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Massachusetts’ “humane exemption” from universal coverage

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Massachusetts’ “humane exemption” from universal coverage

Promises, promises in healthcare reform

The Boston Globe
March 17, 2007

People of all stripes are closely following the state health reform plan as it is rolled out. Many are beginning to feel that in fact it will be rolling over quite a few in need of affordable quality healthcare (“State OK’s 7 low-cost health plans for uninsured,” Business, March 9).

The utter irony of the quote from Jon Kingsdale, a former Tufts HMO executive and the executive director of the Commonwealth Connector board, is as tragic as it is absurd: “We want to get everybody in the Commonwealth using health insurance, but we also want to be humane and recognize the exceptions.”

This statement amounts to applauding the law’s “individual mandate exemption” that will allow moderate-income state residents who lack health insurance to request a “humane” exception in order to not face tax penalties while receiving state permission to remain uninsured.

ANN ELDRIDGE MALONE
Jamaica Plain
The writer, a registered nurse, is executive director of the Alliance to Defend Health Care.

JAMES ROOSEVELT, chairman of the private insurers’ trade organization, dismisses worries about the affordability of the state’s mandated health plans (“Misinformation and fear muddy healthcare debate,” Letters, March 13). He trumpets the fact that plans without deductibles will be available. What he doesn’t say is that these plans will have huge copayments. In the “basic” no-deductible plan, patients will have to pay 35 percent of the total cost of hospital care, X-rays, lab tests, and outpatient surgery. Even a simple appendectomy would cost thousands out-of-pocket. Few of the uninsured could afford this, especially after forking over premiums of between $3,028 (for a 26-year-old) to $6,056 (for a 56-year-old).

The Connector (the agency running the new health reform) and the insurance companies boast about the low-cost, quality coverage they’re forcing the uninsured to buy. But they admit, in insurance speak, that the new plans have 60 percent of the actuarial value” of a comprehensive plan. Stripped of jargon, this means the uninsured will get 60 percent of the coverage people like Mr. Roosevelt have for their families. And he could afford high copayments and big deductibles. Our patients can’t.

Drs. STEFFIE WOOLHANDLER and DAVID U. HIMMELSTEIN
Cambridge

http://www.boston.com/news/globe/editorial_opinion/letters/articles/2007/03/17/promises_promises_in_healthcare_reform/

Comment:

By Don McCanne, MD

Does universal mean everyone? Or does it mean everyone, except for those who cannot afford health care access because we insist on a convoluted model of reform that is designed to preserve the interests of those very entities most responsible for the intolerable injustices of our high-cost health care system merely because the politics of protecting those interests are more easily negotiated than the politics of obtaining affordable health care for everyone?

Doesn’t the simplicity contrasted with the complexity of those two questions tell you something?

Critical condition: Single-payer plan gains steam as cure for health care system

By Julie Creek
The Journal Gazette
Sun, Mar. 18, 2007

Fears about cost, quality and lack of access have pushed health care reform to center stage in American domestic politics. In the 13 years since the Clinton health care plan went down in flames, the problems that plan was designed to address have become more severe, and reform promises to be a major issue in next year’s presidential race.

Among solutions under discussion is the “single-payer” system, which proponents argue is the best way to provide health insurance and control costs. Here are some questions and answers about it:

1. Why are we hearing more about a single-payer health care system?

It seems almost a misnomer to refer to the existing hodge-podge of private and public health care financing as a system. And it’s becoming increasingly difficult to find anybody familiar with health care who doesn’t believe the “system” is either in crisis already or headed for collapse.

Consider:

* About $2 trillion is spent each year on health care in the United States — 15.2 percent of the country’s gross domestic product in 2003 — twice as much as any other country — and that amount is expected to rise rapidly.

* Roughly 30 percent of what we spend goes to administrative costs alone.

* Even with all the money spent, as a group, Americans aren’t particularly healthy, ranking in the middle among industrialized countries on a list of overall health indicators — including life expectancy and infant mortality.

* Nearly 47 million people — about 15 percent of the population — have no health insurance at all, including about 800,000 Hoosiers. And that number is increasing as American companies, struggling to compete in the global economy, jettison employee health insurance. People with chronic medical conditions who aren’t covered by group insurance often can’t buy health insurance at any price.

* Workers who still have private health insurance have watched their insurance premiums rise 87 percent since 2000.

* Many hospitals — especially not-for-profit hospitals — are struggling to care for uninsured patients who cannot pay for the expensive care they receive in emergency rooms.

The economic and social crisis spawned by the many uninsured prompted several states, led by Massachusetts, to come up with their own plans to provide basic health insurance to all citizens. The Indiana General Assembly is mulling over a plan that would hike the cigarette tax and plow the increased revenue into health insurance coverage for a portion of the state’s uninsured working poor population.

A New York Times/CBS News poll released in early March found that a majority of Americans believe the federal government should guarantee health insurance to every American and say they’re willing to pay more taxes to do so.

2. What — exactly — is a single-payer system? What would it look like?

Single-payer national health insurance is a system in which doctors and hospitals work for themselves but a single public or public-private agency handles the financing. Under the single-payer plan proposed by Physicians for a National Health Program, all Americans would be covered for medically necessary services for life, and patients would have a choice of doctors and hospitals.

Patients would go to their doctor or hospital for treatment. Doctors would bill the national agency and receive payment on a fee-for-service basis. Hospitals would receive lump sums to pay operating expenses. Health facilities — including nursing homes — would be managed by regional planning boards.

Proponents of a single-payer system argue that much of the cost of providing universal coverage could be paid by eliminating the role of private insurance companies and putting wasted administrative dollars back into caring for patients. A health care tax would replace private insurance premiums and out-of-pocket expenses currently paid by individuals and businesses. Costs would be controlled by negotiated fees, global budgeting and bulk purchasing.

