Two-thirds of Americans support Medicare-for-all (#1 of 6)

Introduction to a Six-part Series
By Kip Sullivan, JD

“Americans are scared to death of single payer.”

These words were not uttered by some foaming-at-the mouth wingnut. They were written by Bernie Horn, a Senior Fellow at the Campaign for America’s Future, a member of Health Care for America Now, on June 8, 2009. Horn explained that he was moved to write this tripe because single-payer supporters were asking why Democrats had taken single-payer off the table to make room for the “public option”:

The question most frequently asked by progressive activists at last week’s America’s Future Now conference was this: We hear Obama and congressional Democrats talking about a public health insurance option, but why aren’t they talking about a single-payer system like HR 676 sponsored by Rep. John Conyers? Why is single-payer “off the table”?

Horn went on to assert that single-payer had been taken off the table because Americans want it off the table. He claimed polling data supported him, but he cited no particular poll. The truth is that the Campaign for America’s Future (CAF) and other groups in Health Care for America Now (HCAN) had decided years earlier they would push Democratic candidates and officeholders to substitute the “option” for single-payer, and they would tell both Democrats and progressive activists that Americans “like the insurance they have” and that Americans oppose single-payer.

The argument that single-payer is “politically infeasible” is not new. That argument is as old as the modern single-payer movement (which emerged in the late 1980s). It is an argument made exclusively by Democrats who don’t want to support single-payer legislation – a group Merton Bernstein and Ted Marmor have called “yes buts.”

The traditional version of the “yes but” excuse has been that the insurance industry is too powerful to beat or, more simply, that “there just aren’t 60 votes in the Senate for single-payer.” But the leaders of the “option” movement felt they needed a more persuasive version of the traditional “yes but” excuse. The version they invented was much more insidious. They decided to say that American “values,” not American insurance companies, are the major impediment to single-payer.

How did the “option” movement’s leaders know that Americans oppose single-payer? According to Jacob Hacker, the intellectual leader of the “option” movement, they knew it because existing polling data said so. According to people like Bernie Horn and Roger Hickey at CAF, they knew it because focus group “research” and a poll conducted by pollster Celinda Lake on behalf of the “option” movement said so.

About this series

This six-part series explores the research on American attitudes about a single-payer (or Medicare-for-all) system to evaluate the truth of the new version of the “yes but” argument. We will see that the research demonstrates that approximately two-thirds of Americans support a Medicare-for-all system despite constant attacks on Medicare and the systems of other countries by conservatives. The evidence supporting this statement is rock solid. The evidence against it – the focus group and polling “research” commissioned by the “option” movement’s founders – is defective, misinterpreted, or both.

In Part II of this series, I will describe two experiments with “citizen juries” which found that 60 to 80 percent of Americans support a Medicare-for-all or single-payer system. The citizen jury research is the most rigorous research available on the question of what Americans think about single-payer and other proposals to solve the health care crisis. It is the most rigorous because it exposes randomly selected Americans to a lengthy debate between proponents of single-payer and other proposals.

Of the two “juries” I report on, the one sponsored by the Jefferson Center in Washington DC in 1993 remains the most rigorous test of public support for single-payer legislation ever conducted. After taking testimony from 30 experts over the course of five days, a “jury” of 24 Americans, selected to be representative of the entire population, soundly rejected all proposals that relied on competition between insurance companies (including President Bill Clinton’s “managed competition” bill) and endorsed Sen. Paul Wellstone’s single-payer bill. These votes were by landslide majorities. Washington Post columnist William Raspberry accurately noted, “Perhaps most interesting about last week’s verdict is its defiance of inside-the-Beltway wisdom that says a single-payer … plan can’t be passed” (“Citizens jury won over by merits of Wellstone’s single-payer plan,” Washington Post October 21, 1993, 23A).

