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Vermont single-payer proposals a 'major step in right direction': doctors group

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Vermont single-payer proposals a 'major step in right direction': doctors group

FOR IMMEDIATE RELEASE
January 21, 2011

Contact:
Deborah Richter, M.D.
Ali Thebert, Vermont Physicians for a National Health Program, ali@pnhp.org
Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

MONTPELIER, Vt. – Longtime reform advocate and Vermont family physician Dr. Deborah Richter hailed Wednesday’s report of health system expert William Hsiao to the Vermont Legislature, particularly Hsiao’s findings that a single-payer system would be the best remedy for what he called the state’s “broken” and “unsustainable” way of paying for care.

“Dr. Hsiao’s team of researchers found that a streamlined, single-payer system for financing health care would save money by reducing excess paperwork and bureaucracy, cover everyone in Vermont with no increase in health spending, reduce or eliminate patient co-pays, promote job growth and economic development, and control costs,” Richter said.

“Although the devil is in the details, the broad outlines of his single-payer proposals are very promising,” she said. “They represent a major step in the right direction.

“This thoughtful, evidence-based approach to solving our state’s health care problems – an approach that involves our new governor, our congressional delegation and state lawmakers poised to take swift, positive action to translate reform proposals into law – stands in stark contrast to the noisy goings-on in Washington this week,” Richter said, alluding to the Republican party’s symbolic vote in the House to repeal the federal health law.

While her overall attitude toward Hsiao’s draft report was very positive, Richter said that her group, the Vermont chapter of Physicians for a National Health Program, would be making recommendations to improve the single-payer models to maximize administrative savings and strengthen cost control even further. After a period of public comment, a final report from Hsiao is due Feb. 17.

“Only a one-payer system can maximize the efficiencies and cost savings,” Richter said. “So it will be important to fully incorporate Medicare and Medicaid into the system as soon as possible. We will also be recommending the use of single-payer tools like separate operating and capital budgets for hospitals.”

“Optimally, a single-payer program would also prohibit the participation of investor-owned, for-profit delivery systems, which studies show drive up costs and produce worse medical outcomes,” she said.

Hsiao is a professor of economics at the Harvard School of Public Health and an internationally recognized authority on health care systems. Last year he and his team were commissioned by the Legislature to analyze three models for state health reform, including a single-payer model, where private insurers are excluded from the system and all medical bills are paid by a single public or quasi-public authority.

In his presentation to Vermont lawmakers, Hsiao outlined the three models: a public single-payer plan, a plan that builds on the new federal health law but adds a so-called public option, and his team’s recommended plan.

Hsiao’s team found that the “public option” plan would yield the poorest results, having only a very modest impact on reducing costs and having almost no impact on reducing the number of the uninsured.

While citing the merits of a publicly administered single-payer plan, Hsiao’s team ended up by recommending a “public-private hybrid single-payer” model that would be managed by an independent board and that would contract-out the job of claims processing to private and public bidders. A private company like Vermont Blue Cross Blue Shield, for example, could be hired to process the claims, as is done currently by Medicare.

Richter likes the idea of the independent board and says physicians in Vermont favor single payer because it’s the only approach that gives them a voice and negotiating power – something they lack with insurers today. Single payer will also benefit the state’s physicians by simplifying billing and giving them a choice of practice options. “It will make primary care very attractive in Vermont,” she said. “We’ll be able to choose where we want to practice and patients will be able to freely choose their doctors.”

She also would like to see the enactment of a plan that provides for comprehensive care.

Richter practices family medicine in Montpelier, and has pushed for single payer in Vermont for more than two decades. She is a past president of Physicians for a National Health Program, a nationwide organization of 18,000 doctors who favor single-payer national health insurance, commonly referred to as an improved Medicare for all.

“Dr. Hsiao has performed an extraordinary service,” Richter said. “Vermont has an historic opportunity to lead the nation on fundamental health reform.”

Vermont: A Health System for the 21 Century
Dr. William Hsiao’s slideshow presentation before Vermont State Legislature, January19, 2011

Statement by William C. Hsiao before Vermont State Legislature
January 19, 2011

Achieving Affordable Universal Health Care in Vermont
Full report: Act 128, Health System Reform Design
Submitted by WILLIAM C. HSIAO, PhD, FSA; STEVEN KAPPEL, MPA; JONATHAN GRUBER, PhD; and a team of health policy analysts
January 19, 2011

Physicians for a National Health Program (www.pnhp.org) is an 18,000-member organization of doctors who advocate for a nonprofit, single-payer national health insurance program for the United States. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Insurance Execs Not Happy with Hsiao’s Single Payer

By Russell Mokhiber
Single Payer Action, January 20, 2011

Harvard Professor William Hsiao is a single payer supporter.

