The Coming Health Care Apocalypse

Over on Substack,* Nobel laureate Paul Krugman takes a hard look at the impact of the Big Bad Budget Bill that's taking shape in the Senate this week on health insurance. The impact will be worse than grim.

After a quick review of what Obamacare did and didn't accomplish, Krugman writes:

[I]t led to a large decline in the number of Americans without health insurance. It also led to a large reduction in anxiety among Americans with preexisting conditions, who no longer had to fear being denied coverage or being trapped in jobs with health benefits for fear of losing coverage.

Essentially all these gains are about to be wiped out.

Apocalyptic sounds about right. Here's a graphic representation of the impact:

If we look at the Medicaid-eligible population (i.e., mostly those who are too young for Medicare), it looks like this:

Krugman's conclusion: 

Basically, we’re talking about undoing all the progress America has made in expanding health insurance. And as I said, many independent analysts believe it could be substantially worse.

Remember, this isn’t happening to save money: If Republicans cared about the deficit, they could forego those tax cuts. It isn’t happening by popular demand: the Big Beautiful Bill is extremely unpopular already, and will become even more unpopular once people see its effects.

So why is this happening? Krugman's take on the situation is hard to resist:

It’s happening because our government has been taken over by fanatics who believe that, one way or another, they can escape the electoral consequences of making millions of Americans’ lives much, much worse. 

 ___________________________

* You can follow Krugman for free on Substack or, for a small monthly fee, you can get extended commentary. Either way, it's a good deal.

"Four Ways Trump’s ‘One Big Beautiful Bill’ Would Undermine Access to Obamacare"

The nonpartisan Kasier Family Foundation (KFF) News service highlights some of the changes that won House approval and await consideration in the Senate. Presumably convinced that Obamacare won't get repealed anytime soon (after 60+ attempts to do so have failed), the GOP intends to kill it with a thousand cuts. Here are four:

1. Tax Credits Are Jeopardized by Enrollment Hassles

The House-passed bill, which runs more than 1,000 pages, would create paperwork requirements that could delay access to tax credits for some enrollees, potentially raising the cost of their insurance.

More than 90% of ACA enrollees receive tax credits to defray monthly premiums for their coverage. There are two key provisions for them to watch.

One would end automatic reenrollment for most ACA policyholders each year. More than 10 million people were automatically reenrolled in their coverage for the 2025 plan year, with their eligibility for tax credits confirmed via a system that allows ACA marketplaces to check government or other data sources.

The House bill would instead require every new or returning policyholder each year to provide information on income, household size, immigration status, and other factors, starting in 2028. If they don’t, they won’t get a premium tax credit, which could put the price of coverage out of reach.

“Everyone who wants to either purchase or renew a marketplace plan will have to come with a shoebox filled with documents, scan in and upload them or mail them in, and sit and wait while someone reviews and confirms them,” said Sabrina Corlette, a research professor and co-director of the Center on Health Insurance Reforms at Georgetown University.

She and other policy experts fear that many consumers will become uninsured because they don’t understand the requirements or find them burdensome. If too many young and healthy people, for example, decide it’s not worth the hassle, that could leave more older and sicker people for ACA insurers to cover — potentially raising premiums for everyone.

But supporters of the House bill say the current approach needs changing because it is vulnerable to waste, fraud, and abuse.

“This would ensure that enrollees need to return to the exchange to update their information and obtain an updated eligibility determination for a subsidy — best protecting the public against excess subsidies paid to insurers that can never be recovered,” the conservative Paragon Institute wrote in an April letter to top Department of Health and Human Services officials. 

 2. Having a Baby? Getting Married? Expect Coverage Delays

Today, people who experience life changes — losing a job, getting married or divorced, or having a baby, for instance — are considered provisionally eligible for tax credits to reduce their premiums if they sign up or change their ACA plans. That means they would be eligible to receive these subsidies for at least 90 days while their applications are checked against government data or other sources, or marketplaces follow up with requests for additional information.

The House bill would end that, requiring documentation before receiving tax credits. That could create particular hardship for new parents, who can’t confirm that babies are eligible for premium subsidies until they receive Social Security numbers weeks after they’re born.

Policy experts following the debate “did not expect the end to provisional eligibility,” Corlette said. “I don’t know what the reaction in the Senate will be, as I’m not sure everyone understands the full implications of these provisions because they are so new.”

It can take up to six weeks for the Social Security Administration to process a number for a newborn, and an additional two weeks for parents to get the card, according to a white paper that analyzed provisions of the House bill and was co-authored by Jason Levitis, a senior fellow at the Urban Institute, and Christen Linke Young, a visiting fellow with Brookings’ Center on Health Policy.

Without a Social Security number, any application to add a newborn to an ACA policy would automatically generate a hold on premium tax credits for that family, they wrote — increasing their out-of-pocket costs, at least temporarily.

“It puts consumers on the hook for any delays the marketplace is taking,” while the Centers for Medicare & Medicaid Services, which administers the ACA marketplaces, “is cutting staff and adding a lot more paperwork to burden the staff they have,” Levitis said.

Provisions in the House bill that would require ACA enrollees to provide information each year that they reenroll — or when seeking to add or change a policy due to a life circumstance — would increase the number of people without health insurance by 700,000 in 2034, according to the latest CBO estimate.

