April 23, 2015

Health Care Bills On the Move from the House to the Senate

We’re approaching the end of the session, and it’s worth highlighting a few health care-related bills that are winding through the Missouri General Assembly.

  • HB 769 makes “medical retainer agreements” exempt from regulation by the state’s Department of Insurance. MRAs are direct-pay arrangements—where a patient and a doctor contract directly for care. Such contracts are not a matter of insurance, but in other states there have been pushes to regulate them under the “insurance” umbrella. HB 769 would preempt such a move.
  • HB 985 enhances Missouri’s Medicaid eligibility verification system by leveraging the resources of a third party. Over the past year MO HealthNet has been hit by a series of embarrassing reports of waste and mismanagement. Suffice it to say, money wasted is money that cannot go to the poor beneficiaries who need it most. HB 985 tries to tackle the problem of waste on the enrollment side by trying to make sure those limited dollars flow to beneficiaries who, in fact, qualify for them.
  • HB 319 expands on an existing state law dealing with MO HealthNet telemonitoring services, also known as telemedicine. Telemedicine allows medical professionals to diagnose medical problems remotely, which for people in medically underserved communities is a great technological innovation and benefit. Section 208.670.1 of current law already allows for reimbursements for telehealth “in the same way as reimbursement for in-person contacts”; HB 319 pushes MO HealthNet to further adopt and advance telemedicine practices.

April 17, 2015

What Does It Mean to “Have Health Care”?

This question has come into sharp focus just five years after the Affordable Care Act’s (ACA) passage. Does it mean having insurance? Or does it mean having accessible, affordable, and fundamentally personal care?

These may sound like philosophical questions, but the answers have very real consequences, as this story in the New York Times shows.

Alison Chavez, 36, who is self-employed, signed up for a marketplace plan in October 2013 that she hoped would be an improvement on her previous plan. She had recently been given a diagnosis of breast cancer and was just beginning therapy, so she was careful to choose a policy on the Covered California marketplace that included her physicians.

But in March, while in the middle of treatment, she was notified that several of her doctors and the hospital were leaving the plan’s network. She was forced to postpone a surgery as she scrambled to buy a new commercial policy that included her doctors. “I’ve been through hell and back, but I came out alive and kicking (just broke),” she wrote in an email.

Obamacare tries to treat the symptoms of a sick American health care system—the rising cost of insurance—but it doesn’t really treat the underlying sickness, the rising cost of care. And that’s ultimately what we expect when we “have health care”: care. It’s just not necessarily what people receive under the ACA.

In that context, it’s understandable that many Americans are looking for alternative care models that meet their needs, not the needs of a government bureaucrat. The “direct care” model is one of the most promising. The direct care model is simple; for a set fee, patients and doctors can contract for health care services. These care “subscriptions” guarantee access to a doctor of the patient’s choosing, oftentimes because the doctor is limiting the number of total patients he or she will take over that period. Instead of paying for insurance and getting poor care or no care at all, patients pay for care and receive . . . care. Imagine that.

An article published in Time Magazine late last year sums up what makes direct care arrangements attractive.

The driving insight here is that primary care and specialized care have two very different missions. Americans need more of the first so they’ll need less of the second. And each requires a different business model. Primary care should be paid for directly, because that’s the easiest and most efficient way to purchase a service that everyone should be buying and using. By contrast, specialty care and hospitalizations—which would be covered by traditional insurance–are expenses we all prefer to avoid. Car insurance doesn’t cover oil changes, and homeowners’ insurance doesn’t cover house paint. So why should insurance pay for your annual checkup or your kid’s strep swab? [Emphasis mine]

You can think of it as “a la carte care” or “concierge care,” or something else, but it is indisputably care—care that the patient has chosen and can actually access. The potential for direct care extends even to more specialized care, too. At the Surgery Center of Oklahoma (SCO), the surgeons post the prices of their services online, with prices oftentimes a fraction of what other hospitals and insurance companies charge patients. This 2012 video from Reason TV explains the lower-cost, and arguably more personal, SCO model.

