facing long-term hurdles since their costs are growing faster than nominal GDP.
In my previous article, I discussed my repulsion for the AHCA, which progressively fell out of favor. But don’t think I am a fan of ACA, it is also something that cannot survive the long-term.
As usual, the Billions of readers consulting my comments have already remarked that I am wrong, that Medicaid is much more expensive than ACA. But obviously, it is because no one thinks anymore, they delegate thinking to Group retarded-ness, Twitter and facebook…even DC doesn’t think for itself anymore, except when comes the time to create corrupt shenanigans…
Naturally, I won’t sink everyone in details, it would be the best way to lose an argument, and an audience. But let’s just rough out some numbers for the sake f it.
From the Congressional Budget Office (CBO) The Budget and Economic Outlook 2015-2016, Apendix B (Updated Estimates of the Insurance Coverage provisions of the Affordable Care Act (ACA)) we get a few numbers on the cost of Obamacare.
P. 117 Table 1:
and P.120 Table 2:
From the ACA law, we get the Table of Maximum Premium Contribution by Family percentages:
and from The 2016 Actuarial Report on the Financial Outlook of Medicaid, Table 19, page 62:
And Finally, from the “Brief summary of Medicaid and Medicare” November 2016, page 31 and prepared by the Office of the Actuary, Centers for Medicare & Medicaid Services, Department of Health and Human Services, we get the following:
“As with all health insurance programs, most Medicaid beneficiaries incur relatively small average expenditures per person each year, and a relatively small proportion incurs very large costs. Moreover, the average cost varies substantially by type of beneficiary. Estimates for 2015, for example, show that Medicaid payments for services for 28.0 million children, who constituted 40.8 percent of all Medicaid beneficiaries, averaged $3,316 per child; for 24.5 million non-disabled non-aged adults, who represented 35.7 percent of beneficiaries, payments averaged $5,421 per person. Of these adults, 9.1 million were newly eligible under the Medicaid expansion, with average per enrollee costs of $6,351. Still, other groups had much larger per-person expenditures. Medicaid payments for services for 5.5 million aged, who constituted 8.1 percent of all Medicaid beneficiaries, averaged $15,099 per person; for 10.5 million disabled, who represented 15.4 percent of beneficiaries, payments averaged $19,355 per person. When expenditures for32 these high- and lower-cost beneficiaries are combined, the 2015 payments to health care vendors for 68.5 million Medicaid beneficiaries averaged $7,487 per person.“
Now, most people believe that Medicaid is so costly, that extending a paying form of medicaid to the non-insured would be exorbitant, that the private sector offers much better solutions. Well, nothing could be further from the truth.
The reason that Medicaid, if one looks at a general average of per covered extended Medicaid enrollee might look expensive is due to 2 main factors. Medicaid covers the riskiest “clientèle” profile of the market. Less wealthy individuals are usually less healthy, and as analysed by health conditions, the current Medicaid population is the riskiest. Secondly, the current demographic of Medicaid is populated by services extended to costly demographics because of the nature of the services, these are Nursing care patients (often referred to dual status patients, because the greater majority is over 64 and is also covered by medicare, and the Handicapped, which have traditionally been more costly to carry. And I say this with no prejudice. If I point to this, is that these 2 groups are not present in the current uninsured, or recently insured through the ACA exchange.
The currently uninsured are healthier adults and very few children. Therefore a potential “clientèle” in majority between the ages of 18 and 64. The recent enrollees in ACA exchange have also mostly been adults, 9 million, against 2 million children.
In the previous tables, the one, Table 19, produced by the Actuarial Report, you can see that the newly enrolled Medicaid recipients carried implementation costs in 2016, making their average per enrollee costs to the program 6,300$. But in the next 3 years, this amounts drops to 5,300$ per enrollee, in fact lower than the comparable “Adults” category, the only difference being the average health.
The CBO estimates that each subsidized Exchange enrollee (those who qualified for a private sector Health Insurance Tax credit) will get a 5,300$ tax credit in 2018. This is the cost to government. But the Enrollees must pay an amount, which is the difference between the premium cost and the subsidy from government. This is the only number I could not yet get an estimate of. But the HHS estimates that the average (but distribution asymmetric tilted towards the left) enrollee had a 275% Federal Poverty Line (FPL) Ajusted Gross Income (AGI). If this is so, one can estimate that in 2018, the average contribution of enrollees should be around 2,400$ to 2,600$ (let’s round this up to 2,500$). If this is the case, it means that the average cost of insurance was 7,800$ (5,300$ + 2,500$).
