Drew Altman, Kaiser Family Foundation
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The medical bill score: How the public judges health care

We track a lot of numbers in health care: how much we spend on health as a share of our economy; the number of uninsured; and the share of the federal budget allocated to health programs. What we don't track — and a number the Congressional Budget Office cannot score — is the statistic that means the most to the American people: the share of the public having problems paying their health care bills.

Data: Kaiser Family Foundation/New York Times Medical Bills Survey (conducted August 28-September 28, 2015); Chart: Lazaro Gamio / Axios

The bottom line: The “medical bills score" is the single most important measure of how we are doing in health care from the public's perspective. And ultimately, if Congress ever passes a new health care bill, it is how the public will evaluate that plan — from Graham-Cassidy to Medicare for All and everything in between.

The numbers that matter: As we found in a Kaiser Family Foundation poll in February:

  • 31% of Americans age 18-64 report they or a family member face problems paying their health care bills.
  • But that number shoots up to 57% for people who are sick.

It makes sense that people who use more care have more health care bills, but it also reveals how poorly our system performs from a consumer perspective when people who need care the most are protected the least by insurance coverage.

The impact: People are not just whining about necessary cost sharing. In a survey we did with the New York Times, we found that:

  • 70% of people with problems paying medical bills report cutting back on food, clothing and other basic necessities.
  • 59% report using up most of their savings.
  • 41% say they've taken an extra job to help pay for their health care.

Not surprisingly, the uninsured (41%) are more likely to have problems paying medical bills. But this is not a problem limited to the uninsured: 30% of the insured – think voters — have problems with medical bills.

The back story: The share of the public reporting problems paying their medical bills has not moved much in recent years. The Affordable Care Act has extended coverage and better financial protection to tens of millions, but it doesn't have much of an impact on affordability beyond people covered by the Medicaid expansion and the marketplaces.

In the far larger employer-based health insurance sector, deductibles and other forms of cost sharing have been growing about five times faster than wages, and deductibles have been growing especially sharply for people who work for smaller employers. .

What to watch: Health care is a pocketbook issue for most of the public and the American people have their own scoring system. They may give this or that mostly partisan response about a health reform idea on a poll, but until they see how they'll get help paying their health care bills, they will ultimately be disappointed by every health reform plan.

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How single payer helps Republicans change the subject

Since the collapse of the GOP effort to repeal and replace the Affordable Care Act, single payer has gained new life on the left. Sen. Bernie Sanders released his “Medicare for all" plan yesterday, and a majority of House Democrats have signed on to another version proposed by Rep. John Conyers.

Data: Kaiser Family Foundation Polls; Note: 2008-09 is an average of 7 polls; Chart: Andrew Witherspoon / Axios

The big picture: Politically, single payer — the idea of having the government pay for health care rather than private insurers — can help rally the left much like the prospect of repealing the ACA rallied the right. But it could also help Republicans, who own the problems in health care now, switch the target to the Democrats and their sweeping new health reform plan.

The pros for Democrats:

  • As the chart shows, single payer is popular among Democrats, with about two thirds in favor. But it has also gained popularity among independents in recent years, with over half supporting it. Republicans, not surprisingly, aren't so crazy about it.
  • Single payer is a big idea many Democrats can rally around. It excites the base and party activists by establishing health care as a right, achieving universal coverage, and eliminating insurance companies. This analysis is about politics, but most advocates of single payer advance the idea because they believe in it, not as a political calculation.

The cons for Democrats:

  • They could lose a one-time opportunity to tar Republicans with the damage their ACA replacement plan would have done to millions of people, according to the multiple analyses that showed lost coverage and higher premiums for vulnerable people.
  • By campaigning on their own sweeping health reform plan, Democrats could give Republicans a fighting chance to change the subject.
  • More targeted policy ideas, such as Medicaid buy-in options for the ACA marketplaces and a Medicare buy-in for 50-64 year olds, could also be popular on the left and the center, while offering far smaller targets than a sweeping single-payer plan would.

Reality check: Single payer is popular, but polling today doesn't tell us much about where the public will be if there is a national debate about actual single-payer legislation in the Congress. ACA repeal had the support of about half the public in Kaiser Family Foundation polling in late 2016 and early 2017, but fell to closer to 30 percent once there was an replacement plan under the microscope.