3. Less Time To Sign Up

The House bill would turn into law a Trump proposal to shorten the ACA open enrollment period. The start date would continue to be Nov. 1. But the window would be shortened by about a month, with an end date of Dec. 15. This affects people in states that use the federal marketplace as well as the 19 states and the District of Columbia that run their own, most of which offer open enrollment into at least mid-January.

Also, as soon as the end of this year, a special enrollment period the Biden administration created would be done away with. It allowed people with lower incomes — those who earn up to 1.5 times the 2024 federal poverty level, or about $38,730 for a family of three — to sign up anytime during the year.

Critics, including the Paragon Institute, argue that this enrollment opening led to fraud, partly blaming it for a steep increase last year in instances of insurance agents seeking commissions by enrolling or switching consumers into plans without their consent, or fudging their incomes to qualify them for tax credits so large they paid no monthly premiums at all.

But supporters — including some states that run their own ACA exchange — say there are other ways to address fraud.

“We anticipate that much of the improper activity can be prevented by security and integrity upgrades to the federal marketplace, which we understand the Centers for Medicare and Medicaid Services (CMS) is implementing,” the National Association of Insurance Commissioners wrote in a May 29 letter to congressional leaders. 

4. Premiums and Out-of-Pocket Costs Will Likely Increase 

The reason? Enhanced tax credits created during the pandemic expire at the end of the year. The House bill doesn’t extend them. Those more generous payments are credited with helping double ACA enrollment since 2020.

The CBO estimates that extending the subsidies would cost $335 billion over 10 years. The House bill instead funds an extension of Trump’s tax cuts, which largely benefit wealthier families.

If the enhanced credits are allowed to expire, not only would premium subsidies be smaller for many people, but there would also be an abrupt eligibility cutoff — an income cliff — for households above four times the federal poverty rate, or about $103,280 for a family of three for this plan year.

Taking into account the smaller subsidies and the cliff, KFF estimates a national average premium increase of 75% for enrollees if the enhanced subsidies expire. The CBO expects that about 4.2 million more people will be uninsured in 2034 as a result.

KFF continues: "Additional, potentiallu devastating, changes also would come from regulations the Trump administration proposed in March and the potential expiration of larger premium subsidies put in place during the covid-19 pandemic.

"Millions of people might drop or lose coverage by 2034 as a result, according to the nonpartisan Congressional Budget Office.

"Combined, the moves by Trump and his allies could “devastate access” to ACA plans, said Katie Keith, director of the Center for Health Policy and the Law at the O’Neill Institute, a health policy research group at Georgetown University. 

Health Affairs: "The Impact Of The Election On Health Policy And The Courts"

The nonpartisan and highly respected journal, Health Affairs, today posted an analysis of some of the more conspicuous (and worrying) changes to the health care scene we might expect to see once Donald Trump's administration is in place. It is, as usual, well worth reading in whole.

The areas that are discussed include:

• the Affordable Care Act (ACA) (primary concern: allowing premium tax credit enhancements to expire entirely after 2025, which could result in 4 million people losing their health insurance coverage; also -- whether by statute, agency regulation, or executive order -- any number of the ACA's protections are at risk)
• Medicaid (during the campaign Trump vowed to leave Social Security and Medicare alone; "experts noted that Medicaid was conspicuously absent from the conversation")
• reproductive health care (abortion, LGBTQ nondiscrimination, reviving the Comstock Act, changing the Administration's position in state and federal lawsuits)
• nondiscrimination and health equity ("Health care is a civil rights issue. . . . Anti-discrimination protections in health are also likely to suffer major blows going forward."
• Medicare Drug Negotiation Program (hard to believe that a program that will save the government and citizens billions will be watered down, but Big Pharma has hated this law from the beginning and it has some attentive allies in the new administration)
• public health (RFK, Jr. -- need I say more? He was named as Trump's nominee for Secretary of HHS; the mind reels)
• the courts (Yup. From the Supreme Court on down, expect change)

The end. (Take that any way you want.)

Tax-Exempt Hospitals & Charity Care: A Mixed Bag

Health Affairs just published (and re-published) a few articles on this topic. Their titles pretty much tell the whole story (but here are links so you can read them yourself):

• US Nonprofit Hospitals Have Widely Varying Criteria To Decide Who Qualifies For Free And Discounted Charity Care, Luke Messac et al. (current issue)
• Nonprofit Hospitals: Profits And Cash Reserves Grow, Charity Care Does Not, Derek Jenkins and Vivian Ho (June 2023)
• Analysis Suggests Government And Nonprofit Hospitals’ Charity Care Is Not Aligned With Their Favorable Tax Treatment, Ge Bai et al. (April 2021)
• In California, Not-For-Profit Hospitals Spent More Operating Expenses On Charity Care Than For-Profit Hospitals Spent, Erica Valdovinos et al. (August 2015)

Although some commentators insist that the provision of charity care is a requirement for obtaining and maintaining federal tax-exempt status, I think that's a serious misreading of § 501(r) of the Internal Revenue Code, which was added to the Code by the Affordable Care Act in 2010. Yes, the Code now requires tax-exempt hospitals to formulate, adopt, and widely publicize a financial assistance policy ("FAP"). But the minimum requirements for the FAP merely include the following: "Eligibility criteria for financial assistance, and whether such assistance includes free or discounted care" (emphasis added). 

