PNHP

Labor's Love Lost Over Obamacare?

Labor's Love Lost Over Obamacare?

By Steve Early
The Huffington Post, Aug. 30, 2013

Like many labor negotiators, I looked to health care reform for legislative relief from endless haggling with management over employee benefit costs. My own union and others worked hard for passage of President Obama’s Affordable Care Act (ACA) three years ago. Despite its failure to take health insurance issues off the bargaining table, as a more preferable Medicare-for-All system would do, Obamacare was widely cheered by labor.

Union members were told, correctly, that the ACA would expand Medicaid access for millions of lower-income Americans and make private insurance coverage more consumer-friendly for everyone else. Organized labor also expected the new law to aid union bargaining by leveling the playing field among all employers, much like the minimum wage and other protective labor legislation does.

Unions hoped that the ACA would restrain medical cost inflation and corporate pressure for health care cost shifting. Both trends have been a major cause of recent strikes or contract rejections at AT&T, Verizon, and United Parcel Service.

Instead, just months before key ACA provisions go into effect, Obamacare is backfiring in multiple ways on a labor movement already battered and bruised. Contrary to repeated White House assurances, many unionized workers now face more, rather than fewer, health plan problems and costs. Alarmed by Obama administration decisions and ACA provisions unfriendly to labor, top union leaders now fear that Obamacare will create “nightmare scenarios” for millions of workers, retirees, and their families.

Unintended Consequences?

In frantic letters to Congress, national presidents of the Teamsters, Laborers, Hotel Employees, and United Food and Commercial Workers unions cite the multiplying “unintended consequences” of the ACA. Around the country, smaller firms are already outsourcing so they can keep their total head count below 50 and not be covered by ACA requirements. Larger ones, like Wal-Mart, are planning to hire more part-timers and schedule existing employees for less than 30 hours a week so they won’t have to cover their non-fulltime workforce.

Even unionized retailers like Stop & Shop, faced with higher ACA-imposed medical plan costs, are pushing back. The food store chain sought to eliminate health coverage for thousands of part-time workers in New England, creating what one union official called his most difficult negotiations in 40 years.

Under the ACA, federal subsidies for eligible workers who wish to keep their individual job-based insurance won’t help them add or maintain family coverage — because the cost of that is not factored into the ACA subsidy formula. Even lower-income participants in multi-employer plans (known as Taft-Hartley funds) may end up being disadvantaged if ACA rules don’t permit them to qualify for subsidies on the same basis as workers without union-negotiated medical benefits. In both the private and public sector, employers are already citing the ACA’s 2018 tax on mis-named “Cadillac coverage” to justify givebacks from employees who, in reality, only have a healthcare Chevy in their garage.

According to MIT professor Jonathan Gruber, a top White House consultant, this impending 40 percent excise tax on higher cost plans “is intended to shift compensation away from excessively generous health insurance to wages.” Yet few in labor believe that more premium sharing, higher deductibles and co-pays will translate into better pay for workers without a fight over that as well.

Race to the Bottom

The International Brotherhood of Electrical Workers, which faults the ACA for triggering a “race to the bottom with respect to benefits,” is one of those labor organizations still hoping that the White House will make “common sense corrections” in the ACA.

However, the only flexibility that President Obama has shown so far is delaying, until 2015, the law’s requirement that larger employers provide insurance or pay a penalty. Plus, the White House has postponed much-needed limits on out-of-pocket costs for health care consumers. As D. Taylor, president of UNITE HERE, complained to HuffPo’s Dave Jamieson on Aug. 21, the “people who’ve gotten special treatment are the business community… Here’s what we’re saying: ‘You made the problem, you fix it.’ Here we have a situation you can’t blame on the Republicans.”

Labor’s love will certainly be lost, this Labor Day and future ones, if ACA implementation punishes the president’s friends and rewards their corporate adversaries. In 2010, rank-and-file anger over Obama Administration plans to tax union members’ benefits produced a big labor vote in favor of Republican Scott Brown, when he briefly captured a vacant U.S. Senate seat in Massachusetts. The national GOP, which has no positive agenda for health care reform, may yet reap the harvest of wider working-class disillusionment with health care reform.

One leading single-payer activist worries that labor’s growing disaffection with Obamacare will generate more calls for its repeal — a stand already taken by the Roofers Union–followed by “a return to the status quo ante.” This former local union officer fears that a labor movement “more divided and cozying up to the Republicans to teach the Democrats a lesson” is not likely to find a better way forward.

To steer union discontent in a better direction, the Labor Campaign for Single Payer Healthcare has collected hundreds of signatures on an open letter to be distributed to delegates at the national AFL-CIO convention in Los Angeles, Sept. 8-11. The letter urges AFL President Rich Trumka to “push the envelope further” in “the cause of health care justice” by using the shortcomings of Obamacare to build broader support for tax-supported universal coverage that “would take healthcare off the bargaining table.”

Instead, there are strong indications that top AFL-CIO officials want to tamp down any public criticism of ACA and the president (even though they are hailing their 2013 convention as “a time for decisive action to answer the challenges facing working people.”)

Preventing the labor backlash against Obamacare from actually forcing a real discussion on the convention floor will take some doing. In a resolution passed earlier this month, even the Nevada AFL-CIO has joined the public chorus of Obamacare critics, noting that “our health plans only get worse” while the White House fails to respond to serious union concerns.

Steve Early is a labor journalist, lawyer, and retired national staff member of the Communications Workers of America. He was involved, for many years, in bargaining with manufacturing and telecom firms in New England. He is the author, most recently, of Save Our Unions: Dispatches From A Movement in Distress, forthcoming from Monthly Review Press in November. He can be reached at Lsupport@aol.com.

http://www.huffingtonpost.com/steve-early/labors-love-lost-over-oba_b_3838302.html

The tycoons seem to care less about our health care

Large U.S. Employers Project a 7% Increase in Health Care Benefit Costs in 2014, National Business Group on Health Survey Finds

National Business Group on Health, August 28, 2013

The cost of providing employee health care benefits at the nation’s largest employers is projected to increase 7% in 2014 – the third consecutive year employers have budgeted this amount, according to a new survey by the National Business Group on Health, a non-profit association of more than 365 large U.S. employers. The survey – one of the industry’s first look at costs and plan design changes for 2014 – also found that some employers believe health insurance exchanges could be a viable option for certain populations. Additionally, more companies plan to offer workers a consumer-directed health plan as their only health benefits option in 2014.

