PNHP

Brief Comments on ColoradoCare

Brief Comments on ColoradoCare

By Ida Hellander, M.D., David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H.

Organizers for the ColoradoCare ballot initiative have contacted some activists in Physicians for a National Health Program, seeking their endorsement and financial support. We summarize, below, our understanding of the initiative.

Description of the program

ColoradoCare is a ballot initiative for a publicly financed, universal health plan for the state of Colorado that would be operated by a private cooperative under a 21-person elected Board. While the ballot measure spells out the program’s governance and Board structure in considerable detail, key aspects of the program are not specified, and/or left to the discretion of the Board. In the past the drafters made clear in public statements that ColoradoCare is NOT a single-payer plan.

The initiative would cover all Colorado residents under a publicly funded, cooperative insurance plan. While the new program would replace most private insurance, Medicaid and CHIP coverage, it would serve only as supplemental coverage for those covered by Medicare, the VA and TriCare. The initiative would not prohibit the purchase or sale of private coverage duplicating the public plan. However, proponents expect that little private insurance would persist, since most businesses and individuals would not want to pay twice for coverage.

The proposal would cover a broad range of benefits, but would not cover dental care for adults, or long-term care for most individuals.

ColoradoCare would be funded via a payroll tax of 6.67 percent on employers and 3.33 on employees, or 10 percent of non-payroll income (excluding pensions and annuities), along with federal funds that would have come to the state via subsidies for private coverage under the Affordable Care Act, for Medicaid, and for other programs.

The drafting of ColoradoCare was spearheaded by Colorado Sen. Irene Aguilar and psychologist Ivan Miller. Volunteers and paid staff gathered the signatures necessary to put it on the ballot. Journalist T.R. Reid has become a champion and spokesperson for the plan both inside and outside of Colorado.

Strengths of ColoradoCare

1. The proposal if implemented would cover all, or nearly all of Colorado’s uninsured – apparently (and laudably) including the undocumented.

2. The proposal includes some useful cost-control features, notably the creation of an annual budget, and the ability to negotiate lower prices with pharmaceutical companies.

3. The plan allows for a free choice of primary care doctor.

4. The financing plan is more progressive than the current system.

5. ColoradoCare’s organizers have mounted an impressive campaign with considerable mobilization.

Weaknesses of ColoradoCare

1. Multiple payers would persist – probably including private insurers. As a result, it sacrifices much of the administrative savings that could be realized through a true single- payer reform because providers would have to maintain much of their current cost-tracking and billing apparatus in order to apportion costs among the multiple payers. Published cost estimates for ColoradoCare overstate the savings that could be achieved through single payer, and do not take into account the additional costs entailed by ColoradoCare’s failure to adopt a full single-payer structure.

2. The initiative makes no mention of how hospitals or other institutions would be paid – apart from a rhetorical nod favoring ACOs. It makes no mention of global budgeting, separating operating and capital payments, or other constraints on hospital capital spending. Global budgeting is critical to achieving administrative savings; separating operating and capital payments is a bedrock of effective health planning, which is essential for long-term cost containment.

3. The initiative would not ban for-profit hospitals or other providers, despite clear evidence that they inflate costs and compromise quality. For-profit ACOs (indistinguishable from HMOs in most respects) might also flourish.

4. The initiative specifies that patients would have a free choice of primary care physicians, but makes no mention of whether the choice of specialist or hospital could be restricted.

5. While the plan would outlaw deductibles, the Board could impose copayments.

6. While the 10 percent tax rate would apply to both the rich and poor (including those with incomes below the poverty line), income over $350,000 would not be taxed.

7. The campaign’s anti-government rhetoric is problematic.

8. Rather than specifying critical aspects of the plan, the initiative leaves many of these to be decided later by the Board. Delaying such decisions has often favored corporate interests, who can intervene after the popular mobilization required to pass a reform has subsided. In the case of the ACA, corporate lobbying during the rule-making process attenuated cuts in Medicare HMO overpayments; reduced promised funding for public health and community clinics; effectively neutered limits on insurance overhead; and watered down the mandated benefit package. In Vermont, the broad-brush program initially passed by the legislature was whittled down in the detailed design stage, leading to rising cost estimates and ultimate rejection by the governor.

Dr. Ida Hellander is director of health policy and programs at Physicians for a National Health Program. Drs. David Himmelstein and Steffie Woolhandler are internists, professors at the City University of New York School of Public Health, lecturers in medicine at Harvard Medical School, and co-founders of PNHP.

PNHP note: While there have been numerous articles about the ColoradoCare plan, one by Michael Corcoran, published by Truthout on Oct. 20, is among the most comprehensive. 

Readers sound off on Medicare

Medicare for All

By David and Carol Butler
The Tennessean, Letters, Oct. 25, 2015

Re: “Medicare for all would solve many problems,” by Vanderbilt and Meharry medical students, Oct. 19.

We were pleased to see this op-ed proclaiming the need for a truly universal single-payer system of health care such as one finds in all other “developed” countries.

They differ in many details of operation, but all provide greatly superior health outcomes than we get, and at far less cost.

Opponents love to come up with “horror” stories out of some of those systems.

We have seen many more such problems here in America.

We lived four years in Canada and one in France and have spent a good deal of time in Great Britain, Switzerland, Holland and Germany where we still have many contacts.

These friends, in spite of their complaints, would not trade for the American system and cannot understand how we can be so backward and so callous as to fail to recognize the civilized need to assure basic health care to everyone.