It is no wonder several proposals now floating around the Missouri Legislature aim not only to protect direct care arrangements, but also to facilitate them. One proposal would insulate direct care arrangements from undue bureaucratic interference; another would initiate a pilot program to make direct care available to the poor. Both are well worth the consideration of Missouri legislators, especially before the legislature’s session comes to a close next month.

Direct care has the potential to help patients like Alison find and keep the doctors they want—and not have that relationship jeopardized by some middleman insurance relationship. Amidst all the problems of America’s post-Obamacare medical system, direct care represents a bright shining possibility for a better model for our health care: one that puts the patient first, not the government.

March 30, 2015

Audit: Medicaid Program Rife With Problems

At this point, it goes without saying that Missouri’s Medicaid program has issues. From technical snafus to indisputable quality and access problems, the state’s Medicaid program has a long track record of failure that should dissuade responsible lawmakers from compounding the problem with an expansion of the program.

This fact is made all the more obvious by this story, reported last week.

Missouri’s Medicaid program could have recovered as much as $27 million from more than 30,000 estates of deceased patients but did not file claims in time, according to a statewide audit of federal programs released Tuesday.

Federal and Missouri laws allow the state to recover Medicaid funds spent on a participant as a state debt but a claim against the person’s estate in probate court must be filed within a year of their death. Of 9,321 cases closed in fiscal year 2014 by the MO HealthNet Division, an average of $15,000 was recovered from 6 percent of those, according to the audit.

The $27 million estimate is based on a similar estimated recovery rate for the 30,000 cases that were past the deadline to file. . . .

According to the audit, “MHD personnel indicated there are not sufficient staff in the Probate and Estate Unit to process all probate estate cases timely and cases are not prioritized in an effort to maximize recovery.” The department says it will work to fix the problem but that response is a recurring theme in audits of Missouri’s Medicaid program.

Indeed, there were more problems uncovered by the audit that a short news story frankly can’t get to, including documentation, oversight, payment, and coding problems. In fact, the sentence construction of “As noted in X previous audits” dots the report’s summary. In other words, many of these are enduring, not passing, problems.

If you believe in good government, the department’s semiannual refrain of “We’ll do better next time” should be intolerable. The solution isn’t growing the program; it’s fixing it. There are ways to make the Medicaid program in Missouri better. Expanding a broken status quo is not one of those ways.

March 20, 2015

Mark Your Calendars, Kansas City and St. Louis: Michael Cannon is Coming to Town

Michael Cannon is the director of health policy studies at the Cato Institute and is one of the most prominent figures in the free market movement today. Cannon’s national influence extends to a wide swath of health care issues, but lately it’s his work focusing on the health insurance subsidies of Obamacare that has been most prominent. With Case Western Reserve law professor Jonathan Adler, in 2013 Cannon co-wrote “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits under the PPACA.”

If that topic sounds strangely familiar to you, fear not; it is indeed the topic at the center of the King v. Burwell case, which is currently before the Supreme Court. Cannon has been instrumental in not only providing the research that undergirds the plaintiffs’ case, but he has also been instrumental in delivering clear, concise and compelling explanations of what the government did with these subsidies (and why it matters) to audiences across the country. Michael’s Washington Journal segment below, recorded for C-Span earlier this month, provides a good preview of what he’ll be talking about next week.

I hope you’ll be able to join us, either in Kansas City on March 25 at 5:30 pm at the Kansas City Club, or in St. Louis on March 26 at 5:30 pm at Saint Louis University. Both promise to be excellent events.

