Majority of Republicans supports ‘Medicare for all,’ poll finds

By Julia Manchester
The Hill, October 22, 2018

More than half of Republicans in a new American Barometer poll say they support “Medicare for all,” also known as a single-payer health-care system.

The survey, conducted by Hill.TV and the HarrisX polling company, found that 52 percent of Republicans polled said they supported the option, while 48 percent said they opposed it.

Twenty-five percent said they “strongly” supported “Medicare for all,” while 27 percent said they “somewhat” supported it.

Twenty-two percent said they “somewhat” opposed the idea, while 26 percent said they “strongly” opposed it.

The poll comes as Democrats aim to make health care, along with “Medicare for all,” a central campaign issue.

Reid Wilson, campaign reporter for The Hill, told Hill.TV’s Joe Concha that Republicans have yet to find their messaging on the issue.

“Republicans are only beginning to think about how to message this. So this is not baked in at all. This is a debate that plays out over the long term,” he added.

The American Barometer was conducted on October 19-20 among 1,000 registered voters. The sampling margin of error is 3.1 percentage points.

https://thehill.com…

The question asked? Would you support or oppose providing Medicare to every American? This is not an ambiguous question.

According to this poll, half of registered Republicans now support Medicare for all (52% with a sampling error of 3.1%). Well over four-fifths of Democrats (86%) and two-thirds of Independents (68%) also are in support.

The support of the Democrats is understandable, but we can only speculate as to what has resulted in the sharp increase in support from Republicans, especially considering the intensity of political polarization in this nation. It is likely that Republican and Independent voters are quite dissatisfied with the status quo in health care financing, and that they have grown weary of the Republican politicians who have continued to call for the repeal of Obamacare, but when it came time to perform with a replacement program, they came up empty handed. The turning point may well prove to be when Sen. John McCain expressed the will of the American people by turning thumbs down on the empty charade of reform without substance.

Although the voters are aligning themselves in support of Medicare for all, the politicians are not, though the Republicans have latched onto supporting coverage of pre-existing conditions to show the voters that their hearts are in the right place, even if they have not developed any effective policies to implement it should Obamacare be repealed.

People lead, politicians follow. Hopefully the Republican voters will cause their candidates to develop some introspection and seriously consider the greater value that a Medicare for all would bring us – just common business sense – not to mention that the program would be truly universal, equitable, and affordable for all.

The congressional Republicans would have to neutralize the McConnell curse – if the the Democrats are for it, we’re against it – the insane attitude that partisan politics must take precedence over sound policy. It would be easiest if Sen. McConnell could simply experience a revelation. If the Republican voters are loud enough, that just could happen.

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Trump Administration announces State Relief and Empowerment Waivers to give states the flexibility to lower premiums and increase choices for their health insurance markets

The Centers for Medicare & Medicaid Services (CMS), October 22, 2018

Today, the Centers for Medicare & Medicaid Services (CMS) and the U.S. Department of the Treasury (collectively, the Departments) issued new guidance so states can move their insurance markets away from the one-size-fits-all rules and regulations imposed by the Affordable Care Act (ACA) and increase choice and competition within their insurance markets. The new guidance grants states more flexibility to design alternatives to the ACA and to give Americans more options to get health coverage that better meets their needs. Under this new policy, states will be able to pursue waivers to improve their insurance markets, increase affordable coverage options for their residents, and ensure that people with pre-existing conditions are protected. These waivers are called State Relief and Empowerment Waivers to reflect this new direction and opportunity.

“The Trump Administration inherited a health insurance market with skyrocketing premiums and dwindling choices,” said CMS Administrator Seema Verma. “This is a new day – this is a new approach to empower states to provide relief. States know much better than the federal government how their markets work. With today’s announcement, we are making sure that they have the ability to adopt innovative strategies to reduce costs for Americans, while providing higher quality options.”

https://www.cms.gov…

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State Relief and Empowerment Waivers

Federal Register, Scheduled to be published October 24, 2018

Agencies: Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services; Department of the Treasury

Action: Guidance

Summary: This guidance relates to section 1332 of the Patient Protection and Affordable Care Act (PPACA) and its implementing regulations. Section 1332 provides the Secretary of Health and Human Services and the Secretary of the Treasury (collectively, the Secretaries) with the discretion to approve a state’s proposal to waive specific provisions of the PPACA (a State Innovation Waiver, now also referred to as a State Relief and Empowerment Waiver), provided the section 1332 state plan meets certain requirements. The Department of Health and Human Services and the Department of the Treasury (collectively, the Departments) finalized implementing regulations on February 27, 2012. This updated guidance provides supplementary information about the requirements that must be met for the approval of a State Innovation Waiver, the Secretaries’ application review procedures, the calculation of pass-through funding, certain analytical requirements, and operational considerations. This guidance supersedes the guidance related to section 1332 of the PPACA that was previously published on December 16, 2015. Changes include increasing flexibility with respect to the manner in which a section 1332 state plan may meet section 1332 standards in order to be eligible to be approved by the Secretaries, clarifying the adjustments the Secretaries may make to maintain federal deficit neutrality, and allowing for states to use existing legislative authority to authorize section 1332 waivers in certain scenarios. The Departments are committed to empowering states to innovate in ways that will strengthen their health insurance markets, expand choices of coverage, target public resources to those most in need, and meet the unique circumstances of each state. This guidance aims to lower barriers to innovation for states seeking to reform their health insurance markets.

From I. Overview

This guidance intends to expand state flexibility, empowering states to address problems with their individual insurance markets and increase coverage options for their residents, while at the same time encouraging states to adopt innovative strategies to reduce future overall health care spending. Section 1332 of the PPACA permits a state to apply for a State Innovation Waiver (referred to as a section 1332 waiver or a State Relief and Empowerment Waiver) to pursue innovative strategies for providing their residents with access to higher value, more affordable health coverage. The overarching goal of section 1332 waivers is to give all Americans the opportunity to gain high value and affordable health coverage regardless of income, geography, age, gender, or health status while empowering states to develop health coverage strategies that best meet the needs of their residents. Section 1332 waivers provide states an opportunity to promote a stable health insurance market that offers more choice and affordability to state residents, in part through expanded competition. These waivers could potentially be used to allow states to build on additional opportunities for more flexible and affordable coverage that the Administration opened through expanded options for Association Health Plans (AHP) and short-term, limited-duration insurance (STLDI).