But if one follows my proposition, and extend to future enrollees a Modified Medicaid (where one would pay to get a Medicaid Health Insurance Coverage). Then, one must subtract the 2,500$ that an enrollee pays to the private insurance company, and will now pay to government. the 2018 5,300$ estimate costs (based on the cost of current new enrollees in the Medicaid program) minus the 2,500$ enrollee personal contribution, results in a net cost to government of 2,800$ per enrollee. And this coverage, the coverage of Medicaid is unlike private coverage in the sense that they are no real significant co-pay, co-insurance or deductibles. But since current enrollees, which appear very satisfied to get Silver Low Cost Plans which are 30/70 co-pay, co-insurance with a deductible around 4,000 to 6,000$ annualy…governemtn could impose to these new enrollees a Platinum Low Cost Plan structure which is 10/90 co-pay, co-insurance. Government could even have the largess of limiting deductible to 1,500$ annually. A plan like this should be a lot more interesting to any potential future enrollees. This is half the price of ACA.
What are the great disadvantagesof this proposition:…well for one thing, with Medicaid, it is true that you cannot: ” I Cancelled my appointments 10 times with no Penalty…”; and they may not offer expresso in the waiting room, the decor may not be as glorious as Entertainment Tonight stage set…but you will get very good medical care.
Now, since DC and wall street and the Media all want to fix the problem with the private sector, we will have to make them a little gift as to “Shut them off”. So we could do without all the special taxes that ACA has imposed. But the get funding revenue, we could, and this will be the least popular element of my proposition instigate a federal slaes tax. Since we cannot trust our leadership to pay for “Health Care for Everyone”, we should have a 2% national federal Sales Taxes on Product and Services (with the exception of essentials such as food, medical services, education and the likes). I estimate that such a tax could bring in around 180 Billion$, this could be split in half, half for Medicaid, half for Medicare.
So, if you transfer the recent ACA enrollees, and project that all uninsured (that is the 16 millions currently subsidized enrollees, plus the remainder 27 millions no insured) get covered in the future, the cost to government should be around 43 Millions * 2,800$ = 120 Billion$ (against the 240 Billiob$ of the ACA to cover everyone). But this cost could be less, because these new enrollees have a lower risk profile, they will consolidate the Medicaid Services provider network, which should bring in economies of scales. With other small charges (charging for the dental services and eyes medical services, which are traditionally covered by Medicaid, but not by the Private sector) and by putting a Platinum Deductible structure, this whole program could be funded and not being kidnapped by Wall Street of private interests.
Therefore, this program would be self-funded, and have some staying power, instead of being kidnapped by private sector appetite.
Naturally, people would have the choice of Joining a Paying Medicaid program (we could call it MedicaidTOO (for Medicaid’s Trump Other Offer), the card could be Purple, for Product differentiation and cultural adequacy, creating a 2 class Medicaid system (free for the really needy, and somewhat less free for the somewhat less needy but deserving). And the Choice would be: MedicaidToo or Private Insurer, but if you go private, you don’t get any government subsidy, you are on your own.
Is there, really, anything as exhausting, futile, as trying to follow a Washington DC Bill of interest to the general population being debated in the Highest popular court of the Country…How many years have I hoped for something intelligent and nonpartisan to emerge from the DC Swamp…to my own exhaustion and despair.
This AHCA (American Heath Care Act, Trumpcare, Obamacare 2.0, American More Of The Same Act, etc…or wathever else you name it) is just really the indication that there is absolutely no solution to hope for amongst the great lawmakers universe which compose the Hill.
A farce…a REDiculous and BLUBBLEitious walk of fame towards the same holes of fiscal suicide.
Why can’t neither of the richest political elites belonging to each party come to grasp that if Obamacare could not survive…AHCA cannot either.
According to the wittiest minds on the hill defending AHCA, this time, the Republicans will make it work because we can trust that if Health Insurance Companies don’t pay anymore federal taxes, that they expenses even costs they never incurred, they may show incredible good faith and suddenly lower premiums…Is that the best they can come with. Because lowered premium is the only sales pitch that could sell this nightmare.
How come the greatest economists on wall street can’t figure out that if government has less revenues to pay for an even more generous proposal, DC will go bankrupt in a few hours after implementation of this New Health Bill.
I mean…really, in this case, a five years old, could do the math…and I mean even a non “savant” 5 years old could figure it out; don’t need to be Asperger here.
I guess the US is the only country where everyone believes that you can get health care for free, and no one has to pay for it.
