It all started yesterday (I think it was yesterday...) when I watched MTP Daily …..
Katy Tur sat in for Chuck Todd and was sorta trying to get Rep. Jim Jordan (R) of Ohio to admit the current version of the AHCA is a cruel law. She didn’t get anywhere with him. She seemed dumbfounded by his confounding BS. She was prepared to say the AMA, AARP and a few other organizations are against this law, but she was either dazzled by his footwork or baffled by his bullshit.
To her credit, Katy Tur asserted that High Risk Pools are not well regarded. She went through a list of organizations criticizing them. Jordan and Tur went back and forth. Then, cornered, Jordan spewed this nonsense:
The $125 billion over ten years in subsidies will make the high risk pools work.
I have a couple (dozen) issues with this, but I’ll start with these:
First, it’s supposedly $130 billion over the next tens years, not $125. There is $15 billion in the invisible risk pool. There is $15 billion in the maternity fund and there’s $100 billion in the Patient and State Stability Fund. (There might be an additional $8 billion to get more moderate support.)
But,
- How many people would likely see relief from this $125 to $130 billion over ten years? 100,000? a million? two?
- This law is expected to increase the number of uninsured by 24 million. How is that considered a success?
- It’s impossible to know if $130 billion is enough, when we don’t know how many people will be in these pools.
- How is splitting off the high risk population going to work since this group tends to dynamically change from year to year?
- How is this going to work for 50-64 year olds that are facing rates 5 times higher than 25 year olds? Not all of them will be high risk pool eligible.
- The ACA’s PreExisting Condition Insurance Plan (PCIP), the temporary high-risk health insurance program cost anywhere from a low of$4,276 per enrollee to a high of $171,909 per enrollee depending upon the state and medical circumstances. The PCIP only helped a cumulative 134,708 people for an average cost of $32,000 per enrollee for 2012 alone. How is shoving all these people into sick pools going to be sustainable?
- Where did they get the $130 billion figure? Where’s the math that shows this number will be adequate?
- Who will be eligible for these High Risk Pools?
- What about the people who won’t be in the pools, but due to chronic conditions and their age, they will be looking at premiums of $900/month/enrollee or higher?
- What happens to people who have lower premiums than that, but they don’t get enough subsidies to be able to afford insurance?
- In light of Congress failing to appropriate funds for the ACA Risk Corridor Payments, what assurances do we have that Congress will continue to fund these High Risk Pool Programs for the next 10 years? After all, Jim Jordan casually did a spit ball cut of $5 billion from the proposed $130 billion during the MTP Daily interview.
- Who are going to be the losers of this new plan and will they vote for the GOP after they get the shaft like this?
The short answer is that we don’t have any reason to believe Congress will continue to support a High Risk Pool Program. We don’t know what allowing insurers to charge more for pre-existing conditions will do to market premiums. Even USA Today says this law is a sham, a ruse. If Congress’s past performance is a reasonable predictor of future behavior, then these high risk pools are not going to be funded any better than the Risk Corridors.
What gets me is why can’t our news media personalities step up and say or ask about what just a little bit of research should reveal to them?
Why can’t a reporter simply ask:
Wouldn’t it be most fair to create an Optional Medicare for All program? Allow people to keep their private insurance if they want it, but allow those who want it to go into a non-profit public program?
I guess not.
It makes more sense to go single payer, but the GOP doesn’t want to hear that.
So, I’ll get on with it.
Even if Congress makes good on their word and fully funds $125-$130 billion over the next ten years for High Risk Pools.
It is not enough money.
Say, they enroll the cumulative number as were enrolled in the ACA 2012 PCIP Program, 134,708 and we’ll use their average enrollee cost of $32,000 from 2012 just to give us a base line.
134,708 x $32,000 = $4,310,656,000 or a little more than $4,3 billion to help 0.041% of the total U.S. population.
Well, good. That looks like plenty of cash. ….except, after thinking about it.
