About healthreformtrends.com

Health Reform Trends, Research and Analysis Website

This website provides analyses into assorted health care issues in the United States. With the aging U.S. population, there will be a significant increase in demand for health care services.  Under the status quo, these demands will place an extremely heavy burden not only on Federal and state governments but on citizens as health care costs continue to rise faster than inflation, wages, salaries, and benefits.

In 2011 there was an increased interest in 2011 on funding issues. In response, the site adds analyses dealing with wealth and income that may provide potential funding sources, not just for health care but to reduce deficits that have grown sharply during the “great” recession. Analyses focusing on income and wealth issues are now noted separately on the “Research-Analysis” tab on this website.

The analyses on this site rely primarily on data provided by non-partisan government agencies, long-established research institutions, and enterprises whose business is to analyze aspects of health care, be it health insurance or hospitals or health care providers.

For more information about this site click on “About” tab.

For information about 8 ways to navigate to articles on this site click on the “Help” tab.

To read the full text of any article, CLICK ON THE TITLE.

A Single Amendment Makes ACA Affordable and Sustainable

Download PDF Report >>> ACA amendment

This report is superceded by a newer report found at: https://healthreformtrends.com/2017/09/04/exchange-fix-stabilizes-and-restores-affordable-to-affordable-care-act/

The newer report builds upon an interactive ACA Exchange simulator that tracks costs in detail across the population, then “runs” those costs through standard health claims processing. Also included are derivation of premiums and subsidies for low income Exchange members.

SUMMARY

Senator Rubio blocked funding of ACA’s “reinsurance”, a key factor in its current crisis. Just one amendment, adding reinsurance back into ACA would do far more than any other to restore ACA to affordability and sustainability.

It greatly reduces insurers’ risk, leading to billions of dollars in lower insurance costs. Those reductions would in turn reduce (also by billions of dollars) premium and co-pay support that ACA provides to the 85% of people who buy insurance on exchanges.

The net result is to shift billions of costs from people to government, in effect bypassing insurers who have been adding 15 to 20% overhead to all the dollars they now handle. The combined savings will provide the bulk of funds needed to cover reinsurance costs.

Ironically, Republicans now support high-risk pools, a less efficient form of reinsurance.

REPORT

Healthcare costs are extremely skewed with just 1% incurring some 20% of all health costs, and 5% consuming about half. To spread all insurance costs over all members results in less than enthusiastic “return on investment” for most, especially younger and healthier people. Something needs fixing but what. To begin, let us go back to the days before ACA.

Then, health insurers could reject people with pre-existing conditions. This forced millions not only to pay the costs for these conditions but also for all medical attention including ordinary care. ACA prohibiting pre-existing exclusions shifted many billions of dollars of costs to health insurers.

Second, health insurers capped the amount they would pay out in any year or over a lifetime. ACA prohibiting any limits shifted many more billions of dollars to health insurers.

With these huge shifts in costs to insurers, nearly everyone would have to participate in an insurance program in order for insurers to have any hope of financial survival. ACA recognized the need for full participation and included the “dreaded” individual mandate. Note that President Nixon proposed a healthcare reform in the 1970’s that also included an individual mandate and for exactly the same reason.

However, even with full participation, the cost shift to insurers was so great that they would have no choice but to raise premiums and deductibles. ACA also recognized this new imbalance, and added a “Risk Corridor” provision that would provide rebates to insurers who suffered extraordinary losses. The fallacy of this thinking was that after 3 years, the market would stabilize and be self-funding by insurers who had healthier enrollees and who enjoyed extraordinary gains.

In ACA’s first two full years, 2014 and 2015, reimbursable insurers’ losses exceeded $8 billion, but only several hundred million were reimbursed. Senator Rubio had slipped into a spending law a provision claiming to save taxpayers from an “insurance industry bailout.” The chaos from blocked funds was entirely predictable. ACA’s initial concerns became a self-fulfilling prophecy with insurers pulling out of areas with the highest loses and boosting premiums and deductibles in areas where they stayed. Of course, this cannot be sustained.

