Health care exchange Q&A with Rep. Bill Cassidy, R-Baton Rouge ...

Following the House Energy and Commerce Committee meeting Thursday that featured Louisiana Health and Hospitals Secretary Bruce Greenstein, I chatted with Rep. Bill Cassidy, R-Baton Rouge. Cassidy, a committee member and a practicing physician, doesn't see a bright future for Obamacare under its current arrangement.

Q: I guess the first question is what do you see happening come January, it's like no one knows what to expect.

Cassidy: Are you speaking of the exchanges or just in general?

Q: Well, both, but primarily I guess with the exchanges.

Cassidy: The exchanges don't start until, I think, October of '13, so that's when it's supposed to start so maybe better to start there. What I got out of this committee is very disturbing. Again, as you know my bio, I work in the LSU hospital system so I'm all about providing access to health care to those who are lower income. But let me walk you through this -- you ready?

Q: Yuup.

A: First, the exchanges that are being proposed by the administration are based upon what was done in Massachusetts and Massachusetts has the highest individual and small business health insurance premiums cost in the nation. Number 2: McKinsey Consulting predicts, based upon surveys, that at least 30 percent, maybe more, of employers will drop their employees into the exchange. Number 3: talking to insurance brokers, they suspect the typical family fending for themselves will go for the least generous plan. So, the company, which usually provides a more generous plan, will put their employee into the exchange where those who know about the marketplace suggest they will go for the least generous plan. And so, I'm a guy about access, and when you go from more generous to less generous, that's disturbing. And lastly, which kind of sealed it, if you will, in Wisconsin they have real data, not computer models but real data, that when people who are roughly 200 percent of federal poverty level, have to being paying premiums that before they did not have to pay, as many as 50 percent of them drop their coverage. Now under the plans of this exchange, the ones my people tell me folks are most likely to take, they're going to have a $2,000 deductible and they're going to have premiums. They're going to go from more generous to less generous while seeing costs they've never seen before, and the empiric information is that many of those folks will drop coverage. As a person who is all about working for access for working class families, I am very disturbed after this committee hearing.

Q: Let me ask you this, as a physician don't you think that in the long run maybe some of that will help in this sense: it seems to me that one of the real inflationary aspects of health care has been that people don't pay -- somebody else is paying for it. If everybody had to pay for their own health care, that would be an incredible check on costs, would it not? I mean, I realize it's incredibly complex and you can't immediately withdraw from the market and the market has been so warped by government subsidies and insurance and the like, but in theory ...

Cassidy: Jim, let me give you this scenario.

Q: OK

Cassidy: Under the 'Bronze Plan,' somebody has a policy with a deductible for $2,000. But if they go to the emergency room everything is paid for. Now they get a headache. And they want get it checked out, they can go to their physician, they haven't made their deductible yet so it's all out-of-pocket, they've got a $30 co-pay. Or they can go to the emergency room and everything is paid for. Jim, where do you think they're going to go?

Q: The emergency room.

Cassidy: So if you structure this reform poorly your results will be poor. What you originally suggested I absolutely agree with. But there's a way to do it right and a way to do it wrong, and I think what I'm getting from our hearing today is that the way this health care bill is being implemented is the way to do it wrong. Again, as a guy who is concerned about that family not having to go to the emergency room, I am seeing that they are going to be driven to it.

Q: Which is what everybody complains is happening now, right? It's, 'oh, people go to the emergency room all the time for their care...'

Cassidy: It may get worse if what McKinsey predicts is true, that employers will dump their employees into the exchange and somebody goes from a more generous plan to a less generous plan. And so we actually may be worsening the problem.

Q: OK. I want to come back to that in a second, something you just mentioned, but, keeping that thread -- what options does Louisiana have right now?

