Here’s Who’s Winning the War Over Obamacare

Plus, a GOP push to make it harder to raise state taxes By Yuval Rosenberg and Michael Rainey The Obamacare Battles Have These Businesses Raking In Big Bucks The years-long battles over Obamacare aren’t over yet, but one clear winner has emerged, writes Joanne Kenen at Politico. Health-care consultants are reaping a bonanza. The ingredients are ripe for consultants to make a mint: an industry in turmoil, various stakeholders casting about for fixes and trillions of dollars sloshing around. That’s been true for decades, and management consultants have been feeding at the health-care industry trough for a long time. But the changes brought about by Obamacare — and the subsequent pushback by the Trump administration — have taken the consulting boom to a whole new level. “During the Obama years, one thing that kept consultants busy was gaming out possible outcomes from the constant legal and political challenges to the health law,” Kenen writes. “A mirror image of that is playing out now, with numerous suits challenging Trump administration policies from contraception coverage to Medicaid work requirements.” The result has been a multi-billion-dollar boon to those who “promise to help navigate a landscape that seems to change every six weeks,” Kenen writes: These fixers—the visionaries, the mercenaries and everyone in between—have been dramatically increasing their role in the economy since the Affordable Care Act was passed in 2010. A Modern Health Care Magazine survey of just 25 prominent national consultant firms found that revenue rose from $2.3 billion in 2008—the year before Obama took office—to $6.6 billion in 2014, the start of the ACA coverage expansion. Deloitte, for instance, which topped the list in 2014, saw its health-related revenue rise from $725 million to $2.2 billion in that time. Market-research firm IBISWorld says health-care consulting has been growing by more than 7 percent a year, and while definitions and measures of the sector vary, consultant Paul Keckley estimated in 2015 that management consulting in health care was a $20 billion a year business. “The amazing thing is all of this gets paid for. Somehow, it must find a way into our health care bills,” Princeton’s Uwe Reinhardt, a noted health care economist, told Kenen last year before he died. The big question, then, is what the health-care system gets for all that money and outside “expertise” — and, Kenen adds, “whether the helpers become grafted onto the health care system in perpetuity.” [Read the whole story at Politico.]( It’s worth your time. Trump Administration Freezes Affordable Care Act Payments The Trump administration [announced]( Saturday that it will freeze billions of dollars in payments to insurance companies participating in the federal health exchanges established by the Affordable Care Act. The "risk adjustment" payments, which do not involve taxpayer money, are meant to help insurers who face higher-than-expected costs for their ACA patients. Insurers pay into a fund that is redistributed according to the relative health of their insurance pools, transferring money from companies with healthier patients to those with less healthy ones. The risk payments for 2017 total $10.4 billion. The Trump administration said that a New Mexico court ruling in February, which found fault with the risk payment method, forced it to suspend the payments for 2017. Critics have pointed out that a Massachusetts court upheld the same method, and questioned the need to freeze payments. The suspension of the payments is expected to further destabilize the federal insurance markets and drive ACA premiums higher in 2019. "Insurers hate uncertainty, and when faced with it tend to raise premiums to hedge their bets," Larry Levittt of the Kaiser Family Foundation [told]( NPR. "When the rules of the game change after the fact — insurers don't necessarily see the federal government as a particularly reliable partner right now. This is one of several steps the Trump administration has taken to undermine the ACA.” Nicholas Bagley, a law professor at the University of Michigan, was more critical, [writing on his blog]( that “the needless suspension of the risk adjustment program is a signal that the Trump administration remains intent on sabotage. Already, insurers were stiffed on their risk corridor money. Then the cost-sharing payments evaporated. Now, even risk adjustment money may go up in smoke. What’s next? This is no way to run a health program, and no way to run a government.” Tweet of the Day President Trump bashed Pfizer and other drugmakers Monday after the pharmaceutical companies last week raised prices on [104 drugs](. The tweet comes six weeks after the president said that drugmakers would soon announced “massive” voluntary price cuts. Pfizer stock fell after the president’s tweet, but it recovered some of its losses by the end of trading