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ALEC, “Shadowy Group” Behind State Efforts To Sabotage Health Reform Faces Heat From IRS

Last August I wrote an in-depth piece about the American Legislative Exchange Council (ALEC), “a powerful but ‘discreet group’ that counts some 2,000 conservative state legislators as well as representatives from some of the nation’s largest industries as members.” The focus of that post was the prominent role ALEC has taken in organizing state-level resistance to the health reform law. The Council drafted model legislation entitled the “Freedom of Choice in Health Care Act” that has served as the basis for laws passed by eight states (including Virginia, Idaho, and Arizona) and has been “introduced or announced” in 42 others. This law would block any state or federal “public option,” bar the individual mandate and obviate other major provisions of the Affordable Care Act. According to the Council, the mission of ALEC’s health and human services care task force is to promote “free-market, pro-patient health care reforms at the state level.”

Today, Common Cause, a political watchdog group, filed a complaint with the Internal Revenue Service accusing the American Legislative Exchange Council of violating its tax-exempt status by lobbying state legislators. The Council, which is registered as a public charity under section 501(c)(3) of the tax code, recently made headlines because of its support of gun-rights bills similar to the “Stand Your Ground” statute at the center of the Trayvon Martin killing in Florida; advancing laws that weaken labor unions; and support for tougher voter registration rules. Most recently, ALEC has been under scrutiny for its intensive lobbying efforts to convince state legislators to oppose legislation  that would make it easier to recover money from businesses that defraud the state.

The New York Times reported yesterday that documents and records obtained by an investigation by the paper and Common Cause  “offer a glimpse of how special interests effectively turn ALEC’s lawmaker members into stealth lobbyists, providing them with talking points, signaling how they should vote and collaborating on bills affecting hundreds of issues like school vouchers and tobacco taxes.

“The documents — hundreds of pages of minutes of private meetings, member e-mail alerts and correspondence — were obtained by the watchdog group Common Cause and shared with The New York Times. Common Cause, which said it got some of the documents from a whistle-blower and others from public record requests in state legislatures, is using the files to support an Internal Revenue Service complaint asserting that ALEC has abused its tax-exempt status, something ALEC denies.”

In my piece I explain how as part of their campaign against the Affordable Care Act, ALEC  published “The State Legislators Guide to Repealing ObamaCare”, which urges lawmakers to “decline to build the ObamaCare edifice” and offers 14 practical steps states can take to undo or impede the Affordable Care Act. These steps include having states return federal grants for setting up health insurance exchanges, encouraging them to opt completely out of Medicaid, and urging them to file federal waiver petitions to block the medical loss ratio requirement (the new rule requiring insurers to spend 80-85% of premiums on patient care). At that time I wrote, “The last time the states were rallied to rise up against federal legislation was during the civil rights battle over forced integration of schools.” Read more…

Anatomy of Another ACA Lie

By John McDonough

(This post originally appeared on the blog Health Stew)

Lots of folks ask me why I think the Affordable Care Act/ObamaCare is so unpopular. I first assert that it’s not as unpopular as popularly characterized (see Kaiser Family Foundation monthly tracking polls) and then I refer to the deliberate and false claims about the law being widely circulated around the nation, particularly aimed at senior citizens. I wrote about one particular falsehood last month. Now, my newfound pals at the GE Retirees Association yesterday sent me another they have been receiving in their email inboxes:

Subject: Medicare Premiums —FYI
MEDICARE
Look clearly at the 2014 rate compared to the 2013 rate.

For those of you who are on Medicare, read the following. It’s short, but important and you probably haven’t heard about it in the Mainstream News:

“The per person Medicare Insurance Premium will increase from the present Monthly Fee of $96.40, rising to:

$104.20 in 2012

$120.20 in 2013

And

$247.00 in 2014.”

These are Provisions incorporated in the Obamacare Legislation, purposely delayed so as not to confuse the 2012 Re-Election Campaigns. Send this to all Seniors that you know, so they will know who’s throwing them under the bus.

