PNHP

CBO report on the public option

CBO report on the public option

Preliminary Analysis of the Affordable Health Care for America Act

Congressional Budget Office
October 29, 2009

The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have completed a preliminary analysis of H.R. 3962, the Affordable Health Care for America Act, as introduced on October 29, 2009.

The options available in the insurance exchange would include private health insurance plans as well as a public plan that would be administered by the Secretary of Health and Human Services (HHS). The public plan would negotiate payment rates with all providers and suppliers of health care goods and services; providers would not be required to participate in the public plan in order to participate in Medicare. The public plan would have to charge premiums that covered its costs, including the costs of paying back start-up funding that the government would provide.

Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.

That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)

http://www.cbo.gov/ftpdocs/106xx/doc10688/hr3962Rangel.pdf

And…

Affordable Health Care for America Act

H.R. 3962 (replaces H.R. 3200)
Introduced October 29, 2009

SEC. 321. (b) (2) ENSURING A LEVEL PLAYING FIELD

Consistent with this subtitle, the public health insurance option shall comply with requirements that are applicable under this title to an Exchange-participating health benefits plan, including requirements related to benefits, benefit levels, provider networks, notices, consumer protections, and cost-sharing.

H.R. 3962 (1990 pages)
http://docs.house.gov/rules/health/111_ahcaa.pdf

Comment:

By Don McCanne, MD

What happened to that public option that the liberals promised us when they decided not to try to enact the golden standard of a single payer national health program? You know, that government program, like Medicare, designed to be less expensive, more efficient and more equitable, and that each of us could choose in place of private health plans. Really, what happened to it?

Well, Congress plowed it under. Their first priority never was about patients. It was always about taking care of the private insurance industry. Instead of enacting policies that would provide everyone with affordable health care, they have crafted reform that provides a robust insurance market, and then patients are crammed into whatever niches that market creates.

A prime example of their approach is that they have insisted that the public option be prohibited from using policies that provide the greater efficiency and effectiveness of government health care financing programs such as Medicare. To protect the private insurers from “unfair” competition from the government, they have included in the legislation policies to “ensure a level playing field.”

What does the CBO predict will be the outcome of these policies? The public option would have “premiums that are somewhat higher than the average premiums for the private plans in the exchanges,” and fewer than 2 percent of our nation will be enrolled in our own Medicare-like plan that was promised as a choice for all of us.

The golden standard? This public option is not even made of brass. It’s merely the slag cast off while the private insurers walk away with the ingots.

(NB: Do not assume that this message is a plea for a “robust” public option. Adding a robust option to our dysfunctional, fragmented system of health care financing would have very little impact in reducing the waste, inequities, and inefficiencies in our system. This message is a plea to dump the private insurers into the slag pit and use our taxpayer ingots to purchase our own improved Medicare-for-all system.)

Weiner single payer amendment tanks

Nancy Pelosi starts clock on House health bill

By Patrick O’Connor and Chris Frates
Politico
October 29, 2009
(House Speaker Nancy Pelosi) backed down from a deal granting liberals a vote to establish single-payer government-run health care. She cut the deal with New York Rep. Anthony Weiner to break a last-minute logjam on the Energy and Commerce Committee. But, in the end, party leaders were concerned the final cost would be astronomical and the vote would fail to garner votes from even half the caucus.
http://www.politico.com/news/stories/1009/28884.html

What the… !?

Health Care Choices and Decisions in the United States and Canada

Joseph S. Ross, MD, MHS; Allan S. Detsky, MD, PhD
JAMA. 2009;302(16):1803-1804. 10/28/2009

Media speculation about the scope of proposals for health care reform in the United States has led many Americans to be “very concerned” that changes will limit their choices in the future.1 Health care choices are made on 3 levels: insurance plans, sources of care (physicians and hospitals), and clinical decisions (diagnostic tests and treatments). In this Commentary, the extent to which Americans currently are able to exercise choices is discussed. For context, the US environment is compared with that in Canada, partly because the Canadian health system, with much greater government involvement, is often publicly portrayed in the United States as limiting choice.

Insurance Coverage

United States

All US citizens, other than those aged 65 years or older and the very poor, make the choice to purchase private health insurance (or not). It is estimated that nearly 47 million individuals have no coverage. It is unknown how many choose not to purchase coverage, cannot afford coverage, or cannot obtain coverage. Uninsured persons are severely limited in all other health care choices. They must either receive charity care or pay for care out of pocket, possibly incurring substantial debt or bankruptcy.

The choice of insurance plan is also often limited; 96% of US Metropolitan Statistical Areas have insurance markets that are highly concentrated, consolidated among only a few companies.2-3 Employers who offer health insurance also frequently limit choices. One plan is often established as preferred and made less expensive through lower premiums and co-payments. Few working adults can afford to purchase plans outside of their employer because other plans’ costs and risks are neither subsidized nor pooled. In addition, loss or change of jobs often results in loss of insurance coverage or substantially higher payments to retain existing coverage.

In contrast, insurers have the choice to accept or deny individuals coverage for innumerable reasons, often related to prior or current medical conditions. They may even deny coverage among those they insure for specific care related to preexisting conditions.

