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.
U.S. House of Representatives
Committee on Energy and Commerce
February 24, 2010
From: Committee on Energy and Commerce Majority Staff
Re: Questions Raised by Internal WellPoint Documents
As part of the Committee’s investigation into premium increases proposed by Anthem Blue Cross, a subsidiary of WellPoint, Inc., the Committee has received over 3,000 documents from WellPoint and its regulators, including internal WellPoint correspondence, presentations to senior corporate management, company-produced actuarial assessments, and regulatory filings. Committee staff also spoke to representatives of the company; received briefings from regulators, including the California Department of Insurance and the National Association of Insurance Commissioners; and spoke to outside experts in the field of health finance.
As summarized below, a review of the documents provided to the Committee and the other information received by the Committee raises multiple questions that members may wish to pursue during today’s hearing.
Question 4: Is WellPoint pushing people into less generous plans?
According to Ms. Braly’s testimony (Angela Braly, WellPoint President and CEO), “Another dynamic in our current challenging economy is that a higher proportion of healthy individuals move to lower cost coverage, such as coverage with a higher deductible, than in more robust economic times.”
Internal documents suggest that WellPoint’s business plan includes moving consumers into less generous plans. This strategy appears to have three components.
First, WellPoint’s highest rate increases seem to apply to their most comprehensive insurance plans. Maternity care is a marker for a more comprehensive package of benefits. A chart of proposed rates shows that WellPoint’s highest rate increases apply to the only two product families regulated by the Department of Insurance with maternity coverage. The chart also shows that for the most part, WellPoint proposed lower increases within specific product lines for the versions with higher deductibles than for the versions with lower deductibles.
Second, WellPoint is developing new products, called “downgrade options,” to promote to consumers facing the high rate increases. In one e-mail, David Shea, the Vice President for Individual Pricing, states: “Jim has asked Bryan to price 5-6 downgrade options to be made available in conjunction with the upcoming rate action.” In another internal e-mail, Mr. Curley, the Regional Vice President and Actuary, proposed that WellPoint “create 5-6 CA look-alike plans for CA with a benefit or two removed to create a downgrade option upon renewal.”
WellPoint also introduced a completely new product line called CoreGuard, advertised to have “some of our lowest monthly rates” and a “higher percentage of member cost-sharing in exchange for lower premiums.” One of the CoreGuard plans has a $20,000 deductible for a family for in-network services and a separate $20,000 deductible for non-network services. On top of that, a family can spend an additional $15,000 for co-payments for non-network services. Enrollees can be liable for another $4,500 in prescription drug costs. This adds up to a potential $59,500 out-of-pocket maximum for a family, who are still liable for the cost of drugs not on the formulary and maternity services.
Third, company officials discussed scaling back benefits for existing plans. In an e-mail, Mr. Shea states: “During our Plan review this morning Brian was mentioning that, in CA in the past, we mitigated rate increases by introducing product changes for existing members. We brought up the introduction of new products but he wanted to pursue existing product changes.” In another e-mail, Mr. Curley described scenarios that would produce a 6% to 10% reduction in benefits for four plans. The options included raising deductibles in three of the four plans and adding 25% coinsurance payments.
Testimony of Angela Braly, WellPoint President and CEO:
When most of us are concerned about skyrocketing health care costs, the private insurers have concentrated on their more immediate concern: How can they maintain a market presence by making their health plans more affordable?
To keep premiums at a level that maintains their market, the insurers have reduced benefits and and have increased cost sharing, especially through much higher deductibles and greater coinsurance. Compared to copayments, coinsurance, as a percentage of charges, shifts much more of the costs to those who need a greater amount of health care.
These innovations are resulting in a transformation of the market into a choice of new options, referred to internally by the insurance industry as “downgrade options.” The consumer facing outrageous premium increases would have new choices – either deceptive “look-alike” plans with reduced benefits, or new innovative products such as CoreGuard. With CoreGuard, for a reduced premium, you can have a plan with family cost sharing of only $59,500 plus the cost of products and services that are not included as a benefit.
Of course, these downgrade options represent an expansion in the market of underinsurance products. Downgrade options are a devious method of shifting health care cost increases to those individuals who need health care. It is bad enough to be sick or injured without having to face intensifying financial hardship and perhaps bankruptcy, even if insured.
