“The House Public Plan: Yes, It’s Worth It” write Jacob S. Hacker and Diane Archer in The New Republic. Jacob Hacker is Stanley B. Resor Professor of Political Science at Yale University. Diane Archer is director of the Health Care Project at the Institute for America’s Future and founder and past president of the Medicare Rights Center.
to “The House Public Plan: Yes, It’s Worth It”
By Sarah K. Weinberg, MD
Jacob Hacker and Diane Archer ask us to believe that:
…health reform is much more likely to succeed with a public health insurance option, even one with negotiated rates, than if private insurers are left to run the show.
So a public plan that will be available to less than half the population and will attract maybe 2% as enrollees is going to have any effect at all on big insurers? I don’t think so, and I’ll bet the big insurers and their investors don’t think so either. (United Health Group and Wellpoint stock prices are stable this morning.)
In a remarkable paragraph, Hacker and Archer claim that private insurance premiums will be lower because sicker people will selectively enroll in the public plan:
Let us start with the obvious: No one knows for sure the exact role that the public option will play. CBO may be correct that the public plan will attract a less healthy pool of enrollees, and that risk-adjustment (paying plans with higher-cost patients more) will not fully compensate for this. And it is surely correct that the public plan will have lower administrative costs than private plans. (It should be emphasized that if the public plan has higher premiums primarily because it’s attracting less healthy enrollees, then it is still reducing average premiums and hence federal subsidies for premiums. That’s because average premiums would be even higher if the people enrolled in the public plan enrolled in private plans. That’s what the CBO’s more recent letter discussing “downward pressure” on private premiums implies.) But while the CBO estimates are rightly the authoritative source for Congress, they are by no means infallible. CBO has made clear that an unusually high level of uncertainty attaches to its analysis of the public plan.
Private insurance premiums will be lower because sicker people will selectively enroll in the public plan, forcing its premiums upward. Huh?!
ALL the premiums will go up – the only issue is how steeply. As for the public plan providing significant competition, what business is going to worry about a competitor with restricted access that only has about 2% of the market?
They also assume that providers will voluntarily sign up for a new public plan with a miniscule number of enrollees:
…the public plan would pay the same rates as the private sector. Nothing in the bill requires this.
Especially if that plan tries to pay the providers less than private insurers, there’s no reason to believe this assumption. Buried in this thought is the assumption that private insurers currently pay providers handsomely – something any doctor or hospital can tell you is totally false. American health care costs twice as much as health care anywhere in the world for several reasons, of which the largest is the enormous cost of all the administrative bureaucracy our system requires. Gross overpayment of doctors is not a reason, even though there are some who do exceptionally well from providing overvalued procedures. In fact, private insurers “save” by cutting payments to providers, but not by cutting administrative costs or profits.
This statement is supposed to support the idea that healthy non-elderly Americans will be willing to pay more for a public plan that offers “the same transparency and accountability the public Medicare plan offers”? Hacker and Archer argue they will:
The vast majority of older and disabled Americans enroll in the public Medicare plan – even though by choosing (excessively subsidized) private Medicare [Advantage] plans, many can get broader benefits for less than they pay for Medicare plus supplemental insurance [Medigap].
Generalizing from choices made by 65 year old Medicare eligibles to the notion that the public will flock to the public plan that costs more because they like “transparency and accountability” is… um… a stretch. As a Medicare enrollee, I can tell you that I never have thought of Medicare as transparent and accountable. I’m enrolled in the public Medicare plan because, as the spouse of a federal retiree, I’m required to if I want to keep the federal BC/BS plan as secondary (Medigap) insurance. I suspect that other factors are more important when 65 year olds decide on their Medicare choices. Wanting to stay with the doctor(s) and hospital they already know rather than shift to a plan with a different list of preferred providers would likely be number one on the list, especially for anyone with health issues. (Of course, this is exactly what the peddlers of Medicare Advantage plans want – to attract the 65 year olds who aren’t seeing doctors regularly. These plans often make their enrollees miserable once they do get sick, and many then switch out to public Medicare.)
These eminent health policy thinkers also continue to assume that the public plan will hold down medical costs better than the private plans, just because it is public:
Over the past twenty years, the public Medicare plan has had a substantially slower rate of growth than private insurance.
However, it’s not the public nature of the plan that holds cost increases down, it’s the fact that Medicare covers an entire (willingly) captive population and has great power to dictate payment terms.
But then they point out that:
The CBO report on the House bill states that private insurers are better at controlling utilization than a public plan would be.
The only functioning utilization controls in the U.S. (possibly excepting the VA and the military) are the private insurers’ dirty tricks: delaying or denying coverage for expensive care; rescinding the policies of those who get sick; raising cost-sharing with the sick to astronomical levels, etc.
Hacker and Archer write that:
…the public plan is really the only tool available for testing and implementing reforms in the market for the non-elderly.
