Narrow Provider Networks in New Health Plans: Balancing Affordability with Access to Quality Care

By Sabrina Corlette, JoAnn Volk, Robert Berenson and Judy Feder
Urban Institute, Georgetown University Center on Health Insurance Reforms, May 2014

New network configurations offer trade-offs for consumers. Many insurers were able to lower their overall costs by reducing the prices they pay participating providers, which in turn allowed them to lower their premiums to attract price-conscious shoppers. However, in many cases, consumers have been surprised to discover that their new plan offers a more limited choice of providers. Some others willing to pay more to purchase a plan with broader access to providers have found that only limited-network plans are available in their area.

It is not yet clear whether these new, narrower network plans can effectively deliver on the benefits promised under the plan. If policyholders opt to seek medically necessary care out-of-network, it could expose them to significant financial liabilities. If policyholders delay or forgo care because in-network providers can’t meet their needs, it could put their health at risk.

Consequently, state and federal policy-makers are taking another look at the Affordable Care Act (ACA) requirement that plans participating on the new health insurance marketplaces maintain an adequate provider network. In doing so, they must strike a delicate balance. If they overly constrain insurers’ ability to negotiate with providers, consumers could face significant premium increases. On the other hand, consumers must be able to choose among plans with confidence that they have a sufficient network to deliver the benefits promised and that they will not be exposed to unanticipated health and financial risks because of an inadequate network. Insurers also need incentives to take provider quality into account (in addition to prices).

Conclusion

There is no perfect approach to the oversight of health plan networks. In the absence of other government policies to constrain provider prices, insurers’ ability to exclude or threaten to exclude providers from the network is important to their ability to negotiate reimbursement rates and offer more affordable premiums to consumers. On the other hand, if insurers narrow their networks too much, consumers could be harmed if forced to go out-of- network or to a less-preferred provider tier to meet their needs. Policy-makers therefore need to strike a balance between consumer protection and insurer flexibility.

Our proposed approach sets minimum quantitative standards, with waivers for certain providers based on price and quality; improves transparency and consumer information to give consumers better tools to make informed choices; gives insurers the flexibility to develop more value-oriented network designs so long as they maintain a provider network that can meet people’s needs; and — to assure effective consumer protection — calls for continuous monitoring of consumers’ use of out-of-network services, complaints and appeals, and more active oversight of plan behavior.

Full report (10 pages): http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2014/rwjf413643

****

Comment:

By Don McCanne, MD

This report provides an excellent discussion of the tradeoffs between affordability and access to care when insurers use networks of providers, especially the trendy narrow networks in many of the ACA exchange plans. Unfortunately, the authors’ approach to trying to achieve an optimal balance misses an opportunity both to totally avoid the impaired access characteristic of narrow networks, and to make health care even more affordable.

The flaw is that they assume that private health plans are a given. With that, they then try to achieve a compromise between avoiding excessively reduced access to providers and reducing insurance premiums by restricting patients to providers who agree to lower contracted rates. A single payer system would have full choice of providers and would be more affordable because of the efficiencies of a government administered program, including its power as a monopsony. Compared to single payer, patients enrolled in narrow network plans have less choice of providers and pay more. They lose on both counts.

Even broader networks found in the majority of private plans still compromise between these choices, though not to as great of a degree. But they still do compromise.

The remedial proposals in this report are designed to support the superfluous private insurer intermediaries, while compromising access and cost for patients. Our health care system should be about patients, not insurers.

It is not as if the authors of the report do not understand this. They write, “In the absence of other government policies to constrain provider prices…” If they are going to change policy, why don’t they move to policies that actually benefit patients? Like a single payer national health program – full access to all health care professionals and institutions, in an equitably funded system that all of us can afford.

Narrow Provider Networks in New Health Plans: Balancing Affordability with Access to Quality Care

By Sabrina Corlette, JoAnn Volk, Robert Berenson and Judy Feder
Urban Institute, Georgetown University Center on Health Insurance Reforms, May 2014

New network configurations offer trade-offs for consumers. Many insurers were able to lower their overall costs by reducing the prices they pay participating providers, which in turn allowed them to lower their premiums to attract price-conscious shoppers. However, in many cases, consumers have been surprised to discover that their new plan offers a more limited choice of providers. Some others willing to pay more to purchase a plan with broader access to providers have found that only limited-network plans are available in their area.

It is not yet clear whether these new, narrower network plans can effectively deliver on the benefits promised under the plan. If policyholders opt to seek medically necessary care out-of-network, it could expose them to significant financial liabilities. If policyholders delay or forgo care because in-network providers can’t meet their needs, it could put their health at risk.

Consequently, state and federal policy-makers are taking another look at the Affordable Care Act (ACA) requirement that plans participating on the new health insurance marketplaces maintain an adequate provider network. In doing so, they must strike a delicate balance. If they overly constrain insurers’ ability to negotiate with providers, consumers could face significant premium increases. On the other hand, consumers must be able to choose among plans with confidence that they have a sufficient network to deliver the benefits promised and that they will not be exposed to unanticipated health and financial risks because of an inadequate network. Insurers also need incentives to take provider quality into account (in addition to prices).

Conclusion

There is no perfect approach to the oversight of health plan networks. In the absence of other government policies to constrain provider prices, insurers’ ability to exclude or threaten to exclude providers from the network is important to their ability to negotiate reimbursement rates and offer more affordable premiums to consumers. On the other hand, if insurers narrow their networks too much, consumers could be harmed if forced to go out-of- network or to a less-preferred provider tier to meet their needs. Policy-makers therefore need to strike a balance between consumer protection and insurer flexibility.

Our proposed approach sets minimum quantitative standards, with waivers for certain providers based on price and quality; improves transparency and consumer information to give consumers better tools to make informed choices; gives insurers the flexibility to develop more value-oriented network designs so long as they maintain a provider network that can meet people’s needs; and — to assure effective consumer protection — calls for continuous monitoring of consumers’ use of out-of-network services, complaints and appeals, and more active oversight of plan behavior.

Full report (10 pages):http://www.rwjf.org/content/dam/farm/reports/issue_briefs/2014/rwjf413643

This report provides an excellent discussion of the tradeoffs between affordability and access to care when insurers use networks of providers, especially the trendy narrow networks in many of the ACA exchange plans. Unfortunately, the authors’ approach to trying to achieve an optimal balance misses an opportunity both to totally avoid the impaired access characteristic of narrow networks, and to make health care even more affordable.