While large employers will not be eligible to participate in state health exchanges until 2017 at the earliest, employers expect that certain populations may find exchanges to be a viable option on an individual basis in 2014. Roughly four in ten (41%) employers believe COBRA plan participants might find public health exchanges to be the most cost effective option. Additionally, more than one-fourth (26%) felt that some pre-65 retirees might opt to join exchanges, while 20% believe that some part-time employees will do the same.

“Private exchanges are another option some employers are considering. In the last year, there has been an increase in the number of private exchanges that are being launched. And while some employers are considering private exchanges for active employees sometime in the future, very few (3%) are considering eliminating health care coverage entirely,” said Darling.

More Employers Embracing Total Replacement CDHPs

The survey found that implementing a consumer-directed health plan (CDHP) was considered the most effective tactic to control rising costs, cited by more than one-third of respondents (36%). In fact, nearly three-quarters of employers (72%) now offer at least one CDHP. This number has remained relatively steady over the last couple of years. However, the number of employers that are offering only a CDHP to employees continues to rise, with 22% planning to implement a total replacement CDHP next year, up from 19% this year.

(The National Business Group on Health members are primarily Fortune 500 companies and large public sector employers — including the nation’s most innovative health care purchasers — who provide health coverage for more than 55 million U.S. workers, retirees, and their families.)

https://www.businessgrouphealth.org/pressroom/pressRelease.cfm?ID=214

Comment:

By Don McCanne, M.D.

The National Business Group on Health survey is important because it represents the views of the nation’s largest employers who provide coverage for over 55 million workers and their families – supposedly the best health benefit programs available. Three findings in this survey should have us concerned.

1)  The costs of providing health care benefits have increased at the rate of 7 percent for each of the past three years, considerably higher than the rate of inflation. This indicates that health care costs continue to increase at unsustainable rates, regardless of the implementation of several programs supposedly designed to slow spending increases.

2)  Although large employers cannot use the state health exchanges until 2017, interest in both private exchanges and state exchanges is increasing. A major attraction of the exchanges is that employees are most likely to select plans with actuarial values of only 60 to 70 percent because of their lower premiums. This offers employers the opportunity to shift from defined health benefits to defined contributions for the exchange plans. This shifts more of the health care costs to employees.

3)  About three-fourths of employers now offer consumer-directed health plans (CDHPs), and next year 22 percent will offer CDHPs as the only option. CDHPs are high deductible plans that shift more costs to employees and their families. Some may be associated with a health spending account, but that is little more than a tax gimmick that favors higher income employees. Whether these accounts are funded by direct employee contributions or by employer contributions representing forgone wage increases makes little difference as far as whether or not health care is more affordable. It is ultimately the employee that is responsible for the increases in out-of-pocket costs.

The National Business Group on Health represents two-thirds of the Fortune 100 companies – the biggest of the biggest. They should be offering the very best. But instead, these trends should make us want to accelerate our movement away from employer control of individual health plans and toward enactment of a single, publicly-financed national health program that would include everyone and treat all of us fairly. The tycoons seem to be losing interest in the welfare of their employees, so what chance would the rest of us have without converting to an improved Medicare that covered everyone?

The unsteady rollout of Obamacare

By Caroline Poplin, M.D.
McClatchy-Tribune News Service, Aug. 26, 2013

Any program as large and complex as Obamacare (not to mention one facing such entrenched opposition) is going to encounter some turbulence on its shakedown cruise. But the recent glitches are as important for what they tell us about reform, as for what they do.

Obamacare (more formally, the Patient Protection and Affordable Care Act) will cover millions of currently uninsured Americans as advertised — but with as little disruption to corporate profits as possible. Patients and taxpayers are to shoulder most of the additional cost.

The administration will delay for one year — until 2015 — the requirement that large employers offer their employees decent insurance, or pay a small penalty (the so-called “employer mandate”). There was no corresponding delay of the individual mandate, the requirement that all citizens sign up for insurance coverage starting in 2014, the most unpopular provision of ACA. This means that next year employees of the recalcitrant firms will have to buy health insurance without any contribution from their employers.

The Congressional Budget Office estimates this delay could affect up to a million people. If families cannot afford the insurance offered on the new exchanges, and fall below 400 percent of the poverty line, taxpayers will pick up part of the tab. The Kaiser Foundation calculates that about half the uninsured will qualify for Federal subsidies.

Congressional Republicans (and some Democrats) passed a bill to delay the individual mandate also. However, no one in Washington really wants that; it would hurt the insurance companies, who are adamant that young, healthy individuals be required to enroll so as to cover the costs of the sick, who will sign up right away.

The administration also quietly postponed for a year ACA annual and lifetime limits on out-of-pocket costs in some employer-sponsored plans. This delay will fall hardest on the sickest — patients with diseases like cancer, multiple sclerosis, or HIV, where the costs of drugs alone can easily exceed $100,000 a year.

Democrats winced and largely remained silent. Republicans chortled, passed another symbolic bill, and continue to obstruct the ACA wherever they can.

Business contended — and the administration apparently agreed — that these two provisions were too complicated to implement on time. However, these are large corporations that deal with complex matters all the time — and they had three years to plan. By contrast, figuring out the new exchanges, benefit packages and tax subsidies will be at least as difficult for individuals, who get just three months to plan; most exchanges will not be up until October, and people must enroll by January.

Is there something wrong with this picture?

Don’t misunderstand: extending health insurance coverage to millions of uninsured and underinsured Americans is an unequivocal good, and a substantial step forward.

However, the U.S. pays the highest prices in the world for health insurance and health care. Notwithstanding its name, the Affordable Care Act extends this extravagantly expensive system to the uninsured with little attention to reducing or spreading the cost, just a hope and a prayer that the invisible hand of the market will somehow do the heavy lifting. The law puts minimal burdens on corporations, who are sitting on record profits, even though wages, out of which families must pay the new premiums, continue to stagnate.

