Friday, December 4, 2009
Important interview on Medicare cuts
Ezra Klein talks with Jim Horney, director of federal fiscal policy at the Center on Budget and Policy Priorities.
Friday News and Observer Column
looks at what happens to private insurance premiums if the Senate bill becomes law. Total premiums for employer based coverage (160 Million people today) will be slightly less (0-3%). The share a worker pays is determined by the benefits offered by their employer, today and under the Senate bill.
Total premiums for individual based policies (14 Million people so covered today) will go up, by 10-13%. The increase is mainly due to mandate benefits that will make individual purchase cover similar to employer based. In terms of changes in insurance, it goes like this:
In 2016
Ind. cover bought in exchange 23 Million
Medicaid expansion 14 Million
Employer based -5 Million
Nongroup/other -4 Million (incl. some Medicare ESRD/perm disabled, but mostly shift from indivdiual purchase outside exchange to purchase in exchange).
Net increase in insured 28 Million
Still uninsured 23 Million (includes illegal immigrants)
If you want more details, see CBO report of Nov. 18, 2009, in particular Table 3 which shows flows across coverage categories from 2010 to 2019.
The CBO report of Nov. 30, 2009 on premiums is quite complex, detailed and well done. The full report is here. Of particular importance is table 1, which details not only total effect on premiums but how different aspects affect premiums (for example, mandating benefit package increases premiums for individual purchase, but indivdiual mandate that brings in younger, healthier people has a decreasing effect; the net in the individual purchase market is up by 10-13%). There are detailed assessments of how the subsidies work in this report that cannot be covered in a 700 word newspaper column.
The key for me is that the TOTAL PREMIUM for individual purchase is up. The INDIVIDUAL SHARE of this depends on your income (Table 2 has the details). About 6 in 10 of the 32 Million purchasing indivdiual policies (18 of the 23 Million buying in exchanges) will get a subsidy that averages two-thirds of total cost. The 9 Million still purchasing individual coverage outside of exchange will not get subsidy. Around $350 Billion of the $850 Billion in outlays of the Senate bill are for premium subsidy and setting up exchanges. Around $375 Billion of the outlays are for Medicaid expansions. Around $120 Billion is for reinsurance and risk adjustment. These expenditures are offset by Medicare cuts and higher taxes...CBO says net effect is reducing deficit by $130 Billion over 2010-2019.
The primary reason that premiums are down slightly for 160 Million people now covered in employer based is due to competition spurred by exchanges. CBO's analysis did not include the effect of small business tax credits on people covered by small employers....that would further reduce premiums share for the approx. 1 in 10 persons with employer cover in businesses with less than 50 persons.
Total premiums for individual based policies (14 Million people so covered today) will go up, by 10-13%. The increase is mainly due to mandate benefits that will make individual purchase cover similar to employer based. In terms of changes in insurance, it goes like this:
In 2016
Ind. cover bought in exchange 23 Million
Medicaid expansion 14 Million
Employer based -5 Million
Nongroup/other -4 Million (incl. some Medicare ESRD/perm disabled, but mostly shift from indivdiual purchase outside exchange to purchase in exchange).
Net increase in insured 28 Million
Still uninsured 23 Million (includes illegal immigrants)
If you want more details, see CBO report of Nov. 18, 2009, in particular Table 3 which shows flows across coverage categories from 2010 to 2019.
The CBO report of Nov. 30, 2009 on premiums is quite complex, detailed and well done. The full report is here. Of particular importance is table 1, which details not only total effect on premiums but how different aspects affect premiums (for example, mandating benefit package increases premiums for individual purchase, but indivdiual mandate that brings in younger, healthier people has a decreasing effect; the net in the individual purchase market is up by 10-13%). There are detailed assessments of how the subsidies work in this report that cannot be covered in a 700 word newspaper column.