It reminds me of this ridiculous Micheal Moore moment where this great Hollywood Docu-genious affirms, to an audience all mouth open and drooling :..”look…in Canada, health care is free…you don’t have to pay anything”. Well I guess you don’t Micky, and your docu american friend using a canadian health venue either…but we Canadians had to pay for your American friend’s visit..with our personal income taxes, our product and services sales taxes and all other Canadian Federal and Provincial taxes oriented to subsidize a public heath system…how ridiculously rhetorical can you be Micky…Hollywood educted, obviously…maybe you could join Franky on the “Hill”…
It appears, that increasingly, Americans believe that if the Nasdaq, or the Biotehc and Pharma indexes go up enough….Healthcare will become free because of all these “wonderful” innovations…
Did delusion really build America? Sometimes I really wonder…Its great to believe…but then again, even if cell phones are great tools, we are far from teleportation, yet, the Captain Kirks of the world of politics would have believe otherwise. It’s true that we now do have these great “Retard” watches that can make people believe they are super heroes because their watch told them they climbed 10 stairs today and that this should have them loose at least 10 pounds of their extreme obese fat.
But while the “great brains of Apple, Google, Facebook, Wall Street, Washington DC” work hard at curing all of our ills, I am not sure a cell phone can even venture into taking a glycemic plasma measure, yet.
So can’t we start working on a quality and decent (yes, you have noticed, I did not say the BEST and Most INCREDIBLE) health coverage for All Americans that won’t drive the State to go bankrupt in a whiff.
For those “billions” of readers that frequent my blog….please read this proposition first, its about creating regional clusters through limited consolidation of health markets…then come back here.
Now, I am not unhappy that lawmakers finally backed down from dis-regulating the Health Insurance market…it would have been a disaster. On the other hand, some markets lack the capacity to consolidate economies of scales enough to attain critical levels of population density that may be more fitted for the evolution of the Health Care Services.
Market structure is important, and in this case, market structure of those offering services, before those covering their costs, yet both are intertwined since money dictates.
I still prefer a State limited Health Care Insurance Market against a national one. But still, one must consider that over the past 20 years, health care has developed deeper knowledge with the effect that we have noticed clustering of specialised centers for treatment. Treatment for cancers, for diabetes, for neurodegenerative conditions, for heart disease…etc. In this context, it is very difficult for smaller economies to keep pace and hope for their respective state to see in the near future these kind of clusters grow spontaneously. by allowing some smaller States to regroup in small unions (on the landscape of healthcare only), would give them opportunity to make benefit from critical population mass that would allow for specialized clusters to take foot.
But most importantly, is there not a way to figure out how the governments can participate in HealthCare without turning it bankrupt? The first stept is to make the country understand that there is no single road you can travel where suddenly HealthCare will become “free”. Some people may pay more, others less, some very little…but heathcare cannot be free.
What good is it if they create a HealthCare solution that cannot survive in the long run, will we have the current scenario repeat itself at every regime change?
Yesterday, march 20th, they added an amendment to the AHCA which they believe will allow the Bill to pass both chambers. It adds 150 Billion to the ten-year federal budget forecast. That is an extra 15 Billion in annual deficit to the already 37 Billion of new HealthCare unfunded average annual future liabilities of the AHCA as analyzed the CBO report (Congressional Budget Office Cost Estimate of the American Health Care Act).
Adding to this fiscal whole, the New Congress is already drooling at the fiscal upcoming holiday they may start enacting before July, which may even include retrospective fiscal measures.
So, if the AHCA is already less funded than the ACA it replaces, and this, from the onset…when you factor in the Fiscal Gifts to the Rich and Famous, to these modern Financial Holocaust victims, DC’s faith may take the same direction as Detroit’s municipal administration, and will have to declare bankrupcy…what god will have been the AHCA under this “hospice”?
But, as many overly educated analysts explained this past weekend, we should not worry because Health Insurance Companies only have to lower their Premiums by 50% and everything will work fine…you see, it’s what the CBO forgot to consider, and what those who promote this Bill are claiming: if Premiums go down by 50%, everything will work fine.
It is surprising that with such a window of opportunity, State governors don’t request that from now on, Medicaid should become a strict State sponsored program. No, instead, most of them beg that DC do more. When everybody knows the principal problem we face as a country is that DC wants to do everything.
One of the reasons the Federal government got involved with Medicaid in the first place, was to minimize the differential of wealth between the different States in the barriers it created in allowing all Americans to have somewhat equal access to Healthcare services.
