Liz Kowalczyk of the Boston Globe reports on troubling new health data out of Massachusetts which finds that insurance companies are paying some hospitals “significantly more than others for providing similar care,” even though the higher paid hospitals are not producing better outcomes:

Cambridge Health Alliance was paid less than $5,000 each for 55 caesarean sections performed in 2009, while Massachusetts General Hospital was paid more than $10,000 each for 483 caesarean deliveries that year, state officials found.

They said it was unclear why insurers paid some hospitals dramatically more, since officials found no obvious differences in quality of care, and their analysis allowed for instances in which hospitals treat sicker patients.

Disparities in payments were first documented by Attorney General Martha Coakley’s staff last year, which concluded after an investigation that the highest paid hospitals had more market clout, some because of their brand names, but that they were not necessarily providing better care. The new report, which the governor’s office planned to release to the public today, mirrors Coakley’s initial findings.

It’s hard to know exactly how to counter this kind of waste, but the Independent Payment Advisory Board (IPAB) in the Affordable Care Act and some of the payment reform demonstration projects could provide a good starting point by changing the way Medicare pays providers and thereby nudging private insurers to adopt similar reforms. The budget the Center for American Progress released yesterday would get even more to the point by empowering the board to modify payment practices across the entire health system:

In our plan, aggressive implementation of the new health reform law, along with some enhancements to its existing cost-control mechanisms, will result in dramatically lower health expenditures, both for the federal government and overall. But predicting the exact effect of the myriad test programs and reforms in the new health law is fraught with uncertainty. Thus we also include a failsafe mechanism that would ensure significant savings.

Our failsafe would be triggered if, starting in 2020, total economywide health care expenditures grow at a rate faster than the economy. Should that happen then we would empower the Independent Payment Advisory Board to extend successful reforms in Medicare and other public programs to insurance plans offered in the health care exchanges and then potentially to all health care plans, such that the target is met. This will ensure that costs are constrained across the health care sector, preventing cost-shifting and maintaining access for all.

In that model you can see how reforms like pay-for-performance (if successful) could begin to ratchet down the overpayments some hospitals are now enjoying.

At a town hall in Derry, NH this afternoon, GOP presidential candidate and former Speaker of the House Newt Gingrich admitted that the Affordable Care Act — which he seeks to repeal — has been successful in extending coverage to young people who would have otherwise gone uninsured.

Pressed by an attendee about reports that at least 600,000 young adults are now obtaining coverage through their parents’ plans until they turn 26 as a result of the Affordable Care Act, Gingrich conceded that the ACA does include 200 pages of effective provisions. He insisted, however, that Congress should first repeal the law and “take the 200 pages and pass them later”:

Q: I just read this morning in Forbes, I think, that over 600,000 people newly insured in the first quarter of just 2011 and most of those were young people who previously had no insurance. So I’m just wondering, what’s bad about that?

GINGRICH: Look, if you take a 2,800 page bill, you can find 200 pages that are okay. The other 2,600 are a disaster. And the parts that are okay, we can look at after we repeal Obamacare and we can decide whether or not to pass them as free-standing legislation. But I would always insist on passing the entire bill, because I don’t trust the Washington bureaucracy to tell us which part of the bill they’re going to repeal.

Q: But this is the largest health insurance companies reporting this in just the first quarter.

GINGRICH: That’s right. That particular piece there is nothing wrong with. I didn’t say there is anything wrong with that. I’m happy to concede out of 2,800 pages, at least 200 are good. But the bill overall is a disaster and we’re better off to take the 200 pages and pass them later, separately, having gotten rid of Obamacare.

Watch it:

At the event, Gingrich also laid out his own vision for health care, but did not specifically say that he would maintain the above dependent coverage provision or any other consumer protection.

Instead, Gingrich reiterated a “free-market approach” to health care that sounds a lot like Sen. John McCain’s (R-AZ) failed campaign health care proposal. He promised to equalize the tax treatment of employer and non-group plans and provide tax credits for individuals and families to buy insurance on the individual market. Gingrich would allow employers to buy individual insurance for their workers “instead of non-portable group insurance” and “extend health savings accounts throughout the health care system.” Everyone in Medicare, Medicaid, and employer-sponsored coverage “should be able to choose a health care savings account as part of their coverage, if the want it,” he said.

With House Budget Committee Chairman Paul Ryan’s (R-WI) Medicare privatization scheme essentially dead, policy wonks are worried that his draconian cuts to the Medicaid program could be seen as an area for bipartisan consensus. Recall that Ryan aims to repeal health reform’s expansion in Medicaid coverage and transform the program’s matching rate financing structure — under which the federal government pays 50 to 75 percent of each state’s Medicaid costs — into a block grant that would pay states less than projected costs. Federal spending on Medicaid would fall by $1.4 trillion from 2012 to 2021 and so states would be forced to either make-up the shortfall in funding or limit eligibility and benefits.

A Kaiser Family Foundation study recently found that up to 44 million Americans could potentially lose their health insurance and now a Kaiser poll discovers that the cuts also face steep public opposition:

About 60 percent of Americans want Congress to keep Medicaid in its current form with the federal government guaranteeing coverage and setting minimum benefits for states to follow, according to the survey by the Kaiser Family Foundation. Just over half said they didn’t want to see funds cut. [...]

The poll found public support for Medicaid was similar to that of Medicare and Social Security — two programs whose longstanding public support has made them nearly untouchable by politicians.

Just 13 percent of Americans say they would support major reductions in Medicaid spending as part of Congress’ efforts to reduce the deficit, the Kaiser survey found. That compares to 10 percent supporting major reductions in Medicare and Social Security.

Strong public support of Medicaid appears a dividend of many Americans either receiving assistance from the program or knowing a family member or friend who has. While 56 million Americans are enrolled in Medicaid at one time, about 69 million are enrolled at some point during the year as people go in and out of the program.

