Proposed Trumpcare bill would reverse Michigan health care progress, and hurt residents

Dominick Pallone, Gilda Jacobs

Dominick Pallone is executive director of the Michigan Association of Health Plans. Gilda Jacobs is president and CEO of the Michigan League for Public Policy.

In the ongoing discussion on how to improve the health insurance system in our state and nation, it’s vital to recognize the parts that are working, and what needs to be improved.

The House Republican health bill, the American Health Care Act, is going in the wrong direction. It would reverse the progress that Michigan has made in improving affordable access to health insurance and would make our health system worse.

In today’s world, access to health insurance is tantamount to access to health care. Better healthcare outcomes should be the goal of any changes moving forward. And for about 88 percent of the state’s population, the Affordable Care Act (ACA) and our current system is working pretty well. Any changes made to our healthcare system should ensure we are adding to the 88 percent of us who have coverage – not reducing that number.

But we should still work to reduce health care costs overall, and try to improve the individual market, the major source of concerns today.

First, let’s look at the employer-sponsored market, which provides insurance coverage to more than half of the state’s residents.  This market is relatively stable and working today.  Since passage of the ACA, average annual increases for family premiums are running at 3.5 percent. In an era of rapidly exploding pharmacy drug prices that now consume 20 percent of all premiums, maintaining low premium increases is an incredible accomplishment.

Next, look at public programs that provide health coverage – Medicaid and Medicare – which provide services for 35 percent of Michigan citizens. Both traditional Medicare and Medicare Advantage are providing good services to seniors and people with disabilities. We should avoid major changes to Medicare and not do anything to undermine its finances.

Similarly, Medicaid is providing good value.  In Michigan, traditional Medicaid, which covers seniors, people with disabilities and low-income children and their parents, is managed smartly by private sector insurers under contract with the state. Its cost per beneficiary has increased at about a third of the cost of commercial insurance.

And outcomes are good – those in the program are getting care from responsible physicians. The health plans helping to manage Medicaid consistently rank among the nation’s best on quality score.  As a result, proposals to cap and cut federal Medicaid funding for states like Michigan wouldn’t make Medicaid more efficient or perform better; it would only shift costs to Michigan and require the state to cut low-income people off the program, reduce benefits or make it harder for beneficiaries to see a hospital or doctor.  

The new Healthy Michigan Plan, Michigan’s Medicaid expansion, is also a success. More than 510,000 of the 650,000 persons in the plan have incomes below the federal poverty level.  Those enrolled now have access to much needed preventive care services and are seeing primary care physicians.

The Healthy Michigan Plan, managed by private insurers, helped to cut uncompensated care for hospitals by nearly 50 percent, according to University of Michigan studies. The plan is working. That’s why Gov. Rick Snyder has been working with Congress to maintain the Medicaid expansion funding allowed under the ACA.

But one part of our insurance system, here and nationally, needs improvement – the individual market. Long before the ACA, legislatures including ours have grappled with reforms under threats that the individual market was in a “death spiral.” Prior to the ACA, many persons with pre-existing conditions struggled to find a choice of affordable coverage at all. And today, the individual market struggles with well-documented affordability concerns. Those issues are connected.

While the individual market has had its difficulties, it’s also important to note that the market is quite small. Today, only 6 percent of the state’s residents are buying insurance in the individual market – about 260,000 people. But four out of five of them receive subsidies that help make insurance affordable. That leaves some 60,000 persons who did not and face high costs without assistance.

This is the primary problem that Congress needs to address.

How can we increase stability and affordability in the individual market? There are many laudable ideas that should be thoroughly discussed and debated by Congress, as the ACA is “tweaked” or “reformed.” Perhaps the subsidies need to be expanded. Perhaps those in the individual market could be invited to purchase a form of Medicaid. It is important that Congress continue cost sharing reduction payments that help stabilize the market. We invite all members of Congress to roll up their sleeves and address this shortcoming in a bipartisan fashion.

But repealing the entire act and replacing it with something that looks like the American Health Care Act will hurt many more Michiganders than it purports to help. When discussing health care reform, we would be wise to borrow the oath of the medical profession and “first, do no harm.” 

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan.

About The Author

Dominick Pallone

Dominick Pallone is executive director of the Michigan Association of Health Plans.

Gilda Jacobs

Gilda Jacobs is president and CEO of the Michigan League for Public Policy. 

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Comments

Kevin Grand
Fri, 06/16/2017 - 3:34pm

"This market is relatively stable and working today. Since passage of the ACA, average annual increases for family premiums are running at 3.5 percent. "

Obviously Mr. Pallone or Ms. Jacobs have not picked up a newspaper this week. If they had, they would immediately realize how far off this number actually is.

http://www.detroitnews.com/story/news/local/michigan/2017/06/14/bcbs-rat...

