: WTF Is Going On? The Caligulization of America and the End of the American Century http://spitfirelist.com/news/the-gop-plays-the-health-care-poisonous-hot-potato-death-spiral-blame-game-with-itself-medicare-and-medicaid-death-spirals-part-of-rules/ Killing Granny: The GOP’s “One Size Fits All” Death Panel for Health Care Posted by Pterrafractyl ⋅ January 28, 2017 Tags Affordable Care Act, austerity, GOP, Medicaid, Medicaid Expansion, Medicare, Obmacare, Paul Ryan, Republican Party, Tom Price In this post we’re going to be taking another look at the GOP’s health care reform agenda. And since it’s the GOP’s health care reform agenda it’s inevitably going to include an examination of how it’s actually a privatization agenda that “saves health care” by reducing access to affordable health care and thus reducing the overall health care costs (and then probably letting you die early from the lack of health care via pre-existing condition waiver loophole). We’ll be returning to the “block granting” of Medicare and Medicaid to the states and then having those states either erode the programs over time or issuing another “block grant” to individuals in the form of a voucher. But we’re also going to look at another dimension to the GOP’s health care reform agenda: reforming who is going to carry that health care cutting agenda out and, in turn, reforming who gets blamed. Specifically, how the GOP plans on transferring blame for that agenda from Congressional Republicans to state-level governors and lawmakers by block granting Medicaid and Medicare to the states – but not letting those block grants grow fast enough to keep up with rising health care cots – and letting state governors and legislators decide what specifically gets cut. Blame redistribution/diffusion is a key part of this agenda but it could have interesting consequences. In addition to the predictably tragic consequences of cutting health care costs by cutting health care.
********************************* Change is coming to Washington DC. Mostly horrible changes. But as we’ll see in this post, there is one very significant and positive change coming as a consequence of the unified GOP control of the White House and Congress: GOP is actually going to start getting the blame it deserves for all the damage its pro-oligarch/anti-everyone-else agenda routinely inflicts upon the American people. Politics can be frustrating for a myriad of reasons, but one of the biggest sources of frustration is the cloud of perpetual obfuscation and confusion that tends to permeate the political discourse and collective understanding of what’s actually happening, why it’s happening, and who should be rewarded or blamed for it. But for the next couple of years, at a minimum, it’s going to be very clear who to blame for the damage DC is about to unleash, and it’s not just going to be Donald Trump:
Talking Points Memo Editor’s Blog The Republican Congress is Responsible By Josh Marshall Published January 28, 2017, 4:00 PM EDT For political and moral reasons, it is important to remember that very little of what the President is now doing is possible without a compliant Congress. Executive orders in most cases fill in the blanks that legislation leaves to the President’s discretion. So this isn’t just a matter of the sway a Congress of the President’s party can exercise over him, which is substantial. In many or most cases, Executive Orders and Actions can literally be overruled with new legislation. Since President Trump is unpopular, Democrats have a clear political incentive to tar the Republican Congress with Trump’s unpopularity. But this is not simply a political gambit. They make his actions possible. They are responsible for virtually everything he’s doing. How unpopular is he? The latest reputable poll (Quinnipiac) puts Trump’s approval rating at 36%, an unheard of level of unpopularity for a new President. Gallup’s number has generally been more favorable to Trump. But according to numbers released today, his net approval rating dropped 8 points during his first week in office. Again, virtually unheard of. Meanwhile a new AP-NORC poll shows weak for repealing Obamacare and that 56% of American are either “extremely” or “very” worried that many Americans will lose their health care coverage if Obamacare is repealed. An additional 27% are “somewhat” concerned.
The President is unpopular. His main policies are unpopular. His behavior is unpopular. The Congress makes everything he’s doing possible. Most of them are up for reelection in less than two years. “Since President Trump is unpopular, Democrats have a clear political incentive to tar the Republican Congress with Trump’s unpopularity. But this is not simply a political gambit. They make his actions possible. They are responsible for virtually everything he’s doing.” Yep, the American people didn’t just elect a new man-child for president. They also reelected the Republican-controlled Congress that’s going to be carrying Trump’s water and giving him a green light to carry out his agenda. And what is that agenda? Well, for the most part, it’s the classic GOP agenda of privatizing entitlements, slashing taxes on the rich, and burning down the social safety-net. Sure, Trump didn’t actually campaign on privatizing entitlements and gutting the safety-net, but as we’re going to see in the article excerpts below, he’s now made it abundantly clear that the GOP’s agenda is his agenda too…especially when it comes to entitlements and the safety-net. And the GOP Congress will be holding his hand and guiding his path every step of the say. So when the GOP-controlled Congress is carrying water for Trump they’re actually carrying their own water…without the help of the Democrats to take the blame like they might have been with divided control of the federal government in case everyone becomes all wet.
The Republicans Appear to Have a Guilty Conscience Fear of Getting Caught on Health Care Especially So the GOP and Trump have a particularly precarious mutual water-carrying operation ahead of them. And the fact that the water the GOP and Trump are carrying happens to be poisonous water – both politically poisonous – isn’t going to make it any easier. Especially when it comes to all the poisonous water they’re going to carrying in relation to health care reform since that’s going to be literally poisonous for the health and well-being of their constituents and therefore extra politically poisonous too. And while it’s clear that the GOP doesn’t actually care about the physical harm it inflicts upon the American people they really do care about the political harm they’re about to inflict upon themselves The Washington Post Behind closed doors, Republican lawmakers fret about how to repeal Obamacare
By Mike DeBonis January 27, 2017 at 11:08 PM PHILADELPHIA — Republican lawmakers aired sharp concerns about their party’s quick push to repeal the Affordable Care Act at a closed-door meeting Thursday, according to a recording of the session obtained by The Washington Post. The recording reveals a GOP that appears to be filled with doubts about how to make good on a long-standing promise to get rid of Obamacare without explicit guidance from President Trump or his administration. The thorny issues with which lawmakers grapple on the tape — including who may end up either losing coverage or paying more under a revamped system — highlight the financial and political challenges that flow from upending the current law.
Senators and House members expressed a range of concerns about the task ahead: how to prepare a replacement plan that can be ready to launch at the time of repeal; how to avoid deep damage to the health insurance market; how to keep premiums affordable for middle-class families; even how to avoid the political consequences of defunding Planned Parenthood, the women’s health-care organization, as many Republicans hope to do with the repeal of the ACA. “We’d better be sure that we’re prepared to live with the market we’ve created” with repeal, said Rep. Tom McClintock (R-Calif.). “That’s going to be called Trumpcare. Republicans will own that lock, stock and barrel, and we’ll be judged in the election less than two years away.”
Recordings of closed sessions at the Republican policy retreat in Philadelphia this week were sent late Thursday to The Post and several other news outlets from an anonymous email address. The remarks of all lawmakers quoted in this article were confirmed by their offices or by the lawmakers themselves. “Our goal, in my opinion, should be not a quick fix. We can do it rapidly — but not a quick fix,” said Sen. Lamar Alexander (R-Tenn.). “We want a long-term solution that lowers costs.” Sen. Rob Portman (R-Ohio) warned his colleagues that the estimated budget savings from repealing Obamacare — which Republicans say could approach a half-trillion dollars — would be needed to fund the costs of setting up a replacement. “This is going to be what we’ll need to be able to move to that transition,” he said.
Rep. Pete Sessions (R-Tex.) worried that one idea floated by Republicans — a refundable tax credit — would not work for middle-class families that cannot afford to prepay their premiums and wait for a tax refund. Republicans have also discussed the idea of generating revenue for their plan by taking aim at deductions that allow most Americans to get health insurance through their employers without paying extra taxes on it. Sen. Bill Cassidy (R-La.), who has drafted his own bill to reform the Affordable Care Act, said in response, “It sounds like we are going to be raising taxes on the middle class in order to pay for these new credits.” Rep. Kevin Brady (R-Tex.), who chairs a key tax-writing subcommittee, countered, “I don’t see it that way,” adding that there is “a tax break on employer-sponsored health care and nowhere else” equal to $3.6 trillion over 10 years. “Could you unlock just a small portion at the top to be able to give that freedom [to self-employed Americans]? That is the question,” Brady said. Rep. John Faso (R-N.Y.), a freshman congressman from the Hudson Valley, warned strongly against using the repeal of the ACA to also defund Planned Parenthood.
“We are just walking into a gigantic political trap if we go down this path of sticking Planned Parenthood in the health insurance bill,” he said. “If you want to do it somewhere else, I have no problem, but I think we are creating a political minefield for ourselves — House and Senate.” The concerns of rank-and-file lawmakers appeared to be at odds with key congressional leaders and Andrew Bremberg, a top domestic policy adviser to Trump, who have laid out plans to repeal the ACA using a fast-track legislative process and executive actions from the administration. However, these leaders acknowledged in Thursday’s meeting, as they have before, that Obamacare cannot be fully undone — or replaced — without Democratic cooperation. … House Speaker Paul D. Ryan (R-Wis.) dismissed the concerns aired in the meeting during an interview at a Politico event Friday. “We have a responsibility to work for the people that put us in office,” he said. “That’s the oath we take: to defend the Constitution, to fight for the people we represent, and this is a fiasco that needs to be fixed.” Of particular concern to some Republican lawmakers was a plan to use the budget reconciliation process — which requires only a simple majority vote — to repeal the existing law, while still needing a filibuster-proof vote of 60 in the Senate to enact a replacement.
“The fact is, we cannot repeal Obamacare through reconciliation,” McClintock said. “We need to understand exactly: What does that reconciliation market look like? And I haven’t heard the answer yet.” Several important policy areas appeared unsettled. While the chairmen of key committees sketched out various proposals, they did not have a clear plan for how to keep markets viable while requiring insurers to cover everyone who seeks insurance. At one point Cassidy, a physician who co-founded a community health clinic in Baton Rouge to serve the uninsured, asked the panelists a “simple question”: Will states have the ability to maintain the expanded Medicaid rolls provided for under the ACA, which now provide coverage for more than 10 million Americans, and can other states do similar expansions? “These are decisions we haven’t made yet,” said House Energy and Commerce Committee Chairman Greg Walden (R-Ore.). Rep. Tom MacArthur (R-N.J.) worried that the plans under GOP consideration could eviscerate coverage for the roughly 20 million Americans now covered through state and federal marketplaces and the law’s Medicaid expansion: “We’re telling those people that we’re not going to pull the rug out from under them, and if we do this too fast, we are in fact going to pull the rug out from under them.” Republicans are also still wrestling with whether Obamacare’s taxes can be immediately repealed, a priority for many conservatives, or whether that revenue will be needed to fund a transition period. And there seems to be little consensus on whether to pursue a major overhaul of Medicaid — converting it from an open-ended entitlement that costs federal and state governments $500 billion a year to a fixed block grant. Trump and his top aides, including counselor Kellyanne Conway, have publicly endorsed that idea. But doing so would mean that some low-income Americans would not be automatically covered by a program that currently covers 70 million Americans. Many of the concerns aired Thursday were more political than policy-oriented.
Faso’s remarks about Planned Parenthood generated tepid applause. Ryan said this month that he expects the House to pursue the organization’s defunding in the reconciliation bill. Those expressing qualms included some of the top congressional leaders who are in line to draft the health-care legislation. Alexander, for one, is chairman of the Senate Health, Education, Labor and Pensions Committee. Ryan and other leaders have said they intend to pursue a piecemeal approach, following the reconciliation bill with smaller ones that address discrete aspects of reform. … Faso warned that by defunding Planned Parenthood in the reconciliation bill, “we are arming our enemy in this debate.” “To me, us taking retribution on Planned Parenthood is kind of morally akin to what Lois Lerner and Obama and the IRS did against tea party groups,” he said, a reference to accusations that the Internal Revenue Service improperly targeted conservative political groups for audits. Faso continued: “Health insurance is going to be tough enough for us to deal with without having millions of people on social media come to Planned Parenthood’s defense and sending hundreds of thousands of new donors to the Democratic Senate and Democratic congressional campaign committees. So I would just urge us to rethink this.”
““We’d better be sure that we’re prepared to live with the market we’ve created” with repeal, said Rep. Tom McClintock (R-Calif.). “That’s going to be called Trumpcare. Republicans will own that lock, stock and barrel, and we’ll be judged in the election less than two years away.”” Is the GOP prepare to “live with the market we’ve created”? Well, it’s not quite the right way to phrase the question since it’s the American public, and not the GOP members of Congress, who are going to have to be “living” with the market the GOP creates. Or dying with it. The question is whether or not the GOP is ready to politically own what they’re about to do to American health care. And if the concerns expressed by the congressmen above are any indication of an answer to that question, no, the GOP is not ready to politically own what they’re about to do. In part because they really, really want to block grant Medicaid and get another doomed grand experiment in neoliberal austerity but are very mixed about keeping the Obamacare Medicaid Expansion. By block granting it and putting the grand game of federal-state Medicaid-cuts Political Hot Potato started. You don’t want to rush a game of Hot Potato of that nature. And set it on a path towards privatization. They aren’t sure they’re ready to start that quite yet. But Trump’s already on board so that’s not going to be an obstacle: … Rep. Tom MacArthur (R-N.J.) worried that the plans under GOP consideration could eviscerate coverage for the roughly 20 million Americans now covered through state and federal marketplaces and the law’s Medicaid expansion:
“We’re telling those people that we’re not going to pull the rug out from under them, and if we do this too fast, we are in fact going to pull the rug out from under them.” Republicans are also still wrestling with whether Obamacare’s taxes can be immediately repealed, a priority for many conservatives, or whether that revenue will be needed to fund a transition period. And there seems to be little consensus on whether to pursue a major overhaul of Medicaid — converting it from an open-ended entitlement that costs federal and state governments $500 billion a year to a fixed block grant. Trump and his top aides, including counselor Kellyanne Conway, have publicly endorsed that idea. But doing so would mean that some low-income Americans would not be automatically covered by a program that currently covers 70 million Americans. … And here’s the thing: when you hear GOPers fretting about “We’re telling those people that we’re not going to pull the rug out from under them, and if we do this too fast, we are in fact going to pull the rug out from under them,” don’t forget that all the GOP’s plans for health care reform involve pulling the rug out. It’s just supposed to happen slowly. That’s what block granting is all about. So concern about pulling the rug out too quickly aren’t really concerns about pulling the rug out from underneath their constituents.
They’re concerns about doing it so rapidly and noticeably the the public realizes what’s happening and the GOP ends up owning their politically poisonous policies. It’s a Matter of When, Not If, the GOP Block Grants Medicaid and the Death Spiral Begins. So Says Team Trump But it’s just a question of when, not if, the GOP has to seriously wrestle with the political consequences block granting Medicaid and setting it on a path towards a death by a thousand state-level cuts since Trump’s team is already signally its ready to carrying the GOP’s water on to the Medicaid block grant plan:
The New York Times Trump’s Health Plan Would Convert Medicaid to Block Grants, Aide Says By ROBERT PEAR JAN. 22, 2017 WASHINGTON — President Trump’s plan to replace the Affordable Care Act will propose giving each state a fixed amount of federal money in the form of a block grant to provide health care to low-income people on Medicaid, a top adviser to Mr. Trump said in an interview broadcast on Sunday. The adviser, Kellyanne Conway, who is Mr. Trump’s White House counselor, said that converting Medicaid to a block grant would ensure that “those who are closest to the people in need will be administering” the program. A block grant would be a radical change. Since its creation in 1965, Medicaid has been an open-ended entitlement. If more people become eligible because of a recession, or if costs go up because of the use of expensive new medicines, states receive more federal money. If Congress decides to create block grants for Medicaid, lawmakers will face thorny questions with huge political and financial implications: How much money will each state receive? How will the initial allotments be adjusted — for population changes, for general inflation, for increases in medical prices, for the discovery of new drugs and treatments? Will the federal government require states to cover certain populations and services? Will states receive extra money if they have not expanded Medicaid eligibility under the Affordable Care Act, but decide to do so in the future? Ms. Conway, speaking on the NBC program “Sunday Today,” said that with a block grant, “you really cut out the fraud, waste and abuse, and you get the help directly” to intended beneficiaries. Medicaid covers more than 70 million people at a combined cost of more than $500 billion a year to the federal government and the states. More than 20 million people have gained coverage under the Affordable Care Act, more than half of them through Medicaid. … As a candidate, Mr. Trump said he wanted to “maximize flexibility for states” so they could “design innovative Medicaid programs that will better serve their low-income citizens.” On Friday, in his first executive order, he directed federal officials to use all their authority to “provide greater flexibility to states” on the health law.
