Transitional plans and insurance exchanges II

One day after my last post, the New York Times ran an article on Geisinger Health, an insurance company requesting a large rate increase on the PA exchange. One reason why? Because the transitional plans are keeping considerable numbers of healthy people out of the exchanges. It would have been nice if the article had mentioned it before three paragraphs from the end.

Are transitional insurance plans driving losses on state exchanges?

The ACA's insurance exchanges have generally been successful in helping to reduce the ranks of uninsured in the United States, while providing reasonable quality insurance to its policyholders.

However, several challenges still remain. Most notably, a good number of insurers have had problems with breaking even on the exchange products (though some are making money). That stems from several problems, notably Marco Rubio blowing up the risk corridor reinsurance program that undermined many insurer's business plans, especially non-profit co-ops trying to break into the market. Other insurers, like United Health, have just tended to be bad at competitively designing and pricing plans.

However, the risk pools for the exchanges have also proven to be somewhat older and sicker than predicted, which has also tended to drive up prices in 2016 and will likely do so more in 2017. I haven't seen a great explanation for this other than "predicting new risk pools is hard," -- which it undoubtedly is.

However, the New England Journal of Medicine last week featured a very interesting Perspectives piece (gated unfortunately) by John Hsu that fingers grandmothered plans as the culprit.

Boring Bureaucrats help save the world: energy edition

When it comes to stopping global climate change, you probably don't think much about vending machines. Fortunately for all us, a lot of non-descript civil servants do.

Don't worry, the government is on it. (Really.)

Nor have you probably ever heard of the Department of Energy's Appliance and Equipment Standards Program (AESP). I'm sure it's staffed by lovely, if slightly nerdy khaki-wearing personnel.

But it's one of the Obama administrations most effective secret weapons in the fight against global warming.

Let's start with the two million beverage vending machines in the United States. Rules issued by AESP in 2015, will lead to machines coming online in 2019 required to be 16 percent more energy efficient in 2019 than today's. Over 30 years, it will save 7 million metric tons of carbon dioxide emissions, an average 233,000 tons a year. That's the equivalent of  shutting down Ohio's First Energy's Lakeshore Power Plant, which is a medium-sized coal plant in Ohio.

It will also save businesses at least $210 million in electrical bills over the same time.

Big deal, you say. The US emitted 6.8 billion tons of CO2 equivalent in 2014,  cutting 233,000 tons a year is a nice gesture, but hardly serious climate reduction.

We're just getting started. Read on to see efficiency standards really start to add up.

Beating swords into plowshares: If you could cut the Pentagon's budget, what would you spend it on?

So with the usual amount of depressing news circulating through, I set myself a happier task, which nicely dovetails with this piece by Daily Kos' Meteor Blades on military spending:

How much could I cut the U.S defense budget and what would I spend the proceeds on?

The rules were designed to make this somewhat realistic. I'm not trying to eliminate the Pentagon's budget entirely, unilaterally disarm, or make the Air Force hold a bake sale to buy necessary equipment. The idea here is simply to identify some reasonable spending limits for the American military machine (kind of like the discussions we have for regulatory agencies, health care funding research and infrastructure spending), and then think about what sorts of programs (or tax cuts, or deficit reduction) we could implement with the savings.

Figure 1 shows U.S. military spending as a percentage of national GDP between 1962 and 2015, based on GDP figures from the Bureau of Economic Advisors and spending figures from the White House's Office for Management and Budget. This number represents military expenditures, but doesn't represent veteran services or health care (i.e. funding for activities under the Department for Veterans' Affairs.) Notice how the figure generally steadily declines, though it does ramp up during the Vietnam War, the 1980s Reagan build-up and the Iraq and Afghanistan wars. The 1990s peace dividend is clearly visible as well, reflecting the end of the Cold War.

In 2015, according to GDP figures, from military spending represented about 3.16 percent of GDP. In a world in which we made decisions that maintained a reasonable military investment, what might defense spending look like? I came up with plausible three candidates.

