PNHP

Medicare for all would be great solution

Medicare for all would be great solution

By Sandra F. Penn, M.D.
Albuquerque Journal, Aug. 14, 2014

Remember when Sen. Domenici became an advocate for mental health parity? It came as no surprise to some of us that he had a “close relative” with mental health challenges.

Now, we were given a thorough piece about insurance issues in an UpFront column by Journal staff writer Win Quigley, who has a “close relative” who has been caught in the quagmire of prior authorization and insurance silos.

He ends his column with a suggestion that a plan that is “easy to use, easy to understand, consistent and fair would stand out in this or any other market.”

Well, yes! There is a plan just like that, and many of us have been advocating for it for years.

It is called Medicare, and we would like all of us enrolled in it.

Medicare for all would eliminate many of the conditions that now plague our convoluted system.

The Affordable Care Act has increased health insurance coverage and Medicaid expansion has been so important in our poor state.

Nevertheless, our multiplicity of insurance companies and their ways of controlling costs or trying to, can make all of us miserable when we are caught in the tangle.

The majority of us who need limited medical intervention at the moment are quite fortunate. When need appears, as with a personal illness or one in the family, we can no longer be philosophical about what is happening. It can be overwhelming.

Win suggests that the newly insured may not have the experience to know how to maneuver with insurance.

As a physician, I can tell you that even the long insured and the professional can be confused because it is almost a given that the system is meant to be anything but simple and easy to use.

Why do we not have a simple, easy to use national health insurance? Over the many years and multiple attempts, there is always some interest group that fears loss of income or loss of control.

The American Medical Association, the various insurance companies, physicians and ideologues with an interest in “small government,” have each in turn found ways to paint national health insurance as a fearsome thing.

There were “Harry and Louise,” “death panels” and “the government controlling what your doctor can do.”

Our electorate can be persuaded to vote against its actual interests by clever sound bites paid for by those who willingly make enormous sums of money from the process and from maintaining the current foul system.

Will that ever change?

That old saw often comes to mind: “Americans will do the right thing after they have exhausted all other possibilities.”

Dr. Sandra F. Penn is an Albuquerque resident.

http://www.abqjournal.com/445522

Growth of private exchanges leading to two-tier system

The Evolution Of A Two-Tier Health Insurance Exchange System

By Rosemarie Day, Pamela Nadash and Angelique Hrycko
Health Affairs Blog, August 13, 2014

Health reform has been a catalyst for change. It has fostered the creation of public health insurance exchanges and accelerated existing trends in health insurance coverage for employees. Many employers are reevaluating their coverage offerings, some employers are no longer providing insurance coverage, and, among those who continue to offer it, high deductible plans with restricted networks are becoming the norm.

In addition, employers are increasingly outsourcing health insurance benefits management by moving employees to private health insurance exchanges – often in combination with a shift toward a defined contribution approach. Estimates vary, but surveys show that anywhere from 9 to 45 percent of employers plan to implement private exchanges in the future.

Accenture has predicted that by 2018, private exchange enrollment will outpace public exchange enrollment.

Consulting firms and benefits consultancies are positioning themselves to grab this market, and are generating interest by publicizing upbeat projections of conversions to private exchanges. This publicity means that attention is focused on these firms and the large employers they target.

However, another, less visible movement is taking place among small to mid-size employers, whose employees may not be so well served by private exchanges. Not only do small employers lack the negotiating power of large employers, but exchange operators for this market may be unable to offer the same level of service; nor does it seem likely that the public small business exchanges will offer sufficient competition.

Benefits consultancies, such as Aon Hewitt, Towers Watson, and Mercer, have been actively recruiting employers to switch to this model, and — with notable success — have acquired large well-known companies like Walgreens. Other major employers are currently negotiating arrangements, planning to phase in private exchanges over time, focusing on different groups of employees.

Two Tiers: Small vs. Large Employers

However, these established consulting firms and benefits consultancies are, by and large, initially focusing on large employers, which represent only one segment of the American workforce. Small employers (with 2-50 employees working at least 30 hours a week) make up nearly 96 percent of all U.S. businesses and employ nearly 34 million workers – and the health insurance picture here isn’t pretty.

People working at firms with fewer than 50 employees are disproportionately uninsured, constituting 25 percent of American workers, but 40 percent of the uninsured. The smaller the firm, the less likely they are to cover their workers.

Moreover, the health insurance that they do provide has tended to be less robust than that offered by large employers – the phenomenon that the term “underinsurance” was created to describe. This is largely because small businesses pay, on average, 18 percent more for health insurance than large employers do, due to higher administrative costs.

The Affordable Care Act (ACA) attempts to address this problem by establishing the Small Business Health Options Program, or SHOP exchanges.

SHOP vs. Private Exchanges

However, like the public exchanges for the individual market, SHOP exchanges have had their problems. For the 32 states participating in the federal SHOP exchange, the picture is gloomy: the administration delayed implementation and dropped the requirement that insurers participating in the public exchange also participate in the federal SHOP exchange, reducing choice for employees, and making life more complicated for the federal SHOP exchange – they will now need to negotiate with each carrier individually to encourage participation.

In addition, the “employee choice” option was delayed for the federal SHOP exchanges until 2015, and most recently, 18 of these exchanges sent a request to CMS to opt-out of employee choice for another year, pushing this delay to 2016.

The picture for the 17 states and DC running their own SHOP exchanges is somewhat better, but not great. Currently, only 3,000 out of roughly 120,000 small businesses in Colorado participate in its SHOP exchange, while enrollment in other states has been low: in Connecticut, only 330 lives are insured, along with only 4,900 lives in California.

Are There Any Downsides to These Private Sector Efforts?

Given the slow start-up of the SHOP exchanges, the private exchanges may provide a valuable service, and, because they have the chance to corner the market before the SHOP exchanges are fully up and running, they may provide public exchanges with stiff competition.

Yet, with private exchanges, employers are likely to get what they pay for. Consequently, large employers will likely have the interest and capacity to demand quality from the sophisticated organizations competing for their private exchange business. These entities are likely to do a good job, using well-designed websites and decision support tools that promote product transparency.

Less sophisticated organizations, dealing with employers who have less negotiating power and insurance expertise, may not.

Private exchanges may well end up segmenting based on the markets they are catering to: more bare-bones, with fewer options and decision support tools for the small employer sector, and more generous, better options with more sophisticated decision support tools for large employers.

Moreover, if private exchanges corner the market, SHOP exchanges may never get off the ground.

http://healthaffairs.org/blog/2014/08/13/the-evolution-of-a-two-tier-health-insurance-exchange-system/?view=full

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Comment:

By Don McCanne, MD

It’s complicated. As insurance coverage expands, inside and outside of the ACA marketplace (insurance exchanges), it looks like some of the current inequities and injustices will be expanded as well.

