Indiana’s Claims About Its Medicaid Experiment Don’t All Check Out

Indiana expanded Medicaid under the Affordable Care Act in 2015, adding conditions designed to appeal to the state’s conservative leadership. The federal government approved the experiment, called the Healthy Indiana Plan, or HIP 2.0, which is now up for a three-year renewal.

But a close reading of the state’s renewal application shows that misleading and inaccurate information is being used to justify extending HIP 2.0.

This is important because the initial application and expansion happened on the watch of then-governor and now Vice President Mike Pence. And Seema Verma, who is President Donald Trump’s pick to lead the Centers for Medicare & Medicaid Services, helped design it. (Among other functions, CMS oversees all Medicaid programs.) So, states are watching to see if the approval of Indiana’s application is a bellwether for Medicaid’s future.

To get the program extended again, the Indiana Family and Social Services Administration has to prove to CMS that the experiment is working and that low-income people in the state are indeed getting access to care and using health care efficiently.

The key part of Indiana’s experiment requires low-income participants to make monthly payments. Advocates say this promotes recipients’ taking personal responsibility for their health care. But some health policy experts say the information provided by the state shows that the provision isn’t working as well as it should. Some examples:

The Claim: Most members are making regular payments to maintain coverage.

The Fact: A lot of people are missing the first payment.

The state’s application says that “over 92 percent of members continue to contribute [to their POWER accounts] throughout their enrollment.”

This claim is missing context. Here’s a primer on how HIP 2.0 works: Members can get HIP 2.0’s more complete coverage, the HIP Plus plan, by making monthly payments into a “Personal Wellness and Responsibility Account,” or POWER account.

If they don’t make the payments, there are penalties. If a recipient makes less than the federal poverty level — about $12,000 a year — they’re bumped to HIP Basic, a lower-value plan that requires copays and doesn’t include vision or dental insurance.

If a recipient is above the poverty line and misses a payment, they become locked out of coverage completely for six months.

The state’s claim that 92 percent of members make consistent payments is based on data in a report by the Lewin Group, a health policy research firm in Virginia that evaluated HIP 2.0’s first year.

But the Lewin report also says that when people sign up for HIP 2.0 they can be declared “conditionally enrolled,” which means they’re eligible but have not yet made their first payment.

According to the Lewin report, in HIP 2.0’s first year, about a third of people who were conditionally enrolled never fully joined.

“I don’t see those numbers being captured,” said Dr. David Machledt, senior policy analyst with the National Health Law Program, which advocates for low-income individuals. Machledt said the state should recalculate the figure to include those people, because it’s potentially an indicator that people are confused about how the program works or that they can’t afford the payments.

He added that the figure cited is based on the first year of HIP 2.0, and that the rate of losing coverage for missing payments has increased substantially since then.

The Claim: HIP 2.0 users check their POWER account.

The Fact: More than half of people don’t even know they have one.

The state says the POWER account is promoting personal responsibility in health care; meaning, if someone is aware of how much they are spending, they’ll choose their medical care wisely. As evidence, the state writes in its application that 40 percent of HIP Plus members “check their [POWER Account] balance at least once a month.”

Again, the state leaves out important context. According to the Lewin report, most people in HIP Plus didn’t know they had a POWER account. Of those who did, 40 percent checked their account once a month, but that’s much smaller than 40 percent of all HIP Plus members. In fact, an analysis of the numbers shows only about 19 percent of HIP Plus members reported checking the balance of their POWER account monthly.

Rather than evidence of personal responsibility, Judy Solomon, vice president for Health Policy at Center on Budget and Policy Priorities, sees evidence of confusion.

“I think that’s another really significant finding [in the Lewin report] that so far I have never seen the state come to terms with,” said Solomon.

A spokesperson for the state wrote in an e-mail that the phrase “of the members surveyed” was unintentionally omitted from the application.

The message did not address the overall concern that the statement was misleading.

The Claim: People on HIP Plus are more responsible.

The Fact: Experts say HIP Plus is just better insurance.

The application also says “HIP members who contribute [to their POWER accounts] are twice as likely to obtain primary care (31 percent to 16 percent), have better prescription drug adherence (84 percent to 67 percent), and rely less on the emergency room for routine treatment.”

Machledt said simply showing that HIP Plus members use the emergency room less frequently than HIP Basic members doesn’t tell the whole story.

