Gov. John Hickenlooper wants yet another expansion of Colorado Medicaid. This one will cover the more than 86,000 college students in Colorado that the Census Bureau estimates have incomes below the federal poverty level. It also will cover the unknown number of otherwise healthy single students above the poverty level who have incomes up to $15,414 a year. (Income figures do not include additional subsidies received for things like housing, child care, energy assistance and food.)

As the Hickenlooper Administration claims the expansion would enroll an additional 160,000 people, it seems that college students will be its primary beneficiaries.

Many Colorado colleges already require students to buy health coverage. But Medicaid enrollment is free and it covers everything from unnecessary emergency room visits and major surgery to over-the-counter drugs with $5 copays and no deductible. Students and their parents know a good deal when they see one.

Under the Hickenlooper plan, rational observers expect droves of students to drop their private coverage in favor of Medicaid. Since Medicaid enrollment is also open to anyone who can produce a driver’s license, photo ID or other proof of residence in Colorado, the expansion offers equal opportunity for the state’s taxpayers to pay for the health care of both in-state and out-of-state students.

The plan will cost taxpayers a bundle. Medicaid medical services premiums for the program’s least expensive adults are $3,000 a year per enrollee, according to the legislature’s Joint Budget Committee. Capitated payments (one flat fee for everyone) to regional organizations that provide mental health care will add another $278 for each adult without dependent children.

Groups that have managed care contracts with the state Medicaid program receive these payments for each person enrolled, whether services are used or not. This arrangement creates a financial incentive to encourage the state to enroll people in Medicaid regardless of need.

This may explain why people hear so little about the Colorado Indigent Care Program, a state program that already underwrites needed medical care for people who cannot afford it and are ineligible for Medicaid. It also may explain why the state continues to try to herd Medicaid recipients into managed care, even though it has admitted that managed care increases Medicaid expenditures. The Robert Wood Johnson Foundation also has concluded that Medicaid managed care does not save money.

In addition to paying for the new costs arising from the Medicaid caseload increase, Colorado taxpayers will have to make up for the tax revenues lost when people stop making payments to private insurers and start receiving benefits from the government.

Assuming that the federal government picks up the entire cost of medical service premiums for the first few years of the expansion, the Hickenlooper Administration estimates that state taxpayers will be on the hook for an additional $1.4 billion over the next 10 years. That assumption may understate the cost, given the state of the federal budget and the fact the Obama Administration has already proposed reducing federal funds.

Since increasing Colorado taxes is likely to trigger an exodus to other states with lower taxes, spending is a zero sum game. An additional $1.4 billion for the healthy college students means $1.4 billion less for expenditures on schools, roads, law enforcement and other core functions of state government.

This article originally appeared in Health Policy Solutions, January 24, 2013.

Should doctors ask patients if they own guns? Currently, ObamaCare bans the federal government from using patient medical records to compile a list of gun owners. But following the Newtown, CT shootings, President Obama issued an executive order clarifying that “the Affordable Care Act [ObamaCare] does not prohibit doctors asking their patients about guns in their homes.” The American Academy of Pediatrics (AAP) similarly encourages physicians to ask patients if they own firearms — in the name of protecting child safety. As a physician, I consider this advice misguided. Instead, physicians should not routinely ask patients whether they own guns, because it could compromise the integrity of the doctor-patient relationship. …

University of Chicago economics professor Steven Levitt has also warned about excessive fear mongering about gun ownership. In their best sellerFreakonomics, he and co-author Stephen Dubner note that a child is 100 times more likely to die in a swimming accident than a gun accident.

Yet the AAP does not tell parents to “NEVER bring your child to a swimming pool,” nor does it advocate “the strongest possible regulations of swimming pool ownership.” Rather, it recommends that parents supervise children around swimming pools and follow basic rules of water safety. The AAP correctly recognizes that a home swimming pool can be a genuine value to a family, provided that parents and children follow proper precautions. Similarly, a gun can be a genuine value to responsible homeowners, provided that parents and children follow proper precautions. …

A local colleague, Dr. Matthew Bowdish, has declared, “I will not undermine the Second or Fourth Amendment rights of any of my patients who are lawful gun owners. Nor will I record my patients’ gun ownership status in any medical records that could be accessed by government officials unless relevant to a specific medical issue.” This should be the credo of all freedom-loving physicians.

via Why Doctors Should Not Ask Their Patients About Guns – Forbes.

