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Tax day surprise for some exchange participants

A Slippery Slope To Defunding The Health Law

By Timothy Jost
Kaiser Health News
February 15, 2011

A key provision of the health law that will provide 19 million consumers with tax credits to help afford their health insurance has been raided once. Now, Republicans are planning to raid it again.

Here’s the background: In late December Congress was looking for money to help pay for a plan to stop dramatic scheduled cuts in doctors’ Medicare reimbursements. As a temporary fix, the lame duck Congress changed a part of the new health law so that some consumers will have to pay back a hefty chunk of their tax credits. That change is expected to save the government $16 billion over 10 years.

Now Congress is again looking for money – this time to offset the funds lost with the repeal an unpopular health law provision that involves 1099 tax reporting requirements. Republicans are proposing another increase in the liability of tax credit recipients to raise the necessary revenue.

To understand why the proposal is worrisome, it is necessary to understand the function of the new tax credits. They are designed to help finance insurance premiums beginning in 2014, and are, perhaps, the most important provision in the new law for making health care affordable to middle-class Americans. They will be available on a sliding scale to families with incomes up to 400 percent of the federal poverty level. This is $88,200 for a family of four, but most of the money will go to families with far less income.

Here’s how they work. The amount of the tax credit for which people are eligible is based on annual income for the year the credits are received. But, because people will likely need help paying their insurance premiums during that tax year, the law provides for advance payments of the credits. These payments are made directly to the insurer on a monthly basis. The insurance exchanges, through which individuals will purchase health coverage, will determine eligibility for tax credits based on a taxpayer’s prior year tax return. (Taxpayers can provide more recent information if their income or family circumstances have changed.) At the time taxpayers file their annual tax return, the advance payments will be reconciled against the tax credit for which the taxpayers are eligible using their annual income reported on their return. If the advance payments are greater than the final tax credit, the taxpayer will get a bill from the Internal Revenue Service.

Excess advance payments can happen easily and will happen often. The income of hourly-wage lower and middle-income Americans often fluctuates from week to week and is difficult to predict. Dependents may leave or return home. Family members may become eligible for Medicaid or CHIP. Taxpayers may be eligible for a premium tax credit in the early months of the year while unemployed but then get a job with coverage and no longer need premium assistance. Or they may lose a job part way through the year and face dramatically reduced income, even though their full year reported income remains high.

All these changes will affect the subsidy calculation. It will be difficult for the exchanges to keep up with changes in family circumstances and for families to know what changes they should report and to whom. It is inevitable that there will be some inconsistency between advance payments based on estimated income for the year and the final credit determined at tax time.

Originally, when the health overhaul was signed into law, the amount the government could recover was capped at $400 for families with incomes below 400 percent of poverty. The amendment adopted in December increases the amount families will owe on a sliding-scale basis. Under the December amendment families with incomes at 200 percent of poverty will have to pay back as much as $1,000; families with incomes at 400 percent will have to pay back up to up to $2,500. It also, however, puts some limits on overpayments for families up to 500 percent of poverty.

The “1099 fix” legislation, which is likely to be considered this week by the House Ways and Means Committee, would require families at 200 percent of poverty to pay $1,500, and families earning a dollar more than 400 percent of poverty to pay back their entire tax credit.

It is important to understand what is at stake here.

Fear of potential end-of-year liability could be a substantial deterrent to participation in the advance premium tax credit program. It was estimated that the December amendment increased the likely number of uninsured after 2014 by about 200,000 people, who would rather be uninsured than face substantial repayments. Millions more consumers will face unanticipated financial burdens. This is likely to create a powerful backlash, as Americans who thought they were receiving a tax credit to help them purchase insurance find out it was in fact only a loan, and that they owe the IRS a substantial debt.

http://www.kaiserhealthnews.org/columns/2011/February/021511jost.aspx

Update: Today (Feb. 17) the House Ways and Means Committee approved the 1099 repeal bill, including the requirement for “consumers earning more than 400 percent of the poverty line to pay back the subsidy.”

http://thehill.com/blogs/healthwatch/health-reform-implementation/144847-1099-repeal-gets-trickier-with-house-bill

Comment:

By Don McCanne, MD

In choosing to base reform on private insurance plans, our policy makers introduced an administrative complexity that that would have been totally unnecessary had they selected instead a universal risk pool funded equitably through taxes. The private insurance model requires that a specific premium be assigned to each individual or family, even though those premiums are no longer affordable for the majority of us. Thus they had to devise a very complex system of subsidies to lessen the financial burden of premiums (though still unaffordable for many even with the subsidies).

These subsidies, of course, are based on the current year’s income, but the advance payments made directly to the insurers are based on the previous year’s income. Because income levels change frequently for many individuals and families, many will be receiving incorrect subsidies. The Internal Revenue Service determines the corrected subsidies, based on actual income, when the tax return is filed the following year.

If income increases, it is likely that excessive premium subsidies will have been credited since the payment to the insurers is semi-automatic. Under the Affordable Care Act (ACA) as originally enacted, once the tax return is filed, the individual or couple is billed for overpayments of the subsidies, up to a maximum of $250 for an individual or $400 for a family. Since this is an additional tax bill added to full income taxes already being paid, it was felt that amounts above these limits would be a hardship for most individuals and families.

That has changed. The newly enacted “doc fix” (postponing scheduled sharp reductions in physicians’ reimbursements for Medicare) was paid for partly by raising the reimbursement requirement up to $2500. There are very few families that would not have difficulty paying this tax day surprise, added to their full income taxes.

