Another sign that the party establishment is taking single-payer seriously: the Center for American Progress (CAP), a think tank with close ties to the Clinton campaign (it’s current CEO, Neera Tanden, and its founder, John Podesta, were both Hillary advisors) just released a detailed plan for universal healthcare, which its calling Medicare Extra for All. It isn’t quite single-payer, but it would move our healthcare system pretty far in that direction.

Although not far enough for some apparently– Adam Gaffney, secretary of Physicians for a National Health Program (PNHP), has already called CAP’s proposal a “second-rate scheme” that “would exact sacrifices from patients to placate the insurance industry, and could serve to divert the single-payer movement.” On Twitter, the organization People for Bernie, drew a line in the sand, saying that any Democrat who backed it would be “ignoring the will of the party’s activists.”

It’s a little disheartening to watch these groups attack CAP’s proposal right out of the gate, since it could offer a path to single-payer that avoids the one pitfall that’s doomed every other single-payer plan: massive sticker shock when it comes time to figure out how to pay for it.

A quick intro to Medicare Extra

For all the criticism of CAP’s Medicare Extra plan from single payer advocates, it’s worth noting how much it shares in common with Sanders Medicare for All bill: both proposals would fold existing government health programs (Medicare, Medicaid, and CHIP) into a new enhanced Medicare plan that covers health, vision, and dental with much lower out-of-pocket costs than traditional Medicare.

That said, there are some significant differences:

Medicare for All: Sanders plan doesn’t just consolidate existing health federal programs– it eliminates private insurance entirely. Within four years, every American would be automatically enrolled into a new Medicare-for-All plan, with almost no out-of-pocket costs. So no co-pays, no co-insurance, no deductibles– you’d walk into a doctor’s office or hospital, give them your name, get treated, and walk out without paying a cent. There could be some cost-sharing on non-preventative prescription drugs (his plan leaves that up to the Secretary of Health and Human Services), but that would be capped at $200 per person annually.

Medicare Extra: CAP’s proposal is more complicated… It would automatically enroll newborns, individuals turning 65, Medicaid and CHIP recipients, and people who don’t already have other coverage into the new “Medicare Extra” plan. Premiums for Medicare Extra would be on a sliding scale from zero to 10% of their income, depending on how much they make, and current Medicare recipients could choose between traditional Medicare, Medicare Advantage (now called Medicare Choice), and Medicare Extra. CAP’s proposal wouldn’t eliminate private insurance: employers could continue offering private insurance coverage, but these plans would have to meet new minimum standards. Also employees wouldn’t have to enroll in their employer’s plan– they could choose to enroll in Medicare Extra instead. Private insurers would also be allowed to continue offering Medicare Advantage plans, although the program would now be called Medicare Choice and those plans would have to follow stricter guidelines.

Also, unlike Medicare for All, Medicare Extra would have out-of-pocket costs, on a sliding scale based on income. At the low end, for people making below 150% of the poverty line (currently $18,090 for an individual), there would be no cost-sharing; at the highest end people with “middle incomes or higher” plans would resemble Obamacare’s “gold” level plans (gold plans typically have deductibles hovering around $1,000, along with additional copays and/or coinsurance fees).

The (several) trillion dollar question

If the only factor in designing a health plan were the benefits, then there’d be no reason to consider CAP’s Medicare Extra proposal. However, designing the coverage side of a single payer system has always been the easy part– it’s in figuring out how to pay for it where things start to fall apart.

We’ve seen this pattern repeat itself time and again in states that have tried to pursue single-payer: (1) single payer advocates put together a plan that covers everyone in the state with almost no cost-sharing; (2) outside groups analyze the plan and find that it costs way more and requires higher taxes than expected; (3) support for the plan collapses. For example:

California: In California, a single payer bill was recently working its way through the state legislature until an analysis found that it would cost $400 billion– more than twice the state’s current budget– and it would take a 15% payroll tax to pay for it. (To put that in perspective, the tax that currently pays for Medicare is 2.9% of payroll.) The state’s Democratic House Speaker eventually halted the bill, saying that it “does not address many serious issues, such as financing, delivery of care, [or] cost controls…”

Vermont: In 2011, Vermont looked like it was on its way to setting up the first single payer health system in the country— a single-payer bill passed in the legislature by a huge margin, which its governor, Peter Shumlin, supported. However, when the state did the math on how to pay for the new benefits, it found that moving to single payer would cost $3 billion a year (at the time Vermont’s entire state budget was only $2.7 billion). Paying for the plan would require at least an 11.5% payroll tax on all employers, and a new income tax on individuals of up to 9.5%. Shumlin said he had his team look into ways to make the system more affordable, like increasing out-of-pocket costs or eliminating a phase-in for businesses, but in the end, couldn’t make the numbers work.

Colorado: A 2016 single payer ballot initiative in Colorado failed for all sorts of reasons, but a big part of it was the cost of the plan. An analysis from the nonpartisan Colorado Health Institute (CHI) found that the plan’s proposed 6.67% payroll tax, 3.33% wage income tax, and 10% tax on non-wage income wouldn’t be enough to cover costs, and the gap would grow every year. Within ten years, CHI’s projections showed the plan would be running a nearly $8 billion annual deficit (again, for comparison, the state’s entire budget is only about $28.5 billion).

Sanders’ Medicare for All bill seems to be following a similar trajectory. For all the detail in the bill about the coverage it will provide, there is no explanation in the bill of how it would be funded. However, Sanders’ office did put out a list of options for financing Medicare for All, including a 7.5% payroll tax, a 4% income-based premium, and some new taxes on the wealthy, which he says would generate about $1.5 trillion per year. Assuming his numbers are right, even if every one of those options were adopted, it still likely wouldn’t be enough to pay for his plan.