Support for single-payer falls by 10 to 20 percentage points when people are read common criticisms, such as that it will increase taxes or give the government too much control over health care. Arguments in favor, including that single payer will make health a basic right or reduce administrative costs, increase support by similar amounts.

We cannot simulate what will happen in a real debate, which depends on the actual details of the legislation and the power of the arguments made.

Be smart: This is more than just a health policy debate. It is also a proxy debate about the future of the Democratic Party. The party can swing left trying to build energy in the base, or it can move to the center, trying to capture the votes of many of the more conservative working people who voted for President Trump.

Don't forget: Most Americans are far less focused on sweeping health policy ideas than they are on lowering their out-of-pocket costs. Health reformers – left, right, or center – who make the connection between their policy ideas and these pocketbook concerns may capture the most voters.

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How to keep ACA stabilization narrow

When Congress returns next week, the health debate will shift from trying to pass sweeping legislation to stabilizing the non-group insurance market. This will be a different debate about a thorny but smaller problem. The weaknesses that need to be fixed are fairly specific, and they don't affect the majority of Americans.

Data: Kaiser Family Foundation; Chart: Andrew Witherspoon / Axios

The bottom line: If Congress can keep the focus on market stabilization and doesn't get mired in another divisive debate about health reform, and the news media can keep this relatively manageable problem in perspective for the public, there is at least a decent chance for bipartisan cooperation and a successful outcome.

The problem: Premiums in the Affordable Care Act marketplaces have been rising sharply, with the average increase for the benchmark "silver plan" up 21% this year. Proposed rates for next year will range from a 49% increase in Wilmington, Delaware to a 5% decrease in Providence, Rhode Island.

But the non-group market is actually fairly small, covering about 18 million people, with about 10 million of them in the ACA marketplaces which have received so much attention.

The perception: A Kaiser Family Foundation poll this month found that when people read headlines or hear about "premiums soaring" in the ACA marketplaces, most Americans — 76% — they think they are hearing about their own premiums, even though the vast majority of Americans are not in the individual insurance market and are not affected. (A smaller but sizeable percentage believe they are affected when they hear about counties with no or limited insurance options in the ACA marketplaces.)

There are several reasons for this, and the media bears some of the responsibility. Health journalists have generally done an outstanding job covering the issue, but sloppy cable headlines, commentary from pundits, and spin from politicians have too often implied that everyone in America is affected when they are not.

For context: In fact, the rest of the health system where most Americans get their coverage looks very different from the non-group market. As the chart shows:

  • Average premiums in the employer insurance market, where 151 million Americans get their health coverage, rose by an average of just 3% last year. And we're expecting continued moderation this year.
  • Likewise, per capita spending for Medicaid is projected to grow a modest 3% in 2017, with per capita Medicare spending growing by just 2 percent.

The back story: Insurers and regulators have been struggling with a unique set of issues in the non-group market, most especially a sicker than expected risk pool and the uncertainty surrounding Trump administration policies. The most important areas of uncertainty have been whether the administration will continue to pay out the $7 billion in cost sharing subsidies and enforce the individual mandate.

But even before the ACA, the non-group market was also the weak link of the insurance system, with sick people priced out or excluded from coverage altogether.

What to watch: Some think a deal on stabilizing the non-group market could be as narrow as an agreement to appropriate the $7 billion in federal cost sharing subsidies in exchange for greater flexibility for states under the ACA. That might not be a slam dunk if that flexibility trips over third rail issues, such as endangering coverage for people with pre-existing conditions.

But whether the formula for a bipartisan deal is that one or another one, policymakers will have a better chance of addressing the problems in the marketplaces if they forge a narrow agreement. And the debate stands a better chance of not spinning out of control if the news media works overtime to help the public understand who is affected and who is not.

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The ACA stability "crisis" in perspective

The big questions about the stability of the Affordable Care Act marketplaces have focused on how fast premiums will rise, and how many plans will participate. But an equally important question, and the heart of the matter politically, is: How many people will be affected by the sharp premium increases?