Today the bill eliminating the burdensome 1099 requirement for small businesses cleared its first hurdle by a party-line vote in the House Ways and Means Committee. The lost revenues would be offset by a further increase in the subsidy repayment requirement – up to a full refund for those over 400 percent of the federal poverty level. Thus a family of four with an income of just one dollar over $89,400 (400% FPL for 2011) could be hit with a bill from the IRS for nearly a full year’s prem
ium – on top of their full income taxes – if their subsidies had been based on a very low income the prior year. Now that’s a tax day surprise that would be devastating for any of us.

Admittedly, this is only a minor technicality, but try to tell that to those who will receive massive tax day bills from the IRS.

This is not only unfair, it is so unnecessary. We can fix this by funding a single national risk pool that covers everyone, using equitable progressive tax policies.

No longer would we have to link individuals and families to premiums in the private insurance market. We don’t need the private insurers at all (and we certainly wouldn’t need to give them 15 to 20 percent of the premiums for their own intrinsic purposes). The system will have already been paid for through taxes, and people would simply receive the care that they need, when they need it.

Simpler. Cheaper. And better. Taking care of us all. Why don’t they get it?

Justin Bieber's bodyguard

Justin Bieber Talks Sex, Politics, Music and Puberty In New 'Rolling Stone' Cover Story

Rolling Stone
February 16, 2011

The Canadian-born (Justin) Bieber never plans on becoming an American citizen. “You guys are evil,” he jokes. “Canada’s the best country in the world.” He adds, “We go to the doctor and we don’t need to worry about paying him, but here, your whole life, you’re broke because of medical bills. My bodyguard’s baby was premature, and now he has to pay for it. In Canada, if your baby’s premature, he stays in the hospital as long as he needs to, and then you go home.”

http://www.rollingstone.com/music/news/justin-bieber-talks-sex-politics-music-and-puberty-in-new-rolling-stone-cover-story-20110216

Comment:

By Don McCanne, MD

They say that you should not use anecdotes to make policy, but when the policy science we know supports the millions of anecdotes Americans have regarding our “evil” ways in health care, it is time to use them to make policy. Just ask Justin Bieber’s bodyguard.

Conyers continues push for single-payer system

By Jessica Zigmond
ModernHealthcare, Feb. 15, 2011

As federal lawmakers continue to debate the constitutionality, financing and implementation of the healthcare reform law, one House Democrat has introduced legislation calling for a universal health insurance program with single-payer financing.

Rep. John Conyers Jr. (D-Mich.) has sponsored the “Expanded and Improved Medicare for All Act,” which would create a publicly financed, privately delivered healthcare system that expands the existing Medicare program to all U.S. residents and those living in U.S. territories. According to a summary from Conyers’ office, the legislation would negotiate reimbursement rates annually with physicians; allow for “global” budgets—described as monthly lump sums for operating expenses for hospitals—and negotiate prices for prescription drugs, medical supplies and equipment.

Also, the bill would establish a “Medicare for all Trust Fund” to ensure funding. Annual congressional appropriation would be authorized to ensure optimal funding levels, according to the summary.

Conyers has sponsored single-payer legislation in the past.

The physician group Physicians for a National Health Program praised the bill, as Dr. Garrett Adams, the organization’s president, said it “would go far beyond the new health law, which would still leave 23 million people uninsured in 2019.”

The bill has been referred to the House Ways and Means, Energy and Commerce, and Natural Resources committees for consideration. Both the Ways and Means and Energy and Commerce committees have been tasked with drafting legislation to replace the Patient Protection and Affordable Care Act.

Read more: Conyers continues push for single-payer system – Healthcare business news from Modern Healthcare http://www.modernhealthcare.com/article/20110215/NEWS/302159963#ixzz1E8ruKsC6?trk=tynt

Justin Bieber On Health Care: U.S. System 'Evil'

The Huffington Post
02/16/11

Justin Bieber has taken the United States by storm, but if he gets sick, he may find himself retreating back to Canada — and not just for the home-cooked meals.

Bieber, a 16-year old popstar who was nominated for two Grammys and saw his bio movie make $30 million this weekend, covers the new issue of Rolling Stone. In addition to talking the usual trappings of fame — the music, the tour stories, the girls — the magazine asked him to wade a bit into the political waters. At least on one major issue, he already has a fully formed opinion.

Asked if he wanted to become an American citizen, Bieber made clear his love for Canada — and its health care system.

“You guys are evil,” he told the magazine, out on February 18th. “Canada’s the best country in the world. We go to the doctor and we don’t need to worry about paying him, but here, your whole life, you’re broke because of medical bills. My bodyguard’s baby was premature, and now he has to pay for it. In Canada, if your baby’s premature, he stays in the hospital as long as he needs to, and then you go home.”

It’s a surprisingly astute observation for the a 16-year old superstar singer, whose life mainly consists of recording, touring, appearing and otherwise working. But then, few 16-year olds have met President Obama, something Bieber has done twice, including at the White House Easter Egg Roll. He has Obama daughters Sasha and Malia to thank for that.

But while the point is moot because he doesn’t plan to vote in the United States, his health care stance and chumminess with the President don’t necessarily make him a sideline supporter of the Democratic party.

“I’m not sure about the parties,” he said. “But whatever they have in Korea, that’s bad.”

http://www.huffingtonpost.com/2011/02/16/justin-bieber-takes-on-evil-us-health-care_n_823942.html

Help med students rally in Vermont for single payer, plus H.R. 676 news

February 16, 2011

Dear PNHP colleagues,

Great news! There’s a medical student rally for single payer in Vermont being planned for March 26, and our national single-payer bill, H.R. 676, has just been reintroduced on Capitol Hill. You can help advance both of these efforts today.

1. Please lend a helping hand to medical students and other health professional students who are organizing for a regional rally in support of single-payer health reform the steps of the Vermont Statehouse in Montpelier, Vt., on Saturday, March 26, at 1 p.m. EST by donating to their effort today. The event is sponsored by Physicians for a National Health Program (pnhp.org) and the American Medical Students Association (amsa.org).

