PNHP

Florida’s Medicaid privatization raises costs, not quality

Florida’s Medicaid privatization raises costs, not quality

By F. Douglas Stephenson
The Gainesville (Fla.) Sun, Nov. 1, 2015

Like many other states, Florida has shifted the administration of its Medicaid into a managed care program administered by the private insurance industry. The companies are paid by state government, and their profit depends on spending as little as possible on Medicaid patients.

It’s hard to imagine any greater disconnect between public good and private profit: the interest of private health insurance companies lies not in the obvious social good of delivering quality health care to patients but in having as few as possible treated as cheaply as possible. No better example exists of a private capitalist enterprise that feeds on the misery of man.

You might think that we learned the lesson of discredited managed care in the 1990s. The term “managed care” is confusing to many, but really amounts to managed reimbursement rather than managed care. A set prospective annual payment is made by federal/state governments, as in the case of Florida Medicaid managed care, to cover whatever services patients will receive over the coming year. There is therefore a built-in incentive for managed care organizations to skimp on care and pocket more profits.

The same problem is back in Florida in the form of privatized Medicaid managed care, facilitated further by the Affordable Care Act. More than one-half of Medicaid beneficiaries are now in privatized plans, which have been catching on in Florida and many states based on the unproven theory that private plans can enable access to better coordinated care and still save money.

That theory is not just unproven, it is patently wrong as the state forecasters are now discovering. Medicaid will eat up 45.9 percent of growth in general revenue over the next three years, ballooned by approval of a 7.7 percent increase in payment to private managed care plans.

Privatized programs have high administrative costs, built-in profits, and do not save money or improve care. Their route to financial success is by finding more ways to limit care and deny services.

Without evidence or disclosure by the private Medicaid plans business/profit interests, private HMOs claim this saves Florida millions annually. Shockingly, we let the Scott administration get away with this illusion by forgetting that adding a “profiteering middleman” to manage health care delivery always adds cost, and does not lower them.

Scott and fellow Republicans lobbied hard for Medicaid managed care. Scott’s scare tactics claimed that more than 3 million recipients would receive better care and also save the state money, sternly warning the roughly $23 billion a year Medicaid bill was consuming the state budget.

Today, private insurance companies now demand a $400 million raise and a 7.7 percent increase for rates from Florida. “We are losing a significant amount of money” in the Medicaid managed care program, Molina’s President David Pollack told the Florida hospital commission at a meeting in Miami. Molina was spending about 81 percent on services before the state privatized the program last year, but Pollack said its now spending 97 percent, leaving a razor thin margin for profit “that is not sustainable” for his stockholders, board of directors and himself as CEO.

Dr. John P. Geyman, former chair of the University of Washington Department of Family Medicine and one of the most published family physicians in the U.S., asks, “Why do we still worship at the altar of privatization in U.S. health care, especially for the poor and most vulnerable among us?”

“Four answers stand out:

(1) there is a lot of money to be made by insurers operating health programs subsidized by the Florida and other state governments;

(2) exploitive privatized programs are perpetuated by well-funded “free market” think tanks, their followers in Big Business, and compliant politicians responding to industry lobbyists;

(3) regulations are inadequate to prevent gaming by insurers at patients’ expense;

(4) as a society, we still don’t seem to care when people have bad health outcomes and die because of failed health care policies.”

Florida citizens should demand that private corporate HMOs be removed and banned from the administration of our public programs in Florida. Privatization of Florida’s Medicaid increases costs, without any corresponding increase in quality or access to care.

Private insurers maximize profits by mainly limiting benefits or by not covering people with health problems. The greed of casual inhumanity is built in the business model and the common good of Florida citizens is ignored. Excluding Florida’s poor, aged, disabled and mentally ill is sound business policy, since it maximizes profit.

As long as health care remains so lucrative for private insurers, patients’ needs and the public interest don’t carry much weight. We need Florida state government to finance a not-for-profit, one-tier system of universal coverage, based on medical need, not ability to pay.

F. Douglas Stephenson, LCSW, BCD, is a former president of the Florida Society for Clinical Social Work. He lives in Inglis.

http://www.gainesville.com/article/2015151029607

High midlife mortality in US white, non-Hispanics

Rising morbidity and mortality in midlife among white non-Hispanic Americans in the 21st century

By Anne Case and Angus Deaton
Proceedings of the National Academy of Sciences, published online before print on November 2, 2015

Abstract

This paper documents a marked increase in the all-cause mortality of middle-aged white non-Hispanic men and women in the United States between 1999 and 2013. This change reversed decades of progress in mortality and was unique to the United States; no other rich country saw a similar turnaround. The midlife mortality reversal was confined to white non-Hispanics; black non-Hispanics and Hispanics at midlife, and those aged 65 and above in every racial and ethnic group, continued to see mortality rates fall. This increase for whites was largely accounted for by increasing death rates from drug and alcohol poisonings, suicide, and chronic liver diseases and cirrhosis. Although all education groups saw increases in mortality from suicide and poisonings, and an overall increase in external cause mortality, those with less education saw the most marked increases. Rising midlife mortality rates of white non-Hispanics were paralleled by increases in midlife morbidity. Self-reported declines in health, mental health, and ability to conduct activities of daily living, and increases in chronic pain and inability to work, as well as clinically measured deteriorations in liver function, all point to growing distress in this population. We comment on potential economic causes and consequences of this deterioration.