One close friend in Canada, now deceased, and one like a “daughter” in Northern Ireland, who is now dying of cancer, received excellent and prolonged care over several years and were given, against all odds, added years of good-quality life before the final phase set in.

And that has not bankrupted their families!

Let’s try Medicare for all!

David and Carol Butler reside in Hermitage.

****

Try standard Medicare

By Dorothy M. Gager

​Re: “Vanderbilt, BCBST hit Medicare Advantage impassed,” Oct. 21.

The story about Blue Cross/Vanderbilt Medicare issues failed to mention a vital part of the issue.

The so-called “Advantage” plans are required to provide a core set of services that are also covered by standard Medicare.

They are paid a per capita rate for each enrollee, ​regardless of the amount of medical care provided to that individual.

They are allowed to be more tightly “managed,” meaning that their provider lists might be much more restricted, with the private insurance companies being able to determine length of stay and kinds of services authorized in each situation and to dictate the funding formula for authorized providers.

They can also add additional services, generally targeted at healthy Medicare recipients who are much less likely to require the costly care needed by those with chronic or severe illnesses.

For the insurance company, the incentive is to attract healthy enrollees and keep the amount of money paid for medical care to a minimum, since they receive the same funding for each enrollee.

Therefore, they spend huge amounts of money in advertising to attract the healthiest people eligible for Medicare.

Standard Medicare, on the other hand, provides the same basic services, only paying medical providers for services rendered and being accepted by a much larger pool of medical providers.

The legislation creating the “Advantage” plans gives them permission to advertise and specifically prohibits any advertising by the standard Medicare program.

Many people nearing the age for Medicare eligibility are not even aware of the option of standard Medicare, assuming from the barrage of advertising that they have to enroll in an “Advantage” plan.

Dorothy H. Gager, M.Div., LCSW, resides in Nashville.

****

Be careful at enrollment

By Clark Meyer

I’m 79 years old. I had to change Medicare supplemental insurance companies for the 2015 year.

Having had the same primary care doctor for over 10 years, with each new insurance company I considered, I insisted that I would only sign with them if indeed I could keep my doctor.

A number of companies could not make that promise — until Humana came along.

They made that promise, I signed up.

A few weeks later they sent me that little plastic card that listed benefits, co-pays, etc. — and sure enough on the back of that card my doctor was listed as the doctor I insisted on having.

Four months into the plan, Humana informed me that that was not possible as they had no contract with that particular doctor and that they had assigned me to a doctor that I did not know.

After a lot of calls with numerous Humana folks the story was, “sorry” we messed up and we cannot help you.

Contacting my doctor of choice he informed me that Humana has done the same thing to a number of his patients.

So, old folks beware of promises made to you during the upcoming enrollment period.

What “they” tell you may not be true. You sign up, they profit from the misinformation, and you don’t get what they promised.

Clark Meyer resides in Nashville.

http://www.tennessean.com/story/opinion/readers/2015/10/26/letters-editor-medicare/74480902/

Why are the media celebrating a 7.5% ACA premium increase?

2016 Marketplace Affordability Snapshot

CMS.gov, October 26, 2015

The 2016 Affordability Snapshot provides a review of the final rate increases for second lowest cost silver plans, known as benchmark plans, which will be available for purchase in the 37 states that used the HealthCare.gov platform in 2015, including those in the Federally-facilitated Marketplace, State Partnership Marketplaces, and supported State-based Marketplaces.

Across all 37 states that used the HealthCare.gov platform, the cost of the benchmark plan will increase on average 7.5 percent in 2016. These increases do not take into account advanced payments of premium tax credits, which lower the monthly costs for the overwhelming majority of Marketplace consumers.

The second-lowest cost silver plan is notable because it serves as the benchmark plan to calculate the amount of advanced premium tax credit consumers may be eligible for to help lower the cost of their Marketplace coverage.

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2015-Fact-sheets-items/2015-10-26-2.html

***

Consumer Price Index Summary

U.S. Bureau of Labor Statistics, October 15, 2015

Consumer Price Index for All Urban Consumers (CPI-U)

Percent changes, unadjusted 12 months ended September 2015

0.0%  All items

1.9%  All items less food and energy

2.4%  Medical care services

2.7%  Medical care commodities

http://www.bls.gov/news.release/cpi.nr0.htm

***

Comment:

By Don McCanne, MD

Although there are many variables that produce a wide variation in premiums for plans offered in the health insurance exchanges (Marketplaces), the second lowest cost plans in the silver tier serve as the benchmark for premium tax credits and thus can provide an anchor for determining health care inflation as reflected by the premiums for the plans offered by the exchanges.

Many reports in the media today are celebrating the fact that average increases in the benchmark premiums were held to a single digit. But these increases in insurance premiums were about 5% greater than the consumer price index (CPI-U) increases for medical care services and commodities, and a 7.5% increase over CPI-U for all items.

Our health care financing system that has been heavily dependent on private insurance plans has been ineffective in slowing health care inflation to sustainable levels. The Affordable Care Act was supposed to have made health care more affordable by creating a separate competitive market of regulated private plans within government-operated insurance exchanges.  With a 7.5% increase above the CPI-U, we can say that this experiment with private health plans has been failure.

If we want affordable health care for all, we need to eliminate the private insurers and establish a single payer national health program. As Fareed Zakaria said last week, “It’s absolutely clear that is the only way you can achieve that goal.”

I just turned 26. Here’s what I learned while buying health insurance.