What will President Obama’s proposal do to rectify the injustices of these downgrade options? For most individuals, almost nothing. They will remain in their employer-sponsored plans or other programs such as Medicare or Medicaid. For the minority who will be able to purchase plans through state insurance exchanges, the plans will have prescribed benefits and an actuarial value at a relatively low 70 percent (60 percent for some), meaning that cost sharing can still pose a major burden. Because these relatively Spartan plans will still be more generous than the downgrade options, the premiums will be higher.
The Obama plan specifies that a family will not have to contribute more than 9.5 percent of income to the premium (less for lower income families), as long as they don’t upgrade to a plan with the benefits that they should have. If they upgrade, they pay the entire difference. Obama’s plan also would limit cost sharing to current HSA limits ($11,900 per family in 2010), but that is misleading since considerable costs can be racked up outside of the plan.
With higher premiums than current individual plans, with some limits placed on the exposure of the family to costs, and with impotent measures to slow cost escalation, an increasing burden will be placed on the taxpayers who are subsidizing this system. That’s us. So we’ll pay, one way or another.
Why is President Obama forcing on us this profoundly expensive, administratively complex, and comparatively ineffectual system when we could have an improved Medicare for all of us that would ensure that we get the care we need while keeping it affordable? More to the point, why aren’t we mounting a rebellion (with civility)?
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.
Purchasing Value in Health Care
Selected Findings From the 15th Annual National Business Group on Health/Towers Watson Survey Report — 2010
The prolonged economic downturn is putting additional pressure on companies to change their health care programs to help relieve financial strain. The results of this year’s survey also show employers are frustrated by employees’ poor health habits and are struggling to effectively motivate behavior change. Additionally, they are uncertain about the future of employer-sponsored benefits, especially in light of the potential for health care reform legislation. Against this backdrop, employers are doing more to hold the line on costs and achieve better health and productivity outcomes.
* Annual median health care cost increases rose slightly in 2009 to 7%, compared with 6% in 2008. This pace is still more than twice the rate of inflation.
* Fifty-seven percent of respondents are very confident that employers will continue to offer health care benefits 10 years from now. This figure is down from 2009, when 62% of employers expressed a high level of confidence.
* Employers report that lack of employee engagement is the biggest obstacle to changing health behaviors. Still, they are trying new ways to encourage employees to become healthier and buy health care services more efficiently.
* There is considerable room for improvement in vendor programs designed to change member health habits and encourage efficient use of health care services. Employers rate these programs as ineffective.
* Today, 54% of companies have a consumer-driven health plan (CDHP) in place – a 6% increase over last year’s findings – and is expected to increase to 61% in 2011.
Everyone agrees that it is better to practice good health habits. So who could object to employers providing incentives for their employees to improve their health behaviors?
During the national health reform dialogue, opponents of comprehensive reform frequently attempt to reframe the problem as a lack of individual responsibility for personal health. If people would eat better, exercise, and not smoke, many of the reform proposals would not be necessary.
This concept has now been co-opted by many of the nation’s large employers as they introduce wellness programs into their companies. What has been their experience?
According to this Towers Watson survey (a consolidation of Towers Perrin and Watson Wyatt), “employers are frustrated by employees’ poor health habits.” Employers report that “lack of employee engagement is the biggest obstacle to changing health behaviors.” Regarding their vendor programs that are designed to change employees’ health habits, “employers rate these programs as ineffective.”
Though they rate their wellness programs as ineffective, the sister programs that actually have slowed the growth in employer costs have been the consumer-driven health plans (CHDPs). A majority of large employers have now introduced CHDPs. Although the supporters of CHDPs use the rhetoric of placing the consumer in charge, these plans are nothing more than very high deductible plans which shift more of the responsibility of paying for health care from the employer to the employee.
During the period of employment, most injuries and illnesses for which the employee would require care would not be prevented by the wellness interventions. Employers who shift costs to employees who are unfortunate enough to need health care are being dishonest when they claim that they are doing this to enhance wellness.
During the reform dialogue, we cannot allow the opponents to reframe the debate as the need for wellness programs to address employees’ lack of engagement in correcting poor health habits, while these opponents in truth are supporting passing more costs onto the infirm.
Keep the framing on target. We need to remove financial barriers to care so that absolutely everyone can have the health care that they need. Properly designed wellness programs are fine, but we cannot let them distract us in our efforts to enact a single payer national health program – an improved Medicare for everyone.