Scenario 1: We reduce military spending to the lowest level of spending (Fiscal Year 1999) in which we spent about 2.7 percent of GDP on military spending.  This scenario would give us roughly $82 billion (all peace dividends will be rounded down) in funding to allocate elsewhere.

Scenario 2:  We reduce military spending to levels of the Republic of Korea (South Korea), which is about 2.6 percent of GDP, according to the Stockholm Institute for Peace Research in 2014. I thought this seemed reasonable, since the ROK is an advanced industrialized democracy, participates at a reasonably high level in international operations and faces a clear and presents military danger from North Korea, both of which necessitate large investments in the armed forces. Cutting to this level leaves us with a annual peace dividend of about $101 billion.

Scenario 3: We could really give into the hippies and spend only the percentage of our GDP that an average country spends on the military: 2.3 percent of GDP.  This would leave us with a cool $155 billion to spend.

Note that all three of these scenarios would leave use spending at least double any other country in the world in absolute amounts of defense spending.

Head below the fold to see what I came up with to spend my peace dividend under each scenario. Some funding proposals are fairly detailed, but most (e.g. the preschool and parental leave are rough back-of-the-envelope calculations at best) Let me know in the comments what you would do with your surplus.

Exploring potential legislative ways to limit the damage of Friedrichs

Public sector labor unions across the country have been grimily preparing for the likely negative results  from the Friedrichs vs. California Teachers Association case heard two weeks ago. The opinion in Friedrichs (undoubtedly 5-4, written by a super smug Samuel Alito, with a vicious dissent coming from Elena Kagan) will likely ban union agency fees on the grounds of free speech.  

Previously, I have outlined why this opinion shouldn’t be conflated with the end of public sector unionism. Here, I outline a legislative step unions and workers might be able to lobby for to blunt some of the impact of yet another depressing Alito majority opinion.

Saving the world one state or province at a time: a look at existing carbon-pricing schemes in North America

With the Paris climate accord in place, now comes the hard work of actually implementing emissions reductions goals to, well, save civilization. There are many, moving parts to making this work; one of the largest set of which involve putting a price on emitting carbon.

There are two major ways to do this: cap-and-trade program, and a direct carbon tax. Cap and Trade sets a total cap on emissions for regulated sectors then lets enitities purchase emissions credits they can cash in for their emissions or sell on a secondary market if they don't exceed their cuts. Carbon taxes, in contrast, directly place a levy on carbon emissions from regulated sources. Both have their supporters and detractors, and I'm not going to wade into that debate here (personally, I'd support a well-designed plan of either).

Follow me below the fold for a brief look at the carbon-pricing landscape in North America. I don't have detailed looks at the programs (though I do link to formal reports that detail each of the existing or proposed programs). What this should serve as is a basic lay of the land and give an idea of how these already successful programs lay an extremely important groundwork for the deeper emission cuts that will need to come.

ACA eases extreme financial stress from medical bills, but out-of-pocket costs remain a problem

The Kaiser Foundation and the New York Times have teamed up on an interesting study to measure the number of Americans suffering from financial hardship due to medical bills.

The good news is that by expanding insurance accessibility, ACA has helped steadily curtail the amount of financial stress Americans experience due to health bills.  Insured Americans are much less likely to suffer individual financial stress related to health bills.

The ACA has helped affordability, but we're still

not here yet.

The bad news is a significant portion of Americans between the ages of 18 and 65 with insurance -- 20 percent -- still suffer significant financial hardship. (That's a heck of a lot better that the 53 percent without insurance reporting having problems, but it's a real issue).

Things are getting better, but we haven't reached single-payer nirvana where you can show your provincial ID card and focus on getting well.

The Times and Kaiser go into details in their reporting, which you should read.  However, follow me below the fold for a general overview of the situation.

How much would expanding Medicaid help in states that haven’t accepted the expansion?

