Health Insurance and Mortality, Part 2

Please read Part 1 of this post before continuing.

Not surprisingly, there have been several criticisms of the Sommers, Long and Baicker study. Here are the main ones I've been able to identify so far, and my comments on each.

• It's too good to be true. The New York Times reports that experts are “skeptical of the magnitude and suddenness of the decline” in mortality. According to Dr. Joseph Antos, a health economist at the American Enterprise Institute, “Health care is a much more involved process—you don't just sign up and suddenly get well.” This objection, of course, does not explain the results. These researchers may be overlooking the fact that being without health insurance is a psychological stressor, the removal of which may have immediate health benefits.

• The results contradict those of the Oregon Medicaid study. A 2013 study by Baicker, et al., examined the effects of Medicaid expansion in Oregon using a randomized control group design. (The opportunity to sign up for Medicaid was determined by lottery.) Although this study found economic and psychological benefits of Medicaid, its effects on objective measures of health were disappointing. Blood pressure, cholesterol and blood sugar levels were all lower in the Medicaid group, but the differences were not statistically significant. However, the Oregon study's sample size was too small to detect medically important health benefits. The Massachusetts study has many more particpants. If the same percentage decline in mortality observed in the Massachusetts study had been seen in Oregon, it too would not have been statistically significant. The two studies are not inconsistent. An important strength of the Massachusetts study is its larger sample size. Furthermore, it measured the effects of the entire health reform package, not just Medicaid expansion.

• It costs too much. Using the Sommers, et al., data, Cannon calculated that it cost Massachusetts $4 million per life saved. He argues that this is not cost effective. However, this assumes that the only benefit people received from Romneycare was when it saved their lives. It ignores the many health and quality of life benefits people receive from medical treatments for non-life-threatening illnesses and injuries. What is the value of a knee or hip replacement that allows a person to walk free of pain for 20 years? How do you measure the benefits to a family of avoiding bankruptcy and the loss of their home?

• Massachusetts is different from other states. Massachusetts is “whiter and more affluent” than most other states, but the matched comparison groups control for race and income. It could be argued that Massachusetts has a more effective health care system (more doctors, better-equipped hospitals) than other states. However, a convincing alternative explanation must explain not just lower mortality in Massachusetts, but all the results. Why did the mortality rate change from 2001-2005 to 2007-2010? Wouldn't a better health care system be expected to help people over 65 as well? As Sommers, et al., state in their conclusion:

Although we cannot rule out unmeasured confounders, it is challenging to identify factors other than health care reform that might have produced this pattern of results: a declining mortality rate in Massachusetts since 2007 not present in similar counties elsewhere in the country, primarily for health care-amenable causes of death in adults aged 20 to 64 years (but not elderly adults), concentrated among poor and uninsured areas and not explained by changes in poverty or unemployment rates.

Of course, health insurance is useless if there are no doctors or hospitals in your area. The quality of the health system may have interacted with health care reform to produce a better result in Massachusetts than would be expected in other states. This does not explain away the results, but it may limit our ability to generalize from them.

• More research is needed. This cliché is, of course, trivially true. However, it is unrealistic to expect definitive studies of effects of the Affordable Care Act (ACA), since it is being implemented simultaneously in all 50 states. There are no experimental and control groups, only before and after comparisons, the results of which can easily be dismissed as caused by other changes taking place in society at the same time. About the best we can expect will be comparisons between states that do or do not expand Medicaid. (Pennsylvanians will be happy to know that, thanks to Governor Tom Corbett and our legislature, future researchers will be counting the number of excess deaths in our state.) However, states that are not expanding Medicaid are already known to differ both economically and politically from other states. And while Medicaid expansion is an important provision of the ACA, it is only a part of it.

In short, the Sommers, et al., study may be the best that is available for the foreseeable future. Even conservative critics of health care reform are granting it grudging respect.  Megan McArdle stated, "(A)fter yesterday's report, I've revised the probability of 'huge benefits' [from health care reform] upward, and you should do the same."

You may also be interested in reading:

Health Insurance and Mortality, Part 1

Big News From Oregon:  Not All of It Good

The Coverage Gap:  The Real Failure of Obamacare

Romneycare:  The Bottom Line

Health Insurance and Mortality, Part 1

In 2006, Massachusetts implemented the country's first comprehensive health care reform (“Romneycare”). It made health insurance mandatory for nearly all citizens, expanded Medicaid to cover people earning up to 150% of the federal poverty level (FPL), and provided health insurance subsidies for people with incomes up to 300% of FPL. It became the structural model for the Affordable Care Act (ACA). A previous study showed that Massachusetts residents reported themselves to be in better health following the implementation of Romneycare. A new study out this week shows that health care reform significantly reduced the mortality rate in Massachusetts compared to nearby states. This is the bottom line in health care research. It's good news not only for the ACA, but for single payer advocates as well, since single payer would further expand the number of people covered by health insurance and would presumably reduce the red tape and out-of-pocket costs that keep some people from using health care.

The study, by Drs. Ben Sommers, Sharon Long, and Katherine Baicker, is a quasi-experimental design. It lacks an important feature of true experiments—random assignmnent of participants to conditions—but attempts to compensate for this by using a matched comparison group that controls for most plausible alternative explanations. In this case, the experimental group was the citizens of Massachusetts. Each county in Massachusetts was matched with a comparison county drawn from a nearby state. The counties were matched for age distribution, race and ethnicity, poverty, income, unemployment, lack of health insurance, and their existing mortality rate. The authors compared the mortality rates of adults under 65 from 2001-2005 (prereform) to 2007-2010 (postreform). Here are the results.

