June 24, 2017

McConnell’s Deal-Making Yields to Politicking

But as Congress trudges toward its next budget showdown, the Mr. Fix-It of Washington is looking more like its Invisible Man as he balances his leadership imperatives with his re-election.

“The House and the White House in the end will have to reach some kind of understanding on both these issues,” Mr. McConnell said last week as he sat in his spacious Capitol office and looked toward Sept. 30, when much of the federal government runs out of money, and mid-October, when it exhausts its borrowing authority. “I don’t intend to participate in any discussion, publicly or privately, that raises taxes or spends more than current law.”

That may prove to be more threat than destiny. The taciturn lawmaker is known for playing his cards extremely close to his vest, and when he has swooped in to resolve impasses, he has usually come in late — more a closer than a middle reliever. But his decision to stay out of the budget fray is one of the central reasons a resolution seems distant at the moment.

Democrats and, increasingly, Republicans are complaining that the minority leader’s absence from many of this year’s most intense and consequential negotiations — from the immigration overhaul to the budget to a fight over internal rule changes that almost paralyzed the Senate — has created a power vacuum and left Democrats without a bargaining partner.

They worry that Mr. McConnell is too hamstrung by political concerns in the Capitol and back home in Kentucky. In Washington, a rebellious crop of new Republican senators, led by Ted Cruz of Texas, has rejected his compromising brand of politics. Mr. Cruz has led the charge to tie any further government financing to gutting President Obama’s health care law, a movement that has angered many veteran Republicans and brought the federal government to the brink of a shutdown.

On Monday, Mr. McConnell gave the first indication of how he will figure into the budget standoff, saying that he would support a House bill that denies financing for the health care law, putting him at odds with Mr. Cruz, who has encouraged his colleagues to filibuster the bill so Democrats cannot amend it.

And in Kentucky, the junior senator, Rand Paul, has largely set the agenda for a Tea Party-infused Republican Party there.

Mr. McConnell is dealing with an unwanted primary challenge from a well-financed Tea Party candidate who keeps telling Kentucky voters the senator is an establishment pawn.

Mr. McConnell is leading his challenger by a large margin in internal polls. But after Tea Party candidates rose from nowhere in the past two elections to beat veteran senators, Mr. McConnell is leaving nothing to chance.

“He’s got an election,” said Senator Harry Reid of Nevada, the majority leader. “And that’s his No. 1 concern. I hope we can work together on things, but we’ll just have to wait and see.”

What worries members of both parties is that efforts to work around Mr. McConnell and bridge the partisan disagreements over the budget, health care and taxes have failed.

Early this year, just off his re-election triumph, Mr. Obama tried to reach out to Senate Republicans beyond the leadership. This group, called the “sounding board,” met repeatedly with the White House chief of staff, Denis McDonough, and other senior White House officials and came away with nothing.

Senator Lindsey Graham, Republican of South Carolina and a member of that group, said what was lacking was the level of trust that would persuade the two sides to accept a deal that would be politically difficult for both sides’ most dedicated activists to swallow. He said that Vice President Joseph R. Biden Jr. and Mr. McConnell trusted each other. No other partners have emerged in Mr. McConnell’s absence to fill “probably the biggest missing ingredient,” Mr. Graham said.

Article source: http://www.nytimes.com/2013/09/24/us/politics/often-at-the-forefront-mcconnell-seems-to-step-back.html?partner=rss&emc=rss

Economix Blog: The Path to Complexity on the Health Care Act

Jared Bernstein is a senior fellow at the Center on Budget and Policy Priorities in Washington and a former chief economist to Vice President Joseph R. Biden Jr.

In contemplating the one-year delay in the Affordable Care Act’s employer penalty, I was reminded that the health care law is an awfully complicated piece of work.

Today’s Economist

Perspectives from expert contributors.

I’m a supporter of the bill, and someone who was working for the administration when health legislation was designed, so let’s be clear: the fact that it’s complex doesn’t mean its implementation is anything like the train wreck that conservative Republicans (and Max Baucus) like to call it.

