Posts Tagged ‘obamacare’

What are the US Democrats’ big ideas?

May 20, 2018

One of the ongoing criticisms of Democrats since Barack Obama moved out of the White House is that the party has been defined by what it opposes, instead of what it wants to do.

They’re not Donald Trump. They’re against travel bans, border walls, trade wars, financial and environmental deregulation, corporate tax cuts and repeal of the Obamacare health insurance system.

But what are they for? What are their ideas?


May 20, 2018

Elizabeth Warren and Bernie Sanders appear together at a news conference.

Image copyright GETTY IMAGES

Those are the kind of questions the speakers at the Center for American Progress’ “Ideas Conference” held in a Washington hotel were tasked with answering.

A long list of Democratic politicians – some up for re-election in the mid-term contests this year; others possibly angling for the Democratic 2020 presidential nomination – took the stage in panels and set-piece speeches. Many offered variations on the a-word – “alternatives”.

“We’re not going to win if we spend all our time bemoaning that he’s there,” Minnesota Senator Amy Klobuchar said of Mr Trump’s White House occupancy. “He’s there. And we have to offer an alternative.

“People ask how come you’re not offering alternatives,” Ohio Senator Sherrod Brown said at the conference. “And I say we are.”

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But are they? After a day of statements and speeches, there were a lot of broad-brush strokes. A lot of paeans to the forgotten working class, celebrations of women activists and candidates, a lot of talk about action and exactly how bad things are right now.

Here’s a look at some of the proposals and priorities offered by Democratic politicians in Washington last week.

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Minimum wage and ‘freeloader fees’

Sherrod Brown, who is both up for re-election this year and considered a possible presidential contender, spent most of his time talking about how to appeal to a traditional Democratic demographic that, at least in the Midwest, helped deliver the White House to Mr Trump in 2016 – the working class.

“I think workers in my state are looking for somebody in elected office to talk about the dignity of work, to talk about whose side they are on,” he said.

He pushed what he calls a “corporate freeloader fee” – imposing a penalty on companies with more than $100,000 in payroll taxes that do not pay their workers high enough wages to keep them off public assistance programmes.

Sherrod Brown speaks at a congressional committee hearing.Image copyrightGETTY IMAGES
Image captionOhio Senator Sherrod Brown has said corporations that pay low wages should be penalised

Mr Brown and other Democrats also mentioned raising the federal minimum wage from its current $7.15 an hour level, which was set in 2009. Some states have passed much higher minimum-wage levels.

Senator Cory Booker of New Jersey said the federal government should guarantee Americans a job if they want one, which he said was not a “radical idea”.

“Why not invest on the front-end with secure jobs so that you’re not seeing negative impacts that come with low-employment or unemployment like foreclosures and evictions?” he asked.

It’s an idea that has also gained support from Vermont Senator Bernie Sanders and New York Senator Kirsten Gillibrand, although neither discussed specifics during their appearances.

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Expanding public schooling

Education was also a recurring theme for conference speakers. New York City Mayor Bill de Blasio explained how he implemented a tax on wealthy residents to pay for universal pre-kindergarten schooling. He said it wasn’t a “conventional wisdom” position at the time, but that progressives should propose and advocate ambitious policies.

“When we are bold and clear and sharp, people get it,” Mr de Blasio said. “People feel it.”

New York Mayor Bill de Blasio (Center-R), along with Schools Chancellor Carmen Farina (L), First Lady Chirlane McCray (C), and Queens Borough President Melinda Katz (R), visits Pre-K classes at Home Sweet Home Children's School in Queens on the first day of NYC public schools, September 4, 2014
New York Mayor Bill de Blasio on a tour of pre-kindergarten classes in 2014. Getty Images

New Jersey Governor Phil Murphy, elected last November, said he was pushing for his state to provide both universal kindergarten and free tuition for the first two years of college.

“We need to set a new standard for education,” he said. “Who said that public education should be a right for everybody between [the ages of] five and 18, but not for those either before five or after 18?”

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Ethics, reform and oversight

Democrats’ views of Mr Trump’s rise to the White House and his performance there have seeped into some of their policy proposals as well, and a few of them were mentioned on the stage last week.

Congressman Ted Lieu of Oregon, who is one of the more outspoken Trump critics on television and Twitter, plugged his series of Stop Waste and Misuse by the President (SWAMP) Acts. One would require the president to reimburse the government for expenses incurred when he visits his private business properties.

Another would prohibit administration officials from taking non-commercial air travel – a response to a series of controversies surrounding the use of private and government jets by Trump cabinet secretaries.

Ms Klobuchar plugged her Honest Ads Act, which would require online advertisements – such as those on Facebook and Google – to comply with the same disclosure obligations as those on television, print and radio.

Massachusetts Senator Elizabeth Warren, one of the leading voices of the progressive movement, aimed her criticism at the American political system of allowing politicians to draw congressional district maps that favour their own re-elections.

“Democrats believe in a fair fight, and making sure that districts aren’t drawn to cut out one party or the other is a critical first step,” she said.

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‘Dismantling the oligarchy’

Mr Sanders, who mounted a surprisingly strong challenge against Hillary Clinton for the 2016 Democratic presidential nomination, was slated to give a speech on criminal justice reform.

Instead, he launched into a sweeping condemnation of US income inequality that sounded a lot like a campaign stump speech.

U.S. Sen. Amy Klobuchar (D-MN) (L) speaks as House Majority Whip Rep. Steve Scalise (R-LA) (R) listens during a meeting with President Donald Trump at the Cabinet Room of the White House February 28, 2018 in Washington, DC.
Amy Klobuchar wants Congress to pass legislation on internet political ads

After rattling off a list of policy ideas he said he was sure other politicians had spoken about, he insisted nothing could be done unless the US addresses structural economic imbalances.

“The oligarchy in this country, whose greed is insatiable, is destroying… our vision for America and is moving us to a government of the few, by the few and for the few,” he said.

He called for increased taxes on the wealthy and, in particular, a “substantial” increase of the estate tax, “not only to bring in needed revenue but to help dismantle the oligarchy”.