There is no way that there are only 134,708 uninsurable people in the U.S. post-ACA. The number of those with hemophilia alone is 20,000. There are about 1.4 million American’s currently living with Crohn’s disease or ulcerative colitis. There are about 1.6 million new cases of cancer diagnosed each year. Since 2014 people who didn’t have insurance got it and got health care with their access card. This fact alone has ballooned the uninsurable population. To what level? I could spend a week of 18 hour days looking into it (providing I had good access to restricted information) and still not know for sure.
Where did the writers of the AHCA get $130 billion? If they started with the 134k 2012 number and then SWAG’d it to get their $12.5 billion per year, then:
How many people will $12.5 billion help per year? It depends upon what the cost per enrollee is and some states will see their dollars go farther than others, but I’ll continue to use the 2012 PCIP $32,000 figure because it has some real history to it. If we fairly adjusted it for fours years of inflation it would be significantly higher and valid, but staying with the old figure will still prove the point.
$12.5 billion / $32,000 = 390,625 people — about 0.12% of the total U.S. population of 323 million.
$12.5 billion will fully fund high risk pool for roughly one eighth of one percent of the U.S. total population per year and twice that if we only subsidize them at 50% or roughly one quarter of one percent of the total U.S. population.
High Risk Pools are a ruse, which I’m sure isn’t news to most people who visit dkos regularly, but there are many who don’t. Obviously, many reporters, don’t.
The vastness of our health care system is mind boggling …. here’s some numbers for reference:
The United States spent about $3.2 Trillion on health care in 2015 about $9,990 per person. About $2.3 Trillion came through various health insurance plans both public and private. That’s everything including Institutionalized and Community populations. That number includes hospital, nursing homes, clinics, drugs, private physicians, military, public health centers, mental health, substance abuse, diagnostics, home health — the whole banana.
But it might add some perspective to split out the institutionalized population and I have to go back to 2012 to do that.
In 2012 the expenses for the non-institutionalized population, the Community Populations was estimated to be $1.35 Trillion with total spending to be about $2.795 Trillion (you can download the historical tables from here).
Comparing $12.5 billion to an annual outlay of $1.35 Trillion (a three year old stat) for the Community Population alone should give us pause as to evaluating the adequacy of the GOP High Risk Pool Funding plan. It’s not even 10% of the 2012 Community Population Medical Expenditures.
$12.5 billion per year is not enough money to take care of our sickest population.
We have 323 million people with roughly 290 million having any type of health plan as of 2015.
We have historical data showing the top 1% of health care consumers account for about 22% of health care expenditures. (So, if we take the $3.2 Trillion x .22 we get $704 billion. Or, we could take 1.35 Trillion x .22 and get $297 billion. Both are staggering numbers.) We also know this group isn’t static. As many as 45% of the people in this 1% this year are expected to fall to a lower percentile the following year. Another factor is determining what percentage of this 1% would be in the high risk pool. That’s is the $12 billion dollar question.
The top 5% account for about 49-50% of health care expenditures.
The top 10% account for an estimated 66% of health care expenditures.
And not exactly a surprise, the Pareto chart (80/20 principle) holds true in health care where the top 20% of health care consumers account for about 80% of health care expenditures. (even Politifact had to find this one true.)
And we know the bottom 50% use hardly any health care at all — maybe 2.7-3% of all health care expenditures — few in this group will be in the high risk pool eligibles.
Is there a valid way to guesstimate with any accuracy what percentage of 290 million insured people will land in a High Risk Pool?
Maybe, but we need a lot more data than what the GOP did to come up with $130 billion over ten years.
I’m left with a spitball figure of my own:
After skimming over just a few data points, I’m sure the percentage of the population that will be shoved into the high risk pools has to be vastly underestimated by the writers of the AHCA. I’m also sure a significant percentage of people excluded from the high risk pools will find themselves priced out of insurance.
I’m pretty sure it’s going to be a heck of a lot more than 390k people.
These High Risk Pool funds will be distributed to the states for each state to run their own high risk pool, but I’m going to lump it all into one pot for a baseline look at the folly of what the House GOP is proposing.