Other polls have shown that Medicaid — which is still perceived as a program for the poor — usually ranks third in public support after Medicare and Social Security. But given the recession, Americans’ greater reliance on the program, and its increasing expenditures on seniors and people with disabilities, it could be on its way to achieving the kind of protected status that Medicare enjoys.

One of the most underreported provisions of the House Republican budget — one which House Budget Committee Chairman Paul Ryan (R-WI) himself routinely eschewed during his town halls across Wisconsin — is the fact that the plan gradually raises the Medicare eligibility age to 67 beginning in 2022. Ryan wasn’t too enthusiastic about discussing this portion of the blueprint and regularly replied to constituents’ questions about eligibility by using the phrase “when you become eligible” rather than any numerical age.

It’s easy to see why Ryan would be so hesitant to get into actual specifics: keeping seniors out of Medicare longer does reduce federal expenditures, but it also increases out-of-pocket expenses for 65 and 66 year-olds and raises the health care costs of employers. As a recent Kaiser Family Foundation report concluded:

Employers’ costs are estimated to increase by $4.5 billion in 2014 if the Medicare eligibility age is raised to 67. This increase results from employer plans becoming primary rather than secondary payer (wrapping around Medicare) when Medicare is no longer the primary payer. We estimate that total premiums would increase as a result, increasing costs for employers and retirees, each of whom are estimated to pay half of the higher premium. The increase in retiree health costs would also be reflected in the long-term liability of employers for their retiree health obligations.

Moreover, if the Affordable Care Act is not repealed, “premiums for people younger than 65 purchasing coverage through health reform’s insurance exchanges would rise by an estimated 3 percent.” Medicare Part B premiums would increase by a similar amount, as the youngest seniors are removed from the Medicare risk pool.

But the employer piece is particularly overlooked even though it clashes with the GOP’s “no new taxes on the organ of job creation” rhetoric and business agenda. It’s worth taking this up with the National Federation of Independent Businesses (NFIB) — which calls itself the “voice of small business” — given that organization’s endorsement of Ryan in 2010.

Given the relative disfranchisement of Medicaid beneficiaries, elected officials have historically been much more prone to view the Medicaid program in economic terms and justify any proposed reduction in federal or state spending as budgetary necessities. And so it is not surprising that this latest GOP attempt to take away coverage from some 400,000 Medicaid recipients — who are most in need of and least likely to afford health coverage — is being framed as an economic decision rather than legislation that would literally take away medical care from the most vulnerable among us:

With their proposal to turn Medicaid into block grants all but dead, Republicans now are pushing legislation to let states tighten eligibility rules for the health program for the poor and disabled.

The move, which would affect Medicaid as well as the Children’s Health Insurance Program, would help cash-strapped states save money but could also cause hundreds of thousands of people to lose health coverage.

While Democrats strenuously oppose the proposed Medicaid change, some advocates and physician groups worry that the issue could wind up as a bargaining chip in the partisan wrangling over the debt limit. [...]

Medicaid covers about 56 million Americans, with states sharing the costs with the federal government. States have been barred from cutting eligibility for the program since 2009 when economic stimulus legislation gave states billions to prop up their Medicaid program on the condition they didn’t tighten eligibility standards. The 2010 health law extended this requirement until 2014.

According to a Congressional Budget Office analysis, the House Republican proposal to repeal the requirement [which currently prevents states from throwing people off the rolls] would save $2.1 billion from 2012 through 2021. If it became law, approximately 400,000 people – about two-thirds of whom are children – would lose their Medicaid and Children’s Health Insurance Program coverage in 2013. About 100,000 of those people would enroll in employment-based insurance, according to CBO.

That’s right, after mercilessly attacking the Affordable Care Act and Democrats for breaking their promise of “if you like the coverage you have you can keep it,” Republicans on the House Energy and Commerce Health Subcommittee have already approved and many others are lining up to endorse a measure that would permit states to deny coverage to thousands of beneficiaries, effectively rationing their care. Republicans are doing this while trying to repeal the Affordable Care Act and block grant the Medicaid program in order to provide states with less federal dollars to cover people. It turns out that this is the “repeal” in their “repeal and replace.”

A new survey from the Commonwealth Foundation finds that actual health care policy experts from across the ideological spectrum don’t buy the GOP/Mitt Romney argument that the Affordable Care Act is a one-size-fits-all solution that hampers state innovation and undermines local autonomy. In fact, according to the findings from the latest Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey, a majority of respondents — 203 individuals from the fields of academia and research; health care delivery; business, insurance, and other health industries; and government, labor, and advocacy groups — actually believe that the federal government should have more authority, not less:

41 percent of opinion leaders said the federal government should have more authority and 29 percent say that the law has struck an appropriate balance between states’ and the federal government’s roles. Only 25 percent of respondents thought the states should have more authority.

On many health care reform provisions, opinion leaders were somewhat more likely to think the federal government should have a stronger role. For instance, under the law, new federal rules will prohibit insurers from restricting coverage or basing premiums on health status or gender. Half of health care opinion leaders support granting the federal government more power to set such health insurance market rules; 23 percent feel the law got the balance between the federal government and states about right. In addition, half of respondents favor a stronger role for the federal government in developing and spreading innovative provider payment methods, including new models like accountable care organizations and patient-centered medical homes.

What’s more, 61 percent supported the creation of a federal health insurance exchange and 42 percent said there should be more federal authority over the health insurance exchanges. So policy wonks, as it turns out, prefer a more comprehensive national approach to reform rather than the patchwork — states are mostly on their own — solutions that national GOP figures are trying to advance.

