Good morning ... Do we have single-payer yet? No? Well, did Republicans' last-ditch repeal effort pass? Also no? Then I guess it's back to the health care system we have, and the Senate's slow but steady effort to fine-tune it.
The ACA fix that could work, but isn't on the table
Nearly every witness before the HELP Committee over the past two weeks has said creating some kind of program to help pay the costs of expensive enrollees would be an effective way to reduce premiums and help stabilize the Affordable Care Act. But Chairman Lamar Alexander has made it clear that federal funding for such programs — called reinsurance — isn't likely to be part of the stabilization package he's working on.
Which naturally raises the question: Why wouldn't the committee want to include a proposal endorsed by almost every expert it's heard from? There are two big reasons:
- Money: Creating a federal reinsurance program would, at least initially, cost money. And several states — including Alaska and Maine — have been able to set up such programs on their own, without federal assistance.
- Politics: Creating a federal reinsurance program could sink the bill. Several Republicans have said they're not interested in spending more money on the ACA, especially without deep policy changes in return.
Yes, but: Several witnesses have said some states, especially poor ones, don't have the money or infrastructure to set up their own reinsurance program, and federal funding would help.
- "Long term, I definitely feel like a state should run those programs…for the first year, you're going to have to have the federal government help on that," Tennessee Gov. Bill Haslam said.
What we're watching: Although it seems like Alexander has made up his mind, there's still a (very remote) possibility that federal seed money for reinsurance programs could end up being part of the package.
How single payer helps Republicans change the subject
The Kaiser Family Foundation's Drew Altman points to one of the risks Democrats are taking with their embrace of Sen. Bernie Sanders' "Medicare for all" plan: It could let Republicans off the hook for the political consequences of their ACA repeal plans.
Why? In today's column, Altman notes that Democrats had wanted to pummel Republicans over the damage their health care plans could have caused — but now Republicans will be able to put the target back on Democrats' backs. Yes, single payer is popular among Democrats and even independents now, he writes — but their support is malleable, and could be easily swayed in a debate over the actual details.
Speaking of Bernie: Listening to his cosponsors talk about the bill yesterday was a reminder of why single payer is appealing on the left — in part, because it seems simpler. Not as a system to set up and pay for, but to use, as a patient.
- Even if the rest of the Democratic Party doesn't get on board with single payer, "I do think you'll see even a number of the more centrist Democrats looking at alternatives in which there can be real progress on the cost and complexity issues," Democratic health care strategist Chris Jennings told me.
Medicare is giving doctors a lot of power over their own pay
Medicare has signaled it will rubber-stamp almost every 2018 payment proposal made by a little-known American Medical Association's panel of doctors — raising the ire of numerous advocacy groups and primary care doctors, who believe the federal government is bending to the will of the powerful medical lobby.
What we've heard: Consumer advocates and primary care doctors told Axios' Bob Herman that the Centers for Medicare and Medicaid Services is relying too heavily on an AMA panel known as the RUC, which makes recommendations about how much Medicare should pay for certain services. Its critics say it too often gives preferential treatment to more expensive procedures, at the expense of primary care.
- "If CMS aims to obtain the best services at lowest cost, changing the payment structure to pay more to the speciality who produces the same product at higher cost makes no sense," one doctor told Bob.
Why it matters: CMS pays out roughly $100 billion per year for physician services, and its prices also affect what private insurers are willing to pay.
Competition lags in the exchanges...
CMS yesterday released its latest estimates of insurer participation in the ACA's exchanges.
- 63 counties — all in Virginia — currently don't have any insurers signed up to sell plans next year. Those "bare" counties contain less than 1% of all enrollees.
- About 28% of exchange enrollees — more than 2.6 million consumers — live in counties that are projected to only have one participating insurer next year.
By my count, that would mean roughly 70% of enrollees live in areas with at least two competing insurers. (CMS didn't do that math in its release. It only chose to highlight the number of people who wouldn't have multiple plans to choose from.)
...and less competition leads to high premiums
Competition among insurers really does help lower premiums, according to a new analysis from the consulting firm Avalere Health. Its findings:
- In counties with just one insurer to choose from, premiums are almost 10% higher than in counties with two insurers.
- Compared to counties with three or more insurers to choose from, premiums in one-insurer counties are an average of 15% higher.
- Having three or more insurers also appears to lower deductibles.
How it works: There's usually a reason insurance companies aren't interested in competing in a particular region: It doesn't have a lot of the young, healthy customers insurance companies crave. Insurers do compete on price, but only when they know they've got a solid base of customers who will pay premiums without filing a lot of claims.