Cassidy: Well, the options for Louisiana right now are basically what the federal government gives them, and I think that's some of the concern because the federal government, as I understand -- I mean, the rules for the exchanges came out and folks had 30 days before the deadline to decide whether to adopt. Now, this is an incredibly complex project, Utah has been beta-testing their exchange for about three years, Massachusetts has been tweaking their exchange since it was first put in, and now states have 30 days to review the regs and have a robust exchange going by October 2013. It's probably not practicable. Nonetheless, the options the state has is to either attempt to do that or to turn the matter over to the federal government. And I just saw something, a press release in which like 30 states are going to ask the federal government to do it for them. When 30 states, or let's see, when two-thirds of the exchange enrollment will be federally administered is what it says, so that's not necessarily the number of states, but it is two-thirds of those people there, that is 17 states plus the District of Columbia will set up an exchange and Utah is trying to get their's approved and everybody else has turned it over to the feds, that's a little bit of a commentary and just how daunting the task seems.

Q: Well, you know, here when Jindal says ...

Cassidy: And by the way the deadline to decide is this Friday. So it isn't as if they had six months to work through it. No, over the holiday season, Thanksgiving etc., they were given all this and said, 'ok, you've got 30 days to decide.' I can see why a lot of states decided to punt.

Q: Well, Gov. Jindal has said, look, he isn't going to do it, we'll be one of those states that, as you just described the federal government's going to set it up, and he's been painted in my newspaper and in others and by a lot of his opponents down here as kind of, you know, nuts to go this route and setting off on his own. But I look at it and I see Gov. Christie doing the same thing in New Jersey and I see Gov. Perry doing the same thing in Texas, and you mentioned Utah -- I mean, it seems that Louisiana is not taking some maverick approach here, it's taking one that other governors are also taking and I guess in part because as you just said they don't like what they're seeing.

Cassidy: 33 states are not doing it. Now at some point you've got to assume that these guys and gals who've got to get re-elected are doing things not just for political reasons but in the best interests of their state if they hope to get re-elected. And the scenario I just described where, if Mackenzie is right and employers being to dump their employees in the exchange and people go from more generous coverage to less coverage, and then people are dropping their coverage because they cannot afford the dollar amount as Wisconsin experience shows - but, again as a person who has dedicated his professional life to providing access and I see this incredibly logical process playing out, I can see the governors saying, 'we need a different sort of exchange. This is not one that we can administer.'"

Q: You're saying this 'logical,' or, 'illogical,' process play out?

Cassidy: What I described, now we're back where we're worse off than we were before -- that just seems like it's going to happen under the current scenario.

Q: OK, well this then goes back to the point I wanted to talk about a moment ago which is when Obamacare first came up a lot of people talked about it as really a Trojan horse to try to get us toward a single payer system. And from what you're saying here it sounds like that might have been an apt description.

Cassidy: Well, Barney Frank suggested that, if done right, it would certainly lead to single player. A little ironic, I think what he really meant is if it's cumbersome enough and un-workable enough, we'll end up with single payer. I would like to think, I'm a doctor whose been working at a government-run institution and I've found that when the patient has the power, the patient does better. And so whenever there's a process set up where bureaucrats in Washington have more power than the patient, I am very concerned. So, ideally, probably too much to hope for, people will see what's going to happen and they'll look for a way to make it more workable for a working family so that they really do have access at a lower cost instead of a piece of paper but without access.

Q: There's been some talk that I've heard over the last week or so about the House tightening the purse strings here and maybe having a positive impact on some of the worst aspects of Obamacare by doing that. What are they talking about there, what is that you guys can do?

Cassidy: Well all that is subject to negotiations, but let me tell you what we have to do. Medicare is going broke within 12 years. The president's health care law cuts $716 billion out of Medicare. Now that the election is over, the president of AARP has come out opposing any further cuts to Medicare, precisely because Obamacare cuts $716 billion from it. Now, after the election he says it, I wish he had said it beforehand (laughter). But again, that's not Republican rhetoric, that's the head of the AARP...