You can help this effort immensely by making a tax-deductible contribution today. Money is needed for buses, sound system equipment, posters, banners and more, all of which will help medical and health professional students from throughout the Northeast show they want the Vermont Legislature to enact a single-payer program and to help point the way for the nation toward fundamental health reform.

Here’s how one medical-student organizer from Connecticut explains his involvement:

“I’m helping organize students to rally for single payer in Vermont because I believe that injustice is inherent in our current insurance system. Right now, Vermont’s political climate is ripe for single payer. We have an extraordinary opportunity to enact change — change that could spread to other states, as it did when Saskatchewan became the first province to enact single payer in Canada. Let us stand together and show the medical community, politicians, and Americans that Vermont can be a beacon for health justice across all the United States!”

— Carl Berdahl, MS4, Yale School of Medicine

Please contribute to this important effort today. To keep on top of other Vermont developments, visit the Vermont state news page on our website (also accessible on our home page).

2. At the national level, Rep. John Conyers Jr. reintroduced H.R. 676, the national single-payer bill, into Congress last Friday. The bill is now titled “The Expanded and Improved Medicare for All Act.” PNHP’s news release about it appears below.

As Dr. Don McCanne observed this week, “The immediate task for all of us who support an expanded and improved Medicare for all is to begin to recruit more co-sponsors [beyond the initial 25 announced on Friday]. Remind your representative that this does not eliminate the important beneficial measures of the Affordable Care Act. What it does instead is it replaces the highly flawed financing structure of ACA with a proven model that both makes health care affordable and includes everyone – the paramount goals of health care reform that have remained elusive until now.”

PNHP activists are urged to call the Congressional Switchboard at (202) 224-3121 and ask to speak to their representatives about becoming a co-sponsor of H.R. 676. A personal call from a physician carries considerable weight, even if you only speak to the health legislative aide.

Cordially,

Garrett Adams, M.D.
President

P.S. Once again, if you haven’t done so already, please make a donation to the medical student rally organizing effort in Vermont. While we suggest a contribution of $50 or more, any amount will be much appreciated.

FOR IMMEDIATE RELEASE
February 15, 2011

Contact:
Garrett Adams, M.D., president, Physicians for a National Health Program
Margaret Flowers, M.D., congressional fellow
Quentin Young, M.D., national coordinator, (312) 782-6006
Mark Almberg, communications director, (312) 782-6006, mark@pnhp.org

Doctors’ group hails reintroduction of Medicare-for-all bill

Single-payer health program would cover all 51 million uninsured, upgrade everyone’s benefits and save $400 billion annually on bureaucracy, physicians say

A nationwide physicians’ group today hailed the reintroduction of a popular federal bill that would quickly upgrade the Medicare program and expand it to cover the entire population.

The “Expanded and Improved Medicare for All Act,” H.R. 676, sponsored by Rep. John Conyers Jr., D-Mich., would replace today’s private health insurers – and the Obama law’s individual mandate, which is being challenged as unconstitutional – with a single, streamlined public agency that would pay all medical claims, much like Medicare works for seniors today. (See bill summary here.)

“There’s no doubt that expanding Medicare to all is both constitutional and the most cost-effective way to cover everyone,” said Dr. Garrett Adams, president of Physicians for a National Health Program. “A national single-payer program would save over $400 billion a year on bureaucracy and paperwork alone. Plus, it would use proven, effective cost-control techniques like negotiating drug prices and hospital budgets.”

“An improved Medicare-for-all program would provide comprehensive coverage to all of the 51 million people who are currently uninsured and enhance the coverage that everyone else has, by eliminating co-pays and deductibles,” Adams said. “It would go far beyond the new health law, which would still leave 23 million people uninsured in 2019.”

“In these difficult economic times, with lack of health coverage leading to thousands of deaths and personal bankruptcies each year, and states struggling to pay the high costs of Medicaid and health coverage for st
ate workers and retirees, everyone’s taking another look at single payer,” he said. “Legislation that could lead to a single-payer plan was just introduced last week in Vermont, led by a push from the governor and a report by Harvard economist William Hsiao that single payer would cover everyone and save the state $490 million in 2015 and at about four times that much by 2024.”

“Surveys have repeatedly shown that about two-thirds of the public supports a Medicare-for-all approach,” Adams said. “And a recent survey of physicians shows that a solid majority now favor government legislation to create national health insurance.”

“As the founder of a free medical clinic in rural Tennessee, I can assure you that the need for fundamental health care reform has never been greater,” he said. “It’s time to stop putting the interests of private insurance companies over patient needs and adopt a single-payer national health program in the U.S.”

*****

Physicians for a National Health Program (www.pnhp.org) is an organization of 18,000 physicians who advocate for single-payer national health insurance, an improved Medicare for all. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Medicare administrative costs – an update

2011 Primer on Medicare Spending and Financing

Kaiser Family Foundation

Administrative Costs

The costs of administering the Medicare program have remained low over the years – less than 2 percent of program expenditures. As such, program administration is not a contributing factor to Medicare’s expenditure growth. Administrative costs include all expenses by government agencies in administering the program (HHS, Treasury, the Social Security Administration, and the Medicare Payment Advisory Commission). Also included are the cost of claims contractors and other costs incurred in the payment of benefits, collection of Medicare taxes, fraud and abuse control activities, various demonstration projects, and building costs associated with program administration.

http://www.kff.org/medicare/7731.cfm

And…

Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance

By Robert A. Book, Ph.D.
The Heritage Foundation
June 25, 2009

“The fact is that, in recent years, Medicare administrative costs per beneficiary have substantially exceeded those costs for the private sector, this despite the fact that, as critics note, private insurance is subject to many expenses not incurred by Medicare. Contrary to the claims of public plan advocates, moving millions of Americans from private insurance to a Medicare-like program will result in program administrative costs that are higher per person and higher, not lower, for the nation as a whole.”

http://www.heritage.org/research/reports/2009/06/medicare-administrative-costs-are-higher-not-lower-than-for-private-insurance

Comment:

By Don McCanne, MD

The costs of administering the Medicare program remain at less than two percent of program expenditures. Several other reports have been circulated claiming that the administrative costs are much higher. Some of these recalculations add in administrative costs that they claim were excluded from the Medicare numbers, such as the administrative costs of claims contractors, costs of collecting Medicare taxes, and the costs of policing fraud and abuse.

