PNHP

Reform lesson from Massachusetts

Reform lesson from Massachusetts

Sticker shock for state care plan

By Alice Dembner
The Boston Globe
January 20, 2007

A state panel yesterday outlined for the first time the minimum requirements for coverage under the state’s new health insurance law, a package estimated to cost $380 a month on average for an individual.

Panel members struggled yesterday to balance affordability with protection from catastrophic medical bills and remained divided on many issues.

“If we’re going to mandate this, people need to see that they’re getting some value,” said panel member Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology. But, he added, the premium is “bad news.”

“I’m trying to think of something to get this number down,” he said.

The minimum plan would limit annual out-of-pocket expenses to $5,000 for an individual and $7,500 for a family and include prescription drug coverage, according to the proposal by a subcommittee of the Commonwealth Health Insurance Connector board, which is implementing the new law.

As proposed, deductibles would run no higher than $2,000 per individual and $4,000 per family.

Advocates for the uninsured were stunned at the price, considerably higher than the $200 estimated by Mitt Romney when he was governor and first proposed universal coverage. A spokesman for insurers said the requirements were too prescriptive and could undermine the goal of universal coverage.

“For a large proportion of the folks not eligible for subsidized care, the bare minimum plan is flat-out unaffordable, not only because of the premiums, but the deductibles and out-of-pocket expenses,” said John McDonough, executive director of Health Care for All, an advocacy group that supports the health law. “This is a significant disappointment. We think the Connector and particularly the insurers need to go back to the drawing board.”

Eric Linzer, vice president of the Massachusetts Association of Health Plans, said the Connector committee’s recommendations were boxing insurers into a corner.

“There’s really a limited number of ways you can make premiums affordable,” he said. “If the minimum credible coverage is too high and coverage is unaffordable, it runs the risk of not achieving universal coverage.”

http://www.boston.com/news/local/massachusetts/articles/2007/01/20/sticker_shock_for_state_care_plan/?page=full

Comment:

By Don McCanne, MD

It is astonishing that former Gov. Romney and the Massachusetts legislature are basking in the glory of having enacted a universal health program for the state, considering the process that is taking place.

They decided to establish a requirement that each person purchase a private health plan (individual mandate). That would work only if the plans were affordable. It was also decided that the plans must meet a reasonable standard of coverage. So what did they do? They declared that the plans would have to meet a reasonable standard of coverage and that they would have to have low, affordable premiums.

It was not as if this fundamental flaw in their proposal was simply overlooked. Many activists pointed out that you can have insurance premiums that are affordable, or you can have coverage that makes health care affordable, but you can’t have both. Health care simply costs too much. To be effective, the fragmented private insurance pools must have adequate funds to pay reasonable health care costs. That means that the private insurance funds must charge high premiums to fund them. Simply declaring otherwise is legislative malfeasance.

There is another option that would work. Abolish the fragmented risk pools and establish a single, universal pool to fund comprehensive health care. Automatically include everyone in that pool. Then, instead of attempting to tailor premiums to fit each individual, use equitable tax policies to fund the pool. That way, the contribution asked of each individual is affordable, and health care access is also affordable. And isn’t it affordability that everyone is trying to achieve?

Nurses, Doctors, Patients Respond to Bush Health Proposals, Unite In Call for Real Universal Healthcare

Legislators Introduce Key Single-Payer Health Bill

California Nurses Association
National Nurses Organizing Committee
Physicians for a National Health Program

Washington Press Conference Wednesday

Physicians, registered nurses and patients will join together in a Washington press conference Wednesday to respond to President Bushs State of the Union healthcare proposals and to promote legislation for the only healthcare reform that would assure universal coverage, control cost, and end insurance industry interference with care.

WHO: Oliver Fein, MD (PNHP); Deborah Burgher, RN (CNA/NNOC); Reps. John Conyers and Dennis Kucinich, and Patients.

WHERE: National Press Club, Zenger Room, 529 14th St. NW, Washington

WHEN: Wednesday, January 24

TIME: 1 p.m.

In addition to commenting on the President’s healthcare initiatives, the physicians and nurses will describe a stepped up campaign on behalf of HR 676, the United States National Health Insurance Act.

HR 676, introduced by U.S. Reps. John Conyers and Dennis Kucinich with 78 co-sponsors, is being re-introduced in the new Congress. HR 676 is also supported by 225 labor organizations across the nation. Reps. Conyers and Kucinich will be at the conference to talk about future Congressional efforts.