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Guns, the environment and healthcare

New firearm regulations were a hot topic of discussion among Democrats following the Parkland high school shooting three months ago – and they may be again after the latest incident in Santa Fe, Texas.

At the Ideas Conference, however, the gun debate was mostly limited to one afternoon panel that included Senator Chris Murphy of Connecticut and Parkland student Ryan Deitsch.

The conversation was light on concrete proposals, instead focusing on what Mr Murphy identified as a changing political attitude towards gun control.

“Republicans know that everything is different right now, and they know that they are fundamentally mispositioned on this issue, and they know that it may actually cost them for the first time ever in the midterm election of 2018,” he said.

Sandy Hook Senator: ‘This happens nowhere else’

After the Obamacare repeal battles of 2017, the topic of healthcare reform has also been less of a priority for Democrats. Massachusetts Congressman Joe Kennedy, in a late afternoon speech, essentially implored his party to keep talking about the issue in the coming months.

“Our healthcare system is a reflection of who we are,” he said. “We are judged not by how we treat each other in times in ease, but how we care for a neighbour in their time of deepest need – when we are broke, when we are sick, when we are helpless, desperate or more vulnerable than we can ever imagine.”

The environment and climate change was another topic that saw limited widespread discussion outside of a panel specifically dedicated to it.

Washington Governor Jay Inslee touted a state ballot measure in November that would impose the first-ever direct carbon fee in the US, setting up a billion-dollar fund to subsidise clean energy jobs and handle pollution remediation, particularly in poorer communities.

“Climate change will no longer be on the back burner,” Mr Inslee said. “Every Democrat running needs to make it a central message. The American people are with us.”

Last week in Washington, Democrats offered plenty of suggested messages to run on. Over the coming months, as the party chooses its nominees for the forthcoming mid-term elections, Democratic voters will have the opportunity to decide which ones – if any – should be central.


The dismantling of Obama’s legacy proves our government still works

May 12, 2018

When President Obama and John Kerry made the Iran nuclear deal they neglected to get Senate ratification — Because the president would never have won ratification for a deal remotely similar to the one he entered….

It’s strange that a president who had such a transformative effect on our national discourse will leave such a negligible policy legacy. But Barack Obama, whose imperial term changed the way Americans interact and in some ways paved the way for the Trump presidency, is now watching his much-celebrated and mythologized two-term legacy be systematically demolished.

This, in many ways, tells us that American governance still works.

When President Trump announced that the United States would withdraw from the Iran nuclear deal, he was able to do so without much difficulty because the agreement hinged on presidential fiat rather than national consensus. Obama’s appeasement of Iran was only one in a string of unilateral norm-busting projects that deserve to be dismantled.

You’ll remember the panic-stricken coverage we endured when the United States withdrew from the faux international Paris climate agreement last year. It’s true that the deal was oversold as a matter of policy, but it was symbolic of how the Obama administration concerned itself more with international consensus than domestic compromise.

We know because the president would never have won ratification for a deal remotely similar to the one he entered — nor did he attempt to. Obama had about as much interest in genuine concession as his political adversaries did.

The defense rested on the idea that the Republican-led Congress had failed to “do its job” and act on issues Democrats had deemed vital. But Congress, of course, “acted” all the time by checking the president’s ambitions. This was not only well within its purview but also in many ways the reason the electorate handed the GOP Congress in the first place.

Even if you substantively supported Obama’s actions, the reasoning that girded these supposedly temporary executive decisions was soon revealed to be abusive. In 2012, Obama told the nation that the Deferred Action for Childhood Arrivals program, a stand-in for legislation, was merely a “temporary stopgap measure.” By the time Trump overturned it, the measure represented “who we are as a people.” That’s because by “temporary” Obama always meant “until Democrats can make it permanent through the courts or electoral victories.”

Affordable Care Act — A Law Without Enough Money

When it became inconvenient, they began arbitrarily implementing parts of laws. When the president decided ObamaCare’s employer mandate was politically inconvenient, he simply skipped it for expediency.

The Constitution doesn’t say, “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law unless liberals tell us it’s super important.” Yet shortly after the passage of the Affordable Care Act, the Obama administration realized it would need more subsidies and asked for an appropriation from Congress.

One federal court found the ObamaCare subsidy unconstitutional, and the case was working its way toward the Supreme Court. But then again, no administration in memory was stopped more often by courts, often by unanimous Supreme Court decisions. Whether it was ignoring the Senate in making appointments or claiming to rewrite employment law, Obama tried to function without constitutional restraints.

None of this even breaches the unprecedented regulatory regime Obama built to circumvent the legislative branch. Even The New York Times characterized his governing as “bureaucratic bulldozing, rather than legislative transparency.”

Fortunately, it is also unsustainable. As we now see, this kind of governance not only corrodes constitutional order but also undermines stability, as new presidents busy themselves overturning the executive actions and international agreements enacted by the previous. While most Americans aren’t sticklers for process, it seems they are content with destroying legacies built on the rickety foundation of unilateralism for political reasons.

That’s fine, too. It means that if Trump engages in similar legislative efforts through the executive office, his agenda will also be dismantled one day. That’s as it should be.

David Harsanyi is a senior editor at The Federalist.

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Trump’s Request to Cancel Spending (Rescission) Has Shot at Passing Congress

May 8, 2018

President Donald Trump’s request to Congress Tuesday to cancel $15.4 billion in unspent government funds has a strong chance of clearing Congress because it doesn’t touch this year’s bipartisan spending bill.

Image result for Mick Mulvaney, photos

White House Budget Director Mick Mulvaney said House Republicans reacted positively to the request when he presented it Tuesday morning behind closed doors. Mulvaney told lawmakers that the White House will send a separate request later in the year to cancel some funds from the $1.3 trillion 2018 omnibus spending bill, an idea that has met resistance from Senate Majority Leader Mitch McConnell.

The proposal is a Republican effort to claim fiscal responsibility after a deficit-increasing tax cut and higher spending in the omnibus bill. The effort comes as the GOP is struggling to keep control of the House and Senate in November elections.