The Medicare program for senior citizens — created by Congress in the mid-1960s — is a single-payer system. A federal agency pays all the bills. Doctors and hospitals negotiate fees with the agency, and Medicare spends only about 3 percent of its funds for administrative expenses.

Some proponents of a single-payer system advocate expanding the Medicare program to cover all Americans. Physicians for a National Health Program supports a bill introduced a couple of years ago in Congress by Rep. Dennis Kucinich that would do so.

3. What are the advantages and disadvantages of a single-payer system?

Probably the most obvious advantage is that it would cover everyone from cradle to grave, eliminating the inequities and economic distortion created by the nearly 47 million Americans who have no health insurance at all.

A single-payer system would also streamline an administrative system that sucks up 30 percent of every dollar spent on health care. Many doctors say the bureaucratic tangle has begun to feed on itself, forcing them to hire more workers to handle insurance claims and billing, increasing office overhead expenses.

A single-payer system would eliminate profit-driven insurance companies from the health care system. Because they answer to stockholders, private insurance companies are under enormous pressure to control costs. As the cost of care increases, companies respond by limiting the care they cover and lowering payments to health care providers. On the other hand, taxpayers, especially corporate ones, are likely to exert the same kinds of pressure on the government to hold down costs.

On the disadvantage side, a single-payer system would be a wrenching change and create a huge, faceless bureaucracy. That prospect scares many physicians, even those who dread haggling with insurance companies over treatment for their patients. They also fear the power that would be conferred upon a single payer.

“Who would you rather fight with, the federal government or Anthem?” asked Dr. Mike Schatzlein, an executive with the Lutheran Health Network. “I would probably take my chances with Anthem.”

Health care observers also fear that removing the profit motive from the health care system altogether would stifle investment and innovation in finding new treatments and drugs. If the federal government became the only payer, limiting potential profit, companies would be less likely to invest the huge sums necessary up front to develop new drugs and treatments.

4. Who supports it?

A few health care consumer groups, including Hoosiers for a Commonsense Health Plan, support a single-payer system as the most equitable way to distribute finite health care resources.

As a group, physicians are split.

Physicians for a National Health Program claims 12,000 physician members across the country, but others favor less dramatic reforms.

“Most physicians believe we need universal access,” said Dr. Vidya Kora, president of the Indiana State Medical Association. “But that doesn’t necessarily translate into believing in a single-payer system.”

“Most people believe the solution won’t come from the feds,” he added. “That’s why states are experimenting.”

Many physicians hope states will lead the way to more coherent regional systems — which might include single-payer elements — that will cover everybody.

“I would hope to see individual states or coalitions of states work together to build a state system,” said Dr. Tom Hayhurst, a retired physician and outgoing Fort Wayne City Council member. “Of course they would have to figure out how to pay for it.”

5. Who opposes it?

Insurance companies oppose a single-payer system because it would kick them out of the health care system, which has been a major profit center for them.

Many business groups also oppose a single-payer system because it would place controls on for-profit health care providers.

“A single-payer system would disrupt the marketplace and impede consumer choice,” said Katie Mahoney, director of health care policy for the U.S. Chamber of Commerce.

The U.S. Chamber is backing an incremental plan that would extend the federal Children’s Health Insurance Program to cover all uninsured children, allow states to offer Medicaid coverage to adults based solely on need and create a tax credit to help individuals and families afford private health insurance.

Even as they’re being squeezed by increasing number of uninsured patients and lower reimbursements for treating Medicare and Medicaid patients, hospital officials are generally suspicious of dealing with a bureaucracy that has no competition.

While they agree that everyone should have health insurance, the American public is split — largely along party lines — on whether a national health insurance program is the answer.

6. What has been the experience of other countries that have national health care systems?

The U.S. is one of just a few industrialized countries that don’t have government-sponsored national health-insurance programs, but plans vary widely from country to country. Some countries — including Spain and Great Britain — have “socialized” programs in which doctors and other providers are government employees and receive government salaries.

National health care programs in Canada and Germany use a system in which doctors are self-employed but bill a national health care agency on a fee-for-service basis.

Canada’s program is mentioned most often as a potential model for an American single-payer system, although Canadians often complain that they must wait long periods for non-emergency procedures.

7. Would health care be rationed under a national single-payer system?

Of course. But, remember, it is already rationed in the existing system based on the ability to pay. Generally speaking, those who can afford it get care; those who can’t afford it don’t, unless they’re lucky enough to find a provider who can give them free care or go to a hospital emergency room that is required to provide emergency care. When there is disagreement in cases of privately insured Americans, insurance companies frequently decide what care patients will receive by refusing to pay for procedures or treatments they deem unnecessary.

Single-payer advocates believe that taking insurance companies out of the equation will free up most of the 30 percent of health care dollars spent on administrative costs to provide more care.

Some single-payer advocates support allowing patients to buy supplementary insurance that would cover elective or cosmetic treatments that likely wouldn’t be covered under a national plan. But Dr. Rob Stone, of Hoosiers for a Commonsense Health Plan, believes that supplementary plans would result in some patients being “more equal” than others.

8. Would I be able to choose my doctor?

More than likely. The plan proposed by Physicians for a National Health Program wouldn’t affect the relationship between doctors and their patients. The change would come in the way doctors are paid for their work. Ultimately, it would depend on what kind of plan Congress adopted, but given that Americans feel so strongly about their freedom of choice, it’s hard to imagine Congress creating a single-payer system that didn’t allow patients to choose their doctors.