In fact, as I read the recent report from the Government Accountability Office on setting up the state exchanges — the most complex part of the bill’s implementation — I’d say it’s proceeding apace despite train wreckers trying to derail it. I suspect most state exchanges will be up and running on Oct. 1 (the federal government is setting up and will operate most of them), and when you consider the magnitude of this challenge amid the blowback and underfunding of the effort, if I’m even close to correct, that will be a very impressive outcome.

But when the White House announced the delay in the employer penalty, a lot of people pointed out that had the United States gone with a single-payer, Medicare-for-all style system, it wouldn’t have had to futz around with Rube Goldberg policy structures like that in the illustration below from the Congressional Research Service on the employer penalty.

Congressional Research Service

It’s a fair point, and one that took me back to my days of selling the bill out on Pebble Beach, that little strip of land next to the White House where television cameras film administration officials. A typical interview back then (2009-10) would usually involve a reporter asking me to defend the proposed reform and explain why the people should be for it. I cringe to think that I often started out by suggesting that it had the potential to “bend the cost curve” — i.e., slow the unsustainable growth of health costs.

Why cringe? Not because I was wrong — that was a major motivator and the law may already be showing some promise in that critical regard. The cringe is because very few listeners knew what to make of that assertion, and it certainly didn’t answer what they really wanted to know, which was, “How is this thing going to affect me and my family?”

That’s why being able to say the other line I recall using out there — “If you’re happy with your current coverage, this law won’t affect you at all” — was so important. And that’s also why we’re stuck with a lot more complexity than we’d like.

To understand why we are where we are with the Affordable Care Act, it’s useful to think about the concept of path dependency, meaning that where you end up is often a function of where you start out. And in the United States, we start out with an employer-based system. Though employers have been shedding coverage, about 58 percent Americans and their families are still covered through their job, down from 68 percent a decade ago (not counting older Americans). Perhaps more importantly, among those with private coverage, a group that the opposition was and is trying to scare about the impact of the law, about 90 percent are covered through their employer.

That’s the path we started on, and our judgment was that straying from that path would doom the bill. I suspect we were right. I can assure you that being able to hammer home that line about keeping what you have was very important and comforting for people to hear. Passing the law was in no small part about convincing a majority of passengers on an already rickety boat that they’d be better off if they threw a life preserver to the minority floundering in the water.

That doesn’t mean that what we ended up with is optimal. Certainly, the addition of a public, Medicarelike option within the health care exchanges would have been a good compromise, a way to stay on the path but branch off in a more progressive direction. But even without that, objective analysts score the bill as eventually covering millions of people and saving billions of dollars.

Could we have bucked path dependency? Must we continue to accommodate the employer-based system, not to mention the powerful insurance industry deeply embedded in America’s uniquely inefficient health care delivery system? Do we really need a bunch of separate health care exchanges?

Well, private insurers supported the law only when it looked as though they’d get to cover a lot more people, with many getting subsidized coverage. Though the coverage offered in the exchanges has to meet national standards, states will continue to regulate the insurers within their borders. (The state accommodations are particularly ironic, because deference to states run by arch conservatives is turning out to be a tough implementation barrier; according to G.A.O., 11 states say they lack “the authority to enforce or are not otherwise enforcing” the insurance market provisions of the Affordable Care Act. It’s starting to look like the euro zone out there.)

Perhaps my former colleagues and I lacked imagination, but in the case of health care, with large, risk-averse majorities worried about keeping what they had, powerful industries lining the existent path and a largely reactionary House of Representatives, it’s hard to imagine that we could have deviated from path dependency.

So as the implementation season proceeds and new delays and complications pop up, remember the rocky path we started on. I firmly believe that if we can fully carry out the Affordable Care Act — and I think we will — the path will become smoother. And that means the next round of reform will start from a better place.

