PNHP-MD co-chair Dr. Eric Naumburg appeared on “State Circle” on Maryland Public Television on July 27, 2018. He discussed the advantages of a single-payer national health program and the prospect of passing a state program (as has been proposed in Maryland) versus a national program (as has been proposed by PNHP).
Reducing personal medical debt
Unlike Medical Spending, Medical Bills In Collections Decrease With Patients’ Age
By Michael Batty, Christa Gibbs, and Benedic Ippolito
Health Affairs, July 25, 2018 (published ahead of print)
Abstract
Health policy is often designed to help protect patients’ financial security. However, there is limited understanding of the role medical debt plays in household finances. We used credit report data on more than four million Americans to study the age profile of people whose medical bills were sent to a US collections agency in 2016. We found that, unlike health care use and spending, medical collections decreased substantially with age. The average size of medical debt decreased nearly 40 percent from patients age twenty-seven to sixty-four, with increases in health insurance coverage and incomes likely playing important mediating roles. However, the frequency of medical collections—that is, the proportion of people with a collection by age—was less closely tied to insurance coverage rates. A potential explanation is that most medical collections were relatively modest in size, with more than half of them less than $600 annually. As a result, medical collections could still occur under typical insurance plans. We discuss how these results could inform policies targeting medical debt and insurance regulation, such as restrictions on age rating.
From the Introduction
Using deidentified credit report data on more than four million people, we found that the frequency (proportion of people with a medical collection by age) and size of medical collections peak in the late twenties and decline as age increases. This pattern is similar to that of the percentage of people without health insurance by age, but it differs markedly from the sharp rise in medical spending by age.
Furthermore, while the average size of medical collections exhibits a close relationship with uninsurance rates by age, the portion of people who actually incur any medical debt within a given year does not decline as much at older ages as uninsurance rates do. We augment these findings by showing that many annual medical collections are relatively modest in size (more than half under $600). Insurance typically reduces what patients are asked to pay, but if it includes nontrivial cost sharing, patients may still face bills they cannot afford or do not pay. This may both limit consumers’ demand for insurance and temper expectations for how much all but very generous forms of universal coverage would reduce the medical debt we observed.
From the Policy Implications
As prior research has shown, our results suggest that health insurance is associated with medical debt. In addition, we found that younger adults are more likely than their older peers to have medical collections, despite having lower medical spending. Thus, policies that promote insurance coverage for younger adults may have the greatest effect on reducing medical collections. One such policy is the oft-debated limitation on age rating in the ACA Marketplaces for individual insurance coverage. An actuarially fair system would charge the oldest enrollees premiums closer to five times those of the youngest, compared to the current three-to-one age rating cap. Relaxing this limitation could lower premiums for younger consumers and boost coverage in a group that currently incurs the most medical debt, though at a cost of higher premiums and potentially increased medical debt for older people. The extent to which this would alter the total amount of debt or simply redistribute it in part hinges on consumers’ responsiveness to health insurance premiums and wealth differences across age groups.
While our results suggest that insurance is important for reducing the dollar amount of unpaid debts, they also imply that consumers could still incur a substantial amount of debt even under universal coverage, if such coverage required nontrivial cost sharing. This is consistent with data from the 2016 National Health Interview Survey, which show that 72 percent of the patients ages 20–65 who reported not being able to pay medical bills were insured. Thus, one option is for policy makers to further limit allowable levels of cost sharing (for example, restricting the availability of “catastrophic” plans or requiring higher actuarial values more broadly). However, all else equal, this would increase the price of insurance, potentially discouraging the most price-sensitive consumers from purchasing coverage and raising concerns about moral hazard. Policy makers could increase subsidies to offset the price increases, but this may face political opposition, given recent evidence.
If policy makers are committed to the provision of insurance with substantial cost sharing, as has become increasingly common in many employer-sponsored plans and in the ACA individual market, reducing medical collections would require policy efforts to increase funds available to pay bills—either by increasing after-tax incomes or by promoting savings. Although health savings accounts are the most prominent health-specific savings vehicle, their tax-advantaged structure is considerably less valuable to the lower-income people who likely constitute more of the population with medical debt than higher-income people do. As a result, a continued focus on this type of policy would likely have muted effects on the medical debt of lower-income people.
Finally, consideration of the size distribution of medical debt is important for policies aimed at increasing insurance coverage. For example, Amy Finkelstein and coauthors argue that the availability of uncompensated care reduces the cost of being uninsured (though not fully) and may cause people to not purchase insurance even when the subsidized price is far below their own expected medical expenses. Similarly, Neale Mahoney argues that bankruptcy offers some implicit health insurance for those without formal insurance. Our results indicate that most medical debts are relatively modest in size, which means that they could be incurred before the insured person meets their deductible. Thus, the channels that decrease demand for insurance may be in effect for a wider range of medical expenses than previously thought.
***
Health Affairs Comment:
By Don McCanne, M.D.
The discussion of policy implications really needs to be expanded.
The two primary causes of medical debt that results in collections include being uninsured, which calls for policies that would make coverage truly universal, and underinsurance with excessive patient cost sharing resulting in medical debt.
Most policy discussions of the latter seem to accept consumer directed health care as a given – making the patient sensitive to health care spending through higher deductibles and other cost sharing. This results in policy recommendations that do not eliminate the medical debt issue but rather use trade-offs that only shift the problems, often inequitably.
As an example, setting premiums closer to age-related risk would increase medical debt problems for older individuals, not really a desirable policy. Another example is that increased use of medical savings accounts increases tax expenditures that benefit the wealthy – a highly inequitable method of financing health care that is unfair to our taxpayers. Solutions that are directed to moral hazard and consumer price sensitivity do not solve the problems but merely shift them around.