By the Numbers

The cost of health care:

Amount spent on health care per person in 2003:

Canada — $2,998

Germany — $2,983

Great Britain — $2,317

United States — $5,711

Projected growth of National Health Expenditure in US:

2007: $2.3 trillion

2008: $2.5 trillion

2009: $2.7 trillion

2010: $2.9 trillion

Julie Creek is an editorial writer for The Journal Gazette. She joined the newspaper in 1990 and was an education reporter and assistant metro editor. You can reach her at 260-461-8609 or by email at jcreek@jg.net

Watson Wyatt on employer costs and CDHPs

12th Annual National Business Group on Health / Watson Wyatt Survey Report 2007

Watson Wyatt Worldwide
March 15, 2007

Annual cost increases for all employers remained at 8 percent for the second year in a row (about twice the rate of inflation) and are expected to stay at this level through 2008.

CDHPs (consumer-directed health plans) continue to gain popularity. Thirty-eight percent of employers now offer such a plan, and 25 percent offer a health savings account (HSA). Yet, the median employee enrollment rate in CDHPs remains a relatively low 8 percent. While CDHPs can help control cost increases when combined with other tactics, the use of CDHPs alone does not correlate with a lower cost trend.

http://www.watsonwyatt.com/research/resrender.asp?id=2007-US-0031&page=1

And…

Employers up use of high-deductible health plans

By Kim Dixon
Reuters
March 15, 2007

Nine percent of U.S. employers in a poll by a health consulting firm (Watson Wyatt Worldwide) said they plan to offer only one health insurance option next year — a high-deductible policy that may encourage workers to skimp on care.

This type of plan charges higher monthly deductibles, typically about $1,000 for individuals, in exchange for cheaper monthly premiums and preventive services. The aim is to stem a rise in overall medical costs, which are climbing at twice the rate of general inflation.

“There is a concern about whether we are working our way toward a system where high deductibles are the norm and consumers don’t have a choice,” Gail Shearer, a health policy analyst at the advocacy group Consumers Union, said.

“If you are a person of low or moderate income, if the deductible is very high, there will be financial barriers to care.”

Late last year, another survey (Employee Benefits Research Institute and Commonwealth Fund) found that the plans encourage workers to scrimp on care and that people who were in the plans were more likely to cut back on basic care such as prescriptions or doctor visits.

http://today.reuters.com/news/articleinvesting.aspx?type=companyNews&storyid=26135+16-Mar-2007+RTRS

Comment:

By Don McCanne, MD

This report from the industry confirms that more employers are offering high-deductible health plans (HDHPs), and in some instances as the only option for the employee. Many employers are not including the other component of consumer-directed health plans (CDHPs) – health savings accounts (HSAs).

Other studies have confirmed that high-deductible plans create financial barriers to care which cause patients to reduce their use of basic, beneficial health care services and medications. Thus HDHPs have been a major contributor to the growing epidemic of underinsurance.

Perhaps the most important finding of this new study is that CDHPs alone do not correlate with a lower cost trend.

Decreased utilization of services without a decline in cost trends would seem to be an enigma, but it really isn’t. High-deductible plans have very little impact on our total health care spending because most high-cost care is given after the deductible has been met and is no longer a disincentive to care. On the other hand, high-deductible plans potentially do decrease office visits and prescription drug use for the majority of us who have not met our deductibles. Thus a great opportunity for preventive and early intervention health care is passed by for many, even though the cost of that care is so small that it does not shown up in cost trends in this study.

Since the underinsurance of CDHPs/HDHPs has failed to reduce health care cost trends that are twice the rate of inflation, then why are we expanding these programs that violate the fundamental rule of first do no harm?

When to Violate the Top Two Commandments of Antigovernment Crusaders

By ROBERT H. FRANK
New York Times
March 15, 2007
Economic Scene

When asked to identify the two most important items from their list of 10 public policy commandments, most antigovernment crusaders pick (1) public spending shall be kept to an absolute minimum and (2) the state shall not transfer income from rich to poor.

No government heeds these admonitions in any literal sense. Yet they have had a profound impact on public policy decisions, especially in the United States. Often, however, their impact has been the opposite of what antigovernment crusaders intended.

The problem is that many compellingly advantageous public policies cannot be enacted without violating the two commandments. Every significant policy change benefits some people and harms others. If the gains to winners substantially outweigh the costs to losers, solutions can always be found that allow everyone to come out ahead. But those solutions often involve higher taxes and income transfers to the poor.

Regulations that limit auto emissions are a case in point. Because these regulations increase car prices, legislators in most jurisdictions exempt older vehicles to avoid imposing unacceptable costs on the mostly low-income motorists who drive them. Yet the cost to society of this exemption far outweighs its benefit for the poor.

For example, although fewer than 10 percent of the vehicles in Los Angeles are more than 15 years old, these cars account for more than half the smog. Exempting the old cars thus necessitates much stricter regulations for new ones. But the cheapest ways of reducing emissions from new cars have long since been adopted. According to a RAND Corporation study, meeting air quality targets by further tightening new-car standards is several times as costly as meeting those targets by eliminating the exemption for older vehicles.

By raising taxes on high-income motorists, the government could finance vouchers that would enable low-income motorists to scrap their older vehicles in favor of cleaner used cars of more recent vintage. The required taxes would be much smaller than the resulting savings from not having to adopt such costly standards for new vehicles. Both rich and poor motorists would win.

The problem is that taking these steps would violate the two commandments. Antigovernment crusaders have prevailed for now. The ostensible champions of economic efficiency, they have kept government budgets smaller and blocked some transfers to low-income families. In the process, however, they have made everyone poorer.

Some believe that minimal government is synonymous with economic efficiency. But it is not. As the emissions example illustrates, economic efficiency sometimes requires that government play a larger role.

This example is part of a much broader pattern. In health care, for example, the private insurance system employed in the United States delivers worse outcomes at substantially higher cost than the single-payer system employed in virtually every other industrial country. But switching to the single-payer system would require higher taxes and increased benefits for low-income citizens, steps that would violate the two commandments. So for now, we remain saddled with a system that everyone agrees is dysfunctional.