I also found it interesting how they glossed over the detrimental effects of Obamacare on the rest of America. Those of us left paying the bill for this government benevolence.

Does anyone remember the "promise" made by Pres. B.O., "If you like your plan you can keep it? If you like your doctor you can keep them? Americans will be an average savings of $2,500/year?"

All lies.

http://www.politifact.com/truth-o-meter/article/2013/dec/12/lie-year-if-...

It strongly bears mentioning again that Obamacare's passage was based on the "stupidity of the American Voter". Those are not my words, those are the words of Obamacare architect Johnathan Gruber himself.

https://www.washingtonpost.com/news/post-politics/wp/2014/11/11/obamacar...

My takeaway from this piece is that Mr. Pallone & Ms. Jacobs are sincerely hoping that this still holds true.

Based upon my conversations with other people across the Midwest (I travel a lot due to work), these two are sadly mistaken.

Ann
Sat, 06/17/2017 - 9:54am

Inflating the numbers here with the nonsense claim that "for about 88 percent of the state’s population, the Affordable Care Act (ACA) is working pretty well"

The ACA has NOTHING to do with 96% of the population!
Population is 9,230,000
283000 buy plans on the Exchange (and 209000 opt to pay the penalty than buy junk coverage with huge deductibles and copays)
143400 were added to Medicaid
Those 2 insured groups are less 4% of the state.

If you ask those with ACA plans that demand a waitress making $20000 ante up $2000 (premiums and deductibles) before the insurer pays for a case of bronchitis, you will be told that it is NOT working and she hates the coverage

If you ask the late-50s couple both working making $65000 who get hammered with $1400-1900 a month in premiums ($19800 in premiums alone!) and a $3600- 5000 deductible before coverage pays for illness or injury or diagnostics and then get clobbered with another $10000 in copays, you will be told they HATE the coverage.

Only ones who are happy with the coverage are the ones who get 'free' care - the Medicaid crowd.

As far as the insurers go,
* Humana loves it so much they pulled out of the state
* Priority 'loves it" so much they are pulling out of counties and dropping their PPO plan and will only managed care HMOs
* Blue Cross is bleeding $68,000,000 last year on its ACA enrollees

duane
Sun, 06/18/2017 - 1:03am

Ann,
It seems you give more altruistic purpose to the authors of the article than I do.
Their focus is on the money for medical care for they mention nothing about the role/responsibilities, the individuals they seem so concerned about, those the authors are focused on have in their own health.

I have been told by my doctors over the years that lifestyle choices have the greatest impact on the health of the vast majority of people, including those the author are 'concerned with,'

If we want to reduce the cost of medical care for the individual there should be more incentives for better lifestyle choices. The reality is that we as individuals get in bad habits and will justify them even when the health consequences are apparent. We are much more responsive to changing habits when we receive immediate and personal feedback/reward for good behaviors.

The authors approach is to raise the cost to those making healthy choices [fewer medical visits and less treatment] to subsidize those making unhealthy choices and requiring more medical care.

If the authors were interested in putting more of their medical care, and lowering costs, they would be looking for ways for people to make better cost choices for their care. In my community there are several different organizations providing medical testing [much of it being standard for all patients], it would be helpful to know the cost of standardized testing so we could make informed choices when selecting testing company.

Because of these obvious omissions and the emphasis on money, getting more of it to be spent on medical care, I am skeptical of why they wrote this article.

John Saari
Sun, 06/18/2017 - 6:47am

Expand Medicare

Alan Blackburn
Sun, 06/18/2017 - 6:07am

I'm sure the two posters here must work in healthcare or health policy as they cite articles and all of the supposed lies that were told to them by the previous administration. And listen to the bleating over someone who is elderly, disabled or of low income might be getting; "Free care." As if any tax they pay or have paid isn't worthy enough to afford them of any benefits that their labors may have provided. Be careful my fellow citizens as it may be your parents and ultimately you who may need Medicaid as you age and need nursing care. And if you think you were lied to by the previous administration, wait until you see what this one is producing behind closed doors. One thing is for sure, after working in healthcare and health policy for 40 years, we all need healthcare and access to it. You also may be unaware of risk corridors and how insurance companies were promised funding to provide coverage to a group that they had no way of guaranteeing who would purchase policies and what their potential losses may have been. This funding would have covered losses and kept the markets stable. That funding was gleefully cut by the opposing party in Congress bad a means of sabotaging the ACA. The current administration has still not guaranteed that funding, causing many insurance companies to flee from the market. All of us, no matter how much we have taken care of ourselves, no matter how much money we made, no matter whether our employers cover us or not, need, or will need dignified access to healthcare. We just have to decide as a society if it should only be for the wealthy who can pay for it readily, or if it should be available for all citizens.