Briefly, here is what we are looking at:

  • The public ACA exchanges are now covering individuals, but primarily with plans that have lower actuarial value (pay a smaller percentage of health care costs) and with narrow networks (greatly limiting choice of physicians and hospitals). These undesirable features slow the growth of insurance premiums though, even with government subsidies, they are still too high for many who are then allowed to opt out on a hardship basis.
  • Federal and state SHOP exchanges (Small Business Health Options Program) are being established to provide a health insurance market for small businesses now, and eventually for large employers as well. For reasons explained in the article, these government SHOP exchanges are off to a very slow start and may become inconsequential as employers turn to private insurance exchanges instead.
  • Employers have been seeking relief from the burdens of their employee health benefit programs. They are turning to private insurance exchanges which employees accept as a means of providing them with greater choices of health insurance plans. However, employers are using this opportunity to increase deductibles and other cost sharing, reduce provider choice through narrower networks, and switch from defined benefit to defined contribution – placing more of the burden on employees. It may take a while before employees realize what happened.
  • Large employers will still have leverage to negotiate more favorable features with the competing private exchanges.
  • Small employers will not have leverage and will be stuck with higher administrative costs and bare minimum, lower actuarial value plans. They likely will end up using private exchanges by default because of the implementation difficulties that the government SHOP exchanges are experiencing.
  • As this article explains, it appears that we will perpetuate and expand the two-tiered nature of lousy plans for small employers and slightly better but mediocre plans for large employers.

Where is health care justice in all of this? Not to be found. We need an equitable single payer national health program. The sooner the better.

Health navigators for everyone

More Employers Limit Health Plan Networks But Seek To Preserve Quality, Says Adviser

By Mary Agnes Carey
Kaiser Health News, August 13, 2014

Dr. Robert Galvin is chief executive officer of Equity Healthcare (a wholly owned subsidiary of Blackstone, a global investment and advisory firm), where he works with executives of nearly 50 companies that purchase health coverage for 300,000 people. Galvin says the 2010 Affordable Care Act has made employers more engaged in health benefits while encouraging their workers to be savvier health care consumers.

“I think what the ACA has done more than anything is it has made every employer examine their strategy and in every case it’s bringing the CFO and the CEO” into decisions about the company’s health care, which often didn’t use to happen, he said.

Q: We’re hearing a lot these days about narrow networks. While they existed before the ACA, how are employers using tools like narrow networks or high-deductible plans to control costs?

A:  Those employers who are going to stay in the game – which is the majority of them – in many cases have to [improve] what they’re covering. They now have to use the managed care tools that they all abandoned 15 years ago.

So the answer is narrow networks – we now call them “performance networks” – they are definitely increasing in popularity.  And I think what we’re trying to do differently this time is to make them performance [based] and not just narrow.

The second change from the ‘90s is always offering options outside of the narrow network.  So rather than “Here’s your narrow network, that’s it,” it’s, “Here’s your performance network that is going to be less expensive for you.  If you want to, [you have the option] of paying considerably more money,  and getting to another network, or another physician.”

I think what we learned in the ‘90s was that Americans want choice, even if it’s the wrong choice.

On the high deductible side, there’s absolutely a move in that direction.  The way we think about it, we’re trying to make more informed consumers.

This is a more intelligent way of getting people more involved in their health decisions. I think the thing to watch, honestly, is the full replacement high deductible.  [There’s] no [preferred provider option], no point-of-service.  All you have is a high deductible.  There’s still in and out of network but what it means as an employee is you can’t choose between a PPO where you pay $20 to see your doctor or a high deductible where you’ll have to pay $120.  The only option you have is the high deductible.  About 20 percent of the commercial companies have that.  The key thing to watch is how many companies basically only offer high deductibles. It’s about 20 percent now but I think that’s going to grow double-digits every year.

Q: Does the ACA need the employer mandate to work?

A: My bottom line feeling about that is no.

I think people in government have absolutely no idea what kind of work and complexity [employers face] for what seems like a simple regulation. In terms of who’s eligible, who’s tracking hours, doing the look back, what you have for HR systems to manage the reporting requirements, actually administering that is a nightmare.

Q: How do employers help their employees understand more about the health care they’re purchasing?

A: The first thing  is they need to make employees price sensitive.  Time has shown that all the education you can give someone really only impacts a small percent of employees who are interested anyway. 

With more price sensitivity is an obligation, if you want the market to work, for information. And information that works for individuals.  More companies are giving [employees] access to health navigators, or health coaches.  So that if you look at information on the computer or you don’t have broadband or you don’t know what it means, you have someone to call who can walk you through it.

It’s a real need in the market to be able to call a navigator or a coach, not through an insurance company, but a free-standing company and have that person help employees figure things out.

Along with price sensitivity has to come the support.

http://www.kaiserhealthnews.org/Stories/2014/August/13/More-Employers-Limit-Health-Plan-Networks-But-Seek-To-Preserve-Quality.aspx

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Equity Healthcare (a subsidiary of Blackstone)

Equity Healthcare works with private equity firms and their portfolio companies to bring innovative solutions to manage health care costs.

http://www.equityhealthcare.com/default.aspx

****

Blackstone

At Blackstone, we apply our strengths as a leading global investment and advisory firm to deliver solutions, unlock value and propel growth.

Above all, we have made it our No. 1 priority to serve the needs of our investors and clients.

http://www.blackstone.com/the-firm/overview/why-blackstone

****

Comment:

By Don McCanne, MD

Follow the logic. To receive greater value in health care, we need to put the patients in charge of purchasing decisions by exposing them to price sensitivity – requiring out-of-pocket payment of high deductibles. We also have to use the managed care tools of 15 years ago – provider networks – but which are now narrower, so we are renaming them “performance networks.” But this does increase the complexity of a system already infamous for its administrative excesses. So what can we do to improve the patient’s ability to negotiate this complex maze of market-oriented health care?

Simple. Let’s provide each patient with a “health navigator” or “health coach.” They can help patients figure out how this thing works. Of course, they can’t give medical advice, but they can provide additional administrative services to assist the patient. Equity Healthcare promotes free-standing companies that provide health navigator services – more administrative services, but no health care services, but at least these entities can help fulfill the mission of serving the needs of Blackstone’s investors.