1. It is at technically correct that an FAP may not provide for free or discounted care. A wise hospital administrator should probably avoid this option, but it is available. Charity care is still an audit item, even if it is not required, and it's an important part of a hospital's connection to the community it serves.
2. The FAP's eligibility criteria my be written in such a manner that little or no financial assistance is actually provided. Failure to meet the community need for health care requires an explanation, but it does not appear to be a basis for the revocation of tax-exempt status.
3. Discounted care alone would also satisfy the requirements of the FAP. So, presumably, would be a low- or no-interest loan program. Again, § 501(r) does not require the provision of any level of charity care; prudence does, but not the IRC. 
4. The IRS's 63-page final rule to implement the ACA's Community Health Needs Assessment mention charity care in exactly one paragraph of the rule's preamble, and it's in the discussion of the administrative burden on hospitals that have to implement the final rule's requirements. 

None of this is to say that the governing legal standard for federal tax-exempt status ("community benefit") doesn't include charity care. It does; it's just not required. The requisite level of "community benefit" can be satisfied without it, as long as other forms of community benefit (education, training, research, etc.) are deemed to be adequate. 

Many if not most communities in this country have some level of need for charity care. Section 501(r) requires that the level of need be documented along with an exempt hospital's efforts to meet that need. Unfortunately, reporting does not mean the same as providing. Maybe someday it will, but not yet.

Texas Governor Abbott Weaponizes Charity Care

Uncompensated care is a serious issue that requires a serious response from serious politicians. On Thursday, rather than doing something to alleviate the crisis in Texas, Governor Greg Abbott chose to weaponize the issue in his ongoing battle with the Biden Administration over control of the Texas-Mexico border.

Texas's nonprofit and for-profit hospitals alike can be challenged by the volume of uncompensated care they provide. The federal Emergency Treatment and Active Labor Act (EMTALA) requires all hospitals that receive Medicare funds to provide emergency care without regard to the patient's ability to pay. Added to that, if the patient needs to be admitted as an in-patient in order to stabilize their emergency medical condition, the cost of the hospital's EMTALA obligation can really sky-rocket.

Add to that Texas's requirement that nonprofit hospitals must provide a certain amount of uncompensated care in order to maintain their nonprofit status as well as their state tax-exempt status. 

Beginning in 1954 a hospital's federal tax-exempt status required the provision of charity care to the extent of its financial ability, but that requirement ended in 1969. The Affordable Care Act (ACA) does require hospitals to provide charity care, though it does require tax-exempt hospitals to report on community needs, including uncompensated care, and on the hospital's own level of uncompensated care (26 USC § 501(r)). My hope is that the hospital reports, as well as the IRS summaries that the ACA required be sent to Congress, will result in the reinstatement of a charity-care requirement. Time will tell.

As a result of these state and federal rules, the distribution of uncompensated care is spread unevenly among hospitals across the state. There are some for-profit hospitals that report higher levels of uncompensated care than nonprofit providers. And among the nonprofit hospitals, the cost of charity care as a percentage of net revenues varies wildly. This is often a function of location. Residents of wealthier communities tend to have decent health insurance (and other assets to pay for care that is not covered by their insurance policies), while poorer communities have a higher percentage of uninsured and under-insured residents. 

The Affordable Care Act expanded insurance coverage, to be sure, but the uninsured rate in the U.S. is still hovering around 9%, slightly better than our poverty rate of around 11%. Texas's numbers aren't just higher than the national average; they are alarmingly, embarrassingly so. Poverty: 14% (33% higher than the national rate). Uninsured: 16.6% (about twice the national rate). If Texas cared about doing something to improve the health of our poorest residents, it could expand Medicaid eligibility (with matching federal dollars picking up the lion's share of the cost) with the stroke of a pen. 

For that to happen, we would need leaders who are serious about helping our uninsured poor population to get the health care they need. This past week, however, Gov. Abbott demonstrated his lack of seriousness and instead chose to turn uncompensated care into a political football in his on-going battle with the federal government over control of our border with Mexico. On Thursday (Aug. 8) the governor issued an executive order calling upon hospitals to report their costs of providing uncompensated care to patients who are in the country illegally. Abbott's plan is clear: 

"Texans should not have to shoulder the burden of financially supporting medical care for illegal immigrants," Mr. Abbott said in an Aug. 8 news release. "Texas will hold the Biden-Harris Administration accountable for the consequences of their open border policies, and we will fight to ensure that they pay back Texas for their costly and dangerous policies."

Political point: scored. Human suffering: unchanged. 

SCOTUS and Health Agencies (Part 2)

The totally excellent health-policy journal, Health Affairs, posted an analysis of the likely impact of the death of the Chevron doctrine on some hotly (or at least frequently) litigated federal health-law issues: "Supreme Court Overrules Chevron Doctrine: Ripple Effects Across Health Care," by Zachary Baron et al. (I have no idea if this article is available only to subscribers (like me) or is free to the public. The latter, I hope.)

The authors start with Chevron itself, a useful three-paragraph introduction especially for anyone -- lawyers and non-lawyers alike -- with limited or no familiarity with Chevron deference.

