The public option is now a reality in 3 states

“Washington state first approved its public option in 2019 and made it available to consumers for enrollment in 2020. The state now has a year of experience getting the Cascade Care program up and running, and it’s already starting to tinker with the policy design. It’s also offering lessons for Colorado and Nevada (the other state to pass a public option this year, one week before Colorado).

As these states have drawn up their plans, one thing has become clear: The potential value of a public option is in keeping health care costs in check by keeping rates lower than those of private insurance plans. But it still remains to be seen whether a public option can expand health coverage to more people.”

“None of the states offer a “public” option like the one Congress contemplated in 2009, where the government sets up and administers its own health insurance plan.

“None of them are true public options in that sense,” says Katie Keith, who writes about insurance reform for Health Affairs and consulted with states as they developed public option legislation.

Instead, she compares them with public-private partnerships. States are contracting with private companies to create new insurance options to be overseen, if not run, by the government. States would face practical challenges to doing a “true” public option — namely, building up the financial reserves they’d need to pay out claims — so they’re taking another approach wherein private insurance companies will run the public option under rules set by the government.”

“The plans will be sold on the ACA marketplaces, alongside ACA-compliant private insurance. Only people who are eligible for ACA coverage through the individual and small-group market can sign up”

“How much to pay health care providers is the most important issue for any health insurance plan — those prices dictate the premiums charged to customers — and these states are taking divergent approaches in their calculations.”

“One challenge in trying to set lower provider rates is that doctors and hospitals might simply choose not to accept the public option plan. That was Washington’s experience in its first year: Some hospitals refused to contract with the public plan, and since an adequate provider network isn’t possible without a hospital, the plan has only been available in 19 of the state’s 39 counties.

Washington is trying to correct that issue through recently signed legislation that will, among other things, require hospitals in large systems to participate in at least one public option plan. Nevada and Colorado, having seen Washington’s network-adequacy issues, are setting up their own provider participation requirements from the start.”

What Obamacare achieved — and didn’t

“The Affordable Care Act’s achievements are clear. People who buy insurance in the individual and small-group markets no longer face discrimination for preexisting conditions. Preventive services for Americans with all types of insurance are free. Combine the marketplaces that provide tax subsidies for private coverage and the Medicaid expansions adopted by 38 states (along with a handful of smaller provisions), and the ACA has provided coverage to about 31 million Americans, according to a new estimate from the Biden administration.

After the rocky rollout of HealthCare.gov in 2014 and a few years of soaring premiums, the law’s private marketplaces have stabilized”

“one of the biggest gaps in the ACA itself: Medicaid. The program’s expansion to cover more low-income adults was supposed to be mandatory for all 50 states, a statutory overreach that was scaled back by the Supreme Court, where two liberal justices joined the conservatives to rule that the expansion must be optional.

As a result, 12 states still refuse to expand Medicaid. An estimated 4 million people who would have been covered by the expansion remain uninsured.”

“Some people who purchase private insurance through the law can still face high out-of-pocket costs. Some of the health plans sold on the marketplaces have deductibles as high as $6,000 for an individual or $13,000 for a family — and those are usually the cheapest plans available. Until this year, people who made too much money to qualify for the law’s subsidies had to pay the full cost for their insurance, making it unaffordable for some.”

“one core problem remains: While every other developed country in the world enjoys universal (or near-universal) health coverage, 1 in 10 people living in the United States still don’t have insurance.

That number is lower than it was before 2010, when it was about 17 percent. But it is an embarrassing outlier among our economic peers. Americans also spend more of their own money on their health care than people in almost every other country.”

“America spends more money on health care for worse outcomes than its peer countries, as researchers have noted time and again. On a global index of health care quality and access, the US trails many more socialized systems. Life expectancy has dipped in recent years, ending decades of progress and dropping the US further behind comparable countries.

There is no denying that the high quality of health care available in the United States — for those who can afford it. The US health care industry can undoubtedly be among the most innovative in the world: It was American science that cured hepatitis-C in the last decade. The success of the country’s Covid-19 vaccine development, production and distribution is undeniable.

But prioritizing innovation above all else creates its own problems, leaving US health policy captive to private interests.”

Why Democrats’ ambitions for health care are shrinking rapidly

“America still has the highest uninsured rate in the developed world and the highest health care costs. So long as the health care industry wields a veto pen over any plan that would cut into its profits to address those problems, little is going to change.”

