Soaring premiums send thousands in Maine over a health care cliff

Insurance costs have grown by as much as 110 percent for those who earn too much to receive Affordable Care Act subsidies.

Escalating premiums and deductibles have driven about 10,000 Mainers over a health care “cliff,” where they can barely afford coverage thanks to a vulnerability in the Affordable Care Act exploited by the actions of the Trump administration.

Depending on the plan chosen, premiums have increased by about 70 percent or more since 2014 for people who earn too much to qualify for subsidies for the federal health care program. By contrast, ACA enrollees with subsidies have been mostly shielded from rate increases. The lack of a cap on premium increases, or other cost controls, for ACA enrollees who earn more than 400 percent of the federal poverty limit leaves them unprotected, making the “affordable” part of the program for some impossible.

Those cost hikes have accelerated since President Trump took office, and ratepayers are expected to be pummeled with giant rate increases again in 2019. Rates haven’t yet been filed with the Maine Bureau of Insurance, but will be by May.

“The cliff is real,” said Erik Wengle, a research analyst with the Urban Institute, a Washington-based think tank. “These plans have gotten quite expensive, and as they’ve gotten more expensive, we’re seeing people getting priced out.”

People earning more than 400 percent of the federal poverty limit – about $81,000 for a family of three, $65,000 for a two-person family or $48,000 for a single person – are not eligible for subsidies in the ACA marketplace.

“These are people firmly in the middle class,” Wengle said.

COSTS VARY COUNTY BY COUNTY
This subset – consistently about 10 to15 percent of the 75,000 Mainers who have ACA marketplace insurance – have seen their premiums soar. A 40-year-old single nonsmoker in Cumberland County who earns $50,000 per year has seen premiums for a silver plan increase from $284 per month in 2014 – the first year the ACA marketplace was in effect – to $489 in 2018, a 72 percent increase. If that same person lived in Aroostook County, he or she would have seen premiums increase from $376 per month to $790 per month, a 110 percent hike, according to an Urban Institute analysis.

Meanwhile, those who qualify for the subsidies are mostly protected from premium increases, because the subsidies go up roughly the same amount that premiums increase. For example, some silver plans in 2018 cost about $300 to $350 for those just under 400 percent of the poverty level, while bronze plans can be purchased for about $75 to $150, depending on where in Maine you live.
For those who don’t qualify for subsidies, they shoulder the entire burden of the increases.

Eric Cioppa, Maine Bureau of Insurance superintendent, said the state intends to start a reinsurance program for 2019 that will help keep insurance premiums in check, but affording insurance will still be difficult, especially for those who make more than 400 percent of poverty level.

“It’s literally becoming unaffordable if you’re over 400 percent,” Cioppa said.

The ACA categorizes its plans as bronze, silver or gold, with bronze having the lowest premiums but high deductibles; gold offering generous benefits, higher premiums and lower deductibles; and silver plans falling in the middle.

COUPLE ADVISED TO EARN LESS
For the Rices of Durham and the Williamses in Stonington, both empty-nester families that earn more than 400 percent of the poverty limit, going over the affordability cliff means sky-high deductibles and premiums.

“I have to bite my tongue when people complain about a $20 premium increase. I feel like saying, ‘Are you kidding me? Let me show you what I pay,’ ” said Jane Rice, a financial adviser who owns a Christmas tree farm with her husband, David, 60.

Rice, 57, said her husband has previously had prostate cancer and currently is being treated for esophageal cancer, and they expect to hit the out-of-pocket maximum, which this year is about $25,000, including premiums and deductibles.

Their total premiums are $1,500 per month with an $11,000 deductible.

Both are self-employed small-business owners who don’t have access to employer-based insurance – one of the key categories of people the ACA was designed to help. And for business owners who make less than 400 percent of the poverty level, it has kept insurance relatively affordable. But those who earn more have increasingly had to pay more.

Rice said she’s been told a few times that they “need to make less money.” The cliff effect creates a reverse incentive, because health care costs increase dramatically once enrollees earn slightly more than 400 percent of the poverty level.

“I reject that. I want to be successful and for our businesses to be successful,” Rice said.
She declined to list their family income, but she said the only way they’ve been able to afford insurance is by being frugal.

“We live within our means and we are hard-working people,” Rice said. “Sometimes it feels like we are paying the equivalent of insurance for six people, not two. It has just been ridiculous. It is just not right.”

Judy and John Williams of Stonington said they earn about $100,000 but they’ve also seen the cost of health insurance jump to nearly unaffordable levels. But as a couple nearing retirement age, they value insurance and know they need it, even though they’ve been generally healthy. As lobstermen, the couple don’t have access to employer-based insurance.

Ann Woloson of health advocacy group Consumers for Affordable Health Care says “we are creating a sicker, more expensive health insurance marketplace” when young people have little incentive to get coverage and people like John and Judy Williams, above, subsidize care for everyone else. 

John is 63 and Judy is 62, and they pay a combined premium of $1,997. Their deductible was $750 four years ago, but now it’s $5,400.

“We have to spend nearly $12,000 before the insurance kicks in,” John Williams said. “We’re very fortunate that we can pay the premiums, but it’s a lot of money.”

He said that they are looking forward to age 65 when Medicare kicks in and coverage is free, although many often purchase “gap insurance” to pay for things that insurance doesn’t cover. But he said he doesn’t mind knowing that people who earn less can get insurance for far less.

People earning up to about $27,000 in Maine can qualify for zero-premium bronze plans through the ACA, while typical premiums for people who earn about $40,000 to $45,000 are about $200 to $300 per month, depending on age and where you live. Insurers can charge up to three times more based on age, and can charge more based on address.

Williams said the disparity is unfortunate, but doesn’t change his opinion that insurance should be affordable. He said it doesn’t bother him that some at lower incomes have access to zero-premium insurance while he and Judy have expensive insurance.

“People that need insurance should be allowed to have it. Everyone should be able to afford insurance,” Williams said.

ACA FIXES HAVEN’T BEEN ENACTED
The Trump administration in 2017 ended cost-sharing reduction payments to insurance companies – payments that were designed to help lower-income people afford out-of-pocket costs such as co-pays and deductibles. Ending the cost-sharing reduction payments had no effect on lower-income people, but increased premiums for people earning more than 400 percent and skewed the market. To prevent further weakening of the ACA marketplace, state insurance commissioners, including in Maine, responded with complicated work-arounds that resulted in zero-premium bronze plans and lower-cost gold plans that were much better deals than in previous years.

The ACA, as former President Barack Obama’s signature domestic policy achievement, has been caught up in partisan politics almost since it was signed into law in March 2010. Trump campaigned against it, and has vowed to get rid of it.

Most Republicans in Congress agreed with Trump, while Democrats have stood behind it and worked with a few moderate Republicans, including Maine Sen. Susan Collins, to save the law.