After that, the authors focus on six areas of possible impact as a result of the Court's decision in the Loper Bright Enterprises case (discussed by this blog on July 7):

1. Nondiscrimination Protections. This includes "the battle over the meaning of 'sex' under Section 1557 [of the Affordable Care Act], which prohibits discrimination in health care on the basis of race, color, national origin, disability, age, and sex."
2. Medicare Reimbursement. An early test might be a case currently pending before the Supreme Court for its 2024 Term: Advocate Christ Medical Center v. Becerra. As the authors point out, there are few statutes that rival the Medicare statute in complexity, and lower courts often decide these reimbursement disputes by relying on Chevron: If the statutory provision is unclear (which is often the case), the courts defer to any reasonable interpretation by HHS/CMS. That was the case in Advocate Christ Medical Center. If I had to guess, this case might be remanded for reconsideration in light of Loper Bright, but there will be others!
3. Medicare Advantage. Noting that "federal agencies often face hurdles to accomplishing their regulatory goals separate and aside from Chevron, . . . the path forward for litigation over the MA program following Chevron being overruled is not clear." Not necessarily good news for "more than half, or 51 percent, of the eligible Medicare population."
4. Medicare Drug Negotiation. BigPharma has been fighting this program since before its enactment, bringing "a slew of constitutional, statutory, and agency authority claims against the negotiation program, [and] industry has lost on the substance of all their legal arguments." Will Loper Bright help the drug makers in future court challenges to the program. The authors think not.
5. Private Health Insurance. In the more than 2,000 legal challenges to the Affordable Care Act and its volumes of regulations, Chevron has played a role in the final rulings of many cases but far from all. The authors look at a couple of cases involving the No Surprises Act that are currently pending before the Fifth Circuit. The authors conclude: "Now, the Administration and health care providers are sparring about the fallout from the Loper Bright decision and how it will impact the pending Fifth Circuit decisions. Yet with the current Fifth Circuit taking such a strict approach to statutory interpretation even when Chevron remained on the books, the Administration faces a challenging environment there."
6. FDA. Chevron deference has been "critical to allow FDA to use its expertise to administer very complex and technical programs that widely touch industry and health care consumers alike. . . . Overturning Chevron could open the floodgates to challenges of a wide variety of FDA regulations." 

The authors conclude:

This revised legal regulatory landscape opens up new opportunities to challenge regulations and other agency actions by future administrations. These challenges may affect the implementation of agency regulations addressing consumer protections, access to health care services, women’s rights, and other measures that impact health care costs. . . . The level of disruption remains uncertain, and may be felt unevenly, but the trend line remains clear: Courts more than ever will have the final say on complex policy decisions that affect the health of millions of Americans."

Oh, happy day. {sigh} 

Happy Birthday, Obamacare

March 23 marked the 14th anniversary of the enactment of the Patient Protection and Affordable Care Act (PPACA, a/k/a "ACA" and "Obamacare"). and the 10th anniversary of its full implementation (minus occasional trimming by the Congress and the Supreme Court). As Paul Krugman observed today in his subscribers-only newsletter, the program has been a considerable success, defying the predictions and warnings of critics on the right and the left.

The ACA certainly enjoys substantial public support. Krugman points to a graphic from the Kaiser Family Foundation:

(click on image to enlarge)

The newsletter is worth reading, but "fair use" dictates that I share only a little of Krugman's take on the ACA's success:

In any case, Obamacare has worked. It didn’t provide universal coverage, but it did provide health insurance to millions of Americans, some of whom desperately needed that safety net — and it did so without breaking the bank. Predictions that the A.C.A. would be unworkable have been proved wrong. 

This paragraph ends with a warning:

At this point, the only serious threat the program faces — and it is a serious threat — is political: People who kept insisting, wrongly, that health reform would die of its own accord may simply step in to kill it.

Biden's State of the Union Address: 13 Health Care Take-aways

Becker's Hospital Review takes a look at "13 healthcare takeaways" from President Biden's State of the Union address last evening. They include:

1. Expanding Medicare's drug price negotiation scope
2. Limiting drug costs
3. Expanding rebate requirement
4. Closing Medicaid coverage gap [for 10 states, including Texas, that haven't expanded eligibility]
5. Capping the cost of insulin
6. Abortion access
7. COVID-19
8. Affordable Care Act
9. Women's health
10. Taxes
11. Gun violence
12. PACT Act [Resources for Veterans]
13. ARPA-H (Advanced Research Projects Agency for Health ) 

Out-of-Pocket Costs Are Top of the List of Voters' Concerns

Money's tight. Inflation seems to be stuck at a level that bothers voters -- R, D, and Ind alike. Worries that the Fed may back off a notch or two in its current rate-reduction program seems to have spooked the equities markets, and that's an unsettling development to tens of millions of workers and retirees whose retirement plans are in managed stock portfolios. 

Add to all this a broadly shared view that out-of-pocket expenditures for health care are too high, according to polling done by the nonpartisan Kaiser Family Foundation. When registered voters were asked about their health-care concerns, these payments -- copays, coinsurance, deductibles -- were #1 by a lot:

This concern was shared across the political spectrum. As the KFF folks put it: 

What this means is that affordability is now the theme that will resonate most with voters, whether candidates are talking about health on the campaign trail, or policymakers are advancing policy proposals. That doesn’t mean that other themes like “universal coverage” or health care as a “right” (if you lean liberal), or “choice” or “competition” (if you lean more conservative), don’t work with large segments of the population. But with 92% of the population now covered and so many people struggling with medical bills and medical debt, affordability is the big tent theme that will connect with the most Americans.  

