The Center's work on 'Health Policy' Issues

The Center works to ensure that federal and state health insurance programs provide coverage that meets the health care needs of low-income children and families, as well as seniors and people with disabilities. The Center also works to remove barriers preventing eligible families from gaining access to health coverage.


CBPP Releases New Resource on State Marketplace Design and Policies

April 17, 2014 at 11:28 am

Health reform’s marketplaces launched in every state on January 1, offering individuals and small businesses the opportunity to shop from an array of affordable, comprehensive health insurance plans.  Now that the open enrollment for 2014 coverage has closed, states have a chance to fine-tune their plans for next year.  A new database that CBPP has launched will give them critical information that they’ll need to make those decisions.

The health reform law gave states the option to establish and operate their own marketplace as a State-based Marketplace (SBM), partner with the federal government through a State Partnership Marketplace (SPM), or defer to the federal government to provide a Federally-facilitated Marketplace (FFM) in the state (see map).

The states that opted to develop their own marketplaces or to partner with the federal government have significant design and operational flexibility to exceed federal minimum requirements and tailor the program to meet state-specific needs.

CBPP has analyzed the 17 SBM and 6 SPM states across a number of design questions as well as best practices.  We’ve summarized the findings in a new database that states can use as they work to ensure that their marketplaces meet adequate competition, affordability, accessibility, and customer satisfaction requirements.

Among our key findings:

  • Marketplace governance:  In an effort to ensure independence in governance and policy setting, avoid conflicts of interest, and ensure long-term viability, 11 states created a quasi-governmental agency to operate their marketplaces.  Governing boards composed of experts and key stakeholders oversee the new agencies; the majority of states prohibit insurers and/or brokers from serving on the board.
  • Marketplace plan standards:  States adopted a variety of innovative standards to enhance competition and affordability, improve value and transparency for consumers, and mitigate the risk of “adverse selection,” under which sicker-than-average people buy marketplace insurance compared with those who enroll outside the marketplaces, which would result in higher marketplace premiums.  In fact, several require that issuers offer a standardized plan design to enable consumers to more easily compare plans based on price and provider networks.
  • Customer service and website features:  States used a variety of interactive web features to provide a customer-friendly application and shopping experience, including allowing consumers to browse plans before creating an online account or submitting an application.  Many states also allow consumers to effectively filter and search marketplace results by plan features, including by premium, deducible, co-pays, or provider.

CBPP will continue to collect and update information on each State-based Marketplace and State Partnership Marketplace, and we’ll provide additional analysis to assist states as they institute marketplace policies for the 2015 plan year and beyond.

Click here to access the interactive database.

CBO: Health Reform Is Working — and Costing Less

April 14, 2014 at 5:23 pm

In new estimates that it released today, the Congressional Budget Office (CBO) projects that health reform’s coverage expansions will cost less than it previously estimated.  That’s good news for two reasons:

First, the new cost projections come even as CBO also estimates that health reform will dramatically reduce the number of Americans without health coverage.  Second, the lower cost estimate likely means that health reform will reduce budget deficits even more than CBO previously estimated.

Let’s take these one at a time.

Health reform will cut the rate of uninsurance nearly in half.  CBO estimates that health reform will reduce the share of the non-elderly population without insurance from 20 percent in the law’s absence to about 16 percent in 2014 and about 11 percent in 2016 and beyond.  That’s 26 million more people with health coverage.

This coverage expansion also will cost less than the original estimates.  In March 2010, CBO projected that the coverage expansions would have a net cost of $172 billion in 2019.  In February of this year, the projected cost had fallen to $151 billion.  The latest estimate is $144 billion — a drop of 5 percent since February and 16 percent since 2010.  Major reasons for this decline are a 15-percent reduction in projected premiums in the health insurance marketplaces and a somewhat smaller decline in the cost of covering additional Medicaid beneficiaries.

