Plain Talk: Health care solution is simple: single-payer

By Dave Zweifel
The Capital Times, November 2, 2011

The answer to the nation’s health care crisis is staring everyone in the face, yet as a country we continue to refuse to come to grips with it.

It is far from rocket science. What this country simply needs is a single-payer national health insurance program that covers all American citizens from the day they’re born to the day they die — just as other advanced countries have done for decades.

We could finance health care coverage for every American by taking the resources that employees and employers are pumping into the current broken system and still have money left over for a substantial tax cut, not to mention that it would put U.S. employers back on a level playing field with their competitors in the world market.

Yet we refuse to even put that debate on the front burner where it belongs, plodding along with a system that with each passing year continues to hurt more and more Americans in many different ways.

(Dave Zweifel is editor emeritus of The Capital Times.)

http://host.madison.com/ct/news/opinion/column/dave_zweifel/article_e26dbb61-a1d2-5a03-86b6-ff2e6524596f.html

As the implementation of the Affordable Care Act unfolds, it becomes ever more evident that it won’t accomplish our goals and that we will need to enact a single payer national health program.

How much are you worth to HMOs?

By Carol Gentry
Health News Florida, October 28, 2011

Medicare health plan members are worth more than any other category of enrollee in a merger or acquisition deal, Wall Street analysts say.

In fact, they’re worth four times as much as members of employer-based plans and five times as much as members of Medicaid plans, according to a report from Goldman Sachs researchers Matthew Borsch and Samuel Wass.

By their calculations, Medicare Advantage (HMO or similar managed-care plan) enrollees have a “value per member” of $6,000 in a merger or acquisition.

That compares with $1,500 for commercial plans – the ones that employers offer but in which the insurer takes the financial risks – and $1,200 per member for Medicaid plans.

The researchers prepared the analysis in the wake of Monday’s announcement that Cigna will buy HealthSpring, a holding company that includes Medicare plans in 11 states and Washington, D.C. that encompass 340,000 members.

Other analysts have also noted the mega-insurers’ growing desire to acquire Medicare customers. As Carl McDonald of CitiGroup wrote today in a note about Universal American: “It’s hard to overstate how much the attitude of the largest plans …has changed toward the Medicare business in just the last six months.”

United Health Group was first to discover the pot of gold Medicare plans offered and bought PacifiCare in 2005, as McDonald notes, but now WellPoint, Cigna and Aetna are waking up.

http://www.healthnewsflorida.org/top_story/read/how_much_are_you_worth_to_an_hmo

Bet you didn’t realize that by signing up with a taxpayer-financed, private Medicare Advantage plan you can command a price of $6000 for the sale of yourself when your plan is acquired by another plan. Well, actually you don’t get the $6000. Neither does it revert to Medicare and the taxpayers. No, it goes to the top 1 percent, while leaving the 99 percent of us once again dumbfounded.

What price does a person in the traditional Medicare program command? What a ridiculous question. Medicare doesn’t buy and sell patients. That happens only when Medicare patients are privatized. Selling patients is a function limited to private plans, not public social insurance programs.

When are we finally going to say that we are not for sale to the 1 percent? Since it was Congress that arranged the sale, let’s Occupy Congress!

Self-funded health plans under attack in New Jersey

By Joanne Wojcik
Business Insurance, October 30, 2011

In an Oct. 25 letter to Thomas Considine, commissioner of the New Jersey Department of Banking and Insurance, the Self-Insurance Institute of America Inc. asked the department to rescind a bulletin it issued this month that alleges stop-loss insurers are “cherry-picking” employer groups with good claims experience.

The Oct. 3 bulletin alleges that the insurers, which write excess coverage for self-funded group benefit plans, are “selectively marketing coverage to small employers on the basis of health history of that employer’s employees, and denying coverage to employers based on employee health status. The result of this selective underwriting is to “cherry-pick’ groups less likely to incur claims, leaving the groups more likely to incur claims to the state’s guaranteed-issue insured market. This, in turn, drives premiums up for small employers purchasing insured plans.”