Reproductive rights will motivate large groups of voters to go to the poll. The issue polls well with Democrats, independents, and college-educated women, among others. It appeared to have an effect in 2023 elections, but its impact on 2024 remains to be seen. 

To be clear, affordability of health care isn't simply a political issue. It has huge implications for access to health care, even among the 92% of Americans who have health insurance coverage, at least to the extent health care is postponed or not sought at all because of high cost-sharing obligations. Also, when care is postponed or passed up, that has an impact on quality of care, and reduced access and quality affect societal concerns with the justice and fairness of the health care delivery system that continues to price millions of covered individuals out of the market. 

Healthiest & Unhealthiest Counties in the U.S.: Texas is Tops on One of These Lists

Market Watch's latest report (January 5) ranks 576 counties based on "14 key metrics that capture the individual, environmental and structural aspects of health for a given community. This includes measures such as life expectancy and health insurance coverage, water and air quality, and food insecurity and healthcare access." Here are the high- and low-lights:

Healthiest counties:

1. Marin County, Calif.

2. Gallatin County, Mont.

3. San Francisco County, Calif.

4. Arlington County, Va.

5. Maui County, Hawaii

6. New York County, N.Y.

7. Boulder County, Colo.

8. San Mateo County, Calif.

9. Chittenden County, Vt.

10. Bergen County, N.J. 

Unhealthiest counties: 

1. Harris County, Texas

2. Apache County, Ariz.

3. Pinal County, Ariz.

4. Webb County, Texas

5. Hidalgo County, Texas

6. Navajo County, Ariz.

7. Cameron County, Texas

8. Orange County, Texas

9. Livingston Parish, La.

10. Jefferson County, Texas 

No state appears on either list more than three times except for one: Texas. And it's the list no self-respecting government (at the state or county level) should want to be on.

If I were of a statistical bent, I'd compare these lists with three other metrics: per capita income, per capita governmental expenditures, and a map of cancer "hot spots." Interestingly, Medicaid expansion does not seem to play as great a factor as one might expect. Louisiana and Arizona share space on the "Unhealthiest" list, and both are states that expanded Medicaid eligibility. But is it a coincidence that the state with six out of ten counties on that list has not expanded Medicaid eligibility? I believe it has to be a factor. Compare the map at the top with the Kaiser Family Foundation's map of expanded-eligibility states (click to expand the images):

DeSantis Pledges to Supersede ACA

As reported in Becker's Hospital Review (Dec. 4), Ron DeSantis regards the ACA as a failure and has vowed to "repeal and supersede" the Act with a shinier and better alternative. Taking a page out of the Trump playbook in 2016, DeSantis has no plan of his own to offer, but he assured viewers of "Meet the Press" yesterday that his plan will "reduce healthcare costs to ensure affordability for individuals, protect those with preexisting conditions, and scrutinize 'big institutions that are causing prices to be high: big pharma, big insurance and big government.'" 

Right. 

As Abbe Gluck and two co-authors wrote in the Georgetown Law Journal in 2020, "[t]he ACA is the most challenged statute in American history." The authors cite more than 2,000 legal attacks, more than 70 GOP-led attempts in Congress to repeal or strip down the Act, and seven trips to the Supreme Court. Add to the story that "the statute has been rebelled against by the states charged with implementing it, sabotaged by the second President to administer it, and financially starved by Congress," and the story becomes one of "unprecedented statutory resilience."

According to a recent Statista study, tens of thousands of lives have been saved by the ACA, and 40 million of us are enrolled in ACA-related health plans. The same study points out that the ACA was flawed in some ways and -- due in part to the intransigence of twelve states that still haven't expanded Medicaid eligibility -- 19.5 million Americans are still uninsured. 

So the results have been mixed, though we will never know what the original Act would have accomplished, because of significant changes from Congress and SCOTUS before it was even implemented.  

The empty rhetoric and even emptier promises of DeSantis and Trump are recent illustrations of the wisdom of H.L. Mencken: "There is always an easy solution to every human problem -- neat, plausible, and wrong." A less well-knowm but perhaps even more apt Mencken quote is this: "The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary."

When Your "Free" Annual Check-up Isn't Free

A good reminder from the Kaiser Family Foundation (and broadcast on NPR's "Morning Edition" today: The ACA requires that insurers pay for an annual physical with no out-of-pocket payment by the insured patient, but that doesn't cover "extra" services that are offered during the same visit.

What's "extra." Like so much in health care, it depends.

One patient, Christine Rogers, answered her doctor's screening questionnaire honestly when it asked about depression. Her mother had unexpectedly died in a nursing home 13 hours away, and she answered the questionnaire with "It was a horrible year. I lost my mom." That triggered a 5-minute conversation about depression and an additional charge - not covered by her insurer - of $76.06.

Ms. Rogers felt a bit betrayed by a screening process that depends upon honest answers to questions about a patient's physical and emotional condition and then adds to her bill at the rate of $912.72 an hour.

The hospital and physician group stood behind the charge but -- perhaps to avoid being highlighted by KFF and NPR -- wrote off the extra charge.

The take-away: The ACA guarantees you one free physical per year, but what's included in that free service may vary from provider to provider, with precious little guidance to constrain billing practices.

Caveat emptor, indeed.