As part of their “Better Way” agenda, House Republicans said in June that they would roll back the Affordable Care Act’s expansion of Medicaid and give each state a set amount of money for each beneficiary or a lump sum of federal money for all of a state’s Medicaid program — “a choice of either a per capita allotment or a block grant.” Governors like the idea of having more control over Medicaid, but fear that block grants may be used as a vehicle for federal budget cuts. “We are very concerned that a shift to block grants or per capita caps for Medicaid would remove flexibility from states as the result of reduced federal funding,” Gov. Charlie Baker of Massachusetts, a Republican, said this month in a letter to congressional leaders. “States would most likely make decisions based mainly on fiscal reasons rather than the health care needs of vulnerable populations.” Gov. Robert Bentley of Alabama, a Republican, said that if a block grant reduced federal funds for the program, “states should be given the ability to reduce Medicaid benefits or enrollment, to impose premiums” or other cost-sharing requirements on beneficiaries, and to reduce Medicaid spending in other ways. In Louisiana, Gov. John Bel Edwards, a Democrat, said he was troubled by the prospect of a block grant with deep cuts in federal funds. “Under such a scenario,” he said, “flexibility would really mean flexibility to cut critical services for our most vulnerable populations, including poor children, people with disabilities and seniors in need of nursing home and home-based care.”
Gov. John W. Hickenlooper of Colorado, a Democrat, said that block grant proposals could shift costs to states and “force us to make impossible choices in our Medicaid program.” “We should not be forced to choose between providing hard-working older Coloradans with blood pressure medication or children with their insulin,” Mr. Hickenlooper said. “Governors like the idea of having more control over Medicaid, but fear that block grants may be used as a vehicle for federal budget cuts.” That’s some healthy fear right there. And why shouldn’t governors, especially GOP governors, fear what there federal GOP brethren have planned for them? It’s a plan that makes the governors and state legislatures the new leaders in implement all those cuts the GOP has been trying to do at the federal level for decades … “We are very concerned that a shift to block grants or per capita caps for Medicaid would remove flexibility from states as the result of reduced federal funding,”
Gov. Charlie Baker of Massachusetts, a Republican, said this month in a letter to congressional leaders. “States would most likely make decisions based mainly on fiscal reasons rather than the health care needs of vulnerable populations.” Gov. Robert Bentley of Alabama, a Republican, said that if a block grant reduced federal funds for the program, “states should be given the ability to reduce Medicaid benefits or enrollment, to impose premiums” or other cost-sharing requirements on beneficiaries, and to reduce Medicaid spending in other ways. … “Gov. Robert Bentley of Alabama, a Republican, said that if a block grant reduced federal funds for the program, “states should be given the ability to reduce Medicaid benefits or enrollment, to impose premiums” or other cost-sharing requirements on beneficiaries, and to reduce Medicaid spending in other ways.” Ok, so Governor Bentley of Alabama doesn’t appear to fear actually making the cuts to block granted programs like Medicaid. Instead he fears not being able to make those cuts when the GOP cuts the per-capita block grant size that the federal government is inevitably going to make, which is a somewhat silly fear since getting the states to cut health care expenditures is the whole point of block granting these programs. But what about the rest of the GOP governors like Governor Baker of Massachusetts? Are they also going to readily embrace the freedom to “reduce Medicaid benefits or enrollment, to impose premiums” or other cost-sharing requirements on beneficiaries, and to reduce Medicaid spending in other ways,” like Governor Bentley clearly had no problem doing? We’ll find out, but that’s all part of the GOP’s plan: convert Medicaid to a block grant and then let the state governors and legislators carry the water on implementing the actual cuts. It’s a GOP-style redistribution scheme: a scheme for the permanent redistribution from Congress to the states of the political fallout that will inevitably come from the implementation of the GOP’s dream of slowly, but eventually, killing the safety-net:
The Washington Post The GOP plan to fund Medicaid through block grants will probably weaken it By Ryan LaRochelle January 18, 2017 Republicans in the 115th Congress are wasting no time trying to remake the social policy landscape. Barely a week after the new Congress was sworn in, GOP members took an initial step toward repealing aspects of the Affordable Care Act, the major domestic piece of President Obama’s legacy. Republicans seem likely to set their sights on other components of the U.S. welfare state, including Medicaid, Medicare and Social Security. President-elect Donald Trump may not go along with congressional Republicans if they try to alter Medicare and Social Security. But many key Republicans are especially interested in changing Medicaid, the nation’s health insurance program for the poor — including Trump, House Speaker Paul D. Ryan (Wis.) and Tom Price (Ga.), Trump’s nominee to head the Department of Health and Human Services. Each of those three has proposed converting Medicaid from a program funded jointly by the federal government and the states into a block grant program. Doing so would send a set amount of money to each state, thus capping total Medicaid spending, and would let each state decide how to disburse those funds.
Turning Medicaid into a block grant would result in less funding. Here’s how we know. Under the current arrangement, the federal government pays states a certain percentage of program expenditures based on criteria, such as per capita income. The percentages are regularly adjusted at three-year intervals based on changes in the economy. How would changing that into a block grant change the program? 1. Data shows that the move to block grants leads to less funding over time. Historical data suggest that a shift to block grants would result in a gradual decline in Medicaid funding. A 2016 report by the Center on Budget and Policy Priorities (CBPP) showed that when the federal government uses block grants, the funding for the programs shrinks over time: [O]ur analysis of the 13 major housing, health, and social services block grant programs that policymakers have created in recent decades shows that funding for all but one has shrunk in inflation-adjusted terms since their inception, in some cases dramatically. … Overall funding for the 13 block grants has fallen by 37 percent since 2000, adjusted for inflation and population growth. Does that mean that the switch to block granting is the factor that drove down spending? It’s hard to say. But here’s one example that is instructive. From 1935 to 1996, under Aid to Families With Dependent Children, the federal government matched state expenditures based on need. Poorer states received a higher federal match rate than wealthier states.
And federal expenditures responded to cyclical variation in the economy. From 1970 until the mid-1990s, state and federal expenditures for AFDC were relatively stable. But in 1996, the Clinton administration and congressional Republicans teamed up to replace it with Temporary Assistance for Needy Families (TANF), in which funding was distributed via block grants so that states could experiment with how they would deliver it. As the CBPP report points out, after adjusting for inflation, TANF funding has dropped by 32 percent since its inception. Or to put it differently, before the federal government converted AFDC into the TANF block grant, 68 out of 100 poor families received cash assistance. By 2014, only 23 out of 100 poor families did. 2. Reformers argue that block grants need less funding because they reduce costs. But they don’t. When reformers propose switching a program to a block grant, they increasingly ask to have the funding reduced at the same time. In the 1960s and 1970s, both Democratic and Republican administrations used block grants primarily to consolidate existing programs, which did not automatically result in funding reductions. In some cases, block granting actually increased funding for the programs involved — as happened with the Community Development Block Grant and the Omnibus Crime Control and Safe Streets Act.
But since the 1980s, most new block grant proposals have gone in the other direction. Proponents argue that the difference would be made up by increased efficiency and administrative savings. That’s the approach with Medicaid, as well. Trump’s health-care reform website claims that under a Medicaid block grant, “States will have the incentives to seek out and eliminate fraud, waste and abuse to preserve our precious resources.” Public administration scholar Carl Stenberg’s analysis of block grants, however, found no empirical evidence that the shift to block grants reduced total administrative costs. Rather, these costs are passed from the federal government to the states. 3. Block granting leads to drops in funding because the policies don’t get regular tuneups. Cornell political scientist Suzanne Mettler’s research shows that just like cars and houses, policies need periodic upkeep to remain effective. Legislators can maintain policies by reauthorizing them to guarantee funding streams, adjusting them for inflation, and periodically reassessing and reforming them. But legislators often don’t maintain existing policies, leaving them to fall into disrepair. That neglect is not unique to block grants. But certain features of block grants make them particularly susceptible to deferred maintenance and policy drift. Block grants typically do not keep pace with inflation, population changes, rising poverty rates or increased housing costs. Further, many block grant programs are designed to help low-income people — a group that is least likely to mobilize politically. Unlike, say, the elderly — drawn from every economic strata — the people who rely on poverty programs probably won’t organize to protect their programs from cuts or call for improvements. And so those programs atrophy. With TANF, for instance, research finds that what citizens need isn’t the factor that pushes states to make sure its policies are effective. Rather, three factors make the difference in how well TANF is designed: the race of most of the state’s beneficiaries, the state’s political ideology and the state’s wealth.
Poor, conservative states with a high proportion of African Americans tend to have less generous benefit packages, firmer eligibility rules and stricter work requirements than comparatively well-off states that are more racially homogeneous. Some states take better care of their low-income residents than others because of race, ideology and capacity, not because of need. In other words, while proponents argue that block grants let states better respond to their residents’ needs, the results show significant inequality across the states. … “Public administration scholar Carl Stenberg’s analysis of block grants, however, found no empirical evidence that the shift to block grants reduced total administrative costs. Rather, these costs are passed from the federal government to the states.” And that, right there, is part of sinister cleverness of the GOP’s grand poisoned water political fallout redistribution scheme: Congress passes a law now that will set in motion a multi-decade long cycle of benefit cuts and squeezed state budgets that will eventually eviscerate programs like Medicaid and state legislatures and governors will be taking a big share of the blame. But not all of the blame obviously, and there’s going to be plenty of blame to go around since this is an incredibly unpopular agenda that Trump and the GOP are about to impose. It’s why the GOP Congress, and Trump, still have major reasons to be seriously worried about any of the blame for their poisonous agenda. The Beginning of the End of Medicaid Could Be the Beginning of the End of the GOP’s Own Voters. Especially the New Ones And let’s not forget one of the other significant factors in the federal-to-state blame redistribution scheme:
The GOP controls most of the states. Not only that, but the counties where Donald Trump pick up the most support vs the 2012 election happen to be poorer counties that will be most heavily impacted by the GOP’s poison agenda: The Washington Post Trump’s plan to roll back Medicaid will especially affect his voters By Andrea Cerrato, Francesco Ruggieri and Federico Maria Ferrara January 27, 2017 On Sunday, the Trump administration signaled its intention to convert Medicaid to a block-grant program, giving states more flexibility in how they finance health care for low-income residents. If implemented as part of an Obamacare repeal, the change would likely result in overall less funding for the states. Although the details of an overhaul would determine where and how large any cuts would be, President Trump may have reason to worry about the electoral effects of a Medicaid rollback.
Our research shows that a significant portion of Trump’s support in 2016 came from low-income areas that would likely be harmed by cuts to Medicaid. And even though those voters did not abandon Trump during the campaign because of his opposition to Obamacare, an actual reduction in benefits is easier said than done. The politics of Medicaid expansion Medicaid has been a major political issue since its creation in the 1960s, but it became even more contentious after the passage of the Affordable Care Act in 2010. Under the ACA, the program was expanded to include all non-disabled adults whose Modified Adjusted Gross Income (MAGI) is below 138 percent of the federal poverty level. After a 2012 Supreme Court decision, states had the choice to implement the new eligibility standards in exchange for additional federal funds, or to opt out altogether. As of today, 31 states and the District of Columbia have adopted the Medicaid expansion. Given Trump’s campaign pledge to repeal Obamacare, one might have expected him to perform poorly in states where the ACA’s expansion of Medicaid gave low-income Americans better access to health care.
But our analysis suggests that Trump did not lose support among low-income voters in Medicaid expansion states. How Medicaid expansion played out (or didn’t) in the election The Medicaid expansion was implemented in January 2014, so we examined Trump’s performance relative to that of 2012 Republican nominee Mitt Romney. In particular, we compared the president’s gains in counties where Medicaid has not been expanded to his showing in counties where more adults are now eligible to benefit from the program. By taking the difference in vote share between Trump and Romney, we tried to capture Republican voters’ sensitivity to the Obama administration’s health-care policies. We also collected demographic and financial data from IPUMS-CPS, an integrated set of individual and household-level variables in the United States. Following IRS guidelines, we estimated the national share of non-disabled adults whose MAGI is below 138 percent of the federal poverty level, the threshold for Medicaid expansion eligibility. Then, we weighted these shares using a county-level indicator of poverty, which produced a measure of the degree of potential eligibility for the Medicaid expansion in each county, shown in the map below. [see map of potential eligibility for expanded Medicaid]
Low-income households are concentrated in the Southeast (Mississippi, Louisiana, Arkansas, Alabama, Georgia, Florida, South Carolina, North Carolina), in the Southwest (New Mexico, Arizona, California), and in the Northwest (Oregon, Washington, Montana). Thus, darker counties are located in both traditionally Democratic and Republican states. Finally, we performed a regression analysis to estimate the effect of extended Medicaid eligibility on the shift in the Republican vote share between 2012 and 2016. We weighted the observations for each county’s population and added controls for ethnic and racial composition and educational attainment, as well as state fixed effects.
Perhaps surprisingly, Trump’s gains were uniform across counties with more low-income households, regardless of whether they were in Medicaid expansion states. Indeed, on average Trump outperformed Romney in traditionally Democratic states that extended health-care eligibility. This counterintuitive result corroborates one of the main trends of the 2016 presidential election. Overall, Trump performed better than any other Republican candidate in the recent past among low-income voters. His opposition to Obamacare had a negligible effect in areas that one would expect to be affected by Medicaid expansion. Why Medicaid cutbacks could be risky On the one hand, this could suggest that Trump has little to worry about if the GOP converts Medicaid to a block grant, effectively reducing the size of the entitlement program. After all, if low-income voters were not concerned about Trump’s opposition to Obamacare during the campaign, why would they be now? But two factors suggest caution might be in order. First, a pledge to roll back a welfare benefit may not have the same impact as its actual repeal. As political scientist Paul Pierson has argued, “frontal assaults on the welfare state carry tremendous electoral risks.”
One reason is that interest groups and voters often oppose direct threats to welfare programs. And already, the specter of a reduction in health-care benefits appears to have mobilized unhappy constituents in some parts of the country. Second, to the extent that a reduction in Medicaid benefits weakens Trump’s support among low-income voters, their shifting allegiances could prove pivotal, either in the 2018 midterms or in the 2020 presidential election. This is especially true in light of his narrow margin of victory in key battleground states. … “Our research shows that a significant portion of Trump’s support in 2016 came from low-income areas that would likely be harmed by cuts to Medicaid. And even though those voters did not abandon Trump during the campaign because of his opposition to Obamacare, an actual reduction in benefits is easier said than done.” Yep, while it might take years for the the GOP’s health care attrition agenda to get fully implemented via this ‘death by a thousand cuts’ block grant strategy and the political fall out to be fully felt, it may not take very much fall out to start seriously impacting the GOP. Especially since Trump’s gains for the GOP were often in counties with the most to lose from any cuts at all: …
Perhaps surprisingly, Trump’s gains were uniform across counties with more low-income households, regardless of whether they were in Medicaid expansion states. Indeed, on average Trump outperformed Romney in traditionally Democratic states that extended health-care eligibility. This counterintuitive result corroborates one of the main trends of the 2016 presidential election. Overall, Trump performed better than any other Republican candidate in the recent past among low-income voters. His opposition to Obamacare had a negligible effect in areas that one would expect to be affected by Medicaid expansion. … So after Trump makes big gains for the GOP with low-income voters, the GOP and Trump immediately start working together to screw over that exact group in a massive way that will only get worse for years to come. It’s hard to see how implementing a scheme to shift future blame for safety-net cuts from Congress to the states is going to blunt the immediate fall out for immediately implementing that scheme. And even if the GOP decides to skip the Medicaid block granting scheme for now and instead just do the Obamacare “repeal and replacement” alone, that’s still probably going to involve rolling back the Medicaid expansion in these same low-income counties that swung for Trump.
And After Medicaid, It’s Medicare on the Block Grant Chopping Block. Of Course All in all, it’s extremely unclear what the GOP can do at all to avoid massive blame if they actually implement their agenda which is probably why they haven’t decided yet on what exactly they’re going to do and when they’re going to do it. Their agenda is a politically Phyrric victory. And the more of it they implement the Pyrric it’s going to be. Which could be extremely Pyrrhic: The Huffington Post Not Just Obamacare: Medicaid, Medicare Also On GOP’s Chopping Block The health care safety net as we know it could be bound for extinction. Jonathan Cohn Senior National Correspondent, The Huffington Post Jeffrey Young Senior Reporter,
The Huffington Post 11/15/2016 11:50 am ET | Updated Nov 15, 2016 Donald Trump and Republican leaders in Congress have made clear they are serious about repealing Obamacare, and doing so quickly. But don’t assume their dismantling of government health insurance programs will stop there. For about two decades now, Republicans have been talking about radically changing the government’s two largest health insurance programs, Medicaid and Medicare. The goal with Medicaid is to turn the program almost entirely over to the states, but with less money to run it. The goal with Medicare is to convert it from a government-run insurance program into a voucher system – while, once again, reducing the money that goes into the program. House Speaker Paul Ryan (R-Wis.) has championed these ideas for years. Trump has not. In fact, in a 2015 interview campaign website highlighted, he vowed that “I’m not going to cut Medicare or Medicaid.” But the health care agenda on Trump’s transition website, which went live Thursday, vows to “modernize Medicare” and allow more “flexibility” for Medicaid. In Washington, those are euphemisms for precisely the kind of Medicare and Medicaid plans Ryan has long envisioned. And while it’s never clear what Trump really thinks or how he’ll act, it sure looks like both he and congressional Republicans are out to undo Lyndon Johnson’s health care legacy, not just Barack Obama’s. Of course, whenever Trump or Republicans talk about dismantling existing government programs, they insist they will replace them with something better – implying that the people who depend on those programs now won’t be worse off.
