Healthcare Reform 2.0 – Woolhandler and Himmelstein

Posted by on Wednesday, Nov 9, 2011

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.

Healthcare Reform 2.0

By Steffie Woolhandler, MD, MPH and David Himmelstein, MD
CUNY School of Public Health, Social Research, Fall 2011

So while the American people want an expanded and improved Medicare for All — that is, a single-payer system — corporations dead-set against single-payer reform have come to dictate the agendas of both political parties. Hence, the only way to win national health insurance is to build a popular movement to counter corporate power.“healthcare-reform-2-0″-in-the-fall-2011-issue-of-social-research/

Healthcare Reform 2.0 (12 pages):

This brief primer (9 short pages plus references) on Healthcare Reform 2.0 will provide little new information for those who have followed the research and educational efforts of the leadership of Physicians for a National Health Program. Nevertheless, it should be downloaded to be used as an advocacy piece to explain to others why Healthcare Reform 1.0 (Affordable Care Act) will remain a failure, and why we have to move on to Healthcare Reform 2.0 (expanded and improved Medicare for All). By distributing this, electronically or in hard copy, you can become a part of the popular movement to counter corporate power.

Out-of-pocket medical expenses drive more into poverty

Posted by on Tuesday, Nov 8, 2011

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.

Census Bureau measures more Americans living in poverty

By Michael A. Fletcher
The Washington Post, November 7, 2011

The Census Bureau on Monday released a new, comprehensive poverty measure that painted a more dismal picture of the nation’s economic landscape than the official measure from September.

The report found that 49.1 million Americans — 16 percent of the population — lived in poverty in 2010, which is higher than the 46.2 million Americans found to live in poverty by the official measure released in September.

The new report marked the culmination of a years-long effort by the Census Bureau to come up with a poverty measure that takes into account the huge amounts of money in social services benefits provided to the needy, as well as their expenses for things such as medical care and payroll taxes.

The increased level of poverty revealed by the supplemental measure is at odds with what some poverty experts expected. The increased level of poverty was fueled by the sharply higher levels of poverty among senior citizens found by the alternative measure.

The poverty rate for those 65 and older was 15.9 percent based on the supplemental measure, much higher than the 9 percent rate for the elderly when using the official poverty yardstick.



Current Population Reports
United States Census Bureau, November 2011

The National Academy of Sciences (NAS) established the Panel on Poverty and Family Assistance, which released its report titled Measuring Poverty: A New Approach in the spring of 1995. Based on its assessment of the weaknesses of the current poverty measure, this NAS panel of experts recommended having a measure that better reflects contemporary social and economic realities and government policy.

SPM (Supplemental Poverty Measure) family resources should be defined as the value of cash income from all sources, plus the value of in-kind benefits that are available to buy the basic bundle of goods (FCSU) minus necessary expenses for critical goods and services not included in the thresholds. In-kind benefits include nutritional assistance, subsidized housing, and home energy assistance. Necessary expenses that must be subtracted include income taxes, social security payroll taxes, childcare and other work-related expenses, child support payments to another household, and contributions toward the cost of medical care and health insurance premiums, or medical out-of-pocket (MOOP) costs.

Resource measure:

Official Poverty Measure:  Gross before-tax cash income

Supplemental Poverty Measure:  Sum of cash income, plus in-kind benefits that families can use to meet their FCSU needs, minus taxes (or plus tax credits), minus work expenses, minus out-of-pocket medical expenses

For children, not accounting for the EITC (Earned Income Tax Credit) would result in a poverty rate of 22.4 percent, rather than 18.2 percent. The inclusion of each of the listed in-kind benefits results in lower poverty rates for children. Not subtracting MOOP (medical out-of-pocket expenses) from the income of families with children would have resulted in a poverty rate of 15.4 percent. Findings are similar for the other two age groups shown. For the 65 years and older group, however, WIC (Women, Infants, and Children program) has no statistically significant effect while SPM (Supplemental Poverty Measure) rates increase by about 7.3 percentage points with the subtraction of MOOP from income. Clearly, the subtraction of MOOP has an important effect on SPM rates for this group.

