Susan Pendergrass is joined by Elias Tsapelas, director of state budget and fiscal policy at the Show-Me Institute, to break down the sweeping new federal legislation known as the “One Big Beautiful Bill.” They discuss what it really means for Medicaid recipients, food stamp programs, state budgets, and Missouri taxpayers.

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Timestamps

00:00 Understanding the One Big Beautiful Bill Act
06:44 Medicaid: Changes and Implications
11:23 SNAP Benefits: New Regulations and Effects
14:18 Tax Implications for Missourians
19:09 Future of Medicaid and State Budgets

Episode Transcript: Understanding the One Big Beautiful Bill with Elias Tsapelas (Download Here) 

Susan Pendergrass (00:00)
Okay, here we go. You ready? Elias Tsapelas, we are going to talk about IT—the big IT—the One Big Beautiful Bill Act. I don’t feel like I understand it. I suspect there’s a lot of people reading the news that don’t understand it, but you seem to understand a lot of it. So thanks for coming to talk to us about it today.

Elias Tsapelas (00:19)
No problem. I think there’s a lot of misconceptions, especially about what’s happening with the welfare programs in the bill. So I’m happy to dive into those.

Susan Pendergrass (00:27)
Yes, yeah. I’ve definitely seen claims that this is going to basically strip health care from millions and millions of people and that kids will be hungry. And I don’t want to minimize that. But we had Brian Blase on the podcast, and I thought I had an understanding of it that didn’t exactly line up with that narrative. So let’s just start there. People are saying that tens of millions of people are going to lose health insurance under the One Big Beautiful Bill Act. Explain that to me.

Elias Tsapelas (01:01)
Well, the first thing people need to understand about Medicaid is that it’s gotten tremendously more expensive in recent years. The Biden administration made a lot of changes during COVID—changes to how the program works and its future trajectory. Even after the One Big Beautiful Bill goes into effect, we’re basically just putting the program’s costs back on the trajectory it was on in 2021. This isn’t going back to the Stone Age—it’s more like going back five years.

A lot of this stems from efforts to eliminate waste, fraud, and abuse. And while there’s certainly some of that, what many people don’t realize is that most states, including Missouri, now contract with private health plans to cover people on Medicaid—particularly the Medicaid expansion population, which consists of healthy adults.

Susan Pendergrass (02:11)
Okay, so let’s just pretend we know nothing. Medicaid is a program that covers health insurance costs for low-income and disabled individuals?

Elias Tsapelas (02:24)
Yes. About 50% of kids in Missouri are on Medicaid. The program covers around two-thirds of all nursing home costs and over a third of all births in the state.

Susan Pendergrass (02:34)
So low-income pregnant women can get Medicaid coverage, and their children can as well. Who exactly is in the “expansion population”?

Elias Tsapelas (02:47)
Good question. And just to clarify—yes, Medicaid also covers a lot of very disabled individuals who private health insurance wouldn’t. But the expansion population refers to healthy adults making up to 138% of the federal poverty limit. These are not permanently disabled people. They’re generally able to work.

Before 2021, someone like me—unmarried and childless—couldn’t qualify for Medicaid in Missouri, even if I lost my job. Medicaid expansion changed that, and with it came a lot of problematic incentives. One issue is that states are paying health plans monthly for enrollees, but there isn’t always a process to verify whether those people are still eligible.

Susan Pendergrass (04:53)
Let me just stop you there. So the state is paying monthly premiums for people who might not even know they’re on Medicaid? And they might have a job now and no longer qualify, but the state hasn’t gone back to check?

Elias Tsapelas (05:40)
Exactly. Ideally, people would notify the government when they get a job, but most don’t, and the IT systems don’t really catch that. Previously, states just paid the bills as they came in. If someone didn’t go to the doctor, there was no cost. Now we’re paying premiums whether they use care or not, which adds up quickly.

Susan Pendergrass (06:40)
So what’s in the One Big Beautiful Bill? Are states required to recertify people?

Elias Tsapelas (06:45)
Yes. One big provision is that states must check eligibility at least twice per year. The Congressional Budget Office projects significant enrollment losses just from checking more often. That’s raised concerns about red tape, but the goal is to ensure people who are no longer eligible aren’t still receiving coverage.

Susan Pendergrass (07:13)
Can Missouri do that? Do we have the systems in place?

Elias Tsapelas (07:20)
I’d like to think so, but I’m not sure. During COVID, states weren’t allowed to check eligibility at all for over three years. Missouri spent an entire year catching up when that ended. Right now, about 1.2 million people are on Medicaid in Missouri, including 350,000 in the expansion group. So yes, it would mean more IT strain.

Another major part of the bill is requiring “community engagement” or work requirements for the able-bodied expansion group.