From the Discussion

Although the epidemic of pain, suicide, and drug overdoses preceded the financial crisis, ties to economic insecurity are possible. After the productivity slowdown in the early 1970s, and with widening income inequality, many of the baby-boom generation are the first to find, in midlife, that they will not be better off than were their parents. Growth in real median earnings has been slow for this group, especially those with only a high school education. However, the productivity slowdown is common to many rich countries, some of which have seen even slower growth in median earnings than the United States, yet none have had the same mortality experience. The United States has moved primarily to defined-contribution pension plans with associated stock market risk, whereas, in Europe, defined-benefit pensions are still the norm. Future financial insecurity may weigh more heavily on US workers, if they perceive stock market risk harder to manage than earnings risk, or if they have contributed inadequately to defined-contribution plans.

A serious concern is that those currently in midlife will age into Medicare in worse health than the currently elderly. This is not automatic; if the epidemic is brought under control, its survivors may have a healthy old age. However, addictions are hard to treat and pain is hard to control, so those currently in midlife may be a “lost generation” whose future is less bright than those who preceded them.

Significance

Midlife increases in suicides and drug poisonings have been previously noted. However, that these upward trends were persistent and large enough to drive up all-cause midlife mortality has, to our knowledge, been overlooked. If the white mortality rate for ages 45−54 had held at their 1998 value, 96,000 deaths would have been avoided from 1999–2013, 7,000 in 2013 alone. If it had continued to decline at its previous (1979‒1998) rate, half a million deaths would have been avoided in the period 1999‒2013, comparable to lives lost in the US AIDS epidemic through mid-2015. Concurrent declines in self-reported health, mental health, and ability to work, increased reports of pain, and deteriorating measures of liver function all point to increasing midlife distress.

http://www.pnas.org/content/early/2015/10/29/1518393112.full.pdf

***

Comment:

By Don McCanne, M.D.

In recent years concerns have been raised about the increases in death rates from prescription pain medications, but the magnitude of the problem was not recognized until this landmark study was released yesterday. Midlife deaths from poisonings with alcohol and drugs or from suicide of white, non-Hispanic men and women in the United States have skyrocketed since 1999. Morbidity likewise has increased in this group.

The intensity of the problem can be easily visualized by clicking on the link above and looking at Figure 1. The mortality curve of US white non-Hispanics, ages 45-54, is moving upward as the curves for US Hispanics and for residents of six other wealthy industrialized nations are continuing downward.

Although the other nations have more egalitarian, accessible and affordable health care systems, that alone cannot explain the differences since Hispanics in the United States have not seen this same isolated increase in mortality.

The authors suggest that the decline in economic security that began in the early 1970s may be an important factor. Not only have wages stagnated, but retirement security has diminished with a shift from defined benefit to defined contribution pension plans. Lack of higher education has been especially associated with this phenomenon of higher mid-life morbidity and mortality.

A single payer system would help by improving access to preventive health, mental health, and drug treatment services. But we need to do more. We need public policies that distribute the gains in productivity to the workers rather than to the rentiers, plus tax policies that reduce the injustices of income and wealth inequality. We need to ensure adequate education opportunities for all, including industrial arts and training for the service industries, along with assurances of adequate incomes in those fields. In general, we need policies that serve the social good.

To do that we need political leaders who are dedicated to the health and welfare of the people and who would enact policies to ensure that. We need to displace our current political leaders who have dedicated themselves to supporting the military-industrial complex (through more warfare), the medical-industrial complex (through prioritizing support of insurers and pharmaceutical firms above the interests of patients), and the rentiers of Wall Street who are redistributing wealth from the masses to the magnates.

The ACA insurance exchange model has failed

Obamacare Premiums Climb, But Insurers Struggle for Profit

By Zachary Tracer
Bloomberg Business, October 30, 2015

Many people shopping for health coverage this weekend on the websites created by Obamacare are going to see double-digit percentage increases in their premiums. That’s still not enough for some insurers.

Anthem Inc. says there remain competitors in the government-run marketplace offering premiums that aren’t enough to profitably provide the coverage patients will require. Prices in some areas probably will have to climb in 2017 and even 2018 to reach levels that make sense, according to Chief Financial Officer Wayne Deveydt. Meantime, Anthem will sacrifice market share to keep its plans profitable, he said.

“When you have fewer national enrollees and you have price points that we don’t believe are sustainable, we’ve just made a conscious decision we’re not going to chase it,” Deveydt told analysts on a conference call on Wednesday. “We are going to need to be patient until this works itself out.”

Deveydt’s remarks spotlight a problem for the Patient Protection and Affordable Care Act’s marketplaces as the third annual sign-up period begins Sunday. Set prices too low to lure customers, and losses can mount. Some smaller firms already have closed, and some bigger insurers have withdrawn from markets — such as Aetna Inc., which will offer coverage in two fewer states this year.

The conundrum has led to this year’s price increases, which have been higher, on average, than last year’s hikes. But the danger is that premiums are now too expensive for some families to afford coverage, especially the uninsured people the Obama administration is trying to persuade to shop on the exchanges for the first time.

But the remaining uninsured are poorer and younger than those who’ve already signed up, and they’re more difficult to reach, Health and Human Services Secretary Sylvia Mathews Burwell has said. That may mean slower growth for the insurers.

Charles Gaba, who tracks the health law on ACASignups.net, estimates that the rate increases across the U.S. will average about 12 percent to 13 percent, based on a weighted average of current enrollment.