After years of 60+ failed votes to “repeal and replace” ACA, Republicans went to work with their own plan. One of the key elements in their solution was to fund high-risk pools for people with high medical costs. In effect, by removing high cost people from the general population, costs for the remainder would drop substantially, similar to what existed prior to ACA. Their proposal effectively shifts billions from insurers to the government that would fund these high-risk pools. Ironically, this is 180̊ contradictory to Senator Rubio’s effort to save taxpayers from an “insurance industry bailout.”

However, there is a subtle difference between the ACA and Republican solutions.  With segregated pools, members are either in or out, attaching a stigma to those IN the high-risk pools. It also removes medical confidentiality with regard to members. Finally, if the past is any guide, state run high-risk pools are also prone to manipulation and funding reductions.

On the other hand, ACA reinsurance will allow all members to join in the community pool, and only when an individual’s costs exceed some threshold, reinsurance kicks in and covers those excess costs. This “ceiling” is not a new concept. It is exactly what insurers did when they set annual coverage limits before ACA. Government would assume all payments above some limit. If that limit was still too high for some health insurers, existing private reinsurers could step in to reduce health insurer’s risk. Reinsurers already sell policies to self-insured companies that want to lower their risk.

Reinsurance also offers other advantages. Primary insurers cover everyone’s routine medical costs. Members deal with one insurer for all their healthcare needs. Further, reinsurance requires minimal infrastructure change to process high cost claims. Former insurer “ceilings” simply become thresholds where, instead of denying members’ excess claims, insurers simply forward them to the government for payment.

As noted above, healthcare costs are extremely skewed at the high end. Shifting huge costs from insurers to government lowers insurer’s costs to that near pre ACA. With ACA caps on insurer’s profits, insurers will have to lower premiums and deductibles by billions of dollars. Not only will reductions reflect claims cost transfer to government, but also 15%- 20% overhead that insurers now add to those billions of dollars.

Finally, when premiums and deductibles are lowered, so will premium supports and co-pay help of which some 85% of enrollees receive. With net enrollee payments unchanged, all reductions in insurers’ costs reduce enrollee support costs. Overall, net federal spending increases should be modest.

The solution? Since ACA’s Risk Corridor” has “expired”, all one needs to do is replace it with [a] “Excess of Loss Treaty Reinsurance”, [b] with permanent government financing, and [c] with thresholds adjustable for inflation. One Amendment would have a multi-billion dollar favorable impact on ACA.

Download PDF Report >>> ACA amendment

Senate Filibusters Reveal Deliberate Obstruction

Download PDF Report >>> Senate Filibusters Reveal Deliberate Obstruction

SUMMARY

Americans are holding Congress in low esteem because there is little getting done to solve the nation’s problems. Neither party is blameless. Americans want results, but that requires both parties to govern. One cause analyzed here is the recent dramatic increase in use of the filibuster which has reached extraordinary levels. The source of all graphs is one table from U.S. Senate Archives: Senate Action on Cloture Motions

As much as this huge increase in filibusters stands out, even more striking has been their success or failure. For 93 years, the majority of cloture motions to end filibusters failed. In the 2013-2014 session however, 74% of all filibusters were overridden by super majorities of the Senate.

This is not the majority trampling on the wishes of a large minority, but a small minority trying to impose their wishes on a super majority. Clearly, this was not the intent when the Senate set filibuster rules. Rather, this is simply obstruction by a small group abrogating their responsibility to govern.

DISCUSSION

When the founding fathers created the constitution, they put no restrictions on the senate as to debates. Having no limits was one way to restrain a bare majority from ignoring a large minority. Filibusters offered a protection. While there were some lengthy debates in the 19th century, it was during World War I when filibusters got a bit out of hand as some tried to limit U.S. involvement in the war. But so little else got done that President Wilson urged some limits on debate.

“In 1917, senators adopted a rule (Rule 22) … that allowed the Senate to end a debate with a two-thirds majority vote, a device known as “cloture.” The new Senate rule was first put to the test in 1919, when the Senate invoked cloture to end a filibuster against the Treaty of Versailles.”  In the next 42 years cloture was invoked just 4 times.

The Senate posts its cloture data back to its origin in 1919. First, it is noted that only one senator is needed to start a filibuster. Senate archives track three items: [1] cloture motions filed by at least 16 senators to end a filibuster or debate. Motions are not a vote on the legislation itself, but simply a vote to limit further debate on legislation; [2] votes on cloture that for years this required 2/3 or 67% of all senators, later reduced to 3/5 or 60%; [3] cloture invoked whereby this super majority of senators vote to limit debate to 30 more hours thus ending the filibuster.