By Augie Lindmark
KevinMD blog, Oct. 5, 2015

I cracked a Budweiser and flipped on Spotify radio for what I was told would be a challenge. On my computer screen, Minnesota’s health insurance exchange website waited expectantly, to which I submitted the Holy Trinity of health information — age, date of birth, and tobacco usage — and waited. The next page loaded slowly, evidence of the voluminous information that would soon surface. I had hoped for simplicity, instead, I qualified for 38 different health plans from which to choose.

The timing of this health insurance search was important because I would soon celebrate my 26th birthday — the threshold age under the Affordable Care Act that initiates millennials into health insurance independence — and with that, an expulsion from my parents’ health insurance plan.

As a medical student, I’m surrounded by practicing physicians who forewarn me about the pitfalls of shoddy health insurance. Buried in those 38 plans lurked high deductibles, unknown health provider networks, and procedural coverage that acted more like a sieve than a blanket.

I experienced what some economists and physicians refer to as information asymmetry — the situation where a patient is inherently disadvantaged because the knowledge needed to make decisions is siphoned to those who approve claims, set prices, and charge bills.

Health insurance has too many options. And the wrong choice has serious consequences.

While I attempted to purchase health insurance for the first time in my life, I could see why over 600,000 Americans are annually bankrupted by medical bills. But the holes in our health system are underscored by the percentage of those cases covered by insurance. The answer is a lot. Of medically related bankruptcies in this country, almost two-thirds involve patients with some form of health insurance. American health insurance, when stripped down to its core, is a ruse.

Consider the recent example of Susan Rosalsky and Michael Trost. After chest pains led to an Emergency Room visit, an out-of-network charge meant a surprise $32,845 medical bill from a cardiologist not covered by their insurance. The majority of their bill was covered, but with a minor — albeit very expensive — exception. Regrettably, their story isn’t unique: Nearly one-third of patients covered by private insurance experience some level of surprise medical bill, according to a 2015 survey conducted by the Consumer Reports National Research Center.

When I scrolled through my online health insurance options, plan #35 cost $150 a month, a monthly premium that fit into my budget. But I would need to pay $6,300 out of pocket before I saw in-network charges covered, and only 60 percent coverage on out-of-network bills. And I had little knowledge of what procedures were included in the plan.

To assist confused customers like myself, state exchanges employed armies of health care navigators (assistants trained to help with purchasing coverage). When I spoke with a navigator, he could explain deductibles and define co-pays, but neither of us could decode the future implications of a high or low coverage, expensive or cheap, transparent or confusing health plan.

We both navigated alright. Except we didn’t know which way to go.

If you’re an uninsured millennial, you pose problems to health insurers

Two years ago the Obama administration made its push to encourage the millennial generation to sign up for health insurance. The success of the Affordable Care Act hinged on the turnout of the “Young Invincibles” and their willingness to get coverage. Big insurance corporations like UnitedHealthcare and Aetna watched with keen interest.

If Millennials didn’t flock to the insurance market, the insurance companies would be left with older, sicker patients. Younger people bring less risk to insurance pools; we tend to be healthier. In the eyes of insurance companies, you’re a good patient if you never step foot into a hospital, or need an emergency appendectomy, or get cancer, because that money can be moved away from health care and allocated to shareholders and beer cup advertising at major sporting events.

As you may remember, the push to get millennials signed up for health insurance employed numerous media mediums which included President Obama’s awkward, viral interview withZach Galifianakis on Between Two Ferns. A millennial generation focused news outlet, Mic News, held a competition to gather ideas of how to enroll 18 to 35-year-olds: They sent the top three voted proposals to the White House, including my submission, to get feedback. But perhaps the best — and most unbelievable attempt — were the Brosurance ads, first aired in Colorado, which utilized the alluring power of keg beer to sign up for health insurance. Had the state’s marijuana legalization preceded the Affordable Care Act, different tactics might have been used.

Marketing aside, at a legislative level, the fear of insurance companies would need to be assuaged. Two key components allowed the hefty insurance players to buy into the plan. The first was the individual mandate — the requirement for individuals to purchase health insurance or face a penalty. The second was expanding coverage to millennials under their parents’ insurance plans.

That is, until we turned 26.

Private health insurance makes cents, not sense

Unfortunately for Americans, millennial or otherwise, health care has evolved such that financial stability designates how we partake in, and access, health care. Our patchwork system treats medicine as a good that can be bargained and bought, similar to that of fresh produce or potato chips. Of industrialized nations, we’re the only one without some sort of universal health coverage. Unsurprisingly, we place dead last in preventable death.

My health insurance, for now, is a student health plan offered to medical students. The details of coverage are hazy, but it has a low deductible and reasonable premiums.

Years ago I welcomed my birthday by counting the years successfully completed as a human on my fingers: five and ten, one hand and two, were prominent milestones. I confess I still complete this action every morning of September 29, though, it’s more compulsion than proclamation.

This year, I counted four hands plus six for 26 years. When I finished my tally, I crossed my fingers in hope — for luck, for health coverage, but above all, for an inexpensive 26th year.

Augie Lindmark is a medical student. He can be reached on Twitter @AugieLindmark.

http://www.kevinmd.com/blog/2015/10/i-just-turned-26-heres-what-i-learned-while-buying-health-insurance.html

Single-Payer Health-Care Bill to be Introduced in Pa.

Berks Community Television (Reading, Pa.), Oct. 25, 2015

HARRISBURG, Pa. – A bill to create a single-payer health-care system in Pennsylvania will be introduced in the state Legislature by the end of the month.

