Troubled Kodak moves to drop health coverage for Medicare-eligible, post-1991 retirees

The Washington Post, February 28, 2012

Eastman Kodak Co., looking to whittle expenses as it reorganizes under bankruptcy protection, wants to end health care benefits for about 16,000 retirees who are over age 65 and thus eligible for Medicare.

The possibility of losing their health care benefits has been a primary worry among Kodak’s 38,000 retirees. A letter Monday to Kodak retirees unaffected by the current proposal — those not yet 65 or who retired before October 1991 — did little to reassure them.

“This change …. will not apply to you,” the letter said. “However, Kodak continues to review its retiree medical, dental and survivor benefits and may in the future request court authority to modify or terminate additional benefits.”

http://www.washingtonpost.com/business/troubled-kodak-moves-to-drop-health-coverage-for-medicare-eligible-post-1991-retirees/2012/02/28/gIQAnkICgR_story.html

And…

America’s Biggest Companies, Then and Now (1955 to 2010)

By Douglas A. McIntyre
24/7 Wall St., September 21, 2010

Today’s corporate America is dominated by service companies, tech firms, and huge retailers which have thousands of locations and hundreds of thousands of workers. At the end of the decade following WWII, corporate America looked very different from it does now.  Fifty five  years ago, most of the largest corporations in the US built cars, supplied car parts, or provided fuel for America’s vehicles.

The decades-long movement away from a United States dominated by smoke stacks to one dominated by computers and malls has also caused a shift in the geographic placement of the country’s better-paid workers. In the 1920s, they migrated to the North – places like Pennsylvania, Ohio, and Michigan – where blue-collar jobs were abundant. Eight decades later their descendants are out of work in numbers that total well into the millions.

http://247wallst.com/2010/09/21/americas-biggest-companies-then-and-now-1955-to-2010/

Comment: 

By Don McCanne, MD

Think back to half a century ago. If you worked for a great American company like Eastman Kodak you were assured of having very generous health benefits for the rest of your life. Things change.

One thing that should not change is the ability to receive health care whenever you need it. Tying health insurance to employment is not a sound policy, especially in these days in which full careers are almost never with a single employer with a stable health benefit program.

Your eligibility for health care should be determined simply by the fact that you exist. The Affordable Care Act will never get us there, but a single payer national health program certainly would.

Troubled Kodak moves to drop health coverage for Medicare-eligible, post-1991 retirees

The Washington Post, February 28, 2012
Eastman Kodak Co., looking to whittle expenses as it reorganizes under bankruptcy protection, wants to end health care benefits for about 16,000 retirees who are over age 65 and thus eligible for Medicare.
The possibility of losing their health care benefits has been a primary worry among Kodak’s 38,000 retirees. A letter Monday to Kodak retirees unaffected by the current proposal — those not yet 65 or who retired before October 1991 — did little to reassure them.
“This change …. will not apply to you,” the letter said. “However, Kodak continues to review its retiree medical, dental and survivor benefits and may in the future request court authority to modify or terminate additional benefits.”
http://www.washingtonpost.com/business/troubled-kodak-moves-to-drop-heal…

And…

America’s Biggest Companies, Then and Now (1955 to 2010)

By Douglas A. McIntyre
24/7 Wall St., September 21, 2010
Today’s corporate America is dominated by service companies, tech firms, and huge retailers which have thousands of locations and hundreds of thousands of workers. At the end of the decade following WWII, corporate America looked very different from it does now.  Fifty five  years ago, most of the largest corporations in the US built cars, supplied car parts, or provided fuel for America’s vehicles.
The decades-long movement away from a United States dominated by smoke stacks to one dominated by computers and malls has also caused a shift in the geographic placement of the country’s better-paid workers. In the 1920s, they migrated to the North – places like Pennsylvania, Ohio, and Michigan – where blue-collar jobs were abundant. Eight decades later their descendants are out of work in numbers that total well into the millions.
http://247wallst.com/2010/09/21/americas-biggest-companies-then-and-now-1955-to-2010/

Think back to half a century ago. If you worked for a great American company like Eastman Kodak you were assured of having very generous health benefits for the rest of your life. Things change.
One thing that should not change is the ability to receive health care whenever you need it. Tying health insurance to employment is not a sound policy, especially in these days in which full careers are almost never with a single employer with a stable health benefit program.
Your eligibility for health care should be determined simply by the fact that you exist. The Affordable Care Act will never get us there, but a single payer national health program certainly would.