The key for me is that the TOTAL PREMIUM for individual purchase is up. The INDIVIDUAL SHARE of this depends on your income (Table 2 has the details). About 6 in 10 of the 32 Million purchasing indivdiual policies (18 of the 23 Million buying in exchanges) will get a subsidy that averages two-thirds of total cost. The 9 Million still purchasing individual coverage outside of exchange will not get subsidy. Around $350 Billion of the $850 Billion in outlays of the Senate bill are for premium subsidy and setting up exchanges. Around $375 Billion of the outlays are for Medicaid expansions. Around $120 Billion is for reinsurance and risk adjustment. These expenditures are offset by Medicare cuts and higher taxes...CBO says net effect is reducing deficit by $130 Billion over 2010-2019.
The primary reason that premiums are down slightly for 160 Million people now covered in employer based is due to competition spurred by exchanges. CBO's analysis did not include the effect of small business tax credits on people covered by small employers....that would further reduce premiums share for the approx. 1 in 10 persons with employer cover in businesses with less than 50 persons.
Thursday, December 3, 2009
They actually voted!
and passed amendment on mammography 61-39....snowe, collins and vitter from (LA) voted yes and Feingold and Ben Nelson voted no.
Stem Cell Lines
NIH announcing that 13 new NIH funded stem cell lines will become available for research, the result of the Obama Administration's change of the Bush Admin stem cell policy.
Wednesday, December 2, 2009
Optimism rising for a bill
per Washington Post. And Peter Orszag noting that it will take years to decades to get to a system that rewards quality over quantity. That is one reason why it is so important to act and kick the ball down the field....you will never be done tinkering with the system....but we know that status quo is a disaster.
More on CBO premium report
The report on the effect of the Senate bill on private insurance premiums released by CBO on Nov. 30 is a comprehensive report with lots of information. It seems as though its major findings are allaying some fears of the moderates like Landrieu and Lieberman. The basics of what CBO found are, that as of 2016 as compared to no reform:
*160 people with employer based insurance today would have slightly lower premiums in 2016 (from negligible to 3% reduction). To be sure this is better than premiums going up 3% over the status quo....but it is important to remember that the status quo (no reform) is essentially a doubling of premiums over the next decade. Much more needs to be done on the cost control front.
*14 Million in indivdiual purchase market today, premiums for individual market policy in 2016 would be 10-13% higher....but that the policy coverage that would be obtained would be more generous. Meaning covering more things, and having a higher actuarial value....the percent of costs that insurance pays v. out of pocket payments for a representative group of patients.
In 2016, there will be 32 Million in the individual purchase market. 23 Million of these will be in the exchanges, and 18 Million of this 23 Million will get a subsidy to purchase insurance (5 Million will get no subsidy, and 9 Million purchasing individual cover outside of exchanges will also not get subsidy). So, the 10-13% higher premium is the true cost of the insurance. Around 6 in 10 of persons in indivdiual market will get subsidy so THEIR COST will be a lot less than it would be without reform, and the subsidies defray the cost of cover. The subsidies are expensive and that is the major outlay of the bill....and that is what the increased taxes and cuts to Medicare offset. In 2016 with no refrom we will have 52 Million uninsured; if Senate bill becomes law we will have 23 Million.
There is some sorting amongst types of insurance as follows by 2016 (non elderly).
Exchanges +23 Million
Medicaid +14 Million
Employer -4 Million
Other -5 Million (mostly perm disabled, ESRD covered by Medicare; Update: actually this is mostly non group people who CBO is saying would have had priv non group policy with no bill who now will buy via exchange.)
The subsidies go something like this:
below 133% poverty, cover via Medicaid
150-200 poverty, [$20,600 individual, $42,000, midpoint of income range] the max you can spend on premium is 4.7% to 6.5%, and the share of premium paid by the subsidy is 77% for individual, 83% for family.
350-400% poverty [$44,200 individual, $90,100, midpoint of income range] max you can spend on premium is 10.2%, with share of premium paid by subsidy being 13% for individual, 35% family.
Like with all means tested programs, there is quite a perverse incentive right at the point when subsidy goes away....for family cover income of $102,100+ in 2016 gets 0 premium support, whereas $90,100 gets 35% of premium paid. You can raise the trigger point, but you just raise the point of the perverse incentive.
Given that you have concluded that doing something to address the uninsured rate is important, and then concluded that you were going to stick with an employer based system and try and put together insurance markets for individuals to purchase coverage, this is pretty good.