Article source: http://economix.blogs.nytimes.com/2013/07/16/the-path-to-complexity-on-the-health-care-act/?partner=rss&emc=rss

Today’s Economist: Casey B. Mulligan: Massachusetts Employees Will Keep Their Health Plans

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Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

Massachusetts and a few neighboring states are likely to experience the Affordable Care Act a lot differently than the rest of America.

Today’s Economist

Perspectives from expert contributors.

Massachusetts is often held up as a window into America’s health insurance future, because it embarked on what came to be called the Romneycare reform six years ago. Like the Affordable Care Act provisions going into effect nationwide next year, Romneycare aimed to increase the fraction of the population with health insurance by imposing mandates on employers and employees and by subsidizing health insurance plans for middle-class families without employer plans.

Because the subsidized plans are available for only low- and middle-income families whose employers do not offer affordable health benefits, some analysts fear employers around the nation will drop their health benefits as the Affordable Care Act goes into full effect, resulting in millions of people losing the opportunity to get health insurance through an employer.

But some people say they believe this fear is likely to be unfounded, because the propensity of Massachusetts employees to receive employer-sponsored health insurance was hardly different after Romneycare went into effect than it was in the years before.

The details and dollar amounts in the Massachusetts health care law differ from the national Affordable Care Act, and for that reason alone I hesitate to infer too much from the Massachusetts experience. Even if the two laws were essentially the same, the effects in Massachusetts could be different than the national effects because Massachusetts has a different population and business environment than the rest of the nation.

Last week I explained how specific types of employers could be expected to drop their health benefits during the next couple of years: those employers that currently offer benefits but nonetheless pay much of their payroll to people living in households below 300 percent of the federal poverty line, who are eligible for the most generous federal subsidies as soon as their employer ceases to offer benefits.

Massachusetts has an extraordinary fraction (almost two-thirds) of its population above 300 percent of the federal poverty line, and as a result practically all Massachusetts employers will prefer to retain their health benefits over the next few years, even though a significant fraction of employers elsewhere will not.

One way to quantify the difference between Massachusetts employers and employers elsewhere is in the percentage of payroll going to employees from families below 300 percent of the poverty line. At a national level, the percentage varies from 4 percent in Internet publishing to about 50 percent in restaurants and private household employers. The national average is 20 percent, compared with 13 percent in Massachusetts.

Employers have a variety of factors to consider in their benefit offering decisions, but I have made some estimates that focus on the payroll-composition statistics noted above. By my estimates, employers with percentages of 26 to 35 percent of employees above 300 percent of the poverty level have a sufficiently high percentage that they are likely to have been offering health insurance benefits before the Affordable Care Act. Yet they have a low enough percentage that their employees gain on average if the employer health benefit is dropped and employees take the subsidies available through the Affordable Care Act’s health insurance exchanges.

About 10 percent of employees with health insurance live in a state and work in an industry with compensation percentages in the range where profits are to be gained by dropping employer health insurance. But none of them live in Massachusetts, and some states that border Massachusetts, including New Hampshire and Connecticut, are in a similar situation.

A number of states and industries – especially the industries I emphasized last week – have more than 35 percent of their payroll paid to people in families under 300 percent of the poverty line and are unlikely to be offering employee health benefits.

But those employers in Massachusetts who have 35 percent of their payroll paid to people in families under 300 percent of the poverty line are more likely to offer some kind of health benefit, in part because of Romneycare’s incentives to create “cafeteria plans” in which employees authorize pretax salary to be withheld from their paychecks for the payment of health insurance premiums.

Under the federal law, the Massachusetts cafeteria plans will lose some of their advantages to employers in terms of avoiding penalties for failure to offer health benefits.

Based on the combination of these two factors — that no Massachusetts industries have 26 percent to 35 percent of their employees under 300 percent of the poverty line, and that Massachusetts employers will lose the advantages of their cafeteria plans — I calculate that employers offering health insurance in Massachusetts are one-third as likely to drop their employee health plans over the next couple of years as are employers in the rest of the nation.