• Mortality in Massachusetts declined 2.9% relative to the comparison group. This is equivalent to 8.2 deaths per 100,000 people, or one death prevented for every 830 people who obtain health insurance. The New York Times calculates that a national 2.9% decline in mortality among adults under 65 would translate to about 17,000 lives saved per year. Harold Pollack claims that the number is as high as 24,000 per year.
• Mortality “amenable to health care,” i.e., from causes such as cancer, heart disease and diabetes, declined 4.5% relative to the control group. Mortality from causes not amenable to health care, i.e., auto accidents, was unchanged. See the chart below.
  
  

• Mortality among people over 65 was unaffected. This is to be expected, since senior citizens already had Medicare.
• Reductions in the mortality rate were greatest among counties with the lowest incomes and the lowest rates of insurance coverage prior to reform.
• As you would expect, the study also found significant increases in insurance coverage, access to medical care, and self-reported health in Massachusetts compared to the comparison group.

As health care expert Austin Frakt has noted, this study constitutes the strongest evidence yet that having health insurance can save your life. Nevertheless, the study is not without its critics. I will look at some of those criticisms in Part 2 of this post.

You may also be interested in reading:

Health Insurance and Mortality, Part 2

Big News From Oregon:  Not All of It Good

The Coverage Gap:  The Real Failure of Obamacare

Romneycare:  The Bottom Line

In Denial

Political scientist Brendan Nyhan was on All In with Chris Hayes last night (March 11) for a discussion of the Julia Boonstra television ad. The political ad, which was financed by the Koch Brothers' PAC, Americans for Prosperity, is running in Michigan in an early attempt to discredit Democratic Senatorial candidate Gary Peters. In it, Ms. Boonstra, a cancer patient, claims that her health insurance was cancelled due to the Affordable Care Act, that she can't afford the alternative policy offered to her, and that she is afraid she will die as a result. The ad was awarded three Pinocchios by the Washington Post after it was discovered that the alternative policy actually would save her $1200 a year. Her response was, “I personally do not believe that,” and that it “can't be true.”

This ad is part of a larger campaign in which Republican organizations trot out Obamacare “victims” to tell stories that are almost always misleading. Journalists eventually debunk these stories, but many more people hear the lie on television than read the truth in a newspaper, and even those who are told that the story is false often refuse to believe it.

Brendan Nyhan has been doing research for several years which shows that attempts to correct misinformation fail when they oppose people's deeply entrenched political ideologies. In fact, they can backfire and produce a boomerang effect—attitude change in the direction opposite to that intended by the speaker. Dr. Nyhan's latest study, released just last week, was an attempt to dispel the myth popular among conservatives that the measles, mumps and rubella vaccination (MMR) causes autism. Here's some background on the controversy from Aaron Carroll.

In the study, a nationally representative sample of 1759 young parents were randomly assigned to receive one of four pro-vaccine messages or a control message, delivered via the internet. The pro-vaccine messages, all taken from the Center for Disease Control (CDC) website, were:

1. Autism correction—written scientific evidence debunking the vaccination-autism link.
2. Disease risks—written descriptions of symptoms and risks associated with measles, mumps and rubella.
3. Disease narrative—a dramatic narrative in which a mother tells how her baby almost died from the measles.
4. Disease images—photographs of children suffering from symptoms of the three diseases.

The control group received an article about the costs and benefits of bird feeding. Nyhan measured the belief that the MMR causes autism, the belief that the MMR has serious side effects, and whether the participants intended to have their next child vaccinated, both before exposure to one of the messages and again about two weeks later.

The results were disappointing. Compared to the control group, the autism correction message significantly reduced the belief that the MMR causes autism. That was the only intended effect. The other three significant results were all boomerang effects. The disease narrative increased the belief that the MMR has serious side effects. The disease images increased the belief that the MMR causes autism. And finally, the autism correction resulted in parents reporting that they would be less likely to vaccinate future children. This latter effect was strongest for those parents who initially believed that the vaccine causes autism.

Ordinarily we should not make too much of studies that demonstrate no significant change. After all, the CDC messages could have been ineffective for a variety of reasons not immediately apparent to a reader of the study. It's also possible that different messages or combinations of messages might have worked. However, these were statistically significant backfire effects, and they should probably be taken seriously. The tendency of beliefs to persist or grow stronger even when the evidence for them is shown to be false is known as belief perseverance. The widely-accepted explanation for perseverance effects is self-persuasion. When people hear a message they disagree with, they counterargue with it. In the process, they expose themselves to their own counterarguments and persuade themselves to change their attitudes in the opposite direction from the message.

In the short run, at least, social scientists are becoming known in the media for delivering a depressing message: Factual information is ineffective in changing people's ideologically-motivated attitudes. So far, we have been unable to propose effective strategies for breaking through the barriers imposed by politically-inspired misinformation.

You may also be interested in reading:

Death By Anecdote, Part 1

The Open and Closed Mind

Motivated Reasoning

The Singer, Not the Song

In 2010, social psychologist Eric Knowles and two colleagues published a study showing that some of the opposition to health care reform results from prejudice toward African-Americans and dislike of Barack Obama. The research was a panel study in which participants were interviewed several times over the internet.

During the first contact, Knowles measured implicit prejudice against blacks using a variation of the Implicit Association Test. This test measures an automatic tendency to associate white Americans with the concept “good” and black Americans with the concept “bad.” This bias this is unintentional and occurs without our awareness. Knowles found that the people high in implicit prejudice toward African-Americans reported more negative attitudes toward Obama before the 2008 election and were less likely to vote for him. This is one of several studies to show that racial prejudice influenced votes in both the 2008 and 2012 elections.

These negative attitudes toward blacks spilled over onto Obama's policies. People high in implicit prejudice were more opposed to health care reform in 2009, before the Affordable Care Act (ACA) was passed. How do we know their opposition to health care reform was due to prejudice rather than political conservatism, which is highly correlated with prejudice in this country? Knowles did an experiment in which he described a health care plan. For half the participants, it was presented as Bill Clinton's 1993 plan and for the other half, it was presented as Obama's plan. (The actual description was of features that both plans had in common.) Implicit prejudice had no effect on attitudes toward the “Clinton” plan, but when it was attributed to Obama, the more prejudiced participants were more opposed to it. This study was replicated two years later with the same results.

