Re Accretive's squeeze on patients: Single-payer system would restore dignity

By Ann Settgast, M.D.
The Star Tribune (Minn.), April 29, 2012

While the behavior of Accretive employees reported in the April 25 article “Attorney general: Fairview put squeeze on patients” is appalling, it should hardly surprise us. As stated, Minnesota hospitals write off hundreds of millions of dollars in uncompensated health care each year. I applaud the AG for highlighting the shameful practice of harassing sick people for money they don’t have, but I implore readers to recognize that this situation simply underscores the giant health care mess we are in, and there is no end in sight.

The need for our hospitals to provide uncompensated care to uninsured and underinsured Minnesotans will continue to grow if we do not fundamentally change our system. Assuming the Affordable Care Act is fully implemented, more than 250,000 Minnesotans will remain uninsured, while hundreds of thousands more will rely on skimpy insurance that does not properly protect them from serious financial strain if they fall ill.

As a practicing physician representing more than 900 Minnesota physicians and medical students in our chapter of Physicians for a National Health Program, I continue to find the injustice of our nonsystem shocking. But I do not despair, because there is a solution. Under a unified single-payer system, hospitals would reliably receive the compensation they deserve for the valuable work they do, and patients would seek care when they need it without being subjected to humiliating harassment. Let’s do the right thing and change our system for real.

Dr. Ann Settgast resides in Minneapolis.

http://www.startribune.com/opinion/letters/149314445.html

Re Accretive’s squeeze on patients: Single-payer system would restore dignity

By Ann Settgast, M.D.
The Star Tribune (Minn.), April 29, 2012

Dr. Ann Settgast resides in Minneapolis.

http://www.startribune.com/opinion/letters/149314445.html

More on small businesses and self-insured plans

Implementing Health Reform: Amidst Turbulence, Federal Work Goes On

By Timothy Jost
Health Affairs Blog, April 27, 2012
Stop-Loss Coverage And Self-Insured Plans
On April 27, 2012, HHS, Treasury, and Labor published a Request for Information Regarding Stop Loss Insurance. The concern that drives this is the potential of stop loss-insured self-insured employer plans destabilizing the small group insurance market post-2014.
Employers have always had reasons to self-insure. Plans that are self-insured escape state regulation, including state mandates, and can be less expensive than commercial insurance for low-risk groups. The Affordable Care Act (ACA), however, increases these incentives dramatically. Insurers understand this, and are actively marketing “self-insured” products to small groups. These products offer administrative services and “stop-loss” coverage that shields small employers from the risk that would otherwise make self-insured status unattractive. They often have very low “attachment points,” which define when the employer ceases to bear risk and the stop-loss insurer takes over. Some stop loss plans are almost indistinguishable from high deductible health plans, except that the risk remains nominally with the employer rather than the employee.
Self-insured plans become more attractive to small groups under the ACA for two reasons. First, they are subject to fewer regulatory requirements than are insured plans. Whether in or out of the exchange, small group plans must offer the essential benefits package, include their members in a single risk pool, participate in the risk adjustment program, offer the same premiums without regard to health status, and offer the precious metal tiers. Self-insured plans are not, however, subject to these requirements. Moreover, neither self-insured plans nor the stop-loss coverage that makes self-insurance possible for small groups are subject to the ACA’s minimum medical loss ratio requirements. Self-insured plans are also exempt from a fee imposed on insurers under ACA section 9010 and stop-loss plans do not need to justify unreasonable rate increases.
Second, once the ACA establishes guaranteed issue and bans health status underwriting and pre-existing condition exclusions for small groups in 2014, the risk to small employers of self-insuring will be dramatically reduced. Under current law in most states, a self-insured small employer faces the prospect of significantly increased stop-loss rates or lack of affordable access to conventional insurance if the group’s risk profile deteriorates (e.g. an employee or dependent gets cancer or needs an organ transplant). But, beginning in 2014, insurers (in or out of the exchange) will not be able to refuse to insure higher-risk small groups or exclude preexisting conditions, and will have to insure them at standard rates. SHOP (small employer) exchanges cannot have open enrollment periods for employers but must admit small employers whenever they apply for coverage. The threat of adverse selection to the exchanges could be substantial. Healthy small groups will be able to self-insure with stop-loss coverage and then leave that coverage and enter the exchange at standard rates the moment an employee or dependent suffers a serious illness or accident.
Without stop loss insurance, however, self-insured small group plans become much less viable. Few small groups can fully take on the risk of self-insuring without stop-loss. As of this point, stop loss insurance for small groups is not regulated at the federal level and largely unregulated at the state level. The term “self-insured” is not defined in the ACA, and the agencies clearly have the authority to define when a plan with stop-loss coverage is in fact so fully-insured that it ceases to be self-insured. In the request for information, the agencies are seeking to determine how common stop-loss coverage is, how it operates, how insurers decide which employers to insure and how much they charge, and how stop loss insurance is regulated. Presumably regulations will follow.
http://healthaffairs.org/blog/2012/04/27/implementing-health-reform-amidst-turbulence-federal-work-goes-on/