In the realm of antipoverty policy, most economists agree that raising the earned-income tax credit would be the most efficient way of increasing the living standard of the working poor. Under this program, general tax revenues support income subsidies to those whose earnings fall below a given threshold. Its compelling advantage is that unlike a higher minimum wage, it does not discourage hiring. But raising taxes to increase the earned-income tax credit would violate the two commandments.

Because the most efficient antipoverty policy is deemed politically unfeasible, many economists support current legislative proposals to raise the minimum wage for the first time in a decade. If this legislation passes, antigovernment crusaders will be able to claim, truthfully, to have prevented an increase in the federal budget. But they will have won a hollow victory. For unlike an increase in the earned-income tax credit, an increase in the minimum wage not only limits job creation for the least- skilled workers, it also raises the prices of goods they produce. Over all, it would have been cheaper to raise the earned-income tax credit.

Antigovernment crusaders have also prevented the adoption of energy policies that would produce better outcomes for all. For example, economists of all political stripes have argued that a stiff tax on gasoline would relieve traffic congestion, reduce greenhouse gases, accelerate the development of energy-saving technologies and reduce dependence on foreign oil. But it would also impose significant economic hardship on low-income families, making it necessary to increase transfer payments to those families. Both the tax on gasoline and the transfers to low-income families would be clear violations of the two commandments. And so gasoline taxes continue to be far lower in the United States than in other industrial countries.

That democratic forces limit the economic hardship that government can impose on low-income families is a good thing. But sometimes imposing hardships on those families would create far larger gains for society as a whole. In such cases, we can always devise solutions that make everyone better off. But it is impossible to put these solutions into practice without violating the two commandments.

Is it better to solve a problem by spending two extra dollars in the private sector than by spending one additional dollar in the public sector? The two commandments insist, preposterously, that it is.

Economic efficiency is a worthy goal because when the economic pie grows larger, everyone can have a larger slice than before. Antigovernment crusaders deserve credit for emphasizing the importance of this goal. But as events of recent years have repeatedly demonstrated, they are often the biggest obstacles to its achievement.

Robert H. Frank, an economist at the Johnson School of Management at Cornell University, is the author of “The Economic Naturalist,” which will be published this spring. Contact: www.robert-h-frank.com.

Universal health care provides everyone access

By DOMENICK BUSCEMI
The Morning Call
March 15, 2007

”Rationing in the U.S. system is based on income: If you can afford care, you get it; if you can’t afford it you don’t.”

Local op-ed columnist John Brinson wrote last month about Gov. Ed Rendell’s ”Prescription for Pennsylvania” proposals and health care in general. I see things much differently.

He asserted that this country has the best health-care system in the world. But a 2000 study by the World Health Organization based on various indicators (including disability-adjusted life expectancy, child survival to 5 years of age, social disparities in care, experiences with health-care system and out-of-pocket health care expenditures) found the average ranking of the United States to be 15th out of 25 countries. In another study of 11 Western countries, the U.S. was ranked last with respect to its primary care base and its per capita health care expenditures (the highest).

He said that problems in health care today are due to government interference in the marketplace. I think the truth is quite the opposite. A single-payer system would dramatically reduce administrative costs. Under our current market-driven system, administrative costs, including all paperwork and billing, are about 24 percent of our health-care budget. Our Medicare system overhead, on the other hand, is less than 4 percent. More than half of our health dollars are already tax-supported (Medicare, Medicaid, government employees, military, tax breaks to providers, etc.), and any new taxes needed would be offset by decreased insurance premiums and out-of-pocket costs.

Brinson also said government mandates and price controls result in long waits and lower quality. Statistics prove him wrong. The reason we hear more about these stories in the other countries is because their health care systems are publicly accountable, while ours is not. So, problems are aired in public. In the United States, no one is ultimately accountable for how health care works. Rationing in the U.S. system is based on income: If you can afford care, you get it; if you can’t afford it you don’t. This is the reason many Americans die needlessly every year. No other industrialized nation rations health care to the degree that the United States does. Yet, a number of studies, notably by the General Accounting Office in 1991 and by the Congressional Budget Office in 1993, show that there is more than enough money in our health-care system to serve everyone, if it were spent wisely. One example is administrative costs, which are far higher in the United States than other countries.

His statistics on the uninsured don’t give the reasons why people eligible for Medicaid haven’t signed up. (Perhaps the regulations are too confusing.) He also doesn’t take into account that the cost of COBRA insurance ($800 to $1,200 a month) is prohibitive for many unemployed people. He mentions people who have no insurance for two years or less because they can’t afford it, or worse, are uninsurable, but he brushes over this injustice as if it were insignificant. I say these are reasons why we need universal coverage.

His solution is to give employees tax deductible money to buy insurance. Isn’t this, in effect, government-sponsored health care? Can you imagine the pressure and misinformation to which the average person would be subjected by competing health insurance agents? It also adds to the cost of overhead to pay for the brokers and insurance agents who sell the coverage. He doesn’t elaborate on the amount or kinds of insurance that would be purchased by a $200-a-month policy. His suggestion about people turning to charitable hospitals for care has little respect for a person’s dignity. Furthermore, his claim that it’s efficient to pass the cost of care for the uninsured on to people with insurance is absurd. This care is frequently provided by expensive emergency rooms, when a preventative care visit to a doctor’s office would be more efficient.

The obvious solution to the problem is to stop making a profit from the sickness and misery of human beings. Facts point to a single-payer, universal health care system where everyone pays his or her fair share and everyone receives equal access.

Domenick Buscemi of Lower Mount Bethel Township is the organizer for the Lehigh Valley Healthcare Reform Meetup Group (http://healthcare.meetup.com/26/ ) and is the former president of Teamster Local 773 in Allentown. His e-mail address is buscemi@ptd.net.