We don’t segregate grocery stores into those that sell to poor customers and those that do not. Grocery stores take all comers, and they charge the same price to each of them. … The [food stamp] program allows poverty and near-poverty families to have access to the full range of food products. Because they pay market prices, food stamp families are welcome customers at every grocery outlet. Although they live with more limited budgets, food stamp families are able to make tradeoffs in grocery choices—using food stamps in a way that meets their own preferences and needs. Competition for food stamp dollars forces stores to compete on price and, unlike healthcare, the prices are transparent. Every paper contains full-page ads in which price plays a dominant role.

This proposal makes certain that the poor have the wherewithal to pay for their healthcare not by forcing them to wait or take poorer quality, but with healthcare dollars. These healthcare dollars are full dollars to providers, insuring that the poor can complete for resources with all other buyers of care.

via Reforming Medicaid with Health Stamps | The Beacon.

Federal officials at the Department of Health and Human Services just finalized rules governing health insurance for individuals and small businesses purchased through Obamacare’s new exchanges. The announcement brings us a step closer to a health-care system wherein spending continues to grow rapidly while basic coverage remains unaffordable.

Just look at what will be considered “Essential Health Benefits” (EHB). Starting in 2014, insurance plans must cover everything from mental-health and drug-abuse treatments to dental and vision for children — regardless of
whether patients want or need them.

Mandating such generous health plans for all will surely drive premiums through the roof. …

In Connecticut, for instance, insurance mandates account for 22 percent of premiums for group coverage and 18 percent for individual plans, according to the University of Connecticut’s Center for Public Health and Health Policy. …

Indeed, patients between ages 18 and 24 can expect their premiums to rise by roughly 45 percent. Those aged 25 to 29 will see a 35 percent jump, according to a study from Oliver Wyman, a consultancy. The same study showed that a three-to-one age band would drive half a million young Americans out of the insurance market.

Read more: Obamacare’s not-so-essential benefits.

Yet despite being at the center of the gun-control debate for decades, neither President Obama nor Ms. Feinstein (the author of the 1994 legislation) seems to understand the leading research on the effects of the Federal Assault Weapons Ban. In addition, they continue to mislabel the weapons they seek to ban. …

Ms. Feinstein points to two studies by criminology professors Chris Koper and Jeff Roth for the National Institute of Justice to back up her contention that the ban reduced crime. [But these authors concluded just the opposite]. …

The large-capacity ammunition magazines used by some of these killers are also misunderstood. The common perception that so-called “assault weapons” can hold larger magazines than hunting rifles is simply wrong. Any gun that can hold a magazine can hold one of any size.  …

Ms. Feinstein’s new proposal also calls for gun registration, and the reasoning is straightforward: If a gun has been left at a crime scene and it was registered to the person who committed the crime, the registry will link the crime gun back to the criminal.

Nice logic, but in reality it hardly ever works that way. Guns are very rarely left behind at a crime scene. When they are, they’re usually stolen or unregistered. …

If we finally want to deal seriously with multiple-victim public shootings, it’s time that we acknowledge a common feature of these attacks: With just a single exception, the attack in Tucson last year, every public shooting in the U.S. in which more than three people have been killed since at least 1950 has occurred in a place where citizens are not allowed to carry their own firearms.

Read the whole article: John Lott: The Facts About Assault Weapons and Crime – WSJ.com.

[C]hanging magazines takes one to three seconds, which will rarely make a difference in assaults on unarmed people.

Magazine size is more likely to matter for people defending against aggressors, which is why it is dangerously presumptuous for the government to declare that no one needs to fire more than X number of rounds. As self-defense experts such as firearms instructor Massad Ayoob point out, there are various scenarios, including riots, home invasions, and public attacks by multiple aggressors, in which a so-called large-capacity magazine can make a crucial difference, especially when you recognize that people firing weapons under pressure do not always hit their targets and that assailants are not always stopped by a single round.  …

If magazines holding more than 10 rounds are not useful for self-defense and defense of others, shouldn’t the same limit be imposed on police officers and bodyguards (including the Secret Service agents who protect the president)? And if the additional rounds do provide more protection against armed assailants, it hardly makes sense to cite the threat of such attacks as a reason to deny law-abiding citizens that extra measure of safety.

Read more: The Threat Posed by Gun Magazine Limits – Reason.com.