The Affordable Care Act offers Mack-truck-size loopholes for small businesses that decide to self-insure – loopholes that defeat many of the noble intentions of health care reform. Timothy Jost describes these loopholes above.
In his full article available at the link above, Professor Jost also describes 1) several technical considerations for the medical loss ratio, 2) some of the complexities in determining whether individuals have access to employer-sponsored plans, which in turn can affect eligibility for exchange plans, and 3) technicalities that determine whether or not employer-sponsored plans meet minimum value requirements.
A quick read of the full article will reinforce two points that we already know: 1) the Affordable Care Act significantly increases the administrative complexity of health care financing when our system is already weighted down with expensive administrative excesses, and 2) the Act opens up further the opportunity for gaming the system thereby perpetuating and expanding the inequities and injustices of our uniquely American system that already uses gaming that drives up costs and diverts our finite funds away from health care.
As Professor Jost says, more regulations should follow. Great. Each loophole patch seems to create multiple additional loophole opportunities.
It is astounding that we continue to make such an intense effort to try to get this turkey to fly when we could have a health care system that would soar like an eagle. (If only metaphors could send us off in the right direction, but alas… )

Group backs human rights status for health care

Health Care for All-Oregon plans statewide campaign to put pressure on Legislature

By Bennett Hall
Corvallis Gazette-Times, April 24, 2012

Taking a page from Vermont’s playbook, Oregon reform advocates plan to launch a major campaign to have health care declared a human right.

“It means you get the care you need when you need it,” said Dr. Mike Huntington of Corvallis, the newly elected president of Health Care for All-Oregon.

The statewide organization’s ultimate goal remains single-payer health care — a taxpayer-funded system that would cover medical, mental and dental treatment for all Oregon residents, replacing private health insurance.

But despite some support in Salem, single-payer bills have never gotten very far in the Legislature.

Now, Huntington said, it’s time for a new tactic: a broad-based effort to mobilize public support for the notion that everyone deserves access to health care.

“We realized from others’ experience — primarily from Vermont — that it doesn’t really matter how good your argument is,” Huntington said. “It’s how well you can move people.”

In 2011, a three-year grass-roots organizing campaign led by the Vermont Workers Center culminated in a legislative declaration that access to health care should be considered a fundamental right. The state also passed the most far-reaching health reforms in the country, setting the stage for a single-payer system.

“The idea of health care as a human right resonated very well,” Huntington said. “We’re following their lead.”

Huntington aims to copy that strategy, gathering photo petitions from Oregonians suffering under the current system, dispatching speakers to address civic groups and holding house parties to spread the gospel of a universal right to health care.

The idea is to first generate a groundswell of public support and then push for a joint resolution in the Oregon Legislature.

Rep. Michael Dembrow, D-Portland, a longtime single-payer advocate, plans to work on the issue from the House side. A human rights declaration, he said, would go a long way toward advancing the cause of universal coverage for all Oregonians.

“It would clarify that this is something the Legislature should be working on,” Dembrow said. “The first step is really to get that public commitment that health care is not just an individual issue. We have a stake in it as a society.”

Huntington brings solid credentials to his new role as head of the state’s largest health care reform group.

A retired radiation oncologist, he helped organize the Oregon chapter of Physicians for a National Health Program in 2007. Two years later, he teamed up with fellow Corvallis physician Paul Hochfeld and several Portland-area practitioners to launch the Mad as Hell Doctors.

The group set off on a cross-country road show to tout the benefits of single-payer care, holding town hall meetings in 26 cities and capping the journey with a rally in Washington, D.C., where Congress was hashing out the details of Obamacare. The Mad Docs have remained active, following up their national tour with shorter jaunts through California and Oregon.

As head of Health Care for All-Oregon, Huntington said, he will continue to push for universal, not-for-profit coverage both statewide and nationally.

“We are strengthening our ties with other organizations around the nation that are doing the same thing,” he said. “We’re trading ideas on how we can succeed.”

And Huntington has a re-energized Health Care for All-Oregon to back him up. At the same April 13 meeting in Portland where Huntington was elected president, the organization bequeathed its name to the Oregon Single-Payer Campaign, a 2-year-old coalition of labor unions and health care advocates.

Health Care for All-Oregon was formed in the 1990s to promote a single-payer health care system. But it suffered a stinging defeat at the ballot box when Measure 23 lost by 700,000 votes in 2002 and had been largely dormant since then.

Inspired by the rapid rise of the Oregon Single-Payer Campaign, the older group’s leaders decided to pass the torch.

“At board meetings we kept discussing this and said, ‘We don’t need two organizations’” promoting universal health care, said longtime board member Betty Johnson of Corvallis.

“We could just see the kind of energy that this organization was trying to create.”

The Oregon Single-Payer Campaign — which grew out of a partnership between Health Care for All-Oregon, Portland Jobs With Justice, the Mad as Hell Doctors and Physicians for a National Health Program — drew 500 people to a conference in Portland last year.

Some 28 labor unions, nonprofits and advocacy groups were represented at another conference this January, and the coalition’s ranks have continued to swell. Now that the group has assumed the mantle of Health Care for All-Oregon, some 46 organizations have signed on, including some of the state’s largest labor unions.

The membership now includes the Oregon Education Association, the American Federation of Teachers-Oregon, the Oregon Nurses Association and locals of the Communication Workers of America, Service Employees International Union and International Association of Machinists.

“There’s several other big unions thinking very seriously about it,” said Peter Shapiro of Portland Jobs With Justice.

Universal health care can be a touchy subject for union leaders, who are reluctant to give ground on hard-won insurance benefits. But rising health care costs are already undermining many of those gains, Shapiro said, and more and more labor leaders are warming to the cause.

“And I think, in terms of providing some institutional clout and organized muscle, unions have a big role to play in the single-payer movement,” he said.