Health Insurers' Tactic Resurfaces With a Vengeance: Deny, Deny, Deny

I once had a Health Law student who had been an HMO employee in a previous life. She was the one who answered the phone when a provider (hospital, clinic, physician, etc.) dialed 1-800 for pre-authorization for a procedure, hospitalization, or prescription item (medication, wheelchair, PT, etc.). Her standing order was simple: Always deny the request first time around. In Texas, we call that "bad faith claims handling" and it's a tort that can result in compensatory and punitive damages. So much for the deterrence effect of tort law!

A lot has changed in health care in the intervening two decades, byt "deny, deny, deny" is still with us. It's frustrating for policy holders (a/k/a patients and human beings), and it's aggravating for the providers. It's also a form of Russian roulette that results in dangerous delays in providing needed health care goods and services.

A recent article in Becker's CFO Report (Aug. 14, 2023) highlights the problem. As described by a hospital CEO with 37 years of experience in health care, bare-knuckle negotiations over reimbursement rates get all the media attention when providers and a payor appear to be at impasse and termination of the contract is a looming reality for thousands of patients whose providers are about to be "out of network." Reimbursement rates are the "above the surface" story in these negotiations, but eventually both sides compromise and crisis is averted.

The "below the surface" issues, though, have an outsized effect on providers. These issues stem from denials of payment for any of the myriad reasons insurers can cite: service or medication not covered, no pre-authorization or referral from a gatekeeper, DRG down-coding, difference in clinical judgment about medical necessity . . . . The list goes on. Here's the eye-popping heart of the article:

Data and numbers on denial rates are not easy to find, but some examination paints a picture rich with variation. An analysis of 2021 plans on Healthcare.gov conducted by KFF found nearly 17 percent of in-network claims were denied, with rates varying from 2 percent to 49 percent. The reasons for the bulk of denials are unclear. About 14 percent were attributed to an excluded service, 8 percent to lack of pre-authorization or referral and 2 percent to questions of medical necessity. A whopping 77 percent were classified as "all other reasons." 

Adding to the inconsistency is the fact that health plan denial rates fluctuate year over year. In 2020, a gold-level health plan offered by Oscar Insurance in Florida denied 66 percent of payment requests; in 2021 it denied 7 percent.

And here's a refrain I hear from physician friends from all over:

"Nobody becomes a physician because they hope to feel like a cog in a factory," Michael Ivy, MD, deputy chief medical officer of Yale New Haven (Conn.) Health, told Becker's. "However, between meeting the demands of payers for referrals, denials of payment and increased documentation requirements in order to assure proper reimbursement and risk adjustment, as well as an increasing number of production metrics, it can be difficult not to feel like a cog." 

As for the government's role in policing the conduct of these insurers:

Authors of the 2010 Affordable Care Act worried that provisions to expand health insurance access — such as barring health insurers' refusal to cover patients with preexisting conditions — could cause them to ratchet up other tactics to make up for the change. With this in mind, the law charged HHS with monitoring health plan denial rates, but oversight has been unfulfilled, leaving denials widespread.  

When you consider insurance company profits and their executive salaries, it's apparent that the "middle men" in these transactions are getting rich at the expense of providers and patients alike. Where's a good, old-fashioned congressional or FTC hearing when you need one? 

Public Health Law Priorities to Pursue While Congress Recesses

The American Public Health Association (APHA) sent out its call to action during the current Congressional recess. In addition to providing advice on how to press your views on public-health issues while the Senators and Representatives are away, the APHA missive provides links to a wealth of policy papers, reports, and the like across a broad spectrum of public health. And its not only about Congress. As the APHA suggests, state and local officials -- traditional wielders of "police powers" -- also need to be educated about public health, about which so much misinformation and disinformation emerged during COVID. And there are op-ed opportunities. The list goes on . . . .

Congressional recess is here (July 31 – Sept. 11 for the House and July 31 – Sept. 4 for the Senate) which makes this month the perfect time to raise your public health voice and urge your members of Congress to take action. Join the Speak for Health campaign with APHA’s suggested advocacy activities:

•  Got a minute? Head over to APHA’s action alerts and send a quick message to your elected officials on a variety of topics including environmental health, reproductive rights, gun violence and public health funding.
• Schedule a meeting with your members of Congress, virtually or in person, to discuss public health priorities. You can call their local offices for details on scheduling a meeting.
• When speaking to elected officials, point to APHA’s 2023 advocacy priorities as key areas for action.
• Boost your advocacy efforts with issue fact sheets that summarize priority advocacy issues and state fact sheets that break down public health in each state.
• Write and submit an op-ed to your local paper. APHA offers op-ed writing tips and sample op-eds on gun violence, climate change, public health funding and reproductive health which you can request by emailing speakforhealth@apha.org.
• Engage elected officials on social media about their support for public health. You can include social media shareable images found on the Speak for Health page, and make sure you use the hashtag #SpeakForHealth!
• Attend a town hall and ask your elected official key questions about their commitment to supporting public health. You can contact their office to ask when the next town hall is scheduled.

Your voice helps shape how members of Congress view critical public health issues, and your community’s public health concerns deserve to be heard by our nation’s leaders. Join us and Speak for Health — for today and for future generations.