Canada

All Canadian citizens and landed immigrants are eligible to receive health insurance through the 1 government-sponsored plan administered by their province or territory. Because the application process is simple, without screening for current or preexisting health conditions or means testing, unenrolled individuals who seek care are routinely enrolled by clinical practices and hospitals, removing the need for charity care. Insurance coverage is not tied to employment and so does not change with loss or change of jobs.

The Canadian government mandates that all provincial plans cover “necessary care,” including most physician and hospital services. However, there are private insurance plans to obtain coverage for services that are not covered by some provincial plans, such as pharmaceuticals, private rooms in hospitals, dental care, home care, physiotherapy, and chiropractic care.

Hospitals and Physicians

United States

The choice of hospital or physician is often made by an individual’s insurance plan. Whether structured as a health maintenance organization, preferred provider organization, or otherwise, most plans attempt to limit costs by designating hospitals and physicians, offering either discounted coinsurance or additional benefits to promote their use. Receiving care “out of network” requires that individuals pay substantially larger co-payments.

Health insurance plans often require individuals to choose a primary care physician on enrollment who arranges referrals to specialist physicians. Forty percent of sicker adult Americans report difficulties seeing a specialist, 40% because of long waiting times, 31% because of a denied referral or waiting for a referral, and 17% because they cannot afford private insurance.4

Choice is also influenced by availability of care. The United States ranks last in international comparisons for patients finding it somewhat or very difficult to obtain care on nights or weekends without going to an emergency department.5

Canada

Canadians may choose to receive care from any physician or hospital anywhere in Canada. Typically, a family physician provides primary care and makes referrals to specialists. There is no limit to the number of different physicians a patient can see. If patients are not satisfied with the care of one physician or hospital, they may change to another. Specialists generally require a referral from another physician (not necessarily the family physician) to be reimbursed for a “consultation” but can evaluate any patient and be reimbursed for an “assessment.” Individuals may present to any hospital emergency department and request specialty care, which is scheduled as long as the emergency physician, who has no incentive not to, agrees.

Diagnostic Testing and Treatments

United States

The common presumption is that there is access to every new diagnostic test, procedure, medication, and intervention in the United States. However, insurance plans make use of formularies that restrict medications. Generally, at least 1 medication in any pharmacologic class is offered among “first-tier” medications, for which co-payments are the least expensive. Choosing less expensive or generic medications is also facilitated by requiring prior authorization for brand-name medications when a generic alternative exists or by offering 1 medication in a class at a lower co-payment after contracting with the manufacturer to obtain a discounted price.

Similarly, although many routine, less expensive services are not restricted, prior authorization is often used to limit the use of expensive health care services such as magnetic resonance imaging or experimental interventions.

In international comparisons, US waiting times are consistently shorter for elective surgeries and procedures.6 However, even though physicians and hospitals generally are able and willing to provide care quickly and efficiently, insurance plans are not necessarily similarly willing to fully reimburse charges. Often, it is not until after the procedure and utilization review that patients become aware of the substantial portion of the payment they must incur.

Canada

Virtually all health care services available in the United States are also available in Canada. There is regionalization of specialized services, such as surgical, oncology, or imaging procedures. For services unavailable in all parts of Canada, such as gamma knife surgery, governments will reimburse care received in the United States, but patients are required to apply in advance. In contrast with common perception, Canadians’ use of elective health care services in the United States is not common.7 For care in Canada, there is no utilization review and all services are covered in full without co-payment. Physicians and hospitals are paid promptly by the government. Patients receive no bill and fill out no forms. However, as opposed to prior authorization, the use of expensive health care services is limited by supply; there are fewer facilities per capita that provide this care. Provincial and private drug plans use formularies similar to those in the United States.

Waiting time is less a health care issue than a political one. Both federal and provincial governments have responded to media-facilitated public pressure to reduce wait times for specific services, such as hip and knee replacement, cataract surgery, cancer surgery, and emergency care through strategies that resemble pay for performance.8-9 Moreover, there is provincial variation in reliance on private facilities that charge individuals directly for common diagnostic services (eg, blood drawing, imaging); some provinces have allowed (or tacitly encouraged) these facilities, allowing patients to choose to pay for some routine care to receive it sooner.

The Bottom Line

Government-sponsored plans like Canada’s are frequently publicly portrayed as limiting choice. However, there is clear evidence that for Canada’s health care system, less choice in insurance coverage (although guaranteed) has not resulted in less choice of hospitals, physicians, and diagnostic testing and treatments compared with the United States. In fact, there is arguably more choice.

AUTHOR INFORMATION

Corresponding Author: Allan S. Detsky, MD, PhD, Mount Sinai Hospital, 429-600 University Ave, Toronto, ON M5G 1X5, Canada (adetsky@mtsinai.on.ca).

Financial Disclosures: None reported.

Funding/Support: Dr Ross is currently supported by the National Institute on Aging (K08 AG032886) and by the American Federation of Aging Research through the Paul B. Beeson Career Development Award Program.