The Secretaries will consider favorably section 1332 waiver applications that advance some or all of these five principles as elements of a section 1332 waiver application. The principles are:

* Provide increased access to affordable private market coverage. Making private health insurance coverage more accessible and affordable should be a priority for a section 1332 waiver. A section 1332 state plan should foster health coverage through competitive private coverage, including AHPs and STLDI plans, over public programs. Additionally, the Departments will look favorably upon section 1332 applications under which states increase issuer participation in state insurance markets and promote competition.

* Encourage sustainable spending growth. Section 1332 waivers should promote more cost-effective health coverage and be fair to the federal taxpayer by restraining growth in federal spending commitments. For example, states should consider eliminating or reducing state-level regulation that limits market choice and competition in order to reduce prices for consumers and reduce costs to the federal government, as part of their section 1332 waiver applications.

* Foster state innovation. States are better positioned than the federal government to assess and respond to the needs of their citizens with innovative solutions. We encourage states to craft solutions that meet the needs of their consumers and markets and innovate to the maximum extent possible under the law.

* Support and empower those in need. Americans should have access to affordable, high value health insurance. Some Americans, particularly those with low incomes or high expected health care costs, may require financial assistance. Policies in section 1332 waiver applications should support state residents in need in the purchase of private coverage with financial assistance that meets their specific health care situations.

* Promote consumer-driven healthcare. Section 1332 waivers should empower Americans to make informed choices about their health coverage and health care with incentives that encourage consumers to seek value. Instead of only offering a one-size-fits-all plan proposal, a section 1332 state plan should focus on providing people with the resources and information they need to afford and purchase the private insurance coverage that best meets their needs.

From II. Changes to 2015 Guidance

A major disadvantage of the 2015 interpretation was that it deterred states from providing innovative coverage that, while potentially less comprehensive than coverage established under the PPACA, could have been better suited to consumer needs and potentially more affordable and attractive to a broad range of its residents. For example, even if coverage similar to that made available under the PPACA remained available in a state, an offer of more attractive, but less comprehensive plans would have reduced the number of residents who elected PPACA-like coverage, and would likely have caused the state waiver plan to fail the comprehensiveness guardrail. To avoid this effect of the 2015 guidance, this guidance focuses on the availability of comprehensive and affordable coverage. This shift in focus ensures that state residents who wish to retain coverage similar to that provided under the PPACA can continue to do so, while permitting a state plan to also provide access to other options that may be better suited to consumer needs and more attractive to many individuals.

The coverage guardrail requires that coverage be provided to at least a comparable number of residents as would occur absent the waiver. However, the text of the coverage guardrail provision of the statute is silent as to the type of coverage that is required. Accordingly, to enable state flexibility and to promote choice of a wide range of coverage to ensure that consumers can enroll in coverage that is right for them, this guidance permits states to provide access to less comprehensive or less affordable coverage as an additional option for their residents to choose. This guidance on the coverage guardrail continues to consider the number of state residents who are actually receiving coverage. As long as a comparable number of residents are projected to be covered as would have been covered absent the waiver, the coverage guardrail will be met.

From III. Statutory Guardrail Requirements

A. Comprehensiveness and Affordability

The Departments may consider these guardrails met if access to coverage that is as affordable and comprehensive as coverage forecasted to have been available in the absence of the waiver is projected to be available to a comparable number of people under the waiver. The Departments will not require projections demonstrating that this coverage will actually be purchased by a comparable number of state residents; in other words, these guardrails will be met if the state plan has made other coverage options available that state residents may prefer, so long as access to affordable, comprehensive coverage is also available.

B. Number of State Residents Covered (Coverage)

A section 1332 state plan will be considered to comply with this coverage guardrail if, for each year the waiver is in effect, the state can demonstrate that a comparable number of state residents eligible for coverage under title I of PPACA will have health care coverage under the section 1332 state plan as would have had coverage absent the waiver. For purposes of meeting this guardrail, in line with the Administration’s priority favoring private coverage, including AHPs and STLDI plans, the Departments will consider all forms of private coverage in addition to public coverage, including employer-based coverage, individual market coverage, and other forms of private health coverage.

C. Deficit Neutrality

Under the deficit neutrality requirement, the projected federal spending net of federal revenues under the section 1332 waiver must be equal to or lower than projected federal spending net of federal revenues in the absence of the section 1332 waiver.

https://s3.amazonaws.com…

Section 1332 of the Affordable Care Act authorizes the states to apply for waivers to modify health plans offered through their insurance exchanges as long as they still meet certain specifications that fulfill the intent of the legislation. Now the Trump administration wishes to reduce federal regulatory oversight of the exchange plans with the ideological goal of allowing states to “increase choice and competition within their insurance markets.”

They plan to do that by using the “Guidance” released today. Wading through their regulatory jargon, their intent is made clear by this statement: “… in line with the Administration’s priority favoring private coverage, including AHPs (Association Health Plans) and STLDI plans (short-term, limited-duration insurance), the Departments will consider all forms of private coverage in addition to public coverage, including employer-based coverage, individual market coverage, and other forms of private health coverage.”

The perilous deficiencies of AHPs and STLDI plans have provoked concerns, but the administration apparently has been tone deaf to these concerns. They state that it remains their priority to favor private coverage, including these deficient insurance products.

According to the Guidance, “the Departments have determined that the analysis of comprehensiveness and affordability of coverage under a waiver should focus on the nature of coverage that is made available to state residents (access to coverage), rather than on the coverage that residents actually purchase” and “this guidance permits states to provide access to less comprehensive or less affordable coverage as an additional option for their residents to choose.” As they repeatedly state, it’s all about access (to insurance products, not health care).