Susan Pendergrass (08:24)
So that’s people under 65 who aren’t disabled? How do they know who’s supposed to work?

Elias Tsapelas (08:32)
There are carve-outs—new moms, parents with kids under 14, people over 65, etc. The idea is to target people who could be in the workforce. There are also alternative ways to meet the requirements, like volunteering. And it’s worth noting: the SNAP program (food stamps) has had work requirements since the 1990s.

Susan Pendergrass (10:25)
Then why are people saying this will “kick people off”?

Elias Tsapelas (10:33)
Because people will have to meet work or volunteer requirements, and the state will recertify them more often. The question is: how many people will get caught in red tape? That depends on how well states implement the changes. Most of the bill’s provisions are phased in over time to allow states to adapt.

Susan Pendergrass (11:34)
Let’s talk about SNAP benefits. People are saying this will take food away from families. What’s actually changing?

Elias Tsapelas (11:46)
The federal government will now penalize states with high error rates in SNAP administration. Missouri’s overpayment error rate is about 10%, and some states are worse—Alaska’s is nearly 25%. Under the bill, if your error rate is over 6% for two years, the state will have to start covering some of the cost. So Missouri may have to pay a portion of benefits if it doesn’t improve.

Susan Pendergrass (14:06)
How does the bill impact taxes for Missourians?

Elias Tsapelas (14:14)
The standard deduction is going up—by $750 for single filers and up to $6,000 more for seniors. There’s also a new deduction for car loan interest and temporary exemptions for taxes on tips and overtime. Since Missouri’s tax code follows the federal code, that could mean less state revenue, too.

Susan Pendergrass (15:41)
So what will this cost Missouri?

Elias Tsapelas (15:46)
It depends. If we reduce our SNAP error rate, the cost isn’t too bad. But a bigger issue is the provider tax cap dropping from 6% to 3.5% over a few years. Missouri is at 4.2% now, so we’ll need to lower it. That tax generates about $1.5 billion per year for hospitals.

Susan Pendergrass (17:09)
How does the rural hospital fund come into play?

Elias Tsapelas (17:24)
The bill creates a $50 billion Rural Hospital Fund to be distributed over five years. States will get a portion based on how rural they are. The hope is this fund offsets the provider tax losses—at least through 2030. But after that, the fund ends. So there’s concern about what happens long-term.

Susan Pendergrass (19:18)
Senator Josh Hawley mentioned he supports the bill but hopes to fix the provider tax issue in five years.

Elias Tsapelas (19:29)
That seems to be the thinking—pass it now and revisit the unpopular parts later. A lot of the tax and spending changes are temporary, which is partly how they got the bill to comply with budget rules.

Susan Pendergrass (20:30)
This reflects what voters asked for—smaller government and more state responsibility. It reminds me of the Department of Education cuts. Missouri will have to decide which programs to keep and how to fund them. But I was surprised the expansion of the MOScholars tax credit program made it in.

Elias Tsapelas (22:35)
Yes, Medicaid will continue to dominate the state budget if we don’t address it. Every year it’s, “How much more is Medicaid going to cost?” Then we build the rest of the budget around that. This bill will force Missouri lawmakers to reevaluate some of those assumptions and perhaps reconsider whether managed care is working.

Susan Pendergrass (25:02)
That’s going to be interesting to watch. Thanks for breaking it down, Elias. This bill is being talked about a lot, but I think a lot of people are still unsure what it really does.

Elias Tsapelas (25:16)
No problem. I think we’re all looking forward to seeing what happens next.

Produced by Show-Me Opportunity

The post Understanding the One Big Beautiful Bill with Elias Tsapelas appeared first on Show-Me Institute.

According to the report, most hospitals in the St. Louis region are charging above what is considered a “fair price,” with BJC hospitals charging the most. To determine what was “fair,” the report used guidelines established by the National Alliance of Healthcare Purchaser Coalitions. The coalition determined that any rates below 200% of what the federal government reimburses for Medicare to be “fair.” This is a bar that not many hospitals in the area are able to clear (see graphic above).

Of course, not everyone pays the price that hospitals charge, and some hospitals in the region do offer lower or more “fair” prices. But what shouldn’t get lost in this discussion is that assembling a report like this that includes pricing data for every hospital in the St. Louis region would have been nearly impossible if not for the federal price transparency rules that went into effect in 2021.

I’ve written several times over the past year about the benefits of price transparency in the healthcare sector and suggested that Missouri should go further than the feds to maximize transparency. As of early 2023, fewer than half of Missouri’s hospitals were in full compliance with the federal transparency requirements years after the rules went into effect. Unfortunately, even fewer were posting their data in a format that was consumer friendly for patients to access and understand.