“Some of the large carriers are having pretty significant rate increases,” said Jeff Smedsrud, who runs the private insurance shopping site Healthcare.com.

Price isn’t the only challenge for insurers, according to Shawn Guertin, Aetna’s CFO. Membership levels are lower than expected, and some individuals are sticking with pre-Obamacare plans, cutting into the size of the market. There’s also been lots of churn — customers signing up and then dropping their policies throughout the year.

Aetna hasn’t been turning a profit in Obamacare plans, the company has said. Guertin said its price hikes range from high single digits to the mid-teens, depending on the market. UnitedHealth Group Inc., the largest U.S. health insurer, has said its premium increases are in the double digits as well.

http://www.bloomberg.com/news/articles/2015-10-30/obamacare-premiums-jump-but-insurers-still-struggle-for-profit

***

Comment:

By Don McCanne, M.D.

The performance of competing private insurance plans within the ACA exchanges is not much different from the performance of the pre-ACA private plans in the individual market. Trends in higher insurance costs, greater cost sharing, and narrower choices were already occurring, and they continue to grow progressively worse. Access and affordability can only suffer.

Higher premium credits and out-of-pocket subsidies are helping individuals with incomes near poverty levels, but, for middle-income families, they are inadequate to provide much benefit.

Higher premiums and more cost-shifting to patients are adequate to maintain profits for most larger insurers, but where even these measures are inadequate, insurers are pulling out of the exchanges, and some of the smaller insurers are even folding. Market manipulations create instability.

The insurers show their true colors through statements such as that of Anthem’s Chief Financial Officer Wayne Deveydt. Reporting to Wall Street analysts, Deveydt said about the market, “When you have fewer national enrollees and you have price points that we don’t believe are sustainable, we’ve just made a conscious decision we’re not going to chase it.”

Higher premiums, greater cost-sharing, narrower networks – the behavior of the private insurers is not changing in spite of the promise of higher value and lower costs through the ACA Marketplaces. The ACA exchanges are a creeping failure that is growing worse.  Congress enacted the wrong model of reform. We need single payer.

The Salt Lake Tribune: Should have been single payer

Editorial: End of Arches points to single-payer

The Salt Lake Tribune, October 29, 2015

The collapse of Utah’s cooperative insurance provider, the Arches Health Plan, was not unforeseen, either by those who favor the Affordable Care Act or those who have always hated it.

Count Utah’s Sen. Orrin Hatch among the latter.

Hatch’s preferred alternative, the Patient CARE Act, has the advantage of not being Obamacare. But it is at least as complex as the ACA, shifts more costs onto consumers and more work onto states. Worst of all, passing it would force millions of Americans who have finally found health care under the current law back to square one.

Which is what just happened to 63,000 Utahns who will have to find new coverage now that Arches has tanked.

All of this fiddling with rival steampunk assemblages of subsidies, mandates, taxes, exchanges and co-ops continues to burden Americans because Republicans have never accepted, and Democrats have never fully sold, the realization that a country where millions of people do not have access to affordable health care is the skunk in the garden party of First World nations. No truly civilized society would tolerate such a condition.

The establishment of non-profit co-ops was one of many unsatisfying compromises between those who wanted a single-payer, Medicare-for-all design — or, at the least, a government-run public option — and those who irrationally trusted the private sector to provide what it simply is not willing or able to provide, now or ever, affordable health care for all.

The original ACA had funds to back the co-ops if — when — they ran out of money. But the Republican-controlled Congress, frustrated by many failed attempts to repeal Obamacare outright, cut back on the guarantees. So at least 10 such organizations around the country have now failed.

Meanwhile, premiums continue to rise and the private insurance sector is consolidating as big firms are bought by bigger ones. There is less and less of the competition that reformers of all ideological stripes were hoping, some with more faith than others, would keep costs down.

What Obamacare opponents do not seem to grasp is that, if it doesn’t work, if the co-ops fail and the exchanges don’t meet the needs of working families, going back to a pre-ACA jungle will not be a workable or ethical option.

It’ll be single-payer, or at least a robust public option. As it should have been from the beginning.

http://www.sltrib.com/opinion/3111523-155/editorial-end-of-arches-points-to

***

Comment:

By Don McCanne, M.D.

What a great opener for this weekend’s national meeting of Physicians for a National Health Program. An editorial in The Salt Lake Tribune tells us that, as we see the failures of the co-ops, the inadequacies of the exchanges, and “rival steampunk assemblages,” it should have been single payer from the beginning.

They mention, “or at least a robust public option.” But lost in the prior enthusiasm for the public option was the fact that it would not have been an adequate solution since it would have been only one more player in our highly dysfunctional, fragmented health care financing system. But this does not reduce the impact of their message since the prevalent belief was that the public option would eventually lead to single payer (a highly unlikely event since it would not have fundamentally altered the highly flawed, complex financing infrastructure). So their intent is certainly well meaning.

Yes, single payer, as it should have been from the beginning.

ACA plans do not always have a full complement of in-network specialists

Adequacy of Outpatient Specialty Care Access in Marketplace Plans Under the Affordable Care Act

By Stephen C. Dorner, MSc; Douglas B. Jacobs, ScB; Benjamin D. Sommers, MD, PhD
JAMA, October 27, 2015

In this study of federal marketplace plans, nearly 15% completely lacked in-network physicians for at least 1 specialty. We found this practice among multiple states and issuers. This likely violates network adequacy requirements, raising concerns regarding patient access to specialty care. Such plans precipitate high out-of-pocket costs and may lead to adverse selection (ie, sicker individuals choosing plans with broader networks), which is similar to concerns over restrictive drug formularies.