The current senate filibuster rule began 95 years ago, and through 2014. 1,624 motions have been filed to end debate. But its use has not been uniform. In its first 50 years, only 49 cloture motions were filed. Prior to 1971, senate filibusters were rarely used with cloture motions averaging about one per year. Rarity was no longer the case from 1971 through 2014 as shown in Graph 1 below. For 36 years, cloture motions trended upwards. However, in the last 8 years, they first jumped to over 100 and then in the last session, rose past 250. In short, the use of filibusters in the last two years was unprecedented in senate history.

motions1

    Graph 1                                                    

An obvious question is what is behind this fairly drastic increase in the use of filibuster. This analysis explores multiple aspects to identify root causes.

The first aspect explored was whether the parties of the President and Senate could explain the use of filibusters. Graph 2 above modifies Graph 1 by color coding the party of the President and Senate for each session. The solid blue bars represent both a Democratic President and Senate. The red blue bars represent both a Republican President and Senate. The green and gold bars represent a mix with the President’s party having a minority in the senate.

motionsparty

    Graph 2                                                     

For all but the last bar, both parties engaged in filibusters to restrain senate legislation. Save for the last session, it is fair to say that both parties used the filibuster to require the majority to consider the minority. Motions were filed, votes were taken, and filibusters were or were not sustained.

This graph shows that both parties increasingly relied on filibusters. In 2007-08, the senate majority changed from the party of the President and it was Democrats who were behind the doubling of cloture motions. In 2013-14, motions doubled again, but something else occurred as shown in Graph 3.

Graph 3 is the same as Graph 1 showing motions filed, but adds yellow bars for the filibusters overridden. For all but the last session, attempts to end filibusters failed over half the time which means they achieved their purpose of enabling minority senators to apply some brakes on the majority.

overridden

    Graph 3                                                    

However, the same cannot be said for the 2013-2014 session where attempts to end filibusters succeeded 74% of the time rather than failing over half the time. This is not the majority trampling on the wishes of a large minority, but a small minority trying to impose their wishes on a super majority. Clearly, this was not the intent when the Senate set filibuster rules. Rather, this is simply obstruction by a small group abrogating their responsibility to govern.

It also demonstrates that blame for recent senate gridlock is not evenly divided between the two political parties. Rather, the evidence clearly places responsibility on a small group of Republicans sometimes associated with the Tea Party. To be clear, this is not to blame Republicans in general, but only a few disruptive Senators and only in the last session.

Another aspect is to view filibusters by President, regardless of the party of the senate. The next Graph 4 shows motions filed per year for Presidents Kennedy through Obama.

motionsyear

   Graph 4                                                     

In this graph there was less than one cloture motion/year (28 in 42 years) to end filibusters from inception up to President Kennedy in 1961. Motions almost doubled under Presidents’ Reagan & Bush 39, then nearly doubled again under Presidents’ Clinton & Bush 41. Finally, under President Obama, motions doubled yet a third time to over 80 per year and more than four times versus President Reagan. Filing   motions to invoke cloture sometimes ends the filibuster.

Failing withdrawal, the Senate then votes on the cloture motion. Graph 5 below shows a fairly flat trend in percent of motions that went to a vote.

Taking votes on cloture has had little effect on filibuster usage. As suggested in Graph 3 above, the same cannot be said for percent success in ending filibusters.

votedon

   Graph 5                                                     

Graph 6 below shows the percent of filibusters defeated by president. For both President Bush 41 and Obama, percents are heavily affected by their two latest years in office. But only in Obama’s presidency is the overall average of filibuster defeats approaching a super majority. Clearly, many minority senators are voting with the majority to at least end debate and allow a vote on the actual legislation. And voting yea or nay is the responsibility of governing.

pctdefeated

   Graph 6                                                     

Yet another view of filibusters is to compare the first six years of Presidents Nixon, Reagan, Clinton, Bush 41 and Obama, the last five presidents who had a second term. In Graph 7 below, the red bar is the number of motions filed. The blue bar is the number of cloture votes which alone suggests strong opposition to the filibuster. Finally, the green bar is the number of filibusters overridden, with 2013-2014 Senate having more overrides than all four previous presidents.