Exhibit 3 provides a very important lesson. At age 65 there is an abrupt decline in the numbers of uninsured, obviously due to increased enrollment in Medicare. But also within a couple of years medical collections become almost negligible, most likely due to the fact that the deficiencies in Medicare coverage are filled in by other coverage including retiree plans, Medigap plans, Medicare Advantage plans, or dual coverage with Medicaid. This suggests that, instead of increasing administrative complexity and costs through the use of these various supplemental plans, Medicare benefits should be expanded to fill in the gaps in coverage if we want to protect patients from medical debt.
Improving Medicare and expanding it to cover everyone would not only address the medical debt issue, it would also make coverage truly universal, and it would be funded equitably through progressive tax policies. Regarding affordability, the policies characteristic of a well-designed single payer system would use other more patient-friendly measures to control spending such as reduction of our profound administrative waste, use of publicly administered pricing such as negotiated rates and bulk purchasing, and planning and separate budgeting of capital improvements to ensure efficient distribution of our health care delivery resources.
These policies would change the cost trajectory to make it sustainable, not only to benefit individuals but society as a whole. That does not remove the major barrier to reform that the authors also allude to – the political opposition to government financing, even though the decrease in private financing, especially employer-sponsored plans and plans in the individual market that disproportionately burden individuals with modest or low incomes, is a major reason that public insurance systems work so well. To enact the beneficial policies that we need for an equitable, affordable health care financing system for all, we need to change the politics.
https://www.healthaffairs.org…
***
Further Comment:
By Don McCanne, M.D.
An important theme that runs throughout this article: “consumers could still incur a substantial amount of debt even under universal coverage, if such coverage required nontrivial cost sharing.”
Nontrivial cost sharing is the primary cause of medical debt in insured individuals. Deductibles, coinsurance and often copayments are usually more than trivial in today’s private insurance products.
Several other nations have shown that cost sharing has not been necessary to keep health care spending rates at a level well below that of the United States. Cost sharing in the United States has not kept us from spending the most on health care, and it has created unnecessary exposure to medical debt.
We really can provide health care to everyone for free at the point of service while controlling costs though single payer policies that are much more patient friendly and much more effective than consumer-directed cost sharing, and we can pay for the system painlessly through equitable, progressive public financing.
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.
Activists Call For Hill To Withdraw From ACA Lawsuit
By Brandon Smith
WFYI Indianapolis, July 27, 2018
Local health care advocates want Attorney General Curtis Hill to withdraw the state from a lawsuit that aims to dismantle the Affordable Care Act.
The advocates delivered letters and a 600-signature petition to Hill’s office Friday.
Indiana is one of 20 states in a lawsuit that seeks to eliminate the Affordable Care Act, also known as Obamacare. The Trump administration announced in June it would no longer defend the federal health care law.
Protect Our Care Indiana spokesperson Kate Shepherd says the lawsuit threatens more than those who use the ACA’s marketplace.
“If successful, insurance companies could once again deny or drop from the coverage the more than 2.7 million Hoosiers with preexisting conditions, like asthma, diabetes, or cancer,” Shepherd says.
Indiana University McKinney School of Law clinical professor Fran Quigley is also the coordinator of People Of Faith For Access To Medicines. He says Hill didn’t need to join the lawsuit.
“Stop misusing the power of your office. Stop misusing the taxpayer funds we’re paying for to administer this lawsuit,” Quigley says.
Hill responded to the petition late Friday afternoon. He said in a statement, since Congress repealed the tax but left the individual mandate in place, the ACA is unconstitutional.
“I hope to see the emergence of sound policies that constitutionally safeguard the healthcare needs of all Americans, including those with pre-existing conditions,” Hill said in a statement. “I support efforts to this end by Gov. [Eric] Holcomb and the General Assembly here in Indiana, and I support such efforts by Congress and the Trump administration on the national level.”
CMS Administrator Seema Verma’s opposition to Medicare for All
Commonwealth Club, July 25, 2018
Seema Verma: Americans enjoy the benefits of the best health care providers and innovators in the world. Yet while the volume of care consumed by American patients has not increased dramatically compared to similar economies, the cost of care in the United States has accelerated at an alarming pace. Health care costs are growing faster than the United States GDP, making it more difficult with each passing year for CMS to ensure health care for generations to come.
The status quo is simply unsustainable, and there is no easy solution. Anyone who tells you that more government spending alone can fix this problem doesn’t understand the issue, because despite the huge increase in funding we saw from Obamacare, many of our health care challenges not only remain but continue to worsen. As a country, we have not figured out how to slow the rate of growth in health care spending.
***
Before I conclude…I want to address one additional issue.
We have all heard the drumbeat for what advocates of a government-run – socialized – health care system call “Medicare for All.” Let me briefly explain why this notion reveals a fundamental lack of understanding about the uniqueness of Medicare to the very specific population that it serves.
First, Medicare is a program to provide care to our most vulnerable, disabled and aging population that needs it. Second, by proposing to expand services offered by Medicare to every American, you further strain Medicare’s funding streams and run the risk of depriving seniors of the coverage they have worked their entire lives to receive.
We have just discussed the challenges that Medicare faces in serving the nation’s seniors, the misaligned financial systems that are driving up costs, and the bureaucratic hurdles faced by doctors and hospitals. We have a lot of work to do to strengthen the existing Medicare program. Putting millions more Americans on Medicare will undermine the health care for the very demographic the program is designed to assist. Ideas like “Medicare for All” would only serve to hurt and divert focus from seniors, all the while expanding the regulatory burden and the misaligned and perverse incentives of a government-run system.
In essence, Medicare for All would become Medicare for None.
By choosing a socialized system, you’re giving the government complete control over the decisions pertaining to your care or whether you receive care at all. It would be the furthest thing from patient-centric care.
Let’s learn from the mistakes made in Medicaid when the Affordable Care Act pushed millions of able-bodied Americans into a program designed for pregnant women, children, aged, and those with disabilities, only to then incentivize states to serve the able-bodied before protecting Americans most in need. We have seen this movie, and the last thing we need to see is the sequel.
