KHN’s ‘What the Health?’: 2020 in Review — It Wasn’t All COVID

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COVID-19 was the dominant — but not the only — health policy story of 2020. In this special year-in-review episode of KHN’s “What the Health?” podcast, panelists look back at some of the biggest non-coronavirus stories. Those included Supreme Court cases on the Affordable Care Act, Medicaid work requirements and abortion, as well as a year-end surprise ending to the “surprise bill” saga.

This week’s panelists are Julie Rovner of KHN, Joanne Kenen of Politico, Anna Edney of Bloomberg News and Sarah Karlin-Smith of Pink Sheet.

Among the takeaways from this week’s podcast:

  • The coronavirus pandemic strengthened the hand of ACA supporters, even as the Trump administration sought to get the Supreme Court to overturn the federal health law. Many people felt it was an inopportune time to get rid of that safety valve while so many Americans were losing their jobs — and their health insurance — due to the economic chaos from the virus.
  • Preliminary enrollment numbers released by federal officials last week suggest that more people were taking advantage of the option to buy coverage for 2021 through the ACA marketplaces than for 2020, even in the absence of enrollment encouragement from the federal government.
  • The ACA’s Medicaid expansion had a bit of a roller-coaster ride this year. Voters in two more states — Oklahoma and Missouri — approved the expansion in ballot measures, but the Trump administration continued its support of state plans that require many adults to prove they are working in order to continue their coverage. The Supreme Court has agreed to hear a challenge to that policy. Although lower courts have ruled that the Medicaid law does not allow such restrictions, it’s not clear how the new conservative majority on the court will view this issue.
  • Concerns are beginning to grow in Washington about the near-term prospect of the Medicare trust fund going insolvent. That can likely be fixed only with a remedy adopted by Congress, and that may not happen unless lawmakers feel a crisis is very near.
  • The Trump administration has sought to bring down drug out-of-pocket expenses for Medicare beneficiaries. Among those initiatives is a demonstration project to lower the cost of insulin. About a third of Medicare beneficiaries will be enrolled in plans that offer reduced prices in 2021. But the effort could have a hidden consequence: higher insurance premiums.
  • Many members of Congress began this session two years ago with grand promises of working to lower drug prices — but they never reached an agreement on how to do it.
  • President Donald Trump, however, was strongly motivated by the issue and late this year issued an order to set many Medicare drug prices based on what is paid in other industrialized nations. Drugmakers detest the idea and have vowed to fight it in court. Although some Democrats endorse the concept, it seems unlikely that President-elect Joe Biden would want to spend much capital in a legal battle for a plan that hasn’t been carefully vetted.
  • The gigantic spending and COVID relief bill that Congress finally approved Monday includes a provision to protect consumers from surprise medical bills when they are unknowingly treated by doctors or hospitals outside their insurance network. The law sets up a mediation process to resolve the charges, but the process favors the doctors. Insurers are likely to pass along any extra costs to consumers through higher premiums.

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Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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Sen. Graham Complains That 3 Blue States Get a Third of ACA Funding

Sen. Lindsey Graham has never been a fan of the Affordable Care Act — even though it’s helped dramatically lower the number of uninsured people in his home state of South Carolina.

The Republican, who heads the Senate Judiciary Committee, attacked the law at the confirmation hearings for Supreme Court nominee Amy Coney Barrett. Democrats have made the nomination a referendum on the health law, which will be the subject of a Supreme Court hearing on Nov. 10. They fear the court may overturn the entire law, which has led to huge expansions in coverage and blocked insurers from discriminating against people with preexisting conditions, among other consumer protections.

Graham suggested that South Carolina was getting the short end of funding because the health law is sending a disproportionate amount of its money to states represented by Democrats in Congress.

“Under the Affordable Care Act, three states get 35% of the money, folks. Can you name them? I’ll help you: California, New York and Massachusetts. They’re 22% of the population. Sen. [Dianne] Feinstein’s from California, [House Speaker] Nancy Pelosi’s from California, Chuck Schumer, the leader of the Democratic Senate, is from New York, and Massachusetts is [Sen.] Elizabeth Warren. Now, why do they get 35% of the money when they’re only 22% of the population? That’s the way they designed the law: The more you spend, the more you get.”