Even though the report’s authors were able to navigate their way through the federal data to generate findings for the St. Louis region, the process is still too difficult to expect the average Missouri patient to do the same. That’s why Missouri should, in addition to establishing its own price transparency requirements, follow the leads of many other states in creating its own web-based tool to make it easy for every patient to learn the prices of the care they’d like to receive prior to receiving it.

None of this is to say that simply requiring hospitals to publish their prices will be enough to immediately drive down costs, or entirely fix our broken healthcare system, but it’s an essential step toward making healthcare more consumer friendly.

Given that a coalition of businesses paid for this report, employers clearly want to be able to compare prices between providers, and that is something patients should be able to do as well. Hopefully, Missouri’s general assembly agrees, and lawmakers decide to make hospital price transparency a priority when they return to Jefferson City in 2025.

The post Transparency Yields Results appeared first on Show-Me Institute.

A few months ago, laws went into effect in both Texas and Tennessee that provide patients with new avenues to avoid overpaying for health services. These laws offer a glimpse at one of the next steps for states in the effort to make prices more transparent. More specifically, these new “self-pay” laws allow individuals covered by certain health plans to receive deductible credit if they can find services cheaper than the rate their insurer negotiated.

Are there really that many services where patients could find cheaper prices than what their insurer has agreed to pay? Surprisingly, the answer appears to be yes. According to a recent report, when offering to pay cash instead of using insurance Josh Archambault found:

We recently made some phone calls in Nashville and found we could pay $541 in cash for a colonoscopy, far less than the $2,400 average rate the three largest insurers in the state negotiated. In fact, we found at least four providers in downtown Nashville that would charge less if we paid cash instead of using our insurance card.

In other words, it’s likely that many patients are currently overpaying for services when they use their insurance. And what these new laws do is allow patients to take the $541 option and require their insurer to count that spending toward their yearly deductible, as their insurer would do for any other spending on covered health services. For many patients, especially those with chronic illnesses, this change could result in significant cost savings.

As I’ve written before, price transparency isn’t a silver bullet for our health care system, but it will be key for lowering health care costs—if Missouri lawmakers ever decide to get serious on the issue. Going into this year’s legislative session, I hope our lawmakers decide to make tackling skyrocketing health care costs a priority. Following what’s recently worked for both Texas and Tennessee would represent a step in the right direction.

The post New Avenues for Price Transparency appeared first on Show-Me Institute.

It’s been a little more than two years since the federal government began requiring that hospitals disclose their prices in a consumer-friendly format. As of a few months ago, compliance was reportedly still incredibly low. The Centers for Medicare and Medicaid Services (CMS) and the American Hospital Association (AMA) claim that around 70% of hospitals were complying, which is much higher than the numbers we found in our investigation into Missouri’s hospitals.

A recent study in the Journal of the American Medical Association throws some cold water on the supposed success thus far for hospital price transparency. The problem isn’t simply that so many hospitals seem uninterested in complying with the federal rule, or at least complying in spirit. Even the hospitals that are “complying” don’t appear to be publishing their real prices. The report concludes:

Findings of this cross-sectional study suggest that there was poor correlation between hospitals’ self-posted online prices and prices they offered by telephone to secret shoppers. These results demonstrate hospitals’ continued problems in knowing and communicating their prices for specific services. The findings also highlight the continued challenges for uninsured patients and others who attempt to comparison shop for health care.

In other words, hospitals are quoting different prices if you call them than what they’re publishing online. This also means that the federal price transparency rule has not succeeded in making health care services easily shoppable—at least not if you’re only shopping online.

Price transparency is important because it allows patients to know the price of the treatment they’re receiving before getting the bill. Knowing the price can then empower patients to shop around and search for savings. Informed consumers (patients) and market forces can then apply downward pressure on the nation’s constantly rising health care costs. Or at least that’s the idea. Needless to say, for transparent prices to have the desired effects, the posted prices need to be accurate. If they’re not, how can patients, especially those uninsured, make the best financial decision for themselves with that information?

Going forward, it’s clear more needs to be done to ensure patients are armed with the information they need to make their health care decisions, and I’m hopeful Missouri policymakers will take action in 2024. But until they do, be sure to call ahead for your medical procedures just in case.

The post Shopping by Phone? appeared first on Show-Me Institute.

Health care price transparency was added to the Show-Me Institute’s 2022 blueprint because of its potential to dramatically improve the lives of Missourians. Price transparency arms the health care consumer with greater knowledge about what exactly procedures will cost, what prices insurers negotiate with hospitals, and how the cost of a procedure differs from hospital to hospital. This information should be easily accessible so that someone could do accurate research before ever scheduling a hospital visit.