1. Medical Device Tax
2. A new Surtax on Investment Income
3. A new Medicare Tax
4. The new Flexible Spending Account Tax
5. ObamaCare also tightens the screws on Itemized Medical Deductions

[A] new study by two members of the American Academy of Actuaries finds that tens of millions of Americans will be exposed to increased insurance costs, even when one takes the value of Obamacare’s subsidies into account.

The new report, authored by Kurt Giesa and Chris Carlson, was published in the latest issue of Contingencies, the American Academy of Actuaries’ bimonthly magazine. (Actuaries are people who specialize in the design and structure of insurance plans.) Their analysis focuses on Obamacare’scommunity rating provision, the piece of the law that forces young people to pay dramatically more for health insurance in order to partially subsidize the cost of insurance for older Americans. …

“Our core finding is that young, single adults aged 21 to 29 and with incomes beginning at about 225 percent of the FPL, or roughly $25,000, can expect to see higher premiums than would be the case absent the ACA, even after accounting for the presence of the premium assistance.” Fully 80 percent of these twenty-somethings have income above $25,000.

Read more: Insurance Analysts: Obamacare to Increase Out-of-Pocket Premium Costs, Despite Lavish Subsidies – Forbes.

While the President contemplates a gun control agenda that could restrict American rights to own guns, the President quietly signed legislation on January 10 that provides the “lifetime Secret Service protection of former Presidents.”

As if former U.S. Presidents could not afford to pay for this with their own money, which includes a six-figure pension funded by taxpayers.

Over the weekend, The New York Times published a report noting that health insurers across the nation are both “seeking and winning double-digit increases in premiums” — this despite the fact that “one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.” …

What’s going on? Why are these rates going up?

Suderman explains how mandated benefits explain some of the increase.  He then explains a less obvious culprit: mandatory medical loss ratios. Suderman writes:

The MLR is an accounting requirement which says that insurers have to spend at least 80 percent of their total premium revenue on medical expenses, leaving just 20 percent for administrative costs, marketing, and other non-medical expenditures. Any insurer that fails to meet this target must issue rebates to customers. This year, insurers rebated about $1 billion.

The MLR provision creates two incentives for insurers to jack up health insurance premiums. One is the plain fact that with profit and administrative costs capped as a percentage of premium revenue, the easiest way to generate larger profits is to charge higher premiums.

The other is that the rebate requirement means insurers may need to charge higher up-front premiums in order to protect themselves from the risk of a bad year.

Read more: Is ObamaCare Causing Health Insurance Premiums to Rise? – Hit & Run : Reason.com.

There have been several developments with respect to the Obama administration’s attempt to impose the Patient Protection and Affordable Care Act’s employer-mandate penalties and individual-mandate penalties where it has no authority to do so.

Read about it here: The Obama Administration’s Illegal Health Care Taxes: an Update | Cato @ Liberty.

The most direct effect of the move on general businesses could be a long-term slowing of the growth of health-insurance costs if hospitals can reduce the cost of uncompensated care for uninsured patients — which they now pass along to patients insured by employers by increasing their costs of care.

I left the following comment:

This analysis does not account for how much Medicaid, through low doctor payment rates, increases insurance premiums. This amount is much more than the amount uninsured people increase premiums when they do not pay part of all of their medical bills. For details on this, see my article: Your Health Care; Don’t Trust the Colorado Trust.

Benjamin Domenech of the Heartland Institute summarizes the Florida’s pilot program involving premium support for commercial insurance. (“Premium support” differs from a voucher.)  Domenech  writes:

A little more than six years ago, Florida Gov. Jeb Bush established a pilot program in five large counties in Florida with a total overhaul of Medicaid. Under the pilot program, more than 300,000 Medicaid recipients—bigger than the total programs in 17 states—were given the choice of a wide variety of plans created by multiple insurers. …

In the program, Medicaid recipients get to choose among a dozen different plans with different offerings. The plans compete on benefits, copays, and provider networks, and offer risk-adjusted capitated rates, allowing for better matching of payment to risk to prevent insurers from avoiding sick people. …

The program has achieved results. According to the Florida Agency for Health Care Administration, the health outcomes are 64 percent better than under a managed care system, with 83 percent higher satisfaction from those in the program. Florida is currently saving roughly $118 million a year on Medicaid in the five counties, with better outcomes for the people in it.