Politicians tell us that this market-driven system, heavily reliant on consumer payments and subsidies, is the only one that Americans today will accept. Maybe.

Yet keep in mind that the U.S. is the outlier here. In one way or another, all the other advanced Western democracies regulate insurers, hospitals, doctors and manufacturers to ensure that all their citizens (sometimes even visitors!) receive the health care they need, with modest profits to providers.

Indeed, we have such “socialized” health insurance already, hiding in plain sight: Medicare, the most popular program in the country after Social Security. Medicare covers all services that are medically necessary (except eyeglasses and hearing aids), at lower cost, and with far less complexity, than private health insurance. People pay according to their income. Employers are required to contribute for all employees, including part-timers. There are no restrictions on patients’ choice of hospital or doctor. We could easily finance the extension of Medicare with the money that goes for private premiums now.

For the sake of millions of uninsured citizens, I hope the rollout of the peculiarly American ACA is successful. But if it turns out to be too complex or too expensive, voters have a cheaper, simpler, fairer alternative. Employers, insurers and providers, take heed.

Caroline Poplin is a physician, attorney and policy analyst in Bethesda, Md. She wrote this column for McClatchy-Tribune News Service.

Read more here: http://www.mcclatchydc.com/2013/08/26/200353/the-unsteady-rollout-of-obamacare.html#.Uh4Zc5g_e6o#storylink=cpy

Medicare for all

By Bob Balhiser
Independent Record (Helena, Mont.), Letters, Aug. 28, 2013

I am no fan of “Obamacare” because it allows some 1,300 private insurers to profit from our medical misfortunes. When that many companies have their ‘fingers in the pie’ everyone pays an extra price. We pay not only in dollars but in complexity, as demonstrated by Mike Dennison’s Sunday IR article on the subject.

It is well known that we in the U.S. pay far more overall for health care than other advanced countries. In fact, we pay nearly 18 percent of Gross Domestic Product while other advanced countries pay an average of 11 percent GDP. In our economy, that 7 percent GDP difference amounts to about $1 trillion in annual potential savings. Yes, we are talking $1,000,000,000,000 annually … that’s a lot of money to throw away on huge profits, administrative costs and other non-productive efforts.

Medicare-For-All, done right, would recapture much of this misspent money in the three following ways: by eliminating health insurance company profit and administrative costs; by relieving doctors, hospitals, clinics and pharmacies of the unnecessary paperwork burden and other costs and rules that numerous private insurers impose on them, and by bargaining with giant pharmaceutical companies to reduce drug costs to levels that Canadians pay.

Given the tenuous financial circumstances we face in the U.S., isn’t it time to give some serious consideration to the huge savings that could be realized by implementing Medicare-For-All?

The writer lives in Helena.

http://helenair.com/news/opinion/readers_alley/medicare-for-all/article_5340fc00-0f71-11e3-9c70-0019bb2963f4.html

The Des Moines Register is back on message

The Register's Editorial: Why tie insurance to jobs?

By the Editorial Board
The Des Moines Register, August 27, 2013

In many households, one spouse buys health insurance through a job for the entire family. Now United Parcel Service Inc. has announced it intends to cut this coverage for working spouses of nonunion employees next year.

A UPS spokesman said the change is necessary to keep costs down.

Denying insurance to workers’ spouses will certainly create a financial burden for families, particularly if companies don’t reduce the premiums for workers when they implement such a change. Now the family needs to purchase two policies to cover both adults in the home. Also, the health insurance offered by the spouse’s employer may not cover needed services or may impose higher co-payments and deductibles.

Unfortunately, this is how things work in a country that has tied health insurance to employment. We have long recognized that is a bad idea. Your employer doesn’t select and subsidize your homeowner’s insurance or your car insurance.

The practice burdens U.S. businesses and puts them at a disadvantage in a global economy. In other countries, the government facilitates coverage for everyone.

Employer-based health insurance creates problems for workers. They are at the mercy of their company when it comes to which plans are available.

In some ways, the health reform law addresses some of these problems.

Yet the Affordable Care Act is built on a broken system. As the Register’s editorial board wrote for years prior to the passage of the health law in 2010, this country needs a single-payer health care system with coverage facilitated by the government. Similar to Medicare, everyone could contribute through taxation and everyone would be covered. Instead of such a change, Congress cemented in place the practice of tying health insurance to jobs by requiring many companies to offer it.

The long term result will likely be more companies doing exactly what UPS is doing.

http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=2013308270030

Comment:

By Don McCanne, M.D.

We already knew that The Des Moines Register held an editorial position in favor of single payer reform, but this reiteration of their position is highly significant.

Much of the activity in support of single payer has faded as attention has turned to implementation of the Affordable Care Act. The prevailing attitude is that, well, we tried and this is the best that we could get. We can work on trying to patch this system, but forget trying to negotiate the major barriers erected by obdurate politicians. Even if current laws and regulations have locked up much of the nation’s health care funds, we’ll just try to muddle our way through with incremental steps using some future form of magical waivers which we will need since the currently available waivers, including those in the Affordable Care Act, cannot change the basics of the fundamentally flawed, fragmented infrastructure of multiple public programs and private plans, or no plans at all for far too many of us.

What is so important about today’s message is that the Register’s editorial board sees through this nonsense. “The Affordable Care Act is built on a broken system.” Congress has “cemented” into place this highly dysfunctional infrastructure. Incremental steps cannot work when we are heading down the wrong pathway.

As the Register states, “This country needs a single-payer health care system with coverage facilitated by the government – similar to Medicare, everyone could contribute through taxation and everyone would be covered.”

The Des Moines Register is back on message. We have to get back on message as well.

‘Breaking Bad’ Is Fully Dependent on Our Broken Health-Care System

By Tricia Romano
The Daily Beast, August 27, 2013

When Breaking Bad first aired on AMC in January 2008, the country wasn’t yet in a recession and Obamacare wasn’t a word, but the health-care debate was front and center.