The flaw is that they assume that private health plans are a given. With that, they then try to achieve a compromise between avoiding excessively reduced access to providers and reducing insurance premiums by restricting patients to providers who agree to lower contracted rates. A single payer system would have full choice of providers and would be more affordable because of the efficiencies of a government administered program, including its power as a monopsony. Compared to single payer, patients enrolled in narrow network plans have less choice of providers and pay more. They lose on both counts.

Even broader networks found in the majority of private plans still compromise between these choices, though not to as great of a degree. But they still do compromise.

The remedial proposals in this report are designed to support the superfluous private insurer intermediaries, while compromising access and cost for patients. Our health care system should be about patients, not insurers.

It is not as if the authors of the report do not understand this. They write, “In the absence of other government policies to constrain provider prices…” If they are going to change policy, why don’t they move to policies that actually benefit patients? Like a single payer national health program – full access to all health care professionals and institutions, in an equitably funded system that all of us can afford.

Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally

By Karen Davis, Kristof Stremikis, David Squires, and Cathy Schoen
The Commonwealth Fund, June 2014

The United States health care system is the most expensive in the world, but this report and prior editions consistently show the U.S. underperforms relative to other countries on most dimensions of performance. Among the 11 nations studied in this report—Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States—the U.S. ranks last, as it did in the 2010, 2007, 2006, and 2004 editions of Mirror, Mirror. Most troubling, the U.S. fails to achieve better health outcomes than the other countries, and as shown in the earlier editions, the U.S. is last or near last on dimensions of access, efficiency, and equity. In this edition of Mirror, Mirror, the United Kingdom ranks first, followed closely by Switzerland.

The most notable way the U.S. differs from other industrialized countries is the absence of universal health insurance coverage. Other nations ensure the accessibility of care through universal health systems and through better ties between patients and the physician practices that serve as their medical homes.

Key Findings

Quality: The indicators of quality were grouped into four categories: effective care, safe care, coordinated care, and patient-centered care. Compared with the other 10 countries, the U.S. fares best on provision and receipt of preventive and patient-centered care. While there has been some improvement in recent years, lower scores on safe and coordinated care pull the overall U.S. quality score down.

Access: Not surprisingly—given the absence of universal coverage—people in the U.S. go without needed health care because of cost more often than people do in the other countries. Americans were the most likely to say they had access problems related to cost.

Efficiency: On indicators of efficiency, the U.S. ranks last among the 11 countries, with the U.K. and Sweden ranking first and second, respectively.

Equity: The U.S. ranks a clear last on measures of equity. Americans with below-average incomes were much more likely than their counterparts in other countries to report not visiting a physician when sick; not getting a recommended test, treatment, or follow-up care; or not filling a prescription or skipping doses when needed because of costs. On each of these indicators, one-third or more lower-income adults in the U.S. said they went without needed care because of costs in the past year.

From the Discussion

It is difficult to disentangle the effects of health insurance coverage from the quality of care experiences reported by U.S. patients. Comprehensiveness of insurance and stability of coverage are likely to play a role in patients’ access to care and interactions with physicians. We found that insured Americans and higher-income Americans were more likely than their counterparts in other countries to report problems such as not getting recommended tests, treatments, or prescription drugs. This is undoubtedly a reflection of the lack of comprehensive health insurance coverage and the high out-of-pocket costs for care in the U.S., even among the insured and those with above-average incomes. Fragmented coverage and insurance instability undermine efforts in the U.S. to improve care coordination, including the sharing of information among providers. Patients in other countries, in addition, are more likely to have a regular physician and long-time continuity with the same physician.

These results indicate a consistent relationship between how a country performs in terms of equity and how patients rate other dimensions of performance: the lower the performance score for equity, the lower the performance on other measures. This suggests that, when a country fails to meet the needs of the most vulnerable, it also fails to meet needs for the average citizen. Rather than regarding performance on equity as a separate and lesser concern, the U.S. should devote far greater attention to building a health system that works well for all Americans.

http://www.commonwealthfund.org/~/media/files/publications/fund-report/2014/jun/1755_davis_mirror_mirror_2014.pdf

Comment:

By Don McCanne, MD

In this 2014 update of The Commonwealth Fund study on the performance of the U.S. health care system compared to other nations, the United States once again comes in last, in spite of having the most expensive system of all nations.

This year the authors express hope that implementation of the Affordable Care Act (ACA) will improve our performance, though so far the changes in the first three years of ACA have not been enough to lift us from the bottom. There is reason to believe that it is too weak of a program to ever have enough impact.

An interesting finding in this report is that the United Kingdom came in first in most categories studied, placing it in solid first place overall. Their National Health Service is government owned and operated – socialized medicine – and is one of the least expensive systems of all, spending only 40 percent per capita of what we spend in the United States. The next time someone claims that we are headed towards socialized medicine, we can respond, “Don’t we wish.”

However we do have to be careful about drawing sweeping conclusions from this study. Canada, which has a single payer system, scored next to the bottom, just above the United States. They scored lower in access, especially in timeliness of care, and in efficiency and safety. Although they have single payer government insurance systems in each province, the health care delivery system remains largely private. Since the deficiencies are primarily those of private delivery systems, it would suggest that the Canadian government should play a much greater role in improving resource allocation.

One of the more important deficiencies of a single payer system is that when conservative governments are in control – as they now are in Canada – the politicians attempt to reduce the role of government. Currently in Great Britain, conservatives are attempting to move more towards privatization, but so far their solidarity has prevented a massive shift in that direction, though they have introduced some worrisome policies.

Nevertheless, politics will always play a role in any system. That makes it even more imperative to put in place a system that is much less vulnerable to political whim – a universal national system in which the people take pride.

Mirror, Mirror on the Wall: How the Performance of the U.S. Health Care System Compares Internationally

By Karen Davis, Kristof Stremikis, David Squires, and Cathy Schoen
The Commonwealth Fund, June 2014

The United States health care system is the most expensive in the world, but this report and prior editions consistently show the U.S. underperforms relative to other countries on most dimensions of performance. Among the 11 nations studied in this report—Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States—the U.S. ranks last, as it did in the 2010, 2007, 2006, and 2004 editions of Mirror, Mirror. Most troubling, the U.S. fails to achieve better health outcomes than the other countries, and as shown in the earlier editions, the U.S. is last or near last on dimensions of access, efficiency, and equity. In this edition of Mirror, Mirror, the United Kingdom ranks first, followed closely by Switzerland.