We gain more administrative services and greater investor opportunity at a cost of reducing patient choices in health care while exposing them to potential financial hardship. Is that how markets are supposed to work? Making things worse for patients while imposing on them the costs of yet more superfluous administrative services? Adam Smith would be perplexed. Producers gain by serving consumers, yet today producers are abusing consumers to achieve their gains. Isn’t it time to replace the invisible hand of the market with the opaque hand of government by establishing our own single payer national health program?

To save lives and money, choose single-payer health care

By Morolake Amole
AMSA ‘On Call’ blog, Aug. 13, 2014

The problem with health care in the United States is not that we suffer from inadequate medical resources. Quite the contrary.

We have thousands of highly skilled and dedicated doctors and nurses. We have many top-notch hospitals possessing state-of-the-art equipment and medications. We have significant patient protection laws.

So then how do we explain our country’s poor health outcomes, e.g. that we ranked 19th out of 19 wealthy nations in 2010 on preventing deaths that could have been avoided with medical care?

Here’s a clue: If you compare the U.S. system with those of other industrialized nations, you’ll see that no other country relies so heavily on multiple private insurance plans and has such high financial barriers to care.

Does the Affordable Care Act change this picture? The ACA will, within a few years, increase coverage for about 20 million people through a combination of subsidies for private insurance and an expansion of the Medicaid program (in those states that have agreed to accept it). This increased coverage will likely save many thousands of lives each year.

Yet even when the ACA is fully implemented, 30 million Americans will remain uninsured. Some won’t be able afford a private plan. A recent survey by Kaiser Family Foundation found that 36 percent of Americans between the ages of 18-64 who remain uninsured stated that they opted out of buying insurance because the plans available were too expensive.

Many million more will remain “under-insured,” i.e. vulnerable to severe financial stress if they get sick because they’re enrolled in skimpy health plans with high deductibles and co-pays.

The U.S. health care system is the most expensive in the world. In 2012, our nation spent roughly $2.8 trillion on health care, about $8,508 per person. Yet the ACA has no proven ways to control costs.

So, if the Affordable Care Act is not the final answer, what is?

Many physicians and economists believe that the answer lies in the adoption of a single-payer system. Such a system has already proven successful in Canada, where most care is taxpayer financed but delivered by private doctors and hospitals. One could cite a dozen other examples, from Norway to Taiwan.

Citizens of these nations enjoy high-quality health care, with outcomes that are generally as good as or better than ours – at much lower cost. They’re successful for a variety of reasons.

By establishing a payment system in which citizens pay taxes that are then designated toward health care, there’s an implied idea of transparency in health care spending. Citizens can see how their money is being spent.

Their systems have very low administrative costs, allowing them to spend more resources on providing actual health care. Single-payer systems are also better at controlling costs. They can buy drugs and medical supplies in bulk, and efficiently plan big capital outlays.

Nonprofit single-payer systems take away the power of private insurance companies to come between patients and their doctors. Patients no longer have to look to insurance agents for decisions on health matters, and patients can choose to go to whatever doctor or hospital they want.

And because patients are able to obtain primary care and receive treatment for problems at an earlier stage, they require fewer costly interventions later.

With a single-payer system in the U.S., physicians would be able to concentrate much more on what they were trained to do, and be less burdened with time-consuming and costly insurance paperwork. They’d remain well-compensated (e.g. Canada’s physicians have incomes comparable to their U.S. counterparts, especially when you factor in how little they have to lay out in overhead and malpractice), but primary care physicians would see their incomes rise, reflecting the crucial role they play.

The most important reason for enacting a single-payer national health insurance program, or an “improved Medicare for all,” is that it would achieve the goal of giving everyone equitable access to all medically necessary care. Health care would be re-routed toward its original goal of giving people an improved quality of life.

We should implement a nonprofit single-payer system without delay.

Morolake Amole is a clinical medical student at Meharry Medical College in Nashville.

http://www.amsa.org/AMSA/Homepage/TakeAction/AMSAOnCall.aspx

Brits, don’t be fooled: the NHS is brilliant. And Aussies? Don’t let your guard down

After my breast cancer scare and exemplary care in the UK, I’ve felt a powerful urge to shout at the Brits: do you know what an extraordinary health system you have?

By Paola Totaro
The Guardian (U.K.), Aug. 12, 2014

I found the lump a fortnight ago while on a work assignment in Vilnius, Lithuania. It was a hot, sunny day in the landlocked capital but as my fingers discovered what felt like a ping pong ball sized growth, ice went through my veins. I am not a catastrophist by nature but within seconds, I had envisaged the worst and by the time I was in the air homeward bound for Heathrow a few days later, I was writing my will in my head.

We have lived in London since 2008 and not a day goes by when the National Health Service isn’t in the news, more often than not for mistakes, delays, apparent inefficiency or targeted for funding cuts. From the red top tabloids to the circulation busting, Daily Mail, sticking the knife into the NHS seems to have become a favoured British sport (paradoxically, Britons still gush with national pride about Danny Boyle’s London Olympics opening ceremony and his eccentrically, flamboyant homage to the NHS.)

Paradoxically too, despite this background hum of complaint, just 11% of Brits have private medical cover, compared to the 54% of Australians who pay for some form of general treatment cover.

Like most other Aussies, I’d paid for private health insurance since my mid 20s. Australia also has a world class public health system but “gap” payments – the costs over and above what is reimbursed by Medicare – can be significant, especially for specialist treatment. Having a family with four kids meant it made even more sense later although I was shocked by a rough, back of the envelope calculation that shows $70,000 went in medical insurance since the mid 1980s.

In Britain, dentistry is pretty much the only medical procedure you pay for, and even that is incredibly cheap: £18.50 for screening and x-rays to a capped, one-off £219 payment for complex, multiple treatments like crowns, bridges and dentures.

All GP visits and diagnostic tests are free while under 16s receive free prescription medicines as well as dentistry, including orthodontics such as braces.

Last year alone, the NHS performed 10,595m operations, up nearly 60% on 10 years ago. Every 36 hours, the NHS deals with one million patients while its hospitals admitted 15,146m people between 2012 and 2013, up by a third on a decade ago. Do UK taxpayers have any idea just how lucky they are?

Suddenly vulnerable that fateful Monday morning, I wasn’t thinking quite so optimistically about the system. Without an appointment, I headed to the local GP surgery at 7.50 am for the first open surgery. Despite widespread national complaint about waiting times, I was in with my usual GP within 35 minutes. Brisk, efficient and thorough, she examined me with empathy and promised King’s Hospital would contact me for tests within seven working days. She insisted I call her if I’d not heard anything by Friday.

Exactly 24 hours later, Royal Mail delivered a letter giving me an appointment with the breast care unit at King’s College Hospital at 11am that Friday (four days later). I couldn’t believe my eyes.

