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Posts Tagged ‘ACA’

An Election Democrats Can Win

April 11th, 2014

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Obamacare versus Ryanomics. That’s the battle line for 2014. It’s also a battle Democrats can win.

Why? Because most Americans are pragmatists. Pragmatists believe that whatever works is right. Ideologues believe that if something is wrong, it can’t possibly work — even if it does work. That’s the Republican view of Obamacare: It’s wrong, so it can’t possibly work.

But it now looks like Obamacare may work. More than 7 million people signed up for health insurance by the March 31 deadline, meeting the Obama administration’s original goal. Senate Majority Leader Harry Reid (D-Nev.) said, “The Affordable Care Act, whether my Republican friends want to admit it or not, is working.”

Republicans admit nothing. “Even though the Democrats are trying to take some victory lap, it’s very short term,” Senator John Thune (R-S.D.) told the New York Times. “The bad news continues. The hits keep coming.”

Do they? The Affordable Care Act continues to be unpopular, though some polls show a slight uptick in public support. “House Republicans will continue to work to repeal this law,” House Speaker John Boehner (R-Ohio) promised last week. (They have already voted to repeal all or parts of the law 55 times.) The Republican view is simple: It’s wrong, therefore it can’t possibly work.

It will be difficult, if not impossible, to repeal a law that gives health insurance to so many Americans. A recent Rand study estimates that 9.3 million American adults were added to the insurance rolls as of March, a figure that includes those who signed up in the new marketplace, received new employer coverage or enrolled in Medicaid. They are all being helped by Obamacare.

Still, it’s too early to conclude that the law will work. There are many challenges coming. The employer mandate goes into effect next year, and some employers may use the requirement to cover their employees’ health insurance as a pretext to reduce workers’ hours and wages.

Moreover, insurers will announce new premiums for 2015 this fall. If the risk pools do not include enough young and healthy people, premiums could skyrocket.  That would set off a backlash among those currently insured — just in time for the midterm elections.

In the public’s view, the Affordable Care Act should be mended but not ended. What people don’t want to lose are the two most popular provisions of the act — requiring insurers to cover people with pre-existing conditions and allowing young adults to stay on their parents’ policies until age 26.

Representative Paul Ryan (R-Wis.), chairman of the House Budget Committee, said those provisions would be too expensive to include in any Republican replacement measure.

The least popular component is the individual mandate requiring every American to purchase health insurance or pay a penalty. If you do away with the mandate, however, the entire plan falls apart. So mending the law won’t be easy.

Then, seemingly out of nowhere, Democrats had a stroke of luck.  On April 1, Ryan came out with a 10-year budget plan involving massive cuts in popular federal programs like Medicare, Medicaid, food stamps, education, student loans and environmental protection. Ryan’s proposal would eventually change Medicare — the most popular of all federal programs — from an insurance policy to a “premium support” program, where seniors would be given subsidies to purchase private insurance. GOP presidential nominee Mitt Romney proposed doing that in 2012. Look where it got him

“Thank you, thank you, Congressman Paul Ryan for reminding us what Republicans would do if they had control,” Senate Majority Whip Richard Durbin (D-Ill.) remarked. Representative Steny Hoyer (D-Md.), the House Democratic whip, called it “a bad April Fool’s joke.”

Ryan’s proposal, which includes repeal of Obamacare, is a severe austerity plan aimed at achieving a balanced budget by 2024. There is no evidence that most Americans are willing to make the kinds of sacrifices necessary to get a balanced budget. Nor is Ryanomics likely to be signed into law.

What it does is give Democrats something to run against. “The choice is stark,” Reid said, as he stood on the Senate steps flanked by more than 30 Democratic senators. “The American people are watching.”

Democrats will run against Ryanomics. Republicans will run against Obamacare. Remember the rule of pragmatism: Whatever works is right.

If Americans come to believe Obamacare works, they will be reluctant to throw it out.  Especially the millions who will already have a stake in Obamacare. On the other hand, Ryan is threatening to do away with programs like Medicare that people know are working. Why? Because he and his fellow Republicans think those programs are wrong. Attacking programs that work is pure ideological bloodlust. And a losing battle for sure.

This piece was originally published via Reuters.

As the ACA Stands Up, Can Programs for the Uninsured Stand Down?

March 25th, 2014

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It is clear that HealthCare.Gov is working better. Enrollment figures are climbing. Over 5 million Americans have selected a plan through the federal and state marketplaces, and another 6.3 million are getting coverage through Medicaid. While problems remain, the level of interest in getting coverage has grown—to as many as 2 million visits to the federal website in one day.

But amid these public proof points will be another less obvious measure of success—a decline in the need for a patchwork of programs designed to help the poor who continue to lack coverage despite the Affordable Care Act (ACA).

One of those programs, called the 340B Drug Pricing Program, however, shows no signs of slowing down. The 340B program supports clinics and hospitals that serve a high proportion of low-income and elderly patients. 340B requires drug manufacturers to provide discounts to hospitals and clinics that generally serve low-income patients or other groups like HIV-AIDS patients. The program allows hospitals and clinics to dispense the drugs purchased through 340B to their patients who may have their own private insurance coverage and pocket the difference between their deeply discounted purchase price and the amount that a health plan reimburses for the drug. For example, hospitals like Denver Health, which is the public safety-net provider for the city, have used 340B to expand services for at-risk patients. The discounts range from 20% to 50% off the cost of drugs. Those discounts are often bigger than the discounts required of drug manufacturers for Medicaid patients. Federal auditors have found that Denver Health is compliant with program requirements. But they also have found many other facilities to be out of compliance under current federal policy. Moreover, current law and regulations may be inadequate to ensure 340B is truly helping vulnerable Americans.