That’s because the percentage of the United States work force at risk of losing its employer insurance (because of the tendencies of their industry and states to have low- and middle income employees) is three times the percentage of the Massachusetts work force in the same situation.

Article source: http://economix.blogs.nytimes.com/2013/05/22/massachusetts-employees-will-keep-their-health-plans/?partner=rss&emc=rss

Today’s Economist: Casey B. Mulligan: The Incomes of Physicians

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Casey B. Mulligan is an economics professor at the University of Chicago. He is the author of “The Redistribution Recession: How Labor Market Distortions Contracted the Economy.”

Laws that govern training and licensing of physicians influence their incomes at least as much as health care demand does.

Today’s Economist

Perspectives from expert contributors.

Medical doctors are a critical part of the supply of health services and their incomes are an important determinant of health care costs.

While a desire to help people motivates men and women to become physicians and go to work every day, that desire has existed for centuries and will continue to exist in the future and thereby is not the primary variable that causes physicians’ incomes to fluctuate over time.

By law, physicians are educated people, the types of people who would have earned college degrees, if not advanced degrees, even if they had never become doctors. For this reason, the incomes of physicians depend on the supply-and-demand factors determining the incomes of college graduates generally, such as technological change and the emergence of worldwide markets in many products.

As the wages of scientists, accountants, lawyers and other college-graduate professionals have pulled ahead of the wages of high school graduates, so too have the incomes of physicians, because most aspiring physicians have the option to enter another profession instead (Figure 2, on Page 37 in this paper, shows how incomes of physicians have been pretty constant relative to those of lawyers since World War II).

You would think that a greater demand for health care, such as the demand associated with the aging of the population or perhaps a universal health care law, would increase physicians’ incomes as more patients (or insurance companies on the behalf of patients) compete for physicians’ time. And that’s true in the short run, because physicians take many years to train. But demand is less important in the longer term (a decade or two).

In the long term, a relatively small increase in the incomes of physicians could be enough to attract a substantial number of physicians from pursuing other careers or from pursuing medicine in other countries (that’s one reason my Economix colleague Uwe Reinhardt concluded that the slow aging process was not a major cost driver in health care). Indeed, some of today’s physicians began their careers understanding that the population was aging and the health care industry offered many job opportunities (see also this paper on career choice and industry prospects).

Barriers to professional entry may have a greater influence on physicians’ incomes than health care demand would by itself. Laws regulate the training and licensing of physicians and the tasks that can be performed by people without a doctor of medicine degree. The number of medical schools in the United States has hardly changed since the 1980s, despite significant population growth.

Perhaps the restrictions on medical training and licensing are desirable, even though they raise physicians’ incomes.

State laws are starting to widen the scope of medical services that can be performed by nurses and physician assistants to include services previously permitted only by medical doctors. Physician outsourcing has also been discussed.

It is possible that the new health care law, with its emphasis on reducing costs, will apply pressure to ease restrictions on entry into the provision of health care services. On the other hand, centralized health care policy may naturally seek the advice of industry experts – especially medical doctors – who may appreciate the merits of keeping medical doctors closely involved with the provision of health services.

Article source: http://economix.blogs.nytimes.com/2013/02/13/the-incomes-of-physicians/?partner=rss&emc=rss

Bucks Blog: Breast Pump Coverage Under New Law Varies In Practice

As part of its coverage of preventive health-care services for women, the Affordable Care Act requires many insurance plans to provide equipment and services to promote breast-feeding, like breast pumps and lactation counseling, at no extra cost.

The requirement took effect last summer but kicked in for many plans on Jan. 1, the start of new insurance plan years for many employers.

The coverage could potentially save breast-feeding women hundreds of dollars. But there is considerable variation in what sort of pumps are covered, and how they are covered. The law’s recommendations aren’t specific, so coverage varies from health plan to health plan. Some cover purchase of manual pumps only; others exclude hospital-grade pumps, often used soon after birth to help mothers establish adequate milk flow (although some plans cover such pumps if a doctor deems one medically necessary). Most plans require women to obtain the pumps from designated vendors, which may or may not offer the model a woman prefers; that means women usually can’t buy a pump at retail and submit a receipt for reimbursement.