Joe Biden is stretching Obamacare as far as it can go

“We are about to witness, for the first time, the power of a fully operational Affordable Care Act (ACA).

The American Rescue Plan made 3.7 million more people eligible for the ACA’s premium subsidies. The Biden administration had already opened up enrollment after taking office, and 200,000 Americans signed up in the first two weeks. Now the administration is extending enrollment until August 15, backed by millions of dollars in advertising.

Insurers are expanding into new markets, and some who abandoned it long ago in the law’s fraught early years are now reentering. The individual mandate is gone, but, as it turns out, it may not be as important to the law’s long-term viability as originally thought. The law had been weakened since its passage by the Supreme Court and Republican opposition. So this is a new beginning of sorts.

“The ACA is right now much closer to what its advocates hoped it would be from the start,” Larry Levitt, executive vice president at the Kaiser Family Foundation (KFF), told me. “This is a true test of how effective a juiced-up ACA can be at getting us closer to universal coverage.

Taken together, come Labor Day, the country should have the clearest idea yet of how the ACA functions at full strength — and where holes in the US health system remain.”

Medicaid for Kids could pay for itself

“examining how the rollout of Medicaid in the late 1960s affected people who were children at the time.

If you got health insurance through the program as a child, he found, you were less likely to die young; you were likelier to be employed and less likely to have a disability as an adult; and all these benefits actually wound up saving the government money.”

Charging patients just $10 more for medications leads to more deaths

“Researchers at Harvard University and the University of California Berkeley examined what happened when Medicare beneficiaries faced an increase in their out-of-pocket costs for prescription drugs. They found that a 34 percent increase (a $10.40 increase per drug) led to a significant decrease in patients filling their prescriptions — and, eventually, a 33 percent increase in mortality.

The rise in deaths resulted from people indiscriminately cutting back on medications when they had to pay more for them, including drugs for heart disease, hypertension, asthma, and diabetes.

“We find that small increases in cost cause patients to cut back on drugs with large benefits, ultimately causing their death,” the authors — Amitabh Chandra, Evan Flack, and Ziad Obermeyer — wrote. “Cutbacks are widespread, but most striking are those seen in patients with the greatest treatable health risks, in whom they are likely to be particularly destructive.””

“This finding challenges an important assumption embedded in American health care policy. In the 1970s and ’80s, the RAND Health Insurance Experiment concluded that small copays encouraged patients to use fewer health care services without leading to worse health outcomes. That helped establish a new economic argument for insurers to ask their customers to put more “skin in the game”: it would encourage more efficient use of health care services with no downside.

But that premise presumed people would be rational. For example, if they are being asked to pay more money for prescription drugs, they would cut back on less-valuable medications first. The Harvard/Cal study didn’t detect any such rationality. When costs went up, people just stopped filling their prescriptions for statins — high-value drugs that are effective in preventing heart attacks.

The researchers explained it like this: The way patients behaved when faced with higher out-of-pocket costs would suggest that they placed very little value on their lives. They literally stopped taking high-value drugs because of the price.”

“If patients can’t make good value judgments, the economic argument for cost-sharing starts to crumble, and it starts to seem like eliminating cost-sharing — increasing the likelihood patients will continue to take the medications they need to stay alive — would be a cheap way to “buy” people more health. As the researchers wrote, “improving the design of prescription drug insurance offers policy makers the opportunity to purchase large gains in health at extremely low cost per life-year.””

“Eliminating out-of-pocket costs would come with a price: Insurers would likely charge higher premiums to offset the loss of the copays and coinsurance that currently reduce their direct costs. But if the goal is better health outcomes, that is arguably a price worth paying.”

Singapore Is Not the Model for a More Libertarian America

“In 1984, they introduced MediSave, a health savings account that was part of the country’s mandatory savings scheme, called the Central Provident Fund (CPF). Adding the MediSave bucket to the fund (which also has a bucket for housing and a bucket for retirement) forced all Singaporeans to pay something for medical care. This was followed in 1990 by the introduction of a catastrophic insurance policy called MediShield Life that is mandatory for all Singaporeans and permanent residents. Finally, in 1993, Singapore introduced MediFund, a government-managed endowment for Singaporeans who cannot cover their medical bills using the above two funding methods, cash, or family assistance. Interest from the endowment is given to certain health care institutions to underwrite the bills of patients who can’t pay. (The family help aspect is important, as MediSave funds can be used to pay the health bills of an immediate family member.) Although the country also has a supplemental private insurance market, Singaporeans under 55 must contribute 20 percent of their salaries, and their employers another 17 percent, to the CPF.