The legislation is being introduced by Representative Pamela DeLissio of Philadelphia and was crafted with the assistance of HealthCare 4 ALL PA, a not-for-profit advocacy group. David Steil, past president of that organization, says the bill is simply called the Pennsylvania Health Care Plan.

“What it does is create a health-care system that includes every resident of Pennsylvania, that is publicly funded and privately delivered,” says Steil.

The cost of the program would be covered by increased taxes, which Steil acknowledges may present a significant obstacle to passage by the state Legislature.

The plan would increase the state personal income tax by an additional three percent, substantially less than most pay for private insurance. It would also add a 10 percent payroll tax on businesses which, as Steil points out, is much less than what businesses spend on health insurance now.

“The average cost for health care benefits for companies that provide health care is about 17 percent of payroll,” he says. “So at 10 percent of payroll, the saving is significant.”

Similar legislation has been introduced in each legislative session since 2007.

Most recently it was introduced as Senate Bill S-400. None of the earlier versions have not gotten very far. Raising taxes is a hard sell, especially to conservative lawmakers. But Steil insists they’re asking the wrong question.

“The question each one has to ask is not just ‘look at the taxes’ because there are taxes to it, it’s not free,” he says. “The question is, ‘How much less than you’re currently paying is this plan to you?'”

Steil says the bill would also eliminate health-insurance costs on pension plans and vehicle insurance, making the potential savings even larger.

http://www.bctv.org/special_reports/health/pa-legislature-introduces-single-payer-health-care-bill/article_a41a6da0-7996-11e5-b8a4-2ba3ba19b536.html

Live and let live: Are we closer to a national health program?

By Aaron Burch
Louisville Medicine, October 2015

The protection of patients and physicians has been a continuous fight in America for decades. One of the biggest moments of the modern era of health care came July 30, 1965, when President Lyndon B. Johnson signed Medicare into law.

This year was the 50th anniversary of that historic legislation and celebrations took place across the country. At the Louisville Public Library, the Kentuckians for Single-Payer Healthcare hosted “Medicare – Protect It, Improve It, Expand It!” The event, lovingly referred to as PIE, taught attendees about the history of Medicare in the United States and projected a future of an expanded and improved Medicare system for everyone.

Jonathan Ross, MD, internist from Toledo, Ohio, and past president of Physicians for a National Health Program (PNHP), spoke at the event and gave his vision for the future of medicine. Dr. Ross has argued for single-payer health care since the Clinton administration. Along the way, he’s seen the PNHP grow from a few dozen physicians to more than 25,000 across the United States.

“We took a bus ride to Little Rock after the election of Bill Clinton thinking he would work on health reform. On the bus with me was a man who worked with the Electrical Workers Union. He’d been working on health care reform since FDR. We started talking and he told me, ‘Son, this is a lifetime of work.” Dr. Ross laughed, “Here I am a lifetime later and it’s still a lifetime of work.”

Still, he remains passionate about the potential success of the single-payer system. For years, House Bill 676, sponsored by Congressman John Conyers, has floated around the nation’s capital. HR 676 would establish the “Medicare for All program to provide all individuals residing in the United States and U.S. territories with free health care…” While it has more than 60 Democratic co-sponsors, it hasn’t gone any further than the House of Representatives. That won’t change anytime soon until a more significant number of physicians take up the cause. PNHP activists including Dr. Ross and Dr. Garrett Adams of Louisville know this is a huge undertaking.

“I think we’ve made a pretty good step in the last two decades, but these things take a long time. How long a struggle was women’s suffrage?” Dr. Ross said. “There are certain things which are tipping points, certain things that are necessary to happen. PNHP’s role in this is to get physicians to see the inadequacies of the system. We need to get away from the ‘No, leave government out of our lives’ talk and recognize we need a new system.”

Dr. Ross and other members of the PNHP’s views are simple. There are some things too important to leave to the capitalist marketplace. Among those are sanitation, water, fire, police and, yes, health care.

“The data is solid. For every 1,000 people uninsured, one will die unnecessarily,” said Dr. Ross. “There are 30 million people uninsured. So, 30,000 people are dying unnecessarily every year. I’m not sure what would happen if we had somebody come over and blow up 30,000 people each year, but I have a feeling we would deal with it differently.”

Dr. Ross said, “This situation is a quiet disaster. These people are separated. There’s no publicity for them, but they’re out there.”

Following the successful Medicare PIE event on July 30, Dr. Ross and other representatives met with medical students on campus to talk about ways to get involved and what can be learned from always being skeptical. Dr. Ross recalled a story of one of his patients who passed away unnecessarily.

“He was an assistant manager at a burger shop, I won’t say which one. He had three kids, so he had to think about how to get by with the money he was making. He chose not to purchase the very paltry insurance package provided by his work. When he came to see me, he was seriously overweight. He had trouble breathing, sleeping, and edema in his legs which indicates heart failure. I told him it was a serious problem but there was no place I could send him to get a sleep study without proper insurance and he didn’t have the money to get it done.”

Once a social worker became involved in the case, the man was advised to quit his job. “They said, ‘You have three dependent children. You’ll qualify for Medicaid within the month and then we can order the study. So he quit his job. But, he died in his sleep the night before his sleep study was scheduled,” Dr. Ross said.

“These are the stories we see. Every doctor has stories like this, a near miss or a wounding or sometimes these stories where we lose good hard-working folks who were kicked aside by the health care system. Working with the city population, you see this stuff day after day.”