From the Summary

Results showed a higher proportion of several groups were poor using the SPM. These groups were adults aged 18 to 64 and 65 and over, those in married-couple families or with male householders, Whites, Asians, the foreign born, homeowners with mortgages, and those with private health insurance.

Since in-kind benefits help those in extreme poverty, there were lower percentages of individuals with resources below half the SPM threshold for most groups. The effect of benefits received from each program and expenses on taxes and other non-discretionary expenses on SPM rates were examined. It was shown that medical out-of-pocket expenses had an important effect on SPM rates and on the well-being of those 65 years and older, in particular.

Many have believed that our poverty rates would not be so dismal if more factors were considered such as the value of social services benefits, thus the supplemental poverty measure was created. The shocking result is that poverty rates are actually greater, especially because of the additional drain on resources of out-of-pocket medical expenses – a measure even worse for those over 65.

PNHP’s version of single payer would provide first dollar coverage, eliminating out-of-pocket expenses such as deductibles, co-payments, and coinsurance. This would not only reduce financial barriers to health care, it would also reduce U.S. poverty levels. This is partly what we mean by “improved” in “an improved Medicare for all.”

Massachusetts physicians prefer single payer over the Affordable Care Act

Posted by on Monday, Nov 7, 2011

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.

Temperatures Rise Over Costs Of Care: Polls Find Public, Doctors Favor More Government Involvement

By Livia Gershon
Worcester Business Journal, November 7, 2011

Presumably, doctors are more familiar than the general public with the pressures driving up health care costs, and an overwhelming majority of them also say there needs to be some government involvement in the health care system. A survey by the Massachusetts Medical Society this fall found that 41 percent of doctors thought the best option for health care reform in the U.S. would be to adopt a single-payer system like Canada’s. That number was up from 34 percent in 2010.

(Another survey by the Blue Cross Blue Shield of Massachusetts Foundation) found that 88 percent of Massachusetts residents think it’s important for the state government to take major action on health care costs.


Physician Workforce Study

Massachusetts Medical Society
September 28, 2011

6.1.  Practicing Physicians Opinions on U.S. Health Care System Reform

A question was added to the Practicing Physician Survey in 2010 to document how physicians view upcoming system changes in national health care reform. The following question was asked again this year of each of the respondents:

Which of the following would you choose as the best option for the U.S. health care system?

The percent of practicing physicians choosing each response is outlined below:

1.  Both public and private plans with a public buy-in option (allow businesses and individuals to enroll in a public Medicare-like health insurance plan that would compete with private plans) — 23%

2.  Keep the existing mix of public and private plans, but allow insurers to sell plans with limited benefits and high deductibles to keep premiums low. State subsidies would help low-income individuals buy insurance. Individuals could choose to buy a less expensive catastrophic plan, more expensive comprehensive coverage, or no insurance at all — 15%

3.  The recent national plan (Patient Protection and Affordable Care Act) passed by Congress in 2010 (modeled after the Massachusetts health reform law of 2006). This plan includes an individual mandate, expansion of public programs, American Health Benefit Exchanges, changes to private insurance including prohibiting the denial of coverage for preexisting conditions, and employer requirements —- 17%

4.  Single-payer national health care system offering universal health care to all U.S. residents — 41%

5.  Other (please specify) — 4%

While more physicians prefer single payer as the best option for U.S. heath care reform compared to last year’s survey results (41% in 2011 and 34% in 2010), the majority of physicians prefer other options (59% in 2011 and 66% in 2010).

Of five options for the U.S. health care system presented to Massachusetts physicians, far more – 41 percent – preferred single payer to any other option. That was almost twice as many as those who preferred the second choice option. The single payer choice jumped from 34 percent last year, likely representing further dissatisfaction with their current system based on a design very similar to that of the Affordable Care Act.

The leadership of the Massachusetts Medical Society is not very supportive of single payer, pointing out in this report that 59 percent of Massachusetts physicians prefer other options to single payer. But if they were more objective, they would have pointed out that when offered a choice of “The recent national plan (Patient Protection and Affordable Care Act) passed by Congress in 2010 (modeled after the Massachusetts health reform law of 2006),” 83 percent of physicians prefer other options.

Presenting the remaining data in the same manner, 85 percent of physicians prefer other options to high deductible plans, 77 percent prefer other options to a “public option,” and 96 percent prefer one of the listed options (including single payer) to any other undefined option that they might otherwise prefer.

