Sen. Sanders to introduce bill for single payer waiver

Posted by on Monday, Aug 2, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Sanders promises to seek health care waiver from Obama for Vermont

By Susan Smallheer
Rutland Herald
August 1, 2010

U.S. Sen. Bernard Sanders, I-Vt., pledged to personally take Vermont’s case for a statewide single-payer health care system to President Obama if the Legislature authorizes it next year.

Sanders, speaking at a health care rally at the Hetty Green Park in downtown Bellows Falls on Saturday afternoon, said that he and other members of Congress would also introduce legislation that would roll back to 2014 the current 2017 restriction for states to apply for a waiver in order to implement their own systems. He said Democratic Reps. Dennis Kucinich of Ohio and John Conyers of Michigan would be co-sponsoring the legislation with him.

http://www.rutlandherald.com/article/20100801/NEWS02/708019832/1003/NEWS02

Although the Patient Protection and Affordable Care Act would allow states to apply for waivers to implement their own systems, they cannot do so until 2017, three years after they are required to implement the private insurance exchanges. Many have asked if Sen. Sanders still intends to introduce legislation to move that date up so that states would not have to set up the exchanges only to replace them soon thereafter with a single payer system. The answer is yes.

Happy birthday, Medicare

Posted by on Monday, Aug 2, 2010

Originally published in the Berkshire Eagle.

Say “Happy Birthday” to Medicare, signed into law by President Lyndon Johnson 45 years ago, on July 30, 1965.

This national program provides health insurance coverage for everyone 65 years and older, regardless of income or health status, as well as covering people with disabilities. Our senior citizens love Medicare, which, along with Social Security, has substantially lowered poverty among the elderly, providing a secure safety net for our most vulnerable citizens.

Medicare is an example of a “single payer” health insurance program, in which health care dollars are administered by only one payer, the federal government. Medicare patients love the program for a number of reasons. Their premiums, deductibles and co-payments are reasonably priced. No one 65 and older can be denied coverage due to pre-existing conditions. Patients have their choice of doctors and hospitals, and are able to make decisions with their doctors about the care they need.

This safety net is now being threatened. President Obama has appointed a committee, the “National Commission on Fiscal Responsibility and Reform,” to make recommendations to Congress for reducing our federal deficit. Unfortunately, some members of this commission are already considering cuts to Medicare and Social Security benefits. Other solutions for reducing the deficit, like cutting the military budget, taxing the rich, negotiating drug costs, and eliminating the waste of the private health insurance industry by enacting a single-payer health insurance program, are not being considered. The commission is expected to make its recommendations to the House of Representatives after the fall elections, with a vote anticipated in December during a lame duck period of Congress.

Instead of cutting Medicare benefits, a better solution is to eliminate the failed and very costly for-profit “multiple payer” model, that includes hundreds of private health insurance companies with their high administrative costs and exorbitant CEO salaries, as well as their intrusion into the doctor-patient relationship. A much more cost-effective insurance approach would be to improve and expand Medicare to include everyone. At a time when our nation faces high unemployment, and fiscal crises, an expanded Medicare program would be a boon for individuals, small businesses, towns and states.

How would such a program produce savings and control health care costs? First, with Medicare, administrative costs are much lower than for private insurance companies. Administrative savings would be about $400 billion/year, enough money to provide coverage for everyone. Second, prescription drug prices would be negotiated, and drug costs could be lowered by 40 percent, bringing U.S prices in line with other developed countries. Third, an expanded Medicare system could establish global budgets for health care facilities.

The majority of Americans support Medicare and an expansion of this program to provide single-payer health insurance for everyone. Last week this was demonstrated again when participants in town meetings sponsored by “America Speaks” demanded single-payer as the option to solve the health care crisis, and 71 percent voted to not cut Medicare and Medicaid.

Our public and private dollars are flowing into the coffers of the private health insurance industry. These insurance companies continue to squeeze patients and health care providers financially, while paying their executives enormous salaries and bonuses. In 2009, the United Health Group, one of the biggest health insurance companies, paid CEO Stephen Helmsley a compensation package of over $107. 5 million. A recent conference of health economists in Chicago concluded that increasing consolidation in the health insurance industry has led to higher premiums, fewer jobs for health care workers, and reduced physician earnings.