On the deficit front, CBO estimated in March 2010 and again in July 2012 that, considering all of its provisions, health reform will reduce the deficits.  CBO cannot update that estimate because it is not possible to isolate the incremental effects of many of the provisions of health reform that cut federal health spending or increased revenues.  But since the estimated cost of the legislation has fallen, there is every reason to believe that health reform will reduce the deficit by as much or more than the earlier estimates.

Ryan Budget Gets 69 Percent of Its Cuts From Low-Income Programs [Updated]

April 10, 2014 at 5:10 pm

Some 69 percent of the cuts in House Budget Committee Chairman Paul Ryan’s new budget would come from programs that serve people of limited means, our recently released report finds.  These disproportionate cuts — which likely account for at least $3.3 trillion of the budget’s $4.8 trillion in non-defense cuts over the next decade — contrast sharply with the budget’s rhetoric about helping the poor and promoting opportunity.

The low-income cuts fall into five categories:

  • Health coverage.  The Ryan budget has at least $2.7 trillion in cuts to Medicaid and subsidies to help low- and moderate-income people buy private insurance.  Under the Ryan plan, at least 40 million low- and moderate-income people — that’s 1 in 8 Americans — would become uninsured by 2024.
  • Food assistance.  The Ryan budget cuts SNAP (formerly food stamps) by $137 billion over the next decade.  It adopts the harsh SNAP cuts that the House passed last September — which would force 3.8 million people off the program in 2014, according to the Congressional Budget Office — and then converts SNAP to a block grant in 2019 and imposes still-deeper cuts.
  • Help affording college.  The Ryan budget cuts Pell Grants for low- and moderate-income students by up to $125 billion through such means as freezing the maximum grant (which already covers less than a third of college costs) for ten years, cutting eligibility in various ways, and repealing all mandatory funding for Pell Grants.
  • Other mandatory programs serving low-income Americans.  The Ryan budget cuts an additional $385 billion — beyond its SNAP cuts — from the budget category containing many mandatory programs for low- and moderate-income Americans, such as Supplemental Security Income for the elderly and disabled, the school lunch and child nutrition programs, and the Earned Income and Child Tax Credits for lower-income working families.  We estimate that about $150 billion of these cuts would fall on such low-income programs, as explained in the final paragraph of this blog.
  • Low-income discretionary programs.  The Ryan budget cuts these programs by about $160 billion, on top of the cuts already enacted through the 2011 Budget Control Act’s discretionary caps and sequestration.

Our estimates are likely conservative.  In cases where the Ryan budget cuts funding in a budget category but doesn’t distribute that cut among specific programs — such as its cuts in non-defense discretionary programs and its unspecified cuts in mandatory programs — we assume that all programs in that category, including programs not designed to assist low-income households, will be cut by the same percentage.

Chairman Ryan’s Obfuscation: Part 2

April 10, 2014 at 2:10 pm

I explained earlier today the hollowness of House Budget Committee Chairman Paul Ryan’s attempt to deny that his budget cuts low-income programs deeply.  Ryan’s defense was that since total federal spending grows under his budget, how can we say it contains cuts, rather than merely slowing the rate of growth?  We disposed of this in my earlier post, but I want to dig deeper here to expose a budget trick Chairman Ryan is playing.

Sure, total federal spending grows under his budget in nominal dollars.  But that’s driven in large part by increases in Social Security and Medicare — whose costs rise with inflation and the aging of the population, among other factors — and interest payments on the debt.  Ryan cites trends for overall federal spending to mask the fact that his budget contains hefty cuts — even in nominal (non-inflation-adjusted) dollars — in key low-income programs like Medicaid and SNAP (formerly food stamps).

In his attempt to deflect our finding that 69 percent of his budget cuts come from programs targeted on Americans of limited means, Ryan says that Medicaid would receive over $3 trillion during the coming decade under his budget and that its costs would grow in all years after 2016.  Here’s what his too-clever-by-half response conceals:

  • Under the Ryan budget, expenditures for Medicaid, the Children’s Health Insurance Program (CHIP), and a few small related programs (i.e., expenditures for “budget function 550”) would fall — not grow — in nominal dollars between 2014 and 2016, from $357 billion to $311 billion.
  • While this figure would grow in nominal dollars after 2016, that would be from this shrunken starting point.
  • And it wouldn’t return to its 2014 level, even in nominal dollars, until 2022 — by which time health care costs will be substantially higher than in 2014, the population will be considerably larger, and the number of poor, elderly people in nursing homes will have risen considerably given the aging of the baby boomers.  That’s partly why, as my earlier post explained, tens of millions of less-fortunate Americans would lose health coverage and become uninsured under the Ryan budget.