The next day however, a hospital receptionist rang to apologise that they’d over-booked Friday and would I mind moving to the following Monday. The idea of another anxiety-riddled weekend led me to beg that they call me if a cancellation opened up: I live a walk away and could be there in minutes. Unbelievably, an hour and a quarter later, thanks to patient being delayed by a train malfunction, I found myself in the breast unit.

Over the following four hours I saw a specialist consultant, underwent four mammograms, two ultrasounds, a needle-guided aspiration of one lump and an intense and frightening moment when a second lump was found behind the first. Another two mammograms followed, apparently 3D this time, but when I saw the specialist again late that afternoon, I knew from his unabashed smile it would be alright: “I’m convinced there is nothing sinister. These were cysts…we don’t know why and it may happen again, but all you need for now is this antibiotic, just to be sure.” Pathology would be back on Monday but his confidence was clear. I could have hugged the man and he, an oncologist delivering good news, was genuinely happy too.

In the weeks since, I’ve felt a powerful urge to shout at the Brits: “Do you know what an extraordinary health system you have? How civilized your society is to afford everyone, rich, poor, young and old a world class health safety net?”

Back with my GP the following week, I said something similar and this chronically over worked, brisk wonderful woman stopped and rummaged in her drawer: “Look at this,” she said showing me the latest British Medical Journal, “The NHS tops the world’s health systems in a comparison of 11 developed nations … it tops it! And nobody reports it, nobody says a word. Of course we have problems, all systems do but when things go right – which they do more often than not – silence!”

Well, here I am not only saying something but shouting it publicly and loudly: wake up British taxpayers, wake up and appreciate – and protect – what you have built with such vision since the NHS’s birth in 1948.

And Aussies? Please, please don’t ignore the possibility that the proposed GP co-payment, sold as a measure to slash the mounting cost of health care driven, won’t just get hiked over and over again – and the Medicare that you know and do love won’t just disappear before your eyes.

Paola Totaro is an Australian journalist and writer specializing in European affairs, politics, social policy and the arts. She was most recently the London-based Europe correspondent for the Age and the Sydney Morning Herald and has reported widely across politics, education and urban affairs.

http://www.theguardian.com/commentisfree/2014/aug/13/brits-dont-be-fooled-the-nhs-is-brilliant-and-aussies-dont-let-your-guard-down

Does $760m a year of industry funding affect the FDA’s drug approval process?

A study out this week indicates that new “black box” warnings and safety withdrawals have increased since the drug approval process was changed

By Sydney M. Wolfe, M.D.
The BMJ, Aug. 5, 2014

In 1992, because of widespread concern that the US Food and Drug Administration was taking too long to approve drugs, the Prescription Drug User Fee Act (PDUFA) was enacted, authorizing the FDA to collect user fees from drug companies to expedite the approval process. Besides providing funding for an increased FDA staff, the act established performance goals during the approval process to ensure more rapid review.

As of the current fiscal year (October 2013 to September 2014), $760m (£450m; €570m) in drug industry money is allocated to the FDA’s Center for Drug Evaluation and Research, comprising a large proportion, more than 60%, of the center’s drug review expenditure.[1]

The hypothesis posed in a study published this week was that “new black-box warnings and safety withdrawals have increased following PDUFA’s enactment, perhaps as a result of an expedited review process that may not adequately detect serious drug safety problems in the preapproval period.” This was the first study to look at all FDA drug approvals for a long enough time before and after the enactment to examine this question.[2]

The study involved the 748 new molecular entity drugs approved by the FDA between 1975 and 2009. The principal finding was that “drugs approved after the act’s passage [from 1993 to 2009] were more likely to receive a new black-box warning or be withdrawn than drugs approved before its passage (26.7 per 100.0 drugs versus 21.2 per 100.0 drugs at up to sixteen years of follow-up,” a statistically significant 25% increase in the rate of such safety actions.

In the case of drugs withdrawn from the market, the average review time for those approved before PDUFA was around three years, but this had fallen sharply to one year for the post-PDUFA drugs. After PDUFA was passed, the number of approvals of new molecular entity drugs rose dramatically, with 92 approved in 1996 and 1997 combined, considerably more than in any other two year period from 1975 to 2009.[3] Of the 39 new drugs approved in 1997, a fifth (eight) were eventually withdrawn for safety reasons, considerably more than in any year in the 1975 to 2009 interval encompassed by this study.[2] These eight withdrawn drugs were three fluoroquinolone antibiotics, one appetite suppressant, one antidiabetes drug, one statin, one non-steroidal anti-inflammatory drug, and one antihypertensive drug—none arguably breakthrough drugs.

Although the study found that the faster post-PDUFA drug approvals were associated with a higher rate of subsequent safety withdrawals and black box warnings, it could not establish a causal connection between the funding aspects of PDUFA and the increased dangers of these outcomes.

However, coinciding with the original law and its renewal every five years have been legislative changes that often outline specific steps or pathways toward faster drug approval. One such change has given the FDA the authority to mandate post-approval studies to resolve safety issues that have arisen during the pre-approval review of a drug. There is therefore concern that one reason for the outcomes documented in this new study is that the shorter review times—combined with increased FDA authority to require further studies after approval, rather than settling safety issues before approval—have contributed to the increased rate of withdrawals and black box warnings.

In a survey of FDA physicians who review drugs (medical officers) conducted in 1998, by which time the PDUFA effect had clearly sunk in, many of the 53 respondents expressed concern that drugs they thought should not have been approved had been, despite negative safety conclusions. Respondents thought that standards of safety and efficacy had been weakened since the passage of the law. Nineteen medical officers identified a total of 27 approved new drugs in the past three years that they reviewed that they thought should not have been approved. Most of these medical officers said that current FDA standards were “lower” or “much lower” than previous ones. Twelve medical officers identified 25 new drugs that they reviewed in the past three years that in their opinion had been approved too fast.[4]

The most important preventive remedy for this post-PDUFA increase in safety withdrawals and black box warnings would be to restore more thorough reviews of the majority of approved drugs that clearly do not represent a therapeutic breakthrough. For the smaller proportion of drugs that appear to represent important advances, a shorter approval time, without compromising standards of safety or efficacy—as occurred in the case of approval of the antiviral zidovudine, a long time before the PDUFA—is appropriate.