Role of the Sponsor: The funding organizations had no role in the preparation, review, or approval of the manuscript.

Disclaimer: The views expressed in this article are those of the authors and do not necessarily represent the views of the US Department of Veterans Affairs.

Author Affiliations: Departments of Geriatrics and Palliative Care and Medicine, Mount Sinai School of Medicine, New York, New York, and Health Services Research and Development Research Enhancement Award Program and Geriatrics Research, Education, and Clinical Center, James J. Peters Veterans Administration Medical Center, Bronx, New York (Dr Ross); Department of Medicine, Mount Sinai Hospital and University Health Network, and Departments of Health Policy, Management, and Evaluation and Medicine, University of Toronto, Toronto, Ontario, Canada (Dr Detsky).

REFERENCES

1. Current satisfaction vs future worry defines the battle on health reform. June 24, 2009. http://abcnews.go.com/images/PollingUnit/1091a2HealthCareReform.pdf. Accessed October 7, 2009.
2. American Medical Association. Competition in Health Insurance: A Comprehensive Study of US Markets: A 2007 Update. 2007. http://www.ama-assn.org/ama1/pub/upload/mm/368/compstudy_52006.pdf. Accessed August 13, 2009.
3. Biles B, Pozen J, Guterman S. Paying Medicare Advantage by Competitive Bidding: How Much Competition Is There? 2009. http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2009/Aug/1311_Biles_paying_Medicare_Advantage_plans_competitive_bidding.pdf. Accessed August 13, 2009.
4. Blendon RJ, Schoen C, DesRoches C, Osborn R, Zapert K. Common concerns amid diverse systems: health care experiences in five countries. Health Aff (Millwood). 2003;22(3):106-121. FREE FULL TEXT
5. Davis K, Schoen C, Schoenbaum SC; et al. Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care. New York, NY: Commonwealth Fund; May 2007.
6. Blendon RJ, Schoen C, DesRoches CM, Osborn R, Zapert K, Raleigh E. Confronting competing demands to improve quality: a five-country hospital survey. Health Aff (Millwood). 2004;23(3):119-135. FREE FULL TEXT
7. Katz SJ, Cardiff K, Pascali M, Barer ML, Evans RG. Phantoms in the snow: Canadians’ use of health care services in the United States. Health Aff (Millwood). 2002;21(3):19-31. FREE FULL TEXT
8. Canada’s new government announces patient wait times guarantees office of the prime minister [press release]. April 4, 2007. http://www.pm.gc.ca/eng/media.asp?id=1611. Accessed October 7, 2009.
9. Tam P. Key surgical wait times dropping fast; cataract surgery, joint replacements speedier but still behind provincial targets. Ottawa Citizen. November 26, 2008:C1.

Sanders to push for single-payer

By DANIEL BARLOW
Times-Argus (Vt.)
Oct. 29, 2009

MONTPELIER — U.S. Sen. Bernard Sanders will likely make history this year when — for the first time ever — he brings a bill creating a national single-payer health care system to the floor of the Senate for a vote.

As a compromise on a public-option plan that would allow states to opt out gains steam in the U.S. Senate, Sanders, a Vermont independent, continues to focus his attention on a single-payer bill, although he acknowledges that there are not enough votes to pass it.

“That bill will lose,” Sanders said Wednesday morning during a telephone interview. “The question, however, will be how much support it will get.”

Introduced in the early spring, Sanders’ American Health Security Act of 2009 would eliminate the role of private insurance companies in health care and create a public fund that would insure all residents of the United States.

Sanders said his bill would insure the 46 million Americans without coverage and could save upwards of $400 million annually by eliminating insurance overhead and medical bureaucracy.

The system would be paid for through existing sources of government health care spending along with some tax increases, which advocates say would be less than what people pay now in co-pays or out-of-pocket expenses.

Sanders’ bill has received little attention in Washington political circles as this summer’s health-care debate focused more on discredited fears of government death panels and the cost of a public health insurance option, which President Obama favors.

There has never been a vote on a single-payer health care system in either the U.S. Senate or the House, according to Mark Almberg, communications director for the organization Physicians for a National Health Program, a national advocacy organization that supports a single-payer system.

“We do believe that this could be the first time a single-payer bill gets a vote in Congress,” said Almberg, whose organization supports Sanders’ bill.

Almberg agreed that single-payer does not have the votes to pass the U.S. Congress. He said there are about 80 co-sponsors of a similar House bill, but would not hazard a guess as to how many votes for such a plan there are in the Senate.

Knowing that his single-payer bill is likely to fail, Sanders said he also plans to try including a provision in the final health-care bill that would allow states such as Vermont to experiment with a single-payer system on a state level.

If that legislation is approved, it would be welcomed by some lawmakers in Vermont. Sen. Doug Racine, D-Chittenden, a candidate for governor in 2010, said he plans to kick off hearings at the Statehouse in January on exactly what a single-payer system in the Green Mountain State would look like.

Racine said Vermont would need certain waivers from the federal government to conduct a single-payer health care system here — exactly the type of clearance that Sanders’ proposed provision would allow.