But Republicans are not trying to replicate what Medicaid, Medicare and the Affordable Care Act do now. Nor are they trying to maintain the current, historically high level of health coverage nationwide that these programs have produced. Their goal is to slash government spending on health care and to peel back regulations on parts of the health care industry, particularly insurers. This would mean lower taxes, and an insurance market that operates with less government interference. It would also reduce how many people get help paying for health coverage, and make it so that those who continue to receive government-sponsored health benefits will get less help than they do now. It’s difficult to be precise about the real-world effects, because the Republican plans for replacing existing government insurance programs remain so undefined. Ryan’s “A Better Way” proposal is a broad, 37-page outline without dollar figures, and Senate Republican leaders have never produced an actual Obamacare “replacement” plan. But the Republican plans in circulation, along with the vague – and shifting – health care principles Trump endorsed during the campaign, have common themes. And from those it’s possible to glean a big-picture idea of what a fully realized version of the Republican health care agenda would mean. Obamacare Obamacare has expanded and bolstered health insurance mainly through two sets of changes: a straightforward expansion of Medicaid eligibility, which the 31 states and the District of Columbia now offer, and a makeover of the insurance market for people buying private coverage on their own rather than through employers.
The net effect of the Affordable Care Act is an estimated 20 million fewer uninsured than before the law. Obamacare’s makeover included writing new rules for insurers: All policies must now include comprehensive benefits, for example, and carriers can no longer deny coverage to people with pre-existing conditions nor charge them higher rates than healthy people. The newly reformed insurance system also offers subsidies: to assist people who could never afford coverage before; and to offset the higher prices insurers charge now that they must cover more services, without turning away the people most likely to use them. Repealing the law outright would increase the number of uninsured Americans by 22 million, according to the Congressional Budget Office. Republicans have vowed to replace Obamacare with something better – “great health care for much less money,” as Trump put it on “60 Minutes” Sunday. But GOP plans would scale back the federal commitment to Medicaid, then unwind the changes to the individual insurance market by reducing the regulations on coverage. GOP plans would also eliminate the health insurance exchanges through which more than 10 million people get access to private insurance and those all-important subsidies. Republican schemes envision new forms of financial assistance, but generally lower income people would get less money, and (depending on the details) many middle-income people would too.. Some of the regulatory changes would be indirect.
Allowing insurers to sell across state lines – an idea Trump mentioned frequently – would let all insurers relocate to states with the fewest rules, effectively gutting requirements more progressive states might impose on coverage. Overall, the result would be less coverage and protection than Obamacare provides. And while some people would benefit, others would suffer. To take one example, healthy 25-year-olds could buy cheaper, skimpier policies than the law now allows. But 55-year-olds with high blood pressure would tend to face higher premiums – because insurers could resume charging them more – and bigger copayments at the pharmacy. Republicans talk a lot about preserving Obamacare’s most popular provisions, like protections for people with pre-existing conditions. But the fine print of their proposals shows their guarantee is different – and less ironclad. Insurers could still turn away people who don’t maintain “continuous coverage.” That’s no small thing. People who lose jobs frequently let coverage lapse – and it’d happen more commonly in a world without the generous financial assistance Obamacare provides. Conservatives say they have a solution for this: They would create special insurance plans, called “high-risk pools,” for people insurers won’t cover.
This idea has been tried before, at the state level – and it didn’t work very well. The plans typically offered weaker coverage at higher prices, and required vast infusions of money that state governments rarely provided. Tellingly, Ryan’s budget allocates just $25 billion over 10 years for high-risk pools. Even conservative experts believe it would take far more money for the pools to be the viable alternatives that Republicans imagine. In September, RAND Corp. researchers analyzed Trump’s health care reform principles and determined that his plan would increase the number of uninsured by 16 million to 25 million people, with a particularly tough impact on people with serious medical conditions who would face higher out-of-pocket charges. That’s a very rough guess, and a worst-case scenario. You can find analysts who make assumptions more favorable to conservative plans and end up more sanguine about the results. But the basic effect of all GOP replacement plans is clear: fewer people with insurance, less protection for people who have it, or some mix of the two. Gallup Medicaid As of August, 73 million Americans had benefits from Medicaid or the Children’s Health Insurance Program, according to the Centers for Medicare and Medicaid Services, which doesn’t break up the numbers for the two programs. All but around 16 million of them are covered by pre-Obamacare rules, but all Medicaid beneficiaries stand to be affected by the GOP’s plans. Until the Affordable Care Act, working-age adults without disabilities were ineligible for this benefit in most cases, with some exceptions, including low-income pregnant women and very poor parents of children who qualified for Medicaid or CHIP. As an entitlement like Medicare and Social Security, Medicaid gets however much money it takes to cover the medical expenses for everyone enrolled. Over a 10-year time period, the Medicaid plan the House Budget Committee approved this year would reduce federal spending on the program by about one-third, or roughly $1 trillion, not even counting the effects of repealing Obamacare’s expansion of the program, according to the Center on Budget and Policy Priorities. Repealing the Affordable Care Act and its Medicaid expansion fully would eliminate the coverage for the roughly 16 million people the Centers for Medicare and Medicaid Services reports have enrolled under this policy. The federal government paid for 62 percent of the $532 billion in Medicaid expenditures in fiscal year 2015, the most recent year for which such a breakdown is available. In 25 states, the federal share of spending is higher still, so even states that may want to maintain today’s Medicaid benefits would find it extremely difficult, if not impossible, to replace the federal dollars that would disappear under GOP proposals. One result could be 25 million fewer Medicaid beneficiaries, according to the RAND Corp.’s analysis of Trump’s plans.
Trump and other Republicans have long promoted “flexibility” that would enable states, which jointly finance and manage Medicaid with the federal government, to alter the program. While this may seem on its face like simple federalism, the purpose is not to allow states to cover as many people as they do now in different ways, but to significantly reduce federal spending on Medicaid and to permit states to cut back on who can receive Medicaid coverage and what kind of benefits they have. Ryan’s latest version of this 35-year-old idea idea would establish either “block grants” to states – that is, a flat amount of money each state would get from the federal government each year to spend on Medicaid as they like – or “per capita allotment” – meaning a flat amount of money for each person enrolled.
These approaches would differ in terms of how much money states would receive yearly and how much the funding would increase from year to year. In any case, the funding wouldn’t be high enough to maintain current coverage, inevitably leading to millions of currently covered individuals losing their benefits. And the financing would grow at a slower rate than health care costs, portending more lost coverage over time. For those who remain on Medicaid, Ryan would permit states to charge them monthly premiums and add other strings, such as a work requirement. … Medicare The Medicare revamp in “A Better Way” would result in wholesale changes to the entitlement – ones that would realize Ryan’s long-term goal of privatizing the program. Today, most of the 55 million Medicare beneficiaries enroll in the traditional, government-run program and then buy private supplemental insurance to cover remaining out-of-pocket costs. A sizable minority opts to buy private insurance plans, through the Medicare Advantage program. The government regulates these plans tightly, to make sure they provide coverage at least as generous as the traditional Medicare program does.
Ryan would replace this arrangement with a “premium support” system, under which each senior would get an allotment of money – voucher, in other words – he can use to get insurance. When Ryan introduced the first formal version of his proposal, in 2010, he envisioned ending the traditional government program altogether. Now he says it should continue to exist alongside the private plans, competing with them for business. What would this mean for beneficiaries? A great deal would depend on details Ryan has yet to provide, particularly when it comes to the value of that voucher – and how quickly it would increase every year – compared to the cost of the insurance. But the whole point of the system is to ratchet down the value of the vouchers over time. That would reduce spending on Medicare, which Ryan always says is a goal, and some seniors would likely end up saving money, because they could easily switch to cheaper plans. The question would be what happens to everybody else.
Without adequate regulation of benefits and other safeguards tailored to the special needs of an older, frequently impaired population of seniors, the consequence of moving to premium support could be higher costs for individual seniors who have serious health problems – with low-income seniors feeling it most intensely. If at the same time Republicans shrink Medicaid, those seniors will suffer even more, since today the poorest seniors can use the program to pay for whatever medical bills Medicare does not. Ryan promises that the proposal would not affect seniors who are 55 or older, since the new system wouldn’t begin operating for 10 years. But realistically the entire Medicare program would change once premium support took effect – private plans would almost certainly find ways to pick off the healthiest seniors, for instance – and, at best, the damage would simply take longer to play out. Ryan’s Medicare scheme includes one other element – a provision to raise the eligibility age gradually, so that seniors would eventually enroll at 67, rather than 65. Particularly in a world in which the Affordable Care Act no longer exists, 65- and 66-year-olds searching for private coverage would find it harder to obtain, more expensive and less generous than what they’d get from Medicare today. The end result would almost surely be higher out-of-pocket costs for those younger seniors – and a significant number of them, maybe into the millions, with no insurance at all. “The Medicare revamp in “A Better Way” would result in wholesale changes to the entitlement – ones that would realize Ryan’s long-term goal of privatizing the program.” Privatized Medicare. That could actually happen. Soon. And almost certainly will happen soon if the GOP is confident it can avoid the fall out. But it’s very unclear how that fall out can be avoided unless the GOP can figure out how to sell the public on replace Medicare with a voucher.
Although we do any an idea of what they might do: block grant Medicare while simultaneously offer the voucher privatized voucher system so they can claim that Medicare isn’t going away (while ignoring the fact that the whole point of the block grant scheme is to make sure Medicare eventually erodes away…along with the vouchers): … Ryan would replace this arrangement with a “premium support” system, under which each senior would get an allotment of money – voucher, in other words – he can use to get insurance. When Ryan introduced the first formal version of his proposal, in 2010, he envisioned ending the traditional government program altogether. Now he says it should continue to exist alongside the private plans, competing with them for business. What would this mean for beneficiaries? A great deal would depend on details Ryan has yet to provide, particularly when it comes to the value of that voucher – ant ome seniors would likely end up saving money, because they could easily switch to cheaper plans. The question would be what happens to everybody else. Without adequate regulation of benefits and other safeguards tailored to the special needs of an older, frequently impaired population of seniors, the consequence of moving to premium support could be higher costs for individual seniors who have serious health problems – with low-income seniors feeling it most intensely. …
So a few wealthier and healthier seniors might befit from Paul Ryan’s Medicare voucher plan, and every else gets screwed. Slowly. Or maybe quickly depending on how it all plays out. Either way, there’s going to be an abundance of political fall out that’s going to have to be redistributed over the coming decades if the GOP is going to maintain its grip on Congress. That’s part of what’s going to make this whole fiasco so depressingly fascinating: the Congressional GOP’s plans for destroying the US health care system is simultaneously a plan to make the GOP-dominated governors and state legislators much, much less popular with the electorate. And while that might seem like a decent trade off if you’re a GOP congressman, don’t forget that one of the secrets to the GOP’s success at the federal level is all the gerrymandering that’s almost guaranteed the GOP a lock on the House of Representatives. And future GOP gerrymandering requires state-level control.
And don’t forget that one of the other secrets of the GOP’s success at the state level is political posturing against “DC” and all the things that happen at the federal level that voters are paying more attention to than state-level issues. But with this block granting scheme, one of the biggest political lightning rods in DC becomes a state-level lightning rod too and the kind of lightning rod that the GOP’s ‘kick the poor’ orthodoxy might not mesh well with. Especially after Trump and the GOP Congress finish off what’s left of the US middle class and the wealthy own basically everything. The more successful the Trump and the GOP are in implementing their broader socioeconomic agenda (which is still basically the Koch brothers’ agenda despite the Trumpian veneer), the more political potency health care for the financially struggling is going to be in coming decades.
So we really could be seeing the Congressional GOP’s federal-to-state block granting switcharoo scheme sowing the seeds for GOP’s future demise. The GOP controls the federal branch of government relies heavily on its control of the states, so if it loses its grip on state control the losses at the federal level are pretty much inevitable. That’s what happens if you undo egregious gerrymandering. So if Paul Ryan and the GOP Congress screw this up massively – by first screwing up US health care and then screwing up their blame redistribution scheme – they’re obviously going to hurt their political prospects. But if they succeed – by first screwing up US health care (screwing it up is succeeding for the GOP) and then succeeding in their federal-to-state blame redistribution scheme – they might end up being even more screwed in the long run by losing control of state legislatures and governorships and losing the ability to gerrymander the hell out of the House of Representatives.
Don’t underestimate how unpopular state governments could become if they start carrying the Congressional GOP’s poisonous water. After all, the “premium support” (voucher) plan that Paul Ryan has for Medicare means that we’re not just looking at block-grants to states. Those states are going to in turn create block-grants for individuals. That’s what a voucher is: an individual block grant that’s designed to shrink over time and not be able to deal with sudden funding emergencies. Is a multidimensional block grant scheme political owned by federal and state GOPers going to endear that party to the American people? It all raises the question of when the state-level GOP is going to join the rest of the country in opposing the likely ‘Trumpcare’ model of block granting entitlements and sending them into a planned slow-death spiral. Purely out of a sense of personal political survival. Otherwise it’s time for the GOP to play Poisonous Hot Potato Death Spiral. Do state-level GOP elected officials want to see programs like Medicare and Medicaid slashed and burned? Almost assuredly. They’re Republicans. But do they want to do those cuts themselves? That’s a very different question. But their Congressional brethren are about to make sure they do. What should the GOP do? Well, they could stop having a psycho agenda, but since that’s apparently not an option it’s very unclear what they should do. It all raises the question of when the GOP’s voter suppression agenda is going to expand past minorities, the poor, and the youth, to include targeting the elderly too.
And, of course, there’s the question of what the GOP’s plan is after they’ve completed their entitlement privatization/evisceration agenda and adequate health care access is a pipe dream for tens of millions more Americans than were lacking health insurance in the pre-Obamacare era for the kinds of health care needs that even heartless oligarchs should want to see the rabble have access to. Like health care for communicable disease. Will hospital emergency rooms be just expected to pick of the slack? Forever? How about all the new communicable diseases of the future? Do Trump and the and his fellow GOP travelers in Congress have a plan for that? Unfortunately, maybe. Discussion 7 comments for “Killing Granny: The GOP’s “One Size Fits All” Death Panel for Health Care” Remember how Jim O’Neill, Donald Trump’s likely choice to head the FDA based on the recommendation of transition-advisor Peter Thiel, was known for wanting to champion the idea that the FDA should approve drugs without proven effectiveness as long as they’re considered safe? Well, it sounds like Trump has a similar idea in mind. Similar, except the opposite:
The New York Times Trump’s F.D.A. Pick Could Undo Decades of Drug Safeguards By KATIE THOMAS FEB. 5, 2017 President Trump’s vow to overhaul the Food and Drug Administration could bring major changes in policy, including steps to accelerate the process of approving new prescription drugs, setting up a clash with critics who say his push for deregulation might put consumers at risk. Mr. Trump has been vetting candidates to run the agency, which regulates the safety of everything from drugs and medical devices to food and cosmetics. Among them is Jim O’Neill, a former official at the Health and Human Services Department who is an associate of the Silicon Valley billionaire and Trump supporter Peter Thiel. Mr. O’Neill has argued that companies should not have to prove that their drugs work in clinical trials before selling them to consumers. Other candidates also have called for reducing regulatory hurdles. If the most significant proposals are adopted — and many would require an act of Congress — they will reverse decades of policy and consumer protections dating to the 1960s. Congress toughened the drug approval process in the wake of the worldwide crisis over thalidomide, which caused severe birth defects in babies whose mothers had taken the drug in pregnancy.
Since then, the F.D.A. has come to be viewed as the world’s leading watchdog for protecting the safety of food and drugs, a gold standard whose lead other countries often follow. Mr. Trump’s most recent statements, made at a White House round-table discussion last week with leaders of the nation’s top drug companies, have reverberated throughout the medical and pharmaceutical industries. Supporters of deregulation have long wanted to reduce bureaucracy and lessen oversight of drugs and devices, while critics say the market for drugs could be destabilized and the door opened to unproven products based on junk science. “Everyone depends on the agency, from the drugs in our medicine cabinet to the food on our dinner table, to our blood supplies,” said Dr. David Kessler, who was commissioner of the F.D.A. during the presidencies of the elder George Bush and Bill Clinton. “We are the envy of the world because our honey is our honey. Our foods are not laced with pesticides. Our drugs work.”
Mr. Trump said at the meeting that he was close to naming a “fantastic” person to lead the agency. In addition to Mr. O’Neill, candidates whose names have recently surfaced include Dr. Scott Gottlieb, a former F.D.A. official with longstanding ties to pharmaceutical and biotech companies, and Dr. Joseph Gulfo, a former biotech and medical device executive. All three have called for streamlining the drug approval process, but Mr. O’Neill’s stance has drawn the most attention. He is a managing director of Mithril Capital Management, an investment firm Mr. Thiel co-founded, and previously led the Thiel Foundation, Mr. Thiel’s philanthropic organization. During the George W. Bush administration, Mr. O’Neill held a series of roles in the Health and Human Services Department, including as principal associate deputy secretary, where he worked on policy, including for the F.D.A., according to his LinkedIn profile.