Also, “the Departments will consider the longer-term impacts of a state’s proposal, and may approve a waiver even where a state expects a temporary reduction in coverage but can demonstrate that the reduction is reasonable under the circumstances, and that the innovations will produce longer-term increases in the number of state residents who have coverage such that, in the aggregate, the coverage guardrail will be met or exceeded over the course of the waiver term.” They will approve waivers that reduce the number of insured, in exchange for a promise (a la Trump) that they’ll cover them later.

Deficit neutrality is met even if federal spending net of federal revenues is lower than projected federal spending net of federal revenues in the absence of the section 1332 waiver, but, of course, not if it is higher. Obviously, this administration’s goal is to reduce federal spending.

This would all go away if we would enact and implement an improved Medicare for All. But Seema Verma says, “Medicare for All would become Medicare for None.” We desperately need government health care stewards with a much better vision than that.

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Does Anyone Really Know What ‘Medicare for All’ Means?

By Elisabeth Rosenthal and Shefali Luthra
The New York Times, October 19, 2018

After decades in the political wilderness, “Medicare for all” and single-payer health care are suddenly popular. The words appear in political advertisements and are cheered at campaign rallies — even in deep-red states.

Republicans are concerned enough that this month President Trump wrote a scathing op-ed essay that portrayed Medicare for all as a threat to older people and to American freedom.

It is not that. But what exactly these proposals mean to many of the people who say they support them remains unclear.

More than 120 members of Congress have signed on as co-sponsors of a bill called the Expanded and Improved Medicare for All Act, up from 62 in 2016. And at least 70 have joined Capitol Hill’s new Medicare for All Caucus.

But some worry the terms “Medicare for all” and “single payer” are at risk of becoming empty campaign slogans. In precise terms, Medicare for all means bringing all Americans under the government’s insurance program now reserved for people 65 and over, while single-payer health care would have the government pay everyone’s medical bills. But few are speaking precisely.

For every candidate with a clear proposal in mind, another uses the phrases as a proxy for voter frustration. The risk, some critics say, is that “Medicare for all” could become a Democratic version of the Republican “repeal and replace” slogan — a vote-getter that does not translate to political action because there is neither agreement about what it means nor a viable plan.

Dr. Carol Paris, the president of Physicians for a National Health Program, an advocacy group, said she has fielded a number of calls from candidates asking for tutorials on Medicare for all.

“I’m heartened, but not persuaded” that all the high-profile talk will result in any action, she said. She worries about what she called “faux ‘Medicare for all’ plans” that don’t live up to the mantra.

https://www.nytimes.com…

“Medicare for All” means fixing Medicare and then expanding it to include everyone. It is a straightforward concept that has gained widespread support in the United States. Because of its popularity, many politicians on the left have latched onto the “Medicare for All” label to use in their campaigning while remaining quite vague on the fact that they really support the post-Obamacare status quo for most of us, with the addition of a public option or Medicare buy-in. Those on the right have noticed that this chicanery has gained traction and so, led by President Trump, they are condemning “Medicare for All” using whatever pejorative terms suit their campaigns.

Soon the midterm campaigns will be over. At that time we need to pressure those who said they support Medicare for All to live up to their campaign promise and cosponsor bona fide Improved Medicare for All legislation. For those who claim to be opposed to Medicare for All but also said that they now support a guarantee of health care for individuals with pre-existing disorders, we need to convince them that a single payer national health program is the most efficient and equitable method of achieving that goal. Maybe we’ll even let them call it Trumpcare if that gets the job done.

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Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials

U.S. Department of Health and Human Services, Office of Inspector General, September 2018

Why OIG Did This Review

A central concern about the capitated payment model used in Medicare Advantage is the potential incentive for MAOs to inappropriately deny access to services and payment in an attempt to increase their profits. An MAO that inappropriately denies authorization of services for beneficiaries, or payments to healthcare providers, may contribute to physical or financial harm and also misuses Medicare Program dollars that CMS paid for beneficiary healthcare.

What OIG Found

When beneficiaries and providers appealed preauthorization and payment denials, Medicare Advantage Organizations (MAOs) overturned 75 percent of their own denials during 2014–16, overturning approximately 216,000 denials each year. During the same period, independent reviewers at higher levels of the appeals process overturned additional denials in favor of beneficiaries and providers. The high number of overturned denials raises concerns that some Medicare Advantage beneficiaries and providers were initially denied services and payments that should have been provided. This is especially concerning because beneficiaries and providers rarely used the appeals process, which is designed to ensure access to care and payment. During 2014-16, beneficiaries and providers appealed only 1 percent of denials to the first level of appeal.

Centers for Medicare & Medicaid Services (CMS) audits highlight widespread and persistent MAO performance problems related to denials of care and payment. For example, in 2015, CMS cited 56 percent of audited contracts for making inappropriate denials. CMS also cited 45 percent of contracts for sending denial letters with incomplete or incorrect information, which may inhibit beneficiaries’ and providers’ ability to file a successful appeal. In response to these audit findings, CMS took enforcement actions against MAOs, including issuing penalties and imposing sanctions. Because CMS continues to see the same types of violations in its audits of different MAOs every year, however, more action is needed to address these critical issues.

https://oig.hhs.gov…

The findings of this review by CMS’s Inspector General are shocking. Of the claim rejections by the private Medicare Advantage Organizations that were appealed, most of them were overturned, indicating that the claims were certainly legitimate. But likely due to the tremendous administrative burden on the providers of health care, 99 percent of the claim rejections were never appealed. For these organizations to keep funds entrusted to them that were designated to pay for health care services that were actually delivered is worse than thievery because it is on such a massive scale. This is racketeering at its worst.

In her response to this report, CMS Administrator Seema Verma concurs with the recommendations for corrective actions, but then offers no new remedial measures. It is likely that they are not forthcoming. In an effort to privatize Medicare she has greatly increased the payment rates for the plans well beyond legislative intent. She has relaxed the star rating requirements allowing more plans to receive bonuses. She has recently relaxed the regulations on benefits to encourage more Medicaid beneficiaries to enroll in the private plans. And yet she states, “We are not steering any Medicare beneficiary anywhere” (Pear, NYT, 10/13/18).

