PNHP

Use Medicare as model for all health insurance

Use Medicare as model for all health insurance

By Aldebra Schroll, M.D.
Chico (Calif.) Enterprise-Record, Letters, June 27, 2015

We are quickly approaching the 50th anniversary of Medicare on July 30. Medicare is the federally funded health program for seniors 65 and over and those with permanent disabilities. It was developed to guarantee health care to the elderly population and prevent poverty as people age. In surveys Medicare has the highest rate of patient satisfaction.

Surveys show two-thirds of the public support a Medicare for all approach guaranteeing universal health care. Under the Affordable Care Act, 53 million were uninsured for part of 2013. Another 39 million find themselves “underinsured” with deductibles and co-pays that limit their access to health care. Medical bills are a leading cause of personal bankruptcy in the U.S.

An improved Medicare for all would offer universal coverage; through a publicly funded and privately delivered health care system. It would save an estimated $400 billion by eliminating the administrative costs associated with the private insurance industry. As we near this important anniversary, isn’t it time to guarantee health care to all?

Dr. Aldebra Schroll resides in Chico.

http://www.chicoer.com/opinion/20150627/letter-use-medicare-as-model-for-all-health-insurance

Single payer better than flawed ACA

By Melissa Stiles, M.D.
The Capital Times (Madison, Wis.), Letters, June 28, 2015

The Affordable Care Act withstood yet another attack as the U.S. Supreme Court rejected the King v. Burwell challenge. The issue was whether the ACA’s language allows the federal government to provide subsidies to people who bought health insurance in states that did not set up their own “marketplaces.” As only 13 states set up state-managed marketplaces, this decision has significant consequences for millions of Americans. The Urban Institute estimated that 9.3 million people in 34 states would have lost their subsidies within the year and an estimated 8.2 million would have joined the ranks of the uninsured if the decision was upheld.

Although the ACA has many positives (i.e., decreased the number of uninsured, one cannot be denied insurance for a pre-existing condition), it is fundamentally flawed due to its complexity and design. The ACA will never achieve universal coverage. Even if all of the states had taken the Medicaid expansion, there would still be 24 million uninsured. The ACA perpetuates the central role of for-profit interests (insurance companies, Big Pharma, device manufacturers) in the U.S. health care system. We believe this is an unacceptable and an unsustainable health care model.

We believe the way to more forward is to institute a single-payer system that would achieve truly universal, more affordable and comprehensive health care. The annual savings ($400 billion) alone would help finance the system. We believe that health care is a human right.

Everybody in, nobody out!

Dr. Melissa Stiles resides in Madison. She submitted this letter on behalf of the Linda and Gene Farley Chapter of Wisconsin Physicians for a National Health Program.

http://host.madison.com/news/opinion/mailbag/dr-melissa-stiles-single-payer-better-than-flawed-aca/article_0d0cf9b2-ee57-5a58-80b8-b07e218de4b7.html#ixzz3eSf1v8qk

Health insurers’ warped approach to competition

How Insurers Competed in the Affordable Care Act’s First Year

By Katherine Swartz, Mark Hall, Timothy S. Jost
The Commonwealth Fund, June 24, 2015

Abstract

Prior to the Affordable Care Act (ACA), most states’ individual health insurance markets were dominated by one or two insurance carriers that had little incentive to compete by providing efficient services. Instead, they competed mainly by screening and selecting people based on their risk of incurring high medical costs. One of the ACA’s goals is to encourage carriers to participate in the health insurance marketplaces and to shift the focus from competing based on risk selection to processes that increase consumer value, like improving efficiency of services and quality of care. Focusing on six states — Arkansas, California, Connecticut, Maryland, Montana, and Texas — this brief looks at how carriers are competing in the new marketplaces, namely through cost-sharing and composition of provider networks.

From the Conclusions

The ACA reforms will surely stimulate continuing adaptations by carriers, providers, and policymakers, and we expect the competitive strategies in the marketplaces to evolve as consumers and carriers gain more experience with marketplace competition.

http://www.commonwealthfund.org/publications/issue-briefs/2015/jun/insurers-aca-first-year

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Comment:

By Don McCanne, M.D.

What should the consumer expect from marketplace competition? Business experts tell us that competition is the key to higher quality at lower cost. So what has competition between private health insurance plans brought us?

Based on international comparisons, our health care quality is mediocre and our health care costs are by far the highest of all nations. The insurers have been ineffective in improving either of those. Okay, but what about the health plans themselves? Are we receiving high quality insurance products at low prices?

Before the Affordable Care Act (ACA), insurers competed primarily on the prices of their insurance premiums, and they still do. Before ACA, the most effective method of keeping their premiums from increasing more than they did was to exclude people from coverage who actually needed health care. The most important purpose of insurance is to make health care access affordable by diluting risk through insurance risk pools. Yet the insurers instead excluded risk by attempting to insure only those who could pass underwriting standards in the individual market, or by pricing group plans out of the market if they experienced high health care utilization.