2% of the population spread across the entire U.S. is not going to be a group that will be useful for this kind of experimentation. This will especially be true when only a limited number of providers choose to participate.
In conclusion, we are asked to believe that any public option at all will make all the difference:
But it’s still immensely valuable to give Americans an out – another choice – to let the insurers feel the heat of not being the only game in town.
First of all, the majority of Americans won’t have any such choice – they’ll get what their employers offer them, like it or not. Next, we should recognize that the big insurers already ignore the small insurers in each market who have 5% or less of the available business.
Finally, industry opposition to the public option is held up as evidence of the wisdom of the public option:
The fierce and continuing opposition of the insurance industry suggests that they think that a public option will prove a serious counterweight…
I think instead that the insurers’ opposition has been just fierce enough to get them a public option small enough to drown in a bathtub – success beyond their wildest dreams. Because when this public option fails, they (and the Republicans) will say: “See – single-payer health reform doesn’t work!”
Hacker and Archer (and other apologists for HR 3962) are letting their wishful thinking get the better of their common sense. Enough already!
Dr. Weinberg is a retired pediatrician, a member of Physicians for a National Health Program for 20 years, and the Newsletter Editor for Health Care for All – Washington for 9 years. She is also one of the authors of the Washington Health Security Trust, proposed legislation that would establish a single payer health financing system in the State of Washington.
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.
eHealth Views Passage of House Health Reform Bill as “Historic Step Toward Connecting All Americans to Coverage”
November 8, 2009
Health Insurance Exchanges Are Key
The following is (from) a statement from Gary Lauer, chairman and CEO of eHealth, Inc., regarding tonights passage of the U.S. House of Representatives’ health reform legislation:
“eHealth’s experience over the past decade in connecting nearly two million Americans to coverage through our national online marketplace proves that exchanges do work. By employing multiple paths to coverage, including exchanges, and online solutions like ours, we can optimize enrollment and provide the uninsured with the most choices and flexibility.
“The technologies that have been developed by private sector players, such as eHealth, are key to ensuring Americans find and receive the coverage this legislation would mandate.
“eHealth looks forward to being an active partner in implementing meaningful health reform legislation, and is poised and ready to connect the uninsured to coverage quickly.”
eHealth is “Ready to Connect America to Coverage:”
H.R. 3962 – AFFORDABLE HEALTH CARE FOR AMERICA ACT
SEC. 305. OUTREACH AND ENROLLMENT OF EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS IN EXCHANGE-PARTICIPATING HEALTH BENEFITS PLAN.
USE OF OTHER ENTITIES.–In carrying out this subsection, the Commissioner may work with other appropriate entities to facilitate the dissemination of information under this subsection and to provide assistance as described in paragraph (2).
From paragraph (2): (C) assist Exchange-eligible individuals in selecting Exchange-participating health benefits plans and obtaining benefits through such plans.
eHealth is ready to become the nation’s broker for private health insurance. Watching the two minute video at the “Ready to Connect” link above will demonstrate just how ambitious their plans are.
This is yet one more reason why the model of reform selected by Congress and the Obama administration is the most expensive of all. With all of the other wasteful administrative expenses, brokers’ fees are added on top, though often hidden in the premium as a commission rather than a fee.
Compare this to Medicare enrollment. The administrative costs for automatic enrollment in Medicare, at that only once in a lifetime, are negligible for the government and its taxpayers.
Imagine the simplicity and efficiency of automatic, lifetime Medicare enrollment at birth for everyone. But Congress won’t go there… not until the nation demands it.
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.
Rep. Weiner Withdraws Single Payer Amendment from Current Health Care Debate
Representative Anthony Weiner
November 6, 2009
Today, Representative Anthony Weiner (D – Brooklyn and Queens), a member of the House Energy and Commerce Health Subcommittee, released the following statement on his decision to withdraw his single payer amendment to H.R. 3962, the House health care reform bill:
“I have decided not to offer a single payer alternative to the health reform bill at this time. Given how fluid the negotiations are on the final push to get comprehensive health care reform that covers millions of Americans and contains costs through a public option, I became concerned that my amendment might undermine that important goal.”
“I am going to continue to press the case for health care reform in every venue I can. And I also will continue to press for a smarter, less-expensive, more-comprehensive alternative to the employer-based health insurance system we have today.”
“I’ve discussed the issue with Speaker Pelosi, Chairman Waxman, and agree with them that the health reform bill is so close it deserves every chance to gain a majority.”
Pelosi Statement on Congressman Anthony Weiner’s Single Payer Alternative
Speaker Nancy Pelosi
November 6, 2009
Washington, D.C. — Speaker Nancy Pelosi issued the following statement today on Congressman Anthony Weiner’s single payer alternative:
“Within the next few days, the House will vote on the most comprehensive health care legislation in our history. Our bill will provide affordability to the middle class, security to our seniors, and responsibility to our children by not adding a dime to the deficit. While our bill contains unprecedented reforms, including an end to discrimination for pre-existing conditions and a prohibition on raising rates or dropping coverage if you become ill, our bill cannot include provisions some strongly advocated. The single payer alternative is one of those provisions that could not be included in H.R. 3962, but which has generated support within the Congress and throughout the country.