Further, the health care law exempts plans that meet certain requirements, so not all plans have to provide the coverage, although some may choose to anyway. So even as the law’s requirement fuels demand for breast pumps, some women are uncertain how to go about getting one.

“There is a lot of confusion,” said Judy Waxman, vice president for health and reproductive rights at the National Women’s Law Center, which is urging the federal Department of Health and Human Services to issue more detailed recommendations. “Everybody’s winging it.”

Since coverage varies, the best thing to do is to contact your health plan, using the number on your insurance card. The women’s law center offers a script that can help you determine if your plan is offering the benefits, and how to use them.

A spokesman for H.H.S., Fabien Levy, said in an e-mail that the law allowed for flexibility:

“The law gives health plans the flexibility to decide whether to pay for women to purchase or simply rent a pump, and plans are allowed to use reasonable strategies to manage costs, for example covering only what doctors find to be medically necessary.”

He continued, “The nonpartisan Institute of Medicine recommended this coverage in part because preventive care, like breast-feeding, reduces health care costs by improving health outcomes for the baby and the mother. And, the independent economists at the Congressional Budget Office have reviewed the effects of all of the provisions of the law and found, on the whole, the Affordable Care Act will reduce premiums.”

The provision is one of eight preventive health benefits for women recommended by the Institute, which was asked to develop them by H.H.S. The agency endorsed the recommendations, making them required benefits under the health care law.

A fact sheet on H.H.S.’s healthcare.gov Web site states, “Pregnant and postpartum women will have access to comprehensive lactation support and counseling from trained providers, as well as breast-feeding equipment. Breast-feeding is one of the most effective preventive measures mothers can take to protect their health and that of their children. One of the barriers for breast-feeding is the cost of purchasing or renting breast pumps and nursing related supplies.”

There are several different types of breast pumps, however, from simple manual models to portable electric consumer models and larger, heavier hospital-grade pumps. Some women prefer initially to use hospital-grade pumps — often available for rent — to help establish their milk supply, then switch to a more portable electric pump when they return to work after giving birth.

As any woman who has pumped breast milk can testify, there is a difference between a manual model and an automatic pump. If you are a working mother who only has short breaks at work during which to pump, it’s unlikely you’ll pump sufficient milk with a manual pump to maintain your milk supply.

An Aetna spokeswoman says its benefit, for plans that cover women’s preventive services with no cost sharing, covers a standard (meaning nonhospital grade) pump within 60 days of birth, every three years, or a manual breast pump within twelve months of birth provided the patient hasn’t already received an electric or a manual pump in the last three years. If you become pregnant before you’re eligible for a new pump, you can still get another set of accessories — typically, tubing and containers — to use with the pump.

Women whose plans don’t cover the pumps without cost can still buy one at a discount through approved Aetna vendors.

A Cigna spokesman said in an e-mail that it developed its coverage based on the federal guidelines. “Cigna covers standard breast pumps as rental up to the purchase price, which is typically reached quickly, therefore the standard breast pump would be purchased for the individual. The breast pumps must be purchased through a national medical equipment company that Cigna contracts with. Hospital-grade pumps are rental only and are subject to precertification.”

Blue Cross Blue Shield of Illinois, according to a summary on its Web site, covers manual pumps only; a footnote explains that “electronic and hospital-grade pumps will not be covered with no cost sharing.”

And United Healthcare says on its Web site that it will cover rental or purchase of electric pumps at no cost to the member who must acquire the pump through an approved hospital or vendor, which will bill United directly for payment.

Have you tried to obtain a breast pump from your health plan under the new law? What was your experience?