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What unites Democrats? Republicans!

February 13th, 2014

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Back in 1901, Finley Peter Dunne’s character Mr. Dooley said, “The Dimmycratic Party ain’t on speakin’ terms with itsilf.” Is that happening again now? You might think so, given the talk about a populist revolt on the left.

But Democrats are in fact remarkably united on most issues. They agree on everything from increasing the minimum wage, to extending unemployment benefits to raising the debt ceiling.

Yes, there are divisions emerging over trade and energy. But it’s not anything like the bitter confrontations we used to see among Democrats over civil rights and the Vietnam War. It’s also not anything like the bitter civil war that’s broken out in the Republican Party. No one is threatening to walk out.

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GOP Health Care Reforms would Affect Jobs, Too

February 10th, 2014

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Lost in the back-and-forth over the most recent CBO report on the Affordable Care Act (ACA) is a simple fact that any expansion of health care coverage for Americans will inevitably have an impact on America’s working habits. It is no less true of GOP proposals than Obamacare.

To make coverage more affordable, any proposal must provide some sort of subsidy. For example, the recent Republican proposal from Sens. Tom Coburn (R-OK), Richard Burr (R-NC), and Orrin Hatch (R-UT) includes a tax credit for lower income workers. The act of giving someone financial assistance for health care will naturally reduce the need to work somewhat.

Rep. Paul Ryan (R-WI) thinks this creates a poverty trap. While Ryan neglects the fact that millions of Americans are bankrupted every year due to medical bills, he instead focuses on the ACA’s subsidies to buy coverage through the federal and state marketplaces. These subsidies decline as workers earn more money, which means that workers have to work a little harder to keep another dollar in take-home pay. So yes, some people will choose to work less to keep their subsidy. But does that make the ACA a poverty trap? Of course not. We have dozens of social insurance programs ranging from food stamps to the Earned Income Tax Credit, and yet we remain the world’s greatest economy.

The alternative to phasing out benefits by income is to provide the same benefit to rich and poor alike, as many European nations do. But that requires higher tax rates or cuts in government services, which, in turn, leads to greater burdens on everyone.

Here is how CBO describes this problem in their most recent report:

CBO’s estimate that the ACA will reduce employment reflects some of the inherent trade-offs involved in designing such legislation. Subsidies that help lower- income people purchase an expensive product like health insurance must be relatively large to encourage a significant proportion of eligible people to enroll. If those subsidies are phased out with rising income in order to limit their total costs, the phaseout effectively raises people’s marginal tax rates (the tax rates applying to their last dollar of income), thus discouraging work. In addition, if the subsidies are financed at least in part by higher taxes, those taxes will further discourage work or create other economic distortions, depending on how the taxes are designed. Alternatively, if subsidies are not phased out or eliminated with rising income, then the increase in taxes required to finance the subsidies would be much larger. 

This is nothing new. CBO had previously estimated that the ACA would have some impact on jobs. What’s new is that the CBO has refined his estimate and made it more precise based on the latest research.

Some conservative commentators like Avik Roy have acknowledged that GOP plans will also affect working habits due to income-based subsidies. But conservatives persist in the belief that GOP alternatives are morally superior even though their actual solutions are just different choices about the amount of the subsidies and the degree of security offered to American workers.

Economics is called the dismal science because it shows the downside to any choice. But there’s nothing dismal about having security and stability in your health care. As Jason Furman, Chairman of the Council of Economic Advisors at the White House explains, the ACA provides many economic benefits. Today, under Obamacare, millions of Americans no longer have to worry about getting coverage for a pre-existing condition.  They don’t have to stay in a job that they don’t like because of their health insurance. And they don’t have to worry about losing their health care coverage if they lose their job. The GOP needs to make it clear whether they disagree with the goals of Obamacare or the means.

2014: Another Election About Obamacare

December 23rd, 2013

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Here we go again.

2014 will be the third election in a row in which Obamacare is the central issue. The Affordable Care Act, which President Barack Obama signed into law in March 2010, contributed to a fierce voter backlash against Democrats in November 2010. After the Supreme Court upheld the law in June 2012, the issue seemed to be settled by Obama’s re-election that November.

But no.

The botched Obamacare rollout this year has again thrust the issue to the top of the political agenda. Republicans are counting on opposition to Obamacare to propel them to a majority in the Senate next year. A conservative group is already running an ad attacking Senator Jeanne Shaheen (D-N.H.) for supporting Obamacare: “Next November, if you like your senator, you can keep her. If you don’t, you know what to do.”

2013 came to a close with two big political stories. The government shutdown in October was immensely damaging to Republicans. So damaging that House Republicans defied their conservative base and voted for a compromise budget deal last week. Speaker John Boehner (R-Ohio) attacked the Tea Party, accusing them of pushing congressional Republicans “into this fight to defund Obamacare and shut down the government.” A fight Boehner said all along was unwinnable.

The message was, “No more shutdowns.” Republicans didn’t want to step on the second big political story, one immensely damaging to Democrats: the rollout of Obamacare.

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