In 2017, Congress attempted to repeal the ACA, but those efforts failed by one vote in the Senate, with Collins one of three senators to buck the party and vote to preserve Obamacare. But in a year-end party-line vote, Collins sided with Republicans on a tax cut package that included repealing the Affordable Care Act’s individual mandate. Collins supported the tax bill in exchange for Republican leadership promises to pass ACA stabilization measures, but those efforts collapsed last month.

Repealing the individual mandate – which requires people to purchase insurance or pay a penalty – makes it more likely that young, healthy people will not purchase insurance, driving up costs, according to health care experts.

Ann Woloson, executive director of Consumers for Affordable Health Care, an Augusta-based health advocacy group, said the cost of insurance for those making more than 400 percent of the poverty limit prices people out if they have any kind of significant debt – such as car payments, mortgages and other loans.

“It is unaffordable and unsustainable for people,” Woloson said. “We are creating a sicker, more expensive health insurance marketplace.”

One of the fixes touted by Collins – a federal plan to direct $30 billion over three years for reinsurance – would have helped keep premiums in check for people above the subsidy threshold. But it was paired with another reform – restoring the cost-sharing reduction payments – that received a mixed review in a Congressional Budget Office report released last week.

The work-arounds created by states lowered premiums for many, so unwinding those work-arounds when restoring the insurance company payments would cause many earning less than 400 percent to experience premium increases. The mixed CBO report and a fight over Obamacare abortion restrictions supported by Republicans deep-sixed the deal.

Democrats have since launched a counterplan that would, among other things, cap costs for those making more than 400 percent of poverty level to 8.5 percent of their income. With Republicans in control of Congress, it’s not likely to go anywhere, at least this year.

Woloson said the ACA is still standing and helping about 20 million Americans, through Medicaid expansion and ACA coverage. Maine voters approved Medicaid expansion in November but Republican Gov. Paul LePage is fighting Democrats in the State House over implementation costs.

‘ESSENTIAL’ BENEFITS NOT COVERED
Complicating the health care picture is a state-run reinsurance program that was put on hold when the ACA started. A LePage-era reform, it is likely to be relaunched and take effect in 2019.

The state’s reinsurance plan – called the Maine Guaranteed Access Reinsurance Association – redistributes insurance money by charging a fee of $4 per person per month on individual, small and large group plans, and funneling the revenue only to individual plans. The plan would also tap into federal money to help pay for what is estimated to be a $90 million program in 2019, according to Milliman, an insurance consultancy firm. That will help keep premiums 10 percent lower than they otherwise would be, but since rates haven’t been filed yet, Cioppa, the Maine Bureau of Insurance superintendent, said it’s unknown what the rate hikes will be for 2019.

The Trump administration is also promoting the expansion of short-term and association plans that would further undermine the ACA markets, Woloson said. Those short-term and association plans would be exempt from “essential health benefits” that all ACA plans are required to cover, such as maternity care, mental health, prescription drugs and substance use treatment. While they would carry lower premiums, Woloson said, patients would often find that many services aren’t covered, which was often the case with individual plans purchased prior to passage of the ACA. Often these plans were called “junk insurance” and if allowed to flourish would further weaken the ACA and could cause premium spikes, Woloson said.

The Trump administration has indicated that the association and short-term plans are on the way, but they are still going through federal rule-making.

Kevin Lewis, chief executive officer of Community Health Options, a nonprofit that provides ACA insurance, said what will happen with short-term and association plans is a “big looming question” of “paramount importance.”

Cioppa said Maine law currently allows for “rigorous” regulation of short-term and association plans. As long as the federal government doesn’t try to usurp state authority to regulate those plans, Cioppa said that Maine will be able to prevent them from weakening the ACA marketplace.

In addition to the 10,000 who have ACA marketplace plans and earn more than 400 percent of the federal poverty limit, an additional 9,000 people have off-marketplace plans, and many of them also would not qualify for subsidies.

Meanwhile, John Williams, the Stonington lobsterman, said the system needs an overhaul.

“All I know is, there’s got to be a better way of doing this than what we’re doing now,” Williams said.

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Republican health policy is destroying rural health care

The border between Kentucky and Tennessee runs just over 340 miles in a nearly straight line. It doesn’t waver to follow natural divides, such as rivers or high mountains. It is an entirely artificial designation indicating only a difference on governance.

But oh, what a difference governance can make. On one side of that straight line, rural health care is doing well. On the other, it’s undergoing something close to a collapse.

The roots of that collapse run deep and speak to important aspects of what kind of country we want to be. When President Ronald Reagan signed the Emergency Medical Treatment and Active Labor Act (EMTALA), mandating that hospitals treat desperately ill people without regard for whether they could pay, it was a triumph of humanity over economics. Congress and the president acknowledged that health care has a moral component above other goods and services, and that the market could not be relied upon to fulfill that moral obligation.

The passage of the EMTALA had relatively mild effects on hospitals in wealthy communities, where almost everyone is insured. But in poor areas with large numbers of uninsured, it dropped an existential burden on already frail medical centers. 

Because poverty rates in farm communities are higher than in cities, the cost of Reagan’s unfunded mandate fell hardest on rural hospitals. In addition, the increasingly capital-intensive nature of high-tech medicine favored big hospitals benefiting from economies of scale. Over time, that double whammy increased the fragility of hospitals in America’s small towns until, according to The National Rural Health Association, more than 700 rural hospitals were at risk of going out of business.

The Affordable Care Act’s Medicaid expansion was intended not just to provide more humane treatment for the uninsured, but to ensure that the hospitals serving the working poor would remain viable. North of the Tennessee border, Kentucky’s former Democratic governor enthusiastically embraced and supported the expansion, providing insurance to hundreds of thousands of people, mostly in rural areas. To the south, in Tennessee, the Republicans in charge abandoned Reagan’s humanity in favor of small-government ideology. They refused billions in federal aid, leaving the welfare of their constituents to market forces that are, literally, amoral.

The results, only a few years later, are dramatic. Before the ACA, the uninsured rate on Kentucky’s side of the border was 16 percent; Tennessee’s was 15 percent. According to a Kaiser Family Foundation study, after the ACA Kentucky’s rate has dropped to 7 percent, while Tennessee’s has remained high, at 13 percent. (The national average is 10 percent.)

There is no explanation for the difference that the Kentucky-Tennessee border makes except the two states’ different approaches to the health of their citizens. If Tennessee had accepted the Medicaid expansion and its uninsured rate had fallen as far as Kentucky’s, its health care system would be serving 400,000 fewer uninsured patients. In rough terms, hospitals and clinics would have almost $750 million more to cover operating expenses.

Since the passage of the ACA, 10 Tennessee hospitals have gone out of business, versus only four in Kentucky. (Adjusted for population, Tennessee’s closure rate is about 50 percent more than Kentucky’s.) 

