Apr 2, 2019

Axios Vitals

Sam Baker

Good morning ... D.C. readers: You're invited to News Shapers: Health Care in America, tomorrow morning at 8am.

  • Join Axios' Mike Allen for a series of conversations dissecting the future of the Affordable Care Act. He'll sit down with Sen. Chris Murphy (D-Conn.) and Rep. Mark Meadows (R-N.C.) — then Axios' Caitlin Owens will explain why it matters. 
  • RSVP here.
1 big thing: Americans' health care pessimism
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Data: U.S. Healthcare Cost Crisis report by West Health and Gallup; Chart: Naema Ahmed/Axios

Americans' expectations about our health care system are a cascade of pessimism, according to new survey data from West Health and Gallup.

By the numbers: 76% expect health care costs to increase over the next couple of years, and 77% said they're concerned that rising health costs "will result in significant and lasting damage" to the U.S. economy.

  • 69% said they're "not at all confident" Washington will be able to do anything about it.

Between the lines: Given the hypothetical choice between a 10% increase in their income or a guarantee that their health care costs wouldn't go up for 5 years, most people — 61% — said they'd take the freeze in health care costs.

  • Statistically, health costs are a bigger burden on lower-income families. But majorities in every income group — even people making more than $180,000 per year — said they'd rather have a freeze in health care costs than a 10% raise.

Americans are more down on the system as a whole, rather than their personal experience with it.

  • Just 39% of those surveyed in the Gallup/West Health poll said they're satisfied with how well the U.S. health care system works for Americans generally, while 64% are satisfied with the way it works for their households.
  • Only 10% of those surveyed said they had foregone treatment in the past year because of its cost, while 12% said they borrowed money to pay for care.
  • Even so, that satisfaction seems tenuous: 45% are concerned that a "major health event" in their families could lead to bankruptcy.

My thought bubble: This same tug-of-war animates the political debate over health care — people are receptive to the idea that our system is bad, but there's still a risk in changing what they think works well for them.

2. Republican attorneys general defend the ACA

The Republican attorneys general of Montana and Ohio are breaking with their party and urging the 5th Circuit Court of Appeals not to throw out the entire Affordable Care Act.

Driving the news: The pair filed a friend-of-the-court brief yesterday agreeing that the ACA's individual mandate is unconstitutional — the core of the lawsuit filed by their fellow Republican AGs.

  • But, they said, Judge Reed O'Connor went too far when he threw out the entire ACA along with the mandate — a decision the Trump administration now supports in full.

What they're saying: The debate about whether the individual mandate is "severable" from the rest of the ACA is pretty easy, the officials argue: Congress effectively severed it, by zeroing out its enforcement mechanism. So, yes, it's severable.

  • "This is the rare case that involves constitutional overreach by two separate branches," they wrote. "Congress acted unconstitutionally by enacting the individual mandate and the court below exceeded its power by striking down the Affordable Care Act in full."
3. 2020 will be kind to Medicare Advantage

The average payment rate from the federal government to companies that sell Medicare Advantage plans will go up 2.53% in 2020 — a sizable boost from what was proposed in January, Axios' Bob Herman reports.

The big picture: Even though the 2020 pay increase isn't as generous as 2019's, health insurers will still benefit a lot from higher payments as well as other new, industry-friendly policies — like being able to cover meals and car rides to doctors' appointments, which could attract more seniors to these plans.

Yes, but: Against the industry's wishes, Medicare will change part of its process for calculating insurers' payments according to how sick their members are — known as a "risk score."

  • Currently, 75% of a patient's risk score is based on traditional medical data, and 25% is based on "encounter data" — a more complete dataset of a patient's conditions.
  • Insurers dislike encounter data because they say it's inaccurate.
  • But the system will be shifting to a 50/50 split by 2020.

But, but, but: All MA risk scores originally were supposed to be based 100% on encounter data by 2020, so insurers are still coming out ahead.

Go deeper: How seniors are being steered toward private Medicare plans

4. Where rising premiums hurt the most
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Data: Leonard Davis Institute of Health Economics, United States of Care; Cartogram: Andrew Witherspoon/Axios

The financial burden of insurance premiums is growing, especially in sparsely populated states in the South, West and Northeast, my colleague Caitlin Owens reports.

  • And this new analysis, by the Leonard David Institute of Health Economics and United States of Care, doesn't include out-of-pocket spending — which is rising even faster.

Details: Nationally, premiums grew by 27.7% between 2010 and 2016, while income grew by 19.8% — meaning the burden of health care costs on families' budgets is getting bigger.

  • Louisiana had the highest cost burden in 2016, with 37.1% of income going toward premiums. Minnesota had the lowest, at 24.4%.

Go deeper: Health care costs are skyrocketing, and wiping out wage increases

5. Medicaid expansion aids addiction recovery

West Virginia is the epicenter of the opioid epidemic, and the state's decision to adopt the Affordable Care Act's Medicaid expansion has made treatment much more readily available.

A study published in the new issue of Health Affairs tracks the change in treatment levels among West Virginians covered by the Medicaid expansion.

By the numbers: The number of people diagnosed each month with opioid use disorder nearly tripled from 2014 to 2016, the authors found.

  • And as more people were diagnosed, more people got treatment.
  • About one-third of people diagnosed with opioid use disorder in 2014 were prescribed buprenorphine — the leading medication-assisted therapy for opioid dependence. By 2016, that was up to 75%.

Medicaid covers about 25% of all adults suffering from opioid addiction, per the Kaiser Family Foundation, making the program — and its expansion — a critical lifeline in the midst of an epidemic.

  • And it's a prime example of a Trump administration priority — bolstering access to medication-assisted treatment — that depends on a part of the ACA.
Sam Baker