and finished the session up 0.13 percent. GOP Lawmakers Push to Make It Harder to Raise State Taxes Republican state lawmakers are taking preemptive action to make it harder for Democrats to raise taxes and enact a progressive agenda if they score big election victories this year. The Washington Post’s Jeff Stein [reports]( that Florida Republicans have approved a November referendum that would require a two-thirds supermajority of the state legislature to enact any new taxes. At least 14 states already have such supermajority tax laws on the books, Stein reports, citing data from the National Conference of State Legislatures. Conservatives and business groups are now pushing similar plans in Oregon and North Carolina as well as Florida, Meg Wiehe, a tax analyst at the liberal Institute on Taxation and Economic Policy tells Stein. The North Carolina ballot initiative would change the state constitution to lower the maximum income tax rate from 10 percent to 7 percent. If approved, any increase above 7 percent would then require the constitution to be changed again. Why it matters: Supermajority requirements could make it nearly impossible for Democrats to raise revenue to pay for social programs, education spending or other items on their agenda. "These supermajority rules make policymaking incredibly difficult," Elaine Maag of the nonpartisan Tax Policy Center tells Stein. "If a state can't increase spending because of these very high bars for raising taxes, they can't expand programs even if people in the state want them." [Read the story at The Washington Post.]( State and Local Employment Still Lags State and local governments have fewer employees than they did before the recession, Bloomberg [reports](. There are currently 14.5 million local employees in the U.S., and 5.1 million state employees. After rising steadily since bottoming out in 2014, employment at local governments is just .01 percent below where it was at the beginning of the recession in late 2007. But employment at state governments is .72 percent lower than it was at that time, and has been falling for more than a year following a resurgence between 2014 and 2016. The slowdown in state government hiring is politically driven, according to Natalie Cohen of Wells Fargo. "States have tightened their belt consistently and they continue to do that. We have a lot more conservative ’no tax, don’t spend’ governors," Cohen told Bloomberg. The steady increase in local employment, on the other hand, is driven largely by hiring at local school districts. Cohen said that she expects state-level hiring to pick up in the coming months, as new taxes on marijuana, online sales and sports betting provide extra revenues. News - [Corporations Invested Their Tax Cuts Into Stock Buybacks That Didn’t Even Work]( – New York - [The Government Officials Who Wrote the Tax Bill Have New Jobs as Lobbyists]( – Vox - [GOP Runs into Trump Tax Law in New Jersey]( – The Hill - [More Money – and Stricter Scrutiny – for Child Care]( – Stateline - [Medicare for All Is New Democratic Mantra in Congressional Races]( – Washington Post - [A New Messaging Tactic on the Left: Drug Prices Rise, as Pharma Prospers from Tax Law]( – STAT - [Hospital Drug Discount Program Under Lawmakers’ Microscope]( – Roll Call - [Why Hasn’t Telemedicine Taken Off? Hey, Blame This Guy.]( – Fortune - [Trump’s Fight with Federal Employee Unions Gets Real on Monday]( – Washington Post - [New Battleground Emerges Over State, Local Government Union Fees]( – Route Fifty - [As Trump Pushes Space Force, Support Quietly Builds for 'Space Guard']( – Politico - [The Bill for the Ballot Battle Over California Gas Tax Might Reach $75 Million]( – New York - [The Strange Case of Ford’s Attempt to Avoid the ‘Chicken Tax’]( – Washington Post - [Italy Says Won't Buy More F-35 Fighter Jets, May Cut Existing Order]( – Reuters Views - [Do Poor People Have a Right to Health Care?]( – New York Times Editorial Board - [Pruitt and Kennedy Leaving Increases the Chances of Government Shutdown to Over 50%]( – Stan Collender, The Budget Guy Blog - [5 Challenges Atul Gawade Will Face in a Risky New Health CEO Role]( – Casey Ross, STAT - [One Sure Way to Hurt the U.S. Economy? Cut Immigration]( – Noah Smith, Bloomberg - [What Does the Wayfair Decision Really Mean for States, Businesses, and Consumers?]( – Joseph Bishop-Henchman, Tax Foundation - [Protecting Families of Fallen Service Members from Another Government Shutdown]( – Rep. Gerald E. Connolly (D-VA), The Hill - [People Returning to Labor Force in Droves — a Key Step for the Economy]( – Evan Kraft, The Hill - [Oversight Matters: What's Next for Inspectors General]( – Bipartisan Policy Center - [Agency Watchdogs Can Do Much More Than Bark and Bite]( – David Williams and Dan G. Blair, Roll Call Copyright © 2018 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com. 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