In Part III, I’ll review polling data and explore the question, Why do some polls confirm the citizen jury research while other polls do not? We will discover an interesting pattern: The more poll respondents know about single-payer, the more they like it. We will see that polls that claim to find low support for single-payer provide little information about what a single-payer is (they fail to refer to Medicare or to another example of a single-payer system), they provide misleading information, or both. For example, when Americans are asked if they would support “a universal health insurance program in which everyone is covered under a program like Medicare that is run by the government and financed by taxpayers,” two-thirds say they would, but when they are asked, “Do you think the government would do a better or worse job than private insurance companies in providing medical coverage?” fewer than half say “government” would do a “better job.” Although neither question provided anywhere near as much information as the citizen jury experiments did, it is obvious the former question was more informative than the latter.

In Parts IV and V, I’ll discuss the evidence that “option” advocates cite for their claim that single-payer is opposed by most Americans. Part IV will examine polling data that Jacob Hacker uses to justify his refusal to support single-payer and his decision to promote the notion of “public-private-plan choice.” Part V will examine the survey and focus group “research” done by Celinda Lake for the Herndon Alliance and subsequently cited by leaders of HCAN, the two groups most responsible for bringing the “public option” into the current health care reform debate.

We will see that Hacker’s research relies on polls that pose such vague questions that the results resemble a Rorschach blot more than a guide to health care reform strategy. Would you make a decision about whether to abandon single-payer based on a poll that asked respondents to choose between these two statements: (1) “[I]t is the responsibility of the government in Washington to see to it that people have help in paying for doctors and hospital bills… ;” and (2) “these matters are not the responsibility of the federal government and … people should take care of these things themselves”? I wouldn’t, but Hacker did. If it turned out that about 50 percent of the respondents said it was the federal government’s responsibility, 20 percent said it was the individual’s responsibility, and the other 30 percent split their vote between government and individual responsibility, would you read those results to mean Americans “are stubbornly attached to employment-based health insurance”? I certainly wouldn’t, but Hacker did. Would you use this poll as evidence that “American values [are] barriers to universal health insurance”? I wouldn’t, but Hacker did.

The “research” that Celinda Lake did for the Herndon Alliance used strange methods. For example, she selected her focus groups based on their answers to questions about “values” that had nothing to do with health care reform. The values included “brand apathy,” “upscale consumerism,” “meaningful moments,” “mysterious forces,” and “sexual permissiveness.” “Meaningful moments,” for example, was described as, “The sense of impermanence that accompanies momentary connections with others does not diminish the value of the moment.” Do you think it’s important to ask Americans about their “sense of impermanence” before deciding whether you will support single-payer legislation? I don’t, but Celinda Lake and the Herndon Alliance did.

The “option” movement’s “research” turns out to be no match for the more rigorous research which demonstrates two-thirds of Americans support Medicare-for-all.

In Part VI I discuss the wisdom of allowing polls and focus group research to dictate policy and strategy, something the “option” movement’s founders talked themselves into doing. Hacker has been especially vocal about this. He repeatedly urges his followers to think “politics, politics, politics,” a squishy mantra that, in practice, translates into an exaltation of opportunism. The failure of Hacker and HCAN to object to the shrinkage of the “public option” by congressional Democrats, from a program covering half the population to one that might insure 1 or 2 percent of the population, documents that statement.

The fact that two-thirds of the American public supports single-payer does not mean the enactment of a single-payer system will be easy. It won’t be. But it does mean the new “yes but” justification for opposing single-payer, or indefinitely postponing active support for single-payer, is false and should be rejected.

Stay tuned.

Do the insurance industry reports totally lack all credibility?

Posted by on Friday, Dec 4, 2009

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.

Good News on Premiums

Editorial
The New York Times
December 3, 2009

The health insurance industry frightened Americans — and gave Republicans a shrill talking point — when it declared in October that proposed reform legislation would drive up insurance costs for virtually everyone by as much as thousands of dollars a year. The nonpartisan Congressional Budget Office persuasively contradicted that claim this week.

Undaunted, the industry issued a rebuttal report, claiming again that premiums would soar. We find this second industry report no more persuasive than the first.

The insurance industry is not giving up. On Thursday, the Blue Cross and Blue Shield Association issued a report contending that the C.B.O. underestimated the expected medical costs of people who will be buying policies on the individual (nongroup) market.