Article source: http://bucks.blogs.nytimes.com/2013/01/28/breast-pump-coverage-under-new-law-varies-in-practice/?partner=rss&emc=rss

Amgen’s New Enbrel Patent May Undercut Health Care Plan

Enbrel, which is used to treat rheumatoid arthritis and psoriasis, was one of several biotechnology drugs that were expected to face competition in the next few years from copycat versions, eventually saving the health care system billions of dollars a year.

The 2010 health care law established a way for such biologic drugs, which can cost tens of thousands of dollars a year, to face competition from near generic versions, which are often called biosimilars. A new law was needed because biologic drugs, which are made in living cells, were not covered by the 1984 law governing most pharmaceutical competition.

The main patent on Enbrel was to expire in October of next year. But the new patent could stave off such biosimilar competition until Nov. 22, 2028. By that time, Enbrel will have been on the market 30 years, far longer than the 20 years of protection expected in patent law.

Enbrel had sales of $3.5 billion in the United States and Canada in 2010, accounting for nearly one-quarter of Amgen’s revenue. The drug costs more than $20,000 a year. Pfizer sells Enbrel abroad.

Merck announced in June that it planned to develop a biosimilar version of Enbrel, in a partnership with Hanwha Chemical of South Korea.

“Enbrel is widely considered to be one of the most important biosimilar molecules,” a Merck executive said in a statement at that time. Merck had no comment Tuesday on Amgen’s patent.

The application for the new patent was filed in 1995. But it took until Tuesday to get through the Patent Office because it was reworked and at one point rejected, forcing Amgen to appeal.

Patents now run 20 years from the date of application, to avoid situations like this where an invention gets extended protection because of delays or maneuvers at the patent office. But since this patent was filed before the law changed, it is governed by the old rules and lasts for 17 years from the date of issuance.

Amgen benefited from a similar situation with its anemia drug Epogen, which is still protected by patents even though it has been on the market since 1989.

The new patent on Enbrel, No. 8,063,182, is owned by Roche but was licensed to Amgen, which took it through the Patent Office.

Amgen executives said earlier this year that they did not anticipate biosimilar competition to Enbrel in the next five years anyway, in part because of other patents covering the use or formulations of Enbrel. But such patents tend to be weaker than one that covers the basic composition of the drug, as Amgen says the new patent does.

Still, it is possible that some biosimilar manufacturers will try to challenge the patent or work around it. And Enbrel might face competition from generic versions of other arthritis drugs, including Abbott Laboratories’ Humira, and from new oral drugs that might reach the market in the next few years.

Article source: http://feeds.nytimes.com/click.phdo?i=b6a706e5ca50205b387e0c11af4fe9c9

Bucks: Thursday Reading: Veteran Care Costs Will Continue to Rise

July 28

Thursday Reading: Veteran Care Costs Will Continue to Rise

The cost of treating veterans will continue to rise, a challenge to the health care law may reach the Supreme Court, two Southern states vie for the best peaches and other consumer-focused news from The New York Times.

Article source: http://feeds.nytimes.com/click.phdo?i=a7d0826838913fff82989c91c27255b7

Economix: How Health Insurance Affects Health

In the nearly year and a half since Congress passed the health care overhaul, one of the main purposes of the bill — to provide health insurance to people who lack it — has often been lost in the debate. Instead, supporters and opponents of the bill have argued over whether the bill is constitutional, and they’ve argued over whether the bill will cut medical costs more or less than the Congressional Budget Office projects.

Those are obviously important issues. But so is the fact that, unlike any other rich country in the world, the United States has tens of millions of people who do not have health insurance and therefore go without some forms of medical care.

A new study being released today, by some of the country’s top health economists, aims to estimate the effects of not having health insurance — and the effects are large.

The researchers used a lottery that the state of Oregon conducted in 2008 to determine who would become eligible to apply for a limited number of Medicaid slots. The researchers compared the health outcomes of those who won the lottery (many of whom then received insurance) and those who did not (who were more likely to remain uninsured).

The researchers have followed the subjects for only a year so far, so the paper has some clear limitations. But it nonetheless suggests that having health insurance substantially improves health. Expanding insurance does not save society money — as some advocates of preventive medicine have claimed — but it does appear to make people mentally and physically healthier.

