REPOST: Michigan: John James tries explaining his position on healthcare policy again. It does not go well.

RE-UPPED 1/31/22: It was announced this morning that John James, who lost not one but two statewide U.S. Senate races back to back in 2018 & 2020, is taking a third swing at elected office in 2022. This time he's setting his sights lower, going for Michigan's new open 10th Congressional district, which is still competitive but which definitely has more of a GOP-tilt to it. In light of that, I decided to dust off this post again.

A month ago, incumbent Democratic Senator Gary Peters of Michigan and his Republican challenger John James were both interviewed as part of a Detroit Regional Chamber series on several issues, including healthcare policy and the ACA.

As I noted at the time:

• James called for no-cost primary care to be mandated...which is already included in the ACA.
• James called for coverage of pre-existing conditions to be mandated...which is already included in the ACA.
• James accused Peters of supporting Medicare for All...which Peters explicitly doesn't, which James was called out for during the segment.
• James, who has repeatedly called the ACA a "nightmare" he wants repealed, now says that he wants to keep "the part that works"...namely it's coverage of pre-existing conditions.

Most curiously, however, when asked how he intends to guarantee coverage of pre-existing conditions if the ACA is struck down en masse, James rattled off a short list of head-scratchers, including "tort reform".

I'll come back to this later, but this morning, James (and Peters) both appeared on a different talking head show, WDIV-TV's "Flashpoint" with Devin Scillian. Here, again, is a verbatim transcript of the healthcare segment of James' segment, which starts at around 3:20 and runs for roughly 8:40:

SCILLIAN: "The healthcare debate has really shaped a lot about this contest between the two of you. You have run so many ads talking about wanting to protect people who have pre-existing conditions, and yet you have supported the repeal of the Affordable Care Act, better known to many as Obamacare. And I think a lot of people have come to understand that--"

JAMES: "--Repeal and what? Repeal and what?"

SCILLIAN: "Well, that's what I'm gonna ask you. Repeal and what will you replace it with? Republicans have had about 10 years to show us a new healthcare plan to replace it with; the President has promised one time and time again...it hasn't come. And I don't see a full healthcare plan on your website. What do you want to replace it with?"

(long pause)

JAMES: "So...here's the thing...I'm not, oh, uh, I'm not...a politician. I'm coming to this as someone who has real world experience. I said--and this is the two year anniversary, Devin--of when I stood up on the debate stage with Senator Stabenow, and told her to her face that she was lying about me. I said, Senator, you're fibbing again. I will always vote to protect those with pre-existing conditions. We must have a market-based, patient-centered approach that will do that. And...the Democrats have ignored that because it gets in the way of their narrative. I believe that creating a system where we have, where we make the Affordable Care Act actually affordable, by allowing competition, through tax, tort & regulatory reform...expanding risk pools across state lines...allowing associations, so that people can have more choice. Senator Peters is on a gold-plated, taxpayer-funded plan that we don't have access to, that he gets to benefit...has different limitations. Deductibles are such that people are rationing their care and putting themselves at higher risk, driving insurance costs up, and I would support having a legislative requirement that protects people with pre-existing conditions. Senator Peters has been in Washington for 12 years, he was part of a unified Congress, a Democrat Congress, and a Democrat White House..."

OK, let's pause for a minute here because there's a lot to unpack.

First, that long pause, followed by James stumbling around for a moment before blurting out "I'm not a politician!" has already gone viral (in fact, this is what caught my attention in the first place and caused me to watch the entire segment to make sure it wasn't an out-of-context edit...except the full segment is far worse).

John James is a politician now whether he likes it or not. The literal definition is "a person engaged in party politics as a profession". James became a politician until the day he filed to run for U.S. Senate the first time in 2017 (against Michigan's other Senator, Debbie Stabenow). At the very least, if he wins, he sure as hell will be a politician the moment he takes office, at which point he'll be expected to be setting, you know, policy.

Second, he supports striking down the only federal law which mandates that health insurance companies cover pre-existing conditions, without replacing it with any comprehensive plan to do the same thing. That, again, by definition means that two years ago, at least, he supported eliminating mandated coverage of pre-existing conditions, period. Which means that Senator Stabenow was correct and he was wrong on that debate stage.