“They don’t talk about the risk profile of those different groups,” Machledt said. He said people who are above the poverty line are generally less likely to frequent the ER in the first place. “There’s no evidence to me that they’ve risk-adjusted … to show that they’re comparing apples to apples,” he said.

Indiana argues that the higher levels of primary care use and drug adherence for those making POWER account payments “confirms the principle of personal responsibility.”

But Solomon said the differences in behaviors simply confirm something else: Those who pay their POWER account have better insurance. HIP Plus makes it easier for people to access primary care and to adhere to their prescription drug regimens, Solomon said.

“The policy for people in HIP Plus is that they get a three-month supply of drugs, and can even use mail order, without any copays,” she said. Meanwhile, people in HIP Basic have to pay copays and are limited to a one-month supply of drugs.

Solomon said getting less primary care and relying on the ER for health crises is worse for patients and could also mean higher costs. “You have large numbers of people that are not getting care in the right place at the right time, and not maintaining adherence to prescription drug regimens.”

The Claim: HIP 2.0 is meeting its enrollment projections.

The Fact: No, it isn’t.


Enrollment projections for HIP 2.0 submitted to CMS in 2014. (Healthy Indiana Plan Expansion Proposal/FSSA)

The state’s application reads “HIP has continued to meet its enrollment goals with over 394,000 individuals fully enrolled in HIP as of December 1, 2016.”

But the state isn’t meeting its enrollment goals. According to a chart published in 2014 in Indiana’s original proposal for HIP 2.0, its enrollment goal for December of 2016 was higher: 424,339. (The chart is off by a month, because the state started HIP 2.0 a month later than planned, so the actual projection for December 2016 appears on the line for November 2016.)

The most recent enrollment report shows 403,142 HIP members in January 2017, short of the state’s projection of 427,702.

The Claim: The survey shows people like HIP 2.0

The Fact: The survey’s data and methodology are unreliable.

There’s reason to doubt the survey results that underlie much of the Lewin report, according to Dr. Leighton Ku, director of the Center for Health Policy Research at the Milken Institute School of Public Health at George Washington University.

“They were not using what would generally be considered best practices in their survey methodology,” Ku said.

Ku said the methodology available to the public is vague. From the information provided, he said, there are multiple ways that bias could have been introduced into the survey results used in the Lewin report. For one thing, the sample sizes of the survey were too small to draw accurate conclusions, Ku said, and the data was analyzed using “not an optimal method.”

Ku said that the results are not displayed in a scientific manner and that it appears the survey and analysis were done in a hurry. “You would not, as a survey researcher, have great confidence in the results that they show,” he said.


As Indiana looks to extend HIP 2.0, health policy experts say it’s important to get an accurate picture of how well the program is working. Requiring POWER account payments was key to making the program a reality in Indiana, but they say a more traditional Medicaid expansion — one that does not require monthly payments and six-month lockouts — is a better option.

Dr. Jennifer Walthall heads the Indiana Family and Social Services Administration, the government agency that runs HIP 2.0. She said that in order to comment on discrepancies between the state’s extension application and the Lewin report, “I would have to go back and look at the way that these data were reported.” She continued, “I’m happy to look into that and get that for you.”

In a separate prepared statement, the agency noted that the state “has made significant achievements” on HIP 2.0’s stated goals and that it looks forward “to continuing to build on these successes with future versions of HIP. … The analysis of this program is constant and ongoing and includes continuous conversation with our federal partners to discuss all aspects of the proposed waiver as well as program outcomes.”

If the application does not go forward, the state could choose to expand Medicaid under the Affordable Care Act without any special provisions, or not accept the expansion at all. The federal government welcomes public comment on Indiana’s application until March 17.

This story is part of a partnership that includes WFYI, Side Effects Public Media, NPR and Kaiser Health News.

Categories: Cost and Quality, Medicaid, Repeal And Replace Watch, States, Syndicate, The Health Law

Tags: Indiana

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Hospitals, Both Rural And Urban, Dread Losing Ground With Health Law Repeal

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PRINCETON, Ill. — Commuting past the barren winter fields in northern Illinois, Cathie Chapman worries about the future.

More than a year ago, she lost her job at a nearby rural hospital after it closed and, as Republicans work to dismantle the Affordable Care Act, wonders whether she’ll soon be out of work again.