Contact Bennett Hall at 541-758-9529 or bennett.hall@gazettetimes.com.

Healthcare: What Might Have Been

By JULIET LAPIDOS
The New York Times, April 27, 2012

Long before the sexting scandal that ended his career, Rep. Anthony Weiner advised the president on how to pass healthcare reform. Robert Draper reports in his new book, “Do Not Ask What Good We Do,” that in September of 2009 Mr. Weiner told the president, “I think you’re looking at this entirely the wrong way. You need to simplify it. Just say that what we’re doing is gradually expanding Medicare.”

That was code for a single-payer system, which the president insisted could never pass. But Mr. Weiner was undeterred: “You only have votes for something when you go out and fight for them.”

It’s impossible to say what might have happened if Mr. Obama had listened to Mr. Weiner, but with hindsight it’s obvious that his strategy had certain advantages. By framing the Affordable Care Act as an expansion of an already popular program—instead of as a bold new experiment—the Democrats could have better defended themselves against right-wing attacks. The ludicrous “keep government out of my Medicare” meme might never have taken off. Maybe we’d have ended up with the single-payer system liberals wanted instead of the Heritage Foundation-inspired individual mandate, which might not even survive Supreme Court review.

Mr. Weiner wasn’t the only congressman to pitch an alternative approach. According to Mr. Draper, John Tanner, a Blue Dog Democrat, told House Speaker Nancy Pelosi that she should “break the bill down:”

Have a bill that covers pre-existing conditions. Pass that—or make the Republicans vote against it—and then move onto another part. But you do this omnibus approach, they won’t know what the hell’s in it. And they’ll keep yelling at it.

Mr. Tanner was right about the yelling, and maybe about everything else. According to the Kaiser Family Foundation, the “component parts” of the ACA have been “consistently popular” over the past two years with one “glaring exception:” Only 32 percent favor the individual mandate. It stands to reason that it’s discomfort with the mandate, and that alone, that drives a plurality of Americans to say Congress should repeal the ACA (about 38 percent, depending on the poll, with about 20 percent wanting to leave it as is, and 33 percent favoring expansion).

Under Mr. Tanner’s scheme, the Democrats could have campaigned on the “component parts,” described the mandate as a payment mechanism, and defied the opposition to come up with a viable alternative to it.

http://loyalopposition.blogs.nytimes.com/2012/04/27/healthcare-what-might-have-been/

Quantitative assessment of ACA underinsurance

Patient Cost-Sharing Under the Affordable Care Act

Kaiser Family Foundation
April 2012

To provide a more tangible picture of what coverage people would be required to buy, the Kaiser Family Foundation commissioned Aon Hewitt, a prominent benefit consultant, to estimate dollar values for several illustrative cost-sharing structures for non-group bronze and silver level plans when the ACA is fully implemented in 2014. Bronze plans are the least comprehensive of the four tiers, and represent the minimum coverage people purchasing non-group coverage could buy to satisfy the individual mandate. Silver plans are likely to be the most common level of coverage because premium tax credits are based on silver plan premiums and only people enrolled in silver plans will be eligible for cost-sharing subsidies.

These estimates update previous work and better reflect the federal guidance on essential health benefits and actuarial value.

We present two illustrative cost-sharing designs that were applied to each tier: one with a deductible and 20 percent patient coinsurance up to an out-of-pocket limit of $6,350 for an individual, and a second with a smaller deductible and higher patient coinsurance of 40 percent up to the same out-of-pocket limit. The deductible and coinsurance were assumed to apply to all services except preventive services, which are available under the ACA without patient cost-sharing. This means that for most services covered by the plan under these designs, the patient would pay all of the cost until the deductible is reached, and either 20 percent or 40 percent (depending on the option) of any additional costs until total patient cost-sharing reaches the out-of-pocket limit. Under the ACA, out-of-pocket limits for health plans are subject to the limit that currently applies to health savings account-qualified health plans, which is $6,050 for single coverage in 2012, and we estimate it to be $6,350 in 2014.

Discussion

The ACA seeks to standardize coverage options available in the non-group and small group markets, making it easier for consumers to compare plans and focusing competition on premium levels.

Coverage with cost-sharing levels comparable to current employer-based plans will be available through gold (actuarial value of 80 percent) and platinum (actuarial value of 90 percent) plans. The estimated actuarial value of typical employer-sponsored coverage is over 80 percent, with coverage offered by small employers generally less comprehensive.

However, the minimum coverage people will be required to buy starting in 2014 will have much higher cost-sharing than typical employer-based coverage and than the average purchased now in the non-group market. With standard 20 percent coinsurance, a bronze plan would have an estimated deductible of $4,375 for a single individual and double that for a family. This compares with an average single deductible of $2,498 in 2010 in the non-group market and an average of $675 in employer-sponsored PPO plans with deductibles in 2011. Deductibles in employer plans paired with tax-preferred savings accounts averaged $1,908 in 2011.

With much of the controversy over the ACA focusing on the individual mandate, it is noteworthy that the minimum coverage requirement is for insurance that is significantly less generous (and with a lower premium) than what most people have today. It is a level of coverage that most would consider catastrophic, providing protection in the event of an expensive illness while subjecting routine expenses (except for preventive care) to a relatively high deductible.