Data: Kaiser Family Foundation analysis of data from Mark Farrah Associates, Healthcare.gov, and KFF Survey of Nongroup Health Insurance Enrollees; Chart: Andrew Witherspoon / Axios

The bottom line: The answer is about 6.7 million Americans who buy coverage in the non-group market in and out of the exchanges, and do not receive premium subsidies. That is a significant number of people, and an urgent policy problem requiring congressional attention and action by the administration, but it's not a system-wide health insurance crisis. The non-group market has always been the most troubled part of the insurance system, and it was far worse before the ACA.

The breakdown:

  • 17.5 million in the non-group insurance market, including:
  • 10.3 million enrolled in the ACA exchanges
  • Approximately 7.2 million buying insurance off the exchanges
    • Most of this group buys ACA-compliant plans
    • About 1.2 million in "grandfathered" plans purchased before the ACA's market reforms took effect

Yes, 17.5 million is a sizeable number, and what happens to their health insurance coverage and costs is important. But, to put it in perspective:

  • 156 million get their primary coverage through an employer, where premiums rose a modest 3% last year for family coverage
  • More than 74 million are covered by Medicaid and CHIP.

According to our new analysis of proposed 2018 premium changes in the exchanges, double-digit increases for benchmark silver plans are quite common, though the range across major cities is large, from a 5% decrease in Providence, R.I. to a 49% increase in Wilmington, Del.

A big reason for these increases is the uncertainty in the market surrounding Trump administration policies, especially whether they will let the $7 billion in cost-sharing reduction (CSR) subsidies flow and whether the individual mandate will be enforced.

Who's getting hit: 84% of the enrollees in the marketplaces – about 8.7 million people – receive premium subsidies under the ACA and are insulated from these premium hikes.

However, roughly 6.7 million people — the ones who buy ACA-compliant plans inside or outside the marketplace and aren't subsidized — will feel the full brunt of premium increases. They'll be hit if the uncertainty is not resolved and the rates do not come down before they are finalized.

In many cases, there is as much as a 20 percentage point swing or more in rates depending on whether the CSRs are paid.

The big picture: Dealing with this uncertainty is an urgent situation, particularly since it may result in some counties having no insurers at all, as well as coverage that is unaffordable for millions of Americans. But it is far from a crisis affecting most Americans and their health insurance.

The media needs to take great care to put this problem in perspective — otherwise they could unduly alarm the public and drive people to support the wrong policy solutions. Already, most Americans wrongly believe that premium increases in the relatively small non-group market affect them. So the headline should be: "Premiums Spike for SOME Americans."

The danger in Congress is that discussion will spread too far beyond the immediate need to stabilize the non-group market, opening up all the old wounds surrounding the ACA and producing stalemate.

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GOP may not be punished if it can't pass repeal

The GOP base will punish Republicans in upcoming elections if they fail to deliver on their promise to repeal the Affordable Care Act, or at least make an all -out effort to do so. That's the conventional wisdom, right? It was the political motivation behind Republican efforts to pass a widely unpopular repeal-and-replace plan, and then to consider a risky repeal-and-delay plan in the Senate.

Except for one problem: When you look at the polling, the idea that the base will rise up and punish Republicans if they don't repeal the ACA appears to be exaggerated, and possibly even a political fiction.

Data: Kaiser Family Foundation Health Tracking Poll (Nov. 15-21, 2016); Chart: Andrew Witherspoon / Axios

Consider:

  • As the chart shows, health care was not the top concern for Trump voters and Republican voters in the 2016 presidential election. It ranked far behind their general concerns about the direction the country is headed in, jobs and the economy, and their feelings about Hillary Clinton. Just 7% of Trump voters and a paltry 5% of Republican voters picked health care as the biggest factor in their vote.
  • Focus groups with Trump voters reinforce this picture; they are focused much more on making ends meet and, when health comes up, getting help with paying their premiums and deductibles. They hoped candidate Trump would find a way to help them pay their health care bills. Just like Democratic voters, and all voters, they care more about their health care costs than the partisan Washington debate about the ACA.
  • Republicans also don't show high levels of intensity on the issue. For example, in July, just 25% of Republicans said they had a "very favorable" view of the Republican ACA replacement plans, while 52% of Democrats said that about the ACA.
  • About half (52%) of Republicans have supported the idea of repealing the ACA now and replacing it later, but that is hardly an overwhelming mandate. (Just 26% of the public overall supported the idea.) Still, most Republicans do want to keep trying. In July, 80% said they don't want to give up on efforts to repeal and replace the ACA.
  • The most conservative Republicans who advocate repeal come from safe districts. They have little to worry about, whether the ACA is repealed or not.