The authors point out that the insurance in question — Medicaid — is the same one that many uninsured people will receive as part of the health care law. For that reason, among others, the paper suggests that the law is likely to improve the health and well-being of many of the uninsured.

Katherine Baicker — one of the authors and a Harvard economist who served in President George W. Bush’s administration — wrote the following to me, via e-mail:

There has been a great deal of uncertainty about how much of a difference Medicaid makes to enrollees. Some argued that Medicaid isn’t ‘good’ insurance coverage and that a Medicaid card doesn’t get enrollees much access to care. Others argued that the uninsured already have access to care through the emergency room, clinics, or charity care.

Our study shows that gaining access to Medicaid matters on a number of different dimensions, including increased access to and use of health care.

The authors also point out that the benefits of health insurance aren’t only medical. They’re financial too, as is the case with other forms of insurance. Here’s another author, Amy Finkelstein (an M.I.T. economist who has written for The Wall Street Journal opinion pages and whom I’ve written about), also via e-mail:

Health insurance isn’t just about access to health care – it’s also about protection from financial ruin. This point isn’t often discussed in the debate about health insurance expansions, but the reduction in financial strain that we found was substantial. This is important for enrollees, but it is also important for the providers who see fewer of their bills go unpaid.

Besides Ms. Baicker and Ms. Finkelstein, the paper’s authors include Jonathan Gruber (an M.I.T. economist, who has advised the Obama administration) and Joseph Newhouse (a Harvard economist who designed and ran the famous RAND Health Insurance Experiment in the 1970s and ’80s). The other authors are Sarah Taubman, Bill Wright, Mira Bernstein, Heidi Allen and members of the Oregon Health Study Group.

Excerpts from the study follow:

About one year after enrollment, we find that those selected by the lottery have substantial and statistically significantly higher health care utilization, lower out-of-pocket medical expenditures and medical debt, and better self-reported health than the control group that was not given the opportunity to apply for Medicaid.

The increase in hospital admissions appears to be disproportionately concentrated in the approximately 35 percent of admissions that do not originate in the emergency room, suggesting that these admissions may be more price sensitive.

[W]e find that insurance is associated with improvements across the board in our measures of self-reported physical and mental health, averaging two-tenths of a standard deviation improvement. These results appear to reflect improvements in mental health and also at least partly a general sense of improved well being; they may also reflect improvements in objective, physical health, but this is more difficult to determine with the data we now have available.

[I]nsurance is also associated with an increase in compliance with recommended preventive care. We look at four different measures of preventive care: blood cholesterol checks, blood tests for diabetes, mammograms, and pap tests. …[T]he results indicate … a 20 percent increase in the probability of ever having one’s blood cholesterol checked, a 15 percent increase in the probability of ever having one’s blood tested for high blood sugar or diabetes, a 60 percent increase in the probability of having a mammogram within the last year (for women 40 and over), and a 45 percent change in the probability of having a pap test within the last year (for women).

[Our] calculation suggests that insurance is associated with a $778 (standard error = $371) increase in annual spending, or about a 25 percent increase relative to the implied control mean annual spending.

Article source: http://feeds.nytimes.com/click.phdo?i=cc449c4862027e8bb8525e806cb27c6f

Health Law in a Swirl of Forecasts

After nearly two weeks of widespread queries and criticisms, McKinsey Company, the management consulting firm, posted on Monday the questionnaire and methodology of an online survey it had released that was denounced by the White House and others for contending that nearly a third of employers would definitely or probably drop coverage for employees when provisions of the health care law took effect in 2014.

The White House responded on Monday night. “As we learn more, it’s become clear that this one flawed study from McKinsey is truly an outlier,” Nancy-Ann DeParle, an assistant to the president and deputy chief of staff, said in a blog post.

The White House initially pointed to forecasts by the Congressional Budget Office and other experts whose estimates were much smaller in terms of whether employees would lose some or all coverage. For example, an Urban Institute study to be released on Tuesday suggests that employees in small businesses may receive more coverage, not less.