We also found substantial turnover in directory listings. This may contribute to inaccuracies in listings, which prompted more stringent federal requirements for 2016. However, physician listings without any specialists (even if inaccurate) may confuse or impede consumers’ access to physicians.

(R)ural regions are known to have fewer physicians and may have an even higher prevalence of specialist-deficient plans.

http://jama.jamanetwork.com/article.aspx?articleid=2466113

***

Comment:

By Don McCanne, MD

This study shows that not all health plans in the ACA insurance exchanges have a full complement of specialists in their networks. When patients have to obtain their care out of network, they may face impaired access and financial penalties. If private insurers cannot provide the basics, why would we want to include them in our health care system in the first place?

Single payer.

Evaluation of the ColoradoCare initiative by PNHP’s founders and Policy Director

Brief Comments on ColoradoCare

By Ida Hellander, M.D., David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H.
Physicians for a National Health Program, October 27. 2015

Organizers for the ColoradoCare ballot initiative have contacted some activists in Physicians for a National Health Program seeking their endorsement and financial support. We summarize, below, our understanding of the initiative.

Description of the program

ColoradoCare is a ballot initiative for a publicly financed, universal health plan for the state of Colorado that would be operated by a private cooperative under a 21-person elected Board. While the ballot measure spells out the program’s governance and Board structure in considerable detail, key aspects of the program are not specified, and/or left to the discretion of the Board. In the past the drafters made clear in public statements that ColoradoCare is NOT a single-payer plan.

The initiative would cover all Colorado residents under a publicly funded, cooperative insurance plan. While the new program would replace most private insurance, Medicaid and CHIP coverage, it would serve only as supplemental coverage for those covered by Medicare, the VA and TriCare. The initiative would not prohibit the purchase or sale of private coverage duplicating the public plan. However, proponents expect that little private insurance would persist, since most businesses and individuals would not want to pay twice for coverage.

The proposal would cover a broad range of benefits, but would not cover dental care for adults, or long-term care for most individuals.

ColoradoCare would be funded via a payroll tax of 6.67 percent on employers and 3.33 on employees, or 10 percent of non-payroll income (excluding pensions and annuities), along with federal funds that would have come to the state via subsidies for private coverage under the Affordable Care Act, for Medicaid, and for other programs.

The drafting of ColoradoCare was spearheaded by Colorado Sen. Irene Aguilar and psychologist Ivan Miller. Volunteers and paid staff gathered the signatures necessary to put it on the ballot. Journalist T.R. Reid has become a champion and spokesperson for the plan both inside and outside of Colorado.

Strengths of ColoradoCare

1. The proposal if implemented would cover all, or nearly all of Colorado’s uninsured – apparently (and laudably) including the undocumented.

2. The proposal includes some useful cost-control features, notably the creation of an annual budget, and the ability to negotiate lower prices with pharmaceutical companies.

3. The plan allows for a free choice of primary care doctor.

4. The financing plan is more progressive than the current system.

5. ColoradoCare’s organizers have mounted an impressive campaign with considerable mobilization.

Weaknesses of ColoradoCare

1. Multiple payers would persist – probably including private insurers. As a result, it sacrifices much of the administrative savings that could be realized through a true single-payer reform because providers would have to maintain much of their current cost tracking and billing apparatus in order to apportion costs among the multiple payers. Published cost estimates for ColoradoCare overstate the savings that could be achieved through single payer, and do not take into account the additional costs entailed by ColoradoCare’s failure to adopt a full single-payer structure.

2. The initiative makes no mention of how hospitals or other institutions would be paid – apart from a rhetorical nod favoring ACOs. It makes no mention of global budgeting, separating operating and capital payments, or other constraints on hospital capital spending. Global budgeting is critical to achieving administrative savings; separating operating and capital payments is a bedrock of effective health planning, which is essential for long-term cost containment.

3. The initiative would not ban for-profit hospitals or other providers, despite clear evidence that they inflate costs and compromise quality. For-profit ACOs (indistinguishable from HMOs in most respects) might also flourish.

4. The initiative specifies that patients would have a free choice of primary care physicians, but makes no mention of whether the choice of specialist or hospital could be restricted.

5. While the plan would outlaw deductibles, the Board would be empowered to impose copayments.

6. While the 10 percent tax rate would apply to both the rich and poor (including those with incomes below the poverty line), income over $350,000 would not be taxed.

7. The campaign’s anti-government rhetoric is problematic.

8. Rather than specifying critical aspects of the plan, the initiative leaves many of these to be decided later by the Board. Delaying such decisions has often favored corporate interests, who can intervene after the popular mobilization required to pass a reform has subsided. In the case of the ACA, corporate lobbying during the rule-making process attenuated cuts in Medicare HMO overpayments; reduced promised funding for public health and community clinics; effectively neutered limits on insurance overhead; and watered down the mandated benefit package. In Vermont, the broad-brush program initially passed by the legislature was whittled down in the detailed design stage, leading to rising cost estimates and ultimate rejection by the governor.