When will Americans have governors that will understand that political clout comes from the money you gather. Let’s have States charge the Medicaid Individual Income Tax portion, and let them administer their own program. By collecting their own Medicaid taxes, they could allow the Federal government to simply become responsible for exercising some form of moderate equalization as to contain excessive wealth spreads between the different states. Then maybe states can start offering and structuring services in a manner more proper to their constituents needs and desires. This should allow a better balance of power politically in their dealings with the Federal government, not only in health care, but in other manners. And aren’t the states the best positioned to understand the market organization their constituents need, instead of these distant Lawmakers from DC?
As for the current AHCA and ACA…I always believed that it is the wrong hybrid approach. The federal government subsidizing net margins of private corporations doesn’t make sense.
My whole view for a solution is far away of any proposition we have heard yet, but it may,
in the long run, offer a better chance at long-term coverage of the maximum amount of Americans, which the current proposition, by setting us back to the pre-Obama levels of uninsured, surely doesn’t fix, but ACA did not either, despite the much wishful thinking.
I believe that the best way to discipline the Health Insurance industry in offering truly competitive pricing is if government competes with it. Since most hospital anticipate that the Republican proposal will hurt their capacity to offer proper services to their clientèle because many hospital depend on Medicaid dollars to cover fixed costs, eliminating anticipated future revenues from ACA policies may have for effect of bankrupting many of them.
This is the reason I believe it would be less costly for government to collect from taxpayers the amounts paid to insurers as the maximum premium amount, and pay the remainder of what is needed to hospital and service providers to support this demographic.
For example, if we take the example from the CBO report on ACHA cost estimates, this is what it could look like:
As I mentioned, the House has just amended the current proposition to modify the Tax Credit Limitations (from page 89, line 23 of the original leaked document, section 36C (c) Limitations) applied only to singles and adjusted for age brackets (limitations amounts) of less than 30 ($2,000), to 30-39 ($2,500), 40-49 ($3,000), 50-59 ($3,500) and 60 to 64 ($4,000).
These limitation increased the out of insurance holder premium portion he had to pay. It is what in fact creates this 14900 premium portion that a 60 years old has to pay from a projected $1,700 under ACA in 2020 to $14,900 under the un-amended AHCA.
But, for the purpose of demonstration, lets look at the 21 and 40 years old individuals in the upper part of the table. Their premiums would be 3,900 and 6,050 respectively. They would incur $1,450 and $2,400 in their share of premium costs. This amount would be collected by government. It would become their share of pay to participate in Medicaid services delivery. The government would then fund the remainder of Medicaid programs to cover the cost between this contribution and the cost incurred for delivery of service.
Since Medicaid delivers cost at a discount over Private coverage, and there is no net margins, the direct and indirect cost to government would be a lot less that the portion of premium they would pay through the Premium Tax Credit, which is a subsidy to Insurance companies, more than to the insured.
This would allow a better consolidation of services for the whole Medicaid programs and guarantee survival of Hospitals. This would effectively create a competition between the public and private sector, requiring private insurers to either concentrate on product differentiation or pure bottom line price competition. Either way, by giving the choice to consumers of which market they want to participate in, you give them choice, and you could then easily require that people are required to have insurance, therefore maintaining the universal mandate.
This approach has a better chance of offering a survival of the funding mechanism as well as a healthy consolidation of the Service provider network that delivers Medicaid services.
It is therefore a Participation Extension of Medicaid, up to 138% under the Federal Poverty Line (which if states repatriate Health Authority, could become each respective States Poverty Line), it is free save for the marginal co-insurance and co-pay amounts, over 138% you gradually pay more following the current tables proposed by the AHCA but measuring the Maximum Medicaid Insurance Premium amount.
The following table taken from the original AHCA proposal would now be entitled:
Maximum Medicaid Insurance Premium amount
Now, obviously, with such a proposal, I will immediately be accused of being a socialist because I support big government…but if government pays less for a better service, how can it be bigger government than subsidizing net margins of private corporations. Or, again, for the same critics…why is government serving people earning less than the median income socialism, but subsidizing families earning more than the median income becomes genuine capitalism.
What the Republicans are proposing is as socialist as the ACA, my solution may be less corporate finance friendly, but it sure has a better chance of long-term survival. Government is already in this business through Medicaid and doing a respectable, and sometime better, job at it than pure private service oriented venues…
Obviously, I make abstraction of people over 64, who are in long-term care, and are on Medicaid. This is purposefully, because they are a different problem which needs to be addressed separately. But one must consider that when analyzing Medicaid costs, often the average per patient cost includes these patients, which makes understanding the true cost government would face in the preceding proposition hard to figure out.