When a rural hospital closes, it impacts not just the area’s health, but its economy. Studies have shown that after a hospital closes, unemployment rises and wages fall. The sense of place the hospitals support weakens, with all the social pathologies that accompany the loss of a sense of community.

“Our politicians are blind to these people,” says Dr. Garrett Adams, who founded the Beersheba Clinic to provide health care in Tennessee’s rural mountains. “It’s like the population nobody cares about.”

In a rational world, our two states would look across the border and adopt the policies most beneficial to their citizens. In fact, nothing of the sort is happening. Kentucky’s new Republican governor is ignoring the lessons of Tennessee and busily hacking away at the state’s successful ACA adoption — which will cost at least 100,000 people their health insurance and cause rural hospitals to close. In Tennessee, Republican resistance to the ACA is so entrenched that adopting the successful policies of the state next door isn’t even under consideration. 

The great irony of this is that the counties most adversely affected by Republican policy are counties that typically vote heavily Republican. The hospitals that go out of business, the patients who go untreated, the small businesses that fold as communities collapse are part of the Republican base. One would imagine that would be of concern to Republican politicians on both sides of our long, straight border. It’s not. 

John Yarmuth (D) is U.S. representative for Kentucky's 3rd Congressional District. Mariah Phillips is a teacher and a Democratic candidate for Congress in Tennessee's 4th District.

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GOP Plan To Trim Insurance Benefits Might Not Tame Premiums

As House Republicans try to find common cause on a bill to repeal and replace the Affordable Care Act, they may be ready to let states make the ultimate decision about whether to keep a key provision in the federal health law that conservatives believe is raising insurance costs.

Conservatives from the House Freedom Caucus and members of a more moderate group of House Republicans, the Tuesday Group, are working on changes to the GOP health overhaul bill that was pulled unceremoniously by party leaders last month when they couldn't get enough votes to pass it.

At the heart of those negotiations is the law's requirement that most insurance plans offer 10 specific categories of "essential health benefits." They include hospital care, doctor and outpatient visits and prescription drug coverage, along with things like maternity care, mental health and preventive care services.

The Freedom Caucus had been pushing to strip required benefits, arguing that the coverage guarantees were driving up premium prices.

"We ultimately will be judged by only one factor: if insurance premiums come down," the Freedom Caucus chairman, Rep. Mark Meadows, R-N.C., told The Heritage Foundation's Daily Signal last month.

But moderates, bolstered by complaints from patient groups and constituents, fought back. And a brief synopsis of a proposal outlined by Rep. Tom MacArthur, R-N.J., suggests that the compromise could be letting states decide whether they want a federal waiver to delete essential health benefits.
"The insurance mandates are a primary driver of [premium] spikes," Meadows and Sen. Ted Cruz, R-Texas, wrote in March.

But health analysts and economists say that eliminating those benefits probably won't bring premiums down — at least not in the way conservatives are hoping.

"I don't know what they're thinking they're going to pull out of this pie," says Rebekah Bayram, a principal consulting actuary at the benefits consulting firm Milliman. She is the lead author of a recent study on the cost of various health benefits.

Opponents of the required benefits point to coverage for maternity care and mental health and substance abuse treatment as things that drive up premiums for people who will never use such services.

But eliminating those benefits wouldn't have much of an impact, Bayram says. Hospital care, doctor visits and prescription drugs "are the three big ones," she says. "Unless they were talking about ditching those, the other ones only have a marginal impact."

John Bertko, an actuary who worked in the Obama administration and served on the board of Massachusetts' health exchange, agrees: "You would either have very crappy benefits without drugs or physicians or hospitalization, or you would have roughly the same costs."

Maternity care and mental health and substance abuse, he says, "are probably less than 5 percent" of premium costs.

Of course, requiring specific coverage does push up premiums to some extent. James Bailey, an assistant professor of health economics at Creighton University in Omaha, has studied the issue at the state level. He estimates that the average state health insurance mandate "raises premiums by about one-half of 1 percent."

Those who want to get rid of the required benefits point to the fact that premiums in the individual market jumped dramatically from 2013 to 2014, the first year the benefits were required.

"The ACA requires more benefits that every consumer is required to purchase regardless of whether they want them, need them or can afford them," Ohio Insurance Commissioner Mary Taylor said in 2013, when the state's rates were announced.

But most of that jump was not due to the broader benefits, Bayram says, but to the fact that for the first time sicker patients were allowed to buy coverage.

"The premiums would go down a lot if only very healthy people were covered and people who were higher risk were pulled out of the risk pool," she says. (Some conservatives want to change that requirement, too, and let insurers charge sick people higher premiums.)

Meanwhile, most of the research that has been done on required benefits has looked at plans offered to workers by their employers, not policies available to individuals who buy their own coverage because they don't get it through work or the government. That individual market is the focus of the current debate.

Analysts warn that individual-market dynamics differ greatly from those of the employer insurance market.

Bailey says he "saw this debate coming and wanted to write a paper" about the ACA's essential health benefits. But "I very quickly realized there are all these complicated details that are going to make it very hard to figure out," he says, particularly the way the required benefits work in tandem with other requirements in the law.

For example, says Bertko, prescription drugs can represent 20 percent of costs in the individual market. That's far more than in the employer market.

Another big complication is that the required benefits do double duty, Bayram says. They not only ensure that consumers have a comprehensive package of benefits, but enable other parts of the health law to work by ensuring that everyone's benefits are comparable.

For example, the law adjusts payments to insurers to help compensate plans that enroll sicker-than-average patients. But in order to do that risk adjustment, she says, "all of the plans have to agree on some kind of package. So if you think of essential health benefits as an agreed-upon benchmark, I don't know how they can get rid of that and still have risk adjustment."

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

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ACA individual insurance market is improving, but still fragile

Despite claims from President Donald Trump and other Congressional Republican leaders that the Affordable Care Act's individual insurance market is in a “death spiral,” that market is actually improving, according to one analysis.

Ratings firm S&P Global looked at the financial performance of 32 Blue Cross and Blue Shield companies that have sold coverage in the individual insurance market since the ACA took effect in 2014.

It found that the medical-loss ratio, which represents the amount of collected premiums spent on medical claims, improved significantly in 2016 for most Blues insurers, which have struggled with the market in the first couple of years. Last year, insurance premiums exceeded medical care costs for the majority of the Blues plans studied.

“We are seeing the first signs in 2016 that this market could be manageable for most health insurers,” the report stated.

Barring any major legislative changes, S&P analysts predict many of the Blues plans will get close to breaking even in their individual market business this year, and more will record a profit in 2018. But that could change if the Trump administration makes any major legislative changes to the healthcare law.

“The market is still fragile,” said Deep Banerjee, S&P analyst and lead author of the report.

The findings are good news for a market that has been plagued with negative headlines and enrollment declines.