Talking to his residents at St. Vincent Mercy Medical Center in Toledo, Dr. Ross routinely jokes about the United States having the “best health care system in the world,” emphasizing the social determinants and inadequacies of the health care system. Despite going for laughs, he somberly admits many of his colleagues believe it to be true.

“We cost twice what everyone else does and we don’t do anything substantially better. We have worse mortality and some of the worst childhood health statistics and maternal mortality statistics in the world. Our system is dysfunctional because it’s too complicated. There are too many people trying to make money from it rather than look at it as a social good,” he said. In person, Dr. Ross is a whirlwind of ideas and examples and statistics, but he knows that it doesn’t matter what he alone thinks, but rather what he can do to convince others.

All involved agree that the future of the PNHP and the continued prospect of a single payer system depend on new blood. Medical students and young physicians who will continue to fight and get a seat at the table are becoming increasingly important as older members can no longer maintain their level of activity.

Dr. Adams spoke to the students and residents in attendance. “The most exciting thing happening in PNHP in the last five years is the student movement. The questions and worries they have are taking place across the country. What kind of practice will they have? Will their activism affect their careers? You’ll get courage and encouragement from them.”

Dr. Adams encouraged each of the students to keep a lookout and get involved, saying he was so busy studying for medical school that he didn’t pay attention to the civil rights movement until it was already coming to pass. “It’s crazy to admit that now, but it’s true,” he said.

Both argued that the physicians coming out of medical school now will decide the future of a national health program. Even if HR 676 is never ratified, they argue, there will be physicians who know it is worth fighting for.

“I’m going to give the rest of my life to try and make it happen,” Dr. Ross said. “At the very least, my activism could keep things from being that much worse. While I was in this meeting, I got two e-mails telling me about new ICD-10 classifications I have to learn. And why? It’s about the money. The more specific you can be, the more they’ll pay you in the long run. So here we are bowing down to money, but it isn’t going to make a bit of difference to my care of the patients.”

Dr. Ross travels throughout the country in support of single-payer health care. He is a graduate of Cornell University and the Medical College of Ohio. He also holds a master’s degree in health policy and administration from the University of Michigan School of Public Health. He’s previously been a guest speaker at the University of Louisville and the University of Kentucky.

“We have to change the caregivers’ minds and make them realize they don’t want to be part of an immoral system anymore,” Dr. Ross concluded. “The reason I advocate is that the policy science says it will work. The studies that have been done say it is economically feasible. A national health program would improve the quality of life in America. We know it’s constitutional. So why not? I know why it will work. Tell me why it won’t.”

For more information about Physicians for a National Health Program, visit their website www.pnhp.org.

Aaron Burch is the communications specialist for the Greater Louisville Medical Society.

http://www.joomag.com/magazine/louisville-medicine-volume-63-issue-5/0089043001443635994?short

IRS Form 8962 may cause individuals to lose their ACA premium subsidies

Thousands Who Didn’t File Tax Returns May Lose Health Care Subsidies

By Robert Pear
The New York Times, October 25, 2015

Tens of thousands of people with modest incomes are at risk of losing health insurance subsidies in January because they did not file income tax returns, federal officials and consumer advocates say.

Under federal rules, anyone who receives an insurance subsidy must file a tax return to verify that the person was eligible and received the proper amount of financial assistance based on household income.

When the federal insurance marketplace opens for the third enrollment season next Sunday, users will see a new question: “Did your household file a 2014 tax return and reconcile any premium tax credit you used?”

If the answer to that question is no, consumers risk losing the subsidies they receive to help pay premiums. Without such assistance, many would find insurance unaffordable.

Many of the people potentially affected have incomes so low that they would not otherwise have to file tax returns. But if they received insurance subsidies in 2014, they were required to file this year.

(Christine Speidel, a tax lawyer at Vermont Legal Aid) identified three groups of people at risk: those who did not file a tax return; those who filed a return without the correct form to reconcile advance payments of the premium tax credit; and those who filed and reconciled this fall, too late for the information to be made available to health insurance exchanges before the open enrollment period.

In July, the Internal Revenue Service said 710,000 people who had received subsidies under the Affordable Care Act had not filed tax returns and had not requested more time to do so.

If those people do not return to the marketplace this fall, they may be automatically re-enrolled in the same or similar health plans at full price. And when they receive an invoice from the insurance company next year, they may be shocked to see that their subsidies have been cut to zero.

The I.R.S. also said 760,000 taxpayers had received subsidies and filed returns but had not attached the required form comparing the subsidies paid with the amount they were entitled to receive. Taxpayers describe that document, I.R.S. Form 8962, as daunting.

“The premium tax credit form, the dreaded 8962, is really hard,” said Eileen P. Duggan, a piano teacher and freelance writer in Maplewood, Mo., outside St. Louis, who filed the form with her tax return. “It’s enough to make you cry, that form. It was almost impossible to figure out.”

http://www.nytimes.com/2015/10/26/us/politics/thousands-who-didnt-file-tax-returns-may-lose-health-care-subsidies.html

IRS Form 8062 – Premium Tax Credit
https://www.irs.gov/pub/irs-pdf/f8962.pdf

IRS Instructions for Form 8962 (15 pages)
https://www.irs.gov/pub/irs-pdf/i8962.pdf

***

Comment:

By Don McCanne, M.D.

This is just one more small but somewhat shocking example of the unnecessary administrative complexity created by the Affordable Care Act (ACA).