Peggy Riehle
Internal Representative
Network Contracting
205-220-6778

Blue Cross Blue Shield.jpg

Could I verify or contradict the message, my GE Retiree friends wanted to know. Didn’t sound right to me, so I did some investigating. My contacts in the Obama Administration and the U.S. Senate said it’s a viral email lie that has been going around for more than one year now. Independently, FactCheck.org did their own investigation last year of these claims, and here is their conclusion: Read more…

Is the High Cost of Cancer Care Really “Worth It”?

The U.S. spends far more on cancer care than 10 European countries, but according to a new study, it may be “worth it” as “the value of the survival gains greatly outweighed the costs.”

The study, published this week in Health Affairs, found that U.S. spending on cancer care, in 2010 dollars, increased by 49% from 1983 through 1999, from $47,000 per cancer case to $70,000 per case. Meanwhile, in the European countries, spending on cancer care (also in 2010 US dollars) increased 16% from $38,000 per cancer case to $44,000. But the sharp increase in cost seems to come with clear benefits; for patients diagnosed with cancer between 1995 and 1999, average survival from time of diagnosis in the U.S. was 11.1 years, while in Europe it was 9.3 years. These gains were greatest in patients with prostate and breast cancer, as well as chronic and acute myeloid leukemia.

At first glance, this study, which was partially funded by cancer-drug maker Bristol-Myers Squibb, should give ammunition to those stalwarts who continue to insist that America’s health care is the very best that money can buy—at least when it comes to cancer. But despite the findings that the “value of survival” far outweighs the skyrocketing financial costs of cancer care (the National Cancer Institute puts it at $125 billion in 2010)—many questions remain.

First of all, the Health Affairs authors do note some limitations of the study; for example, even though the results suggest that survival gains for U.S. cancer patients have been “worth it” in terms of cost, “this does not imply that all treatments are cost-effective. Additionally, we could not examine the extent to which better outcomes were the result of earlier diagnosis due to screening or newer treatments,” they write. I would add, the data analyzed are more than a decade old—cancer treatments and diagnostic technologies have changed both in cost and efficacy since then. How do we factor in the “value” of a brand new $90,000 cancer drug that keeps a small percentage of very sick patients alive for at most two or three more months?

There are other problems with reading too much into this report. Read more…

On Predictions, the Supreme Court and the Health Law

Last week’s coverage of oral arguments before the Supreme Court debating the constitutionality of the health reform law was like the Super Bowl for health policy types. But instead of being glued to my computer screen, parsing the Justices’ questions and the lawyers’ answers and reading the flood of game-day analysis following each two-hour session, I unthinkingly had made plans to go hiking, mountain biking and rappelling down 180-foot cliffs in the spectacular and isolated environs of Moab, UT.

Instead of witnessing live theater, I read as much as I could before setting off in the morning or before falling asleep that night. And I talked to pretty much anyone I ran into about how they felt about the new health law and how it would impact their lives. Mostly, I learned that for the many young, uninsured people who worked two or three jobs to survive in that town, health reform offered the chance for affordable health coverage. As removed as I was from the doings in Washington, media coverage began to feel like breathless conjecture; the fate of the health law seemed to vacillate widely with every pointed question from one of the justices or a poor performance by the Solicitor General. I am not a constitutional scholar, nor am I an economist. But now, back in New York and a week removed from the reporting frenzy and after digesting commentary by both knowledgeable experts and political hacks (and those in between) the emphasis has shifted to the ramifications of the Supreme Court’s eventual ruling. I will expand on some of these issues in future posts, but first I want to address the science and politics of predictions.

1) On Monday, President Obama said of the health law, “We are confident that this will be upheld because it should be upheld,” adding firmly: “It’s constitutional.” He also warned that an “unelected” group of justices should not overrule the will of Congress. That is tough talk; perhaps the right kind of talk to set the tone for the next few months while the Supreme Court considers the legislation. Nancy Pelosi is also on board: Last week she told reporters, “I have no idea. None of us does,” when asked how the Supreme Court would rule on the health law. But on Tuesday she also expressed this new confidence, telling an audience at The Paley Center for Media, “Me, I’m predicting 6-3 in favor.”

But is the administration’s confidence realistic? I turn to some stalwarts; the legal scholars and policy wonks who have insisted for nearly two years that the constitutional challenge is legally unsupportable. Have they changed their tunes at all? Read more…

How did the challenge to the Affordable Care Act ever make it to the U.S. Supreme Court?