“Congressman Anthony Weiner has been a forceful and articulate advocate for the single payer approach and our legislation. His decision not to offer a single payer amendment during consideration of H.R. 3962 is a correct one, and helps advance the passage of important health reforms by this Congress. While single payer, like other popular proposals, is not included in the consensus bill we will vote on this week, Congressman Weiner has been a tireless and effective advocate for progress on health care, and his work has been a vital part of achieving health care reform.”
Chairman Waxman’s Statement on Rep. Weiner’s Single-Payer Amendment
Chairman Henry A. Waxman
Committee on Energy and Commerce
November 6, 2009
Today Chairman Henry A. Waxman released a statement in response to Rep. Anthony Weiner’s decision not to offer a single-payer amendment to the House Democratic health care legislation.
“Rep. Anthony Weiner has been one of the most tireless and effective advocates for health care reform. His decision not to offer his amendment on the floor was a difficult one for him, and for supporters of the measure. I believe Rep. Weiner’s choice will be enormously helpful in passing the health care reform package. His step is a correct and courageous one. I thank Rep. Weiner for it, and look forward to working with him closely. Rep. Weiner deserves a great deal of credit for helping to make quality, affordable health care more available to millions of Americans.”
Comment by Ida Hellander, M.D., Executive Director, Physicians for a National Health Program:
Next steps and interpretation –
1) The fact that single payer got so far along in the House is a testament to the strength of our single payer movement. The huge number of calls by single payer advocates in support of single payer and the Weiner amendment in recent days have been noted by several members of Congress.
2) It appears that nobody, particularly the President, expected our single payer option to be alive in the Congress for so long. As you know, they attempted to keep it “off the table” from the very beginning.
3) The President was directly involved in the decision to not hold a vote on the Weiner single payer amendment, and Weiner will be meeting with him later today. Stay tuned.
4) We need to increase pressure on the Congress and the White House for Medicare for All through lobbying, civil disobedience, media outreach, and grassroots organizing. Sen. Sanders will call for a vote on single payer in the Senate – this could come up anytime in the next month. Encourage your Senator to support the Sanders bill and also an amendment he will offer for a state single payer option. The California Nurses Association/NNOC has already started lobbying visits in the Senate in D.C.
5) We have been asked how to tell members to vote on the House bill. Our response is that the bill is “like aspirin for breast cancer.”
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.
Health Care Abroad: Taiwan
An interview of William Hsiao, Ph.D., Professor of Economics at the Harvard School of Public Health
The New York Times
November 3, 2009
Q. What’s the most important lesson that Americans can learn from the Taiwanese example?
A. You can have universal coverage and good quality health care while still managing to control costs. But you have to have a single-payer system to do it.
William Hsiao, Ph.D.
There is no person more qualified to discuss health system design than William Hsiao (see the link above for his qualifications).
If you were to believe the hype that accompanied its release, you might think that it would be as important as Medicare and Social Security. The New York Times concluded that “This bill will take a long stride toward universal coverage while remaining fiscally responsible.” Nobel laureate economist Paul Krugman added: “The political environment is as favorable for reform as it’s likely to get. The legislation on the table isn’t perfect, but it’s as good as anyone could reasonably have expected.”
But this bill is not good enough to pass. It will not make a big enough difference in addressing the three main problems requiring reform–containing the spiraling costs of health care, providing universal access to affordable health care, and improving its quality. If we look at the provisions of this 1,990-page bill concerning just the first two of these three goals, we see that it will fail to deliver real reform.
After all of the political compromises along the way that have led to the introduction of the new bill (HR 3962), on the positive side we can say that it will introduce some limited reforms to the health insurance market, expand health insurance to some of the uninsured (primarily by expansion of Medicaid and by often-inadequate government subsidies to individuals and small employers for the purchase of private insurance); and help to address some other problems, such as the growing shortage of primary care providers.
But the negative side far outweighs the positive:
• Although supporters of the new House bill claim that it would expand coverage for as many as 30 million uninsured, we are actually likely to see an increase in the number of uninsured in coming years for these kinds of reasons—as costs keep going up, many Americans will be forced to drop their present coverage because of inability to afford rapidly rising costs of premiums, deductibles and co-payments; there is no guarantee that the uninsured will be able to afford new private coverage (even with subsidies, which won’t kick in for another four years); and expansion of Medicaid will not take place until 2013 (many states are already pushing back with concerns that the their recession-strained budgets will not allow them to pay their share in adding to their Medicaid programs, potentially leaving millions of the poorest Americans uninsured.