(CBO notes that) the legal mandate to obtain coverage, the penalties for noncompliance, and the generous subsidies for low- and middle-income people would encourage most people to enroll without waiting to become sick.

http://www.nytimes.com/2009/12/04/opinion/04fri1.html?_r=1&ref=opinion

And…

Coming Attractions: Insurance Industry Funded Study is Wrong on the Facts… Again…

Posted by Dan Pfeiffer, White House Communications Director
The White House
The White House Blog
December 3, 2009

Later today, the insurance industry releases their latest in a string of flawed analyses designed to confuse the debate around health reform.

In addition to ignoring Congress’s independent budget experts, the new report reaches its conclusions by cherry-picking which policies to analyze – a tactic we’ve seen the industry use repeatedly. Most egregiously, its alarmist headline conclusions leave out the impact that new tax credits will have on the cost of health insurance for families. That makes no sense. In reality, the report itself acknowledges that: “[s]ubsidies will entirely or partially offset these premium increases for some individuals.”

http://www.whitehouse.gov/blog/2009/12/03/coming-attractions-insurance-industry-funded-study-wrong-facts-again

And…

Impact of the Patient Protection and Affordable Care Act on Costs in the Individual and Small-Employer Health Insurance Markets

By Jason Grau and Kurt Giesa
BlueCross BlueShield Association
Oliver Wyman
December 3, 2009

Impact of Subsidies

Subsidies would play an important role in reducing out-of-pocket costs for certain individuals, especially those below 200% of FPL, who are likely to purchase insurance under the proposed reforms. Subsidies will cover more than 90% of premium costs for individuals in this income range, significantly reducing financial barriers to purchasing coverage.

By contrast, our analysis of the Senate bill projects that 8.7 million will not be eligible for the subsidies. Another 3.3 million people who purchase coverage will have incomes of 300-400% FPL and will be eligible for average subsidies of 45% of their premiums (which would not fully offset the cost increases we predict). Finally, 13.3 million lower-income individuals who purchase coverage will have incomes of 100-300% FPL. They will have access to subsidies of 70-90% of their premiums, which will offset much if not all of the increased premiums they will face.

Our modeling predicts that those who are eligible for subsidies will be more likely to purchase insurance than those who are not. However, subsidies will not ensure that young and healthy people participate. Short of achieving 100% coverage, adverse selection will always exist, and the young and healthy will be the most difficult to bring into the market.

Impact of Weak Individual Mandates

The Senate bill requires individuals to purchase insurance coverage or face financial penalties. An amendment accepted during mark-up of the Chairman’s Mark in the Finance Committee, and largely retained in the Senate leadership bill, substantially weakened the bill’s individual mandate. The individual mandate penalty in PPACA is set at just $95 in the first year insurance reforms become effective (2014). This penalty rises gradually, reaching a maximum of $750 per adult in 2016. This maximum penalty is likely to be only about 16 percent of an average premium in 2016, assuming current rates of medical cost inflation.

The amendment also exempts individuals whose premiums exceed 8% of their adjusted gross income (AGI). In 33 states, the average cost of health insurance exceeds eight percent of median state income. In fact, in the first year of reform 25% of the exchange-eligible population will face insurance costs in excess of the 8% AGI threshold and qualify for mandate exemption. Premium increases over a ten-year period will result in nearly half of the population qualifying for mandate exemption status.

Conclusion (excerpt)

The provision of subsidies alone will not offset the impact of insurance reforms on average premiums in the market. A balanced, sustainable insurance pool, that ensures everyone is covered, is critical to making healthcare affordable for all.

http://www.bcbs.com/issues/uninsured/background/patient-protection-affordable-care-act.html

Full report:
http://www.bcbs.com/issues/uninsured/background/Impact-of-the-Patient-Protection-and-Affordable-Care-Act-on-Costs.pdf

Recent reports from the insurance industry, including this report from the BlueCross BlueShield Association, have been targeted by proponents of the current leading reform model as biased reports without credibility – witness the comments by The White House and The New York Times (both also biased). But the fundamental message from the insurance industry is very valid: the reform proposal before Congress does not do nearly enough to control health care costs, and the mandates, subsidies and penalties are inadequate to ensure that all risks are adequately pooled.