By Maggie Mahar

(This post originally appeared on the blog healthinsurance.org)

In 2009, when someone asked Nancy Pelosi a question implying that health reform legislation might be unconstitutional, she replied: “Are you serious?

Pelosi wasn’t alone. At the outset, many legal scholars considered the challenge to the Affordable Care Act (ACA) both “implausible” and “frivolous.”

But over the next two years, the notion that state courts might strike down the ACA took on a life of its own. Most people had only a hazy idea of what was actually in the legislation; nevertheless the idea of “health reform” inspired heated rhetoric. Soon, state attorneys general and governors responded to the political opportunities, banding together to make what Slate Senior Editor Dahlia Lithwick calls, “novel arguments in the form of what was always a constitutional Hail Mary pass … It’s no accident that until the lower district courts started striking down the act, none of the challengers really believed that they could succeed.”

Yet somehow, this week, the highest court in the land is hearing oral arguments in a case that even supporters viewed as a long shot. How did this happen?

The media played a major role, fanning political passions by quoting every challenge – including the absurd claim that the bill called for “death panels.” As Rachel Maddow observed Monday night: this case was “built up as the Super Bowl of American partisan politics.” Thus, the Supreme Court was left with little choice: it had to hear “The Case of the Century.” Read more…

Without Individual Mandate, Obama and Insurers Will Call For Overturn of Key Coverage Provisions

It’s great that so many Americans across the political spectrum support two of the most important provisions of the health reform law. According to the latest poll from the Kaiser Family Foundation, 70% feel favorably about guaranteed issue—the part of the Affordable Care Act that prevents insurers from rejecting individuals or businesses because of age, sex, occupation or health status. Americans also support the idea of using community rating when setting insurance premiums; meaning that older people, women or those with chronic illness or pre-existing conditions shouldn’t have to pay more for their coverage.

It’s just too bad that these could be the first consumer protections to go if the Supreme Court overturns the Affordable Care Act’s individual mandate. That’s because, as Uwe Reinhardt, an economics professor at Princeton points out, “The aim is to create a risk pool in which younger and healthier enrollees subsidize through their community-rated premiums the health care of older or sicker individuals.” Otherwise, people wait until they are sick to buy insurance, quickly using up all the resources of a plan they haven’t contributed to when they were healthy. This inevitably drives up premiums for everyone. The ACA without an individual insurance mandate says Reinhardt, “is about as sensible as the idea of manufacturing two-legged stools.”

Americans haven’t grasped that connection; most consumers still believe that all the things they like about health reform—such as keeping their children on their health plans until they are 26, free preventive care, no lifetime limits on coverage and the promise of subsidies to help lower income people afford insurance—will still be available without the mandate. In fact, the Kaiser poll found that two thirds say they continue to have an “unfavorable view of the individual mandate, including 54 percent who take a ‘very unfavorable’ (up from 43 percent last November)” opinion of the provision.

How do we know that insurer coverage mandates won’t work without an accompanying mandate for all Americans to buy insurance? Just take a look at what Ian Millhiser, a policy analyst at the Center for American Progress calls “Seven Horror Stories” from states that already tried to implement community rating without a requirement that everyone purchase insurance:

  • Kentucky: Forty insurers left Kentucky’s market by some estimates, and only two remained before the law was repealed
  • Maine: Thirteen of Maine’s 18 major insurance carriers stopped issuing new individual policies. Many also doubled their premiums
  • New Hampshire: New Hampshire’s insurance law left it with nearly no carriers in its individual insurance market. The state enacted an emergency tax to compensate insurers for the costs of the law, which was repealed in 2002
  • New Jersey: Premiums rose as much as 350 percent in New Jersey after its pre-existing conditions law took effect. Even HMO plans, which tend to resist premium increases, nearly doubled in price
  • New York: The percentage of nonelderly New Yorkers without insurance grew 21 percent, with premiums increasing as much as 40 percent per year.
  • Vermont: Vermont fared better than other states with similar laws, but its premiums spiked an average of 16 percent in two years.
  • Washington: Nonmanaged care options disappeared entirely from Washington’s individual market. Eventually, entire counties had no private individual insurance options at all.