Though candidates Barack Obama and Hillary Clinton differed on the specifics, they agreed that the U.S. health-care system, which was bankrupting so many people, needed an overhaul. (John McCain, of course, didn’t support anything resembling single-payer or universal health care.)

By the time Breaking Bad’s second season premiered, everything had changed. The unemployment rate was skyrocketing, and people were losing their homes. Obama had just been sworn in and promised to reform the health-care system. Fixing health care wasn’t just a pie-in-the-sky dream; it now had a renewed urgency.

Walter White (Bryan Cranston)’s initial foray into making meth was about paying for his cancer treatment and keeping his family from going broke. And he was a man with health insurance. Imagine his desperation had he been without it, as 55 million Americans are, according to the Commonwealth Fund.

In Breaking Bad’s first few seasons, Walt struggled to come up with the cash to pay for his treatment. The $5,000 deposit at the oncology center was a fraction of the overall expense, which would total $90,000, a number only the rich could afford. Forget about a high school chemistry teacher. Later his hospital stay runs up another $13,000 tab. And while Walt grumbles to Skyler (Anna Gunn) about stealing from his pension, he does the math—it’s going to take a lot of meth to make a dent in his financial hole.

On Sunday night, during White’s gross, false videotaped “confession,” he talked about how he was afraid the cancer diagnosis would “bankrupt his family.” He spoke of paying for his brother-in-law Hank (Dean Norris)’s health care—$177,000—which Hank called the “last nail in the coffin” preventing him from going to the DEA and spilling the beans.

In what other country would “I paid for your health care” be a menacing bribe?

If Breaking Bad had aired the ’80s, it would have read as a giant “Just Say No” campaign. But in 2013, with health-care costs rising and Obamacare on the brink of becoming a reality, the show’s main takeaway isn’t “meth is bad,” “money is evil,” or “people can’t change their nature.” Breaking Bad almost seems to be saying good health care is worth killing for.

Walter White finds other reasons to continue his downward spiral into madness—he’s a prideful, resentful, ego-driven sociopath, after all. Skyler was asking Walt how much money would be enough to feed his ego and desire for power when she took him to the storage unit and showed him a bed of cash. But though his cancer had receded at that point, Walt’s bed of money is a good reminder of how much money Americans really need to cover their health-care expenses, for cancer in particular. According to the National Cancer Institute, national cancer-care costs were $124 billionin 2010—$12.12 billion of that just for lung-cancer costs.

The average person spends $8,233 a year on health care, according to the Organization for Economic Cooperation and Development. Health care accounts for 17.6 percent of the U.S. GDP, 1.5 times more than any other country.

What’s interesting about Hank’s situation in particular is how ignorant he is about his own insurance policy: “$177,000,” he says. “Hell’s he talking about? Why were they paying for my medical bills? What about my insurance?”

Marie (Betsy Brandt), who works as a radiology technician, certainly knows how the system works. She gives Hank a lesson in Insurance 101: “Insurance wouldn’t have covered the treatment that you needed.” She adds: “Without it, you never would have been able to walk again.”

Hank’s ignorance is likely an accurate reflection of many Americans’ inability to comprehend just how crappy our system is. Most people wrongly assume that if they have coverage, they are golden. But they don’t realize that even with that precious, must-be-protected-at-all-costs, employer-paid health care, they could still go bankrupt thanks to the magic phrase “out-of-pocket expenses.”

Indeed, medical care is the biggest cause of bankruptcies in the U.S., according to several studies, including one by Harvard University and a recent study byNerdWallet.

According to NerdWallet: “Despite having year-round insurance coverage, 10 million insured Americans ages 19-64 will face bills they are unable to pay.”

In 2005 Harvard researchers found that in half of the bankruptcies they studied, medical causes were cited as the reason for declaring bankruptcy.

A few have noted that Breaking Bad couldn’t be set in any other country but the U.S., something star Cranston acknowledged in a 2011 Rolling Stone interview. “If we did have universal health care five years ago, the show might not have worked,” he said. “Thank God Obamacare wasn’t in play five years ago. Whew!”

An Internet meme imagined if Breaking Bad were set in Canada, which has socialized medicine. The Canuck Breaking Bad wouldn’t last long, it turns out.

“You have cancer. Treatment starts next week,” says the doctor in the first frame.

There’s only one other panel.

“The End.”

http://www.thedailybeast.com/articles/2013/08/27/breaking-bad-is-fully-dependent-on-our-broken-health-care-system.html

High-deductibles cause men to avoid emergency department use for high-severity conditions

The Impact of High-deductible Health Plans on Men and Women: An Analysis of Emergency Department Care

By Kozhimannil, Katy B. PhD, MPA; Law, Michael R. PhD, MSc; Blauer-Peterson, Cori MPH; Zhang, Fang PhD; Wharam, James Frank MB, BCh, BAO, MPH
Medical Care (APHA), August 2013

Abstract

Background: Prior studies show that men are more likely than women to defer essential care. Enrollment in high-deductible health plans (HDHPs) could exacerbate this tendency, but sex-specific responses to HDHPs have not been assessed. We measured the impact of an HDHP separately for men and women.

Methods: Controlled longitudinal difference-in-differences analysis of low, intermediate, and high severity emergency department (ED) visits and hospitalizations among 6007 men and 6530 women for 1 year before and up to 2 years after their employers mandated a switch from a traditional health maintenance organization plan to an HDHP, compared with contemporaneous controls (18,433 men and 19,178 women) who remained in an health maintenance organization plan.

Results: In the year following transition to an HDHP, men substantially reduced ED visits at all severity levels relative to controls (changes in low, intermediate, and high severity visits of −21.5% [−37.9 to −5.2], −21.6% [−37.4 to −5.7], and −34.4% [−62.1 to −6.7], respectively). Female HDHP members selectively reduced low severity emergency visits (−26.9% [−40.8 to −13.0]) while preserving intermediate and high severity visits. Male HDHP members also experienced a 24.2% [−45.3 to −3.1] relative decline in hospitalizations in year 1, followed by a 30.1% [2.1 to 58.1] relative increase in hospitalizations between years 1 and 2.