The most notable way the U.S. differs from other industrialized countries is the absence of universal health insurance coverage. Other nations ensure the accessibility of care through universal health systems and through better ties between patients and the physician practices that serve as their medical homes.

Key Findings

Quality: The indicators of quality were grouped into four categories: effective care, safe care, coordinated care, and patient-centered care. Compared with the other 10 countries, the U.S. fares best on provision and receipt of preventive and patient-centered care. While there has been some improvement in recent years, lower scores on safe and coordinated care pull the overall U.S. quality score down.

Access: Not surprisingly—given the absence of universal coverage—people in the U.S. go without needed health care because of cost more often than people do in the other countries. Americans were the most likely to say they had access problems related to cost.

Efficiency: On indicators of efficiency, the U.S. ranks last among the 11 countries, with the U.K. and Sweden ranking first and second, respectively.

Equity: The U.S. ranks a clear last on measures of equity. Americans with below-average incomes were much more likely than their counterparts in other countries to report not visiting a physician when sick; not getting a recommended test, treatment, or follow-up care; or not filling a prescription or skipping doses when needed because of costs. On each of these indicators, one-third or more lower-income adults in the U.S. said they went without needed care because of costs in the past year.

From the Discussion

It is difficult to disentangle the effects of health insurance coverage from the quality of care experiences reported by U.S. patients. Comprehensiveness of insurance and stability of coverage are likely to play a role in patients’ access to care and interactions with physicians. We found that insured Americans and higher-income Americans were more likely than their counterparts in other countries to report problems such as not getting recommended tests, treatments, or prescription drugs. This is undoubtedly a reflection of the lack of comprehensive health insurance coverage and the high out-of-pocket costs for care in the U.S., even among the insured and those with above-average incomes. Fragmented coverage and insurance instability undermine efforts in the U.S. to improve care coordination, including the sharing of information among providers. Patients in other countries, in addition, are more likely to have a regular physician and long-time continuity with the same physician.

These results indicate a consistent relationship between how a country performs in terms of equity and how patients rate other dimensions of performance: the lower the performance score for equity, the lower the performance on other measures. This suggests that, when a country fails to meet the needs of the most vulnerable, it also fails to meet needs for the average citizen. Rather than regarding performance on equity as a separate and lesser concern, the U.S. should devote far greater attention to building a health system that works well for all Americans.

http://www.commonwealthfund.org/~/media/files/publications/fund-report/2…

In this 2014 update of The Commonwealth Fund study on the performance of the U.S. health care system compared to other nations, the United States once again comes in last, in spite of having the most expensive system of all nations.

This year the authors express hope that implementation of the Affordable Care Act (ACA) will improve our performance, though so far the changes in the first three years of ACA have not been enough to lift us from the bottom. There is reason to believe that it is too weak of a program to ever have enough impact.

An interesting finding in this report is that the United Kingdom came in first in most categories studied, placing it in solid first place overall. Their National Health Service is government owned and operated – socialized medicine – and is one of the least expensive systems of all, spending only 40 percent per capita of what we spend in the United States. The next time someone claims that we are headed towards socialized medicine, we can respond, “Don’t we wish.”

However we do have to be careful about drawing sweeping conclusions from this study. Canada, which has a single payer system, scored next to the bottom, just above the United States. They scored lower in access, especially in timeliness of care, and in efficiency and safety. Although they have single payer government insurance systems in each province, the health care delivery system remains largely private. Since the deficiencies are primarily those of private delivery systems, it would suggest that the Canadian government should play a much greater role in improving resource allocation.

One of the more important deficiencies of a single payer system is that when conservative governments are in control – as they now are in Canada – the politicians attempt to reduce the role of government. Currently in Great Britain, conservatives are attempting to move more towards privatization, but so far their solidarity has prevented a massive shift in that direction, though they have introduced some worrisome policies.

Nevertheless, politics will always play a role in any system. That makes it even more imperative to put in place a system that is much less vulnerable to political whim – a universal national system in which the people take pride.

Political Polarization in the American Public

Pew Research Center, June 12, 2014

Section 4: Political Compromise and Divisive Policy Debates

Government’s Role in Health Care

The idea of a single-payer health care system – in which the government pays for all health care costs – has long been a dream of many liberals. But when Congress took up health care reform in 2009, Democrats united behind a market-based proposal – what became the Affordable Care Act – which was seen as more politically feasible.

The current survey finds that government involvement in the health care system continues to draw extensive liberal support: Fully 89% of consistent liberals say it is the responsibility of the federal government to make sure all Americans have health care coverage. And roughly half – 54% – think health insurance “should be provided through a single national health insurance system run by the government.”

Overall, the public is divided over how far the government should go in providing health care. About half (47%) say the government has a responsibility to make sure all Americans have health care coverage, while 50% say that is not the responsibility of the federal government.

Those who believe the government does have a responsibility to ensure health coverage were asked if health insurance should be provided through a mix of private insurance companies and the government, or if the government alone should provide insurance. The single-payer option was supported by 21%, while about as many (23%) favor a mix of public and private insurance.

On the other side of the issue, while half say it isn’t the government’s responsibility to make sure all have health care coverage, relatively few want the government to get out of the health care system entirely. Rather, 43% say it’s not the government’s responsibility to ensure health care coverage for all, but believe the government should “continue programs like Medicare and Medicaid for seniors and the very poor.” Only 6% of Americans go so far as to say the government “should not be involved in providing health insurance at all.”

Even among consistent conservatives, there is minimal support for the government having absolutely no role in providing health care. Three-quarters of consistent conservatives (75%) say the government should continue Medicare and Medicaid while just 20% think the government should not be involved in providing health insurance.

http://www.people-press.org/2014/06/12/section-4-political-compromise-and-divisive-policy-debates/

Bar graph of poll results on government involvement in health care: http://www.people-press.org/2014/06/12/section-4-partisan-compromise-and-divisive-policy-debates/pp-2014-06-12-polarization-4-08/

Table 4.7 Government Role in Health Care

Q121/a/b: Do you think it is the responsibility of the federal government to make sure all Americans have health care coverage, or is that not the responsibility of the federal government?

