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‘Rogue’ State Lawmakers Should Write Health Care ‘Star Wars’ Episode

January 5, 2017

Consumer Power Report #530

Any lawmaker, health care policy geek, or ordinary citizen suffering under the Affordable Care Act (ACA) who sees Rogue One: A Star Wars Story – which has grossed more than $350 million in the United States in its first two weeks – may glimpse a parallel or two between the intergalactic power struggle on screen and the real-life struggle to liberate health care markets from imperialist elected and appointed officials. (Minor spoilers follow.)

Rogue One reveals how the overwrought Vader/Luke/Leia saga portrayed in other films shapes the battlefield for countless freedom fighters dealing with the unintended consequences of choices made by leaders far, far away. Similarly, state lawmakers in 2017 will have the chance to write their own Rogue One health care laws in answer to the federal government’s Star Wars.

As Ben Domenech, former Consumer Power Report editor and current publisher of The Federalist and The Transom, has noted, Rogue One steers the camera away from the soap opera drama of the Skywalker family central to other Star Wars films--a thin sliver of the generations-long war raging across the galaxies--and instead narrates the heroism of ordinary soldiers tasked with extraordinary challenges.

Health care policy debates in the United States frequently resemble the seven “main line” Star Wars films by focusing on a few notorious (or heroic, depending on your slant) celebrities whose decisions reverberate at every level of American society: President Barack Obama, Supreme Court Chief Justice John Roberts, Department of Health and Human Services (HHS) Secretary Sylvia Burwell, former HHS Secretary Kathleen Sebelius, Senate Minority Leader Harry Reid (D-NV), House Minority Leader Nancy Pelosi (D-CA), Jonathan Gruber, and Ezekiel “Zeke” Emanuel, among others.

The reality, however, is that the struggle to liberate patients and markets from overregulation will outlive the reign of these famous officials and policy architects, just as it predated them, and that for every showdown over health care policy in Washington, DC, there are hundreds of skirmishes unfurling closer to the people. Scattered across these United States are 50 state legislatures waging their own unique battles for (and against) health care freedom.

The decisions federal lawmakers and bureaucrats have already started making in 2017 regarding ACA--whether to repeal it wholly or partially, and whether to replace it immediately or in three years or at all--will cause repercussions in each state. But state lawmakers should not wait for Washington, DC, to dictate how to deal with these repercussions.

Overreliance on federal officials to boost the country into health care hyperspace landed the country in the Obamacare asteroid field. State lawmakers should consult the other end of the spectrum for answers: patients and health care providers acting in their own self-interest.

For example, while Congress and President-elect Donald Trump devise ways to expand access to affordable health care, state lawmakers can beat them to it by repealing certificate-of-need (CON) laws, which obstruct innovation, competition, and patient access. Thirty-five states entered 2017 with CON laws on the books. Some of these laws require developers of medical facilities to obtain special permission from a state board before opening up a new treatment center, renovating an existing facility, and buying expensive equipment, such as imaging machinery.

CON review boards frequently consult special-interest groups hell-bent on blocking innovators from entering the region’s health care market. This would be like the Jedi Council asking Darth Vader which of the little Jedi Younglings should be trained to defeat him. (This would be a terrible idea, considering Vader massacres all the Younglings, along with most of the Jedi Council, in his attempt to eliminate challengers, in Star Wars: Episode III – Revenge of the Sith.)

Consequently, CON laws keep health care prices high and quality low by restricting the supply of providers, competition, and ease of entry for disruptive innovators. State lawmakers should repeal these anti-competitive laws, trusting patients to reward providers offering the best value.

State lawmakers can further expand access to affordable, high-quality care faster than officials in Washington, DC, by protecting from overregulation an up-and-coming direct-pay health care business model. In many states, patients have started paying doctors monthly membership fees of $25 to $150 per person in exchange for a suite of preventive care services and tests. These direct primary care (DPC) agreements are cost-effective for patients and providers because they bypass middleman insurers.

Nevertheless, inaction by state lawmakers deters prospective DPC providers from treating patients under this proven business model. Only 13 states have passed laws specifying that DPC agreements are not a form of insurance and shall not be regulated as such. Consequently, the possibility of investing in a DPC clinic only to be robbed and destroyed by a Jabba-the-Hut-like mafia of insurers and bureaucrats deters entrepreneurs and market-driven cost reductions in 37 states.

State lawmakers should not wait for Trump and Congress to figure out how to destroy the Death Star of overregulation in the country’s health care and insurance markets. Instead, state lawmakers should eliminate the threat of government interference in their own backyards. The force of the market will be with them.

-- Michael T. Hamilton (mhamilton@heartland.org) is a Heartland Institute research fellow and managing editor of Health Care News, author of the weekly Consumer Power Report, and host of the Health Care News Podcast.


IN THIS ISSUE:


WITH TRUMP’S VICTORY, GOP HOPES TO OVERHAUL MEDICAID

When President-elect Donald Trump takes office in January, Republicans will have the opportunity to pull off something they have wanted to do for years – overhaul Medicaid, the program that provides health care to tens of millions of lower-income and disabled Americans.

Any changes to the $500 billion-plus program hold enormous consequences not only for recipients but also for the states, which share in the cost.

Trump initially said during the presidential campaign that he would not cut Medicaid, but later expressed support for an idea pushed for years by Republicans in Congress – sending a fixed amount of money each year to the states in the form of block grants. Backers say such a change in the Medicaid formula is one of the best ways to rein in spending, but critics say big cuts would follow.