Fast forward to 2014. Aaron Chatterji and colleagues just published a study asking why members of the House of Representatives did or did not vote for the ACA. The study only included Democrats, since only one of 177 Republicans voted for the bill. The researchers looked at whether three variables were related to the legislators' votes: (1) the percentage of their constituents without health insurance, (2) Obama's margin of victory or defeat in the 2008 election in their district, and (3) political contributions from health insurance companies. The statistical analysis also controlled for eight demographic variables, such as the age and racial composition of the district, and five Congressperson characteristics, such as their own 2008 margin of victory. The results were:

• Percentage of constituents without health insurance was unrelated to the legislators' votes.
• Obama's margin of victory made a significant difference. The 219 Democrats who voted for the ACA came from districts in which Obama's average margin of victory was +30%, while the 39 Democrats who voted against it came from districts in which Obama lost by slightly under 10%. Obama's margin of victory accounted for 47% of the variance in these Representatives' votes.
• Political contributions from the health insurance industry also had no relationship to voting.

The authors note that if the Congresspeople had the best interests of their constituents in mind, there should have been greater support for the ACA from Representatives whose districts contained a higher percentage of uninsured people. At different places in the article, they refer to this as either ignoring their constituents' preferences or ignoring their constituents' needs. The latter is more accurate, since they have no measure of voter preference. Maybe some of the people who needed the ACA did not prefer it (or did not know they preferred it). It is primarily the needs of their poorer constituents that these legislators ignored. This is no surprise, since there is a growing body of research showing that politicians votes are consistent with the opinions of their constituents in the top third of the income distribution, but the opinions of the lower and middle thirds are disregarded.

Of course, Obama's margin of victory or defeat is also a salient indicator of constituent preferences, and these Congresspeople were very responsive to it. However, the presidential election was not a referendum on health care reform, which played only a minor role in the campaign, but is more reasonably regarded as a measure of Obama's popularity. It appears that the legislators voted for or against the ACA based on the evidence of Obama's popularity in their district.

The common thread among both studies is that both citizens' and legislators' attitudes toward health care reform seem to be less influenced by the substance of the policy than by attitudes toward the President himself. At the present time, politicians in 24 states (including Pennsylvania) are ignoring the needs of their poorer citizens by refusing to implement the ACA's provision to expand Medicaid. Is this decision also driven by attitudes toward the President?

By the way, the fact that political contributions from insurance companies had no effect on voting doesn't really contradict the hypothesis that politicians are influenced by campaign contributions. The health insurance industry never clearly favored or opposed the ACA, since it has both advantages and disadvantages for them. In fact, the authors never predicted whether health insurance money would make a Congressperson more or less likely to vote for the bill.

You may also be interested in reading:

Old-Fashioned Racism

Whose Opinion Matters?

Symbolic Racism and Gun Ownership

The Oregon Health Experiment: The Gift That Keeps On Taking Away

Be prepared for a barrage of conservative criticism of the Affordable Care Act (ACA) that may be assumed to have negative implications for single-payer health care as well.

As I've noted before, the Oregon Health Experiment is a randomized control group design, far superior to most health care research. In 2008, Oregon hoped to expand Medicaid, but didn't have enough money, so they held a lottery. They invited everyone who was eligible to apply. Of the 90,000 applicants, 30,000 were randomly selected to receive Medicaid, while the losers became eligible for the control group. In previous data analyses, it was found that the Medicaid group spent 35% more on health care than the control group. They visited primary care physicians (PCPs) and were admitted to hospitals more often, and spent more on prescription drugs. They were also healthier and freer of financial worries, although most of the health differences are not statistically significant due to insufficient sample sizes in the study.

A new analysis by the Oregon research group reports that the Medicaid participants were also more likely to visit the emergency room (ER). Specifically, during their first 18 months on Medicaid, they made an average of 1.43 ER visits compared to 1.02 in the control group—a 40% difference.

This should not have been a surprise. If you reduce the cost of a service, people are more likely to use it. However, some ACA proponents claimed that Medicaid expansion would save money by reducing ER use. Although the ER accounts for only 4% of health care spending, an ER visit is more expensive than visiting a doctor. The pro-ACA argument was that if patients established a relationship with a PCP, they would have a place to go for medical care and these doctor visits would prevent potential emergencies. For example, Health and Human Services Secretary Kathleen Sebelius said in 2009:

Our health care system has forced to many uninsured Americans to depend on the emergency room for the care they need. We cannot wait for reform that gives all Americans the high quality, affordable care they need and helps prevent illnesses from turning into emergencies.

It is important to note that these results are not due to the fact that Medicaid provides health insurance for poor people. Private health insurance patients are also more likely to use the ER than the uninsured.

Increased ER use might not be seen as a problem if the visits were real emergencies. However, the study found ER use to be higher even for non-urgent care that should ideally have been treated by a PCP. These results could be used by the opposition to suggest that single-payer might cause an massive influx of people outside the ER waving torches and pitchforks and demanding free care.

There are several considerations that may place these results in clearer perspective.

• The time frame of the study, 18 months, may not have been sufficient to change uninsured people's lifelong habits of going to the ER every time they were sick. A three-year study of Romneycare in Massachusetts found an estimated 5-8% reduction in ER use.

• Medicaid expansion could have been accompanied by education regarding when to go to the ER and when to visit your PCP. Of course, some may argue that education is not enough and should be supplemented by punishment, such as a co-payment, for “inappropriate” ER use.