“Many of my friends did not find jobs they love,” she said. “They’re working for less money or only part time. Some haven’t found any jobs yet, even after a year.”

Now she runs the pharmacy at Perry Memorial Hospital here, warily watching the Republicans’ repeal efforts.

“I think everybody who works in health care now feels a little uneasy,” said Chapman. “We don’t know what’s coming around the corner, and how it will affect us. But we know that change is happening so fast, it is exhausting and difficult to keep up with.”

Rural hospitals have long struggled to stay open. They have far fewer patients and thin profit margins. Dozens have closed across the country in recent years, mostly in states that didn’t expand Medicaid.

But in Illinois, which did extend Medicaid to nearly all poor adults, patients at Perry Memorial have gained coverage under the Affordable Care Act and many hospitals have found firmer footing.

If large numbers of people lose their insurance under the Republicans’ replacement, the hospital’s finances — and those of its patients — would be at risk, especially after the hospital invested so much money and time in complying with the health law, said chief executive Annette Schnabel.

“We have spent the last six years gearing up towards everything that we were responsible for doing in the ACA,” said Schnabel. If the hospital has to “totally go a different direction, how will we do that? It’s going to take a lot of work.”

And for some hospitals to survive or break even, it would require Congress to restore billions of dollars in funding that kept hospitals afloat before the 2010 law took effect.

Hospitals across the country made a high-stakes trade when they signed on to the Affordable Care Act. They agreed to massive cuts in federal aid that defrayed the cost of caring for the uninsured. In exchange, they would gain tens of millions of newly insured customers. Now that deal is in jeopardy, and many hospital executives anxiously await whatever comes next.

In states that have seen growth in the number of insured patients, hospitals have invested in new equipment and hired more employees. (Screenshot/PBS)

In states that have seen growth in the number of insured patients, hospitals have invested in new equipment and hired more employees. (Screenshot/PBS)

In Chicago, John H. Stroger Jr. Hospital of Cook County is among the nation’s busiest hospitals, handling most of the city’s gunshot victims. The vast majority of its patients used to be uninsured, and the county-run hospital struggled to take care of their medical and mental health needs.

Those patients now have Medicaid coverage because of the Affordable Care Act, and the Cook County hospital system gained $200 million in new revenue to cover their services, breaking even for the first time.

“We have no interest in slipping back in what we’ve been able to do,” said Dr. John Jay Shannon, chief executive of the Cook County Health and Hospitals System. “We’re not able to do the kind of work that we do today with good will alone. Our staff are not a volunteer staff. We can’t get IV fluids and medical equipment on credit and a wink and a nod.”

Two hospital trade groups — the American Hospital Association and the Federation of American Hospitals — have warned of “an unprecedented public health crisis” if the law gets hastily scuttled.

They say if Congress repeals the law entirely and 20 million people are kicked off their insurance, hospitals will lose $166 billion in Medicaid payments alone in the next decade.

And hospitals face much steeper losses if certain Medicare cuts that were part of the law aren’t restored.

In Chicago, limo driver Jerold Exson is one patient who could lose coverage and have his hospital bills — once again — go unpaid. These days, the hospital helps enroll low-income adults such as Exson into Medicaid. In 2014, he was shot nearly a dozen times in a case of mistaken identity.

His medical care is now covered, and the hospital can provide follow-up surgeries, physical therapy and mental health treatment that were often off-limits to the uninsured.

Clinical psychologist Natalia Ruiz helps Exson manage the after-effects of gun violence. “I used to be real antsy,” said Exson who suffers from post-traumatic stress disorder. He recalled a recent moment when he was driving and a “rock hit the window, and it kind of sent me into a tailspin.”

The health law also shifted the business model for U.S. hospitals. It offered them financial incentives to move away from expensive ER visits to primary care and managing chronic conditions.

Earl Williams Sr. finally has brought his diabetes under control. He’s diligent about exercising, taking his medication and seeing his doctor.

“I had high sugar levels, I had high blood pressure, there was quite a few things that was going on with me that now I know how to control,” said Williams.

Before the Affordable Care Act, hospitals had little incentive to reduce emergency department visits, especially from Medicare patients who generate a lot of revenue.

At University of Chicago Medicine, an academic medical center, Dr. Kenneth Polonsky said if those incentives are rescinded and patients forgo preventive care, they’ll clog up already strained emergency rooms.