Read more:

• As States Consider Program Expansion, Focus Turns to Florida Medicaid Cure Heartlander Magazine.
• medicaidcure.org

The federal Patient Protection and Affordable Care Act (Obamacare) has radically restructured federal subsidy programs for medical care. For the first time in decades, Colorado can begin bringing state expenditures in line with tax revenues by using federal money to reverse the excessive growth in its Medicaid and child health insurance programs.

Shrinking Medicaid and CHP could make a lot of people better off. Obamacare makes subsidized commercial health coverage available for a large fraction of the healthy adults and children who make up the bulk of the state’s Medicaid and CHP caseloads. The catch is that people have to be ineligible for Medicaid and CHP in order to be eligible for the federally subsidized coverage.

Compared to Medicaid, commercial policies have historically reimbursed at significantly higher rates, making it easier to find a physician and to arrange for timely care. Low reimbursements generally translate into less care. A number of recent papers in medical literature report that Medicaid coverage is an independent predictor for increased mortality, extended hospital stays and higher costs. In some cases, Medicaid patients even have worse outcomes than uninsured patients.

Obamacare annual premiums for commercial coverage for people at 100 percent of the federal poverty level ($11,170 in money income in 2012) are limited to $217 for a single person. They increase by about $75 for each additional person. Federal poverty level income refers only to cash income.

It does not take into account subsidies from programs like those that provide means-tested assistance for food, housing, transportation, child care or heat. According to the 2010 Consumer Expenditure Survey, people with under $10,000 a year in pretax income spent about $1,000 on entertainment, $1,000 on food away from home, and more than $2,000 on private vehicle transportation.

Because Medicaid puts severe limits on the price that can be charged for care, Medicaid patients often have to wait. This increases the time price of care. Unpredictable waiting times are especially burdensome for hourly workers who aren’t getting paid while they wait.

Many low-income people would rather pay nominally higher prices for care than miss work, but Medicaid rules prevent this. When North Carolina Medicaid reduced the allowable one-stop supply of Medicaid prescription medications from 100 days to 34 days and raised the co-pay from $1 to $3, raising the time price led to a much greater reduction in the needed drugs obtained by chronically ill patients than increasing the price.

Even if Obamacare didn’t offer the opportunity to make many Medicaid clients better off by switching them to private insurance plans, Medicaid expansion makes little fiscal sense. Even though the federal government promises to cover the medical costs of Medicaid expansion through 2019, it does not cover the state share of additional administrative costs, which average an estimated $2.48 for each additional $100 of state Medicaid spending.

Plus, the Obama administration’s FY 2013 budget has already proposed making states pay more.

Even without expanding the program, Colorado Medicaid costs are set by an unknown amount.

Thanks to Obamacare’s individual mandate, some fraction of the one-third of the uninsured who are already Medicaid eligible but simply have not signed up because they don’t need health care will now sign up, swelling caseloads and costs. People who are eligible for Medicaid but who currently have private coverage will add to the rolls as employers respond to Obamacare by cutting hours and dropping employer coverage.

The state budget will also face increased demands for provider subsidies. Medicaid pays most providers less than cost, so increasing Medicaid caseloads can increase uncompensated care costs.

Finally, Obamacare makes deep cuts in Medicare reimbursements, a loss that will lead to calls for more taxpayer subsidies for Colorado’s government-owned hospitals.

This article originally appeared in the Pueblo Chieftan, January 6, 2013.

Colorado plans to expand Medicaid coverage next year to cover more than 160,000 additional low-income adults, aided by cost-control savings of more than $280 million over the next 10 years, Gov. John Hickenlooper announced Thursday.

“This is a step toward what we have talked about for a couple of years: How can we make sure we’re making Colorado the single healthiest state in America?” Hickenlooper said.

Apparently the governor is not familiar with how lousy medical care is for people stuck in the Medicaid ghetto.

The article continues:

The state’s ability to embrace the health-care expansion draws on “a relentless focus on how to control costs,” Hickenlooper said. The Department of Health Care Policy and Financing zeroed in on several areas of projected savings, largely by rewarding value over volume.

The article then quotes from Linda Gorman of the Independence Institute on why these savings are unlikely and that Medicaid expansion is a bad deal for the poor. A better policy, she said would provide them access to commercial insurance.

Read Gorman’s comments: Colorado governor proposes Medicaid expansion – The Denver Post.