Enrollment in the ACA's exchanges fell to 12.2 million in 2017 from 12.7 million the year before. Premiums rose by double-digits on average in 2017. Health insurers have threatened stop selling insurance plans in the individual market next year without a sign that it will stabilize and become profitable soon.

Some have already pulled the plug: Aetna, UnitedHealth Group and Humana, have exited or scaled back their participation in the individual insurance market. And last week, two of Iowa's largest insurers—Wellmark Blue Cross and Blue Shield and Aetna—announced they will no longer offer ACA-compliant individual coverage in the state in 2018, citing financial losses and uncertainty about future insurance regulations.

But many of the Blues insurers have stuck around. They slowly figured out the market, adjusted insurance premiums and tweaked provider networks.

And now they are seeing results: According to the report, the weighted average medical loss ratio, or MLR, for the Blues plans studied was 92% in 2016, down from 106% in 2015 and 102% in 2014. That means for the first time since 2014, the plans collected more money in premiums than they spent on medical claims in 2016.

But while the “individual market is not in a 'death spiral,' it isn't on stable footing either,” the S&P report said.

The Trump administration has yet to address insurers' most pressing concerns about the availability of cost-sharing reductions and the enforcement of the mandate that consumers purchase coverage. The S&P report also notes that enforcement of the ACA's special enrollment periods and enrollment outreach are crucial to the stability of the market.

“If insurers are uneasy regarding the future of the market, they may have to decide between adding an "uncertainty buffer" to their pricing or--worst case--exiting the exchanges altogether,” the S&P report said.

 

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Obamacare Sign-Ups Surge as Threat of Repeal Looms

A record number of Americans signed up for Obamacare Thursday on what they thought would be the last day to enroll in health insurance coverage that starts in the new year, President Barack Obama said Friday.

So many people visited the federal government website that the administration extended the deadline until early next week to give more people time to sign up for what could be the last year of Obamacare coverage.

The Republicans who will control Congress and the White House starting next month say they'll repeal the law that provides the insurance markets as soon as they can — although there's no clear plan for how, when or what to put in its place.

Obama plugged the health insurance marketplace, the centerpiece of the 2010 Affordable Care Act, in his last press conference of the year before heading to Hawaii for vacation.

"Yesterday was the biggest day ever for Healthcare.gov. More than 670,000 Americans signed up to get coverage," Obama said.

That's compared to 600,000 sign-ups last year on the Dec. 15 deadline.

Obama said when he took office, 44 million Americans lacked health insurance. "Today, we have covered more than 20 million of them," he said. "For the first time in history, more than 90 percent of Americans are insured."

Republican opponents of Obamacare don't dispute the coverage numbers but say the law has failed to bring down costs for consumers, as had been promised.

Premiums have risen as insurance companies taking part in the exchanges have struggled to make the profits they seek with the other restrictions imposed by the law. Obamacare limits the ability to charge higher premiums for women and older people, and it forces insurers to take all comers, even people who are already sick.

But the publicity over higher premiums didn't seem to scare off new customers. The Department of Health and Human Services said more than 4 million people have signed up for coverage on Healthcare.gov, compared to about 2.8 million enrollments by the first week of December last year. That includes 1.1 million people not covered before and 2.9 million renewals.

Most people who buy private insurance on the health insurance marketplaces get a hefty federal subsidy to help pay the premiums. An analysis by the Center for Health and Economy found those subsidies would cost $42.6 billion next year, an increase of nearly $10 billion over this year.
The enrollment numbers do not include 12 health insurance marketplaces run by states and Washington, D.C. independently of the federal government.

The new demand could help improve profitability for insurers, said Larry Levitt of the nonpartisan Kaiser Family Foundation. "If the current (Affordable Care Act) open enrollment period is successful and enrollment grows, it means the insurance market is not collapsing," he said via Twitter.

"Because of the extraordinary demand, we extended the deadline to sign-up for January 1 coverage by two business days until 11:59 pm PST December 19. We don't yet know how many people will take advantage of this extension, but nearly a million consumers left their contact information to hold their place in line," HHS said in a statement.

Obama on Friday took a shot at critics who said the law would hurt business and employment by requiring larger employers to cover their workers.

"Since I signed Obamacare into law, our businesses have added more than 15 million new jobs," he said.

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Mitt Romney Finally Takes Credit For Obamacare

Former GOP presidential nominee Mitt Romney struggled to distance himself from the health care program he implemented in Massachusetts. Now he has acknowledged it was a precursor to Obamacare.

It's a good thing for him that Mitt Romney isn't running for president again.

The 2012 GOP presidential nominee — who has still been bandied about as a potential candidate — just embraced everything that made many conservatives skeptical of him. He admitted that the health care plan he instituted as governor of Massachusetts was the precursor to Obamacare.

In a quote in a Boston Globe obituary for Staples founder Thomas Stemberg, Romney praised the businessman who opened his first store in the Boston suburbs with backing from Romney's Bain Capital.

Romney often mentioned the success of the company on the campaign trail, and Stemberg even addressed the Republican National Convention in 2012.

Romney credits Stemberg with pushing him toward implementing universal health care in the state in 2006 (with nine key words we bolded):

Romney said that shortly after he was elected, Mr. Stemberg asked him why he ran for governor. Romney said he told him that he wanted to help people, and Mr. Stemberg replied that if he really wanted to help, he should give everyone access to health care, which Romney said he hadn't really considered before.

"Without Tom pushing it, I don't think we would have had Romneycare," Romney said. "Without Romneycare, I don't think we would have Obamacare. So, without Tom a lot of people wouldn't have health insurance."

During the campaign, Romney was forced many times to defend the law, arguing that it was never intended to be expanded nationally.

"I like the fact that in my state, we had Republicans and Democrats come together and work together," Romney said during an October 2012 debate. "What you [President Obama] did instead was to push through a plan without a single Republican vote. What were some differences? We didn't raise taxes. You've raised them by $1 trillion under Obamacare. We didn't cut Medicare. Of course, we don't have Medicare, but we didn't cut Medicare by $716 billion. We didn't put in place a board that can tell people ultimately what treatments they're going to receive."

But in the primary, Romney was often on the defensive from GOP rivals on the program. Former Minnesota Gov. Tim Pawlenty tried to land a jab by branding Romney's brainchild, "Obamneycare." But Pawlenty pulled the punch in the next debate.

Still, Romney also never withdrew his support from the program.

"I respect the views of those who think we took the wrong course and who think we should have taken a different course," he said in a May 2011 speech. "I also recognize that a lot of pundits around the nation are saying that I should say that was a bone-headed idea, and I presume folks would think that would be good for me politically. But there's only one problem with that. It wouldn't be honest."
After a backlash Thursday, Romney tried to walk that line again, posting on Facebook that he still opposes Obamacare because "it has failed," "drove up premiums" and "took insurance away from people":

"Getting people health insurance is a good thing, and that's what Tom Stemberg fought for. I oppose Obamacare and believe it has failed. It drove up premiums, took insurance away from people who were promised otherwise, and usurped state programs. As I said in the campaign, I'd repeal it and replace it with state-crafted plans."