The key takeaway of this graph is that both Democratic Presidents had filibusters more than double over the same period of the Republican presidents before them. Again, this exhibits a greater reliance by Republicans to use filibusters to restrain the incumbent President.

presfilibuster6yr

    Graph 7                                                   

CONCLUSION

Americans are holding Congress in low esteem because there is little getting done to solve the nation’s problems. Neither party is blameless. Americans want achievement, but that requires both parties to govern. Each party blames the other for the gridlock, but is blame really equal? This analysis shows that with regard to filibusters, recent blame falls more heavily on a small group of Republican senators.

Once a rarely used tool, the Senate’s increased use of the filibuster not only has reached extraordinary levels but differs significantly from history. The current senate filibuster rule began 95 years ago, and through 2014, 1,624 motions have been filed to end debate. But its use has not been uniform.

In its first 50 years, only 49 cloture motions were filed. In the 24 years from President Nixon through Bush39, 427 motions (18 per year) were filed. In the 8 years from President Clinton through Bush41, motions increased to 643 (40 per year). Finally in 6 years of President Obama, 505 motions were filed (84+ per year).

As much as this huge increase in filibusters stands out, even more striking was their success or failure. For 93 years, the majority of cloture motions to end filibusters failed. In the 2013-2014 session however, 74% of all filibusters were overridden by super majorities of the Senate.

This is not the majority trampling on the wishes of a large minority, but a small minority trying to impose their wishes on a super majority. Clearly, this was not the intent when the Senate set filibuster rules. Rather, this is simply obstruction by a small group abrogating their responsibility to govern.

Still another apparent trend is for Republicans to sharply increase use of the filibuster when the presidency changes from Republican to Democratic. While not conducive to results, it is a method Republicans have felt very free to use.

Download PDF Report >>> Senate Filibusters Reveal Deliberate Obstruction

SOURCE REFERENCES

Filibuster and Cloture

Institutional Development

Senate Action on Cloture Motions

 

MORE GRAPHS AND SOURCE DATA

motionbypres

votesbypres

overridebypres

senatearchive

While most senate filibusters are initiated by the minority party, the most controversial filibusters were initiated by senators in the majority, not minority party. “During the 1930s, Senator Huey P. Long effectively used the filibuster against bills that he thought favored the rich over the poor. The Louisiana senator frustrated his colleagues while entertaining spectators with his recitations of Shakespeare and his reading of recipes for “pot-likkers.” Long once held the Senate floor for 15 hours. The record for the longest individual speech goes to South Carolina’s J. Strom Thurmond who filibustered for 24 hours and 18 minutes against the Civil Rights Act of 1957.”

 

Senate Gridlock – the Filibuster Factor 2012

Download PDF Report >>> Filibuster Trends 2012

SUMMARY

For decades, filibusters served Congress well as a method for the minority to put some checks on the majority. But the nation’s founders never envisioned this turn of events. The constitution requires the VP to break Senate vote ties clearly indicating that 51 % is a majority. Republicans recent reliance on the filibuster has effectively raised the votes needed to pass to 60%, a super majority. Using the filibuster to wrestle power back is not a recipe to reduce people’s frustration with gridlock.

ANALYSIS

This is a mid 2012 post updating earlier posts that record actual data through summer 2012. Americans of all political persuasions are more and more frustrated with the gridlock that has almost brought Washington to a standstill. This analysis focuses only on the Senate and the filibuster.

The Senate posts filibuster data back to 1919. Records track three items.

  • First, cloture motions to end debate which occur when a minority of senators threaten or actually filibuster. That sometimes ends the filibuster.
  • Second, once a motion has passed, there is a cloture vote.
  • Third is recording the cloture vote. If the vote succeeds, cloture is invoked and the filibuster is overridden.

When a filibuster is overridden, then the Senate still has to vote on the actual bill. But then, only a simple majority or 51% is required for the legislation to pass.

cloture motions

Republicans’ use of filibuster has reached unprecedented levels with no signs of abating. But it was not always so. In the graph above, only 56 cloture motions were filed over 52 years from 1919 through 1970. At just over one per year, filibusters were rarely used. 420 cloture motions were filed over the next 22 years, from 1971 to 1992, a sharp increase to 19 per year.