Conclusions: Initial across-the-board reductions in ED and hospital care followed by increased hospitalizations imply that men may have foregone needed care following an HDHP transition. Clinicians caring for patients with HDHPs should be aware of sex differences in response to benefit design.

http://journals.lww.com/lww-medicalcare/Abstract/2013/08000/The_Impact_of_High_deductible_Health_Plans_on_Men.2.aspx

Comment:

By Don McCanne, M.D.

One of the most important changes in health care financing taking place today is the tremendous surge in the use of high-deductible health plans. This is yet one more study that shows that we should question the wisdom of this policy intervention.

Males whose employers switched them from a traditional HMO to a high-deductible health plan reduced their use of emergency department high-severity visits by 34 percent. That is, they did not go to the emergency department when the severity of their condition clearly warranted it. That was followed a year later by a 30 percent increase in hospitalizations. Lead author Katy Kozhimannil stated, “The trends suggest that men might have put off needed care after their deductible went up, leading to more severe illness requiring hospital care later on” (American Medical News, Aug. 26).

High-deductible health plans not only cause financial hardship, they also maim and kill people. And they aren’t even necessary as a means to control spending. We can control costs more effectively and far more humanely through a publicly-administered single payer program that provides first-dollar coverage.

Bare Bones Health Plans Expected To Survive Health Law

By Jay Hancock and Julie Appleby
Kaiser Health News, Aug. 25, 2013

Consumer Reports calls it “junk health insurance.” A California regulator described them as “skeleton policies.” To an expert from the American Cancer Society, they “are a perfect example of why health care reform is so crucial.”

They are bare-bones health plans, and critics say they could leave consumers who become seriously ill on the hook for tens of thousands of dollars in medical costs. The Affordable Care Act was supposed to do away with them.

“The good news is that these plans will be a thing of the past in 2014,” Steve Larsen, then a high-ranking Department of Health and Human Services official, told reporters two years ago.

The law did outlaw so-called “mini-med” plans, which cap annual benefits at, say, $2,000 even though the average hospital stay costs $14,000. But now a new type of bare-bones policy may take their place.

Consumer advocates, employers and insurers say that unless regulators move to block them at the last minute, plans with limited benefits may continue to be offered by some large businesses, especially those with low-paid workers such as restaurant chains and retailers.

Proposed and final rules issued this spring surprised many by failing to bar large employers from offering insurance policies that could exclude benefits such as hospitalization.

Offering bare-bones policies may result in some fines, but that expense could be less than the cost of offering traditional medical coverage.

For large employers, “the feds imposed no minimum standard on how skimpy that coverage can be other than to say, in essence, it’s got to be more robust than a dental plan or a vision plan,” said Ed Fensholt, a senior vice president at insurance broker Lockton Companies. “We had customers looking at offering some relatively inexpensive and skimpy plan designs to satisfy the individual mandate at modest cost.”

Employers Showing Interest

“There is a lot of interest” from retailers and others that have offered limited-benefit plans in the past, said Joan Smyth, a partner with benefits consultant Mercer. She’s gotten so many inquiries since the Wall Street Journal reported on the issue in late May that limited benefit plans are “my favorite topic,” she joked.

Such plans were typically offered because some insurance was seen as better than none — and the premium costs for both employers and workers were far lower than for traditional coverage.

This summer, the Obama administration gave businesses with 50 or more employees another year, until 2015, to comply with the requirement that they offer insurance or pay a fine.

“Some of the pressure was taken off because of the announcement” to delay the employer mandate, said Neil Trautwein, employee benefits policy counsel at the National Retail Federation, a trade group. “But I think you will continue to see employers in many industries … carefully calculate their strategy for compliance,” in part by considering skinny plans. “As always, the interest is to limit cost increases.”

Officials for McDonald’s, Ruby Tuesday, Darden Restaurants and other large employers that have offered mini-med coverage in the past declined to comment or did not respond to questions about their plans.

Small Businesses Barred

The bare-bones plans cannot be offered to small businesses with fewer than 50 workers, or to individuals buying coverage through new online marketplaces that open for enrollment Oct. 1. But benefit experts expect some larger firms that buy outside the marketplaces or that self-insure to consider them. 

The Obama administration says that workers offered such coverage may qualify to shop in the marketplaces and to buy subsidized plans.

“Individuals who are not already offered quality, affordable health care can enter into the marketplaces and choose a health insurance option that works for them,” said Sabrina Siddiqui, spokeswoman for the Treasury Department.  

About 2 million Americans are covered by limited benefit mini-med insurance policies, many of which were issued by Aetna and Cigna.

Asked whether Cigna will offer new versions next year, a company spokesman said, “We are currently evaluating the types of plan designs that will meet the needs of employers and employees.” Aetna spokesman Matt Wiggin said the insurer is “still assessing” customer needs.

Skimpy insurance under the Affordable Care Act won’t be quite the same as it is now. Under the new rules, capping the dollar value of annual benefits isn’t allowed, but excluding entire categories from coverage – such as hospital stays – is permitted, say benefit consultants. That’s another way of keeping costs down.

‘Mini-Meds Have Morphed’

The law says only that large-employer policies must cover preventive care such as blood pressure tests or vaccines with no co-pays for consumers. So the plan could cover dental, vision and preventive cancer screenings, but possibly not the treatment or hospital care a patient could need if diagnosed with an illness.

True, the health act requires policies to include coverage for 10 broad categories of “essential health benefits,” such as hospitalization and mental health services, but that provision applies only to plans sold to small businesses and individuals.  Larger firms and self-insured employers are exempt.

Benefit advisers say some retailers and restaurant chains are considering limited-benefit plans for 2014 even though the deadline was pushed back for offering coverage or facing fines.

“It seems like mini-meds have morphed,” said Lydia Mitts, a health policy analyst for Families USA, a consumer advocacy group. The new limited benefit policies “are not the same animal but are still substandard coverage.” Employers offering these sorts of plans do face some risks, experts said. If a large employer doesn’t offer “minimum essential coverage,” it’s potentially liable for fines of $2,000 per full-time worker after the first 30 workers. Under the abstruse wording of the health law, however, skinny plans appear to qualify as minimum essential coverage.