McKinsey also came under fire for not providing access to the survey’s authors, and for not publishing the questions, the types of employers taking part or the survey methodology.

In posting “details regarding the survey” on its Web site Monday, McKinsey acknowledged that its survey was “not comparable” to the studies by the budget office, Urban Institute or others using economic modeling.

Rather, it surveyed business owners using an online panel. McKinsey said it paid for the survey by Ipsos, a French marketing firm, “to capture the attitudes of employers,” large and small.

In addition, McKinsey seemed to be trying to address the criticisms by the White House and others, asserting that its report was not intended to be predictive.

McKinsey’s explanations did not satisfy Senator Max Baucus, chairman of the Senate Finance Committee, and several from the House who have inquired.

“This report is filled with cherry-picked facts and slanted questions,” he said in a statement. “It did not provide employers with enough information for them to make honest choices and fair evaluations. Rather than correct the major deficiencies in their report, McKinsey has chosen to again stand by their faulty analysis and misguided conclusions.”

Several other reports have focused on small businesses, the group having the hardest time dealing with rising medical costs.

The latest, issued on Tuesday, is by the Urban Institute, a Washington research center. Its study, based on analysis of Census Bureau and Department of Health and Human Services surveys, estimates that employer coverage will increase modestly for workers and their dependents in firms with 50 or fewer employees.

By contrast, Douglas Holtz-Eakin, who was an economic and health policy adviser to Senator John McCain’s presidential campaign, predicts that more than 35 million people will lose employer insurance. “We figured they would all end up in the exchanges,” the state-sponsored insurance agencies to be set up under the new law, he said in a telephone interview.

Over all, including all employers, analyses by a number of widely cited researchers predicted little or no change in employer-sponsored insurance in 2014. They include the Congressional Budget Office, RAND, Lewin Associates and Mercer.

John Arensmeyer, a small business advocate who supports the law, the Affordable Care Act, calls it “a big step in the right direction.” But he said a poll by his group, Small Business Majority, found that more than half of respondents did not know what was in the law.

“Once they learn about tax credits and the exchanges option, they are more inclined to participate,” Mr. Arensmeyer said.

Linda J. Blumberg, an Urban Institute researcher, said, “Contrary to a lot of statements that have been made in the press and elsewhere, the impact of the law on small employers is going to be positive in great degree.”

Mr. Holtz-Eakin headed a group of 105 economists who filed a brief supporting the lawsuit by Republican officials from 26 states seeking to have the Affordable Care Act overturned.

But Dr. Blumberg said Virginia and other states with Republican governors were working to set up the exchanges. Republicans prefer state exchanges to the probability of a federal version if they do not act.

Four states, West Virginia, Maryland, California and Colorado, recently passed laws to establish exchanges, and similar bills have been adopted by one house in a number of other states, she said. “There is a division between what the attorneys general are doing and what governors’ offices are doing,” she said.

Gerry Harkins, who owns a small construction company in Atlanta and is a spokesman for the National Federation of Independent Business, said he would try to “figure out a way to game the system.”

“This whole plan is really slanted toward large employers,” he said. Firms with 10 and fewer workers also should benefit. “The burden falls in the middle.” His company, Southern Pan Services, had 1,200 employees before the economic crisis. It now has “under 100,” he said.

He is considering splitting his company into two units to get under 50 employees each and reduce the $3,000 penalty, for each worker, he will face for his current health plan, which is entirely paid for by employees. Joseph R. Antos, a health policy expert at the American Enterprise Institute, criticizes the health law. He says it has “too much central direction and not enough appreciation for our fiscal situation.”

But Mr. Antos said large employers, who cover the majority of American workers, would probably wait several years after 2014 to see how the new system worked before deciding what to do. Those with union contracts will take much longer, he said.

He said the many variables in the law made predictions difficult. “Whatever you assume, is what you get out of it,” he said.

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