Politically, the most importatn thing that the CBO report says is that the 160 Million people with employer provided insurance will see small decreases (wrongly wrote increases here yesterday) in premiums, not large increases that many have been saying. The wavering moderates in the Senate will have to decide how bad they think the status quo really is.
*160 people with employer based insurance today would have slightly lower premiums in 2016 (from negligible to 3% reduction). To be sure this is better than premiums going up 3% over the status quo....but it is important to remember that the status quo (no reform) is essentially a doubling of premiums over the next decade. Much more needs to be done on the cost control front.
*14 Million in indivdiual purchase market today, premiums for individual market policy in 2016 would be 10-13% higher....but that the policy coverage that would be obtained would be more generous. Meaning covering more things, and having a higher actuarial value....the percent of costs that insurance pays v. out of pocket payments for a representative group of patients.
In 2016, there will be 32 Million in the individual purchase market. 23 Million of these will be in the exchanges, and 18 Million of this 23 Million will get a subsidy to purchase insurance (5 Million will get no subsidy, and 9 Million purchasing individual cover outside of exchanges will also not get subsidy). So, the 10-13% higher premium is the true cost of the insurance. Around 6 in 10 of persons in indivdiual market will get subsidy so THEIR COST will be a lot less than it would be without reform, and the subsidies defray the cost of cover. The subsidies are expensive and that is the major outlay of the bill....and that is what the increased taxes and cuts to Medicare offset. In 2016 with no refrom we will have 52 Million uninsured; if Senate bill becomes law we will have 23 Million.
There is some sorting amongst types of insurance as follows by 2016 (non elderly).
Exchanges +23 Million
Medicaid +14 Million
Employer -4 Million
Other -5 Million (mostly perm disabled, ESRD covered by Medicare; Update: actually this is mostly non group people who CBO is saying would have had priv non group policy with no bill who now will buy via exchange.)
The subsidies go something like this:
below 133% poverty, cover via Medicaid
150-200 poverty, [$20,600 individual, $42,000, midpoint of income range] the max you can spend on premium is 4.7% to 6.5%, and the share of premium paid by the subsidy is 77% for individual, 83% for family.
350-400% poverty [$44,200 individual, $90,100, midpoint of income range] max you can spend on premium is 10.2%, with share of premium paid by subsidy being 13% for individual, 35% family.
Like with all means tested programs, there is quite a perverse incentive right at the point when subsidy goes away....for family cover income of $102,100+ in 2016 gets 0 premium support, whereas $90,100 gets 35% of premium paid. You can raise the trigger point, but you just raise the point of the perverse incentive.
Given that you have concluded that doing something to address the uninsured rate is important, and then concluded that you were going to stick with an employer based system and try and put together insurance markets for individuals to purchase coverage, this is pretty good.
Politically, the most importatn thing that the CBO report says is that the 160 Million people with employer provided insurance will see small decreases (wrongly wrote increases here yesterday) in premiums, not large increases that many have been saying. The wavering moderates in the Senate will have to decide how bad they think the status quo really is.
Tuesday, December 1, 2009
Public Option Key?
Paul Starr says no, but accelerating the start up time of the benefits of reform is key in the NY Times.....also published today in the News and Observer. Speaking of Starr, he wrote the best history of American Medicine, winner of the Pullitzer Prize for General Non Fiction in 1982... The Social Transformation of American Medicine (Basic Books, 1982). The first sentence of the book is brilliant, "The dream of reason did not take power into account."
So true.
Speaking of (un)reason(able)....Howard Dean saying the bill without a public option is not worth it and should be defeated. This is completely ridiculous, in part because the version of public option that is in the Senate bill (and House) is watered down and not likely to be conssequential one way or another.
And in the race for the most unreasonable thing said on the floor in the Senate reform debate, Sen. Coburn takes the early lead with a 'die sooner' redux.
So true.
Speaking of (un)reason(able)....Howard Dean saying the bill without a public option is not worth it and should be defeated. This is completely ridiculous, in part because the version of public option that is in the Senate bill (and House) is watered down and not likely to be conssequential one way or another.
And in the race for the most unreasonable thing said on the floor in the Senate reform debate, Sen. Coburn takes the early lead with a 'die sooner' redux.
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