Lessons from Maine

The Connecticut General Assembly  is considering SB194, which would change the process by which insurance companies obtain rate increases in the individual insurance market.  I offered some perspective before the Insurance and Real Estate committee, drawing on our experience in Maine.

Connecticut Residents Oppose House, Senate Bills

Massachusetts isn’t the only New England state in which residents oppose ObamaCare. According to a recent survey conducted for the Yankee Institute for Public Policy, “Connecticut residents oppose the current bills in Congress by a margin of 51-34 percent.” They also oppose an individual mandate and to a lesser extent, an employer mandate.

The Rich Get Richer: Senate’s Medicaid Proposal Gives Bigger Bailout to Wealthier States

People were rightly upset when they learned about the “Cornhusker Kickback,” the deal whereby Sen. Ben Nelson of Nebraska sold his vote in favor of the Senate’s health bill in exchange for his state never having to pay for any of the Medicaid expansion in the bill.

However, the biggest problem with the Medicaid expansion in the Senate health bill is not the “Cornhusker Kickback,” but that it leverages an already flawed formula to determine federal payments to state Medicaid programs. The Senate bill would motivate states to invest more resources in recruiting higher-income residents into Medicaid, rather than traditionally eligible beneficiaries, including the blind and disabled. The Senate bill also gives richer states a bigger Medicaid bailout than lower income ones. New Hampshire, Maryland, and Connecticut get the biggest handouts, while Mississippi, West Virginia, and Arkansas are short-changed, according to my just published analysis.

The Federal Medical Assistance Percentage (FMAP) is the federal financing formula that encourages each state to spend its own taxpayers’ money irresponsibly in order to maximize its take from other states. For example, California’s FMAP was traditionally the 50 percent minimum: For every dollar California spent, the U.S. Treasury would kick in one dollar. However, the FMAP is supposed to give more federal dollars to states with more poor people. So, Mississippi has had the highest FMAP, 75.67 percent: For every dollar Mississippi spent on Medicare, the U.S. Treasury would kick in $3.11.

The Senate bill proposes a much higher FMAP, averaging 90% nationwide, in 2019. However, the higher FMAP would only apply to the relatively higher-income, able-bodied, newly eligible, beneficiaries. People eligible under the current law will still draw the previous FMAP. States with FMAPs of 50 percent would see them increased to 82.3 percent for the newly eligible beneficiaries. Imagine yourself a county public-health bureaucrat who would attract one federal dollar for every dollar spent on a blind or disabled Medicaid beneficiary, or $4.65 for every dollar spent on an able-bodied young man. Obviously, you would invest your energy in recruiting the able-bodied youth.

Furthermore, the expanded FMAP gives more federal fiscal leverage to rich states: Each thousand-dollar increase in money income per capita is associated with a one-percent increase in the FMAP under the Senate bill, and this statistically significant regression explains over one-third of the variance in the change in FMAP.

For example, New Hampshire’s money income is $68,175 per capita, which is $16,942 greater than the national average of $51,233. Its FMAP would increase from 50 percent to 82.3 percent, an increase of 65 percent. This is 18 percent greater than it would have been if higher per capita incomes did not explain the Senate’s “generosity.” On the other hand, Mississippi’s FMAP increases by only 20 percent: From the current 74.73 percent to 95 percent. This increase is 15 percent less than it would have been if the state’s low income did not explain its poor outcome in the Senate’s FMAP allocation.

Instead of leveraging the FMAP, Medicaid reform should jettison it entirely, in favor of easily understood block grants.

The Inequity of the Nebraska Compromising is Appalling

Officials in various states continue to be unhappy about the health reform bills moving towards completion in Congress. Gov. M. Jodi Rell (R-Conn.) has asked her state’s attorney general to look into possible legal action. The Hartford Courtant, in an article written before the Senate vote, quotes Rell on the “Nebraska Compromise”:

The inequity of this provision is astonishing. The doling out of favors for senators is appalling. The cost of this federal health care bill is beyond comprehension because of all the special provisions included to garner the 60 votes for passage.”By the time Washington finishes with this proposal and drops it at the taxpayers’ doorsteps, it will be monstrous. The Senate may get their votes, but the American taxpayer will get the bill. The best Christmas gift Congress could deliver to the American people would be to strip out every special consideration, every gift, every piece of pork and concentrate on the heart of the matter – real and affordable reform.”

Connecticut AG Seeks to Obscure Cost of “Public Option”

We need open and strong competition in health care, no doubt. But is getting government into the act of providing insurance the way to do that? A look at Connecticut shows one state in which politicians speak about competition, but prefer to rig the game for government programs.

You might say that Connecticut has a “public option” program of its own, the Charter Oak health plan. Anthem Blue Cross and Blue Shield wants hospitals to give it the lowest prices they give to other insurers.

The lowest-paying insurer?

Charter Oak, whose rates are so low that hospitals would be foolish to take, especially if that meant extending those rates to a very large insurance company.

This logic doesn’t appeal to the state’s chief legal officer. According to the Hartford Courant, “Charter Oak should be an exception because publicly subsidized plans, notably Medicare and Medicaid, typically pay less than commercial insurers, [Attorney General Richard] Blumenthal said.”

So what Blumenthal wants, it appears, is a built-in advantage over Anthem and any other commercial insurer.

Charter Oak wants a 60% discount over what commercial insurance companies pay, and Blumenthal wants to make sure that it keeps that.