• Taking a broader view, the problem may be with the health care system rather than the patients. PCPs tend to be available Monday through Friday from 9 to 5—times that are inconvenient for most employed people. You can't always get same-day appointments with a PCP. A 2012 survey by the Commonwealth Fund found that in the US, only 35% of PCPs see patients after hours. In nine European countries and Canada, the average was 80%.

This study is one of a growing number that show that providing health insurance to the uninsured alone does not save money. The ACA contains some cost controls, such as the Independent Payment Advisory Board, which may eventually reduce costs. Single payer eliminates the cost of private insurance, which will save much more. Other changes may be needed. One of them may be asking PCPs to become more consumer-friendly by seeing more patients on evenings and weekends.

You may also be interested in reading:

Big News From Oregon--Not All of It Good

Tom Corbett to PA's Working Poor:  "Drop Dead"  Part 1.  Medicaid Improves Health and Saves Lives

Death By Anecdote, Part 2

Please read the first part of this article.

When a story is false, we run into a third problem: Even when misinformation is corrected, many people continue to believe it. For example, in one study, participants from Australia, Germany and the United States were asked about arguments made by the US government favoring the invasion of Iraq which were subsequently retracted, such as the claim that Iraq possessed weapons of mass destruction (WMDs). The Australian and German students were sensitive to retraction; that is, when they knew a claim had been retracted, they tended not to believe it. The Americans, however, were insensitive to retraction; on the whole, they tended to believe statements that they knew had been retracted about as much as statements they did not know had been retracted.

Paradoxically, attempts to correct misinformation can lead to a backfire effect, in which people are more likely to believe false information after it has been debunked. Sometimes this is due to increased familiarity with the claim as a result of its being repeated during the retraction. However, backfire effects are most likely to occur when the original claim is consistent with the ideology of the person who believes it. Not surprisingly, Republicans were more likely than Democrats to continue to believe that Iraq had WMDs even after the Bush administration admitted they didn't. When ideological backfire effects occur, people can be suspicious of the motives of the person or organization doing the correcting (often the news media) and discount the retraction.

Lewandowsky and others make three suggestions for successfully correcting misinformation: (1) warn people at the time of initial exposure that the information is suspect, (2) repeat the retraction several times, focusing only on the new, correct information, and (3) provide a plausible alternative explanation for the previous false belief. In the case of ideologically motivated false beliefs, they make a fourth recommendation: Affirm the target's ideology before attempting to correct the false belief. The first two remedies require news media cooperation that the Obama administration is unlikely to receive. Since no single alternative explanation accounts for all the anti-ACA anecdotes, providing plausible explanations for false beliefs requires extensive investigation of individual cases. The fourth suggestion would seem to require a statement like this: “We agree with you that Obamacare is a disaster, but in this case, you are wrong because . . .” 

Here is Lewandowsky discussing misinformation and its correction in the important area of climate change.

I see no magic bullet here. The best solution for the administration may be to appeal to the value Americans place on self-reliance and encourage them to explore their health care options for themselves. But they can't do that until their website is fixed. If they lose the cooperation of young people, the market will suffer from adverse selection—not enough people paying into the system, and too many older, sicker people drawing it down. Insurance rates could increase dramatically next year, just in time for the 2014 elections. Then Obama will see how much fun it would be if the Tea Party controlled the Senate as well as the House.

The HealthCare.gov fiasco is bad news for single payer advocates too. I'm afraid most people don't realize that it was Obama's reliance on an "overly-complicated, market-based Republican health care plan" that made the website so difficult to set up. They may simply conclude that government can't do anything right.

You may also be interested in reading:

Death By Anecdote, Part 1

Policy By Anecdote

Climate of Mistrust

Death By Anecdote, Part 1

You can lie with statistics, but a well-chosen anecdote is much more effective.

Here's something to look forward to, right along with your next colonoscopy.  The New York Times reports that the Republican Party plans to carry out a sustained, organized attack on the Affordable Care Act (ACA) for the next year, in the hope of gaining an advantage in the 2014 elections. The Republican campaign, described as a “multilayered sequenced assault,” is outlined in the House Republican Playbook, a 17-page strategy document prepared by their House leadership. It lists a series of talking points such as: “Because of Obamacare, I lost my insurance,” “Obamacare increases health care costs,” and “The exchanges may not be secure, putting personal information at risk.” House members are advised to collect anecdotes from constituents in support of these talking points through social media, letters and visits to their home distract. A new website, gop.gov/yourstory, centralizes the collection of these anecdotes. Republicans are instructed in the use of “messaging tools” for disseminating the stories, for example, a sample op-ed for submitting to local newspapers.

The idea is to flood the media with anecdotes in support of a particular talking point. If there is an effective counterresponse from Democrats, they will shift immediately to a different talking point. Topics waiting in the wings for possible use include insurance “rate shocks,” threats to being able to keep your doctor, and possible changes to Medicare Advantage policies.

The Republicans recognize that anecdotes can have a powerful influence on public opinion. When making inferences, people use judgmental heuristics, or mental shortcuts to make decisions quickly and easily. The use of heuristics is automatic and unconscious. They usually lead to correct inferences, but they sometimes lead us astray.

One inference we often make is to estimate the size of a category or the frequency of an event. For example, how many Americans are being harmed by the ACA? The availability heuristic suggests that the size of a category is judged by the ease with which examples can be brought to mind. Examples are more easily retrieved from memory if they are concrete rather than abstract, if they are dramatic and interesting, or if they happened recently or nearby. Personal experiences are particularly salient. When people are asked to estimate the frequency of various causes of death, they overestimate homicides and auto accidents, but underestimate strokes and diabetes. Clearly, their estimates are influenced by media coverage.