The main benefit of price transparency is that more information is available to patients, insurers, and employers to aid in decision making. Insurers can use the information to better negotiate prices with hospitals, while patients and employers can use the information to make more informed decisions when purchasing health plans. A price tag attached to a procedure makes it much easier to weigh the costs and benefits of a service, so you know exactly what you are putting in your healthcare shopping cart.

In Missouri, the strictest price transparency rules come at the federal level. Under the guidelines of a Trump administration 2019 executive order, hospitals are required to publish a list of standard charges for 300 common procedures in a user-friendly, shoppable display. In addition, hospitals must publish a complete list of charges in a machine-readable format. “Machine readable” simply means the information can be downloaded off the hospital website into a file format that your computer could understand—like a Microsoft Excel file, as one example. The files need to include the gross charge, a discounted cash price, any payer-specific negotiated charges, and both the highest and lowest negotiated charge for any given service.

While price transparency reforms such as this one are potentially very beneficial for patients all across the nation, there are problems with compliance. The Wall Street Journal reported that, as of last December, many of the nation’s largest hospital systems were not complying with the 2019 rule, without any penalty from the Centers for Medicare and Medicaid Services. In the next post, I take a deep dive into Missouri hospitals and their compliance (or lack thereof) with price transparency rules.

The post Health Care Price Transparency in Missouri: Part One appeared first on Show-Me Institute.

It should be no shock that the past two years have been tumultuous and expensive for Missouri’s largest government program. Medicaid fulfilled its role as the state’s health coverage provider during a global pandemic, and on top of that, Missouri also adopted Medicaid expansion. These two factors have the potential to swing state Medicaid spending by billions of dollars.

Today, Missouri’s Medicaid program enrollment sits at the highest point in state history, which as I’ve written before, is in large part because of COVID-19. Fortunately, there’s hope that the federal state of emergency for the pandemic will end in the next few months. Such a move would represent a green light for states to begin once again checking whether program enrollees still qualify for the services they’re receiving (one of the conditions of receiving stimulus funds for Medicaid was not removing anyone from the rolls for the time being).

This is important because enrollment is the single biggest driver of Medicaid spending, and there are many reasons to believe that there are large numbers of ineligible enrollees right now. According to the Urban Institute, more than 350,000 current enrollees could lose coverage if the state starts checking eligibility again. To put that number in context, even if you assume the monthly cost of coverage for these enrollees is $400 (it’s likely higher), this is saying the state may be spending $140 million per month on people who don’t qualify to receive services!

It should not be controversial to insist that state tax dollars only pay the cost of health coverage for those who meet the qualifications to receive it. In normal times, federal law requires states to check eligibility regularly to ensure funds aren’t being wasted. Federal law also requires those who are qualified to receive benefits regardless of any administrative difficulties. This is a problem for many Missourians right now, as the wait time for application processing far exceeds what’s allowed by federal law. (It should be noted that those who are eligible for coverage when they apply will have their qualified costs covered retroactively once enrolled regardless of processing time.)

To summarize: There’s an enormous backlog of current enrollees whose eligibility needs to be checked, and once an eligibility check is completed we will likely see a major decline in total enrollment. But there’s also a sizable backlog of applicants who are waiting to be enrolled—and once that process is complete, total enrollment will increase.

The good news is that the governor and legislature appear to recognize the enormity of the task ahead; both have included increased funding to help reduce the administrative backlogs in their budgets. It’s anybody’s best guess how much Medicaid enrollment will fluctuate over the next year, but there are potentially billions of reasons that state taxpayers should care about enrollment numbers.

The post Medicaid’s Volatile Upcoming Year appeared first on Show-Me Institute.

The event couldn’t have come at a more pivotal time. Missouri, like many states, is looking seriously toward making permanent changes to our health care system in response to last year’s health crisis to ensure that health care is affordable and accessible, pandemic or not. Our guests Josh Archambault, Naomi Lopez and Rea Hederman talked about telehealth, scope of practice, and health insurance respectively, although we had the opportunity to pick their brains about other health care issues in the Q&A period that followed the talks.

The event was about an hour long, and we’re happy to share the video of this informative event below. Enjoy.

The post Three Health Care Experts Reiterate Importance of Making COVID Reforms Permanent appeared first on Show-Me Institute.

Governor Parson has already taken two important steps to prepare Missouri’s health care supply for the coming surge in demand. A little more than a week ago, he waived multiple regulations that were preventing able providers from caring for Missourians. But as my colleague Patrick Ishmael and I have outlined, more action is needed to respond to COVID-19.