“We’ll go back to a very frustrating time, where people had limited options for health care, because of inability to get health insurance,” said Polonsky, dean of the Division of the Biological Sciences.

The uncertainty is also roiling county governments, which often fund medical care for the poor.

The burden on local taxpayers to fund the Cook County health system has dropped by $300 million since the health law went into effect, and repealing the law could force local governments to raise taxes.


The political uncertainty surrounding health care is roiling county governments, which often fund care for the poor. (Screenshot/PBS)

“It’s a $300 million hole in our budget,” said Toni Preckwinkle, president of the Cook County Board of Commissioners. “There aren’t a lot of options other than raising more revenue. It’s a nightmare for us.”

In Waukegan, Ill., near the Wisconsin border, Vista Health System chief executive Barbara Martin said that with more patients covered and additional reimbursement from the ACA, she has invested in new equipment and hired hundreds of new employees across Vista’s two for-profit hospitals.

She said if the 900,000 Illinois residents who gained insurance under the law lose coverage — and hospital revenue drops suddenly — hospital executives estimate 95,000 jobs could be lost.

“That certainly would impact jobs at Vista,” Martin said. “We’re going to go back to those days where hospitals were closing.”

But Edmund Haislmaier, a senior fellow at the Heritage Foundation, a conservative think tank, said the U.S. already pays too much for health care. A member of President Donald Trump’s transition team on health policy, Haislmaier said communities — and states and local governments — shouldn’t rely on hospitals to create jobs and fill budget holes.

“Hospitals, in particular, have become economic development projects,” he said. “If you’re paying tax dollars for Medicare or Medicaid, treating that as an economic development project is a problem, not a benefit.”

Earl Williams is diligent about seeing his doctor, but worries whether he will have health insurance after Republican changes to the ACA. (Screenshot/PBS)

Earl Williams is diligent about seeing his doctor, but worries whether he will have health insurance after Republican changes to the ACA. (Screenshot/PBS)

More than a dozen top Republican lawmakers declined to be interviewed for this story. But a spokeswoman for Sen. Lamar Alexander, the Tennessee Republican who chairs the Senate Committee on Health, Education, Labor and Pensions, said in a statement that Alexander “is listening to hospitals, doctors, patients, state insurance commissioners, governors” as they draft the replacement plan.

The most recent draft of the Republican’s proposal would eliminate the Medicaid expansion, which covers 14 million people, by 2020. To offset the increase in uninsured patients, the plan would reverse some of the payment cuts to hospital.

Back in Chicago, patients like Earl Williams have been bringing their questions to their doctors, with the hope of some clarity.

At a recent checkup, Williams asked pointedly, “Am I going to have insurance in a month or two? That’s kind of scary for brothers that’s in the community.”

“You and I have been knowing each other for a long time, and I’m going to give it to you straight,” responded William’s physician, Dr. Pete Thomas. “And that is: It’s likely that it’s going to change. It’s not going to be the same.”

PBS NewsHour producer Jason Kane contributed to this story.

Categories: Medicaid, Repeal And Replace Watch, Syndicate, The Health Law

Tags: Hospitals, Medicaid, Medicaid Expansion, Repeal and Replace

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Supporting Comprehensive and Innovative Care for Children: Request for Information on a Potential Pediatric Alternative Payment Model

February 27
by Centers for Medicare & Medicaid Services

February 27, 2017

By Patrick Conway, M.D., M.Sc., Acting Administrator, Centers for Medicare & Medicaid Services; Deidre Gifford, M.D., M.P.H., Deputy Director, Center for Medicaid and CHIP Services; Ellen-Marie Whelan, N.P., Ph.D., Chief Population Health Officer, Center for Medicaid and CHIP Services; and Alex Billioux, M.D., D.Phil., Director, Division of Population Health Incentives and Infrastructure, Center for Medicare & Medicaid Innovation

In partnership with states and providers, the Centers for Medicare & Medicaid Services (CMS) plays a leading role in safeguarding the health of America’s future by providing coverage for more than one in three American children[1]. Through Medicaid and the Children’s Health Insurance Program’s (CHIP) mandatory and optional benefits, children receive access to a spectrum of comprehensive and preventive health care services aimed at providing a sound start for lifelong health. As a result, children enrolled in Medicaid and CHIP lead the nation in participation in preventive care and access to needed care[2].