The APHA 2023 advocacy priorities cover a lot of territory and offer something for everybody:

• Increase and protect funding for vital public health agencies and programs and strengthen the nation’s public health infrastructure. 
• Uphold the Affordable Care Act and expand access to health coverage and services. 
• Address the health impacts of climate change. 
• Protect access to reproductive health care. 
• Pass a 2023 Farm Bill to protect nutrition security. 
• Protect nutrition standards for children. 
• Uphold and strengthen critical public health laws and regulations and reverse damaging rollbacks. 
• Address the nation’s gun violence epidemic.

For more information on APHA’s advocacy priorities, visit https://www.apha.org/advocacy or contact Don Hoppert at Donald.Hoppert@apha.org or Jordan Wolfe at Jordan.Wolfe@apha.org.   

FDR's Four Freedoms on the 4th of July 2023

In his State of the Union speech on Jan. 6, 1941, FDR famously offered up "the Four Freedoms" to explain why the United States was at war abroad and on a war footing at home. He introduced the Four Freedoms with this eerily familiar list of goals for the country: 

[T]here is nothing mysterious about the foundations of a healthy and strong democracy. The basic things expected by our people of their political and economic systems are simple. They are:

Equality of opportunity for youth and for others.

Jobs for those who can work.

Security for those who need it.

The ending of special privilege for the few.

The preservation of civil liberties for all.

The enjoyment of the fruits of scientific progress in a wider and constantly rising standard of living.

These are the simple, basic things that must never be lost sight of in the turmoil and unbelievable complexity of our modern world. The inner and abiding strength of our economic and political systems is dependent upon the degree to which they fulfill these expectations.

Many subjects connected with our social economy call for immediate improvement.

As examples:

We should bring more citizens under the coverage of old-age pensions and unemployment insurance.

We should widen the opportunities for adequate medical care. [emphasis added -- this is a HealthLawBlog, after all]

We should plan a better system by which persons deserving or needing gainful employment may obtain it.

Then FDR got to the part of his speech that made it so enduring:

In the future days, which we seek to make secure, we look forward to a world founded upon four essential human freedoms.

The first is freedom of speech and expression--everywhere in the world.

The second is freedom of every person to worship God in his own way--everywhere in the world.

The third is freedom from want--which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants-everywhere in the world.

The fourth is freedom from fear--which, translated into world terms, means a world-wide reduction of armaments to such a point and in such a thorough fashion that no nation will be in a position to commit an act of physical aggression against any neighbor--anywhere in the world. 

As the Smithsonian has noted:

The public response? Crickets. Congress barely applauded. The next day most newspapers didn't even mention the “Four Freedoms.” Those who were still talking about the phrase in the weeks and months that followed did so to lambaste its “hollow, empty sound.” The government hired [E.B.] White and other A-list scribes to drum up some buzz, but White’s boss called his pamphlet “dull.” The “Four Freedoms,” in the words of one federal administrator, were a “flop.”

Ever the optimist, FDR concluded the list with this: "That is no vision of a distant millennium. It is a definite basis for a kind of world attainable in our own time and generation." Eighty-two years later the Four Freedoms are still aspirational, not real, for much of the world and for many of our fellow citizens. 

How to Save a Quarter-Trillion Dollars a Year in Health Care (Hint: It's Not as Easy as It Sounds)

The consulting firm McKinsey & Co. has a new report (full, executive summary) that identifies the sorts of administrative simplification that together could save the health care system $265 billion annually. As illustrated by a Perspectives piece in the October 20 issue of JAMA, that sum "would be more than 3 times the combined 2019 budgets of the National Institutes of Health ($39 billion), the Health Resources and Services Administration ($12 billion), the Substance Abuse and Mental Health Services Administration ($6 billion), and the Centers for Disease Control and Prevention ($12 billon)." As Everett Dirksen and Charlie Halleck might have said back in the day, a quarter-trillion here and a quarter-trillion there, and pretty soon you're talking about real money.

So, if administrative simplification is such a good idea and the benefits are so patently obvious, why has it not happened already? McKinsey identifies the types of changes that would need to be made. Some are changes that could happen within individual organizations (assuming regulators and private accreditation agencies were on-board). Other changes would need to be implemented between organizations (same assumptions and assuming public and private antitrust enforcement would permit it). And, finally, there are market failures that will require "seismic" interventions at the industry level -- "including the necessary decision-makers and influencers from both the public and private sectors for a given intervention" (emphasis added).

By comparison, the interventions introduced by the Affordable Care Act look downright modest. But the question remains: Can we really afford to continue to pay one trillion dollars every four years for nonbeneficial administrative waste?

New Book: A political history of the Affordable Care Act

There is one scholar whose knowledge and understanding of the PPACA is second to none: Tim Jost. His book review of Jonathan Cohn's The Ten-Year War in the June 2021 issue of Health Affairs has sent me directly to the bookstore to buy my copy. Here are two key excerpts:

One of the main messages of The Ten Year War, Jonathan Cohn’s excellent history of the Affordable Care Act (ACA), appears in the final chapter: “The Affordable Care Act is a highly flawed, distressingly compromised, woefully incomplete attempt to establish a basic right that already exists in every other developed nation. It is also the most ambitious and significant piece of domestic legislation to pass in half a century—a big step in the direction of a more perfect union and a more humane one as well.”

Cohn has produced the most readable and comprehensive history of the ACA yet available—a must-read for anyone who wants to understand this history.

Looking forward to reading (and reviewing) this book! 