Obama’s commission should not recommend cutting Medicare benefits. Write to your senators and representatives, and let them know how you feel about preserving, and expanding Medicare. Ask them to improve and strengthen Medicare by making it available to everyone, so that in coming years we will all be able to enjoy and celebrate the birthday of this life-saving health insurance program.

Susanne L. King, M. D., is a Lenox-based practitioner.

By Margaret Flowers, M.D.

Today we celebrate the 45th anniversary of the enactment of Medicare. Events are happening across the nation to mark this significant occasion, and yesterday I and about 10 other single-payer health reform advocates walked the halls of Congress and distributed literature to underscore its importance.

Medicare is a true American legacy which has brought health security to many of the most vulnerable members of our society. Because of Medicare, fewer senior citizens are living in poverty. Because of Medicare, health disparities which are growing in younger populations begin to decline after the age of 65. Medicare serves as a model of a universal (for those 65 and older) health system which operates with significantly lower administrative costs as compared to commercial health insurance so that a greater proportion of Medicare dollars pay for direct patient care.

During the recent health reform process, it was puzzling to health advocates to hear members of Congress and the president say that we must keep what works and fix what doesn’t and then see them keep what doesn’t work – commercial insurance. It was puzzling to hear legislators say that we needed to keep the American legacy of employer-sponsored health insurance while they ignored the true American legacy of Medicare.

We took every opportunity to let legislators know that the most effective solution to our health care crisis is to improve and expand a Medicare-like health system to everybody. To the detriment of the people in this nation, while the single-payer movement did grow, our arguments were largely ignored by Congress. The result was increased privatization of health care with its inherent inequities and soaring costs.

Now that a health bill has passed, we face a new challenge altogether. Instead of pushing to expand Medicare, we will have to struggle just to keep our current Medicare, and other social insurances, from being further weakened and privatized. This is a struggle that must not be ignored. We cannot cede any more ground to those who profit at the expense of our human lives.

The president appointed a new commission in April of this year, close on the heels of the passage of the health bill. Known as the National Commission for Fiscal Responsibility and Reform, this group of 18 is packed with and sponsored by those who will gladly use this opportunity to gut our feeble social safety nets. The same marketing tools used so successfully in the health reform process are being employed again: scripted public events used to create the illusion of popular support, public hearings designed to give the appearance of public input and co-optation of progressive institutions in support of neoliberal policies.

The single-payer movement has once again, come together to stand united to oppose the actions of the deficit commission. Four representatives of organizations who are members of the Leadership Conference for Guaranteed Health Care (LCGHC) testified at the deficit commission public hearing in June. However, given the extent of influence being wielded by the billionaire Peter G. Peterson Foundation, it is unlikely that our testimony will influence the commission members.

Our greatest strength as a movement is to hold our legislators accountable by urging them to oppose changes that weaken Medicare, Medicaid and Social Security. To that end, members of the LCGHC spent July 29 walking the halls of Congress. We delivered a letter from the LCGHC, copies of our testimony to the commission, a pledge for members to sign and information about single payer to each of the 435 members in the House and to most of the senators.

In addition, we met with staff in the offices of the co-chairs of the Congressional Progressive Caucus to present them with nearly 1,000 postcards signed by people from across the nation asking them to oppose cuts to Medicare and instead to create improved Medicare for All. We asked that the caucus make a public statement confirming their commitment to not only oppose such cuts, but to actively work to defeat such recommendations.

The deficit commission is charged with the task of submitting their plan to Congress in early December and Congress has committed to vote on their recommendations. The timing of these events has been arranged to occur after the November elections when there will be a lame duck Congress. Such timing makes the task of holding elected officials accountable more difficult but it remains crucial that we attempt to do so.

The struggle for health justice will go on. We must plan now for the future. For this reason, I urge you to meet with your member of Congress and senators during the August break. They will be campaigning in their home districts. You can find information to use in these visits at www.pnhp.org. Ask your legislators to sign the pledge available at www.healthcare-now.org. Publicize the results. And let your legislators know that you will be watching. If they pledge to oppose cuts before the election and then turn around and vote for cuts, no matter what excuse they give, then you must pledge to withhold your vote for them in the 2012 election.