“We will get the rescissions package passed” House Majority Leader Kevin McCarthy of California told reporters after the Tuesday meeting.

No lawmakers came out against the $15.4 billion request during the meeting, lawmakers said.

‘No Pushback’

“There was no pushback whatsoever. In fact people said they want more,” said Representative Mark Walker of North Carolina, who leads the conservative Republican Study Committee. He said the White House has more work to convince Senate Republicans.

The cuts can be adopted with a simple majority in the House and Senate, meaning Republicans could pass it without Democratic votes.

The request would cancel $7 billion from prior years for the Children’s Health Insurance Program, including $5 billion in funds that expired in September. The March spending bill canceled other leftover CHIP funds and used the money to boost domestic spending elsewhere. That bill was supported by lawmakers from both parties.

“These Republican rescissions show the hypocrisy of a GOP Congress that insists on tight budgets for children and families while handing enormous, unpaid-for giveaways to corporations and the wealthiest,” House Minority Leader Nancy Pelosi of California said in a statement.

She told a Washington audience Tuesday morning that the second rescission request has “no chance”of passing, but she didn’t make a similar declaration about the first one.

Other unspent funds that would be canceled include $4.3 billion for a vehicle technology program and Energy Department loans, funds for Obamacare, the 2015 Ebola outbreak and railroad retiree benefits.

Smaller Request

The $15 billion request is scaled back from the administration’s initial goal of cutting a larger amount of domestic funds from the 2018 spending bill signed by Trump in March, which has proven unpopular with Republican voters. The goal is to keep Congress from tapping unspent money for new purposes as has happened in the past, a senior administration official said Monday.

Senate Appropriations Chairman Richard Shelby, an Alabama Republican, said in a Monday interview that he’s open to a spending-cut plan though he hadn’t seen the details.

“If it is frivolous stuff that we can get rid of and save the taxpayer money, then we ought to do it,” Shelby said. He said he doesn’t favor reopening the 2018 spending bill.

“We’ll take a look at it,” said House Appropriations Chairman Rodney Frelinghuysen of New Jersey, noting that the plan would address prior-year funds. He had previously said he strongly opposed cutting current-year spending because it would break trust with Democrats and make it harder to reach future spending deals.

Partly as a result of the tax-cut law, the annual federal deficit is projected to increase from $665 billion in 2017 to $1 trillion by 2020, according to the Congressional Budget Office.

— With assistance by Arit John

Trump administration issues rule further watering down Obamacare

April 10, 2018

WASHINGTON (Reuters) – The Trump administration took additional steps to weaken Obamacare on Monday, allowing U.S. states to relax the rules on what insurers must cover and giving states more power to regulate their individual insurance markets.

The Centers for Medicare and Medicaid Services issued a final rule that allows states to select essential health benefits that must be covered by individual insurance plans sold under former President Barack Obama’s healthcare law. The 2010 Affordable Care Act requires coverage of 10 benefits, including maternity and newborn care and prescription drugs. Under the new rule, states can select from a much larger list which benefits insurers must cover.

That could lead to less generous coverage in some states, according to Avalere Health, a research and consulting firm.

President Donald Trump’s administration has used its regulatory power to undermine Obamacare after the Republican-controlled Congress last year failed to repeal and replace the law. About 20 million people have received health insurance coverage through the program.

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The new CMS rule also allows states the possibility of modifying the medical loss ratio (MLR) formula, the amount an insurer spends on medical claims compared with income from premiums that is also a key performance metric. A state can request “reasonable adjustments” to the medical loss ratio standard if it shows that it could help stabilize its individual market.

Insurers could also have an easier time raising their rates under the new rule. Obamacare mandated that premium rate increases of 10 percent or more in the individual market be scrutinized by state regulators to ensure that they are necessary and reasonable. The new CMS rule raises that threshold to 15 percent.

Reporting By Yasmeen Abutaleb; Editing by Cynthia Osterman

Republican Spending Reprieve — Rescission still makes a lot of sense

April 10, 2018

Congress can claw back some of its spending with rescissions.

The Congressional Budget Office finally rolled out its semiannual budget outlook on Monday, and the federal deficit is expected to be $804 billion this fiscal year and is heading toward $1 trillion by 2020. That should concentrate the minds of Republicans to use their power to rescind at least some of the excess spending in the recent blowout omnibus budget bill.

The Congressional Budget and Impoundment Control Act of 1974 is a bad law that has made it hard for the GOP to repeal ObamaCare or reform other entitlements. But a corner of the statute lets the President request that certain discretionary (that is, non-entitlement) funds not be spent even though they have been appropriated. Congress then has 45 days to approve the rescission request. If Congress fails to act, the spending proceeds. A rescission package is subject to limited debate and requires only a 51-vote majority in the Senate.

Republican Spending Reprieve

This has the potential to undo some of the fiscal damage in this year’s 2,232-page, $1.3 trillion spending bill. The GOP felt obliged to accept huge increases in domestic discretionary spending in exchange for a modest and long-needed increase for defense. For example, the omnibus included $13.7 billion more for transportation and housing in 2018 than what the House passed in appropriations bills. The deal featured large increases for environment, labor, health and more, none of which were pinched for cash before this gusher.

Democrats are acting like rescission is a novel or extralegal idea, but it isn’t. Presidents have proposed 1,178 rescissions since 1974, according to the American Action Forum’s Gordon Gray. Congress agreed to only 461, and 101 were in 1981 thanks to Ronald Reagan. The total amount rescinded over the years comes to about $25 billion out of $76 billion proposed by Presidents. Bill Clinton in 2000 was the last President to propose rescissions.

Democrats will also cry that the GOP is reneging on a spending deal, but Democrats used their leverage with the 60-vote filibuster rule to coerce more non-defense spending. Republicans would now use their power under the Budget Act to claw some of that back. This is using legitimate political leverage under the law.

Republicans have been getting pounded by their voters for passing a Democratic budget, with the exception of defense, despite having GOP majorities. A rescission vote can restore some of the political accountability that the filibuster blurs.