CMS and states have also demonstrated consistent commitment to improving the health of children through care redesign and innovation in programs such as Medicaid Health Homes, the Medicaid Innovation Accelerator Program, and models tested under the Center for Medicare and Medicaid Innovation (Innovation Center), including the State Innovation Models Initiative and Strong Start for Mothers and Newborns Initiative. To build on those efforts, the Innovation Center, in partnership with the Center for Medicaid and Chip Services (CMCS), is releasing a Request for Information (RFI) today seeking input on the design of alternative payment models focused on improving the health of children and youth covered by Medicaid and CHIP. As the insurer of a third of the nation’s children and a leader in health care innovation, CMS is uniquely positioned to improve the health of America’s children.

We know there is more to health than health care alone, and for children, factors such as sound nutrition, safe living environments, responsive adult caregivers, and nurturing social relationships are especially critical for healthy growth and development. Inadequate or inconsistent access to these factors can have physical and behavioral impacts that reverberate throughout a child’s life course as he or she grows into adulthood. Some children and youth enrolled in Medicaid and CHIP, especially those that are high-need and high-risk, may experience barriers to accessing the optimal combination of child-focused programs and services that are available to address these critical factors. Through the RFI, we are seeking input on approaches to improve the quality and reduce the cost of care for children and youth enrolled in Medicaid and CHIP. In particular, we are exploring concepts that encourage pediatric providers to collaborate with health-related social service providers (e.g., early childhood development programs, child welfare services, and home and community based service providers) at the state and local levels and share accountability for health outcomes for children and youth enrolled in Medicaid and CHIP.

CMS seeks input through the RFI from the broad community of child and youth-focused stakeholders on concepts critical to addressing the comprehensive health needs of children and youth, such as:

  • Opportunities and impediments to extending and enhancing integrated service model concepts like accountable care organizations (ACOs) to the pediatric population;
  • Flexibilities and supports states and providers may need in order to offer such models of care to a state’s pediatric population; and
  • Approaches for states and providers to coordinate Medicaid and CHIP benefits and waivers with other health-related social services for children and youth.

Investing in child health can provide lifelong benefits and improve the nation’s health. We look forward to front-end comments from our state partners and other stakeholders who share our dedication to improving the health of our nation’s children.

For more information on the RFI, please visit: To be assured consideration, RFI comments must be received by March 28, 2017.

[1] Department of Health and Human Services. 2015 Annual Report on the Quality of Care for Children in Medicaid and CHIP. February, 2016.

[2] See CHIPRA Mandated Evaluation of the Children’s Health Insurance Program: Final Findings, available at; Kreider AR, French B, Aysola J, Saloner B, Noonan KG, Rubin DM. Quality of Health Insurance Coverage and Access to Care for Children in Low-Income Families. JAMA Pediatr. 2016;170(1):43-51. doi:10.1001/jamapediatrics.2015.3028

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BIDMC scientists discover vulnerability that offers new strategy to combat triple-negative breast cancer

February 28, 2017 at 1:55 AM

Physicians currently have no targeted treatment options available for women diagnosed with an aggressive form of breast cancer known as triple-negative breast cancer (TNBC), leaving standard-of-care chemotherapies as a first line of defense against the disease. However, most women with TNBC do not respond to these broadly-targeted chemotherapies, and those who do often develop resistance to the drugs. Investigators at the Cancer Center at Beth Israel Deaconess Medical Center (BIDMC) have discovered a vulnerability that offers a new strategy to combat TNBC.

Their findings are published online today in the journal Cancer Discovery.

“Given the complete lack of any targeted therapies specific to triple-negative breast cancer, we started thinking about how we could find other vulnerabilities in tumor cells,” said corresponding author Alex Toker, PhD, chief of the Division of Signal Transduction in the Department of Medicine and Pathology and the Cancer Center at BIDMC. “If we could find such vulnerabilities, we could develop strategies to exploit them, perhaps with already FDA-approved drugs that could be used in combination with existing cancer drugs.”