This is the power that we the people possess: the power of the vote. And having the courage to use this power, this tool, at this point in time will bend the arc of justice to the needs of the people of this country.

So, on this day of celebration, Medicare’s 45th, please pledge to yourself to be a defender of our much needed social insurance programs. Step up and join with us to preserve and protect Medicare, a true American legacy.

Margaret Flowers, M.D., is congressional fellow for Physicians for a National Health Program (www.pnhp.org).

Lawmakers vow to continue fight for Medicare for All

Posted by on Friday, Jul 30, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

The following text is an open letter to the single-payer community from Rep. Dennis Kucinich of Ohio, Rep. John Conyers Jr. of Michigan and Sen. Bernie Sanders of Vermont. It was released on the eve of Medicare’s 45th anniversary.

Congress of the United States
July 29, 2010

Dear friends of health care for all,

Now that a new health care bill has been signed into law, it has never been more important to have a strong movement behind Medicare for All.

Many health care experts have expressed concern that the Patient Protection and Affordable Care Act does not adequately contain costs for American families and businesses. If they are correct, and we believe they are, additional legislative cost containment measures will be necessary in the future.

When it is time for Congress to try to control health care costs again, the demand for Medicare for All must be undeniable. There is substantial support for a federal Medicare for All solution, embodied by H.R. 676, the National Health Care Act, and S. 703, the American Health Security Act, in the Congress and around the country. We believe that this support can and will continue to grow.

The truth is not enough. We already know that such a health care system has repeatedly proven to control costs more effectively, cover everyone or almost everyone, and deliver care of significantly higher quality than health care systems that tolerate the presence of private health insurance companies. Now we must make it so that the truth can no longer be ignored.

During the health care debate, the movement created significant momentum on which to build. Its voice was heard in multiple Congressional hearings – it won historic victories in a House vote to grant an ERISA waiver to a state that passes a Medicare for All-like plan and in a Senate provision allowing a waiver from the Exchanges for states to innovate with health coverage such as a state-based Medicare for All-like system that was included in the new law.

The latter victory created a new opening. Though the effective date for the Exchange waiver was pushed back to 2017 by the Congressional Budget Office to avoid driving up the estimated cost of the bill, the waiver’s presence sent a clear message: if a state thinks it can do better, Congress wants to see it.

We are encouraged by the progress already garnered in multiple states toward guaranteed health care and we will continue to work hard in Congress to clear any obstacles in the way. The 2017 date can be changed at the same time Congress considers all of the other waivers from federal laws that will be required for the state to move forward. That can happen either before or after a state passes a Medicare for All-like bill.

Regardless of the legislative path, we vow to continue to fight alongside you for health care justice at the both the federal and state levels. We believe that Medicare for All is inevitable in the United States. It is up to all of us to determine when the inevitable becomes the reality.

Sincerely,

Rep. Dennis J. Kucinich

Rep. John Conyers Jr.

Sen. Bernie Sanders

http://www.pnhp.org/news/2010/july/lawmakers-vow-to-continue-fight-for-medicare-for-all

On the 45th anniversary of Medicare it is reassuring to know that the vision of President Lyndon Johnson and the 89th Congress for an America that ensures health care for everyone, through a comprehensive Medicare for all, not only still lives, but is an inevitability.

The Obama administration supports closed enrollment

Posted by on Thursday, Jul 29, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Giving Our Kids the Care they Need

By Nancy-Ann DeParle
The White House
July 28, 2010

One important change in the new law is a provision that prevents insurance companies from discriminating against children with pre-existing conditions.

Some state insurance commissioners expressed concern that, without an open enrollment period that was widely communicated, people might wait until their children got sick to enroll them in coverage, causing plans’ costs to increase. And we were concerned when last week, some indicated that insurance companies would choose to stop offering policies for children rather than cover kids with pre-existing conditions.