But because these much needed changes have not yet occurred at the FDA, the principle of caveat emptor (and caveat prescriber) must be applied. An important conclusion of the new study was that patients should delay using any new non-breakthrough drug until it has been on the market for several years and is thereby less likely to be subject to a safety withdrawal or a new black box warning. An article published several years ago discusses the “seven year rule,” referring to the suggestion that in the case of drugs that aren’t breakthroughs—the majority of drugs approved—it is safer to wait at least seven years after approval before using them. Even though subsequent withdrawals and new safety warnings beyond seven years will still occur, older alternative drugs are, on average, safer.[5]

The answer to the question in the title of this article seems to be yes, but the source of the impact on the approval process goes beyond the massive drug industry funding itself and is likely to be related to many of the legislative, regulatory, and attitudinal changes that have inevitably accompanied PDUFA and its renewal every five years.

Sidney M Wolfe (Swolfe@citizen.org) is founder and senior adviser, Health Research Group at Public Citizen, Washington, DC, USA.

Notes

Cite this as: BMJ 2014;349:g5012

Footnotes

    Competing interests: I am a coauthor of the Health Affairs article on which this article was based.

    Provenance and peer review: Commissioned; not externally peer reviewed.

References

  1. Food and Drug Administration. FY 2015: justification of estimates for appropriations committees. www.fda.gov/downloads/aboutfda/reportsmanualsforms/reports/budgetreports/ucm388309.pdf.
  2. Frank C, Himmelstein DU, Woolhandler S, Bor DH, Wolfe SM, Heymann O, et al. Era of faster FDA drug approval has also seen increased black-box warnings and market withdrawals. Health Affairs2014;33:1453-9.
  3. Food and Drug Administration. CDER new drug review: 2012 update. www.fda.gov/downloads/aboutfda/centersoffices/officeofmedicalproductsandtobacco/cder/ucm331454.pdf.
  4. Lurie P, Wolfe SM. FDA medical officers report lower standards permit dangerous drug approvals. Dec 1998. www.citizen.org/Page.aspx?pid=2339.
  5. Wolfe SM. The seven-year rule for safer prescribing. Aus Prescrib 2012;35:138-9.

This is an Open Access article distributed in accordance with the Creative Commons Attribution Non Commercial (CC BY-NC 3.0) license, which permits others to distribute, remix, adapt, build upon this work non-commercially, and license their derivative works on different terms, provided the original work is properly cited and the use is non-commercial. See: http://creativecommons.org/licenses/by-nc/3.0/.

http://www.bmj.com/content/349/bmj.g5012

Both Medicaid and uninsured patients face disparities in care of deadly cancers

Disparities in Stage at Diagnosis, Treatment, and Survival in Nonelderly Adult Patients With Cancer According to Insurance Status

By Gary V. Walker, Stephen R. Grant, B. Ashleigh Guadagnolo, Karen E. Hoffman, Benjamin D. Smith, Matthew Koshy, Pamela K. Allen and Usama Mahmood
Journal of Clinical Oncology, August 4, 2014

Abstract

Purpose 

The purpose of this study was to determine the association of insurance status with disease stage at presentation, treatment, and survival among the top 10 most deadly cancers using the SEER database.

Patients and Methods 

A total of 473,722 patients age 18 to 64 years who were diagnosed with one of the 10 most deadly cancers in the SEER database from 2007 to 2010 were analyzed. A Cox proportional hazards model was used for multivariable analyses to assess the effect of patient and tumor characteristics on cause-specific death.

Results 

Overall, patients with non-Medicaid insurance were less likely to present with distant disease (16.9%) than those with Medicaid coverage (29.1%) or without insurance coverage (34.7%; P < .001). Patients with non-Medicaid insurance were more likely to receive cancer-directed surgery and/or radiation therapy (79.6%) compared with those with Medicaid coverage (67.9%) or without insurance coverage (62.1%; P < .001). In a Cox regression that adjusted for age, race, sex, marital status, residence, percent of county below federal poverty level, site, stage, and receipt of cancer-directed surgery and/or radiation therapy, patients were more likely to die as a result of their disease if they had Medicaid coverage (hazard ratio [HR], 1.44; 95% CI, 1.41 to 1.47; P < .001) or no insurance (HR, 1.47; 95% CI, 1.42 to 1.51; P < .001) compared with non-Medicaid insurance.

Conclusion 

Among patients with the 10 most deadly cancers, those with Medicaid coverage or without insurance were more likely to present with advanced disease, were less likely to receive cancer-directed surgery and/or radiation therapy, and experienced worse survival.

http://jco.ascopubs.org/content/early/2014/08/01/JCO.2014.55.6258.abstract

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Comment:

By Don McCanne, MD

Clearly, insured patients with one of the most deadly cancers have better outcomes than uninsured patients. Of concern is that this study shows that patents on Medicaid do not do much better than uninsured patients. What can we make of this?

Medicaid coverage is limited to low-income populations. These people have many other problems that can result in impaired access and impaired outcomes – conceivably enough to explain these differences. However, Medicaid also may result in impaired access because of a lack of an adequate number of physicians who are willing to care for Medicaid patients. This is particularly true of specialists, such as oncologists who would otherwise care for these patients with the most deadly cancers. Impaired access due to a lack of willing providers applies to both uninsured and Medicaid patients. That is not true for either privately insured or Medicare patients.

Under a well designed single payer system – an improved Medicare for all – physicians would not cull patients out of their practices merely because they were on Medicaid or uninsured. Enacting single payer would allow us to remove barriers based simply on the type of insurance coverage or lack thereof. That would then allow us address other important societal issues that result in impaired access, delayed or forgone management, and impaired survival.

Although this study will be used by opponents as an excuse not to fund Medicaid based on the fact that Medicaid patients did not do much better than the uninsured, we cannot allow them to discount the other factors faced by low-income patients that undoubtedly played a greater role in these disparate outcomes. Many other studies have shown that Medicaid patients definitely fare better than the uninsured. Until we can enact and implement a single payer system, it is imperative that Medicaid continue to be offered as an interim measure.

First person perspective: Lobbying for single-payer health care

By Burkely Hermann
Citizen Vox blog (Public Citizen), Aug. 7, 2014

Lobbying usually gets a bad rap, and sometimes for good reason: it can be part of corporate special interest money’s current corruption of the political system. But during the first-ever national Single-Payer Lobby Day events in May, real people lobbied for a good cause that benefited the general public, not just a wealthy few.

As Congress’ August recess approaches and activists prepare to make in-district visits with their lawmakers’ offices, now is a good opportunity to recall my experience lobbying for single payer.

As an undergraduate student who is currently interning with Public Citizen, I participated in the second day of events, which kicked off with a training for participants. I saw many different faces in the room, which was filled with about 75 people, ranging from nurses, who are part of National Nurses United, physicians who are members of Physicians for a National Health Program (PNHP), union leaders fighting for healthcare justice and concerned citizens who want a universal and inclusive health care system.