March 16, 2015

How to Fix the Evergreen Clause

I previously wrote about how less than 16 percent of home care workers were able to force the rest of the people involved in that program to accept representation from the Missouri Home Care Union. If you followed that issue I doubt you’ll be surprised to hear that when the union negotiated a contract with the state it made sure to include an evergreen clause in the deal. An evergreen clause makes a labor agreement, and all of the work rules and policies provided for in that agreement, unchangeable without the union’s consent.

evergreen2See for yourself:

This Agreement shall take effect upon signature of the Parties and shall run for a period of thirty (30) months. If a successor Agreement has not been reached upon the expiration of this Agreement, the Agreement will continue in effect until a successor Agreement is finalized.

This is how an evergreen clause works. The agreement has a term, in this case 30 months, but after that term is up, the policies set by the agreement remain in effect until both parties settle on a new agreement. In this way, a union that wins a contract with an evergreen clause gets veto power over any new policies proposed by government representatives or the people. This shift of power from democracy to union negotiations is the real danger.

Senate Bill 549 aims to correct this egregious practice by limiting government labor agreements to a term of two years. If it passes and the courts decide to apply it correctly, then it’ll be a big win for anyone interested in good, flexible, democratically accountable government.

March 12, 2015

Bill Would Give Workers a Vote

Imagine you could vote for the president only one time, and then you were stuck with the results until he or she were impeached. This wouldn’t be very democratic would it? For many of our government employees, including teachers and firefighters, this is the sort of democracy used to determine whether workers are unionized.

I previously wrote about the government union transparency gap and a bill addressing it, but if you are a government worker subject to union representation, not knowing where your dues go is only part of the problem. In many cases, you also have very little say in who represents you, and you have no recourse to ensure that your voice is heard. That’s why we need reform that would give all unionized public employees the ability to vote in regular union elections.

voteConsider the example of personal care attendants enrolled in the state’s consumer-directed health care program. Attendants get paid out of a state-managed program to take care of home-bound Missourians. In 2009, the attendants had an election to determine whether they would all be represented by the Missouri Home Care Union, a joint local union affiliated with both AFSCME and SEIU.

Out of 13,151 eligible voters, only 2,085 voted for the union. According to the state board running these elections, 294 ballots were challenged and 1,405 voters voted against the election. The challenged ballots plus the number of votes against the union were not enough to affect the outcome of the election. So in a low-turnout election with hundreds of challenged ballots, less than 16 percent of personal care attendants were able to force union representation on every other person enrolled in this program.

You might think, “Well, that’s just democracy. If you don’t vote, you deserve the representation you’re given.” The problem is that after a one-time election there will not be another election unless workers organize and go through a notoriously difficult decertification process. Depending on how a union contract is written, the union may even sue workers for trying to decertify the union or supporting another union. There’s nothing democratic about voting for a representative once and then being stuck with the results indefinitely.

If public employees are going to be subject to union representation against their will, then they at least should get a regular vote so that they can hold their union accountable. The Missouri Legislature has a bill, SB 549, that would require these regular elections. Regular union elections could help ensure that public employees, like teachers, police, and firefighters, are only subject to unions that work for them.

March 4, 2015

Proposed Senate Bill Would End Obamacare Medicaid Expansion Nationwide

Last month, a trio of U.S. senators released their version of an Obamacare replacement bill, which they called the Patient Choice, Affordability, Responsibility, and Empowerment Act (Patient CARE Act). The legislation would initiate a host of changes to how health care is delivered in the United States . . . and that includes a wholesale rollback of Obamacare’s Medicaid expansion.

03/492 According to the Center for Health and Economy,

The federal funding for the Medicaid expansion provided by the ACA is no longer available under the Patient CARE Act. Additionally, the current Medicaid funding mechanism will be replaced with capped, per-beneficiary allotments that are indexed to inflation. States will receive pass-through grants for certain high-risk populations and defined budgets for long-term and elderly care.