We don’t have an official estimate of the cost of Sanders’ Medicare for All bill, but when he proposed a similar plan during the 2016 election, his campaign estimated a cost of about $1.38 trillion annually. However, a recent analysis from Dean Baker, an economist with the left-leaning Center for Economic and Policy Research, found that Sanders’ cost estimate was at least $500 billion too low. Another outside analysis, from Kenneth Thorpe, a professor of health policy at Emory University, found that Sanders 2016 plan would cost $2.5 trillion per year, leaving him the plan with a trillion dollar shortfall. Annually. (To get a sense of the size of these numbers, the entire Affordable Care Act costs about $120 billion per year.) In other words, paying for his plan might require nearly doubling the tax rates that Sanders originally proposed.

Why so high?

These higher cost estimates tend to come as a shock to single-payer supporters, who often respond by attacking the authors of those estimates. Single-payer supporters say that their plans create massive savings by (1) reducing administrative costs and (2) paying doctors, hospitals, and drug companies less. And it’s true, a single payer system would likely reduce those costs… eventually. But the folks writing single-payer plans tend to take the most optimistic projection for potential savings, and assume those cuts in spending would happen on day one of their plan.

So take administrative costs, for example. The Sanders campaign claimed that the savings on administrative costs from switching to single payer would be about $630 billion per year– or about 13.4% of our total current healthcare spending. But as Dean Baker pointed out in his analysis of Sanders’ plan, “the savings would come from providers, such as hospitals, doctors’ offices, and nursing homes, cutting back on their [medical billing] staff.” We did a quick, back-of-napkin calculation, and if you assume that the average person who works in medical billing makes $50,000 (which is probably too high– according to the Bureau of Labor Statistics, the median pay for a medical records worker is $38k per year), then cutting $630 billion in administrative spending would mean a loss of something like 12 million jobs. That’s not something most of us would want to happen all at once, but luckily for those employees, it’s unlikely that healthcare providers would adjust to the new system overnight. It’s much more likely– and frankly preferable– that the administrative savings would come as the healthcare system slowly adapts to a simpler system over a number of years.

The same could be said about the savings from paying doctors, hospitals, and drug companies less to provide care in a single payer system. Other countries pay less than we do because their healthcare systems managed to keep health spending from growing a period of decades. Trying to slash U.S. reimbursement rates overnight to get them in line with other countries’ would be a disaster– providers wouldn’t be able to adjust quickly enough, and many would be forced out of business. Savings from single payer would come in the long run, which means that trying to switch to single-payer in a single step would require a lot more money in the early years (or possibly decades) than its supporters claim.

Medicare Extra to the rescue?

CAP’s Medicare Extra might reduce some of that sticker shock, since it moves healthcare spending over to the federal side more slowly than Sanders’ single payer plan. It does this a couple of ways.

For starters, CAP’s plan includes some cost-sharing. Single-payer supporters have argued that the cost sharing is too high, and they’re probably right– it’s possible some people wth Medicare Extra could still wind up owing over a thousand dollars in medical bills in a given year. However, some minimal amount of cost-sharing could help bring down the cost of the plan somewhat, while discouraging the use of unnecessary care. As Dean Baker pointed out in his analysis, if we paid just what Canada and the UK pay in out-of-pocket costs, it would reduce the shortfall in Sanders’ plan by at least $250 billion (i.e. two Affordable Care Acts) annually.

The CAP plan also gives employers a bunch of options for providing coverage to their employees:

• They could continue to provide private health insurance (as long as it met the standards we mentioned earlier). Employees wouldn’t have to take it though, and could choose to enroll in Medicare Extra instead;
• They could buy Medicare Extra as their employer-provided plan: employers would cover at least 70% of the cost of the premiums and employees would pay an income-based premium;
• They could make “maintenance of effort” payments, which means they’d pay exactly what they’re paying now for private insurance, and enroll their employees in Medicare Extra; or
• They could make aggregated payments of 0 to 8% of payroll (depending on their size), which is about what employers pay now on average for private health coverage, and enroll their employees in Medicare Extra.

Most people who get insurance through an employer say they like their coverage– the first option lets them keep it so long as the employer keeps offering it. (Clearly though, CAP believes that eventually most people will choose Medicare Extra.) The other options give employers different ways to provide Medicare Extra for their employees without paying more than they currently do for private coverage– but also without paying too much less. CAP says that any remaining gap in funding could be filled by bringing back some of the taxes on the wealthy that were cut in the recent Republican tax plan, additional taxes on high income earners, and higher taxes on cigarettes.

Unfortunately there isn’t even a rough estimate of how much Medicare Extra would cost (CAP says that it plans to “engage an independent third party to conduct modeling simulation.”), so we have no idea whether the numbers actually add up. But it’s an interesting idea that at least tries to address the issues that have doomed other promising attempts at single-payer in this country. Single-payer advocates shouldn’t be so quick to dismiss it.

Republicans in Congress weren’t able to repeal the Affordable Care Act last year, but the Trump administration had a Plan B– using executive authority to chip away at the number of people covered under the law. Over the past year, they’ve taken a number of steps to “reform” the law by making it harder for people to get coverage, including stricter verification requirements, shortening the open enrollment period, and cutting funding for Navigators (outreach groups that help people sign up for coverage).

Those steps mostly targeted people signing up for private insurance coverage, but in 2018 the Trump administration has apparently set its sights on Medicaid as well. Earlier this year, Trump’s Medicaid director announced that for the first time in the history of the program, states will be allowed to introduce work requirements for Medicaid beneficiaries. It has already accepted work requirement plans from two states– Kentucky and Indiana— and ten other states have announced plans to follow suit.

On the surface, these work requirement programs sound reasonable. Republicans argue that if a person can work and simply chooses not to, why should the hard-earned tax dollars from people who do work go to pay for that person’s benefits? Asking them to contribute to society by working is not only fair, it could also improve their health, since being employed is also associated with better health outcomes. Or so the argument goes.