“There are only two real choices in the present healthcare debate, those commercially-based models which reinforce the insurance industry and fail to provide genuine universal and comprehensive care, and HR 676, a patient-based model which caregivers know is the most effective, humane approach,” said Deborah Burger, RN, president of the 75,000-member California Nurses Association/National Nurses Organizing Committee.

“Solutions to the health care crisis based on increasing our reliance on private health insurance companies are bound to fail,” said Dr. Oliver Fein, director of the 14,000-member Physicians for a National Health Program. Insurance companies limit patients’ choice of doctor and hospital, and take money out of patient care and put it into marketing, bill collectors and claims deniers. This situation is morally repugnant. We need a National Health Insurance program. We need HR 676.”

PNHP and CNA/NNOC are co-sponsoring the event.

Contacts:
CNA/NNOC: Charles Idelson, 510-273-2246, 415-559-8991 (cell)
PNHP: Nick Skala, 312-782-6006, 773-220-9268 (cell)

Krugman's response to Bush plan

Gold-Plated Indifference

By PAUL KRUGMAN
New York Times
January 22, 2007

President Bush’s Saturday radio address was devoted to health care, and officials have put out the word that the subject will be a major theme in tomorrow’s State of the Union address. Mr. Bush’s proposal won’t go anywhere. But it’s still worth looking at his remarks, because of what they say about him and his advisers.

On the radio, Mr. Bush suggested that we should “treat health insurance more like home ownership.” He went on to say that “the current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes. We can reform the tax code, so that it provides a similar incentive for you to buy health insurance.”

Wow. Those are the words of someone with no sense of what it’s like to be uninsured.

Going without health insurance isn’t like deciding to rent an apartment instead of buying a house. It’s a terrifying experience, which most people endure only if they have no alternative. The uninsured don’t need an “incentive” to buy insurance; they need something that makes getting insurance possible.

Most people without health insurance have low incomes, and just can’t afford the premiums. And making premiums tax-deductible is almost worthless to workers whose income puts them in a low tax bracket.

Of those uninsured who aren’t low-income, many can’t get coverage because of pre-existing conditions — everything from diabetes to a long-ago case of jock itch. Again, tax deductions won’t solve their problem.

The only people the Bush plan might move out of the ranks of the uninsured are the people we’re least concerned about — affluent, healthy Americans who choose voluntarily not to be insured. At most, the Bush plan might induce some of those people to buy insurance, while in the process — whaddya know — giving many other high-income individuals yet another tax break.

While proposing this high-end tax break, Mr. Bush is also proposing a tax increase — not on the wealthy, but on workers who, he thinks, have too much health insurance. The tax code, he said, “unwisely encourages workers to choose overly expensive, gold-plated plans. The result is that insurance premiums rise, and many Americans cannot afford the coverage they need.”

Again, wow. No economic analysis I’m aware of says that when Peter chooses a good health plan, he raises Paul’s premiums. And look at the condescension. Will all those who think they have “gold plated” health coverage please raise their hands?

According to press reports, the actual plan is to penalize workers with relatively generous insurance coverage. Just to be clear, we’re not talking about the wealthy; we’re talking about ordinary workers who have managed to negotiate better-than-average health plans.

What’s driving all this is the theory, popular in conservative circles but utterly at odds with the evidence, that the big problem with U.S. health care is that people have too much insurance — that there would be large cost savings if people were forced to pay more of their medical expenses out of pocket.

The administration also believes, for some reason, that people should be pushed out of employment-based health insurance — admittedly a deeply flawed system — into the individual insurance market, which is a disaster on all fronts. Insurance companies try to avoid selling policies to people who are likely to use them, so a large fraction of premiums in the individual market goes not to paying medical bills but to bureaucracies dedicated to weeding out “high risk” applicants — and keeping them uninsured.

I’m somewhat skeptical about health care plans, like that proposed by Gov. Arnold Schwarzenegger, that propose covering gaps in the health insurance market with a series of patches, such as requiring that insurers offer policies to everyone at the same rate. But at least the authors of these plans are trying to help those most in need, and recognize that the market needs fixing.

Mr. Bush, on the other hand, is still peddling the fantasy that the free market, with a little help from tax cuts, solves all problems.

What’s really striking about Mr. Bush’s remarks, however, is the tone. The stuff about providing “incentives” to buy insurance, the sneering description of good coverage as “gold plated,” is right-wing think-tank jargon. In the past Mr. Bush’s speechwriters might have found less offensive language; now, they’re not even trying to hide his fundamental indifference to the plight of less-fortunate Americans.