Third, he checks off having a "market-based" and "patient-centered" approach. The latter term is utterly meaningless doublespeak. The former, "market-based" is exactly what we had BEFORE the Affordable Care Act. The primary way to make health insurance "market-based" would be to bring back individual medical underwriting, which means...wait for it...remove protections for coverage of pre-existing condtions.

He then rattles off five supposedly brilliant ideas: "Association Plans", "Tax Reform", "Tort Reform", "Regulatory Reform" and this old chestnut: "Selling Across State Lines".

"Association Plans" are actually something which are already allowed for to a limited extent under the ACA and which, unfortunately, were vastly expanded under Trump Administration regulations. Here's a taste of the problem with "association plans:

There is a long history of shady and inept operators of association health plans and related multiple employer welfare arrangements, with dozens of civil and criminal enforcement actions at the state and federal levels. The U.S. Government Accountability Office identified 144 "unauthorized or bogus" plans from 2000 to 2002, covering at least 15,000 employers and more than 200,000 policyholders, leaving $252 million in unpaid medical claims. Some were run as pyramid schemes, while others charged too little for premiums and became insolvent.

Citing ERISA, abusive AHP operators often have taken advantage of unclear lines of regulatory authority between the states and the federal government. Patients have had to file for bankruptcy to escape providers' claims for large unpaid bills.

Such cases have declined since the ACA made health insurance more affordable and accessible for employers and individuals without access to large-group coverage, said Marc Machiz, a retired Labor Department attorney who formerly headed ERISA and AHP enforcement in the Philadelphia area.

Now he and other experts worry there will be a fresh wave of fraud when the new rule takes effect in 2018 for new fully insured AHPs and in 2019 for new self-insured plans. They warn that small employers and self-employed individuals desperate to find cheaper premiums as ACA marketplace rates rise will be particularly vulnerable to plan operators promising rates that are too good to be true. In addition, the new rule will allow groups to form that lack the close professional bonds of true industry associations.

"The relaxed federal standards for forming AHPs risk opening the doors wider to a surge of scam operators who will seek to exploit the looser environment," said Jim Quiggle, spokesman for the Coalition Against Insurance Fraud, which includes the Blue Cross and Blue Shield Association, the National Association of Insurance Commissioners and Families USA.

Yeah, no thanks, Mr. James. I think I'll pass on your "Association Plans", especially if combined with "Regulation Reform" which appears to mean reducing regulation of the health insurance industry instead of strengthening it.

I literally laughed out loud when James dusted off "Selling Across State Lines" for a couple of reasons:

Buying health insurance across state lines has been proposed as an alternative to the Affordable Care Act – but it’s already in the law.

The Republican presidential front-runners, along with their trailing competitors, are all big fans of allowing Americans to buy health insurance across state lines, arguing that doing so would boost competition, resulting in lower costs and greater choice for consumers. Often, conservatives have framed such a plan as part of a replacement package for Obamacare.

The thing is, such permission is already part of President Barack Obama's health care law.

The little-known provision, found in section 1333 of the roughly 1,000-page Affordable Care Act, allows for states to create "health care choice compacts" permitting insurers to sell policies to consumers in any state participating in the compact, as long as they follow specific rules.

In fact, guess what?

Five states – Georgia, Kentucky, Maine, Rhode Island and Wyoming – already have enacted interstate compact statutes, according to the National Conference of State Legislatures.

So what's the problem?

...even with five states enacting these compacts, not a single insurance carrier has expressed any interest in utilizing them, with very good reason: A Michigan resident enrolling in a healthcare policy sold out of Alabama isn't going to find it particularly useful unless they plan on making a 15-hour drive every time they have to visit the doctor or pick up a prescription.

In order for an insurance carrier to set up shop in a state, they have to establish a network of doctors, hospitals, clinics and other participating healthcare providers. Furthermore, those providers are subject to the home state's regulatory structure, not those of the state the carrier is based in. That takes an awful lot of time, money and resources to do, and can get confusing when the carrier is trying to intermingle the rules of one state with another in their internal operations. It's simply more trouble than it's worth.