His statement got us wondering if those numbers are true.

Complicated Math

We asked Graham’s office for evidence to support his statement. His spokesperson responded with data he said was from the Centers for Medicare & Medicaid Services as well as the Medicaid and CHIP Payment and Access Commission, a congressional advisory board.

To look at total spending under the ACA, Graham’s office analyzed federal money that went to pay for the Medicaid expansion, tax credits given to consumers to subsidize premiums of insurance plans on the marketplace, cost sharing reduction subsidies (which were given to insurers to defray some of the costs they were required by the ACA to pick up for marketplace customers with very low incomes) and the Basic Health Program, which is an option in the ACA that lets states offer low-income residents different coverage than plans offered on the marketplaces.

Graham’s office did not share the actual reports used for the analysis, but staffers said they used 2016 data, even though more recent data was available. The numbers were based on calculations made in 2017 when Republican lawmakers sought to repeal and replace the ACA. Their analysis showed $118 billion in total 2016 federal spending on the ACA, with California, New York and Massachusetts receiving about $43 billion, or about 37% (slightly higher than what Graham cited at the hearing).

Nearly two-thirds of the funding was attributed to the expansion of Medicaid to all adults below the federal poverty level. The Supreme Court ruled that pursuing the expansion was an option left to states’ discretion — South Carolina opted against it. The federal government paid all those Medicaid costs from 2014 through 2016 for new enrollees and then gradually reduced its share to 90% today.

We decided to independently look at the spending using the latest available numbers. We reviewed federal data compiled by KFF as well as data provided directly from the U.S. Centers for Medicare & Medicaid Services and the states, when necessary. (KHN is an editorially independent program of KFF.)

It is important to note that the Trump administration ended the cost sharing reduction payments in October 2017. So, KHN’s analysis did not include spending for that program.

We analyzed the latest Medicaid expansion funding from 2018 and the latest Obamacare tax credit spending and also Basic Health Program spending from 2019. Only two states participate in that program, New York and Minnesota.

Adding up the latest data and the federal share of funding came to nearly $140 billion. Of that amount, New York, California and Massachusetts — which represent about 20% of the nation’s population — received a combined $40 billion, or about 29%.

The largest category of federal funding by far was the nearly $27.5 billion the three states together received from Medicaid expansion.

New York received about $5 billion in fiscal 2019 for the Basic Health Program.

Sifting through older datasets, one key discrepancy stands out in the figures used by Graham. He lists Massachusetts as receiving $6.1 billion in federal exchange subsidies — almost 20% of the national total — while federal data used by KFF in 2016 cites $360 million.

Graham insinuated that South Carolina wasn’t getting its fair share of money, calling the law “a disaster for the state.”

But the refusal by the state’s Republican leaders for the past seven years to expand Medicaid — which would have brought in billions of federal dollars — is the main reason for the funding disparity. South Carolina is one of 12 states that have not adopted Medicaid expansion.

That decision has left hundreds of thousands of the state’s residents uninsured because they have incomes too high for Medicaid but too low to qualify for federal subsidies to help them buy insurance plans sold on the ACA marketplaces. To qualify for a subsidy, consumers’ income must be at least at the federal poverty level, or $12,760 in 2020.

“A big driver of the flow of federal funds is related to that decision about whether to expand,” said Larry Levitt, KFF’s executive vice president for health policy. “It is not inherently in the design of the law.”

If South Carolina expanded Medicaid, about 330,000 more residents would be covered and the federal government would give an additional $1.6 billion in annual Medicaid funding to the state, according to an analysis by the Urban Institute. State Medicaid spending would rise by $250 million.

Even without expanding Medicaid, the uninsured rate in South Carolina has dropped from 20% in 2008 to about 13% in 2019, according to Census data.

More than 9 in 10 people in the state who get coverage through the ACA marketplace get tax credits to help them pay their monthly premiums.