At the same time, Verma has refused to recommend much needed reforms in the traditional Medicare program. In fact, she is fighting to force physicians to take downside risk in the traditional program (i.e., bear losses), likely with the intent of driving physicians out of the traditional program and into the private Medicare Advantage plans. Verma makes the outrageous claim that Medicare for All “would destroy Medicare for the seniors” (AHIP 10/16/18), when it would actually increase their benefits. Yet she is doing all she can herself to destroy Medicare while building up the private plans so that they can eventually take over.

Enough with the privateers and the racketeers. Let’s take back our Medicare, improve it, and expand it to cover everyone. But we do need public stewards in charge who actually believe in government of, by, and for the people.

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1,495 Americans Describe the Financial Reality of Being Really Sick: ‘Do you pay the hospital bill or do you pay the utility bill?’ Don’t count on your health insurance for serious illnesses, a new survey warns.

By Margot Sanger-Katz
The New York Times, October 17, 2018

The whole point of health insurance is protection from financial ruin in case of catastrophic, costly health problems. But a recent survey of people facing such problems shows that it often fails in that basic function.

The survey, of some of the country’s most seriously ill people, found that even with health insurance, more than a third of the respondents had spent all or most of their savings while sick. They are often faced with deductibles and co-payments; treatments their insurance won’t cover; and financial challenges — like lost work — that health insurance alone can’t address.

The New York Times, the Commonwealth Fund and the Harvard  T.H. Chan School of Public Health used the survey to examine the sliver of the American population who use the health care system the most. To be included in the results, a respondent had to  have been hospitalized twice in the last two years, and to have seen at least three doctors.

Their experiences may serve as an early warning system for problems that all of us may face: Because the estimated 40 million people in this population visit doctors, hospitals, nursing homes and pharmacies the most, they are the likeliest to see the weak points in the health care system.

One of these is financial insecurity. Among people with health insurance, more than 20 percent had trouble paying for basic necessities. More than a quarter had bills in collection, and 13 percent had borrowed money as a result of their illness.

https://www.nytimes.com…

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Being Seriously Ill in America Today

The Commonwealth Fund, The New York Times, Harvard T.H. Chan School of Public Health, October 2018

From the Conclusions

These poll results present a unique look at the experiences of the most seriously ill patients in America today. They point to significant conclusions.

First, although about nine in ten seriously ill patients (91%) have health insurance coverage, the survey shows that while most people are financially protected, a substantial minority are not. About one-third (34%) report serious problems paying their hospital bills, and about three in ten (29%) report serious problems paying for their prescription drugs.

Among seriously ill patients who have health insurance coverage, these numbers about financial problems are still high. Thirty-one percent report serious problems paying their hospital bills, and 27% say they have problems paying for their prescription drugs.

These unpaid bills have a significant impact. Thirty-seven percent report that they used up all or most of their savings as a result of the cost of their medical condition, and 23% report being unable to pay for basic necessities like food, heat, or housing. For many of these individuals the problem is not that they have no health insurance coverage, but that their coverage is inadequate to deal with a serious illness.

This has implications for the national debate about whether or not governments should require higher levels of basic health insurance coverage for individuals. It also has implications when looking at the scope of public programs, such as Medicare. It is very unlikely that these seriously ill people imagined this high amount of health care expenditures in the years ahead at the time they bought their health insurance coverage or were aware of the level of coverage that Medicare would or would not give them if they were seriously ill.

https://cdn1.sph.harvard.edu…

Other resources on this topic, “Health Care in America: The Experience of People with Serious Illness,” are available at the following link:
https://www.commonwealthfund.org…

Some say that we need health insurance only for major illnesses and injuries, that we can take care of routine care out of our savings whether or not the funds are transmitted through a health savings account. We know that isn’t true since routine costs have been shown repeatedly to impair access to essential health care services and frequently result in financial hardship for individuals and families. But what about the larger expenses? Does insurance provide adequate protection against catastrophic expenses?

“Among seriously ill patients who have health insurance coverage… Thirty-one percent report serious problems paying their hospital bills, and 27% say they have problems paying for their prescription drugs.” Further, “These unpaid bills have a significant impact. Thirty-seven percent report that they used up all or most of their savings as a result of the cost of their medical condition, and 23% report being unable to pay for basic necessities like food, heat, or housing.”

Obviously insurance is not providing adequate protection for all too many Americans. Even for those over 65 with Medicare, though protection is better it is still not adequate – thirty percent still used up most or all of their savings. That is one of the main reasons why we insist that we need an improved version of Medicare to serve as a financing infrastructure for a single payer national health program.

We can’t say too often that when people use the label, “Medicare for All,” to advocate for a public option or Medicare buy-in, we must challenge them on the inadequacy of such a proposal. Not only is more of the same kind of Medicare inadequate, most of the rest of the financing system that is resulting in the financial hardship reported in this study would remain in place.

The health care financing system needs to be changed. Let’s fix Medicare and then expand it to include absolutely everyone. We’ll still need other changes, but removing the financial barriers to care is a great start.

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Controversial former aide to Maine’s LePage to run Medicaid

By Dan Diamond and Brianna Ehley
POLITICO, October 15, 2018

The Trump administration has tapped Mary Mayhew — the architect of Maine’s aggressive conservative reforms to the social safety net — to oversee the national Medicaid program. She has been an ally of outgoing Maine Gov. Paul LePage, a Republican who has fought as hard as any governor against expanding Medicaid under Obamacare.

CMS announced the move internally Monday, the day Mayhew began as the agency’s deputy administrator and director of Medicaid and the Children’s Health Insurance Program.

Mayhew served as Maine’s health commissioner for six years under LePage, leading efforts to tighten the state’s Medicaid eligibility standards, add work requirements to the food stamp program and implement other conservative reforms. She supported LePage as he rejected efforts to expand the state’s Medicaid program — repeatedly vetoing legislation and then resisting after nearly 60 percent of Maine voters approved expansion on a ballot measure in 2017. LePage is spending his final months in office fighting a court order to expand the program.