From this we can conclude that a clear plurality of Massachusetts physicians, who have direct experience with the Affordable Care Act model, would prefer single payer, and that support is increasing. By a large majority, they reject any other option, including their current system based on the model of the Affordable Care Act.

Exemptions for self-insured plans place employees at risk

Posted by on Friday, Nov 4, 2011

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.


By Julian Pecquet and Sam Baker
The Hill, November 3, 2011

Consumer advocate and law Professor Tim Jost on Thursday urged the National Association of Insurance Commissioners to take a “leadership role” in pressing states to address potential gaps in the healthcare law’s applicability. The law’s consumer protections don’t apply to all types of plans, and Jost said those gaps pose problems for both consumers and insurers.

Self-insured plans are exempt from most of the law’s regulations, and policies offered by large employers also don’t have to meet certain requirements. Jost said small businesses are shifting toward self-insurance, so employees will be stuck without benefits Congress intended to provide. There’s also a risk to insurers, he said, because small businesses could drop their self-insured policies and move into the exchanges as soon as one of their workers gets sick.


Self-Insurance and the Potential Effects of Health Reform on the Small-Group Market

By Kathryn Linehan
National Health Policy Forum, December 21, 2010

Self-insured employer plans are explicitly exempted from some requirements, though “self-insured” is a term not defined in PPACA (or elsewhere). The exemptions are described below.

• Self-insured plans are not required to provide coverage with minimum essential benefits.
• Individual and small-group plans are required to participate in a risk-adjustment system, but self-insured plans are exempt.
•  Self-insured plans are not subject to provisions (specifically, medical loss ratio requirements and review of premium increases) that are intended to limit insurer earnings.
• Starting in 2014, health insurers are required to pay an annual fee to be calculated by the Secretary, but self-insured plans do not have to pay this fee.

In a September 2010 paper, Timothy Stoltzfus Jost described the “threat” of self-insuring to exchanges:

If small businesses with healthy employees can remain “self-insured” until the health of their pool deteriorates and then join the exchange, premiums within the exchange will increase and the exchange will become less viable. If a state opens its exchange to groups above 100, the threat is even greater, as legitimate self-insured plans will seek to insure their employees through the exchange when their experience deteriorates. Moreover, the self-insured plans that have proven most adept at providing high-quality benefits to their employees at low cost (which exist at many large firms) are likely to remain independent of the exchange, while less successful self-insured plans turn to the exchange for coverage.

Well over half of all employees who obtain their health insurance through their work are enrolled in self-insured plans – plans in which health care bills are paid by the employer rather than by a private insurer (except for stop-loss insurance). By self-insuring, employers escape state insurance regulation, and they are exempt from many of the provisions of the Affordable Care Act.

These exemptions may benefit the employers, but they expose the employees and their families to greater risks, potentially impairing health care access and increasing the cost sharing burden, including costs for care that the plan is not required to cover.

Some say that employers will not compromise their self-insured plans since they would be used to attract better qualified employees, but we are already seeing a shift of risk from employers to employees through greater cost sharing and other plan innovations. As mentioned in a message earlier this week, there has been an increase in the sale of deceptive “self-insured packages” which are merely stop-loss plans that look like health insurance, but that are exempt from the regulatory oversight of private health plans. As health care costs continue to rise, employers surely will continue to leverage lax self-insured rules to accrue to their own benefit, at a cost to their employees.

For those employers who end up facing higher costs in their self-insured plans resulting from deterioration in the average health status of their employee pools, they have the out of transferring their employees to the new state insurance exchanges. Of course, subjecting the exchanges to adverse selection (enrolling more costly patients) will drive up premiums for everyone else enrolled in the exchange plans.

As we have said many times before, the fundamental flaw in the reform process was that Congress elected to build on our highly dysfunctional, fragmented system of financing health care. It wasn’t working before, and the tweaks in the Affordable Care Act are not near enough to make it work now.

We need to start over with an improved Medicare that covers everyone.