The next step is to allow providers to care for their patients to the full extent of their training. For example, if there were a shortage of doctors, and a nurse, medical student, or pharmacist could capably provide a service that had traditionally been delivered by a physician, the law should allow it. Reforming Missouri’s scope of practice laws would expand the state’s capacity to deliver medical services in a crunch. The governor has made some progress on scope of practice issues already by waiving the 75-mile requirement for APRNs and their collaborating physicians, but further steps, like appropriately allowing pharmacists to prescribe some medications, should be pursued.

Policymakers should also consider reducing the government-imposed barriers that are limiting available health care resources. Specifically, Missouri’s certificate of need (CON)laws (laws that require health care providers obtain government approval before opening health care facilities) hamper the response to COVID-19 by making it more difficult to build new (temporary or permanent) facilities. Missouri should follow the lead of the at least 18 other states that have suspended some portion of their CON laws in response to the coronavirus. Abolishing these barriers permanently would allow hospitals or other providers to build the facilities they believe communities need—not just the ones the government says the community should have.

Finally, the public health crisis and resulting economic downturn have highlighted the need for increased access to affordable health coverage. As many Missourians deal with the loss of their employer-sponsored health coverage and other income, it is essential they have access to a range of insurance options. Reforming state regulations on traditional coverage plans and also extending the duration of short-term medical plans would help ensure that Missourians have access to coverage that meets their needs while helping to mitigate financial risk.

Missouri will likely continue seeing increased need for health care resources over the coming few weeks, and there are policy responses that can help weather the storm. Here’s to hoping Missouri’s elected officials rise to the occasion by making the regulatory and legislative changes needed to help protect our state’s residents during this trying time.

The post More Policies to Fight COVID-19 appeared first on Show-Me Institute.

What we know:

• Medicaid eligibility criteria in Missouri are far more lenient for children than for adults – Individuals under eighteen years old qualify for Medicaid based on their family’s total income. Those whose parents make less than 150 percent ($38,625 for a family of four) of the federal poverty level (FPL) can enroll in the traditional Medicaid program. And those whose families earn between 150 and 300 percent ($38,625–$77,250 for a family of four) of the FPL can enroll in the Children’s Health Insurance Program (CHIP). The care available to individuals in both groups is identical, but those who are in the first receive the coverage free while those in the second group are asked to pay a monthly premium. While CHIP and Medicaid are separate programs, both groups are typically included in total Medicaid enrollment numbers.
• Federal law requires at least yearly income verification for Medicaid enrollees – Since people qualify for the program based on income, the federal government requires states to check whether enrollees are still eligible to receive services at least once per year. Nearly six months ago, it was revealed that Missouri’s Medicaid agency had stopped performing annual income verifications from 2014 through 2017. Missouri resumed verification at the beginning of 2018. However, some claim that the administrative burden required to verify eligibility is too high.
• The drop in enrollment is concentrated among Missouri’s children – Today, there are roughly 520,000 children enrolled in Missouri’s Medicaid program, but only about 25,000 of them are enrolled in CHIP. The majority of the enrollment drop has been among children in families making less than 150 percent of the FPL, but there has been a slight increase in CHIP enrollment. There are limitations to what net enrollment figures can tell us. The enrollment figures do not show how many people came off the rolls, how many came on, or why anyone’s enrollment status changed.

What we don’t know:

• Whether the state adequately advises eligible beneficiaries on how to maintain their coverage – The decline in enrollment began once Missouri’s Medicaid agency restarted its annual verifications at the beginning of 2018 with the help of a new automated system. With the rollout of the new system, Medicaid recipients began receiving letters in the mail informing them they would need to verify their incomes and the process required to do so. Some contend that the state did not do enough to ensure each recipient received and understood the letter. Nonetheless, coverage may be canceled within 30 days absent verification in order to remain compliant with federal law.
• How many children would still be eligible for the Medicaid program they were previously enrolled in – Some claim that many of the children removed from the Medicaid rolls were probably still eligible for coverage. The key distinction is that many might be eligible for coverage, but likely only eligible for CHIP. As mentioned previously, CHIP requires monthly premiums; traditional Medicaid is free. Without hearing from parents, should the state really enroll people who were previously receiving free coverage into a plan that requires monthly payments? The reality is that we do not know how many children removed from the rolls could have remained in the traditional Medicaid program.
• Why the children have not re-enrolled – Eventually, some parents of kids who lost coverage must have realized their kids were still eligible. So why didn’t these parents re-enroll their children? It seems the most likely answer is that many found out their children were now only eligible for CHIP instead of Medicaid, and simply chose another option instead of enrolling in CHIP. If parents find out they must pay a premium for coverage, and they are eligible for private insurance through the individual marketplace or through their employer, it would make sense that they might not opt for Medicaid coverage.