Mayhew stepped down in May 2017 and ran to succeed LePage as governor, losing in the June Republican primary. As part of her campaign, Mayhew touted how safety-net programs had shrunk under her watch, pointing to a 70 percent decrease in enrollment in the Temporary Assistance for Needy Families program — one of the sharpest declines in the nation — and a 24 percent decrease in Medicaid enrollment.

Advocates have warned that Maine’s safety-net suffered under Mayhew’s leadership, noting that measures of hunger and poverty rose even while she oversaw cuts to programs designed to feed and support low-income residents.

https://www.politico.com…

The Trump administration has appointed Mary Mayhew as director of Medicaid and the Children’s Health Insurance Program (CHIP). She previously worked with Maine Governor Paul LePage to slash safety net programs in that state, taking great pride in the fact that they reduced Medicaid enrollment by 24 percent.

Really? President Trump, Secretary Azar and Administrator Verma brought in a slash and burn expert to supervise the health programs for low-income individuals and families? This is happening right now in the good old United States of America? What kind of a nation have we become that we tolerate this?

Shall we call for a hundred million man march on Washington? If we did, I’m afraid that it would be quite lonely out there.

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Is Medicare for All the Answer to Sky-High Administrative Costs?

By Austin Frakt
The New York Times, October 15, 2018

Calls for a Medicare for All system are growing louder. Many Democrats have embraced it, while President Trump said last week that it would raise health care costs drastically.

Democrats say that giving people the option to partake in Medicare — no matter their age — will actually cut costs.

American administrative costs for health care are the highest in the world, and they argue that one advantage of Medicare for All is that it would save money because Medicare’s administrative costs are below those of private insurers.

Does that argument hold up?

Don’t forget about Medicare’s private plans

Medicare’s administrative costs were $8.1 billion last year, or 1.1 percent of total spending, close to the proportion it has been in recent years.

But some have argued that the actual cost is higher because of services performed for Medicare by other parts of the government that aren’t accounted for: The Social Security Administration collects premiums, the Internal Revenue Service collects taxes for the program, the F.B.I. provides fraud prevention services, and at least seven other federal agencies and departments also do work that benefits Medicare.

The claim that these administrative costs are overlooked is false. As annual reporting of Medicare’s finances plainly states, they are accounted for.

But there is something missing from the $8.1 billion Medicare administrative cost figure, as Kip Sullivan explains in a 2013 paper published in the Journal of Health Politics, Policy and Law. Although it accurately accounts for the federal government’s administrative costs, it does not include those borne by private plans that also offer Medicare benefits.

In addition to the traditional (public) Medicare plan, Medicare is also available from private plans through the Medicare Advantage program. Today, one-third of people using Medicare are in such plans, up from about one-fifth a decade ago. Moreover, all Medicare drug benefits are administered through private plans.

National Health Expenditure data shows both the government’s administrative costs for Medicare and those of Medicare’s private plans. Putting them together for the most recent year available (2016), they reach $47 billion, or 7 percent of total Medicare spending — well above the administrative costs borne directly by the Medicare program.

Medicare’s private drug benefit plans incur administrative costs that are about 11 percent of their spending. All of this additional, private administrative cost is paid for by taxpayers and, through their premiums, people who use Medicare.

Medicare’s direct administrative costs are not only low, but they also have been falling over the years, as a percent of total program spending. Yet the program’s total administrative costs — including those of the private plans — have been rising.

“This reflects a shift toward more enrollment in private plans,” Mr. Sullivan said. “The growth of those plans has raised, not lowered, overall Medicare administrative costs.”

The high costs of private insurer plans

Making an accurate estimate of the administrative costs of Medicare for All would depend, in part, on whether it would be more like an expansion of traditional Medicare (with its 1.1 percent administrative cost rate) or of all of Medicare, including its private plans (with a combined 7 percent administrative cost rate).

Yet both figures are well below private insurers’ administrative costs, which run about 13 percent of spending (this also includes profit), according to America’s Health Insurance Plans, an advocacy organization for the industry.

Some critics have argued that Medicare’s administrative cost rate appears artificially low because Medicare enrollees’ health spending is so high. Average Medicare spending per beneficiary is just over $12,000 per year; for an average worker in a private plan, it’s about $6,000. If you simply divide administrative costs by total spending, you will get a lower number for Medicare for this reason alone.

This is true, but the government’s administrative costs for Medicare are still below those of private plans. The government’s administrative costs are about $132 per person compared with over $700 for private plans. One reason Medicare’s are so much lower is that it reaps economies of scale. It also benefits from not needing to do much marketing, and it doesn’t earn profits.

A final critique of Medicare’s administrative costs is that they’re inefficiently low because the program doesn’t spend enough on anti-fraud efforts.

This is hard to prove or disprove. The government engages in a number of Medicare anti-fraud activities that more than pay for themselves. Perhaps another dollar spent tracking fraud would yield more than a dollar in return.

Still, even if Medicare did every bit as much in this area as the private sector, it would not raise its administrative costs by much.

“While private health plans have active anti-fraud, waste and abuse efforts, their total spending on this is very low,” said Andrew Naugle, a health care consultant with Milliman who studies health plan administrative costs. “For most plans, it’s not even in the top 10 categories of administrative spending.”

Features that may be worth the cost

Although Medicare for All might shed some administrative costs, it could also shed some other features, including some that many people appreciate.

“We should keep in mind that traditional Medicare and private plans are completely different products, and thus their associated administrative cost loads are very different,” Mr. Naugle said.

Traditional Medicare is primarily focused on processing payments to providers, while private plans — including those offered by Medicare Advantage, employers and Affordable Care Act marketplace plans — engage in care management, which could help coordinate care for people with chronic conditions. Private plans also establish networks of physicians, which could help steer enrollees to higher-quality providers.

These activities cost money and are things traditional Medicare doesn’t do, at least not directly. It has, however, put in new programs to give health care providers incentives to better coordinate care.

Another point in favor of private plans is that they’re more responsive to consumer demand. For this reason, private plans have provided some benefits that Medicare hasn’t — or provided them long before Medicare did.

For example, drug coverage was commonplace in private plans well before Medicare put in a universal prescription drug benefit in 2006. Another is that traditional Medicare still doesn’t have an out-of-pocket limit, whereas that’s standard for private plans.