Not only are these costs already included in the “less than two percent” calculation, resulting in true double counting by those challenging the numbers, but the costs they estimate are often pie in the sky, resulting in even greater embellishments of the numbers.

They also play with the numbers, using calculations based on per beneficiary services, or excluding those non-administrative services that the private insurers force on us, and using this as a distraction to dismiss as irrelevant the true percentages paid for administrative services.

Not only do they claim that Medicare administrative costs are understated, they also claim that the true administrative costs of insurers are very close to or even less than their “corrected” Medicare numbers. If that is true, then why have the insurers claimed that they will have difficulty keeping their own administrative costs down to fifteen to twenty percent, a requirement of the Affordable Care Act? And that fifteen to twenty percent doesn’t even include the tremendous administrative burden that they place on the health care delivery system.

So Heritage’s Robert Book claims that a Medicare-like program would result in higher administrative costs for the nation as a whole, than would private insurance.

How do we confront this? Do we simply reply that their circus antics are not credible, and walk away? Or do we simplify our rhetoric and call them what they are – liars? That might not sell well to a public that clings to the lies of the right, while rejecting the process of critical thinking.

PNHP commentary on the Vermont health reform bill

The Vermont health bill: a brief overview from the single-payer perspective

By Dr. Ida Hellander

This is a two-stage bill which attempts to use the establishment of the required health benefit exchange under PPACA as a bridge to a “public-private single payer health care system” (Green Mountain Care) upon receipt of the required federal waivers. Here are some representative quotes:

“This bill proposes to set forth a strategic plan for creating a single payer and unified health system. It would establish a board …. ; establish a health benefit exchange for Vermont as required under federal health care reform laws; create a public-private single payer health care system to provide coverage for all Vermonters after receipt of federal waivers” (p. 1).

“The intent of the general assembly is to establish the Vermont health benefit exchange in a manner such that it may become the foundation for a single payer system” (p. 5).

“Green Mountain Care shall be implemented upon receipt of a waiver … of the Affordable Care Act. As soon as available under federal law, the secretary of administration shall seek a waiver to allow the state to suspend operation of the Vermont health benefit exchange and to enable Vermont to receive the appropriate federal fund contribution ….” (p. 44).

Comments and concerns

1. The reforms enacted prior to the implementation of single payer are inadequate and delay fundamental reform for 3-6 years. Several states have enacted reforms in the past only to repeal them before full implementation.

2. Provisions necessary for cost-control, such as an annual budget, and separate operating and capital budgets for hospitals, do not appear in the legislation, but do (confusingly) appear in the summary and testimony on the bill by Anya Rader Wallack (summary, p. 3 and testimony, p. 8).

3. The section on pilot projects for payment reform/ACOs appears to allow insurance companies to run ACOs: (p. 15) “the scope of services in any capitated payment should be broad and comprehensive, including prescription drugs, diagnostic services, services received in a hospital, mental health and substance abuse services, and services from a licensed health care practitioner … and may consider “whether to include home health services and long-term care services as part of capitated payments.” Only insurers can bear this much risk, and indeed the three private insurers in Vermont are already involved in developing ACOs.

4. The section on administration allows an insurance company to bid for “administration of certain elements of Green Mountain Care.” This adds unnecessary expense to the program.

5. What will the cost sharing be? (p. 39) “Green Mountain Care shall include cost-sharing and out of pocket limitations as determined by the Vermont health reform board … there shall be a waiver of the cost-sharing requirement for chronic care for individuals participating in chronic care management and for primary and preventive care.” Cost-sharing limits access to care and is ineffective at controlling costs; it should be eliminated.

6. There is no ban on investor-owned health facilities.

7. On the bright side, the single-payer plan includes Medicare and Medicaid (p. 40, 41-42), workers’ compensation and retirees (p.38); covers all “residents” (not just citizens, p. 37); there is at least a nod to the need to have comprehensive benefits including long-term care (if the budget allows); there is language on retraining displaced administrative workers (p. 56); bulk purchasing of drugs and supplies; use of “smart card” technology as in Taiwan (p. 37); and insurance coverage that duplicates the single payer is proscribed (p.41). (This last feature is contradicted, however, by a provision that allows employers to retain their existing coverage.)

8. Some additional features: There is an emphasis on mental health parity and an adequate supply of mental health professionals; emphasis on primary care and use of “medical homes” (this could be good or bad, depending on if they are part of an insurance company-run delivery system).

9. Finally, the bill does not specify financing, except to say that two options will be presented for consideration and all options for raising revenues will be considered (not just a payroll tax, as Dr. William Hsiao had recommended).

Conclusion

Single-payer advocates will have to fight to strengthen the single payer section of this bill, keep single payer in the bill at all (there will likely be attempts to strike it), get the necessary federal waivers and make single payer (aka “Green Mountain Care”) a reality.

Dr. Ida Hellander is executive director of Physicians for a National Health Program.