“There are lots of different questions that need to be answered,” Racine said. “I think we need to move past the question of whether or not a single-payer system would be good for Vermont and begin looking at how it would work.”

Sanders was hesitant to make predictions of where health care reform will end up in the Senate — his staff has yet to see a final version of the bill and a date for a vote has not been scheduled.

But his expectation is that the final bill will have the required 60 votes to overcome a Republican filibuster to bring it to a final vote, which only requires more than 50 votes to pass.

“I think that, once we get closer to a vote, the American people will look closely at what is in the Senate bill and what is in the House bill,” Sanders said. “I hope that we will see a groundswell of support for health care reform that will force some members to take a stand and allow for a vote.”

Still, Sanders is not too enthusiastic about the public-option opt-out plan pushed by Senate Majority Leader Harry Reid, a Nevada Democrat, this week.

“All the American people should be given the option of a public health insurance plan that competes on the market with the private insurance companies,” he said.

Doctors risking arrest for single-payer health care for all

By Kevin Gosztola
OpEd News
Oct. 28, 2009

At least three doctors will be risking arrest in civil disobedience actions during Mobilization for Health care for All’s third wave of actions this week, which are being held to demand an end to insurance abuse and to demand real health care reform for all.

Ken Weinberg, who will be risking arrest at the Wellpoint Offices in New York City, says it dawned on him that this is a moral issue, he needs to be out there, and he is risking arrest because he doesn’t know what else to do.

“I’ve met with my senators and congressman and nothing works,” says Weinberg. “I think what really pushed me over was the new study that came out from Harvard that showed that 45,000 people die each year because they don’t have health insurance and that to me is criminal.”

Weinberg adds, “Our elected representatives are so in the pockets of the insurance companies that they’re not doing anything. They’re not responsive to the American people. So, this is a wake up call to them as well.”

Matt Hendrickson, who will be risking arrest at the Cigna offices in Glendale near downtown Los Angeles, says he’s “inspired by the people that have already gotten arrested in the last three weeks.”

“They’re just as angry as I am by how the private insurance industry is ruining our health care system,” says Hendrickson.

Additionally, Hendrickson cites the fact that 50 percent of his patients either have no insurance or they are underinsured, being a self-employed doctor whose premiums are going up 15 percent a year, and previous human rights movements (civil rights, anti-war, self-determination, etc) as reasons for being willing to risk arrest.

Margaret Flowers, who will be risking arrest at Carefirst Blue Cross/Blue Shield in Baltimore, Maryland on Thursday, explains that as the Senate Finance Committee hearing started hearings on health care single-payer advocates were excluded. This really showed Flowers that America’s democratic process was not in tact and functioning.

She explains at the first meeting “there were 41 people that testified. They had AHIP, Pharma, and Big Business” but nobody was there “that really represented the health providers and the patient’s point of view.” And, there definitely was no person advocating for a national health care program.

So, at the second Finance Committee hearing on May 5, she and other single-payer advocates showed up at the hearing to ask why their voices weren’t being included in the debate.

Since the spring, there has been an effort to discount and outright ignore the single-payer action movement that has been carrying out several campaigns to push back against anti-health care reform agendas and improve any reform that may funnel or divert money into the hands of insurance companies for profits instead of patient care.

Despite snubs from Democrats and Obama, the single-payer action movement has momentum and is why the public option is being considered.

“The reason why the public option was introduced, according to congress people that have spoken to the single-payer movement, was because of the single-payer movement,” says Hendrickson. “There was such an upswell [by progressives] for single payer that [leaders] opted for some compromise that would not have been given if there wasn’t so much support for single payer.”

So, why are progressives settling for incremental change? Why are they settling for a public option that has proven to be a failure in states like Tennessee, Oregon, and Massachusetts?

With the public option now being outfitted with an opt-out provision, with leaders doing everything they can to make sure the option will fail to compete with insurance companies, and with Sen. Joe Lieberman publicly declaring that he has no problem with obstructing a vote on health care on behalf of for-profit insurers, isn’t it time to up the ante?

And isn’t it time for more doctors and nurses to come out of the woodwork for real health care reform?

“We swore an oath when we finished our medical school and part of that was to practice our professional dignity and honor and to keep the health of our patients first and foremost,” says Flowers. “So, how can we continue to be silent in the face of a private insurance market-based model of health care which is literally killing our patients?”

“We’re all complicit in this. We’re forced to be complicit,” says Weinberg. “What we want is patient care. We want the best possible patient care for people and we are constantly having to play games to skirt around what the insurance companies are forcing us to do.”

Or, as Hendrickson so eloquently puts it: “It is a personal decision and everybody knows when it’s the right time to make that sacrifice. Doctors do have an enormous moral authority in our society. And when you see physicians that advocate for a status quo approach that the American Medical Association has basically pushed, it really hurts our image as physicians.

“We as physicians have a noble duty to care for our patients,” he continued. “And to be given an opportunity to make a relatively small sacrifice — spend a few hours, maybe a night in jail — in exchange for bringing this issue of the private insurance industry and how much harm they’re doing to medicine [to the forefront] — I think it’s a phenomenal opportunity.