State workers union backs single-payer health legislation

By Workday staff
Workday Minnesota
22 January 2007

SHOREVIEW – The Minnesota Association of Professional Employees, representing more than 11,000 professional state government employees, has endorsed a national single-payer health-care system.

The MAPE Board of Directors on Friday endorsed HR 676 (the United States National Health Insurance Act), which is sponsored by Congressman John Conyers, D-Mich. HR 676 would institute a single-payer health-care system in the United States by expanding a greatly improved Medicare system to every resident.

“Affordable health care should be made available to all residents of this country,” said MAPE Executive Director Jim Monroe. “Single-payer health care is an economical way to address the health-care crisis in this country.”

Monroe added, “All Americans should be able to get the preventive care that they need to help prevent catastrophic illnesses when they are easier and less expensive to treat. Furthermore, if they do get ill, all Americans should be able to concentrate on getting well instead of worrying about how they will pay for the urgent care that they need.”

In backing HR 676, MAPE joined the Minnesota AFL-CIO which also endorsed the legislation at its last Executive Council meeting.

“The General Board of the Minnesota AFL-CIO supports HR 676 because we believe it is the best, most efficient and cost effective way to ensure that everyone has access to affordable, quality health care,” said Secretary-Treasurer Steve Hunter.

The Minnesota AFL-CIO is the 17th state labor federation to endorse the proposal. More than 200 individual unions and central labor councils also have voiced their support.

HR 676 would cover every person in the United States for all necessary medical care including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental, mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care, chiropractic and long term care. It would end deductibles and co-payments. Proponents say HR 676 would save billions annually by eliminating the high overhead and profits of the private health insurance industry and HMOs. Clinics, hospitals and other health care providers would continue to be privately operated, but would be reimbursed for services through one government system.

Physicians and Nurses Decry Bush Health Plan, Reject Reform Based on Private Insurance

Unite in Call for National Health Insurance – “Medicare for All”

New Congress to Introduce Plan and Hold Hearings

Embargoed Until:
January 23, 2007 (12:00 a.m. EST)

Contacts:
Oliver Fein, MD 917-859-5140 (cell)
Nick Skala 312-782-6006
Charles Idelson(CNA) 415-559-8991 (cell)
Kay Tillow 502-636-1551

Washington, DC – The 75,000-member California Nurses Association and the 14,000-member Physicians for a National Health Program will announce their opposition to President Bush’s feeble health reform proposal at the National Press Club on Wednesday, January 24 at 1:00 p.m. The groups will call on Congress to pass single-payer legislation that will provide real coverage to all Americans.

“There are only two real choices in the present healthcare debate, plans that continue to push the defective products of the private insurance industry, and the one plan that would expand Medicare to all Americans (HR 676) . Caregivers know that this patient-based model is the most effective and humane approach,” said Deborah Burger, RN, president of the California Nurses/National Nurses Organizing Committee.

“Bush’s reform plan – fiddling with the tax system and peddling skimpy private health plans – will fail miserably. Like other plans that rely on private insurers – e.g. the Massachusetts reform and the Schwarzenegger, AHIP, and Wyden proposals – it would leave millions without coverage and continue to squander $300 billion annually on private insurance marketing, bill collectors, and other useless bureaucratic activities.” said Dr. Oliver Fein, Professor of Medicine at Cornell University and Director of Physicians for a National Health Program. “Moreover, none of these plans would upgrade coverage for the tens of millions who are currently under-insured. Three-quarters of Americans bankrupted by medical bills last year had health insurance. Only national health insurance can cover all the 47 million uninsured and improve coverage for all other Americans at an affordable cost.”

“Private health insurers succeed by bankrupting and impoverishing families like mine,” said Nathan Wilkes, a computer network engineer whose three year old son, Thomas, has hemophilia. “My employers’ premiums have skyrocketed since Thomas was born. The only private coverage available to our company today has a million dollar cap, which Thomas will exceed in a few months. The only health proposal that doesn’t bankrupt families unfortunate enough to face serious illness is single payer national health insurance.”

National health insurance has been adopted by every other industrialized country in the world.

“America’s industrialized competitors all have national health care systems that cover everyone and are more efficient than our broken, fragmented system,” said Kay Tillow of the Kentucky Nurses Professional Organization. Over 225 unions have endorsed a national health insurance program for the US (HR 676), including 17 state AFL-CIO’s. “Labor support is growing rapidly. Premiums have been skyrocketing and the employer-based system is collapsing. Single payer is the only plan that will cover everyone and effectively control costs.”