But let’s get back to the main question we posed at the top: Are Democrats right that Medicare’s administrative costs are below those of private insurers? The answer is yes. But that’s in part because private plans do things that Medicare doesn’t. Whether those things are worth higher administrative costs is a value judgment on which reasonable people can disagree.

https://www.nytimes.com…

The 1.1 percent administrative cost of traditional Medicare increases to 6 percent when only one-third of the Medicare beneficiaries are enrolled in private Medicare Advantage plans. The waste of the private plans is diluted by the efficiency of the traditional program.

More importantly, the administrative excesses permeate our entire health care delivery system because of the highly fragmented, dysfunctional financing system which also places a great administrative burden on the providers of health care. When people ask where we are going to get the funds tp pay for Medicare for All, they should be reminded that hundreds of billions of dollars are actually recoverable by merely changing to an efficient Medicare for All public financing. That would still leave hundreds of billions for essential administrative services.

Regarding whether or not the private Medicare Advantage plans are providing value for their administrative excesses, the answer is clearly no. Their intrusive care management has been directed more at upcoding to increase profits rather than providing much in the way of truly beneficial services.

It would be much more efficient to roll the extra benefits of Medicare Advantage, retiree plans, and Medigap into the traditional program, creating an improved Medicare for All. The administrative savings along with negotiated pricing is the key to providing affordable health care services to absolutely everyone.

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Medicare-for-All and Public Plan Buy-In Proposals: Overview and Key Issues

By Tricia Neuman, Karen Pollitz, and Jennifer Tolbert
KFF, October 2018

As policymakers debate next steps for expanding health insurance coverage and lowering health costs, some have introduced legislation that would broaden the role of public programs, such as Medicare and Medicaid. During the 115th Congress, eight such proposals were introduced, ranging from bills that would create a new national health insurance program for all U.S. residents, replacing virtually all other sources of public and private insurance (Medicare-for-All), to more incremental approaches that would create a new public plan option, as a supplement to private sources of coverage and public programs.

These eight legislative proposals differ in ways that have important implications for consumers, health care providers and payers, including employers, states, the federal government, and taxpayers. Key policy differences relate to eligibility, the size and scope of the public plan, covered benefits and cost sharing, premiums, subsidies for premium and cost sharing, cost containment strategies, and the likely interactions with current public programs and private sources of coverage. They also vary in their level of detail; some bills, according to their sponsors, are intended to serve as blueprints for reform, and are expected to include greater specificity over time. Given the timing of the legislative calendar, these bills are unlikely to advance in the current Congressional session; however, they illustrate the range of options that will likely serve as prototypes for legislation that may be introduced in the next session of Congress.

Greatly simplified, these public plan proposals fall into four general categories:

* Two proposals would create Medicare-For-All, a single national health insurance program for all U.S. residents (Senator Sanders, S.1804; Rep. Ellison, H.R. 676);

* Three proposals would create a new public plan option, based on Medicare, that would be offered to individuals and some or all employers through the ACA marketplace (The Choice Act by Rep. Schakowsky, H.R. 635, and Sen. Whitehouse, S. 194); The Medicare-X Choice Act by Sen. Bennett, S. 1970, and Rep. Higgins, H.R.4094; and the Choose Medicare Act by Sen. Merkley, S. 2708 and Rep. Richmond, H.R. 6117)

* Two proposals would create a Medicare buy-in option for older individuals not yet eligible for the current Medicare program (Sen. Stabenow, S. 1742; Rep. Higgins, H.R. 3748); and

* One proposal would create a Medicaid buy-in option that states can elect to offer to individuals through the ACA marketplace. (Sen Schatz, S. 2001 and Rep. Luján, H.R. 4129).

This policy brief summarizes key features of these proposals, highlights similarities and differences, and discusses key questions, trade-offs and potential implications.

Issue Brief (16 pages):
http://files.kff.org…

Side-by-Side Comparison of Medicare-for-All and Public Plan Proposals (12 pages):
http://files.kff.org…

Interactive for comparing proposals:
https://www.kff.org…

The enthusiasm for Medicare for All continues to increase so much so that it has now become part of our national parlance. Until recently, the meaning of the term has been quite specific, referring to a single payer national health program based on an improved version of our traditional Medicare program that would include everyone and which would be publicly-financed and publicly-administered.

Now advocates of various models of incremental reform want to get in on the action, and they are doing so usually by using the Medicare label. So we not only have two Medicare for All bills, but we also have the labels of Medicare public option (Choice, Medicare-X Choice, Choose Medicare), Medicare Buy-in (Medicare at 55, Medicare Buy-in and Health Care Stabilization), and even a Medicaid buy-in option. Needless to say, this has caused confusion which particularly has been a problem with distinguishing true single payer from merely adding a public option to our current inefficient, fragmented financing system.

This report, authored by the policy experts at KFF, is timely and welcome since it describes the eight leading legislative proposals and discusses some of the key issues that distinguish them. The authors do set apart Medicare for All as a single, federal, government-administered program that would provide coverage to all U.S. residents, replacing virtually all other sources of private health coverage (employment-sponsored plans and insurance offered inside and outside ACA marketplaces) and most public programs, including Medicare, Medicaid and CHIP. All of these other programs – public option, Medicare buy-in, and state Medicaid buy-in – keep intact our administratively inefficient, expensive, fragmented, dysfunctional health care financing system while merely adding administratively complex options.

The difference is night and day. There should be no confusion between an improved Medicare for All that would fix our health care financing problems, and the other proposals that merely add to the complexity and waste while failing to adequately address the inequities and deficiencies inherent in our current system.

This is why the Issue Brief and Side-by-Side comparison produced by KFF are so pertinent. They can be used to educate others on the stark differences between the two approaches to reform – single payer versus adding an option – not to mention that they can be used to sharpen your communication skills as you attempt to educate others on these crucial differences.

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To Infinity and Beyond: Exposure to Out-of-Network Bills Is High and Rising in the Individual and Small Group Markets

Robert Wood Johnson Foundation, October 4, 2018

The threat to consumers posed by bills from out-of-network (OON) health care providers is an issue that has been gaining prominence lately, with coverage from the media and growing policymaker interest.

