Aaron E. Carroll's Blog, page 142

No, Secretary Price, you can’t fix the CBO score by regulating

With the release of the dismal CBO report on the American Health Care Act, the administration is playing defense. Secretary Price says the report is “just not believable” because it does not take into account the regulatory changes that he intends to make to bring down the cost of coverage. It also “ignored completely the other legislative activities that we’d be putting into place.”

This is all very vague, but what Price seems to have in mind is an alteration to the rule requiring insurers in the individual and small-group markets to cover the “essential health benefits.” If plans have to cover fewer things, the reasoning goes, they’ll be much cheaper, enabling millions of people to afford coverage that would otherwise be out of reach.

Don’t be fooled.

When it comes to essential health benefits, Congress has already been sidelined. Coverage requirements don’t directly affect the federal budget, which means they can’t be changed through reconciliation. And Democrats will filibuster any effort to water down the essential health benefits. So unless Mitch McConnell blows up the filibuster, there is no chance that Congress will act.

On the regulatory side, Price is hemmed in by the text of the ACA, which says that “the scope of the essential health benefits” must be “equal to the scope of benefits provided under a typical employer plan.” Price has some latitude to determine what counts as “typical,” but he can’t read the word out of the statute. He’s got to be able to identify a substantial number of plans in the employer market to use as a benchmark.

The Institute of Medicine looked into employer plans back when HHS was first considering what to do about the essential health benefits. It found that plans from one another in the scope of their coverage. Prominent insurers reported “that little of the variation in customizing coverage in either the large and small group market is due to differences in covered benefits as opposed to benefit design options.” Instead, insurers held down costs by networks and cost-sharing.

If most employer plans cover the same stuff, you can’t squeeze much juice out of a redefinition of the essential health benefits.

Yes, Price can make some changes at the margin. Under its current approach to essential health benefits, HHS allows the states to select an existing employer plan to use as a benchmark. As Helen Levy and I explained in an article we wrote a few years back, existing plans will necessarily cover all services mandated under state law. Not all of those services, however, need to be considered “essential” within the meaning of the ACA.

Take infertility treatment, which is an essential health benefit in (at least) those fifteen states with infertility mandates. In other states, however, some small group plans infertility treatment. Price could probably determine that plans that exclude such coverage are “typical” and redefine essential health benefits to categorically exclude infertility treatments. But that would yield only a decrease in premiums.

What Price can’t do is lop off whole benefit categories. The ACA is explicit, for example, that the essential health benefits must include treatments for maternity care and mental health disorders. Because Price can’t exclude big categories from coverage, he’ll struggle to redefine the essential health benefits in a manner that will drive down costs.

Plus, if Price were to define essential health benefits in an especially parsimonious manner, he’d face a lawsuit challenging his decision as unreasonable. (I for one would love to litigate that case.) The resulting legal uncertainty would drive premiums up, not down. And remember, too, that Price can only change the existing rule by going through notice-and-comment rulemaking, which will take at least a year, maybe more.

Price therefore can’t do much to drive down premiums by tinkering with the essential health benefits. What gives me pause, however, is the possibility that he might take a page from the Obama administration’s playbook and “delay” the implementation of the existing statutory requirements. Such a move would be unconstitutional and vulnerable to a legal challenge, but I don’t know if that will stop HHS: refusing to enforce the law might be the only way to give insurers room to materially narrow their scope of coverage.

Apart from this illegal possibility, however, don’t put much stock in Secretary Price’s vague claim that future regulatory changes will transform CBO’s coverage estimates. They can’t and they won’t.

@nicholas_bagley

Preserving wellness programs by infringing on privacy

A bill is moving through Congress—the Preserving Employee Wellness Programs Act—that would effectively allow businesses to require their employees to disclose lots of sensitive medical data, including their genetic information.

It’s an ugly piece of legislation. Explaining why is tricky, but bear with me.

* * *

The point of workplace wellness programs is to discriminate among employees. Those who adhere to the wellness program—whether by filling out a health assessment, taking a blood test, or attending smoking-cessation classes—pay less for their health coverage. Those who don’t, pay more.

At the same time, a bunch of federal laws aim to stop discrimination in the workplace. HIPAA is one such law: it prohibits employers from asking employees to pay more for their coverage based on their health status. Many wellness programs couldn’t exist in the face of that prohibition.