As a result, if a carrier really wants to expand into a different state, all they have to do is establish a subsidiary corporation in that state with its own legal entity status, staff, policy offerings and so forth...which is exactly what some carriers have done. In case you haven't noticed, health insurance conglomerates like UnitedHealthcare, Aetna, Molina and so on do offer plans in more than one state...some are available in dozens, in fact.

The one which really takes the cake (or the tort, actually) is James listing "Tort Reform" as having some connection to mandated coverage of pre-existing conditions.

"Tort Reform" in the context of healthcare, for those unfamiliar, generally refers to legislation to reduce the number of supposedly frivolous lawsuits against medical practitioners as well as placing caps on awards granted in malpractice cases, which would supposedly result in lower malpractice insurance premiums for doctors and hospitals.

First of all, a number of states have already implemented tort reform laws, which means doing so nationally would have a much smaller impact than you might think.

Second and more importantly, the total cost of medical malpractice insurance expenses (including for doctors, hospitals & legal) in 2008 was just $55 billion...just 2.4% of U.S. healthcare spending. In fact, tt's actually *dropped* as a percentage since then. In other words, even if you made suing doctors or hospitals for malpractice completely illegal altogether, it would only reduce total healthcare spending by 2.4%...and that assumes that 100% of that savings was passed along to the enrollees/patients, which of course is laughable on the face of it.

Third, and most important of all, tort reform has absolutely nothing to do with mandating coverage of pre-existing conditions. I suppose the idea is that reducing hospitals/doctors' overhead would lead to them reducing their rates, which would in turn lead to insurance carriers reducing their overhead, which would in turn lead to them lowering their premiums and that somehow this would lead them to be more willing to accept higher-risk patients.

Or something.

In reality, none of that would happen. Doctors and hospitals would likely charge the same amount and pocket the difference. Even if everything happened exactly as just laid out, it might lead to a slight reduction in insurance company overhead. It still wouldn't lead them to voluntarily foregoing medical underwriting.

GETTING BACK TO THE TRANSCRIPT, to his credit, host Devin Scillian calls James out on a critical point:

SCILLIAN: "...But we have a healthcare law RIGHT NOW that protects people with pre-existing conditions, and the Republican administration in charge at the moment is trying to..."

Yes, that's right: The Trump Administration, which John James says he "supports 2,000 percent", is in federal court right now demanding that the Supreme Court strike down the entire Affordable Care Act...including coverage of pre-existing conditions.

What's James' response to this?

JAMES: "...I'm not in the Administration!"

SCILLIAN: "Are you arguing right now that you do NOT believe that it should be repealed?"

(pause)

JAMES: "I'm not arguing...I'm saying, emphatically, that we must NOT repeal coverage and protections for our seniors and people with pre-existing conditions. But they will continue to lie about my position on it, because this is something that's very personal to me. I have people in my family with pre-existing conditions. I will always protect them. I have people who I employ who have pre-existing conditions. And I'm paying 85% of their healthcare premiums through our business to make sure they can continue to maintain this healthcare even through a pandemic. Senator Peters is most concerned about staying on his ACA-exempted plan...his exempted. And he hid that from the media, because he knew that it wasn't setting the right example, and he knew that he was getting over on the people of the state of Michigan. I think that's wrong. I believe that fair is fair, and I believe that people have to have choices, and they need to make their own choices, and not the federal government and insurance companies.

Except that, once again, not only is the Trump Administration in court right now asking for the entire ACA to be struck down, they specifically demand that protections for coverage of pre-existing conditions be struck down. Which is why Scillian's bewilderment about what the hell James is saying here is understandable.

I'll also note that James' bringing his own family into the discussion is meaningless since a) as the head of a decent-sized company, of course he'll make sure that his family will be covered; this is about other people who aren't fortunate enough to be in his position; and b) if he wins the election, he would become a U.S. Senator...who receive heavily-subsidized top-notch healthcare coverage both before and under the ACA anyway.