Next was an informational panel featuring single-payer advocates, labor leaders and physicians railing against the unjust lack of coverage, administrative waste caused by billing multiple insurance companies and urging Congress to pass a Medicare-for-all single-payer health care system. Representatives Jim McDermott (D-Wash.) and John Conyers (D-Mich.) also spoke to participants about their single-payer bills, H.R. 676 and H.R. 1200. Rep. McDermott focused on building on the existing reforms put in place by the Affordable Care Act, while Conyers advocated directly for single payer.

Participants in the lobby meetings spoke of single payer as a fair and comprehensive solution to the many shortcomings of the Affordable Care Act (ACA). I joined my fellow Marylander single-payer lobbyists, consisting of physicians, labor leaders, concerned citizens and a dietician. A member of PNHP, which advocates for a national single-payer health care system, led our lobbying team, but the group still made decisions collectively.

For each lobby meeting, different members of our group took different roles. The group’s deepest strength was the diversity of stories told in favor of single payer. A nurse who worked in D.C. talked about how, even under ACA, health care was not affordable and told a story of how her colleague didn’t bring her kids to the doctor because she already owed the doctor a co-pay. An elderly private citizen recalled being treated by Austria’s single-payer health care and explained how she wanted the same sort of system in the U.S. A single-payer activist talked about surveys conducted by his organization, Healthcare-NOW! of Maryland, showing that a majority of those living in 10 of Maryland’s counties support single-payer health care. Other individuals, like the labor leaders and seniors, stated that they were glad they had Medicare and wanted to expand it to others.

Our main message was simple: to have a health care system based on human need, not profit, and which would cover everyone, including undocumented immigrants, from birth until death.

We visited five different House offices and two Senate offices. In most instances, representatives’ or senators’ staff members met with our lobbying group to hear our stories about why we support a single-payer health care system. We also had the opportunity to meet directly with Rep. Chris Van Hollen (D-Md.), who made an impromptu stop by our scheduled meeting with his staffers. When asked by our group about support of single-payer legislation, he was not able at the time to provide an answer as to whether he would lend his support for single-payer health care in the future (though he made an important point about Republican governors denying Medicaid expansion money).

The lobby day highlighted the solidarity between doctors, concerned citizens, labor leaders and others around a common cause. It was exciting and empowering to see that my fellow group members were willing to engage in action to support something they cared about.

While the two days of events helped shine an important light on the need for single payer, many of the offices we met with stated that their current task was to defend the recent health care reforms from political attacks.

People are “mad as hell” about the current health care system, built around greed, not human need, and pushing for a single-payer system is the antidote. That sentiment is why it’s so imperative that citizen activists contact their members of Congress and Senators about the urgent need to implement a national single-payer system. If concerned citizens and activists from multiple organizations can lobby lawmakers, sometimes face-to-face, then so can you.

To start this process, sign up to let us know you’re interested in lobbying your member of Congress during the August recess.

Burkely Hermann is a summer intern for Public Citizen’s Congress Watch division and part of Public Citizen’s Online Action Team.

http://www.citizenvox.org/2014/08/07/first-person-perspective-lobbying-for-single-payer-healthcare/

Study questions value of some home health providers

By Lois A. Bowers
Long-Term Living, Aug. 7, 2014

Should for-profit home health agencies continue to receive Medicare reimbursement for the services they provide? That’s the question authors of a new study published in Health Affairs are asking after they found that the entities scored slightly but statistically significantly worse on some quality indicators compared with their nonprofit counterparts.

The authors, from the City University of New York (CUNY), analyzed cost reports filed with Medicare by more than 7,000 home health agencies in 2010-2011 as well as data related to 22 quality measures from Medicare’s Home Health Compare database covering more than 9,000 agencies. They found higher per-patient and administrative costs, slightly lower-quality care and less avoidance of hospitalization among the for-profit entities. Overall cost per patient was $1,215 higher at for-profits, with operating costs accounting for $752 of the difference and excess profits for $463. For-profits also reported many more speech, physical and occupational therapy visits, which are often highly profitable under the complex Medicare payment formula, than the nonprofits, according to the researchers.

When it came to care, on average, the for-profits met each quality standard 77.2 percent of the time, whereas the nonprofits met them 78.7 percent of the time. Rehospitalizations occurred in 28.4 percent of for-profit patients versus in 26.5 percent of nonprofit patients.

Medicare spent $18 billion on home care in 2012, the most recent year for which figures are available, say the study authors, who note that 88 percent of agencies are for-profit and they care for 81 percent of Medicare home care patients.

“While our study is the first to show that profit-making has trumped patient care in Medicare’s home health program, that’s no surprise,” says lead author William Cabin, PhD, MPH, MSW, JD, MA, an assistant professor of social work at Temple University who undertook the study as part of his doctoral work at CUNY. “A large body of research on hospitals, nursing homes, dialysis facilities and HMOs has shown that for-profits deliver inferior care at inflated prices.”

Senior author Stephanie “Steffie” Woolhandler, MD, MPH, a professor of public health at CUNY’s Hunter College and a lecturer at Harvard Medical School, says: “Letting for-profit companies into Medicare was a huge mistake that Congress needs to correct.”

Lois Bowers is senior editor at Long-Term Living.

http://www.ltlmagazine.com/news-item/study-questions-value-some-home-health-providers

Not all health care systems are created equal

By Ann Troy, M.D.
Pacific Sun (San Rafael, Calif.), Letters, Aug. 7, 2014

Congress created Medicare 49 years ago to provide seniors with health care, protection against financial ruin and peace of mind. All you needed was proof of age, citizenship (or legal residency) and you were covered. It was so simple and straightforward that all seniors were enrolled in six months, in the pre-computer era—using index cards!

Congress could have and should have extended Medicare to cover all Americans, creating a single-payer system with free choice of doctors and hospitals. Instead, they passed the hopelessly complex Affordable Care Act with its malfunctioning websites and uneven coverage. It has kept the wasteful and bureaucratic insurance industry in health care, wreaked havoc on the health care system, left millions uninsured and millions more with woefully inadequate coverage.

It could be argued that by not extending Medicare to cover all Americans, the government is not providing equal protection under the law.

It is well known that people without insurance or with high deductibles wait longer to seek medical care, thus, their illnesses or problems become more difficult to treat. They suffer more from injuries and disabilities, resulting in decreased productivity and poorer quality of life. They face financial hardships or ruin (50 percent of bankruptcies in the United States are due to medical debt). And, sometimes they die because they have no insurance (an estimated 50,000 every year).