House Republicans are already discussing possible rescissions, and it’ll take finesse to command a majority. Senate Republicans will be even less thrilled given their narrow 51-vote majority. But one reason Republicans are at political risk of losing in November is the lack of enthusiasm among their voters, and a fight over spending restraint would show grass-roots Republicans that it matters who controls the House and Senate next year.

Congress and the White House will also have to work together on a consensus package of what to rescind. The worst case would be for a rescission proposal to get public attention but then fail as Republicans defect or Mr. Trump wigs out. Cooperation isn’t impossible. The Administration and Congress managed to work together last year to repeal more than a dozen Obama-era regulations under the Congressional Review Act, and some votes were close.

President Trump should be on board after announcing how unhappy he was to sign the omnibus to get more dollars for defense. “I will never sign another bill like this again,” the President threatened at the signing. But if the GOP loses the House in the fall, Mr. Trump will be signing bills so big he’ll be sick of losing. A fight over spending restraint is worth having.

Why Some Americans Are Skipping Health Insurance

March 26, 2018


Prices and deductibles are rising. Networks are shrinking. And even some well-off Americans are questioning what they’re paying for.
Illustration: Cathryn Virginia

In tiny Marion, North Carolina, the Buchanans decided that $1,800 a month was too much to pay for health insurance, and are going without it for the first time in their lives.

In Harahan, one bend of the Mississippi river up from New Orleans, the Owenses looked at their doubling insurance premiums and decided no, as well. “We’re not poor people but we can’t afford health insurance,” Mimi Owens said.

And in a Phoenix suburb, the Bobbies and their son Joey will go uninsured so the family can save money to cover their nine-year-old daughter Sophia, who was born with five heart defects.

Across America there are thousands of people like the Buchanans, the Owenses and the Bobbies making the same hard decision to go without health insurance, despite the benefits. They’re risking it—betting that they’ve got enough savings, enough of a back-up plan, or enough luck to get them through a twisted knee, a cancer, or a car wreck.

Bloomberg is following a dozen of these families this year in an effort to understand the trade-offs when a dollar spent on health insurance can’t be spent on something else. Some are financially comfortable. Others are scraping by.

While the share of Americans without health insurance is near historic lows four years after the Affordable Care Act extended coverage to almost 20 million people, the Trump administration has been rolling back parts of the law. At the same time, the cost for many people to buy a health plan—if they don’t get it from a job or the government—is higher than ever.

No one had to tell the Buchanans about the risk. Dianna, 51, survived a bout with cancer 15 years ago. Keith, 48, has high blood pressure and takes testosterone shots. They live in Marion, North Carolina, and make more than $127,000 a year from the small IT business Keith runs and Dianna’s job as a physical therapy assistant, with some additional income from properties they own. That puts them in the top fifth of households by income.

But their insurance premium was $1,691 a month last year, triple their mortgage payment—and was going up to $1,813 this year. They also had a $5,000 per-person deductible, meaning that having and using their coverage could cost more than $30,000.

What sealed the deal was when Blue Cross and Blue Shield of North Carolina and the major hospital system in Asheville, Mission Health, couldn’t reach an agreement, putting the hospital out of network. Keith Buchanan compared the fight to a cable company battling with a broadcaster over what channels to carry.

“It was just two greed monsters fighting over money,” he said. “They’re both doing well, and the patients are the ones that come up short.”

Blue Cross and the hospital eventually made a deal, but enough was enough for the Buchanans. Instead of insurance, they’re paying $198 a month for membership in a local doctors’ practice. They get unlimited office visits and discounts on medications and lab tests. They also signed up for Liberty Health Share, a Christian group that pools members’ money to help pay for medical costs. Liberty costs $450 a month, including a $150 surcharge based on the couple’s blood pressure and weight.

Three days after dropping their Blue Cross coverage at the start of the year, Keith took a wrong step and injured his knee.

It could have been worse. He got it checked out at an urgent care center, where the visit and an X-ray cost him $511. That’s still less than he was paying in premiums to Blue Cross.

“If we can control our health-care costs for a couple of years, the difference that makes on our household income is phenomenal,” Buchanan said. The couple doesn’t have children.

There’s plenty of evidence that having insurance is a good thing. People with health coverage spend less out of pocket on medical care and are less likely to go bankrupt. They see the doctor more often and get more preventive care. They’re less depressed and tell researchers they feel healthier. Some studies suggest having insurance reduces the likelihood of death.

Despite those benefits, some 27.5 million Americans under age 65 were uninsured in 2016, about 10 percent of that population, according to the Kaiser Family Foundation. The most common reason: the cost was too high. A Gallup poll suggests that, after declining for years, the percentage of adults without coverage has increased slightlysince the end of 2016, when President Donald Trump was elected promised to dismantle Obamacare. Other data show no significant change.

The Affordable Care Act wasn’t just an expansion of insurance coverage. It also rearranged how Americans’ medical costs are distributed, favoring some and asking others to pay more.

People near the poverty line got Medicaid for free, while those making more—up to about $100,000 for a family of four—got subsidies to lower the price of private health plans.

Above that threshold, people pay the entire price. Because the law barred insurance companies from charging sick people more or refusing to cover them entirely, costs for healthy people went up as well. Some insurers have left the market, while others have sharply raised premiums to compensate for actions taken by Congress and the administration to weaken the law.

The Bobbie family remembers the problems that the ACA was intended to solve.

Their daughter Sophia was born with serious heart defects, and the organs inside her tiny abdomen were in all the wrong places. She spent the first two weeks of her life in a neonatal intensive care unit. On her six-month birthday, she had open-heart surgery. At nine months, doctors operated on her stomach.

Sophia qualified for Arizona’s Medicaid program. But when she turned 2, the Bobbies were told they made too much money for her to get low-cost state coverage. Her father Joe Bobbie, who co-owns a Philly steak shop with his brother, reduced his take-home pay so Sophia would still qualify.

She had another heart operation just before she turned 3. In just a few short years, her parents were told, Sophia’s medical costs had come to well over $1 million. Before the ACA, no private insurer was willing to cover Sophia’s pre-existing conditions.