But if employers don’t offer “comprehensive” policies — defined as covering at least 60 percent of health expenses — they must pay $3,000 for each worker who receives subsidies to buy coverage. Opinions differ on whether skinny plans will be able to pass the comprehensive test; some regulations are still pending. But employers see that potential expense as far lower than the cost of offering all their workers more robust coverage, experts said.

Some businesses are also betting that few workers will go to the government-run marketplaces to seek subsidized coverage, opting instead for the skinny plan “which costs less than the penalty,” said Dania Palanker, senior counsel for the National Women’s Law Center in Washington, D.C.

Signing up for a company skinny plan would fulfill a consumer’s obligation to be covered under the health act and protect her from the law’s fines. 

Advocates are still pressing employers to offer more comprehensive policies.

“People need to be covered for hospitalizations,” said Mitts of Families USA. “It’s important for employers to do the right thing and they should not just look at the minimum requirements of the law.”

http://www.kaiserhealthnews.org/Stories/2013/August/26/bare-bones-health-insurance-health-law.aspx

Why Health Law’s ‘Essential’ Coverage Might Mean ‘Bare Bones’

It came as a surprise to some that the Affordable Care Act seems to allow large employers to offer health insurance that pays for preventive care and not much else. Check out our story on “skinny” plans quoting a consultant saying that for employers with 50 or more workers, “the feds imposed no minimum standard on how skimpy that coverage can be other than to
say, in essence, it’s got to be more robust than a dental plan or a vision plan.” The Wall Street Journal broke the story in May.

Retailers, restaurant chains and temporary staffing companies are said to be interested.

But how can a law praised for expanding coverage — one that includes an “employer mandate” to offer “minimum essential coverage” — allow companies to offer insurance that might not even cover hospitalization?

Take a walk through the ACA weeds to see why.

First of all, there is no outright ban on skinny plans — even after the employer mandate kicks in in 2015. Instead, large employers — those with 50 or more full-time employees — run the risk of fines only if the coverage doesn’t conform to ACA rules. The regulations published so far, however, seem to allow skinny plans with a penalty that many employers may choose to pay because it is less costly than offering fuller coverage.

There are two fines in the health law for large employers failing to offer adequate coverage. First, any company that does not offer “minimum essential coverage” is liable for a $2,000-per-worker penalty (minus the first 30 workers), triggered when at least one employee enrolls in subsidized coverage in the online marketplaces known as exchanges.

But what is minimum essential coverage? Not as robust as you might think. To start, don’t confuse it with “essential health benefits,” including maternity benefits and prescription drugs, that must be included in plans sold to individuals or small employers.

If health insurance is merely sponsored by an employer, it passes one test for minimum essential coverage.

Now how good does that employer insurance have to be? The regulations are obscure, defining minimum essential coverage largely in terms of what it is not. For example, “limited-scope dental or vision benefits” are not minimum essential coverage. Nor is “coverage only for a specified disease or illness.”

Neither the law, nor the regulations say much about what minimum essential coverage offered by a large employer is. As a result, many experts believe large employers can shield themselves from the $2,000 penalty by offering a plan that covers the health law’s required preventive care, but still leaves workers vulnerable to thousands in bills if they’re hospitalized. If employees sign up for such plans, which may cost as little as $50 a month, they would also be protected from health-law penalties levied on individuals without coverage.

The health law also fines employers that don’t offer “minimum value” in their health plans, says Alden Bianchi, a Boston-based benefits and compensation lawyer. Skinny coverage flunks that test, based on regulations that measure minimum value against “benchmark plans” in each state, Bianchi said. But the employer penalty is only $3,000 for each worker enrolling in subsidized exchange coverage. That’s likely to be much less than the fine for not offering minimum essential coverage, which is $2,000 for nearly every employee in the company, even if most don’t buy policies in the exchanges.

But what about other rules governing health benefits? What about the part of the health law that bans insurers from cutting off benefits at a certain dollar level? Not a problem for skinny plans. Unlike the “mini-med” plans in common use before the law was passed, they don’t impose a dollar cap; they merely exclude large categories of care, which also keeps down costs.

What about new rules limiting out-of-pocket expenses for consumers? For 2014, your plan can’t make you pay more in co-pays and deductibles than $6,350 for individuals and $12,700 for families. (That may temporarily be higher if your employer has separate administrators for drug benefits and doctors and hospitals.) Skinny plans pass the test again. Out-of-pocket caps are for covered care only, and skinny plans don’t cover much care.

What about restrictions on self-insured employers (the large majority of large companies are self-insured) offering a rich-benefit plan to managers and a limited-benefit plan to hourly workers? Skinny plans survive this one, too, says Ed Fensholt, a senior vice president at Lockton Cos., a large insurance broker. These non-discrimination rules contain exceptions for high-turnover workers, he said. And they require employers only to offer the management plan to hourly workers, not for the workers to enroll.

“That plan would be priced at a place where relatively few rank and file employees would want it,” Fensholt says. “And then they’d offer the skinny plan to the rank and file.”

When asked about the situation, the Obama administration said consumers lacking good coverage “can enter into the marketplaces and choose a health insurance option that works for them.”

Bianchi, who represents large employers, says the people who wrote the law intended to give companies a bare-bones option.

“The ability to offer such plans is a result of conscious policy decisions by Congress, as implemented by the regulators,” he wrote in an industry brief.

The Cato Institute’s Michael Cannon, on the other hand, suspects the administration “had no idea what they were doing,” as he wrote on the libertarian think tank’s blog.

http://www.kaiserhealthnews.org/Stories/2013/August/26/essential-benefits-bare-bones-health-insurance.aspx

A version of these articles also appeared at The Washington Post.

Obamacare architects reap windfall as lobbyists

ObamaCare's architects reap windfall as Washington lobbyists

By Megan R. Wilson
The Hill, August 25, 2013

ObamaCare has become big business for an elite network of Washington lobbyists and consultants who helped shape the law from the inside.

More than 30 former administration officials, lawmakers and congressional staffers who worked on the healthcare law have set up shop on K Street since 2010.