Perhaps the single biggest story about the implementation of the Affordable Care Act has been the battle in states deciding whether to accept the Medicaid Expansion. The expansion is perhaps the single most important tool in the ACA’s coverage expansion tool kit. It takes 50 state-based single payer systems and drastically expands eligibility for them, which is the single largest progressive victory in politics since the Great Society. Other important Medicaid reforms drastically streamline the application procedures and eliminated asset tests to draw out formerly eligible people who might have gotten tangled up in the system or not bothered applying because the state made you apply in person on Tuesday between the hours of 2:30 p.m. and 3:04 p.m.

However, the expansion is not some magical talisman that instantly enrolls all eligible individuals. Some people will remain ignorant of the program despite the best outreach efforts, while other will not enroll for any variety of reasons. And more to the point, 24 states hadn’t fully taken advantage of the Medicaid expansion by the beginning of 2015. Pennsylvania, Indiana, Montana and Alaska have all signed on this year, leaving 20 holdouts (half of whom were in the former Confederacy – but I digress).

The cool thing that we have some real data of how ACA has actually performed on the ground over the last two years, we make some interesting dynamic projections of what would have happened had some states accepted the Medicaid, instead of simply discussing the number of people who would be eligible for help under the expansion.

I mean, heck, this Charles Gaba fellow has been counting the people who actually signed up for coverage for two years, I might as well take one shot at figuring out who would have signed up if they could have. 

To accomplish that, follow me below the fold, where I build a simple interactive regression model to project the reduction in the uninsured population in states that haven’t expanded Medicaid. Don’t worry; I’ll label the scary part where I work through the model so you can skip the simple summary where I discuss the results in plain English (but you really should read the model section, it’s rather of important and it makes fun of Bobby Jindal).  

Does having a state-run exchange improve health insurance access under the ACA?

With the ruling in King vs. Burwell behind us, focus on the differences between state sponsored health exchanges vs. the federal exchange has fallen away. But as state-based data has been rolling in from Gallup, the CDC, and the Urban Institute on declines in people without health insurance, I began wondering whether providing a state-based exchange has any advantages over a the federal marketplace. Gallup’s comments and tables in particular seem to push the idea that states with state-based exchanges seem to have had more success with reducing the uninsured rate.

Of course, the real reason that state-based exchanges exist is political. The original House of Representatives bill had a national marketplace, while the Senate Bill incorporated state-based marketplaces. This particular breakdown shouldn’t surprise anyone, since Senators represent entire states, and all states are equally represented. The general state-based structure of the Senate bill won out. The final ACA incorporated a mechanism that defaulted to a federal backstop, but the markets themselves were still based on state boundaries.

However, despite that structural political reason, there might be some practical reasons why state exchanges might have superior performance to a unified federal exchange. First, commentators often refer to states as “laboratories of democracies” that can innovate and try numerous different ideas. Over time, the theory goes, good ideas from some states will diffuse across other states naturally and more quickly than if the federal government had installed and tried to improve a clunky national idea. Second, there’s the idea that differing conditions and preferences across states mean that state-based exchanges will allow individual states to customize their exchanges to best fit the needs of their state.

We would have to hold these potential advantages against some very real drawbacks. First, there’s administrative complexity and cost of constructing and running an exchange for a state-level. With federal grants to construct exchanges running out, several smaller states are already transitioning back to the federal marketplace, while others are having trouble paying the upkeep costs. Also note that there’s a question of whether several states even have enough potential subscribers to form a healthy individual insurance market to begin with.

With these ideas in mind, I used Gallup’s state-based data to build an extremely simple statistical model to predict the effects of a state-based exchange on improvements in health insurance coverage.  Follow me below the fold for more details.

ACA reduces uninsured in Texas, but would do more if state expanded Medicaid

Shockingly (not really), failure to expand Medicaid continues to cost poor Texans access to health insurance.

The Baker Institute at Rice University the Episcopal Health Foundation have released their latest issue brief on the latest results of the Health Reform Monitoring Survey, a quarterly survey which tracks the effects of the Affordable Care Act on individuals.  The Institute and  the Foundation implement the survey for Texas.