In fact, South Carolina gets a larger share of those premium tax credits than most states. South Carolina, the nation’s 23rd-largest state by population size, ranks 11th in the number of residents getting those subsidies and ninth in receipt of the federal ACA premium subsidies, according to the federal data.

Disadvantage for ‘Fiscally Responsible States’

Kevin Bishop, a spokesperson for Graham, said the point of the senator’s remarks is that the ACA “is structured so that states that either expanded [Medicaid] or have favorable state eligibility will have a disproportionate share of funds. This gives an advantage to high-spending states.” States that are more “fiscally responsible” are at a disadvantage, he said.

Bishop acknowledged that ACA spending does change each year.

Levitt noted that Graham’s critique omitted an important perspective about other states. The senator did not mention that enrollees in two Republican-controlled states with large populations, Florida and Texas, receive more in ACA premium subsidies than people in New York or Massachusetts. However, neither of those Southern states has expanded its Medicaid program.

Still, experts noted that Graham’s comment that the more states spend the more they get from the ACA is partly true.

It accurately reflects the ACA’s Medicaid formula. As states expand Medicaid eligibility, they pick up more expenses and also receive more money in a federal match.

Joe Antos, a health economist with the conservative American Enterprise Institute, said Graham is correct that the Medicaid expansion was designed to help direct additional funding to wealthier states such as New York, California and Massachusetts. Those states, as well as some others, had broader Medicaid eligibility rules than poorer states before the law was enacted, so their Medicaid rolls were relatively larger already.

That’s why the Medicaid expansion was set at 138% of the federal poverty level, rather than 100%, he said. The higher amount meant those states could get a larger reimbursement for people already in their program.

But he said states that chose not to expand Medicaid under the law can’t blame the law for getting fewer federal dollars.

“If a state did not expand, it’s on them for having less federal funding,” Antos said.

Ed Haislmaier, a senior research fellow at the conservative Heritage Foundation, said the expansion of Medicaid for those more progressive states significantly increased their funding. “New York made out like a bandit,” he said, noting the state had one of the nation’s largest Medicaid populations before 2010.

Our Ruling

Graham points to higher federal spending on ACA programs in three states that are represented by top congressional Democrats and complains that South Carolina is not faring as well. While his numbers are four years old, the latest numbers are just a few percentage points lower than what he cited — 29% compared with 35%.

He also left out some critical information — most important, that South Carolina didn’t pursue federal funding through Medicaid expansion.

His argument that the law was designed to help some states largely controlled by Democrats fails to note that many Republican-controlled states have received heavy federal funding, too, either because of ACA tax subsidies or Medicaid expansion, or both.

He also didn’t acknowledge that South Carolina does have a strong record of receiving federal subsidies for consumers buying insurance on the ACA marketplace.

We rate Graham’s statement as Half True.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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KHN’s ‘What the Health?’: Still Waiting for That Trump Health Plan

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President Donald Trump keeps promising to unveil a comprehensive plan to replace the Affordable Care Act, but it keeps not appearing. However, this week he did order an expansion of telehealth for Medicare beneficiaries and a program to help struggling rural hospitals.

Meanwhile, the administration still lacks a comprehensive plan to fight the COVID-19 pandemic in the U.S., and Congress remains unable to agree on another round of COVID relief funding, despite broad agreement on the need.

Outside Washington, Missouri this week became the sixth state where voters approved an expansion of Medicaid under the Affordable Care Act over the objections of Republican governors and/or Republican-controlled legislatures.

This week’s panelists are Julie Rovner of Kaiser Health News, Alice Miranda Ollstein of Politico, Tami Luhby of CNN and Kimberly Leonard of Business Insider.