According to Kaiser Family Foundation’s research, we know about 27% of the U.S. population under 65 (281 million x .27 = About 76 million people) will be considered uninsurable in the individual policy market when we return to the pre-ACA standard. These people should be eligible for the high risk pools.
Of that 27%/76 million people:
About 55% will get their insurance through their employer, but there are concerns that employers will do more health discrimination in their hiring and firing decisions.
The U.S. 2015 Census (See Table 1) estimated proportion of direct purchase insureds, 52 m divided by the total number of insured, 289.9 m = 17.9%. If that proportion holds, then, 76 million x .179 = 13.6 million people possibly … probably? seeking a high risk pool, but they might not be able to afford it.
Here’s why:
The ACA high risk pools utilized from 2010 to 2013 cost about $32,000 per enrollee for 2012.
13,600,000 x $32,000 = $435,200,000,000 or $435 billion dollars to run a national high risk for the first year alone.
$125 billion a year in subsidies wouldn’t be enough.
Ok, that number is wildly high. A couple things to consider is that this is 100 times more people than were in the high risk pools in 2012, but access to those pools were highly restricted. Plus, not everyone in the 13.6 million will have an annual cost of $32,000...and I could list a few more factors that would explain why $435 billion is wildly high, but at least we can get an idea of a ceiling number of people who could be shoved onto a high risk pool insurance plan and just how absurdly expensive such a plan could cost.
Let’s look at it another way.
About 19% of the population is 50-64 years old or about 61 million people. Of that 61 million:
About 70% or 42.7 million are estimated to have at least one chronic condition that would make them uninsurable.
About 4.1 million 50-64 year olds have individual policies
About 70% of 4.1 million leaves 2.9 million of 50-64 year olds that would likely be shoved into these high risk pools, but they might not be able to afford it.
2,900,000 x $32,000 = $92,800,000,000 or $92 billion to run a national high risk pool for the first year for less than 3 million people — less than 1% of the U.S. total population. An estimate that starts with excluding 262 million people, but we’ll continue with this number just to get an idea of how far $125-130 billion in subsidies will go.
That $125-130 billion is ten years of subsidy, $12.5 billion per year.
$92 billion - $12.5 billion = $79.5 that enrollees must pay for their insurance
$79.5 billion / 2,900,000 = $27,413 /per enrollee for the first year alone
Ok, maybe this number could also be too high. Again, I could give a bunch of factors to consider to change this number, but hey! Jim Jordan said with a straight face that $125 billion across 10 years is plenty funding to subsidize our sicker population’s ability to get affordable insurance with nothing to back up his claim. What’s with reporters? It wasn’t that difficult to discover $130 billion over 10 years is not enough to keep our sickest population alive let alone as well as their chronic condition will allow them to be.
Let’s see if we can find a number with some historical data behind it…..
Kaiser Family Foundation crunched some numbers on high risk pools run by the states and figured about 2.2% of people who were on non-group plans were in high risk pools pre-ACA. This is a historical number, but access to these high risk pools was highly restricted and again, we are 3 years into the ACA’s pre-existing condition elimination requirements that has inflated this population. Even with these caveats, this is a historical number that has some basis to it. 2.2% of the direct insurance purchasers (aka the individual policies).
If I go back and take that U.S. Census Direct Purchase number from Table 1 (52,057,000) and multiple that by 2.2%, I get:
52,057,000 x 0.022 = 1,145,254 projected enrollees roughly, 0.35% or one third of one percent of the U.S. population.
We can only hope the number of people needing the high risk pool is this low.
1,145,254 x 32,000 = $36,648,128,000 or $36.65 billion to run a national high risk pool for the first year, but the enrollees might not be able to afford it.
$36.65 billion - $12.5 billion = $24.15 billion
$24.15 billion / 1.145 million = $21,090 per enrollee for the first year of a national high risk pool.
That is the very definition of unaffordable if you are making the median income that is currently around $53,000/year.
Jim Jordan is betting on reporters like Katy Tur not doing the math.
High Risk Pools are a lousy idea.
They really are.