This report contains absolutely no surprises for anyone with more than three functioning brain cells and who hasn’t been living under a rock for the last five years.

First, the good news: The percentage of uninsured working-age adults (ages 18-64) estimated by the survey declined by nearly one third, from nearly 25 percent to 17 percent between September 2013 and March 2015. Most encouragingly, Hispanics – though still the higher proportion of uninsured in Texas – had the largest decline, with a drop of 38 percent.

This indicates that the health exchange model, supported by federal subsidies, is helping a large number of uninsured individuals get coverage.

The bad news of course, is that poor people who fall into “Medicaid gap” – those who earn income less than 100 percent of the poverty line necessary to obtain subsidies on the exchange, but higher than current Texas cutoffs for Medicaid -- are still left out in the cold.  The memo notes that respondents under 138 percent of the poverty line have increased from roughly 63 percent to 67 percent of those uninsured in Texas. This change in the two surveys isn’t statistically distinct from zero, but almost surely understates the impact of the state’s failure to expand Medicaid, because individuals between 100-138 percent of the poverty line qualify for subsidies.

Two other nuggets in the report are of interest.  First, the potential tax penalty for health insurance, also known as the individual mandate -- appears to have some effect on driving the uninsured to seek insurance. More than half (53 percent) of uninsured respondents say that the prospect of a fine for not purchasing insurance is “somewhat” or “very” important to them. (Note that the IRS is waiving the fine for households that fall into the “Medicaid gap.”

Finally, uninsured respondents overwhelming say that they can’t purchase insurance because they can’t afford it (57 percent) instead of because they don’t want it (17 percent). That’s useful because it undermines (again) the talking point that uninsured people are satisfied in their current state and that the government should just butt out.

To sum up then: Texans generally want health insurance, the ACA is effective in helping them get insurance, and the ACA would help a lot more Texans get insurance if the state were to expand Medicaid. Absolutely all these things were predicted by proponents of Obamacare.

Montana on cusp of passing Medicaid expansion

In breaking news yesterday, the Montana House of Representatives passed a Medicaid Expansion Bill to a final reading by a 54-46 vote.

The expansion called the Health and Economic Livelihood Partnership Act (HELP Act), is a slightly  amended version of Senate Bill 405, which was approved in that chamber on March 30 by a 28-21 vote. The amended House version, slated for final approval today is almost certain to pass the Senate next week, after which Democratic Governor Steve Bullock will be extremely likely to sign the HELP Act into law.

The bill is slightly different from a traditional Medicaid expansion in that it will require some beneficiaries to pay co-pays; and has a job search component. However, as Section 6 of the bill notes, those co-pays will not exceed caps and regulations established by law.  The job-search component (Section 14) also appears to not affect eligibility for expanded Medicaid and only asks the state labor and industry department to partner with the state health department to match up HELP beneficiaries with potential job openings.

This should get through the Federal Department of Health and Human Services with few problems.

In both chambers, a moderate Republican sponsored the bill. In the House, Democrats managed to get the bill out of a hostile committee that had bottled up both it and Bullock's own expansion proposal this year by using a legislative stratagem called the "Silver Bullet": Under a gentleman's agreement during this session that each party gets to move six bills of their choice that have been blocked in committee on to the House floor for a straight-majority vote. Eleven Republicans helped the 41 Democrats in the chamber get the bill on the floor, while 13 GOPers joined the Democrats to advance the bill to final passage.

There are four things about this that are great news:

1. Poor Democratic Representative Tom Jacobson will finally get to forget about his accidental vote that killed expansion in 2013.
2. These guys spent a lot of money on an astroturf campaign that is going to fail.
3. 29 states now will have expanded Medicaid coverage.
4. Best of all, 27,000 to 45,000 people are going to get access to health insurance.

Obama moves a bit more on the environment

The New York Times reports that President Obama has signed an executive order that will seek to have all federal agencies reduce greenhouse gas emissions by 40 percent from their 2008 levels by 2025.