In reality, most Medicaid recipients who are able to work are already working. Meanwhile, not only will work requirements like fail to encourage employment among the “able-bodied,” these requirements will force many people who can’t work– due to illness or disability– out of the program.  

Most Medicaid recipients who can work are working

Before we look at how these work requirements could affect Medicaid recipients, let’s take a look at how many people on Medicaid really are able to work, but choosing not to. The Kaiser Family Foundation is considered the “gold standard” of health policy polling and analysis– they found that among non-elderly adults with Medicaid coverage, nearly 80% are in a family where at least one adult works, and 60% are working themselves. Of the people who aren’t working, most are either disabled, in school, or not working due to caregiving:

Kaiser also asked adults on Medicaid who weren’t working why they were unemployed– in addition to the reasons listed above (illness/disability, acting as a caregiver, going to school), some were retired and others were looking but couldn’t find work. That left just 3% who could be defined as “able-bodied” and choosing not to work:

Still though, even though just a tiny fraction of Medicaid recipients would be the targets of a work requirement, you could make the case that it would be worth it if work requirements improved the lives of those “able-bodied” unemployed– or at least encouraged them to find employment– without harming the folks who can’t work. Unfortunately neither is true…

There’s little evidence that Medicaid work requirements would improve health or increase employment

In a letter providing guidance to states who want to implement work requirements in Medicaid, Trump’s Medicaid director cited the health benefits of work promotion:

CMS recognizes that a broad range of social, economic, and behavioral factors can have a major impact on an individual’s health and wellness, and a growing body of evidence suggests that targeting certain health determinants, including productive work and community engagement, may improve health outcomes. For example, higher earnings are positively correlated with longer lifespan. One comprehensive review of existing studies found strong evidence that unemployment is generally harmful to health, including higher mortality; poorer general health; poorer mental health; and higher medical consultation and hospital admission rates.

First, we should note that the Trump administration has to make the case for the health benefits of work requirements– whether true or not– to prevent courts from blocking them. The administration is using its authority under section 1115 of the Social Security Act, a provision that lets it grant waivers to states who want to experiment in making changes to their Medicaid programs, just so long as those experiments will potentially “assist in promoting [Medicaid’s] objectives.” Medicaid was never meant to be an employment program, so in the letter Trump’s Medicaid director is reminding states that work requirements “should be designed to promote better mental, physical, and emotional health in furtherance of Medicaid program objectives.”

Still, it’s true that employment is often associated with better physical and mental health. However, there is little evidence that work requirements in social welfare programs lead to increased employment in the long term. The Temporary Assistance for Needy Families program that came out of welfare reform in the 1990s has work requirements similar to what the Trump administration is encouraging states to implement in their Medicaid programs. Margot Sanger-Katz of the New York Times Upshot blog summarizes the evidence on the effect of TANF’s work requirements:

The general conclusion is that the work requirement increased the number of welfare beneficiaries who worked in the short term but had little impact on their long-term employment prospects or their long-term earnings. While work requirements appear to have nudged some beneficiaries who were close to the poverty line above it, they do not appear to have meaningfully improved the long-term financial circumstances of eligible people, who were predominantly parents of young children with low levels of education.

Even conservative health policy experts don’t believe that work requirements will increase the employment rate of Medicaid beneficiaries. Robert Rector, a senior research fellow at the conservative Heritage Foundation, writes:

“In reality, it is difficult to get eligible able-bodied adults without dependent children to enroll in Medicaid. After all, they do not need to enroll in the program to receive free medical care. They know that if they get sick and walk into a clinic or emergency room they will get enrolled in Medicaid prospectively or receive treatment pro bono.

A work requirement would just make it less likely for able-bodied adults without dependent children, known as ABAWDs, to register for the program. The work requirement would reduce Medicaid enrollments, but Medicaid costs might well go up because the eligible ABAWDs would go to the emergency room rather than receive routine care elsewhere.

Also, it would be politically very difficult to enforce a work requirement for medical services […] Suppose a Medicaid eligible ABAWD enrolls in Medicaid and then fails to do his work assignment (a very likely outcome based on experience with other work requirements). This individual then shows up sick in the emergency room or clinic. Is the government going to deny him medical care because he did not do his workfare assignment? Of course not.

Meanwhile, people who are unable to work could lose coverage

Ok, so if Medicaid work requirements probably won’t work, and would instead be, as Rector puts it, “theoretical and symbolic,” why are healthcare advocates fighting so hard against them? After all, these work requirements could lead to more red states expanding their Medicaid programs under the Affordable Care Act. Just this week, Virginia’s Republican-controlled legislature backed a budget that would expand Medicaid under the ACA, as long as it could institute work requirements. The expansion would bring coverage to an estimated 300,000 uninsured Virginians.

The problem is that instituting a work requirement means that every Medicaid recipient will have to verify that they are either working or exempt from the requirement. The Kaiser Family Foundation points out:

Those who are already working still must successfully document and verify their compliance. Those who qualify for an exemption also must successfully document and verify their exempt status, as often as monthly. States would need to pay for the staff and systems to track work verification and exemptions.

Because of complex documentation and administrative processes, some eligible individuals could lose coverage. There is a real risk of eligible people losing coverage due to their inability to navigate these processes, miscommunication, or other breakdowns in the administrative process. People with disabilities may have challenges navigating the system to obtain an exemption for which they qualify and end up losing coverage.

So, for example, states could decide to use eligibility for Social Security Disability benefits to determine who is exempt from the work requirement because they’re not “able-bodied.” What about the tens of thousands of people currently receiving Medicaid who haven’t qualified for social security, but who have an illness or chronic health problem that prevents them from working?