ASK IF GOV’T RESPONSIBILITY: Should health insurance (Be provided through a single national health insurance system run by the government) OR (Continue to be provided through a mix of private insurance companies and government programs) [RANDOMIZE]?

ASK IF NOT GOV’T RESPONSIBILITY: Should the government (Not be involved in providing health insurance at all) OR (Continue programs like Medicare and Medicaid for seniors and the very poor) [RANDOMIZE]?

Table of results at this link: http://www.people-press.org/2014/06/12/government-role-in-health-care/

Comment:

By Don McCanne, MD

It is often said, based on many polls, that about 60 percent of Americans support a single payer national health program. How solid is that support? This important poll from Pew Research Center provides some perspective.

Those polled were split into two groups based on whether or not they thought that it is the responsibility of the federal government to make sure all Americans have health care coverage. They were split fairly evenly – 47 percent believing that it is a government responsibility and 50 percent believing that it is not. But then the 50 percent who thought it is not a government responsibility split into 43 percent of the total believing that we should keep Medicare and Medicaid and only 6 percent holding the position that government should not be involved at all.

This demonstrates a problem with polling. We tend to think that answers to seemingly straightforward questions accurately represent the views of the public. But against a background of rhetoric, memes, subliminal persuasion, and the messages of controlled media (think Fox), simple responses are not all that simple. The oft-repeated line, “Keep government out of my Medicare,” facetiously represents the complexity of seemingly simple concepts. Fully half of people seem to believe that they do not want the government to have the responsibility of making sure that all Americans have health care coverage, yet actually only 6 percent do not want the government involved if it means eliminating Medicare and Medicaid. That does not seem to be intuitive. People do want the government involved, even though half said that health care coverage wasn’t the government’s responsibility.

Single payer supporters likely will be troubled by the further responses of the nearly one-half who do believe that the government should be involved. Of those individuals ideologically classified as “Consistently Liberal” 89 percent believe that it is a government responsibility, yet only 54 percent believe that we should have a single national health insurance system run by the government; 31 percent believe that we should have a mix of private insurance and government programs. Of “Consistently Conservative” 98 percent believe that the government should not be involved, and zero percent support single payer (though that 98 percent drops to 20 percent of the “consistently conservative” when asked about Medicare and Medicaid).

Overall, only 21 percent of Americans in this poll seem to believe that we should have a single national health insurance system run by the government.

Most single payer supporters find this difficult to believe. But the view is quite malleable and subject to exposure to memes, rhetoric, political advertising and whatever. As examples, California’s Proposition 186 and Oregon’s Measure 23 – two single payer ballot measures – had support in the polls early in their campaigns, yet three-fourths of voters rejected Prop. 186, and four-fifths rejected Measure 23. Late in each campaign, the insurance industry had very little difficulty in taking advantage of the malleability of the views on single payer.

How could the voters be so deceived? It’s easy. It took only one more question in this Pew poll to change opposition to government involvement from 50 percent to 6 percent!

The lesson is that we cannot rest on believing that the 60 percent of Americans who support single payer will eventually drive the political process and bring us reform. That 60 percent is not an absolute – ask single payer supporters in California and Oregon. People need to have a much better understanding of health policy than they do. We need a solid foundation that cannot be washed away by memes. That is a monumental task, but that is what we are faced with.

We have a lot of educating to do. Get to work.

Addendum:  The full Pew report represents a massive undertaking of defining political polarization in America. It is important to understand better this polarization if we hope to communicate our views on a superior alternative for health care financing – a single payer national health program (or, using malleable political rhetoric, “an improved Medicare for all”).

Political Polarization in the American Public: http://www.people-press.org/2014/06/12/political-polarization-in-the-american-public/

I also want to thank Harvard Professor Robert Blendon for the help he has given me in understanding political polling. Several years ago, responding to my request to get the wording right on single payer in the polls that Harvard and Kaiser Family Foundation were conducting, he sent me a large package of material that amounted to a mini-course on political polling. He convinced me how naive my view was that if we could just phrase the poll questions appropriately, we could get a stronger response supporting single payer and then use that to move the political process. We may have many polls with a 60 percent favorable response, but do we have single payer?

Political Polarization in the American Public

Pew Research Center, June 12, 2014

Section 4: Political Compromise and Divisive Policy Debates

Government’s Role in Health Care

The idea of a single-payer health care system – in which the government pays for all health care costs – has long been a dream of many liberals. But when Congress took up health care reform in 2009, Democrats united behind a market-based proposal – what became the Affordable Care Act – which was seen as more politically feasible.

The current survey finds that government involvement in the health care system continues to draw extensive liberal support: Fully 89% of consistent liberals say it is the responsibility of the federal government to make sure all Americans have health care coverage. And roughly half – 54% – think health insurance “should be provided through a single national health insurance system run by the government.”

Overall, the public is divided over how far the government should go in providing health care. About half (47%) say the government has a responsibility to make sure all Americans have health care coverage, while 50% say that is not the responsibility of the federal government.

Those who believe the government does have a responsibility to ensure health coverage were asked if health insurance should be provided through a mix of private insurance companies and the government, or if the government alone should provide insurance. The single-payer option was supported by 21%, while about as many (23%) favor a mix of public and private insurance.

On the other side of the issue, while half say it isn’t the government’s responsibility to make sure all have health care coverage, relatively few want the government to get out of the health care system entirely. Rather, 43% say it’s not the government’s responsibility to ensure health care coverage for all, but believe the government should “continue programs like Medicare and Medicaid for seniors and the very poor.” Only 6% of Americans go so far as to say the government “should not be involved in providing health insurance at all.”

Even among consistent conservatives, there is minimal support for the government having absolutely no role in providing health care. Three-quarters of consistent conservatives (75%) say the government should continue Medicare and Medicaid while just 20% think the government should not be involved in providing health insurance.

http://www.people-press.org/2014/06/12/section-4-political-compromise-an…

Bar graph of poll results on government involvement in health care: http://www.people-press.org/2014/06/12/section-4-partisan-compromise-and…

Table 4.7 Government Role in Health Care

Q121/a/b: Do you think it is the responsibility of the federal government to make sure all Americans have health care coverage, or is that not the responsibility of the federal government?