“Every door, every option, everything was just slammed in our face,” Sophia’s mother, Corinne, said.  Medical costs that insurance didn’t cover piled up. The family skipped vacations and nights out, and lost their house and car because they couldn’t make the payments.

Corinne and Joe Bobbie, with their children Sophia and Joey.
Source: The Bobbie Family

Those sacrifices have been tough on the Bobbies, but they’ve let Sophia have a relatively normal life. She takes medication for blood pressure and blood-thinners, and a daily antibiotic because she was born without a spleen. She goes to school, rides horses, and plays piano. A recent tumble from her horse frightened her mom, but Sophia jumped up and climbed right back on.

When Obamacare coverage became available in 2014, the Bobbies, who made about $55,000 last year, bought a policy for Sophia that now costs $217 a month.

Adding Sophia’s seven-year-old little brother Joey, who’s healthy, would have cost another $160 per month, with a $6,000 deductible. So he’s uninsured, and so are Joe and Corinne. The money they save risking their own medical and financial health goes to paying Sophia’s bills.

“Every single decision that you make has to be very carefully calculated so that your finances don’t fall apart,” Corinne Bobbie said.

The Trump administration proposes to make it easier for Americans to buy cheaper health plans, which could open more affordable options for the rest of the Bobbie family. But those less-expensive choices, such as short-term health plans, would lack some of the consumer protections created by the Affordable Care Act that allowed Sophia to get coverage in the first place.

The tax proposal that became law in December will also lift the Affordable Care Act’s requirement that every American have coverage or pay a fine. Economists warn that these changes could further weaken insurance markets, pushing up costs for sick patients like Sophia—and forcing more people into similar choices.

Some states are already trying out the new rules, offering plans that don’t adhere to ACA’s requirements. In Idaho, the state’s Blue Cross insurer attempted to offer a “Freedom Plan” with annual limits on care and questionnaires that would let it charge higher premiums to people who are sick or likely to become so. The Trump administration reluctantly judged that such a plan would violate Obamacare’s rules. But federal officials encouraged Idaho to explore offering similar policies as short-term plans that can offer skimpier benefits and lower prices.

In Harahan, Louisiana, outside New Orleans, Mimi Owens learned this year that her family’s $750-a-month plan with Humana Inc. was being discontinued. A new plan for her two daughters and husband on the ACA market would cost close to $1,600. Their family makes about $147,000 from a small business selling class rings and gowns to schools.

Owens said they go to the doctor “for a sniffle, for a flu,” and have a few regular prescriptions, so they looked into short-term health plans and tried out a Christian health-sharing ministry for a few months. The best solution she’s found so far is paying $130 a month to join a direct-primary-care group, which she calls “the best care we’ve ever had.”

It doesn’t cover the big things, though. An accident like a car crash could wipe out their finances.

“We were raised to have insurance,” Owens said. “This is crazy to us.”

— With assistance by Hannah Recht

Death of Texas teacher highlights true cost of US drugs

March 22, 2018

Flu victim should have paid much less for her medication, data show

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By David Crow in New York
Financial Times
March 22, 2018

When Heather Holland, a primary school teacher, went to collect her flu medicine at a local drugstore in Texas in January, she balked at the price. The pharmacist said she would have to pay $116 out of her own pocket, so she left empty-handed.

Her husband returned to the pharmacy the next day to pay for the medicine, a generic version of Tamiflu, and Mrs Holland starting taking the drugs. But her condition continued to deteriorate. A few days later she died in hospital. She was 38.

There is no way of knowing whether Mrs Holland, who was in otherwise good health, would have survived if she had taken the medicine sooner, although the delay cannot have helped.

A Financial Times analysis of confidential and public pricing data has found that Mrs Holland should have paid much less for her flu medication.

Her story captured the attention of a US public already outraged by the soaring cost of healthcare, and prompted many to ask the same question: how is it that a common flu drug — which is on the world’s list of essential medicines — can end up costing so much in America?

The answer lies in part in the miserly health insurance policies now held by millions of Americans, but also in the way that access to drugs is managed by for-profit “middlemen” like CVS Health’s Caremark, Express Scripts and UnitedHealth’s Optum.

These middlemen, officially known as pharmacy benefit managers or PBMs, are unique to the private US healthcare system. Their business model involves amassing millions of patients from different health insurance plans, before using the combined heft to demand big discounts from drugmakers.

Pharmaceutical companies that refuse to discount their medicines can find themselves frozen off the lists of drugs that PBMs are willing to pay for, which can have a chilling effect on their sales. More often than not they agree to the price cuts.

But critics allege that PBMs have opaque business models that boost their profits while pushing up costs for patients.

If Mrs Holland had not used her insurance card and instead paid outright herself, she would have been charged roughly $107 for 10 tablets of generic Tamiflu, according to several pharmacies contacted by the Financial Times.

The cost would have fallen further still if she had foregone insurance and printed off a savings coupon from the website GoodRx. A 10-tablet pack of generic Tamiflu, also known as oseltamivir phosphate, can be bought by without insurance for about $52 with a coupon at Walmart, the grocery chain.

“What’s the point of having insurance, if it means you end up spending more than if you were uninsured,” asks John Norton from the National Community Pharmacists Association.

In Mrs Holland’s case, it is hard to lay the blame for the $116 charge at the door of the pharmaceuticals industry, which has borne the brunt of anger over soaring drug prices in recent years.

The list price for a 10-tablet pack of generic Tamiflu is about $129, according to figures seen by the FT, but the real negotiated price is significantly lower.

According to confidential invoices seen by the FT, pharmacies can acquire a pack of Tamiflu for $45.46 if they contract with the Walgreens Boots Alliance Development, a large purchasing organisation that supplies its own stores, other big chains, and independent pharmacists.

Other large drug purchasing consortiums, like Red Oak, of which CVS is a member, and an alliance of Walmart and McKesson, the wholesaler, can source the drug for a similar sum, according to people briefed on the negotiations.

That means the real amount being booked by generic drugmakers that sell the medicine is often below $45.46, after allowing for a cut taken by the wholesaler.

So why did Mrs Holland end up paying $116, and what happened to the roughly $70 difference?