Translation? In many respects, Medicaid would return to its intended focus of assisting those in poverty—that is, those at and below the federal poverty level—rather than those above the poverty line. That’s extraordinarily important. Obamacare’s Medicaid program basically makes able-bodied, childless adults not in poverty a federally preferred class of beneficiaries, with the federal government paying a greater share of the cost for many adults above the poverty line (90/10 federal to state) than it does for all sorts of beneficiaries below it (roughly 60/40).

Are adults between 100 percent and 133 percent of the federal poverty level rich? No. Are they in poverty? Also no, by definition.

Keep in mind, too, that the Patient CARE Act is only one of many proposed overhauls of the country’s health care system. All of its provisions, as well as the provisions of competing reform legislation, need to be debated on their merits in the weeks and months ahead. (We have our own ideas for key reforms of our health care system, of course.)

Make no mistake: Taxpayers have every right to be skeptical of the federal commitment to fully fund its portion of the Medicaid expansion indefinitely as the government swims in trillions of dollars of fresh debt. As the unsustainable fiscal realities of the Medicaid program and this Obamacare alternative both demonstrate, taxpayer skepticism of the expansion’s future is fully warranted.

March 2, 2015

King v. Burwell: A Quick Preview

Last month, constitutional law expert Josh Hawley visited with Show-Me Institute supporters to discuss a wide array of health care policy issues. While he was with us, he offered some great insights into this Wednesday’s King v. Burwell oral arguments. If you can set aside about 45 minutes, watch the video of the whole event; you’ll be glad you did.

If you’re short on time, however, the case deals with what happens when a state declines to set up an insurance exchange under Obamacare, forcing the federal government to do so instead. Here’s the big question in King: Does the Affordable Care Act (ACA) block federal subsidies from going to insurance plans purchased in government exchanges that were not, as the law says, “established by the State”? If the answer is yes, it could simultaneously take subsidies away from millions of insurance plans and protect millions of taxpayers from the law’s mandates. It’d be a body blow to the law.

Why would Congress condition subsidies on states building their own exchanges? The answer is reasonably straightforward: Congress didn’t want the burden of creating exchanges to be on the federal government—that is, Healthcare.gov—and thought offering the subsidy as a carrot would get states to do the heavy lifting. Congress never thought the federal government would be running the exchanges for basically two-thirds of the country, as it’s doing today. Healthcare.gov’s rollout disaster was part and parcel of this miscalculation by Congress.

Supporters of Obamacare now contend the “established by the State” language was a drafting error, but there is lots of evidence that runs against that claim. The state exchange “carrot” strategy had appeared in prior, contemporaneous bills that were combined to form the ACA—suggesting that at least some legislators were well aware of the system they were creating. In fact, in the years that followed, Obamacare architect Jonathan Gruber famously repeated what the consequences of states not building their own exchanges would be:

With most states declining to create their own exchanges, the Internal Revenue Service then wrote rules that would extend the federal subsidies not only to exchanges “established by the State,” but also to federal exchanges. The problem is that since the federal subsidies are the basis for penalties that, thanks to the IRS, would suddenly apply to tens of millions of Americans in states that didn’t create exchanges, those subsidies could be an illegal tax. Thus, we have the King litigation.

After Wednesday’s oral arguments, we’ll likely see a decision handed down on the case sometime this summer. How will it turn out? We’ll keep you posted.

February 26, 2015

Constitutional Law Expert Joshua Hawley Weighs in on Obamacare at Policy Forum

Joshua Hawley, a professor of law at the University of Missouri, was gracious enough to join the Show-Me Institute in Columbia last month to talk about a wide array of health care and Obamacare issues, including King v. Burwell, a case before the Supreme Court the week of March 2.

Much could be said about Hawley. A graduate of Stanford University and Yale Law, Hawley went on to clerk for Chief Justice John Roberts. He was one of the attorneys for Hobby Lobby in last year’s Burwell v. Hobby Lobby case, and he has been a highly sought-after speaker on a wide variety of legal and historical matters for a number of years. His book, Theodore Roosevelt: Preacher of Righteousness (2008), is available on Amazon. Hawley also happens to be a graduate of my alma mater, Rockhurst High School, in Kansas City.