People will have the option of buying more generous coverage than the minimum required, and lower-income enrollees will be eligible for cost-sharing subsidies that decrease their out-of-pocket costs. But, some may still find themselves with insurance that requires substantial cost-sharing.

http://www.kff.org/healthreform/upload/8303.pdf

Comment:

By Don McCanne, MD

The cheapest plans in the exchanges – bronze plans with an actuarial value of 60% (patient pays an average of 40% of covered costs) – will have deductibles of $4,375 for an individual ($8,750 for families) with coinsurance of 20% (the patient pays 20% of the amount over the deductible). The deductible can be reduced to $3,475 for an individual but then the patient faces a staggering coinsurance of 40%.

Because of the availability of income-indexed subsidies, it is likely that silver plans with an actuarial value of 70% will be the most commonly selected plans. These are still well below the typical employer-sponsored plans which have an average actuarial value of 82%. The deductible for the silver plans would be $2,050 for an individual with a 20% coinsurance rate. The deductible could be reduced to $650 but, again, the coinsurance rate would increase to 40%.

Subsidies would assist those with lower incomes, but for this population even the most modest out-of-pocket cost sharing expenses can create financial barriers to care. As income increases, the subsidies diminish and eventually phase out altogether. The 2014 limit for maximum out-of-pocket spending will be $6,350 for an individual or $12,700 for a family (on top of the portion of the premium that that must also be paid). These income-adjusted increases in cost sharing will still be excessive for most individuals and families with significant health problems and with all of the other financial problems that often are associated with ill health.

This is what we mean by underinsurance. The new standard plans to be offered by the state insurance exchanges will not offer enough protection to prevent financial hardship for those with health care needs.

A properly designed single payer system would remove all financial barriers to essential health care services for everyone. The Affordable Care Act won’t do that.

Debt Collector Is Faulted for Tough Tactics in Hospitals

By Jessica Silver-Greenberg
The New York Times, April 24, 2012

Hospital patients waiting in an emergency room or convalescing after surgery are being confronted by an unexpected visitor: a debt collector at bedside.

This and other aggressive tactics by one of the nation’s largest collectors of medical debts, Accretive Health, were revealed on Tuesday by the Minnesota attorney general, raising concerns that such practices have become common at hospitals across the country.

The tactics, like embedding debt collectors as employees in emergency rooms and demanding that patients pay before receiving treatment, were outlined in hundreds of company documents released by the attorney general. And they cast a spotlight on the increasingly desperate strategies among hospitals to recoup payments as their unpaid debts mount.

To patients, the debt collectors may look indistinguishable from hospital employees, may demand they pay outstanding bills and may discourage them from seeking emergency care at all, even using scripts like those in collection boiler rooms, according to the documents and employees interviewed by The New York Times.

In some cases, the company’s workers had access to health information while persuading patients to pay overdue bills, possibly in violation of federal privacy laws, the documents indicate.

The attorney general, Lori Swanson, also said that Accretive employees may have broken the law by not clearly identifying themselves as debt collectors.

Accretive Health has contracts not only with two hospitals cited in Minnesota but also with some of the largest hospital systems in the country, including Henry Ford Health System in Michigan and Intermountain Healthcare in Utah. Company executives declined to comment on Tuesday.

Although Ms. Swanson did not bring action against the company on Tuesday, she said she was in discussions with state and federal regulators about a coordinated response to Accretive Health’s practices across the country. Regulators in Illinois, where Accretive is based, are watching the developments closely, according to Sue Hofer, a spokeswoman with the State Department of Financial and Professional Regulation.

“I have every reason to believe that what they are doing in Minnesota is simply company practice,” Ms. Swanson said in an interview, but declined to provide details.

In January, Ms. Swanson filed a civil suit against Accretive after a laptop with patient information was stolen, saying that the company had violated state and federal debt collection laws and patient privacy protections. That action is still pending.

An Accretive spokeswoman declined to comment on whether other states were looking into its practices and issued a brief statement, “We have a great track record of helping hospitals enhance their quality of care.” In its annual report, the company said it was cooperating with the attorney general to resolve the issues in Minnesota.

As hospitals struggle under a glut of unpaid bills, they are reaching out to companies like Accretive that specialize in collecting medical bills.

Hospitals have long hired outside collection agencies to pursue patients after they have left hospital facilities. But financial pressures are altering the collection landscape so that they are now letting collection firms in the front door, according to Don May, the policy adviser for the American Hospital Association, a trade group.

To achieve promised savings, hospitals turn over the management of their front-line staffing — like patient registration and scheduling — and their back-office collection activities.

Concerns are mounting that the cozy working relationships will undercut patient care and threaten privacy, said Anthony Wright, executive director of Health Access California, a consumer advocacy coalition. “The mission of these companies is in direct opposition to the supposed mission of these hospitals.”

Still, hospitals are in a bind. The more than 5,000 community hospitals in the United States provided $39.3 billion in uncompensated care — predominately unpaid patient debts or charity care — in 2010, up 16 percent from 2007, the hospital association estimated.