Triple-negative breast cancer accounts for nearly 20 percent of breast cancer cases and is defined by its cells’ lack of receptors for three well-known drivers of other forms of the disease – estrogen, progesterone and human epidermal growth factor (HER2). Without receptors for this trio of hormones, TNBC is impervious to the therapies used to combat other breast cancer subtypes. TNBC treatment is limited to standard-of-care chemotherapies that work by damaging cancer cells’ DNA, to which it often develops resistance. Moreover, these non-specific standard-of-care, first line therapies are blunt instruments that may also kill normal cells and are responsible for the side effects associated with cancer treatment such as nausea and hair loss.

Researchers still don’t know what initiates or drives the development of TNBC tumors. However, Toker and his colleagues demonstrated that the cancer cells increase production of nucleotides called pyrimidines when exposed to standard chemotherapy. Because pyrimidines are a crucial ingredient in DNA, the researchers reasoned that its increased production – or, biosynthesis – is an adaptive response that promotes resistance to DNA-damaging chemotherapies.

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“What chemotherapy does in triple-negative breast cancer – for reasons we don’t yet fully understand – is reprogram this pyrimidine-biosynthetic pathway to really crank up production of these nucleotides,” said Toker, who is also an investigator at the Ludwig Center at Harvard. “If we could inhibit this increase, then we might be able to restore the chemotherapeutic benefit of standard-of-care drugs.”

To test that notion, Toker and colleagues, including lead author Kristin K. Brown, PhD, formerly of BIDMC and now at Peter MacCallum Cancer Center in Melbourne, Australia, treated TNBC cells with a cancer-killing drug called doxorubicin. As expected, the cancer cells increased production of pyrimidine nucleotides. The scientists reproduced these results both in vitro – in cancer cells grown on plastic – and in vivo, in mice implanted with human TNBC cells.

Next, the researchers treated TNBC cells with a combination of a standard-of-care chemotherapy called doxorubicin and leflunomide, a drug known to block the pyrimidine biosynthetic pathway that is already an FDA-approved treatment for rheumatoid arthritis. Again, TNBC cells responded as Toker and colleagues expected. In mice, the scientists saw significant tumor regression with the combination therapy. Other experiments revealed that either drug alone had minimal impact on TNBC cells, while the combination therapy had no impact on the other breast cancer subtypes driven by estrogen, progesterone or HER2.

Based on these findings, Toker intends to initiate clinical trials in partnership with clinical oncologists. He will also focus on testing both FDA-approved as well as newer drugs that may exploit this new-found Achilles’ heel in TNBC and other cancers that depend on similar metabolic pathways to develop chemotherapy resistance. The goal is to speed new potential therapies to patients.

“We focused our attention on the pyrimidine-biosynthetic pathway because we wanted to develop a combination therapy strategy without having to develop new drugs,” said Toker, who plans to start a company to test existing drugs. “Indeed there is already one drug in use that inhibits one of the key enzymes in this pathway. Repositioning that drug should provide a much more rapid path to clinical impact and clinical benefit.”


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Drowning In A ‘High-Risk Insurance Pool’ — At $18,000 A Year

Some Republicans looking to scrap the Affordable Care Act say monthly health insurance premiums need to be lower for the individuals who have to buy insurance on their own. One way to do that, GOP leaders say, would be to return to the use of what are called high-risk insurance pools, for people who have health problems.

But critics say even some of the most successful high-risk pools that operated before the advent of Obamacare were very expensive for patients enrolled in the plans, and for the people who subsidized them — which included state taxpayers and people with employer-based health insurance.

Craig Britton of Plymouth, Minn., once had a plan through Minnesota’s high-risk pool. It cost him $18,000 a year in premiums.

Britton was forced to buy the expensive coverage because of a pancreatitis diagnosis. He called the idea that high-risk pools are good for consumers “a lot of baloney.”

“That is catastrophic cost,” Britton said. “You have to have a good living just to pay for insurance.”

The argument in favor of high-risk pools goes like this: Separate the healthy people, who don’t cost very much to insure, from people who have preexisting medical conditions, such as a past serious illness or a chronic condition. Under GOP proposals, this second group, which insurers expect to use more medical care, would be encouraged to buy health insurance through high-risk insurance pools that are subsidized by states and the federal government.

Republican Speaker of the House Paul Ryan made the case for high-risk pools on public television’s “Charlie Rose” show in January.

“By having taxpayers, I think, step up and focus on, through risk pools, subsidizing care for people with catastrophic illnesses, those losses don’t have to be covered by everybody else [buying insurance], and we stabilize their plans,” Ryan told the TV host.