Today, the Administration is releasing new guidance to health insurance plans to help ensure children get the high-quality care they need. The new FAQ document notes that insurance companies may establish an open enrollment period for children with pre-existing conditions.

http://www.whitehouse.gov/blog/2010/07/28/giving-our-kids-care-they-need

And…

Questions and Answers on Enrollment of Children Under 19 Under the New Policy That Prohibits Pre-Existing Condition Exclusions

U.S. Department of Health & Human Services
July 27, 2010

Question #2: Do these interim final rules require issuers in the individual health insurance market to offer children under 19 non-grandfathered family and individual coverage at all times during the year?

A: No.  To address concerns over adverse selection, issuers in the individual market may restrict enrollment of children under 19, whether in family or individual coverage, to specific open enrollment periods if allowed under State law.  This is not precluded by the new regulations.

http://www.hhs.gov/ociio/regulations/children19/factsheet.html

And…

Insurers back down on child-coverage stance

By Julian Pecquet
The Hill
July 29, 2010

Health insurance plans across the country on Wednesday began to backtrack on their decision to pull out of the child-only coverage market after the Obama administration addressed their concerns about the potential damage to their bottom lines.

The Department of Health and Human Services (HHS) on Tuesday clarified regulations mandating that insurance plans agree to cover sick children. HHS made it clear that plans are free to set up specific enrollment periods for their insurance plans if allowed under state laws.

“We think this policy will ensure that children get the comprehensive coverage they need while avoiding this unintended consequence,” Scott P. Serota, president and CEO of the Blue Cross and Blue Shield Association, said in a statement. “This is consistent with other public and private health insurance programs.”

Karen Ignagni, president and CEO of America’s Health Insurance Plans, followed suit.

“Today’s announcement will help ensure millions of children have access to affordable healthcare coverage,” she said. “For years, structured enrollment periods have been used in the Federal Employees Health Benefits Program, Medicare and in employer-based coverage to minimize disruption for families, seniors and small businesses. Health plans are committed to working with federal and state officials to ensure consumers are aware of all of their coverage options, including how and when they are able to sign up for coverage.”

http://thehill.com/business-a-lobbying/111535-insurers-backing-down-on-child-coverage-stance

A Quote of the Day message earlier this week described how private insurers were getting around the requirement to provide coverage to children with preexisting disorders. The insurers intended to avoid this obligation simply by closing enrollment to new applicants. It is important to understand the counter-response of the Obama administration because it exemplifies just how dysfunctional the private insurance model is that President Obama and Congress chose for us.

From a business perspective, the insurers’ complaint was quite valid. If a child was guaranteed insurance no matter the circumstances, it would be a wise decision to save money by forgoing insurance while healthy, but then purchasing the coverage only when needed. Adverse selection (concentrating high-cost patients within a plan) results in the death spiral of insurance premiums (shutting down the plan because it is no longer economically viable).

The insurers said that they could provide coverage for children with preexisting disorders only if open enrollment periods were established. As an example, December could be set aside as the one month in which a child could enroll for the following year. If the parents decided not to enroll the child that month, they could not change their minds during the next twelve months. If something serious came up, that’s too bad. They should have known better than to gamble with their child’s health.

Whoa! Wasn’t the original intention of the reform effort to be sure that each and everyone of us could have the health care that we need without having to face financial hardship? But now the Obama administration is giving its stamp of approval to a policy that will make access worse, not better.

“Open enrollment” is a business concept that serves the insurance industry well, but it is a very deceptive term. Instead of having open enrollment throughout the year, the insurers have really established the concept of “closed enrollment” for most of the year. From the patient’s perspective, instead of improving access to insurance products, it greatly impairs access – the opposite of what reform was supposed to bring us. We should change the rhetoric to “closed enrollment,” because that’s really what they are promoting.

As expected from the industry, the statements of Scott Serota of the Blue Cross and Blue Shield Association and Karen Ignagni of America’s Health Insurance plans are very supportive of closed enrollment. Of course, it’s in their business interests, even if not in the interests of patients who are shut out.

Suppose we had a single payer national health program – an improved Medicare for all. The concept of closed enrollment totally vanishes since everyone is automatically enrolled.

Imagine a couple of generations from now explaining to someone that there was a time in America that private companies prohibited you from having the insurance you needed because of a quirky rule that closed enrollment for most of the year. Isn’t that weird? I mean… like… enrollment is only once… for life!

