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more vote. that will be the last time jn giggled votes in this house after 59 years. a great service of our country. [applause] >> c-span call powered by cable. ♪♪ >> next from a discussion on medicaid and medicare reform event surviving american enterprise institute academics and policy advocates discussed several topics including the difference between healthcare benefits and contributions to help savings accounts, concerns and quality of healthcare provider under medicare and medicaid. this is about 90 minutes.

i am tom miller the health policy at aei and policies color. and the health policy scholar so you're talking about today medicaid and medicare coverage lower healthcare costs and improve its quality. so this is a version of let's make a deal. and with the health policy but the let's make a deal concept that the early canadian-american and pioneers but we are combining let's make a deal

let's make a really new deal and it's a different approach to the entitlements and projects. we had a lineup of wacky customs and discussions today and then you are chosen for the show so the idea is and then to the choice to upgrade your door 2 or 3. the idea you could take a risk

and come out better than that we are talking about with today's program and takes a few more risks with what you do if you could do better now the problem is if you did bad iwas a song. so with today's program i will introduce in just a moment. with a provocative papers and 1 of the most frequently published. and then to push the envelope. and then moving toward another

policies so what we have you don't have to read through but i am obligated 1 is called leveraging the medicaid expansion. and with the affordable high quality health care. and with that same title and asset we are trying to do. and then to leverage them. also going on boo called approach talk about the band of highly skilled operatives so

they tried to settle the score with corporate evildoers and with and leveraging with the medicare financial disaster but what could they do differently about medicare? and talk about the financial insecurity of the lack of healthcare coverage this is the building blocks but at the core of what is being proposed today this is a concept going back decades ago in economics with the inflationary environment but

you are the customer to have more leverage and control cash transactions and more transparent and also the quality produced and with the educated consumer. that is a stried-dow vlue and then ultimately they have to close up shop in with the other retail sectors. so to think of with the welfare

program that is pretty much with the healthcare system but this puts it into the system so they are not as hungry to cut back on their appetite. so with the overall value so he produces a lot of work and scholar at a he i and more of a full-time job among any -- -- among many others at georgetown university law center and published a number of books

before but overcharged a few years ago talk about to some extent. and then when he was special counsel. and trying to put a normal brain into the system. like a frankenstein moment. and that this could work explaining how this could work. >> thank you all for coming.

and i think i can match this is a paper with charlie silver from the university of texas and the title i gave him harkens back these articles started as 1 and thinking about the problem of how we might make medicaid expansion more appealing if that had not opted in by crafting a program differently and then subsequently and realized they promised for a medicare reform then traditionally was the case

so we have these 2 articles with footnotes share them with anybody in the audience who is interested and then to lower the expectations this is to grade a long time policy analyst working in washington on the side of the divide over a prior article in 2007 but surprisingly readable paper for professor of law. the law professors were right accordingly you may want to

lower your expectations about this idea the history of health reform and with those ideas sometimes they get deployed or ignored this is actually the graphic aei sent out but you did not choose it. it's a very important issue with lots of government policies. and where the aspects of the current healthcare system.

and with the c- grade with the performance of the system that's not to say and it is truly exceptional with most of the career spent studying the healthcare system i got to see it on the other side is a trauma patient and is pretty exceptional let's not talk about the building that followed but nonetheless you should not assume that are not hiccups or problems or difficulties we have not thought about. unintended consequences. by way of analogy there is a movie a couple years ago called particle fever and there's a wonderful quote from a theoretical physicist jumping from failure to failure there is

a lot of that in health policy as well. and then to focus on the things that have gone wrong but there is no shortage of things the big 3 issues of health policy i used to tell my students they could be a health policy analyst as we but i stopped doing that because they did not like that but nonetheless it is a useful framework and the cost and benefits of any proposed reform of what i will be talking about today or whatever the latest thing is whatever that policy shop is. the american healthcare system

it doesn't matter where you look. thre topic and the only thing that changes is how long it would be. it goes up or down and then we see the cherry blossoms they go away but we don't do much of anything unless the de fund and then we see some tweaks but as pointed out to spend money on other things. the bigger problem it was the

fundamental fiscal imbalance more than any possible tax revenue. with the promises that we made. but is not nearly as accessible the trust fund was going bankrupt with the huge liability. and from this from the "washington post" and at every stage to say the data shows that you will be okay during the segment but it cannot go on indefinitely than there is a

reckoning. the only question when and if we will be around for it. this medicare is -- -- has real challenges like overcharge the unfortunate reality is a air to create systematic incentives it is a massive payer of bills they might argue about the price not price negotiator but now 20 years old there is evidence the more medicare spends less the