Twenty years ago, he helped push through a single payer system for Taiwan.

And now, he wants to do something similar in Vermont.

Over the past couple of months, Hsiao has been working feverishly – with a team of 20 researchers – to finish a report to the Vermont legislature on how to best implement a single payer system for the state.

Yesterday, he delivered his 132-page report.

And at the beginning of his one hour presentation to the legislature in Montpelier, he made it clear that “what I’m going to present is not necessarily popular for everyone.”

“Recently I was talking to an insurance executive,” Hsiao said.

“And I asked him if he was in favor of spending $50 billion to manufacture a new shuttle to the moon.”

“And he says – yes, if you will go.”

That got a chuckle out of the gathered legislators.

But clearly, the insurance industry is not at all pleased with Hsiao.

They are watching events in Vermont carefully.

The newly elected Governor – Peter Shumlin – ran on a single payer platform.

Shumlin said that in his first conversation with Hsiao last year, Hsiao told him that he had “given up on America.”

“I told him we are Vermonters,” Shumlin said. “We think independently. We take care of each other, and we do things that others dare not do.”

The Vermont legislature tasked Hsiao with putting forth and analyzing three proposals.

A pure single payer government run system.

The current system with a public option.

And Hsiao’s preferred system – a single payer system run by an independent board.

While Hsiao is not explicit about this in his report, the bottom line is clear – under Hsiao’s single payer proposals, the private health insurers in Vermont would be out of the business of marketing and selling basic health insurance.

That’s why the insurance industry would prefer to see Hsiao headed to the moon than on the ground speaking before the Vermont state legislature.

“Our analysis of the three health insurance companies with significant operations in Vermont – Blue Cross Blue Shield of Vermont, MVP, and Cigna – was much more limited than our analysis of other groups, partly because much of Act 128 has fairly clear implications for those companies,” Hsiao writes in his report.

“It is reasonably safe to assume that health insurance companies would oppose any major health system reform that reduces their autonomy in financing and paying for health care, increases government’s role, and/or introduces new competitors to their market.”

“However, given Vermont’s history with reforms such as guaranteed-issue, community-rating, and the Blueprint program, it must be noted that the remaining health insurers in Vermont – especially those run as non-profits – are likely more accustomed and potentially more open than insurers elsewhere to working with state-led regulations. In addition, a continued market for supplementary insurance would generate ongoing opportunities for private insurance in the state.”

“It is possible that one or more companies may be interested in partnering with the state and substantially reforming their business model in order to continue to operate in Vermont.”

And in fact, Vermont’s largest insurer – Blue Cross Blue Shield – with 75 percent of the state’s health insurance business – signaled yesterday that it might be interested in taking Hsiao at his word.

“If there’s a single payer system, we’d like to be the single payer,” Leigh Tofferi, the Blue Cross-Blue Shield lobbyist in Vermont told vtdigger.org.

But Hsiao warned of another possible insurance industry reaction.

“Of course, the opposite is also possible – that an industry with deep pockets nationally will oppose reforms due to the threats they pose to the Vermont market and other markets that could follow Vermont’s lead,” Hsiao wrote.

There’s not a mention of the report in today’s big three newspapers – the New York Times, the Wall Street Journal or the Washington Post.

Early indications are that supporters of a pure government run single payer system are willing to accept Hsiao’s public/private compromise.

Physicians for a National Health Program’s (PNHP) Deb Richter told vtdigger.org that while a government administered system “makes the most sense in terms of good policy,” the system doesn’t have to be controlled by the government to be effective.

And PNHP’s Don McCanne said that “although advocates of the pure single payer model will find some problems with this report on a reform proposal for Vermont, there is very good news in this analysis. The report emphatically confirms the superiority of the single payer model in ensuring that everyone is included while containing health care costs.”

“One very serious deficiency is that they decided to leave in place Medicare and Medicaid, primarily because of existing barriers to move them into a single payer system,” McCanne wrote. “Thus their proposal is not a single payer system. Leaving these programs in place sacrifices some of the important single payer efficiencies.”

“Within the next couple of days, we’ll have a clearer concept of where the single payer community should be on this report. Tentatively, it seems that it deserves our support, but support that is qualified by strong advocacy to make it right by such measures as including comprehensive benefits, and rolling in and eliminating Medicare and Medicaid,” McCanne said.