The problem gets worse when you consider the base rate fallacy, which states that people are inattentive to population statistics, and their judgments are not sufficiently affected by them. In one study, participants were given vivid stories about misbehavior by prison guards or welfare recipients. Attitudes toward these groups were equally negatively affected regardless of whether they were told that the anecdotes were typical of the population, not typical of the population, or they were given no base rate information. In another study, college students' intentions to take courses were affected by single brief face-to-face comments from a stranger, but hardly at all by statistical summaries of the course evaluations of much larger numbers of students who had previously taken the course.

The availability heuristic and the base rate fallacy suggest that even if people are given accurate information suggesting than the story is unrepresentative, their false impression is unlikely to be corrected. There was heavy media coverage of the first wave of anecdotes from people who claimed that their insurance costs went up due to Obamacare. When critics examined them more closely, many of these anecdotes were found to be misleading. Insurance companies cancelled policies and raised rates long before the ACA. The percentage of people whose policies were cancelled was small. Some of these people were able to get equal or better insurance through the exchanges without paying more. However, the corporate media can't be counted on to investigate anecdotes before airing them, and the debunking stories seldom receive anywhere near the attention given to the original report.

The Obama administration has apparently decided that the best defense is a good offense, so they are responding with anecdotes of their own—so-called Obamacare “success stories.” While this may be the best they can do under the circumstances, they are unlikely to get much cooperation from the corporate media in publicizing these stories. The media don't cover successful airplane landings--unless you land it in the Hudson River. Meanwhile, the administration and the media have largely overlooked another potential source of much more tragic stories: the 5.2 million people who are being denied health insurance entirely because they happen to live in states where Republican governors and legislatures have blocked Medicaid expansion. But to the corporate media, an upper middle class person losing a few dollars a month is much more newsworthy than a poor person losing his or her life.

But remember, the plural of anecdote is not data. To be continued.

You may also be interested in reading:

Death By Anecdote, Part 2

Policy By Anecdote

The Coverage Gap:  The Real Failure of Obamacare

Conceptualizing Health Care Policy

Mike Konczal has written an important article in which he asks: (1) What parts the Affordable Care Act (ACA) are not working well, and why?, and (2) What does this imply about future developments in health care policy? Will government abandon the effort to provide health care for all, or will we move toward a single-payer system?

Paul Krugman has described the ACA as a “kludge.” It is too complicated, and those complications are making the system inefficient and expensive, while depriving many Americans of health insurance. Konczal notes four specific problems:

1. The process of signing up for health insurance in the federal exchange (HealthCare.gov) is complicated because everyone must be means tested. The government must be able to confirm virtually every datum the applicants enter: their identity, their citizenship, their income, their eligibility for coverage through other federal or state programs, etc. All this is necessary to determine whether each applicant is entitled to a subsidy, and if so, the amount.
2. A further complication is that each applicant must be matched to a private insurer. The government must check that all of the thousands of insurance plans meet their minimum standards. They must clearly communicate the important characteristics of each policy to consumers, even though the insurance companies deliberately try to confuse them. They must contend with insurance company sabotage such as canceling plans abruptly and arbitrarily raising rates.
3. The ACA faces the threat of adverse selection—the possibility that the oldest and sickest among us will patiently navigate the exchange and eventually purchase a policy, while the youngest and healthiest will ignore the law and hope the penalty for not buying insurance is unenforceable. If Americans in poor health are more likely to buy insurance, the costs go up and there is a very real possibility that the system will collapse.
4. Finally, the federal government has to deal with attempted sabotage by states controlled by Republican governors and legislatures, exemplified by their refusal to set up state exchanges and to participate in Medicaid expansion, which is denying coverage to over 5 million low income Americans.

Summarizing these problems, Konczal describes two approaches to social insurance, which he calls Category A and Category B.

Konczal describes Category A as the “neoliberal” approach to public policy. Neoliberalism has, in recent years, become a synonym for conservatism. It refers to policies that reduce the role of government in public life through strategies such as privatization and deregulation. Category A social insurance sees the government as “an enabler to market activities, with perhaps some coordinated charity to individuals most in need.”

Category B, on the other hand, encompasses progressive programs such as the New Deal and the Great Society. It sees certain goods and services, such as food, shelter and health care, as basic human rights, and attempts to remove them from the marketplace by providing them to everyone.

There are very few pure examples of Categories A and B; most policies fall somewhere along a continuum between these extremes. However, the ACA falls clearly into Category A. This is not surprising because it is a plan devised by a conservative think tank which was promoted for decades by the Republican party. Social Security and Medicare, on the other hand, fall into Category B. Medicaid is a hybrid, since it is means tested and administered (and regularly sabotaged) by the states.

In the last three decades, we have seen a gradual rollback of Category B programs. This is not surprising, given the extent to which the political system is controlled by corporations and wealthy individuals. In the old days, the Republicans favored Category A and the Democrats Category B. As both parties have shifted to the right, the Democrats have shifted their allegiance to the Category A policies favored by their corporate donors, while many Republicans advocate eliminating social insurance entirely.

Whenever a public service is privatized, it moves from Category B to A. This is what happens, for example, when you turn over tax dollars to charter schools, so that corporations can make profits by educating children as cheaply as possible. Of course, the ultimate disaster for the country would be the Republican plan to privatize Social Security, since another Great Recession—a virtual certainty in the absence of financial reregulation—would have the potential to impoverish our elderly population.

PA Governor Tom Corbett's proposal to expand Medicaid would move this program further toward Category A through a combination of stricter means testing and turning the program over to private insurance companies. Dave Steil, President of Healthcare 4 All--PA, has written an op-ed critizing the Corbett plan. He rightly notes the waste of money that would result from turning Medicaid over to private insurance companies. However, he overlooks the hardship that increased means testing, premiums and copayments will impose on working class Pennsylvanians.