1993-1994 saw Republicans’ “Contract with America” that escalated partisanship to higher levels. From 1993-2006, motions nearly doubled to 36 per year. Cloture motions took an even more dramatic upturn in 2007 when Republicans lost control of the Senate. Cloture motions again jumped sharply through mid 2012 to average nearly 70 per year. Clearly, filibuster has become the weapon of choice for Senate Republicans.

Republicans accuse Democrats of filibustering, and there is some truth to that. But as the graphs show, Republicans (red bars) initiated each spike and have now taken filibustering to an absurd new level. Virtually every major piece of legislation now runs the filibuster gamut. Motions to end filibusters is only the first part. The senate then needs to vote and this occurs about 75% of the time. Of those times when no vote is taken, either a compromise is reached or the bill is withdrawn.  The graph below shows the trend in cloture votes taken.

cloture votes

Americans hold Congress in low esteem because of gridlock. Americans want achievement, but that requires both parties to compromise. Neither party is blameless but neither is the blame 50/50. The frequency of filibuster and threats of it does not reflect well on Republicans’ acting in good faith.

Credit Republicans with discipline. They threaten any of their own party who don’t tow the party line and vote out of office those who compromise, not in the general election but in the Republican primaries. While that increases the effect of their filibuster threats, it is essentially a negative strategy. They’re short on their own ideas. They’re adamant about their own ideas while they just say “NO” to all Democratic ideas.

cloture invoked

As the above graph shows, those filibustering do not always get their way. Since 1960, filibusters have been overridden less than 45% of the time. However, in the past 5 ½ years with Republicans filibustering, overriding those filibusters has succeeded almost 60% of the time.

For decades, filibusters served Congress well as a method for the minority to put some checks on the majority. But the nation’s founders never envisioned this turn of events. The constitution requires the VP to break Senate vote ties clearly indicating that 51 % is a majority. Republicans lost majority through the ballot. Their reliance on filibuster has effectively raised the votes needed to pass to 60%, a super majority. It’s ironic that Republicans should blame Senate Democrats for not passing legislation, even though Democrats are in a majority. Using the filibuster to wrestle power back is not a recipe to reduce people’s frustration with gridlock.

Download PDF Report >>> Filibuster Trends 2012

Source Document shown below: http://www.senate.gov/pagelayout/reference/cloture_motions/clotureCounts.htm

filibuster history

Income Disparity and Sources of Income

Download PDF Report >>> Income Distribution

SUMMARY

Regardless of how one views the Occupy Wall Street (OWS) movement and “We are the 99 percent”, it has succeeded in raising awareness about wealth distribution. Also in October, 2011, the Congressional Budget Office (CBO) published an analysis of household incomes addressing that subject.

 CBO first grouped households by quintiles (1/5 in each) and clearly the top fifth have done far better than the bottom fifth. CBO then divided the top 20% (fifth) into 10%, 5%, 4%, and the highest 1% of households. The income disparity was even more striking with the highest 1% far greater than the others. 

This analysis further drills down within this top 1% and finds income disparity wider yet, and vastly greater than all other group comparisons. Pre-tax income for the top 1/100 of 1%, (or 12,000 households) totaled some $450 billion, greater than the combined pre-tax income of the 24 million lowest income households. To rephrase, income of just one of these richest households is more than 2,000 lowest income households. Continue reading

Worsening Inequality of Wealth and Incomes

SUMMARY

In October 2011, the Congressional Budget Office (CBO) released an analysis at the request of the Senate Committee on Finance. The analysis documents changes in household income distribution from 1979 to 2007. That analysis titled “Trends in the Distribution of Household Income notes that the share of average after-tax income for the top 20% gained, while the lower 80% declined seen in Summary Figure 2.

Further, within the top 20%, the share of after-tax income of the top 1% grew from less than 18% to over 30% of the top 20% income bracket. While actual incomes for all quintiles increased, only the share of total after-tax income of the top 1% increased. The 81-99% remained essentially flat while the lower 80% of all households declined over 28 years.   Continue reading

Senate Gridlock – the Filibuster Factor – Update

This Analysis has been replaced with a new version: Senate Filibusters Reveal Deliberate Obstruction