• There are no effective cost containment mechanisms built into the bill, either for the costs of health insurance or for health care itself. As it whines about weakening of the individual mandate that will likely limit some of its big increase in the insurance market, the health insurance industry is already warning that sharp premium increases will result. The most the bill will do is to require disclosure and review of premium increases, without any regulatory teeth. Although the bill would set up a Health Benefits Advisory Committee to recommend a minimal essential benefits package (with four tiers), insurance industry lobbyists will argue for the most minimal levels of coverage, and we can anticipate an exponential growth in underinsurance. Moreover, there are no price controls to be applied anywhere in the system, except perhaps in authorizing the government to negotiate drug prices with manufacturers. But that provision will almost certainly not clear the Senate, where we can expect even less concern for affordability and prices.
• Although the public option has been the target of intense controversy, it will play a negligible role in health care reform. The CBO has concluded that it would cover no more than 6 million Americans, just two percent of the population, in 2013, and will cost more than private programs, mostly due to adverse selection in attracting sicker individuals and its inability to set reimbursement rates for physicians and hospitals as is done by Medicare. Moreover, middle-income families may be required to spend 15 to 18 percent of their income on insurance premiums and co-payments.
• HR 3962 will not result in making health care more affordable, despite allocating some $605 billion over ten years for subsidies to low- and middle-income Americans to buy insurance on Exchanges. We can count on continued increases in the cost of health insurance as far as the eye can see, together with less actuarial value of coverage.
• Buried in the fine print of this monster bill are many provisions that will benefit corporate stakeholders in the medical industrial complex on the backs of patients and their families. These examples make the point:
• Although medical loss ratios (MLR) (the proportion of premium revenue actually spent on medical care) are specified at a minimum of 85 percent, this loophole has been added–”while making sure that such a change doesn’t further destabilize the current individual health insurance market.” By way of comparison, the Senate Commerce Committee has found that the average MLR for the largest insurers in the individual market is only 74 percent, with 26 percent of premium revenue going to marketing, administrative overhead and profits.
• Although the bill would create a much-needed Center for Comparative Effectiveness Research, it would have no say over reimbursement and coverage policies. As the bill says, it “contains protections to ensure that research findings are not construed to mandate coverage, reimbursement or other policies to any public or private payer.”
In sum, this $1.055 trillion plan over ten years will not fix the major problems of cost and affordable access to health care in our deteriorating system, will add new layers of bureaucracy and complexity to the present system, is not fiscally responsible, and is not sustainable.
What to do now? Rather than accept an unworkable bill that is politically expedient, we would be better off to make a major course change. That vote could take place as early as tomorrow.
If that fails, shelving this bill would be the best option. Until a few days ago, I would have added that lawmakers should be pressed to retain the amendment proposed by Dennis Kucinich (D-Ohio) to allow states to experiment with single-payer plans, as a number of states would like to do (e.g. California, Colorado, Illinois, Maine, New Mexico, New York and Pennsylvania). Although that amendment had already been passed by a rare bipartisan vote of 27-19 in the House Education and Labor Committee, it has been stripped from the bill.
The best first option would be to call for a floor vote, as originally promised by the House Speaker Pelosi, for the amendment proposed by Anthony Weiner (D-NY) to substitute HR 676, a single-payer proposal, for HR 3962. If that fails, shelving this bill would be the best option, but if that is not possible, lawmakers should be pressed to retain the amendment proposed by Dennis Kucinich (D-OH) to allow states to experiment with single-payer plans, as a number of states would like to do (eg. California, Colorado, Illinois, Maine, New Mexico, New York and Pennsylvania).
That amendment has already been passed by a rare bipartisan vote of 27-19 in the House Education and Labor Committee. Whether a health care bill survives the end game in both chambers of Congress in this session is still up in the air. If a bill is finally enacted into law, however, it will be ineffective in remedying the big problems of cost and access to health care. We should be gearing up for an intense effort in 2010 to push for real health care reform–Medicare for All.
Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It.” Buy John Geyman’s Books at: http://www.commoncouragepress.com
Letter from CBO Director Douglas Elmendorf
Congressional Budget Office
November 2, 2009
This letter responds to questions about the subsidies that enrollees would receive for premiums and cost sharing and the amounts that they would have to pay, on average, if they purchased a relatively low cost plan in the new insurance exchanges to be established under H.R. 3962, the Affordable Health Care for America Act, as introduced in the House of Representatives on October 29, 2009.
The enclosed table focuses on enrollees who purchase a “reference” plan (the premiums for which equal the average of the three lowest-cost “basic” plans, as defined in the bill), because federal subsidies would be tied to that average. Such a plan would have an actuarial value of 70 percent, which represents the average share of costs for covered benefits that would be paid by the plan.