With the growing use of managed care plan designs and narrow networks, OON coverage is becoming increasingly rare. This tendency is more pronounced in the fully insured market. In the individual market in particular, there has been a steep decline in the percent of plans that offer OON coverage, from 58 percent in 2015 to 29 percent in 2018. The decline in the small group market has been far less sharp, and probably tracks more closely to what is happening in larger employer plans. Part of the difference in the two segments reflects patterns in carrier participation in the individual market. National commercial carriers, which are more likely to offer broader network plans, exited the individual market in droves in 2016 and 2017, leaving a market that is dominated by Blues and Medicaid-managed care organizations (MMCO). MMCO plans almost always offer closed-network plans, and even many Blues plans have shifted to narrow network offerings in the individual market.

High Deductibles

The share of plans with OON benefits has declined, and so has the comprehensiveness of those OON benefits that are offered. In about 95 percent of individual and small group plans with OON benefits, the deductible must be met before there is any cost-sharing. OON deductibles are generally high, particularly in the individual market, where the median OON deductible is approximately $12,000. In about 30 percent of individual market plans with OON coverage, the deductible is greater than $20,000. The small group market is quite different, with a median deductible of about $6,000 and virtually no deductibles higher than $20,000.

Infinite Maximum Out-of-Pocket

After the deductible is met, cost-sharing usually takes the form of 50 percent co-insurance. This generally continues until the maximum out-of-pocket (MOOP) limit is reached. For ACA plans, the MOOP for in-network coverage is capped at $7,350 for individuals, and at about $14,700 for families. Yet for OON benefits, there is no such limit. In fact, about one-third of individual marketplace plans have no dollar amount for the MOOP, meaning that cost-sharing can continue basically forever once the deductible is reached. For plans that do have dollar limits, they are high. The median for the individual market is close to $19,000. In the small group markets this is much less common, as only 8 percent of plans with OON benefits have no MOOP limit. Median out-of-pocket maximums for plans with dollar limits are about $15,000 in the small group market.

OON bills are a source of concern to consumers, and a recent study showed that approximately 20 percent of hospital visits among patients with large group coverage resulted in an OON bill. In the case of medical emergencies, the ACA requires that OON care is reimbursed at in-network rates, although depending on state law, providers may still “balance bill” patients. Consumers with plans in the individual and small group markets have a high level of exposure to these charges. Narrow networks increase the likelihood that providers are out of network. Many plans in the small group market and most plans in the individual market do not have any OON coverage at all, and for those that do, the coverage tends to be very minimal, leaving consumers with a lot to lose in the event of an unpleasant surprise.

https://www.rwjf.org…

One of the most important reasons for enactment of the Affordable Care Act was the inadequacy of plans offered in the individual insurance market. Though some of the deficiencies were corrected, such as ensuring availability of coverage for individuals with pre-existing medical conditions, it is not the nature of the insurance industry to forgo opportunities to improve the business model of their insurance products. This report on what has happened in the individual insurance market since the implementation of ACA should raise alarms.

With an emphasis on controlling access to care by establishing narrower networks of health care providers, the insurers have reduced coverage provided for care obtained outside of the networks. As recently as 2015, 58 percent of individual plans offered coverage for care obtained outside of networks. This year that has declined to only 29 percent. If there is out-of-network coverage the average deductible is about $12,000 and for about 30 percent of the plans it is over $20,000. Since out-of-network care is often unavoidable, the potential financial exposure can be very great in spite of the effort of some states to regulate such exposure.

The Affordable Care Act did place limits on the maximum out-of-pocket costs to which enrollees in exchange plans would be exposed, but this maximum may not apply to care obtained out-of-network. Some individual plans do have a maximum on out-of-network out-of-pocket costs though the average maximum is about $19,000. The majority of individual plans do not have an out-of-pocket maximum and thus cost sharing can continue forever. Thus this coverage would be inadequate for a majority of individuals who had to obtain a significant portion of their care out-of-network.

It is not in the nature of the private insurers to find ways to remove financial barriers to care for patients. Quite the opposite. To meet their own business goals, they increase barriers. After the implementation of ACA we have seen an increase in the use of narrow networks and higher deductibles. If we find ways to reduce the negative impact of these policies on patients, the insurance industry, as masters of innovation, will find more ways to avoid paying for health care. In a way it is our fault because we have allowed our elected representatives to keep these people in charge.

Suppose we had a well designed, single payer national health program – an improved Medicare that covered everyone. Networks designed to limit access would not exist. High deductibles designed to erect financial barriers to care would not exist. Unlimited out-of-pocket spending would not be a problem since costs for essential health care services would be fully covered. Public programs are designed to serve patients whereas private programs are designed to serve business interests.

Again, insurer innovation since full implementation of ACA has been detrimental, as this report shows, and further detrimental innovation is inevitable as long as we leave the private insurance industry in charge. Instead of continuing with our relatively feeble efforts to try to level the playing field, let’s establish our own level field supervised by our own public stewards.

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Democrats ‘Medicare for All’ plan will demolish promises to seniors

By Donald J. Trump
USA Today, October 10 2018

Excerpts

Throughout the year, we have seen Democrats across the country uniting around a new legislative proposal that would end Medicare as we know it and take away benefits that seniors have paid for their entire lives.

Dishonestly called “Medicare for All,” the Democratic proposal would establish a government-run, single-payer health care system that eliminates all private and employer-based health care plans and would cost an astonishing $32.6 trillion during its first 10 years.

As a candidate, I promised that we would protect coverage for patients with pre-existing conditions and create new health care insurance options that would lower premiums. I have kept that promise, and we are now seeing health insurance premiums coming down.

I also made a solemn promise to our great seniors to protect Medicare. That is why I am fighting so hard against the Democrats’ plan that would eviscerate Medicare. Democrats would gut Medicare with their planned government takeover of American health care.