Dr. Ida Hellander is director of health policy and programs at Physicians for a National Health Program. Drs. David Himmelstein and Steffie Woolhandler are internists, professors at the City University of New York School of Public Health, lecturers in medicine at Harvard Medical School, and co-founders of PNHP.

https://www.pnhp.org/news/2015/october/brief-comments-on-coloradocare

***

Comment:

By Don McCanne, MD

Until the nation supports a political environment in which a bona fide single payer national health program can be enacted, it is wise for activists to advance beneficial health policies that can reduce suffering and hardship on an interim basis. Until then, PNHP will continue to carry out its mission of educating the public as we advocate for a single payer system. As others continue with their efforts to improve the system, we encourage them to simultaneously actively support the golden standard of a single payer national health program. All of us share the common goal of health care justice for all.

Healthcare Costs Loom for Roseburg Shooting Victims

Everyone who needs healthcare should be able to receive it, regardless of their financial condition

By Sam Metz, M.D.
The Lund Report (Portland, Ore.), Oct. 28, 2015

The tragedy of the Roseburg shootings did not end when Christopher Harper-Mercer shot himself after killing nine people at Umpqua Community College. The injured survivors now find themselves unable to pay for the medical care their injuries require.

Much of that medical care is complex: multiple operations, intensive care, long hospital stays, and rehabilitation. Four survivors set up internet donation sites because their families were unable to pay for care. One survivor, newly released from the hospital, received nearly $800,000 from people around the country, which may be sufficient to pay his current and future medical bills. Three other survivors remain hospitalized, one in critical condition. Their families are not as fortunate. As of last week, their combined internet appeals collected less than $20,000, not quite enough for one person to stay five days in an ICU.

What happens to these families if the charity of strangers fails to pay for their care?

How this tragedy should inform firearms legislation remains an incendiary topic. But we should not let the smoke of that issue cloud our vision of the second and ongoing tragedy for the community of Roseburg. Our health care system does not provide health care, even that required by unpredictable acts of psychosis, without devastating families with hospital bills they can never pay in several lifetimes.

The hospitalized survivors of the Roseburg shooting wanted nothing more from their college education than the opportunity for a better life. None of them were rich. None of them thought they might be victims of a lone gunman and should therefore pay not only for college tuition, but for health insurance that could cover catastrophe care without unaffordable deductibles. And now their families have their grief compounded by medical bills.

We live in a harsh society. In midst of wealth and the world’s best hospitals, ordinary Americans unfortunate enough to be caught up in someone else’s psychotic break can only get the medical care they suddenly need by sacrificing their savings, their future tuition money, and perhaps even their homes. Our society failed these families who, through no fault of their own, now owe hundreds of thousands of dollars in medical care.

Mass shootings like that in Roseburg are rare, though not unheard of, in other developed countries – in 2011 Anders Breivik of Norway shot 69 people, most of them children. However, citizens of other developed countries do not need internet sites to pay for health care. Citizens of other developed countries do not suffer medical bankruptcy. Citizens of other developed countries are not denied care because they are too poor – all care is prepaid.

None of the hundreds of surviving Norwegians injured by Anders Breivik required internet donations to pay for their health care. None lost their homes to medical debt.

We can do nothing to bring back the lives of those killed in the Roseburg shootings, nor can we undo the injuries among the survivors. But we can decide, right now, that our healthcare system cannot be left unrepaired.  We can decide that everyone in the US who needs healthcare for any reason, even injuries inflicted by an armed psychotic, should get that care no matter what their financial circumstances – be they community college students, or our neighbors, or our friends, or our families.

Samuel Metz is a private practice anesthesiologist who lives and works in Portland. He is a member of Physicians for a National Health Program and a founding member of Mad As Hell Doctors, both of which advocate for universal health care in Oregon and nationally. He can be reached at S@SamuelMetz.com. 

https://www.thelundreport.org/content/healthcare-costs-loom-roseburg-shooting-victims

Brief Comments on ColoradoCare

By Ida Hellander, M.D., David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H.

Organizers for the ColoradoCare ballot initiative have contacted some activists in Physicians for a National Health Program, seeking their endorsement and financial support. We summarize, below, our understanding of the initiative.

Description of the program

ColoradoCare is a ballot initiative for a publicly financed, universal health plan for the state of Colorado that would be operated by a private cooperative under a 21-person elected Board. While the ballot measure spells out the program’s governance and Board structure in considerable detail, key aspects of the program are not specified, and/or left to the discretion of the Board. In the past the drafters made clear in public statements that ColoradoCare is NOT a single-payer plan.

The initiative would cover all Colorado residents under a publicly funded, cooperative insurance plan. While the new program would replace most private insurance, Medicaid and CHIP coverage, it would serve only as supplemental coverage for those covered by Medicare, the VA and TriCare. The initiative would not prohibit the purchase or sale of private coverage duplicating the public plan. However, proponents expect that little private insurance would persist, since most businesses and individuals would not want to pay twice for coverage.

The proposal would cover a broad range of benefits, but would not cover dental care for adults, or long-term care for most individuals.

ColoradoCare would be funded via a payroll tax of 6.67 percent on employers and 3.33 on employees, or 10 percent of non-payroll income (excluding pensions and annuities), along with federal funds that would have come to the state via subsidies for private coverage under the Affordable Care Act, for Medicaid, and for other programs.

The drafting of ColoradoCare was spearheaded by Colorado Sen. Irene Aguilar and psychologist Ivan Miller. Volunteers and paid staff gathered the signatures necessary to put it on the ballot. Journalist T.R. Reid has become a champion and spokesperson for the plan both inside and outside of Colorado.