Based on income alone, many people are not required to file tax returns if their income falls below a certain threshold (amount varies based on taxpayer status). However, many of these low-income individuals purchase plans through the ACA insurance exchanges and qualify for premium tax credits. All individuals who receive these credits under ACA must submit Form 8962 for the premium tax credit. It must be attached to an income tax return (Form 1040, 1040A, or 1040NR), so these people are required to submit tax returns no matter how low their incomes.

The penalty for not submitting Form 8962 attached to an income tax return is the requirement to refund any premium tax credits received and a disqualification from receiving tax credits in the following year. That’s quite a penalty for people with low incomes when you consider that ACA was supposed to make health care affordable. After all, “Affordable” is in its name.

But look at Form 8962 (click on link above). Then glance through the 15 pages of instructions for filling out Form 8962 (link also above). Sophisticated taxpayers are likely to find this daunting, but think of what it would be like for many of the low-income individuals who would have difficulties with just the simplified Form 1040A tax return, not to mention this monstrosity. It makes you think that ACA means “Administrative Complexity for All.”

Since there are no premiums in a well-designed single payer system, there would be no need for premium tax credits. The entire health care system would be funded by simplified taxes based on ability to pay. The health care system would always be there for you whenever you needed it, regardless of your tax situation. Even if delinquent, the IRS could not penalize or take away your health benefits.

Academia must stand up to drug companies

By Richard A. Lippin, M.D.
Philadelphia Inquirer, Letters, Oct. 23, 2015

David Sell tried his best to write a balanced article in Sunday’s Inquirer (“When pharma, academia join forces”), but he wrote about a scandal of monumental proportions in American medicine that has grown worse, especially over the past two decades.

In the story, the research director for the Hastings Center, an independent bioethics research institute, said that disclosure of relationships between academic researchers and drug companies is important, but I would say it has come about only under pressure. And not giving companies veto rights for the publication of results is key, the Hastings director said, though I would say that relationship is not improving in most cases.

An overlooked elephant in the room is the outrageous, escalating cost of new medicines – especially for unique diseases – which only the wealthy can afford and the poor sometimes don’t receive. America stands alone among peer nations in failing to provide basic health care, including affordable medications, to all its citizens.

Philadelphia, with its concentration of academic medical research centers and area drug companies, should be ashamed of perpetuating this broken, unethical, and immoral system through unsavory economic alliances. We especially need academic leaders to stand up for what is morally right.

Dr. Richard A. Lippin resides in Southampton.

http://www.philly.com/philly/opinion/inquirer/20151023_Give_seniors_a_break_with_cost-of-living_adjustments.html

Fareed Zakaria on single payer, using lesson from Kenneth Arrow

Fareed Zakaria: Health IT is no magic bullet

By Bernie Monegain
Healthcare IT News, October 21, 2015

As Fareed Zakaria sees it, the remedy for America’s ailing and expensive health system is clear.

It might be hard for some to swallow, but, in his view, it is sure and proven.

“There’s absolutely no question that when we look at the ability to provide good healthcare at an affordable price, lower levels of massive inequality in healthcare outcomes or provision, a single government payer and multiple private providers is the answer. It’s absolutely clear that is the only way you can achieve that goal,” Zakaria said. “The revolution that’s needed here is not an information revolution, it’s a political revolution.”

Zakaria is a journalist, author and host of Fareed Zakaria GPS, a Sunday morning staple on CNN that delves into global issues and ways to solve them. For purposes of his broadcast “GPS” stands for Global Public Square.

Zakaria spoke to a crowd of more than 600 healthcare CIOs at the annual CHIME Fall Forum, October. 16 in Orlando, Fla.

“The fundamental point, I think, that you have to understand about healthcare is information technology, globalization are not magical solutions,” Zakaria told the audience.

This is especially so, because the fundamental structure of healthcare “makes it very difficult to achieve certain economies of scale.”

“What I’m always struck by when I look at healthcare,” Zakaria said,  “is the fundamental accuracy, impressions of the 1961 or 1962 article written by Kenneth Arrow, a Nobel Prize winning economist, who said healthcare is not going to operate like any other market.”

Indeed, noted economist, New York Times columnist and author Paul Krugman also references Arrow’s work.

“One of the most influential economic papers of the postwar era was Kenneth Arrow’s Uncertainty and the welfare economics of health care, which demonstrated – decisively, I and many others believe – that health care can’t be marketed like bread or TVs,” Krugman wrote in a 2009 column.

Exactly Zakaria’s point.

Healthcare “is all non-tradable work,” he explained. Yet, “people look at healthcare and they ask themselves, ‘Why aren’t you getting more and more productivity?'”

That approach works in most industries.

“We have wrung inflation out of literally every industry,” Zakaria noted. “In most cases you’ve seen enormous price deflation. Think about computers; think about technology.”

Higher education and healthcare have been elusive when it comes to controlling spiraling costs. In fact inflation rates have been two to three times higher than the national average, he said.

“In both cases, you have the consumer not paying, very complicated government regulation that involves lots of third parties that pay and reimburse on very complicated schedules,” Zakaria said.  “So all the normal price mechanisms that are at work that allow supply and demand to find equilibrium do not exist. “

As Zakaria sees it, the answer does not lie in technology – at least not in technology alone, but rather in the structure of the health system itself and leaders should be prepared to unravel the structure.