Hendrickson also hopes the physicians getting arrested tomorrow and others planning to be arrested in the next wave in November will give “more confidence, more motivation, more inspiration to follow suit because so many of us know how badly the insurance industry is harming our ability to practice medicine.”

Flowers is a pediatrician and mother who quit her practice a few years ago to educate legislators, colleagues and others on real health care reform.

Weinberg is an emergency care physician who has been practicing for 25 years and who has been advocating for single-payer for 15 years.

Hendrickson is a self-employed doctor.

Each of these doctors will be participating in actions, which will occur Wednesday, Oct. 28 or Thursday, Oct. 29. MobilizeforHealthcare.org will post updates on the actions as they are received.

To join or support the campaign that is motivating doctors to risk arrest, visit Mobilization for Health Care for All and sign up today at www.MobilizeForHealth care.org

Kevin Gosztola writes regularly at OpEdNews and Open Salon and he is a 2009 Young People For (YP4) Fellow. He is a documentary filmmaker currently completing a film/video degree at Columbia College in Chicago.

http://www.prosperityagenda.us/node/2462

Weiner single payer amendment tanks

Nancy Pelosi starts clock on House health bill

By Patrick O’Connor and Chris Frates
Politico
October 29, 2009

(House Speaker Nancy Pelosi) backed down from a deal granting liberals a vote to establish single-payer government-run health care. She cut the deal with New York Rep. Anthony Weiner to break a last-minute logjam on the Energy and Commerce Committee. But, in the end, party leaders were concerned the final cost would be astronomical and the vote would fail to garner votes from even half the caucus.

http://www.politico.com/news/stories/1009/28884.html

Comment:

By Don McCanne, MD

What the… !?

The ethics of health care reform

“Making Sense of the Health Care Debate”

A round table discussion of health care reform
University of California at Irvine
The UCI Interdisciplinary Center for the Scientific Study of Ethics and Morality
October 27, 2009
Comments of Don McCanne, M.D. (from memory, edited and abridged):
I’ll be brief because I want to make only one very simple point: An ethical health care system is designed to take care of patients. What could be more obvious? If the health care system is doing its job in taking care of patients then the health care system itself is being taken care of. Special interests legitimately involved in health care delivery will do just fine.
Although this principle seems very obvious, it hasn’t been guiding the process in Washington, DC. Our politicians are designing a health care system that is taking care of the private insurance industry. Patient care is secondary, as it must conform to the private insurance model.
As Senator Joe Dunn just said, legislation is 10 percent principles and 90 percent politics. Congress is providing us with a political solution rather than a solution based on sound health policy science.
We were told that we would have health care reform that would cover everyone, and that costs would be controlled, making health care affordable for each of us. Yet when they insisted that reform be based on private insurance plans and that the budget be limited to $900 billion over the next ten years, they realized that at least 20 million people could not be insured under this proposal. Likely it will be many more, especially after four more years of health care inflation before the basics of this plan are even in place. And since there are no effective measures for controlling costs, health care will be even less affordable.
The limitations imposed have resulted in such bizarre policy proposals as granting waivers to individuals to exempt them from the fines that would be imposed for committing the criminal act of being uninsured.
A fundamental flaw of their proposal was to try to craft reform based on a package of benefits in a private insurance plan that has a premium assigned to it. That premium plus the out-of-pocket expenses must cover the average family health care costs of $16,771 (Milliman Medical Index). With a typical family income of perhaps $60,000, those costs now create a financial hardship for families, especially those at income levels where the subsidies phase out.
By designing reform that primarily benefits insurers, the most productive sector of our society – middle income Americans – is going to be the hardest hit by the adverse consequences of this legislation.
Since this is a forum on ethics, I have to conclude that our legislators, by failing to place the patient first, compromised ethics when they crafted this reform.
http://www.ethicscenter.uci.edu/

The ethics of health care reform

"Making Sense of the Health Care Debate"

A round table discussion of health care reform
University of California at Irvine
The UCI Interdisciplinary Center for the Scientific Study of Ethics and Morality
October 27, 2009

Comments of Don McCanne, M.D. (from memory, edited and abridged):

I’ll be brief because I want to make only one very simple point: An ethical health care system is designed to take care of patients. What could be more obvious? If the health care system is doing its job in taking care of patients then the health care system itself is being taken care of. Special interests legitimately involved in health care delivery will do just fine.

Although this principle seems very obvious, it hasn’t been guiding the process in Washington, DC. Our politicians are designing a health care system that is taking care of the private insurance industry. Patient care is secondary, as it must conform to the private insurance model.

As Senator Joe Dunn just said, legislation is 10 percent principles and 90 percent politics. Congress is providing us with a political solution rather than a solution based on sound health policy science.

We were told that we would have health care reform that would cover everyone, and that costs would be controlled, making health care affordable for each of us. Yet when they insisted that reform be based on private insurance plans and that the budget be limited to $900 billion over the next ten years, they realized that at least 20 million people could not be insured under this proposal. Likely it will be many more, especially after four more years of health care inflation before the basics of this plan are even in place. And since there are no effective measures for controlling costs, health care will be even less affordable.