Mr. O’Neill is a libertarian who is on the board of the SENS Research Foundation, a charity that funds anti-aging research, and until recently served on the board of the Seasteading Institute, an effort to create new societies at sea. At an anti-aging conference in 2014, Mr. O’Neill advocated something he called “progressive” approval, in which drugs that were proved safe, but not yet proven effective, could be allowed on the market. “Let people start using them, at their own risk,” Mr. O’Neill said. “Let’s prove efficacy after they’ve been legalized.”
Companies have been required to prove that their drugs work since 1962, when Congress passed legislation requiring that licensing for sale be based not just on safety but also on “substantial evidence” of a drug’s efficacy. That law, and others passed since, forced companies to rigorously test their products, running them through a gantlet of clinical trials whose results are then vetted by the F.D.A. before any sales to consumers. Ninety percent of drugs that enter clinical development fail these trials.
(The F.D.A. also regulates medical devices, but they undergo a separate approval process.) As a result, newly discovered drugs can take years to reach the market, a period that Mr. Trump said last week was too lengthy. “When you have a drug, you can actually get it approved if it works, instead of waiting for many, many years,” he told the pharmaceutical executives. “We’re going to be cutting regulations at a level that nobody’s ever seen before, and we’re going to have tremendous protection for the people.” Some have suggested that a commissioner determined to weaken the efficacy standard need not seek congressional action, but could interpret existing regulations loosely so that requirements for certain clinical trials — particularly the costly, large-scale ones that can take years and involve thousands of patients — can be rolled back. That could have serious implications for patients.
Last month, the F.D.A. released a study of 22 drugs that appeared promising in early studies but failed in final, large-scale trials. Drug safety watchdogs point to examples like the painkiller Vioxx, which was withdrawn from the market in 2004 over safety concerns, as proof of the high stakes involved in drug approval. While Mr. Trump’s call to cut regulations has been warmly received by other industries, some biotech executives have reacted to his remarks with alarm. Those affiliated with some smaller companies have privately described the choice of Mr. O’Neill as a worst-case scenario that could send the drug industry into chaos.
The F.D.A., they say, is not perfect, but its standards provide a level playing field on which both big and small companies can compete. “We’re not selling Coca-Cola and Pepsi, where patients can taste the Coca-Cola and decide if they like it,” said John M. Maraganore, the chief executive of Alnylam Pharmaceuticals, a Massachusetts biotech firm. “Our products are lifesaving medicines.”
Industry executives said big changes to the agency would also be bad for business, making it difficult for companies with breakthrough treatments to distinguish their products from those that are shams. If standards at the F.D.A. are rolled back, “then we might as well be advertising in the middle of the night on how terrifically we can cure all your illnesses,” said Dr. Leonard S. Schleifer, the chief executive of Regeneron, a pharmaceutical company in Tarrytown, N.Y. “That’s not the business that I think most of us want to be in.”
Daniel Carpenter, a professor at Harvard University who studies the F.D.A., said its role is not just to ensure the safety of a drug. “The underpinnings of belief among patients, payers, even investors, is that somebody out there has tested these things and has shown, with some evidence, that they work,” he said. … Drug industry leaders say that they want the F.D.A. to be more open to allowing new kinds of clinical trials, and that it needs to become more nimble in keeping up with the breathtaking pace of medical advances. They have also been prodding the agency to fill an estimated 1,000 staff vacancies so that decisions can be made on more quickly. But that is apparently delayed because the president ordered an across-the-board hiring freeze. “The only way you would make it shorter is you staff up,” said Michael Gilman, an entrepreneur who has founded several biotech companies.
“You certainly don’t do it by slashing staff. So the logic of the whole thing doesn’t compute for me.” “If the most significant proposals are adopted — and many would require an act of Congress — they will reverse decades of policy and consumer protections dating to the 1960s. Congress toughened the drug approval process in the wake of the worldwide crisis over thalidomide, which caused severe birth defects in babies whose mothers had taken the drug in pregnancy. Since then, the F.D.A. has come to be viewed as the world’s leading watchdog for protecting the safety of food and drugs, a gold standard whose lead other countries often follow.” No more expensive safety standards. Along with no more need to prove effectiveness.
These are the kinds of innovative policy prescriptions the US gets for the next four years to eight years indeterminate period of time. You have to wonder if Trump University is about to open up a drug development research division. And note that gutting standards isn’t the only plans for keep drug prices down that Trump recently uttered. For instance, how about blaming Medicare, which is currently banned from negotiating drug prices thanks to a Bush era law, for “price-fixing” and preventing young small start-ups from bringing drugs to the market. And while it’s unclear what exactly Trump meant by all that, it presumably means he’s going to have Medicare pay more for drugs to increase competition to bring in more drugs to bring down drug prices
. Or something Politico Trump tells drugmakers he’ll tackle prices By Sarah Karlin-Smith and Nolan D. McCaskill | 01/31/17 10:03 AM EST | Updated 01/31/17 01:45 PM EST President Donald Trump vowed today to speed up drug approvals while reiterating his pledge to bring down drug costs. “For Medicare, for Medicaid, we have to get the prices way down,” Trump said during a White House meeting with pharmaceutical executives and the industry’s top lobbyist. During the campaign and since his election, Trump has often talked of pharma in tough terms. Just earlier this month, he accused the industry of “getting away with murder” and said he wanted to competitively bid drug purchases. But in public remarks on Tuesday, he took a conciliatory tone, pledging to reduce regulations and lower the bar for drug approvals. “We’re also gonna be streamlining the process so that from your standpoint, when you have a drug, you can actually get it approved if it works instead of waiting for many, many years,” Trump said. “The U.S. drug companies have produced extraordinary results for our country, but the pricing has been astronomical for our country.”
Trump, who’s pledged to unwind the nation’s regulatory regime, signaled a potentially radical approach to overhauling the Food and Drug Administration. He expressed a willingness to approve some drugs before they have been proven safe, which would be a big departure from the FDA’s current practices. And he said he would soon name an FDA commissioner who will be “streamlining” the agency. … Trump also appeared to reiterate his support for drug negotiations. He contended that drugmakers need to face increased competition and bidding. Yet he appeared to suggest that Medicare, which is banned from negotiating with drugmakers, is hurting competition. “I’ll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing a product to a vibrantly competitive market,” he said.
“That includes price-fixing by the biggest dog in the market, Medicare, which is what’s happening. But we can increase competition and bidding wars big time — we have to — into that program.” Trump also said he plans to work on global trade and tax policy that could benefit U.S. drugmakers. “We’re gonna be changing a lot of the rules. We’re going to be ending global freeloading,” Trump said. “Foreign price controls reduce the resources of American drug companies to finance drug and R&D innovation,” he said, also encouraging drugmakers to bring more of their manufacturing back to the United States. … “Trump also appeared to reiterate his support for drug negotiations. He contended that drugmakers need to face increased competition and bidding. Yet he appeared to suggest that Medicare, which is banned from negotiating with drugmakers, is hurting competition.”
So no more safety or efficacy standards for drugs that Medicare will pay more for. It’s going to be a brave new world of expensive ineffective drugs. Maybe. It’s unclear what exactly he meant: … “I’ll oppose anything that makes it harder for smaller, younger companies to take the risk of bringing a product to a vibrantly competitive market,” he said. “That includes price-fixing by the biggest dog in the market, Medicare, which is what’s happening. But we can increase competition and bidding wars big time — we have to — into that program.” … But keep in mind that Trump’s policy on Medicare drug negotiations is more opaque that his vague statements above suggest. And sort of the opposite: Politico Trump backs Medicare negotiating drug prices
By POLITICO Pro Staff 01/25/16 11:23 PM EST Donald Trump said tonight he could save Medicare billions of dollars by allowing it to negotiate drug prices directly with pharmaceutical companies — embracing a position Democrats have championed and Republicans have opposed for years. The Associated Press quotes Trump as telling a crowd in Farmington, N.H., that Medicare, a huge buyer of prescription drugs, could “save $300 billion” a year if it negotiated discounts. “We don’t do it,” he said. “Why? Because of the drug companies.” Democrats have wanted to give Medicare that power at least since 2003, when the Medicare drug benefit law was passed — but the Republicans have always blocked it. The Democrats, including the 2016 presidential candidates, support Medicare drug negotiations, and President Barack Obama has called for that policy in his budgets. …
“The Associated Press quotes Trump as telling a crowd in Farmington, N.H., that Medicare, a huge buyer of prescription drugs, could “save $300 billion” a year if it negotiated discounts.” So it looks like whatever mind-altering drugs Big Pharma has been giving to Congress since 2003 just got peddled to Trump. And he liked the way they made him feel. A lot, which is unfortunate. They aren’t cheap.
Posted by Pterrafractyl | February 6, 2017, 12:56 am It looks like Donald Trump may have back flipped on his position over whether or not Medicare should be directly negotiating its drug prices with drug companies. After decrying the absurdity of the rule that prevents Medicare from using its immense market power to negotiate lower prices for drugs, Trump appeared to reverse that pledge last week, blamning Medicare for “price fixing” and hurting young drug companies. Well, according to his spokesman, Trump is again supporting Medicare negotiating drug prices, as is evident from the sinking pharma stocks: Bloomberg Markets Trump Sinks Pharma Stocks on Medicare Drug Price Negotiation * ‘He’s for it, yes,’ spokesman says at press briefing * Stocks slump, then pare losses as investors ponder position Cécile Daurat and Toluse Olorunnipa February 7, 2017, 1:40 PM CST
Updated on February 7, 2017, 7:57 PM CST President Donald Trump supports Medicare drug price negotiations, his spokesman said Tuesday, remarks that sent pharmaceutical stocks swinging again as investors tried to assess whether drugmakers will be forced into bidding wars for government business. “He’s for it, yes,” White House spokesman Sean Spicer said at a press briefing in response to a question asking to clarify Trump’s position on the matter. Trump has given conflicting signals in the past weeks on whether he would let the government intervene directly in drug prices to reduce health-care costs. The Medicare program for the elderly is the biggest purchaser of health services in the country, and bidding for its business could have a major impact on Big Pharma’s profits. Unlike most countries in the world, the U.S. doesn’t directly regulate medicine prices, and drugmakers have strongly resisted it. “The easier way to look at this is to look at what other countries have done: Negotiating costs to keep those down,” Spicer said at the briefing. The rising costs of health care and prescription drugs are a “huge burden” on seniors, he said. The Nasdaq Biotechnology Index fell as much as 0.8 percent in the moments after Spicer’s remarks. The gauge pared the decline and was down 0.4 percent at the New York close.
The Standard & Poor’s 500 Health Care Sector Index was little changed. Surprising Comments Spicer’s comments took investors by surprise because Trump appeared to have backed down from the idea last week after a meeting at the White House with top pharmaceutical CEOs. Although the president said at the time that competition was key to lowering drug prices, which he called “astronomical,” he also added that he was against price fixing. “My new thing is going to be pharma, because we pay too much,” Trump said in a Fox News interview that aired Tuesday night. “We are the largest drug purchaser in the world, and they don’t negotiate.” …
Pharmaceuticals stocks had plunged last month when Trump, then president-elect, made a surprise attack against the industry and suggested price negotiating to save the government billions of dollars. Until then, drugmakers had seen the businessman-turned-president as a friend of the industry. Trump also has made conflicting comments about how and when he plans to replace Obamacare, whose dismantling was one of his campaign’s top priorities. The president said Sunday that the process to come up with a replacement for the Affordable Care Act could stretch into next year, a longer period then he previously indicated. Republican lawmakers are facing major challenges to undo the massive law, which has brought coverage to 20 million people since it passed in 2010. “Trump has given conflicting signals in the past weeks on whether he would let the government intervene directly in drug prices to reduce health-care costs. The Medicare program for the elderly is the biggest purchaser of health services in the country, and bidding for its business could have a major impact on Big Pharma’s profits.
Unlike most countries in the world, the U.S. doesn’t directly regulate medicine prices, and drugmakers have strongly resisted it.” We’ll see if this is Trump’s final position on the matter, but for now it’s pretty clear that Big Pharma has some more lobbying to do. Still, even if Trump does somehow end up following through on his tepid pledge to allow Medicare to directly negotiate drug prices, it’s worth noting that the rest of the GOP’s health care reform package could end up impacting the private insurance market’s drug prices too. How so? Well, part of the ‘magic’ that the GOP has long peddled as an Obamacare alternative is to use a “consumer-driven” healthcare. And what’s that? It’s a euphemism for having consumer pay directly for medical services, including drugs, out of their pockets instead of having insurance companies pay for it. And it typically gets paired with a high-deductible plan (so premiums are cheaper), and a “health savings account” that lets individuals save money tax-free for those out-of-pocket expenses.
This way, the theory goes, consumers and ‘the market’ will lower the cost of health care because they’ll be be incentivized to shop around and find the cheapest services. Or the cheapest drugs. As the article below notes, it’s a rather questionable theory based on the empirical evidence so far where health saving accounts have already been tried. Health care costs did indeed drop, but largely due to individuals skipping things like preventive care or filling their prescriptions. And a substantial number of Americans can’t possibly afford to meaningfully save anything in their health savings accounts which presumably means a lot less gets spent on drugs by these lower-income individuals. So that has to give the pharmaceutical industry pause. But at the same time, with all these consumers running around individually shopping for the cheapest medical services that presumably means they – or their private insurers – won’t be collectively bargain for cheaper drug prices in the private insurance market:
The Atlantic GOP: Shop Around for Surgery For people sick of high deductibles, Republicans offer high-deductible plans as replacements for Obamacare. Jonathan Ernst / Reuters Olga Khazan Jan 24, 2017 Obamacare’s days are numbered. That was the message of the executive order President Donald Trump signed Friday, instructing government agencies to “minimize the unwarranted economic and regulatory burdens of the [Affordable Care Act].” When I spoke with a handful of Trump supporters after the inauguration Friday, they said they eagerly awaited Obamacare’s end. Tanya, a woman from Virginia who was rolling a walker down I Street to the inaugural parade, said she was struggling with her $6,750 deductible. “As a business person who is self-employed, it’s killing me,” she said. Nearby, Marlita Gogan, from Houston, said she just wants Trump to “do what he says”—repeal and replace Obamacare. Her daughter’s insurance premium has risen from $250 to $375, with a $5,000 deductible. “It’s too much,” she said. “You can’t even use it.” But what’s less clear is whether the crown jewel of most of the Republicans’ replacements for Obamacare—health savings accounts—will ease the financial strain some people feel under Obamacare.
The idea of these accounts is that people will sock away money, in some cases with the help of a government subsidy, to pay for their health care. Typically, they will simultaneously enroll in an insurance plan with a large deductible. The amounts will vary depending on the whims of the insurance market, but past studies of firms with HSAs have used a deductible of about $4,300 for a family, with a $1,300 employer contribution to the HSA. The high deductible would encourage them to compare prices among different doctors and find the cheapest one, while the savings account would, theoretically, allow them to store money to cover their planned medical expenses. The Republican Study Committee’s recently unveiled plan calls for the “Enhancement of Health Savings Accounts.” The one proposed by Senators Bill Cassidy and Susan Collins would help states create HSAs for low-income adults. House Speaker Paul Ryan’s “Better Way” plan touts “Health Savings Accounts” as one of the “four major successful health reforms” of the 21st century, and says that “improving the flexibility of health savings accounts and other consumer-oriented health care options will further enhance individual choice.”
The plan put out by Representative Tom Price, a Georgia Republican and Trump’s choice to lead the Department of Health and Human Services, provides for the creation of high-risk pools that “offer at least the option of one or more high-deductible plan options.” These high-deductible plans would then be paired with a health savings account, where people can save money before taxes to pay for their medical care. Health-savings accounts are already available in some insurance markets. Writing in Health Affairs, Timothy Jost explains how they would change under the various GOP replacement plans: Replacement proposals would generally increase the amount that could be deposited in HSAs, make them available for more government programs, and otherwise liberalize program requirements. Some would even offer tax credits to partially fund HSAs. Supporters of HSAs argue that they reduce health care expenditures:
When people spend money from HSAs they are effectively spending their own money rather than an insurer’s money; they will spend less and shop around to find lower-cost, and perhaps higher-quality, care. The thinking is that forcing people to reckon with the true cost of medical procedures is our only hope in controlling health-care costs. “Medical prices are so distant from consumers that there’s no way we’re going to get costs under control,” said Steve Parente, a professor at the University of Minnesota who has analyzed Better Way and other conservative health-care proposals. “HSAs are not a perfect mechanism to get you there, but it’s a nudge.” By way of example, he explained that he saved several hundred dollars on a prescription drug because he heard from someone that a Costco in town had the medication for dirt cheap. While this kind of bargain-hunting isn’t possible in emergencies, but having a high-deductible plan might prompt you to press your surgeon on just how much that shoulder operation is going to cost, he says. Parente said ideally, these high-deductible plans could be “bespoke”—tailored to someone’s medical conditions, so that, say, allergy shots could be covered before the deductible for someone with hay fever.