This report confirms once again that the subsidies are inadequate, particularly for middle-income families, and likely will result in adverse selection as the healthier take their chances on remaining uninsured. It confirms that the penalty for being uninsured is too small to ensure compliance with the insurance requirement. It also confirms that a very large and rapidly growing number of individuals will be exempt from the mandate to purchase insurance simply because their incomes are inadequate to be able to afford the plans.

There is one statement in this report that the proponents of the proposal before Congress should take careful note of, and it is remarkable that it is coming from the insurance industry: “A balanced, sustainable insurance pool, that ensures everyone is covered, is critical to making health care affordable for all.”

The dysfunctional, fragmented model of health care financing that Congress is moving forward with can never create a balanced, sustainable risk pool, nor can it ensure that everyone is covered, nor can it make health care affordable for all.

We really do need a balanced, sustainable pool that includes everyone and is equitably financed: an improved Medicare for all.

CRS on the health insurance market

Posted by on Thursday, Dec 3, 2009

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 Market Structure of the Health Insurance Industry

By D. Andrew Austin and Thomas L. Hungerford
Congressional Research Service
November 17, 2009

Evidence suggests that health insurance markets are highly concentrated in many local areas. Many large firms that offer health insurance benefits to their employees have self-insured, which may put some competitive pressure on insurers, although this is unlikely to improve market conditions for other consumers. The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced output — high premiums and limited access to health insurance — combined with high profits. Many other characteristics of the health insurance markets, however, also contribute to rising costs and limited access to affordable health insurance. Rising health care costs, in particular, play a key role in rising health insurance costs.

Health costs appear to have increased over time in large part because of complex interactions among health insurance, health care providers, employers, pharmaceutical manufacturers, tax policy, and the medical technology industry. Reducing the growth trajectory of health care costs may require policies that affect these interactions. Policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.

http://www.fas.org/sgp/crs/misc/R40834.pdf

About the Congressional Research Service:
http://www.loc.gov/crsinfo/whatscrs.html

The Congressional Research Service (CRS) has an outstanding reputation for authoritative, objective and nonpartisan analyses, providing Congress with the analytical support it needs to address the most complex public policy issues facing the nation.

In this 65 page report to Congress on the market structure of the health insurance industry, CRS concludes that “policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.”

The conclusions are certainly no surprise. Every reasonable economist agrees that free market principles do not apply to health care. Yet where is Congress on this? They are moving forward with a proposal that relies heavily on the market of private health plans.

Don’t the members of Congress read their own reports? They need to read this one!

MedPAC on variation in service use

Posted by on Wednesday, Dec 2, 2009

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.

Report to the Congress: Measuring Regional Variation in Service Use

MedPAC (Medicare Payment Advisory Commission)
December 2009

In this paper, we present data on the difference between regional variation in Medicare spending and regional variation in the use of Medicare-covered services. Regional variation in Medicare spending per beneficiary reflects many factors, including differences in beneficiaries’ health status, Medicare payment rates, service volume (number of services), and service intensity (e.g., MRI versus simple X-ray). In contrast, regional variation in the use of Medicare services reflects only differences in the volume and intensity of services that beneficiaries with comparable health status receive.

… raw per capita spending is 55 percent higher for beneficiaries in the area at the 90th percentile than for beneficiaries in the area at the 10th percentile.

Service use in higher use areas (90th percentile) is about 30 percent greater than in lower use areas (10th percentile).

… the correlation between rate of growth in adjusted spending from 2000 to 2006 and the level of service use in an MSA is slightly negative.

Regional variation in service use is not equivalent to regional variation in Medicare spending. The two should not be confused.

http://www.medpac.gov/documents/Dec09_RegionalVariation_report.pdf

This paper is an important addition to the work of John Wennberg and his colleagues at Dartmouth on regional variation in spending in the Medicare program. It separates the variation in use of services by individuals with comparable health status from other factors that influence spending, especially Medicare payment policies.

The differences are important because they lead to different policy solutions. Policies to ensure adequate but not excessive volume and intensity of services are separate from, though must be integrated with, policies that establish proper levels of spending for services that Medicare beneficiaries should be receiving.

The complexities of these interdependent policies that would improve spending can be mastered only with a concerted effort by public agencies. The private insurance industry has no capability to create and apply the essential policies that would transform our health care delivery system into the efficient, affordable system that we desperately need.

