The good, the bad, the ugly of McKenna's health care plan
Plan engages consumers well, but falters on being a short-term measure with sloppy arithmetic.
The race for governor continues to be close as Sept. 14 saw the release of the latest Elway poll, which put Jay Inslee up over Rob McKenna by 3 points, or within the margin for error.
Looking ahead to the final six weeks of the campaign, one of the few issues with the potential to fundamentally change the dynamics of this race down the stretch is health care.
Don’t believe me? Just look at the role health care has had so far in shaping this campaign — in an election otherwise about jobs and education.
Health care became a factor in many ways in this race when McKenna joined the lawsuit appealing the Affordable Care Act (ACA). Given Inslee’s leadership in passing the ACA in Congress, this staked out health care as a wedge issue in the gubernatorial campaign.
Health care again became a lead issue in this race when, in June, the Supreme Court largely upheld the ACA. It was the talk of the summer.
Finally, just when everyone thought health care was off the radar screen, Mitt Romney’s selection of Rep. Paul Ryan as his running mate again put health care back in the mix nationally.
Thus is the context of the recent release by the McKenna campaign of its health care policy platform.
As someone who makes a living working on health policy and system reform and is focused on solutions rather than sound bites, this document reminds me of Clint Eastwood — taken altogether, it has some good, some bad, and some ugly.
First, the good.
As McKenna has campaigned all year, this document calls for a “realignment of incentives for providers” by moving away from a traditional fee-for-service system in health care, where every visit to a provider is a separate charge, toward more managed care and its emphasis on prevention. McKenna is correct when he notes — unlike perhaps a generation ago — that there is “broad consensus” around moving in this direction. This principle is perhaps one of the foundational elements of McKenna’s vision for Washington State health care and one I think makes a lot of sense.
Another central element to his vision is engaging and empowering consumers. Typically, this means asking consumers to more actively engage in managing their health by bearing more of the costs of their care and enjoying more of the savings, depending on one’s health care utilization.
While McKenna’s call for “pairing high-deductible insurance plans with health savings accounts” has long been advocated by the market-oriented right, the more general notion of empowerment of consumers in their health choices has become more broadly embraced by folks across the spectrum.
McKenna’s platform also lists addressing “defensive medicine” (the idea that doctors prescribe more care in order to avoid litigation rather than what’s best for patient health) and successfully implementing a health benefit exchange. Both of these points have general support among the public and the health care community, though strong differences of opinion emerge around the details.
In sum, there are some important, smart elements in this plan that can be embraced widely.
But, then there is the bad — as defined by policy statements that don’t appear to make sense when placed in a broader context.
For instance, McKenna’s call to move patients towards consumer-directed health plans might make sense — but only until 2014. That’s when the health benefit exchange will be operational and will limit insurance plans to four actuarially defined bands of benefit packages — all of which are significantly richer in their service offerings than a consumer-directed health plan.
Now, the Health Benefit Exchange will also offer “catastrophic health plans” — the kind of health insurance that only covers catastrophes. So, it’s possible that this is what McKenna is referring to — broadly moving Washingtonians to catastrophic coverage.
But, honestly, with federal subsidies available to folks making up to 400 percent of the federal poverty level ($92,200 for a family of four) to buy health insurance on the Exchange, I can’t imagine that a key element of McKenna’s reform plan is to ask these Washington citizens to forego that federal support in 2014 to opt instead for catastrophic coverage only. However, the flip side is also hard to imagine — that after a full campaign, McKenna’s plan calls for a strategy that can only be employed in 2013 and is moot thereafter. This strikes me as having not been very well thought out.
When it comes to the central question of whether to expand Medicaid or not, allowed under the Supreme Court’s affirmation of the ACA, McKenna appears to fall in line with Republican governors from states like Texas, South Carolina and Louisiana in rejecting that alternative.