This isn't earth shattering in itself -- the federal government only accounts for 1 percent of U.S. greenhouse gas emissions. But it's not nothing either, as the government is the single largest purchaser of goods and services in the U.S.  It's policies can create markets for goods and service that can percolate through the rest of the economy, and its ability to bind federal contractors can help spread policies to a broader group of businesses.

The order extends a previous order signed in 2009 that required the government to cut emissions by 25 percent by 2020. The Feds are on track to meet it. Good on the administration for following up on earlier success.

Every ton of CO2 we keep out of the atmosphere helps. And this order will keep several million in the ground.

"Orthogonal to reality"

Jared Bernstein summarizes the 2016 House Republican budget about as pithily as possible.

Here's a look at President Obama's proposal.
The New York Times compares the GOP and Obama budgets. Note that they accept the assumptions implicit in both documents. For how strong those assumptions are, see Bernstein's comments -- the GOP budget is full of magical thinking and assumptions about how their tax cuts will magically transform into lower deficits.

And finally, here's an outline of the Congressional Progressive Caucus' "People's budget", which won't go anywhere because it's not Very Serious or something.

Medicaid Expansion -- an Historical Perspective

Since the Supreme Court made the Affordable Care Act’s Medicaid Expansion optional, many state legislatures and governors; well at least many of them dominated by Republicans, have loudly declaimed that they will not accept the expansion.

Proponents of the expansion – meaning those of us who understand public policy and/or have a soul – have been bitterly disappointed in the states which are preventing millions of people from getting access to health insurance.

But let’s have a bit of historical perspective here.  The original Medicaid was a voluntary program as well and it took a bit of time for the states to get their act together. When federal matching funds became available in January of 1966, a grand total of six states had programs set up, as this Kaiser Foundation brief shows (see page 6). By the end of the year, 26 states had signed up.

Coincidentally, when New Hampshire expands its Medicaid program in July, 26 states will have signed up for the expansion (plus DC).

For the original program, 37 states had jumped on board by the end of 1967, 41 by the end of 1968 and 48 by Jan. 1 1970. (Alaska joined in 1972 and Arizona finally dragged itself into the program in 1982)

The point is that we tend to forget that it took more than a decade for all states to get into the Medicaid program. The beauty (sarcasm alert) of American federalism is that instead of merely having to get things enacted through an inefficient national legislature and executive, we often have to get them enacted through 50 inefficient regional legislatures and executives as well. Give it some time – often  states will see what’s working in other states and try to pick up on programs (or free money) that work. The Children's Health Insurance Program is another example -- it took three years for all 50 states to get on board after the federal government created the program in 1998. 

This analysis doesn’t necessarily mean that the ACA’s Medicaid expansion will be picked up as quickly – political parties weren’t as polarized in the late 1960s as they are today, which means that opposition to the latest expansion may be more entrenched, even when the results are crystal clear.  And in any case, delays to extending the program will result in thousands of unnecessary deaths.

However, we shouldn't despair -- Medicaid wasn't built in a day; so there's no reason to expect the expansion to become universal in a year either. The important thing is to keep grinding forward and organizing to gain political power to make states do the right thing for their residents. 

New Hampshire joins the Medicaid Party

It's been lost over the general noise of the debate surrounding the recent close of the enrollment period for the health exchanges, but on March 27, New Hampshire became the 26th state to accept the Medicaid expansion.

New Hampshire --split between a Democratic governor and lower house on one hand, and a GOP-controlled upper house on the other -- negotiated an interesting path to expansion, as

Ann Marie Marciarille over at her highly informative Missouri State of Mind blog discusses.

States seeking a modified Medicaid waive have generally tried to work the waiver out first then implement the program. For states that got a late start or that faced GOP-induced delays to considerations -- Pennsylvania and Michigan come to mind -- this has led to the delay in the start-up. Of course, this has led to frustrating delays in getting needy people health insurance and left federal money on the table (since the Feds pay for 100 percent of the expansion until 2017.)

