A healthcare plan that even Bernie could love?

Clinton's new healthcare proposal is more ambitious than her original, but still more realistic than Sanders' proposed system overhaul

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  • healthinsurance.org contributor
  • July 11, 2016

Hillary Clinton announced her official campaign healthcare platform Saturday. While she’s included a list of assorted small-scope healthcare improvement proposals on her website since last fall, none of it came close to the bold-but-utterly-unrealistic complete overhaul of the entire healthcare system in the U.S. the way that Bernie Sanders kept demanding throughout his campaign.

While Clinton has actually been a strong advocate of a Public Option dating back to at least the 2008 campaign (and continued to push for one even when she was Secretary of State), many were underwhelmed by her bullet points, which seemed like small potatoes compared to Bernie’s single payer proposal.

The fact that she flatly dismissed his proposal as something which would “never, ever happen” led many to falsely assume that she had given up on making any major changes to the healthcare system, and was content to nibble around the edges of Obamacare.

Well, guess what? As Jonathan Cohn of the Huffington Post reported,

Hillary Clinton reaffirmed her support on Saturday for creating a “public option” within Obamacare and allowing people to enroll in Medicare at age 55.

The presumptive Democratic presidential nominee also called for a substantial increase in funding in medical clinics that serve low-income Americans, fully embracing a proposal from Sen. Bernie Sanders (I-VT).

Obviously some of the credit for this announcement belongs to Sen. Sanders for pushing so hard during the campaign … but again, the public option portion was always something Clinton has favored. It should also be noted that while I’m sure trying to win over Sanders supporters for the general election is part of this, there’s little evidence that she needed to do so; as of late June, 81 percent of his supporters had already faced reality and switched their support over to her.

In other words, any fears about Sec. Clinton “pivoting to the center” for the general election appear to be unfounded, at least as far as healthcare policy is concerned.

Regardless of how it came about, the fact is that this is what Clinton is proposing … and while the major points are well-known, some of the smaller ones are among those on my own “wish list” back in February. Before she gets started, she makes sure to give high praise to the ACA for achieving much of the heavy lifting:

The Affordable Care Act was a critically important step toward the goal of universal health care, offering coverage to 20 million more Americans, and ensuring all Americans will never be denied coverage on account of a pre-existing condition or their gender. Today, 90 percent of all Americans have health insurance, the most in the history of our country.

It looks like Clinton’s overall healthcare plan includes nine major provisions:

1. The Public Option

As you may recall, I noted back in February that Clinton recognizes that pushing a national public option through is likely next to impossible … but it might be feasible to do so on a state-by-state basis working with state officials using the Section 1332 Waiver strategy … let’s say perhaps a dozen or so blue states.

What would these look like? Well, frankly, they’d probably look a lot like the existing cooperatives which have been falling like dominoes over the past year or so … but with important differences: Experience and proper funding support.

The co-ops have been failing for a variety of reasons, but much of it had to do with them being inadequately funded in the first place … and then having both arms tied behind their backs once they launched, expected to sink or swim on their own out of the gate. The co-ops were effectively designed to fail from the start; the fact that a third of them have managed to survive this long at all, especially after 2013’s Transitional Policy Brouhaha, 2015’s Risk Corridor Massacre and the current Risk Adjustment Misadjustment is actually pretty impressive to me.

I’m actually not convinced that even a national Public Option would has as much of an impact on keeping rates down as most supporters are, since just having one doesn’t do anything by itself to reduce the cost of the actual services, just as the ACA requiring that carriers spend 80 percent of premiums on medical expenses doesn’t mean much if they’re already spending 110 percent. Still, it should have some positive impact, as well as providing an alternative for areas with only one or two options.

A real public option with permanent funding to tide them over rough patches should be able to survive and thrive.

2. Medicare buy-in at 55

There are around 41 million people between 55 and 64 years old. Twenty-six percent of current ACA exchange enrollees are ages 55 to 64, or around 2.9 million. If half of these folks (say, about 1.5 million) were to shift over to Medicare, what do you suppose the impact on the individual market risk pool would be?

Well, it would mean that instead of young people only making up 28 percent of exchange enrollees, they’d suddenly make up 33 percent … significantly closer to the 40 percent which is supposedly “necessary” to have a stable risk pool. This should immediately improve the exchange program’s viability.

Just as importantly, this should also finally convince a substantial chunk of the 7 million uninsured people who don’t qualify for APTC assistance (who are over 55 years old) to come around, as well as some of the 6.5 million who do qualify for APTC but haven’t signed up yet. I’m not sure how many of either group are over 55, but I have to figure it’s at least a few million; I’d guess that at least 2 million currently uninsured people in those groups would sign on.

3. Health center funding boost

While the Medicare expansion may sound like the most “Bernie-like” part of Hillary’s proposal, as Cohn notes, that honor actually belongs to the clinic funding portion:

In describing the proposals to The Huffington Post, senior Clinton campaign aides noted that Sanders had championed these ideas – and, in particular, that the former Secretary of State’s funding proposal for the clinics matched one that the independent senator had made.

Here’s how Clinton describes it:

One critical component of establishing universal primary care is to expand our proven system of Federally Qualified Health Centers. Today, 25 million people in the United States get their care from these community health centers each year. We must significantly expand that coverage so that every American, regardless of where they live, has good quality primary health care available to them at a cost they can afford.