Advocates of single payer health insurance—obviously a Category B program—are going to be urinating into a stiff wind for the foreseeable future. However, there is some hope. It is the four Category A characteristics noted above that are turning the ACA into a “kludge.” While Republicans will argue for repeal, pragmatists are likely to notice that if you drop some of these characteristics, you can improve health outcomes while saving money. And if you drop all four, you have single payer.

You may also be interested in reading:

The Coverage Gap:  The Real Failure of Obamacare

A Clouded Vision, Part 1:  The Stick

A Clouded Vision, Part 2:  The Carrot

Just Asking

The following letter appeared in yesterday's Pittsburgh Post-Gazette.

           Under attack?

In this day and age, we hear and read on an almost weekly basis, instances of hackers penetrating many government and industry websites to install malicious malware and viruses. So I'm kind of surprised to see no one inquiring whether the Affordable Care Act website has likewise been attacked by individuals intent on installing similar defects in the website software to negatively impact its successful rollout, and to further embarrass and smear the president. Just asking.

Steve Siskind

Canonsburg

I have been wondering the same thing myself. I can understand why, if this is true, the Obama administration might not want it to be known. But shouldn't the news media be inquiring about this?

The Coverage Gap: The Real Failure of Obamacare

Right now, the corporate media are focused like a laser on the “scandal” of the malfunctioning of the national health insurance exchange website. Although these glitches reflect negatively on the Obama administration, they are technical problems that will be fixed. They have nothing to do with the substance of the law. A more important failure is the number of people, particularly poor people, who will remain uninsured after the Affordable Care Act (ACA) is implemented. This is not the fault of the act as written, but is the result of the Supreme Court decision on its constitutionality and intractable opposition from Republican politicians.

An October study by the Kaiser Family Foundation (KFF) estimates that 5.2 million non-elderly adults living below the federal poverty level (FPL) will remain uninsured in 2014 because they live in the 26 states that—at the time of the study—had declined to participate in the Medicaid expansion. These states are concentrated in the South and West and are controlled largely by Republican governors and legislatures. About half of Americans, but 58% of America's uninsured working poor, live in those states. Pennsylvania is among them. Our Medicaid expansion status is uncertain, but even if the Corbett administration reaches agreement with the federal government on an expansion plan, it is unlikely to be implemented in 2014.

To review, of the approximately 30 million people who were expected to be insured for the first time under the ACA, fully half of them—the poorest half—were to be insured through Medicaid expansion. Traditional Medicaid is jointly administered by the state and federal governments. Federal law requires that all children be covered if their family makes less than the FPL. Children under six are covered up to 133% of FPL. The eligibility rules for adults are determined by the states. In most states, adults without children don't qualify no matter how poor they are. The income level at which parents with dependent children qualify for Medicaid varies from a low of about 20% of FPL in the least generous states to a high of 133% is the most generous states. (In Pennsylvania, it is 46%.)

The ACA expanded Medicaid by making everyone—children and adults—eligible for Medicaid if their family income is 138% of FPL or less. Since this is expensive, the feds agreed to pay most of the cost: 100% in 2014, dropping to 95% in 2017 and 90% in 2020. The ACA required states to implement Medicaid expansion. If they refused, the federal government threatened to withhold its contribution to traditional Medicare—about 57% of the cost. However, this clashed with the conservative majority of the Supreme Court's long-term goal of rolling back federal regulation of the states. In National Federation of Independent Business v. Sibelius, the Supremes decided that the Medicaid expansion rules were coercive and that states may opt out. This denies medical care to many of the Americans who need it most, people who fall into the coverage gap.

The ACA provides subsidies, on a sliding scale, for people individuals and families whose income is between 100% and 400% of FPL. The coverage gap consists of those people, living in states that do not expand Medicaid, who are not poor enough to qualify for Medicaid in their state, but whose income is below 100% of FPL, the level at which the subsidies kick in. This is illustrated in the chart below.

As noted, poor and uninsured Americans tend to be concentrated in the “red states” that are not expanding Medicaid. Twenty percent of the people in the coverage gap live in Texas, and another 15% live in Florida, followed by Georgia with 8% and North Carolina with 6%. At present, 6.8% of the residents of states that are participating Medicaid expansion are poor and uninsured, but 9.1% of the residents of the refusing states are poor and uninsured. The chart below shows the breakdown of the poor and uninsured by race, and shows that Medicaid expansion has a discriminatory impact.

	Live in States Expanding	Live in States Not Expanding
White	40%	60%
Black	32%	68%
Hispanic	51%	49%
Asian	70%	30%
Total	42%	58%

These are America's working poor. By occupation, the folks most likely to be poor and uninsured are (1) cashiers, (2) construction laborers, (3) housekeepers, (4) cooks, and (5) waiters and waitresses.

At the time the ACA was passed, single payer advocates noted that the ACA provided less than universal coverage. The largest excluded group is undocumented immigrants, but the ACA also excludes native Americans and people who are incarcerated, have a religious objection, or can prove financial hardship. To that we must now add 5.2 million working poor Americans, a target group that the ACA was clearly intended to help. These people are being left to die for lack of health care. It will be interesting to see whether they respond at the ballot box when they realize what their state politicians have done to them.

Single payer health insurance is needed now more than ever.

You may also be interested in reading:

A Clouded Vision, Part 1: The Stick  (See both parts)

Tom Corbett to PA's Working Poor: "Drop Dead!"  Part 1  (See all four parts)

The Friday Morning Quarterback

A Clouded Vision, Part 2: The Carrot

Please read Part 1 of this post.

The Carrot

If the Obama administration agrees to the Medicaid "reforms" described in Part 1, then Pennsylvania will accept its gift of virtually free money. However, there is an important catch. People who make up to 133% of the Federal Poverty Level (FPL) will be given this money to purchase private insurance policies through the national health insurance exchange. (Corbett refused to establish a PA exchange, so Pennsylvanians will be using the national exchange.) This means that people who would have been eligible for Medicaid expansion under the Affordable Care Act (ACA) will now be exposed to all the disadvantages associated with the private insurance market, including copayments that are likely to be considerably higher than PA Medicaid's current copayments. An exception is made for people in this income group deemed to be “medically frail,” who will be allowed to enroll in PA Medicaid.