Strengths of ColoradoCare

1. The proposal if implemented would cover all, or nearly all of Colorado’s uninsured – apparently (and laudably) including the undocumented.

2. The proposal includes some useful cost-control features, notably the creation of an annual budget, and the ability to negotiate lower prices with pharmaceutical companies.

3. The plan allows for a free choice of primary care doctor.

4. The financing plan is more progressive than the current system.

5. ColoradoCare’s organizers have mounted an impressive campaign with considerable mobilization.

Weaknesses of ColoradoCare

1. Multiple payers would persist – probably including private insurers. As a result, it sacrifices much of the administrative savings that could be realized through a true single- payer reform because providers would have to maintain much of their current cost-tracking and billing apparatus in order to apportion costs among the multiple payers. Published cost estimates for ColoradoCare overstate the savings that could be achieved through single payer, and do not take into account the additional costs entailed by ColoradoCare’s failure to adopt a full single-payer structure.

2. The initiative makes no mention of how hospitals or other institutions would be paid – apart from a rhetorical nod favoring ACOs. It makes no mention of global budgeting, separating operating and capital payments, or other constraints on hospital capital spending. Global budgeting is critical to achieving administrative savings; separating operating and capital payments is a bedrock of effective health planning, which is essential for long-term cost containment.

3. The initiative would not ban for-profit hospitals or other providers, despite clear evidence that they inflate costs and compromise quality. For-profit ACOs (indistinguishable from HMOs in most respects) might also flourish.

4. The initiative specifies that patients would have a free choice of primary care physicians, but makes no mention of whether the choice of specialist or hospital could be restricted.

5. While the plan would outlaw deductibles, the Board could impose copayments.

6. While the 10 percent tax rate would apply to both the rich and poor (including those with incomes below the poverty line), income over $350,000 would not be taxed.

7. The campaign’s anti-government rhetoric is problematic.

8. Rather than specifying critical aspects of the plan, the initiative leaves many of these to be decided later by the Board. Delaying such decisions has often favored corporate interests, who can intervene after the popular mobilization required to pass a reform has subsided. In the case of the ACA, corporate lobbying during the rule-making process attenuated cuts in Medicare HMO overpayments; reduced promised funding for public health and community clinics; effectively neutered limits on insurance overhead; and watered down the mandated benefit package. In Vermont, the broad-brush program initially passed by the legislature was whittled down in the detailed design stage, leading to rising cost estimates and ultimate rejection by the governor.

Dr. Ida Hellander is director of health policy and programs at Physicians for a National Health Program. Drs. David Himmelstein and Steffie Woolhandler are internists, professors at the City University of New York School of Public Health, lecturers in medicine at Harvard Medical School, and co-founders of PNHP.

PNHP note: While there have been numerous articles about the ColoradoCare plan, one by Michael Corcoran, published by Truthout on Oct. 20, is among the most comprehensive. 

Readers sound off on Medicare

Medicare for All

By David and Carol Butler
The Tennessean, Letters, Oct. 25, 2015

Re: “Medicare for all would solve many problems,” by Vanderbilt and Meharry medical students, Oct. 19.

We were pleased to see this op-ed proclaiming the need for a truly universal single-payer system of health care such as one finds in all other “developed” countries.

They differ in many details of operation, but all provide greatly superior health outcomes than we get, and at far less cost.

Opponents love to come up with “horror” stories out of some of those systems.

We have seen many more such problems here in America.

We lived four years in Canada and one in France and have spent a good deal of time in Great Britain, Switzerland, Holland and Germany where we still have many contacts.

These friends, in spite of their complaints, would not trade for the American system and cannot understand how we can be so backward and so callous as to fail to recognize the civilized need to assure basic health care to everyone.

One close friend in Canada, now deceased, and one like a “daughter” in Northern Ireland, who is now dying of cancer, received excellent and prolonged care over several years and were given, against all odds, added years of good-quality life before the final phase set in.

And that has not bankrupted their families!

Let’s try Medicare for all!

David and Carol Butler reside in Hermitage.

****

Try standard Medicare

By Dorothy M. Gager

​Re: “Vanderbilt, BCBST hit Medicare Advantage impassed,” Oct. 21.

The story about Blue Cross/Vanderbilt Medicare issues failed to mention a vital part of the issue.

The so-called “Advantage” plans are required to provide a core set of services that are also covered by standard Medicare.

They are paid a per capita rate for each enrollee, ​regardless of the amount of medical care provided to that individual.

They are allowed to be more tightly “managed,” meaning that their provider lists might be much more restricted, with the private insurance companies being able to determine length of stay and kinds of services authorized in each situation and to dictate the funding formula for authorized providers.

They can also add additional services, generally targeted at healthy Medicare recipients who are much less likely to require the costly care needed by those with chronic or severe illnesses.

For the insurance company, the incentive is to attract healthy enrollees and keep the amount of money paid for medical care to a minimum, since they receive the same funding for each enrollee.

Therefore, they spend huge amounts of money in advertising to attract the healthiest people eligible for Medicare.

Standard Medicare, on the other hand, provides the same basic services, only paying medical providers for services rendered and being accepted by a much larger pool of medical providers.

The legislation creating the “Advantage” plans gives them permission to advertise and specifically prohibits any advertising by the standard Medicare program.

Many people nearing the age for Medicare eligibility are not even aware of the option of standard Medicare, assuming from the barrage of advertising that they have to enroll in an “Advantage” plan.

