Obama’s Bid to Save Healthcare Reform

January 28, 2010

I won’t say that Republicans despise President Obama as much as they despised President Clinton (man, did they despise President Clinton), but last night’s State of the Union address received a cold reception from conservative lawmakers.  The whole evening, in fact, seemed subdued to me — long stretches during the speech when you could hear a pin drop.  In fairness, that’s probably because everyone actually wanted to hear what the President had to say.  Given the Democrats’ Senate loss in Massachusetts and with the Obama agenda hanging in the balance, last night’s speech was one of those “Whatcha gonna do?” moments. 

Obama did well.  I thought it was a powerful — and at times moving — speech.  But it was clear he distanced himself from healthcare reform; instead the emphasis was on jobs and middle class economic security.  He didn’t talk about healthcare reform until halfway through his hour-long speech — and then for only five minutes.  What exactly did he say about healthcare? 

After nearly a century of trying — Democratic administrations, Republican administrations — we are closer than ever to bringing more security to the lives of so many Americans….Still, this is a complex issue. And the longer it was debated, the more skeptical people became….But I also know this problem is not going away. By the time I’m finished speaking tonight, more Americans will have lost their health insurance. Millions will lose it this year. Our deficit will grow. Premiums will go up. Patients will be denied the care they need. Small-business owners will continue to drop coverage altogether.  I will not walk away from these Americans, and neither should the people in this chamber….

Here’s what I ask Congress, though: Don’t walk away from reform, not now, not when we are so close. Let us find a way to come together and finish the job for the American people. Let’s get it done.

It’s not as strong a statement as reformers would have liked.  For example, he’s still talking about coming together and putting aside differences when it’s clear that approach won’t work with Republicans.  The only way reform will get done is if the House passes the Senate bill — and that’s going to take some arm-twisting by the Obama Administration.

There are differing views on why Obama appears to have de-emphasized healthcare reform.  Here are two.  1. Reform is dead, and he’s turning tail and running.  2. Getting reform out of the spotlight might be what’s needed for the final push toward getting it done.  I’m already on the record that in the end, House Democrats will come together and pass the Senate bill.  Nobody I know agrees with me.  But that’s all right.  What really matters is whether Obama has the will to push reluctant members of his own party — which I might remind you is in the majority — to get it done.

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Reminder: Uninsured to Hit 54 Million by 2019, CBO Says

January 27, 2010

Remember all those nice charts the Congressional Budget Office published showing how healthcare reform would reduce the ranks of the uninsured?  CBO also included a chart showing what would happen without reform.  To wit: the number of uninsured would rise to 54 million by 2019.  That would be an increase of 46% since the demise of Hillarycare.  Read it and weep.

Updated March 22, 2010, to correct error in chart.


Managed Medicaid Enrollment Grows in Florida

January 25, 2010

In the category of “is this good news or bad news,” the state of Florida reports that managed Medicaid membership rose about 1% in January to 1.8 million lives — accounting for nearly 70% of total Medicaid enrollment in the state.  Scott Fidel of Deutsche Bank reports that Florida managed Medicaid enrollment has grown for 13 consecutive months and is up 23% since January 2009.  However, the pace of growth has slowed from 1.9% in December and 2.8% in November.  Notes Fidel:

Given the medical cost challenges that Medicaid plans had with new enrollment in 2009, we would view a slowing of organic growth in the near term as a necessary ingredient to help stabilize medical cost trends in Medicaid managed care. In this context, we view the slower growth rate in Florida Medicaid in January as an encouraging development. However, it is too early to tell whether the stabilization in enrollment in Florida will also be replicated in other markets, or whether the slower growth rate will actually lead to more stable medical costs for the Medicaid plans.

Could the slowing rate of increase also be a sign that the economy is improving?  Not so fast, Fidel says: “The recent rise in weekly jobless claims data suggests that caution should be applied before assuming that unemployment is now set to start improving in the immediate future.”


Quote of the Day: David Einhorn

January 25, 2010

David Einhorn, famous short-seller and head of Greenlight Capital, in a speech last year on investing:

Americans understand that the Washington-Wall Street relationship has rewarded the least deserving people and institutions at the expense of the prudent. They don’t know the particulars or how to argue against the “without banks, we have no economy” demagogues. So, they fight healthcare reform, where they have enough personal experience to equip them to argue with Congressmen at town hall meetings. As I see it, the revolt over healthcare isn’t really about healthcare, but represents a broader upset at Washington. The lack of trust over the inability to deal seriously with the party goers feeds the lack of trust over healthcare.


Medicare Advantage Takes One on the Chin

January 25, 2010

As expected, enrollment in Medicare Advantage plans took a hit in January — falling nearly 3% to just shy of 11 million members compared to year-end 2009.  (Enrollment is still up 5% year-over-year). 

Also as expected, the biggest losses were among Private Fee for Service plans, reflecting market exits by WellCare and Coventry in light of looming reimbursement cuts.   PFFS enrollment fell 33% to 1.6 million.  Since PFFS plans are the least efficient Medicare Advantage product (see prior post), it’s hard to argue they are an economically viable product.  Unfortunately for health plans, however, PFFS was a fast-growing product.

But membership in local CCPs (largely Medicare HMOs) – the most efficient Medicare Advantage product – was up 2.8% to 8.2 million members.  Regional PPOs also enjoyed gains, up 54% to 689,000.  All of which is a good indication of what will likely happen to Medicare Advantage when the full weight of reimbursement cuts take hold (Note: reform or not, cuts are coming).  Wither PFFS.  Gains in PPO.  HMOs will struggle, but hang tough.


Quote of the Day: Barack Obama

January 21, 2010

President Obama spoke last night about the future of healthcare reform in the wake of Republican Scott Brown’s U.S. Senate victory in Massachusetts.

I would advise that we try to move quickly to coalesce around those elements of the package that people agree on. We know that we need insurance reform, that the health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don’t, then our budgets are going to blow up and we know that small businesses are going to need help so that they can provide health insurance to their families. Those are the core, some of the core elements of, to this bill. Now I think there’s some things in there that people don’t like and legitimately don’t like. If they think for example that there’s a carve out for just one or two particular groups or interests, I think some of that, clearing out some of that under brush, moving rapidly.

As Paul Krugman notes, not exactly fighting words.


Quote of the Day: Scott Brown

January 20, 2010

From the acceptance speech of Scott Brown, U.S. Senator-elect from Massachusetts:

One thing is clear, voters do not want the trillion-dollar health care bill that is being forced on the American people.  This bill is not being debated openly and fairly. It will raise taxes, hurt Medicare, destroy jobs, and run our nation deeper into debt….I will work in the Senate with Democrats and Republicans to reform health care in an open and honest way. No more closed-door meetings or back room deals by an out of touch party leadership. No more hiding costs, concealing taxes, collaborating with special interests, and leaving more trillions in debt for our children to pay.


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