Veterans of the healthcare push are now lobbying for corporate giants such as Delta Air Lines, UPS, BP America and Coca-Cola, and for healthcare companies including GlaxoSmithKline, UnitedHealth Group and the Blue Cross Blue Shield Association.

Ultimately, the clients are after one thing: expert help in dealing with the most sweeping overhaul of the country’s healthcare system in decades. 

Experts say that those able to fetch the highest salaries have come from the Department of Health and Human Services (HHS) or committees with oversight power over healthcare.

“After passage of major legislation, those who have networks on Capitol Hill take exceedingly lucrative jobs with the same industries subject to the legislation,” said Craig Holman, a lobbyist for Public Citizen. “It raises questions about the [bill’s] integrity.”

http://thehill.com/business-a-lobbying/318577-architects-of-obamacare-reap-windfall-as-washington-lobbyists

Comment:

By Don McCanne, M.D.

We need lobbyists, that is lobbyists such as Craig Holman of Public Citizen. But what about administration officials, lawmakers and congressional staffers who helped to create a profoundly wasteful health care financing system that falls tragically short of reform goals, and then left government employment to accept windfalls as private lobbyists representing clients who must deal with Obamacare? As Holman says, it raises questions about the bill’s integrity

Lobbying integrity that makes the difference? “Public Citizen serves as the people’s voice in the nation’s capital.” Public Citizen is already on record as supporting a single payer system:

http://www.citizen.org/singlepayer

A profession full of human beings

By Andrew D. Coates, M.D., F.A.C.P.
WAMC Northeast Public Radio, Aug. 23, 2013

A long time ago when I was about to apply to medical school and struggling with college courses in organic chemistry and calculus and the like, a friend pointedly mocked my desire to become a physician. He dismissed the idea that the profession of medicine could be “a calling” to serve humanity.

My friend specifically suggested that the notion that a doctor could play a modern role analogous to the village physicians of the agrarian past – wise and indispensable servants of the community – amounted to a stupid fantasy. In his view, as a profession, medicine, already overwhelmed by vanity and greed, had long since ceased to be a noble calling – if it ever had been one, he added. To hear this kind of thing from a respected friend can fill a person with self-doubt.

A couple of years after that stinging assessment, and right at the start of my clinical training, all of my doubts were cleared. I was the student accompanying a family physician on a house call in the Schoharie Valley. My teacher had worked his way up, from manual laborer, to hospital orderly, to a wise and indispensable, and indeed beloved, physician for his rural community.

We sat at a kitchen table of a massive man in his senescence. Tethered to oxygen, short of breath with exertion, the man could not get his feet into his shoes because of edema, swelling. He braced himself on backs of chairs to cross the small kitchen to the sink and breathed through his mouth as he went. He suffered advanced lung disease as well as congestive heart failure.

My teacher spoke gently to his patient about salt intake, about watching his weight daily to guard against the danger of accumulating too much fluid. He was sympathetic about how difficult it was to use the scale and stern about how oxygen needed to be used always. The patient volunteered that he had given up pretzels.

The doctor pointed to a gallon-sized pickle jar that sat empty against the wall on the counter. “Did you eat many of those?” he asked.

“No,” the patient replied, “I don’t eat too many. But I do like to drink the pickle juice.”

I could see from the twinkle in his eyes and a twitch at the corner of his mouth that my teacher wanted to laugh out loud. But out of respect for his patient the doctor remained cordial and easy, gently explaining that heavy salt intake would lead to retaining fluid and breathing problems too. The patient listened intently and pointed out that he needed his energy to make it out of the house to visit his wife at the nursing home.

Afterward, for my benefit, my teacher lingered over the lesson of how smoking-related illness had ruined the couple’s “golden years.”

“For decades the inside of that house has been a blue haze of cigarette smoke,” he observed. “Cigarettes have just about killed them both,” he explained in a way that illuminated the human tragedy of tobacco without putting the blame upon any one person.

My teacher later took me with him to the nursing home to visit the man’s wife. I admired his dedication, his insight, his commitment to care for the whole family, the whole community. I could see that the patients and nurses did too.

Later on that year I was invited on a house call in Manhattan, in Inwood, about 30 blocks north of our medical school. An elderly matriarch, incapacitated by her illnesses and attended by a private-duty home health aide, greeted us from a wheelchair in her living room. My teacher, her doctor, carefully reviewed the patient’s medications and how the aide helped give them, making minor adjustments. But most of all she encouraged the patient to live and make plans, cataloging upcoming and recent family events, the Jewish holidays.

Like the upstate doctor, she knew every detail of the cultural and family life of her patient. She emphasized for me the hardship of the patient’s decline from the viewpoint of her family. This family counted upon this doctor in a profound way, to shepherd them through this painful chapter, with an emphasis upon living life to the fullest experience. I was especially privileged not only to witness this human interaction, but to be charged with studying and absorbing as much as I could.

As my education and training, and now my so-called career, have proceeded, I can testify that these role model physicians – outstanding human beings and great teachers – are not exceptional in the context of the profession of medicine. Yes, house calls may be rare, but they illustrate an impulse I find in so many of my colleagues. (And more of us do them than you might think.)

Vanity and greed do threaten to undermine the practice of medicine as the so-called medical industry can’t help but introduce assembly-line management techniques. But the profession of medicine remains full of human beings striving to fulfill a noble calling, full of good doctors who know our patients, their culture, our communities.

Medicine as a profession remains full of potential to promote for the health of each and all. We have what it takes. We must rebuild our system to allow our caring, care-giving profession to live up to its calling.

Dr. Andrew Coates practices internal medicine in upstate New York. He is president of Physicians for a National Health Program.

You can listen to Dr. Coates’ radio broadcast here: http://www.wamc.org/post/andrew-coates-profession-full-human-beings

The Last Bad Idea

By Gerald Friedman
Center for Popular Economics blog, Aug. 23, 2013

The Patient Protection and Affordable Care Act (ACA) was adopted in 2010, but many provisions are only being phased in over several years.

Important provisions that have already taken effect include the requirement that family policies allow parents to keep their children enrolled until they are 26. The high unemployment rate for young adults and the lack of health coverage even for many with jobs has made this provision a great boon to many.