The Vermont health bill: a brief analysis

By Drs. David Himmelstein and Steffie Woolhandler

The proposed Vermont health reform legislation includes two distinct elements: clear plans to rapidly implement the deeply flawed federal health reform (PPACA) in Vermont; and a vague outline of a single-payer plan that might be implemented six years hence if the feds were to allow it.

In contrast to the bill’s detailed prescription for implementing PPACA, the sections on the single-payer plan leave much to the imagination, punting decisions on critical issues to a board appointed by the governor. It seems that the board is to determine whether critical services like long-term care are included in the benefits package; whether co-payments will be affordable or daunting; how hospitals, home care agencies, nursing homes and doctors will be paid; and whether capital funds are to be allocated separately from operating funds (the sine qua non of effective health planning). And the bill includes no plan for funding the single-payer program.

Happily, the legislation would enroll all Vermont residents (regardless of immigration status) in the single-payer plan. In one critical area the bill seems to come down on both sides of the fence. While it would proscribe the sale of private coverage that duplicates the public plan if the single-payer program is implemented, it would also allow employers to opt out of the plan.

Finally, its uncritical embrace of the latest health policy fad – Accountable Care Organizations (ACOs) – would bols
ter the role of private insurers, at least in the short run. The bill calls for pilot projects in which an ACO would receive capitation payments which would cover all care for a defined population, including long-term care, prescription drugs, etc. Insurers are the only organizations in Vermont with the financial muscle to take on such “full risk” contracts.

In sum, the Vermont bill evidences good intentions and bold promises, but leaves the make-or-break decisions about restructuring health care financing for a later date. This “kick the can down the road” approach is worrisome in a state where the governor and Legislature change every two years, and where multi-stage health reforms have been enacted in the past, only to see the planned reforms abandoned without being implemented. In this context, ongoing mobilization of a broad-based single-payer movement will be critical. Such a mobilization can bolster the governor’s evident enthusiasm for the single-payer project and maintain the courage of the Legislature as they face the inevitable onslaught of corporate opposition to real health care reform.

Drs. Himmelstein and Woolhandler are co-founders of Physicians for a National Health Program.

The Vermont health bill, H. 202: suggested revisions and clarifications

By Vermont Health Care for All members Dr. Deb Richter, Ethan Parke, Marilyn Mode, Ellen Oxfeld and Marjorie Power

The following suggestions have been submitted to members of the Vermont Legislature.

1. Order of elements in bill: Put single payer at the front of the bill – this is the goal. Make clear that the goal is for Green Mountain Care to be up and running as soon as waivers are attained and that the exchanges (the next part of the bill) are an intermediary step that will last only as long and until waivers are obtained.

2. Emphasis: Need stronger language in the single-payer section that the goal is to attain waivers at the earliest date possible. This will also make more political sense, and it will be easier to and simpler to sell to the public.

3. Board: More support staff will be needed for this board. Think about the Public Service Board that has been operating for decades and all the support staff that they have. The consumer rep on the board will be especially in need of support staff because he/she does not already have an association (such as the hospital association) at his or her disposal to help when an issue comes up.

4. What if the federal law is repealed, amended, defunded, or struck down by the U.S. Supreme Court? It should be made clear that Green Mountain Care is contingent on the federal law only to the extent that it might be federally preempted. If the federal law is repealed or changed in such a way that states have more latitude to innovate, then the bill should make clear that we will move more quickly to Green Mountain Care (since no exchange stage would be necessary). H. 202 should also be clear that if the federal government does not fund states under the federal health reform bill, then Vermont must take immediate steps to create a single-payer system with whatever resources are at hand.

5. Principles: Section on principles at the beginning should include health care as a public good as well as health care as a human right.

6. Global budgets: Hospitals should receive global revenue budgets for cost containment and administrative savings. These revenue budgets are not for capital expansion. Hospital capital budgets should be allocated separately from their global revenue budgets. For instance, all things that will generate ongoing operating expenses, such as monies for a new parking lot or an additional MRI scanner, are part of capital budgets and should be allocated separately.

7. Role of for-profit entities: Although we recognize that there are already some for-profit entities within the Vermont health care system, the bill should consider a future moratorium on any for-profit health entities.

Doctors’ group hails reintroduction of Medicare-for-all bill

Single-payer health program would cover all 51 million uninsured, upgrade everyone’s benefits and save $400 billion annually on bureaucracy, physicians say

FOR IMMEDIATE RELEASE
February 15, 2011

Contact:
Garrett Adams, M.D., president, Physicians for a National Health Program
Margaret Flowers, M.D., congressional fellow
Quentin Young, M.D., national coordinator, (312) 782-6006
Mark Almberg, communications director, (312) 782-6006, mark@pnhp.org

A nationwide physicians’ group today hailed the reintroduction of a popular federal bill that would quickly upgrade the Medicare program and expand it to cover the entire population.

“In these difficult economic times, with lack of health coverage leading to thousands of deaths and personal bankruptcies each year, and states struggling to pay the high costs of Medicaid and health coverage for state workers and retirees, everyone’s taking another look at single payer,” he said. “Legislation that could lead to a single-payer plan was just introduced last week in Vermont, led by a push from the governor and a report by Harvard economist William Hsiao that single payer would cover everyone and save the state $490 million in 2015 and at about four times that much by 2024.”

*****

H.R.676 reintroduced in the 112th Congress

112th Congress

The Library of Congress
Thomas

H.R.676

To provide for comprehensive health insurance coverage for all United States residents, improved health care delivery, and for other purposes.