Rep. Conyers and Rep. Kucinich will introduce “The National Health Insurance Act: Medicare for All (HR 676)” into the new Congress this week. The bill garnered nearly 80 co-sponsors in the last Congress, more than any other reform proposal, and at least three of the newest members of Congress made support for single payer national health insurance a key issue in their campaigns.

“Private health insurers are obligated only to their shareholders. But nurses and doctors have an obligation to our patients – both the patients we have today and the ones we will have tomorrow. We know that only guaranteed, lifelong, coverage for every American under a national health program can heal our wounded health system and restore compassion and humanity to medicine,” said Dr. Fein. “We call on our colleagues from medicine, nursing, public health, and other branches of medicine to join us in our insistence that health care is a public service, not a business.”

####

Physicians for a National Health Program (www.pnhp.org) is an organization of 14,000 physicians that support single payer national health insurance. PNHP is headquartered in Chicago and has physician-spokespeople across the US. For contacts in your area, call 312-782-6006 or write nick@pnhp.org

The California Nurses Association/National Nurses Organizing Committee (www.calnurses.org) is the fastest- growing professional RN organization in the nation representing over 75,000 direct-care registered nurses in 170 facilities.

Krugman’s response to Bush plan

Gold-Plated Indifference

By PAUL KRUGMAN
New York Times
January 22, 2007

President Bush’s Saturday radio address was devoted to health care, and officials have put out the word that the subject will be a major theme in tomorrow’s State of the Union address. Mr. Bush’s proposal won’t go anywhere. But it’s still worth looking at his remarks, because of what they say about him and his advisers.

On the radio, Mr. Bush suggested that we should “treat health insurance more like home ownership.” He went on to say that “the current tax code encourages home ownership by allowing you to deduct the interest on your mortgage from your taxes. We can reform the tax code, so that it provides a similar incentive for you to buy health insurance.”

Wow. Those are the words of someone with no sense of what it’s like to be uninsured.

Going without health insurance isn’t like deciding to rent an apartment instead of buying a house. It’s a terrifying experience, which most people endure only if they have no alternative. The uninsured don’t need an “incentive” to buy insurance; they need something that makes getting insurance possible.

Most people without health insurance have low incomes, and just can’t afford the premiums. And making premiums tax-deductible is almost worthless to workers whose income puts them in a low tax bracket.

Of those uninsured who aren’t low-income, many can’t get coverage because of pre-existing conditions — everything from diabetes to a long-ago case of jock itch. Again, tax deductions won’t solve their problem.

The only people the Bush plan might move out of the ranks of the uninsured are the people we’re least concerned about — affluent, healthy Americans who choose voluntarily not to be insured. At most, the Bush plan might induce some of those people to buy insurance, while in the process — whaddya know — giving many other high-income individuals yet another tax break.

While proposing this high-end tax break, Mr. Bush is also proposing a tax increase — not on the wealthy, but on workers who, he thinks, have too much health insurance. The tax code, he said, “unwisely encourages workers to choose overly expensive, gold-plated plans. The result is that insurance premiums rise, and many Americans cannot afford the coverage they need.”

Again, wow. No economic analysis I’m aware of says that when Peter chooses a good health plan, he raises Paul’s premiums. And look at the condescension. Will all those who think they have “gold plated” health coverage please raise their hands?

According to press reports, the actual plan is to penalize workers with relatively generous insurance coverage. Just to be clear, we’re not talking about the wealthy; we’re talking about ordinary workers who have managed to negotiate better-than-average health plans.

What’s driving all this is the theory, popular in conservative circles but utterly at odds with the evidence, that the big problem with U.S. health care is that people have too much insurance — that there would be large cost savings if people were forced to pay more of their medical expenses out of pocket.

The administration also believes, for some reason, that people should be pushed out of employment-based health insurance — admittedly a deeply flawed system — into the individual insurance market, which is a disaster on all fronts. Insurance companies try to avoid selling policies to people who are likely to use them, so a large fraction of premiums in the individual market goes not to paying medical bills but to bureaucracies dedicated to weeding out “high risk” applicants — and keeping them uninsured.

I’m somewhat skeptical about health care plans, like that proposed by Gov. Arnold Schwarzenegger, that propose covering gaps in the health insurance market with a series of patches, such as requiring that insurers offer policies to everyone at the same rate. But at least the authors of these plans are trying to help those most in need, and recognize that the market needs fixing.