Jared Bernstein has a good and clear explanation as to why Rep. Paul Ryan’s (R-WI) argument about seniors using “premium support” vouchers to “deny business to inefficient providers” is so horribly wrong:

Suppose you send me to the grocery store to buy you a gallon of milk. Milk costs $3.50 a gallon but you give me $2. I spend the whole day “denying business to inefficient providers”—i.e., grocers who all charge more than that—and at the end of the day, bring you back a pint.

Now, instead of milk, where I’ve got the information I need to be a smart shopper, suppose you give me the same under-priced voucher but ask me to bring you back a plan for treating that strange pain you’ve been experiencing on your left side on humid days.

There’s no “denying business to inefficient providers” in the Ryan plan because there’s no market discipline that average folks with incomplete information armed with an inadequate voucher can enforce on a private health insurance market that’s…well, different.

Part of the problem is that individuals don’t have the market clout of a large employer or a program like traditional Medicare, which are able to secure better prices from providers than future retirees purchasing coverage on their own (under Ryan’s plan) or many other private payers.

Look at this data from S&P tracking the growth of health care costs. As Maggie Mahar points out, over the year ending March 2011, Medicare spending rose at an annual rate of 2.78% — the lowest rate posted for the Medicare Index in its six-year history — while “health care costs covered by commercial insurers rose by 7.57%.” This creates a problem for those who argue that private businesses are magically able to control costs better than government programs:

Why is Medicare cost growth slowing? It appears that “costs for Medicare patients are being better contained than those covered under commercial insurance plans,” observes David M. Blitzer, chairman of the S&P Index Committee. And the provisions in the Affordable Care Act that will put Medicare on the road to financial solvency haven’t even begun to kick in. Meanwhile, conservatives argue that we must privatize Medicare, because taxpayers cannot affords “runaway” government entitlement programs. I wonder how they explain the S&P report.

Robert Pear reports that the Obama administration is raising concerns about Indiana’s new law to cut off all state and federal dollars to Planned Parenthood, arguing that the measure may impose “impermissible restrictions on the freedom of Medicaid recipients to choose health care providers.” The Indiana measure “prohibits state agencies from entering contracts with or making grants to ‘any entity that performs abortions or maintains or operates a facility where abortions are performed’ and “terminates existing state contracts with such entities”:

Asked for comment on the Indiana law, the federal Centers for Medicare and Medicaid Services provided this statement, cleared by the White House: “Federal law prohibits federal Medicaid dollars from being spent on abortion services. Medicaid does not allow states to stop beneficiaries from getting care they need — like cancer screenings and preventive care — because their provider offers certain other services. We are reviewing this particular situation and situations in other states.” [...]

States can obtain federal permission to waive certain requirements of the federal Medicaid law. But the federal law says that “no waiver” may restrict the choice of Medicaid beneficiaries in receiving family planning services.

In other words: House Republicans who voted to ban federal funding to Planned Parenthood in Congress and the five states — Kansas, North Carolina, Oklahoma, Texas and Wisconsin — considering similar legislation are actively trying to do what they accuse the federal government of doing: ration health care to millions of lower-income Americans. The Obama administration — the alleged rationer-in-chief — is working to preserve “choice” and fair access to providers.

The other irony is that the GOP’s efforts to restrict funding to contraception will great increase spending, further undermining the GOP’s claims of fiscal responsibility. According to a new study from the Guttmacher Institute, unintended pregnancies cost taxpayers approximately $11 billion per year. Not surprisingly, “rates of unintended pregnancy are far higher among poor and near-poor women (those with incomes under twice the federal poverty level) than those with higher incomes” — the very women who would be denied contraception under the GOP’s reforms. As NPR’s Julie Rovner reports, “As a result, nearly two-thirds (64 percent) of the 1.6 million births resulting from unintended pregnancies in 2006 were paid for by public health insurance programs.”

By Igor Volsky and Pat Garofalo

This morning, former Minnesota Governor Tim Pawlenty (R) formally announced his candidacy for the 2012 GOP presidential nomination in Des Moines, Iowa, promising Americans “a different approach” to his campaign and potential presidency. “I am going to tell you the truth. The truth is, Washington’s broken,” Pawlenty declared. “It’s time for new leadership. It’s time for a new approach. And, it’s time for America’s president – and anyone who wants to be president – to look you in the eye and tell you the truth.”

From there, Pawlenty preceded to list various “truths” about the state of the nation, many of which appear — on closer examination — to be either completely untrue or grossly exaggerated:

T-PAW TRUTH: Health care reform has added to the national debt. Social Security is in peril. “Our national debt, combined with Obamacare, have placed Social Security, Medicare, and Medicaid in real peril. I’ll tell young people the truth that over time and for them only, we’re going to gradually raise their Social Security retirement age.”

ACTUAL TRUTH: Health care reform reduced health care spending. According to the Congressional Budget Office, enacting the Affordable Care Act “will produce a net reduction in federal deficits of $143 billion over the 2010-2019 period.” Similarly, the Center for Medicare and Medicaid Services (CMS) concluded that Medicare spending will decline $86.4 billion and that by 2019, it is projected to grow 7.7 percent—0.9 percentage point more slowly” than if the law had not passed.

ACTUAL TRUTH: Social Security is not in real peril. It can pay full benefits through 2036 and close to full benefits for decades after that, according to the latest trustee’s report. Moderate tweaks to the system, including raising the cap on the payroll tax can more than make up for the program’s long-term shortfall. Raising the retirement age is not only unnecessary, but is a hugely regressive change. Furthermore, the Affordable Care Act and the national debt have nothing to do with the financial health of Social Security.

T-PAW TRUTH: Block granting Medicaid will “solve problems.” “And, we need to block grant Medicaid to the states. There, innovative reformers closest to the patients can solve problems and save money.”