The limitations imposed have resulted in such bizarre policy proposals as granting waivers to individuals to exempt them from the fines that would be imposed for committing the criminal act of being uninsured.

A fundamental flaw of their proposal was to try to craft reform based on a package of benefits in a private insurance plan that has a premium assigned to it. That premium plus the out-of-pocket expenses must cover the average family health care costs of $16,771 (Milliman Medical Index). With a typical family income of perhaps $60,000, those costs now create a financial hardship for families, especially those at income levels where the subsidies phase out.

By designing reform that primarily benefits insurers, the most productive sector of our society – middle income Americans – is going to be the hardest hit by the adverse consequences of this legislation.

Since this is a forum on ethics, I have to conclude that our legislators, by failing to place the patient first, compromised ethics when they crafted this reform.

http://www.ethicscenter.uci.edu/

The actuarial squeeze on low and middle income families

Provision Under Consideration for Merged Senate Health Bill Would Harm Needy Families

By January Angeles and Judith Solomon
Center on Budget and Policy Priorities
October 26, 2009
A family of three earning $27,465 a year before taxes — that is, at 150 percent of the poverty line — would have to pay $1,318 a year for health coverage under a proposal that Senate negotiators are considering for a merged health reform bill that they would bring to the Senate floor.
This is related to efforts that Senators working on the merged bill are making to cap the cost of insurance premium contributions at 10 percent of income for households that earn between 300 and 400 percent of the poverty line, rather than at 12 percent of income as under the Finance Committee bill. To help pay for this change, they reportedly are also considering increasing the amounts that very low-income households would be required to pay.
http://www.cbpp.org/cms/index.cfm?fa=view&id=2962

And…

Trends In Underinsurance And The Affordability Of Employer Coverage, 2004-2007

By Jon R. Gabel, Roland McDevitt, Ryan Lore, Jeremy Pickreign, Heidi Whitmore and Tina Ding
Health Affairs
June 2, 2009
Health plans covered slightly fewer expenses in 2007 than in 2004, but out-of-pocket spending grew more than one-third because of growth in overall health spending.
Underinsurance rose from 2004 to 2007 as the actuarial value of employer-based health insurance declined slightly, from 81.4 percent of the bill to 80.1 percent. The major change in benefit design during these years was an increase in the percentage of plans with deductibles and an increase in the average deductible level.
In the United States, if you are sick and earn a modest income, then you are probably underinsured–even if you have employer-based health coverage.
http://content.healthaffairs.org/cgi/content/full/28/4/w595

The best private insurance available today – employer-sponsored health plans – have an actuarial value of 80%. That means that the insurance pays 80% of the covered costs of health care and patients are responsible for the other 20%. Patients also are usually responsible for out-of-network services and for services and products that are not benefits of the plans.
The Health Affairs article by Jon Gabel and his colleagues shows that plans with an 80% actuarial value are not providing adequate financial protection to individuals with modest incomes who need health care. Having a plan with an 80% actuarial value can place you in the ranks of the underinsured.
Basic coverage under the proposals before Congress would provide an actuarial value of 65% or 70%. That means that the patients would be responsible for the remaining 30% or 35% of health care costs, although the proposals would limit the total amount for which the patients are responsible under the plans. Patients also would be responsible for out-of-network services and for services and products not covered by their plans.
If there is a cap on out-of-pocket spending, then why should the precise actuarial value make difference? Simply, the lower the actuarial value, the greater the likelihood that the patient will have to spend the full amount up to the cap. Thus more individuals will be negatively impacted. Also, the amount of the cap makes a very big difference. The proposed caps on out-of-pocket spending, when added to the patient’s share of the premium, create a financial hardship for most low and middle income individuals and families.
Members of Congress are particularly concerned about the high costs for those at income levels wherein the subsidies supporting the premiums are phased out. Not only do they understand that making health care unaffordable is not wise policy, but they also understand the backlash that would likely occur when the most productive sector of our society finds out what hit them.
The report from the Center for Budget and Policy Priorities demonstrates how desperate our legislators are to find a way out of this highly flawed financing proposal that hits their base supporters the hardest. To soften the impact on middle income individuals and families, they are investigating a proposal to increase the amounts that low income families would have to pay, even though they already can’t pay the current levels proposed. Perhaps they calculate that, at election time, bankrupting individuals without a political voice is a safer than facing a backlash from the base supporters.

Why the Health Insurance Excise Tax Is a Bad Idea

By Steve Early & Rand Wilson
The Nation
Oct. 21, 2009

Twenty years ago, 60,000 workers from New York City to Maine rallied against healthcare cost-shifting at the telecom giant then known as NYNEX (since “rebranded” as Verizon).

NYNEX was a very profitable, multinational company seeking to capitalize on a demoralizing decade of lost strikes, contract givebacks and widespread unionbusting. At a time when many workers were forced to make concessions, NYNEX strikers held the line for four months and emerged victorious. They successfully resisted the company’s demand that they pay hundreds and eventually thousands of dollars a year for medical benefits. But this singular union win didn’t come cheap. Customer service was disrupted by the work stoppage, resulting in tens of millions of dollars worth of lost wages. Hundreds of strikers were arrested, fired or suspended–and one, Gerry Horgan, was killed on a picket line in Westchester County.