So, in HIPAA, Congress partly exempted wellness programs. They were allowed to discriminate a little bit based on health status. The ACA expanded HIPAA’s carve-out. Today, wellness programs can ask employees who don’t adhere to a wellness program to pay up to 30% more for their health coverage.

But Congress has never fully resolved the tension between federal antidiscrimination law and wellness programs. Take the Americans with Disabilities Act. It says that employers can’t ask their employees to take a medical exam, including a medical history, unless doing so is “voluntary.”

What if an employer imposes a 30% insurance surcharge on employees who refuse to do a health assessment? The surcharge would not be trivial. The cost of an average family plan in 2016 was $18,142; 30% of that is $5,443. With a penalty of that size, it’s nuts to say that a health assessment is still “voluntary.”

Nevertheless, the Equal Employment Opportunity Commission, which oversees wellness programs, has adopted a rule saying that ACA-compliant wellness programs are consistent with the ADA, voluntariness notwithstanding. A couple of courts have bought the argument. One of the courts reasoned that “even a strong incentive is still no more than an incentive; it is not compulsion.”

The mafia would happily endorse that sentiment, but it’s crazy to see it in a judicial decision. As I’ve explained before, the EEOC rule is unlawful and it’s vulnerable to legal challenge. An AARP lawsuit will soon work its way to the D.C. Circuit. The wellness industry is rightly worried that it could lose.

That’s where the new bill comes in. It says that wellness programs that comply with the ACA can never be involuntary. The AARP lawsuit would be deader than a doornail. Employers could effectively compel their employees to answer questions about their disabilities.

* * *

A similar dynamic is in play with the Genetic Information Nondiscrimination Act, which prohibits businesses from asking employees for their genetic information. The term “genetic information” is defined to exclude an employee’s medical history—that’s not closely enough connected to her genes. But genetic information includes information about any “manifestation of a disease or disorder in family members.”

The reason is simple: a family member’s illness may suggest a genetic propensity in the employee herself. And so, under GINA, asking an employee whether she has ever had breast cancer is OK. Asking whether her sister or mother has ever had breast cancer isn’t.

Under the new bill, however, it’s open season on your family’s medical history. You can refuse to answer, but good luck with that 30% surcharge.

If you think that’s no big deal, imagine that your spouse is an alcoholic or that your 22-year-old son was just diagnosed with schizophrenia. Employers aren’t supposed to use that kind of information to discriminate against you. But they’ll be sorely tempted: through your employer-sponsored coverage, they’re on the hook for your family’s medical expenses.

The bill goes further still. Under GINA, employers can’t insist on their employees’ genetic data. GINA, however, supplies an exception for data that are compiled as part of a wellness program and given to the employer in de-identified, aggregate form. The new legislation says that wellness programs “shall be considered to be in compliance” with that exception.

This is a little confusing. Would the bill bless all requests for genetic information, or only those requests that otherwise meet some of the terms of the exception? Read literally, I think it’s the former: any wellness program’s inquiry into an employee’s genetic history is deemed to be in “compliance” with the exception.

If that’s right, then the bill would allow your employer to insist on the disclosure of any genetic data. If you don’t want to answer, you don’t have to. Just cough up your $5,443 penalty.

* * *

Adrianna, Aaron, Austin, and I have a paper coming out soon detailing the dubious empirical and legal foundations of workplace wellness programs. For the very curious, here’s an excerpt examining some of the legal questions that I’ve just discussed.

But the bottom line on the new legislation is simple. The Preserving Employee Wellness Program Act sweeps aside federal antidiscrimination law in order to give businesses more power to root about in their employees’ lives. If wellness programs worked, maybe that’d be OK. But the evidence is overwhelming that most don’t work. This bill is just a naked, unearned giveaway to the wellness industry.

Oh, and on top of all of this, the bill would strip the EEOC of its authority to regulate wellness programs. Instead, that power would go to HHS, Labor, and Treasury. The effect would be to shift power from an independent agency that cares a lot about discrimination to agencies under the firm control of the Trump administration.

As I said, it’s an ugly bill.

@nicholas_bagley

The AHCA’s mandate replacement doesn’t make sense to me

I’m having a really hard time with this. I’m going to try and walk through my dilemma in the hope that someone will be able to make me understand.

The Republicans hate the individual mandate. I get that. I don’t necessarily understand their rationale, but I accept it. They also, however, understand the need for some sort of carrot/stick to get healthy people to buy insurance so that we don’t get adverse selection and see the private insurance market enter a death spiral. So they need to replace it.