Those with Medicare have more protection against the devastating effects of illness and injury, get more help overcoming or living with disabilities and are protected against financial ruin.

“Equal protection” has been used, with some success, to improve access to education and to allow same-sex couples to marry. It seems that an even stronger case can be made regarding access to health care -— which is considered a right in every other developed nation.

Dr. Ann Troy resides in San Anselmo.

http://www.pacificsun.com/opinion/letter-it-is-well-known-that-people-without-insurance/article_e4419b8a-1dab-11e4-8689-0017a43b2370.html

ACA plan renewal leads to rate shock and delayed tax refunds

An Ounce Of Prevention For The ACA’s Second Open Enrollment

By Jon Kingsdale and Julia Lerche
Health Affairs Blog, August 4, 2014

Since recovering from its flawed rollout, the ACA has enjoyed a string of successes. By April, some eight million Americans managed to enroll.

Approximately 87 percent of Marketplace enrollees claimed premium tax credits, of which an estimated 85 percent, or six million, actually paid premiums. Many of the original six million, plus more recent enrollees, will experience their second enrollment between November 15, 2014 and February 15, 2015. They will also file with the IRS for a premium tax credit as early as January 2015.

The two events in combination represent a huge risk.

However, moderate rate actions, and even rate decreases, can translate into huge, net (after-subsidy) rate hikes. This is one of the challenges that Marketplaces and other stakeholders must anticipate and address. The other potential crisis for enrollees, coinciding with the last month of open enrollment, is filing for their 2014 tax refunds; while most high-income filers with complex returns file in March, April or later, many low-to-moderate-income taxpayers who anticipate a refund file by February. But doing so in 2015 may be impossible. If not addressed, rate shock followed by refund delays will deliver a one-two punch.

I. Rate Shock

Premium subsidy calculations are based on household income and the benchmark premium (second-lowest-cost silver plan) available to each household. For the benchmark plan, a subsidy-eligible enrollee’s monthly contribution is based solely on the household’s modified adjusted gross income (“MAGI”); but for any other qualified health plan, the subsidized enrollee’s contribution is based on MAGI plus/minus the difference in premium between that plan and the benchmark.

There is a very high likelihood that the price and identity of the benchmark plan will change from year to year, as issuers adjust premiums, offer new, narrow network plans, enter new Marketplaces, and expand or contract service areas. A recent study of proposed premium changes in the largest city in each of nine states indicated a change in benchmark plans in eight of them. The impact on after-subsidy rates will be very significant.

Because subsidies are tied to a benchmark plan, the only way a subsidy-eligible consumer can ensure relatively stable premiums is to enroll in the benchmark plan each year. Consumers could even move to another state and pay similar after-subsidy rates, if they were committed to enrolling in the benchmark plan. However, consumers may resist changing plans each year, because they like their current plans, they like their current providers, and/or because of simple inertia.

The calculus is even more complicated for enrollees in non-benchmark plans. Since they contribute the rate they would have paid for the benchmark plan, plus or minus the difference in premiums between their plan and the benchmark, their monthly contributions will change if either the benchmark or their current plan’s premium changes. In other words, it is the difference between two moving targets that determines the net contribution for a subsidized household in a non-benchmark plan. This creates counter-intuitive results.

II. Delayed Tax Refunds

Fifteen public Marketplaces, hundreds of issuers, and CMS/IRS have been trading information for months now in a massive effort to reconcile who is enrolled in what coverage for which months, and who owes what to whom. These are the “back-office” processes that are still being worked on, months after most consumer-facing web sites were fixed. This kind of reconciliation among accounting entities can continue for years; indeed, it is generally “tolerated” ad infinitum among insurers, Medicare, Medicaid, and hospitals with respect to claims submitted, approved, and actually paid, not to mention COB and subrogation. The firms estimate year-end liabilities and reserve for them; auditors check their credibility.

The “tolerable” accounting timeframe for taxpayers of modest means is entirely different. They typically file returns soon after receiving their W-2s in January. Why the rush? According to H&R Block, the country’s largest tax preparer, many of their 21 million clients fit the socio-economic profile of subsidy-eligible enrollees, and most of those receive tax refunds. Refunds average $2,500 to $3,000 and often represent the filers’ largest financial transaction of the year; filers may urgently need the refunds to pay rent, utilities, medical and other bills.

The annual cycle for these tax filers begins to build in January, and it crests in mid-February. No doubt, this is why the IRS requires Marketplaces to provide all their enrollees with the information required to claim and reconcile premium tax credits by January 31. However, meeting this deadline in 2015 will be a challenge, to say the least. Anticipating the need for corrections, IRS/CMS will allow Marketplaces to update these notices monthly, until April 15, 2015. They also want Marketplaces to start sending CMS this information (year-to-date) no later than October 15, but the ability of some Marketplaces to comply is in serious doubt. Even for Marketplaces that have been tracking and reconciling these data all along, two other problems will arise.

First, there will be hundreds of thousands of “open” issues in December 2014, which probably cannot be resolved in time for the January notices. If not delayed, these January notices must be subsequently “corrected.” For example, consider the impact of the 90-day grace period for late premium payment: subsidy-eligible enrollees who do not pay their share of October-through-December premiums until late December will have received APTCs for October, but not for November and December. If the late-payment is received within 90 days (December 29), the issuer must post and report it to the Marketplace, and the Marketplace must reconcile this report with prior data, report that to CMS/IRS, and incorporate it into the enrollee’s 1095-A by January 31 — smack in the middle of its busy open enrollment season. On the other hand, if late payment is not received by year-end, and there were other lapses in coverage, the enrollee may be subject to a tax penalty. (A filer may qualify for both premium tax credits and the penalty.)

Second, for tax filers accustomed to handling one or more W-2s and perhaps their bank’s 1099, the new 1095s with over a dozen data fields will be mystifying. Some tax filers will receive multiple 1095s from Marketplaces, employers and insurers. Many subsidized enrollees will probably not recall “receiving” advance tax credits, since the advance credits simply offset QHP premiums. Reconciliation will also require filing a new (8962) tax form; and filers who previously used the short form (1040EZ) must switch to a long form (1040 or 1040A).

And this is the simple scenario. The IRS regulations also describe multiple formulas for allocating premiums and tax credits among (a) members of one tax-filer’s household enrolled in multiple health plans, or (b) members of one subscriber’s family who file taxes separately.

Difficulties in projecting tax credits at the time of enrollment and fear about “claw-back” later on have received much attention. Far more significant may be the dislocation that will occur if millions of low-to-moderate income enrollees cannot file their tax returns in January and February 2015 because they lack accurate 1095s, cannot decipher them, or are stymied by the new tax forms.