Yes, he acknowledges, it might be painful at first to spend your own money on medical care; high deductibles are a major reason for American’s dissatisfaction with their health plans. People on high-deductible plans tend to go through stages of grief: “First, they’re like, ‘this is screwing us,’ then they get hardened, but then they survive it,” he said. The push for high-deductible plans is part of conservative policymakers’ fondness for “consumer-driven” healthcare, says Renee Hsia, director of health-policy studies at the University of California in San Francisco, “where we see patients as empowered shoppers who can and should be making decisions about their health care with their wallet.” But according to Hsia, the problem is that health care doesn’t work like most other consumer goods.
“For example, if I want to go buy a loaf of bread, I can easily see the ingredients, I can look at the nutritional information, I can look at the price, and I know the consequences of buying the loaf of bread and not buying the loaf of bread (i.e., it either means having it or not),” she explained. “If I have chest pain, there is no much information I don’t have: I don’t know what the diagnosis is, I don’t know what it will require if I do see a doctor to get to a diagnosis and what tests I will require, I don’t know the consequences of not getting treated are, I don’t know what procedures I will require even once I do get to a diagnosis.” Multiple studies have shown that the amount different hospitals charge for the same tests can vary by thousands of dollars.
That’s the kind of thing a consumer could “shop around” for, in theory—but not if there’s only one hospital in town. And past studies have shown that hospitals are more forthcoming with the price of their parking lots than they are about the prices for routine tests. What’s more, several of the Trump supporters I’ve interviewed, including Tanya, say they want to be able to keep seeing their favorite doctors. That might not be an option if they’re forced to seek out the one that’s cheapest. High-deductible health plans do cause people to spend less money on medical care—by about 5 to 7 percent. They especially avoid things like getting lab tests and filling their prescriptions, particularly in the first year they have the plan. That’s because it takes a while for money to build up in the health-savings account, and also, there’s a “newness factor,” said Anthony Lo Sasso, a health-policy professor at the University of Illinois. “There’s a learning curve, and that probably tamped down spending. They also become more careful about going to the doctor. “You might give that upper-respiratory infection a few more days,” Lo Sasso said. But the intended effect—that people will learn to shop around for the cheapest doctor—doesn’t always kick in. A 2015 study of a firm that switched to a high-deductible health plan found that the employees didn’t learn to price-shop after two years. Instead, they just reduced the amount of medical services they received, including potentially valuable services like preventive care. People with chronic conditions delayed care for themselves and their children.
This is a recurring issue with high-deductible health plans, according to Paul Fronstin, an economist at the Employee Benefit Research Institute who led a study of a large employer who adopted a high-deductible plan. People don’t know that certain services—like, say, flu shots—are excluded from the deductible. Or, they worry that while they’re at the (covered) appointment, the doctor will find a potentially-cancerous lump, which would then compel them to get a scan that’s not covered before their deductible. That suggests people on high-deductible plans are getting less care, not just cheaper care. Another question is whether people will be able to figure out how much they need to contribute to their health-savings accounts to offset their deductibles, or to parse which tests and procedures are skippable, and which aren’t. Insurance is already a domain that few Americans understand perfectly. “If people don’t understand the cost-sharing of insurance, one should have very little hope that people are going to understand how they are going to take up and enroll in an HSA, and how to offset the burden of the high-deductible plan,” said Saurabh Bhargava, a behavioral economist at Carnegie Mellon University. Finally, many economists doubt that most working-class Americans have enough spare money to put in their health-savings accounts to compensate for these high deductibles. Nearly half of Americans would have trouble scraping together $400. And because health-savings accounts shelter money from taxes, they tend to favor the rich, whose taxes are higher.
The tax credit Price proposes doesn’t increase at lower income levels like Obamacare’s subsidies, which might mean low- and middle-income people will continue to be squeezed by high deductibles. Sara Rosenbaum, a professor of health policy at George Washington University, took the dimmest view of the GOP’s plans. She called health-savings accounts “a device that wealthy people can use to sock away pre-tax outcome to partially offset out-of-pocket costs for the health care [they] can afford to get.” … “But what’s less clear is whether the crown jewel of most of the Republicans’ replacements for Obamacare—health savings accounts—will ease the financial strain some people feel under Obamacare. The idea of these accounts is that people will sock away money, in some cases with the help of a government subsidy, to pay for their health care. Typically, they will simultaneously enroll in an insurance plan with a large deductible. The amounts will vary depending on the whims of the insurance market, but past studies of firms with HSAs have used a deductible of about $4,300 for a family, with a $1,300 employer contribution to the HSA. The high deductible would encourage them to compare prices among different doctors and find the cheapest one, while the savings account would, theoretically, allow them to store money to cover their planned medical expenses.” And that right there is your likely Obamacare replace for the private insurance market: high-deductible plans plus a tax-free health savings account to save for that high deductible.
And if everything goes right, consumers will magically find cheaper health care services, or cheaper drugs, once they start pay much more of the cost of their health care out of pocket: … The thinking is that forcing people to reckon with the true cost of medical procedures is our only hope in controlling health-care costs. “Medical prices are so distant from consumers that there’s no way we’re going to get costs under control,” said Steve Parente, a professor at the University of Minnesota who has analyzed Better Way and other conservative health-care proposals. “HSAs are not a perfect mechanism to get you there, but it’s a nudge.” By way of example, he explained that he saved several hundred dollars on a prescription drug because he heard from someone that a Costco in town had the medication for dirt cheap. While this kind of bargain-hunting isn’t possible in emergencies, but having a high-deductible plan might prompt you to press your surgeon on just how much that shoulder operation is going to cost, he says. Parente said ideally, these high-deductible plans could be “bespoke”—tailored to someone’s medical conditions, so that, say, allergy shots could be covered before the deductible for someone with hay fever. Yes, he acknowledges, it might be painful at first to spend your own money on medical care; high deductibles are a major reason for American’s dissatisfaction with their health plans.
People on high-deductible plans tend to go through stages of grief: “First, they’re like, ‘this is screwing us,’ then they get hardened, but then they survive it,” he said. … “By way of example, he explained that he saved several hundred dollars on a prescription drug because he heard from someone that a Costco in town had the medication for dirt cheap. While this kind of bargain-hunting isn’t possible in emergencies, but having a high-deductible plan might prompt you to press your surgeon on just how much that shoulder operation is going to cost, he says” By transferring the cost of health care onto consumers who will pay directly for as much of their health care as possible, people will all of sudden learn about all the local ‘dirt cheap’ deals on everything from drug costs to shoulder surgery. That’s the GOP’s big plan to bring down health care costs. And keep in mind that one of the provisions of Obamacare is a requirement that insurance policies cover prescription drugs and that provision would almost certainly be going away under a GOP low-premium/high-deductible/HSAs Obamacare replacement scheme. So whatever reduction in drug prices that insurers may have been negotiating with drug manufacturers is presumably going away too. Big Pharma must be shuddering in its big boots.
Although keep in mind that there is one big reason Big Pharma should be concerned about the GOP’s “consumer-driven” health care plan: since most American’s don’t have the financial ability to creating any meaningful savings in their health savings account, that also means most Americans probably aren’t going to have the money they need to pay for their prescription drugs. It’s a potential pitfall that highlights one of the most sinister aspects of the “consumer-driven” health care plan: It doesn’t actually have to provide better, or even adequate, health care in order to decrease health care costs. It can reduce those costs simply by reducing the amount of health care services (or drugs) administered: … What’s more, several of the Trump supporters I’ve interviewed, including Tanya, say they want to be able to keep seeing their favorite doctors.
That might not be an option if they’re forced to seek out the one that’s cheapest. High-deductible health plans do cause people to spend less money on medical care—by about 5 to 7 percent. They especially avoid things like getting lab tests and filling their prescriptions, particularly in the first year they have the plan. … “High-deductible health plans do cause people to spend less money on medical care—by about 5 to 7 percent. They especially avoid things like getting lab tests and filling their prescriptions, particularly in the first year they have the plan.” Reducing health care costs by reducing the amount of health care services actually administered and prescriptions filled. That’s one way to do it. Although probably not the doctor-recommended way to do it since the reduced medical services appears to include reduced preventive care: … But the intended effect—that people will learn to shop around for the cheapest doctor—doesn’t always kick in. A 2015 study of a firm that switched to a high-deductible health plan found that the employees didn’t learn to price-shop after two years. Instead, they just reduced the amount of medical services they received, including potentially valuable services like preventive care. People with chronic conditions delayed care for themselves and their children.
This is a recurring issue with high-deductible health plans, according to Paul Fronstin, an economist at the Employee Benefit Research Institute who led a study of a large employer who adopted a high-deductible plan. People don’t know that certain services—like, say, flu shots—are excluded from the deductible. Or, they worry that while they’re at the (covered) appointment, the doctor will find a potentially-cancerous lump, which would then compel them to get a scan that’s not covered before their deductible. That suggests people on high-deductible plans are getting less care, not just cheaper care. So, as we can see, it’s not just Trump’s on-again-off-again threats to allow Medicare to negotiate drug prices that should be dragging down Big Pharma’s stock prices. It’s also the fact that the GOP’s likely health care reform package is actually a stealth plan to reduce health care costs by reducing the amount of health care services provided. Including prescription drugs. Under the GOP’s vision for health care, everyone’s pocketbook will be their own personal death panel.
It’s the kind of reform that really probably should have Big Pharma shaking at last a little in their boots. Also keep in mind that since the future of health care spending is going to become reliant on the fiscal health of all these individuals health savings accounts, that means the future revenues of Big Pharma and the rest of the health care industry is also going to be reliant on all those HSAs. And those HSA funds are presumably going to be sitting in a savings account or invested in the stock market. And that means it’s not just the chronically low rates of savings that will threaten future health care spending. A big messy financial crisis that threatens the US financial system could do the trick too. So while Big Pharma and the rest of the health care industry is no doubt watching closely how exactly Trump and the GOP decide to ‘repeal and replace’ Obamacare, that’s not the only signature law from the Obama years that the industry needs to be keeping an eye on. Posted by Pterrafractyl | February 7, 2017, 10:02 pm It sounds like the GOP’s long-held pledge to ‘repeal and replace’ Obamacare might be getting replaced: ‘repealing and repairing‘ Obamacare…presumably so they can keep calling it ‘Obamacare’ and blame Obama for the monstrosity they’re about to inflict on the voters: Bloomberg Politics GOP Rebrands Obamacare Strategy From ‘Repeal’ to ‘Repair’ * Lawmakers advised to shift to friendlier Obamacare messaging *
Some try out ‘repair’ as others stick with stronger words by Anna Edney, Billy House, and Zachary Tracer February 1, 2017, 4:10 PM CST February 2, 2017, 8:21 AM CST Some Republicans in Congress are starting to talk more about trying to “repair” Obamacare, rather than simply calling for “repeal and replace.” There’s good reason for that. The repair language was discussed by Republicans during their closed-door policy retreat in Philadelphia last week as a better way to brand their strategy. Some of that discussion flowed from views that Republicans may not be headed toward a total replacement, said one conservative House lawmaker who didn’t want to be identified. Using the word repair “captures exactly what the large majority of the American people want,” said Frank Luntz, a prominent Republican consultant and pollster who addressed GOP lawmakers at their retreat. “The public is particularly hostile about skyrocketing costs, and they demand immediate change,”
Luntz said in an e-mail response to questions. “Repair is a less partisan but no less action-oriented phrase that Americans overwhelmingly embrace.” Republicans are grappling with their party’s desire — and President Donald Trump’s promise — to dismantle Obamacare, as well as the political disaster that could ensue if millions of Americans lose coverage as a result of legislation. A Jan. 6 Kaiser Family Foundation poll found that 75 percent of Americans either are opposed to Congress repealing Obamacare or want lawmakers to wait until they have a replacement ready before repealing it. While Trump has promised a plan of his own, Republicans have yet to coalesce around any of the plans that have been floated in recent years to end Obamacare while maintaining a stable insurance market. ‘Repair the Damage’ “Our goal is to repair the damage caused by Obamacare where we find damage,” Senate Health, Education, Labor and Pensions Chairman Lamar Alexander, a Tennessee Republican, said at the start of a hearing he held Wednesday on the individual insurance market. Senator Susan Collins, a Maine Republican, echoed Alexander during the hearing:
“Regardless of who was elected president, we were going to have to do major repairs on the Affordable Care Act.” While Trump ran on the promise he would repeal Obamacare, he appears to have softened his view a bit after the election. Lately, he has pivoted to pledging insurance for everyone. Speaker Ryan House Speaker Paul Ryan, a Wisconsin Republican, has also tried out “repair.” “We’ve been working with the administration on a daily basis to map out and plan a very bold and aggressive agenda to make good on our campaign promises and to fix these problems — to repeal and replace and repair our broken health care system,” Ryan said at a news conference during the Philadelphia retreat. Ryan was asked about the “repair” strategy Thursday on Fox & Friends and said there was a “miscommunication.” “So what kind of got going on here is, I’ve got a confluence of words,” Ryan said during the television interview. “To repair the American health-care system, you have to repeal and replace this law, and that’s what we’re doing.” … “Republicans are grappling with their party’s desire — and President Donald Trump’s promise — to dismantle Obamacare, as well as the political disaster that could ensue if millions of Americans lose coverage as a result of legislation.” Yeah, when your party’s signature legislative agenda is going to involve millions of voters losing their health insurance – or at least losing meaningful insurance is getting throw onto useless joke plans so Trump can declare that ‘everyone is insured’ – it’s probably a good idea to do everything you can to avoid the label ‘Trumpcare’. Or ‘GOPcare’.
Especially when polls are indicating that half of Trump voters don’t want Obamacare repealed (yowza). So we’ll see if the GOP really does stick with the ‘repeal and repair’ language so they can claim they’re offering a ‘repaired Obamacare’ to voters (that’s going to result in a national health catastrophe). While they aren’t committed to the rebranding scheme yet they’re definitely tempted. But it’s worth noting that there’s one type of Obamacare repair that it looks like Trump and the GOP are going to have to do right away. Specifically, repairing the damage the GOP did to Obamacare back in 2014 when they removed the insurer subsidies designed to keep premiums downs:
Talking Points Memo DC Insurer Scores A $200M Court Win After GOP Move To Block O’Care Payments By Tierney Sneed Published February 10, 2017, 2:02 PM EDT An Oregon-based insurer scored a $214 million court victory this week in a case brought after congressional Republicans in 2014 hobbled the federal government’s ability to fund an Affordable Care Act program. The program, known as risk corridors payments, sought to blunt some of the risk insurers were taking on in the first three years of Obamacare’s implementation. The program shifted money from insurers that over-performed on expectations to those that underperformed. However, GOP lawmakers inserted an amendment in must-pass legislation barring the government from drawing funding for the program from elsewhere in the Department of Health and Human Services to make up any shortfalls between the money collected from insurers and the money owed. (Florida’s GOP Sen. Marco Rubio, pictured above, led the charge against the risk corridors program.) As a result, insurers, on average, have received around 12 percent of the payments they have been owed. A U.S. Court of Claims ruled Thursday that the feds had “breached the contract by failing to make full risk corridors payments as promised,” and handed over to the Oregon insurance company Moda the $214 million summary judgement:
There is no genuine dispute that the Government is liable to Moda. Whether under statute or contract, the Court finds that the Government made a promise in the risk corridors program that it has yet to fulfill. Today, the Court directs the Government to fulfill that promise. After all, “to say to [Moda], ‘The joke is on you. You shouldn’t have trusted us,’ is hardly worthy of our great government.” Brandt v. Hickel, 427 F.2d 53, 57 (9th Cir. 1970). In effect an attack against the ACA Republicans launched under President Obama is now a mess that President Trump’s administration will need to clean up. … There are a few other percolating lawsuits brought by insurers against the U.S. government for the shortfalls in the payments. According to University of Michigan Law School professor Nicholas Bagley, the major question isn’t whether courts will side with insurers (he believes they will), it is how lawmakers will move forward in making the payments as the insurer victories pile up in court. Bagley estimated that government could ultimately be on the hook for as much as $15 billion in total. “Refusing to pay is a shabby way to treat insurers, which entered the exchanges in reliance on the federal government’s promises,” Bagley wrote at the blog, Incidental Economist. “Our president, however, has a track record of stiffing business partners. I wouldn’t be surprised if he signed a law doing just that.” “In effect an attack against the ACA Republicans launched under President Obama is now a mess that President Trump’s administration will need to clean up.” Yep, if the GOP was actually going to repair Obamacare, it would mostly involve undoing the damage the GOP did to it. So while they probably aren’t going to be using a ‘repeal and repair the damage we did – although we can never repair to damage to real lives that was done as a consequence of our endless, and sometimes successful, attempts to undermine Obamacare by raising premiums and restricting access‘ slogan, it would be much more appropriate. Posted by Pterrafractyl |
February 10, 2017, 8:14 pm One of the big questions for US politics as we enter into the Trump era is whether or not Trump’s political opponents will be able to maintain the historic levels of activity that we’ve seen in the first month. And while it’s impossible to predict whether or not the anti-Trump intensity will be sustained, it’s worth keeping in mind that while a great deal of the public animosity towards Trump has to do with the caustic nature of Trump’s own personality and authoritarian leadership style, a great deal of that opposition is also due to the fact that the Trump White House is by and large simply trying to implement the classic GOP agenda. The classic politically toxic GOP agenda that gets more and more loathed the more people learn about it: Talking Points Memo DC GOP Reps Skip Out On Town Halls As O’Care, Travel Ban Concerns Flare Up By Allegra Kirkland Published February 6, 2017, 4:05 PM EDT Constituents requesting that Rep. Jimmy Duncan Jr. (R-TN) hold a town hall on repealing the Affordable Care Act aren’t being met with a polite brushoff from staffers anymore. Instead, Duncan’s office has started sending out a form letter telling them point-blank that he has no intention to hold any town hall meetings. “I am not going to hold town hall meetings in this atmosphere, because they would very quickly turn into shouting opportunities for extremists, kooks and radicals,” the letter read, according to a copy obtained by the Maryville Daily Times. “Also, I do not intend to give more publicity to those on the far left who have so much hatred, anger and frustration in them.” In the first weeks of the 115th Congress, elected officials dropping by their home districts were surprised to find town halls packed to the rafters with concerned constituents. Caught off guard and on camera, lawmakers were asked to defend President Donald Trump’s immigration policies and provide a timeline on repealing and replacing the Affordable Care Act. Now, many of them are skipping out on these events entirely. Some have said large meetings are an ineffective format for addressing individual concerns. Many others have, like the President himself, dismissed those questioning their agenda as “paid protesters” or radical activists who could pose a physical threat. Voters turning out to town halls are pushing back hard on this characterization, arguing that they represent varied ideological backgrounds and have diverse issues to raise.