Accretive is one of the few companies specializing in hospital debt collection that is publicly traded. Last year, it reported $29.2 million in profit, up 130 percent from a year earlier.

http://www.nytimes.com/2012/04/25/business/debt-collector-is-faulted-for-tough-tactics-in-hospitals.html

Quantitative assessment of ACA underinsurance

Patient Cost-Sharing Under the Affordable Care Act

Kaiser Family Foundation
April 2012
To provide a more tangible picture of what coverage people would be required to buy, the Kaiser Family Foundation commissioned Aon Hewitt, a prominent benefit consultant, to estimate dollar values for several illustrative cost-sharing structures for non-group bronze and silver level plans when the ACA is fully implemented in 2014. Bronze plans are the least comprehensive of the four tiers, and represent the minimum coverage people purchasing non-group coverage could buy to satisfy the individual mandate. Silver plans are likely to be the most common level of coverage because premium tax credits are based on silver plan premiums and only people enrolled in silver plans will be eligible for cost-sharing subsidies.
These estimates update previous work and better reflect the federal guidance on essential health benefits and actuarial value.
We present two illustrative cost-sharing designs that were applied to each tier: one with a deductible and 20 percent patient coinsurance up to an out-of-pocket limit of $6,350 for an individual, and a second with a smaller deductible and higher patient coinsurance of 40 percent up to the same out-of-pocket limit. The deductible and coinsurance were assumed to apply to all services except preventive services, which are available under the ACA without patient cost-sharing. This means that for most services covered by the plan under these designs, the patient would pay all of the cost until the deductible is reached, and either 20 percent or 40 percent (depending on the option) of any additional costs until total patient cost-sharing reaches the out-of-pocket limit. Under the ACA, out-of-pocket limits for health plans are subject to the limit that currently applies to health savings account-qualified health plans, which is $6,050 for single coverage in 2012, and we estimate it to be $6,350 in 2014.
Discussion
The ACA seeks to standardize coverage options available in the non-group and small group markets, making it easier for consumers to compare plans and focusing competition on premium levels.
Coverage with cost-sharing levels comparable to current employer-based plans will be available through gold (actuarial value of 80 percent) and platinum (actuarial value of 90 percent) plans. The estimated actuarial value of typical employer-sponsored coverage is over 80 percent, with coverage offered by small employers generally less comprehensive.
However, the minimum coverage people will be required to buy starting in 2014 will have much higher cost-sharing than typical employer-based coverage and than the average purchased now in the non-group market. With standard 20 percent coinsurance, a bronze plan would have an estimated deductible of $4,375 for a single individual and double that for a family. This compares with an average single deductible of $2,498 in 2010 in the non-group market and an average of $675 in employer-sponsored PPO plans with deductibles in 2011. Deductibles in employer plans paired with tax-preferred savings accounts averaged $1,908 in 2011.
With much of the controversy over the ACA focusing on the individual mandate, it is noteworthy that the minimum coverage requirement is for insurance that is significantly less generous (and with a lower premium) than what most people have today. It is a level of coverage that most would consider catastrophic, providing protection in the event of an expensive illness while subjecting routine expenses (except for preventive care) to a relatively high deductible.
People will have the option of buying more generous coverage than the minimum required, and lower-income enrollees will be eligible for cost-sharing subsidies that decrease their out-of-pocket costs. But, some may still find themselves with insurance that requires substantial cost-sharing.
http://www.kff.org/healthreform/upload/8303.pdf

One of the major flaws of the Affordable Care Act is that underinsurance will become the new standard for health insurance in the United States. This new analysis demonstrates how the most common plans that will be purchased in the state insurance exchanges will fall well below the coverage that most people have today.
The cheapest plans in the exchanges – bronze plans with an actuarial value of 60% (patient pays an average of 40% of covered costs) – will have deductibles of $4,375 for an individual ($8,750 for families) with coinsurance of 20% (the patient pays 20% of the amount over the deductible). The deductible can be reduced to $3,475 for an individual but then the patient faces a staggering coinsurance of 40%.
Because of the availability of income-indexed subsidies, it is likely that silver plans with an actuarial value of 70% will be the most commonly selected plans. These are still well below the typical employer-sponsored plans which have an average actuarial value of 82%. The deductible for the silver plans would be $2,050 for an individual with a 20% coinsurance rate. The deductible could be reduced to $650 but, again, the coinsurance rate would increase to 40%.
Subsidies would assist those with lower incomes, but for this population even the most modest out-of-pocket cost sharing expenses can create financial barriers to care. As income increases, the subsidies diminish and eventually phase out altogether. The 2014 limit for maximum out-of-pocket spending will be $6,350 for an individual or $12,700 for a family (on top of the portion of the premium that that must also be paid). These income-adjusted increases in cost sharing will still be excessive for most individuals and families with significant health problems and with all of the other financial problems that often are associated with ill health.
This is what we mean by underinsurance. The new standard plans to be offered by the state insurance exchanges will not offer enough protection to prevent financial hardship for those with health care needs.
A properly designed single payer system would remove all financial barriers to essential health care services for everyone. The Affordable Care Act won’t do that.

Vt. lawmakers approve health care measures

By The Associated Press
Bennington (Vt.) Banner, April 25, 2012

MONTPELIER (AP) — The Vermont Senate on Tuesday passed stage two of the state’s push to get as close as it can to a universal, single-payer health care system by late in this decade.

By a 20-7 vote, the Senate approved a House-passed bill that sets up a regulated health care marketplace, or exchange, and requires employers with 50 or fewer workers either to enroll their employees in the exchange or let them do so on their own, taking advantage of federal tax credits or subsidies to help them pay for it.

“It’s our intention to use the … exchange as sort of a pivot point,” said Sen. Claire Ayer, D-Addison and chairwoman of the Senate Health and Welfare Committee, in an interview after the Senate vote. “We want to take full advantage of it in terms of helping us define some of our cost-saving processes, develop our health information technology and get ourselves on a path to a single-pipe payer.”

Minor differences between the Senate and House versions likely will be worked out in a legislative conference committee before the bill is sent to Gov. Peter Shumlin, who is a strong backer.