Financing the Maryland Health Security Act

By Gerald Friedman, Professor of Economics, The University of Massachusetts at Amherst
February, 2012
This policy memo explores the economic implications of enacting the Maryland Health Security Act (MHSA) and establishing the Maryland Health System Trust (MHST) a single-payer system to finance health care in Maryland. The proposed trust would finance virtually all necessary medical care including hospital care, doctor visits, dental care, mental health, prescribed occupational and physical therapy, prescription drugs, medical devices as well as medically necessary nursing home care and home health care. Medical care would be financed through the MHST without co-payments or deductibles.
The MHST will finance medical care with substantial savings compared with the existing multi-payer system of public and private insurers. Some of these savings would be used to extend coverage to the 15 percent of nonelderly adults in Maryland without insurance and to improve coverage for the growing number with inadequate coverage. In addition to improving access to health care, the MHST would reduce economic inequality by replacing the current regressive system of health insurance finance with progressive and proportional taxes. By reducing administrative and other waste, the MHST would increase real disposable income for most Maryland residents while reducing the burden of health care on Maryland businesses.
Financing the Maryland Health Security Act (31 pages):
http://www.md.pnhp.org/docs/Maryland-single-payer-study.pdf
House Bill 1035 – Maryland Health Security Act of 2011:
http://mlis.state.md.us/2011rs/billfile/hb1035.htm

Many proposals have been advanced and bills introduced for single payer programs. Perhaps the most frequent question asked is, “How would you pay for it?” The general answer is easy. You simply use progressive tax policies to fund a universal risk pool that pays for all appropriate care for everyone. Most people want specifics. In this report, Professor Gerald Friedman describes a financing proposal for the Maryland Health Security Act of 2011, a single payer model of reform.
As with all other single payer proposals, he reaches the conclusion that the substantial savings of the single payer model could be used to extend coverage to the uninsured and to improve coverage for the growing number with inadequate coverage. This would increase disposable income for most residents and reduce the burden of health care costs on Maryland businesses.
Friedman also provides a graph projecting three scenarios for Maryland health expenditures for the next decade: 1) the existing health care finance system, which we all know is terribly inflationary, 2) growth under the Affordable Care Act, which is much worse (since this is the most expensive model of reform), and 3) growth under single payer, which is dramatically reduced – bringing cost escalation down to tolerable levels – truly “bending the curve.”
One important footnote in his report should be mentioned: “We assume that all necessary federal waivers are granted and legislation is enacted to allow the incorporation of existing federal programs into the MHST (Maryland Health System Trust), including Medicare, Medicaid, and the Veteran’s Administration.” We might add to that legislation addressing the preemption clause for self-insured, employer-sponsored plans under the federal Employee Retirement and Income Security Act of 1974 (mentioned in the fiscal and policy note for HB 1035).
Activists should continue to support state efforts for single payer reform while simultaneously supporting enabling federal legislation, for the reasons mentioned. The former is not possible without the latter. A far better option would be to enact a national single payer program, but until we can bring sanity to our political process, state single payer reform should be pursued.

Insurer Battles Physician Group

By Anna Wilde Mathews
The Wall Street Journal, February 29, 2012
A clash between health insurer Blue Shield of California and a doctor group that sold its operations to UnitedHealth Group Inc. highlights emerging tensions as lines blur between health insurers and medical providers.
On Tuesday, the health insurer filed a demand for at least $10.5 million in damages from Monarch HealthCare, a 2,300-physician association based in Irvine, Calif., that last fall sold its management arm to UnitedHealth’s Optum health-services unit.
Among the allegations: that Monarch sought to steer Blue Shield members away from Blue Shield and toward competing health plans, and that its doctors started declining to see some Blue Shield members. The complaint says these moves violated Blue Shield’s contract with Monarch, which the insurer has previously said will end on May 1.
“It seems crazy to be contracted with someone who’s a direct competitor, and share everything you design with them,” said Juan Davila, senior vice president for network management at Blue Shield, which has 3.3 million members. Blue Shield felt its “worry was proved true” by Monarch’s alleged actions, he said.
At the root of the clash is the deal unveiled last fall for Monarch’s operations arm to be acquired by Optum, the unit of UnitedHealth Group, which is also the parent of UnitedHealthcare, the nation’s biggest insurer. Because California law bans most entities from directly employing practicing doctors, acquisitions involving independent-practice associations like Monarch often have complex structures.
The dispute raises issues for both sides. Blue Shield says in its complaint that it lost existing and prospective members. Also, its provider network will soon lack one of Orange County’s biggest doctor groups. Monarch risks losing some patients who are Blue Shield members.
In its complaint, Blue Shield said it had around 19,200 members in commercial and Medicare Advantage plans last September who used Monarch doctors. In May, Blue Shield’s members have to pay more to keep seeing Monarch doctors, who would become out-of-network providers.
Similar static is beginning to surface elsewhere as health plans have begun buying medical providers, and some providers have started making insurer-style moves, with some considering direct approaches to employers and even seeking to launch their own health plans.
WellPoint Inc.’s Anthem Blue Cross broke off a deal with Monarch to create a cooperative “accountable-care organization” and also said in a letter to doctors that it will discontinue its health-maintenance organization relationship with Monarch in the future. In the letter last October, an Anthem official said the ACO move came as “a result of the group’s pending transaction” with Optum.
http://online.wsj.com/article/SB10001424052970203833004577251773887296652.html