Schwarzenegger's Health Plan Unaffordable for California, Nurses Charge

Healthcare Costs Could Hit $12,320--or 25% of Income--on Premiums and Deductible Before Insurers Pay for Any Care

Total Out-of-Pocket Costs Could Exceed 36% of Household Income

California Nurses Association
Press Release
March 15, 2007

Gov. Arnold Schwarzenegger’s health plan could cost the typical California household from 25% to 36 percent of their family income, according to data released today by the California Nurses Association.

Schwarzenegger’s health proposal, based on a new Massachusetts law, would require all California residents to purchase health insurance. But with no controls on rising premiums — which have risen 87 percent this decade — most Californians are likely to opt for bare bones plans that carry a heavy price tag and limited benefits.

Under the Governor’s minimum plan, the typical California resident would likely be expected to pay $12,320 per year in medical expenses and premiums—before any medical care is paid for by their insurance company.

Schwarzenegger has proposed that the minimum, cheapest plans include a $5,000 deductible prior to an insurance payment. The deductible is on top of the insurance company’s premium charges, which are likely to cost up to $7,320 per household, the amount established in eastern Massachusetts for those required to buy health insurance.

For the typical California household, that means being forced to spend 25 percent of their income on medical costs—before any care is paid for by the insurance they are forced to buy (based on the median household income of $48,440 as of 2003 U.S. Census Bureau data).

The real costs could be far more. Schwarzenegger’s proposal further says that out-of-pocket costs could rise to $10,000 per household if more extensive care is needed — which would drive out of pocket costs up to 35 percent of the median family income. (Any hospital stay would expose a family to the $10,000 cost quickly; the average hospital charge per discharge in California is nearly $33,000.)

And since the Governor’s projected costs are for the least expensive coverage, it is likely that most families would have to spend extra for dental, vision, mental health, long-term care, and other care.

“Many families may end up having to make the terrible choice of assuming more medical debt which can lead to financial ruin, or foregoing needed care,” said CNA President Deborah Burger, RN. “Schwarzenegger’s healthcare plan could lead to financial ruin and bankruptcy, instead of nursing them back to health.”

Health care experts say health costs constitute a “financial burden” if they exceed 10 percent of a family’s post-tax income. In testimony to the House Ways and Means Committee in January, Diane Rowland, vice president of the Kaiser Family Foundation, noted that one in six adults who are privately insured “report having substantial problems paying their medical bills” and that two-thirds of the privately insured who have medical debt have family incomes of up to $75,000.

Additionally, a recent study by the American Academy of Pediatrics found that high-cost, high-deductible insurance plans are a hazard to patient health, because they provide parents and other patients with an incentive to skip or delay preventive care, immunizations, compliance with recommended treatment, and other needed care.

SB 840 Would Provide Affordable Care to Californians:

CNA has long advocated for a universal, single-payer healthcare plan as the only affordable and fair way to ensure that every patient receives a single standard of high-quality care. Governor Schwarzenegger vetoed just such a plan, Sen. Sheila Kuehl’s SB 840, last year.

Upon reintroducing her bill this year, Senator Kuehl remarked, “SB 840 works by pooling our health care resources so everyone — state and federal government, income earners and employers – contributes something and we all get coverage. This allows us to consolidate the administrative functions of thousands of different insurance companies and plans into one comprehensive insurance plan, saving businesses and consumers, as well as the state, billions of dollars in the first year alone.”

CNA is the principal sponsor of SB 840 and is engaging in an active campaign to ensure its passage, including direct mail to households, a radio ad, and a new web site, www.SinglePayer.com.

Representing 75,000 RNs from California to Maine, the California Nurses Association/National Nurses Organizing Committee is the fastest-growing association of direct-care RNs in the nation. Learn more at www.CalNurses.org

Schwarzenegger’s Health Plan Unaffordable for California, Nurses Charge

Healthcare Costs Could Hit $12,320–or 25% of Income–on Premiums and Deductible Before Insurers Pay for Any Care

Total Out-of-Pocket Costs Could Exceed 36% of Household Income

California Nurses Association
Press Release
March 15, 2007

Gov. Arnold Schwarzenegger’s health plan could cost the typical California household from 25% to 36 percent of their family income, according to data released today by the California Nurses Association.

Schwarzenegger’s health proposal, based on a new Massachusetts law, would require all California residents to purchase health insurance. But with no controls on rising premiums — which have risen 87 percent this decade — most Californians are likely to opt for bare bones plans that carry a heavy price tag and limited benefits.

Under the Governor’s minimum plan, the typical California resident would likely be expected to pay $12,320 per year in medical expenses and premiums—before any medical care is paid for by their insurance company.

Schwarzenegger has proposed that the minimum, cheapest plans include a $5,000 deductible prior to an insurance payment. The deductible is on top of the insurance company’s premium charges, which are likely to cost up to $7,320 per household, the amount established in eastern Massachusetts for those required to buy health insurance.

For the typical California household, that means being forced to spend 25 percent of their income on medical costs—before any care is paid for by the insurance they are forced to buy (based on the median household income of $48,440 as of 2003 U.S. Census Bureau data).

The real costs could be far more. Schwarzenegger’s proposal further says that out-of-pocket costs could rise to $10,000 per household if more extensive care is needed — which would drive out of pocket costs up to 35 percent of the median family income. (Any hospital stay would expose a family to the $10,000 cost quickly; the average hospital charge per discharge in California is nearly $33,000.)

And since the Governor’s projected costs are for the least expensive coverage, it is likely that most families would have to spend extra for dental, vision, mental health, long-term care, and other care.

“Many families may end up having to make the terrible choice of assuming more medical debt which can lead to financial ruin, or foregoing needed care,” said CNA President Deborah Burger, RN. “Schwarzenegger’s healthcare plan could lead to financial ruin and bankruptcy, instead of nursing them back to health.”