We have discussed this before. There are many ways to solve this adverse selection problem without a mandate. Open enrollment periods, penalties for not signing up, loss of protections, inducements for keeping coverage, etc. We have written about this again and again and again and again and again and again. So I’m not saying that you can’t replace the individual mandate.

Many wonks believe that too few healthy people are joining the exchanges. This is leaving the risk pool too expensive and leading to higher premiums. To fix that, we could increase the size of the mandate penalty (stick), increase the size of the subsidies to make insurance cheaper (carrot), or both (carrot and stick).

The AHCA plan, though, goes at this sideways. It eliminates the stick. It reduces the carrot. And it then puts in a new plan – the 30% insurance markup if people lose continuous coverage.

In theory, making people pay a lot more if they don’t buy insurance as soon as they need to will make healthy people join the market. If they know it will cost a lot more if they wait until they are sick, or if they know it will mean they won’t have community ratings if they don’t purchase plans early, they should buy in – reducing adverse selection.

But this plan doesn’t really do that. It’s a one-time, one year, 30% markup on insurance. That’s a tiny, tiny penalty in the scheme of things.

Let’s say I’m single and I’m in my late 20’s, and insurance costs me $3000. With the promised $2000 subsidy, I’d have to pay $1000 more to get insurance. Or… I could just forego it this year, and if I need it next year, it will cost me $3900 (I will owe $1900). In just one year, I make money. If I skip a number of years, I can save even more. I’m not sure this is much of a stick.

They could fix this by increasing the size of the stick or by sweetening the deal with carrots, but they didn’t.

Moreover, the incentive is totally in the wrong direction. The individual mandate punishes those who don’t buy insurance – every year. As long as I remain uninsured, I will be penalized. I will be hit again and again, until I buy insurance. That’s a stick.

The new AHCA penalty works in the opposite direction. Once I’m out of the market, I’m left alone. It’s not until I re-enter that I’m hit with the penalty. The longer I stay out, the longer I avoid the pain. It’s an inducement to remain uninsured.

We know what needs to happen to reduce adverse selection. We need to make the carrots and/or sticks stronger. This seems to do the opposite. I don’t get it.

@aaronecarroll

P.S. I’m also not entirely sure that this aspect of the law can pass muster for reconciliation. It’s an insurance regulation, not part of the federal budget.

Healthcare Triage – The American Health Care Act: A Republican Response to The Affordable Care Act

After so many, many years, it’s finally here. The Republican bill for repeal and replace. Kudos to Mark and Stan for getting this up so fast.

Welcome to a very special episode of Healthcare Triage.

Text of the bill can be found here.

@aaronecarroll

If the AHCA can’t pass, what does @SpeakerRyan do next?

The House Republicans released the American Health Care Act (AHCA) on Monday. Aaron summarizes it here. Critics of the bill include all liberals, many conservatives, the major medical societies, and many health industry groups.

It will be challenging to pass the bill. On the one hand, Democrats will oppose it because it reduces taxes on people with high incomes while cutting Medicaid and health insurance subsidies. On the other hand, the conservative wing of the House Republicans may not support it because they view it as “Obamacare-lite“.

Nevertheless, the AHCA could pass Congress. Will House conservatives really vote against a bill that largely repeals the ACA? The House leadership is moving the AHCA forward as fast as possible, hoping they can pass it before opposition groups can mobilize. Senator McConnell can eliminate the filibuster rule so that the AHCA can be passed on a majority vote. He might then be able to hold his coalition together to get that majority.

But suppose conservatives refuse to support the AHCA and it is defeated in the House. What happens next?

Speaker Ryan will revise the bill to meet the conservatives’ demands and unite the Republican caucus. He’ll then pass the revised bill in the House. Here’s why.

First, although Ryan could conceivably pass a more liberal ACA replacement with Democratic votes, he won’t. Ryan believes what the conservatives believe. The current AHCA is his attempt to win just enough moderate Republican Senate votes to get the bill passed. The current AHCA was his move to the left, and he won’t make another one if it fails. Second, although Ryan’s in trouble if he can’t pass something, he’s finished as Speaker if he compromises with the Democrats on ACA repeal.

Ryan’s problem if he moves right is that a more conservative AHCA would probably lose moderate Senate Republican votes and be defeated in the Senate. However, that defeat would not cost Ryan his job and his credibility with the Republican base, and with them his prospects for enacting his legislative program. Moreover, the 2018 election has many Democratic seats at risk. If the Republicans take those seats and expand their Senate majority, the chances for a hard-right ACA repeal and replace bill get much better.