Mr. Bush, on the other hand, is still peddling the fantasy that the free market, with a little help from tax cuts, solves all problems.

What’s really striking about Mr. Bush’s remarks, however, is the tone. The stuff about providing “incentives” to buy insurance, the sneering description of good coverage as “gold plated,” is right-wing think-tank jargon. In the past Mr. Bush’s speechwriters might have found less offensive language; now, they’re not even trying to hide his fundamental indifference to the plight of less-fortunate Americans.

The president's new reform proposal

Bush Seeks Shift in Health Coverage

He Would Tax Those With Higher-Priced Plans, Give Breaks for Buying Cheaper Ones

By Michael A. Fletcher
The Washington Post
January 21, 2007

President Bush will propose a deep tax break for Americans who purchase their own medical insurance and would finance it with an unprecedented tax on a portion of high-priced health-care plans that workers receive from their employers, according to the White House.

Under the president’s proposal, workers who receive employer-provided health insurance would have to pay a tax on the cost of their benefit above $15,000, the threshold proposed by Bush for the tax break.

People with families who buy low-cost policies, meanwhile, would have their taxable income reduced by $15,000, regardless of the cost of the plans and whether they itemize deductions on their tax returns. The deduction would be $7,500 for single individuals. The deduction, to be indexed to account for inflation, would also be extended to those with employer-provided plans, to be offset by the cost of their coverage.

The Bush administration estimates that 80 percent of people with employer-provided plans would see their tax liability fall because the deduction would be larger than the value of their insurance plans.

http://www.washingtonpost.com/wp-dyn/content/article/2007/01/20/AR2007012000468.html

Comment:

By Don McCanne, MD

By giving every family with health insurance a $15,000 deduction from their taxable income, the president provides incentives to buy less expensive plans, since the tax benefit is the same for the cheapest plan and every other plan up to a value of $15,000.

Why would the president want to provide tax incentives to encourage individuals to buy cheaper health plans? He claims that insurance causes patients to over-utilize health care, and that health care costs will not be controlled until we end this waste. The fact is that the savings achieved by having the healthy decline services of marginal value is only a minuscule portion of our total health care budget. Most health care is provided to sick or injured individuals who need the care. The cheaper plans that the president is encouraging will increase out-of-pocket costs, often making actual health care unaffordable for precisely those who really do need it.

A further potential impact is that employers who would like to terminate their health benefit programs would have less incentive to continue to provide coverage since the employee now would become eligible for the $15,000 deduction. This further advances the president’s goal of shifting responsibility to the individual through an expansion of the ownership society – wherein you own the right to pay for your medical care.

His proposal also is a regressive method of funding health care. Since every insured individual receives the same deduction, higher-income individuals receive a greater government subsidy because of our graduated tax schedule. Worse, for individuals with modest incomes, the tax subsidy is not enough to make insurance affordable, and they will continue to do without.

At a time when everyone agrees that major reform is essential, the president comes up with this proposal. Doesn’t he care about us?

Letters: Rethinking health care options

Flies in Register's ointment

Saturday, January 6, 2007
Orange County Register

The Register’s editorial, “A healthy dose of free-market forces”[Jan. 2], makes a case for controlling health care spending by reducing government insurance programs and encouraging lower-cost private coverage options that shift more of the spending responsibility to the individual. Such changes theoretically would reduce the “perverse
incentives” to obtain too much care if the individual had to pay for it directly.

The problem with this theory is that most of us need very little care, and the marginal services that we would decline are only a very small fraction of our nation’s total health care bill.

The real reduction in spending would occur with average-income individuals who develop major medical problems and need care.

This reduction would not be the result of informed health care shopping, but it would occur simply because the individuals could not pay the out-of-pocket expenses that would be required by the stripped-down, lower-cost plans.

This is not simply theory, since it has been well documented repeatedly in the health policy literature.

If we follow the Register’s recommendations, hundreds of thousands will suffer needlessly, and tens of thousands will die.

Don McCanne, M.D.
San Juan Capistrano

Register’s editorial: http://www.ocregister.com/ocregister/opinion/editorials/article_1401774.php

Massachusetts premiums to average $380 a month

Sticker shock for state care plan

Average premium of $380 outlined

By Alice Dembner
Boston Globe Staff
January 20, 2007

A state panel yesterday outlined for the first time the minimum requirements for coverage under the state’s new health insurance law, a package estimated to cost $380 a month on average for an individual, more than $100 above recent estimates.