New Hampshire reversed that strategy by jumping into the Medicaid pool now while attempting to negotiate a waiver over the next year to 18 months to reach an Arkansas- or Iowa-style program in which individuals between 100 percent and 138 percent of the poverty line will get steered into purchasing subsidized plans available on the state exchange.

The law also contains a stipulation that program will sunset at the end of 2016 (when the federal match is reduced from 100 percent to 95 percent) unless the legislature votes to renew it.

Of course, it's a bit frustrating that New Hampshire simply didn't accept the expansion straight-up, but it's a good thing that they decided to start up the program now and dicker about the details later.

Most importantly over the short term, 50,000 people are going to get access to health insurance -- and by extension, health care -- that they didn't have before.  After all, that's the point of the Affordable Care Act, right?

It's also a milestone of sorts now that more that half of the states are in the expanded Medicaid program. Of the 26, five are under split control (New York, Nevada, New Hampshire, Arkansas and Iowa) and four are under complete GOP control (Michigan, Ohio, North Dakota and Arizona). The Medicaid expansion isn't just a program for dirty hippies and effete coastal elites any more.

The current state of play in the states regarding Medicaid expansion can be found at the ever-useful Kaiser Foundation.

Court upholds Ohio Medicaid expansion

Good news, via Ideastream (NE Ohio's public broadcaster)

The state’s highest court says it is constitutional to allow the controlling board, a panel of legislative leaders, to allow the Medicaid department to accept the federal funds that would allow for expansion of Medicaid. 

The Ohio General Assembly didn't vote to expand Medicaid, but Gov. John Kasich used the state's budget controlling board -- made up by several legislative leaders (several handpicked by Kasich) to accept the federal grants. The state Supreme Court ruled 4-3  that the board acted within its rights to accept the money for Ohio's Medicaid.

I'd have rather it gone through the legislature, but I'll take it -- as will the 275,000 Ohioans who are going to get health insurance.

Also, there's a long-term issue here -- the board has the power to accept grant money, but it has very limited power to expend state funds. Starting in 2017, the legislature is going to have to vote state monies to cover the state's share of the expansion or lose the federal money. By then of, course, we hope that the expansion will be tough to take away and the ledge will come in line. 

Raise the minimum wage to reduce the Medicaid gap

Aaron Carroll of at The Incidental Economist (a must-read blog for those with interest in health care policy) has a really thoughtful post up on the people who fall into the Medicaid gap in states that aren't choosing to expand Medicaid at the Academy Health Blog. These people are in a bind; they're too rich to be covered under most of these states' existing Medicaid plans, but they fall below the poverty line, and aren't eligible for subsidies on the health exchanges. In describing this population, Carrroll writes a paragraph that really got me thinking:

It’s worth considering, though, that the majority of people in the coverage gap are working poor who, ironically, make too little to be helped out by the government. If they made just a bit more, they might qualify for insurance that is so subsidized that it is almost free. But because of the coverage gap, the people with the fewest resources get less help (none)  than those who have a bit more money. (Italics mine)

If only the working poor made just a bit more money, we could lift hundreds of thousands of them above the poverty line and get them eligible for subsidies that would massively cut their monthly premiums and limit their out-of-pocket expenses. Hmm... what could we possibly do to get the working poor some more income?

Oh I don't know, it's crazy, but maybe we could just raise the minimum wage.

Some minimum wage comparisons Or "Yes, we can most certainly afford to raise the minimum wage"

So it appears one of the next big issues that's coming to a head is a debate over raising the national minimum wage. New Jersey raised its minimum wage and linked it to inflation during the last election, while the town of SecTac in Washington State raised its minimum wage to $15 an hour. Washington D.C. and two neighboring counties just voted to raise their wage to $11.50 an hour over the next several years, while California has voted to jump its minimum to $10 over two years.

Texas Republican Joe Barton, naturally, wants to go the other way.