I seriously hope those who advocate it take time to understand the complexity of the program and the adverse consequences of their proposal.
Rather than straining Medicare, we are working to strengthen Medicare. We are activating patients to be consumers of health care, to drive providers to compete for patients by innovating and providing value. We are getting rid of burdensome regulations that are barriers to value-based care while realigning incentives so that providers can focus on delivering care that improves quality and lowers cost.
We are running out of time to solve the challenges of our health care system. Not addressing health care costs not only threatens the future of the Medicare program but our country’s future. This administration will never stop driving our system towards delivering value for the patient. This will take every single part of the health care system working together to ensure that we continue to drive towards value. Everybody will need to do their part to create a value-based system, but we need you to do your part as well. Please engage with us. We need and want your ideas and your unique perspective. At some point, we’re all going to be Medicare beneficiaries, so let’s work together to strengthen the program and leverage that strength for the future of our entire health care delivery system. This is not a luxury, but a necessity. The prosperity and the well-being of future generations is dependent on the decisions that we make today. So join us as we ensure those decisions will benefit all Americans. Thank you.
***
Q&A Session:
Mark Zitter, Moderator: I’d like to turn to the bigger issue that people have brought up and that you raised about single payer health care. I’m not going to ask the question that you already answered. I know the administration is not in favor of it. I do find that many people confuse single payer health care with universal coverage – not the same thing. Many countries have both – not the same thing. So clearly the administration is not in favor of a single payer approach; what’s the Trump administration’s feeling about everybody having health care coverage.
Seema Verma: I think we’ve always said that we want to make sure that people have access to coverage. That’s always been a goal of the administration. I just don’t think the government is the one to make decisions for each and every American. People need to make decisions about health care on their own. They need to have choices and options and they need to make the decisions that are going to work best for them. We don’t think the the government should be making decisions about individual families and for people about their health care. That should come from the individual.
Mark Zitter: And when you say “access to coverage,” is that the same as coverage?
(Audience laughter)
Seema Verma: We want people to have access to coverage, and I don’t…I think we’ve been very clear about making sure that, you know, that there’s access in a lot of different ways. What we’ve had through Obamacare is a type of plan – a very expensive plan that lots of people can’t afford. Different people want different types of plans, and I think they should be able to make the choices – decide what’s going to work best for them.
Mark Zitter: So we have through the Affordable Care Act about half the number of uninsured in America. We still have eight or nine percent, whatever that might be, and granted the coverage for everyone is not optimal, so just being covered is not all that we need. However we still have eight or nine percent, more in some states, less in others; what’s the Trump administration’s plans to get that number up pretty close to one hundred.
Seema Verma: So a couple things that we’ve done…What we’re seeing in the exchanges is that the coverage has become very expensive, and for people that are subsidized, they’re not necessarily experiencing issues in terms of getting access to the coverage; they still may having a lot of problems in affording the out-of-pocket expenses and the very high deductibles. But a lot of people cannot afford the coverage; they are not able to get subsidies. And so one of the things that we’re trying to do is to make certain that there is different types of options available, providing more flexibility – short term limited duration plans; we put out a rule for association health plans. The idea is to create more flexibility and more options for consumers to be able to have different choices, because I don’t think that everybody can afford the one-size-fits-all Obamacare approach – a very expensive plan that’s leaving out millions of Americans.
Mark Zitter: We just heard over the past week in terms of the association health plans – there have been some new rules there. One of the groups that was most in favor of it didn’t feel like the new rules were sufficient for it to pursue. So are there other plans to do something else in that regard?
Seema Verma: We’re always going to be continuing to drive towards getting Americans options. I think the way Obamacare is structured, it’s a one-size-fits-all approach, and so you’re going to see action by the agency, and I think that’s what the president, in terms of his executive order, wants to make sure there is different types of plans available, that people have choices about their care.
Mark Zitter: One of the statements that the president has made that has gotten a lot of excitement on the right, and increasing interest on the left, is the notion of giving states much more flexibility in how they administer health care to their residents. There’s concern on the left that maybe states won’t do what they want overall, but of course you’ve talked about experimentation… Here in California, as you probably heard, we have a gubernatorial race. Most candidates are running on some kind of platform about single payer health care on a statewide basis. Plenty of challenge to that, but I guess my question to you is that should that platform go forward it would require, I suppose, waivers from the federal government so the money that currently flows through your department would be put into the California single payer pool. Should that happen… should that be requested, what would be your feeling about granting California that flexibility?
Seema Verma: I don’t think a single payer system is going to work, number one. I think that a lot of the analyses show us that it’s unaffordable, and that it would actually put many people in the situation where the government is making decisions about their health care. We’ve been consistent that we support flexibility, but when we look at proposals, we evaluate them to see are they fiscally sustainable, are they fiscally sustainable for the federal government as well as the states, and when we’re evaluating proposals that’s what we’re looking at, we’re looking to see whether the proposal falls within the confines of the law. But it doesn’t make sense for us to waste time on something that is not going to work.
Mark Zitter: So that’ll be a no.
Seema Verma: Like I said, our parameters are that it has to be fiscally sustainable for the federal government.
https://www.commonwealthclub.org…
YouTube video (1 hour, 7 minutes):
https://m.youtube.com…
Transcript of prepared speech:
https://www.cms.gov…
***
Comment:
By Don McCanne, M.D.
This speech was primarily the rhetorical spin that this administration has been spewing out – much conservative and libertarian ideology with a paucity of health policy recommendations that are largely ineffective and often detrimental. Medicare for All advocates should be particularly concerned about what she has to say.
To no surprise, she dismisses Medicare for All with what she believes to be an inflammatory label: “socialized.” She then accuses advocates of not understanding Medicare. She says that that Medicare for all would risk removing resources from current Medicare beneficiaries, which of course is the opposite of the truth since it would expand benefits. She insists that it is unaffordable, ignoring the fact that increased government spending would be offset by the reduction in private health care spending.