These disputes between UnitedHealth’s Monarch HealthCare, Blue Shield of California, and WellPoint’s Anthem Blue Cross not only impose a great disservice on their patients, but also should outrage all of us over the fact that these health care intermediaries act as if they regard patients to be their chattel – jerking them around in order to fulfill their own business goals. How long are we going to continue to tolerate this reprehensible industry? They may need us, but we don’t need them.

By Lynn Quincy
Health Affairs Blog, February 28, 2012

On February 24, 2012, the Department of Health and Human Services (HHS) released guidance describing a proposed method for estimating the actuarial value of health plan benefit designs in 2014. The actuarial value measures the percentage of expected medical costs that a health plan will cover. It can be considered a general summary measure of health plan generosity. As such, it can help consumers make sense of their health plan options by providing an overall measure of coverage in addition to discrete information on deductibles, copayments, and coinsurance, etc.

A Trade-Off Between Simplicity And Accuracy
 
The bulletin highlights — but doesn’t resolve — a tension between simplicity and accuracy in the estimation of actuarial value. HHS initially proposes to use a “practical and easy-to-use” calculator that would utilize the “handful” of cost-sharing features that have a large impact on a plan’s actuarial value, such as deductible, co-insurance, and maximum out-of-pocket. This approach may not take into account more subtle features of a plan, such as service specific deductions or exceptions to the out-of-pocket limit.

There are trade-offs, however, from taking this “practical” approach.  First, cost-sharing features that may be only worth a few points of actuarial value can have a big impact on an individual consumer’s cost-sharing obligations. Second, high level plan features like the maximum out-of-pocket can vary in how reliably they reflect patient cost-sharing. One study found that plans with similar reported out-of-pocket maximums actually differed by thousands of dollars in the final cost to patients due to exceptions to the maximum.

Third, by opting for a simple calculator, HHS envisions insurers using supplementary methods to calculate actuarial value if their plan design doesn’t fit neatly into the calculator. This could greatly undermine the goal of using a common method of calculating actuarial value to ensure that plan comparisons are truly “apples to apples.” A recent study demonstrated that the same plan design can yield different actuarial value estimates, if different methods are used to calculate it.

Addressing A Tension Between Actuarial Value And Out-Of-Pocket Maximums

Depending on the actuarial model being used, some researchers have found it impossible to hit the required actuarial value targets and the lower out-of-pocket limit requirements simultaneously. While it may seem counter-intuitive, allowing for a higher out-of-pocket maximum means lower deductibles can be offered while still hitting the required actuarial value target. As many consumers will not hit their out-of-pocket maximum, flexibility to use higher out-of-pocket limits benefits a greater number of consumers.

In a nutshell, HHS proposes to let actuarial value targets trump maximum out-of-pocket rules if this conflict arises. HHS intends to publish an annual notice providing guidance as to the out-of-pocket levels that would be consistent with the actuarial value targets for households with incomes from 100 percent to 250 percent of FPL, presumably reflecting the types of estimates being produced by the federal calculator. For households with incomes of 250 percent to 400 percent of FPL – which are also entitled to lower out-of-pocket maximums under the ACA but remain tied to the standard actuarial value benchmark of 70 percent – HHS proposes to do away with the requirement for lower out-of-pocket maximums altogether.

http://healthaffairs.org/blog/2012/02/28/actuarial-value-why-it-matters-and-how-it-will-work/

CMS: Actuarial Value and Cost-Sharing Reductions Bulletin (16 pages):
http://www.cciio.cms.gov/resources/files/Files2/02242012/Av-csr-bulletin.pdf

Comment: 

By Don McCanne, MD

The actuarial value of a health plan represents the average percentage of covered services that a plan is expected to pay for, the balance being paid by the patient. The Affordable Care Act calls for four levels of plans, ranging from 60 percent to 90 percent actuarial values. Cost sharing, such as deductibles, coinsurance, and maximum out-of-pocket amounts, is an important consideration in determining the actuarial value of the plan.