Falling Medicaid enrollment in Missouri is certainly an important topic, but it is also a complicated one. The issue isn’t whether children should have health coverage or not, but rather how the state should administer its Medicaid program to ensure optimal care for recipients while making the best use of taxpayer dollars. Policymakers should be sure they have all the facts before acting.

The post What’s Really Happening with Medicaid Enrollment? appeared first on Show-Me Institute.

The post Short-Term Medical Insurance: A Step Forward for Health Choice appeared first on Show-Me Institute.

The existential risks of an unreformed Medicaid program are not, however, the only health care issues that Missouri should grapple with next year.

• Earlier in 2019, I published a paper on the state’s Certificate of Need law, which can dictate where hospitals and other care centers open, and how readily Missourians can access important health care services. Missouri’s CON law should be repealed.
• I have talked about short-term medical insurance reforms for a long time as yet another option to provide consumer choice and economic value. Policymakers should reduce the mandated coverage requirements on Missouri health insurance products generally, but they should be especially careful about harmonizing Missouri’s short-term medical insurance market with the new rules instituted at the federal level early in 2018.
• Elias and I have also talked about other reform options, including reassessing the state’s scope of practice regulations, taking a fresh look at our medical licensing laws and pursuing innovative health care shopping incentive programs, both in public and private.

There will be many important items on policymakers’ legislative agendas in 2020. Medicaid reforms should be a high priority—not only as a health care priority, but as an issue that will affect the state’s financial health well into the future. But legislators should also not forget that great progress can be made for Missouri patients through other legislative changes, and I hope these largely modest reforms make their way onto the agenda.

The post Legislators Shouldn’t Neglect Health Care Reform Opportunities in 2020 appeared first on Show-Me Institute.

Moving from a system . . . [that has] 1000 of something to one of something sounds a lot like a monopoly, and monopolies don’t always work in consumer interests.

The sheer cost of a Medicare for All program would dwarf our current federal spending levels and require massive new taxes on Americans. The Atlantic reports:

The Urban Institute, a center-left think tank highly respected among Democrats, is projecting that a plan similar to what [two candidates] are pushing would require $34 trillion in additional federal spending over its first decade in operation. That’s more than the federal government’s total cost over the coming decade for Social Security, Medicare, and Medicaid combined, according to the most recent Congressional Budget Office projections.

In recent history, only during the height of World War II has the federal government tried to increase taxes, as a share of the economy, as fast as would be required to offset the cost of a single-payer plan, federal figures show. There are “no analogous peacetime tax increases,” says Leonard Burman, a public-administration professor at Syracuse University and a former top tax official in both the Bill Clinton administration and at the CBO. Raising that much more tax revenue “is plausible in the sense that it is theoretically possible,” Burman told me. “But the revolution that would come along with it would get in the way.”

Health care providers, health insurers and pharmaceutical companies are not always “good guys” in our health care system, but they compete with one another, which serves consumer interests. Policymakers should go much further in compelling such competition and preventing these industries from leveraging government for their own interests. But Medicare for All goes in the very opposite direction—monopolizing control of our health care system, reducing choice and trusting government to provide these services instead.

It was a bad idea last year. And it is still a bad idea this year.

The post “Medicare for All” Remains a Terrible, Terrible Idea appeared first on Show-Me Institute.

The cost of health care is hurting the state’s budget and Missourians’ pocketbooks. This year, Missouri passed the largest budget in the state’s history and Medicaid is a bigger portion of the budget than any other single item. Medicaid today consumes more of the budget than ever before, and shows no sign of slowing down. In fact, Missouri’s Medicaid enrollment today is less than it was in 2005, but the program costs nearly twice as much.

Premiums for private coverage also continue to rise, partly as a result of restrictions imposed by the Affordable Care Act. My colleagues have advocated for the expansion of short-term medical plans to help ease cost inflation. Short-term medical plans allow consumers to personalize their coverage without costly Obamacare restrictions, such as mandated maternity and mental health coverage. Bills that would expand short-term plans have received support in both chambers the past two years. Hopefully a bill expanding the availability of short-term plans will finally pass next year.

The lone bright spot in health care policy was the creation of the “Missouri Health Insurance Innovation Task Force.” When the task force meets later this year, they will “develop innovative ways to transform the health insurance marketplace” and request an innovation waiver from the federal government. I’ll be outlining some market-based reforms the task force should consider in a future blog post.

The work of this task force and the reforms they consider could bring substantial health care savings for Missourians. Sadly, the implementation of any reforms won’t be completed until at least next year.  It’s nice to have a glimmer of hope for the future, but that doesn’t make the present any less disappointing.

The post Another Year without Reform appeared first on Show-Me Institute.

The excitement surrounding such a reform is not reserved to Missouri. The Trump administration itself has pushed very hard for such expansions, and central to that push is the secretary of the Department of Health and Human Services, Alex Azar. At a conference late last month, he laid out why this reform is important.