Q: Well, it's definitely not Republican rhetoric then! (laughter)

Cassidy: "It's going bankrupt in 12 years and we just took $716 billion out of it, ideally we'd begin to make, change, restructure Medicaid so it continues to provide safety-net benefits to those who are on it, but also can survive beyond 12 years. I mean, we just have to do that. The president's plan does not. The president's plan makes it worse.

Q: But how can you change it, right? What's done is done.

Cassidy: At some point the left will have to admit that it's going bankrupt. And by law, by law, Medicaid's supposed to be self-sufficient and we're not allowed to transfer money out of the general fund to cover its losses. Now, either the left is going to say -- you know, national Democrats, I should say -- either national Democrats are going to say, 'yes, indeed, we can't afford to have this important safety net program fail.' Or they're going to say, 'let's restructure it in a way which ideally holds people who are currently on it harmless, maybe those who are going to be on it within 10 years harmless, but allows those who are younger to begin to restructure their plans.' That would be ideal. There are bi-partisan plans that would do just that. Unfortunately, the president demagogued them during his national campaign. So we'll have to see what we can do.

Q: I appreciate you taking the time to walk me through some of these things, but it's just so damn complex, I think people get frightened because it seems like such a behemoth, they don't know how to make sense of it. What kind of advice can you give people?

Cassidy: I would say, if a plan puts more power with the patient, then you know immediately it is a better plan. If a plan takes power from the individual, or the family, takes their power and gives it to someone in Washington, or someone associated with an exchange, or things like that, then you are going to have less control over your outcomes, less control over your taxes, less control over your pocketbook -- that is bad. That's always the litmus test, if you will. More power to the patient, which are the proposal I favor, I think ultimately you end up getting more access for that; less power to the patient, it's going to be a worse-off family.

Q: I couldn't agree more with what you're saying, but isn't that the argument that went on before Obamacare passed? Aren't we talking about a fight that's already been lost?

Cassidy: The importance of the hearings such as the one we had today is to hopefully bring before the nation's attention those things I described, those kind of logical, this-is-how-it's-going-to-happen -- employers are probably going to put their employees in the exchange, they'll go from a more generous to a less generous plan, and once that happens families are more likely to drop their coverage. All we can do is try to aquaint people with that and say if President Obama and national Democrats are going to insist on this plan, let's make it work for families and not work for bureaucrats.

Q: One of the things that everybody says -- and not just here, but Jindal's been hit pretty hard with this -- is, 'oh, how can you not sign up for it because at the beginning 100 percent of the Medicare costs are going to be covered! It doesn't cost us anything!' And I'm thinking, what world do you live in that you think Medicare is free money? That's still tax money, that's still public money.

Cassidy: Let me also point out, people in Washington love to speak percentages but not dollar amounts. There's a Kaiser Family Foundation study in which it shows how much benefits states get. But, according to this study, which is all about the expansion, Louisiana will pay $1.8 billion more over 10 years out of state general funds to enact this program. Now, for the first time since 2009, states spent more money on Medicaid than they did on K-12 education. Our state is cannibalizing every other part of the budget to pay for Medicaid. This is before the additional $1.8 billion over 10 years required for the state portion of this expansion. How much higher does tuition have to go? How much lower does funding for K though 12 have to go? How many more prisons have to be shuttered, how many more road and bridges will not be built or updated in order to do this? And let me also ask, as a guy who's been working with the uninsured for 20 years: what's more likely going to elevate someone out of poverty -- more money for education or more money for this government mandate?

Q: Well, that's a good question.

Cassidy: I'd say more money for education. But you look at tuition, you look at funding for K through 12, it is being cannibalized and that is before the $1.8 billion required for this expansion. We can send you the study -- their assumptions are specious, I think. Part of the off-set is that they think is that all this extra money will increase economic activity, ignoring the fact there will be a lot higher taxes to pay for the increased Medicare spending. At some point, government spending becomes a zero sum game and the Kaiser study ignores that. But even with that specious sort of reasoning they say it will cost $1.8 billion more over 10 years.

Source: http://www.nola.com/opinions/index.ssf/2012/12/health_care_exchange_q_with_re.html

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