The Democrats’ plan means that after a life of hard work and sacrifice, seniors would no longer be able to depend on the benefits they were promised. By eliminating Medicare as a program for seniors, and outlawing the ability of Americans to enroll in private and employer-based plans, the Democratic plan would inevitably lead to the massive rationing of health care. Doctors and hospitals would be put out of business. Seniors would lose access to their favorite doctors. There would be long wait lines for appointments and procedures. Previously covered care would effectively be denied.

In practice, the Democratic Party’s so-called Medicare for All would really be Medicare for None. Under the Democrats’ plan, today’s Medicare would be forced to die.

The Democrats’ plan also would mean the end of choice for seniors over their own health care decisions. Instead, Democrats would give total power and control over seniors’ health care decisions to the bureaucrats in Washington, D.C.

The first thing the Democratic plan will do to end choice for seniors is eliminate Medicare Advantage plans for about 20 million seniors as well as eliminate other private health plans that seniors currently use to supplement their Medicare coverage.

Next, the Democrats would eliminate every American’s private and employer-based health plan. It is right there in their proposed legislation: Democrats outlaw private health plans that offer the same benefits as the government plan.

Republicans believe that a Medicare program that was created for seniors and paid for by seniors their entire lives should always be protected and preserved. I am committed to resolutely defending Medicare and Social Security from the radical socialist plans of the Democrats.

Donald J. Trump is the president of the United States.

https://www.usatoday.com…

The good news about this op-ed by President Donald Trump is that the Medicare for All concept has gained so much public support that the president feels that he must attack it in his own inimitable style, that is by being untruthful about it in an effort to reduce the political traction that it has been gaining. Although his misstatements and falsehoods are so obvious that we should not have to refute them, nevertheless it is very difficult to remain silent over his outrageous claims. Can’t help but be compelled to respond to at least a few of them.

— “a new legislative proposal that would end Medicare as we know it and take away benefits that seniors have paid for their entire lives”

Improving Medicare and expanding it to cover everyone does not end Medicare and it does not take away benefits from seniors. It expands benefits for seniors, and everyone else.

— “Dishonestly called ‘Medicare for All'”

It might be dishonest to merely add a public option to our fragmented, dysfunctional health care financing system and call that “Medicare for All,” but that is not what the president is talking about. When the proposal would expand Medicare to cover everyone, just what is dishonest about calling that Medicare for All?

— “I promised that we would protect coverage for patients with pre-existing conditions”

The Trump administration is supporting the lawsuit by Republican state attorneys general that asks for repeal of the entire Affordable Care Act which would repeal the requirement that insurers cover pre-existing conditions. How is that keeping his promise?

— “I promised that we would…create new health care insurance options that would lower premiums”

The new products, such as association health plans, have lower premiums only because they do not provide adequate coverage. People who believed they were insured will be very disappointed when they find they will have to file for medical bankruptcy anyway, in spite of their insurance.

— “we are now seeing health insurance premiums coming down”

Trump’s effort to sabotage the Affordable Care Act by cancelling subsidies caused insurers to sharply increase their premiums. When the subsidies were reestablished, some of the insurers were able to reduce their premiums. There was no Trump magic that brought the premiums back down.

— “I also made a solemn promise to our great seniors to protect Medicare”

The Republicans have repeatedly expressed their desire to implement premium support which is a scheme to privatize Medicare. Giving priority to private investors over patients is not protecting Medicare.

— “That is why I am fighting so hard against the Democrats’ plan that would eviscerate Medicare”

Expanding Medicare benefits can hardly be called an evisceration.

— “Democrats would gut Medicare with their planned government takeover of American health care”

Under Medicare for All, health care delivery remains as it is now – mostly in the private sector – and health care decisions are made by patients in consultation with their health care professionals. That is not a government takeover of health care.

— “The Democrats’ plan means that after a life of hard work and sacrifice, seniors would no longer be able to depend on the benefits they were promised”

Seniors absolutely would be able to depend on the benefits they were promised, and even more.

— “the Democratic plan would inevitably lead to the massive rationing of health care”

With the amount we are spending on health care, we have more than enough funds to ensure adequate capacity in the system.

— “Seniors would lose access to their favorite doctors”

Private insurers limit patient access to provider networks, whereas patients would have free choice of their health care professionals under Medicare for All.

— “There would be long wait lines for appointments and procedures”

Several nations have shown that resource planning and queue management can prevent excessive queues in the system.

— “Previously covered care would effectively be denied”

Who is going to deny care? Donald Trump?

— “the Democratic Party’s so-called Medicare for All would really be Medicare for None”

What an outrageous statement.

— “The Democrats’ plan also would mean the end of choice for seniors over their own health care decisions”

What a lie! (There, I said it.)

— “Democrats would give total power and control over seniors’ health care decisions to the bureaucrats in Washington, D.C.”

As mentioned before, health care decisions are the patients’ own, made in consultation with their health care professionals.

— “eliminate Medicare Advantage plans for about 20 million seniors as well as eliminate other private health plans that seniors currently use to supplement their Medicare coverage”

Medicare Advantage and Medigap plans waste funds through their administrative excesses. It would be of greater value to roll any extra benefits of those plans into an improved version of the more efficient traditional Medicare program.

— “the Democrats would eliminate every American’s private and employer-based health plan”

Finally! Thank goodness.

— “I am committed to resolutely defending Medicare and Social Security from the radical socialist plans of the Democrats”

What? Defending the social insurance programs of Medicare and Social Security from the people who created and support them? Besides, now that the Republicans have cut taxes for the rich they say that we need to cut our entitlement spending – Social Security and Medicare.

Lies and distortions. And when they are repeated at Trump’s perpetual rallies, his forever loyal followers passionately cheer him on with total disregard for absence of a factual basis for his pronouncements. As a child, I remember newsreels of what seemed to me to be similar rallies held in a land far, far away. That did not turn out well. I have often wondered what caused the crowds to show such support. I still do.

Physicians for a National Health Program (PNHP) is a single issue advocacy organization supporting a single payer national health program – an improved Medicare for All. PNHP does not support any political candidates nor political parties. If there is a misperception of a political overtone in this article, it reflects strictly the ineptitude of the author in his effort to comply with 501(c)(3) status.

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