Moreover, there is ambiguity in the meaning of this proposal. Most of you probably know that private health insurance offering comparable coverage is significantly more expensive than Medicaid—about $3000 more per person per year, according to the Congressional Budget Office. It is possible that Corbett is asking the federal government to pay the full cost of these private policies, in which case it will be paying more for Medicaid expansion in PA than in other states. The other possibility is that Pennsylvanians will be given a sum of money comparable to the cost of Medicaid, and they will either have to pay part of the premium themselves or accept less comprehensive coverage. A similar plan proposed by Arkansas asks the federal government to pay the full cost of Arkansans' private insurance, but it's not certain if this is legal. If this is what Corbett is proposing, people from other states are being asked to pick up part of the tab for PA's more expensive private health insurance! Since conservatives claim to be concerned about the high cost of providing health care to poor people, this seems like an odd stance for them to be taking.

Not mentioned is the fact that adding so many low income people to the exchanges will almost certainly drive up the cost of insurance premiums for everyone, since they are likely to be in poorer health than the general population.

There is no timetable for when Corbett's plan will take effect, but since it was not submitted to the Obama administration until now, it's unlikely to be available in January 2014.

People who are committed to health care for all Pennsylvanians will find obvious drawbacks to Corbett's Medicaid “reform” package. It significantly weakens the Medicaid program. It increases costs and reduces benefits for the poorest Pennsylvanians, and is almost certain to result in less actual health care being received. The job search requirements are unnecessarily punitive in an economy that falls far short of providing full employment and seem designed to force Pennsylvanians to accept jobs that fail to provide a living wage.

The “expansion” component of the package is likely to drive a wedge between progressive groups. On the one hand, it's just more corporate welfare for the private health insurance companies, corporations that are almost certainly among Corbett's and the Republicans' more generous contributors. On the other hand, if the proposal is accepted, 500,000 to 700,000 working class Pennsylvanians who are presently uninsured will receive some health care. It won't be as good as what they would have received under the ACA, but many progressives will argue that something is better than nothing.

Compared to Medicaid expansion under the ACA, the two parts of Corbett's plan represent a significant transfer of wealth from PA's poor and working class citizens to some of its largest and most profitable corporations.

Single-payer health care advocates are faced with a similar conflict to the one they faced with the ACA. Is half a loaf better than none? As the loaf gets progressively smaller, at what point do we withdraw our support and say, “No more!”?

Whether Corbett's plan will be implemented depends on whether it is accepted by the Obama administration. How “flexible” is the President willing to be? Similar plans have been advanced by Arkansas and Iowa, but Health and Human Services has not yet announced whether they will be approved. One feature of Corbett's plan that is unprecedented is the job search requirement as a condition of receiving Medicaid. Some states charge monthly premiums for Medicaid, but only for people with incomes above 100% of FPL. Are there any health care principles that Obama will not compromise? Having already moved pretty far to the right, Corbett's plan may seem to the White House to be just a baby step further.

Watch this space. Further details of the plan and data describing its financial impact are likely to become available soon. I will update this report as soon as they do.

You may also be interested in reading:

Tom Corbett to PA's Working Poor: “Drop Dead!” (Part 1) (See all four parts.)

Medicaid Expansion Update

A Clouded Vision, Part 1: The Stick

With his reelection campaign coming up next year, PA Governor Tom Corbett is apparently no longer able to resist the pressure to accept Medicaid expansion under the Affordable Care Act (ACA). Yesterday he unveiled the bare bones of a plan to expand Medicaid, while claiming that he is not. The plan lacks critical details and leaves many questions unanswered. It has not yet been accepted by the Obama administration, and should they not agree to it, it would fall through. It has, however, been endorsed by two powerful health care lobbies, the Pennsylvania Medical Society and the Hospital and Health System Association of Pennsylvania.

The plan is called “Healthy Pennsylvania,” and is described in official propaganda as “Governor Corbett's vision” for Pennsylvania. Much of the plan is empty rhetoric, referring to health care policies that are already in place, or new initiatives that appear not to be accompanied by any proposed legislation. Some of the new initiatives—such as “reform” of the medical liability system—are not good ideas, but I'll save that argument for another day. Of the four documents the Corbett administration has released, those parts of the plan that refer to Medicaid reform or expansion are described most clearly in this document.

We can think of the plan as having two parts—the carrot and the stick. The stick is “reform” of PA's existing Medicaid program, which Corbett says is too costly. These changes have the effect of reducing Medicaid benefits to healthy adult recipients, and increasing costs for most recipients. The carrot is a flawed version of Medicaid expansion through private insurance, which Corbett insists is not Medicaid expansion at all. (He's right.) He will agree to expand health insurance availability if and only if he gets his way and the feds agree to his “reform” plan.

The Stick

PA's existing Medicaid program is one of the stingiest in the country. Healthy adults only qualify for Medicaid if they earn less than 46% of the Federal Poverty Level (FPL). Children under six are covered up to 133% of FPL, and older children up to 100% of FPL. The aged, blind and disabled are also eligible up to 100% of FPL, but only if they have assets of less than $2000 per individual or $3000 per couple.

Corbett repeatedly refers to PA's Medicaid program as one of the most expensive in the nation. It's true that PA spends 34% more than the national average per enrollee. However, PA has fewer enrollees per capita than most other states. The chart below compares PA's Medicaid recipients to those of the US generally. PA has fewer healthy adults, who are the cheapest to cover, because of its strict eligibility requirements for this group. A higher percentage of its enrollees are seniors and people with disabilities, who require more expensive long-term care. Moreover, only 22% of PA's long-term care budget is spent on community and home-based care. The national average is 40%.