But there is much more to come with major elements to be implemented in January 2014, including a huge expansion in Medicaid coverage to the working poor, and the requirement that individuals without other coverage buy health insurance through new state exchanges, often with substantial federal subsidies.

Rather than making a fundamental shift to a system where health care is publicly guaranteed as a basic human right, the ACA reforms and expands the existing health insurance system, leaving private for-profit insurance companies as gatekeepers to medical care.

Without changing the foundation of the health care infrastructure, the law offers private insurers an expansion in business as a carrot to get them to accept reforms that limit their use of adverse selection, the practice of screening to identify and discourage the expensive sick (“lemon dropping”) and to attract the low-cost well (“cherry picking”).

The law also provides a dramatic expansion of public insurance by mandating that everyone is eligible for Medicaid whose income is below 138 percent of the Federal Poverty Line (FPL); but the Supreme Court has limited this program by allowing states to opt out of the expansion. Several Republican-dominated state governments are choosing this option despite the Federal commitment to pay over 90 percent of the costs of expansion.

The Court preserved the requirement that everyone have insurance and the law’s subsidies for buying private insurance, subsidies that will go to households with incomes as much as 400 percent of the FPL beginning in January 2014 when the individual mandate goes into effect.

Despite the Court decision and some state-level refusals to expand Medicaid, it is projected that the ACA will reduce the population without insurance by almost half, from 55 million in 2013 to 29 million by 2017. Over 80 percent of the newly insured are expected to receive subsidies; with an average subsidy of over $5,000 paid largely through new taxes on the highest earners, the subsidized insurance will be one of the largest redistributive measures ever enacted.

Subsidized coverage expansion and restrictions on insurance company abuses are significant gains. But these gains come at a steep price because with the ACA the Obama Administration has entrenched the insurance and drug companies as arbiters of America’s health care system.

This is not only repugnant because of these companies’ abusive policies, but it endangers everything that the ACA seeks because it precludes effective action to contain rapidly rising health care costs. Private plans divert health care spending into channels that do nothing to actually deliver health care, such as advertising and profit.

The proliferation of plans has also raised billing costs for providers, hospitals, clinics, and private medical practices, costs that now come to nearly a third of the cost of health care.

Without effective controls on profits and administrative costs, health care costs will continue to soar, rising faster than household, company and government budgets.  The pressure to control health care costs will continue and, having removed profits and administrative waste from consideration, the ACA risks becoming a vehicle to control health care costs by squeezing providers and restricting access.

The ACA commits the United States to providing universal access to health care. This is a great achievement, one to be treasured and nurtured. Now the real fight begins: the fight to turn this commitment into a reality that the ACA itself cannot produce. In a few years, it will be clear that the ACA will have failed to provide universal coverage and failed to control costs.

As president, Barack Obama accepted the political wisdom that it would be impossible to enact a single-payer program that would abolish the private health insurance market, but prior to his presidency he had been a long-time supporter of single payer. And he was right: only a single payer program can provide universal coverage, and only a single payer program can control costs.

The ACA may be the last bad idea that Americans try; after it fails, we will finally do the right thing: single-payer health insurance.

Gerald Friedman is professor of economics at the University of Massachusetts, Amherst.

http://www.populareconomics.org/2013/08/the-last-bad-idea-the-patient-protection-and-affordable-care-act/

Let’s Talk about a Real Healthcare System (And, No, I Don't Mean 'Obamacare')

By Deborah Burger, R.N.
CommonDreams, Aug. 13, 2013

Let’s talk about healthcare. I don’t mean debating the Affordable Care Act. I mean healthcare, as in: If everyone needs healthcare, guarantee that everybody gets it.

I know, when it comes to healthcare, it’s easy to get into a debate for or against Obamacare. But we nurses see the world through a different lens: our patients.

Good healthcare is a fundamental resource that keeps America’s big engine running. Every day, as we do our best to care for our patients, nurses see people with chronic disease like asthma or diabetes who can’t afford insurance costs or medication. Maybe they’re absent from work, tired, and distracted from trying to manage their health on a shoestring. They run the risk of hospitalization. They struggle for a distant unreachable shore hoping something will help. They can’t get ahead because their health keeps dragging them down.

And yet the answer isn’t on the horizon, the answer is in our pockets, in our hands. It’s our taxes. We pay them and we ought to benefit from them.

There’s one thing that every American does. Every working American (OK, except the Wall Street crowd) pays taxes. But what do we pay taxes for? Increasingly, we wonder where our money is going, how our money is serving our communities, and how our tax money is helping us and our families.

There are dozens of arguments about what our tax dollars should be doing. But what if we spent a portion of our tax dollars on the one thing that would position every American, young and old, on the road to success? That one thing is good health. You need it to go to school, get to your job, excel at what you do, and dream big dreams that will make our country great again.

We must do better and nurses have a solution. The United States ranks first in costs but 37th in health outcomes in the world. We do even worse for infant morality and life expectancy.

So nurses are proposing another way. We’re saying that our taxes should pay for our healthcare. It works for seniors, it works for Congressmembers, and it will work for all of us.

This week, we launched an online campaign, asking voters to demand this from Congress.

We’re talking about something that already exists for some, right here in the United States of America, and what can easily exist for everyone. A tax-funded national healthcare system would negotiate prices for prescription drugs, medical devices and services, specialists and more, effectively lowering the cost of delivering care. Taxpayers don’t have to worry about paying for someone else’s care. You’ll be paying for your own care, your family’s care, without raising taxes at all.

Since the tax subsidies to buy insurance under the ACA mostly move money around to pay for private insurance for some that don’t have it, and which allows the insurers to take 20 cents off the dollar, it would be more efficient to uses taxes to pay for everybody’s healthcare directly, eliminating the middleman and the shell game.

We are reaching inside the box to think outside the box; we are charting a third way. It’s time to rediscover healthcare as care rather than insurance for the first time in a long time, and let the taxes we already pay deliver what every American needs.

Deborah Burger is a registered nurse and a co-president of National Nurses United.

http://www.commondreams.org/view/2013/08/13-3