If I’m correct, the Democrats might think they are winning based on the critical reception of the AHCA, but they are actually in peril. They have to defeat the AHCA now and then win seats in 2018. The way to defeat the AHCA is to sustain and build the opposition to ACA repeal shown during the Congressional ‘town hall’ demonstrations this winter. They have to convince Republicans representing Blue districts and states that they are at risk if they vote for the AHCA.

@Bill_Gardner

AcademyHealth: Traditional Medicare is cheaper

Hold on to your hat: Medicare pays lower prices than commercial market insurers. Yeah, OK, you already knew that. But what are the implications for access to care? I answer that question in my latest AcademyHealth post.

@afrakt

 

Federalism and the American Health Care Act

For Vox’s Big Idea series, I’ve adapted my essay, Federalism and the End of Obamacare. Here’s an excerpt:

Republicans may talk the talk of devolving health care policy to the states, but that’s not what the American Health Care Act does. Instead, it starves health reform of the funding upon which it depends.

Most significantly, Republicans intend to phase out the Medicaid expansion and to impose a hard cap on federal contributions. If a recession forces a state to exceed its cap in a given year, any overruns will come out of its Medicaid payments the following year. With that kind of shortfall, the states will have to make savage Medicaid cuts to make ends meet.

Republicans also want to slash the subsidies that make insurance affordable in the private market. Under the ACA, no one making less than four times the poverty level has to devote more than 10 percent of her income toward private coverage; most pay much less. The American Health Care Act would erase that affordability guarantee and, instead, extend age-based subsidies that would be much too meager for most people to afford coverage.

If federal money is withdrawn, states will be stuck. Because of the countercyclical trap and ERISA, they won’t be able to enact and sustain coverage expansions on their own. The end result will not be the diversity that federalism celebrates. It will be a uniformly crappy system that leaves millions of the sick and poor without coverage.

It doesn’t have to be this way. A group of Republican senators led by Bill Cassidy (R-LA) and Susan Collins (R-ME) has floated an alternative, the Patient Freedom Act of 2017, that retains the ACA’s funding streams while giving the states more room to choose how to use that money. That’s a model that deserves serious attention from both Republicans and Democrats. It might enable partisans on both sides move past the rancorous debate over the ACA.

For now, however, the Republicans seem intent on dismantling coverage gains across the entire United States. Their proposals trade on the rhetoric of states’ rights, but they would have the perverse effect of inhibiting state power. That’s bad for federalism — and bad for the country.

@nicholas_bagley

JAMA Forum: Immigration Reform’s Potential Effects on US Health Care

From my latest post over at the JAMA Forum:

Immigration reform is a topic about which many people in the United States are passionate. It involves not only concerns about economic interests, but national security as well. Our health care system is especially sensitive to alterations in immigration policy. Recent events have highlighted the ways in which potentially small changes even to the ways we screen and admit refugees could affect the practice of medicine.

The US health care system is very dependent on immigration.

Go read the whole thing!

@aaronecarroll

The Golden State Mandate

Now that Republicans have finally released their alternative to Obamacare, I’ve got an op-ed in the Los Angeles Times encouraging California and other blue states to take action to protect themselves.

[T]he Republican bill would set chaos in motion because it would immediately eliminate the individual mandate — that is, the tax penalty imposed on those who don’t purchase insurance. Without that mandate, some healthy people will choose to forgo coverage, knowing they can always enroll later if they get sick. Those who keep their insurance will therefore be less healthy than average. Insurers will have to jack up their premiums to cover those sicker enrollees.

That means California’s stable market will start to teeter. Large premium spikes are likely; in some rural areas, insurers might pull out altogether. The Commonwealth Fund estimates that 1 out of 4 people on the exchanges would lose their coverage.

Here’s the takeaway, then: Obamacare wasn’t collapsing — but it could if the Republicans get their way.

California has a shot at preventing that collapse, however, as do other states where Democrats are in charge, including New York, Connecticut, Washington and Oregon. For 2018 and 2019, almost every part of Obamacare except for the individual mandate will remain intact. California can patch that hole by replacing the individual mandate at the state level. Call it the Golden State Mandate.

Read the whole thing!

@nicholas_bagley

Exciting Microbe Research? Temper That Giddy Feeling in Your Gut

The following originally appeared on The Upshot (copyright 2017, The New York Times Company).