Although premiums under H.R. 3962 would vary by geographic area to reflect differences in average spending for health care and would also vary by age, the table shows the approximate national average for that lower-cost reference plan — about $5,300 for single policies and about $15,000 for family policies in 2016. Enrollees could purchase a more expensive plan or more extensive coverage for an additional, unsubsidized premium — and CBO anticipates that many enrollees would do that, so the average premiums actually paid in the exchanges would be higher (although average cost-sharing amounts could be lower than those shown in the table).
Estimate for “Reference Plan” in 2016 — Average of 3 Lowest-Cost Basic Plans:
70% – Actuarial value
$15,000 – Average premium
$5,500 – Average cost sharing
One example – a family of four at a higher income level:
400-450% – Income relative to the federal poverty level
no cap – Premium cap as a share of income
$102,100 – Middle of income range
$15,000 – Enrollee premium in reference plan
0% – Premium subsidy (share of premium)
none – Average cost sharing subsidy
$5,500 – Average net cost sharing
$20,500 – Enrollee premium + average cost sharing
20% – Premium + cost sharing as a percent of income
Of the many flaws in the very expensive and highly inefficient model of health care reform that Congress has selected, one of the more important is the financial impact that it will have on middle- and upper-middle income individuals and families. Let’s look at the example of a family of four with a very good income: $102,100.
The premium ($15,000) and average cost sharing ($5,500) that that family would have to pay would leave them with a net income of $81,600. That is not bad, but it certainly falls short of the $100,000 plus income that no doubt the family believes they should have.
Also that family would likely want coverage beyond the average of the three lowest-cost basic plans. They would want coverage greater than an actuarial value of 70 percent, especially since employer-sponsored coverage now provides an average actuarial value of 80 percent. They would also want more protection should their out-of-pocket medical expenses exceed the $5,500 average net cost sharing. Even with caps on cost sharing, the family would still be responsible for non-benefit products and services and for often-unavoidable out-of-network health care. Take those costs out of the $81,600 balance and that one-hundred-thousand-dollar-income family is going to be very unhappy with this reform legislation.
Do you think that they know about this? Do you think that maybe we should tell them?
On October 30, thirteen brave people sat in front of the entrance of Independence Blue Cross (IBC), in order to demand that IBC change its practice of pretending to be a non profit, while spending millions lobbying against real health care reform. They were arrested for exercising their constitutional right to protest. A hundred more chanting protestors singing “We Shall Not Be Moved” circled in front of Independence Blue Cross, the largest insurer in the Delaware Valley. About half of those arrested were students active in the Student Healthcare Action Network. Among those arrested were Jeff M., an organizer with Healthcare NOW, Rhone F., an organizer with PDA, and Paula B. with Health Care for All Philadelphia. Their letter to Joe Frick, CEO of IBC said the following:
Dear Joseph Frick,
We recognize that Independence Blue Cross was founded with the social mission of providing affordable healthcare to citizens in the Philadelphia area. We know Independence Blue Cross is concerned about the 200,000 Philadelphians and 46 million Americans who cannot afford health insurance. We also know that you’re concerned about the rapidly rising costs of healthcare in this country.
We are concerned, however, with the fact that Independence Blue Cross continues to deny its members life-saving care and is currently funding efforts to kill meaningful healthcare reform in this country, which would bring more affordable healthcare to more people. You have done well at cloaking your efforts behind the slogan “get healthcare reform right,” but your scare tactics and accusations that even a public health care option will have “dangerous consequences” are not benefiting your policy-holders. You are using millions of dollars worth of our insurance premiums to spread that message, too.
The information is in, and it shows that the best option to insure all Americans and provide the best quality care is a single -payer universal healthcare plan. The time has come for Independence Blue Cross to stop blocking the meaningful reform that Americans need and to carry out its mission of serving the “public good”, not its own bottom line.
We are demanding, therefore, that you agree to the following:
1. Until the passage of either a nationwide or statewide single-payer healthcare system, Independence Blue Cross will agree to cover all doctor-ordered procedures and care.
2. IBC will immediately stop using our insurance premiums to fund efforts to quash meaningful reform, such as the fake grassroots (“astroturf”) organization GetHealthReformRight.org
3. You will join us at a press conference in one week to announce IBC’s support for both state and national efforts to create a single-payer health insurance system.
Student Healthcare Action Network
Mobilization for Healthcare for All
I, Joseph Frick, in order to fulfill Independence Blue Cross’ mission to provide affordable healthcare to residents of the Philadelphia area, agree to the aboe demands. I will join you at a press conference in front of Independence Blue Cross offices one week from today to confirm that we have met your demands and to announce Independence Blue Cross’ support for a single-payer healthcare system.
__________________ (Frick never came down to sign this)
Today thousands more called Speaker Pelosi’s office demanding that the Kucinich and Weiner amendments be put forward for a vote as previously promised. Their office was apparently instructed to transfer all such calls to an answering machine. We should be appalled at this effort to dismiss single payer advocates. Short of single payer, this 1,990 page effort to reform health care will be indecipherable for the American public and will quickly become unaffordable. We will be trying to build a house on a crumbling foundation. It will not work and we will be back here again in four years asking what went wrong.