Or say you’re a working parent who simply forgets to send in the form verifying your employment one month– will you get kicked off your coverage? If you think that’s an exaggeration, consider Indiana, which just received the go-ahead to institute work requirements in Medicaid. When it switched to an automated welfare system in 2008, there were over a million benefit denials in three years (including Medicaid denials), often because paperwork was lost or recipients forgot to sign a form somewhere. (One woman lost her Medicaid benefits because she couldn’t attend a recertification appointment on a day she was being treated for cancer– her benefits weren’t restored until the day after she died).

Or say you’re the mother of two autistic children, and your kids are school-aged, which means that you might not qualify for a caregiver exemption to the work requirement (depending on your state’s rules). However, finding and keeping a full-time job can be nearly impossible given the number of meetings and appointments with teachers, psychologists, and therapists that parenting two autistic sons requires. With the new work requirements you’d still be unable to work– and now have no health insurance.

Some of these problems could be avoided if states invest a ton of resources into ensuring that the work requirements are administered effectively, but the Trump administration will not be providing any extra funds. Also, the states that are pushing for these work requirements see them as a way to save money. As Judy Solomon of the left-leaning Center Center on Budget and Policy Priorities, told Vox, “At the end of the day, it’s going to have people who need health care lose coverage.”

About fairness…

A number of reporters have noticed what Andrew Sprung of the Xpostfactoid blog has termed “Medicaid envy.” Lower to middle income Americans who get private coverage on the ACA marketplaces or through an insurer have expressed anxiety about rising premiums, deductibles, copays and drug costs, anger at surprise bills, and confusion at the complexity of their health plans. And as Drew Altman, president of the Kaiser Family Foundation, pointed out last year, these folks “saw Medicaid as a much better deal than their insurance and were resentful that people with incomes lower than theirs could get it.”

It’s understandable why they’re angry– despite Republican claims to the contrary, Medicaid really is a great deal compared to private insurance. But as Atul Gawande, a surgeon and professor with the Harvard T.H. Chan School of Public Health (and also a New Yorker writer) has argued, there’s a better way to achieve a fairer healthcare system than work requirements that could take coverage away from the sick, disabled, and caregivers along with a very small number of people who may be unfairly mooching. A better solution, he says, is to give more people access:

“Anger about Medicaid is not surprising. We have taxpayers with jobs that provide no health coverage paying for poorer people to have coverage they couldn’t dream of — with no premiums, copays, or deductibles. This is bound to create bitterness about who is deserving and who is not. The solution isn’t to cut more people off.  That won’t soften the anger. What would is opening up Medicaid more widely, like Medicare. We don’t have these debates about Medicare because everyone contributes as they are able and everyone benefits.

“Work is an important goal. Health care is an important way to ensure that people can be well enough to work. Refusing health coverage to people unless they work is a proven recipe for more sick people, not more work.”

One of the weird things about Donald Trump’s State of the Union speech was how much he sounded like a normal president– ignore the parts about the wall and MS-13 and the digs at kneeling NFL players and you could easily picture an alternate universe where a President Mitt Romney or a President Jeb Bush was giving the same speech.

Partly that’s just the nature of the State of the Union– it’s a laundry list of policy accomplishments/goals, and for all the talk of Trump being an “outsider” candidate, his actual policies are generic Republican stuff– but it was also partly in how he defended those policies.

We’ve probably fact-checked hundreds of statements about healthcare from politicians on both sides of the aisle, and it’s actually pretty rare to catch them straight up lying. They say things that are false all the time, but they typically do that by starting with a grain of truth and then spinning it wildly out of context. So for example, during the 2012 campaign Mitt Romney claimed that Obamacare “robbed” $716 billion from Medicare– in truth Obamacare didn’t take any money out of Medicare, it simply lowered the reimbursement rates that would be paid to hospitals, insurers, and other providers, saving $716 billion. Or to give an example from the other side, there’s President Obama’s “if you like your plan, you can keep it” claim. It’s true that the Obamacare contained a provision that exempted pre-ACA plans from the ACA’s rules, but there was nothing in the law to prevent insurers from canceling those old plans, and many did.

President Trump is different. From the size of his inauguration crowd to the ratings of his State of the Union, Trump’s tells lies that don’t contain even a grain of truth– and he does it constantly. However, in the State of the Union, at least on healthcare, he spun and mislead like a normal politician. Here’s how…  

The Individual Mandate

“We eliminated and especially — an especially cruel tax on Americans making less than $50,000 a year, forcing them to pay tremendous penalties, simply because they could not afford government-ordered health plans. We repealed the core of the disastrous Obamacare, the individual mandate is now gone.”

Let’s break this down. Republicans did eliminate the ACA’s individual mandate when they passed their tax plan in December (although as NPR’s Alison Kodjak points out, “Technically, the law still requires people to have coverage, but with no penalty available, most people consider the individual mandate to be dead”). It’s also true that most (79%) of the people who paid the individual mandate penalty last year had incomes below $50,000.

Whether they paid the penalty because they couldn’t afford coverage is another story. For starters, if you can’t find coverage for less than about 8% of your income, you don’t have to pay the penalty (on top of that, there’s also a long list of hardship exemptions). Many people– especially those with incomes between $10,000 and $25,000– seem to be paying the penalty by mistake. It’s also important to remember that the individual mandate is relatively weak– for individuals making between $25,000 and $50,000 it’s often cheaper to pay the penalty than buy insurance. If they’re young and healthy, they may feel that they don’t need insurance even though they can afford it and opt for the penalty instead.

In any event, the individual mandate is far from the “core” of Obamacare– the ACA will go on, it just won’t work as well. The Congressional Budget Office estimates that as a result of repealing the mandate 13 million fewer people will have coverage and premiums will increase by about 10%. Even with those losses, up to 20 million people who would have been uninsured will still have coverage thanks to Obamacare.