quality of the care that is delivered is not typically the way we think markets ought to be working and efficiency is the trump card not intended for why we should do medicare for all basically has a 1 or 2 percent overhead favorably to the private insurance market the difficulty is to explain this the formula by which efficiency is fundamentally flawed. and the difficulty the more money you waste and the right way to do the calculation and

subtract to the numerator from the denominator if you do it that way i will not bore you with the math but staggeringly high numbers and then to be significantly higher. the true cost of delivering high-quality care so the pitcher it is a more efficient program and for the private insurers and you shouldn't assume it is uniquely efficient so to talk about medicaid the project

started thinking about the problems the 10 states that decided not to expand medicaid in response with the affordable care act that it was coercive and gave states the option pretty much immediately half of the states opted in and this is year-by-year and with the medicaid expansion's for everybody is on the same page prior to the affordable care act including the series of core populations every state had. and there are huge variations state to state to broaden the populations that would be covered raising the income

limits and practical significance of that and that they suddenly qualify for medicaid. and those that result in access problems. half of the states opted and immediately and starting in 2016 and then for expansion for those days that opted in those that have not done so in the far right column and those that

chose to opt in that year but the more significant point i want to highlight they are not small states but with the sizable population and the results is we started this project if they could be persuaded to opt in and that 1 generally things that health policy with those empirical studies that should make you cautious about drawing a conclusion in any event the geography for the holdout state you can see right here but in the health policy circles but

they are racist because they are part of the confederacy some things that complicate that those that were never part of the confederacy some more. and there are other factors to consider like the fiscal challenges of the individual states are facing. that makes them reluctant to sign on to heavily subsidize■ ad opting into the traditional medicaid program. and what was alluded to earlier

the idea behind this is let's think about ways we can revise the offer other than do it our way and we will subsidize sometimes 90 percent depending on the budgetary dynamics but the core idea is rather than saying do what our way the proposal for medicaid offer the state something that would be more appealing to address the fiscal challenges in the idea essentially moving from the defined benefit approach where the state could set the amount

of money they wish to spend in the federal governmentld match that and it's the funding side of that it's the production healthcare side rather than waiting for bills and checks with the artificially low rates instead we would find hsa or thd beneficiaries by buying catastrophic coverage and spending on the social determinants of health so that is consistent with first of all how we handle social security and the child tax credit and those accounts in the private market the core idea is to give medicare and medicaid beneficiaries money instead of paying the providers we ship

that money into hsa with a direct purchasing market and direct purchasing creates huge incentives for providers so the broad losses and it will take more time and keep spending our own money and spending on things that they value. and then for the state government to provide housing and then food stamps and

vouchers and then they should spend it as they see fit and the medicaid version this is something similar direct purchasing with physical therapist and hospitals but not anything else. that has been the traditional approach but what we are seeing in the healthcare financing system over time with medicaid has been an expansion of the 1115 waiver is to allow the state start spending money on the social determinants of health for medicaid though so this is no different it just cuts out the middleman leading the beneficiary make their own decisions a lot of the things

that drive people crazy about the current system are no longer necessary so t setting those challenges are well known for its too high you overpay if it's too high you don't have access there isn't much need for prior approval requirements theative headaches because they deal direct with their customers or the federal or state government will have to have up front pricing in the traditional contract principles people are bound by what they are offering

with price transparency peter has done a lot of work and we would be happy to wax poetic about the challenges becomes much more automatic we don't mandate price transparency from the retail market but apart from that it results because the buyers are trying to sell things that was in the interest congress finally gets control of the budget for medicare medicaid in the state legislatures have control to set the maximum amount rather than being on autopilot. they actually benefit from the lower prices on prior slide

basically builds on development with the child with a dramatic move over the last several decades and toward the defined contribution. with trillion dollars in medicare and we are getting there. but there is no shortage but they try to get more than they are entitled to their ascent lack of precedent in this could

be in line with social security and then to figure out how much for beneficiary into the savings account and to what extent and reasonable people can disagree about the right formula it is clear and a major source of concern if you give them money they will use it and ways for those that are risk averse will not like and they spend it with unnecessary services spent on social determinants of health

and we need to think hard about what we should do and how we handle that i'm happy to talk about it with q&a this is not everything will work out fine we have to be tough-minded the way it is susceptible. the immediate response of providers is to highlight the way they come out the losers but that's an indication not doing a very good job is because they do the federal or state but in fairness we need to think about do we subsidize and the community health centers and the rural locations all of these i'm sure you will hear about

thinking with never heard about this and it will be a disaster. we have thought about that but this is a better strategy and we should make adjustments rather than using the medicare or medicaid program. >> aid to patients with dependent providers. >> the last point i want to leave you with, this will not be perfect no human institution is and 1 is the 3 little pigs want to privatize health care. and to say let's compromise and that is the nobody has the