Interviews with Washington’s power players
Drew Altman, President and CEO of the Henry J. Kaiser Family Foundation
The Washington Post
November 2, 2009
MS. ROMANO: In your view, what must a bill have in order to be a step forward in health care reform.
MR. ALTMAN: Well, you know, we’re having this debate because the American people, average working Americans, became really worried about and are having real problems just paying their health care bills, and that’s having a real impact also on their family budgets and their ability to pay for other things, pay their rent and mortgage or put a kid through college.
We’ve forgotten a little bit that that’s where this came from. That’s why health got traction again as a political issue.
So the main thing I actually want to see–us health care people tend to talk about this in terms of health care goals, access to care and the quality of care. The first thing I look for is, is this legislation actually responsible–responsive in a meaningful way to the meat-and-potatoes pocketbook problems that average Americans are having, paying for their health care which brought us this debate in the first place. That’s number one for me.
MS. ROMANO: With President Obama trying to cap the cost of these plans at $900 billion over ten years, does that make the discussion about subsidies very important?
MR. ALTMAN: It is a really important discussion, and one of the things that’s happened is, as so much of the debate lately has focused on this hot-button issue [of] the public option. Flying under the radar screen and not getting as much attention are these bread-and-butter consumer issues about will the policies be affordable for people who now have to buy health insurance coverage, are the subsidies high enough, is the coverage that people are going to get going to be adequate.
And I think, as we get to two bills and then one bill that the country can really focus on and that people in the media can really focus on, that issue of the affordability of the coverage will rise to the surface and will become a really big issue.
MR. ALTMAN: I think the public option issue has diverted attention from lots of other issues, and I think this issue of affordability will emerge as a big issue. And there’s a tradeoff as they design this legislation between keeping the overall sticker shock, the price tag of the legislation down and the generosity of the subsidies they can give to people and the comprehensiveness of the coverage that people get, how high–how big those deductibles will be that average middle-class families are going to be asked to pay.
And that’s a very big issue. It’s going to be a big issue not just for the people who are in these exchanges, who get these policies, but for the American people generally who look at this and say is this a fair deal, is this a good deal for people who now have to have health insurance coverage.
I think this is the sleeper issue still. This affordability issue.
And it’s hard to understand. They’re focused on the public option. They haven’t gotten to it yet. So this issue of affordability, I think, is a sleeper issue because it’s complicated, hard to understand how coverage works, what an actuarial value is, how the subsidies work at different income levels, and because they’re focused on the public option. Everyone is so focused on the public option right now, but I think as they get to one bill that everyone can put under a microscope, then this issue of the subsidies and the coverage will really rise to the surface, and we’ll have a much bigger debate about that.
And that’s the consumer issue. It’s the real meat-and-potatoes consumer issue in this legislation.
MS. Romano: Is there a way to hold private insurers accountable on costs other than a government option?
MR. ALTMAN: Well, you know, there are comprehensive reforms of the insurance industry in the legislation, but the one thing they didn’t do in this legislation which was proposed in the Clinton health reform plan, which as we all know failed, they did not propose this time around caps on the increases in insurance premiums. They didn’t say, “Your premiums can only go up two times inflation in the general economy.” That–those–that kind of price controls or regulation, they just didn’t think that would work this time, or they didn’t think it would fly. Anyway, it’s not in the legislation this time.
So, no, there aren’t–I mean, one of the characteristics of the legislation this time is there are not strong controls over the increases that can occur in premiums in the future.
MS. ROMANO: Health care costs are a huge burden on American businesses. Are there enough incentives in these different legislations to help the businessmen pay for this, pay for it for employees, or are we fast approaching a point where businesses will be no longer offering health insurance to employees?
MR. ALTMAN: Well, it’s a big problem in this. The reason we’ve seen a sort of slow drip-drip-drip of coverage out of the employment-based health care system is simply that business can’t pay the cost any longer.
I did a projection the other day that showed that if current trends continue, in 20 years the average cost of a family premium could be 30,000 bucks a year. So we’re not on a good trajectory.
MS. ROMANO: Wow!
MS. ROMANO: Do you see a time when the U.S. will ever drift towards a single-payer system?
MR. ALTMAN: You know, I don’t know for sure, but I certainly think it will be a long time, and I know the single-payer people, you know, don’t like to hear that because they believe so strongly in that approach, but we’re at a point in time now when the approach is favored by the two wings, an all-market approach–people get a voucher, and they shop for themselves–and a single-payer approach are not in the cards.
And so what we’re really looking at, if you view it through that lens, is we’re looking at some form of a centrist deal that brings together elements that the right likes and that the left likes and builds on the existing system. It’s a little bit messy, but that’s all that can fly right now in our political system.