Many Republican governors, after reflecting about what’s in the best interests of their state, have decided against expanding Medicaid as as intrusion by the federal government. That is a reasonable policy position on ideological grounds, and something about which good folks can amicably disagree. That’s not exactly McKenna’s position, however. Instead he says, when referring to Medicaid reform, that “we simply cannot afford to replace private investments consisting of employer and employee premium contributions with new entitlement spending.”
This line of reasoning, sadly, doesn't hold up.
First, not only can Washington State afford it but, according to the Urban Institute, Washington state will save almost a billion dollars by fully implementing the ACA and expanding Medicaid. Even former state Sen. Dino Rossi, in the very document used to support McKenna’s assertion, acknowledges at one point that Medicaid expansion will have a “direct cost relatively small to the state.”
Second, the “private investments” referred to by McKenna generally aren’t being made in the first place. We’re talking about covering folks who aren’t receiving any medical insurance. And, if these low-income folks have employer coverage of some sort, the switch to Medicaid would help small businesses to redirect money previously spent on health insurance to hiring more employees.
Finally, to the point of “new entitlement spending,” we should all be clear on this basic point. Washington state will send tax dollars to Washington, D.C., whether we expand Medicaid here or not. The only question is whether we will get any of those tax dollars back. If we don’t expand Medicaid — like Texas, Louisiana, and South Carolina — our tax dollars will go to states that do, such as Oregon, Massachusetts, and California.
This brings us to the ugly part of this platform. McKenna's arithmetic looks sloppy.
McKenna continues to make the claim that “With the addition of almost half a million new Medicaid-eligible adults nearly 1 in 3 state residents would be eligible for the program in 2014.” While this might be good rhetoric, it’s simply factually untrue.
First, the number McKenna frequently cites of new Medicaid enrollees — in three different places in his platform — is 328,000. You’d have to add another 50 percent to get to the half-million mark.
Second, the reference he uses to support the claim is again the document produced by Rossi on Aug. 23. There, Rossi states that if you take all of the Medicaid population (he even generously throws in the additional Washingtonians from the Basic Health Plan that are not otherwise referenced by McKenna) you get 1.2 million residents. Add the 328,000 and you’re at over 1.5 million residents total with both Medicaid and the Basic Health Plan combined.
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Comments:
Posted Tue, Sep 25, 8:01 a.m. Inappropriate
DJ is a bright guy, but makes his living from the medical profession (hospitals). He is also a nice guy, fairly honest, but can spin with the best of them.
Not faulting his analysis, but giving full disclosure.
Oh, and did I say he is a lefty?
The Geezer has spaketh.
Posted Tue, Sep 25, 10:54 a.m. Inappropriate
I appreciate the comments, Geezer. Though, my friends on the left might sometimes argue I'm too far in the middle.
In any case, though I'm a Democrat, I've attempted to check that at the door in this analysis. Neither party has a monopoly on good ideas, and health care is too complicated a topic for hyperbole or generalizations to be constructive. I'll leave the judgement on whether I've been successful to readers like yourself.
Thanks again.
Posted Tue, Sep 25, 10:14 a.m. Inappropriate
Some good points in this analysis but I think it goes too easy on Rob McKenna's health care proposals.
First it should be asked, if McKenna favors moving away from fee for service to global payment and emphasizing preventive care, why did he spearhead a lawsuit to entirely struck down the Affordable Care Act, which in a variety of ways seeks to move our health care payment system in that direction and places a strong focus on preventive care? The ACA, the state of Washington, and private employers and health plans already are moving in those directions for Medicare, Medicaid, and the general insured population. Jay Inslee supports this. So how would McKenna do this differently?
McKenna seems to be advocating making consumers pay more out of pocket for their health care. In fact, surveys show that U.S. consumers already are paying a lot more out of pocket as employers shift more costs to them and move to higher deductible plans. Studies by the Rand Corporation and others show that high deductible, high-copayment plans discourage people from getting needed preventive care. That's counterproductive. See my article on this:
http://managedhealthcareexecutive.modernmedicine.com/mhe/Benefit+design+and+pricing/HSAs-keep-slow-but-steady-pace/ArticleStandard/Article/detail/719367
BTW, the ACA already allows the sale of catastrophic-type plans for younger people, and people buying through the state insurance exchange will be offered high-deductible plans.