Governor Shumlin’s office is reportedly drafting legislation that will be introduced soon.

Clearly, Shumlin hasn’t given up on America.

Or at least on Vermont.

http://www.singlepayeraction.org/blog/?p=2687

Medicare Advantage plans work the float

Rollup Review of Impact on Medicare Program for Investment Income That Medicare Advantage Organizations Earned and Retained From Medicare Funds in 2007

Office of Inspector General
U.S. Department of Health & Human Services
January 18, 2011

If Federal requirements had been established to delay prepayments to Medicare Advantage organizations (MA organizations) until after the beginning of the beneficiary’s coverage period by the same number of days that we estimated that MA organizations held Medicare funds, the Medicare Part A and Part B trust funds (which finance the Medicare Advantage program) could have earned approximately $450 million of interest income in calendar year (CY) 2007. Alternatively, if Federal requirements had been established to require MA organizations to reduce their revenue requirements in their bid proposals to account for anticipated investment income, the Medicare program could have saved an estimated $376 million that the 457 MA organizations that were included in our sampling frame earned in CY 2007.

We recommended that CMS evaluate these audit results and either (1) pursue legislation to adjust the timing of Medicare’s prepayments to MA organizations to account for the time that these organizations invest Medicare funds before paying providers for medical services or (2) develop and implement regulations that require MA organizations to reduce their revenue requirements in their bid proposals to account for anticipated investment income. CMS did not concur with our recommendation.

http://oig.hhs.gov/oas/reports/region7/71001080.asp

Comment: 

By Don McCanne, MD

Simply stated, the private Medicare Advantage plans receive hundreds of millions of dollars by investing advance payments of taxpayer funds used to pay their health care claims. This is not unusual since all insurers work the float. The longer they can hold on to premiums before they pay out benefits, the greater the returns from investing those funds. It is so commonplace that the Centers for Medicare and Medicaid Services did not concur with the Inspector General’s recommendation to pursue changes to recover that investment income.

The opportunity cost of interest-free cash advances to private insurers is yet one more cost of our flawed system of health care financing. It is a very real cost, amounting to hundreds of millions of dollars just for the private Medicare Advantage plans alone. This is just one more reason that we should establish our own public insurance program – an improved Medicare for all.

No Room in NYT for Single-Payer Doctors, but Right-Wing Cranks Are OK

By Peter Hart
Fairness & Accuracy in Reporting, 01/20/2011

When I saw the headline (1/19/11), “Vocal Physicians Group Renews Health Law Fight,” I thought maybe–just maybe–the New York Times might be talking about Physicians for a National Health Program, the group comprised of “18,000 physicians, medical students and health professionals who support single-payer national health insurance.”

But no. The Times story is about the Association of American Physicians and Surgeons, a 3,000-member organization that is on the far right of the healthcare debate, and is garnering coverage now because they support repeal of the new healthcare law. How far? These excerpts from the Times piece should give you some idea:

Founded in 1943, the Association of American Physicians and Surgeons opposed the creation of Medicaid and Medicare. A decade ago, it was among groups that unsuccessfully urged the United States Supreme Court to release post-mortem photographs of a former Clinton administration official, Vincent Foster. In its brief, the group argued that an independent inquiry was necessary to confirm that Mr. Foster, whose death was attributed to suicide, was not murdered.

And:

Its internal periodical has published studies arguing that abortion increases breast cancer risks, a tie rejected by an expert panel of the National Cancer Institute, as well as reports linking child vaccinations to autism, a discredited theory. Another report, “Illegal Aliens and American Medicine,” contended that illegal immigrants not only brought disease into this country but benefited if their babies were born with disabilities.

“Anchor babies are valuable,” that 2005 report stated, using a negative term for children born in America to illegal immigrants. “A disabled anchor baby is more valuable than a healthy one.”

Now perhaps the angle here is that since repeal is in the news, this group deserves coverage. And citing their extremist positions on an array of subjects might be useful for readers who want to know what sorts of folks are backing repeal.

But in the broader debate over healthcare, single-payer advocates like PNHP are largely sidelined. A search of Times coverage in the Nexis news database shows that PNHP usually shows up only in the letters section. A June 11, 2009 article, “Doctors’ Group Opposes Public Insurance Plan,” focused on opposition to the public option from the likes of the American Medical Association; it included a passing reference to PNHP.

It makes sense for the healthcare debate to include the voices of doctors and other caregivers. But that discussion needs to include those who support single-payer.