His talk is definitely worth your time. A short version is embedded below, and the complete talk can be found here.

February 9, 2015

Tennessee, Wyoming Reject Obamacare’s Medicaid Expansion (Again)

Medicaid is back in the news as pushes to implement Obamacare’s expansion in Tennessee and Wyoming came to a head last week—with both states rejecting the expansion.

First, Tennessee:

Tennessee was widely seen as the next Republican state that could expand Medicaid under Obamacare, with Haslam negotiating with federal officials for months on an approach that included conservative policy elements. But Insure Tennessee always faced significant obstacles in getting legislative approval, and it was killed even though hospitals had agreed to cover the state’s share of the costs.

The 7-4 vote against the plan by the state Senate Health and Welfare Committee came after impassioned testimony on both sides of the debate. The plan has little chance of being revived during the regular legislative session.

The “hospitals will cover the cost” proposal is becoming a common sleight of hand in the realm of conservative Obamacare apologetics. Those costs would be passed on to customers, either directly through their bills or indirectly through their taxes. It’s not free money.

And then there’s Wyoming:

Several senators said Friday they don’t trust federal promises to keep paying. Some said they don’t want to contribute to the national debt by accepting more federal dollars in any case.

“Make no doubt about it, this saddles more debt upon your children and your grandchildren,” said Sen. Larry Hicks, R-Baggs, who voted against the bill.

[Sen. Michael] Von Flatern said that Friday’s vote could make it harder to get expansion in the future because the bill to the state will be higher.

Mr. Hicks is exactly right that the expansion is being funded out of debt, and Mr. Von Flatern is similarly right that the direct costs of the expansion are on the way and will make later expansion fights tougher for Obamacare proponents. Right now supporters are relying on the “no money down” provisions of Medicaid expansion; once that’s gone, then the question of how a state actually pays for the program comes into sharper focus.

Missouri should continue rejecting bad policy like the expansion. It certainly isn’t alone in doing so.

January 23, 2015

Thoughts on Gov. Nixon’s State of the State Address

The president’s State of the Union address is always filled with lots of pomp and formality. It’s the closest thing we have to a monarch addressing Parliament. On Wednesday evening, we had the mini version of that same spectacle when Gov. Nixon gave his State of the State address at the Missouri Capitol. In it, he outlined his priorities for the upcoming year. You can watch the speech here or read a transcript here.

There were some appealing aspects to his speech, like his thoughts on how to address our transportation infrastructure. Gov. Nixon stated:

One option is a toll road on Interstate 70. The Highway Commission’s recent report showed that this approach could make I-70 better and safer … and free up tens of millions of dollars for other roads around the state. Trucks and out-of-state vehicles that do the most damage to I-70 would have to pay their fair share. That deserves serious consideration. Here’s another option: the gas tax. Missouri’s gas tax hasn’t gone up a penny in nearly 20 years. It’s the fifth-lowest in the nation.  With gas prices as low as they are now, this is worth a very close look.

Kudos to Gov. Nixon for at least considering user fees as a way to finance transportation in the state. My colleague Joe Miller has written extensively about the benefits of tolling and how gas taxes are a better way to fund roads than the sales tax. Tolling is a fair way of financing improvements to Interstate 70 because it can be done in such a way as to get much, or even most, of its revenues from commercial vehicles, which cause the most damage to our roads and highways.

However, not everything in Gov. Nixon’s address was good policy. The governor still insists on expanding Medicaid.

Now I’d like to talk about another challenge … but an even greater opportunity: Strengthening and reforming Medicaid. Let me remind you, a lot has changed since last year. Since I stood here last year, Missouri taxpayers have sent $2 billion to Washington. Those dollars are being used right now, in other states, to reform and improve their Medicaid systems. That’s 2 billion Missouri taxpayer dollars.  And this year, there’s another $2 billion at stake. If we keep standing still, that’s $4 billion Missourians will have lost to other states by the end of this year. Across the country, people are moving past the politics.