Minnesota’s newest congressman, Rep. Jason Lewis, a Republican representing Burnsville and Bloomington, recently endorsed high-risk pools on CNN.

“Minnesota had one of the best … high-risk insurance pools in the country,” Lewis said. “And it was undone by the ACA.”

It’s true that the Affordable Care Act banned states’ use of high-risk pools, including the Minnesota Comprehensive Health Association, or MCHA. But that’s because the MCHA was no longer needed, the association’s website explains; the federal health law requires insurers to sell health plans to everybody, regardless of their health status.

Supporters of the MCHA approach tout a return to it as a smart way to bring down the cost of monthly premiums for most healthy people who need to buy insurance on their own. But MCHA had detractors, too.

“It’s not cheap coverage to the individual, and it’s not cheap coverage to the system,” said Stefan Gildemeister, an economist with Minnesota’s health department.

MCHA’s monthly premiums cost policyholders 25 percent more than conventional coverage, Gildemeister pointed out, and that left many people uninsured in Minnesota.

“There were people out there who had a chronic disease or had a preexisting condition who couldn’t get a policy,” Gildemeister said.

And for the MCHA, even the higher premiums fell far short of covering the full cost of care for the roughly 25,000 people who were insured by the program. It needed more than $173 million in subsidies in its final year of normal operation.

That money came from fees collected from private insurance plans — which essentially shifted a big chunk of the cost of insuring people in the MCHA program to people who get their health insurance through work.

Gildemeister ran the numbers on what a return to MCHA would cost. Annual high-risk pool coverage for a 40-year-old would cost more than $15,000 a year, he says. The policyholder would pay about $6,000 of that, and subsidies would cover the more than $9,000 remaining.

University of Minnesota health policy professor Lynn Blewett said there is a better alternative than a return to high-risk pools. It’s called “reinsurance.” In that approach, insurers pay into a pool that the federal government administers, using the funds to compensate health plans that incur unexpectedly high medical costs. It’s basically an insurance program for insurers.

The big question is whether lawmakers will balk at the cost of keeping premiums down for consumers — whatever the approach, Blewett said.

“The rub is, where that funding is going to come from?” she said. “And is the federal government or the state government willing to put up the funding needed to make some of these fixes?”

The national plan Ryan has proposed would subsidize high-risk pools with $25 billion of federal money over 10 years. The nonpartisan Commonwealth Fund estimates the approach could cost U.S. taxpayers much more than that — almost $178 billion a year.

Researchers at the consulting firm McKinsey & Company say reinsurance would likely cost about a third of what the high-risk pool option would.

This story is part of NPR’s reporting partnership with Minnesota Public Radio and Kaiser Health News.

Categories: Public Radio Partnership, Repeal And Replace Watch, States, Syndicate, The Health Law

Tags: Minnesota, U.S. Congress

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To Pay Or Not To Pay – That Is The Question

K.A. Curtis gave up her career in the nonprofit world in 2008 to care for her ailing parents in Fresno, Calif., which also meant giving up her income.

She wasn’t able to afford health insurance as a result, and for each tax year since 2014, Curtis has applied for — and received — an exemption from the Affordable Care Act’s coverage requirement and the related tax penalty, she says.

This year, given President Donald Trump’s promise to repeal the ACA, along with his executive order urging federal officials to weaken parts of the law, Curtis began to wonder whether she’d even have to apply for an exemption for her 2016 taxes.

She also heard that the IRS recently flip-flopped on its previous decision to reject 2016 tax returns that don’t include the taxpayer’s health coverage status.

“I thought, ‘Maybe I won’t have to apply for the exemption again,’” says Curtis, 59. “The public debate about the law makes it confusing.”

Indeed, there’s widespread confusion among consumers about the status of Obamacare, and because of that, they are uncertain how to handle Obamacare-related tax requirements.

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Should you still submit your 1095 tax forms that show when you were covered — or, if you purchased a plan from an exchange, the amount of tax credits you received? Should you apply for an exemption from the Obamacare coverage requirement?

If you were uninsured in 2016 and don’t qualify for an exemption, should you pay the Obamacare tax penalty?

“Unfortunately, there are a lot of myths floating around,” says Lawrence Pon, a certified public accountant (CPA) in Redwood City. “Some of my clients ask me, ‘Does the law still exist?’”