Top 10 Reasons Why the Health Repeal Vote Is Inane

By Rose Ann DeMoro
The Huffington Post, January 19, 2011

At a time when so many Americans continue to fall through the gaping holes in our healthcare system, it’s hard to imagine a more dysfunctional debate in Washington than the charade this week over the Republican effort to repeal President Obama’s healthcare law.

Consider that, to name just a few points:

• The number of officially uninsured tops 50 million,
• Half of all Americans are considered to have pre-existing conditions and thus subject to rampant insurance denials (and ways big insurers will surely find to game the system even if the law remains as is),
• Arizona is denying life-saving transplants to poor people on Medicaid,
• Blue Shield is ignoring protests and pushing through premium rate hikes in California of up to 59 percent for individuals
• A UNICEF report ranked the U.S. a pathetic 22nd in health well-being for our children.

Yet Congress is going a though a Kabuki theater that will end without repeal or real, comprehensive solutions to the ongoing healthcare crisis.

Here’s a Top 10 list for the inanity of the repeal debate:

1. The public is already rightfully confused. A Kaiser Family Foundation poll last month found that nearly as many people (20%) favor expanding the law as favor repealing it entirely (26%). And, perhaps, most significantly, 43% of the public said they were still “confused” about the law.

2. Despite the rhetoric from the right, the law was not a “government takeover,” much less “socialized medicine.” In fact, it serves to prop up and protect the broken private system from a more fundamental reform, single-payer/expanding Medicare to cover everyone, just as President Nixon pushed HMOs as an alternative to single-payer 40 years ago (as Talking Points Memo noted last week).

3. Many Republicans do not really care if people are covered, they care about business making money. The “alternatives” discussed by the repeal crowd would unleash more of the same “magic” of the market that created the current crisis in access, cost, and quality.

4. Democrats and liberals have, ironically, become the foremost champions of “individual mandate,” a concept first proposed by Republicans and adopted in Massachusetts by a Republican Governor Mitt Romney (with a law which has been steadily unraveling in rising costs with the state reducing eligibility and covered services). Yet Democrats now promote the deception that forced purchase of private insurance constitutes “universal” healthcare, while Republicans wail that idea they once loved is unconstitutional.

5. Though the Republicans publicly say they oppose the law in part because it is unfriendly to business, nearly all the giants in the healthcare industry backed the law.

6. Despite a desperate need for fundamental change, proponents of the most far-reaching reform are dismissed as “naive” and “not serious”. Only those who support an unsustainable status quo in corporate control of our health were granted a seat at the table by the Democrats, and anything more than the most token coverage in the media.

7. In an environment where “objectivity” is defined as letting both sides have their say – as long as you stay within the parameters of the story as defined by the media – the side that is willing to tell bigger lies wins the most ink. Thus the debate was distorted by deliberate deceptions about “death panels,” seniors being cut off Medicare, and similar fantasies.

8. Challenging the efficacy of healthcare as a commodity is off the table no matter how many lives are compromised and discarded. Thus, we have a law that is not universal, does little to control costs in rising premiums and un-payable medical bills, improve quality or reduce disparities. And the repeal fans want it to do even less.

9. Few are discussing that the healthcare crisis will grow if the law is repealed or left as is. Insurers, drug companies, and providers will continue to price gouge, insurers will continue to cherry pick healthier customers and find pretexts to deny needed care, the medical technology both sides promote as a panacea will put more patients at risk by eroding professional caretaker judgment, long waits for care will remain, and the ongoing recession will produce a further shredding of the frail safety net, especially as more public hospitals and clinics are forced to close.

10. While everyone talks about a global economy, no substantive consideration was given by policy makers or the media to the way other industrialized countries assure health coverage with lower costs and better outcomes through national or single payer systems, all while failing to challenge those who falsely claim “we have the best healthcare system in the world” (we don’t).

Instead of repealing the law, let’s urge Congress to expand it by opening up the cost-efficient, universal, equitable Medicare program to everyone.

http://www.huffingtonpost.com/rose-ann-demoro/top-10-reasons-why-the-he_b_811118.html

Americans want single-payer system

Letters
Seattle Times, Jan. 19, 2011
 
U.S. Secretary of Commerce Gary Locke’s defense of the new health-care law had the usual fatal flaw: He still allows it to feed a callous health-insurance middleman [“Repealing new health-care law will make America less competitive,” Opinion, Jan. 15].
 