Among the takeaways from this week’s podcast:

  • If a compromise over a federal relief package is not reached, Trump said he will issue executive orders to provide enhanced unemployment benefits and protections for people facing eviction. Even if he can do that, other parts of the stimulus plan — including money for states and local governments facing major deficits, schools, and testing and tracing programs — will likely be out of luck.
  • Six states announced this week they are banding together to purchase quick-turnaround coronavirus tests as they try to increase the number of tests they can offer.
  • States that have been using National Guard troops during the coronavirus emergency to help provide services are facing the prospect of having to pick up part of the cost for those service members. The mobilization was set to expire soon, but this week the administration announced it would extend the use of the National Guard, if states helped pay for it.
  • No new health plan was offered by Trump despite his comments in an interview with Fox News anchor Chris Wallace two weeks ago that a plan would be unveiled by Aug. 2. Instead, the administration has rolled out a number of smaller initiatives, including proposals to lower prescription drug prices and extending telemedicine.
  • The loosening of Medicare’s rules for telehealth during the pandemic has proved popular and may be hard to roll back. It has helped overcome shortages of medical professionals in rural areas and in mental health services. Nonetheless, federal officials and some health policy analysts suggest that increased use of digital medical appointments could expand the nation’s overall health bill. For example, if a patient has a virtual visit with the doctor who then says the patient needs to be seen in person, the doctor can collect fees for two visits.
  • Among the big supporters of the Missouri measure to expand Medicaid was the health care industry, which spent heavily on the campaign.
  • It’s second-quarter earnings season, and most health care companies are reporting good profits, despite the upheaval caused by the coronavirus. Still, they warn that they could take a hit in the third quarter.

Plus, for extra credit, the panelists recommend their favorite health policy stories of the week they think you should read too:

Julie Rovner: Vanity Fair’s “How Jared Kushner’s Secret Testing Plan ‘Went Poof Into Thin Air’,” by Katherine Eban

Alice Miranda Ollstein: The Atlantic’s “How the Pandemic Defeated America,” by Ed Yong

Kimberly Leonard: The New York Times’ “’The Biggest Monster’ Is Spreading. And It’s Not the Coronavirus,” by Apoorva Mandavilli

Tami Luhby: The Washington Post’s “Trump Keeps Promising an Overhaul of the Nation’s Health-Care System That Never Arrives,” by Anne Gearan, Amy Goldstein and Seung Min Kim

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Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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Missouri Voters Approve Medicaid Expansion Despite GOP Resistance

Despite strong opposition from Republicans and rural voters, Missouri on Tuesday joined 37 states and the District of Columbia in expanding its Medicaid program. Voters in Missouri approved creating a state constitutional amendment that will open Medicaid eligibility to include healthy adults starting July 1, 2021.

Voters approved expansion by a margin of 6.5 percentage points.

Missouri joins five other mostly conservative states that have passed Medicaid expansion via ballot initiatives — most recently, Oklahoma, on June 30. Most of the remaining 12 states that have not expanded Medicaid are Republican-leaning states in the South.

Nika Cotton, owner of Soulcentricitea, a new tea shop in Kansas City, Missouri, woke to the news on Wednesday morning. Cotton, whose children are 8 and 10, said she will qualify for health care coverage under the expansion.

“It takes a lot of stress off of my shoulders with having to think about how I’m going to take care of myself, how I’m going to be able to go and see a doctor and get the health care I need while I’m starting my business,” Cotton said.

Medicaid expansion, which states have the option of adopting as part of the Affordable Care Act, extends eligibility in the program to individuals and families with incomes up to 138% of the federal poverty level. A family of three, like Cotton’s, could make up to $29,974 to qualify.

The federal government pays for 90% of expansion costs.

As of 2018, 9.3% of Missourians were uninsured. And in 2019, researchers from Washington University in St. Louis estimated that around 230,000 people in Missouri would enroll for Medicaid if it were expanded. The study also showed expansion would save the state an estimated $39 million a year, largely by eliminating the need for other state health spending.

Missouri’s adoption of expansion follows a trend of increasing support in largely Republican states, according to health policy expert Rachel Nuzum of the Commonwealth Fund.

“What we’ve seen in our surveys over the years is when you take the labels off of the policies, when you take the Affordable Care Act label off, when you take Medicaid expansion off, and just start asking people whether or not you think low-income families should have access to Medicaid coverage, the support is overwhelming,” Nuzum said.