John Geyman’s “Hijacked”

Posted by on Wednesday, Jul 28, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Hijacked: Stolen Health Care Reform V

By John Geyman
The Huffington Post
July 27, 2010

On the positive side of the ledger, the PPACA (Patient Protection and Affordable Care Act) brings some welcome changes.

On the negative side of the ledger, however, these are some of the reasons that the PPACA will fall so far short of needed health care reform that it is not much better than nothing:

• Surging health care costs will not be contained as cost-sharing increases for patients and their families.
• Uncontrolled costs of health care and insurance will make them unaffordable for a large and growing part of the population.
• At least 23 million Americans will still be uninsured in 2019, with tens of millions more underinsured.
• Quality of care for the U. S. population is not likely to improve.
• Insurance “reforms” are so incomplete that the industry can easily continue to game the system.
• New layers of waste and bureaucracy, without added value, will further fragment the system.
• With its lack of price controls, the PPACA will prove to be a bonanza for corporate stakeholders in the medical-industrial complex.
• Perverse incentives within a minimally-regulated market-based system will still lead to overtreatment with inappropriate and unnecessary care even as millions of Americans forego necessary care because of cost.
• The “reformed” system is not sustainable and will require more fundamental reform sooner than later to rein in the excesses of the market.

(Adapted from “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform,” 2010, with permission of the publisher Common Courage Press. John Geyman is Professor Emeritus of Family Medicine at the University of Washington School of Medicine.)

http://www.huffingtonpost.com/john-geyman/hijacked-stolen-health-ca_b_660904.html

Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform

by John Geyman
http://www.commoncouragepress.com/index.cfm?action=book&bookid=402
(Hijacked can be ordered now, at discount, for delivery in September.)

“A trenchant and highly readable account of how the special interests sabotaged health reform, leading to a law that won’t provide universal care nor control escalating costs. Geyman shows us the way to real reform when the current law implodes. An eye-opening book.”

–Marcia Angell, M.D., Senior Lecturer in
Social Medicine, Harvard Medical School,
former editor-in-chief, New England Journal of Medicine

“By reading John Geyman’s very timely Hijacked, those who are uncomfortable with the reform process that took place will be able to understand more precisely what went wrong. He explains why our concerns are fully warranted, but, instead of abandoning hope, he provides us with a road map for reform that will ensure that all of us will have the health care that we need.”

–Don McCanne, M.D., family physician, Senior Health Policy Fellow,
Physicians for a National Health Program (PNHP)

Private insurers shut doors on children with preexisting disorders

Posted by on Tuesday, Jul 27, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Insurers to Comply With Rules on Children

By Robert Pear
The New York Times
March 30, 2010

Under pressure from the White House, health insurance companies said Tuesday (March 30) that they would comply with rules to be issued soon by the Obama administration requiring them to cover children with pre-existing medical problems.

“Health plans recognize the significant hardship that a family faces when they are unable to obtain coverage for a child with a pre-existing condition,” said Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group. Accordingly, she said, “we await and will fully comply with” the rules.

The White House immediately claimed victory.

In a Twitter message, Robert Gibbs, the White House press secretary, scored the tug of war as “Kids 1, insurance 0.”

http://www.nytimes.com/2010/03/31/health/policy/31health.html?_r=1

And…

Some insurers stop writing new coverage for kids

By Ricardo Alsonso-Zaldivar
Philly.com
July 27, 2010

Starting later this year, the health care overhaul law requires insurers to accept children regardless of medical problems – a major early benefit of the complex legislation. Insurers are worried that parents will wait until kids get sick to sign them up, saddling the companies with unpredictable costs.

The major types of coverage for children – employer plans and government programs – are not affected by the disruption. But a subset of policies – those that cover children as individuals – may run into problems. Even so, insurers are not canceling children’s coverage already issued, but refusing to write new policies.

In Florida, Blue Cross and Blue Shield , Aetna, and Golden Rule – a subsidiary of UnitedHealthcare – notified with the insurance commissioner that they will stop issuing individual policies for children, said Jack McDermott, a spokesman for McCarty.

(Blue Cross and Blue Shield of Florida) vice president Randy Kammer said the company’s experts calculated that guaranteeing coverage for children could raise premiums for other individual policy holders by as much as 20 percent.