ASK IF GOV’T RESPONSIBILITY: Should health insurance (Be provided through a single national health insurance system run by the government) OR (Continue to be provided through a mix of private insurance companies and government programs) [RANDOMIZE]?

ASK IF NOT GOV’T RESPONSIBILITY: Should the government (Not be involved in providing health insurance at all) OR (Continue programs like Medicare and Medicaid for seniors and the very poor) [RANDOMIZE]?

Table of results at this link: http://www.people-press.org/2014/06/12/government-role-in-health-care/

It is often said, based on many polls, that about 60 percent of Americans support a single payer national health program. How solid is that support? This important poll from Pew Research Center provides some perspective.

Those polled were split into two groups based on whether or not they thought that it is the responsibility of the federal government to make sure all Americans have health care coverage. They were split fairly evenly – 47 percent believing that it is a government responsibility and 50 percent believing that it is not. But then the 50 percent who thought it is not a government responsibility split into 43 percent of the total believing that we should keep Medicare and Medicaid and only 6 percent holding the position that government should not be involved at all.

This demonstrates a problem with polling. We tend to think that answers to seemingly straightforward questions accurately represent the views of the public. But against a background of rhetoric, memes, subliminal persuasion, and the messages of controlled media (think Fox), simple responses are not all that simple. The oft-repeated line, “Keep government out of my Medicare,” facetiously represents the complexity of seemingly simple concepts. Fully half of people seem to believe that they do not want the government to have the responsibility of making sure that all Americans have health care coverage, yet actually only 6 percent do not want the government involved if it means eliminating Medicare and Medicaid. That does not seem to be intuitive. People do want the government involved, even though half said that health care coverage wasn’t the government’s responsibility.

Single payer supporters likely will be troubled by the further responses of the nearly one-half who do believe that the government should be involved. Of those individuals ideologically classified as “Consistently Liberal” 89 percent believe that it is a government responsibility, yet only 54 percent believe that we should have a single national health insurance system run by the government; 31 percent believe that we should have a mix of private insurance and government programs. Of “Consistently Conservative” 98 percent believe that the government should not be involved, and zero percent support single payer (though that 98 percent drops to 20 percent of the “consistently conservative” when asked about Medicare and Medicaid).

Overall, only 21 percent of Americans in this poll seem to believe that we should have a single national health insurance system run by the government.

Most single payer supporters find this difficult to believe. But the view is quite malleable and subject to exposure to memes, rhetoric, political advertising and whatever. As examples, California’s Proposition 186 and Oregon’s Measure 23 – two single payer ballot measures – had support in the polls early in their campaigns, yet three-fourths of voters rejected Prop. 186, and four-fifths rejected Measure 23. Late in each campaign, the insurance industry had very little difficulty in taking advantage of the malleability of the views on single payer.

How could the voters be so deceived? It’s easy. It took only one more question in this Pew poll to change opposition to government involvement from 50 percent to 6 percent!

The lesson is that we cannot rest on believing that the 60 percent of Americans who support single payer will eventually drive the political process and bring us reform. That 60 percent is not an absolute – ask single payer supporters in California and Oregon. People need to have a much better understanding of health policy than they do. We need a solid foundation that cannot be washed away by memes. That is a monumental task, but that is what we are faced with.

We have a lot of educating to do. Get to work.

Addendum:  The full Pew report represents a massive undertaking of defining political polarization in America. It is important to understand better this polarization if we hope to communicate our views on a superior alternative for health care financing – a single payer national health program (or, using malleable political rhetoric, “an improved Medicare for all”).

Political Polarization in the American Public: http://www.people-press.org/2014/06/12/political-polarization-in-the-ame…

I also want to thank Harvard Professor Robert Blendon for the help he has given me in understanding political polling. Several years ago, responding to my request to get the wording right on single payer in the polls that Harvard and Kaiser Family Foundation were conducting, he sent me a large package of material that amounted to a mini-course on political polling. He convinced me how naive my view was that if we could just phrase the poll questions appropriately, we could get a stronger response supporting single payer and then use that to move the political process. We may have many polls with a 60 percent favorable response, but do we have single payer?

The Moral Case for Affordable Coverage and How Obamacare Fails To Live Up to It

By Austin Frakt, PhD
The JAMA Forum, June 11, 2014

Some health policy commentators have claimed that President Obama and Affordable Care Act (ACA) supporters have not made a convincing moral case for coverage expansion. Scholars suggest that support for the law could turn, in part, on the moral argument for it. What is that argument, and is implementation of the law consistent with it?

We can make some headway by turning to Norman Daniels, PhD; Brendan Saloner, PhD; and Adriane Gelpi, who articulate one possible moral case for universal coverage. Their key assumption is that there is a “social obligation to protect opportunity.”

From this, a lot follows. One’s opportunity is threatened by poor health. In sickness, one cannot learn or earn as efficiently, let alone enjoy the same length or quality of life. Therefore, protecting opportunity implies protection of access to health care services that promote and preserve health. And, it’s hard to argue with the notion that such access should be protected equally.

Access to health care is enhanced by health insurance. As Daniels, Saloner, and Gelpi argue, universal health insurance is a means to this end. But it’s not the only way. The key is to recognize that equality of access is not equality of receipt. The authors are not suggesting that we have a moral obligation to ensure that everyone receive the same amount of health care, merely that everyone have the same degree of access to it.

This more modest obligation would be met in a system that does not cover everyone but extends equal opportunity of access to affordable coverage to everyone. That is, equal opportunity to obtain coverage is a necessary condition for equal access to health care, though some may choose not to avail themselves of that care or that coverage. Put another way, if we are morally satisfied with a regime under which people can choose whether to receive care, we ought to be morally satisfied with one under which people can choose whether to obtain coverage for it, so long as there is equal opportunity of access to that coverage and the care it facilitates.

The distinction is crucial because the ACA was not designed for universal coverage, and it will not achieve it. However, it was passed with the more modest ambition to provide universal access to affordable coverage, the very thing we’re morally obligated to provide.