Mrs Holland had such a high out-of-pocket charge because she was enrolled in a meagre health plan offered by the Teacher Retirement System of Texas (TRS), which charges families a monthly premium of roughly $1,300.

The state of Texas contributes just $75 per member each month, a sum that has remained constant since 2003, even as healthcare inflation has risen at an average of around five per cent a year over the past 14 years.

The true price of drugs? Tamiflu’s 5 different rates
Pharmacy acquisition cost — amount paid by pharmacist to manufacturer / wholesaler

Cash price with coupon — amount patient would pay with drug discount coupon

Cash price — amount patient would pay in cash without coupon

Out of pocket — amount patient in Texas teachers / CVS Caremark plan would pay

Wholesale acquisition cost — list price advertised by drug manufacturer

The TRS health plan has what is known as a high-deductible: members have to cover all expenses until they hit a predefined limit of either $5,000 or $10,000 per family, at which point the insurance kicks in and covers 80 per cent of their drug bills.

TRS outsources management of its health plan to two companies: Aetna, a health insurer, which looks after medical benefits like visits to the doctor and hospitals procedures, and CVS Caremark, a PBM, which controls access to medicines. The companies recently announced plans to combine in a $69bn deal.

When Mrs Holland’s husband filled her prescription, a large chunk of the $70 difference was paid by the pharmacist to CVS Caremark, which kept an undisclosed cut before handing the remainder back to the Texas health plan.

A spokesperson for CVS Caremark said it could not comment on Mrs Holland’s case for privacy reasons, but added: “Our hearts go out to any family who has lost a loved one under these circumstances.”

CVS Caremark and other PBMs have touted their ability to secure discounts from drugmakers, as proven by the case of generic Tamiflu: pharmacies can acquire the drug for 64 per cent lower than list price.

But they have come under increasing scrutiny over what portion of these discounts they keep to boost profits, especially at a time when patients are struggling with rising healthcare costs.

“The vast discrepancy in what a drug costs the pharmacy and the amount it is sold for to the patient is pure profit for someone in the supply chain,” says Michael Rea, chief executive of Rx Savings Solutions, which makes software to help employers and patients cut their drug bills.

Stung by claims that drugmakers are solely to blame for soaring prices, the pharmaceuticals industry recently launched an advertising campaign with the slogan “Share the Savings”, arguing that discounts negotiated by PBMs should be handed back to patients.

“I don’t let pharmaceutical companies off the hook, but it’s true what they’re saying,” says David Mitchell, a pricing campaigner at Patients For Affordable Drugs. “The amount being paid by the PBM for the drug is much lower than the list price, and they are taking a huge piece of the action on the way through.”

PBMs insist their practices have a deflationary effect on drug spending overall. Although they do not disclose how much of the negotiated discount they keep, they insist the vast majority are returned to health plans.

Share this graphic
However, the Trump administration recently signalled that its long-promised push to lower drug prices will focus on PBMs. At an event this week, Alex Azar, the US health secretary, said he would bring forward proposals in a month to explore “how we bring discounts that the middlemen right now are getting to our patients”.

The largest health insurer, UnitedHealth Group, which operates its own PBM, Optum, said this month that it would pass on the “overwhelming majority” of discounts to some of its clients.

CVS also offers “point-of-sale” rebates to 12m of its 94m plan members, meaning that negotiated discounts feed through to the patient. Ultimately it is up to plan sponsors like TRS whether they offer the feature to their patients.

If others follow suit, it could mean a hit to profits for some companies in the healthcare supply chain. But it might also go some way to lowering the soaring drug bills being paid by patients like Mrs Holland.


Restricted access

It is a bizarre feature of the broken US healthcare system that insured patients can sometimes end up paying more for medicines than people without coverage.

Some pharmacists say their contracts with insurers and pharmacy benefit managers can prevent them from informing the patient they could buy the drug at a lower price.

“We need to remove those constraints, so the pharmacist can be more proactive — they can help the patient find the best price by asking the right questions,” says John Norton from the National Community Pharmacists Association.

A group of bipartisan senators have introduced legislation designed to stop these “gag clauses” being included in contracts, while several states are also pushing new laws that target the practice.

PBMs and insurers say they back legislative change, and insist that such contractual arrangements are not commonplace.

“We support the patient always paying the lowest cost at the pharmacy counter,” says a spokesperson for the Pharmaceutical Care Management Association, the trade association for PBMs.

They add: “To the degree this issue was ever rooted in more than anecdotal information, it has been addressed in the marketplace.”

How to Complete the Escape From ObamaCare

March 16, 2018

Congress eliminated the individual mandate. There’s a way around the other onerous regulations.

The he tax-reform provision repealing the penalty on those who refuse to participate in ObamaCare has freed millions of Americans to escape a system that exploits them. But while Americans can escape ObamaCare, they still can’t buy insurance in the individual market independent of ObamaCare because private insurers are prohibited from selling it. If this prohibition can be removed through the granting of state waivers by the Department of Health and Human Services, or by the passage of a new federal statute, ObamaCare will collapse into a high-risk insurance pool for the seriously ill rather than become a stepping stone to socialized medicine.

The politics of the ObamaCare debate changed dramatically when the Congressional Budget Office determined that repealing the coverage mandate would save an astonishing $338 billion over 10 years. The saving would come from undisbursed subsidies, as lifting the tax penalty would induce an estimated 4.6 million people to flee from the exchanges. The number of Americans enrolled in ObamaCare plans is projected to plummet to 7.4 million by 2021, a mere 2.2% of the population.

The repeal of the tax penalty will progressively worsen ObamaCare’s risk pool as healthy enrollees who currently pay more into the system than the expected value of their coverage exit the exchanges. Premiums will rise at an accelerating rate for those who stay in the exchanges, forcing Democrats to find new funding or watch the program implode.

How to Complete the Escape From ObamaCare

There are two ways to restore Americans’ freedom to buy health insurance independent of ObamaCare. First, HHS should grant waivers to states that want to let private insurers offer state-approved plans exempt from ObamaCare’s coverage mandates and rigged risk pool, enabling these states to expand health-care freedom inside their own borders. Second, Congress should amend ObamaCare to permit insurers to sell individual policies outside of the exchanges that are totally independent of ObamaCare regulations, which would dramatically increase the options available to every American.