(source: Center for American Progress )

Insurers are already working on contingency plans if the Supreme Court finds the individual mandate unconstitutional. According to the Wall Street Journal;

“Several officials from large health insurers said that if the mandate were struck down, their first priority would be persuading members of Congress to repeal two of the law’s major insurance changes: a requirement to cover everyone regardless of his or her medical history, and limits on how much insurers can vary premiums based on age. The next step, they say, would be to set rewards for people who purchase insurance voluntarily and sanction those who don’t.”

Insurers are also likely to lobby for an end to restrictions on gender rating; i.e. charging women more than men for insurance coverage. According to a new report from the National Women’s Law Center,  in the 37 states that haven’t already banned this practice, 92% of best-selling plans charge women more for coverage. These excess charges vary between states and even between policies in the same state. For example, one plan offered in Arkansas charges 25-year-old women 81% more than men for coverage while another plan in the same state charges women only 10% more for coverage. The Affordable Care Act would prohibit gender rating; a practice that the NWLC report estimates costs women $1 billion a year.

The Obama administration agrees with insurers on the economic ramifications of the Supreme Court striking down the individual mandate. It has filed a brief arguing that if this happens, the requirement that insurers cover everyone who applies and that they use community rating should be overturned.

Despite the contingency plans, many legal and health policy experts believe they will be unnecessary—at least for now. “Most of us who supported the individual responsibility provisions feel the court is going to sustain [the individual mandate],” Ron Pollack, executive director of Families USA tells Kaiser Health News. “There’s no urgent need to define an alternative course at this point.”

IPAB Repeal: Does the Health Law Still Need A Cost Savings Board?

Efforts to repeal the Independent Payment Advisory Board (IPAB) have intensified over the last few weeks, culminating in two House committees passing a repeal bill and clearing the way for a floor vote next week. This newly aggressive effort to deep-six IPAB— a 15-person independent commission whose job, starting in 2014, is to advise Congress on how to slow Medicare cost growth—is reigniting charges of rationing, death panels and “pulling the plug on Granny.”

The repeal effort, for an advisory board whose function may be limited if Medicare cost growth continues to abate, seems timed for maximum political effect; highlighting a provision of the Affordable Care Act that conservatives use as the poster child for government over-reach and collateral damage to seniors.

Here’s an excerpt from a video series called “Ask Peter” released by Rep. Peter Roskam (R-IL) that “educates” his local constituents about IPAB:

“In a nutshell, it’s 15 unelected bureaucrats who have one job and that is to push cost out of Medicare. While that sounds nice, it will have a direct impact on reimbursement rates which will ultimately impact how doctors practice medicine.

“There was an expert on IPAB that came in and testified before a Committee that I was present, and he said this: IPAB will absolutely restrict a doctor’s ability to administer healthcare. And he went on to say that IPAB will lead to rationed care.”

It’s clearly necessary to revisit the real facts about IPAB and shed some light on Pete’s and his fellow scaremongers’ rationing charges:

1) IPAB’s cost-cutting recommendation process isn’t triggered unless Medicare spending grows faster than the gross domestic product (GDP) plus 1 percent. As Sarah Kliff explains in Ezra Klein’s WonkBlog, “For a while, keeping Medicare cost growth to GDP plus 1 percent was thought to be absurd. Medicare cost growth vastly outstripped the rest of the economy.” But in the last two years, she writes, “health-care costs have grown more slowly than any other point in the past five decades. They rose 3.8 percent in 2009 and 3.9 percent in 2010.” The GDP, meanwhile, grew at 4.2%.

2) The board, which will include health policy experts and consumer representatives, has no authority to limit Medicare benefits; for example, it can’t force Medicare to stop paying for cancer drugs or cut off life-saving treatments to the elderly.

Read more…

CBO Lowers Cost of Health Reform Coverage by $50 Billion; Fox & Friends Report Otherwise

The Congressional Budget Office projected today that insurance coverage provisions of the Affordable Care Act will cost about $50 billion less than expected during the 2012-2021 period.