MS. ROMANO: Is the U.S. obligated to provide every citizen with health insurance–health care–let me ask that again. Is the United States obligated to provide health care to all of its citizens?
MR. ALTMAN: The way I would answer that question is to say that it is certainly something that we should do. And I don’t know anybody–you know, right, left, or center–who doesn’t believe that at some level. The debate is about how we get there, and, unfortunately, that debate about how we get there has been a really bitter and difficult debate in our country. And the tough part of it is, if you scratch beneath the surface and look at the difficult part of it, it is fundamentally about redistributing wealth in our country; that, ultimately, it means, as some of us who have more, have to pay, you know, a little bit more, so that others who have less can have health care. You can slice it and dice it a million ways with this kind of tax or that kind of mandate, but, at the end of the day, that’s what’s involved, and we don’t do that too easily in our country, too happily, or too willingly.
Drew Altman is a very intelligent and very well informed advocate of a health care system that works well for all of us. His only handicap is that, as President and CEO of the Henry J. Kaiser Family Foundation, he must maintain his reputation as a highly credible but impartial voice on health care reform. That requires diligently negotiating his way through the minefield of Washington politics.
Setting ideology and politics aside, Altman makes it clear that wealth redistribution is absolutely essential if everyone is going to have the health care that they need. By far the simplest, most efficient, and most equitable method of doing that would be to enact a single payer system. But this is where ideology and politics enter.
How do you meld the ideology of single payer with the ideology of consumers shopping in a market of private health plans? After all, there’s that redistribution problem. The solution currently being advanced is to perpetuate the market of private health plans while superimposing government policies to achieve redistribution of wealth, without which it would be impossible to finance care for everyone.
The combination of private health plans and government policies requires a complex, difficult balancing act. Some of the variables that must be brought into balance include the package of benefits to be covered by the plans, the premiums to be charged for the plans, annual premium increases not limited by regulation, actuarial values of the plans, eligibility for the insurance exchanges, the value of the vouchers used to purchase the plans, the eligibility for the vouchers as related to income or as to wealth as some suggest, the size of the deductibles, copayments and coinsurance, financial support for out-of-pocket expenses, caps on yearly or life-time spending, payment for non-covered or out-of-network products and services, the variable contribution rates for employers, caps on federal and state budgets that limit the level of government funding, extensive corrections in the Medicare program, eligibility for and financing of taxpayer-financed Medicaid programs, financing the complex administrative services for a program in constant flux because of ever-changing eligibility status and contribution levels, balancing income taxes, payroll taxes, possibly VAT taxes, payroll deductions, taxes on health care products, taxes on insurance plans… (continue with your own additions to this list).
Once you have the full list, just try changing any variable and see what happens to the rest of the variables. What will be the most shocking is to observe what happens to middle-income Americans. They will be clobbered by health care costs!
The primary reason for these complex adjustments is that health care is now so expensive that redistribution is essential if everyone is to have the care they need. The private insurance market by itself is totally incapable engineering redistribution. Drew Altman says that this would be “a little bit messy,” and that, at the end of the day, we won’t do it “too easily, too happily, or too willingly.” But that’s as far as Drew Altman’s job description will allow him to go.
We are not so constrained. Soon we will have “one bill that the country can really focus on and that people in the media can really focus on; that issue of the affordability of the coverage will rise to the surface.”
We can take Drew Altman’s astute observations on “the meat-and-potatoes pocketbook problems that average Americans are having in paying for their health care,” and we can run with it. We know how to fix it, even if he can’t publicly endorse our model of an improved Medicare for all. When we succeed, Drew Altman certainly will be at least a little bit smug. Let’s go!
Changing Numbers Make Meaning Even More Elusive
By David M. Herszenhorn
The New York Times
November 1, 2009
Once Ms. Pelosi realized that she could not get a robust public option, she needed another way to reduce the bill’s cost. The answer was a wider expansion of Medicaid, the state-federal insurance for the poor.
In just one of the counterintuitive concepts in the health care debate, enrolling more people in Medicaid saves money because it is cheaper than subsidizing private insurance, and because states share the cost.
The House bill would increase total Medicaid costs for states by $34 billion. States, of course, object to such added expenses.
The version of the House health care reform bill released last week would further expand Medicaid eligibility to individuals with incomes up to 150 percent of the federal poverty level. This expansion was prompted by the self-imposed requirement to avoid any deficit spending as a result of this legislation. It will cost the government less to enroll these individuals in Medicaid than it would cost to provide them with subsidies to purchase private health plans.
Some implications of this policy:
* Medicaid benefits are more comprehensive than private plans and cost sharing is negligible, unlike private plans. Medicaid patients have more care covered with much less in out-of-pocket costs.
* Taxpayers will be paying less to provide these individuals with Medicaid than they would have paid in subsidies to purchase private plans. Private plans are more expensive even though they provide less coverage.