Ducking This One-Two Punch

Those closest to these issues, the IRS, CMS, and Marketplaces in particular, may have more practical solutions, but we offer a few suggestions for consideration. First, urge enrollees to compare premiums and shop for the best choice of health plans, rather than auto-renew their current health plan. Exchanges were developed to facilitate comparison shopping and they should continue to engage consumers. Doing so will minimize rate shock in 2015 and can actually reduce monthly contributions for some subscribers. This means overcoming consumers’ natural inertia and the policy arguments in favor of auto reenrollment.

Second, help subsidized enrollees understand the gyrations in their net (after-subsidy) rates and select the best option. This will require decision-support tools which customer service representatives, navigators, brokers, and outreach workers can use to assist shopping and APTC redetermination. “Premium migration tables,” developed at the rating region or county level, by FPL level and household size, plus guidance as to which plans offer enrollees’ current providers, could help with renewals. The premium tables are readily doable, but they require advance notice to develop and disseminate.

Third, consider one-time “fixes” to the premium tax credit reconciliation process for 2014, in order to enable timely filing for refunds. One option might be to cut off reconciliation of premium tax credits for 2014 prior to the end of December, so that carriers and Marketplaces have enough time to issue accurate 1095 forms by January 31, 2015. Another might be for the IRS to apply Marketplace-generated data on premium tax credits, even if tax filers omit the long form and 8962s. This might even mean carrying over some 2014 reconciliations into tax-year 2015.

Fourth, prior to January 2015, mail Marketplace enrollees a partial-year 1095-A, reporting advance tax credits paid through September or October 2014. Doing so would remind enrollees that they are benefiting from these tax credits, and allow them to scrutinize and seek corrections of the calculations.

Fifth, provide clear, detailed training from the enrollees’ perspective to health plans, brokers, navigators, and tax preparers on both premium tax credits and counter-intuitive changes in enrollees’ contributions.

The next customer experience with new enrollments, renewals, and tax filings is the next big opportunity to reset public perception of the ACA. At a minimum, those who will be holding enrollees’ hands next winter, must understand these challenges and be given the tools and training to help their clients cope.

http://healthaffairs.org/blog/2014/08/04/an-ounce-of-prevention-for-the-acas-second-open-enrollment/

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Comment:

By Don McCanne, MD

Easy. Set up marketplaces (ACA insurance exchanges), let each shop for his or her own preferences, then apply premium subsidies based on income. Then next year let the plan automatically renew. Then why does it require so many words for Jon Kingsdale and Julia Lerche to describe this simple process?

Clearly, when you read this article, you see that the process is not simple, and, at that, only some of the complexities are discussed here. These complexities are directly due to the highly flawed model of reform selected by President Obama and the Democratic members of Congress.

The authors suggest five possibilities for getting around the two problems they discuss – rate shock and delayed tax refunds. But when you read their proposals for negotiating your way around these complications, you see that they are not so simple either. You almost need an accountant, though that is not affordable for most people who are eligible for premium subsidies because of their lower incomes.

According to the authors, “The next customer experience with new enrollments, renewals, and tax filings is the next big opportunity to reset public perception of the ACA.” And where will that reset of public perception land? In a sea of ACA complexities.

How would renewal under a single payer system compare to renewal in the ACA marketplaces? Renewal wouldn’t exist. Your initial enrollment is for life, not to mention that it is an exceedingly simple process – a matter of simply identifying who you are for purposes of enrollment.

Most uninsured will be exempt from penalties

Fewer Uninsured Face Fines as Health Law’s Exemptions Swell

By Stephanie Armour
The Wall Street Journal, August 6, 2014

Almost 90% of the nation’s 30 million uninsured won’t pay a penalty under the Affordable Care Act in 2016 because of a growing batch of exemptions to the health-coverage requirement.

The architects of the health law wanted most Americans to carry insurance or pay a penalty. But an analysis by the Congressional Budget Office and the Joint Committee on Taxation said most of the uninsured will qualify for one or more exemptions.

The Obama administration has provided 14 ways people can avoid the fine based on hardships, including suffering domestic violence, experiencing substantial property damage from a fire or flood, and having a canceled insurance plan. Those come on top of exemptions carved out under the 2010 law for groups including illegal immigrants, members of Native American tribes and certain religious sects.

Factoring in the new exemptions, the congressional report in June lowered the number of people it expects to pay the fine in 2016 to four million, from its previous projection of six million.

http://online.wsj.com/articles/fewer-uninsured-face-fines-as-health-laws-exemptions-swell-1407378602

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Payments of Penalties for Being Uninsured Under the Affordable Care Act: 2014 Update

Congressional Budget Office, June 5, 2014

Under the Affordable Care Act, most legal residents of the United States are required to obtain health insurance or pay a penalty.

CBO and JCT have estimated that about 30 million nonelderly residents will be uninsured in 2016 but that the majority of them will be exempt from the penalty. Those who are exempt include:

  • Unauthorized immigrants, who are prohibited from receiving almost all Medicaid benefits and all subsidies through the insurance exchanges;
  • People with income low enough that they are not required to file an income tax return;
  • People who have income below 138 percent of the federal poverty guidelines (commonly referred to as the federal poverty level) and are ineligible for Medicaid because the state in which they reside has not expanded eligibility by 2016 under the option provided in the ACA;
  • People whose premium exceeds a specified share of their income (8 percent in 2014 and indexed over time); and
  • People who are incarcerated or are members of Indian tribes.

CBO and JCT estimate that 23 million uninsured people in 2016 will qualify for one or more of those exemptions. Of the remaining 7 million uninsured people, CBO and JCT estimate that some will be granted exemptions from the penalty because of hardship or for other reasons.

All told, CBO and JCT estimate that about 4 million people will pay a penalty because they are uninsured in 2016 (a figure that includes uninsured dependents who have the penalty paid on their behalf).

http://www.cbo.gov/publication/45397

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Comment:

By Don McCanne, MD

The Affordable Care Act was designed with incentives for almost everyone to obtain insurance. A financial penalty was to be assessed against any individual who remained uninsured, but now almost 90 percent of the uninsured will be exempt from the penalty. Larger employers were to be penalized if their employees remained uninsured, but now there is bipartisan support to eliminate the employer mandate. The expansion of Medicaid was to occur in all states but it has now been declined by about half of the states. Even with legislative patches, this fragmented system can never ensure that everyone has adequate health care coverage.

Compare this to a single payer system in which absolutely everyone would have been automatically enrolled in a better plan than any of those currently available, including Medicare. Why is there no clamoring for change?