“I don’t mean to be the bearer of bad news. What I mean is you have a very complicated job ahead of you, which is the structure. In addition to that you have a Democratic system, which makes it very hard to change the structure.”

http://www.healthcareitnews.com/news/zakaria-health-it-no-magic-bullet

Kenneth J. Arrow, “Uncertainty and the Welfare Economics of Medical Care,” The American Economic Review, December 1963: https://www.aeaweb.org/aer/top20/53.5.941-973.pdf

***

Comment:

By Don McCanne, MD

Although Fareed Zakaria has wavered in the past on what we need to do to improve the health care system in the United States, he has now come to the firm conclusion that we need single payer.

As he states, “There’s absolutely no question that when we look at the ability to provide good healthcare at an affordable price, lower levels of massive inequality in healthcare outcomes or provision, a single government payer and multiple private providers is the answer. It’s absolutely clear that is the only way you can achieve that goal.”

He cites the 1963 landmark article by Nobel laureate Kenneth Arrow, “Uncertainty and the Welfare Economics of Medical Care,” (link above) explaining why health care cannot achieve a competitive equilibrium in the marketplace. In today’s terms, Arrow’s work explains why it is foolish to continue to rely on a marketplace of private health plans plus various public programs to try to manage spending in our $3 trillion health care industry.

As Nobel laureate Paul Krugman states, “health care can’t be marketed like bread or TVs.”

Imagine marketing fire or police or disaster relief services like bread or TVs. Those services should be there, ready for any of us whenever we need them. The same is true for health care. That would work just fine if we made our government the single payer.

Sarah Kliff shops for health care

I thought people should shop more for health care. Then I actually tried it.

By Sarah Kliff
Vox, October 19, 2015

I spend most of my time writing about the health care system. But every now and again, I actually use the system, too. This past week, those two activities collided on a very specific subject: shopping for better medical prices, and why patients don’t do it.

I recently decided to select a medical service strictly on price. This is something many economists think ought to happen more, to lower health spending. I was ready to do my part. Most patients, though, don’t do this, even when they have to spend way more out of pocket to get the more expensive care.

In retrospect, I wish I hadn’t either. The lower-cost procedure — in this case, an MRI — did indeed save my insurance plan money. But it created a worse medical experience for me, and was helpful in highlighting the trade-offs that patients must make in the shopping experience.

This past June, I stress-fractured my left foot. Though I spent six weeks in a very stylish walking cast over the summer, the injury has stubbornly refused to heal. Earlier this fall I saw an orthopedic specialist, who recommended an MRI to get a better sense of what exactly was wrong. He referred me to a large academic medical center for the scan, and I made an appointment.

My insurance quickly intervened — and, as a health care wonk, I was very excited!

I got a phone call one evening from a woman who asked if I’d consider switching to a private imaging center nearby that charged about $400 for an MRI — about half as much as the academic center cost. She offered to help me make the appointment, right then and there.

For me, the cost would be exactly the same; I’d have a $50 copay for the procedure regardless of where I got my foot scanned. But I’d long understood MRIs as a commodity health care service, essentially an advanced photograph that would come out the same regardless of who snapped it. So, in the sake of doing my part to lower national health spending, I switched to the cheaper center.

To preface: I understand my list of complaints is relative minor and at the end of the day probably won’t affect the ultimate outcome of my care. At the same time, I didn’t think I was making any trade-off when I chose a cheaper MRI. Now I know that isn’t true.

The first issue arose when I went back to the orthopedic specialist.

He wasn’t familiar with the place my insurer sent me, and the imaging center had forgotten to fax him a copy of my test. This meant a half-hour wait for me in his office, and more work for the office administrators to track down the images and radiological report. 

Getting an MRI at the expensive medical center would have meant a smoother experience. The administrators there would know the exact drill of how and when to ship off my scan. Instead, I inadvertently created a new inefficiency in my own attempt to reduce wasteful spending.

Then there was the image itself. It did show a stress fracture that hadn’t healed, but it was blurry and a little harder for the doctor to make out what exactly was going on. The academic center he refers patients to, he told me, typically sends back much clearer images.

Knowing what I know now, I’m way more torn on whether I would choose the lower-cost MRI facility.

On the one hand, I did save my insurance plan about $400. If everyone at Vox shopped like I did, then that might do a lot of work to reduce our premiums. That would probably make us all pretty happy! My slightly blurry scan was still enough for my doctor to diagnose the fracture, although I still don’t know if he’d have seen something else on a clearer image.

At the same time, my own experience convinces me I’ve downplayed the trade-offs inherent in shopping for even basic health services. If I went back and did it again, I probably would have gone to the academic medical center for the scan.

Recently, I wrote about a new study looking at 75,000 patients who switched from a no-deductible plan to one requiring $3,750 in spending before the benefits kicked in. It showed that even with that really high deductible, patients didn’t shop on price. Instead, they saved money by just going to the doctor less.

One economist who contributed to the study described the finding as “surprising,” and I agreed: When patients have to cover the full cost of their health care, why wouldn’t they look for a better deal? I even called out MRIs specifically as an area where you’d expect to see price shopping but didn’t.

My own health care experience is far from unique. But it was a helpful, first-person demonstration of how shopping for health care might not be a zero-sum game, and that even with basic services, there can be clear winners and losers.

http://www.vox.com/2015/10/19/9567991/health-care-shopping-mri

***

Comment:

By Don McCanne, MD

One anecdote does not a study make. But Sarah Kliff is a very astute observer of our health care system, and she has an important lesson for us that further challenges the rationale of consumer-directed health care (CDHC).

The concept behind CDHC is that the consumers (i.e., patients) are placed in charge of a portion of the spending on health care, through deductibles and other cost sharing, by using their own money. They then, theoretically, are motivated to shop for better prices. Although Sarah Kliff had met her deductible and thus would not benefit by price shopping, as a well informed journalist covering health care financing, she wanted to see how this concept might work anyway.