ACTUAL TRUTH: Millions of lower-income Americans will lose health coverage. As a recent Kaiser Family Foundation report pointed out, converting the existing matching rate formula into a block grant would give states less money that they would have otherwise received and force local governments to cut eligibility to the program. Kaiser examined different scenarios for state responses to reduced federal Medicaid spending and estimated 31 to 44 million Americans could lose their health insurance coverage.

T-PAW TRUTH: Reformed health system in Minnesota. “I know how to do health care reform right. I’ve done it at the state level. No mandates, no takeovers. and it’s the opposite of Obamacare.”

ACTUAL TRUTH: Number of uninsured increased under his governorship. Pawlenty did experiment with different methods of bundling payments to providers — creating baskets for certain conditions — and implemented pay-for performance initiatives, but as Minnesota Public Radio has reported, it’s unclear if his small efforts have actually saved the state any money. But most importantly, as David Frum has pointed out, the number of Minnesotans without health care actually increased during his time as governor from 395,000 citizens without health insurance in 2003, to 446,000 in 2008, the last year before the recession struck.

T-PAW TRUTH: The United States is broke. “Our country is going broke.”

ACTUAL TRUTH: The United States isn’t broke. As the Center for American Progress’ Michael Linden and Michael Ettlinger note, “The notion that the United States is ‘broke’ is a popular talking point for conservative lawmakers…But we’re not broke. Not at all. If we were, it would mean that we were out of money, unable to pay our bills, or meet our financial obligations. We are none of those things.” Bloomberg’s David Lynch has more.

T-PAW TRUTH: Against bailouts and “too-big-to-fail”. “I’m going to New York City, to tell Wall Street that if I’m elected, the era of bailouts, handouts, and carve outs will be over. No more subsidies, no more special treatment. No more Fannie and Freddie, no more TARP, and no more “too big to fail.”

ACTUAL TRUTH: Pawlenty would preserve too-big-to-fail and has flip-flopped on bailouts. The Dodd-Frank financial reform law signed by President Obama last year includes important powers for the government to dismantle large, failed financial firms without resorting to ad-hoc bailouts; Pawlenty opposes those powers. Pawlenty was also for TARP before he was against it, saying in 2008 that TARP “is an imperfect solution, but, like has been said, [the banks] are too big, the consequences are too severe for innocent bystanders to allow them to fail.”

T-PAW TRUTH: The NLRB can dictate to companies where to move. “It especially means the National Labor Relations Board will never again tell an American company where it can and can’t do business.”

ACTUAL TRUTH: The NLRB has not told an American company where it can and can’t do business. Pawlenty has been criticizing a decision by the NLRB that would prevent mega-manufacturer Boeing from shifting a production line from Washington state to South Carolina as retribution against workers who engaged in strikes. Under labor law, it is illegal to retaliate against striking workers by shifting production, but the NLRB has made it abundantly clear that Boeing is free to open new facilities wherever it pleases, provided it complies with the law.

T-PAW TRUTH: Against energy subsidies. “As part of a larger reform, we need to phase out subsidies across all sources of energy and all industries, including ethanol. We simply can’t afford them anymore.”

ACTUAL TRUTH: For oil and gas subsidies. Just a few weeks ago, Pawlenty said that cutting subsidies to oil and gas companies is “ludicrous.” “I mean the worst thing we could do is raise the cost burden on costs on energy and oil…It’s preposterous,” he said.

Republicans have long opposed Dr. Don Berwick, the current head of the Center for Medicare and Medicaid Services, pointing to the Harvard professor’s respect for the British health care system and other European models as evidence that he supports “socialized medicine” and would support government-centered rationing of health care in the United States. “I believe the President of the United States now has what he wants, his health care rationing czar,” Sen. John Barrasso (R-WY) said on the floor of the Senate. “We have a president — a president-appointed czar, essentially a czar to ration health care.” Sen. Pat Roberts (R-KS) expressed similar outrage after Berwick was nominated for the position, saying, “Dr. Berwick is the perfect nominee for a president whose aim has always been to save money by rationing health care.”

But not all prominent Republicans oppose Berwick. In fact, it turns out that 2012 presidential hopeful and former Speaker of the House Newt Gingrich was once a strong promoter of the CMS administrator, praising Berwick for what Republicans are now characterizing as “rationing” — his work to improve the quality of the nation’s health care system. In early part of the last decade, Gingrich “gave credibility and visibility to a set of ideas being talked about in the health policy world about using information technology to improve medical care.” He advocated “reforms such as ‘data-driven reimbursement’ informed by best practices, a national electronic health network and a focus on prevention and wellness. All those items — and others Gingrich supported — are contained in the HITECH Act, part of the budget stimulus package and the Affordable Care Act,” Michael Millenson notes.

An Amazon search of Gingrich’s “Saving Lives & Saving Money” reveals three separate references to Berwick — who was and still is a national leader in improving health care quality — in which Gingrich praises the current CMS head for his passionate belief that quality-care focused systems improve health outcomes and reduce health care spending. Gingrich even included a plug for Berwick’s nonprofit, the Institute for Health Improvement, reprinting the organization’s website on page 122 of his book. In an August 2000 Washington Post op-ed calling on President Bill Clinton to “stop defending inefficiency and to drag health care into the 21st century by insisting on modern management and information systems,” Gingrich singled out Berwick for spreading the word about “quality control”:

The Veterans Administration’s Palo Alto Health Care System is creating a computerized patient medical record system. The new Northwestern Memorial Hospital in Chicago was designed from its conception to be a safer, more accurate and more electronic facility. Don Berwick at the Institute for Healthcare Improvement has worked for years to spread the word that the same systematic approach to quality control that has worked so well in manufacturing could create a dramatically safer, less expensive and more effective system of health and health care.

In July of 2010, however, Gingrich slammed President Obama for recess appointing Berwick to CMS, describing the decision as “a sad mistake” and used Berwick’s appointment as evidence for how “left” Obama is.