Currently, the federal government pays an agreed-upon percentage of each state’s Medicaid costs, no matter how much they rise in any given year.

Republicans have argued that states have little incentive to keep expenses under control, because no state pays more than half the total cost. Both House Speaker Paul Ryan and Trump’s pick for secretary of health and human services, Georgia Rep. Tom Price, want to switch to block grants.

Key questions facing Republicans will be how the funding is structured and how much flexibility will be given to the states.

“It’s exciting because you know it’s not going to be the same as it was, and it’s nerve-wracking because you know it’s not going to be the same as it was,” said Terry England, a Republican state lawmaker who chairs the House budget committee in Georgia.

Republican control of Congress and the presidency means the GOP can act on its long-held priorities of reining in entitlement programs and repealing President Barack Obama’s health care law, which allowed states to expand the number of people eligible for Medicaid. Thirty-one states have opted for the expansion. …

SOURCE: Christina A. Cassidy Associated Press


STATE REACHES AGREEMENT WITH FEDS TO ALLOW MEDICAID TO PAY FOR MORE SERVICES

Those leaving prison and jail in Maryland will be presumed eligible to sign up for Medicaid, the government-run health program for the poor, as part of a five-year agreement with federal authorities announced Tuesday.

Those leaving the corrections system are known to have higher rates of infectious and chronic diseases but often face hurdles securing Medicaid coverage for a number of reasons, including because some lack proper identification.

The change is one of several made under the state’s new agreement with the U.S. Centers for Medicare and Medicaid Services, which waives certain rules to allow reimbursements that are not normally permitted under the program. It takes effect Jan. 1, though state officials said it’s unclear whether the incoming Trump administration will seek to undo the agreement.

There are about 1.2 million people in the state’s Medicaid plan, which operates as a managed care program called HealthChoice. About 260,000 residents were added to the rolls through an expansion under the federal health law known as Obamacare, and their status could be in jeopardy as some GOP lawmakers and Trump nominees for top health posts have signaled they want to dial back such growth.

The state and federal government split the cost of Medicaid, except for those added under Obamacare. The federal government pays the bulk of those expenses.

The idea behind such waivers from Medicaid rules is to improve access to health care for those with complex medical needs in cost-effective ways, according to the state Department of Health and Mental Hygiene. Some new provisions are considered budget neutral because they lead to cost savings, while others will require state money upfront and a federal match, according to state health officials. …

Another provision of the agreement allows Medicaid to pay for some residential treatment for those with substance abuse disorders. Previously only outpatient programs were covered. That will be helpful in closing a gap in coverage, state officials said.

Reimbursement also will be allowed for dental coverage for former foster care youths up to age 26 and for some community health programs. One such program focuses on home visits for first-time mothers and mothers with high-risk pregnancies and their children. …

SOURCE: Meredith Cohn The Baltimore Sun


NEW LAW MAKES IT EASIER FOR FELONS TO GET ILLINOIS HEALTH CARE LICENSES

A new state law taking effect in January will make it easier for previously barred health care workers and first-time applicants with felony convictions to once again become eligible for an Illinois license.

The Illinois Department of Financial and Professional Regulation will determine eligibility for health care applicants who want their felony convictions – including for murder, kidnapping and armed robbery – reviewed in the hopes of getting a license.

The law change doesn’t apply to certain individuals, however, including registered sex offenders or people who have been convicted of criminal battery against any patient who was being treated. Their applications for a health care worker license will be permanently denied under the law.

Besides doctors and nurses, health care workers in Illinois who need licenses include acupuncturists, athletic trainers and audiologists. …

SOURCE: Becky Yerak, Chicago Tribune


HHS TAPS 8 STATES FOR BEHAVIORAL HEALTHCARE INTEGRATION DEMO

Continuing its push to improve the overall health of vulnerable populations by integrating physical and behavioral healthcare, HHS has announced that eight states will participate in its newest care coordination effort.

The two-year Certified Community Behavioral Health Clinic (CCBHC) demonstration program, a follow-up to a 2015 planning effort, will help Medicaid community providers increase access to quality behavioral and mental health services, develop and leverage evidence-based best practices, and work more closely with partners across the care continuum.

“The demonstration program will improve access to behavioral health services for Medicaid and CHIP beneficiaries, and will help individuals with mental and substance use disorders obtain the health care they need to maintain their health and well-being,” said Vikki Wachino, Deputy Administrator of the Centers for Medicare & Medicaid Services, and Director of the Center for Medicaid and the Children’s Health Insurance Program Services.

Minnesota, Missouri, New York, New Jersey, Nevada, Oklahoma, Oregon, and Pennsylvania were among the 24 states participating in a Substance Abuse and Mental Health Services Administration (SAMHSA) initiative started last year, which aimed to create the administrative infrastructure required to support the current demonstration project.

During the planning year, states worked to certify community behavioral health clinics, architect payment structures for the next phase of the demonstration project, and collected stakeholder feedback about the challenges and opportunities of expanding care integration.

Out of the 24 initial participants, nineteen applied for the new demonstration project, and eight emerged as grantees.

SOURCE: Jennifer Bresnick, Health IT Analytics

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Michael Hamilton writes and edits for the liberty-minded clients of Good Comma Editing, LLC, a freelance writing and editing company.
media@heartland.org @MikeFreeMarket