Johnson, Feingold spar over health care again

The Affordable Care Act was a major point of contention when U.S. Sen. Ron Johnson ran against then-Sen. Russ Feingold six years ago, and it's front and center again with their rematch coming up Tuesday.

Johnson, a Republican who was elected to the Senate partly because of his opposition to the health insurance reform law, remains one of its most steadfast critics. Feingold, a Democrat who voted for the law, continues to support it.

But with the law now in its sixth year, few opponents talk of returning to the status quo that existed before it was implemented, and few supporters suggest it has worked out exactly as planned.

Johnson says he wants to ensure that people with pre-existing health conditions have access to health insurance, and he supports providing subsidies to help some people afford health insurance — two key provisions of the law he wants to repeal.

“We all want people to have access to quality affordable health care,” he said.

Yet it isn't clear how he would pay to keep those pieces of the law.

For his part, Feingold notes that while the law is flawed, 20 million more Americans have health insurance today because of it, and the nation's uninsured rate is at a historic low. He applauds the law's guarantees that people with pre-existing health conditions can buy health insurance and that younger people can stay on a parent’s health plan until 26.

“Those are the things we don't want to lose,” Feingold said. “But we do want to make the system even more affordable.”

How each candidate would go about making health care more affordable for people who buy health insurance on their own rather than through an employer exemplifies the ideological divide between the candidates. Johnson would repeal the law; Feingold would work to improve it.

Here are some of their positions:

Johnson

Johnson, who has talked about replacing the Affordable Care Act only in general terms, broadly supports conservative proposals designed to bring more market competition to health care.

He and others who support market-based reforms say that people have little incentive to care about how much they spend on health care when an insurance company, employer or government program is paying all or most of the bill.

That disconnect, Johnson said, is one of the root causes of high health-care costs. He wants a health-care system in which people have a choice of health plans offering different levels of coverage, with high deductibles and health savings accounts. Such a system makes people more conscious of how they spend health-care dollars, and Johnson said that puts more pressure on hospitals and other health-care providers to control costs.

But many people cannot afford the deductibles with their health plans now — and total out-of-pocket expenses, which are capped by the law at $14,300 for family coverage next year, are even higher.

Overall health-care costs also are concentrated among 5% of the population that accounts for more than 50% of health-care spending, and those people have little incentive to be conscious of costs once they hit their deductibles.

To give people a choice of health plans, Johnson would allow health insurers to sell insurance across state lines.

Why an out-of-state insurer would be able to negotiate better prices from health systems than the health insurers already operating in the state also is a question.

“There’s no evidence to suggest that making it easy to sell insurance across state lines is going to be an effective policy,” said Justin Sydnor, an associate professor of actuarial science, risk management and insurance at the University of Wisconsin-Madison School of Business.

Johnson also would end Obamacare's limits on how much insurers can charge older people compared with younger people.

The cost of insurance, Johnson said, should be tied to risk.

“When you are young and you are not making as much, you have not reached your full earnings potential,” Johnson said. “Should you really call on young people to subsidize older people?”

That proposal would make health insurance more affordable for young people — who so far have largely stayed out of the Obamacare market — but increase costs for older people.

Johnson also has talked about setting up so-called high-risk pools to subsidize the cost of covering people with pre-existing health conditions.

The Health Insurance Risk Sharing Plan, known as HIRSP, worked well in Wisconsin for people who could afford insurance. The cost was subsidized by a tax on health plans sold in the state. Hospitals and doctors also accepted HIRSP rates that were a bit above what Medicare pays but lower than those paid by commercial insurers.

But Wisconsin was one of the few states — Minnesota was another — with effective high-risk pools. In most states, high-risk pools were prohibitively expensive for most people, or enrollment in them was capped.

In a meeting with the Journal Sentinel editorial board and in other venues, Johnson said that his own company would put employees or family members with high health costs into HIRSP.  Johnson, as the chief executive of a company, has cut checks for health insurance. But he is mistaken on this talking point.

People who were eligible for insurance through an employer — and employers must offer health insurance to all of their eligible employees — could not get coverage through HIRSP, according to the Office of the Commissioner of Insurance and former members of HIRSP’s board.

That said, setting up high-risk pools to cover people with pre-existing conditions could lower the cost of health insurance for others in the individual insurance market. But there still would be a cost.

“No matter how we massage things, those people have medical needs, and health care in the U.S. is expensive,” Sydnor said. “If we believe they should have health care, it is going to have to be paid for. And a lot of the rest of it is just a question of how we do the accounting — how we spread the costs and to what extent we help them.”

Feingold

Feingold supports minor changes in the Affordable Care Act, but he , including repealing the so-called Cadillac tax that will impose a tax on health plans that cost more than a set threshold.

The tax was designed in part to encourage employers to move to health plans with higher deductibles.

But Feingold said he is not ready to support higher subsidies to draw more people who are young or healthy into the law's marketplaces.

Instead, he contends that more effective marketing would lead more young people to buy health plans.

Feingold also supports the so-called public option — in other words, setting up government-run health plans — in marketplaces where there is no competition.

The question is whether a government-run plan would fare any better than commercial plans unless it forced hospitals and doctors to accept lower rates.

“That’s something we would have to work on and debate, and I don’t have all the specifics on exactly how that would work,” Feingold said.

Feingold also supports allowing Medicare to negotiate drug prices with pharmaceutical companies.

“This is a major reform that is long overdue,” Feingold said.

But a study by the Congressional Budget Office in 2004 noted that Medicare would have to be willing to exclude certain drugs or impose other restrictions on coverage to have any leverage in the negotiations, according to a brief by the Kaiser Family Foundation.

The private insurers who offer Medicare Part D prescription drug plans can do that, threatening to not include a drug in a formulary???ID what this is or put it in a more expensive tier.

That could be hard for Medicare itself to do politically.

But Feingold noted that Medicare is the single largest customer of health care.

“Believe me, the amount of money they (drug companies) are making here, they are going to play ball with the government,” he said.

Feingold also called for consumer protections at the national level to monitor insurance rates.

“We need to crack down on insurers who are gouging their customers,” he said, citing the high deductibles on plans. “I’ve heard too many young couples who are freaked out by a $5,000 deductible."

Yet many insurers have been leaving the marketplaces because they've lost millions of dollars on them. How could they be gouging customers?

The Affordable Care Act also requires insurers to spend 80 cents of every premium dollar on health care, limiting their potential profits.

Feingold said he still believes that deductibles are too high and that the requirements on what health insurers must spend on health care may need to be tightened.