But Romney never outright made such a direct correlation as he did in his remembrance of Stemberg, essentially taking credit for the current health care law, which is anathema to Republicans.

Trying to bill his plan as conservative, President Obama has repeatedly made the case, including in the run-up to his 2012 re-election, that the law was built off of Romney's, even borrowing advisers who helped conceive the Massachusetts program.

Almost a year ago, there was a clamoring for Romney to make a third bid. He appeared very close to getting in again, but he ultimately passed. As the year has gone on, Jeb Bush has faded from previous strength, Donald Trump continues to lead and there have been rumors in some circles that Romney could make a late entrance.

But with those nine words, he may have just sealed his GOP political fate, forever — and vindicated many conservatives who were skeptical of his intentions to begin with.

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How Democrats, Republicans, and Big Medicine Sabotaged Obamacare From the Start

It was the winter of our discontent, 2009. A season of bank failures, massive layoffs and $5-a-gallon gasoline. 

Finally, a fractured country could at least agree on one thing: This had to change.

So President Barack Obama set out to deactivate the next bomb awaiting the U.S. economy, the one ticking inside our bloated, beleaguered health system. 

Since the 1990s, insurance premiums had averaged double-digit annual increases. America was spending over $7,500 per person per year — 50 percent more than Norway, the next largest contender. Health spending alone was chewing up one-sixth of the U.S. economy, double that of competitors like Japan, and putting American employers at a severe disadvantage.

Gage Skidmore/Creative Commons

Although Affordable Care Act enemy House Speaker John Boehner repeatedly claims the U.S. has "the best health-care delivery system in the world," the World Health Organization puts us at number 36.

"We spend one and a half times more per person on healthcare than any other country, but we aren't any healthier for it," Obama told Congress in 2009. "This is one of the reasons that insurance premiums have gone up three times faster than wages."

Big Medicine had done its best to keep it that way. Since 1999, it had spent nearly $6 billion on lobbying, three times what the next-largest industry, insurance, had spent. An obedient Congress had allowed it to build a system in which millions couldn't afford coverage, huge swaths of the country were essentially served by monopolies, and prices continued to go up.

"In the decade up to 2009, 79 percent of all the growth in household income was absorbed by healthcare," says Dr. Brian Klepper, CEO of the National Business Coalition on Health. "Everything in Washington is rigged, but the thing most rigged is healthcare, because they have even more money than the banks. Both sides take money at a rapid clip from the industry in exchange for getting their own way. So everything is done in the special interest, and nothing is done in the common interest."

But that spring, with an enraged electorate and the economy in tatters, Obama was given a once-in-a-lifetime chance to break Big Med's stranglehold. He vowed to do it the old-fashioned way: by introducing competition, forcing Big Med to earn its keep.

Everyone would sit "around a big table," Obama had told a crowd in Virginia the year before. "We'll have doctors and nurses and hospital administrators, insurance companies, drug companies. They'll get a seat at the table. They just won't be able to buy every chair."

Five years later, it's hard to argue with Obamacare's success. Some 7 million people have signed up for insurance. The sick can no longer be barred from coverage, nor can the chronically ill be kicked to the curb.

Yet Republicans still rail that Obamacare is some socialist perversion. Democrats, meanwhile, often treat the plan as an illegitimate child they'd rather not acknowledge.

What both sides neglect to mention is their complicity in sabotaging the bill, selling out an unprecedented opportunity to the very guys who created the time bomb in the first place.

The president's ultimate goal was coverage for the country's 48 million uninsured. In places like Europe and Canada, the government pays basic healthcare costs for all citizens. This type of insurance is often called "single-payer," because one payer, the government, covers basic medical care.

Anyone wondering how it might function need look no further than Medicare, which runs all senior healthcare in this country. It's arguably the most popular government program in America, and one of the more cost-effective.

Start with the cost of administration. Medicare's ranges between 2 and 5 percent of its budget. For private insurance, the average is 12 percent. The Government Accountability Office once estimated that this simple savings alone would be "more than enough to offset the expense of universal coverage."

Moreover, a single provider would have the size to negotiate better prices from providers and pharmaceutical companies. According to a New England Journal of Medicine study, this would save another $400 billion and provide a boon for American business, reducing labor costs by 10 to 12 percent.

A CBS poll found that 59 percent of the public favored a government health plan. Unfortunately, the body politic is more impressed with power than with the will of the people. The insurance industry, one of the biggest players in Congress, wasn't about to get squeezed out of its lucrative role as middle man.

Insurers treat single-payer as a threat to their very existence. With a single-payer system, most health insurers would vanish overnight. So the industry set out to ensure that such a program never saw the light of day.

"Of course they don't want it," wrote Robert Reich, a former Secretary of Labor in the Clinton administration, in a 2009 opinion piece. "A public option would squeeze their profits and force them to undertake major reforms. That's the whole point."

Congress, naturally, would not allow a frontal assault on the insurance industry. So Senator Ron Wyden (D-Oregon) pitched the Healthy Americans Act, which had several Republican sponsors and significant support on both sides of the aisle.

It was a simple plan: Instead of supplying insurance to employees, companies would give that money to workers to shop for policies on their own, allowing them to pocket any savings. With so many shoppers flooding the marketplace, insurers would be forced to truly compete.

Obama's first big mistake was delegating the plan's creation to a cabal of senators and healthcare lobbyists, some still employed by the industry, some recent additions to the senators' staffs. They met behind closed doors, hashing out the details and squeezing other legislators out of the process.

Leading the effort was Senate Finance Committee chairman Max Baucus (D-Montana), who from 1999 to 2005 accepted more special-interest money than any other senator. He delegated the real lifting to his chief health aide, Liz Fowler. Baucus described Fowler as overseeing "the 87-page document which became the basis, the foundation, and the blueprint from which all healthcare measures in all bills on both sides of the aisle came."

Fowler was also a former vice president at WellPoint, the country's largest health-insurance carrier. She returned to Baucus's staff just for this occasion. As the Guardian would later write, "Few people embody the corporatist revolving door greasing Washington as purely as Elizabeth Fowler."

Meanwhile, Big Medicine donated heavily to Democrats, who suddenly began to see the industry in a far less menacing light.

Obama also started back-pedaling. "We don't want a huge disruption as we go into healthcare reform, where suddenly we're trying to completely reinvent one-sixth of the economy," he said. Avoiding a single-payer setup and Wyden's plan not only kept the donations flowing, but allowed the president to make his famous claim that people could "keep the plan that you have."