While we have long known about the existence of microbes — the tiny bacteria, fungi and archaea that live all around, on and in us — our full relationship has become one of the hottest topics for research only in recent years.

Scientists believe that every person contains as many independent microbial cells as human cells. This collection of life, known as the microbiome, provides useful functions for us. Indeed, some of the things we think our bodies do are actually the abilities and enzymes of life-forms living within us. They can help with digestion, vitamin synthesis and even immunological responses.

But, as with many new breakthroughs and advances, the hype of the microbiome often outweighs the reality. This seems especially likely in the field of nutrition. Doing research on the microbiome is not easy, and there are many opportunities to foul things up. To accomplish human studies, large samples of people and microbiomes are needed to account for potential confounding variables.

Specimens have to be collected and stored carefully because contamination has been a big problem. DNA has to be extracted, amplified and sequenced. Finally, powerful bioinformatics tools are necessary to assemble and analyze the huge amount of data contained in a sequence of nucleotides — all of which has resulted in a wide range of new “omics,” including genomics, proteomics, transcriptomics and metabolomics.

Of course, if we think that microbes play a large role in health, we have to rethink the role that antimicrobials play in our lives. In this thinking, antibiotics and antifungals could be life-changing or life-threatening. But that’s not the case. There are many reasons to avoid unnecessary use of these medications, but the microbiome appears able to withstand most treatment.

Still, antimicrobials clearly have an effect on the microbiome. Many studies, along with common sense, suggest that when we treat people with antibiotics, we change the amount and type of microbes that live in our gut. We’ve seen this with Clostridium difficile.

C. diff, as it is also known, is a bacterium that lives in many healthy people. The presence of other microbes keeps its numbers in check. But when we treat people with antibiotics that kill off other bacteria, but not C. diff, it can increase its presence and lead to serious illness. Infection with C. diff is hard to treat, and it’s not uncommon. In 2011 in the United States, there were more than 450,000 cases, causing 29,000 deaths.

A number of studies have shown promise in using the microbiome to treat C. diff. Fecal transplant (which is exactly what it sounds like) effectively fixes a damaged microbiome by infusing it with a healthy one. This type of therapy could theoretically work in treating other diseases.

But there’s a huge gap between “holds promise” and “definitive treatment.” After all, there’s a direct biological explanation for why the microbiome and antibiotics play a role in C. diff. That direct link is much harder to describe when talking about other disorders.

Many have postulated that the microbiome has an important part to play in inflammatory bowel diseases, which, because of my condition, I follow quite closely. Others have attempted to link it to disorders of development and behavior, like autism. Because the microbiome takes root in childhood, studies have explored if pregnancy, method of delivery or even the environment might hold some meaning in the microbiome’s development and later health.

Even more significantly, many have begun to hypothesize that it has a significant role in the current obesity epidemic. Studies have shown that transferring the microbiome from a thin mouse to an obese one, or vice versa, could lead to a change in body size to match. It was this type of study that roused much of your ire when I dismissed it in my discussion of artificial sweeteners. Other studies show that changes in diet can change the microbiome in human beings.

But when you analyze all these studies together, as scientists did in a meta-analysis last summer, the certainty of those links becomes much less certain.

This doesn’t mean that the microbiome doesn’t play a role in nutrition. Some important research has begun to show that chronic malnutrition probably causes changes in the microbiome that make treating the problem much harder than many anticipate. Problems with substandard sanitation can also contribute to microbial changes in very poor environments, compounding the problems of malnutrition. But we haven’t yet figured out how to translate these findings into easily used treatments.

The problem with getting too enthusiastic about the microbiome isn’t much different from the problem with getting too enthusiastic about any research advances. Many mistake correlation for causation; just because some people have a different microbiome doesn’t mean that microbes are responsible for other differences. Studies in mice are not the same as studies of humans; diet is incredibly complex, and rarely do results in genetically similar animals easily translate to diverse groups of people.

And the microbiome is very, very complicated. We understand so little about it, and the idea that we can make accurate representations about it, let alone manipulate it, is somewhat far-fetched.

As with the genome before it, our greater understanding of the microbiome has spurred great excitement and interest. Last May, the White House began the National Microbiome Initiative, with huge public and private investment into research. We hope these investments will yield great returns, but it will be important to temper our enthusiasm with an appropriate amount of skepticism. Health advances usually proceed more slowly than the hype.

@aaronecarroll