MedPAC, the Medicare Payment Advisory Commission, currently provides advice to Congress on proposals to improve spending policies in the Medicare program. Congress is free to reject that advice and often does, more for political reasons than for reasons based on sound policy.

The health care reform proposal before Congress includes provisions to reduce the often perverse politics of Medicare financing by creating a commission, sometimes referred to as MedPAC-on-steroids, with much greater power to enforce its recommendations on spending.

The problem with the proposal is that the recommendations would be limited to the Medicare program alone. Unless the revisions applied to the other five-sixths of our population, it would be difficult to establish policies that would improve the overall use of health care services. Although reform of our financing system is essential, we may not get very far if we don’t have policies that would improve the structure of the health care delivery system.

We really do need an improved Medicare for all. We need to jettison the wasteful, ineffectual private insurers and get on with reform that will use our health care dollars to pay for an efficient health care system that serves all of us well.

By Danielle Alexander, M.Sc

With Congress advancing their health reform bills and the President’s vow to improve our health care crisis, I wish I could be hopeful and encouraged. But I’m neither. Instead, I’m dismayed. And listening to my fellow classmates, I’m not alone.

A little over a month ago I stood with 50 other medical students, faculty, and community members in front of Albany Medical College to remember the 45,000 Americans who die each year because they lacked health insurance.

The vigil was called, “Treat! Don’t Trick”, because we stood to ask Congress for reform that will help us treat our future patients, not fool us with hyperbole. I was moved to be a part of the vigil because I am appalled that deaths due to lack of health insurance has more than doubled since 2003.

Ryan McIntyre explained that he wished we could meet to celebrate; however there is not much to celebrate. He is a third year medical student and President of Physicians for a National Health Program student chapter.

“Obama is quoted as saying that if he could start from scratch he would support a single payer system,” Ryan said. “However, instead of starting from there, he started from a compromised position. What if Hippocrates started with a compromised position when he outlined the Hippocratic Oath?”

“For-profit, private insurance has not worked to control costs and cover everyone, and it will not work,” Megan Ash, a first year medical student, told us. “Improved and expanded Medicare for all is the best solution.”

“Health reform is the civil rights movement of our time,” Naazia Husein announced. She is a second year medical student and Co-President of the club Student Perspectives in Advocacy. “A single payer system is not a dream,” Naazia added, “it’s a demand.”

Reverend Harlan E. Ratmeyer, a pastoral care-giver at Albany Medical Center, explained: “The elite group is in the [healthcare coverage] pool, everyone else out of the pool. From the perspective of justice, and the spiritual, economical perspective, we should all be in the pool.”

Other vigil participants spontaneously began telling their stories too. John Wax, a first year medical student talked about how his father, self-employed, only received treatment for his herniated disc because he was a Vietnam Veteran and could get health insurance through the VA.

James Kelley, a first year medical student, shared that his mother was a nurse for 10 years providing health care in a women’s shelter. But when she needed to use her health insurance, she needed to hire an attorney in order to battle insurance claim denials.

The reforms touted on Capitol Hill will not solve these problems. Not even close.

Millions of Americans will still be without health insurance, private insurance companies will continue to deny health care in order to satisfy their stock holders (yes, even if exclusion due to preexisting conditions are unlawful), rapidly increasing health care costs will not be contained and healthcare coverage will still be tied to employment. As future physicians, and from our own life experiences, my classmates and I see that these these are the very things that demand to be changed.

If President Obama wants to be the last president to take up health care reform, then he must reconsider expanding and improving Medicare to include everyone.

Danielle E. Alexander, Albany Medical College Class of 2013, belongs to the American Medical Student Association and Physicians for a National Health Program.

CBO report on premiums

Posted by on Tuesday, Dec 1, 2009

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.

An Analysis of Health Insurance Premiums Under the Patient Protection and Affordable Care Act

Congressional Budget Office
November 30, 2009

The analysis looks separately at the effects on premiums for coverage purchased individually, coverage purchased by small employers, and coverage provided by large employers.