outcome they want with that proposal we are making but how it compares the highly reality we find ourselves in but with a quote from the article shortly after the affordable care act was implemented with the distortion and consequences were being realized by those who thought it was grand idea. of course we want people to have healthcare just didn't realize i would pay for it. some of them they have to pay for personally. and the sooner we decide how much we want to spend on the the

better off we will be. i think i am well within my time so i reserve my time. >> and the customers that you could give cash which is just as good as money currently senior policy fellow and a lot of work to interact with national policy as well and has a background and what do they try to do what can't they do? additional backgroundd' as a senior advisor to the administrator of cfs to work

with all sorts of proposals when insurance regulation changes were the concepts are more innovative but there could be other opportunities there first how to change around those individual markets and now peter nelson. >> thank you so much. >> i don't really practice law. in the previous administration i got out of the hotel showing with my uber today and that is the humphrey building where hhs is headquartered so here i am in

so i want to start by saying i have a lot of alignment in fact i have been talking about the benefits of defined contribution for years pretty much since i started go back to the first major report ever wrote so i explained in the report titled a primer how employer-based benefits and the tax code distort the healthcare market employers generally offer a health plan and theunthe healthl

consumers want and need and since i that pursuing policies to give individuals more control of the health plans that they choose that's a better way to organize the market to drive more competition i also have a lot of alignment and the need for a deal i have some experience what it might take to strike a deal because i was in the previous administration i started late 2017 and at the time they were under tremendous pressure to expand medicaid. it outlined all the spaces that came after 22 israel states that

1 of the reason i have a lot of pressure is because the states had to initiate the referendum they knew they would extend dramatic -- -- medicaid and how they expanded medicaid of course to have a huge impact on the state budgets and in particular 1 state has an issue they knew the pallet was coming so we wanted to come up with some sort of idea that is an alternative to expand medicaid that stirred up debate and in july 2018 trump spurns the proposal after the debate. i wasn't in the room during that debate and then seeing how

furious it was because usually it was a productive debate we want to expand with the federal population and those that were more conservative encouraging people and the problem with that view 90 percent match that still keep cost going out of control and so basically the white house wa■s concerned about that didn't

do that much in that regard and ultimately at the time it was damned if you do are damned if you don't position. and those that critics expand to have expanded so therefore we have very few conversations on expansion recently but that doesn't mean the issue is gone we still have the system that expanded medicaid mostly so with that in our conversations for extending medicaid for georgia and mississippi and with these

holdout states ultimately they will expand medicaid so we really do need to come up with a better approach so what if medicaid expansion has another opportunity? i think the answer is yes time is a big obstacle getting to yes with medicaid expansion needed more time these are waivers for the affordable care act to let them get out from certain other provisions. we published guidance in 2018 that allows far more flexibility however we knew we were still late in the game. by fall 2018 the legislative session had already been

organized and then it is 2020 and states would not take that on and that is as when they could finalize the approach and the medicaid situation under the same sort of timeline so assuming you have a change there is far more experience and to hit the ground running. so what does it look like critics you can see the defined contribution plan to be above 100 percent and that would be coordinated with the leader

possibly but what could that look like plan? i don't have the waivers however i expect to have some difficulty getting approved because it doesn't have the same automatic benefit structure but just let's assume that maybe congress would step in to say it is okay but with the policy issues that need to be addressed if we go down the road the main problem with the defined contribution approach what needs addressed is the fact that the population of people who were 100 percent have higher health risk with a higher rate of chemical dependency a higher rate of mental health issues.

the first problem relates to the risk as a defined contribution of the individual of the insurance market because the defined contribution could be used for coverage and then moves into the individual market it will increase the risk profile of the individual market and the second issue these people with higher cost conditions less ability to manage their care and then basically result and could increase cost to the state and then they just delay their care more. so let's take a deeper dive and

we have some examples to think about because there were medicaid expansion efforts and then to provide coverage to the expansion population arkansas has done this and with the new hampshire approach then ending in 2018 and when they ended in 2018 they sent a letter to hhs secretary to explain why they stopped and basically said that by stopping it it will bring greater stability to the marketplace which experieed upward rate pressure due to the inclusion of those receiving medicaid services this gives a

picture of what was going on in new hampshire that enrollment popped up in . . you. >> this next slide is basically, it's a similar way to say the same story. but it uses a little different

measure, the hierarchical condition categories and it shows that when you look at the new hampshire market and i also included the arkansas market because they also were putting the medicaid population into the individual market. there is a much higher percent of people with one or more chronic conditions in those markets when you look at 2018 in both markets and you still have higher percentage in new hampshire and two plus conditions and 3 plus conditions. then 2019 in new hampshire basically drops medicaid people from their market and they're now all of a sudden below national average. the national average is the dotted line. so there's a very clear impactcs population to the individual market and it's not a impact and so when you're looking at what we think you need to do to create a defined contribution approach, you definitely need to account for that with some mechanism.