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 President’s Proposal
The White House
February 22, 2010
Policies to Improve Affordability and Accountability
Example for a family of four with income of $66,000:
Maximum percent of income paid for premiums: 9.5%
Percent of costs paid by health insurance plan: 70%
Penalty for remaining uninsured: (in 2016) the higher of $695 (with indexed increases) or 2.5% of income
Hardship exemption – threshold income below which the penalty is waived: The income tax filing threshold ($9,350 for a single or $18,700 for a married couple in 2009)
The greatest significance of President Obama’s health care reform proposal released today is that he has now formally placed his stamp of approval on the fundamental policies already contained in the House and Senate reform bills. While remaining silent on some of the third rail issues (public option, Medicare buy-in, pregnancy termination, etc.), he and his staff merely tweaked the bills and added insurance premium rate review, whatever that’s worth, and some rhetoric on waste, fraud, and abuse.
His proposal still falls far short on two of the most important goals of reform: 1) insuring everyone, and 2) ensuring that health care is affordable for each of us. Merely tweaking the Senate version, which is what they did, could not have attained these goals since the most effective policies were already traded away before serious negotiations began.
That said, let’s look at what the President expects a family of four with an income of $66,000 to pay for health care. The premium contribution would be 9.5% of income, or $6270 for the basic plan with an actuarial value of 70%. If they wanted or needed a better plan, they would have to pay the full difference in the premium. At an actuarial value of 70%, they would also have to pay an average of 30% of all health care costs. This can vary considerably because of plan design in the form of deductibles, copayments, coinsurance, non-covered benefits, stop loss, out-of-network care exempt from stop loss, and other factors. If they either elected not to or were unable to pay the premium, they would have to pay a penalty of $1650, but then, of course, they would have no protection at all against potential health care costs.
Clearly, President Obama has not done any better than Congress in protecting families from financial hardship should they have the misfortune of developing significant medical problems. Unaffordable underinsurance is not the change that we needed.
Do Not Resuscitate the ‘Public Option’
by Andy Coates
Like initiating CPR on a patient who was dead in the field and remained dead on arrival, the effort to resuscitate the “public option” is mistaken and futile.
Once upon a time, proponents of the “public plan option” sought a “Medicare-like” program that might enroll every other person in the nation and thus run private insurers out of business.
“A roadblock to reform” cried the insurance companies.
Now nothing in the bills passed by the House and the Senate bills would erect a public insurer that could possibly influence the insurance market.
In reality the “public option” was never much more than a K-street phrase, a shadow-puppet, a political posture. All along proponents of adding a new government-sponsored insurer boasted “talking points” but never offered workable health reform.
But the insurance companies oppose the “public option” and that proves its virtue, its supporters exclaim.
Hello? Of course the insurers oppose it.
Why would the insurers want to yield even 2 percent of the market to a public plan (House bill) when they’ve been given the “option” (Senate bill) of keeping 100 percent of the market? Why would the insurance companies not fight for the whole pie when the White House let slip that it saw the “public option” as simply a bargaining chip in private dealmaking?
But there is something else here.
With its reliance on the magic of the marketplace, the “public option” is simply not a progressive idea.
Consider two examples of how the market performs when private insurers compete with a public plan. Example 1: under Medicare Advantage the private insurers enroll the healthy and dis-enroll the sick and yet cost more per patient than traditional Medicare. Example 2: in Maine, a “public option” insurer known as DirigoChoice, was established in 2003. Thus far it has failed to enroll but a tiny percent of the uninsured, has not reduced costs for insurance, nor reduced overall health spending, nor lessened disparities in care – and this year it has fatally tanked.
In the United States a corporate oligopoly of huge insurers, with near-monopoly control in most locales, dominate the market. A government insurer of any size would simply add yet another bureaucracy to the present byzantine insurance mess.
Does it really make any sense to think that a government plan could give the private insurance companies a run for their money – within the contemporary corporate marketplace – without draconian regulation upon the industry? Even with regulation, as former Cigna executive Wendell Potter explained at the PNHP annual meeting this year, insurance companies simply “flaunt regulations.”
The insurance market cannot be tricked into reforming itself. The health insurance company that wins at the marketplace avoids and jettisons sick and poor patients and enrolls the healthy and the wealthy – and a “public option” will not change this fact. The market that serves the private interests – profiteering at the expense of the sick – would continue to do so.
The proper name for this kind of “market magic” is the race to the bottom. Adding a public plan into the private mix can not and will not change the character of this cruel game.
Any successful “public option” insurance plan would wind up covering the sick and the poor. It would be designed to lose, not win, the market competition. It would not prove affordable or comprehensive. Worst of all, a highly successful “public plan option” could put our nation on a fast-track to permanent two-tiered health services, exacerbating deplorable disparities that plague us.