In every other advanced industrial nation, the contentious issue of who pays for medical care was taken off the bargaining table long ago. And no worker would ever lose his or her life defending job-based private health insurance.

To this day, members of the Communications Workers of America (CWA) and the International Brotherhood of Electrical Workers (IBEW) who work at the phone company in the Northeast make no premium contributions for their individual or family coverage–an arrangement now enjoyed by a fraction of the labor force. To avoid being stigmatized as a privileged group–selfishly trying to preserve better-than-average benefits–the NYNEX strikers were careful about how they countered management’s demand for premium-sharing and framed the central issue in dispute. Their buttons, banners, press releases and leaflets made it clear that the solution to medical cost inflation was “Health Care For All, Not Health Cuts At NYNEX!”

Backed by allies like Jesse Jackson, Citizen Action and Physicians for a National Health Program (PNHP), the strike became a focal point for ongoing public and membership education about the need for Canadian-style national health insurance. CWA and IBEW took the position that givebacks in telecom wouldn’t benefit the millions of other workers with less insurance or none at all; in fact, any medical cost savings achieved by NYNEX would simply relieve financial pressure on that corporation and others to support real healthcare reform.

Not long after the walkout began, NYNEX provided strikers with a vivid reminder of why healthcare shouldn’t be controlled by employers: the company canceled coverage for all 60,000 employees and their families. Undeterred, NYNEX workers used strike benefits, contributions from other unions or personal savings to pay their doctor and hospital bills and, when necessary, arrange COBRA coverage. As part of the strike settlement, their old health insurance was restored and some costs reimbursed. However, a year later, when CWA tried to put a pro-single-payer resolution before NYNEX shareholders, management got the Securities and Exchange Commission to exclude the proposal from proxy materials sent out before its 1990 annual meeting.

In subsequent rounds of bargaining, the cost of providing generous benefits for active and retired Verizon workers has led to several more strikes and, in 2003, a protracted “work-to-rule” wrangle about the same issue. To this day, telecom executives remain staunch ideological foes of any expansion of the social wage in the form of “Medicare for all.” In its own corporate lobbying, Verizon props up a dysfunctional status quo–the current mishmash of public and private plans–while still objecting to picking up the tab for the latter. Just last month CWA had to file charges before the National Labor Relations Board against Verizon over its refusal to bargain over an announced change in HMO options.

Meanwhile, after twenty years of battling to keep fully paid insurance in place, telecom workers find their medical benefits back in the news–and much demonized–thanks to the tax on “Cadillac” health insurance favored by the Senate Finance Committee. In its current form, the proposed 40 percent excise tax would be applied, four years from now, to the portion of the value of any employer-provided coverage that then exceeds $8,000 for individuals and $21,000 for families. In the Boston area, where medical expenses are particularly high and Verizon’s workforce is getting older, the bill for family care is almost that much now. As CWA national president Larry Cohen pointed out in the New York Times on October 13, “at least half my members would be in health plans subject to the tax in 2013.”

As health policy expert Len Rodberg noted in a recent article, “Is There Any Way Out for Obama?”, quoted on the PNHP website, funding “healthcare reform” in this fashion simply penalizes employers like Verizon who have, under duress, continued to provide “good insurance.” At the same time, the Finance Committee bill approved on October 13 does little to compel better coverage by employers who currently underinsure their employees. In the case of big self-insured firms in the telecom industry, this is not a “tax on insurance companies”–as often reported misleadingly in the media. It’s an additional bottom-line cost that, as Rodberg observes, provides “a strong incentive to cut back on benefits.” Workers who lack collective bargaining rights will have their coverage reduced unilaterally. At unionized firms like Verizon or AT&T–where healthcare has bogged down union bargaining again this year–an excise tax on existing benefits will trigger more 1989-style labor-management conflict at a time when union strike capacity is far weaker than twenty years ago.

This is not what labor activists voted for last fall when they backed Barack Obama and the Democrats in key battleground states or the safer precincts of the Northeast. Because of the searing experience of the NYNEX strike, many of its participants became far more receptive to trading in their so-called Cadillac for the cradle-to-grave security of tax-supported universal coverage no longer tied to now-precarious telecom jobs. But no one wants to pay more for less–particularly when that’s far from the best or fairest route to “healthcare for all.” Senator Max Baucus’s misbegotten scheme to tax the benefits of workers who are slightly better off–so revenue can be raised for budget-busting private insurance subsidies–is, in fact, a lose-lose proposition. If it’s not killed on the Senate floor, or eliminated in a House-Senate conference committee, this undermining of past union gains will leave many embittered workers in its wake.

http://www.thenation.com/doc/20091102/early_wilson

Single-payer proponents say state health care system 'broken'

By Kyle Chene
Belmont (Mass.) Citizen-Herald
Wed Oct 21, 2009

Boston, Mass. – Although state leaders have bristled at the pointed, dismissive and sometimes downright false claims made about the Massachusetts health care system by outsiders, they have said little about the dissent from within.