Veterans Health

“And we are serving our brave of veterans, including giving our veterans choice in their health care decisions.”

We’re not totally sure what Trump is talking about here, but he’s probably an extension of the Veterans Choice Program that Congress approved in August. The Veterans Choice Program was passed in 2014 under the Obama administration, and was meant to reduce wait times for veterans seeking care. It provided $2.5 billion for hiring more medical staff at VA hospitals and $10 billion for vets to get care outside of the VA system. The program was about to run out of money, and Congress couldn’t agree on how to pay for a long term extension (this is the same GOP-controlled Congress that didn’t pay for its $1.5 trillion tax plan), so they passed a $2.1 billion extension to “keep the program alive and buy more time to develop a legislative solution.” We guess that’s better than nothing, but also not something to brag about.

“Last year, Congress also passed, and I signed, the landmark VA Accountability act. Since its passage, and my administration has already moved more than 1500 V.A. employees who fail to give our veterans the care they deserve.”

We’ll let the Washington Post handle this one:

Congress passed the legislation in June making it easier to fire VA employees and shortening the time employees have to appeal disciplinary actions. But the law’s impact on improving accountability at the department remains unclear: More VA employees were fired in former President Barack Obama’s last budget year, for instance, than in Trump’s first.

Prescription Drugs

“To speed access to breakthroughs, cures, and affordable generic drugs, last year, the FDA approved more new and generic drugs and medical devices than ever before in our country’s history.”

This is true: the FDA approved 56 new drugs last year and 1,027 generics, a record in both categories. It also looks like an instance of Trump taking credit for something that his administration had little to do with. As NPR points out, “President Barack Obama signed the 21st Century Cures Act into law on Dec. 13. It offers ways to speed drug approval by pushing the FDA to consider evidence beyond the three phases of traditional clinical trials.”

Also, with drug approvals faster isn’t necessarily better. Before 2017, the FDA was already approving drugs three to four months faster than its counterparts in Europe and Canada, but that speed came with consequences: nearly a third of the drugs approved from 2001 through 2010 had major safety issues years after the medications were made widely available to patients. These issues were more common for drugs that were granted “accelerated approval” and drugs that were approved near the regulatory deadline for approval.

“We also believe that patients with terminal conditions, terminal illnesses, should have access to experimental treatment immediately that could essentially save their lives. People who are terminally ill should not have to go from country to country to seek a cure. I want to give them a chance right here at home. It is time for Congress to give these wonderful, incredible Americans the right to try.”

Here Trump is referring to a federal Right to Try Act, which on its surface sounds great– give patients with no other options the chance to try experimental therapies that haven’t been approved by the Food and Drug Administration. However, as Michael Becker, a former biotechnology executive who has been diagnosed with terminal cancer, notes, patients like him already have access to experimental therapies:

Under the Federal Food, Drug, and Cosmetic Act, patients can seek expanded access, sometimes called compassionate use, to investigational therapies, meaning those that are being studied for safety and effectiveness but that have not been approved by the FDA. Since expanded access was enacted in 2009, the FDA receives approximately 1,000 requests for expanded access each year. It approves more than 99 percent of these requests, and makes meaningful changes approximately 10 percent of the time to improve patient safety.

Becker also points out that Trump’s own FDA Commissioner has serious reservations about the bill, and with good reason:

The FDA retains oversight of expanded access treatments. It can use the results of these treatments to judge the safety and effectiveness of the experimental therapy. As currently drafted, the federal right-to-try bill eliminates or reduces that oversight — a concern noted by FDA Commissioner Scott Gottlieb in testimony before the House Energy and Commerce Committee’s Subcommittee on Health.

Put simply, under the right-to-try bill, a death caused by the use of an experimental drug could not be considered by the FDA in deciding whether to approve or reject the therapy. While this may help address pharmaceutical and biotechnology industry concerns that expanded access programs could jeopardize ongoing studies, it is simply unethical at its core.

I’m also worried about the financial, legal, and medical protection afforded to patients and their families under the proposed right-to-try bill. Do patients undergoing right-to-try therapies lose their coverage for hospice? Would insurers be absolved of any responsibility for covering further medical expenses once a patient starts a drug under right-to-try? What if the experimental drug causes hospitalization or leads to additional treatments — who would pay for that?

In his testimony, Gottlieb also raised the concern that, if the federal right-to-try was enacted without changes, sponsors and others providing investigational drugs to patients would not be subject to a number of rules and regulations related to clinical trials, premarket approval, and labeling. That would, in essence, preclude the FDA from taking enforcement actions based on those provisions. In other words, cutting out the FDA as a gatekeeper increases the risk of patients being harmed through the peddling of false hope and snake oil.

It’s not just Becker who’s worried: dozens of doctors, medical ethicists, and lawyers have urged Congress not to pass the legislation.

“One of my greatest priorities is to reduce the price of prescription drugs. In many other countries, these drugs cost far less than what we pay in the United States. And it is very, very unfair. That is why I directed my administration to make fixing the injustice of high drug prices one of my top priorities for the year. And prices will come down substantially. Watch.”

As a candidate, Trump promised to stand up to the pharmaceutical industry, and, unusually for a Republican, argued that Medicare should negotiate directly with drug companies to bring down prices. As President he has done… nothing.

Meanwhile, his State of the Union address gives no details on how his administration plans to fix the “injustice of high drug prices” this year– and given that he chose Alex Azar, a top executive at the pharmaceutical giant Eli Lilly, as his Secretary of Health and Human Services, we’re not holding our breath.

Opioid Crisis

“In 2016, we lost 64,000 Americans to drug overdoses. 174 deaths per day. Seven per hour. We must get much tougher on drug dealers and pushers if we are going to succeed in stopping this scourge. My administration is committed to fighting the drug epidemic and helping get treatment for those in need. For those who have been so terribly hurt, the struggle will be long and it will be difficult. As Americans always do, in the end we will succeed. We will prevail.”