Regrettably, that the “public option” has been given attention at all is but a measure of how deeply our culture has surrendered to neoliberal ideology, the ideas popularized by Ronald Reagan. It is a lie that the market will always provide, most especially when it comes to health care. So why would some of our friends still seek to revive the false promise of the “public option”?
Marie Gottschalk, University of Pennsylvania Professor of Political Science, identified the psychology at work. In a remarkably prescient essay written in late 2009, she compared health reformers in the United States to victims of the Stockholm Syndrome, in which hostages identify with – and even defend – the hostage-takers.
We ought to reach out with sympathy to our friends who have fallen captive to Ronald Reagan ideology and say – Do not resuscitate the “public option.” It is time to let it go.
All along, adding a feeble public insurance plan to the insurance market has been but a very poor excuse to support “insurance reform” that will criminalize the uninsured, divert billions of tax dollars to subsidize unaffordable private insurance premiums and protect pharmaceutical industry super-profits.
Another world is still possible. It is called Medicare-for-all, expanded and improved.
[An earlier version of this essay appeared at The Progressive and in McClatchy newspapers around the nation.]
Insurance Companies Prosper, Families Suffer: Our Broken Health Insurance System
HealthReform.gov, U.S. Department of Health & Human Services
February 18, 2010
Recently, Anthem Blue Cross of California, an insurance company owned by the for-profit company WellPoint, Incorporated, announced that its individual market premiums would rise by as much as 39 percent in the coming months. This shocking increase isn’t unique. Across the country, families have seen their premiums skyrocket in recent years, and experts predict these increases will continue.
A Broken Health Insurance System Works for Insurance Companies – Not Families
The “value gap” in the health insurance market is evident not just in overall premium hikes, but also in the use of those premium dollars. Over the past decade, the amount private insurance companies spent on administrative costs grew faster than the amount spent on prescription drugs, a trend that is projected to continue through the next decade. Three of the top five insurers cut the proportion of premiums they spent on customers’ medical care last year, committing more to salaries, administrative expenses, and profits.
The Congressional Budget Office estimates that reform will streamline administrative costs of insurance companies and bring more people into the insurance market, lowering premiums of a comparable plan in the individual market by 14 to 20 percent. (25)
(25) Congressional Budget Office. Letter to Senator Bayh. November 30, 2009.
Letter to Senator Bayh
Congressional Budget Office
November 30, 2009.
(Reference 25, above)
CBO and JCT estimate that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law.
• Average premiums would be 27 percent to 30 percent higher because a greater amount of coverage would be obtained.
• Average premiums would be 7 percent to 10 percent lower because of a net reduction in costs that insurers incurred to deliver the same amount of insurance coverage to the same group of enrollees. Most of that net reduction would stem from the changes in the rules governing the nongroup market.
• Average premiums would be 7 percent to 10 percent lower because of a shift in the types of people obtaining coverage. Most of that change would stem from an influx of enrollees with below-average spending for health care, who would purchase coverage because of the new subsidies to be provided and the individual mandate to be imposed.
New Market Rules Would Reduce Administrative Costs
Compared with plans that would be available in the nongroup market under current law, nongroup policies under the proposal would have lower administrative costs, largely because of the new market rules:
• The influx of new enrollees in response to the individual mandate and new subsidies—combined with the creation of new insurance exchanges—would create larger purchasing pools that would achieve some economies of scale.
• Administrative costs would be reduced by provisions that require some standardization of benefits—for example, by limiting variation in the types of policies that could be offered and prohibiting “riders” to insurance policies (which are amendments to a policy’s terms, such as coverage exclusions for preexisting conditions); insurers incur administrative costs to implement those exclusions.
• Administrative costs would be reduced slightly by the general prohibition on medical underwriting, which is the practice of varying premiums or coverage terms to reflect the applicant’s health status; nongroup insurers incur some administrative costs to implement underwriting.
• Partly offsetting those reductions in administrative costs would be a surcharge that exchange plans would have to pay under the proposal to cover the operating costs of the exchanges.
Although the Obama administration continues to advocate for reform based on private health plans, they have seized on the current outrage over skyrocketing insurance premium increases to to demonstrate why reform is essential. Although they are attacking the private insurance industry, they continue to push for a reform model that provides this market with tens of millions of new customers.
Do the proposed reforms of the insurance market really provide us with the assurance that everyone will have access to affordable health care? We already know that they could not achieve the goal of covering everyone, and will leave about 25 million with no coverage (RAND 2/10). Also there is doubt that other measures in the legislation will have much impact in containing costs. But what about the egregious administrative waste in our dysfunctional financing system?