Because stop-loss insurance is excluded from the state’s definition of a health benefit plan, it is not subject to the same regulations as fully insured health coverage, the bulletin states. Therefore, the department has invoked New Jersey’s unfair trade practice law, asserting that “the selective marketing and underwriting described herein constitutes an unfair trade practice.”

Simpsonville, S.C.-based SIIA asserts that the department’s contention is “inflammatory and without merit. Stop-loss insurance is a completely different product than commercial health insurance, so it is misguided to conclude that “unfair competition’ exists,” SIIA said in its letter.

The Employee Retirement Income Security Act’s “regulatory exemption for self-insured (self-funded) plans is a persistent thorn in the side of state insurance regulators,” according to a September statement by Timothy Stoltzfus Jost, a law professor from Washington and Lee University School of Law in Lexington, Va., to the NAIC’s ERISA (B) Subgroup.

“This may be acceptable for large employer groups, which have the bargaining power and expertise to protect their employees. But when small-employer packages purchase “self-insured’ packages from insurers, including stop-loss coverage with very low attachment points and administrative services, they are essentially purchasing conventional health insurance, except that it is free from state regulation,” Mr. Jost said.

Moreover, he said “insurers have always had an incentive to market “self-insurance’ to healthy groups, and small businesses with healthy enrollees have always had an incentive to purchase it. The Affordable Care Act, however, increases these incentives…Insurers understand this and are very actively marketing “self-insured’ products to small groups.”

http://www.businessinsurance.com/article/20111030/NEWS05/310309989?tags=%7C74%7C305%7C339

For smaller employers who want to self-insure their health benefit programs, stop-loss insurance is an imperative. A very large medical bill for one employee or family member could bankrupt a small business. This need to protect against large losses has created a thriving market in self-insured packages from insurers, which escape health plan regulation, yet are beginning to look more like conventional health insurance with extremely high deductibles.

These plans not only provide stop loss coverage at a “low attachment point,” they are now providing administrative services for the employers’ self-insured plans, paying employees’ medical expenses using the employers’ funds. The attachment point – the level at which losses begin to be covered by the insurer – may be $40,000. That is a very low level for a stop-loss plan. Some conventional health plans have deductibles of $50,000. That blurs the distinction between a high deductible in a health insurance plan and a low attachment point in a stop-loss plan.

What is happening is obvious. The insurers are selling these “self-insured packages” as stop-loss plans, avoiding the regulatory oversight for health plans. Yet they actually function as health plans with very high deductibles.

Why does it matter? The insurers can avoid new regulations that prohibit medical underwriting. They are able to cherry pick – limiting the sale of these plans only to businesses with healthy employees, shifting the costs of higher risk employee pools to other programs with guaranteed issue. As Timothy Stoltzfus Jost states, “insurers have always had an incentive to market ‘self-insurance’ to healthy groups, and small businesses with healthy enrollees have always had an incentive to purchase it. The Affordable Care Act, however, increases these incentives…Insurers understand this and are very actively marketing ‘self-insured’ products to small groups.”

The private insurers have an absolute moral obligation to enhance value for their investors, and they must always make every effort to do so. The fault lies not with the private insurers themselves but with a financing model that is dependent on insurers. We need to change the model, switching to a single public insurer.

California gets OK for large cuts to Medi-Cal

By Anna Gorman
Los Angeles Times, October 28, 2011

The Obama administration will allow California to cut hundreds of millions of dollars from Medi-Cal, a move doctors and experts say will make it harder for the poor to get medical treatment.

California plans to reduce rates by 10% to many providers, including physicians, dentists, clinics, pharmacies and most nursing homes, the Centers for Medicare and Medicaid Services announced Thursday.

Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services, told reporters the action gives California the flexibility it had requested to address its budget shortfall. “We know that the reductions that are being approved today will have significant impact on affected providers, and we regret the very difficult budget circumstances that have led to their implementation,” she said.

California, which already spends less per beneficiary than any other state, has led the way in aggressively slashing its programs. Now the government’s decision to allow California to move forward with its plans sets a precedent for other states seeking to reduce their Medicaid bills.

The California Medical Assn. expressed frustration over the new cuts, saying that physicians could receive as little as $11 a visit. Doctors will have no choice but to stop seeing Medi-Cal patients, said CEO Dustin Corcoran. “You can’t pay the bills at these rates,” he said. “They are unconscionably low.”

Federal healthcare reform, which includes a massive expansion of Medicaid, also could be seriously hampered by this new round of cuts, Corcoran said.

“They built federal healthcare reform on the foundation of Medi-Cal, and they just destroyed that foundation,” he said. “We have a hard time seeing how healthcare reform has a chance of being successful in the state of California after these cuts are implemented.”

http://www.latimes.com/news/local/la-me-medicaid-20111028,0,4273464.story

One of the most important components of the Affordable Care Act is the expansion of Medicaid coverage for uninsured, low-income individuals. Does the Obama administration seriously believe that this will be an effective step toward bringing affordable health care to everyone?

Look at what they just approved for California. The state already spends less per Medicaid (Medi-Cal) beneficiary than any other state, yet the Obama administration has approved another 10 percent reduction. Just wait until the budget cutters in other states get wind of this!

Theoretically, drastic payment reductions are met by further ratcheting down overhead expenses. At $11 per office visit, only a fraction of expenses can be covered, no matter how stringent the budgeting. In essence, the government is asking providers to help finance Medicaid through their own personal charity. Trying to cover 7.6 million Medi-Cal patients in the state by depending on provider charity is asking more than the system can bear.

Two quotes above need to be repeated.

Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services: “We know that the reductions that are being approved today will have significant impact on affected providers.”

Dustin Corcoran, CEO of the California Medical Association: “They built federal healthcare reform on the foundation of Medi-Cal, and they just destroyed that foundation.”

And the other major component of the Affordable Care Act? A mandate for individuals to purchase inadequate coverage by paying unaffordable premiums.

The Obama administration officials and their co-conspirators in Congress could not have been serious about bringing us real reform. If they were, we would have an improved Medicare covering everyone.

Physicians for a National Health Program and the American Public Health Association are currently holding their national meetings in Washington, D.C. We need to go to Freedom Plaza and join the Occupy Movement.

By Julian Pecquet
The Hill, October 27, 2011

The report concludes that fewer than 2 million couples — out of 60 million nationwide — are projected to benefit from the insurance subsidies, while “almost half of the beneficiaries of the tax credit will be unmarried individuals without dependent children.”

One reason is that subsidies, which start in 2014, are tied to the federal poverty level, which does not increase proportionally along with household size.

Another problem is a snafu in the law that The Hill first reported back in July.

The law offers insurance subsidies for workers if their employer doesn’t provide affordable coverage, but proposed regulations released in August peg that affordability to individual, not family, coverage. As a result, a worker’s spouse and children would not have access to subsidies if that worker were offered affordable coverage — even if the worker could not afford the family coverage offered by the employer.

The American Academy of Pediatrics is spearheading a sign-on letter to the Centers for Medicare and Medicaid Services (CMS) that decries a “family penalty” that will “negatively impact the opportunity to access quality health insurance for significant numbers of children.”

http://thehill.com/homenews/house/190105-healthcare-reform-penalizes-married-couples-says-report

Comment: 

By Don McCanne, MD

This is yet one more example of the fundamental strategic flaw of trying to design reform to fit a fragmented system of private health plans and public programs. Instead of a complex set of rules which are designed to protect the insurance industry, it would have been so much easier and much more efficient to design reform around the patient instead by simply declaring that everyone is covered by a single comprehensive program that is equitably funded. We can still do that.