Trump’s figures are correct, but so far his administration has done little to actually address the opioid crisis. In the spring he created an opioid commission to study the epidemic and make recommendations– the commission finally release its report in November, but the Trump administration has yet to act on any of them.

In an interim report released back in August, the commission recommended that he declare the opioid crisis a national emergency, which would open up billions of dollars in federal funding. Two waited two months and then in October issued a limited “public health emergency” declaration, which allowed some regulations to be waved, but it opened up just $57,000 (no we’re not missing any zeros) in additional funding– that’s two cents for each individual in the U.S. struggling with opioid addiction. Meanwhile, CNBC reports that “the Trump administration has actually taken steps that will hinder federal efforts to fight opioids […] It has proposed slashing federal substance abuse programs, as well as Medicaid funding, which supports addiction services.”

Passing an extension of funding for the Children’s Health Insurance Program (CHIP) should have been one of the easiest things Congress could possibly do on healthcare.

The CHIP program, which covers 9 million kids nationwide, is wildly popular: a poll from the nonpartisan Kaiser Family Foundation in November found that reauthorizing CHIP funding topped the American public’s list of priorities for Congress and President Trump:

The vast majority of politicians on both sides of the aisle support CHIP– or at least say they do. As always, there are disagreements between the parties about how to pay for it, but finding the money shouldn’t be that hard, since CHIP doesn’t cost all that much. In 2016, spending on CHIP was about $13.6 billion, or less than half a percent of the $3.3 trillion spent on health care last year in the U.S. (By comparison, we spent $672.1 billion on Medicare in 2016.)

CHIP also works really well– in 1996, the year before the program was introduced, the uninsured rate among children was 15%; by 2015 it was down to under 4.5%. And according to a survey of research on the impact of CHIP by the Kaiser Family Foundation, “A vast literature documents much greater access to care among children covered by Medicaid and CHIP relative to uninsured children.”

Yet somehow, Congress let CHIP funding expire in September, putting the health of millions of kids at risk– it then it took 114 days and a government shutdown before they finally acted. Why did it take so long? Good question…  

CHIP: a brief explainer

CHIP was passed into law in 1997 under President Bill Clinton with bipartisan support– in the Senate, the bill creating the program was cosponsored by Ted Kennedy, a Democrat, and Orrin Hatch, a Republican.

It’s designed to cover uninsured children in families whose incomes are too high to qualify for Medicaid, but still low enough where affording coverage could be a challenge. (The ACA provides an option for many families, but thanks to what’s known as a “family glitch” if an employer offers coverage to an employee but not his or her children, the entire family is still ineligible for the ACA subsidies that make premiums affordable.)

CHIP is structured sort of like Medicaid: the federal government provides most of the funding, but it’s administered at the state level, and states can set their own eligibility levels. The original legislation provided states with federal funds to cover children in families whose incomes were up to 200% of the poverty line; the CHIP Reauthorization Act signed by President Obama in 2009 raised that cutoff to 300% of the poverty line.

One major difference between Medicaid and CHIP though is that Medicaid is an entitlement program, meaning that states get federal funding on an as-needed basis– the federal government covers a certain percentage of the cost, no matter how many people sign up or how much their care costs. CHIP, on the other hand, is a block grant program, meaning that states get a fixed amount of money for CHIP each year– if a state runs out, then it’s on the hook for the extra cost. In practice though, CHIP has always received enough funding that states don’t run out (that’s in contrast to the GOP’s recent proposals to convert Medicaid into a block grant program, which are typically just a sneaky way to gut Medicaid funding).

The other big difference is that Medicaid doesn’t expire, and its funding is mandatory— in other words, Congress doesn’t have to keep voting every year to appropriate money for it, since its spending level is set by the law itself. CHIP, however, was established in 1997 as a ten-year program, which means that every so often Congress has to vote to extend it. The latest reauthorization was set to expire on September 30, 2017.

CHIP was originally funded by a tax on tobacco products, but that funding wasn’t locked in. When the Congressional Budget Office does its budget scoring it looks at current law and doesn’t assume that Congress will reauthorize temporary programs– even ones as popular as CHIP– so whenever CHIP has been set to expire, it assumes the money from those tobacco taxes will go to the general fund. This means that every time Congress extends CHIP it has to find new money to offset the cost, or else it will be counted as increasing the deficit.

So… what took Congress so long?

One of the biggest problems in getting a CHIP reauthorization passed was finding $8 billion a year in offsets that both parties could agree on.

In October (which by the way was after CHIP funding had expired– more on that in a sec), the House Energy and Commerce Committee passed a bill that would have funded CHIP through 2022, and paid for it by making a couple minor changes to Medicaid and increasing the premiums that the wealthiest Americans (those making more than $500,000) pay for Medicare. These offsets were nearly identical to those in a bipartisan bill passed by the Senate Finance Committee.

However, this bipartisan compromise was rejected on the floor of the House. House Republicans instead used the bill as an opportunity to troll Democrats, since what they did pass was obviously going nowhere in the Senate. The bill would have offset the cost of CHIP by (1) ending the grace period for people who are late paying their ACA insurance premiums, causing an estimated 500,000 people to lose coverage; (2) denying coverage to kids while billing issues were being resolved; and (3) eliminating the ACA’s Prevention and Public Health Fund.

Really though, the whole offset conversation was somewhat misleading, since, as the Intercept’s Rachel Cohen pointed out, Republicans in Congress have repeatedly chosen to ignore offsets in order to get their priorities passed:

Just last month, when Congress passed a bill to repeal the Independent Payment Advisory Board, a panel created through the ACA to make cost-saving recommendations, legislators waived the $18 billion offset requirement. And now Congress is preparing to pass a mammoth tax reform bill that the Joint Committee on Taxation said Wednesday would fall almost $1 trillion short of paying for itself. Offsets be damned.