“I described it as a secular Socialist machine in a book I wrote recently. And I think what you saw [Obama] do with Dr. Berwick is a good example of machine behavior,” Gingrich said during a July 8, 2010 appearance on The O’Reilly Factor. He added: “Among the elites, there will be great applause for Don Berwick. Among the rest of the country, there will be a very chilly attitude that says is this guy really going to try to impose a British national healthcare system in America? And so, there’s a real split emerging in the country. But among the people in the White House, my hunch is almost all of them uniformly agree with what he’s doing and uniformly believe that somehow they’ll find a way to sell it.”

No, it has nothing to do with rationing care or making coverage decisions for seniors. Rather as the Incidental Economist’s Don Taylor points out in a recent interview with Medicare actuary Charles Blahou, the real danger is that Congress will override the 15-member board and undermine any real opportunity to reduce the growth of health care costs:

Q: What are your views of the cost saving approach represented by the Independent Payment Advisory Board (IPAB)?

A: As a Trustee, I really can’t have a view. If the law states that the IPAB will produce a certain amount of savings and that it will occur unless Congress acts to override it, then we have to assume those savings will materialize. But as a long-serving Senate staffer, I’m much more skeptical. I can’t count the times that we have turned to mechanisms like this to produce savings in Medicare, only to have Congress override the savings when they begin to bite. If we have the political will to cut spending, then cut it. If we don’t have the political will, then IPAB doesn’t have much of a chance. The fact that IPAB was a product of a bill supported by one party while strongly opposed by the other makes its long-term prospects even weaker.

This strikes me as a smart answer and one that should push advocates who support the board to continue pressing the case that while these cuts may be politically difficult, it makes far more sense for a Senate-confirmed commission of various stakeholders to make reductions in payment rates in an accountable and transparent process than it does to leave such decisions to politicians, industry, and lobbyists. But Blahou is right to be skeptical, especially given Congress’ past experiences with reversing the cuts for doctors in Medicare under the Sustainable Growth Rate (SGR) formula and the repeal of 1988′s Medicare Catastrophic Coverage Act.

Brad Joondeph points out that the United States government is now conceding — in a brief filed before the Eleventh Circuit Court of Appeals — that the Affordable Care Act’s “community-rating and guaranteed-issue provisions are not severable from the minimum coverage provision.” That is, one can’t ask insurance companies to accept everyone who applies and charge them an equal rate without also telling people that they can’t game the system by purchasing insurance only when they need it. Joondeph argues that this kind of argument makes sense for three reasons:

First, making such a concession only bolsters the government’s argument that the minimum coverage provision is essential to the ACA’s broader regulation of the health insurance or health care services markets. Second, it makes the government seem more reasonable. Third, it essentially forces the Supreme Court’s hand a bit when the case ultimately gets there: if the justices want to take down the mandate (which might be politically popular), they will also have to bring down the ACA provisions that overwhelming majorities of Americans support. And that would not be so popular.

It also rings very true in many states where policy makers have imposed insurance regulations without an individual requirement. That has resulted in skyrocketing premiums and a departure of insurers from the marketpalce. As one amicus brief filed by a broad coalition of health advocacy groups recently pointed out:

- MAINE: “A 2001 report found that 13 of 18 major carriers ceased issuing new policies to individuals during the eight years since the provision became law,” in 1993….”Many insurance providers doubled their premiums in just three years or less, and all but one of the state’s HMOs experienced ‘at least one rate increase of 25% or more in 1998 or 1999.”

- NEW HAMPSHIRE: “New Hampshire was nearly left with no carriers in the market when Blue Cross Blue Shield of New Hampshire announced it was withdrawing from the individual market.”

- NEW YORK: “New York enacted preexisting condition provisions for the individual market in 1993. Consequently, the portion of non-elderly New Yorkers without insurance worsened from 16.5 percent in 1992 to 20 percent in 1997.”

Republican health care proposals also recognize that fundamental insurance market reform is incredibly costly — probably impossible –without encouraging everyone to buy into the system and so they go only half way in preventing insurers from denying coverage to people with pre-existing conditions. They may protect individuals who recently lost their coverage or were previously insured, but can’t credibly extend those protections to the whole of the uninsured without asking healthier Americans to pay into the system.

Americans may be postponing or forgoing medical care, but health insurance companies “continue to press for higher premiums,” the New York Times reported last Friday, severely complicating the GOP’s argument that giving seniors more “skin in the game” will lead individuals to use less care, spend less, and eventually lower health care costs. Jared Bernstein explains:

The story goes like this: insurers have been raising co-pays (the amount you contribute out-of-pocket when you get medical treatment) which should make people more cost conscious, and in fact, recession-battered families have been responding by seeking less care. So far, basic econ 101.

But despite the cost shifting and resulting demand contraction, premium prices have gone up as fast as ever. [...]

In competitive markets, sellers can’t typically set today’s prices based on where they expect demand to be in the future. If one of them did so, others would capture their market share by pricing based on current supply and demand conditions.

The dynamic should lead you to be particularly skeptical about plans that depend on private insurers responding to market signals (are you listening, Rep Ryan?). Republicans go on about how once everyone’s out there on their own shopping for insurance in unregulated, private markets, competition will drive prices down.

That’s how it works for bananas. It’s not the way it works for health insurance–folks are locked into plans through their jobs, there’s huge information disparities (their business model is to know who’s risky and avoid them), and most importantly, individuals have minuscule bargaining clout. So if you wanna shop for health insurance by yourself, just make sure your policy covers masochism.

