Wednesday, March 15, 2017

Doing better than "repeal and replace", anyhow

Dissection at University of Montpellier, from the Chirurgia Magna of Guy de Chauliac, 1363, via BBC.

This, from Michael Hiltzik/Los Angeles Times—is big news for Obamacare fans, or ought to be:
Moda Health, a small Oregon health insurer, just won a $214-million judgment against the federal government. Normally that wouldn’t be worth reporting, except that in awarding Moda the money, the federal judge in the case dismantled the most cynical attack on the Affordable Care Act that congressional Republicans had devised.
The cynical attack is, of course, the attempt to defund the "risk corridors" with which insurers under the ACA were supposed to be reinsured against unexpected losses in the first years of the program, before the risks of a new market were clearly understood, just as had been successfully done with Medicare Part D in 2006.

House Republicans snuck a rider into a 2014 budget bill stipulating that risk corridor payments to insurance companies could only come out of the profits of insurers that had made more successful bets, not out of general government funds, saying they were preventing a "bailout", in the more or less explicit hope of strangling the program in its infancy; as Senator Marco Rubio (who claimed, probably falsely, to be the originator and leader of the effort) later said:

Because the rider did indeed have an adverse effect:
As it happened, the program ran deeply in the red. The accumulated losses for 2014 and 2015 alone are up to $8.3 billion; some estimates place the total owed over the three years at nearly $15 billion. Because it’s hamstrung to pay the full claims, Health and Human Services has paid out only 12.6% of all claims for 2014, and nothing so far for 2015 or 2016. 
The worst consequences were probably for the member-run health insurance co-ops that were springing up to provide competition to the establishment insurers and push down inflated prices (Republicans love to talk about sacred competition, but they always end up voting for monopoly). By last fall, just seven of the original 23 co-ops were still in business, and the lack of risk corridor payments was a fundamental reason for the failure.

The company that just won a judgment wasn't a co-op but a private insurer claiming the government owed it $214 million:
It argued that the government essentially promised that the money would be paid, and that promise can’t be nullified just because Congress decided to tamper with where the money came from.
Judge Thomas C. Wheeler of the U.S. Court of Federal Claims agreed with Moda on every point. “There is no genuine dispute that the Government is liable to Moda,” he ruled in a decision issued Thursday. “The Government made a promise in the risk corridor program that it has yet to fulfill.” He directed 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.”
Some other lawsuits, two involving co-ops (Maryland's profitable Evergreen Health was ordered to pay $24 million to bail out private Maryland companies), are in progress.

It's not like the nightmare is over, but as it becomes clearer and clearer that the misbegotten Ryan bill won't make it through Congress and the Republicans can't in general come up with a plan that will satisfy even a majority of Republicans, it's nice to see that the ACA is making a turn in the opposite direction, in the very good results of this year's signups in spite of the sabotage of the presidential campaign (also see this), the increasing popularity of the law as seen in polling, the way people are starting to recognize not just Obama but Nancy Pelosi for having worked this very well, and this new defeat of Republican sabotage. It's doing much better than the alternative, and I'm more convinced than ever that we're going to keep it.

More from Bethesda1971.

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