McKenna calls for capping non-economic damages in medical malpractice cases. Contrary to what Wilson says, I don't think the public supports that when they understood what it means. I've seen and read of plenty of cases where people who supported the idea in the abstract realized to their horror that the damage caps blocked them from gaining any legal recourse when they themselves suffered from medical negligence. Watch the documentary Hot Coffee to see an example of that. There are other ways to improve the medical malpractice system, and the ACA provides incentives to state to test various approaches.
The focus of this article should have been on McKenna's statements about the ACA Medicaid expansion. It sounds like McKenna as governor would oppose the expansion, since he sets conditions that the Obama administration, if Obama is re-elected, very likely would not accept. Not going ahead with the Medicaid expansion would have profound negative effects on Washington consumers, hospitals, physicians, and safety-net clinics. Everyone in this state is gearing up for that expansion, and blocking it would set us back in a huge way.
Posted Tue, Sep 25, 12:08 p.m. Inappropriate
"Eligibility" and "access." Those are my favorite words conservatives use to mask the fact that people won't be able to afford the health care that results if their plans are implemented. And as far as managed care, haven't we learned since the 80's that this means bean counters with no medical training or practice making decisions that may affect our very lives? How many stories have we all heard about insurers denying care for so long that a person has died waiting for approval. As for health savings accounts, how are people possibly going to be able to save for health care when they don't have jobs, or have jobs flipping burgers and providing child care?
I am terribly disappointed that we did not get the "robust public option" that Obama promised us, which would move the insurers into a competitive position and reduce, if not eliminate, their ability to control our health care choices. Instead we gave them a great big gift in mandating that even those who don't want to do business with them must do so or pay a fine. Gotta keep those insurance company execs in big salaries and great perks, including Cadillac health plans, after all.
McKenna unfortunately appears to be right in the pocket of the insurance companies, and he, as another commenter points out, also wants to be sure that if we're harmed by negligent medical care, we will be unable to be fully compensated. This despite the underlying premise, that med mal awards are driving up prices and driving care providers out of our state, has been fully and roundly disproved.
I don't want McKenna limiting my choices and remedies, thank you very much.
Posted Tue, Sep 25, 1:13 p.m. Inappropriate
DJ, why do you have to twist the facts to smear McKenna? McKenna never conflated "Medicaid-eligible" with "Medicaid-enrollees".
The fact that 1 in 3 will be eligible is eye-opening, and it has already been fact checked by the Seattle Times:
http://seattletimes.com/html/localnews/2019139135_truthneedle13m.html
Posted Tue, Sep 25, 3:20 p.m. Inappropriate
SeattleKid22: I don't blame you for citing the Times article - certainly normally a reasonable proposition. But, the Times got it wrong.
Medicaid is a big program, and pays for lots of different kinds of things - from long term care for seniors to foster care for kids.
When we're talking about the Affordable Care Act, and the expansion of Medicaid envisioned in that Act, we're only talking about the part of Medicaid that covers health benefits for people. We're not talking about the other stuff - like kids in foster care.
Folks, like McKenna and Inslee, are talking about the part of Medicaid that covers health benefits for folks - and that number is about 1.2m.
The Seattle Times got it wrong. But, Senator Dino Rossi got it right. The number he used (slightly inflated in itself because it includes people on the Basic Health Plan, but which is appropriate) is the right number: 1.2m. It's the document cited by McKenna's platform.
So, while I recognize that repeating the "1 in 3 number" as a result of is good political rhetoric - for which I give it high marks - it simply is not accurate. Repeating it doesn't make it correct.
I agree with Sen. Rossi's number.