Here is what Corbett is proposing. To avoid confusion, remember that these “reforms” only apply to people who are currently eligible for PA's traditional Medicaid.

1. Changes in benefits. Proposed changes in benefits only apply to healthy adult recipients; benefits for children, seniors and people with disabilities will remain unchanged. Medicaid benefits are to be aligned with the benefits provided by private, commercial insurance available in PA's workplaces. What these benefits will be, of course, depends on what private policies they use as their standard. Will they more closely resemble the corporate executive package or the Wal-Mart package? They don't say. But since the goal of the plan is to save money, it is reasonable to assume that they are planning to reduce benefits below what Medicaid enrollees currently receive.

2. Cost-sharing. Cost-sharing is to be achieved by charging a monthly premium. The premiums begin for people who are above 50% FPL. These minimum premiums are not stated. However, they increase on a sliding scale up to a maximum of $25 per month per individual and $35 per household at 133% of FPL. Although it is not explicitly stated, presumably everyone, including children, seniors and the disabled, will pay these premiums. (Healthy adults are only covered up to 46% of FPL, so there would be no need for this cost-sharing plan if it only applied to healthy adults.) Premiums will be indexed to inflation, so they will go up each year.

3. Copayments. Medicaid copayments, which are not particularly high, are eliminated entirely, with one exception. There is a $10 copayment for “unnecessary” or “inappropriate”—as yet undefined—emergency room use. This latter proposal has long been part of the hospital lobby's wish list.

4. Work search requirements. Healthy adult recipients will be treated just like people who apply for unemployment. All working age, unemployed recipients will be required to engage in a job search through PA JobGateway program. There is a premium reduction—amount unspecified—for people participating in job training and work search.

5. Wellness programs. There is also a premium reduction—amount unspecified—for people who participate in wellness programs. Research has so far not shown wellness programs to result in measurable health improvements.

Corbett says his Medicaid “reform” package will result in “significant cost savings.” Will it actually save money? The monthly premium seems to be the only financially significant part of the package. Most of the rest of the plan only applies to healthy adult recipients, which limits its ability to save money, since so few current enrollees fall into this category.

Please read Part 2 of this post.

You may also be interested in reading:

Tom Corbett to PA's Working Poor: “Drop Dead!” (Part 1) (See all four parts.)

Medicaid Expansion Update

No Medicaid Expansion = Higher Health Insurance Premiums

The Rand Corporation has published a study of the predicted effects of the Affordable Care Act (ACA) on private insurance markets in 2014. Like several other recent reports, they conclude that the claims of ACA opponents that insurance premiums would increase dramatically are not justified. However, one aspect of their report is of special interest to Pennyslvanians. It concerns the effect of Governor Tom Corbett's decision not to expand Medicaid on the costs to those Pennsylvanians who purchase their health insurance as individuals—that is, who do not purchase health insurance through their employer. First, let's review a few facts.

• The ACA expands eligibility for Medicaid to all legal residents whose income is less than 138% of the federal poverty level (FPL). Medicaid is administered by the states. However, the federal government will pay the full cost of Medicaid expansion in 2014. The feds' share declines to 90% by 2020.
• The Supreme Court ruled that the ACA's Medicaid expansion was coercive, and that states can decide whether or not to expand eligibility for Medicaid beyond their current limits. Governor Corbett has announced that Pennsylvania will not participate in Medicaid expansion.
• Pennsylvania is currently one of the least generous states in providing Medicaid. Adults only qualify for Medicaid if they earn less than 46% of FPL. Children under six are covered up to 133% of FPL, and older children up to 100% of FPL.
• To encourage people to buy private insurance, the ACA provides subsidies, known as advance premium tax credits, to people making between 100% and 400% of FPL. The lower their income, the greater the subsidy.
• This means that Pennsylvanians making between 46% and 100% of FPL are screwed. No Medicaid and no subsidy means that most of them will be uninsured. They will simply die at a higher rate than they would if Medicaid were expanded. (See my earlier series of four posts for estimates of the effect of Corbett's decision on mortality in Pennsylvania. Here's part 1.)
• However, people making between 100% and 138% of FPL will be eligible for fairly generous subsidies. Many of these folks are currently uninsured. It is anticipated that most, though not all, of them will purchase private insurance.

The Rand study looked at the effect of the entry of this group—people between 100% and 138% of FPL—into the non-group private insurance market. They analyzed it in three states, Florida, Louisiana and Texas, chosen they said because these states were least likely to expand Medicaid. Rand estimates that the effect of rejecting Medicaid expansion in these will be to increase private insurance premiums by 8-10%. There are two reasons for this:

1. Extensive research shows that there is a positive relationship between income and health. The higher your income, the healthier you tend to be. Thus, people between 100% and 138% of FPL are sicker than the average adult and will require more medical care. This will drive up insurance premiums for everyone in the risk pool.
2. Not all of the people between 100% and 138% will try to buy insurance. Some will decide they can't afford it, even with the subsidy. When not everyone purchases insurance, adverse selection occurs. Adverse selection refers to the fact that sicker people are more likely than healthy people to buy health insurance. This adds further to insurance costs.

Rand is confident that premiums will go up, but admits that their estimate of 8-10% is uncertain, primarily because it's hard to predict what percentage of the people between 100% and 138% of FPL will purchase insurance. Unfortunately, they didn't include Pennsylvania in their analysis. My guess is that our premium increase will be less dramatic because we have a slightly lower percentage of poor people than the three states they analyzed.

You may also be interested in reading:

Tom Corbett to PA's Working Poor: “Drop Dead!” (Part 1) (See all four parts.)

Medicaid Expansion Update