In exchange for maintaining the status quo, hospital groups pledged $150 billion in Medicare and Medicaid savings over the next decade, while insurers agreed to limit their overhead to 20 percent. Anything more would have to be rebated to customers.

"Clearly, we made a mistake in taking so much off the table before we ever started," says Congressman John Yarmuth (D-Kentucky). "We should have left single-payer on the table just so people had an idea what the extreme really was. I'm sure that was just a bone to insurance companies to get them on board."

Of all the participants in health reform, the fattest cats came out of it smelling the best — a telling indictment of Obama and Baucus.

Drugs are the most profitable sector of healthcare. Pharmaceutical companies make more than $1 trillion annually, a third of from U.S. sales. Their profits not only dwarf those of other health sectors, but pharmaceutical ranks seventh highest out of 215 industries tracked by Morningstar, an investment research company.

For years, the drug makers' consigliere was Louisiana congressman Billy Tauzin. He was a conservative Democrat who rose to the position of assistant majority whip, only to switch sides after Republicans won the House in 1994, comparing the situation to reaching a fork in the Yellow Brick Road.

"I had one hand on a party that desperately needed a brain and another on a party that desperately needed a heart, and I had to make a choice," he says today. "I decided to go with the party that needed a heart, because heart-transplant surgery was possible."

In 2003, Tauzin helped shepherd through one of the great corporate giveaways in American medicine: President George W. Bush's Medicare Part D prescription-drug plan.

The rationale for Part D was noble enough. It was designed to ease the squeeze on seniors who saw fixed incomes eaten up by the cost of their prescription drugs, which were rising at a double-digit clip.

But instead of running the government-subsidized program through Medicare, where it could have been administered at a fraction of the price, Republicans handed the job to the insurance industry. They also teamed with Democrats like Baucus and Senator John Breaux (D-Louisiana) to ban Medicare from negotiating prices.

That meant that instead of using Medicare's massive size to extract price breaks, taxpayers would have to pay whatever drug makers felt like charging the insurers. According to the Congressional Budget Office, it amounted to a $137 billion giveaway over 10 years.

When the bill took effect, drug makers saw a 34 percent spike in profits. By then, Tauzin had left Congress to become the president of the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry's trade organization. Breaux left a year later to open a lobbying firm, where he received a $300,000 contract to lobby for Big Pharma.

On the campaign trail in 2008, Obama blasted Part D's ban on negotiating, promising to get tough.

"We'll tell the pharmaceutical companies, 'Thanks, but no thanks for overpriced drugs,'" Obama had said at a Virginia campaign stop in 2008. "We'll let Medicare negotiate for lower prices. We'll stop drug companies from blocking generic drugs that are just as effective and far less expensive. We'll allow the safe re-importation of low-cost drugs from countries like Canada."

After all, there was ample evidence that U.S. consumers were being gouged. For example, in France, which negotiates prices, Eli Lilly charged patients $47 for a one-month supply of Cymbalta, a medicine used to treat depression and anxiety. The cost in America was $176.

Michael Fleshman/Creative Commons
Occupy Wall Street protestors at Pfizer's world headquarters in New York. The pharmaceutical giant benefits from the government's inability to negotiate a better price for their drugs -- Canadians pay about a third less for Pfizer's Celebrex than Americans do.

Pfizer charged Canadians $53 for Celebrex, an anti-inflammatory painkiller. The bill for Americans: $162.

In one TV ad, Obama blistered Tauzin for the kind of inside corruption that's made Washington famous.

"The chairman of the committee, who pushed the law through, went to work for the pharmaceutical industry, making $2 million a year," Obama announced to the camera, his sleeves rolled up for action. "That's an example of the same old game-playing in Washington. You know, I don't want to learn how to play the game better; I want to put an end to the game-playing."

A year later, he would find that game not so unpleasant after all.

After he became president, Obama would indulge Tauzin in the same closed-door dealings he once lambasted. The drug industry agreed to taxes and rebates involving $80 billion in savings over 10 years. In exchange, Obama reneged on three crucial promises: to speed generics to market, to allow the importation of cheaper drugs, and to retain the right to negotiate Medicare drug prices.

Senate Democrats/Creative Commons
Florida Senator Bill Nelson tried to enact legislation that would allow Medicare to negotiate drug prices. Three Democrats -- Max Baucus, Robert Menedez, and Tom Carper -- joined with committee Republicans to kill that idea.

Senator Bill Nelson (D-Florida) was among several congressmen who tried unsuccessfully to maintain negotiation rights. He proposed a bill that would have forced drug companies to match prices offered to other government programs (Medicaid, Veterans Administration) that do negotiate.

"I'm not here picking on PhRMA," Nelson said at the time. "I just think, philosophically, that Medicare patients shouldn't be paying more than Medicaid beneficiaries."

But three Democratic senators — Baucus, Robert Menendez (D-New Jersey), and Tom Carper (D-Delaware) — teamed with Republicans to ensure that Nelson's bill was stillborn in committee. They were more interested in keeping their word to the drug makers than in their duty to the American people.
"A deal is a deal," Carper explained.

A less-noticed provision gave pharmaceutical companies the right to extend patents on biologic drugs to 12 years, compared to the five years that conventional drugs receive. This may prove to be the greatest budget-buster of them all.

Biologics are the industry's new cash cow. They're more difficult to manufacture because they're grown rather than chemically assembled. This is the pretext for setting prices 22 times higher than those of ordinary drugs. Some prescriptions cost as much as $100,000 annually.

"Unfortunately, both the administration and leadership felt they should put a moratorium on Medicare being able to buy in bulk and access generic drugs," says Congressman Raúl Grijalva (D-Arizona). "In doing so, they locked in a price scheme that is many times out of control. That concession was painful to many of us, because we allowed the fox to control the henhouse."

Congress and the administration also repeatedly balked at the most direct route to lower prices — greater competition — even though much of the country was without it.

An American Medical Association study found that one insurer controlled more than half the market in thirty states. "In Alabama, almost 90 percent is controlled by just one company," Obama told a crowd in 2009. "And without competition, the price of insurance goes up and quality goes down."

Hit the hardest were rural residents, typically poorer and less healthy than the rest of the country. Metro areas offered the greatest profit, so big insurers and hospital groups had little incentive to compete for nickels and dimes in the countryside. Absent competition, premiums and hospital prices soared.

Many Democrats pushed for a public insurance plan, which would compete with companies like Aetna for customers. But Republicans rallied to insurers, claiming it was unfair to make them compete with government. Never mind that they represented some of the most unhealthy and least competitive stretches of the country, particularly in the South.

"We shouldn't have ever called it a public option," says Kentucky congressman Yarmuth. "We should have called it 'Medicare for all,' and then people would have been for it, because 'public option' was too vague."

Gage Skidmore/Creative Commons

Senate Minority Leader Mitch McConnell's home state of Kentucky has one of the most successful state co-ops, Kynect, which grabbed 60 percent of the market. McConnell helped sabotage co-op funding in 26 other states.