Health care experts say health costs constitute a “financial burden” if they exceed 10 percent of a family’s post-tax income. In testimony to the House Ways and Means Committee in January, Diane Rowland, vice president of the Kaiser Family Foundation, noted that one in six adults who are privately insured “report having substantial problems paying their medical bills” and that two-thirds of the privately insured who have medical debt have family incomes of up to $75,000.

Additionally, a recent study by the American Academy of Pediatrics found that high-cost, high-deductible insurance plans are a hazard to patient health, because they provide parents and other patients with an incentive to skip or delay preventive care, immunizations, compliance with recommended treatment, and other needed care.

SB 840 Would Provide Affordable Care to Californians:

CNA has long advocated for a universal, single-payer healthcare plan as the only affordable and fair way to ensure that every patient receives a single standard of high-quality care. Governor Schwarzenegger vetoed just such a plan, Sen. Sheila Kuehl’s SB 840, last year.

Upon reintroducing her bill this year, Senator Kuehl remarked, “SB 840 works by pooling our health care resources so everyone — state and federal government, income earners and employers – contributes something and we all get coverage. This allows us to consolidate the administrative functions of thousands of different insurance companies and plans into one comprehensive insurance plan, saving businesses and consumers, as well as the state, billions of dollars in the first year alone.”

CNA is the principal sponsor of SB 840 and is engaging in an active campaign to ensure its passage, including direct mail to households, a radio ad, and a new web site, www.SinglePayer.com.

Representing 75,000 RNs from California to Maine, the California Nurses Association/National Nurses Organizing Committee is the fastest-growing association of direct-care RNs in the nation. Learn more at www.CalNurses.org

Bush administration rejects citizens’ health care recommendations

President Rejects Health Care Proposal

By Kevin Freking, Associated Press
The Herald-Sun
March 14, 2007

The Bush administration on Wednesday rejected key recommendations from a citizens’ group (Citizens’ Health Care Working Group) asked by Congress to find out people’s health care wishes.

The group released its report Sept. 29 after hearing from about 6,500 people at 84 meetings.

The task force called for a guaranteed package of health benefits for everyone. It urged creation of an independent, nonpartisan group to select those benefits, such as an annual breast cancer exam or physical.

The group did not answer the hard question of how the government should pay for the benefits, but said people believe that there is enough money to make the changes. The group said the government should first transfer money from other programs to pay for the benefits.

(Health and Human Services Secretary Michael) Leavitt said the administration agrees it is important to make health care more affordable and expand insurance coverage. But he disagreed with the concept of a national commission to define coverage.

“A nationally determined set of core health benefits would place important decision-making about a person’s health care in the control of federal appointees, rather than allowing the consumer to choose the benefits that best meet their needs,” Leavitt said.

The group “chose an approach based on mandates and government intervention rather than an approach emphasizing consumer choice and options,” Leavitt said.

http://www.heraldsun.com/nationworld/14-829396.cfm

Comment:

By Don McCanne, MD

Quoting from the final report of the Working Group: “The overriding message was consistent across every venue we explored: Americans should have a health care system where everyone participates, regardless of their financial resources or health status, with benefits that are sufficiently comprehensive to ensure access to appropriate, high-quality care without endangering individual or family financial security.”

The Working Group recommended defining the core benefits and services that will be assured to all Americans: “To define core benefits and services for all Americans, the best methods must be applied in a transparent process. Consumer participation is critical to ensuring public trust in the process and essential for ensuring that personal values and preferences are taken into consideration in coverage decisions. The group making decisions should be established as a public/private entity to insulate it from both political and financial influence. The group should be an ongoing entity with stable funding, to guarantee its independence and to assure that the benefits continue to reflect advances in medical research and practice. Evidence used to make decisions about coverage can contribute to improvements in the overall efficiency of health care delivery and help patients and providers make informed decisions. Identifying core benefits can help make all health care more effective and efficient, helping to control health care costs overall.”

Defining core benefits is controversial. What beneficial services would you omit? Presumably the purpose would be to control the costs of the insurance product, whether a private plan or public program. There are far better mechanisms for controlling spending, for instance those embodied in the single payer model, that would not necessitate the exclusion of any reasonable beneficial health care services.

The Bush administration is correct to object to a federal process that incidentally might lead to the exclusion of beneficial health services for those with needs. But where they are clearly wrong is that they used this technicality as an excuse to walk away from the overriding message in this report: appropriate, high-quality care for everyone without endangering individual or family financial security.

That goal cannot be accomplished without government playing some role. We are now at a point that the political process is primed to define precisely what that role should be. Those politicians who would walk away from this process should. We need real leaders who want to bring an end to the suffering and death caused by our dysfunctional system.

Bush administration rejects citizens' health care recommendations

President Rejects Health Care Proposal

By Kevin Freking, Associated Press
The Herald-Sun
March 14, 2007

The Bush administration on Wednesday rejected key recommendations from a citizens’ group (Citizens’ Health Care Working Group) asked by Congress to find out people’s health care wishes.

The group released its report Sept. 29 after hearing from about 6,500 people at 84 meetings.

The task force called for a guaranteed package of health benefits for everyone. It urged creation of an independent, nonpartisan group to select those benefits, such as an annual breast cancer exam or physical.

The group did not answer the hard question of how the government should pay for the benefits, but said people believe that there is enough money to make the changes. The group said the government should first transfer money from other programs to pay for the benefits.

(Health and Human Services Secretary Michael) Leavitt said the administration agrees it is important to make health care more affordable and expand insurance coverage. But he disagreed with the concept of a national commission to define coverage.

“A nationally determined set of core health benefits would place important decision-making about a person’s health care in the control of federal appointees, rather than allowing the consumer to choose the benefits that best meet their needs,” Leavitt said.