A network of public hospitals are meant to encourage what Lee Kuan Yew called a “self-administered means test.” Patients can choose any kind of hospital “ward” they like, but the subsidies slide based on consumer income and ward grade. A public hospital’s cheapest ward might sleep four patients to a room and lack air conditioning, while its most expensive wards sleep one person to a room and are cooled. While the vast majority of Singapore’s hospital beds are in public facilities, there are also private hospitals. (The situation for primary care and clinics, where care is cheaper, is the opposite: Most practices are private.)

Singapore has found that making people pay a nominal amount for every type of medical service discourages unnecessary consumption and that the spectrum of service upgrades—from shorter wait times to one-person rooms—allows prices to work as a mechanism for allocating resources. The system is greatly aided by a requirement from the Ministry of Health (MOH) that all public hospitals report to the government what they charge. The MOH then posts facility-specific averages on an easily searchable website where consumers can sort hospitals and wards by how much they charge for specific procedures. Private hospitals aren’t required to submit this information to the MOH, but many do so voluntarily. The differences are stark: The median cost of repairing a one-sided lower abdominal hernia at Singapore’s cheapest public hospital ward in 2018–2019 was $966. The median cost for the same procedure at Singapore’s most expensive private hospital was $15,729.”

“Singapore doesn’t control just the pharmaceutical choices of its residents; it also controls most of their media choices. Consider that Singapore’s buskers—the independent street performers one sees in public transportation systems and parks around the U.S.—not only need a permit (as is the case in Boston and several other American cities) but “are required to attend an audition to ensure consistency in the quality of busking activities,” according to guidelines published by Singapore’s Media Development Authority (MDA). Video games and movies “deemed to undermine public order” or that are “likely to be prejudicial to national interest” are prohibited. Press freedoms are nonexistent.”

“Even people who abhor the draconian policies in Singapore begrudgingly admit that it is a well-put-together place. The science fiction writer William Gibson visited the island for a 1993 Wired article in which he described the airport, streets, and buildings as perfectly maintained and the flora as immaculate. He could find no “wrong side of the tracks” or dilapidated infrastructure. The whole country was safe and polite and advanced. “Only the clouds were feathered with chaos,” Gibson wrote.

Following the publication of the piece, which described the country as “Disneyland with the death penalty,” Singapore banned the distribution of Wired.”

“Singapore is complex, but its core tension comes from the pairing of highly effective public and private institutions that take into account how people respond to incentives while engaging in shocking incursions on personal liberty and bodily autonomy. Imagine for a moment that it were possible for America to import what’s “good” about Singapore—the effective institutions, the economic growth, the tranquility. Could it be done without accidentally importing what’s bad?”

“Singapore is one of the few countries in the world where the public sector outbids the private sector for talent, thanks to the fact that “cabinet level pay may exceed U.S. $800,000, with bonuses attached that can double that sum for excellent performance.” The country’s culture of public service is also bolstered by “complex and overlapping incentives whereby top public sector workers are…respected highly and develop the personal networks for subsequent advancement in either the public or private sectors.””

“Bryan Caplan has argued that Singapore is unique in a way that does not bode well for policy adoption in either direction. In a 2009 paper, he summed up the “Singapore paradox” thusly: The island nation “persistently adopts policies that the democratic process would overturn almost anywhere else on earth, but the same party keeps winning election after election by a landslide. Why doesn’t a rival party promise to abolish the PAP’s unpopular policies and soar to power? How, in short, is Singapore’s political-economic equilibrium possible?”

Caplan probed several explanations in his paper, which he presented in Singapore. He ruled out the idea that the country is not actually a democracy, since it has free and fair (though not competitive) elections. Instead, he found strong survey evidence that Singaporeans were both “unusually concerned about economic performance” and deferential to the party that has delivered consistent economic growth for decades. The 2002 World Values Survey, where Caplan derived his data, reported that 58.8 percent of Singaporeans say “a high level of economic growth” should be their nation’s top priority, compared to 48.6 percent of Americans. In terms of political culture, the differences were much starker: 3.2 percent of Singaporeans reported being “very interested” in politics, and 32.8 percent were “somewhat interested” in politics. In America, the World Values Survey reported those numbers at 18.3 percent and 47.2 percent respectively.