Constituents unable to meet with their elected officials over the weekend told TPM that they’re not attending town hall events to make trouble. Instead, they say they want accountability from the people they pay to represent them. Kim Mattoch, a mother of three and event planner, told TPM that she tried to go to a Saturday town hall in Roseville, California with GOP Rep. Tom McClintock but couldn’t make it in. The 200-seat theater hosting the event was quickly filled to capacity, leaving hundreds waiting outside. “I’m a constituent of McClintock and a registered Republican in a very Republican district—though I don’t really align very well these days with the Republican Party,”
Mattoch said in a Monday phone call. “So I wanted to go to the town hall because I legitimately had questions for the congressman.” Mattoch said the protesters waiting outside had a wide range of “legitimate concerns.” She personally hoped to ask her representative about how the GOP was progressing on repealing and replacing the ACA and why House Republicans last week voted to kill a ruling aimed at preventing coal mining debris from ending up in waterways. Yet McClintock told the Los Angeles Times that he thought an “anarchist element” was present in the crowd outside his event, and said he was escorted to his car by police because he’d been told the atmosphere was “deteriorating.” Ramon Fliek, who attended the McClintock event with his wife, told TPM on Monday that police “were kind enough to block the whole road” to make space for the overflow crowd, and that he overheard protesters thanking law enforcement for “doing their jobs.” “If you look at the videos from the event, you can’t get any notion that it was aggressive,” he said. “There was an older woman with a poodle that ran after him and it’s like, okay, the older lady with the poodle is not going to threaten you. I understand that he might want to give that impression, but it was very pleasant.” …
“Now, many of them are skipping out on these events entirely. Some have said large meetings are an ineffective format for addressing individual concerns. Many others have, like the President himself, dismissed those questioning their agenda as “paid protesters” or radical activists who could pose a physical threat.” Yep, all these town hall protests are all just “paid protesters”. At least that’s the narrative Trump and the GOP are clearly investing in. So if we see sustained, or even growing, town hall protests going forward, we’re presumably going to see a sustained and growing right-wing narrative that it’s all fake. It’s a rather fascinating tactic because, thanks to surprisingly slow progress of the GOP congress despite unified control of both chambers, there’s been almost no substantive legislation passed so the public has only gotten a taste of what Trump and the GOP have in store for them. Including what’s in store for the GOP’s plans to overhaul America’s health care system. Plans that go far beyond ‘repealing and replacing’ Obamacare, like the block granting of Medicare and Medicaid.
We still have yet to see what kind of town hall protests the block granting of Medicare and Medicaid will generate. But Trump and the GOP would like you to believe that all those future town hall protests are going to be paid fake actors too (you know, like the kind Trump hired for his campaign launch). So get ready for the GOP to make a sustained effort to characterize its opposition as fake. Americans, according to the GOP, don’t actually want a guaranteed health care safety net: CNN Trump’s HHS pick: Right to Medicaid may not be guaranteed under block grants by Tami Luhby January 24, 2017: 8:58 PM ET President Trump’s health secretary pick acknowledged Tuesday that Medicaid may cease to be an entitlement for the nation’s low-income residents if Republicans turn it into a block grant, sending a fixed amount of funding to each state. In a contentious hearing before the Senate Finance Committee, Democratic Senator Robert Menendez pressed nominee Tom Price on whether changing Medicaid into a block grant program would mean fewer people would be eligible in the future. Menendez noted Medicaid is currently an entitlement program, meaning anyone who meets the criteria has the right to be covered. “
When you move to a block grant, do you still have the right?” Menendez asked. “No,” Price said. “I think it would be determined by how that was set up.” The question of what to do with Medicaid — particularly how to handle the low-income adults who gained coverage thanks to Obamacare’s expansion provision — came up repeatedly during the hearing. Trump senior adviser Kellyanne Conway said Sunday on ABC News that the president is looking at turning Medicaid into a block grant program. Block grants would give more power over to the states to decide how to give out Medicaid funds and, experts say, reduce overall federal spending. Democratic senators defended the existing program, which they called crucial for many disabled Americans and low-income pregnant women, children and senior citizens.
Nearly 73 million Americans are on Medicaid or the related Children’s Health Insurance Program (CHIP). Under Obamacare, low-income adults are now allowed to sign up for Medicaid in states that expanded their programs. Republicans have long wanted to turn Medicaid funding into a block grant or a per-capita grant, where states receive a fixed sum for each participant. Several of the Obamacare repeal plans that have been floated in Congress —
including Price’s 2015 Empowering Patients First legislation — also call for eliminating Medicaid expansion. Trump listed turning Medicaid into a block grant program on his campaign and transition websites, and Conway’s comments Sunday affirmed that it’s on the top of the new president’s list. Democrats fought back at Tuesday’s hearing. “I feel like the Administration is creating a war on Medicaid,” said Senator Maria Cantwell. Price acknowledged Medicaid is vital, but said it is troubled. Later, he said that the federal government should leave it to governors and state insurance commissioners on how best to cover their low-income residents.
But he said he supports making sure that any replacement bill would provide coverage options for every American, including those now at or near Medicaid eligibility. Block grant proposals usually provide more flexibility for states to tailor their programs to their residents’ needs. While the federal government has set a floor for who must be covered and what services must be provided, states currently have some leeway to widen eligibility to more people and to cover more services. They can also impose some requirements to qualify for care, such as mandating co -payments, though the Obama administration has turned down some governors’ requests. Since one goal of block grants is to slow the growth of health care spending, states could likely wind up with less funding than they have now. Then they would have to choose how many residents to cover and what benefits to provide. Supporters worry that will erode the safety net that the nation’s largest health care program provides. “It’s telling states, here’s the amount of money we’ll give you. You figure out how to take care of 70 million people,” said Sara Rosenbaum, professor of health policy at George Washington University. But those who want to reform the program say that block grants will force states to be more efficient in covering their low-income residents and end the incentive for states to pad their programs in order to receive more federal funding.
Medicaid and CHIP cost $532 billion in fiscal 2015, with the federal government shouldering 63% of the bill and states paying 37%. Lowering the cost of care makes the program more affordable, which would potentially allow states to cover more people, said Paul Howard, director of health policy at the Manhattan Institute. … “Democratic senators defended the existing program, which they called crucial for many disabled Americans and low-income pregnant women, children and senior citizens. Nearly 73 million Americans are on Medicaid or the related Children’s Health Insurance Program (CHIP). Under Obamacare, low-income adults are now allowed to sign up for Medicaid in states that expanded their programs.” 73 million Americans are on Medicaid or CHIP. And part of the reason so many are on the those programs is because they’re a right. But under the Trump/GOP plan, that’s about to change: …
Menendez noted Medicaid is currently an entitlement program, meaning anyone who meets the criteria has the right to be covered. “When you move to a block grant, do you still have the right?” Menendez asked. “No,” Price said. “I think it would be determined by how that was set up.” … So long Medicaid entitlement. Clearly the American people voted for this. Now remember, when Trump and the GOP get ready to make this kind of block granting system into law and we see lots of town hall protests in response, all those protests are paid and don’t actually reflect the fact that 73 million American’s are going to see their access to health care at risk and ALL Americans will see that safety-net (that they might need someday even if they don’t today) on track for perpetual erosion. Yep. Especially after the public finds out that the block granting of Medicaid can lead to things like unpaid community service work requirements, and that Trump’s choice for Centers for Medicare and Medicaid Services administrator, Seema Verma, designed the program in Kentucky’s Medicaid expansion program that has exactly that unpaid-work-for-medical-services-for-the-poor requirement up to 20 hours per week (and this will be unpaid work for the future eroded Medicaid benefits). And then there’s Ohio’s proposal to strip Medicaid recipients of coverage for 6 months if they missed a premium payment that was also designed by Verma’s firm. According to Trump and the GOP, any opposition to plans like that must be paid opposition:
The Guardian Trump’s pick for key health post known for punitive Medicaid plan Seema Verma, the president-elect’s choice for Centers for Medicare and Medicaid Services administrator, pushed lockout periods for low-income people Jessica Glenza in New York Sunday 4 December 2016 07.00 EST Last modified on Monday 23 January 2017 05.11 EST Seema Verma, Donald Trump’s choice to head the two largest public health insurance programs in the US, is a conservative darling who has introduced work requirements and lockout periods for impoverished recipients into the medical safety net in three states. A close adviser to vice-president-elect Mike Pence, Verma – Trump’s nominee for administrator of the Centers for Medicare and Medicaid Services (CMS) – made her name devising Indiana’s Medicaid plan, one of the most punitive in the country. Medicaid is a public health program that ensures America’s poor and disabled have health insurance.
Obamacare dramatically expanded the program, which now serves more than 73 million people. The unique requirements Verma and her consultancy firm SVC Inc designed for Indiana require that the destitute in that state have “skin in the game” by paying “premiums”, even if they were just $1. In Kentucky, her company developed a plan to require the poor to perform “work activity”, which could include unpaid community service, in order to receive health insurance. Approval of that plan is still pending at the CMS, the agency she could soon lead. In Ohio, a plan designed by Verma’s company and rejected by the current leaders of CMS required people with low incomes to be barred from public health insurance until all “premium” arrears were up to date. Her plans were “about saving the dollars by any means possible”, said Indiana Representative Charlie Brown, the ranking Democrat on the public health committee. As a consultant in each state, Verma was the driving force in designing Indiana’s “HIP 2.0” public insurance plan for the poor, and is highly regarded in conservative circles because of its emphasis on personal and fiscal “responsibility”.
Though her plan expanded Medicaid to nearly 400,000 Hoosiers, she has argued that new recipients are “able-bodied” enough to not need “the same set of policy protections” as the “aged, blind, or disabled”. Instead, Verma’s plan forces recipients to pay up to 2% of their income to “premiums”, held in a system similar to tax-free accounts available to commercial plans. It is a plan meant to mimic the commercial market, as a financial lesson for its recipients. It remains one of the most complex and punitive Medicaid expansions in the country, an outlier in a system of state-run safety nets largely free for the poor. Further, it is built on the back of the Affordable Care Act, a law that her potential future boss, Congressman Tom Price, explicitly opposes. Trump has nominated Price to be health secretary. “She’s a hired gun,” said Brown, who described his interaction with Verma as “intense and daily”. “That’s what she was in Indiana, that’s what the administration wanted – to save dollars, and so she comes up with masterful plans.” By 2014, Verma’s small company had secured $3.5m in state contracts with Indiana. She is often described as a behind-the-scenes Republican operative. Regarded as smart and talented, she is also considered single-minded and conservative. She is a registered Republican, and recently agreed to participate in the “leadership network” of the American Enterprise Institute, a rightwing thinktank. …
She and Price, if he is confirmed by the Senate, will be charged with helming a more than $1.1tn budget dominated by public health programs for the very poor, disabled and elderly. Medicaid alone covers more than 73 million Americans, nearly one-quarter of the American population. Neither Verma nor a Pence spokesman replied to a request for comment. Verma’s best known work used a little-known provision of federal health law to push conservative ideas through despite the Obama administration. The strategy made her an influential consultant to Republican state administrations. In Indiana, for example, some of the most controversial provisions of the state’s law were pushed through using this obscure 1115, or “eleven-fifteen”, waiver.
While Obama’s administrator of the Centers for Medicare and Medicaid Services did not approve all of Verma’s plans – a punitive provision developed with Ohio was denied – some were successful. Others are still pending the approval of an agency she may soon run. “One example of a provision in Indiana, which I think is very severe, burdensome, and in fact does not promote the objectives of the Medicaid program, [is] if someone [can’t pay premiums], they get kicked off the program,” said Andrea Callow, a policy analyst at Families USA, a not-for-profit organization focused on consumer health. Premiums are typical of commercial insurance plans – they require beneficiaries to make a monthly payment. But Medicaid recipients typically do not pay premiums because their incomes are so low. The Medicaid expansion carried out under Obamacare allows people to earn a salary of about 138% of the poverty level, about $16,000 for an individual, and remain eligible. In Indiana, if people on Medicaid earning between $11,000 and $16,000 don’t pay their “premiums”, they can be locked out of the program for up to six months, a provision even commercial insurance does not impose. “If someone can’t scrape up the money for premiums for two months, they get dis-enrolled, and they get locked out for six months,” said Kallow.
“Then say they get cancer, they get hit by a truck, they have an accident. They have absolutely no place to turn for health coverage.” Kentucky’s 1115 waiver, on which Verma’s company SVC also consulted, proved equally complex and even more controversial. The state asked CMS to allow Kentucky to impose work requirements beginning three months after benefits began, something no state in the country requires as a condition of Medicaid. “Kentucky’s new expansion proposal has work requirements,” said Kallow, “There’s even sort of unpaid community service, which is very troubling.” After three months, “able-bodied” adults of working age would need to participate in a “work activity” for at least five hours per week. After one year, that requirement would increase to up to 20 hours per week. If that requirement were not met, the state could end the person’s benefits. “There seemed to be a paralysis of analysis as it relates to the downtrodden, those who are in the greatest needs,” said Brown. During a public comment period on Kentucky’s 1115 waiver, 90% of the 1,700 comments received were negative. Analysts also contend that such requirements mean building a new, large bureaucracy just to track whether Medicaid beneficiaries are complying.
“I have no problem with the personal responsibility features to the extent that they improve outcomes,” said Ed Clere, former Republican chair of the Indiana House public health committee. “One of the big questions going forward, both for Indiana and now for the country, will be: is there a link between these personal responsibility features in the way of financial participation and improved healthy outcomes? “I haven’t seen any evidence.” …
“During a public comment period on Kentucky’s 1115 waiver, 90% of the 1,700 comments received were negative. Analysts also contend that such requirements mean building a new, large bureaucracy just to track whether Medicaid beneficiaries are complying.” That 90 percent opposition to Kentucky’s Medicaid free-work requirement during the public comment period? Yeah, that was all paid fake opposition. The public is actually really excited about turning its entitlement programs and health care safety-net into a public works(for free) system. Uh huh. And if the plan to make Medicaid recipients pay a premium, along with the threat that they lose their coverage if they miss a payment, doesn’t scare you because that plan wasn’t approved by the Centers for Medicare and Medicaid Services (CMS), don’t forget that Seem is set to the the CMS’s next administrator so such plans should be a problem for Ohio or any other state in the future after the GOP block grants the program:
… The unique requirements Verma and her consultancy firm SVC Inc designed for Indiana require that the destitute in that state have “skin in the game” by paying “premiums”, even if they were just $1. In Kentucky, her company developed a plan to require the poor to perform “work activity”, which could include unpaid community service, in order to receive health insurance. Approval of that plan is still pending at the CMS, the agency she could soon lead. In Ohio, a plan designed by Verma’s company and rejected by the current leaders of CMS required people with low incomes to be barred from public health insurance until all “premium” arrears were up to date. …
So get ready for Medicaid to get block granted and turned into a national race to the bottom where nickle-and-diming the poor (so your state has an excuse to temporarily deny them health care coverage) becomes the norm. And get ready for Trump and the GOP to declare the opposition to this vision fake and illegitimate. And don’t forget that Medicaid isn’t the only program the GOP is planning on block granting. Medicare is also on the block grant chopping block. And while the kind of ‘kick the poor’ provisions that could get tacked into Medicaid will probably be replaced with different kinds of ‘soak the middle class’ provisions for a block granted Medicare, don’t forget that one of Donald Trump’s favorite things to rail against during his campaign was the 96 million Americans out of work.