Idaho is the first state to allow plans that stray from ObamaCare’s coverage mandates, and Blue Cross of Idaho has proposed five “Freedom Blue” plans outside the state exchange. The plans provide coverage similar to what is available on the exchange, but many are listed at about one-third the price because premiums are set to match individual health-risk profiles rather than subsidize the riskiest enrollees. The new plans also boost affordability by offering higher deductibles.

Idaho’s best chance at obtaining the feds’ blessing for its state-approved plans is to make the plans renewable every 12 months. This would allow them to qualify for the limited-duration exemption recently expanded by HHS. In a March 8 letter the administrator of the Centers for Medicare and Medicaid Services told Idaho Gov. Butch Otter : “These state based plans could be legally offered under the PHS [Public Health Service] Act exception for short-term, limited-duration plans.”

Democratic leaders in Congress were quick to recognize that Idaho’s plan to grant health-care freedom to its citizens posed a mortal threat to ObamaCare. Sens. Patty Murray and Ron Wyden were joined by Reps. Frank Pallone and Richard Neal in sending an intimidating letter to the director of Idaho’s Department of Insurance, threatening massive fines and demanding emails and phone records. Since Idaho has shown no sign of backing down, this battle is certain to escalate. Democrats clearly understand that if Idaho is able to market its “Freedom” insurance, as many as 30 Republican-led states will quickly follow its lead. Health-care freedom in Idaho could lead to the de facto end of ObamaCare throughout America.

The Trump administration and Congress are also working to expand health-care freedom nationwide. When the current administration reversed President Obama’s policy of making cost-sharing payments to keep insurance companies in the exchanges, insurers responded by raising the price of their federally subsidized benchmark insurance options. This premium increase on the benchmark policies triggered an automatic increase in the subsidies, all funded by federal taxpayers. State insurance regulators conveniently looked the other way in 2017, but ObamaCare specifically granted the federal government rate-review powers to prevent insurance companies from gaming the system. The benchmark ruse is unlikely to pass HHS scrutiny in 2018.

Before the repeal of the tax penalty, Democrats couldn’t bear the political cost of being seen as dismantling ObamaCare, but they will be forced to act as the program contracts. As healthier families flee the exchanges and premiums spiral, Democrats will be desperate to boost the subsidies. Politically, it will be very difficult for Democrats to deny people who have voluntarily left the exchanges the freedom to buy their own health insurance independent of ObamaCare regulations. Their stubborn reluctance to permit more-flexible plans will provide cover for Republicans to oppose increasing subsidies to the exchanges.

State and federal action to restore health-care freedom would allow new health-care initiatives, such as the partnership among Amazon, Berkshire Hathaway and JPMorgan Chase , to increase innovation in the insurance market. If more than 40% of people enrolled in the exchanges are expected to flee even when the only alternative is to become uninsured, we can expect the number exiting the exchanges to grow substantially when private alternatives are made available. This accelerated exit will reduce ObamaCare to a high-risk insurance pool. At that point the country can have a real debate about how high-risk care should be structured and funded, and whether it should be administered by states or the federal government. Such a program would undoubtedly enjoy stronger bipartisan support than America’s current restrictive health-care law.

Mr. Gramm, a former chairman of the Senate Banking Committee, is a visiting scholar at the American Enterprise Institute.

Appeared in the March 16, 2018, print edition.

Red and Blue States Move Further Apart on Health Policy

February 28, 2018

Cost and the scope of coverage will look very different depending on which party is on control

Health-care options in any given state are likely to depend on which party controls the statehouse. Here, a hospital room in Cumming, Ga., early this year.
Health-care options in any given state are likely to depend on which party controls the statehouse. Here, a hospital room in Cumming, Ga., early this year. PHOTO: ROBERT RAY/ASSOCIATED PRESS

Democratic and Republican states are moving in opposite directions on health policy, leaving Americans with starkly divergent options for care depending on where they live.

The Trump administration and congressional Republicans, by easing many of the Affordable Care Act’s nationwide requirements after failing last year to repeal the entire law, are effectively turning major components of health policy over to the states. The roughly half of states controlled by Republicans are therefore moving aggressively to roll back the law widely known as Obamacare, while the smaller number of Democratic states are working to bolster it.

As a result, the health-care options in any given state are likely to depend on which party controls the statehouse. That dictates access, cost and coverage, particularly for the roughly 17 million people nationwide who buy their own insurance and the 29 million people who lack it entirely.

Increasingly, state health-care policy reflects the ruling party’s goals. In Democrat-controlled California, a patient with a costly medical condition may likely get relatively affordable premiums, while a young, healthy and self-employed professional could pay more. In Republican Texas, the sicker patient will likely do less well or go without coverage, while the younger, healthier one will have less-comprehensive options that may cost far less.

“You’re seeing red and blue states moving further from each other,” said Sam Richardson, a health economist at Boston College. “You’re going to have blue states hang on to what they can. For red states, the more they can dismantle Obamacare, the more they’ll look like before Obamacare. They’ll have higher rates of uninsured, but other innovations.”

This divergence reflects a seismic rollback of the Obama administration effort to promote a more standardized, nationwide health system. The ACA sought to have the healthy help cover the costs of the sick and the wealthy help cover the poor, and it has led to about 20 million people gaining health coverage. But Republicans have long balked at the ACA’s idea of taxing higher earners to pay for health care and have opposed the law’s mandate that individuals who don’t get care through their job or through a government program get coverage or pay a penalty.

The divergence has existed for years. Eighteen largely GOP states never accepted the federal money to expand Medicaid under the ACA. But now it is widening, with GOP states seeking work requirements in the program, and that gap is also accelerating in the individual insurance market.

After congressional Republicans tried repeatedly last year, unsuccessfully, to repeal the health law, they did repeal the individual mandate, beginning in 2019.