The agency also projected that 2 million fewer Americans will be insured; from 32 million to 30 million. (That leaves a significant 27 million of us without insurance—whether by choice or because cost is still a barrier to coverage is the topic of later post.) And by 2016, the CBO estimates that 4 million fewer people will be getting health insurance coverage at work. According to the report; “Fewer people are now expected to obtain health insurance coverage from their employer or in insurance exchanges; more are now expected to obtain coverage from Medicaid or CHIP or from nongroup or other sources. More are expected to be uninsured.”

Now keep in mind that the CBO has released such projections in March 2010 and March 2011 and the numbers move around a bit each time. Calculation methods change, new legislative tweaks add or subtract revenue and each year we get a better idea of how well the economy is recovering (or not).

It’s also important to note that the CBO states that the net costs of the ACA’s insurance coverage provisions “do not include the effects of the many other provisions of the law, including some that will cause significant reductions in Medicare spending relative to that under prior law and others that will generate added tax revenues relative those under prior law.” These include provisions that encourage the formation of accountable care organizations, cost bundling and other care delivery and payment reforms whose savings are impossible to calculate yet. Savings from stepped-up efforts to crack down on Medicare fraud were also not considered.

So where are the cost savings coming from in this year’s projection? A variety of sources, but mostly due to the fact that the economy hasn’t recovered as quickly or robustly as expected. That means unemployment will be higher and incomes will be lower than were projected last year so more people will qualify for Medicaid or CHIP instead of qualifying for subsidies to buy insurance on the exchanges. Also, the weaker recovery is keeping insurance premiums and health care costs from rising as quickly as expected.

And what about the decrease by 4 million in the number of Americans the CBO projects will receive health coverage through their employers? If you were a reader of Fox Nation you’d have seen this headline: “CBO: Obamacare Will Force 4 Million to Lose Their Health Plans.”

In actuality, some of those people will be unemployed and receiving coverage under Medicaid. A small number of companies may decide that it just isn’t worth it to provide workers with coverage when they can buy it cheaper on the exchanges. But Fox and the other conservative media are, as usual, not matching headlines to the facts. Studies from CBO, Rand and the Urban Institute have found that there will be no mass exodus of employers from the insurance market—employer-sponsored coverage will be left “largely intact.”

Other conservative outlets ran versions of this headline: “Obamacare’s Gross Costs Double to $1.76 Trillion, CBO Projects.” In fact, that $1.76 billion figure refers to the gross cost of the ACA without the $.4 billion in projected revenues and savings, and on top of that, adds in gross costs for 2022 that the CBO felt were too soft to even include.

This is the kind of misinformation and hyperbole that keeps so many Americans in the dark about the real costs and benefits associated with health reform.

The fact is that the new CBO report is an update without any real surprises. This is probably because very little has changed in a year. None of the large-scale insurance coverage provisions have been implemented, state health insurance exchanges have not proceeded beyond the planning stage (if at all) and much hinges on the Supreme Court’s decision about the individual mandate. I’m holding out for next year’s report.

In the Unemployment Office, the Promise of Health Care Jobs

It’s 9:30 in the morning and Peter Andrews, a labor services representative in the New York State Department of Labor is facing a packed room. There are more than 60 of us seated at long tables and along the wall of a conference room where extra chairs have been brought in from another part of the building. At least two-thirds of us are middle-aged or beyond. Despite the size of the crowd, there is no talking—rather, an air of despondency suffuses the room.

I’m here, along with everyone else, because I am officially unemployed and in order to keep collecting our weekly checks we are required to attend this “workshop” on improving our job search skills. As Peter notes, none of us really want to be here.

But Peter is really trying; at the tender age of 26, he’s dressed in a dark grey and white pin-striped suit, a black dress shirt and a silver tie and he’s eager, helpful, working the crowd. He gives a shout-out to some people he notes that have been here before; “If you send me a list of jobs you’ve applied for every six weeks you won’t have to keep coming to these sessions anymore,” he tells them. “It’s simple, just write down a list of like 15 places and email it to me and I’ll take care of it for you.” I’m mentally calculating the number of “places” I’ve applied for a job and it’s nowhere near 15—there just aren’t that many full-time job opportunities for someone whose last job was working on health policy at a “progressive think-tank.” To most people, I don’t really “do” anything.