“Narrow networks” take away choice

Posted by on Thursday, Nov 3, 2011

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 Net set to offer discounted insurance

By Ken Alltucker
The Arizona Republic, November 3, 2011

Health Net of Arizona is teaming with Banner Health to offer a new health-maintenance-organization insurance plan that allows businesses and their workers access to discounted care if they agree to limit their network of health providers.

The Health Net ExcelCare HMO plan offers customers a network exclusively made up of Banner Health Network medical providers and Banner Health hospitals.

Although it’s Health Net’s initial foray into “narrow networks” in Arizona, the health insurer said that it has had success enticing both large and small employers in California to choose similar plans with slimmed-down networks.

Health Net has been among the most aggressive in promoting HMO plans with narrow networks, but other insurance companies such as Aetna and UnitedHealth Group have also offered such plans.

“Narrow networks” – sharply limiting the network of physicians and hospitals that the insurer will cover – is yet another example of private insurer innovation in their marketed products. Only in the private sector can taking away patients’ choices in their health care professionals and institutions be considered an improvement in product design. A public single payer system would be designed to enhance access, not restrict it.

Dave Zweifel on single payer

Posted by on Wednesday, Nov 2, 2011

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.

Plain Talk: Health care solution is simple: single-payer

By Dave Zweifel
The Capital Times, November 2, 2011

The answer to the nation’s health care crisis is staring everyone in the face, yet as a country we continue to refuse to come to grips with it.

It is far from rocket science. What this country simply needs is a single-payer national health insurance program that covers all American citizens from the day they’re born to the day they die — just as other advanced countries have done for decades.

We could finance health care coverage for every American by taking the resources that employees and employers are pumping into the current broken system and still have money left over for a substantial tax cut, not to mention that it would put U.S. employers back on a level playing field with their competitors in the world market.

Yet we refuse to even put that debate on the front burner where it belongs, plodding along with a system that with each passing year continues to hurt more and more Americans in many different ways.

(Dave Zweifel is editor emeritus of The Capital Times.)

As the implementation of the Affordable Care Act unfolds, it becomes ever more evident that it won’t accomplish our goals and that we will need to enact a single payer national health program.

Medicare Advantage patients for sale on Wall Stree

Posted by on Tuesday, Nov 1, 2011

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.

How much are you worth to HMOs?

By Carol Gentry
Health News Florida, October 28, 2011

Medicare health plan members are worth more than any other category of enrollee in a merger or acquisition deal, Wall Street analysts say.

In fact, they’re worth four times as much as members of employer-based plans and five times as much as members of Medicaid plans, according to a report from Goldman Sachs researchers Matthew Borsch and Samuel Wass.

By their calculations, Medicare Advantage (HMO or similar managed-care plan) enrollees have a “value per member” of $6,000 in a merger or acquisition.

That compares with $1,500 for commercial plans – the ones that employers offer but in which the insurer takes the financial risks – and $1,200 per member for Medicaid plans.

The researchers prepared the analysis in the wake of Monday’s announcement that Cigna will buy HealthSpring, a holding company that includes Medicare plans in 11 states and Washington, D.C. that encompass 340,000 members.

Other analysts have also noted the mega-insurers’ growing desire to acquire Medicare customers. As Carl McDonald of CitiGroup wrote today in a note about Universal American: “It’s hard to overstate how much the attitude of the largest plans …has changed toward the Medicare business in just the last six months.”

United Health Group was first to discover the pot of gold Medicare plans offered and bought PacifiCare in 2005, as McDonald notes, but now WellPoint, Cigna and Aetna are waking up.

Bet you didn’t realize that by signing up with a taxpayer-financed, private Medicare Advantage plan you can command a price of $6000 for the sale of yourself when your plan is acquired by another plan. Well, actually you don’t get the $6000. Neither does it revert to Medicare and the taxpayers. No, it goes to the top 1 percent, while leaving the 99 percent of us once again dumbfounded.

What price does a person in the traditional Medicare program command? What a ridiculous question. Medicare doesn’t buy and sell patients. That happens only when Medicare patients are privatized. Selling patients is a function limited to private plans, not public social insurance programs.

When are we finally going to say that we are not for sale to the 1 percent? Since it was Congress that arranged the sale, let’s Occupy Congress!

Insurers obliterate distinction between health plans and stop-loss insurance

Posted by on Monday, Oct 31, 2011

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.