Posted Tue, Sep 25, 1:24 p.m. Inappropriate
Wow SeattleKid22! Thanks for sharing that link. I can't believe this article is so off base! Mr. Wilson, you should be ashamed of yourself for trying to pull a fast one on us readers! I guess it shouldn't surprise me. All of these politicians are just making up numbers and lying to the voters! These Dems have been in power too long. It's no wonder they're confused! We need some new blood in the Governor's office. No more of these lies and mix-ups! We need someone we can trust.
Posted Tue, Sep 25, 1:50 p.m. Inappropriate
RentonMom and SeattleKid22, I recommend that you read that good Seattle Times piece more closely. The bottom line is that it's expected that one in five Washingtonians, not one in three, would be in Medicaid if the state implements the ACA Medicaid expansion:
"No one expects everyone who is eligible to enroll, and, even now, more than a half a million people who could be getting their health insurance through the state are not, according to a widely cited study commissioned by the state.
The study by The Urban Institute's Health Policy Center predicted that about half of the people newly eligible would actually enroll. Those people would generally be younger and healthier than those now in the program, according to the study."
----------------
"All told, The Urban Institute predicts about 328,000 more people would enroll in the program if the Legislature approves the expansion.
That means that about one of every five Washingtonians — or 21 percent of the state's population — would be expected to receive health insurance through Medicaid. That number is now a little more than one in six."
-----------
The Urban Institute study found that more than a third of the people who would qualify for the program already have private health insurance. That's also true for many of the people who could be receiving Medicaid now, but who aren't, according to the study.
Although some would likely abandon their private insurance for Medicaid, the study notes that, historically, people who have private insurance tend to stick with it even though they could be receiving Medicaid.
Posted Tue, Sep 25, 5:03 p.m. Inappropriate
It is not just Republican governors who have balked at accepting a vast expansion of Medicaid. A host of Governors in both parties have voiced concern about the hit their budgets will take once their states begin paying a higher ratio of the costs. I'm surprised DJ missed this, especially since education has taken such a hit in Washington from rising health costs.
Posted Wed, Sep 26, 6:59 a.m. Inappropriate
The Urban Institute? Run by a former Clinton staffer? Trustees who clerked for Ruth Bader Ginsberg? Jaime Gorelick?
http://urban.org/about/officers-and-trustees.cfm
You say Jay Inslee played a significant role in the ACA? What role? Which parts did he add? Jay voted for the parts that had to be removed and were found unconstitutional. Where are Jay's comments against those unconstitutional provisions or even concern in general about the expansion of the Federal Powers under the Commerce Clause? Where was Jay on the 1099 provision that even the President found so punative he asked that it be removed immediately after passage? He voted for it as part of the original bill.
Washington State is a magnet for illegal aliens due to a combination Government policy and Ag markets. Would the expansion of Medicaid include illegal aliens in Washington State? The Pew Center estimated an illegal population of 230,000 in Washington State, growing at double digits every year for the past three years. What do that indicate for Medicaid costs at the State level going forward?
Posted Wed, Sep 26, 8:51 a.m. Inappropriate
As has been pointed out many many times, the Affordable Care Act explicitly excludes illegal immigrants from receiving any benefits under the law, including Medicaid. They are not even allowed to use their own money to buy health coverage in the state insurance exchanges. Even legal immigrants have to wait five years for Medicaid coverage.
Posted Wed, Sep 26, 10:16 a.m. Inappropriate
Well according to the Washington State Auditor, ineligible illegal aliens have been receiving MEDICAID benefits for years via DSHS to the tune of Millions of dollars a year.
http://www.rwjf.org/content/rwjf/en/research-publications/find-rwjf-research/2009/06/health-affairs-rwjf-health-policy-brief-series/the-1099-provision.html
Findings have been going on for over a decade, finding starts on page 9.
Posted Wed, Sep 26, 1:11 p.m. Inappropriate
Here is the correct link.
http://www.sao.wa.gov/findings/6396.pdf finding 03-02 Page 9
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