Right now, the current minimum wage of $7.25 is worth about what it was in 1950 in inflation-adjusted dollars. I show the fluctuation of the minimum wage's value in this fairly well-known chart (figure I) that I reproduced with data from the Bureau of Labor Statistics.

What should we raise it to? Thinking about it's relationship to the poverty line is a good place to start, (though the limitations of the poverty line makes it a bad place to finish.) 

The poverty line for a single parent raising one child is $15,510 for 2013 and for a family of three (a single parent with two children) it's $19,530. For a full-time job at minimum wage to earn enough to lift a family of two above the poverty line, it would have to pay $7.76 an hour-- a raise of about 7 percent from the current wage. To lift a family of three with one worker out of poverty, it would need to be $9.77 -- a raise of about 35 percent.

Of course, that's assuming a full-time job. Many minimum wage jobs in fast-food and retail require lots of flexibility and limited hours (hey, if we gave workers over 28 hours a week, they'd be full time and we'd have to provide health benefits and we couldn't have that!). So let's assume a 25-hour work week, which is more typical at a minimum-wage service job. Keeping a single-parent family of two above the poverty line now requires $12.41 and hour, while a family of three requires $15.63; increases of 71 and 115 percent, respectively.

For historical context,  the minimum wage peaked at a value of $10.74 in 2012 dollars in 1968, which would be a raise of about 48 percent. If the wage had kept up with gains in worker productivity, we'd be looking at a minimum wage of $17.65 an hour, which is an increase of 143 percent. 

I stack all these possible wage gains in Figure II below:

We can debate how high the minimum wage should be, but America needs a raise, and their bosses can afford it. Based on the figures above, D.C's $11.50 over the next three years is easily justifiable, and fast food workers arguing for $15 an hour have a good case to make. Indexing to inflation is a must and future increases arguably should also account for productivity gains above the rate of inflation.

Notre Dame notes

Sure, I'm Catholic, but there are many, many reasons I'm glad when the Irish lose to my Wolverines.

This is not least among them.

What is their president thinking?

Bring on the death panels!: Senate Confirmations and the IPAB

After the Senate eliminated the filibuster on most nominations, the focus has been on judges, and rightly so.

However, one of the lesser-appreciated parts of the power of the Senate to run under majority rules is that now Democrats can fully stock the death panels and get to work denying care to those pesky, expensive senior citizen-- darn it, I just let the cat out of the bag.

All jokes aside, the demise of the filibuster does lift one of the major hurdles to getting what could be a critical part of the Affordable Care Act's bureaucracy running -- the Independent Payment Advisory Board.

The idea behind the IPAB is simple -- if Medicare spending per-person spending increasing increases by a number more than, a panel represents cuts. Those cuts can't charge recipients more or deny access to Medicare.What they can do is limit reimbursements to providers for certain procedures or possibly pharmaceuticals.  (See the ever helpful Kaiser Foundation for an overview)

This ability to say "no" is pretty constrained, but it should get providers' attention and grant Medicare some new leverage to keep costs down. (Think about how much lower drug costs are at the VA where the system negotiates drug prices across the system; the IPAB doesn't have that much power for Medicare, but it moves it in the right direction; better yet, the board can make some recommendations for private health insurers, which should do a bit more to cut costs)

Better yet, the system fast-tracks any recommendations through the House and Senate, where they automatically take effect unless both branches vote with 3/5s of their members to reject them and replace them with other cost savings (which means that some lobbyists' jobs just got a lot tougher).

The president appoints 15 people -- 3 nominees from himself, and three each in consultation with the majority and minority leaders of both houses of Congress. the GOP has been refusing to consult on their six members, but will likely be more likely to bargain now that the Democrats will be able to get their nine members confirmed through the Senate over GOP opposition.

All this is moot for now -- because Medicare expenses increased by 1.15 percent last year,  but thanks to getting rid of the filibuster,controlling health care costs in way that won't hurt patients is about to get a lot easier.