The excerpts above include only two of many complex considerations in trying to standardize rules for establishing actuarial values and associated cost sharing. For instance, in trading off simplicity and accuracy, “plans with similar reported out-of-pocket maximums actually differed by thousands of dollars in the final cost to patients due to exceptions to the maximum.” Also, “For households with incomes of 250 percent to 400 percent of FPL – which are also entitled to lower out-of-pocket maximums under the ACA but remain tied to the standard actuarial value benchmark of 70 percent – HHS proposes to do away with the requirement for lower out-of-pocket maximums altogether.”

By selecting this model of reform, not only do we compound the administrative excesses in health care financing, we also compound some of the inequities in our system. Policy wonks will want to read the full CMS Bulletin covering these complex issues (link above).

It is hoped that those who continue to push for implementation of ACA will finally realize the futility of their efforts and join us in advocating for equitable, efficient reform for all of us through a single payer national health program.

Actuarial Value: Why It Matters And How It Will Work

By Lynn Quincy
Health Affairs Blog, February 28, 2012
On February 24, 2012, the Department of Health and Human Services (HHS) released guidance describing a proposed method for estimating the actuarial value of health plan benefit designs in 2014. The actuarial value measures the percentage of expected medical costs that a health plan will cover. It can be considered a general summary measure of health plan generosity. As such, it can help consumers make sense of their health plan options by providing an overall measure of coverage in addition to discrete information on deductibles, copayments, and coinsurance, etc.
A Trade-Off Between Simplicity And Accuracy
The bulletin highlights — but doesn’t resolve — a tension between simplicity and accuracy in the estimation of actuarial value. HHS initially proposes to use a “practical and easy-to-use” calculator that would utilize the “handful” of cost-sharing features that have a large impact on a plan’s actuarial value, such as deductible, co-insurance, and maximum out-of-pocket. This approach may not take into account more subtle features of a plan, such as service specific deductions or exceptions to the out-of-pocket limit.
There are trade-offs, however, from taking this “practical” approach.  First, cost-sharing features that may be only worth a few points of actuarial value can have a big impact on an individual consumer’s cost-sharing obligations. Second, high level plan features like the maximum out-of-pocket can vary in how reliably they reflect patient cost-sharing. One study found that plans with similar reported out-of-pocket maximums actually differed by thousands of dollars in the final cost to patients due to exceptions to the maximum.
Third, by opting for a simple calculator, HHS envisions insurers using supplementary methods to calculate actuarial value if their plan design doesn’t fit neatly into the calculator. This could greatly undermine the goal of using a common method of calculating actuarial value to ensure that plan comparisons are truly “apples to apples.” A recent study demonstrated that the same plan design can yield different actuarial value estimates, if different methods are used to calculate it.
Addressing A Tension Between Actuarial Value And Out-Of-Pocket Maximums
Depending on the actuarial model being used, some researchers have found it impossible to hit the required actuarial value targets and the lower out-of-pocket limit requirements simultaneously. While it may seem counter-intuitive, allowing for a higher out-of-pocket maximum means lower deductibles can be offered while still hitting the required actuarial value target. As many consumers will not hit their out-of-pocket maximum, flexibility to use higher out-of-pocket limits benefits a greater number of consumers.
In a nutshell, HHS proposes to let actuarial value targets trump maximum out-of-pocket rules if this conflict arises. HHS intends to publish an annual notice providing guidance as to the out-of-pocket levels that would be consistent with the actuarial value targets for households with incomes from 100 percent to 250 percent of FPL, presumably reflecting the types of estimates being produced by the federal calculator. For households with incomes of 250 percent to 400 percent of FPL – which are also entitled to lower out-of-pocket maximums under the ACA but remain tied to the standard actuarial value benchmark of 70 percent – HHS proposes to do away with the requirement for lower out-of-pocket maximums altogether.
http://healthaffairs.org/blog/2012/02/28/actuarial-value-why-it-matters-and-how-it-will-work/
CMS: Actuarial Value and Cost-Sharing Reductions Bulletin (16 pages):
http://www.cciio.cms.gov/resources/files/Files2/02242012/Av-csr-bulletin.pdf