Tuesday’s vote was the latest action in year two of a multi-year effort Shumlin began shortly after taking office last year to move Vermont well beyond the overhaul passed by Congress two years ago and closer to a Canadian-style, government-backed universal health coverage system.

But the long-term plan is fraught with uncertainty. The U.S. Supreme Court is expected to rule in June and could strike down parts of or the entire federal package. That would deprive states like Vermont the federal funding that is crucial to their own overhaul efforts. A change in federal administrations in the November election also likely would halt Vermont’s march to a top-to-bottom shakeup of its $5 billion a year health care system.

Even backers of the legislation acknowledged there are lots of questions, not only about whether Vermont will get to complete the changes that Shumlin made a centerpiece of his 2010 election campaign, but on how the big interim step — the health benefits exchange — would work.

Sen. Ann Cummings, D-Washington and chairwoman of the Senate Finance Committee, likened the passage of the legislation amid so many questions to “driving down the highway in a pea soup fog.”

Backers said the exchange would allow people a simple, computerized system to shop for health insurance, selecting things like the level of coverage, the level of copays they were willing to bear and other features. The actual payments to doctors, hospitals and other providers, would still be made by insurance companies, at least at first, Ayer said.

One principle of insurance is that the bigger the risk pool — the number of people covered — the easier it is to keep costs down. The bill imposes a requirement in stages that people sign up for health insurance through the exchange, starting with workers in companies with 50 employees or fewer.

Critics faulted the mandate. Jeffrey Wennberg, executive director of Vermonters for Health Care Freedom, a group opposing the state’s overhaul efforts, said the legislation “means that within two years upwards of 100,000 Vermonters will be forced to drop their current health insurance whether they want to or not, and purchase insurance through the exchange, which is untested, and undefined.”

The Vermont House also had health reform on its agenda Tuesday, easily giving preliminary approval to a bill calling on health insurance companies to make public their claim denial rates, executive salaries and other data.

Rep. Sarah Copeland-Hanzas, who described the measure to her House colleagues, said it was aimed at making Vermonters smarter health insurance consumers.

http://www.benningtonbanner.com/local/ci_20472676/vt-lawmakers-approve-health-care-measures

Senate gives final approval to health care exchange bill

By Anne Galloway
Vtdigger.org, April 25, 2012

The Senate passed H.559, the health care exchange bill, Tuesday evening, 20-7.

The legislation allows Vermont to take advantage of federal subsidies and tax credits associated with the federal Affordable Care Act. The Shumlin administration plans to use the exchange as a stepping stone toward financing a single-payer health care system.

The bill requires individuals and employers with 50 or fewer workers to buy insurance through the exchange beginning in January 2014. Vermont is the only state so far to pass a mandate for companies to purchase health care coverage on the exchange. In 2016, the federal law will require all businesses with 100 or fewer workers to become part of the exchange.

Senators who support the bill said the exchange program will benefit small companies that struggle to pay health insurance premiums for workers.

Sen. Claire Ayer, D-Addison, told her colleagues that the federal government will look at 2014 participation rates in determining how much financial support to provide the state in 2015.

“We need the strongest healthiest exchange we can get,” Ayer said. “We need everybody in.”

Several attempts to delay implementation of the exchange failed, as did a proposal on Monday from Randy Brock, the Franklin Republican who is running for governor, to require the Shumlin administration to reveal its financing plans for the proposed single-payer health care system before the November election.

With the exception of three votes, the Senate approved the bill along party lines. (Sens. Vince Illuzzi and Kevin Mullin voted for the exchange; Sen. Bob Hartwell voted against it.)

Sen. Diane Snelling, a moderate Republican from Chittenden County, explained why she opposed H.559.

“I hoped by this time to be able to support the movement toward health care reform,” Snelling said as she explained her vote. “I am still deeply troubled by the process while there are many worthy changes in the bill it became too complicated and was broadened too far.”

Senators proposed a number of amendments to H.559, which evaluates the quality and cost of health insurance plans.

Here is a sampling:

Pollina Amendment

Sen. Anthony Pollina, D/P-Washington, proposed an amendment to H. 559, which would bolster insurance payments for mental health treatment. The Senate Finance Committee proposed to delay legislation on mental health coverage until next session, pending a report from the commissioner of financial regulation as to where to draw the line between primary and specialty mental health services. Pollina’s amendment gives the commissioner until October 1, 2013, to adopt rules establishing such guidelines, additionally proposing a section that would prevent health insurance plans from requiring higher co-payments for mental health services than for general medical care. The proposed changes would apply to new or renewed plans in 2014 and extend to all plans by 2015.

The Senate passed the amendment on a voice vote.

Mullin Amendment

Sen. Kevin Mullin, R-Rutland, proposed an amendment that would make it easier for prescribers to get prior authorization from insurers for medications that require such pre-approval. The final version of the amendment requires insurers to respond to urgent prior authorization requests within 48 hours and non-urgent requests within 120 hours. The language proposed by the Senate Finance committee allowed two business days for urgent requests and seven business days for non-urgent requests. That amendment passed.

Mullin also sought to limit insurers to five prior authorization request forms. Currently, insurers like Blue Cross/Blue Shield and MVP Health Care have about 100 forms, representatives said. Hav
ing numerous forms, they said, allows them to get specific information regarding the drug in question, making the process more efficient. Mullin said this system makes it difficult for prescribers to navigate the system to get prior authorization. That amendment was ultimately struck down in committee.