Confirming that her speech is rhetorical, lacking in any beneficial policy substance, she concludes by saying, “Medicare for All would become Medicare for None.”
The conservatives have long supported giving the states a much greater role in regulation and financing of health care, contending that the states are in a better position to make decisions about health care for their people. Yet showing that she is much more driven by ideology than by policy, she insists that a single payer system is not going to work regardless, that it would be unaffordable, which all studies show is absolutely untrue when looking at total health care spending. She says that though she supports flexibility, she is not going to “waste time on something that is not going to work.”
As the moderator Mark Zitter says, “So that’ll be a no.”
I found it very painful to listen to this speech. I left out of the transcript that I typed her little joke about world peace, which to me only compounded the pain – joking about peace, of all things. (The audience didn’t laugh either.)
These people will never understand the ethics and morality of an egalitarian health care system that brings health care justice to all. We need to replace them with people who do understand and who care.
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.
Medicare is turning 53. Here’s the best way to celebrate
By George Bohmfalk, M.D.
The Charlotte Observer, July 26, 2018
Monday is the 53rd birthday of Medicare, the program that added several years to seniors’ lives and elevated millions out of poverty. Many physicians, including my father, fought it tooth and nail, only to find that their incomes grew as their patients’ health improved. Doctors saw that they could practice as they had before, but now get paid for what previously was charity elder care. Their worries about it being socialized medicine ceased.
Medicare is an extremely successful and popular government program, a very good thing for 15 percent of our citizens. As private, for-profit health insurance continues to squeeze enrollees into narrower provider networks and unaffordable cost-sharing, many Americans under 65 are desperate for relief. Most business leaders do not realize that around one-third of every healthcare dollar goes to administration, rather than healthcare. We pay around twice per person what every other country pays for healthcare, the largest share of GDP. Despite being the biggest market, we pay the world’s highest prescription drug prices. Our health outcomes, including life expectancy, rank near the bottom.
Except in the Medicare population. Once people have access to healthcare, their health dramatically improves. Medicare has a secret for the rest of the country: We can expand Medicare to cover everyone, improve it to cover prescription drugs and eliminate deductibles and co-payments, and save money in the process. The secret lies in Medicare’s 2-3 percent administrative overhead, a fraction of private insurance companies’. Politicians commonly campaign on eliminating waste, but their promises rarely materialize. With Improved Medicare for All, we can convert hundreds of billions in administrative waste to actual, life-saving healthcare.
Improving Medicare can be a fairly straightforward process, as described in the House bill HR 676. The taxes to fund it would be less than current healthcare spending for 95 percent of households — a clear win-win for the vast majority of us. Employers would no longer be burdened with providing health insurance and could better compete globally. Everyone truly could choose and keep their doctors, if not their current expensive and restrictive insurance plans.
But as widespread support for Medicare for All has grown, deceptive lookalike proposals have appeared. With names like Medicare Extra for All, Medicare Part E, and Medicare-X, these plans retain private, for-profit insurance companies with their paper-shuffling, treatment denials and cost-sharing. They all threaten real progress in healthcare by preserving the wasteful but profitable status quo.
If those plans prevail, Medicare may not have many more birthdays. The best celebration of Medicare’s 53rd birthday would be to improve it and offer it to everyone. Tell your congressional representatives that’s the birthday gift you want, for yourself, your loved ones, and for the country.
Dr. Bohmfalk, a retired neurosurgeon, chairs the Education Committee of Health Care Justice North Carolina, the Charlotte chapter of Physicians for a National Health Program. He may be reached at HCJusticeNC@gmail.com.
Taking health care reform to the election booth
KFF Health Tracking Poll
Conducted July 17-22, 2018
Thinking about the upcoming election, is a candidate’s position on “passing a national health plan in which all Americans would get their insurance from a single government plan, or Medicare-for-all” the single most important factor in your vote, very important but not the most important factor, one of many factors you’ll consider, or not an important factor in your vote?
12% – Single most important factor
37% – Very important, but not the most important factor
29% – One of the many factors you’ll consider
21% – Not an important factor in your vote
2% – Don’t know/Refused
***
Morning Consult + POLITICO National Tracking Poll
Conducted July 19-23, 2018
How important of a priority should each of the following be for Congress? Passing a healthcare reform bill
55% – A top priority
25% – An important, but lower priority
6% – Not too important a priority
5% – Should not be done
9% – Don’t know/No opinion
***
Comment:
By Don McCanne, M.D.
In the Kaiser poll over three-fourths say that a single government plan or Medicare-for-all should be considered or is very important or the single most important factor in the upcoming election. In the Morning Consult/POLITICO poll three-fourths say that passing a health care reform bill is an important or top priority, with over half saying it is a top priority.
As a topmost priority, generic health care reform seems to have greater support than a single government plan or Medicare for all, but both concepts do have three-fourths majority support. That’s enough to make legitimate health care reform a litmus test in the coming election, and what could be more legitimate than an improved Medicare for all? Let’s get the word out.
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.
Locking patients out of Medigap plans
In All But Four States, Seniors on Medicare Can Be Denied a Medigap Policy Due to Pre-existing Conditions, Except During Specified Windows of Opportunity
KFF, Newsroom, July 11, 2018
In all but four states, insurance companies can deny private Medigap insurance policies to seniors after their initial enrollment in Medicare because of a pre-existing medical condition, such as diabetes or heart disease, except under limited, qualifying circumstances, a Kaiser Family Foundation analysis finds.
Medigap policies provide supplemental health insurance to help cover the deductibles and coinsurance for Medicare covered services. One in four people in traditional Medicare had a Medigap policy in 2015.
This new analysis of federal law and state regulations shows that only Connecticut, Maine, Massachusetts, and New York require Medigap insurers to sell policies to all Medicare beneficiaries ages 65 and older either continuously during the year or for at least one month per year. In all other states and the District of Columbia, insurers may deny a Medigap policy to seniors, except during their initial open enrollment period when they start on Medicare, or when applicants have other specified qualifying events, such as the loss of retiree health coverage.