In their report released yesterday, the administration claims that “reform will streamline administrative costs of insurance companies and bring more people into the insurance market, lowering premiums of a comparable plan in the individual market by 14 to 20 percent.” They cite the CBO letter to Sen. Bayh as their source for this statement.
And what does the CBO say? First, the premiums will actually be 10 to 13 percent higher because of the offsetting requirement for increased benefits in these plans that would increase premiums by 27 to 30 percent. For those who say that the improved benefits are worth this increase, keep in mind that the benefits move from the current actuarial value of 60 percent to an actuarial value of 70 percent. That is still significantly below the 80 percent actuarial value of current employer-sponsored plans. These individual plans will continue to leave many people who need health care exposed to unaffordable out-of-pocket expenses.
What does CBO say about the 14 to 20 percent administrative savings claimed by the Obama administration? Half of it (7 to 10 percent) isn’t even administrative savings but merely represents a dilution of the risk pool with healthy individuals mandated to purchase private health plans.
The other half of the premium savings, also 7 to 10 percent, stems from a slight reduction of administrative costs since the plans would be sold through an insurance exchange eliminating some of the costs such as underwriting and brokers’ fees. When you look at the CBO explanation of where the administrative savings would occur, it is clear that there is not much there, and some of it would be offset by the additional administrative costs of the new exchanges.
Although the Obama administration is using this to claim administrative savings, the total reduction in our national health expenditures (NHE) would be so infinitesimal that it wouldn’t even warrant a footnote in the annual NHE report.
The profound administrative waste in our system is not limited to the outrageous excesses of the private insurers but it permeates the entire system, including the very high costs of the burden that private insurers place on physicians, hospitals and other sectors of the health care delivery system.
Although the amount of the recoverable waste is disputed, everyone agrees that it is profound. Very solid data demonstrates that somewhere around $4 trillion could be recovered over the next decade merely by changing to a single payer national health program – an improved Medicare that covered everyone. Those who argue that it is only half that need to explain why we should therefore refuse the $2 trillion in savings ($ 2,000,000,000,000).
Most of us have tired of conspiracy theories. But think about this. The Obama plan (to be formally released Feb. 22) is a gift of our tax funds to the private insurance industry. Recent events have suggested that the plan may not survive the legislative process. Polls and focus groups show that the public is outraged by insurance company abuses. The insurers have chosen the most inopportune time in the reform process to cram outrageous premiums into the faces of their customers. Or is it inopportune? Look at the platform that it has given President Obama and the cover that it provides for members of Congress. It is giving them an avenue that will allow them to push through this program that the insurance industry understands that it must have for its own survival.
The Obama plan will leave tens of millions uninsured. It will not adequately control health care spending. It will perpetuate the profound administrative waste in our system. Above all, it will revitalize the private insurance industry for decades to come. If we’re not going to react, then we’re simply going to have to learn to live with it.
L.A. County slashes doctors’ reimbursement rate
By Molly Hennessy-Fiske and Ron-Gong Lin II
Los Angeles Times
February 17, 2010
Emergency room doctors and on-call specialists treating poor, uninsured patients at private hospitals in Los Angeles County saw their reimbursement rate slashed by county supervisors Tuesday.
The rate cut could lead private hospitals to close emergency rooms and send more patients to crowded county hospitals, officials said.
L.A. County reimburses doctors 27% of estimated fees for patients’ first three days of care at private hospitals under the Physician Services for Indigents Program. Supervisors voted unanimously Tuesday to reduce the rate to 18% as of July 1.
The county had expected to pay doctors with $9 million from the state’s Emergency Medical Services Appropriation. But state lawmakers eliminated the fund, and as the number of uninsured grows, private doctors are expected to file more claims than ever with the county this year, Meyer said.
More than half of Los Angeles County’s 72 hospitals are operating at a deficit and two are in bankruptcy, Lott said (Jim Lott, executive vice president of the Hospital Assn. of Southern California). Countywide, 11 hospitals have closed since 2002, all of which had emergency rooms, he said.
“The County” – a hospital to which emergency patients with no money and no insurance are shipped. Most of us remember when The County was always the provider of last resort.
No longer. Any hospital with an emergency room, for humane reasons, must now provide emergency services to any person who presents with a bona fide emergency, regardless of the ability to pay. Unfortunately, the change in attitude of some occurred only after it became a criminal offense to fail to recognize that “ship ‘em to The County” fell short of a humane response. The fact that this legislation was needed should not reflect on the great many dedicated professionals who have always been ready to help, without any regard to the financial status of the patient.