Support for expansion came largely from voters in and around Missouri’s urban centers such as Kansas City, St. Louis, Springfield and Columbia. In Kansas City for example, 87.6% of voters backed the measure.

Amendment 2 was rejected overwhelmingly by conservative voters in the mostly rural parts of the state that have the highest uninsured and poverty rates. Voters in McDonald, Morgan and Scotland counties, which have the three highest uninsured rates in the state, rejected the measure by margins of nearly 2-to-1 or greater.

Expansion opponents warned that high enrollment in the program could lead to the state’s 10% share of the costs becoming a significant burden for Missouri, especially when state revenues are down.

“When state revenues fall, it begs the question, how are you going to pay for this?” said Ryan Johnson, in late July. He is a senior adviser for United for Missouri, a conservative policy advocacy organization.

“We’re concerned that they are going to have to raid public education,” he said, “and that’s a disservice to the kiddos who hope to go back to school this fall, the teachers, the administrators and everyone involved in the public education system.”

Responding to declining revenue related to the coronavirus, Missouri’s Republican governor, Mike Parson, recently reduced the 2021 budget by nearly $449 million, with education taking the hardest hit.

Health care experts have said that the economic effects of the pandemic, including high unemployment and lower state revenue, could strain the capacity of state Medicaid programs. However, health care advocates argue that expansion benefits individuals and families struggling as a result of the pandemic, and the influx of federal dollars and the jobs that result from expansion could help the economy.

“If we’re worried about the economy and we’re worried about people working, Medicaid expansion is actually a way to encourage people to work and not have that worry they’re going to lose health insurance for themselves or their families,” said Ryan Barker, vice president of strategic initiatives for Missouri Foundation for Health.

Republican state lawmakers have fiercely resisted Medicaid expansion. The expansion question was placed on the ballot after a petition.

Expansion advocates enlisted the Fairness Project, a Washington, D.C.-based campaigning organization, in developing and executing their campaign strategy. The Fairness Project has been involved in successful Medicaid expansion campaigns in other mostly conservative states, including Maine, Utah, Idaho, Nebraska and Oklahoma.

The “YES on 2” campaign was supported by a wide range of groups, including the Missouri Chamber of Commerce and Industry, the Missouri Hospital Association, the NAACP, the AFL-CIO and the AARP, among others. And, the coalition forged unlikely alliances, including Planned Parenthood supporters and Catholic Charities of St. Louis, which is operated by the Archdiocese of St. Louis.

YES on 2 campaign material made almost no mention of the Affordable Care Act, which has been unpopular in Missouri, and some of its flyers didn’t use the words “Medicaid expansion.”

Although support for the measure was much lower in conservative rural areas, Fairness Project executive director Jonathan Schleifer said Missouri’s expansion success relied on both activating progressive urban voters and engaging rural voters — though conservative resistance remained a significant obstacle to reforming health care policy.

“I think there’s still a lot of work to do to push back against the hundreds of millions of dollars, the public messages coming from as high as the White House, that there’s something wrong with the Affordable Care Act,” Schleifer said.

Opponents to expansion included Gov. Parson and other Republican lawmakers, Missouri Right to Life, Missouri Farm Bureau and Americans for Prosperity.

In the days leading up to the election, the “No on 2 in August” campaign sent a mailer suggesting that expansion would lead to an influx of undocumented immigrants seeking health care, but undocumented immigrants are not eligible for Medicaid and would not be under expansion, either.

The flyer, which featured a man in a medical mask emblazoned with the Mexican flag, read “Amendment 2 Means Illegal Immigrants Flooding Missouri Hospitals … While We Pay for It!”

The “No On 2 in August” campaign did not respond to requests for comment about the flyer.

Between serving customers on a busy morning on Wednesday, shop owner Cotton said her excitement about expansion was only slightly diminished by having to wait almost a year for it to take effect.

“It’s better late than never,” said Cotton. “The fact that it’s coming is better than nothing.”

This story is part of a partnership that includes KCUR, NPR and Kaiser Health News.

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation which is not affiliated with Kaiser Permanente.

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