The group “chose an approach based on mandates and government intervention rather than an approach emphasizing consumer choice and options,” Leavitt said.

http://www.heraldsun.com/nationworld/14-829396.cfm

Comment:

By Don McCanne, MD

Quoting from the final report of the Working Group: “The overriding message was consistent across every venue we explored: Americans should have a health care system where everyone participates, regardless of their financial resources or health status, with benefits that are sufficiently comprehensive to ensure access to appropriate, high-quality care without endangering individual or family financial security.”

The Working Group recommended defining the core benefits and services that will be assured to all Americans: “To define core benefits and services for all Americans, the best methods must be applied in a transparent process. Consumer participation is critical to ensuring public trust in the process and essential for ensuring that personal values and preferences are taken into consideration in coverage decisions. The group making decisions should be established as a public/private entity to insulate it from both political and financial influence. The group should be an ongoing entity with stable funding, to guarantee its independence and to assure that the benefits continue to reflect advances in medical research and practice. Evidence used to make decisions about coverage can contribute to improvements in the overall efficiency of health care delivery and help patients and providers make informed decisions. Identifying core benefits can help make all health care more effective and efficient, helping to control health care costs overall.”

Defining core benefits is controversial. What beneficial services would you omit? Presumably the purpose would be to control the costs of the insurance product, whether a private plan or public program. There are far better mechanisms for controlling spending, for instance those embodied in the single payer model, that would not necessitate the exclusion of any reasonable beneficial health care services.

The Bush administration is correct to object to a federal process that incidentally might lead to the exclusion of beneficial health services for those with needs. But where they are clearly wrong is that they used this technicality as an excuse to walk away from the overriding message in this report: appropriate, high-quality care for everyone without endangering individual or family financial security.

That goal cannot be accomplished without government playing some role. We are now at a point that the political process is primed to define precisely what that role should be. Those politicians who would walk away from this process should. We need real leaders who want to bring an end to the suffering and death caused by our dysfunctional system.

What we need: single payer, a single plan

When it comes to genuine reform of the health care system, a band-aid solution won't do.

Lisa Nilles
Star Tribune
Opinion
March 15, 2007

The universal health insurance plan introduced last week by Healthy Minnesota (a coalition of providers, legislators and insurers) is nothing more than a band-aid on a system in need of a much bigger fix.

It promises universal access to health care by requiring all Minnesotans to “own” health insurance (called individual mandate). On the surface, it may look good, momentarily, to claim that Minnesota has a universal health care plan, but without underlying repair of our overly complex and outrageously expensive health care system, the satisfaction won’t last long.

Healthy Minnesota’s proposal is similar to the universal-health-care-by-individual-mandate plan passed in Massachusetts last year. This is somewhat surprising, since the Massachusetts plan is already failing in its promise to make “affordable” health insurance available to all.

We need repair of the broken system to achieve universal health care. It’s that simple, and it’s that hard. Band-aid solutions are “politically possible.” Genuine reform, which replaces our fragmented, failed system of multiple private insurers with a single payer and one single plan for all, is considered “politically impossible.” But it is what we need to do.

It is not un-American to suggest that we work together to solve the health care crisis. It is a huge social and economic problem that affects each and every one of us. Eighty-six percent of Minnesota physicians believe “it is the responsibility of society, through the government, to ensure that everyone has access to good medical care.” We can’t expect the private market to solve this problem: Entrusting it to manage health care just fractures the system and drives up cost. We need to work together on this one, and the only institution that represents all of us is government.

We don’t want to waste any more time or money on band-aid solutions. We are ready for real reform: single-payer with universal coverage.

Lisa Nilles, M.D., of Minneapolis, is a graduate student in theology and a member of Physicians for a National Health Program.

Underinsurance is bad for your heart

Financial Barriers to Health Care and Outcomes After Acute Myocardial Infarction

Ali R. Rahimi, MD, MPH; John A. Spertus, MD, MPH; Kimberly J. Reid, MS; Susannah M. Bernheim, MD, MHS; Harlan M. Krumholz, MD, SM
JAMA
March 14, 2007

Objective: To measure the baseline prevalence of self-reported financial barriers to health care services or medication (as defined by avoidance due to cost) among individuals following AMI (acute myocardial infarction) and their association with subsequent health care outcomes.

Results: The prevalence of self-reported financial barriers to health care services or medication was 18.1% and 12.9%, respectively. Among individuals who reported financial barriers to health care services or medication, 68.9% and 68.5%, respectively, were insured. At 1-year follow-up, individuals with financial barriers to health care services were more likely to have lower SAQ (Seattle Angina Questionnaire) quality-of-life score (77.9 vs 86.2), and increased rates of all-cause rehospitalization (49.3% vs 38.1%) and cardiac rehospitalization (25.7% vs 17.7%). At 1-year follow-up, individuals with financial barriers to medication were more likely to have angina (34.9% vs 17.9%), lower SAQ quality-of-life score (74.0 vs 86.1), and increased rates of all-cause rehospitalization (57.0% vs 37.8%) and cardiac rehospitalization (33.7% vs 17.3%).

Conclusion: Financial barriers to health care services and medications are associated with worse recovery after AMI, manifested as more angina, poorer quality of life, and higher risk of rehospitalization.

http://jama.ama-assn.org/cgi/content/abstract/297/10/1063

Comment:

By Don McCanne

Many in the policy community insist that we must build on our existing system of private health plans and public programs. They do not perceive the elimination of private plans and substitution of a single public program to be a politically viable option.

The problem with these multi-payer models is that the private insurance industry has been unable to offer products with affordable premiums that are effective in eliminating financial barriers to beneficial health care services. Since the reform proposals require affordable premiums, the insurance industry has responded with products that deliberately erect greater financial barriers for the purpose of reducing health care utilization.

Do these barriers make a difference? Emphatically, yes. As an example, this study confirms that victims of heart attacks have worse outcomes when they have financial barriers to followup care and medications.