The law itself recognizes the immoral abuses of the health-insurance industry. It then immediately gives the industry hundreds of billions of taxpayer dollars every year to continue to deny care and bankrupt Americans.
 
Meanwhile, single-payer insurance systems have been proven to cost half as much as we spend. These single-payer insurance systems also cover everyone, eliminating bankruptcies. Our own government statistics prove single-payer insurance systems are the best at controlling costs. All of Locke’s numbers pale in comparison with the $400 billion we would save each year by simply eliminating the health-insurance middleman.
 
Give all of this, it seems Locke is defending entrenched political donors, not a health-care law. Until we get a single-payer insurance system, we will never see an affordable health-care act.
 
William McQuaid
Seattle

William Hsiao's single payer proposal for Vermont

Statement by William C. Hsiao

Vermont State Legislature
January 19, 2011

Act 128 calls upon our team to develop three options. The Legislature requires that we evaluate a state government-administered and publicly-financed single-payer health benefits system. This system, which we refer to as Option 1, would provide all Vermonters with a uniform benefits package. Within those parameters, we looked at costs of both a “comprehensive” benefits package and a leaner, “essential” benefits package, which I will define and discuss later. The second option is a state government-administered, public option that would allow Vermonters to choose between public and private insurance coverage. Option 2 is designed to allow for and promote competition between the public and private plans, while keeping in place the current multiple payer system. Act 128 allows our team to develop a third option that we design after analyzing all aspects of Vermont’s health care and assessing the positions of key stakeholders across the State of Vermont. We call Option 3 a public/private single-payer system. It provides an “essential” benefits package, is administered by an independent board with diverse representation, and it employs a competitively-selected third party to manage provider relations and claims adjudication and processing.

In analyzing the three options, we determined that all will yield significant savings. However, our research and analysis indicate that the single-payer options will have a more dramatic impact on reducing cost than the public option because they incorporate a uniform benefits package and reduce much of the administrative structure needed to compensate multiple payers. Therefore, we estimate that Option 1 will produce savings of 24.3% of total health expenditure between 2015 and 2024. Option 2 will produce savings of 16.1% of total health expenditure between 2015 and 2024. Finally, Option 3 will produce savings of 25.3% of total health expenditure between 2015 and 2024. Option 3 produces additional savings as compared to Option 1 because it incorporates a public/private partnership in governance and administration.

In 2015, the first full year of implementation, PPACA would reduce the number of uninsured by 18,000 people; however 32,000 Vermont residents will remain uninsured. Ultimately in 2019, PPACA will reduce the number of uninsured by 22,000 in 2019. PPACA will likely add an additional $240 million of federal funds in 2015 to the State of Vermont, which will eventually rise to $420 million in 2019. All of these dollar values are expressed in 2010 dollars.

In comparison with option 1 and 3, Option 2 would still leave approximately 30,000 Vermonters uninsured. Option 2 would not expand the current benefits to cover some dental and vision care nor bring up the benefits for those who are currently under-insured.

The comprehensive benefit package under option 1 covers all health services with minimum cost sharing. As a result, it costs more and requires more funds to finance it. Under a payroll contribution scheme of financing, employers and workers will have to pay more than what they would pay if no reform takes place. This comprehensive benefit option would also increase the total health spending in Vermont which would make this option less feasible.

The essential benefit package under option 1 and 3 have leaner benefits and they can be financed through payroll contributions without increasing the amount that most employers and workers would have to pay as compared to if no reform takes place. It would reduce the total health spending in Vermont slightly in 2015 when the proposed reforms are implemented.

Statement (10 pages):
http://WWW.leg.state.VT.us/jfo/healthcare/FINAL%20VT%20Hsiao%20Written%20Statment%20for%20Jan1911_1.pdf

Full report – William Hsiao, Steven Kappel and Jonathan Gruber (138 pages):
http://www.leg.state.vt.us/jfo/healthcare/FINAL%20VT%20Draft%20Hsiao%20Report.pdf

Comment:

By Don McCanne, MD

Although advocates of the pure single payer model will find some problems with this report on a reform proposal for Vermont, there is very good news in this analysis. The report emphatically confirms the superiority of the single payer model in ensuring that everyone is included while containing health care costs.

In an analysis of the impact of the Patient Protection and Affordable Care Act (PPACA), the authors demonstrated that far too many would still be left without insurance, and it would have a negligible impact in controlling health care costs. As we have said all along, the financing system in PPACA is grossly inadequate and needs to be replaced.