Watching Republican senators like Orrin Hatch say that, “The reason CHIP’s having trouble is because we don’t have money anymore,” while at the same time pushing for a tax cut that mainly benefited corporations and the wealthy which would add a trillion dollars to the deficit was especially infuriating.

However, one weird silver lining of the GOP’s tax plan is that after it passed, Congress could pass CHIP basically for free. That’s because the tax bill also repealed the ACA’s individual mandate, which will drive up premiums for plans on the exchanges and the cost of subsidies to help pay for those premiums. According to the Congressional Budget Office on January 5, covering kids through CHIP would cost the government less money than paying for subsidies for private coverage on the exchanges– reauthorizing CHIP until 2022 would cost less than a billion dollars over the five years; reauthorizing it until 2027 would save the government $6 billion.

Despite the fact that reauthorizing CHIP would now save the government money, the Republican-controlled Congress still didn’t act. Instead, they passed a three week extension of CHIP, and then tried to use the program as leverage in a fight over the federal budget, despite the fact that at least six states — Arizona, California, the District of Columbia, Minnesota, Ohio, and Oregon — were expecting to run out of CHIP money sometime in early February.

It turns out that CHIP wasn’t the only thing Congress had neglected to fund– they also hadn’t passed a budget, which meant they needed to pass a continuing resolution (CR) by 11:59 pm on Friday January 19th to keep the federal government open. Republicans didn’t have enough votes in the Senate to pass a CR on their own, and Democrats had two demands: CHIP funding and DACA (legislation to protect young undocumented immigrants whose parents brought them to the U.S. when they were children).

The American public supports both programs by huge margins, and both programs have bipartisan support in Congress– they would pass easily if they came up for a vote. Republicans agreed to a six-year extension of CHIP, but refused to take action on DACA. Presumably this would allow the GOP to run ads saying that Democrats shut the government down because they’d rather protect illegal immigrants than fund children’s healthcare. However, neither side likes a shutdown, and it only lasted until Monday, when Republicans agreed to attach the six year CHIP extension to a three-week CR, and promised to hold a vote on DACA before the CR expired.

So to recap… Polls showed the American public saying that extending CHIP funding should be Congress’s top priority. When they finally got around to it– after the funding had expired– Republicans killed a bipartisan bill to fund it, and moved onto a tax plan that added a trillion dollars to the deficit while insisting that they couldn’t find the money to fund CHIP. Then after finding out that they could pass an extension of CHIP basically for free, the GOP instead used it as leverage in budget negotiations in an attempt to get Democrats to choose between children’s healthcare and protecting the Dreamers, both of which are wildly popular. Oh and they only agreed to a six-year extension, when a permanent extension would have reduced the deficit.

In the end, it’s tempting to say that all’s well that ends well, since Congress eventually did the right thing (on CHIP anyways– the fate of the Dreamers is still unclear) and no state ran out of CHIP funding before the program was reauthorized. However, Joan Alker, executive director of the Georgetown University Center for Children and Families, told NPR “[she] worries that the months of uncertainty around CHIP may have already caused children to drop out of the program, increasing the uninsured rate among children.” Hopefully the current leadership in Congress saw that. We know that playing stupid political games is kind of their bread and butter, but it shouldn’t be too much to ask that they knock it off when kids’ lives are at stake.

Earlier this year, we heard one of the hosts of a popular political podcast start using a new qualifier: “in Trump-adjusted terms.” She mostly used it to describe how she was feeling on a given day– “I’m fine (in Trump-adjusted terms)”– but it works in all sorts of situations. A boring week (in Trump-adjusted terms) would be one where the President of the United States doesn’t edge us closer to nuclear war with an unstable dictator on Twitter. A successful meeting (in Trump-adjusted terms) is one in which he doesn’t accidentally reveal classified intelligence to a foreign adversary or ask racist questions about immigration.

It’s also a good way to think about the state of American healthcare in 2017. For those of us who believe that everyone in this country should have access to affordable healthcare, the raw numbers are disappointing:

• The uninsured rate had hit a record low of 10.9% at the end of 2016; by the fall of 2017 it had crept back up to 12.3%. That represents 3.2 million Americans becoming uninsured.
  Enrollment in the Obamacare marketplaces was expected to increase slightly in 2017; yet, at least on the federal marketplace that serves 39 states, 400,000 fewer people signed up for 2018 coverage.
• Thanks largely to the Trump administration’s decision to stop paying cost-sharing reduction (CSR) subsidies and uncertainty about whether the individual mandate would be enforced, average premiums increased by about 30% this year.
• The GOP managed to repeal the individual mandate as part of its tax plan, which could increase premiums even more in 2019.

Still though, if you had told us that a year into the Trump administration the vast majority of the ACA would still be standing and covering almost as many people as it had in 2016, we would have been relieved. In other words, 2017 was a pretty good year for the ACA… in Trump-adjusted terms. Here are three reasons why.  

1. Obamacare repeal was defeated

Republicans in Congress had been promising to repeal and replace the Affordable Care Act since the law passed in 2010, and in 2017 they controlled both houses of Congress and the presidency. Things did not look good.

However, while the GOP had spend seven years arguing that Obamacare was a disaster that needed to be repealed, they had pretty much ignored the “replace” part of their “repeal and replace” pledge. It turns out that writing a health reform bill is complicated (who knew?) and what the GOP wanted– less federal spending on healthcare and less government involvement– also meant providing worse coverage and covering fewer people. People who were at risk of losing coverage were, of course, not happy and let their elected representatives know loudly and often.