To help you decipher politico speak, when the governor talks about reforming Medicaid, he really means expanding Medicaid. Show-Me Institute Senior Analyst Patrick Ishmael has done a tremendous job explaining why expanding Medicaid is a bad idea. Not only would it strain future Missouri budgets by adding billions in new spending (Medicaid already takes up 22 percent of Missouri General Revenue expenditures, up from 17.5 percent just 10 years ago), but the program doesn’t work. The poor should get decent health care; Medicaid fails on that front.

Gov. Nixon raises the point about Missouri taxpayers sending money to Washington, and by failing to expand Medicaid, other states get to spend our money. This is also false. Patrick lays out why this claim is wrong in his most recent Forbes piece. First, Missouri is a net recipient of federal tax dollars. This means that Missouri gets more in federal aid than it sends out in tax dollars. Also, the money for Medicaid expansion is not like some large pie that gets distributed to the states that participate in the expansion. Each state has its own allotment of money to help pay for expansion. If the state doesn’t expand Medicaid, the money isn’t reallocated. That’s why you are seeing the overall cost of Medicaid dropping. Fewer states are signing up for expansion, and thus the actual cost growth of Medicaid is falling below what was projected. If the money was being redistributed, actual cost growth would be closer to projections.

Gov. Nixon’s speech was a mixed bag. The legislature should feel free to ignore the bad ideas. I hope, though, that the good parts mentioned above do more than just receive serious attention. There are serious issues in this state that need addressing, and we need pro-market solutions.

January 7, 2015

What Do Home Care Union Executives Really Want: A Wage Increase for Their Workers or a Union Contract?

residentialworker1On Christmas week, while many Missourians were exchanging presents or grabbing Chinese food, members of the Missouri Home Care Union were hard at work lobbying the governor. Ostensibly seeking higher pay for the home care attendants the union represents, the union placed carolers outside the governor’s mansion singing Christmas songs with lyrics altered to convey their message. Irving Berlin’s “White Christmas” became “I’m Dreaming of a Fair Governor,” and St. Louis Public Radio captured union members singing several bars of “home care workers are coming to town.”

The odd thing about this press junket is that the governor wants to give home care workers the pay increase the union is asking for, but the union objects to the method the governor proposes to give home care workers this pay bump. From the governor’s Office of Administration:

“The governor supports the wage range provision of the labor agreement between the Missouri Quality Home Care Council and the Missouri Home Care Union that provides a pay raise for home health care workers. To ensure the wage range provision of the agreement has the full force and effect of the law, the administration will be implementing the wage range recommendation through an administrative rule.”

Jeff Mazur, executive director of the union, responded by calling the governor’s proposal to enact the pay raise “unnecessary and unwise.” It appears union executives like Mazur are really after a governor’s order implementing a collective bargaining agreement. We’ve seen this before in other states.

Home health care unions, like the Missouri Home Care Union, formed to represent home care attendants who received Medicaid funding for acting as a personal assistant of a person in need of care. In many states, such as Illinois and Michigan, once home care unions were formed, they negotiated a union contract that forced all home care workers to pay a portion of their check to the union, whether or not the worker wanted union representation.

Imagine you’re enrolled in Missouri’s home care program and you’re getting a check from the government to help offset the cost of taking care of a disabled relative. Now imagine that the state bound you to a union contract against your will, and a portion of your check is going to union executives and their pet political causes.

Governor Nixon is right to be cautious of the union’s demands. If Missouri is better off increasing payments to people enrolled in the home care program, it can do so without entering a collective bargaining agreement. Such collective bargaining agreements can have bad consequences for the home care assistants subject to them, who often cannot afford to have their benefits tapped into by a union that they do not support.

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