Senator Kent Conrad (D-North Dakota) proposed a compromise by creating nonprofit insurance co-ops to compete with monopolies and provide coverage to rural areas. Actuaries suggested that $10 billion in grants would be enough to get co-ops started in every state. Yet the marionettes in Congress began to strip away their effectiveness almost immediately.

Senator Ben Nelson (D-Nebraska), a former insurance exec and one of the wealthiest members of Congress, withheld his vote unless the grants were changed to loans, making sure the co-ops were saddled with debt from the beginning.

Others sneaked in measures barring the co-ops from competing for the more lucrative business of large employers and banned them from using the government loans for marketing. It was as if Congress merely wanted fig-leaf competition while quietly sabotaging any chance to actually compete.

The $10 billion in loans was continually sheared away. Democrats repeatedly agreed to deals with Senate Minority Leader Mitch McConnell (R-Kentucky) to strip the money away.

In the end, only 23 co-ops received funding. "They don't want to do anything to make the situation in the states better," says Yarmuth. "Instead, they're actively undermining the programs."

Nobody gave the co-ops much of a chance. They had to put together plans overnight, win competitive pricing from providers, and get word of their existence out without spending any of the government loan money.

Still, many were run by real pros with decades of experience. Take Dr. Martin Hickey, CEO of the New Mexico Health Connections co-op and a former executive with Cigna and Blue Cross. "This wasn't just a do-gooder thing," he says. "This was people who understood business, understood insurance and what it was going to take to make this really work. Hope is not a strategy."

Soon, co-ops were offering the lowest premiums in a third of the states in which they operated. And even when they weren't the lowest, they were providing enough competition to drive down all premiums by 8 percent.

In New Mexico's case, Hickey found that hospital groups had a motive to expand competition.

"We were able to sit down with large groups and say, 'This market is consolidating, and the last thing you want is one or two major players, because they'll hammer the hell out of you,'" he says. "I used to work at one. I know. 'It's in your interest to give us a good rate to give us a foothold in the market. We're physician-oriented and physician-led. We get it.'"

The most thriving co-op is Maine Community Health, which has taken 80 percent of the new market from Anthem Blue Cross Blue Shield (a WellPoint subsidiary), despite comparable prices. Co-ops in Nebraska and Iowa secured more than half the market, while Kentucky's co-op grabbed 60 percent.

The latter proved a bitter irony for McConnell, who was instrumental in eliminating funding for 26 other states. Next year, the Kentucky co-op will expand into West Virginia, one of three moving into neighboring states.

"We don't need to own the whole market," says Julia Hutchins, CEO of Colorado Health Insurance Cooperative. "There's an opportunity to push the entire industry in a direction more focused on consumers, and we can do that even with a very small market share."

Of course, not every co-op has been successful. Minuteman Health in Massachusetts, Evergreen Health Co-op in Maryland, and Oregon's Health CO-OP were hamstrung by faulty websites. Others wound up on the wrong side of price, such as Arizona's Meritus Health Partners, which was dramatically undercut by private insurers.

Some, such as the Louisiana Health Cooperative, have already run into trouble. Former CEO Terry Shilling tried to turn it into a money grab for his former health consulting firm, Beam Partners, proposing a four-year contract whereby Beam would receive a $3.3 million consulting fee, a 20 percent performance fee, and up to 50 cents for every person who signed up for the plan.

Moreover, there remains the question of what happens when some of the co-ops inevitably fail. Republicans, who have attempted to subvert Obamacare at every turn, are sure to turn such failures into Benghazi-size incidents on Fox News. Those on the front lines don't possess much faith that Obama will have their backs.

"How do you spin that?" asks Hickey. "It is spin, and I'm not trying to be critical, but up until now, the administration hasn't done a great job of spin on any issue with the Affordable Care Act. So that worries me."

There's little doubt that Obamacare has achieved some remarkable things. Given that Congress can barely agree on whether to pay its bills, the simple act of helping 7 million people get insurance is extraordinary in itself.

And there is reason for optimism.

Courtesy of the Brookings Institute

Brookings's Thomas Mann takes a more optimistic view of the ACA: "Sometimes it takes something that looks godawful to set things in motion for some steps that will eventually give us a better system."

Brookings Institution scholar Thomas Mann is an expert in political dysfunction. He co-authored It's Even Worse Than It Looks: How the American Constitutional System Collided with the New Politics of Extremism. Considering the "Republican party's swing to the right and decision to oppose anything," he believes it's important to take a long view of Obamacare.

"He succeeded where presidents for a half-century have failed, so it wasn't going to be pretty," Mann says. "And it wasn't going to be easy."

Every expansion of the social safety net has been contentious. None kicked off without difficulties. The question is whether Democrats will be willing to wade back into the fight to address Obamacare's woes, particularly the lack of cost controls and competition, while taking endless fire from Republicans, who've shown no interest in repairing healthcare at all.

As Mann sees it, Obamacare is but the first battle.

"Sometimes it takes something that looks godawful to set things in motion for some steps that will eventually give us a better system," he says. "To the right, it looks like communism, but to more rational observers, these are constrained, incremental changes. But they could add up to something quite non-incremental."

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Arizona Hospital and Healthcare Association loses 3 members

Arizona's three largest hospital systems are leaving a statewide hospital lobbying group over concerns about how the group represents the large hospitals on legislative and regulatory issues.

Abrazo Health Care, Banner Health and Dignity Health (formerly Catholic Healthcare West) on Friday informed the Arizona Hospital and Healthcare Association that their membership will end effective March 1.

The pullout by the three hospital systems that represent more than 20 metro Phoenix hospitals comes as larger urban hospitals have faced rising numbers of uninsured patients seeking free or reduced-cost care in hospital emergency rooms. The hospitals say the rise in uninsured patients follows the Legislature's cuts to the state's Medicaid program and Arizona's tepid economic recovery.

"Fundamentally, we believe at this juncture the association can't represent our interests," said Suzanne Pfister, vice president of external affairs for Dignity Health, a three-hospital system that includes St. Joseph's Hospital and Medical Center.

The three hospitals' top executives said in a letter to Arizona Hospital and Healthcare Association CEO Laurie Liles that the hospital association "is no longer consistent with nor reflective of our collective interests on legislative and regulatory issues before the governor and state Legislature."

The letter added: "We know you have sincerely tried to manage the disparate voices within the organization, but we no longer believe the association can serve as a voice for our concerns."

The letter was signed by Banner Health CEO Peter Fine, St. Joseph's Hospital CEO Linda Hunt and Reginald Ballantyne III, senior corporate officer of Vanguard Health Systems, which controls the six-hospital chain Abrazo Health Care.

Pete Wertheim, a spokesman for the hospital association, said the hospital association is still gathering information about why the hospitals decided to leave.