Sponsor: Rep Conyers, John, Jr. [MI-14] (introduced 2/11/2011)

COSPONSORS(25), ALPHABETICAL:
Rep Baldwin, Tammy [WI-2] – 2/11/2011
Rep Capuano, Michael E. [MA-8] – 2/11/2011
Rep Christensen, Donna M. [VI] – 2/11/2011
Rep Chu, Judy [CA-32] – 2/11/2011
Rep Cohen, Steve [TN-9] – 2/11/2011
Rep Dicks, Norman D. [WA-6] – 2/11/2011
Rep Doyle, Michael F. [PA-14] – 2/11/2011
Rep Ellison, Keith [MN-5] – 2/11/2011
Rep Farr, Sam [CA-17] – 2/11/2011
Rep Filner, Bob [CA-51] – 2/11/2011
Rep Frank, Barney [MA-4] – 2/11/2011
Rep Green, Al [TX-9] – 2/11/2011
Rep Grijalva, Raul M. [AZ-7] – 2/11/2011
Rep Hinchey, Maurice D. [NY-22] – 2/11/2011
Rep Jackson, Jesse L., Jr. [IL-2] – 2/11/2011
Rep Lee, Barbara [CA-9] – 2/11/2011
Rep Lofgren, Zoe [CA-16] – 2/11/2011
Rep Maloney, Carolyn B. [NY-14] – 2/11/2011
Rep Meeks, Gregory W. [NY-6] – 2/11/2011
Rep Nadler, Jerrold [NY-8] – 2/11/2011
Rep Pingree, Chellie [ME-1] – 2/11/2011
Rep Roybal-Allard, Lucille [CA-34] – 2/11/2011
Rep Scott, Robert C. “Bobby” [VA-3] – 2/11/2011
Rep Tonko, Paul [NY-21] – 2/11/2011
Rep Weiner, Anthony D. [NY-9] – 2/11/2011

(The text of the bill has not yet been received from the Government Printing Office, but will be posted very soon.)

http://thomas.gov

Comment:

By Don McCanne, MD

The immediate task for all of us who support an expanded and improved Medicare for all is to begin to recruit more cosponsors. Remind your Representatives that this does not eliminate the important beneficial measures of the Affordable Care Act. What it does instead is it replaces the highly flawed financing structure of ACA with a proven model that both makes health care affordable and includes everyone – the paramount goals of health care reform that have remained elusive until now.

Taiwan's NHI system gets healthier

By Elaine Hou
Taiwan Today, Feb. 11, 2011

Debate has raged for almost a decade over the design of Taiwan’s second-generation National Health Insurance System. The seemingly endless rounds of consultations and negotiations pushed the patience of private and public sector participants to the limit, but their efforts paid handsome dividends Jan. 4 after amendments to the NHI Act passed muster in the Legislature.

Despite some lingering concerns, experts believe the 2G NHI is a fairer, more efficient and financially healthier system.

Launched in 1995, NHI is compulsory social insurance covering more than 99 percent of the nation’s 23 million population. Premium payments are shared by the government, the insured and employers.

Under the amended act, the NHI premium rate for individuals is set at 4.91 percent of their monthly salaries, down from 5.17 percent. A new supplementary premium system will also be in place, charging 2 percent on additional earnings over NT$2,000 (US$69), including interest, professional practice income, rent, stock dividends and bonuses exceeding the equivalent of four months’ wages.

According to former Minister of Health Yaung Chih-liang, the altered premium system will enhance NHI’s finances via the expanded premium base. This approach will also reinforce the ability-to-pay principle and relieve the financial burden on salaried employees, who usually receive little additional income.

“Around 83 percent of the population will pay less,” Yaung said. “Only 17 percent will have increased premiums resulting from extra sources of income.”

“The new plan will generate NT$508.6 billion in health insurance premiums per year, balancing the financial shortfall of the current system in five years,” said Tai Kuei-ying, director-general of the Bureau of National Health Insurance. She added that supplementary payments are estimated to bring in NT$20.8 billion annually.

The system is now in the red for over NT$60 billion, according to the BNHI.

Fu Li-yeh, director of National Yang-Ming University’s Institute of Health and Welfare Policy, described the supplementary premiums as a positive change, though not a perfect solution.

The extra premiums will help realize the core objective of the system’s reform—that those who earn more also pay more, thus making the system fairer from a social standpoint, said Fu, a minister without portfolio from 2004 to 2006.

Responsible for the 2G plan originally submitted to the Legislature, Fu pointed out that as a result of economic development since NHI was implemented, people have more and more supplementary income beyond salaries and wages. “This is especially true for wealthier people.”

She also expressed approval of the integration of the NHI Supervisory Committee and Medical Expenditure Negotiation Committee to form the new NHI Supervisory Commission, a move designed to bring revenues and expenditures more in line.

This body, composed of representatives of the insured, employers, medical service providers, experts in related fields and health care authorities, will be tasked with reviewing issues such as premium rates, the scope of benefits and total yearly payments to contracted medical facilities, the BNHI said.

This change will improve NHI’s financial management, Fu said.

The amended act also stipulates that the commission’s meeting records be made available to the public, and that public opinion be consulted before the government decides on major policies.

“This is an encouraging initiative that will keep information transparent and expand citizen participation,” said Chiang Tung-liang, dean of National Taiwan University’s College of Public Health.

Another improvement with regard to information transparency is the requirement for the public release of NHI financial reports, medical quality ratings of contracted hospitals and major violations by medical facilities.

To ensure quality health care for the entire population, the 2G NHI protects the rights of the disadvantaged via continuous coverage and reduced co-payments, and incorporates convicts into the system.

Meanwhile, the government will cover at least 36 percent of annual premiums, up from 34 percent. “The 2-percent increase is expected to require roughly NT$30 billion in government contributions during the first year of implementing the new system,” the BNHI said.

To prevent abuse of the system, the penalty for fraudulent insurance claims and medical expenses will be increased to up to 20 times the amount illegally received. The current fine is set at twice the illicit gain.