Sears Amendment

Sen. Richard Sears, D-Bennington, proposed to remove three sections of H.559, including a section on sports injuries. The section became a subject of heated debate on Monday, when Sears insisted the language be changed to state that coaches must have “actual knowledge” of a head injury in order to be legally required to pull student athletes from a game.

The wording was changed to “an objectively reasonable belief under the circumstances.” The Senate approved the new language.

Illuzzi-Miller Amendment

Sens. Vince Illuzzi, R-Essex-Orleans, and Hinda Miller, D-Chittenden, proposed to delay implementation of the health care exchange by one year to January 2015.

The Senate defeated the proposal by a narrow margin, 15-12.

Illuzzi Amendment

Illuzzi failed to persuade his colleagues to adopt a proposal to ensure brokers are “reasonably compensated” along with a provision that would have given the Secretary of the Administration the ability to modify the implementation planning for the health insurance exchange bill should the U.S. Supreme Court strike down the individual mandate requirement in the Affordable Care Act.

Editor’s note: Taylor Dobbs contributed to this report.

CORRECTIONS: Sen. Illuzzi was listed as a D/P. He is a D/R. Sen. Kevin Mullin voted for H.559; he was originally left off the list of supporters.

http://vtdigger.org/2012/04/25/senate-gives-final-approval-to-health-care-exchange-bill/

WellPoint walks away from sick patients

WellPoint's Profit, Membership Shrinks

By Anjali Athavaley
The Wall Street Journal, April 25, 2012

WellPoint Inc. reported a 7.6% decline in first-quarter earnings and a decrease in members, but the health insurer also gave indications that the problems affecting its Northern California business are easing.

While health insurers, in general, have benefited from the sluggish pace of patient visits to operating rooms and doctors’ offices, WellPoint’s gains have been muted by unexpectedly high costs for seniors in Northern California, where the company picked up thousands of members with expensive health issues.

The company has said it has fixed the problem by walking away from the difficult market, which is part of some planned membership losses for the new year aimed at boosting profit margins.

http://online.wsj.com/article/SB10001424052702304811304577365640340787690.html

Comment:

By Don McCanne, MD

What else can you expect from a private, for-profit health insurer? It is first and foremost a business, which must never allow its role of patient service to interfere with its profit mission.

Insurers providing Medicare Advantage plans are prohibited from exercising favorable selection – cherry picking, cream skimming, or whatever – but what do you call it when they dump an entire plan population of sicker than average patients? That’s worse than cherry picking individuals because that involves an entire plan population.

The plans have figured out how to cheat on the Medicare adjustments for adverse selection when their patients are actually healthier and less expensive than average. They just haven’t figured out how to cheat when their patients are less healthy. They certainly don’t want to make them look healthier which would then adjust downward their payment rates. No, walking away from their sicker populations seems to be their only answer.

And what is the Obama administration doing about this? Not only do they let them walk away from high-cost populations, they also are rewarding these overpaid plans with extra “quality award” money – a phony guise since these awards are going to almost all plans regardless of how mediocre their quality scoring. This is really a money allocation scheme designed to enable plans to offer extra benefits in order to entice patients away from the traditional Medicare program. Numerous releases from HHS have bragged about the increased enrollment in these private Medicare Advantage plans. Why are they promoting and awarding such a despicable industry?

President Eisenhower warned us about the military-industrial complex. Arnold Relman warned us about the medical-industrial complex. But what about the government-private insurer industry complex. That one is killing us… literally.

NOTE TO READERS: There are now almost 3000 of these Quote of the Day messages posted at www.pnhp.org/news/quote-of-the-day. I don’t recall any suggesting that it was wise for the government to continue to provide both financial and policy support for the private insurance industry. Quite the opposite. This despicable, wasteful, expensive, intrusive, uncaring industry merits only our scorn. The question is, with all of the evidence before us, what will it take to reach a threshold at which we are finally willing to do something about it?

WellPoint walks away from sick patients

WellPoint’s Profit, Membership Shrinks

By Anjali Athavaley
The Wall Street Journal, April 25, 2012
WellPoint Inc. reported a 7.6% decline in first-quarter earnings and a decrease in members, but the health insurer also gave indications that the problems affecting its Northern California business are easing.
While health insurers, in general, have benefited from the sluggish pace of patient visits to operating rooms and doctors’ offices, WellPoint’s gains have been muted by unexpectedly high costs for seniors in Northern California, where the company picked up thousands of members with expensive health issues.
The company has said it has fixed the problem by walking away from the difficult market, which is part of some planned membership losses for the new year aimed at boosting profit margins.
http://online.wsj.com/article/SB10001424052702304811304577365640340787690.html