"Obviously, there have been some incredible challenges with hospitals and the budget cuts and other factors," Wertheim said.

The hospital association has not calculated the financial impact of losing its three largest dues-paying members, but it expects to cushion the financial hit with revenue collected through services such as a nursing registry and a discounted vendor program.

Among the major challenges facing hospitals is securing hundreds of millions in federal dollars lost when the Legislature and Gov. Jan Brewer imposed deep cuts to the Arizona Health Care Cost Containment System, or AHCCCS, the state's Medicaid program.

The hospital association proposal to assess a bed tax on hospitals to recoup matching federal dollars received little support at the Legislature. The hospital association also backs a pending legal challenge to AHCCCS enrollment freeze for childless adults. The state Supreme Court next month will decide whether to hear a case challenging the state's enrollment freeze for childless adults in the state's Medicaid program.

Representatives of Banner Health, Dignity Health and Abrazo Health Care said it is pivotal to find a way to reverse the impact of the Medicaid cuts.

Ballantyne said that securing matching federal dollars will be a significant issue for Abrazo, Banner and Dignity Health.

"Within the membership of the association are those who do not place as high a priority on finding a solution permitting the flow of these matching federal funds," Ballantyne said. "We need to take steps to assure solutions and that has grown increasingly difficult given disparate views within the association membership."

The three hospital systems have not yet released a proposal to secure matching federal dollars, but they say they realize it is important to act quickly.

St. Joseph's Hospital reported a 37 percent surge in charity care and bad debt from July through October last year compared with the year before.

Charity care describes free or discounted care a hospital gives to patient who does not have the financial resources to pay their bills, and bad debt stems from patients who don't pay.

St. Joseph's Hospital and its two sister hospitals have responded with their own staffing cuts, eliminating or freezing 300 jobs.

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Ex-Senate leader: Health care reform law is here to stay

Repeal unlikely, Bill Frist tells Avera crowd

The health care reform law will survive even if the Supreme Court declares the individual mandate unconstitutional, former Senate Majority Leader Bill Frist said Wednesday in Sioux Falls.

"It's going to survive. It's not going to be repealed," Frist said.

Frist, a heart surgeon and Republican from Tennessee, spoke to 500 people at an Avera Health conference at the Convention Center.

Congress passed the Affordable Care Act last year with a provision requiring all citizens to buy health insurance by 2014. Several states, including South Dakota, have challenged that in court.

Frist agrees that the mandate violates the Constitution. But unlike others on both sides of the debate, he thinks parts of the law will inject enough money into health care to make the end result workable even without the mandate.

He said the law benefits from growing public support and that its long phase-in period will allow Congress, passing through several election cycles, to amend it without killing it.

"I think the individual mandate is unconstitutional. It's not the bill I would have written," Frist said. "But it's not going to fall. The law will be shaped by these elections."

Sam Wilson, associate state director for advocacy for South Dakota AARP, an agency that supports the reform act, called the individual mandate "absolutely essential" two weeks ago after an appeals court ruled against it. That ruling was one of several that probably will push the issue to the Supreme Court.

"We don't single out any part as the keystone," Wilson said Wednesday. "But it's essential if you're going to bring down the costs in the insurance market. You've got to have a way to spread the risk."

But Frist said state insurance exchanges and a mandate on businesses to provide employee health coverage will bring in substantial revenue to build on the foundation that already has 150 million Americans carrying group insurance through their employers.

A penalty of $2,000 per uninsured employee will not be adequate incentive for businesses that often spend $5,000 or more to insure workers, but a future Congress can fix that with a stiffer penalty, he said.

He called the reform law 70 percent good and 30 percent bad. He had been out of Congress for three years when the law came up for a vote last year, but he urged Republicans to support it.

Deb Fischer-Clemens, vice president of the Avera Center for Public Policy, said she is confident insurance will be competitive because of the exchanges that states, including South Dakota, are setting up. She agreed with Frist that the current system is unsustainable because of rising demands on Medicare.

"Is it the right fix? Not 100 percent. But the fix had to occur," Fischer-Clemens said.

Frist, 59, was a Republican senator from 1995 to 2007 and majority leader the last four of those years. He once was on a GOP short list of possible presidential nominees, but he said in an interview Wednesday that he is glad to be done with politics.

He spoke at the annual conference in which Avera honors health care employees from five states for initiative and quality work.

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NH GOP’s budget off to shaky start

If you visit the Web site of the New Hampshire House Republicans (http://nhhousegop.com), featured prominently under the heading “House 2011 Session Accomplishments” is a brief statement that summarizes its achievements and links to a detailed list inside.

That statement reads in full: “The House has passed legislation that accomplishes our campaign pledge of reforming government, living within our means, moving our economy forward, keeping New Hampshire safe, increasing transperency (sic) …”

Today, we want to focus on two of those “accomplishments” – balancing the budget (“living within our means”) and creating jobs (“moving our economy forward”).

For in the first 29 days since the Republican-controlled Legislature’s two-year budget became law without the governor’s signature, the choices made to achieve the first already have had a direct impact on the second.

And not in a good way.

On Monday, 10 New Hampshire hospitals – including the two in Nashua – filed suit against the state in U.S. District Court over the Legislature’s decision to withhold roughly $230 million in Medicaid money from the state’s hospitals to balance the budget.

The hospitals contend the state’s decision violates federal law and threatens the hospitals’ ability to adequately serve the needs of patients covered by Medicaid.

The next day, Elliot Health System announced it had laid off 182 employees at Elliot Hospital in Manchester – 4 percent of its work force – in response to what it said was a $17 million deficit created by the state’s action. It also froze contributions to its employees’ retirement accounts and ended its 24-hour hotline.

That was followed a day later by a similar announcement from Southern New Hampshire Medical Center in Nashua that it was in the process of laying off 100 employees, or 6 percent of its work force, to help offset a $10 million deficit created by the state’s decision.

And across town, St. Joseph Hospital intends to release its own budget-cutting measures within the next few weeks, which are expected to include layoffs, according to a spokeswoman.

So in less than a month, the Republicans’ “moving our economy forward budget” has resulted in nearly 300 layoffs at two of the largest hospitals with possibly hundreds more on the way.

And should the hospitals prevail in their suit, lawmakers would have to go back to the drawing board and come up with another $230 million in cuts, since we presume any revenue options would be off the table.

Earlier this month, House Speaker William O’Brien wrote an op-ed – titled “Republicans improved NH’s economic situation, as promised” – that ended with these words:

“The people wanted representatives in Concord who work to allow the economy to grow, cut spending and end the regime of out-of-control government expansion and numerous tax hikes. Today, we can see this Legislature has delivered results for the people of New Hampshire.

“The good news is that jobs are coming, and we’re just getting started.”

We can only hope this isn’t what he had in mind at the time.

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