But what about paying for this care? Should the private hospitals and physicians write this off as charity? When operating at a deficit with bankruptcy around the corner, that won’t work. Should the county, as the health care provider of last resort, pay for at least the costs of the care? State and local governments are struggling with deficits in their budgets. The 18 percent payment by Los Angeles County’s Physician Services for Indigents Program obviously won’t cover costs. And the state certainly is not helping by eliminating their Emergency Medical Services Appropriation.
There is a way we could do this. We could establish a single payer national health program – an improved and expanded Medicare that includes everyone. Under such a system, even those physicians who have had difficulty understanding a humane health care system would change their response. When that emergency call comes in that always means another paying patient, it will become natural for those physicians to say, “Ship ‘em here!”
The following letter was sent to the White House on Feb. 9, two days after President Obama announced his plans to convene a bipartisan summit on health reform on Feb. 25 in Washington.
February 9, 2010
President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500
Dear Mr. President,
Physicians for a National Health Program, an organization of 17,000 doctors who support single-payer national health insurance, respectfully requests that you invite one or more of our representatives to participate in your White House health care session on Feb. 25.
We note that in your call for the meeting you urged Republicans, Democrats and health policy experts to gather, go over all the options and “walk through them in a methodical way so that the American people can see and compare what makes the most sense.”
We would like to offer several of our members as health policy experts for this important task.
As you may know, two key research studies that helped drive the health reform process forward this past year – one in the American Journal of Public Health that found 45,000 deaths annually are linked to lack of health insurance, another in the American Journal of Medicine that found 62 percent of personal bankruptcies are linked to medical bills and illness – were the work product of Harvard Medical School research teams guided by PNHP co-founders Drs. David Himmelstein and Steffie Woolhandler.
Drs. Himmelstein and Woolhandler, who are also primary-care physicians in Cambridge, Mass., have had several other groundbreaking studies published in our nation’s leading medical journals, including one in the New England Journal of Medicine that shows administrative costs consume 31 percent of U.S. health spending, most of it unnecessary. They have also frequently testified before Congress on their research. We urge that you invite them to participate in the Feb. 25 meeting.
The presence of Dr. Margaret Flowers, our congressional fellow, would also enhance the meeting. Dr. Flowers, a Maryland pediatrician, has met with numerous members of Congress and testified before two congressional committees last year about the urgent need for single-payer health reform.
Finally, we ask that you invite our president, Dr. Oliver Fein, to participate. Dr. Fein, an internist and professor of clinical medicine and clinical public health in New York City, attended the March 5 White House Summit on health care. He is a past vice president of the American Public Health Association.
Detailed biographies and contact information for each of these doctors are available upon request. Please feel free to call me (312-782-6006) or e-mail me (firstname.lastname@example.org) should you need any additional information.
Ida Hellander, M.D.
Measuring Coverage for Seniors in Medicare Part A and Estimating the Cost of Making It Universal
By Michael Birnbaum and Elizabeth M. Patchias
Journal of Health Politics, Policy and Law
Medicare’s Part A Coverage Gap in the Context of National Health Care Reform
The fact that 1.6 million seniors in the United States — 5 percent of the elderly population — are without full federal Part A coverage is a significant policy issue. While Medicare is widely understood to cover the entire elderly U.S. population, this is at best a substantial exaggeration of Medicare’s reach and perhaps a mischaracterization whose broad acceptance preempts a national debate about Medicare eligibility policy and clouds the existing debate on universal coverage.
Will a national discussion on Medicare eligibility get at least a little traction? At this point it seems unlikely because of a powerful counterargument that Medicare is close enough to universal and that seniors without the full federal Part A benefit have other public programs and sources of government funding to support their health care needs, with some ultimately gaining Medicare Part A through their state Medicaid programs. This argument is valid and empirically strong, but it hangs on a normative question: when we are dealing with Medicare eligibility policy in the context of a national discussion about universal coverage, should we settle for “close enough” and accept that, when people fall through the cracks of Medicare’s eligibility framework, Medicaid and the states will be there as a last resort?
Projected Impact of Senate Health Reform Bill; Estimates of Alternative Designs
February 16, 2010
The (RAND) study finds that health care legislation passed by the Senate in December would cut the number of uninsured Americans to 25 million by 2019 (a 53 percent decrease).
At what level do we say that the rate of coverage under a universal program is “close enough”? For Medicare Part A, we’ve already answered that question. Covering 95 percent of those over age 65 is “close enough,” leaving 1.6 million seniors out of the Part A program (primarily hospital care).