Panel members struggled yesterday to balance affordability with protection from catastrophic medical bills and remained divided on many issues.

“If we’re going to mandate this, people need to see that they’re getting some value,” said panel member Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology. But, he added, the premium is “bad news.”

“I’m trying to think of something to get this number down,” he said.

The minimum plan would limit annual out-of-pocket expenses to $5,000 for an individual and $7,500 for a family and include prescription drug coverage, according to the proposal by a subcommittee of the Commonwealth Health Insurance Connector board, which is implementing the new law. The full board will vote on the proposal Monday.

As proposed, deductibles would run no higher than $2,000 per individual and $4,000 per family. Before the deductible kicks in, the plan would have to cover some medical visits and generic drugs to encourage preventive care. Insurers could not set limits on coverage per sickness, year, or lifetime, nor could they set a dollar maximum of coverage for any medical service.

Immediate reaction to the requirements was negative. Advocates for the uninsured were stunned at the price, considerably higher than the $200 estimated by Mitt Romney when he was governor and first proposed universal coverage. A spokesman for insurers said the requirements were too prescriptive and could undermine the goal of universal coverage.

Under the state’s universal health insurance law, all adults must obtain insurance coverage by July 1 or pay a penalty, unless they secure a waiver by proving they can’t afford insurance. Individuals earning less than 300 percent of the poverty level , or $29,400, are eligible for a separate, state-subsidized insurance package. Young adults, ages 19 to 26, must get some insurance, but will be eligible for less comprehensive and less expensive plans.

For the uninsured who do not qualify for the state-subsidized plans, an estimated 160,000 to 200,000 people, the minimum plan probably would be the least expensive they could buy. Some of the premiums probably would be subsidized by employers.

The estimate of $380 a month in premiums came from a summary of initial bids by insurance companies. Actual premiums will not be set for months.

To meet the state mandate, at least 40,000 people who now have insurance probably would have to buy additional coverage since their plans do not meet the proposed new standard, Connector staff members said. In addition, some employers who now provide more extensive coverage could cut back to the minimum.

The five members of the policy committee argued yesterday about how prescriptive the rules should be. After the 10-member board votes on the requirements Monday, there will be a public hearing on Feb. 16, and then the rules could be revised. However, the board needs to move quickly if new health plans are to be ready for the public by July.

Until Monday’s meeting, groups representing residents, insurers, hospitals, and others will be lobbying board members.

“For a large proportion of the folks not eligible for subsidized care, the bare minimum plan is flat-out unaffordable, not only because of the premiums, but the deductibles and out-of-pocket expenses,” said John McDonough, executive director of Health Care for All, an advocacy group that supports the health law. “This is a significant disappointment. We think the Connector and particularly the insurers need to go back to the drawing board.”

Health Care for All had suggested that the minimum plan cover prescription drugs, and that the drugs not be subject to a deductible. In addition, they suggested a cap of $3,000 on out-of-pocket expenses, and a maximum deductible of $1,100.

Eric Linzer, vice president of the Massachusetts Association of Health Plans, said the Connector committee’s recommendations were boxing insurers into a corner.

“There’s really a limited number of ways you can make premiums affordable,” he said. “If the minimum credible coverage is too high and coverage is unaffordable, it runs the risk of not achieving universal coverage.” Linzer said there might also be thousands of people satisfied with their coverage whose plans do not meet the proposed standard.

Based on information from actuaries reviewed by the board last fall, the panel had expected to get plans with a premium of about $260.

But most of the insurers’ bids, the details of which have not been made public, came in much higher , according to Connector board staff.

For one group of HMO-type plans, the premiums ranged from $250 for a 28-year-old to $500 for a 56-year-old.

In deciding on the proposed minimums, panel members debated how best to serve individuals with high medical expenses, as well as those who are healthy.

“We’ve got to protect the people” with high costs, said Bruce Butler, an actuarial consultant who chairs the policy committee. “But it’s a balancing issue with affordability.” Later, he added, “There’s no one part of it you feel good about, but it’s the best overall.”

Panel members were reluctant to strip the plan of benefits to bring down the cost to consumers. “There’s not only the issue of affordability, but also what provides legitimate protection,” said panel member Dolores Mitchell, executive director of the Group Insurance Commission.

