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Hullabaloo


Sunday, June 18, 2017

 

Death Spiral: We're gonna need a storyboard

by Tom Sullivan

Death spiral sounds like a film Seinfeld's Kramer might want to bootleg. President Donald Trump has promoted it pretty heavily since entering the race for the White House. Like "death panels," it has a certain ring, but one that doesn't ring true.

Politifact took issue with that characterization, providing more detail than I will recount here. But in summary:

In a tweet, Trump linked 2 million people dropping coverage on the Obamacare exchanges to a "death spiral." The figure is plucked out of context. The pattern of people signing up and then dropping coverage has been steady over the past few years. One reason people do so, experts and government data say, is because they find coverage someplace else, most often by getting a job.

The current government report behind Trump’s figure suggests the percentage of people letting their policies lapse has gone up, but this year, the government changed when it counted those lapsed policies. According to experts, that change created the appearance of a trend that might not exist.
Mostly False, Politifact judges.

Claxons announcing Obamacare's demise sound regularly around Republican offices in the capitol. But they don't tell the full tale either, Ricardo Alonso-Zaldivar wrote for the Associated Press last week. Vice President Mike Pence rolled out a chart explaining the programs woes to federal employees:
"Back when Obamacare was first passed, just over seven years ago, the Congressional Budget Office estimated that 23 million Americans would be covered by now," Pence told Health and Human Services Department workers. "That's the blue line on the far left," he added, referring to his chart. "It quickly became apparent that this was farfetched — to put it mildly."

True, only 10.3 million people are enrolled this year in the subsidized health insurance markets, not the 23 million projected by the budget office for 2017.

But Pence — and the chart — omitted any mention of the other major coverage arm of Obama's law, a Medicaid expansion estimated to cover 12 million low-income people this year. More would be covered, but 19 states have refused the expansion because of opposition from Republicans.

Together, the Medicaid expansion and subsidized private health insurance have reduced the number of uninsured by about 20 million people, bringing the uninsured rate to a historic low of about 9 percent, according to the government.
Pence was referring to this chart released Tuesday showing insurer participation in the Obamacare exchanges:

"The American people have fewer insurance choices and in some counties no choice at all," said Seema Verma of the Centers for Medicare and Medicaid Services, the agency overseeing Obamacare:

The map's release comes a week after big insurer Anthem said it was effectively abandoning Ohio's Obamacare market in 2018, leaving 18 counties there with potentially no insurer, and after Washington's insurance commissioner revealed that two counties could be "bare" of Obamacare insurers next year in that state.

Anthem had cited the uncertainty about the Trump administration's funding of so-called cost-sharing reduction subsidies in its decision.
But it might be instructive to compare that map with a map showing the 19 states where states have refused the Medicaid expansion. There is a lot of overlap:

What has received less attention is the number of new insurers moving into areas as competitors pull out. The Hill reported:

An ObamaCare insurer will move into three new states while expanding its footprint in six existing markets.

Centene announced Tuesday it would enter Kansas, Missouri and Nevada in 2018, while expanding its presence in Florida, Georgia, Indiana, Ohio, Texas and Washington.

It's unclear which counties Centene will sell plans in, but the move could mean they are filling "bare counties" in these states that are slated to have no marketplace insurers for 2018.
Forbes reports that as the Senate met in secret to repeal Obamacare with a bill similar to the House-passed American Health Care Act:
Obamacare had a good week, capping with announcements by Oscar Health and Medica that they would join Centene in launching individual products in states where other insurers have left public exchanges under the Affordable Care Act.

Medica said it will file with regulators to sell individual insurance statewide in Nebraska under the ACA. Medica is a big name health plan in the Upper Midwest, which is good news for 100,000 Nebraskans who have bought ACA plans in the past.

[...]

The ACA expansion plans from Medica, Oscar Health and Centene come despite the unknown of what will happen to the individual insurance market if Republicans in Congress and the Donald Trump White House repeal the law. Insurers are raising rates because there is yet to be a commitment on critical cost-sharing reductions and the Republican-led U.S. Senate has yet to make its legislation public as it races to come up with an ACA repeal and replacement plan by July.
Pence heard complaints in Iowa where state officials asked for federal help as insurers Aetna and UnitedHealth Group abandon the state. State officials would use "$352 million in federal money to provide backup funding for insurers and overhaul Obamacare’s subsidies for consumers next year. The state would also create a single standardized plan that insurers would offer."

Medica may enter the Iowa market but has made no commitment. Oscar Health, co-founded by Joshua Kushner (brother to Jared Kushner, Trump's son-in-law), announced on Thursday a partnership with the Cleveland Clinic to provide insurance in five counties in northeast Ohio. But this won't help consumers elsewhere in Ohio left in the lurch by the loss of Anthem on the state's exchange.

The Republican argument is that Obamacare is in a death spiral (say it with me in a low, guttural voice) because, in addition to the rising private premiums, people in many states have only one choice of for-profit insurer. Presumably, Senate Republicans' double secret replacement would provide more choices if not lower costs. But if Iowa lawmakers are preparing to create their own "single standardized plan," there really is no need. Medicare For All would do the job nicely without the uncertainty and middle-man markups.

But that just won't do for Republicans. The Market would be angry.