John Saari
Sun, 06/18/2017 - 6:40am

Just expand Medicare to include everyone. Pay for it by taxing the rich.

Mark
Sun, 06/18/2017 - 8:05am

The Michigan Healthy Plan just shifted the burden from Hospitals and Insurance Compannies to the Taxpayer. Anything Gilda Jacobs says is usually garbage and comes with a heavy price tag for those that pay the bills, the taxpayer. I am very tired of paying for everybody as a taxpayer.

The hospital systems should develop a plan for low income - uncovered people thru increased hospital uncompensated care (their donation) and other private donations.

Matt
Sun, 06/18/2017 - 10:10am

The problem with the ACA (as is much of what comes from government actions) is that they resort to piling more crap onto already deeply flawed programs and institutions rather than reeling back to bedrock where building a viable system is even feasible. Most American's idea of healthcare means everything should be physically perfect, any and every possible form of care or imagined remedy available regardless of efficacy or cost and someone else should pay the bill! Why should be to anyone's surprise that some providers are all too happy to meet this demand. Nor should it be of any wonder that meeting this expectation through some confused form of insurance is doomed to fail, the authors above continue push this fantasy. The ACA has done nothing to change this mindset and amounts to little more than increasing the giant and ongoing income transfer program from producers, providers and future generations to current indigent and elderly populations as well as those trying to get on that train. The ACA has done nothing to create a system to really address the problems faced by our healthcare system and taxpayers (present and future) and just amounts to piling more on an already problematic institution.

Michigan Observer
Sun, 06/18/2017 - 2:53pm

The authors are mistaken about Medicaid. Some years ago, Oregon ran a "natural experiment" on Medicaid when, due to a lack of funds, they found they could not extend it to everyone who was eligible, and held a lottery to choose those who would be covered. Researchers later compared the health outcomes of those who were covered with the health of those who were not. Medicaid was found to be of no value in terms of health outcomes.

Zeke
Mon, 06/19/2017 - 10:00pm

The health industry is a giant shell game in which no one understands how insurance came to be and should be now. In the 1800's a barn fire could wipe out a farmers future so a group of them formed a loose association in which they all pitched in a small amount of money which protected all farmers. The insurance funded the rebuilding costs so other than the livestock lost the farmer was back in business shortly. It was fair and anyone could join.
This type of insurance then became available in cities where unfortunately fraud and arson ruined the principle first established bu the honest farmers.

So now we are trying to adjust health care costs to overcome unreasonable drug costs
which raises our National Debit that congress has no desire to curtail by allowing Medicare to negotiate drug prices just like all civilized countries. When all the political smoke clears it is drug companies who contribute vast sums of money {$100,000's to millions } to buy congressional votes to keep drug prices 28 to 48% higher here than any country elsewhere. Then the long term politicians stealing of money from SS, Medicare and Medicaid to cover other governmental costs bury's the future of those programs in forecasted red ink which in many cases money has been taken by politicians to make these programs worse financially so they can say these programs need to be totally revised to reduce government cost. Which of course they caused.

Not to get off the health care subject but these same politicians in Washington plus every state and municipality have irresponsibly allowed government worker health care and retirement costs to exceed any possible payment in the future because they felt there would be a magic wanded genie to make it all better when they financially fail leaving taxpayers to pick up their mistakes in increased taxation just like Chicago's Cook County had to do last year by raising yearly taxes 40 to 50%. You see most municipalities cannot legally declare bankruptcy. OOP"s to their taxpayers eh.
So basically everyone's government is screwed up leaving our children and grandchildren not much to look forward to much like the French People before they revolted.

So have a drink then go to bed because tomorrow will be worse unless people don't depend on neighbor Joe to fix their problems and take the time to become involved first in their local government municipality, city, township or village and state to understand the important issues and provoke those political decision makers you elected to represent you to do the right thing for you - their their constituency.

Mary Petterson
Tue, 06/20/2017 - 12:01am

Great article. One concern that I have is that a big problem with Medicaid is that there is no coverage out-of-state. I have a handicapped sister whose income fluctuates tremendously as she is a real estate agent. Although she is now Medicare eligible, for the few years that she took advantage of the ACA programs, we strategized to keep her off Medicaid since she does travel, although very limitedly. That's an issue that Medicaid needs to address.