“We believe sensible state regulation of [short-term health insurance plans] is important,” Azar said. “But millions of Americans are in need of affordable insurance options, and states can help build this market outside of Obamacare’s broken regulations.”

As more Americans enter the new economic environment, they find themselves unable to purchase quality health insurance, Azar told the audience. The new policy will give states greater flexibility to create more affordable insurance options for all consumers, especially those workers who do not receive health insurance through an employer, Azar says.

“While these plans aren’t for everyone, we believe they can be an important option for many—people who have been priced out of Obamacare plans, who are between other sources of coverage, or who are independent contractors in today’s gig economy,” Azar said.

You can find out more about short-term medical insurance here. It’s my hope that Missouri makes liberalization of short-term medical insurance one of its highest priorities next year.

The post HHS Secretary Talks Up Short-Term Medical Insurance Plans appeared first on Show-Me Institute.

How do STLDI plans save their members money? For starters, short-term plans are not ACA-compliant. They do not offer all ACA required benefits, cover preexisting conditions, prohibit dollar limits on benefits, or insure dependents to the age of 26—some of the very provisions that drive up the cost of insurance. But because coverage is less comprehensive, individual monthly premiums for STLDI plans cost substantially less than unsubsidized ACA plans (see chart below). For many Missourians, these affordable plans are a welcomed option.

The rise of these STLDI plans will likely affect the ACA insurance markets. The departure of low-cost, younger and healthier customers could increase the volatility of ACA risk pools and stoke spiraling premiums further. And for those who choose an STLDI plan? Those customers may have made a bad bet if they get really sick, given STLDI’s comparatively skinnier benefits relative to the more expensive ACA plans. But considering that almost half of Missouri’s population is under the age of 34 and that many are being crushed by exorbitant premiums, a number of Missourians could benefit from an STLDI expansion.

Missouri currently limits its STLDI plans to six months, requires plans to cover some state-mandated benefits, and necessitates that customers have a 63-day gap in coverage before purchasing short-term plans. These regulations impede customers’ access to these plans, creating significant barriers to affordable insurance.

In the 2018 legislative session, Missouri considered House Bill 1685, which would have extended the six-month limit on plans to a full year. Though the measure did not pass before the session ended, it received support in both chambers, and a similar bill could appear in 2019. In light of the change in federal rules, isn’t it time for policymakers to consider expanding short-term plans for the sake of Missourians’ health—both physical and financial?

The post Not Bronze, or Silver, or Gold, or Platinum-Just Affordable appeared first on Show-Me Institute.

• Health insurance premium hikes
• Free speech on college campuses
• Nationwide school choice survey results
• Transparency for special taxing districts
• School choice in Illinois
• Criminal justice reform opportunities

Click on the link below to read more.

The post Show-Me Institute’s October 2017 Newsletter appeared first on Show-Me Institute.

Rate proposals released Friday by the Missouri Department of Insurance are on average 36 percent to 42 percent higher than rates for similar 2017 plans….

Both Cigna and Anthem Blue Cross Blue Shield, the two companies returning to sell on the marketplace, listed the uncertainty about cost-sharing payments that help consumers cover the cost of insurance as justifications for their proposed rates.

Cigna has reportedly asked for up to a 73% price hike on at least some of its plans. Meanwhile Anthem will be dropping out of at least 17 counties in the state where the company marketed plans just this year. KCUR has a good national map of the number of insurers in each county in 2018. Particularly in Missouri, the map tells a story of an individual insurance market that for hundreds of thousands is less a market and more a monopoly, duopoly, or oligopoly. 

American health care reforms should be based on good policy that empowers people, not government. And these rate hikes are just the latest example of what happens when the center of a health care system is government and its cronies rather than patients themselves. We need change, and we need it sooner rather than later.

The post Ouch–Missouri Individual Health Insurance Premiums To Rise by Double Digits in 2018 appeared first on Show-Me Institute.

Unfortunately, bad policy can also recur like an eclipse—and sadly, not nearly as infrequently as Kansas City’s two-hundred year solar eclipse cycle.

Seven years ago, Congress passed the Patient Protection and Affordable Care Act (or “Obamacare”) on a party-line vote and into law. Not only has that law disrupted the health care of millions of Americans—particularly rural Americans—but it has doubled down on a broken status quo that puts “insurance” at the center of our health care system rather than care. Forcing people to purchase value-questionable comprehensive insurance plans as a stand-in for actual care has not worked so far, and it will not work in the future.

But what’s especially frustrating is that some of the same folks who made Obamacare the law of the land now want to commit even further to a government-centric approach to health care policy, labeling it “bipartisanship.” I submit that bipartisanship that views government as the white knight of health care is not an appropriate compromise position, nor is it the solution to our country’s health care problems. The market is.