It sure does.

As a result, California tax experts have some relatively simple advice for confused taxpayers.

“Until Obamacare is no longer the law of the land, we don’t have much choice other than to continue under the current rules and regulations,” says Janet Krochman, a CPA in Costa Mesa.

Death, Taxes And Obamacare

This year’s tax filing deadline is April 18.

And as many of you learned in the past few years, Obamacare and taxes are inextricably linked.

As part of filing your tax return, you need to prove you had health insurance, or pay a penalty, unless you qualify for one of the law’s exemptions.

If you bought coverage through a health insurance exchange such as Covered California and received federal tax credits, which are based on an estimate of your income, you must report whether your actual income varied from your estimate. Since most of you received tax credits in advance, if there’s a difference you may either owe or be owed money.

Many tax preparers say they’d rather not deal with the law’s arcane and complex requirements. But every single one I spoke with says they will continue doing so as long as former President Barack Obama’s health law exists.

“I tell everybody I want all of their forms. We’re going to document everything,” says Rebecca Neilson, a registered tax preparer in Sheridan, about 40 miles northeast of Sacramento. “I’m not going to change what I’m doing because the law might get changed.”

However, a recent IRS switch has fueled hopes among some consumers that the agency won’t enforce the Obamacare tax penalty for 2016.

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On 1040 tax forms, taxpayers must check a box attesting that they had health care coverage, or enter their penalty amount if they didn’t.

For the first two tax years that Obamacare was in effect, the IRS accepted tax returns that didn’t include this information but often followed up with taxpayers to get it. For 2015, about 4.3 million taxpayers did not check the box, claim an exemption from coverage or pay a penalty, according to the IRS.

The IRS had said it would start rejecting those forms outright for the 2016 tax year — until Trump signed his executive order.

Citing the order, the agency now says it will continue to process tax forms that don’t include a taxpayer’s health coverage status. “This is similar to how we handled this in previous years,” says an IRS statement.

At the same time, the agency says it will continue to enforce the health law and may follow up with taxpayers who withhold their coverage information.

“Legislative provisions of the ACA law are still in force until changed by the Congress, and taxpayers remain required to follow the law and pay what they may owe,” the IRS statement says.

Mixed Signals

Andrew Porter, a CPA in Contra Costa County, believes that the agency “has just added to the confusion” with this change but that taxpayers shouldn’t be lulled into complacency.

“They have to enforce the law,” he says. “It’s exactly the same as last year.”

Though Porter doesn’t advise it, if you choose not to report your coverage on your tax return, he urges you to make sure you have your 1095 form so you have proof of coverage.

“If the IRS does come calling and says you owe this penalty, producing that document may be very useful,” he says.

Michael Eisenberg, a CPA in Encino, acknowledges that there may be consumers who owe a penalty and are hoping that a repeal in the coming months would get them off the hook.

They could request a tax-filing extension, allowing them to submit tax forms to the IRS in October, he says.

But that’s not a sure thing and would require any change in the law to be retroactive to the 2016 tax year, he says. If the penalty is not forgiven, they would have to pay it, plus interest.

“Maybe there will be clarity by October, maybe there won’t be,” Eisenberg says. “You can take your chances, but what’s the likelihood the law would be repealed retroactively? I don’t think it’s that great.”

Krochman, the Costa Mesa CPA, has a few clients who owed the penalty in previous years but haven’t paid it.

“They’re kicking the can down the road in the hopes there will be retroactive removal of the penalty once the law is repealed or replaced,” she says. “What happens down that road, we don’t know.”

Given the uncertainty, my biggest piece of advice is, and always has been, to consult with a tax professional. If you can’t afford it, multiple programs offer free tax help, including the Volunteer Income Tax Assistance (VITA) program, run by the IRS ( and the AARP Foundation Tax-Aide program (

In the face of the confusion, Curtis, of Fresno, erred on the side of caution.

“I ended up deciding this year to go ahead and file the exemption paperwork and be safer than sorry,” she says. “It is the law, and we’re stuck navigating our way through it, as difficult as it may be.”

This story was produced by Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.

Categories: Ask Emily, California, California Healthline, Repeal And Replace Watch, Syndicate, The Health Law

Tags: Obamacare Plans, Tax Penalties

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