* As a welfare program, representing a population without an audible political voice, Medicaid is chronically underfunded.
* Inadequate reimbursement rates due to inadequate funds results in a lack of willing providers. Too many physicians are not willing to accept the losses under this program. This lack of providers impairs access to care.
* Many states are struggling with budgets burdened by massive Medicaid spending. Although this expansion would use federal funds initially, some of the financing burden would be shifted to the states even though they do not have the budget flexibility of the federal government.
On paper, Medicaid looks like a great program. It provides a generous benefit package for lower-income individuals who cannot afford to purchase private health plans. In reality, most Medicaid patients do not have the same access to essential specialized services that wealthier privately insured individuals do, and access to even basic services is often compromised.
Expanding the Medicaid program further locks in a tiered health care system, effectively providing less for the least amongst us. In health care, that’s simply not acceptable.
By Iyah Romm, Sylvia Thompson, MD and Elizabeth Wiley, JD, MPH
I want to cover everybody. Now, the truth is that, unless you have a single-payer system, in which everybody is automatically covered, then you’re probably not going to reach every single individual. ~ President Barack Obama, July 22, 2009
As future physicians, ensuring that every single one of our patients has unrestricted access to health care is a core tenet of our professionalism. President Obama has affirmed what many of us know to be true – a single-payer system is the only responsible solution to our health care crisis. The vast majority of our seniors are satisfied with Medicare; in fact, many patients anxiously await Medicare eligibility because of the security and stability provided by the program’s guarantee of coverage and access. Labor unions and advocacy organizations across the United States support a single payer system as do the majority of health care providers. These groups – these constituencies – recognize that single payer is the best system in which to guarantee quality, affordable, health care for all.
On July 31, 2009, Representative Anthony Weiner (D-NY) introduced an amendment in the House Energy & Commerce Committee to replace key provisions in the House health reform bill with language modeled after HR 676, the Expanded and Improved Medicare for All Act. House Speaker Nancy Pelosi (D-CA) guaranteed a floor vote on single payer if Rep. Weiner withdrew his amendment. Under good faith, Rep. Weiner assented. Now, Speaker Pelosi is reneging on her promise not only to Rep. Weiner, but to the American people, many of whom believe that we need to have a true debate on the merits of a single-payer health care system. We write today calling for an end to these games. Our legislators must stop politicking with the most valuable resource available to them – the lives of our patients, their constituents.
In the long history of single payer advocacy, there has never been such a momentous time – never have Americans had the opportunity to hold their representatives accountable to the people on this issue – rather than to the powerful lobbies that pervade the beltway. According to the Kaiser Family Foundation, nearly one in two Americans support a system of publicly funded, privately delivered, Medicare for all – will the floor vote reflect this statistic? We will only know if Speaker Pelosi upholds her promise.
The American people should be able to trust members of Congress to stand by their promises – both to them and to each other. In the health care debate, the needs of average Americans must come before special interests and politics. Our friends, family, and patients deserve to a true, honest debate. Denying that chance through lies and broken promises is an anti-democratic betrayal of trust that will not easily be forgotten – now or at the polls in November. The Weiner amendment presents a historic opportunity for members of Congress to document their support for single-payer national health insurance as the best way to solve the U.S. healthcare crisis and provide a vote that Members can proudly stand by when approached by constituents.
We see everyday how budget shortfalls result in staff reductions that ultimately threaten the quality and availability of care. Single payer would provide universal and comprehensive coverage for all medically necessary services. Unamended, HR 3962 (formerly HR3200) would leave millions uninsured or with skimpy coverage. Single payer would allow patients free choice of doctor and hospital. Under HR 3962, insurance companies would continue to deny care and restrict access to providers. Single payer would pay for itself by eliminating $400 billion in insurance company administrative waste and redirecting these savings to patient care. HR 3962 would require $1 trillion in new revenue over the next decade. Single payer would establish proven and effective cost-containing mechanisms to ensure that benefits are sustainable over the long run. HR 3962 lacks effective cost control measures by maintaining the primacy of the private insurers.
The private insurance industry has had eight decades to lead change, to shift from a world predicated upon a race to the bottom-line to a culture of innovation and care. But their time has passed. Speaker Pelosi must offer the leadership necessary to truly reform our system and to address one of our greatest moral failures of the last fifty years. Only a single payer system can provide the change President Obama has championed, the change we need – simplifying payment, eliminating unnecessary bureaucracy, and investing the subsequent savings into a solitary goal, providing care to all. The math is simple, the morality pure, and the passion of single payer advocates indefatigable. As future physicians, this is the type of system in which we aspire to practice medicine.
Iyah Romm, Sylvia Thompson, MD and Elizabeth Wiley, JD, MPH are physicians-in-training and PNHP members as well as national leaders in the American Medical Student Association (AMSA).
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