Depending on their state, Medicare beneficiaries who miss these windows of opportunity may unwittingly forgo the chance to purchase a Medigap policy later in life if their needs or priorities change, or if they choose to switch to traditional Medicare after several years of being in a Medicare Advantage plan.
The brief provides new national and state-by-state data on Medigap enrollment, and describes federal and state-level consumer protections that can affect seniors’ access to Medigap.
***
Medigap Enrollment and Consumer Protections Vary Across States
By Cristina Boccuti, Gretchen Jacobson, Kendal Orgera, and Tricia Neuman
KFF, Issue Brief, July 11, 2018
Discussion
Medigap plays a major role in providing supplemental coverage for people in traditional Medicare, particularly among those who do not have an employer-sponsored retiree plan or do not qualify for cost-sharing assistance under Medicaid. Medigap helps beneficiaries budget for out-of-pocket expenses under traditional Medicare. Medigap also limits the financial exposure that beneficiaries would otherwise face due to the absence of an out-of-pocket limit under traditional Medicare.
Nonetheless, Medigap is not subject to the same federal guaranteed issue protections that apply to Medicare Advantage and Part D plans, with an annual open enrollment period. As a result, in most states, medical underwriting is permitted which means that beneficiaries with pre-existing conditions may be denied a Medigap policy due to their health status, except under limited circumstances.
Federal law requires Medigap guaranteed issue protections for people age 65 and older during the first six months of their Medicare Part B enrollment and during a “trial” Medicare Advantage enrollment period. Medicare beneficiaries who miss these windows of opportunity may unwittingly forgo the chance to purchase a Medigap policy later in life if their needs or priorities change. This constraint potentially affects the nearly 9 million beneficiaries in traditional Medicare with no supplemental coverage; it may also affect millions of Medicare Advantage plan enrollees who may incorrectly assume they will be able to purchase supplemental coverage if they choose to switch to traditional Medicare at some point during their many years on Medicare.
Only four states (CT, MA, NY, ME) require Medigap policies to be issued, either continuously or for one month per year for all Medicare beneficiaries age 65 and older. Policymakers could consider a number of other policy options to broaden access to Medigap. One approach could be to require annual Medigap open enrollment periods, as is the case with Medicare Advantage and Part D plans, making Medigap available to all applicants without regard to medical history during this period. Another option would be to make voluntary disenrollment from a Medicare Advantage plan a qualifying event with guaranteed issue rights for Medigap, recognizing the presence of beneficiaries’ previous “creditable” coverage. For Medicare beneficiaries younger than age 65, policymakers could consider adopting federal guaranteed issue protections, building on rules already established by the majority of states.
On the one hand, these expanded guaranteed issue protections would increase beneficiaries’ access to Medigap, especially for people with pre-existing medical conditions. They would also treat Medigap similarly to Medicare Advantage in this regard, and make it easier for older adults to switch between Medicare Advantage and traditional Medicare if their Medicare Advantage plan is not serving their needs in later life. On the other hand, broader guaranteed issue policies could result in some beneficiaries waiting until they have a serious health problem before purchasing Medigap coverage, which would likely increase premiums for all Medigap policyholders. A different approach altogether would be to minimize the need for supplemental coverage in Medicare by adding an out-of-pocket limit to traditional Medicare.
Ongoing policy discussions affecting Medicare and its benefit design could provide an opportunity to consider various ways to enhance federal consumer protections for supplemental coverage or manage beneficiary exposure to high out-of-pocket costs. As older adults age on to Medicare, they would be well-advised to understand the Medigap rules where they live, and the trade-offs involved when making coverage decisions.
***
Comment:
By Don McCanne, M.D.
Although most individuals are relieved when they are finally eligible for Medicare, the traditional program leaves them exposed to excessive out-of-pocket costs and so they often seek additional coverage.
If they are fortunate enough to have an employer-sponsored retiree plan, they will usually select that. If they have very low incomes, they may be eligible for dual coverage with Medicaid. Medigap plans are offered to supplement traditional Medicare, but they are quite expensive and many feel that they cannot afford them. Some decide that they will risk going without any other coverage, but others will select private Medicare Advantage plans usually because the benefits are more generous whereas the premiums are generally quite low, and may be zero.
The Medicare Advantage plans have become quite popular because of their marketing appeal, but some individuals find that their use of provider networks limits their access to other physicians and hospitals that they would prefer, plus they sometimes feel that they are being deprived of care that they feel they should have such as an expensive cancer drug that has been excluded from the plan formulary or placed on a financially inaccessible tier.
When their care becomes complex they sometimes decide that they would prefer to shift to the traditional Medicare program that does not limit them to provider networks, and purchase a Medigap plan to protect themselves against catastrophic losses. At this point they are usually out of luck. If they elected not to enroll in a Medigap plan during the initial enrollment period when they first became eligible for Medicare, with rare exceptions they will find that guaranteed issue no longer applies and that they likely will be denied coverage. The initial marketing appeal of the Medicare Advantage plan comes back to bite them since they are then locked out of the Medigap plans.
There is something unjust here. Congress and the administrations of the past couple of decades have been granting the private Medicare Advantage plans all kinds of concessions while paying them more that what comparable patients would cost in the traditional Medicare program. Yet they have failed to enact the improvements that the traditional Medicare program needs to make benefits comparable to the private plans. That is why Medigap plans exist. They are necessary to cover the financial exposure that exists in traditional Medicare, especially the risk of catastrophic loss.
But why should someone in the traditional plan have to buy an expensive supplemental Medigap plan when we, as taxpayers, are also contributing generously to the private Medicare Advantage insurers (30 percent of what they receive goes to administrative costs, profits, and extra benefits such as Silver Sneakers). Shouldn’t taxpayer support for all Medicare beneficiaries be equitable, whether in the private or public plans?