But, when you go beyond the law’s ambition and consider its actual implementation, there are some problems. It has failed to provide universal access to affordable coverage in at least 2 ways. First, the Supreme Court ruled to permit states to opt out of Medicaid expansion without penalty. Though gradually, more states are expanding their programs, many states still have not. In those states, millions of poor residents lack access to affordable coverage. No matter what institution one wishes to blame, this is a moral failing.

Second, for some consumers, the products offered in the new exchanges are unaffordable, even with subsidies. This is a serious ethical concern, as addressed by Saloner and Daniels.

“[T]he exchanges leave families vulnerable to burdensome out-of-pocket spending for treating health conditions that are costly but not necessarily catastrophic. For example, 25 percent of individuals in the United States have a major chronic condition such as a mood disorder, diabetes, heart disease, asthma, or hypertension. The annual cost of treating such conditions, including visits with specialists and payments for medications, can exceed several thousands of dollars, even with health insurance (Soni 2009). Under the ACA, a family of four with an income around 275 percent of the [federal poverty level] ($64 000 in 2010) would be responsible for premium costs of around $5600 and would not experience relief from cost sharing until it had reached half the family cap, around $6000 in 2010 (KFF 2010b).”

Jed Graham of Investor’s Business Daily recently reported that such affordability concerns have become reality. He documents that some families covered by exchange plans could face out-of-pocket costs as high as 40%. By any reasonable definition of affordable, this is not. This is another moral failing.

So, what can be done to bring policy into better alignment with morality? First, all states could expand Medicaid. Second, Saloner and Daniels suggest that subsidies could be increased for families with higher health care burdens, such as chronic conditions. Third, tax credits, (which now kick in when premiums are higher than a specified percentage of income) could take into account other out-of-pocket costs. Saloner and Daniels offer a final suggestion:

“[E]xchanges could be redesigned to protect specific types of investments by providing income disregards for money that low-income families set aside for paying children’s college tuition, opening a small business, or saving for retirement. An added benefit is that such a proposal would encourage families to increase their assets and to build financial stability.”

All of these approaches would make coverage expansion more expensive, unless they could be offset by policies that would make health system delivery or health insurance more efficient.

Perhaps the moral argument for the ACA was not made fully or loudly in years past. That’s a failing we can now easily remedy. I’ve just done my part. But, having done so, it’s now clear that as designed and implemented, the law is not consistent with what that moral reasoning demands. That too can be remedied, but it will require some changes, potentially at some cost. Do we have the moral fiber to make them?

http://newsatjama.jama.com/2014/06/11/jama-forum-the-moral-case-for-affordable-coverage-and-how-obamacare-fails-to-live-up-to-it/

****

Comment:

By Don McCanne, MD

Austin Frakt is a highly credible health economist with great values, and a person for whom I have profound respect. But sometimes he thinks too much. He is certainly correct when he states that the design and implementation of the Affordable Care Act (ACA) is not consistent with “what moral reasoning demands.” Where he falls short is in his endorsement of flawed recommendations for improvement.

In conceding that ACA was not designed for universal coverage and will not achieve it, he implies that this is acceptable since our only moral obligation is to provide universal access to affordable coverage. The problem is that no matter how much you modify our existing fragmented, multi-payer system, you can never achieve truly universal access to affordable coverage, much less to affordable health care.

Let’s look at his suggestions. He says that all states could expand Medicaid. Sure, but they aren’t, and the Supreme Court ruled that we can’t make them do it. He says that we could increase subsidies for families with greater health care burdens. Sure, but imagine the administrative complexity assigning a health-care-needs status to each individual and then continually adjusting that status as needs change with time. He says that premium tax credits could take into consideration other out-of-pocket costs. Sure, but which would be allowable and how much documentation would be required? He says that exchanges could be redesigned to protect certain investments such as the children’s college education fund, the expenses of starting a small business, or saving for retirement. Sure, but talk about an administrative nightmare, and the error rate would likely be very great.

He says that these approaches would make coverage expansion more expensive. Sure. Much of the increased cost would be in the waste inherent in adding more administrative complexity to a system that is already uniquely heavily burdened with expensive administrative excesses. He says that these extra costs could be offset by increasing efficiency in health system delivery, but that has proven to be an elusive goal with little gain to date. Besides, wouldn’t we want the gains from increased efficiency to be used to improve health care delivery rather than to add to the administrative waste we already have?

The proper moral argument is to make actual health care – not health care coverage – accessible and affordable for absolutely everyone. This is what a single payer system would do. Tweaking our highly flawed financing system so that more people have access to an insurance card falls far short of the moral obligation that we have to each other. Austin Frakt knows this. He should give up on trying to think up ways to skirt single payer.

The Moral Case for Affordable Coverage and How Obamacare Fails To Live Up to It

By Austin Frakt, PhD
The JAMA Forum, June 11, 2014

Some health policy commentators have claimed that President Obama and Affordable Care Act (ACA) supporters have not made a convincing moral case for coverage expansion. Scholars suggest that support for the law could turn, in part, on the moral argument for it. What is that argument, and is implementation of the law consistent with it?

We can make some headway by turning to Norman Daniels, PhD; Brendan Saloner, PhD; and Adriane Gelpi, who articulate one possible moral case for universal coverage. Their key assumption is that there is a “social obligation to protect opportunity.”

From this, a lot follows. One’s opportunity is threatened by poor health. In sickness, one cannot learn or earn as efficiently, let alone enjoy the same length or quality of life. Therefore, protecting opportunity implies protection of access to health care services that promote and preserve health. And, it’s hard to argue with the notion that such access should be protected equally.

Access to health care is enhanced by health insurance. As Daniels, Saloner, and Gelpi argue, universal health insurance is a means to this end. But it’s not the only way. The key is to recognize that equality of access is not equality of receipt. The authors are not suggesting that we have a moral obligation to ensure that everyone receive the same amount of health care, merely that everyone have the same degree of access to it.

This more modest obligation would be met in a system that does not cover everyone but extends equal opportunity of access to affordable coverage to everyone. That is, equal opportunity to obtain coverage is a necessary condition for equal access to health care, though some may choose not to avail themselves of that care or that coverage. Put another way, if we are morally satisfied with a regime under which people can choose whether to receive care, we ought to be morally satisfied with one under which people can choose whether to obtain coverage for it, so long as there is equal opportunity of access to that coverage and the care it facilitates.