As she explains, she accepted the advice given in a cold call from a representative of her insurer – a representative who supposedly assists with obtaining higher quality care at lower prices. Indeed, the price was lower – for the insurer – but the quality was worse, and the patient experience was inferior. (It is ironic that HHS allows the insurers to log these interventions as “quality improvement” that applies to the medical loss ratio, allowing the insurers to retain even more revenue as profits).

She mentions a recent article of hers (covered in a Quote of the Day last week) about an important study that showed that patients with high deductibles do not shop health care prices. Rather the study showed that patients reduce their use of health care services – much of it that would be beneficial – and the sick do so at a greater rate. Thus CDHC does not achieve its goal of reducing prices but rather has the perverse result of reducing beneficial health care services instead.

We want a system that improves quality and the patient experiences while using patient-friendly methods of containing spending. We will not get that from the private insurers, but we would achieve that goal if we established our own public, single-payer national health program.

Houston-Trained Doctor Leads Push For Single-Payer Health Plan

Dr. Robert Zarr, president of Physicians for a National Health Program, says the Affordable Care Act didn’t go far enough. He says only “Medicare for all” will cover everyone and stop medical bankruptcies.

By Carrie Feibel
Houston Public Media, October 21, 2015

The Affordable Care Act has been a target of Republican opposition for years now. But there are also many left-leaning Americans who don’t like the law because they feel it doesn’t do enough. They point out that many people can’t afford the high deductibles on some of the new health plans, and there are still 32 million uninsured people remaining in the U.S.

Dr. Robert Zarr, president of Physicians for a National Health Program, is rallying support for a single-payer health system. Zarr returned recently to Houston to talk about the plan. It was a homecoming of sorts, as Zarr attended Baylor College of Medicine, completed his pediatrics residency at Texas Children’s Hospital, and also earned a master’s degree in public health from the University of Texas School of Public Health.

Now Zarr works as a pediatrician in Washington, D.C., in addition to his advocacy for PNHP. He describes his proposed system as similar to Medicare, but for all ages, and with some key “fixes,” such as the elimination of out-of-pocket costs for medical care. Residents would pay for the system through taxes.

“There are no more deductibles. There are no more co-pays, except to say it is not free,” Zarr said. “We pay taxes, and we do it in a progressive tax system. So the wealthier pay more than the poor, but at the end of the day we all get care in the same hospitals, we get our drugs in the same pharmacy and we get freedom of choice. We can go anywhere we want to go.”

Zarr’s group specifically supports H.R. 676, the “Expanded & Improved Medicare For All Act,” which is sponsored by Congressman John Conyers of Michigan. The bill currently has 53 co-sponsors, including Texas representatives Congressman Al Green, D-Houston, and Congresswoman Sheila Jackson Lee, D-Houston.

You can hear the full interview in the audio player above.

http://www.houstonpublicmedia.org/news/houstontrained-doctor-leads-push-for-singlepayer-health-plan/

Vermont’s Newest Medical Students Weigh in on Single-Payer

Newswise, Oct. 21, 2015

Source Newsroom: University of Vermont    

Newswise — In Bernie Sanders’s home state of Vermont, the newest class of medical students will be participating in a major career milestone – the White Coat Ceremony – on Friday, October 23, 2015. As future physicians, they see a strong need to change the system, but recognize the challenges to actualizing that goal.

“Single payer would be a better system and there are similar systems succeeding in other countries, but it requires everyone’s buy-in for it to work, which clearly isn’t the case right now in America,” says Williston, Vt., native F. Gregory Gause of the University of Vermont College of Medicine’s Class of 2019. “When Vermont tried to unilaterally go to a single-payer system, we were not able to create a more efficient system.”

“As a future physician, I would value practicing in an environment where equal and uninhibited access to care is of paramount importance and doctors are reimbursed in a logical manner,” says Allison Greene, a native of Essex Junction, Vt. “The Patient Protection and Affordable Care Act was a step in the right direction in terms of expanding health insurance coverage and reducing costs, but it seems to have done little to alleviate the administrative burden of signing up for coverage or streamline reimbursement rates for hospitals and clinics. A single-payer system is far simpler, more equitable, and, as has been demonstrated in other countries, produces better health outcomes.”

A native of Sanders’s hometown – Burlington, Vt. – Callie Krumholz Linehan says “I support single-payer healthcare, and believe that all people deserve equal access to care. I will advocate for my patients and my community during all of the many changes to the healthcare landscape over the course of my career.”

Prior to medical school, Gause played basketball for Montreal’s McGill University, where he majored in anatomy and cell biology before returning to Vermont and working as a medical assistant in dermatology at the UVM Medical Center. Greene worked as a medical assistant and rescue squad member, and volunteered at a rural health clinic in California before medical school. Linehan majored in biology at Utica, N.Y.-based Hamilton College and worked briefly with children with Asperger’s syndrome, then moved to Seattle and conducted ovarian cancer research at the Fred Hutchinson Cancer Research Center before returning home.

There are 116 students in the UVM College of Medicine’s Class of 2019. Roughly 30 percent of each class of UVM’s medical students hail from the Green Mountain State.

PNHP note: Physicians for a National Health Program neither supports nor opposes any candidate for public office.

http://www.newswise.com/articles/from-the-land-of-bernie-sanders-vermont-s-newest-medical-students-weigh-in-on-single-payer