If the traditional Medicare program were funded at the same risk-based level as the private Medicare Advantage plans, we could roll all of the Medigap benefits into traditional Medicare and then there would be no need to purchase a separate Medigap plan. Furthermore, there would be no reason to consider a private Medicare Advantage plan unless you were willing to give up your choice of physicians and hospitals in exchange for a Silver Sneakers membership, or if you preferred to receive your care through an integrated health care delivery system such as Kaiser Permanente.
Better, of course, would be to establish a single payer program – an improved Medicare for all. One of the more important improvements would be to roll Plan F Medigap benefits into Medicare. However, Congress decided that in 2020 Plan F benefits will no longer be offered to new enrollees – just one more measure to chisel away at the traditional Medicare program while furthering the cause of privatization by nurturing the private Medicare Advantage plans. In fact, a new administration proposal this month will further expand benefits in the private Medicare Advantage plans while denying them to patients in the traditional program.
How about health care justice for all? We can have that by enacting and implementing an expanded and improved Medicare for all.
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.
CMS proposed rule: Paying the same for all office visits regardless of complexity
Medicare Program; Revisions to Payment Policies under the Physician Fee Schedule and Other Revisions to Part B for CY 2019; Medicare Shared Savings Program Requirements; Quality Payment Program; and Medicaid Promoting Interoperability Program
Federal Register, Proposed rule, Centers for Medicare & Medicaid Services
II.I.2.c (page 345)
Minimizing Documentation Requirements by Simplifying Payment Amounts
As we have explained above, including in prior rulemaking, we believe that the coding, payment, and documentation requirements for E/M visits are overly burdensome and no longer aligned with the current practice of medicine. We believe the current set of 10 CPT codes for new and established office-based and outpatient E/M visits and their respective payment rates no longer appropriately reflect the complete range of services and resource costs associated with furnishing E/M services to all patients across the different physician specialties, and that documenting these services using the current guidelines has become burdensome and out of step with the current practice of medicine. We have included the proposals described above to mitigate the burden associated with the outdated documentation guidelines for these services. To alleviate the effects and mitigate the burden associated with continued use of the outdated CPT code set, we are proposing to simplify the office-based and outpatient E/M payment rates and documentation requirements, and create new add-on codes to better capture the differential resources involved in furnishing certain types of E/M visits.
In conjunction with our proposal to reduce the documentation requirements for E/M visit levels 2 through 5, we are proposing to simplify the payment for those services by paying a single rate for the level 2 through 5 E/M visits.
In alignment with our proposed documentation changes, we are proposing to develop a single set of RVUs under the PFS for E/M office-based and outpatient visit levels 2 through 5 for new patients (CPT codes 99202 through 99205) and a single set of RVUs for visit levels 2 through 5 for established patients (CPT codes 99212 through 99215). While we considered creating new HCPCS G-codes that would describe the services associated with these proposed payment rates, given the wide and longstanding use of these visit codes by both Medicare and private payers, we believe it would have created unnecessary administrative burden to propose new coding. Therefore, we are instead proposing to maintain the current code set. Of the five levels of office-based and outpatient E/M visits, the vast majority of visits are reported as levels 3 and 4. In CY 2016, CPT codes 99203 and 99204 (or E/M visit level 3 and level 4 for new patients) made up around 32 percent and 44 percent, respectively, of the total allowed charges for CPT codes 99201-99205. In the same year, CPT codes 99213 and 3 and 4 for established patients) made up around 39 percent and 50 percent, respectively, of the allowed charges for CPT codes 99211-99215. If our proposals to simplify the documentation requirements and to pay a single PFS rate for new patient E/M visit levels 2 through 5 and a single rate for established patient E/M visit levels 2 through 5 are finalized, practitioners would still bill the CPT code for whichever level of E/M service they furnished and they would be paid at the single PFS rate. However, we believe that eliminating the distinction in payment between visit levels 2 through 5 will eliminate the need to audit against the visit levels, and therefore, will provide immediate relief from the burden of documentation. A single payment rate will also eliminate the increasingly outdated distinction between the kinds of visits that are reflected in the current CPT code levels in both the coding and the associated documentation rules.
(The proposed payments are on page 349.)
Federal Register – Proposed Rule (1472 pages):
https://www.federalregister.gov…
***
Sniffles? Cancer? Under Medicare Plan, Payments for Office Visits Would Be Same for Both
By Robert Pear
The New York Times, July 22, 2018
The Trump administration is proposing huge changes in the way Medicare pays doctors for the most common of all medical services, the office visit, offering physicians basically the same amount, regardless of a patient’s condition or the complexity of the services provided.
Administration officials said the proposal would radically reduce paperwork burdens, freeing doctors to spend more time with patients. The government would pay one rate for new patients and another, lower rate for visits with established patients.
“Time spent on paperwork is time away from patients,” said Seema Verma, the administrator of the Centers for Medicare and Medicaid Services. She estimated that the change would save 51 hours of clinic time per doctor per year.
“We anticipate this to be a very, very significant and massive change, a welcome relief for providers across the nation,” Ms. Verma said, adding that it fulfills President Trump’s promise to “cut the red tape of regulation.”
***
Comment:
By Don McCanne, M.D.
Bizarre. Purportedly paying the same fee for all office visits regardless of the complexity of the care would reduce the administrative time required to code the level of complexity of the visit and would reduce the record keeping requirements even though the complexity level would still be determined and records would still be kept to document the patients’ conditions and care.
What this really does is to sharply reduce fees for caring for patients with complex conditions. What does that accomplish? It appears to be yet another attack on the traditional Medicare program. Physicians caring for patients with the greatest health care needs are already being paid marginally low rates for their services, and this reduction will be enough to cause many physicians to bail out. When patients lose their private physicians and have to turn to community clinics for their complex care, many will not be happy. It is likely that this is intended to pressure more patients to sign up for the private Medicare Advantage plans.