Republicans don't like the ACA, and there is no doubt voting for repeal would be a real plus with the Republican base as well as with big campaign contributors. But the assumption that Republicans will be punished if they fail to repeal the law is a different thing altogether; it has become unexamined conventional wisdom. Republican voters have other things on their minds that matter to them more than health care.

The next election is not until 2018, and the agenda could switch to taxes or a foreign conflict or the Trump administration's continuing problems. In fact, the one thing most likely to keep the ACA on the agenda now would be an effort by the administration to undermine it, and it's far from clear who benefits and loses politically from that.

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Public wants GOP to work with Dems on health care

Senate Majority Leader McConnell has given his fellow Republicans a warning: if they do not pass a bill to repeal and replace the Affordable Care Act, they will be forced to work with Democrats on more modest legislation to address challenges in the ACA's marketplaces. A new Kaiser Family Foundation poll to be released Friday suggests that's actually what the American people would like to see happen.

The bottom line: It looks like Republicans could neutralize a backlash from the base if they give up on repeal and work with Democrats.

Data: Kaiser Family Foundation Health Tracking Poll, July 5-10 2017; Note: Something else, Don't know, Refused responses not shown; Chart: Andrew Witherspoon / Axios

As the chart shows…

  • 71% of the public, including nearly all Democrats and 72% of Independents, favor a bipartisan effort to improve the ACA, rather than Republicans continuing their efforts to repeal it.
  • 46% of Trump supporters say they want to see Republicans work with Democrats to improve the Affordable Care Act — statistically tied with the 47% who would rather see Republicans continue working on their own plan to repeal and replace it.
  • 54% of Republicans want Congress to keep working on a repeal and replace plan, but 41% want Republicans to work across the aisle on fixes to the ACA.

What it means: A poll finding like this probably says more about current views of Washington than the ACA; the public is generally frustrated with partisanship and wants elected officials to work together. There is still plenty of support in the Republican base for repeal, even as support for the Senate health care bill has been slipping and intensity of support in the base is modest.

But this new poll finding suggests that even if Republicans lose ground with some in the base by failing to repeal the ACA, they could make up for it with Trump supporters, Republicans and independents who want to see them work across the aisle on ACA fixes.

Working on repairs rather than repeal could be more of a short-term problem with anti-ACA Republican political contributors, but they will likely come back to incumbents they can rely on for other issues once the health care debate dies down. Still, whether Republicans and Democrats could actually bridge their differences and work together to improve the ACA is a very open question.

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GOP health plan losing support among Trump voters

Senate Republicans have an urgent reason not to give up on repealing and replacing the Affordable Care Act: They don't want to break their promise to the GOP base. But the most recent polls suggest the base may not care as much as Republicans think.

The bottom line: A majority still supports the plan, but support has slipped, and there is some evidence that base Trump voters do not view repeal as a top priority — and many may not punish their representatives if they vote no.

Data: Kaiser Family Foundation; Chart: Chris Canipe / Axios

The repeal push is motivated by several factors. Many Republicans in Congress want to undo whatever former President Barack Obama did. Some want to cap Medicaid spending. Others want to deliver a tax cut.

But the chief motivating factor is the desire to deliver on their campaign promise to the base to repeal "Obamacare," despite the problems with the legislation documented so thoroughly by the Congressional Budget Office. So it seems highly relevant to know where the base actually stands on the Republican replacement plan.

Consider these findings from our most recent June Kaiser Tracking Poll:

  • 55% of President Trump's supporters still support the Republican replacement plan, but, as the chart shows, that number is down a notable 14 percentage points from May.
  • Trump supporters still want Trump and Republicans to keep working on a plan to repeal and replace the ACA (75%). But only 8% cite it as the most important priority for them, similar to the share of the public at large.
  • Less than half of Trump supporters — 44% — say they'd be less likely to support a member of Congress who votes against the bill.