“We believe that the majority of people who would buy this policy were going to use it immediately, probably for high cost claims,” said Kammer. “Guaranteed issue means you could technically buy it on the way to the hospital.”

Kammer said the company did not make the decision lightly. “We were looking at all our other individual policy holders who pay a lot for coverage, and we didn’t think it was fair to give them that kind of an increase to benefit a small population that receives a greater advantage than they do,” she said.

http://www.philly.com/philly/business/personal_finance/072710_no_new_kid_coverage.html

In several speeches about the Patient Protection and Affordable Care Act, President Obama extolled the immediate end of insurers denying coverage to children with preexisting conditions. He was wrong. His miscalculation stems from the fact that he seemed to trust the insurers to do the right thing for patients instead of continuing to place their own business interests first.

Although the insurers can no longer reject a child with preexisting disorders, they can close the plan to new enrollees. As a business decision, that is what many are doing. A social good is not part of their business model.

Although White House press secretary Robert Gibbs scored this as “Kids 1, Insurance 0,” it’s really “Insurance 1, Kids disqualified.”

That the insurers placed business first should come as no surprise to anyone. AHIP’s lobbyist Karen Ignagni continued with the “await and comply” position on the regulations that former WellPoint vice president Liz Fowler is helping to write. Compliance is easy for them when the rules are written to support the insurers’ business model.

Proving that the private insurers have learned nothing, Blue Cross and Blue Shield of Florida vice president Randy Kammer repeats the long held position of private insurers that they didn’t think that it was fair to increase premiums for all of the policy holders merely “to benefit a small population that receives a greater advantage” than the rest of the policy holders. Because it interferes with their business model, they refute the fundamental principle that the primary purpose of health insurance is to transfer funds from the many willing who are healthy to the few who have greater health care needs.

The exchanges won’t be in effect until 2014, and yet we’re already seeing this sterile, perverse behavior on the part of the insurers. Denying children with health care needs the right to buy insurance is only the bare beginning. There is absolutely no way that the regulators can preempt the negative impact of the unlimited innovations that insurers will introduce, especially after the insurance exchange infrastructures are solidly in place.

Businesses do what businesses have to do. Voters need to do what voters have to do. We have to eliminate the private business intermediaries and establish our own public insurance program that has a social mission of patient service.

AHIP on medical loss ratios

Posted by on Monday, Jul 26, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Implementing Medical Loss Ratio (MLR) Requirements to Improve Quality, Promote Choice, and Avoid Disruptions in Coverage

America’s Health Insurance Plans (AHIP)
July, 2010

The “Patient Protection and Affordable Care Act” (PPACA) requires health plans, beginning in 2011, to meet a medical loss ratio (MLR) requirement of 80 percent in the individual and small group markets and 85 percent in the large group market. This means that plans must spend a specified percentage of premium revenue on either reimbursement for clinical services provided to enrollees or “activities that improve health care quality.”

Goal #1

Ensure That Existing Efforts to Improve Quality are Allowed to Continue and New Initiatives to Support the Goals of PPACA are Not Discouraged

(Examples: nurse care managers, maternity managed care programs, and imaging managed care programs, as programs that improve quality)

Goal #2

Recognize That Quality Improvement Efforts Will Be Advanced By ICD-10 Implementation

The startup costs associated with implementing the International Classification of Diseases 10 classification system (ICD-10) by 2013 should be defined as an “activity that improves health care quality.”

ICD-10 is a quality, not a claims payment, initiative.

Goal #3

Include Fraud Prevention and Detection Activities that Improve Quality

The definition of “activities that improve health care quality” should include the expenses health plans are required to make for fraud prevention activities.

Goal #4

Implement a Transition Plan to Maximize Consumer Choice

PPACA provides for the implementation of comprehensive insurance market reforms in 2014, including the creation of state health insurance exchanges. Until that time, consumers in the individual market will rely on brokers to review their insurance options and consider which ones best suit their needs. For health plans, four-fifths of the individual market will remain medically underwritten, guided by the rules and regulations in each state. A transition policy is needed to move from the current system to the new system that will be created in 2014 and to allow individuals to maintain their coverage.