Self-funded health plans under attack in New Jersey

By Joanne Wojcik
Business Insurance, October 30, 2011

In an Oct. 25 letter to Thomas Considine, commissioner of the New Jersey Department of Banking and Insurance, the Self-Insurance Institute of America Inc. asked the department to rescind a bulletin it issued this month that alleges stop-loss insurers are “cherry-picking” employer groups with good claims experience.

The Oct. 3 bulletin alleges that the insurers, which write excess coverage for self-funded group benefit plans, are “selectively marketing coverage to small employers on the basis of health history of that employer’s employees, and denying coverage to employers based on employee health status. The result of this selective underwriting is to “cherry-pick’ groups less likely to incur claims, leaving the groups more likely to incur claims to the state’s guaranteed-issue insured market. This, in turn, drives premiums up for small employers purchasing insured plans.”

Because stop-loss insurance is excluded from the state’s definition of a health benefit plan, it is not subject to the same regulations as fully insured health coverage, the bulletin states. Therefore, the department has invoked New Jersey’s unfair trade practice law, asserting that “the selective marketing and underwriting described herein constitutes an unfair trade practice.”

Simpsonville, S.C.-based SIIA asserts that the department’s contention is “inflammatory and without merit. Stop-loss insurance is a completely different product than commercial health insurance, so it is misguided to conclude that “unfair competition’ exists,” SIIA said in its letter.

The Employee Retirement Income Security Act’s “regulatory exemption for self-insured (self-funded) plans is a persistent thorn in the side of state insurance regulators,” according to a September statement by Timothy Stoltzfus Jost, a law professor from Washington and Lee University School of Law in Lexington, Va., to the NAIC’s ERISA (B) Subgroup.

“This may be acceptable for large employer groups, which have the bargaining power and expertise to protect their employees. But when small-employer packages purchase “self-insured’ packages from insurers, including stop-loss coverage with very low attachment points and administrative services, they are essentially purchasing conventional health insurance, except that it is free from state regulation,” Mr. Jost said.

Moreover, he said “insurers have always had an incentive to market “self-insurance’ to healthy groups, and small businesses with healthy enrollees have always had an incentive to purchase it. The Affordable Care Act, however, increases these incentives…Insurers understand this and are very actively marketing “self-insured’ products to small groups.”

For smaller employers who want to self-insure their health benefit programs, stop-loss insurance is an imperative. A very large medical bill for one employee or family member could bankrupt a small business. This need to protect against large losses has created a thriving market in self-insured packages from insurers, which escape health plan regulation, yet are beginning to look more like conventional health insurance with extremely high deductibles.

These plans not only provide stop loss coverage at a “low attachment point,” they are now providing administrative services for the employers’ self-insured plans, paying employees’ medical expenses using the employers’ funds. The attachment point – the level at which losses begin to be covered by the insurer – may be $40,000. That is a very low level for a stop-loss plan. Some conventional health plans have deductibles of $50,000. That blurs the distinction between a high deductible in a health insurance plan and a low attachment point in a stop-loss plan.

What is happening is obvious. The insurers are selling these “self-insured packages” as stop-loss plans, avoiding the regulatory oversight for health plans. Yet they actually function as health plans with very high deductibles.

Why does it matter? The insurers can avoid new regulations that prohibit medical underwriting. They are able to cherry pick – limiting the sale of these plans only to businesses with healthy employees, shifting the costs of higher risk employee pools to other programs with guaranteed issue. As Timothy Stoltzfus Jost states, “insurers have always had an incentive to market ‘self-insurance’ to healthy groups, and small businesses with healthy enrollees have always had an incentive to purchase it. The Affordable Care Act, however, increases these incentives…Insurers understand this and are very actively marketing ‘self-insured’ products to small groups.”

The private insurers have an absolute moral obligation to enhance value for their investors, and they must always make every effort to do so. The fault lies not with the private insurers themselves but with a financing model that is dependent on insurers. We need to change the model, switching to a single public insurer.

Obama administration approves virtual destruction of Medicaid

Posted by on Friday, Oct 28, 2011

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.

California gets OK for large cuts to Medi-Cal

By Anna Gorman
Los Angeles Times, October 28, 2011

The Obama administration will allow California to cut hundreds of millions of dollars from Medi-Cal, a move doctors and experts say will make it harder for the poor to get medical treatment.