Nongroup Policies

Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single policies and $15,200 for family policies under the proposal, compared with roughly $5,500 for single policies and $13,100 for family policies under current law.

The majority of nongroup enrollees (about 57 percent) would receive subsidies via the new insurance exchanges, and those subsidies, on average, would cover nearly two-thirds of the total premium, CBO and JCT estimate.

Employment-Based Coverage

By CBO and JCT’s estimate, the average premium per policy in the small group market would be in the vicinity of $7,800 for single policies and $19,200 for family policies under the proposal, compared with about $7,800 and $19,300 under current law. In the large group market, average premiums would be roughly $7,300 for single policies and $20,100 for family policies under the proposal, compared with about $7,400 and $20,300 under current law.

Those figures do not include the effects of the small business tax credit on the cost of purchasing insurance. A relatively small share (about 12 percent) of people with coverage in the small group market would benefit from that credit in 2016. For those people, the cost of insurance under the proposal would be about 8 percent to 11 percent lower, on average, compared with that cost under current law.

http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf

For most individuals and families, the Senate health care reform bill will have very little impact on the premiums to be paid for health plans. There are three important exceptions:

* Premiums in the individual market will increase significantly because the plans will be required to provide an actuarial value of 60 percent, higher than the average value in the current individual market.

* About 57 percent of individuals eligible for coverage in the exchange will receive subsidies which will more than offset the premium increases. Note that most individuals are not eligible for coverage in the exchange and would not receive these subsidies.

* Although there will be little change in premiums for small group plans, about 12 percent of people in the small group market will benefit from a small business tax credit designed to encourage small business owners to offer coverage to their employees.

The really bad news in this report is that, on average, premiums for group plans will continue to increase at the same intolerable rates that they would have if we did nothing. This CBO analysis demonstrates that, in 2016, the family premium alone for employer-sponsored coverage, not including deductibles and other out-of-pocket costs, would be over $20,000 for a large group plan, whether or not the proposed legislation is enacted. That is quite a hit for a hard-working family with a $60,000 income.

The only hope for premium relief is for innovative insurance products that would reduce costs for those who don’t need health care, but would increase even more the costs for those who do. This demonstrates why focusing on premium relief has been a misguided endeavor. We have been diverted from the the much more important goal of relieving the financial burden of those who actually need health care.

We can achieve that goal by improving Medicare, funding it equitably, and using its monopsonistic powers to provide us with greater value in our health care purchasing. Had we done that when the Clintons were proposing their flawed model of reform, our national health expenditures would be about 20 percent less than they currently are.

It’s tragic that we would be starting from an inflated baseline, but we can still achieve that level of efficiency in the future if we dumped the highly flawed proposal before Congress and adopted the much more humane system of an improved Medicare for all.

Aetna to dump 600,000 members

Posted by on Monday, Nov 30, 2009

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.

Aetna prepares for loss of 600,000 members as it raises 2010 prices

By Emily Berry
American Medical News
November 30, 2009

Back when it was the largest private health plan in the country, Aetna downsized its membership by millions but boosted profits during an overhaul of its business several years ago.

Now it looks to be making a similar — but smaller — move with a planned price increase for many of its customers in 2010.

The company figures it will lose between 600,000 and 650,000 members next year because of the price hikes.

In a conference call with investment analysts to discuss the company’s third-quarter earnings, Chair and CEO Ron Williams told analysts, “The pricing we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering.”

Aetna President Mark Bertolini laid out how the company planned to raise prices to improve the company’s profit margin. He said the firm had “implemented a combination of underwriting enhancements, pricing actions and plan design changes, intended to ensure that each customer is priced to an appropriate margin.”

Laying out specific expected membership losses is “pretty candid,” said David Gibbs, a retired health insurance industry consultant from San Luis Obispo, Calif. He worked for and consulted with health insurers, including Aetna, for 25 years.

He said Aetna’s decision comes from a system that encourages insurers to drive away sicker members — a strategy not unique to one insurer. “They’re running a business, and their obligation is a very singular one: to increase shareholder profits.”