What is a private commercial insurer to do when when one or more of their plans has thousands of members with expensive health issues? Walk away, of course. That’s exactly what WellPoint did with its expensive plan membership in Northern California.
What else can you expect from a private, for-profit health insurer? It is first and foremost a business, which must never allow its role of patient service to interfere with its profit mission.
Insurers providing Medicare Advantage plans are prohibited from exercising favorable selection – cherry picking, cream skimming, or whatever – but what do you call it when they dump an entire plan population of sicker than average patients? That’s worse than cherry picking individuals because that involves an entire plan population.
The plans have figured out how to cheat on the Medicare adjustments for adverse selection when their patients are actually healthier and less expensive than average. They just haven’t figured out how to cheat when their patients are less healthy. They certainly don’t want to make them look healthier which would then adjust downward their payment rates. No, walking away from their sicker populations seems to be their only answer.
And what is the Obama administration doing about this? Not only do they let them walk away from high-cost populations, they also are rewarding these overpaid plans with extra “quality award” money – a phony guise since these awards are going to almost all plans regardless of how mediocre their quality scoring. This is really a money allocation scheme designed to enable plans to offer extra benefits in order to entice patients away from the traditional Medicare program. Numerous releases from HHS have bragged about the increased enrollment in these private Medicare Advantage plans. Why are they promoting and awarding such a despicable industry?
President Eisenhower warned us about the military-industrial complex. Arnold Relman warned us about the medical-industrial complex. But what about the government-private insurer industry complex. That one is killing us… literally.
NOTE TO READERS: There are now almost 3000 of these Quote of the Day messages posted at www.pnhp.org/news/quote-of-the-day. I don’t recall any suggesting that it was wise for the government to continue to provide both financial and policy support for the private insurance industry. Quite the opposite. This despicable, wasteful, expensive, intrusive, uncaring industry merits only our scorn. The question is, with all of the evidence before us, what will it take to reach a threshold at which we are finally willing to do something about it?

Health care reform: Is it ‘fair’?

A critique of the Affordable Care Act and a proposal for Maine

By Alice E. Knapp
Maine AllCare, April 24, 2012

Good people reasonably disagree on the merits of “Obamacare” (the federal Patient Protection and Affordable Care Act or “ACA”). Recent Congressional Budget Office estimates, however, project the ACA will leave approximately 27 million Americans uninsured in 2016 and beyond. While I might once have been persuaded that the law’s coverage gains justifies its failings, I now equate leaving 27 million Americans uninsured with having passed a law that freed but 90 percent of this nation’s slaves.

I view the ACA as symptomatic of this country’s corrosive slide into divisive, winners/losers politics. The law’s defenders have remained silent on why they believe it appropriate to extend through Medicaid expansions near free, comprehensive health insurance to millions of low income Americans while leaving millions of moderate income Americans similarly unable to afford comprehensive coverage to fend for themselves.

Visiting the Kaiser Foundation’s Health Reform Subsidy Calculator and entering two hypothetical, 52-year-old residents of a high-cost state like Maine illustrates the inadequacy of the ACA’s individual mandate premium subsidies and their arbitrary nature.

Using incomes based on the projected 2014 Federal Poverty Level (FPL), entering the first such resident with gross annual income of $46,021 (400 percent of 2014 FPL) yields a subsidy reducing that individual’s projected $750 monthly premium for the ACA’s “silver plan” to $364/month.

Entering the second resident at a gross annual income $115 higher at $46,136 (401 percent of 2014 FPL) yields no subsidy, leaving that individual to pay the full $750/month “silver plan” premium cost representing 19.5 percent of his/her gross income.

The high cost and coverage inadequacies of the private health insurance market leave both individuals facing upwards of $6,000 in annual, “silver plan,” out-of-pocket expenses (deductibles and coinsurance), on top of their premium expense, should illness or injury require them to use their insurance, and family coverage is exponentially more expensive.

This brings me to the language used by individual mandate proponents, which essentially vilifies the uninsured. Proponents’ “shared responsibility” argument suggests that those who fail to voluntarily purchase insurance in the individual market aren’t doing their part. I dare say most 5-year-olds could tell you that a system under which some get free government funded coverage; some get tax free, employer provided coverage; some get subsidies to help pay the cost of having to buy their own coverage; and the rest are left to pay the full cost of expensive, poor quality coverage, is not “sharing” responsibility for health care costs in any meaningful sense of the word.

Proponents also suggest the uninsured cost the rest of “us” when they get the care they need through the emergency room. Besides the fact that there are an awful lot of “us” who are not paying very much for our health insurance, this promotes the unconscionable myth that the uninsured receive all the health care they need through charity care.

Federal law requires hospitals only to “screen and stabilize” emergency room patients. If you present to the ER feeling poorly and are diagnosed with a malignancy that will kill you in time left untreated, do not expect a free course of radiation and chemotherapy, nor will patients with chronic conditions be sent home with free, refillable supplies of expensive prescription drugs required to stabilize their condition. Accordingly, some 3,000 uninsured Americans die prematurely each month for lack of access to necessary treatment. Countless more are thrown into bankruptcy as they desperately try to pay for needed care.

Language matters, and the scripted dishonesty of arguments defending the individual mandate mask the core unfairness of the ACA approach. A country that turns its back on some in need while providing handsomely for others is not one grounded in equal opportunity, and this shameful paradigm weakens the cohesiveness of our great nation.

American health care spending compared to that of countries with universal health care systems is more than adequate to provide coverage for all, and it is a national disgrace to continue on the path of irrational and grossly inequitable spending. National health care reform having once again failed millions of Americans, as the province of Saskatchewan once did for Canada, the time has come for Maine to lead the way by implementing a statewide single-payer health care system.

Alice E. Knapp, Esq., is a former health insurance regulator who during her tenure was appointed the first director of the Consumer Health Care Division within the Maine Bureau of Insurance. She lives in Richmond, Maine, and is a member of the board of Maine AllCare.

Implementing Health Reform: Amidst Turbulence, Federal Work Goes On

Comment:

Patient Cost-Sharing Under the Affordable Care Act

Senate gives final approval to health care exchange bill

Comment:

WellPoint’s Profit, Membership Shrinks

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