These revisions have received a thumbs up from the Taiwan Healthcare Reform Foundation, an independent, nongovernmental organization promoting the country’s health care quality and patient rights. “We believe they are conducive to a sustainable system, and will unveil a new era for NHI,” the foundation said.

Moreover, the new program will adopt diversified methods of benefit payment to promote illness prevention and the efficient use of resources. These include equal payments for similar diseases or medical treatments, and a capitation fee system.

“Implementation of capitation payment will push physicians to become more proactive in helping people prevent illness, rather than just passively providing medical care to patients,” Fu commented.

Another major amendment to the act requires citizens living overseas for long periods to have been enrolled in NHI over the last two years or to have maintained legal household registration in Taiwan for at least six months before they can enjoy medical care covered by the insurance. In the past, immediate access was granted to those with previous NHI registration or four months of household registration.

“The stricter regulations aim to enhance the system’s fairness,” the BNHI said.

Despite these improvements, the amended act still faces some criticisms, mostly over the new premium base and the unchanged separation of the insured into six categories by occupation, providing the basis for differential premium subsidies from the government.

“The supplementary premiums, which depend mostly on capital gains, seem a less stable source of NHI revenue,” Chiang said. “The amount will go up when the economy is heated and plummet during economic recessions.”

Chu Tzer-ming, former president and chief executive officer of the BNHI, said the six-category structure is a flawed, unfair policy that should be abandoned. “People with the same total income are charged different premiums because they are placed under different categories according to their jobs and vocational status.”

In addition, the policy is inefficient, Fu said. As the categories are based on occupations, when people change careers they may have to drop the insurance and then re-register under a different classification.

“This procedure is unnecessary since these people remain in the same insurance program,” she said.

Fu added that resolving these problems was the major reason for one of the initial 2G NHI proposals—calculating an individual’s insurance fee based on total household income. But this tax-like scheme was roundly rejected in the Legislature due to questions about the rates for the unemployed and those with no income.

Although the outcome is regrettable, Fu said she is still optimistic about the revised act.

“If the supplementary premium system works well, it will encourage future implementation of premium calculations based on household income,” she said.

Cheng Shou-hsia, former director-general of the BNHI, said although the amended bill is not 100-percent perfect, one thing for sure is that the 2G NHI is better than its predecessor. “This should be
acknowledged.”

Despite its problems, Taiwan’s NHI is highly regarded by international experts, Fu said. “I look forward to ongoing improvements to our system.” (THN)

Write to Elaine Hou at elainehou@mail.gio.gov.tw

Excerpted from Taiwan Today: http://www.taiwantoday.tw/ct.asp?xItem=150360&CtNode=428

Single-payer is still needed to ensure health care for all

By Madeline Zevon
The Journal News (White Plains, N.Y.), Feb. 14, 2011

By 2019, the Patient Protection and Affordable Care Act will improve health-care access by extending health insurance to 32 million more people than are now covered — 16 million through Medicaid starting in 2014, and the rest through subsidies to help lower-income people to afford health insurance.

Although the current legislation extends coverage and institutes reforms of the insurance industry, the League of Women Voters looks at it as only a first step to health-care reform. At its national convention last June, the league reaffirmed its resolution to advocate for single-payer Medicare for all.

Under the PPACA bill, 23 million Americans will still be uninsured in 2019. Surging health-care costs will not be contained. As long as we have private insurers we will never be able to achieve truly universal or affordable care. Compared with other developed nations, the United States pays twice as much for health care and yet ranks 49th among male and female life expectancy. By replacing the inefficient patchwork of private insurers with a streamlined single-payer, our nation can save about $400 billion annually, enough to cover everyone, with no co-pays or deductibles. The House single-payer bill, HR 676, will be introduced again this month. In the 2009-10 Congress, there were 12 co-sponsors from New York, and Nita Lowey, D-Harrison, recently said that when the same bill is reintroduced, she will sign on.

Businesses cannot compete in a global market because, in this country alone, they are saddled with the burden of providing health insurance to their employees. Private for-profit health insurance does not fit the market model.

The good news is that we may not have to wait for national single payer health-care reform. Some states are moving forward on their own. In Vermont, it looks likely to happen soon. Gov. Peter Shumlin is a strong single-payer supporter and Vermont may be the first state to pass it. Vermont has just completed a study showing that nearly a quarter of the current expenditures could be saved through adoption of a single-payer plan. Both houses in California have twice passed single-payer, but it was vetoed by former Gov. Arnold Schwarzenegger. The new governor, Jerry Brown, has supported single-payer in the past. In Hawaii, new Gov. Neil Abercrombie is a supporter of single-payer. In New York, Assemblyman Richard Gottfried, D-Manhattan, is again circulating his bill for single-payer. In Canada, Medicare for all was enacted province by province. Maybe that’s what will happen in our country. It is something to hope for and work for.

The writer is president, League of Women Voters of White Plains.

http://www.lohud.com/article/20110214/OPINION/102140313/1076/OPINION01/Single-payer%20is%20still%20needed%20to%20ensure%20health%20care%20for%20all

The Insurers' Real Agenda for Change

By Wendell Potter
The Huffington Post, Feb. 12, 2011

The media had lots of health care news to obsess about last week. A federal judge ruled the health care reform law unconstitutional, and Senate Republicans tried in vain to repeal the law. But most of the press paid virtually no attention to a potentially much more important development — a multi-pronged effort by five major insurers to strip from the law key regulations and consumer protections that aren’t to their liking.

The insurers do not want the bill repealed or declared unconstitutional. Congress gave them exactly what they wanted by including in the legislation a requirement that all Americans not eligible for Medicare or Medicaid buy coverage from a private insurance company. That provision alone will result in hundreds of billions of dollars in revenue and profits the insurers otherwise would never see.