But Peter has lots of ideas; he rattles through a list of workshops the Labor Department offers in resume writing, interviewing techniques, help for “The Mature Worker,” and “Introduction to Social Media.” There are special programs for ex-offenders and immigrants looking for jobs; referrals to charities that offer free business clothing for women (although Peter recommends we avoid the center in Brooklyn because there are reports of bed bugs there) and—this seems to perk up the crowd just a tad—we are told that unemployed New Yorkers can take civil service exams for government jobs free of charge. There are funding opportunities for job training and free use of resource room computers and printers; just be sure to get here early—the line to get into the room is down the block by 11 AM.

OK. Now it’s on to getting us really fired up about the job search. Peter begins the part of his talk that focuses on where we should be looking for employment. In a word, it’s in healthcare or health care (depending on which style guide you follow). He tells us about the brave new world of Health IT where jobs pay $100,000 or more and the industry is flush with “$20 billion in stimulus funding from the government.” The biggest mistake we can make, he tells us, is undergoing training to work in medical coding and billing. Of 300 applications he approved two years ago to pay for this kind of training, more than 70% of the people who completed the certification program remain unemployed. It’s a dying field.

But health IT is another story. Coincidentally, this week Ezekiel Emanuel, health policy professor at the University of Pennsylvania and Senior Fellow at the Center for American Progress wrote an op-ed for Reuters that gushes about the success of the government’s HITECH program that as part of the Recovery Act offers physicians and hospitals payments to adopt electronic health records systems. Among office-based doctors, the use of EHR has “nearly doubled to 34 percent with e-prescribing exceeding 40 percent. Over 41,000 physicians have received more than $575 million in incentive payments,” writes Emanuel. For hospitals, he continues, “35 percent have adopted EHRs, and nearly 2,000 of the 4,700 hospitals have, collectively, received more than $2 billion in incentive payments. Every month has surpassed the previous month as measured by the number of physicians and hospitals that have signed up with the government for the EHR program, suggesting that these numbers will continue to rise.” Read more…

Keeping Dental Problems Out of the Emergency Room

If you’re suffering from a throbbing toothache, the hospital emergency room is not a good choice for treatment. The wait time could be hours, there’s rarely a dentist on staff, and procedures like tooth extractions cost far more if they take place in a hospital versus being performed in a dentist’s office. Yet increasingly, for people covered under Medicaid or for those without any dental insurance, the emergency room is the only option when serious dental problems arise.

A new report by the Pew Center on the States finds that preventable dental conditions were responsible for more than 830,000 visits to the emergency room last year; a 16% increase since 2006. Because ER’s aren’t set up to treat non-accident related dental problems, most of these patients received only symptomatic treatment like pain medication or antibiotics. Some 80% were referred to a dentist for follow-up visits. And so the cycle continues.

Why the rise in emergency visits for preventable dental problems? According to the Pew study, “A major driver…is a failure by states to ensure that disadvantaged people have access to routine preventive care from dentists and other providers.” The report estimates that some 47 million Americans live in areas that the federal government identifies as experiencing a serious shortage of dentists. This is especially true in rural areas where people live very far from the nearest dentist. But the dearth of dental providers is only part of the problem. There are also far too few providers who will agree to see Medicaid patients—in 2008 for example, fewer than half of the dentists in 25 states treated any Medicaid patients. For children the situation is particularly dire; the Pew study finds that in 2009, “more than 16 million Medicaid enrolled children (56 percent) received no dental care—not even a routine exam.” Access problems are the most likely explanation because federal law mandates state Medicaid coverage for all children’s preventive dental services.

A shortage of community dentists; a lack of providers who accept Medicaid patients; a growing number of Americans who have no dental insurance—all these factors result in a reliance on expensive emergency care for acute problems that could have been prevented by regular office visits and simple wellness routines. Sound familiar? These issues mirror the problems of cost and access that plague the rest of the health care system; especially when it comes to controlling chronic illnesses like diabetes and heart disease and preventing unnecessary ER visits and hospital admissions. Read more…