And while there are indeed 96 million unemployed Americans age 16 and older out of work in the US, that’s only if you count students, retirees, disabled, stay-at-home parents or otherwise not in the workforce. So who knows, maybe all those retired people on Medicare will some day be expected to get a job or do 20 hours of free work to keep that Medicare coverage. And if they miss a premium payment they’ll lose coverage for 6 months. And if they get sick during that period of lapsed coverage and get bankrupted in health care costs they’ll get kicked to the joke Medicaid system of the future. Hopefully Medicare in the future will cover anxiety disorders because there’s going to be a lot of it (don’t count on it). Also keep in mind that this loom historic shift in how Americans design their public systems – from public goods to punitive miserly for-profit-in-spirit programs intended to keep taxes low – and the possibility that work requirements is going to be one of the hot new ways to cut costs (it kicks the poor so it could be popular with some people) is going to be taking place during a time when there’s growing concern that technologies like advanced AI and robotics is going to steadily erode a growing number of job opportunities, leading to an eventual systemic crisis.
Whether or not that’s going to happen is very speculative and depends quite a big on whether or not the public decides to create jobs for people (or support industry that will create jobs that can’t get automated). So the GOP’s plan to put people to work for crap public services (which are no longer entitlements) could eventually be coinciding with a period where there really is going to be a growing need to a government as employer of last resort model. A potential future employment crisis brought on by automation also intersects with another key aspect of the GOP’s health care reform agenda: the voucherization of Medicare and Medicaid that Paul Ryan sees as the end goal.
And vouchers have a lot in common with universal basic incomes, another idea that’s being increasingly talked about as a model for possibly necessary tool for a post-employment society. And there are two very different approaches to the universal basic income. A progressive approach adding a universal income on top of a strong safety-net. And the the right-wing version of the UBI promoted by people like Charles Murray where all social safety-net programs are replaced with a check (Murray proposed a yearly $10,000 check when Murray wrote a book about it in 2006, which would be devastating for the poor). So assuming the GOP proceeds ahead with their Medicare and Medicaid block granting schemes, it’s going to be important to keep in mind that this is all going to be playing into the anxiety, warranted or not, about automation and future joblessness. It also plays into the GOP’s larger long-term agenda of privatizing social services.
If Americans screw up this Medicare and Medicaid reform period and go down the path of block grants and, eventually, voucherization, we’re also on track for a really crappy version of the universal basic income if the feared robot employment-pocalypse comes to pass decades from now. But if there is a future employment issue (or a future living wage issue where there are plenty of super-low paying jobs an that’s mostly it), a universal basic income could be a really useful public good. So it’s also going to keep in mind that the inevitable discussion about universal basic incomes is going to have to make it clear that the right-wing plan to use a universal basic income to replace programs like Medicare and Medicaid and the overall social safety-net is a really bad idea. And for many of the same reason block granting and eventually voucherizing Medicare and Medicaid is a bad idea. So let’s hope all those town hall protestors and the broader public succeed in keeping the block granting of Medicaid and Medicare from coming to pass and eventually fixed them (once the Trumpocalypse is over hopefully). That will put the US on a much better path, not just for health care tomorrow but also the possible automation nightmare of the future.
And don’t forget that if we’re ever forced to start having the government think of job for people to do, doing what the town hall protestors are doing is probably one of the most useful things we could have people do. Just lobbying our elected officials. Public lobbyists potentially paid for by a universal basic income + public services. No bosses required. Wouldn’t that be fun way to run a democracy in the future if the robots take all our jobs? If you don’t have a job, you can have a nice basic income (plus services) and you just become informed and then lobby the government. And vote whenever possible. The universal basic income and automation topic isn’t going away (Elon Musk just predicted the need for the UBI due to automation again, but wondered if people would find meaning in their lives without a job) and neither is the GOP’s ongoing government privatization push. And both issues are intertwined in ways that are directly related to the current Medicare/Medicaid block granting agenda (that could lead to work requirements) that Trump and his cabinet officials all support and helped pioneer.
So let’s not forget that the UBI debate ties into the health care reform debate (especially the looming work requirement debate) and let’s also not forget that if we feel the need ask people to work in order to get public services, there’s one job we all need as many people as possible to do and it’s the job that those protestors at the town halls were doing. Let’s not forget that. Imagine all the different areas of government policy that could use a large number of random average people keeping and eye on and effectively lobbying in the public good. If we ever have a universal basic income, let’s just declare being a public lobbyist the default job. The impact of a robust UBI + public service society that gives people lots of time to get informed, get organized, and lobby their government could lead to a flood of new people getting involved with their government. Imagine how many random people would end up running for office. It will be a lot easier for average people to run for office with a UBI + public services, especially if those public services include high quality free education (not likely)
. So while those protestors weren’t actually getting paid that like Trump and the GOP are shamelessly claiming, they should have been. They should have been paid a basic income and offered a bunch of public services so they could have lots of time to educate themselves about things like the GOP’s toxic agenda, educate the public (much of which is also acting as public lobbyist) about what they learned, and then educate their elected officials. Posted by Pterrafractyl | February 19, 2017, 12:21 am You know how Donald Trump previously indicated he’s in favor of Medicare directly negotiating drug prices with drug manufacturers, but then flipped and suggested that was “price fixing”, only to apparently flip back. Well, if Seema Verma, Trump’s pick to lead the Center for Medicaid & Medicare Services and one of the GOP’s go-to individuals for designing kick-the-poor health care policies, is any indication of what Trump’s final position on the matter will be, there may be another flip in store for Trump’s stance on Medicare and drug prices: The Hill Trump’s pick to lead Medicare won’t say if she supports negotiating prices with drug companies By Jessie Hellmann 02/16/17 11:03 AM EST Seema Verma, President Trump’s pick to lead the Center for Medicaid & Medicare Services, dodged questions Thursday about whether she supports the federal government negotiating drug prices for its public health programs. During her confirmation hearing before the Senate Finance Committee, Verma said increased competition could lower drug prices for seniors but did not say she supports allowing the federal government to negotiate with drug companies. “I think that competition is the key to getting good prices,” Verma told Sen. Debbie Stabenow (D-Mich.). Pressed on whether she supports negotiation, Verma said, “I don’t think that’s a simple yes or no answer.” “The goal is to make sure we’re getting affordable prices for our seniors,” she said. “I think we have to figure out ways about how we can increase our competition and support the (Medicare) Part D program.” …
“During her confirmation hearing before the Senate Finance Committee, Verma said increased competition could lower drug prices for seniors but did not say she supports allowing the federal government to negotiate with drug companies.” It sounds like the Trump team might be getting cold feet about Medicare negotiating drug prices again. It’s unclear how much Seema Verma’s answers, or lack thereof, during the confirmation hearings reflect Trump’s thinking on these matters. Especially since it’s very unclear what Trump’s thinking on these matters is at all is at this point: The Washington Post Cummings: ‘No idea why President Trump would make up a story about me like he did today’ By Jenna Portnoy February 16 Rep. Elijah E. Cummings swatted away President Trump’s claim that the Baltimore Democrat wouldn’t meet with him after repeated calls from the White House. Trump made the comment during a wide-ranging news conference Thursday and speculated that Cummings may have been dissuaded from coming to the White House for political reasons, perhaps by Senate Minority Leader Charles E. Schumer (D-N.Y.), whom Trump dismissed as a “lightweight.” “I have no idea why President Trump would make up a story about me like he did today. Of course, Senator Schumer never told me to skip a meeting with the President,” Cummings said in a statement. Trump said Cummings “was all excited and then he said, ‘Well, I can’t move, it might be bad for me politically. I can’t have that meeting.’ ” Trump continued: “But he probably was told by Schumer or somebody like that — some other lightweight. … He was probably told: ‘Don’t meet with Trump. It’s bad politics.’ And that’s part of the problem with this country.” The musings came in response to a question about whether Trump would meet with the Congressional Black Caucus — of which Cummings is a high-profile member — to discuss crime in poor, urban areas.
The 11-term congressman and ranking Democrat on the House Oversight and Government Reform Committee said he planned to talk to Trump about the skyrocketing cost of prescription drugs. But first, he said, he wanted to finalize a proposal he has been working on with Sen. Bernie Sanders (I-Vt.) to allow the Department of Health and Human Services to negotiate drug prices — a concept that Cummings says Trump has supported. “I also sincerely have no idea why the President made this claim in response to an unrelated question about the Congressional Black Caucus. I am sure members of the CBC can answer these questions for themselves,” the congressman’s statement said. Cummings noted that prescription drugs affect “every American family — not just people of color.” The congressman told reporters on Capitol Hill on Thursday afternoon that his office is working on setting up a meeting. “We’re looking forward to it,” he said. “I’m excited about meeting with the president. He’s my president, and I’m excited about meeting with him.” … ““I have no idea why President Trump would make up a story about me like he did today. Of course, Senator Schumer never told me to skip a meeting with the President,” Cummings said in a statement.” According to Trump, Rep. Elijah Cummings decided to pull out of talks with the White House about how to move forward on lower drug costs because ‘it was bad for him politically’, and Cummings told Trump this as his explanation. And Trump told everyone this in response to a question about whether or not Trump would meet with the Congressional Black Caucus during his wacky press conference: …
Trump said Cummings “was all excited and then he said, ‘Well, I can’t move, it might be bad for me politically. I can’t have that meeting.’ ” Trump continued: “But he probably was told by Schumer or somebody like that — some other lightweight. … He was probably told: ‘Don’t meet with Trump. It’s bad politics.’ And that’s part of the problem with this country.” The musings came in response to a question about whether Trump would meet with the Congressional Black Caucus — of which Cummings is a high-profile member — to discuss crime in poor, urban areas. … And what did Elijah Cummings say about this? Simply that he has no idea what the hell Trump is talking about, there was no canceled meeting, but he did have a planned meeting over drug prices that was getting deferred until Cummings and Bernie Sanders worked out a proposal that allow for the Department of Health and Human Services to negotiate drug prices: … The 11-term congressman and ranking Democrat on the House Oversight and Government Reform Committee said he planned to talk to Trump about the skyrocketing cost of prescription drugs. But first, he said, he wanted to finalize a proposal he has been working on with Sen. Bernie Sanders (I-Vt.) to allow the Department of Health and Human Services to negotiate drug prices — a concept that Cummings says Trump has supported. “I also sincerely have no idea why the President made this claim in response to an unrelated question about the Congressional Black Caucus. I am sure members of the CBC can answer these questions for themselves,” the congressman’s statement said. … Elijah Cummings expresses a desire to work with Trump on drugs, works with Sanders on a proposal to bring to Trump for government drug price negotiation, and Trump makes up a weird fake anecdote during his off the wall press conference about Cummings canceling meeting due to bad politics.
And then Trump suggests Chuck Schumer recommended to Cummings that he cancel the meeting. And this is all in response to an unrelated question about the Congressional Black Caucus. So, hopefully the negotiations in Trump’s alternate reality go well, but in the actual reality it looks like Trump stance on drug prices is to make up alternative reality explanations for why he can’t negotiate. Posted by Pterrafractyl | February 19, 2017, 9:18 pm Here’s a leak that doesn’t involve the Trump administration. At least not directly, but since it’s a leak about the Obamacare replacement that the House GOP has in mind it’s very Trump-related. It’s the plan for Trumpcare. Although Ryancare is probably a more appropriate name: Politico Exclusive: Leaked GOP Obamacare replacement shrinks subsidies, Medicaid expansion The replacement would be paid for by limiting tax breaks on generous health plans people get at work. By Paul Demko 02/24/17 11:07 AM EST Updated 02/24/17 03:10 PM EST A draft House Republican repeal bill would dismantle the Obamacare subsidies and scrap its Medicaid expansion, according to a copy of the proposal obtained by POLITICO. The legislation would take down the foundation of Obamacare, including the unpopular individual mandate, subsidies based on people’s income, and all of the law’s taxes. It would significantly roll back Medicaid spending and give states money to create high risk pools for some people with pre-existing conditions. Some elements would be effective right away; others not until 2020. The replacement would be paid for by limiting tax breaks on generous health plans people get at work — an idea that is similar to the Obamacare “Cadillac tax” that Republicans have fought to repeal. Speaker Paul Ryan said last week that Republicans would introduce repeal legislation after recess. But the GOP has been deeply divided about how much of the law to scrap, and how much to “repair,” and the heated town halls back home during the weeklong recess aren’t making it any easier for them. The key House committees declined to comment on specifics of a draft that will change as the bill moves through the committees.
The speaker’s office deferred to the House committees. In place of the Obamacare subsidies, the House bill starting in 2020 would give tax credits — based on age instead of income. For a person under age 30, the credit would be $2,000. That amount would double for beneficiaries over the age of 60, according to the proposal. A related document notes that HHS Secretary Tom Price wants the subsidies to be slightly less generous for most age groups. The Republican plan would also eliminate Obamacare’s Medicaid expansion in 2020. States could still cover those people if they chose but they’d get a lot less federal money to do so. And instead of the current open-ended federal entitlement, states would get capped payments to states based on the number of Medicaid enrollees. Another key piece of the Republican proposal: $100 billion in “state innovation grants” to help subsidize extremely expensive enrollees. That aims to address at least a portion of the “pre-existing condition” population, though without the same broad protections as in the Affordable Care Act. It also would eliminate Planned Parenthood funding, which could be an obstacle if the bill gets to the Senate. And it leaves decisions about mandatory or essential benefits to the states. According to the document, there’s only one single revenue generator to pay for the new tax credits and grants. Republicans are proposing to cap the tax exemption for employer sponsored insurance at the 90th percentile of current premiums. That means benefits above that level would be taxed. And while health care economists on both sides of the aisle favor tax-limits along those lines, politically it’s a hard sell. Both businesses and unions fought the Obamacare counterpart, dubbed the Cadillac tax.
The document is more detailed than the general powerpoint House leaders circulated before the recess. Lawmakers are still in disagreement about several key issues, including Medicaid and the size and form of subsidies. Discussions within the House, and between House leaders and the White House about the final proposal are ongoing. President Donald Trump, who gives a major speech to Congress on Tuesday night, has said he expects a plan will emerge in early to mid March. The exact details of any legislation will also be shaped by findings from the CBO about how much it will cost and what it will do to the federal deficit. But the draft shows that Republicans are sticking closely to previous plans floated by Ryan and Price in crafting their Obamacare repeal package. “Obamacare has failed,” said HHS spokesperson Caitlin Oakley. “We welcome any and all efforts to repeal and replace it with real solutions that put patients first and back in charge of their health care rather than government bureaucrats in Washington, D.C.” Other changes proposed by Republicans align with previous ideas for strengthening the individual insurance market, which has been unstable under Obamacare with rising premiums and dwindling competition.
For example, the legislation would allow insurers to charge older customers up to five times as much as their younger counterparts. Currently, they can only charge them three times as much in premiums. The insurers have been pushing for that change. The proposal also includes penalties for individuals who fail to maintain coverage continuously. If their coverage lapses and they decide to re-enroll, they would have to pay a 30 percent boost in premiums for a year. Like the unpopular individual mandate, that penalty is designed to discourage individuals from waiting until they get sick to get coverage. … Recent polling has shown that Obamacare is increasingly popular. Supporters of the health care law have been turning out by the hundreds at town hall meetings across the country to demand that Republicans answer questions about what’s going to happen to the 20 million individual who have gained coverage under Obamacare.
According to the latest Kaiser Family Foundation tracking poll, released Friday morning, the public now views the Affordable Care Act more favorably than it has since the summer of its enactment. Some 48 percent view the law favorably — up from 43 percent in December. About 42 percent have an unfavorable view of the ACA — down from 46 percent in December. The pollsters say Independents are mostly responsible for the shift. A separate bpoll by the Pew Research Center found 54 percent approve of the health care law — the highest scores for Obamacare in the poll’s history. Meanwhile, 43 percent said they disapprove. “But the draft shows that Republicans are sticking closely to previous plans floated by Ryan and Price in crafting their Obamacare repeal package.” Sticking with the Ryan plan. Oh joy. Now, instead of Obamacare, Americans will get awesome features like replacing the Obamacare subsidies for lower-income people, they’ll get a tax credit. $2,000 a year if you’re under 30 and a whole $4,000 if you’re over 60: .. In place of the Obamacare subsidies, the House bill starting in 2020 would give tax credits — based on age instead of income. For a person under age 30, the credit would be $2,000. That amount would double for beneficiaries over the age of 60, according to the proposal. A related document notes that HHS Secretary Tom Price wants the subsidies to be slightly less generous for most age groups. … And then there’s the Medicaid expansion getting repealed. Plus the entire Medicaid system getting block-granted (which means states are going to be responsible for paying for a greater and greater percentage of the total Medicaid spending as federal contributions don’t grow adequately): … The Republican plan would also eliminate Obamacare’s Medicaid expansion in 2020. States could still cover those people if they chose but they’d get a lot less federal money to do so. And instead of the current open-ended federal entitlement, states would get capped payments to states based on the number of Medicaid enrollees.