Gibbs said simply raising prices probably would not get Aetna what it wants. That actually tends to result in sick people who are more “desperate” for coverage to keep it, and healthier groups to drop it. Instead, Aetna might change benefit designs, scaling back prescription drug coverage, for example, which sicker populations tend to value but healthier ones don’t notice as much.

http://www.ama-assn.org/amednews/2009/11/30/bisb1130.htm

This act by Aetna indicates the level of sincerity the insurance industry has in its alleged new effort to cooperate in ensuring that everyone has the health care coverage that they need. Aetna is redesigning and repricing its products in order to dump over 600,000 of its less profitable members. They need to be sure that “each customer is priced to an appropriate margin.” And, above all, they owe it to their shareholders “to drive away sicker members.”

But that’s one of the ways that markets work – improve profits by cutting losses. We keep hearing that markets improve quality while reducing costs, yet in a bit of irony, for those healthier populations that remain with the Aetna, the insurer is reducing quality through product redesign, and increasing costs through higher premiums.

Once Aetna dumps these members, what private insurer is going to jump in to capture this higher cost population? None you say? And under reform? The higher cost individuals buy into the weak public option driving premiums up through adverse selection to even more unaffordable levels?

Try to imagine Medicare dumping over 600,000 patients because they need more medical care. That is unthinkable and would be reprehensible in a public social insurance program such as Medicare. Yet for the private insurance industry, it’s business as usual. And President Obama and Congress want to keep these marketeers in charge? Talk about reprehensible!

Ignagni calls for lawmakers (not insurers) to control costs

Posted by on Friday, Nov 27, 2009

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.

White House says health-care bills contain cost-cutting remedies

By Shailagh Murray
The Washington Post
November 26, 2009

Critics of the Democratic bills point to cost control as a chief deficiency. Karen Ignagni, president of America’s Health Insurance Plans, said the Senate bill includes only “pilot programs and timid steps” to reform the health-care delivery system, “given the scope of the cost challenge the nation faces.”

Unless lawmakers institute changes across the entire system, Ignagni said in a statement Wednesday, “Health costs will continue to weigh down the economy and place a crushing burden on employers and families.”

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/25/AR2009112503474.html

AHIP president Karen Ignagni says that unless lawmakers institute changes across the entire system, health care costs will continue to weigh down the economy, placing a crushing burden on employers and families. There could not be a more explicit admission that the private insurance industry is not and never has been capable of controlling our very high health care costs. Yet their administrative excesses along with the administrative burden they place on the delivery system are major sources of waste in our health care system.

We need everyone covered, and we need costs controlled in a system designed to provide us greater value. Neither will occur under the proposal before Congress. Although the private insurance industry can’t do it, an improved Medicare program would be designed specifically to accomplish those goals, and at a much lower administrative cost.

Karen Ignagni says that the lawmakers must institute the necessary changes across the entire system (because the insurers can’t). Let’s join her in demanding that Congress take the actions necessary, and then thank her for her efforts, as we dismiss her superfluous industry from any further obligations to manage our health care dollars.

The Emperor’s New Clothes

Posted by on Friday, Nov 27, 2009

In the Hans Christian Anderson fairy tale, The Emperor’s New Clothes, two weavers promise an Emperor a new suit of clothes invisible to those unfit for their positions or incompetent. When the Emperor parades before his subjects in his new clothes, they all pretend they see the new finery, fearing exposure as the incompetents that they are. It takes a child to cry out, “But he isn’t wearing anything at all!”

As the Democratic Party races to claim a “health insurance reform” victory before the Christmas recess, I am reminded of this cautionary tale.

In place of the invisible clothes, we have the invisible reforms. In place of the weavers, we have the lobbyists. In place of the loyal subjects, we have the members of the Progressive Caucus. And in place of the child, we have all the Single Payer Advocates.

Please, President Obama, DON’T be that Emperor.

Dr. Paris is a member of Physicians for a National Health Program

Three Little Pigs: The Compromise

Posted by on Wednesday, Nov 25, 2009

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.

Big Bad Wolf: “… and I’ll huff and I’ll puff… ”

Pig with the feasible compromise: “Oops!”

By Clay Bennett
Chattanooga Times Free Press
Thursday, Nov. 19, 2009

http://www.timesfreepress.com/news/2009/nov/19/compromise/?opinioncartoons

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