Market solutions to health care require reliable pricing signals established by the transacting parties, not the continued reliance on a third-party negotiator for services that has affected care quality, cost, and access over the last half-century. That means disintermediating insurance in our health care system. It means massively overhauling Medicaid to ensure our most vulnerable receive the care they need and that the program doesn’t bankrupt us in the process. It means clearing the way for people to freely help one another through licensing and regulatory reform. It means, in other words, often doing precisely the opposite of what Obamacare supporters want government to do—rather than get government more involved in our health care, it means getting it less involved.

I hope that good policy won’t be eclipsed by a broken Obamacare health care system that continues to hurt millions of Americans. But I especially hope the bad policies driven by Obamacare aren’t exacerbated yet again by another cycle of bad government-centric policy, now seven years on from its last appearance. We’ve seen these mistakes before, and we don’t really need to see them again.

The post Obamacare’s Total Eclipse of Bad Policy appeared first on Show-Me Institute.

Like the Medicaid reform we proposed three years ago, Right to Shop realigns incentives for health care consumers by rewarding them for seeking out cost-effective care. In a Right-to-Shop state, patients would be able to receive a portion of the savings an insurer would realize if the patient went to a lower-cost provider rather than a higher-cost provider. Rather than reinforce the paradigm where the ever-increasing prices we pay for a service go straight toward driving up our respective premiums, Right to Shop shifts the paradigm by empowering consumers in the private market to save themselves—and their risk pools—money that can be used toward other life needs they might have. That means more money can go toward health care spending, but also toward rent, car payments, or whatever else a patient might need, health-related or not.

Here’s how Josh Archambault of the Foundation for Government Accountability, the chief proponents of the idea, explained the concept in Forbes last year:

Right To Shop empowers patients with the knowledge they need to make smart choices about how and where they consume health care. They’re given tools to find the best value providers and, when they choose those options, they get a share of the savings – in cash.

It’s so easy, even a caveman can use it.

“Caveman” is probably a good image here, given that health care shopping was stuck in the Stone Age for much of the last few decades. For most Americans, the price actually charged for our health care when we received it was less of a gripe than the price paid in deductibles, premiums, and copays throughout the year—even though they’re all inextricably connected.

Right to Shop takes us another step in a better policy direction, toward transparency in pricing, competition for our care, and gentle reform of the third-party payer system we’ve come to expect. If Missouri policymakers haven’t considered the idea yet, now would be a good time.

The post “Right to Shop” Idea Promotes Health Care Shopping appeared first on Show-Me Institute.

Regarding the company’s individual commercial medical coverage (Individual Commercial), substantially all of which is offered on-exchange through the federal Marketplaces, Humana has worked over the past several years to address market and programmatic challenges in order to keep coverage options available wherever it could offer a viable product. This has included pursuing business changes, such as modifying networks, restructuring product offerings, reducing the company’s geographic footprint and increasing premiums.

All of these actions were taken with the expectation that the company’s Individual Commercial business would stabilize to the point where the company could continue to participate in the program. However, based on its initial analysis of data associated with the company’s healthcare exchange membership following the 2017 open enrollment period, Humana is seeing further signs of an unbalanced risk pool. Therefore, the company has decided that it cannot continue to offer this coverage for 2018. [emphasis mine]

What does Humana’s decision mean for Missouri? Well for starters, in 2018, Jasper, Greene, and Newton counties will likely have only one insurance provider on the exchange, assuming Anthem doesn’t leave (as they’ve hinted they might do) and make that number zero. Options in Jackson and Clay counties in the Kansas City area will also be reduced, from three insurers to only two. To be clear, Humana wasn’t the largest provider of exchange plans by a long shot, but its departure suggests its suboptimal risk pool will migrate to the remaining plans in the state’s exchange, threatening those business models, as well. If, as Humana suggests, the company’s risk pool was too sick to be sustainable as a business model in 2017, it’s reasonable to believe that the remaining exchange providers will see their pools become sicker in 2018, and thus their business models less profitable. In other words, it’s an insurance death spiral.

Below is the insurer count map that I published earlier this year. The difference in 2018? The southwest corner of the state has only one inurer, and in the Kansas City area, all the 3 insurer counties become 2 insurer counties.

Assuming the accuracy of Humana’s release, the plans listed below will not exist on the Missouri insurance exchange next year. 

The failure of the exchanges only serves to reaffirm that the misnamed Affordable Care Act needs to be repealed and replaced with a plan that empowers people and leverages the market to make care more affordable and accessible. We have a few ideas about how to make that happen. It’s time to finally make progress for patients.

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