Dorothy H. Gager, M.Div., LCSW, resides in Nashville.

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Be careful at enrollment

By Clark Meyer

I’m 79 years old. I had to change Medicare supplemental insurance companies for the 2015 year.

Having had the same primary care doctor for over 10 years, with each new insurance company I considered, I insisted that I would only sign with them if indeed I could keep my doctor.

A number of companies could not make that promise — until Humana came along.

They made that promise, I signed up.

A few weeks later they sent me that little plastic card that listed benefits, co-pays, etc. — and sure enough on the back of that card my doctor was listed as the doctor I insisted on having.

Four months into the plan, Humana informed me that that was not possible as they had no contract with that particular doctor and that they had assigned me to a doctor that I did not know.

After a lot of calls with numerous Humana folks the story was, “sorry” we messed up and we cannot help you.

Contacting my doctor of choice he informed me that Humana has done the same thing to a number of his patients.

So, old folks beware of promises made to you during the upcoming enrollment period.

What “they” tell you may not be true. You sign up, they profit from the misinformation, and you don’t get what they promised.

Clark Meyer resides in Nashville.

http://www.tennessean.com/story/opinion/readers/2015/10/26/letters-editor-medicare/74480902/

Why are the media celebrating a 7.5% ACA premium increase?

2016 Marketplace Affordability Snapshot

CMS.gov, October 26, 2015

The 2016 Affordability Snapshot provides a review of the final rate increases for second lowest cost silver plans, known as benchmark plans, which will be available for purchase in the 37 states that used the HealthCare.gov platform in 2015, including those in the Federally-facilitated Marketplace, State Partnership Marketplaces, and supported State-based Marketplaces.

Across all 37 states that used the HealthCare.gov platform, the cost of the benchmark plan will increase on average 7.5 percent in 2016. These increases do not take into account advanced payments of premium tax credits, which lower the monthly costs for the overwhelming majority of Marketplace consumers.

The second-lowest cost silver plan is notable because it serves as the benchmark plan to calculate the amount of advanced premium tax credit consumers may be eligible for to help lower the cost of their Marketplace coverage.

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-10-26-2.html

***

Consumer Price Index Summary

U.S. Bureau of Labor Statistics, October 15, 2015

Consumer Price Index for All Urban Consumers (CPI-U)

Percent changes, unadjusted 12 months ended September 2015

0.0%  All items

1.9%  All items less food and energy

2.4%  Medical care services

2.7%  Medical care commodities

http://www.bls.gov/news.release/cpi.nr0.htm

***

Comment:

By Don McCanne, MD

Although there are many variables that produce a wide variation in premiums for plans offered in the health insurance exchanges (Marketplaces), the second lowest cost plans in the silver tier serve as the benchmark for premium tax credits and thus can provide an anchor for determining health care inflation as reflected by the premiums for the plans offered by the exchanges.

Many reports in the media today are celebrating the fact that average increases in the benchmark premiums were held to a single digit. But these increases in insurance premiums were about 5% greater than the consumer price index (CPI-U) increases for medical care services and commodities, and a 7.5% increase over CPI-U for all items.

Our health care financing system that has been heavily dependent on private insurance plans has been ineffective in slowing health care inflation to sustainable levels. The Affordable Care Act was supposed to have made health care more affordable by creating a separate competitive market of regulated private plans within government-operated insurance exchanges.  With a 7.5% increase above the CPI-U, we can say that this experiment with private health plans has been failure.

If we want affordable health care for all, we need to eliminate the private insurers and establish a single payer national health program. As Fareed Zakaria said last week, “It’s absolutely clear that is the only way you can achieve that goal.”

I just turned 26. Here’s what I learned while buying health insurance.

By Augie Lindmark
KevinMD blog, Oct. 5, 2015

I cracked a Budweiser and flipped on Spotify radio for what I was told would be a challenge. On my computer screen, Minnesota’s health insurance exchange website waited expectantly, to which I submitted the Holy Trinity of health information — age, date of birth, and tobacco usage — and waited. The next page loaded slowly, evidence of the voluminous information that would soon surface. I had hoped for simplicity, instead, I qualified for 38 different health plans from which to choose.

The timing of this health insurance search was important because I would soon celebrate my 26th birthday — the threshold age under the Affordable Care Act that initiates millennials into health insurance independence — and with that, an expulsion from my parents’ health insurance plan.

As a medical student, I’m surrounded by practicing physicians who forewarn me about the pitfalls of shoddy health insurance. Buried in those 38 plans lurked high deductibles, unknown health provider networks, and procedural coverage that acted more like a sieve than a blanket.

I experienced what some economists and physicians refer to as information asymmetry — the situation where a patient is inherently disadvantaged because the knowledge needed to make decisions is siphoned to those who approve claims, set prices, and charge bills.

Health insurance has too many options. And the wrong choice has serious consequences.

While I attempted to purchase health insurance for the first time in my life, I could see why over 600,000 Americans are annually bankrupted by medical bills. But the holes in our health system are underscored by the percentage of those cases covered by insurance. The answer is a lot. Of medically related bankruptcies in this country, almost two-thirds involve patients with some form of health insurance. American health insurance, when stripped down to its core, is a ruse.