Officially, the insurers are maintaining neutrality on the court challenges to the law and the repeal efforts. They understand that Republican attorneys general who filed the lawsuits and the Congressional Republicans who voted to repeal the law — most of whom received campaign contributions from the insurers’ political action committees — must go through the motions to satisfy “the base.”

The court challenges and repeal efforts are, in reality, a useful smokescreen for the big insurers, whose real agenda is to gut the law while preserving the mandate. Expect a big lobbying and PR campaign — financed by our insurance premiums — to persuade us that the new regulations and consumer protections will make those premiums skyrocket.

The story much of the press missed was the revelation that the CEOs and lobbyists for the five biggest for-profits — UnitedHealth, WellPoint, Aetna, CIGNA and Humana — have been meeting frequently to plot their attack on the law.

Bloomberg’s Drew Armstrong reported that three committees formed by the group have been meeting almost weekly. While Armstrong didn’t indicate what those committees are doing, I can speculate from previous experience as an insurance company executive that the committees are developing strategies in these areas: lobbying, strategic communications the formation of alliances with other political and business groups and the creation of fake grassroots, or “Astroturf” organizations.

Bloomberg and the the National Journal also reported that the for-profits have solicited proposals from three big PR firms that have done extensive work for the industry: APCO WorldWide, Weber Shandwick and Public Strategies. It sounds familiar. While I was serving as head of corporation communications at CIGNA, I hired APCO and Weber Shandwick to help direct similar efforts and to enhance CIGNA’s reputation.

The for-profits reportedly formed the new coalition — as yet unnamed — because they were upset that America’s Health Insurance Plans (AHIP), their umbrella trade association, had been unsuccessful in keeping the new regulations and consumer protections out of the law in the first place.

So they’re going back to a familiar and successful playbook. Over the past two decades, the big insurers have formed such coalitions to defeat reform initiatives or to persuade the public and lawmakers to see things their way.

When the Clinton reform plan was being debated in 1993 and 1994, Aetna, CIGNA, Prudential and United formed the Alliance for Managed Care (AMC) to argue for a “market-based” solution — managed competition, as it came to be called — as an alternative to broader government involvement in health care. The AMC described itself as “a private-sector approach to health care system reform that uses the marketplace and the power of informed consumer choices to achieve better coverage, while improving quality and cutting costs.”

The AMC later joined a broader coalition that included the U.S. Chamber of Commerce and the National Association of Manufacturers to defeat the Clinton plan.

A few years later, within weeks of being named as defendants in two massive class-action lawsuits, the for-profits formed a new group, America’s Health Insurers (AHI), designed to redirect scrutiny away from them and toward the trial lawyers behind the suits. Attorney Richard “Dickie” Scruggs alone cost the companies billions of dollars in market capitalization when the Wall Street Journal reported on Sept. 31, 1999, that Scruggs was planning to file charges against the insurance firms. On that day, stock prices of Aetna and United alone had plunged nearly 20 percent by the time the closing bell rang at the New York Stock Exchange.

I was CIGNA’s main representative to America’s Health Insurers. My counterparts from other big insurers and I met secretly in hotel conference rooms in Washington and elsewhere with APCO to plan the PR strategy. The idea was to “reframe the debate” — shift attention away from the reasons the insurers were being sued — onerous policies and cheating doctors out of payments — and toward those trial lawyers who were getting filthy rich filing “frivolous” lawsuits. The lawyers — not the insurers — were the real villains. APCO reactivated the front group it had created for the tobacco industry — the Coalition Against Lawsuit Abuse — to generate letters-to-the editor and op-ed pieces in cities where the lawsuits had been filed – particularly Miami, where suits were eventually consolidated. The intent was to influence both the federal judges and potential jurors. (The suits were ultimately settled, with the defendants agreeing to change many of their practices and to pay the plaintiffs hundreds of millions of dollars.)

I was also CIGNA’s representative to yet another organization — the Coalition for Affordable Quality Healthcare (CAQH) — that the big insurers created later. We mounted a huge PR and advertising campaign designed to restore Americans’ faith in managed care, which had taken a beating in the press for such well-publicized practices as “drive-through mastectomies” and “drive-though deliveries.”

So this new grouping is just the latest variant on an oft-used tactic to influence public opinion and public policy. This time, however, the stakes are even higher, for both the insurers and for consumers.

What don’t the companies like? Well, for starters, the rules that now require insurance firms to devote at least 80 percent of what we pay in premiums for actual medical care.

But their sights are also on other provisions of the law that might impair profits. AHIP spokesman Robert Zirklebach provided a glimpse of what insurers really want when he told a reporter last week that industry lobbyists have embarked on a campaign to “educate” members of Congress about ‘flaws’ in the law. For instance, the industry will be trying to persuade lawmakers that young people, many of whom are being charged too much already, will see their premiums go sky high. How do you fix that? The insurers, of course, have an answer: get rid of the requirement that insurers can only sell policies that meet minimum benefit requirements and jettison the prohibition against charging older Americans any more than three times as much as young people. They want to charge them five to ten times as much.

If the latest coalition of big for-profit insurance firms meets its objectives, many of us will eventually be convinced — through sophisticated, behind-the-scenes PR campaigns — that those protections are not in our best interests after all. If those campaigns help the big insurers eliminate such protections, that would be ideal for their bottom lines — but devastating for consumers.

This also appeared on the Center for Public Integrity’s website.

Follow Wendell Potter on Twitter: www.twitter.com/wendellpotter

http://www.
huffingtonpost.com/wendell-potter/the-insurers-real-agenda_b_822356.html

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Medicare Administrative Costs Are Higher, Not Lower, Than for Private Insurance

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