California plans to reduce rates by 10% to many providers, including physicians, dentists, clinics, pharmacies and most nursing homes, the Centers for Medicare and Medicaid Services announced Thursday.

Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services, told reporters the action gives California the flexibility it had requested to address its budget shortfall. “We know that the reductions that are being approved today will have significant impact on affected providers, and we regret the very difficult budget circumstances that have led to their implementation,” she said.

California, which already spends less per beneficiary than any other state, has led the way in aggressively slashing its programs. Now the government’s decision to allow California to move forward with its plans sets a precedent for other states seeking to reduce their Medicaid bills.

The California Medical Assn. expressed frustration over the new cuts, saying that physicians could receive as little as $11 a visit. Doctors will have no choice but to stop seeing Medi-Cal patients, said CEO Dustin Corcoran. “You can’t pay the bills at these rates,” he said. “They are unconscionably low.”

Federal healthcare reform, which includes a massive expansion of Medicaid, also could be seriously hampered by this new round of cuts, Corcoran said.

“They built federal healthcare reform on the foundation of Medi-Cal, and they just destroyed that foundation,” he said. “We have a hard time seeing how healthcare reform has a chance of being successful in the state of California after these cuts are implemented.”,0,4273464.story

One of the most important components of the Affordable Care Act is the expansion of Medicaid coverage for uninsured, low-income individuals. Does the Obama administration seriously believe that this will be an effective step toward bringing affordable health care to everyone?

Look at what they just approved for California. The state already spends less per Medicaid (Medi-Cal) beneficiary than any other state, yet the Obama administration has approved another 10 percent reduction. Just wait until the budget cutters in other states get wind of this!

Theoretically, drastic payment reductions are met by further ratcheting down overhead expenses. At $11 per office visit, only a fraction of expenses can be covered, no matter how stringent the budgeting. In essence, the government is asking providers to help finance Medicaid through their own personal charity. Trying to cover 7.6 million Medi-Cal patients in the state by depending on provider charity is asking more than the system can bear.

Two quotes above need to be repeated.

Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services: “We know that the reductions that are being approved today will have significant impact on affected providers.”

Dustin Corcoran, CEO of the California Medical Association: “They built federal healthcare reform on the foundation of Medi-Cal, and they just destroyed that foundation.”

And the other major component of the Affordable Care Act? A mandate for individuals to purchase inadequate coverage by paying unaffordable premiums.

The Obama administration officials and their co-conspirators in Congress could not have been serious about bringing us real reform. If they were, we would have an improved Medicare covering everyone.

Physicians for a National Health Program and the American Public Health Association are currently holding their national meetings in Washington, D.C. We need to go to Freedom Plaza and join the Occupy Movement.

“Family penalty” built into reform

Posted by on Thursday, Oct 27, 2011

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.

Healthcare reform penalizes married couples, says report

By Julian Pecquet
The Hill, October 27, 2011

The report concludes that fewer than 2 million couples — out of 60 million nationwide — are projected to benefit from the insurance subsidies, while “almost half of the beneficiaries of the tax credit will be unmarried individuals without dependent children.”

One reason is that subsidies, which start in 2014, are tied to the federal poverty level, which does not increase proportionally along with household size.

Another problem is a snafu in the law that The Hill first reported back in July.

The law offers insurance subsidies for workers if their employer doesn’t provide affordable coverage, but proposed regulations released in August peg that affordability to individual, not family, coverage. As a result, a worker’s spouse and children would not have access to subsidies if that worker were offered affordable coverage — even if the worker could not afford the family coverage offered by the employer.

The American Academy of Pediatrics is spearheading a sign-on letter to the Centers for Medicare and Medicaid Services (CMS) that decries a “family penalty” that will “negatively impact the opportunity to access quality health insurance for significant numbers of children.”

This is yet one more example of the fundamental strategic flaw of trying to design reform to fit a fragmented system of private health plans and public programs. Instead of a complex set of rules which are designed to protect the insurance industry, it would have been so much easier and much more efficient to design reform around the patient instead by simply declaring that everyone is covered by a single comprehensive program that is equitably funded. We can still do that.

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