Another member, Celia Wcislo, assistant division director of labor union 1199 SEIU, argued for more preventive coverage, including doctors’ visits and drug coverage before the deductible applies, and for a lower deductible, saying that high initial costs could prevent people from getting care.

The board’s executive director, Jon Kingsdale, who does not vote, urged the panel to consider what rules could be enforced and suggested they not specify every detail of coverage.

“I feel very, very nervous about that,” he said. “There’s going to be a court challenge” to whatever the board decides, he predicted.

Under the law, anyone without insurance who meets the minimal standard would forfeit their personal tax exemption for 2007, costing them about $200.

In 2008, they would be fined half of the average premium for the minimal plan.

(C) Copyright 2007 Globe Newspaper Company.

U.S. should focus on finding cure to health-care debacle

WILLIAM CONNOLLY, Columnist
The Evansville Courier & Press
Sunday, January 21, 2007

According to a recent Parade Magazine article by David Wallechinsky, patriotic sentiments notwithstanding, while the United States is still No. 1 in some respects – Nobel prize winners, billionaires and armed forces stationed in other countries – we lag far behind in other categories that more accurately assess social well-being. We lag behind other countries when it comes to health care. Thirty-three countries, including Cuba, have lower infant death rates; 43 have more physicians per capita, including France, Switzerland, Mongolia and Lebanon; and 49 have more hospital beds per capita, including England, Italy and Ireland.

We rank 29th in maternal death rate, 30th in life expectancy for women and 28th for men. All this despite our spending more per capita on health care ($5,700) and as a percentage of gross domestic product (more than 15 percent), higher than any other country.

So why don’t we do better? Perhaps this is a matter of lifestyle. We consume too many calories – we’re No. 1 in obesity. Despite being obsessed with sports, most of the time we are only spectators, not participants. We are inactive at all ages. We have the 15th highest murder rate.

The data also reflect an ailing health-care system, afflicted with confusing, conflicting and inefficient ways of financing care. Most comes from private insurance tied to employment. That system leaves more than 45 million Americans uninsured.

Because the system is composed primarily of the working poor, they end up served by inadequately funded public assistance. They postpone treatment and rely on more expensive emergency care, funded indirectly by the insured. This indirectly increases their costs. As the U.S auto industries have learned, the costs further harm their global competitiveness.

But there is some good news on the horizon. While Washington has provided little leadership, states are beginning to explore alternatives. California Gov. Arnold Schwarzenegger recently promoted an ambitious plan to provide coverage for all Californians. His goal is commendable because his plan promises universal coverage, requiring all to buy health insurance.

Those who cannot afford it will be provided financial assistance. Insurance companies are required to sell insurance to everyone at the same price. It would enable people to obtain preventive care rather than wait for more expensive emergency care. Since insurers have to provide coverage to everyone, they would not waste resources trying to deny coverage. This would allow for more spending on actual care. Furthermore, insurers would have to spend at least 85 percent of premiums on health care, which is quite the improvement.

The program will, however, result in substantial government intrusion to ensure that people buy insurance. It will also determine who will receive assistance and police insurers, guaranteeing their compliance. All of this seems necessary to keep insurance companies in the game. This may make Schwarzenegger’s proposal more politically appealing to insurance companies that plan to do well in this program. However, this complex interplay of private insurers and government killed the Clinton proposals in the early 1990s.

Why not eliminate the middleman and opt for a single-payer system similar to Medicare, contributed to by everyone, including employers? It would be simpler – and cheaper – for employers and health-care providers.

This is a worthwhile debate. While I believe a single-payer system would be better, Schwarzenegger deserves credit for bringing the issue to the table.

http://www.courierpress.com/news/2007/jan/21/us-should-focus-on-finding-cure-to-health-care/?printer=1/

(c) 2006 The Evansville Courier Co.

The president’s new reform proposal

Bush Seeks Shift in Health Coverage

He Would Tax Those With Higher-Priced Plans, Give Breaks for Buying Cheaper Ones

By Michael A. Fletcher
The Washington Post
January 21, 2007

President Bush will propose a deep tax break for Americans who purchase their own medical insurance and would finance it with an unprecedented tax on a portion of high-priced health-care plans that workers receive from their employers, according to the White House.

Under the president’s proposal, workers who receive employer-provided health insurance would have to pay a tax on the cost of their benefit above $15,000, the threshold proposed by Bush for the tax break.