Why it matters: Republicans have been single mindedly focused on their base because they know that only the most dedicated slivers of the electorate come out to vote in midterm elections. These data show that Trump voter intensity on the replacement plan has fallen. The polling data are similar if you look at Republican voters overall, rather than Trump voters.

If the intensity continues to fall, it could diminish this expected turnout. At a minimum, it could make repeal a less effective tool to whip up turnout in the base.

What we don't know: The vote, whenever it happens, could significantly affect the base in directions that are difficult to predict. So could the impact of the law itself if it passes. The CBO predicts that premiums and deductibles in the non-group market will begin to rise sharply and quickly, and Trump voters will be among the groups affected.

It is possible, therefore, that the immediate Republican victory lap that would come from passing repeal could end as Trump voters start to pay their health care bills.

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Republicans see Medicaid as welfare. Most Americans don't

Republicans want to roll back the Medicaid expansion, cap federal Medicaid spending increases, and add work requirements, drug testing, time limits, copays and premiums to some state Medicaid programs. But almost no one else wants to do these things. One poll finding goes a long way toward explaining why: Republicans view Medicaid as a form of welfare, and pretty much everyone else views it as a government insurance program.


Data: Kaiser Family Foundation Health Tracking Poll, May 16-22, 2017; Chart: Andrew Witherspoon / Axios

Why it matters: Welfare remains unpopular in our country; it's always popular to limit or cut "welfare". Whether it should be, and what this says about us, is a different question.

What the poll found: As the chart shows, Democrats (73%) and independents (62%) view Medicaid as an insurance program similar to others that help people pay for health care. But a slight majority of Republicans (52%), see it as more similar to welfare programs like food stamps.

Between the lines: One reason Medicaid limits are no slam dunk for Republicans in the Senate may be that not all Republicans view it as welfare: 46% see it as insurance, just as most Democrats and Independents do. Republicans who are more moderate are worried about the practical effects on citizens and states of rolling back the expansion or cutting federal Medicaid spending. One assumes they wouldn't worry as much unless they viewed Medicaid as valuable health insurance coverage.

Perceptions of Medicaid as welfare don't seem bothered much by facts, such as, for example, that two thirds of Medicaid spending goes for the low income elderly and disabled who don't fit the Ronald Reagan era image of the welfare king or queen. But it's not the majority view in any case. A little less than a third of voters identify as Republicans today, and about half of them see Medicaid as welfare.

It's this group and their perceptions of the program, and elected officials who share their views, that seem to be driving debate about Medicaid today.

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What's really at stake in the Medicaid spending debate

The $834 billion cut in federal Medicaid spending in the American Health Care Act would kick off budget battles in the states that go way beyond Medicaid. We could see cuts to higher education, school funding, corrections, environmental protection or other state priorities — or new taxes, depending on the state.

Data: HMA, based on CMS 2017 projections, CBO Medicaid Baseline and CBO letter to House Speaker Ryan; Chart: Andrew Witherspoon / Axios

The bottom line: What began as a Medicaid spending reduction in Congress will end up as a battle of budget priorities.

A new analysis from long time state Medicaid expert Vern Smith at HMA suggests why. To offset the $834 billion in reductions in federal Medicaid spending in the AHCA, states would need to increase their own general fund spending by an average of one third beginning in 2022, and 37% in 2026. States will have to decide whether to eat the reductions and cut their Medicaid programs, raise taxes, or cut spending for other state priorities, or to do some combination of these things.

In the short term, most of the reductions come from curtailing the ACA's Medicaid expansion, and the 31 states plus the District of Columbia that have expanded will be the most affected.

The problem: It's possible that with more flexibility, states could absorb some of the reductions by operating their Medicaid programs more efficiently, but only at the margins.

Medicaid spending is already growing more slowly than Medicare and private insurance on a per capita basis. Virtually all states have already picked the low hanging fruit to rein in their Medicaid costs, and most have already deployed the full spectrum of delivery and payment reforms currently in the arsenal to control spending growth.