The Affordable Care Act significantly expanded mandatory funding for FQHCs. As part of her comprehensive health care agenda, Hillary is committed to doubling the funding for primary care services at community health centers over the next decade. In doing so, we will dramatically expand access to millions more people. This means extending the current mandatory funding under the Affordable Care Act and expanding it by $40 billion over the next 10 years.

To Sanders’ credit, he’s the one who pushed the ACA’s “significant FQHC funding expansion” provision, which got it up to the current level, which is presumably around $4 billion per year; Clinton is now calling to double that to $8 billion/year or so.

OK, so what about the rest of her proposals? Given the likely political climate, I’m gonna set the bar low and assume she manages to accomplish just 25 percent of her goals in her first term of office.

4. Push to expand Medicaid in every state

She’s gonna try to wheel and deal the 19 remaining Republican-held non-expansion states into finally coming around and expanding Medicaid to around 2.9 million people currently caught in the Medicaid Gap. It’s possible that a few states will flip from Red to Blue in November anyway, which will help; for the rest, this is where she’s counting on her decades of experience in political sausage making and working the system to come through.

A 25 percent success rate would mean roughly 750,000 additional people enrolled in Medicaid.

5. Campaign to enroll people who are eligible

I’m not sure whether this refers to the 8 million or so who are eligible for traditional Medicaid or the 6 million or so eligible for tax credits via private policies on the exchange, or both, but a 25 percent success rate on each would cover an additional 3.5 million people.

6. Allow undocumented immigrants to enroll

It’s important to note that she is not referring to allowing undocumented immigrants to receive tax credits via the ACA exchanges, but simply to enroll at full price. The impact of this would likely be mostly symbolic, since the APTC/CSR credits are the only significant reason for people to enroll on the exchanges in the first place, but it would still be an important step. California recently passed a law which allows exactly this … but it still has to be approved by the federal government.

There’s around 4.5 million uninsured, undocumented immigrants which could potentially take advantage of this, but since only around 15 percent of exchange enrollees are paying full price now, I can’t imagine that too many of these folks would bother. Let’s call it perhaps 250,000 at most, I’d guess.

OK, but up until now this has mostly focused on the coverage side. What about reining in costs?

7. HHS control over unreasonable premium increases

The plan would also give the HHS Secretary authority to block or modify unreasonable health insurance premium rate increases.

Missouri recently became the last state to finally let state regulators even review proposed rate hikes … but even then, MO and many other states are still powerless to actually do anything about rate hikes deemed to be excesive. Hillary’s proposal would give federal oversight and approval authority which presumably would act as an extra check in case the state regulators weren’t willing or able to do so.

As with the Public Option, I’m not entirely convinced this would make that much of an impact on premium rates – if a rate hike is justified, it’s justified – but it should act as a check in states like Missouri.

8. Controlling prescription drug, development costs

Two proposals – a prescription drug cost cap and a reduction in development costs – were among those she’s already been pushing for since last fall.

9. Triple NHSC budget

Proposal: Push for tripling the National Health Services Corps from the current $287 million to $810 million.

Anyone who watched the 1990’s TV series “Northern Exposure” may recall the premise which set up the storyline: Dr. Joel Fleishman, a young NY physician, is legally bound by the terms of his medical student loan to set up his practice in Cicely, Alaska for several years. This appears to be based on the real-world terms of the NHSC:

Members are health professionals providing primary health care services in underserved communities since 1972. In exchange, the providers are given either loan repayment or scholarship throughout their medical education (not to exceed four years).

According to the NHSC website, they currently have about 9,600 doctors, dentists & mental/behavorial health professionals serving 10 million people across 5,000 locations. This proposal would presumably increase that number to around 27,000, for less than a rounding error on the federal budget. This is a great idea.

Clinton plan’s potential impact?

Assuming all 9 of these were to go through (which is highly unlikely), I’d guess the end result of points #2, 4, 5 and 6 would be a further reduction in the uninsured number of around 6.5 million people, bringing the uninsured rate down from the current 10 percent to around 23 million, or just 7 percent of the total population.

At the same time, provisions of #1, 7 and especially 8 should help keep costs from spiraling out of control, although I’ve no idea how successful they’ll be at doing so.

Assuming she wins, the Democrats retake the Senate and make substantial gains in the House, my gut instinct is that she’ll be able to successfully push through #3, 5, 7 and 9, while getting at least limited success (ie, in a handful of states) with #1, 4 and 6. If they manage to sweep the House as well, #2 and 8 could be on the table as well.

As I noted in February, there are five main goals here: Coverage which is Universal, Affordable, Comprehensive, Portable and Simple. Hillary’s plans don’t address all of these, but they focus heavily on the first three. The Hillary and Bernie camps have obviously been working together to find a happy medium between her arguably anemic improvements and his unrealistic total overhaul … and yesterday morning, he officially gave his seal of approval to her proposals:

In short, while I have some quibbles, this is about as close to what I could realistically hope would come out of the Hillary/Bernie primary: More ambitious than her original plans but more realistic than his.

Whether any of it will actually happen is still a huge unknown, of course, but for my part, I like what I’m seeing here. Now the Dems have to actually win the election …

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