People with families who buy low-cost policies, meanwhile, would have their taxable income reduced by $15,000, regardless of the cost of the plans and whether they itemize deductions on their tax returns. The deduction would be $7,500 for single individuals. The deduction, to be indexed to account for inflation, would also be extended to those with employer-provided plans, to be offset by the cost of their coverage.

The Bush administration estimates that 80 percent of people with employer-provided plans would see their tax liability fall because the deduction would be larger than the value of their insurance plans.

http://www.washingtonpost.com/wp-dyn/content/article/2007/01/20/AR2007012000468.html

Comment:

By Don McCanne, MD

By giving every family with health insurance a $15,000 deduction from their taxable income, the president provides incentives to buy less expensive plans, since the tax benefit is the same for the cheapest plan and every other plan up to a value of $15,000.

Why would the president want to provide tax incentives to encourage individuals to buy cheaper health plans? He claims that insurance causes patients to over-utilize health care, and that health care costs will not be controlled until we end this waste. The fact is that the savings achieved by having the healthy decline services of marginal value is only a minuscule portion of our total health care budget. Most health care is provided to sick or injured individuals who need the care. The cheaper plans that the president is encouraging will increase out-of-pocket costs, often making actual health care unaffordable for precisely those who really do need it.

A further potential impact is that employers who would like to terminate their health benefit programs would have less incentive to continue to provide coverage since the employee now would become eligible for the $15,000 deduction. This further advances the president’s goal of shifting responsibility to the individual through an expansion of the ownership society – wherein you own the right to pay for your medical care.

His proposal also is a regressive method of funding health care. Since every insured individual receives the same deduction, higher-income individuals receive a greater government subsidy because of our graduated tax schedule. Worse, for individuals with modest incomes, the tax subsidy is not enough to make insurance affordable, and they will continue to do without.

At a time when everyone agrees that major reform is essential, the president comes up with this proposal. Doesn’t he care about us?

TNR Editorial on Compromise

Mr. Universe

by the Editors
The New Republic
January 29, 2007

For years, Republicans have attacked advocates of universal health insurance as “socialists.” But what are they going to call Arnold Schwarzenegger? Last Monday, the Republican governor announced that he wants to bring universal coverage to California–just as another Republican governor, Mitt Romney, recently did for Massachusetts.

When prominent Republicans start embracing universal coverage, it’s a sign that the next great debate about health care has begun.

But how will it end? A lot depends on how liberals react to proposals like Schwarzenegger’s. On the one hand, his plan represents a clear departure from the previous decade, when even Democrats limited themselves to incrementalism. It would give coverage to virtually every California citizen and would break some important political taboos along the way. The plan features extensive regulations of the insurance industry, so that it cannot exclude people with prior medical conditions. It also has higher taxes and requirements that employers contribute toward health insurance. There is even bigger government, in the form of expanded Medicaid.

Still, the plan has some serious drawbacks. For one thing, its minimum-benefits package seems meager, which could encourage employers who now offer more generous coverage to cut back. For another, its financing scheme makes some heroic assumptions about the savings that reform will produce.

But perhaps the biggest problem with Schwarzenegger’s plan is the danger that it could stall momentum for more sweeping changes–both in California and beyond. His proposal arrives on the heels of a measure he vetoed last year that would have created a single-payer system–the most comprehensive type of reform, in that it seeks to blow up the entire health care system and have government insure citizens directly. Yet even people who support single-payer may be tempted to rally around schemes like Schwarzenegger’s, which have more limited ambitions, because they might fear their preferred plans couldn’t pass.

But it’s not self-evident that moderate plans are so politically viable, either. Consider what happened to Bill Clinton, who tried desperately to blunt the opposition of special interest groups and get past Americans’ well-known skepticism of government.

At the very least, it’s premature for would-be reformers to “settle” on a plan that, like Schwarzenegger’s, has some major flaws. If this plan defines the outer limits of political acceptability, then whatever compromise it finally produces will likely have even greater deficiencies.

Yes, champions of universal coverage should welcome the likes of Schwarzenegger to their cause. But these common areas of belief should be the beginning of discussion, not the end. There is a time for compromise, and that time will come soon enough. But, right now, advocates of universal health care should speak openly and unabashedly about what they actually believe is right, even if that means proclaiming ambitions that defy conventional notions of the politically possible. That is how you stretch the boundaries of debate. And that is how reform, eventually, will happen.

http://www.tnr.com/doc.mhtml?i=20070129&s=editorial070129

Comment:

By Don McCanne, MD

The voices of compromise are very loud right now. Ours must be heard loud and clear above the din.