The NAIC (National Association of Insurance Commissioners) is charged with the responsibility to develop MLR methodologies that take into account special circumstances. This means that Congress intended for the NAIC to exercise its expertise to make adjustments to the MLR to ensure that consumers are not harmed and that competition is not decreased.

http://americanhealthsolution.org/assets/Uploads/Blog/AHIP-MLR-Paper.pdf

In what might be perceived as private insurer chicanery, the industry’s lobby organization, AHIP, is capitalizing on phrasing in the Patient Protection and Affordable Care Act that defines the minimum percent of benefits that the insurers must pay out (medical loss ratio or MLR) as including not only reimbursement for clinical services but also for “activities that improve health care quality.”

Thus any of their administrative functions that they can pass off as improvements in quality will not apply to the 15 percent (large group) or 20 percent (individual or small group) caps on administrative spending. That allows the industry to perpetuate its pattern of profound administrative excesses and very high profits (outrageously high when considered as a percentage of their actual product – the administrative services that they are selling us).

In this report, what are they trying to pass off as quality? 1) Intrusive care managers who are employed to save money. 2) Implementation of diagnostic codes used for claims payments. 3) Administrative functions to detect fraud. 4) Perpetuating medical underwriting during the transition to cover “special circumstances” to ensure that “consumers are not harmed and that competition is not decreased.” That’s code for perpetuating the perversities of adverse selection.

The impact of this relabeling of administrative services as quality improvements is to allow the insurers to retain a greater percentage of the premium dollars for their own intrinsic purposes. The consumer pays for this either through higher premiums or decreased health care benefits.

An extremely important unintended consequence of fixed medical loss ratios has been mentioned here before, but seems to have escaped the mainstream media, so it is being repeated: Once the MLR rules are established, the primary method by which insurers can increase the services they sell us, while increasing their profits, is by increasing gross revenues, since they are guaranteed a fixed percentage of those revenues. The most effective way to increase gross revenues is to increase the amount of health care services authorized and paid for.

If the insurers change provider incentives to double the amount of health care that is being delivered, they can double their own total revenues, keeping even more as profit because of the smaller marginal administrative costs of paying for more care. This incentive of the insurers to increase total health care spending is the exact opposite of the reform goal of slowing future health care cost increases

All of this is good business. But that’s the problem. Our elected representatives chose a business model to finance health care when what we desperately need is a service model.

“Medical loss ratio” is a term that needs to be moved into the history books of failed policy concepts. Instead, we need our own public service model – an improved Medicare for everyone.

Using single payer to establish political credibility

Posted by on Friday, Jul 23, 2010

This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.

Democrats spar over health care claim

WCAX.com
July 21, 2010

The gloves are off in the fight for the Democratic nomination for governor (Vermont). Former State Senator Matt Dunne is calling out Senator Peter Shumlin for what he says is a troubling misstatement.

Peter Shumlin first said it two weeks ago in an online questionnaire, then again this week in a mailing to voters: “I am the only candidate who sponsored a single-payer health care bill.” Dunne says that is simply not true.

“The facts are that I also sponsored a single-payer health care bill,” Dunne told reporters outside the Statehouse Wednesday.

He did. During the 1993-1994 legislative session when Dunne was serving as a State Representative he co-sponsored a bill that would have created a single-payer system. He wants a public retraction of Shumlin’s claim and is requesting that Shumlin send out another mailer with the correction.

“It is critically important that Peter Shumlin take action and take action quickly to correct the record, to be clear in public that he was factually wrong,” says Dunne.

http://www.wcax.com/Global/story.asp?S=12850303

When two candidates for governor are engaged in a political skirmish as to which one is the bona fide single payer supporter, then we know that single payer is back on the table (at least in Vermont).

Our last four posts have examined the PPACA from the perspectives of the four main goals of health care reform — cost containment, affordability, improved access and quality of care. Here we draw these goals together in asking whether this legislation delivers enough to be worth the $1 trillion investment over the next 10 years, and whether it will really work.