The distinction is crucial because the ACA was not designed for universal coverage, and it will not achieve it. However, it was passed with the more modest ambition to provide universal access to affordable coverage, the very thing we’re morally obligated to provide.

But, when you go beyond the law’s ambition and consider its actual implementation, there are some problems. It has failed to provide universal access to affordable coverage in at least 2 ways. First, the Supreme Court ruled to permit states to opt out of Medicaid expansion without penalty. Though gradually, more states are expanding their programs, many states still have not. In those states, millions of poor residents lack access to affordable coverage. No matter what institution one wishes to blame, this is a moral failing.

Second, for some consumers, the products offered in the new exchanges are unaffordable, even with subsidies. This is a serious ethical concern, as addressed by Saloner and Daniels.

“[T]he exchanges leave families vulnerable to burdensome out-of-pocket spending for treating health conditions that are costly but not necessarily catastrophic. For example, 25 percent of individuals in the United States have a major chronic condition such as a mood disorder, diabetes, heart disease, asthma, or hypertension. The annual cost of treating such conditions, including visits with specialists and payments for medications, can exceed several thousands of dollars, even with health insurance (Soni 2009). Under the ACA, a family of four with an income around 275 percent of the [federal poverty level] ($64 000 in 2010) would be responsible for premium costs of around $5600 and would not experience relief from cost sharing until it had reached half the family cap, around $6000 in 2010 (KFF 2010b).”

Jed Graham of Investor’s Business Daily recently reported that such affordability concerns have become reality. He documents that some families covered by exchange plans could face out-of-pocket costs as high as 40%. By any reasonable definition of affordable, this is not. This is another moral failing.

So, what can be done to bring policy into better alignment with morality? First, all states could expand Medicaid. Second, Saloner and Daniels suggest that subsidies could be increased for families with higher health care burdens, such as chronic conditions. Third, tax credits, (which now kick in when premiums are higher than a specified percentage of income) could take into account other out-of-pocket costs. Saloner and Daniels offer a final suggestion:

“[E]xchanges could be redesigned to protect specific types of investments by providing income disregards for money that low-income families set aside for paying children’s college tuition, opening a small business, or saving for retirement. An added benefit is that such a proposal would encourage families to increase their assets and to build financial stability.”

All of these approaches would make coverage expansion more expensive, unless they could be offset by policies that would make health system delivery or health insurance more efficient.

Perhaps the moral argument for the ACA was not made fully or loudly in years past. That’s a failing we can now easily remedy. I’ve just done my part. But, having done so, it’s now clear that as designed and implemented, the law is not consistent with what that moral reasoning demands. That too can be remedied, but it will require some changes, potentially at some cost. Do we have the moral fiber to make them?

http://newsatjama.jama.com/2014/06/11/jama-forum-the-moral-case-for-affo…

Austin Frakt is a highly credible health economist with great values, and a person for whom I have profound respect. But sometimes he thinks too much. He is certainly correct when he states that the design and implementation of the Affordable Care Act (ACA) is not consistent with “what moral reasoning demands.” Where he falls short is in his endorsement of flawed recommendations for improvement.

In conceding that ACA was not designed for universal coverage and will not achieve it, he implies that this is acceptable since our only moral obligation is to provide universal access to affordable coverage. The problem is that no matter how much you modify our existing fragmented, multi-payer system, you can never achieve truly universal access to affordable coverage, much less to affordable health care.

Let’s look at his suggestions. He says that all states could expand Medicaid. Sure, but they aren’t, and the Supreme Court ruled that we can’t make them do it. He says that we could increase subsidies for families with greater health care burdens. Sure, but imagine the administrative complexity assigning a health-care-needs status to each individual and then continually adjusting that status as needs change with time. He says that premium tax credits could take into consideration other out-of-pocket costs. Sure, but which would be allowable and how much documentation would be required? He says that exchanges could be redesigned to protect certain investments such as the children’s college education fund, the expenses of starting a small business, or saving for retirement. Sure, but talk about an administrative nightmare, and the error rate would likely be very great.

He says that these approaches would make coverage expansion more expensive. Sure. Much of the increased cost would be in the waste inherent in adding more administrative complexity to a system that is already uniquely heavily burdened with expensive administrative excesses. He says that these extra costs could be offset by increasing efficiency in health system delivery, but that has proven to be an elusive goal with little gain to date. Besides, wouldn’t we want the gains from increased efficiency to be used to improve health care delivery rather than to add to the administrative waste we already have?

The proper moral argument is to make actual health care – not health care coverage – accessible and affordable for absolutely everyone. This is what a single payer system would do. Tweaking our highly flawed financing system so that more people have access to an insurance card falls far short of the moral obligation that we have to each other. Austin Frakt knows this. He should give up on trying to think up ways to skirt single payer.

Continuing Our Commitment to Consumers: Solutions That Will Enhance Affordability, Stability and Accessibility in the New Health Care Marketplace

America’s Health Insurance Plans (AHIP), June 2014

Enhancing affordability by creating a new lower premium Catastrophic Plan option

While millions of Americans have the peace of mind that health insurance provides, more can be done to maximize choice and affordability for individuals and families. As a solution to bring more families into the marketplace:

Health plans support the creation of a new, lower-premium catastrophic plan.

Such a plan would offer consumers the option of coverage that has lower monthly premiums but still provides the comfort of knowing that their costs will be limited in the event of a serious illness or injury.

Under the ACA, plans offered in the marketplaces fall into several metal-level categories, based on their “actuarial value” (AV) standard – essentially, what percentage of health care costs the policy would cover for a standard population. Plans are labeled as platinum (90% AV), gold (80% AV), silver (70% AV), or bronze (60% AV). A limited number of individuals — including individuals under the age of 30 — also have the option to purchase a catastrophic, high-deductible plan, although it has an actuarial value that is comparable to the bronze plan.

The new catastrophic plan would offer an AV just below the current minimum requirement, allowing for lower premiums, but would still include coverage of the law’s mandated essential health benefits, have no annual or lifetime benefit limits, and cover all preventive health services with zero cost-sharing for consumers. This would allow individuals and families eligible for premium subsidies to use that financial assistance to purchase the new plan, an option currently unavailable to consumers purchasing the ACA catastrophic plan.