Furthermore, the fact that he "pays 85% of his employees healthcare premiums through his business" isn't necessarily all that noble, since he's required to provide healthcare coverage to them under the ACA (James Group International has between 51-200 employees). I do agree that paying 85% of their premiums is more generous than average (I think employers typically cover around 70%), but without knowing how generous the plan is in terms of co-pays, deductibles, network, etc, it's impossible to tell how good a deal they're actually getting. Covering 70% of a Platinum plan's premiums is a lot better than covering 85% of a Bronze plan.

James then attacks Peters as a hypocrite for enrolling in an "ACA-exempted plan" himself. Apparently it was reported this summer that Peters (and presumably his family) are enrolled in a generous healthcare plan which used to be offered to every Michigan state legislator after they retire (Peters was a state Senator from 1995 - 2002), instead of one of the subsidized ACA policies offered to U.S. Senators via the DC Health Link exchange.

This is pretty thin gruel for James to try and attack Peters over, especially at the same time he's demanding "more choice" etc. The ACA doesn't say that everyone has to be enrolled in a policy through an ACA exchange (after all, only around 10 million people are nationally); it simply says that major medical healthcare policies have to adhere to minimum coverage standards. As long as Peters' own plan exceeds those (and it sounds like it does), I'm not sure what the problem is here. Quite a few Senators are over 65, and I'm assuming most of them are on Medicare instead of an ACA exchange plan; John McCain, before his passing, was also entitled to coverage under the VA and Medicare, and I don't recall anyone criticizing him for that either.

SCILLIAN: "The last time you were on this program I asked you what kind of healthcare model there should be, and you said that you think it should be sort of the way when people have a house or a car. That's stuck with me, because that would suggest that not everybody is entitled to the same kind of healthcare. Is that correct? Am I reading that right?"

JAMES: "What I meant by that...and thank you for asking for clarification, I appreciate that...what I meant by that is the concept of being able to make your own choices. You make your own choices about what you do with your car. You make your own choices about how you decorate your house or your apartment. What I'm saying is the choices about what you do with your medical decisions should be up to you...and not up to the federal government or insurance companies. The concept that you should control it. Where Senator Peters is saying that Medicare for All, we're probably going to have it in the future, that's documented, that's the wrong way to go.

Two things: First of all, your body isn't the same as your car or your house. You can replace those, and you have a lot of options about how large or small they should be. You only get one body, and the whole point of health insurance is that you never know what type of coverage you're going to need in the future. You're healthy right up until you aren't. You're of sound body right up until you get in a skiing accident, and so on.

Secondly...holy crap. John James--who opposes abortion in nearly all cases including cases of rape or incest--actually has the audacity to state that "the choices about what to do with your medical decisions should be up to you, not the federal government". Amazing.

"We need to keep the parts of Obamacare that work, and fix the parts that aren't. And Democrats are running on the brokenness rather than fixing the parts that are broken, because healthcare is unaffordable for too many Americans, and I believe that by increasing competition, increasing choice, increasing quality of care, lowering costs, I think we can do that with some of the ways I proposed. Again, broading the risk pools across state lines and giving regulatory, tort & tax reforms, allowing associations to give people their own choice, those are the types of things, through a legislative requirement that must protect pre-existing conditions, and again, this is the 2-year anniversary of when I stood on the debate stage and said exactly that, and Senator Peters is ignoring it."

This is simply sheer, bald-faced bullshit. House Democrats did exactly the opposite of this back in July when they passed H.R. 1425, the Affordable Care Enhancement Act, aka ACA 2.0, which does exactly what James is demanding: It keeps the parts of the ACA which work and fixes the parts that don't. Joe Biden's healthcare proposal goes even further in improving and enhancing the ACA.

The healthcare segment goes on for another minute or two with Scillian playing a pre-existing condition themed attack ad on James and asking for his reaction, but you get the idea. The bottom line is that John James either knows that most of what he's saying is garbage or he doesn't have a clue and is simply reading off vapid talking points handed to him by his GOP handlers. I strongly suspect it's the latter.