A quality risk pooling program would be designed to ensure that everyone receives essential health care, yet by excluding those who have the greatest needs for care, the insurers abandoned any effort to ensure quality in their insurance products.

As far as costs are concerned, health care costs continued to escalate out of control, demonstrating that the insurers could not deliver on the promise of lower costs either.

What has happened since ACA was implemented?

Although the act prohibits medical underwriting, the insurers are still using devious methods to discourage individuals with greater heath care needs from enrolling. As an example, drugs used for certain chronic conditions are placed in upper tiers of drug coverage which require greater coinsurance payments, pricing these products out of reach for the patients, which deters them from joining the plan in the first place. Plans also are still selectively marketed to healthier populations. Professionals and institutions noted for providing care to high needs patents are frequently left out of the insurers’ networks, chasing away patients who use these providers. Again, these efforts to exclude those with needs confirm that the insurers are still marketing low quality insurance products that fall short of the health care needs of the community.

This new report from The Commonwealth Fund shows that the insurers are using two innovations to improve their competitive positions in the marketplace: cost sharing and narrow provider networks.

Cost sharing through deductibles, co-payments, coinsurance, and exclusion of coverage erects financial barriers to care, reducing the use of beneficial services and thus allowing the insurers’ premiums to be priced more competitively. An insurance product that is designed to keep people away from care that they need is a low quality product.

Narrow provider networks reduce health care utilization by preventing coverage of health care professionals and institutions that may be the most appropriate for the patients’ conditions, requiring them to turn to lesser care or no care at all. Also, care may be made less accessible simply by increasing the distances needed to travel to network providers while excluding nearby providers from the networks. Again, insurance products designed to impair access to appropriate health care providers are low quality products.

Thus, with ACA, insurers are impairing quality through the use of the barriers of cost sharing and narrow networks. And regarding costs, it appears that they are again on an upward trajectory. Health care prices have not been controlled. The only slowing has been due to a modest reduction in the use of beneficial health care services caused by these barriers that the insurers have erected. The insurers have failed again on their promise of higher quality at lower cost.

What about the future? The Commonwealth Fund report states, “we expect the competitive strategies in the marketplaces to evolve as consumers and carriers gain more experience with marketplace competition.” We know what this means. The insurers will not be looking for ways to pay for more beneficial health care services. They will be introducing more innovations that prevent patients from getting the care that they need. That’s the way that the marketplace for health insurance products works.

Medicare doesn’t work that way. Instead, efforts are made to include everyone who is qualified and to include all health care professionals and institutions. At the same time, payments are based on legitimate costs and fair margins – a system that is less costly because of administrative efficiencies.

If we really want higher quality at a lower cost, we need to improve Medicare and expand it to cover everyone. The private insurance industry certainly is never going deliver on quality and cost since they will do better for themselves with their warped approach to competition.

America’s health care system is still broken: Why single-payer is the only thing that will ever fix it

The final triumph of Obamacare was great news for Americans depending on it — but it still isn’t enough

By A.W. Gaffney, M.D.
Salon, June 26, 2015

On Thursday, the Supreme Court splintered yet another spear heaved by conservatives trying to destroy, by whatever means necessary, the Affordable Care Act. Those living in the 34 states that rely on the federal “exchange,” who purchase health insurance using subsidies provided by healthcare reform, are understandably relieved.

“Without the subsidy, I am not sure what I was going to do,” said one man, a hairdresser who was diagnosed last year with kidney cancer, to Kaiser Health News. “I was thinking of moving out of my apartment and go live in my car to afford coverage.” Another man, suffering from a form of blood cancer, told the New York Times: “I am nervous about the Supreme Court decision, very nervous,” he said. “If I don’t take that pill, the cancer will come back.” The pill, the Times reported, would otherwise have cost him more than $10,000 a month.

This is what matters most about yesterday’s Supreme Court decision on Obamacare: Many Americans – some 8.2 million, according to an estimate from the Urban Institute – no longer need to worry about being unceremoniously dumped into the ranks of the uninsured. It has been estimated that a ruling in favor of the plaintiffs could have cost between 8,000 and 9,800 lives a year. How the case plays out with respect to ongoing Democratic and Republican political gamesmanship seems, in comparison, a piddling matter.

Now, in other news yesterday, health care stocks were spiking on Wall Street: Insurers (UnitedHealth and Aetna) and corporate hospital networks (Hospital Corporation of America) were seeing strong gains. The link between these events is, of course, obvious: The Affordable Care Act’s premium subsidies are funneled through private health insurance companies, who take a cut. Corporate hospital chains, meanwhile, prefer a well-paying customer.

Together, this might be a bit puzzling for those who’ve adopted that age-old mantra, “What’s good for the health insurance industry is bad for America.” Yet this corporate compromise was fundamental to the passage of Obamacare, as Stephen Brill documents in his book ”America’s Bitter Pill.” As a result, Obamacare is, by and large, good for the health care business. A few years back, as described in a New York Times story headlined, “The President Wants You to Get Rich on Obamacare,” Thomas Scully – who comfortably alternates between working as a government administrator and a government lobbyist – tried to alleviate the concerns of a room of investors about Obamacare at the “21” Club in New York.