If Connecticut wants to subsidize insurance plans for some of its citizens, have at it. At the least, however, it ought to pay hospitals commercial rates. That way, the true cost of the state program would be made more obvious.

State governments ration “free” cancer screenings

When you empower government to provide “free” health care (paid by others through taxes), government gets to decide when it’s appropriate for you to receive it.  Here’s yet another example from the Associated Press:

…low-income women in at least 20 states are being turned away or put on long waiting lists for free cancer screenings, according to the American Cancer Society’s Cancer Action Network. In the unofficial survey of programs for July 2008 through April 2009, the organization found that state budget strains are forcing some programs to reject people who would otherwise qualify for free mammograms and Pap smears.

…

New York used to screen women of all ages, but this year the budget crunch has forced them to focus on those considered at highest risk and exclude women under 50….

At least 14 states cut budgets for free cancer screenings this year: Colorado, Montana, Illinois, Alabama, Minnesota, Connecticut, South Carolina, Utah, Missouri, Washington, Ohio, Massachusetts, Pennsylvania and Arkansas.

U.S. Index of Health Ownership 2nd Edition Is Here

Pacific Research Institute has published the 2nd edition of the U.S. Index of Health Ownership, the only ranking of health care in the states that uses criteria of individual choice.

Americans lack the basic freedom to make their own health care decisions. The Index measures the degree to which individuals, be they patients, health professionals, entrepreneurs, or taxpayers, “own” the health care in their states.

The lack of health ownership is a real problem. Almost half of the country’s health care spending is in the hands of the government, instead of patients themselves. The other half is governed by regulations inflicted upon doctors, health plans and patients.

The Index uses 24 variables to quantify how state laws and regulations affect the liberty of citizens involved in state government health plans (primarily Medicaid), the private health-insurance market, and the provision of medical services. It also assesses the effect of medical tort on people’s freedom to engage health services.

Alabama, Montana, Nebraska, North Dakota, and New Hampshire finished in the top five, as the states that allow their citizens the highest degree of health ownership. Alabama leads the pack primarily because of a lightly regulated private insurance market, and good control of state government programs. Also, the state performs well on medical tort indicators. Alabama’s regulatory environment for providers favors competition, and government health programs run more effectively than in most states.

New York, Massachusetts, Rhode Island, Vermont, and North Carolina rounded out the bottom five, as the states in which the government has taken the most undue control of health care from its citizens. This is the second year that New York was in last place. The state suffers from government health-care programs that are out of control, a grossly overregulated private-insurance market, and almost completely uncompetitive provider markets.

A full listing of all 50 states and their rankings is contained in the Index.

The Index will give concerned citizens a good basis to demand reforms from their state politicians that will put American families in charge of American health care, instead of government and special interests.

Another Example of How Health Care Freedom Has NOT Failed Us

It's a given that "the market has failed us" with respect to health care. When governments pay for half of all health care in this country, it's questionable whether we in fact have a market, rather than a semi-market public utility.

And from Connecticut comes yet another example of how health care isn't a wild west, anything-goes capitalist bazaar.

Kim Karbowski teaches sonography at Yale-New Haven Hospital. A few years ago she spent a lot of money and effort to create What’s Kickin', a business that offers expectant mothers the chance to get DVDs and CDs of sonograms of their children.

You may think that people who go to that trouble are a bit obsessive, but hey, it's their business, right? (You know, a woman's right to choose ought to include the right to chose to get a sonogram.)

Not so fast. Some politicians and others in the state say that the sonograms are mere entertainment, and therefore trivial. Rep. Deborah Heinrich, D-Madison, thinks that's bad. So bad that the state must step in.

So in the words of the New Haven Register, the General Assembly has passed a bill that "would prohibit obstetrical ultrasounds unless they are 'ordered by a licensed health care provider' and 'for a medical or diagnostic purpose.'"

Whatever, says Karbowski, "“Regulate me."

Birds gotta fly. Politicians gotta regulate.

Connecticut House Goes ‘Medicare for All’

Like "Medicare for All?" The Connecticut House has enacted something like that. But the idea must still be approved by the Senate and governor.

No Quarter

This 4/20 ought to have been a real heartbreaker for opponents of cannabis prohibition who’ve bought into the ocean of hype surrounding Obama’s assurances of change.

Or perhaps there was just a communication breakdown, because despite promising a whole lotta love for states’ rights regarding medical marijuana during the campaign, real reform is over the hills and far away.

Obama’s DOJ said over the weekend that after considering a California federal judge’s request for an explanation from the feds regarding their alleged new policy on the persecution of state-approved medical marijuana dispensaries and users, government attorneys have determined it’s basically not much different than the old policy. Furthermore, the Bush administration’s “investigation, prosecution, and conviction of (California medical marijuana distributer Charles Lynch) are entirely consistent with the policies of DOJ and with public statements made by the Attorney General with respect to marijuana prosecutions,” according to the DOJ brief (pdf).

But even if the government’s actions don’t appear now to be exactly jiving with the political smoke blown by Obama and his attorney general, said Justice Department attorneys, it hardly matters. You see, the “enforcement policies of the Department of Justice, including those expressed by the United States Attorney’s Office, or by Attorney General Holder on this topic, do not confer any rights or defenses on any person.”

In other words, the song remains the same: Going to California, or any other state that’s legalized medical marijuana, provides no legal protection whatsoever against an individual’s rights getting trampled under foot by the federal government so long as the criminally incompetent drug war rambles on and the dogs of doom are howling “More.”