i was introduced to this issue back in 2019. and what happened is basically we create -- the state of minnesota to develop, okay, how can we do this better before. we were just a financing mechanism for hospitals but really wasn't serving the patients very well. and what we ended up with was a much better approach that actually created incentives for the local hospitals in the twin cities to take a much more managed approach to the patient and identifying patient needs on the front end versus waiting for people to go into the emergency

department. and -- and that worked immeat hmo, what they do is they are very much coordinated with federally qualified health centers, the level one trauma hospital and county social services department. they are very coordinated. they've had a lot of success in what they've been doing and i think there is a small portion all portion of people who need this approach but that is not the entire population. what new hampshire and arkansas found was when people were willing to individual market coverage, they have much better outcomes. ... to see a specialist way quicker

than if you're in medicaid. evaluation reports for those programs were very good, the trouble is that in new hampshire it really had negative impact on the individual market and they had to move on. those are the two things you need to pay close attention to with this defined contribution approach w. that, i will leave it to the next speaker. he has extensive experience focusing on medicaid congress staffer, executive branch outside scholar, working on -- you think of henry waxman has hands all over the building with

and another lawyer to talk about this from a different perspective, andy schneider. >> good morning. thank you tom, thank you for inviting me. i'm gonna be brief. i want to spend a minute explaining to you that the sub patrolling in families where i work is nonpartisan policy and research center. i'm sorry.

you are talking to somebody who's colorblind. at the research center our mission is to make sure that children and their families have affordable healthcare coverage. making sure low come families are eligible for medicaid or chip, but they are enrolled and the programs work. you can see where this is going, i'm sure find benefit by, we have an issue here. i do like the paper and to talk

to the medicaid expansion issue is that it recognizes there is have these 10 holdouts states that in helping out for a while and leaving a lot of people dangling in the wind uninsured. so we do need to account for that i appreciate the commentators to figure out ways to improve the situation. i don't think the proposed solution is gonna work but i will use tom's metaphor i think were gonna end up with a zonk if we go down this road. first of all, the population low income adults.

by low income we are talking about under $21,000 a year in income. six particularly in these 10 states where the parents with depeent children the median eligibility levels for paid are below half a poverty level under so as peter mentioned there are higher rates of mental health problems and mental health conditions and substance use disorder among the population. of course a lot of them haven't been uninsured for a long time have higher unmet needs for healthcare and higher risk

utilization. i think i would start with the table that the use of decline in the states from 2015 to 2023 and we are moving down from anyone states to 10 remaining states. one of the drivers there as was alluded to hear is the notion that the ballot initiative where people decide to go to the ballot and vote whether they want healthcare coverage or not. it turns out that a number of the states, seven in fact that have gone into medicaid expansion idaho, maine, missouri, nebraska, oklahoma, south dakota, utah. all of those states the ballot initiatives picture of the divine benefit of writing he

got if your defined-benefit person the notion that the government will pay 49% for your retired population other than ■;expansion. is a very good deal. in north carolina think you cou people could see that it's made

a difference. or a 5% going away nothing is going way. none of the states ptthat have adopted expansion and injected it i walked away from it i know in the paper there is reasonable concern about low tax states wanting to stay low tax. you would think low tax x state to take this up because the federal government is paying 90% of the cost there is still some residual liability for you to stop as state policymaker. so if you look at lowest 10 states with the lowest tax

purview which the papers authors were introducing to this particular rating. this is total tax burden. six of them new hampshire, delaware, south dakota north dakota omaha and nevada. you have to ask the question i'm not an expert in state finance how bad is this deal. for low tax states. and effort in a still reduce the number of uninsured in the state. it's just a ntquestion.

so, as you can guess, i'm an incrementalist about this. i think it's worth looking at the proposal on the table. had questions about it and then i will stop. there is a reference in the proposal the overall cap on spending. i didn't know how to read that i hope it comes out a discussion. were fetalking about federal ca on federal contributions in the matching form to state spending on this population and the states, i think that raises concerns for some of us who like the current structure of the program understanding it can be approved a lot of things wrong with it.

what is the overall cap. for the states looking to market the proposal understand there would be an overall cap on federal spending stop and if there is, what are the implications for that. ultimately we are talking about the risk of healthcare inflation. and the others in the paper have a great deal of respect for the ability of the market to detain healthcare inflation as long as consumers can make their own choices. i don't know. i don't know about that. so somebody with sickle cell with an hsa needs to 2.1 million or 3.2 million treatments available.

it's not clear to me putting the dollars into the hands of individuals in these 10 states assuming the states take it up. resulting in better prices from a lot of these stitutions or providers or manufacturers. the other thing unclear, there is no additional things i'd share them with the other thing is that i will leave you with is going back to the question of how do we get this proposal