Cutting payments to providers is always the Medicaid cut of first resort, but payments to providers are already too low in many states to cut them further.

What to watch: The need to absorb large reductions in Medicaid will pit cabinet agencies, legislative committees and interest groups against one another in some states. Nothing receives more attention from governors, legislators and interest groups than the size of the annual increase in the state general fund and how the increase is divided each year.

The amount of the annual increase that goes to Medicaid is already a sore point in state budgets. Now the annual budget dance will start with a big hole to fill in Medicaid.

It does not seem to have dawned on folks with an interest in state funding for higher education, or corrections, or schools, or environmental protection that the debate about Medicaid could soon become a debate about their issues. But Medicaid is the largest source of federal revenues states receive, and once the proposed reductions trickle down to state budgets, it won't only be a Medicaid debate any longer.

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The other implication of the CBO report: Election-year pain

Rick Bowmer / AP

The new Congressional Budget Office score for the American Health Care Act showed who the winners and losers will be, and how quickly its negative consequences will take effect if the House bill is enacted into law without major changes. What it doesn't do is assess the politics. But the implications are clear: The negative effects of the AHCA, and the juicy news stories about them, will play out over each of the next two election cycles. It's the political equivalent of tearing off a bandage slowly.

Probably the biggest effect before the 2018 mid-terms will be the rise in premiums across the non-group market which the CBO predicts after the repeal of the individual mandate. Older workers who buy their own coverage will also begin to pay more, as five-to-one age rating replaces the three-to-one age rating under Obamacare.

Then, before the presidential election in 2020, the new AHCA tax credit will kick in. There will be winners who get can get a better deal, mostly younger, higher-income people in low cost areas who may be happy with "skinnier" limited benefit plans that states may allow. But there will be losers too: mainly older and lower-income people who live in high cost, often rural areas.

Budget fights: As the Medicaid expansion begins to unravel, states that expanded Medicaid will have fights over whether to fill the federal funding gap with state funds. Medicaid will have to compete with school spending, higher education, corrections, environmental protection and other state priorities.

Sick people could face "extremely high" premiums in states that choose to waive Obamacare insurance protections, according to CBO, creating more media stories and political problems.

Each negatively affected voter has a family and friends who know about their experiences, creating a multiplier effect. Media coverage focusing on their stories will add to the narrative. The negative anecdotes are always louder than the positive ones.

What to watch: The next election is the mid-term in 2018, and mid-terms are all about turnout of slivers of the electorate; the most motivated voters. If the CBO's analysis of winners and losers under the AHCA is even close to right, it will morph quickly from the storyline Republicans want — they kept their promise to repeal "Obamacare" — to a reality with winners and losers.

It's hard to see how it will stoke turnout on the right once the reality painted by CBO sets in, and it could diminish it. And it may add energy to voters on the left and in swing districts that could decide control of the House.

Here's a look at how it could play out.

2018 ELECTIONS

Summer 2017:

  • Individual mandate eliminated. Insurers may raise premiums.

Nov. 1, 2017:

  • Open enrollment under the AHCA begins. Consumers in the individual market may find much higher premiums.

Nov. 1, 2018:

  • People with preexisting conditions, gap in insurance may start to face higher premiums in states waiving community rating.
  • Healthy people may see lower premiums.

2020 ELECTIONS

Spring/Summer 2019:

  • States may begin to close their Medicaid expansions to new enrollees.
  • Or they may raise taxes/make cuts elsewhere in budgets.
  • With new federal Medicaid spending limits, states may tighten eligibility and reduce benefits and provider payments.

Nov. 1, 2019:

  • ACA tax credits are replaced with less generous ones. Cost-sharing subsidies are repealed.
  • Winners: The young and higher income in low-cost areas..
  • Losers: Older and poorer in high-cost areas.

Jan. 1, 2020:

  • More states close Medicaid expansion to new enrollees.
  • States can waive essential benefits. Many insurers sell "skinny plans," and many healthy people buy them.

BEYOND 2020

  • Number of uninsured Americans continues to rise. CBO says reaching 51 million in 2026.