In the meantime, the Trump administration has worked to take apart the law piecemeal. One proposal would allow the type of less-comprehensive health plans limited under the ACA. Another would let businesses and some individual band together in associations to get non-ACA-compliant plans. Those actions, along with a willingness to impose new requirements on Medicaid, have emboldened Republican-led states to further undercut the law they have long opposed and raised alarm in Democratic states, where lawmakers are preemptively looking to buttress the law from any GOP policy changes

Health and Human Services Secretary Alex Azar at a conference last week in Washington.
Health and Human Services Secretary Alex Azar at a conference last week in Washington. PHOTO:JOSE LUIS MAGANA/ASSOCIATED PRESS

On Tuesday, 20 Republican state attorneys general sued to overturn the law, arguing that it is unconstitutional now that the individual mandate has been repealed.

Under the administration’s proposals, states are expected to be get more flexibility in waiving some ACA requirements and oversight of plans that don’t comply with the ACA.

Democrats say non-ACA-compliant plans would siphon younger and healthier people away from the law’s exchanges, which they say would cause premiums for older and less-healthy people to jump. Republicans say being able to offer cheaper and less-comprehensive plans amounts to more consumer choice.

Health and Human Services Secretary Alex Azar told reporters he is exploring options to let states “create affordable, individualized insurance” for their systems.

“There is no single one right answer,” he said.

States like Indiana and Kentucky are being allowed to impose certain changes on Medicaid for the first time, like requiring recipients to work or undertake similar activities before they get benefits. In Idaho, Republican Gov. Butch Otter is largely flouting the ACA by letting insurers sell plans that don’t comply with the law.

By contrast, Democrat-led states such as California and Maryland are looking to block or limit the expansion of cheaper and less-robust health plans that don’t adhere to ACA rules. Nearly a dozen states are considering measures requiring residents to have health coverage, essentially re-imposing an individual mandate with new modifications.

Health Care in America: Insurance Gaps and Medical Deserts
In Trenton, Tenn., and similar rural communities around the country, many residents are underinsured or uninsured and struggle with medical costs, often forgoing care. This burdens local hospitals, which in turn close or scale back care, putting patients at risk. Photo: Clara Ritger/The Wall Street Journal

Washington state Insurance Commissioner Mike Kreidler said he is drafting a rule that would ban so-called short-term plans, which aren’t ACA-compliant, from being carried longer than 90 days.

“How are we going to protect this from the feds?” Mr. Kreidler said. “You’re going to see states take these types of action.”

New Mexico, at the behest of the state legislature, is studying plans to allow more people to buy into Medicaid, a state-federal program for the low-income and disabled.

As the states fight it out, the Republicans’ proposed and actual changes could erode some of the ACA’s basic goals like ensuring that health insurance bought by individuals meets certain standards, and that it is priced equally regardless of a person’s medical history.

States with a large share of Democratic legislators, especially those with a Democratic supermajority, are more likely to have generous public health insurance programs and more regulated private insurance than red states, according to a 2015 report by University of Houston researchers.

“If I was chronically ill and didn’t get insurance through an employer and if I was in a red state, I’d be really worried right now,” said Nicholas Bagley, a University of Michigan law professor.

Republicans counter that greater autonomy works best. GOP-designed arrangements tend to allow for lower taxes, they say, while letting individuals find insurance policies that work for them, rather than forcing people into rigidly defined plans.

“Give us flexibility at the state level,” Republican Ohio Gov. John Kasich told reporters recently. “Let me design a Medicaid program I want. Let’s change the Obamacare essential benefit to what I want.”

Insurers that offer ACA plans want to see those markets strengthened, so that rates wouldn’t surge and enrollment, particularly among healthier consumers, would remain steady.

But some companies see a business opportunity in the potential growth of non-ACA-compliant plans. UnitedHealth Group Inc. Chief Executive David Wichmann has said his company has a lot of experience in the types of policies that would increase under the Trump administration’s proposals.

Write to Stephanie Armour at

A New Way to Wreck Obamacare

February 25, 2018


The Trump administration continues its concerted attack on the Affordable Care Act.
By The Editors
Redefining health insurance.

 Photographer: Joe Raedle/Getty Images

The Trump administration’s latest strike on the Affordable Care Act is to expand the availability of so-called short-term health insurance. Don’t be misled by the seeming modesty of this idea. It’s an impressive combination of bad policy and bad faith.

First, these aren’t short-term plans at all. They’d provide coverage for up to a year, much longer than required for the supposed purpose of helping people transition from one insurer to another. Second, the idea will drive up premiums for ordinary health insurance. Third, and most important, it undermines the ACA’s worthy ambition to see that all Americans can get decent health insurance.

Unfortunately, the administration can make this change without getting a law passed. One hopes, therefore, that the plan will be struck down by the courts or countered by state governments.

Adequate health insurance for all means making sure that people who buy individual policies get coverage similar to that provided by employer-sponsored plans. They shouldn’t be turned away or charged higher prices for being already sick. And their policies should cover the care they need — including prescription drugs, mental health care, contraception and emergency-room treatment.

The administration’s elongated short-term plans would not be required to meet those ACA standards. Buyers would pay lower premiums, but in return run the risk of having less coverage than they expect when medical needs arise. Meanwhile, they would have taken themselves out of the regular-insurance risk pool. People choosing to do that will probably be healthier than average — which will raise premiums for everyone else.

This change is only one of several ways the Trump administration has sought to lure healthy people out of the ACA marketplace. It has expanded and deregulated association health plans, which also need not cover essential health benefits. And it has done away with the tax penalty for going without insurance, encouraging people to get by with no coverage at all.

Even taken together, these measures do not amount to a repeal of Obamacare. The law still ensures that people with low incomes qualify for generous premium subsidies. And Medicaid continues to cover an expanded population in 32 states (and counting). Nonetheless, these so-called reforms are a concerted attack on the ACA’s foundations.

If the courts fail to stop the change to short-term health insurance, states ought to step in, and should plan for this immediately by strengthening their own regulations. They should place their own time limits on short-term policies, and demand that such plans cover the health care people need.

Sadly, people in states that won’t provide this protection will be left waiting for leaders in Washington who will.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at .