… And remember getting denied coverage for pre-existing conditions? It’s back. But don’t worry because now states will create high-risk pools for all the people with pre-existing conditions to join. Hopefully. Everyone is pretty sure they’ll be underfunded to maybe you won’t be able to join. And maybe it’ll be expensive. But it’ll be there. Instead of the Obamacare ban on denial of coverage for pre-existing conditions: … Another key piece of the Republican proposal: $100 billion in “state innovation grants” to help subsidize extremely expensive enrollees. That aims to address at least a portion of the “pre-existing condition” population, though without the same broad protections as in the Affordable Care Act. …
It also eliminates funding for Planned Parenthood, guaranteeing a healthcare crisis for women and children across the country. And all the specific cuts that will have to come from the repeal of the Medicaid expansion and paying for spending on high-risk pools will be up to the states: … It also would eliminate Planned Parenthood funding, which could be an obstacle if the bill gets to the Senate. And it leaves decisions about mandatory or essential benefits to the states. … All that and more awfulness is what Trump and the GOP is seriously going to try to peddle to the public. Trump better hope everyone is focused on his ties to Russia while this plan is put into law because this is probably more politically toxic. It’s the deconstruction of the administrative state, as Steve Bannon would put it, getting underway for health care. And all those future cuts are going to get decided by the states. Future undoubtedly brutal cuts because they’ll be cuts for programs like Medicaid where the people seeing their support cut are the least able to compensate. And the new high-risk pool scheme to allow for a return of denial of coverage for pre-existing is guaranteed to bring about a new period of US politics where health-care spending crises are a permanent fixture for a growing number of states until the safety net is shredded and potentially tens of millions lose their access to health care as a result of those cuts. Cuts year after year. All selected by the states. It really is amazing state politicians everywhere aren’t more pissed about this. Although they probably will be once the angry town halls that their federal counterparts are currently experiencing come to a state house near you. indefinitely.
And don’t forget that’s the plan: perpetual cuts mandated by the federal government that the states won’t possibly be able to replace: Reuters Overhaul of Medicaid expansion could cost states $32 billion: report By Hilary Russ | NEW YORK Fri Feb 24, 2017 | 5:51pm EST Proposals in Congress that would effectively end Medicaid expansion in 31 U.S. states would cost those states at least $32 billion altogether in 2019, according to a report released on Friday. “Few, if any, states could absorb such new costs,” the Center on Budget and Policy Priorities, a Washington-based, left-leaning think tank, said in its report. … One scenario to phase out enhanced federal funding would convert the current system, in which states share the cost of Medicaid enrollees with the federal government, into fixed payments, or block grants, sent to the states. But that would dramatically affect the 31 states and the District of Columbia that chose to expand Medicaid, the government health insurance program for low-income Americans, and collect extra dollars that came with expansion. Those states would have to find the extra $32 billion themselves to maintain their expansions, the center said in its report. The block grant conversion would “shrink federal Medicaid funding over time, result in even deeper funding cuts when needs increase, and ultimately place coverage for tens of millions more Americans at risk,” the center said in its report. The reduced federal funding would cause the automatic end of the expansion in seven states. Other expansion states would “almost certainly drop or substantially scale back their expansions,” the report said. Medicaid sits at the heart of the federal-state fiscal relationship.
Over $330 billion in federal Medicaid dollars flowed to states in fiscal year 2016, accounting for more than half of all federal grants sent to state and local governments and the largest individual program, according to Standard & Poor’s. “The block grant conversion would “shrink federal Medicaid funding over time, result in even deeper funding cuts when needs increase, and ultimately place coverage for tens of millions more Americans at risk,” the center said in its report.” Assuming this ‘block-grants and endless, federally mandated state-directed cuts’ model does become law it’s going to be fascinating to see what impact this has on the US political dynamic. Because the ability to raise taxes at the state level really is going to be a life and death issue more and more as the Ryan plan’s eroding effects take hold. What will that do to the GOP’s state-level dominance? It’s not like the party is sane. Or compassionate. It’s the GOP. Can it bring itself to raise taxes at the state-level to avoid people losing coverage or services? Over and over indefinitely? That doesn’t sound very GOP-ish. So we’ll see what happens but move over Death and Taxes. Welcome to the age of Ryancare. It’s now Death or Taxes. Specifically state-level taxes. Posted by Pterrafractyl |
February 25, 2017, 2:34 am Well that’s ominous: Donald Trumps Treasury Secretary Steve Mnuchin tried to assuage fears that Trump’s declared massive cuts to federal spending needed to offset the planned rise in military spending would result in cuts to Medicare and Social Security. Mnuchin’s response? “We are not touching those now…So don’t expect to see that as part of this budget.” How reassuring: Talking Points Memo Livewire Mnuchin: Trump’s Budget Will Not Make Cuts To Social Security, Medicare By Caitlin MacNeal Published February 27, 2017, 7:17 AM EDT Treasury Secretary Steven Mnuchin on Sunday said that President Donald Trump’s budget, which will be sent to Congress in March, will not propose cutting funding for all social safety programs. “We are not touching those now,”Mnuchin said on Fox News’ “Sunday Morning Futures” when Maria Bartiromo asked if the administration planned to cut funding for programs like Social Security and Medicare. “So don’t expect to see that as part of this budget.” … Trump will push for an increase in military spending and cuts at other agencies so that the administration will not have to slash funding for Social Security and Medicare, the New York Times reported Sunday. The White House will call for cuts at the Environmental Protection Agency and the State Department, the New York Times reported, citing four unnamed senior administration officials. Social safety net programs other than Social Security and Medicare could be hit with funding cuts, per the Times. The President’s budget outline will also call for funding increases for the Justice Department, homeland security, intelligence, and law enforcement, Politico reported. “Trump will push for an increase in military spending and cuts at other agencies so that the administration will not have to slash funding for Social Security and Medicare, the New York Times reported Sunday.
The White House will call for cuts at the Environmental Protection Agency and the State Department, the New York Times reported, citing four unnamed senior administration officials. Social safety net programs other than Social Security and Medicare could be hit with funding cuts, per the Times.” So Trump is planning on cutting taxes and going on a military spending spree, and while the administration acknowledges that pretty much all non-military spending at the federal level is going to have to be slashed in order to pay for it…except Social Security and Medicare. They want to assure that the to largest federal spending programs aren’t going to have to be touched in order to pull off this scheme. At least now not. But who knows what will happen later? That’s the reassuring message, which happens to be in direct opposition to the GOP’s long-standing desire to slash Social Security and Medicare: The Washington Post Trump touts spending plan, but promise to leave entitlements alone puts GOP in a quandary By Abby Phillip and Kelsey Snell February 27, 2017 at 7:57 PM President Trump is preparing a budget that would fulfill some of his top campaign promises by boosting military spending while cutting domestic programs. But his reluctance to embrace cuts to entitlement programs could lead to sharp tensions with Republicans in Congress who have long argued that Medicare and Social Security must be overhauled to ensure the government’s fiscal health. The White House on Monday announced the first details of the president’s spending plan, highlighting a $54 billion increase in defense spending and equal cuts to domestic programs, such as the Environmental Protection Agency, and foreign aid. “We are going to do more with less and make the government lean and accountable to the people,” Trump told reporters at the White House on Monday morning. “We can do so much more with the money we spend.”
White House officials skirted questions about whether the budget would include proposals to slow the growth of Social Security, Medicare and Medicaid — the largest drivers of federal spending. But Republican lawmakers, including House Speaker Paul D. Ryan (Wis.), have for years argued that spending increases must be accompanied by significant changes to entitlements. White House press secretary Sean Spicer insisted Monday that the president intends to keep his campaign promise to preserve the programs, but avoided commenting on whether there is any wiggle room, such as protecting current beneficiaries while implementing future changes. “Let me get back to you on the specifics,” Spicer told reporters. Republicans have long advocated significantly changing the programs to address the nation’s debt, which is now nearly $20 trillion. Independent budget analysts said policy proposals the administration has released would do little to fix the growing red ink. “This is a president who loves to talk about easy choices and pretty much runs away from any hard choices when it comes to the budget,” said Maya MacGuineas, president of the nonpartisan Committee for a Responsible Federal Budget. “This president has pointed out that our national debt is an important metric of this country’s health, but he has not put forward a plan for how to deal with it.” Monday’s announcement was the first indication of spending priorities by the new administration, with the president set to arrive on Capitol Hill on Tuesday to address a joint session of Congress. In his speech, Trump is expected to outline an optimistic vision for the country, touting his intent to replace the Affordable Care Act, implement policies to help working parents and address national security concerns, including rebuilding the U.S. military. Ryan and other Republican leaders have avoided weighing in on the specifics of the budget, saying they are waiting to see all the details that will be released in the coming weeks, while speaking positively of the president’s overall agenda. But Ryan has long advocated changing entitlement programs, arguing that their finances are in a perilous state. “Medicare and Social Security are going bankrupt,” he said in October 2012, during a vice presidential debate when he was Republican presidential nominee Mitt Romney’s running mate
. “These are indisputable facts.” White House Budget Director Mick Mulvaney in many ways embodies the fiscal quandary Republicans face under Trump. As a conservative member of Congress from South Carolina, he fashioned himself a deficit hawk who opposed big increases in defense funding and advocated cutting spending for Medicare, Medicaid, Social Security and other entitlement programs. Now he is overseeing Trump’s effort to greatly increase defense spending while offering no plan to address entitlements. On Monday, he avoided answering specific questions about the upcoming budget, noting that the first part will be finalized by mid-March with more details set to arrive in May. Speaking to reporters at the White House, Mulvaney emphasized that the military and domestic spending priorities outlined Monday are intended to send a clear signal that Trump is seeking to fulfill his campaign promises. “We are taking his words and turning them into policies and dollars,” Mulvaney said. “A full budget will contain the entire spectrum of what the president has proposed.” … Republican defense hawks, meanwhile, are calling Trump’s request for defense spending inadequate. “With a world on fire, America cannot secure peace through strength with just 3 percent more than President Obama’s budget,” Senate Armed Services Chairman John McCain (Ariz.) said in a statement. “We can and must do better.” … “White House Budget Director Mick Mulvaney in many ways embodies the fiscal quandary Republicans face under Trump.
As a conservative member of Congress from South Carolina, he fashioned himself a deficit hawk who opposed big increases in defense funding and advocated cutting spending for Medicare, Medicaid, Social Security and other entitlement programs. Now he is overseeing Trump’s effort to greatly increase defense spending while offering no plan to address entitlements.” Yep, even Mick Mulvaney, Trump’s director of the Office of Budget and Management, has been calling for cuts to Social Security and Medicare for years while he was serving in Congress. And continued calling for those cuts after becoming the head of the OMB. But Steve Mnuchin wants everyone to not worry so much because he assures us that Trump has no plans on cutting those programs. At least not yet. Feeling reassured yet? If not, perhaps some words from Trump himself on the matter will help reassure you. It turns out Trump addressed this very issue briefly during an interview on Fox and Friends this morning where explained why cuts to Social Security and Medicare won’t be needed.
Or rather, Trump laid out a scenario under which Trump won’t need to cut Social Security and Medicare. It’s a scenario he’s apparently really confident will happen. And as long as that scenario plays out, no cuts to Social Security and Medicare. So what’s the scenario? An economy that’s “sailing” (presumably indefinitely):
The Washington Post President Trump’s friendly ‘Fox and Friends’ interview went exactly how you think it would By Chris Cillizza February 28, 2017 at 9:46 AM President Trump sat down with “Fox and Friends” on Tuesday morning to preview his address tonight to a joint session of Congress. Using Genius, I annotated it. You can too! Sign up for Genius and annotate alongside me! To see an annotation, click or tap the highlighted part of the transcript. DOOCY: Mr. President, thank you very much for the invitation. TRUMP: Thank you. DOOCY: And by the way, thank you very much for the shout-out you gave at your press conference about 10 days ago. TRUMP: That’s true, I did. And you treated me — you have treated me very fairly and I appreciate it. I like your (INAUDIBLE)… DOOCY: Did you take much heat for that from the other networks? TRUMP: No, not really. I think they know it’s true. You know, they know what’s fair and not. But you have treated me very fairly. And I’ve been a friend of your show for a long time. Remember those call-ins, right (INAUDIBLE)? DOOCY: For years. TRUMP: Maybe without those call-ins, somebody else is sitting here. AINSLEY EARHARDT, HOST: Let’s talk about your speech. You’re addressing Congress tonight. You have talked about spending $54 billion in additional money for our military. Senator John McCain has said that is not enough. What’s your reaction? TRUMP: Well, we’re going to spend a lot more money on military. We really have to. We have no choice. And a lot of people think it’s a tremendous amount of money. It could be, actually, $30 million, $30 billion more than that. We’re going to upgrade our military very substantially. Remember this, I also am going to get involved in negotiating. we have many planes and boats and ships and everything that we are spending too much money individually on. We’re going to get involved in negotiating. We’re going to be able to get, I think, a lot more product for a buck and I’m going to be very, very serious about it. We saved $700 million plus on an F-35 after I got involved. And I have to tell you, Lockheed was terrific. But we saved a lot of money on airplanes and that number is going to increase very substantially as we keep going, We will be having the greatest military that we ever had by the time I finish. … KILMEADE: You have an OMB director, finally. He says you have to take an ax to entitlements. Your Treasury secretary says we’re not touching it. Who’s right? TRUMP: Well, I’ll tell you what who’s right. If the economy sails, then I’m right, because I said I’m not touching Social Security. KILMEADE: So your OMB is wrong? TRUMP: I’m not saying anybody is wrong. I’m just saying this. If we — and I think this is what’s going to happen, Brian. I think our country is going to sail. … “TRUMP: Well, I’ll tell you what who’s right. If the economy sails, then I’m right, because I said I’m not touching Social Security.” So Trump gets asked, who’s correct? His OMB director who says entitlement cuts are necessary or the Treasury Secretary who says no cuts are need (for now)? And Trump responds by basically saying that as long as the economy “sails”, Trump will be correct because he said he’s not touching Social Security. But then adds that his OMB director isn’t “wrong” in saying that entitlement cuts are required, but as long as the US economy “sails” he won’t be right either. So while it’s not entirely clear how to parse Trump’s response, it sure sounds like he’s saying that future Social Security and Medicare cuts are going to be determined by whether or not the economy “sails” going forward. And keep in mind that Trump isn’t simply being optimistic about future US economic performance here, although he is being incredibly optimistic.
The Trump administration’s “sailing” optimism is actually built into the model it’s using in order to justify the proposed Trump budget: The New York Times The Conscience of a Liberal Trump’s Rosy Scenario Paul Krugman Feb 18, 2017 10:46 am The WSJ reports that the Trump administration’s budget planning assumes very high economic growth over the next decade — between 3 and 3.5 percent annually. How was this number arrived at? Basically, they worked backwards, assuming the growth they needed to make their budget numbers add up. Credibility! But the purpose of this post is mainly to explain why such a number is implausible — not impossible, but not something that should be anyone’s central forecast. you should still be expecting growth of 2 percent or under The claimed returns to Trumpnomics are close to the highest growth rates we’ve seen under any modern administration. Real GDP grew 3.4 percent annually under Reagan; it grew 3.7 percent annually under Clinton (shhh — don’t tell conservatives.) But there are fundamental reasons to believe that such growth is unlikely to happen now. First, demography: Reagan took office with baby boomers — and women — still entering the work force; these days baby boomers are leaving. Here’s UN data on the 5-year growth rate of the population aged 20-64, a rough proxy for those likely to seek work: [see chart
] Just on demography alone, then, you’d expect growth to be around a percentage point lower than it was under Reagan. Furthermore, while Trump did not, in fact, inherit a mess, both Reagan and Clinton did — in the narrow sense that both came into office amid depressed economies, with unemployment above 7 percent: [see chart] This meant a substantial amount of slack to be taken up when the economy returned to full employment. Rough calculation: 2 points of excess unemployment means 4 percent output gap under Okun’s Law, which means 0.5 percentage points of extra growth over an 8-year period. So even if you (wrongly) give Reagan policies credit for the business cycle recovery after 1982, and believe (wrongly) that Trumponomics is going to do wonderful things for incentives a la Reagan, you should still be expecting growth of 2 percent or under. …
“So even if you (wrongly) give Reagan policies credit for the business cycle recovery after 1982, and believe (wrongly) that Trumponomics is going to do wonderful things for incentives a la Reagan, you should still be expecting growth of 2 percent or under.” Yes, while realistically we shouldn’t expect average growth to be much above 2 percent going forward, Trump’s budget plan assumes a “sailing” growth of 3-3.5 percent for the next decade. And as we saw from Trump’s above, the main factor that will determine who is correct – his OMB director (who predicts cuts to entitlements will be necessary) is correct vs his Treasury Secretary (who pledges no cuts…for now) – is whether or not the economy “sails” going forward. So under Trump’s budget scheme, if the economy doesn’t experience unprecedented growth going forward entitlements get gutted. It’s something to keep in mind as Trump prepares to give his first speech to Congress tonight and lay out an ‘optimistic’ vision of the future: It’s the kind of optimism that should leave you feeling very pessimistic about the future. Grifter optimism is like that. Posted by Pterrafractyl | February 28, 2017, 4:28 pm