A quarter of the Legislature has signed onto a proposal to scrap the state’s landmark health care system, which still relies on private insurance companies to cover millions of residents, in favor of a single-payer system, publicly run and available to all residents.

Backers of the single-payer plan (H 2127) argued Tuesday that the state’s current system has failed to control costs, prevented even insured residents from obtaining needed care and left as much as 5 percent of the population without coverage.

The legislative supporters include Rep. Ellen Story (D-Amherst), a member of House Speaker Robert DeLeo’s leadership team and a stable of reliably liberal legislators. Officials from the League of Women Voters, the National Association of Social Workers, the Massachusetts Nurses Association and other social advocacy organizations were also on hand to register support. While such proposals have sparked fierce opposition nationally, no opponents spoke at the hearing.

The proposal by Rep. Matt Patrick (D-Falmouth) would establish a “Massachusetts Health Care Trust” reimbursing providers for health care costs, investing in health care facilities, streamlining health care bureaucracy and incentivizing quality of care. The trust would be funded by a “dedicated tax” on employers, workers and citizens, intended to replace funds currently spent on insurance premiums. The trust would also consolidate all municipal and federal health care dollars.

The trust would be overseen by a board that includes the secretary of health and human services, the secretary of administration and finance, the commission of public health, three gubernatorial appointees, three appointees of the attorney general and eight members elected by state residents.

All Massachusetts residents would be eligible to receive health care through the trust, as well as non-residents who work more than 20 hours a week in Massachusetts, pay Massachusetts income and payroll taxes and pay premiums established by the trust. Benefits would include prescription drugs, emergency care, doctor visits, hearing, vision and dental care, home health, maternity coverage and various other medical procedures.

The debate comes at a time that the governor and top lawmakers are eyeing a fundamental overhaul in the way the state pays for care. A special commission of legislators, administration officials, doctors, hospitals, insurers and health care experts recommended over the summer that Massachusetts implement a system of “global payments” aimed at curbing health care costs by coordinating individual patients’ care among various providers.

Gov. Deval Patrick has said he expects legislation enshrining such a system to be ready by the end of the month, and stakeholders from across the health care system voiced conditional support for ending the state’s current “fee-for-service” model.

Noting that the commission report “sounded the alarm” about soaring health care costs, Rep. Patrick questioned the recommendations because the members did not consider a single payer system.

“I dare you to read the report and tell me how it will work,” he said.

Sen. Patricia Jehlen (D-Somerville), a sponsor of the proposal, said passing it this year would be “politically unrealistic,” although she said health care costs would crowd out other government programs if left unchecked.

Despite the criticism of the state’s current system, aimed at offering universal access to health insurance, there is a wide array of support. Backers of the existing structure, while acknowledging that health care costs have continued to climb, note that the state has covered about 430,000 residents since the inception of health care reform in 2006. Individuals are required to purchase health insurance, and low-income residents without access to health care through their employers may obtain partially or fully-subsidized care through the state’s Connector Authority, an exchange that pairs consumers with private plans.

Opponents of single-payer care worry that it places government bureaucrats in charge of important health care decisions, would add layers of bureaucracy to the existing system, would reduce the quality of care and would disrupt relationships between doctors and patients, arguments that single-payer backers reject.

For much of the hearing, single-payer backers spoke to a sparse panel of legislators, as House members flitted between a Democratic caucus and the basement hearing room. In addition, Senate Chair Susan Fargo (D-Lincoln) and Vice Chair Mark Montigny (D-New Bedford) were absent, leaving Sen. Jennifer Flanagan (D-Leominster) with the gavel for much of the hearing. House Chair Jeffrey Sanchez (D-Boston) and Reps. Jason Lewis (D-Winchester), Cleon Turner (D-Barnstable) and Michael Brady (D-Brockton) attended parts of the hearing.

Single-payer advocate Benjamin Day, executive director of MassCare, said his favored system often fails to gain political traction because of intense lobbying efforts by the insurance industry.

“I think it’s tough because single-payer contains effective cost control,” he said. “Every bill that contains cost control is a political slugfest.”

He and other proponents of a single-payer system argued that every ambitious health care reform plan enacted by states has ultimately failed because of unsustainable costs.

Dr. Steffie Woolhandler, a Harvard University professor and advocate with Physicians for a National Health Program, questioned a 97.4 percent health insurance rate in Massachusetts, a figure highly touted by the Patrick administration.

“That’s a single organization, the Urban Institute, that gives that number,” she said. “The problem of underinsurance, being unable to afford care despite having insurance, has actually gotten worse in the state … We’ve tried a reform in this state that’s left 5 percent of the people uninsured, costing the commonwealth $1.3 billion this year.”

Rep. Timothy Madden, a freshman Democrat from Nantucket, said his family has “been through the mill” with insurance companies.

“I think the system is broken,” he said. “We should set the tenor in the leadership and the message to Washington.”

http://www.wickedlocal.com/belmont/news/x927260116/Single-payer-proponents-say-state-health-care-system-broken