Not only is this another step towards privatization of Medicare, it also might place a damper on the enthusiasm for Medicare for all, by discrediting the traditional Medicare program.
Maybe it’s time to consider placing all physicians on salary. We could do that by nationalizing our health care delivery system, converting it into a national health service. A single payer, improved Medicare for all seems to be a much less disruptive option, but we do need public stewards who believe in and support Medicare. Vote!
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.
Medicare for all would save billions in waste
By James Garb, M.D.
Cape Cod Times (Hyannis, Mass.), July 22, 2018
Medicare celebrates its 53rd birthday this month. One of the two most popular government programs, along with Social Security, Medicare now enrolls 10,000 new Americans every day.
Cutting across party affiliation, more than three-quarters of all Americans consider Medicare to be a “very important” program. Today universal health coverage is considered by most people to be a basic human right.
Medicare is simple and efficient, with administrative overhead of just over 3 percent, compared with about 30 percent for private insurers.
We could solve America’s health care crisis by improving Medicare’s benefits and expanding it to everyone with a single-payer plan like H.R. 676, The Expanded & Improved Medicare for All Act.
There have been many costly proposals to increase insurance coverage, mostly by subsidizing profit-driven private insurance. But single-payer Medicare for all would save an estimated $617 billion annually by slashing the administrative waste of private insurance ($504 billion) and bargaining down drug prices ($113 billion), freeing up enough money for universal coverage without any net increase in U.S. health spending.
Those who love Medicare should ask their member of Congress to protect it, improve it and expand it to cover everyone in America.
Dr. James Garb is a physician specializing in internal medicine.
Ask candidates if they support Medicare for all
By Bill Semple, L.C.S.W.
The Daily Camera (Boulder, Co.), Letters, July 21, 2018
How do we live with the fundamental reality that we are all in this together while tending to our responsibilities to ourselves and our loved ones? We see this come to the fore when figuring out how we best pay for our health care.
Hearing individual responsibility and valuing the private marketplace in recent decades has led us to depend on for-profit insurance. Unfortunately we are distinctly vulnerable, when it comes to health care, to being taken advantage of. Experiencing it’s our money or our life, we’ll pay whatever.
And we do. The insurance, pharmaceutical and big-hospital corporations have us paying twice as much per person for poorer health outcomes compared to other countries that have universal ways to pay for health care. We’re being ripped off.
The profit motive will not protect us in our vulnerable, undeniable need for health care. The profit motive drives avoiding the older, sicker, poorer, high deductibles, narrow provider networks, medically driven bankruptcies, and uncoordinated care — sound familiar?
We hunger for a way to pay for health care that is of, by, and for the people. As Medicare works for our seniors, it can be improved and work for us all. Paying our premiums through taxes, not through profits, will protect us from the predation we now experience.
Publicly funded, privately delivered health care is responsible. Privately funded health care makes us unprotected by handing our control and hard-earned dollars over to the pockets of the few.
Time to vote is coming again. Ask your candidates if they support improved Medicare for all, or if they can say who should be bankrupted getting the care they need.
NFIB abandons support of association health plans
Trump promised them better, cheaper health care. It’s not happening.
By Adam Cancryn
POLITICO, July 19, 2018
President Donald Trump handed an influential business advocacy group what should have been a historic lobbying victory when he recently rolled out new rules encouraging small businesses to band together to offer health insurance.
Trump, who’s touted the expansion of so-called association health plans as a key plank in his strategy to tear down Obamacare, even announced the rules at the 75th anniversary party of the National Federation of Independent Business last month, claiming the group’s members will save “massive amounts of money” and have better care if they join forces to offer coverage to workers.
But the NFIB, which vigorously promoted association health plans for two decades, now says it won’t set one up, describing the new Trump rules as unworkable. And the NFIB isn’t the only one: Several of the nationwide trade groups that cheered Trump’s new insurance rules told POLITICO they’re still trying to figure out how to take advantage of them and whether the effort is even worth it.
That could signal there’s minimal early interest in an initiative the administration says will help lower health care costs — and one that Trump himself has prematurely hailed as a wild success. Trump falsely claimed during rallies in recent weeks that “millions” are signing up, though the new health plans can’t be sold until Sept. 1.
Behind the scenes, the NFIB had already been souring on the idea before Trump’s announcement, concluding that establishing an association health plan would be too complex and not worth the effort. The NFIB, which offered only a vague endorsement of the Trump effort last month, now says it’s abandoned any idea of setting up a national plan for its hundreds of thousands of members.
https://www.politico.com…
***
Comment:
By Don McCanne, M.D.
For a couple of decades the concept of association health plans (AHPs) has been vigorously promoted by organizations such as the National Federation of Independent Business (NFIB) since AHPs would satisfy the desire to nominally provide health insurance to small business employees at a lower cost than traditional health plans, made possible by the deficiencies in coverage that characterize most of these plans.
Now that the Trump administration is making AHPs available as a replacement for plans established by the Affordable Care Act, the reality seems to be sinking in. The NFIB “now says it’s abandoned any idea of setting up a national plan for its hundreds of thousands of members.”
Small business owners do want to have health insurance for themselves and for their employees. For those who were hoping that AHPs would be the answer, they do not have to give up hope. They should turn to a far better prospect – a single payer improved Medicare for all. Not only would the coverage be far more effective, the costs would also be affordable because the financing mechanism is equitable, based on ability to pay.
Instead of pie-in-the-sky AHPs, the NFIB should take a serious look at an improved Medicare for all – the best model for small businesses and for everyone else.
Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.
Single-Payer Advocates in Congress Double Down With Medicare for All Caucus
By Michael Corcoran
Truthout, July 20, 2018
When Medicare was created 53 years ago this month, it was over the objections of Ronald Reagan. On behalf of the American Medical Association, Reagan warned that should Medicare become law, it would lead to “a mechanism for national health insurance capable of indefinite expansion in every direction until it includes the entire population.”