SCOTUS grants review in 4 health law cases

The 2021 Term will be a lively one for health lawyers in light of yesterday's grant of four petitions for review (two Medicare cases, one Medicaid case, and a PPACA case that doesn't involve a challenge to the constitutionality of the law):

• American Hospital Association v. Becerra, No. 20-1114, a challenge to a Department of Health and Human Services rule that cut Medicare reimbursement rates for prescription drugs for hospitals that participate in a program for underserved communities. The U.S. Court of Appeals for the District of Columbia Circuit ruled that the reimbursement cut was a reasonable interpretation of the Medicare statute; the justices on Friday agreed to weigh in on whether that deference is appropriate in this case. The court also asked both sides to discuss whether the challenge is barred by a provision of federal law that limits judicial review of certain Medicare-related calculations.
• Gallardo v. Marstiller, No. 20-1263, in which the court will decide whether a state Medicaid program can get reimbursed for past medical expenses that it has paid by taking money from a settlement or jury award that is intended to compensate for future expenses.
• Becerra v. Empire Health Foundation, No. 20-1312, a dispute over how to calculate additional payments under the federal Medicare program for hospitals with a large number of low-income patients.
• CVS Pharmacy v. Doe, No. 20-1374, in which the court will consider whether the Rehabilitation Act, which bars discrimination on the basis of disability by any program or activity receiving federal funding, and the Affordable Care Act allow plaintiffs to bring claims alleging that a policy or practice disproportionately affects people with disabilities.

SCOTUS Rejects Red States' Challenge to ACA

In a 7-2 decision (majority opinion by Justice Breyer, dissent by Justice Alito), the Supreme Court today tossed out the suit filed by Texas plus other states and two individuals, not on the merits but for lack of standing. 

Basic standing analysis requires a direct harm to the plaintiff that is [1] traceable to an unlawful action or provision of law and is [2] redressable if a court were to give the plaintiff the relief it seeks. The majority opinion concluded that -- even if it agreed that the individual mandate lost its constitutional moorings when in 2017 Congress zeroed out the tax for noncompliance -- the only burdens (i.e., "harms") the plaintiffs could point to were the costs of complying with the presumptively lawful parts of the ACA that remained on the books. It is hard to see how future plaintiffs would be able to overcome the standing hurdle created by this opinion.

As the dissent points out, 

Today’s decision is the third installment in our epic Affordable Care Act trilogy, and it follows the same pattern as installments one and two. In all three episodes, with the Affordable Care Act facing a serious threat, the Court has pulled off an improbable rescue.

None of this is to say that challenges to the ACA on other grounds can't or won't be brought, but opponents are running out of constitutional theories. Indeed, the Court has already granted cert. in two ACA cases for the 2021 Term (Nos. 20-429 and 20-539), and there are 6 more ACA cases listed for the Court's next conference.  See Nos. 20-219, 20-1162, 20-1200, 20-1374, 20-1432, and 20-1536. All 8 cases are statutory-interpretation cases and none challenge the constitutionality of the ACA or any part of it. 

SCOTUS still has to decide a big ACA case

On November 10, 2020, the Supreme Court heard oral argument (recording, transcript) in the two cases that will again decide the fate of the Affordable Care Act (ACA): Texas v. California, 19-1019, and California v. Texas, 19-840. Only two cases argued earlier in the Term remain undecided, and as we move into the last month before the Court's summer recess, timing alone suggests the ACA cases are proving to be highly contentious within the Court.

I have a hard time believing the Court will affirm the Fifth Circuit and the District Court and toss out the entire ACA on the specious ground that Congress wouldn't want the ACA to survive without the individual mandate. The premise -- that there is no longer an individual mandate -- flies in the face of the fact that the ACA still contains the individual mandate. The penalty for not purchasing health-insurance coverage was reduced to $0 in the 2017 tax reform law, which renders the mandate a somewhat toothless requirement, But even before 2017, the IRS's collection tools under the ACA were quite limited, which rendered the individual mandate one of the most under-enforced requirements in the United States Code.

Even if the Court agrees that the individual mandate is no more, however, the idea that the Court would go along with tossing out the entire ACA is mind-boggling. That would mean:

• no more prohibition against pre-existing condition exclusions
• no more prohibition against arbitrary and discriminatory rescissions
• no more family coverage for children up to age 26
• the reintroduction of annual and lifetime caps on coverage
• no more Medicaid expansion funds (raising a serious question about the status of funds for the 39 states that have expanded eligibility based on a promise of a generous (read: massive) federal subsidy)
• the elimination of federal insurance exchanges and possibly state exchanges, too
• the elimination of premium tax credits for low-income households
• the elimination of subsidies for out-of-pocket expenditures
• the elimination of what amounts to a cap on the amount insurers can spend on items other than health-care claims (accompanied by a premium rebate when non-health-care expenditures exceed the permitted amount)
• and on and on and on.

None of these practical effects has a doctrinal role in deciding whether the individual mandate is "severable" from the rest of the ACA, in which case the Fifth Circuit should be reversed. Similarly, consistent and growing public support for the ACA since late 2016 has no doctrinal significance. The question instead is whether Congress would want the entire ACA to go away if the individual mandate were to fall. 

What I thought would be an easy question is taking the Court a very long time to work out. If Lyle Denniston, who's been covering the Court for over 60 years, is concerned about what is going on with these cases, we all should be.