Bernstein says that insurers are justifying their increases based on projects of future demand, but the other factor here may be the looming regulations that insurers will be expected to follow once the Affordable Care Act is more fully implemented in 2014. As incoming Federal Insurance Office director Michael T. McRaith put it to Kaiser Health News last month, insurers are using the interim period between passage of the Affordable Care Act and when most of the insurance regulations are enacted in 2014 to increase profits and force the sickest (and costliest) beneficiaries off their rolls. “They are using the absence of rate regulation to price out existing policyholders. That is designed to lead to the accumulation of capital, so that by 2014, when insurers have to cover everyone, they’ll be starting from a point of extreme financial strength,” McRaith explained.

This only goes to show that Congress will need to pass additional legislation to control health care premiums (Sen. Dianne Feinstein (D-CA) has a bill that could help do just that), rather than offer legislation that would deregulate the industry and push individuals to try and find affordable coverage within it.

Lost in all the coverage of Newt Gingrich’s Sunday follies about Paul Ryan’s Medicare reforms and his support for an individual health insurance mandate is this little goodie from Gingrich telling supporters that he had signed a pledge to repeal the Affordable Care Act:

Yesterday in Mason City, Iowa, I signed the Obamacare Repeal Pledge, sponsored by the Independent Women’s Voice and American Majority Action.

Obamacare is such a massive and complex power grab of a law that there are countless specific reasons to oppose the law.

I’ll spare you the reasons — which you can read by clicking over to his newsletter — and just reiterate that any effort to repeal the health law would greatly increase the number of uninsured and blow up the deficit — complicating the GOP’s spending discipline persona.

In fact, according to the Congressional Budget Office (CBO), the GOP’s much-touted repeal would “cause a net increase in federal budget deficits of $210 billion over the 2012-2021 period” and increase the number of uninsured by 33 million, “leaving a total of about 57 million nonelderly people” without coverage. The CBO also offers its own bit of irony for Gingrich: by repealing the coverage provisions in the Affordable Care Act, the he may be lowering the government’s commitment to health care over the first ten years, but because he’s also going after the cost control measures in the law (and growing Medicare outlays), Gingrich would increase the government’s involvement over the next ten:

However, CBO projects that enactment of H.R. 2 would increase the federal budgetary commitment to health care in the decade following the 10-year projection period. The estimated effect in later years differs from that in the first decade because the effects of those provisions that would tend to increase the federal budgetary commitment to health care (such as the increase in Medicare spending and the repeal of the excise tax on insurance policies with relatively high premiums) would grow faster than the effects of provisions that would tend to decrease it (primarily the repeal of the coverage expansions).

“I am unequivocally for repealing the whole bill. I don’t trust the Washington process. I wouldn’t want to try to repeal part of it, because I wouldn’t trust the folks who are around at two o’clock in the morning cutting the final deals,” Gingrich clarified yesterday during an appearance on Hugh Hewitt radio show.

Jordan Fabian is reporting that former Minnesota Governor and likely presidential candidate Tim Pawlenty (R) is the latest influential Republican to endorse a discredited story implying that House Minority Leader Nancy Pelosi (D-CA) used her influence to protect businesses in her district from certain regulations in the Affordable Care Act.

The charges originated from the administration’s announcement last month that it had granted an additional 204 waivers to businesses and policyholders from the Affordable Care Act, excluding those entities from having to offer a minimum amount of coverage annually. In a story published on Tuesday, the Daily Caller’s Matthew Boyle implied that since “Of the 204 new Obamacare waivers President Barack Obama’s administration approved in April, 38 are for fancy eateries, hip nightclubs and decadent hotels in House Minority Leader Nancy Pelosi’s Northern California district — Pelosi must have swayed the decision. She did not:

House Minority Leader Nancy Pelosi (D-Calif.) played no role in the process by which health care waivers were granted to a number of businesses in her district, according to the company that actually requested the waivers on behalf of its clients.

Flex-Plan Services, a third-party benefits administrator based in Bellevue, Wash., made the formal applications for waivers from President Barack Obama’s health care law, said it founder, Hilarie Aitken. [...]

In actuality, Aitken explained, the high percentage of waivers is the byproduct of local law rubbing against the new national legislation. In April 2008, San Francisco passed an ordinance requiring employers to spend a minimum amount per hour on health care for their employees who work in the city. In response, a number of eateries chose to set up Health Reimbursement Arrangements, which are essentially pools of funds set aside by employers to reimburse medical expenses paid by employees.

HRAs are serviced by a third-party administrator or plan service provider. They are also subject to the annual limit provision in the national health care law, which is set at $750,000 in 2011 before it is eliminated fully in 2014.

Like many self-insurance policies and union organizations, employers using HRAs have been applying for a waiver from this provision, arguing that application of the requirements would “completely eliminate the benefit” of setting up the HRA in the first place, Flex-Plan Services said. When they do so, they turn not to lawmakers like Pelosi or to the employers themselves, but to third-party administers like Aitken’s company. (And, as she hinted, political donations by Flex-Plan have leaned Republican, according to data collected by the Center for Responsive Politics.)

Putting aside this particular misguided attack against Pelosi, the GOP is using the waiver “story” to argue that the health care law is so strenuous that even businesses in Pelosi’s heavily Democratic district are trying to find a way out. They’re saying that while also claiming that the Affordable Care Act is a one-size-fits all government monstrosity that doesn’t take the different needs of individual businesses or states into consideration — after all, that’s the entire basis of Mitt Romney’s rejection of the health care law.

But these two arguments can’t both be true and Republicans shouldn’t be getting away with claiming that the law is too didactic while simultaneously attacking the government for providing greater flexibility to businesses and individuals.

A more interesting question to ask would be — should HHS be granting waivers that — at least on their face — undermine the goals of the law. HHS believes that since employees won’t have new coverage options until the exchanges become operational in 2014, the best way to avoid coverage drops is to ensure that employers have flexibility to gradually meet the requirements of the new reforms and transition from subprime insurance that has low annual limits and all kinds of coverage exemptions into comprehensive basic coverage. These waivers are good for a year, but could be extended until 2014, if employees continue to face a coverage cliff.