The actuarial value of a health plan represents the average percentage of covered services that a plan is expected to pay for, the balance being paid by the patient. The Affordable Care Act calls for four levels of plans, ranging from 60 percent to 90 percent actuarial values. Cost sharing, such as deductibles, coinsurance, and maximum out-of-pocket amounts, is an important consideration in determining the actuarial value of the plan.
The excerpts above include only two of many complex considerations in trying to standardize rules for establishing actuarial values and associated cost sharing. For instance, in trading off simplicity and accuracy, “plans with similar reported out-of-pocket maximums actually differed by thousands of dollars in the final cost to patients due to exceptions to the maximum.” Also, “For households with incomes of 250 percent to 400 percent of FPL – which are also entitled to lower out-of-pocket maximums under the ACA but remain tied to the standard actuarial value benchmark of 70 percent – HHS proposes to do away with the requirement for lower out-of-pocket maximums altogether.”
By selecting this model of reform, not only do we compound the administrative excesses in health care financing, we also compound some of the inequities in our system. Policy wonks will want to read the full CMS Bulletin covering these complex issues (link above).
It is hoped that those who continue to push for implementation of ACA will finally realize the futility of their efforts and join us in advocating for equitable, efficient reform for all of us through a single payer national health program.

Kaiser Commission on Key Facts
February 2012

As of 2010, there were 38 million immigrants residing in the United States, accounting for 12.5 percent of the total population. They include 16.7 million naturalized citizens and 21.4 million non-citizens, including both lawfully present and undocumented individuals. The Pew Hispanic Center estimates there were 11.2 million undocumented immigrants in the United States as of 2010, accounting for about 3.7 percent of the total population.

In 2010, the median annual household income for non-citizens was $25,000, roughly half the amount for citizen households.

Health coverage for naturalized citizens is very similar to that of U.S.-born citizens, with the majority covered through employer-sponsored or other private coverage. However, non-citizens are three times as likely as U.S.-born citizens to be uninsured due to lower rates of both public and private coverage.

Coverage Options for Immigrants Under Health Reform

Almost all uninsured non-citizens have household incomes that would qualify for Medicaid or tax credits for exchange coverage under reform, but many will continue to face immigrant eligibility restrictions.
 
The Medicaid expansion will make many lawfully present immigrants newly eligible for the program, particularly low-income adults who have very limited eligibility for Medicaid today. However, the five-year wait for coverage will remain in place, limiting eligibility for many lawfully present immigrants, although states will maintain the option to eliminate the waiting period for lawfully residing children and pregnant women.
 
Lawfully present immigrants without access to affordable employer based coverage will be able to purchase health coverage in the new exchanges, and those with incomes up to 400 percent of poverty will be eligible for tax credits. This will include lawfully present immigrants with incomes below 133 percent of poverty who are unable to enroll in Medicaid due to the five-year waiting period. 
 
Undocumented immigrants will remain ineligible for Medicaid and will be ineligible for tax credits and prohibited from purchasing coverage through an exchange, even at full cost.

Safety-net providers will remain a major source of care for immigrants. Today, uninsured individuals, including many uninsured immigrants, often rely on community health centers and clinics for their care. Safety-net providers are seen as a trusted source for care and are able to offer culturally and linguistically appropriate services that meet the needs of diverse populations. Under reform, these providers will likely remain a primary source of care for millions of newly insured individuals, including lawfully present immigrants, as well as citizens and non-citizens who remain uninsured after 2014.

http://www.kff.org/uninsured/upload/8279.pdf

Comment: 

By Don McCanne, MD

Everyone should have health care. How well will the Affordable Care Act (ACA) work for our immigrant population? It depends partly on immigration status.

The ACA provisions apply to naturalized citizens just as they would for native-born citizens. Thus their barriers will be the same as for most of the rest of us. They will face the same issues of whether or not the subsidies will be adequate to purchase private plans, and whether or not they will be exposed to excessive cost sharing with inadequate subsidies when accessing care.

Non-citizen immigrants are faced with the additional problem of having household incomes that average only half that of the U.S. median. Those who are lawfully present also must wait for five years before they are eligible for the Medicaid program. They will be eligible to purchase programs in the new exchanges, though the subsidies will likely be inadequate for those with incomes that already don’t cover other essential needs.

For immigrants who are undocumented, Congress decided to yield to the forces of anti-immigrant politics, and not only make them ineligible for tax credits for the exchange plans, but also to prohibit them from purchasing the plans with their own funds, even at full cost. It is very unfortunate that Congress co-mingled heath care justice with immigration policy. The sanctity of human life should always prevail over the politics of ideology.

Yes, some will receive excellent care from our safety-net providers, but many will not. Community health centers cannot possibly fill in the full void in coverage.

Most undocumented workers are productive individuals, just like our citizens, and there is no reason that they should not contribute to and participate in a single payer national health program that covers everyone – absolutely everyone.