Based on both the last eight months of social upheaval and on the United States’ decadeslong preference for swapping Democrats and Republicans in and out of federal power, Americans are almost certainly less deferential than are Singaporeans. And therein lies the rub: Being 10 percent less democratic requires American voters to trust elites and government far more than they do and, frankly, far more than they should.”

“Yana Chernyak, the assistant director of strategic initiatives at the American Enterprise Institute (and Cowen’s stepdaughter), wrote a guest post for Cowen’s Marginal Revolution blog in 2014 in which she posited that people “run in circles discussing whether Singapore is replicable based on its public and economic policies” and generally miss that “what actually makes Singapore so unique and probably impossible (or at least very difficult) to replicate” is its culture—specifically, Peranakan culture, which is passed down by the descendants of pan-Asian merchants and which holds a “positive view of commercial activity as the machine of wealth creation and basis of improving one’s life.””

“Singapore has combined classical liberal policies such as free trade, an open port, and low taxes with an authoritarian single-party government that centrally plans large swaths of the island’s economy and infrastructure, plays the role of censor in practically every media sector, canes petty criminals, and executes drug offenders. Because of, or despite, this seemingly incongruous combination, Singapore for most of the 21st century has reported higher annual gross domestic product (GDP) growth than the U.S., as well as lower infant mortality, greater trust in government, a comparable GDP per capita, and a longer life expectancy. The island city-state, as its proudest inhabitants love to mention, is also cleaner than the U.S. and has much less crime.”

This Health Care Law Bars Competition And Drives Up Prices, Even as a Pandemic Rages

“COVID-19 has forced doctors to postpone many types of surgeries, but some things can’t wait. Ophthalmologist Jay Singleton saw one man at risk of permanent blindness on a recent Friday evening in New Bern, North Carolina.

“He had a rare type of glaucoma caused by a large cataract, and the only thing to do was to remove it so the pressure would go down inside the eye,” Singleton says. “We knew it was a very real situation because he already had lost one of his eyes to the same thing.”

Singleton had all the skills and equipment necessary for the job at his state-of-the-art vision center. Unfortunately, the government won’t let him use his space for the vast majority of the surgeries he performs.

North Carolina and many other states impose a regulatory tool called a “certificate of need” (CON), which forces health care providers to prove an unmet need in the market before operating a facility, scaling up, or purchasing major medical equipment. In practice, CON laws block new competition, funneling traffic to big hospital systems—the last thing that should happen during a global pandemic.”

“”You have to pick a side,” Singleton says. “If you treat it like a business, you must allow other people to enter the market and compete with you like every other business. If you treat it like a public partnership, then you can’t enrich yourself on the backs of Medicare patients. You can’t have it both ways.””

“15 states—including California, Colorado, and most recently New Hampshire—have eliminated their CON programs.
None of these states has experienced any negative effects. Indeed, Matthew Mitchell, a researcher at George Mason University’s Mercatus Center, says states that got rid of their CON laws have more hospitals and surgery centers per capita, along with more hospital beds, dialysis clinics, and hospice care facilities.

“Forty years of peer-reviewed academic research suggests that CON laws have not only failed to achieve their goals but have in many cases led to the opposite of what those who enacted the laws intended,” he says.”

“Many states, including Connecticut, Georgia, and South Carolina, suspended their CON laws after the pandemic came to America. Other states, such as Rhode Island, rolled back CON laws at hospitals and nursing facilities but not outpatient surgery centers or hospices.

Instead of just being a temporary reprieve, these emergency actions should be expanded and made permanent.”

Middle Class Welfare: The Pros and Cons of Employer Sponsored Health Insurance: Sources

What’s Wrong with Employer Sponsored Health Insurance Ed Dolan. 11 6 2018. Niskanen Center. The Real Reason the U.S. Has Employer-Sponsored Health Insurance Aaron E. Carroll. 9 5 2017. New York Times. Column: The health insurance tax exemption makes care more affordable,