Newt Gingrich “clarified” his support for privatizing Medicare on a call with conservative bloggers and journalists this afternoon, as he continues to back away from his claim that Paul Ryan’s plan presented a “radical” change to the program. Gingrich admitted that he’s unsure if allowing seniors to purchase Medicare benefits from private insurers would work, but proposed moving bravely ahead by offering supplemental vouchers to today’s senior citizens:

While he continued to warn against imposing “radical change,” Gingrich called for an arguably bolder move on Medicare. “I would offer on a voluntary basis, a supplement plan, a voucher—I wouldn’t call it a voucher—but some kind of support plan this year,” Gingrich said. Paul Ryan’s plan wouldn’t begin to take effect for 10 years. [...]

“Part of what I’m worried about is going through a radical change that has not yet been tested,” Gingrich said. “But you could really start this year. And you could start to reduce some of the pressure on Medicare and on the budget this year. And you then put Obama in the position of saying, ‘No, I’m not going to let any senior citizen choose.’”

“There’s actually an advantage to starting with a voluntary plan,” he continued, “so you get practical operational experience with the first couple hundred thousand people, the first couple million people. And then you look comparatively.”

Someone should tell Gingrich that there is already such a voluntary plan and it’s called Medicare Advantage. And for all the raving you hear about private insurers lowering costs and providing better coverage for less, the data from that “experiment” doesn’t back it up. While some plans are certainly better than others, on the whole private insurers — which don’t have the bargaining power of Medicare — are receiving an average of 9 percent (about $8.9 billion) more than traditional Medicare and don’t seem to be saving the program any money (an estimated 13 percent of the payment going towards profits and administrative costs).

The Washington Examiner’s Phil Klein offers additional details from the call:

Gingrich explained that his differences with the Ryan approach is that he thinks instead of transitioning Medicare entirely into a system in which retirees are given money toward the purchase of private policies, seniors should be given the choice between the current system and a new system. He said he would support offering them that choice immediately, so that the government could study the results of the so-called “premium-support” model with the hundreds of thousands of people rather than implementing it system-wide for all Americans currently 54 and younger.

This is all very similar to what Sens. John Breaux (D-LA) and Bill Frist (R-TN) offered in 1999 and 2001 — which Gingrich seemed to support. Unlike Ryan, Breaux and Frist replaced the current Medicare program with competing health plans, while maintaining the CMS-sponsored Medicare fee-for-service coverage as an option. They also offered seniors a premium support that did a better job of keeping up with health care costs by establishing a contribution that was set as a percentage of actual plan bids for a comprehensive set of benefits. The beneficiary paid the difference between the plan bid and the government’s contribution (which is indexed to average costs).

Analysts at the time argued that the proposal would lead to severe adverse selection for seniors who remain in traditional Medicare and now concede that the cost savings from this kind of approach were likely overstated. Henry Aaron — who developed the premium support concept with Robert Reischauer in 1995 — has since walked away from the proposal, arguing that the Affordable Care Act may push Medicare to use its leverage to create much more substantial savings.

That graphic to the right is part of Rick Santorum’s latest fund-raising email and marks the second time in less than a week that the former senator from Pennsylvania has directly attacked Mitt Romney’s Massachusetts health care law. Santorum was the first presidential contender to condemn Romney’s attempt to whitewash his ongoing support for the individual mandate last Thursday and this latest statement doesn’t pull any punches. Santorum quotes the Wall Street Journal’s strong condemnation of Romney’s refusal to back away from his signature accomplishment and adds:

Mitt Romney has been spending the last week defending his failed “experiment” in government-run health care — and based on news reports it hasn’t been working. The same way that President Obama has been defending ObamaCare since its passage through Congress.

Thursday’s Wall Street Journal discusses how RomneyCare was the first in the nation to introduce “individual mandates” (i.e. the government forcing you to buy insurance) and how health care in Massachusetts has gotten more expensive — even more than the national average.

President Obama & former Governor Mitt Romney’s policies both put government squarely at the center of your health decisions. But I believe more government is not the answer. And I’d be willing to bet you agree.

Look:

I’ve noted the similarities between the two plans before (check out this table here), but it’s also worth pointing out that the differences between the two plans are also not insubstantial. Unlike Massachusetts’ reform, the federal law reduces health care spending by establishing a payment control commission, levying an excise tax on very generous health care plans and financing demonstration projects that, if successful, could transform the way health care is financed in the United States.

Romneycare did not try to tackle health care costs — even though Democrats are now working on an effort to reform the way the state pays for health care services — but is in some ways even more progressive than the federal law. For instance, uninsured residents below 300% of the federal poverty level can participate in the state-subsidized Commonwealth Care program where members get health services by enrolling in health plans which cover a comprehensive package of benefits like “doctor’s visits, surgery, radiology and lab” and abortion services — a procedure Romney says he now opposes. Romney’s law also includes a requirement that employers provide health care coverage, while the national law only requires employers to provide insurance or pay a fee if an employee is receiving government subsidies. Romney did veto the employer mandate and was overridden by the state legislature. He later minimized the significance of the provision in national interviews.

During a speech at the Economic Club of Chicago yesterday, House Budget Chairman Paul Ryan (R-WI) defended his proposal to privatize Medicare for future retirees, arguing that the plan would empower seniors to “deny business to inefficient providers” while President Obama’s proposals to reduce the growth of the program would “give government the power to deny care to seniors.”

As TPMDC’s Brian Beutler notes, Ryan went even further. He likened Medicare to welfare, as if to imply that the program was some sort of government hand out to seniors:

RYAN: As we strengthen welfare for those who need it, we propose to end it for those who don’t. We end wasteful corporate welfare for those such as Fannie Mae and Freddie Mac, big agribusinesses, and others that have gotten a free ride from the taxpayer for too long.