The policy community should be particularly concerned about the fact that two-thirds of the individuals with financial barriers and impaired outcomes were insured! At a time when efforts should be made to remove financial barriers that impair outcomes, the policy community is supporting measures that will increase those barriers.

Private plans that would remove financial barriers to beneficial services cannot serve as the vehicle for coverage for average-income individuals. The reason is that the health care that they must fund through a guaranteed-issue program and the administrative excesses that they require are so great that the premiums they must charge could never be affordable. Since the private plans are no longer able to function as equitable insurance risk pools, why would we want to design reform that merely perpetuates their administrative excesses?

There is another very important policy lesson from this study. Of those reporting financial barriers to health services and medications, 47.6 percent had Medicare coverage and 42.4 percent were on Medicaid. We can only speculate that Medicare patients had inadequate access to affordable drugs and that Medicaid patients had inadequate access because of a lack of willing providers. Regardless, it is important that reform efforts be directed toward taking down these financial barriers that prevent patients from getting the care they need.

For the “but we can’t afford it” crowd, there are many other mechanisms in the single payer model that would reduce waste to a level that would allow us to provide comprehensive care for everyone without spending more than we already do.

'Single-Payer' Idea Stays Afloat

Legislative Committee Clears Two Differing Approaches To Health Care Reform

By DIANE LEVICK
Hartford Courant Staff Writer
March 14 2007

A bill to create a single health insurer in Connecticut – an anathema to the industry – won half-hearted approval Tuesday from a legislative panel, which also passed a reform bill the industry favors.

The Insurance and Real Estate Committee, in a 12-7 vote, approved a bill aimed at creating a “single-payer” system to ensure coverage for all Connecticut residents not on Medicare.

Several Democrats on the committee, including committee Co-chairman Brian J. O’Connor, said they were voting for the Connecticut Saves Health Care bill simply to keep reform debate going despite misgivings about potential job loss in the insurance industry.

State Rep. Christopher R. Stone, D-East Hartford, who voted yes Tuesday, said he wouldn’t support the bill on the House floor.

The bill’s proponents, though, scored the vote a victory because it showed a major shift in the climate for universal health care and keeps the single-payer idea afloat.

The Connecticut Saves Health Care program would replace the current system of employer-based and individually purchased policies, taking away much of the role of private health insurers. However, they wouldn’t be prevented from selling supplemental coverage.

The insurance committee is known for preserving the role of insurance companies in health care, but “what they’ve said today with their vote is the system is broken and we need to change it,” said Phil Sherwood, legislative director of the Connecticut Citizen Action Group. “I think that rang loud and clear.”

Legislators of both parties, however, voiced worries about insurance industry jobs in Connecticut, should there be a switch to a single-payer system.

State Sen. Louis C. Deluca, R-Woodbury, the committee’s ranking member, said Iowa has become as big or bigger a mecca for insurers than Connecticut because of legislators’ actions here over the years.

“We continually give them reasons not to be here,” he said. “I believe this would be another one.”

Keith Stover, a lobbyist for the Connecticut Association of Health Plans, warned that “If Connecticut wants to maintain its pre-eminence as an insurance state, I would think that passage of single-payer would be about the worst possible message you could send to the industry.

“It’s a lot of families that are supported by the insurance industry, a lot of mouths are fed, a lot of children put through college, and the idea that people are willing to just chuck that is extremely disturbing.”

But state Rep. John C. Geragosian, D-New Britain, praised the single-payer concept, saying, “Insurance companies don’t add any value in this [current] system” and that “it’s time to take some bold action” to solve the health care crisis.

Stover blanched at that, saying after the meeting that “essentially every innovation in health insurance, from chronic disease management to consumer-driven health plans, etc., all come from the minds here in Hartford, in Connecticut.”

Tuesday’s vote was a “victorious first step toward comprehensive change,” said Juan A. Figueroa, president of the Universal Health Care Foundation of Connecticut, which had pushed the single-payer bill.

The vote, he said, “acknowledges that incremental steps are not the way to fix our state’s broken health care system.”

The vote for a single-payer system also drew praise from Council 4 of the American Federation of State, County and Municipal Employees, the largest AFL-CIO union in the state, and from Citizens for Economic Opportunity, a labor-community coalition.

But a single-payer system is “potentially unsustainable” from a funding standpoint, said Eric George, associate counsel at the Connecticut Business and Industry Association, which has “grave concerns” about the idea.

The state already under-funds Medicaid payments to hospitals, driving hospitals to make up a part of the shortfall through reimbursements from private insurers, George said. In a single-payer system, health care providers wouldn’t have private insurers to fall back on, he said.

The insurance committee removed funding provisions from the bill because there was no consensus, measures that would have levied a 50 percent surcharge on the state income tax and an 8 percent payroll tax on employers of a certain size. The bill now goes to the Senate.

The committee also passed a revised version of the Healthy Steps bill, which Stover said “provides the most rational framework for ongoing discussion” and relies on a market-based system.

The bill, which now heads to the House, would create a new Health Care Reform Commission to develop a more affordable health plan for small employers of 50 or fewer employees.

The state would contract with a private nonprofit organization that would serve as an insurance purchasing pool for previously uninsured individuals and small employers to buy coverage.

The Connecticut Connector program would offer three kinds of health plans, including a high-deductible plan linked with a health savings account.

Legislators removed from the bill a proposed 3 percent tax on revenue of health care providers in Connecticut that would have helped to fund some of the provisions. Doctors protested the tax at a committee hearing last week.

The bill would provide tax credits at varying levels to small employers that provide health insurance that meets or exceeds the standards set for the affordable plan to be developed.

The measure also calls for expansion of the state’s Husky insurance program, and increased reimbursement to doctors, dentists and hospitals from insurers serving Medicaid members.

Contact Diane Levick at dlevick@courant.com.

Copyright 2007, Hartford Courant