A similar pattern marks the Ryan plan for the part of the budget that includes SNAP, Supplemental Security Income (SSI) for poor people who are elderly or have serious disabilities, the Earned Income Tax Credit, and other such programs.  In this part of the budget, as well, nominal spending wouldn’t return to its 2014 level until 2022.

Chairman Ryan has every right to propose severe cuts in any program he chooses.  But he should be straightforward about what he is proposing.

Chairman Ryan’s Response to the Center’s Analysis Doesn’t Hold Water

April 10, 2014 at 10:26 am

House Budget Committee Chairman Paul Ryan took exception to our finding that 69 percent of the non-defense spending cuts in his new budget come from programs for people with low and moderate incomes.  But he makes no attempt to refute our calculations, and his response both defies logic and conflicts with his own budget and even his own words.

For starters, we derived the 69 percent figure from the cuts that Chairman Ryan displays in his budget.  We added up his cuts in mandatory and non-defense discretionary programs, calculated how much of them would apply to low- and moderate-income programs, and derived the 69 percent figure.  Chairman Ryan was explicit that his budget makes substantial cuts in various programs — like SNAP (formerly food stamps), Medicaid, Pell Grants, and health reform’s subsidies to help people afford insurance — that are targeted on people with low or moderate incomes.

Responding to the 69 percent figure, the Chairman shifted direction in a new piece that he inserted this week in the Congressional Record.  He claimed these cuts aren’t really “cuts” at all; instead, they are simply smaller spending increases than would otherwise occur.  “A smaller increase is not a spending cut,” he wrote.

Well, two problems:

First, the Chairman is trying to have it both ways.  At the very start of his “Pathway to Prosperity,” he writes, “The House Republican budget cuts spending by $5.1 trillion over the next ten years.”  Apparently, he wants to brag to congressional budget cutters that his plan cuts spending deeply, while convincing critics of his budget cuts that they aren’t really “cuts” at all.

Second, the latter argument — that a cut isn’t really a “cut” — makes little sense.  For many programs, it costs more to provide the same services for its beneficiaries from year to year, because of inflation.  In addition, the population is aging and, thus, more people qualify for programs for elderly Americans each year.  For these reasons, the cost of providing the same level of benefits and services to people who qualify rises for various programs from year to year in nominal dollars — that is, in dollars not adjusted for inflation, population growth, or the population’s aging.

A budget allocation that doesn’t cover cost increases due to these factors means either that eligible recipients will see their services or benefits cut, or that some people who would otherwise qualify for those services or benefits are turned away.

For instance, Chairman Ryan claims in the piece he inserted in the Congressional Record that his budget spends more than $3 trillion in Medicaid over the next decade, with spending rising every year starting after 2016.  But his budget would repeal the Medicaid expansions that 26 states and the District of Columbia have adopted under the Affordable Care Act, thereby returning millions of low-income people to the ranks of the uninsured.  And his budget cuts Medicaid by $732 billion on top of that, relative to what the program would otherwise cost, which translates into a 26 percent cut by 2024.  An Urban Institute analysis of a similar cut in a past Ryan budget found that it would cause 14 to 20 million additional people to lose coverage.  Just ask the millions who’d lose Medicaid and end up uninsured whether they consider that a cut.

What’s true in government is true in life.  If a worker gets a 1 percent wage increase in a year in which inflation is 5 percent, that worker has suffered a 4 percent cut in living standards.  He or she has 4 percent less to cover the costs of food, housing, health care, and other necessities. Ask that person whether he or she has suffered a cut in living standards.

We stand by our analysis.