The authors’ Option 2 is essentially PPACA with a “public option” added – a public insurance plan that competes with the private plans. Their analysis shows that it would have only a very modest impact on reducing costs, and an almost negligible impact on reducing the numbers of uninsured. Thus the bluster in support of the public option was misdirected. That energy should have been redirected to supporting single payer instead.

Options 1B and 3 are almost identical. They are both single payer models that totally replace the private insurance plans. They have an “Essential Benefits Package” with an actuarial value of about 87 percent which is close to the typical employer-sponsored plans before they began introducing high deductibles. Their analyses shows that these plans would cover everyone without any increase in spending since the single payer efficiencies would be enough to pay for those currently uninsured or under-insured. So this is the really good news – single payer works (though read on).

The primary difference in 1B and 3 is that 1B is publicly administered whereas 3 is administered by an independent board that contracts with a competitively-selected third party to manage provider relations and claims adjudication and processing. The authors state a preference for Option 3 claiming that it saves a little bit more money by requiring potential managers to compete for the contract. That is highly dubious and more likely was inserted to appease the market ideology of a sector of the twenty some odd contributors to this study. Considering this, I think that we can extrapolate the fact that the authors would also endorse Option 1B, since it is otherwise identical.

Option 1A is like 1B except that it provides a “Comprehensive Benefits Package” – virtually all health care services and products – achieving approximately an actuarial ratio of 97% for medical and mental health services, 90% for drugs and vision care, and 85% for dental, nursing homes and home care. It would cost more than Option 1B, but not that much more. It was not selected by the authors since one of the goals of study was to cover everyone without increasing spending over current levels. In a single payer system the benefits should be comprehensive.

One very serious deficiency is that they decided to leave in place Medicare and Medicaid, primarily because of existing barriers to move them into a single payer system. Thus their proposal is not a single payer system. Leaving these programs in place sacrifices some of the important single payer efficiencies.

They also tout accountable care organizations (ACO), suggesting that capitation should apply to primary care and salaries should apply to specialists. Yet by questions that they pose, they recognize that ACOs are not well defined. For instance, how can they effectively manage the care of a patient that PPACA grants the right to move in and out of the ACO at any and all times?

Within the next couple of days, we’ll have a clearer concept
of where the single payer community should be on this report. Tentatively, it seems that it deserves our support, but support that is qualified by strong advocacy to make it right by such measures as including comprehensive benefits, and rolling in and eliminating Medicare and Medicaid.

IOM's "essential benefits" may serve interests of private insurers

Health care lobby mum on repeal

By Kate Nocera
Politico
January 18, 2011

It’s at meetings like the Institute of Medicine’s Committee on the Determination of Essential Health Benefits where these groups (AHIP and others) can begin to voice their concerns. The committee convened for three days last week to hear from experts, lobbyists and special advocacy groups. The IOM will soon make recommendations to the Department of Health and Human Services on what defines an “essential benefit” that insurers must cover if they want to be listed on the exchanges that are coming in 2014.

Carmella Bocchino, AHIP executive vice president of clinical affairs and strategic planning, asked HHS not to load specific benefits into the bill, so the 10 broad categories of benefits would remain as they are and the market would decide what type of coverage is needed. The group also asked HHS not to include the 2,000 state mandates as part of an essential benefit package. Each state directs insurance providers on what must be covered in the policies they sell. The inclusion of every state mandate in the health care reform law would significantly drive up consumer costs and mandates for all states, which does not necessarily make sense, AHIP argues.

http://www.politico.com/news/stories/0111/47711.html

IOM meeting on essential benefits:
http://iom.edu/Activities/HealthServices/EssentialHealthBenefits/2011-JAN-12/Agenda.aspx

Comment: 

By Don McCanne, MD

The Institute of Medicine (IOM) will be making recommendations to HHS on the definition of required essential benefits for the health plans that are to be offered through the state insurance exchanges. Several experts testifying before IOM’s Committee have called for flexibility in the definition (testimonies provided at IOM link above).

We should all be concerned that the insurance industry intends to use this approach to “let the market decide what type of coverage is needed.” Although the health reform legislation closed large loopholes in insurance coverage, it is clear that the industry fully intends to use innovations in essential benefit design to continue to profit by depriving patients of essential health care.

It was a terrible mistake to design health care financing reform based on the existing model of private insurance plans. No matter how much the private insurers are regulated, they will always find a way to place their own interests first.

It is not too late to stop this nonsense and do it right – establish our own publicly-administered and publicly-financed single payer national health program, an improved Medicare for all.