On the positive side of the ledger, the PPACA brings some welcome changes:

• Will extend health insurance to 32 million more people by 2019.
• Provides subsidies to help many lower-income Americans afford health insurance.
• Starting in 2014, expands Medicaid to cover 16 million more lower-income people.
• Provides new funding for community health centers that could enable them to double their current capacity.
• Eliminates cost-sharing for many preventive services.
• Phases out the “doughnut hole” coverage gap for the Medicare prescription drug benefit.
• Will create a new national insurance plan for long-term services: Community Living Assistance Services and Supports (CLASS) program.
• Will establish a nonprofit Patient-Centered Outcomes Research Institute to assess the relative outcomes, effectiveness and appropriateness of different treatments.
• Initiates some limited reforms of the insurance industry, such as prohibiting exclusions based on pre-existing conditions and banning of annual and lifetime limits.
• Contains some provisions to improve reimbursement for primary care physicians and expand the primary care workforce.

On the negative side of the ledger, however, these are some of the reasons that the PPACA will fall so far short of needed health care reform that it is not much better than nothing:

• Surging health care costs will not be contained as cost-sharing increases for patients and their families.
• Uncontrolled costs of health care and insurance will make them unaffordable for a large and growing part of the population.
• At least 23 million Americans will still be uninsured in 2019, with tens of millions more underinsured.
• Quality of care for the U. S. population is not likely to improve.
• Insurance “reforms” are so incomplete that the industry can easily continue to game the system.
• New layers of waste and bureaucracy, without added value, will further fragment the system.
• With its lack of price controls, the PPACA will prove to be a bonanza for corporate stakeholders in the medical-industrial complex.
• Perverse incentives within a minimally-regulated market-based system will still lead to overtreatment with inappropriate and unnecessary care even as millions of Americans forego necessary care because of cost.
• The “reformed” system is not sustainable and will require more fundamental reform sooner than later to rein in the excesses of the market.

How did this latest reform effort get so far off track? Here are three of the major reasons:

• The issues and policy options were framed as the political process was hijacked by the very interests that are largely responsible for today’s cost, access and quality problems in health care. As examples, the drug industry lobbied successfully to avoid any price controls of drugs, as the VA does so well; the insurance industry avoided real rate controls over their premiums and ended up with other loopholes to game the new system; and all of the corporate stakeholders will gain subsidized new markets without significant regulation of the market.
• The quest for bipartisanship was futile as reform got run over in the middle of the road. The big questions cannot be answered in the political center, such as whether health care should be a right or a privilege, or whether health care resources should be allocated based on ability to pay or medical need.
• Market failure was not recognized as the wellspring of our system problems. When it was agreed to “build on the strengths of the present system” instead of more fundamental reform, corporate stakeholders and their lobbyists found willing legislators to craft centrist “remedies” which could be sold to the public as  reform. But the various incremental tweaks of our existing system, such as employer and individual mandates, have failed over the last 20 or 30 years to remedy cost, access and quality problems.  In the absence of real health care reform, we can now expect these kinds of unfavorable outcomes in coming years:

• soaring costs without effective price controls throughout the system.
• managed care fails to control costs or improve quality.
• persistent financial and other access barriers for many millions of Americans.
• growing backlash by physicians and consumers.
• gaming of private plans and adverse selection in public plans.
• consolidation among hospitals sustaining high prices.
• increased cost-sharing for employees as employers cut back benefits.
• continued high levels of inappropriate and unnecessary care.
• added bureaucracy and waste in an even more fragmented and dysfunctional system.

We have yet to learn that an unfettered health care marketplace can only perpetuate our problems, not fix them. Most industrialized nations have learned this many years ago, and are able to achieve better quality of care with improved outcomes for their populations even as they spend much less on health care than we do. We have to conclude that a larger role of government will be required to assure real and sustainable health care reform.

There is a fix in plain sight for our problems — single-payer financing coupled with a private delivery system. The private insurance industry has outlived its usefulness, and is only being kept alive by government subsidies, whether by overpayments of private Medicare plans or this latest provision in the PPACA to pay out nearly half of a trillion dollars in subsidized premiums for their inadequate coverage.

When will we have the political will to face up to our real problems in health care and show that the democratic process can still work?

Adapted from “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform,” 2010, with permission of the publisher Common Courage Press. http://commoncouragepress.com/index.cfm?action=book&bookid=402

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