Consider the recent example of Susan Rosalsky and Michael Trost. After chest pains led to an Emergency Room visit, an out-of-network charge meant a surprise $32,845 medical bill from a cardiologist not covered by their insurance. The majority of their bill was covered, but with a minor — albeit very expensive — exception. Regrettably, their story isn’t unique: Nearly one-third of patients covered by private insurance experience some level of surprise medical bill, according to a 2015 survey conducted by the Consumer Reports National Research Center.

When I scrolled through my online health insurance options, plan #35 cost $150 a month, a monthly premium that fit into my budget. But I would need to pay $6,300 out of pocket before I saw in-network charges covered, and only 60 percent coverage on out-of-network bills. And I had little knowledge of what procedures were included in the plan.

To assist confused customers like myself, state exchanges employed armies of health care navigators (assistants trained to help with purchasing coverage). When I spoke with a navigator, he could explain deductibles and define co-pays, but neither of us could decode the future implications of a high or low coverage, expensive or cheap, transparent or confusing health plan.

We both navigated alright. Except we didn’t know which way to go.

If you’re an uninsured millennial, you pose problems to health insurers

Two years ago the Obama administration made its push to encourage the millennial generation to sign up for health insurance. The success of the Affordable Care Act hinged on the turnout of the “Young Invincibles” and their willingness to get coverage. Big insurance corporations like UnitedHealthcare and Aetna watched with keen interest.

If Millennials didn’t flock to the insurance market, the insurance companies would be left with older, sicker patients. Younger people bring less risk to insurance pools; we tend to be healthier. In the eyes of insurance companies, you’re a good patient if you never step foot into a hospital, or need an emergency appendectomy, or get cancer, because that money can be moved away from health care and allocated to shareholders and beer cup advertising at major sporting events.

As you may remember, the push to get millennials signed up for health insurance employed numerous media mediums which included President Obama’s awkward, viral interview withZach Galifianakis on Between Two Ferns. A millennial generation focused news outlet, Mic News, held a competition to gather ideas of how to enroll 18 to 35-year-olds: They sent the top three voted proposals to the White House, including my submission, to get feedback. But perhaps the best — and most unbelievable attempt — were the Brosurance ads, first aired in Colorado, which utilized the alluring power of keg beer to sign up for health insurance. Had the state’s marijuana legalization preceded the Affordable Care Act, different tactics might have been used.

Marketing aside, at a legislative level, the fear of insurance companies would need to be assuaged. Two key components allowed the hefty insurance players to buy into the plan. The first was the individual mandate — the requirement for individuals to purchase health insurance or face a penalty. The second was expanding coverage to millennials under their parents’ insurance plans.

That is, until we turned 26.

Private health insurance makes cents, not sense

Unfortunately for Americans, millennial or otherwise, health care has evolved such that financial stability designates how we partake in, and access, health care. Our patchwork system treats medicine as a good that can be bargained and bought, similar to that of fresh produce or potato chips. Of industrialized nations, we’re the only one without some sort of universal health coverage. Unsurprisingly, we place dead last in preventable death.

My health insurance, for now, is a student health plan offered to medical students. The details of coverage are hazy, but it has a low deductible and reasonable premiums.

Years ago I welcomed my birthday by counting the years successfully completed as a human on my fingers: five and ten, one hand and two, were prominent milestones. I confess I still complete this action every morning of September 29, though, it’s more compulsion than proclamation.

This year, I counted four hands plus six for 26 years. When I finished my tally, I crossed my fingers in hope — for luck, for health coverage, but above all, for an inexpensive 26th year.

Augie Lindmark is a medical student. He can be reached on Twitter @AugieLindmark.

http://www.kevinmd.com/blog/2015/10/i-just-turned-26-heres-what-i-learned-while-buying-health-insurance.html

Single-Payer Health-Care Bill to be Introduced in Pa.

Berks Community Television (Reading, Pa.), Oct. 25, 2015

HARRISBURG, Pa. – A bill to create a single-payer health-care system in Pennsylvania will be introduced in the state Legislature by the end of the month.

The legislation is being introduced by Representative Pamela DeLissio of Philadelphia and was crafted with the assistance of HealthCare 4 ALL PA, a not-for-profit advocacy group. David Steil, past president of that organization, says the bill is simply called the Pennsylvania Health Care Plan.

“What it does is create a health-care system that includes every resident of Pennsylvania, that is publicly funded and privately delivered,” says Steil.

The cost of the program would be covered by increased taxes, which Steil acknowledges may present a significant obstacle to passage by the state Legislature.

The plan would increase the state personal income tax by an additional three percent, substantially less than most pay for private insurance. It would also add a 10 percent payroll tax on businesses which, as Steil points out, is much less than what businesses spend on health insurance now.

“The average cost for health care benefits for companies that provide health care is about 17 percent of payroll,” he says. “So at 10 percent of payroll, the saving is significant.”

Similar legislation has been introduced in each legislative session since 2007.

Most recently it was introduced as Senate Bill S-400. None of the earlier versions have not gotten very far. Raising taxes is a hard sell, especially to conservative lawmakers. But Steil insists they’re asking the wrong question.

“The question each one has to ask is not just ‘look at the taxes’ because there are taxes to it, it’s not free,” he says. “The question is, ‘How much less than you’re currently paying is this plan to you?'”

Steil says the bill would also eliminate health-insurance costs on pension plans and vehicle insurance, making the potential savings even larger.

http://www.bctv.org/special_reports/health/pa-legislature-introduces-single-payer-health-care-bill/article_a41a6da0-7996-11e5-b8a4-2ba3ba19b536.html