Ironically, Ryan rejected this very same premise during a town hall in Waterford, Wisconsin on April 28th. Pressed by a constituent about why he was referring to Medicare in a derogatory manner — by calling the program an “entitlement” — Ryan assured the man that he

Q: I don’t necessarily like these programs being called entitlement programs. As far as I’m concerned, I paid in for 50 years….more or less a retirement program that I thought I was putting in with the government.

RYAN: I get this fairly often about why we call this an entitlement program. It almost seems to some people like a demeaning thing. It’s the law — it’s the term of art that’s used in law. It’s not meant to be demeaning. If you pay into the program, you’re entitled to the benefit…so don’t think of it as a slight.

Watch it:

Since Sen. Herb Kohl (D-WI) announced that he would be resigning from the Senate after his term ends in 2013, a slew of potential candidates, from Rep. Tammy Baldwin (D-WI) to former Sen. Russ Feingold (D-WI), have expressed interest in the seat. This morning, Politico reports that Tommy Thompson, the former two-term Republican Wisconsin Governor and Health and Human Services Secretary under President George W. Bush, is jumping into the race, telling friends and colleagues that he plans to pursue the position.

And while politicos predict that Thompson will enter the race as a front-runner, his moderate positions may give pause to conservative activists in the state:

– SUPPORTED THE INDIVIDUAL HEALTH MANDATE: During a symposium in Orlando in September 2008, Thompson said, “Just like people are required to have car insurance, they could be required to have health insurance.” In 2009, he walked back his support saying, “I’m not opposed to it, I just don’t think it’s the most practical way.” [Miami Herald, 3/23/2010; YouTube, 2/03/2009]

– SAID GOP SHOULDN’T REPEAL HEALTH LAW: “When it’s all said and done, you’re not going to be able to repeal health care because President Obama is not going to sign it,” Thompson said during an appearance on CNBC in 2010. “And they don’t have enough votes to override a veto, so why push a cart uphill when you know it’s not going to be able to get to the top?” [CNBC, 11/02/2010]

– PROMOTES SECTIONS OF HEALTH LAW: “The Affordable Care Act gives great discretion to the CMS Administrator to experiment with alternative payment systems. CMS has created an “innovation center” and is looking for ideas,” Thompson wrote just last month. [Huffington Post, 4/20/2011]

– OPPOSES RYAN’S MEDICARE PLAN: “Simply cutting Medicare isn’t the answer by any means. Instead, let’s focus on the most effective fiscal path forward with the least amount of impact on millions of seniors, their families and our broader economy. In other words, reform Medicare, don’t cut it,” Thompson wrote in April. [Huffington Post, 4/20/2011]

– DEVELOPED STATE’S MEDICAID PROGRAM: As governor in the 1990s, Thompson helped develop BadgerCare into one of the country’s most innovative and generous Medicaid program. [NPR, 2/23/2011]

Sen. John McCain (R-AZ) has dubbed Thompson “the smartest guy on health care,” but despite his moderate streak, he has done little to expand access to health care. During his four year tenure as President Bush’s point man at the HHS, the number of uninsured increased from 41.2 million to 46.6 million, Thompson pushed through a lobbyist-written prescription drug bill, helped misrepresent the legislation’s true cost, proposed a radical restructuring of the Medicaid program, and “improperly altered a report documenting large racial and ethnic disparities in health care.”

On June 1, an ideologically divided panel of the United States Court of Appeals for the Sixth Circuit is scheduled to hear oral arguments in a lawsuit challenging the Affordable Care Act. Last Thursday, however, the court sent an unusual letter asking the parties to brief three procedural questions that might lead the court to dismiss the case without reaching the merits of whether the ACA is constitutional:

1. Standing/Ripeness.

a. Have the plaintiffs alleged an injury in fact? If not, have they alleged an “imminent injury” creating a case of actual controversy under Article III and the Declaratory Judgment Act, even though they filed their complaint more than three years before the effective date of the challenged provisions?

b. If the plaintiffs do not purchase minimum essential coverage and do not pay the penalty, what available enforcement mechanisms are available to the IRS? What role, if any, do IRS enforcement mechanisms play in the injury and hardship requirements?

2. Facial/As-applied.

Is the Commerce Clause challenge a facial challenge and, if so, must the plaintiffs prove “that no set of circumstances exists under which the Act would be valid.” United States v. Salerno, 481 U.S. 739, 745 (1987)?

The first two questions essentially concern whether this lawsuit was brought prematurely. The Constitution prevents plaintiffs from challenging a law unless their have experienced an “injury in fact” — that is, unless the law has actually harmed them in some meaningful way. But the ACA litigation challenges a provision that requires some people to pay slightly more taxes beginning in 2014. Because 2014 hasn’t happened yet, the court may be poised to dismiss the lawsuit because the plaintiffs cannot show that they have been injured by it now or that it will affect them when it takes effect in two and a half years.

The third question concerns whether the plaintiffs in this case challenged the ACA in the proper way. Generally speaking, the Supreme Court allows two kinds of challenges to a law: “facial” challenges, that claim that the law must be effectively striken from the books, and “as applied” challenges, which claim that the law cannot be applied to a particular person or entity. The Sixth Circuit may be poised to say that the ACA survives a facial challenge, but that it could possibility be challenged by certain plaintiffs on an as applied basis.

This kind of letter instructing the parties to brief additional questions is not unheard of, but it is somewhat unusual. It indicates that the court is troubled by these three procedural questions — or even, potentially, that the court is looking for a way to make the case go away. In either event, it opens up the strong possibility that the Sixth Circuit will dismiss this case without reaching the merits of whether the ACA is constitutional.