We now hear from our politicians that the Senate reform bill awaiting approval in the House is “close enough” to universal coverage, cutting the number of uninsured in half, leaving only 25 million without coverage, according to this new RAND report.
Many suggest that we abandon the term “single payer” and use “Medicare for All” instead. Universal coverage under single payer means 100 percent – everyone is included automatically, not 95 percent like Medicare Part A.
When we choose to use the Medicare rhetoric because it would resonate better with some audiences, we should refer to it as “improved Medicare for All.” That’s simply code language for replacing Medicare’s numerous flawed policies with a bona fide single payer program – a program that removes financial barriers to health care for absolutely everyone.
During the health reform dialogue, when someone says, “close enough,” you know that person is supporting flawed policies. Jump in immediately, protesting that “close enough” isn’t good enough when we have better policies that will get all of us all the way there.
Republicans Spurn Once-Favored Health Mandate
By Julie Rovner
February 15, 2010
For Republicans, the idea of requiring every American to have health insurance is one of the most abhorrent provisions of the Democrats’ health overhaul bills.
“Congress has never crossed the line between regulating what people choose to do and ordering them to do it,” said Sen. Orrin Hatch (R-UT). “The difference between regulating and requiring is liberty.”
But Hatch’s opposition is ironic, or some would say, politically motivated. The last time Congress debated a health overhaul, when Bill Clinton was president, Hatch and several other senators who now oppose the so-called individual mandate actually supported a bill that would have required it.
In fact, says Len Nichols of the New America Foundation, the individual mandate was originally a Republican idea. “It was invented by Mark Pauly to give to George Bush Sr. back in the day, as a competition to the employer mandate focus of the Democrats at the time.”
Pauly, a conservative health economist at the University of Pennsylvania’s Wharton School, says it wasn’t just his idea. Back in the late 1980s — when Democrats were pushing not just a requirement for employers to provide insurance, but also the possibility of a government-sponsored single-payer system — “a group of economists and health policy people, market-oriented, sat down and said, ‘Let’s see if we can come up with a health reform proposal that would preserve a role for markets but would also achieve universal coverage.’ ”
The idea of the individual mandate was about the only logical way to get there, Pauly says. That’s because even with the most generous subsidies or enticements, “there would always be some Evel Knievels of health insurance, who would decline coverage even if the subsidies were very generous, and even if they could afford it, quote unquote, so if you really wanted to close the gap, that’s the step you’d have to take.”
One reason the individual mandate appealed to conservatives is because it called for individual responsibility to address what economists call the “free-rider effect.” That’s the fact that if a person is in an accident or comes down with a dread disease, that person is going to get medical care, and someone is going to pay for it.
“We called this responsible national health insurance,” says Pauly. “There was a kind of an ethical and moral support for the notion that people shouldn’t be allowed to free-ride on the charity of fellow citizens.”
So while President Clinton was pushing for employers to cover their workers in his 1993 bill, John Chafee of Rhode Island, along with 20 other GOP senators and Rep. Bill Thomas of California, introduced legislation that instead featured an individual mandate. Four of those Republican co-sponsors — Hatch, Charles Grassley of Iowa, Robert Bennett of Utah and Christopher Bond of Missouri — remain in the Senate today.
But the summary of the Republican bill from the Clinton era and the Democratic bills that passed the House and Senate over the past few months are startlingly alike.
Beyond the requirement that everyone have insurance, both call for purchasing pools and standardized insurance plans. Both call for a ban on insurers denying coverage or raising premiums because a person has been sick in the past. Both even call for increased federal research into the effectiveness of medical treatments — something else that used to have strong bipartisan support, but that Republicans have been backing away from recently.
And how does economist Pauly feel about the GOP’s retreat from the individual mandate they used to promote? “That’s not something that makes me particularly happy,” he says.
Chafee’s political prescriptions – Republican Senator John Chaffee has his own proposals for health care reform
By Rich Lowry
January 24, 1994
Senate Minority Leader Robert Dole tapped (Sen. John) Chafee, a long-time student of health care, to craft the principles that 23 Republicans signed last fall as a buffer against the Clinton onslaught.
Chafee’s plan then looked, as critics said, like “Clinton Lite”: no price controls or employer mandates, but, universal coverage, a comprehensive benefits package, a National Health Board, and purchasing alliances. Before long Hillary Clinton, eager for Republican cooperation, was calling him her “counselor and advisor.”