More than five decades of frustration later, advocates are still fighting to make Reagan’s “nightmare” of universal health care a reality. The recent formation of the Medicare for All Caucus by House progressives could prove to be an important development in this pursuit, according to members and advocates who introduced the new caucus at a press conference on July 19.
“We are united today by a common conviction that health care is a human right,” said Rep. Pramila Jayapal during the launch. “One of the best ways to ensure health care for all is to use the system that already exists for millions of seniors [in] Medicare.”
Jayapal founded the new caucus with Reps. Debbie Dingell and Keith Ellison. The caucus had 66 founding members at the 10 am press conference, but by midday that number was 70, according to a list provided to Truthout by Dingell’s office.
The California Nurses Association, National Nurses United, Public Citizen, Physicians for a National Health Program (PNHP), Health Care-Now, Our Revolution and other organizations were also supportive.
“For the first time ever, we have a congressional caucus that is committed to achieving Medicare for All,” said Martese Chism, a registered nurse and board member of the California Nurses Association, who spoke at the launch.
Others praised what they see as an important shift in how to tackle the issue.
The new caucus “clearly marks a shift in congressional approach to Medicare for All from more passive support to laying the groundwork for potential passage of this legislation, depending on how the makeup of Congress shakes out in the coming years,” said Benjamin Day, executive director of Healthcare-NOW, in an interview with Truthout.
Educating the Public
The press conference emphasized health care as a human right and also sought to educate the public about a policy about which there is a great deal of misinformation.
“The congressional Medicare for All caucus will help build the evidence base for Medicare for All,” Jayapal said. “Our goal is to sponsor briefings on a variety of topics, from the basics of Medicare for All to financing, to universal health systems around the world.”
For instance, it is common for critics and much of the mainstream media to emphasize new taxes without mentioning long-term savings. Others often portray single-payer as a radical idea, when in fact, it is within mainstream international norms: The widespread lack of health care coverage within the current US system is what stands apart as an outlier.
Countries that have public, universal health care systems spend considerably less on health care than the US. The per capita spending for the US, according to the Organization for Economic Cooperation and Development (OECD), is $10,029 — by far the largest in the world. The OECD average is less than $5,000.
“We pay a lot more than any other rich country, and we get a lot less,” said Robert Weissman, director of Public Citizen, at the press conference.
Despite paying such hefty sums, the US has poor outcomes compared to other rich countries. The US ranks 27th among the 36 OECD nations in life expectancy and 24th in infant mortality rates, with its outcomes falling far behind those of nations with publicly financed health care. These facts are not controversial, but they are also not well known.
“It is important to make the economic case for single-payer,” Carol Paris, president of PNHP, told Truthout. “If we want to do this, we need to get small businesses on board and try to win bipartisan support for the policy.”
Paris also notes that many Democratic Party alternative plans — general iterations of the public option — are trying to benefit from the popularity of Medicare for All. One example is the Center for American Progress plan, Medicare Extra for All. The plan is not a single-payer one — in fact it preserves employer-based care — but the name has blurred the distinction, leading to headlines such as: “finally, a universal program that would work for everyone.”
“These policies try to win support by using the popularity of Medicare for All as a brand — but they are not single-payer plans. They don’t have the cost savings, and many of them are not even universal,” Paris said. “If this caucus can help study those bills and explain how they are different from single-payer, that would be a valuable service.”
Using Grassroots Pressure to Seize the Current Momentum
Support for Medicare for All is at an all-time high in Congress. The surge in support came more than a year ago when, on the heels of the Bernie Sanders campaign, cosponsors to single-payer legislation in the House jumped from 62 in the last Congress to a record 122 in the current Congress: well more than half the House Democratic Caucus. Sanders’s own bill further accelerated the energy behind the movement.
Despite all the momentum for the policy, there are also some grim realities that progressives need to wrestle with if they want to succeed in their fight for universal health care. Most notably is that while Democratic Party voters are unambiguous in their support of the policy, the Democratic leadership is opposed to the policy: Medicare for All was shot down by delegates in the platform committee meeting in 2016, and the Democratic Congressional Campaign Committee is actively undermining the policy throughout the midterm elections. Meanwhile, the for-profit health industry continues to spend millions lobbying and contributing to candidates and members of Congress.
“There is also the major task of moving the rest of the Democratic Party on board,” Day said. “We took a major leap on that last year during the repeal-and-replace fight, but the work needs to continue … until we reach a tipping point where Democratic leadership feels they have to embrace Medicare for All and actively fight for it. I expect that will only happen with significant grassroots pressure.”
Grassroots pressure has proven to be instrumental not only in defeating Trumpcare, but also in keeping pressure on politicians to adopt single-payer positions.
“The Medicare for All Caucus is by no means a substitute for grassroots organizing,” Paris said. “In fact, it exists largely because of strong grassroots pressure.”
There is also a concern among some single-payer advocates that some co-sponsors of Medicare for All supported the measure mainly to avoid facing unruly and critical crowds at town halls, rather than due to a more genuine willingness to back it. Some co-sponsors to Sanders’s bill made a point to add qualifiers to their support.
Former Sen. Al Franken, for instance, who later resigned in response to allegations of sexual harassment and assault, had offered many qualifiers within his statement of support, undercutting Sanders’s bill as “aspirational,” a “starting point,” and less important than “bipartisan policies that improve our current health care system.”
Kamala Harris also gave about as lukewarm an endorsement as is possible, saying “all people should have access to affordable health care, and as we talk about moving toward a single-payer system” (emphasis added).
All of this has led to skepticism over how serious some Democrats are in supporting single-payer. Skepticism will likely persist toward the 52 co-sponsors of the House bill who have not joined the new caucus.
Paris, however, warns against knee-jerk criticism. “Each situation should be case-by-case. There could be reasonable reasons why someone doesn’t join the caucus,” she told Truthout. “But it is a good opportunity for constituents to raise the issue and talk with their representatives about Medicare for All and why we need it.”