Republican leaders Paul Ryan and Mitch McConnell knew that as more people found out what the bills actually did the less popular those bills became, and responded by trying to jam them through Congress as quickly as possible. This meant no public hearings, no CBO scores (at least until after Congresspeople had voted),  and not even a pretense of trying to work with Democrats. In the end though, even this strategy failed, as Senator John McCain, citing concerns about the process, joined Senators Susan Collins, Lisa Murkowski, and every single Democrat in voting down the last ditch “skinny repeal” bill. (Here’s how crazy the process got: Senate Republican leaders were reportedly still writing the bill over lunch the day of the vote.)

President Trump has tried to argue that when he and Congressional Republicans repealed the individual mandate as part of their tax bill in December, “We have essentially repealed Obamacare.” As usual, Trump is wrong.

It’s true that the individual mandate is an important part of the ACA– it gives younger, healthier people an incentive to buy insurance instead of waiting until they get sick. But now that the ACA has been up and running for a few years, there’s some debate as to how important it actually is.

For starters, the penalty isn’t that large– as Vox’s health reporter, Dylan Scott, points out, “For many people who might be on the fence, it is still cheaper to pay the penalty than to purchase health coverage.” Also, most people who get coverage under the ACA qualify for subsidies to help cover their premiums– so even if some healthier people do drop out because there’s no longer a mandate, most people who remain won’t see their premiums go up significantly. (However, those who make too much to qualify for subsidies will see their premiums jump.)

In its score of the GOP tax plan, the nonpartisan Congressional Budget Office estimated that repealing the individual mandate would result in 13 million fewer people insured by 2027 and would increase premiums by 10%. Those estimates may be too high though: the CBO is in the process of updating the way it estimates the effects of the individual mandate, and it recently stated that, “The preliminary results of analysis using revised methods indicates that the estimated effects on health insurance coverage will be smaller” than the old estimates.

However, even if the CBO’s original estimate is correct, that still means that even without the mandate, up to 20 million people who would have been uninsured will still have coverage thanks to the ACA.

2. CSR sabotage probably backfired

While Congress tried to repeal Obamacare, the Trump administration tried to sabotage it by ending cost sharing reduction (CSR) payments to insurers.

We have a longer explanation of CSR’s here, but basically, under the ACA, people with incomes lower than 250% of the federal poverty line get a subsidy that reduces their out-of-pocket costs if they by a Silver level plan. In 2014, House Republicans sued to stop the payment of these subsidies, which go directly to insurers, saying that Congress had never appropriated the money to pay them. The Obama administration of course disagreed, and the case had been making its way through the courts, but in October the Trump administration said it was simply going to end the CSR payments, starting in 2018.

Insurers still have to reduce out-of-pocket costs on Silver plans for the folks making less than 250% of the poverty level though, despite the fact that they’re not getting reimbursed. In most states insurers responded by increasing premiums for Silver plans by about 14% on average. So successful sabotage by the Trump administration, right? Not so fast.

For anyone making less than 400% of the poverty line, your premium subsidy is tied to the cost of the second cheapest Silver plan, but you can use it one any level of plan. If you want to use it on a Silver plan, then not much changes– premiums for Silver plans increased by 14% on average, but so did your subsidy, so the cost to you is roughly the same. But you could use your subsidy on a Gold or Platinum plan, which tends to have much lower deductibles. Premiums for those plans didn’t change, but your subsidy is a lot higher, so the price you actually pay for these better plans is a lot lower than it was last year. In many places, you can likely get a Gold plan for roughly what you were paying for a Silver plan last year– a way better deal.

The people who lose out are those whose incomes are above 400% of the poverty line– too high to qualify for subsidies. They pay sticker prices, and all of the sudden sticker prices for silver plans in 2018 are 14% higher than they would have been. However, in states that run their own marketplaces there’s a solution for that too, which health policy nerds have dubbed the “silver switcheroo.” Basically insurers can offer the same Silver plan on and off the marketplaces– Silver plans offered off-marketplace would be slightly cheaper (basically the price they’d have been without Trump’s CSR sabotage). Folks who don’t qualify for subsidies can buy that folks who do qualify for subsidies buy on-marketplace, where their higher subsidies cancel out the higher premiums.

We know that’s a little hard to follow– Charles Gaba at the website ACA Signups has a much more in-depth explanation here. But the main takeaway is that while the Trump administration saw ending the CSR’s as a chance to weaken Obamacare, taking them away meant that many lower income people can now get better coverage at a lower cost than before.

3. Despite Trump’s best efforts to break the ACA, nearly as many people signed up for coverage as last year

The Trump administration also took a number of steps to make it harder for people to learn about coverage options and harder to enroll through healthcare.gov. New York Magazine’s Eric Levitz listed some of them:

Trump’s Health Department cut funding for the law’s outreach groups; slashed Obamacare’s advertising budget by 90 percent; spent a portion of the remaining ad budget on propaganda calling for the law’s repeal; cut the open-enrollment period by 45 days; announced that it would be taking Healthcare.gov (where people can enroll in Obamacare online) offline for nearly every Sunday during that time period, for “maintenance” purposes; and derided the law in official statements as “a bad deal” that “many won’t be convinced to sign up for.”

And yet, despite all these efforts to discourage people from enrolling, 8.8 million people signed up through healthcare.gov during this year’s open enrollment– just 4.5% fewer than last year. We don’t have a final count on the total number of signups because open enrollment is still happening in some states that run their own marketplaces. However, those state-run marketplaces have been doing even better than last year, so the final tally of signups through all the marketplaces will likely come pretty close last year’s 12 million enrollments.

Given all the ways the Trump administration tried to sabotage Obamacare in 2017, that’s an impressive figure. However, as Levitz notes, “In the absence of such concerted sabotage, enrollment would have almost certainly been far higher.” In other words, if the ACA held up better than we expected under Trump and a Republican Congress in 2017, just imagine how well it would be doing without them.