In October Chafee’s bill was redrafted under pressure from conservatives and Dole. It went from having mandatory purchasing alliances–the linch-pin of the Clinton plan–to voluntary ones. “This is night and day,” says Don Devine, head of Citizens against Rationing Health, a group supported by the American Conservative Union. The plan now includes medical savings accounts–an essential feature of the conservative John Goodman plan. And Chafee puts off universal coverage to 2005, promising to extend coverage only as savings are realized.
Newt Gingrich delivered perhaps his sharpest attack on the Clinton proposal yet in a speech to Empower America December 14. And, significantly, in a December 16 news conference Dole said, “I don’t think there’s a [health-care] crisis.” He went on to endorse incremental reforms: “When we’ve got some areas we agree on, why not just go ahead and pass those early next year?” Administrative simplification, coverage for people with pre-existing conditions, malpractice reform, insurance portability–the list goes on–would improve the system without scrapping it.
In perhaps the greatest irony of the reform process, President Obama has scheduled a bipartisan health care summit in which the Democrats will submit a right-wing proposal similar to that crafted by conservative economist Mark Pauly and his market-oriented colleagues. The Republicans will offer nominal proposals that would provide no significant benefit in correcting the problems that we face with our health care system.
When President and Mrs. Clinton began their reform efforts, they understood the superiority of the single payer model, but they anticipated that it would be rejected as being a left-wing government program. They decided to stake out a position that they perceived to be in the middle, when in fact it was a market-oriented proposal that would have appeal more to those on the right except for the level of regulatory oversight.
Although with the Clintons already negotiating to the right of center, the conservatives moved the fulcrum of the negotiations further to the right by offering a counter-proposal for mandatory purchasing alliances – “a health reform proposal that would preserve a role for markets but would also achieve universal coverage.” The conservatives then again pulled up stakes and moved even further to the right by making them voluntary. The process ended with Sen. Robert Dole saying that all we needed was some incremental reforms. We all know what’s happened to our health care system since then.
President Obama clearly understands the superiority of the single payer model and has stated so on several occasions, going so far as to say that we would adopt single payer if we were starting from scratch. But the position he eventually staked out was far to the right, even further to the right than the initial Republican counter-proposal offered in 1993. He campaigned against an individual mandate to purchase private plans since they were not affordable to middle-income individuals and families. Although a pseudo-mandate has been included in the Democrat’s proposal, it would still leave tens of millions without coverage, falling short of the goal that conservative economist Mark Pauly likely envisioned.
This bipartisan process began on the right. Over the past couple of decades it has been pulled further and further to the right until it has deteriorated into a process in which we are looking for those reforms, all in right-wing territory, that we can agree on. We’re only one step away from returning to Bob Dole’s incrementalism – a path that leads ever downward into despair.
It’s not too late. We can start over with single payer – an improved Medicare that covers everyone. That would end our despair.
Paul Starr’s analysis of the stalled health insurance reform bill, “Underrating Reform”, suggests that the compromises and concessions made by the Democrats in Congress “to get something passed” in no way diminishes the legislation’s significance. I agree. But not for the reason you might think.
This “stunning historical achievement” succeeds in shining a bright light on “pay to play” politics in Washington and on the spinelessness of the “so-called” Congressional Progressive Caucus. And when the public option finally succumbed to the chopping block, as many of us knew it would, then even “progressives” such as Howard Dean joined the ranks of liberals calling for the President to “start from scratch.”
Professor Starr goes on to assert “the legislation would be a major advance in two important respects…it would boost the living standards of low-wage workers…and improve economic security for the middle class.” A Medicaid expansion would, indeed, improve living standards for low-wage workers. The same is true of the SCHIP expansion that Congress passed in 2007. This clearly improved conditions for many of the country’s poorest children. And it passed without need to resort to reconciliation.
I disagree, however, that the proposed legislation would be a boon to the middle class. That simply defies history. We have only to look to the experiences of the citizens of Massachusetts to see that mandates to purchase private health insurance, subsidized by taxpayers’ money, has been a bust, not a boon, to these families. It has created a population that is underinsured and now has lost its safety net hospitals and providers. Only the private health insurance industry benefits from mandates and subsidies.
What is most distressing, but predictable, about Prof. Starr’s analysis is his vilification of those darn “pie-in-the-sky” liberals who won’t go along with progressive incrementalist spin but, instead, persistently focus the light on shameless influence-peddling by corporate lobbyists and meaningless posturing by progressive Democrats.
Cheap shot, Professor Starr.
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