UPDATE 10/29/20: James has had an Op-Ed posted in The Detroit News in which he regurgitates most of the same stale, debunked talking points he did a week and a half ago. There are a few noteworthy differences, however:

• Someone must have whispered in his ear about the "tort reform" bit being silly and utterly irrelevant, because that's completely missing from his opinion piece. Maybe it was cut for length.

• He once again talks about how he provides healthcare coverage to the employees (and their families) at James Group International. I'd be very interested in knowing how long JGI has done so, and whether the coverage they provide has changed substantially since before the ACA made it mandatory for large- and medium-sized corporations to do so. Perhaps they've been providing quality coverage for their staff and families for decades; if so, good for them! If, however, it turns out that they only started doing so after the Affordable Care Act required it, well, that's one hell of an important point to leave out, given that he's calling for the ACA to be struck down.

• He again says healthcare needs to be "patient-centered so doctors and patients make the decisions, not bureaucrats"...immediately followed by demanding that it require protections for those with pre-existing conditions. Which is the very essence of "bureaucrats" making decisions about healthcare coverage.

• He then claims that covering pre-existing conditions can be done "using risk pools and reinsurance". The first is a non sequitur; the second is something which the ACA already had for 3 years and which over a dozen states have re-implemented via ACA Section 1332 waiver programs.

• He says we can also do so by "expanding risk pools across state lines"...except that, as I explained above, the ACA already allows this; not a single insurance carrier is interested; and expanding people from one state into a given risk pool by definition means siphoning them off from another.

• He claims that these things "mitigate costs and prevent adverse selection" which is nonsense. None of the things he's listed actually drive down overall healthcare costs; they simply shift around who pays for it from one group of people to another. In fairness, much of the ACA does something similar, it's just that most of its cost-shifting is to the superwealthy, which is something most people are perfectly fine with.

• He throws in an interesting claim about reduced competition: Supposedly Michigan's ACA exchange participants have dropped from 13 down to 8. First of all, this is incorrect: There are nine carriers for 2021 (the same as in 2020 and in 2019), not eight. That's actually one higher than in 2018, I should note.

It's true that several carriers did drop out of the on-exchange market in 2018, however: Humana did, and I think UnitedHealthcare and Aetna did in 2017 or 2018 as well. There was one Michigan-specific carrier which dropped out in 2018 for a reason John James probably doesn't want to talk about, however Health Alliance Plan:

HAP cited a variety of motivations for its withdrawal. They included uncertainties over rate premium stabilization programs, along with questions over the individual insurance mandate and cost-sharing insurer payments President Donald Trump’s administration has threatened to end amid continued debate over repealing and replacing the federal health law.

...Enroll Michigan, which also hands down funding to 28 smaller groups, said its budget was cut 90 percent from $1.2 million to $129,899 for the 2018 grant year. Funding for the ACCESS nonprofit was cut 36 percent from $555,000 to about $352,000.

That's right: The reasons HAP dropped out of the Michigan ACA exchange were primarily:

• Because Trump & the GOP were threatening to kill off the individual mandate penalty (which they did later that year, which is the basis for the lawsuit threatening the ACA in the first place)
• Because Trump was threatening to cut off Cost Sharing Reduction (CSR) payments (which he followed through with later that year)
• Because the Trump Administration slashed HC.gov's marketing, outreach and navigator budgets by 90%

• James then says he'd support "the Primary Care Patient Protection Act, a bill that would require high-deductible health plans to include a set of primary care visits each year without the consumer having to pick up the cost or co-pay"

...except that, again, the ACA already includes a long list of preventative care services which have to be provided at zero out of pocket cost to the consumer, including primary care visits, physicals, mammograms, drug/blood screenings, immunizations and so forth. Plus, again, this is exactly what "bureaucrats making decisions about helathcare" is.

Finally, James wraps things up by claiming he wants to "fix Obamacare"...which, if that were true, would mean a) a complete 180 spin from two years ago, and b) would mean supporting H.R. 1425 (the House ACA 2.0 bill which was passed back in July) or, since he's running for the Senate, the closest equivalent to it: Sen. Elizabeth Warren's "CHIPA" (Consumer Health Insurance Protection Act) bill. Something tells me he's not gonna be praising either of those anytime soon.