We believe a new catastrophic plan would further the public policy goal of affordability and call upon policymakers to expand consumer choices by allowing this lower-premium option to be offered.

http://www.ahip.org/News/Press-Room/2014/Policy-Solutions/

****

Comment:

By Don McCanne, MD

One of the worst failures of the Affordable Care Act (ACA) is that, even with subsidies, the premiums and out-of-pocket expenses are unaffordable for far too many people. AHIP now proposes to make the premiums slightly more affordable by offering catastrophic plans with very high deductibles that would make accessing health care truly unaffordable for even more people (cost sharing subsidies are available only for silver plans, but coverage of the proposed catastrophic plans would fall even below the lowest-level bronze plans).

Why would they do this? Could it be that they want to capture a portion of the market of the 31 million people who will still remain uninsured after ACA is fully implemented?

Who would actually select these plans with very high deductibles but lower premiums? Those with very low incomes who would struggle even with subsidized premiums might choose these plans if they consider their subsidized premiums to be “all that they can afford.” These are individuals who would be much more likely to forgo essential health care simply because they couldn’t afford their portion of the deductibles.

Very high income individuals might select these plans to insure against catastrophic losses while deciding to self insure against more modest medical costs. The problem with this is that this is a form of regressive financing of the insurance risk pools. Since average health care costs are well beyond the means of middle income families to pay for them, wealthier individuals need to contribute more to the collective insurance pools (as they would in a single payer financing system). The AHIP proposal for low-premium catastrophic plans would allow them to contribute less than average instead.

For healthy middle-income families there is a preference for the tradeoff of lower premiums for higher-deductibles – an observation confirmed by behavior in the individual insurance market before the enactment of ACA. Families that remain healthy will come out ahead, but those families that later face significant health problems often find that they will face severe financial hardship as well – even bankruptcy.

So the insurance industry is taking a position that they can increase their market, that they will not have to pay for routine medical expenses, and that they can lower their medical losses by paying only for the comparatively few individuals with high medical expenses. Little does it matter that they have the health coverage function backwards in that the healthy and wealthy do very well but the sick and poor suffer. Limiting essential protection for the most vulnerable demonstrates again why the private insurance industry should be dismissed.

The insurance industry has been very successful in getting innovations that benefit themselves. This release by AHIP suggests that this is the beginning of another self-serving public campaign – this time to allow individuals to have (in marketing terms) “the choice of purchasing only the insurance they need” – a high-deductible catastrophic health plan.

Social solidarity takes another beating.

Continuing Our Commitment to Consumers: Solutions That Will Enhance Affordability, Stability and Accessibility in the New Health Care Marketplace

America’s Health Insurance Plans (AHIP), June 2014

Enhancing affordability by creating a new lower premium Catastrophic Plan option

While millions of Americans have the peace of mind that health insurance provides, more can be done to maximize choice and affordability for individuals and families. As a solution to bring more families into the marketplace:

Health plans support the creation of a new, lower-premium catastrophic plan.

Such a plan would offer consumers the option of coverage that has lower monthly premiums but still provides the comfort of knowing that their costs will be limited in the event of a serious illness or injury.

Under the ACA, plans offered in the marketplaces fall into several metal-level categories, based on their “actuarial value” (AV) standard – essentially, what percentage of health care costs the policy would cover for a standard population. Plans are labeled as platinum (90% AV), gold (80% AV), silver (70% AV), or bronze (60% AV). A limited number of individuals — including individuals under the age of 30 — also have the option to purchase a catastrophic, high-deductible plan, although it has an actuarial value that is comparable to the bronze plan.

The new catastrophic plan would offer an AV just below the current minimum requirement, allowing for lower premiums, but would still include coverage of the law’s mandated essential health benefits, have no annual or lifetime benefit limits, and cover all preventive health services with zero cost-sharing for consumers. This would allow individuals and families eligible for premium subsidies to use that financial assistance to purchase the new plan, an option currently unavailable to consumers purchasing the ACA catastrophic plan.

We believe a new catastrophic plan would further the public policy goal of affordability and call upon policymakers to expand consumer choices by allowing this lower-premium option to be offered.

http://www.ahip.org/News/Press-Room/2014/Policy-Solutions/

One of the worst failures of the Affordable Care Act (ACA) is that, even with subsidies, the premiums and out-of-pocket expenses are unaffordable for far too many people. AHIP now proposes to make the premiums slightly more affordable by offering catastrophic plans with very high deductibles that would make accessing health care truly unaffordable for even more people (cost sharing subsidies are available only for silver plans, but coverage of the proposed catastrophic plans would fall even below the lowest-level bronze plans).

Why would they do this? Could it be that they want to capture a portion of the market of the 31 million people who will still remain uninsured after ACA is fully implemented?

Who would actually select these plans with very high deductibles but lower premiums? Those with very low incomes who would struggle even with subsidized premiums might choose these plans if they consider their subsidized premiums to be “all that they can afford.” These are individuals who would be much more likely to forgo essential health care simply because they couldn’t afford their portion of the deductibles.

Very high income individuals might select these plans to insure against catastrophic losses while deciding to self insure against more modest medical costs. The problem with this is that this is a form of regressive financing of the insurance risk pools. Since average health care costs are well beyond the means of middle income families to pay for them, wealthier individuals need to contribute more to the collective insurance pools (as they would in a single payer financing system). The AHIP proposal for low-premium catastrophic plans would allow them to contribute less than average instead.

For healthy middle-income families there is a preference for the tradeoff of lower premiums for higher-deductibles – an observation confirmed by behavior in the individual insurance market before the enactment of ACA. Families that remain healthy will come out ahead, but those families that later face significant health problems often find that they will face severe financial hardship as well – even bankruptcy.

So the insurance industry is taking a position that they can increase their market, that they will not have to pay for routine medical expenses, and that they can lower their medical losses by paying only for the comparatively few individuals with high medical expenses. Little does it matter that they have the health coverage function backwards in that the healthy and wealthy do very well but the sick and poor suffer. Limiting essential protection for the most vulnerable demonstrates again why the private insurance industry should be dismissed.

The insurance industry has been very successful in getting innovations that benefit themselves. This release by AHIP suggests that this is the beginning of another self-serving public campaign – this time to allow individuals to have (in marketing terms) “the choice of purchasing only the insurance they need” – a high-deductible catastrophic health plan.

Social solidarity takes another beating.