“It’s not a government takeover of medicine,” he was quoted by the Times as saying, “It’s the privatization of health care.” As the Times put it, “Billions could flow from Washington to Wall Street, indeed.”

Next question: Why should we care, if the insured are being covered in the process? Well, we should care because our corporate health care compromise comes at a serious cost.

First, it’s a waste of good money. Private insurers have notoriously high overhead: They spend perhaps 12 percent of your premium on administration and profits. Traditional Medicare, in contrast, spends about 2 percent on overhead. A recent analysis found that the insurance expansion under the ACA has been particularly costly from this perspective, with about $1,375 spent on overhead for each newly insured person.

Second, the mandate model of health care reform was never intended to result in universal coverage. “If you took George H. W. Bush’s health plan,” Scully told the investors at the “21” Club with some fairness (again as quoted in the Times), “and removed the label, you’d think it was Obamacare.” The problem with a mandate model – which used to be the conservative approach to health care reform – is that some people will invariably fall between the cracks: Indeed, some 27 million will remain uninsured in the long term under the ACA. Some of these people are undocumented immigrants, while others are working- or middle-class people, for whom the purchase of health insurance is simply too costly.

Third, the problem of underinsurance — which is, roughly speaking, having insurance, but not being able to afford to use it because of copayments or deductibles — is going nowhere quickly. The percentage of non-elderly Americans with private insurance who have a “high-deductible health plan” rose from 22.5 percent in 2009 to 36.9 percent in 2014. Underinsurance doubled between 2003 and 2014, such that by one measure, 31 million Americans are now “underinsured.”

Fourth, the delivery of health care by for-profit corporate enterprises has become an entrenched component of the political economy of American health care. For a particularly unseemly example, consider the explosion of the corporate hospice industry. There was a time not long ago when the hospice was a charitable, religious or not-for-profit enterprise. In the neoliberal era, however, it was all but inevitable that venture capital would try to get in on the market for dying: by 2013, 66 percent of Medicare-certified hospices were for-profit businesses. Quality issues with such for-profit providers are a perennial concern: An investigation by the Washington Post last year, for instance, found that “on several key measures, for-profit hospices as a group fall short of those run by nonprofit organizations,” like the amount spent on nursing each patient.

Which brings us to the final question: What’s the alternative? Is real universal health care – e.g. a single-payer national health program – at this point feasible?

Based on national polling, the answer is yes, absolutely, of course. A majority or near majority generally voice support for a single-payer system, including in one recent survey.

Now, I know, “will of the populace,” yada yada. But on the other hand, there does seem to be a groundswell of outrage at rising inequality in our society that may not be so easily swept away. Electoral politics, to some extent, seem to be reflecting that. Bernie Sanders, for instance – now in second place behind Hilary Clinton in the Democratic presidential primary – has made economic justice the center point of his campaign. He’s also a strong single-payer supporter: “What the United States should do,” he put it in a statement about King v. Burwell yesterday, “is join every other major nation and recognize that health care is a right of citizenship. A Medicare-for-all, single-payer system would provide better care at less cost for more Americans.” Well said, Bernie.

For those who want to open a bottle – or even a case – of champagne to celebrate yesterday’s ruling, I’d say: enjoy. But tomorrow, once the hangover has cleared, the work to transform our corporatized, fragmented, and inequitable health care system remains before us.

A.W. Gaffney is a research fellow in pulmonary and critical care medicine at Harvard Medical School and Massachusetts General Hospital. He received his medical degree from the New York University School of Medicine and completed residency training at Columbia University Medical Center, where he served as chief resident. He is a frequent writer on health policy, blogging at theprogressivephysician.org.

http://www.salon.com/2015/06/26/americas_health_care_system_is_still_broken_why_single_payer_is_the_only_thing_that_will_ever_fix_it/

Next step: Establishing health care as a right through single payer

SUPREME COURT OF THE UNITED STATES

KING ET AL. v. BURWELL, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL.

No. 14–114. Argued March 4, 2015—Decided June 25, 2015

Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter. Section 36B can fairly be read consistent with what we see as Congress’s plan, and that is the reading we adopt.

The judgment of the United States Court of Appeals for the Fourth Circuit is Affirmed.

http://www.supremecourt.gov/opinions/14pdf/14-114_qol1.pdf

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The Elusive Right to Health Care under U.S. Law

By Jennifer Prah Ruger, Ph.D., M.S.L., Theodore W. Ruger, J.D., and George J. Annas, J.D., M.P.H.
The New England Journal of Medicine, June 25, 2015

Is there a right to health care in the United States? No U.S. Supreme Court decision has ever interpreted the Constitution as guaranteeing a right to health care for all Americans. The Constitution does not contain the words “health,” “health care,” “medical care,” or “medicine.” But if we look deeper, a more nuanced picture emerges. The Court has found rights to privacy, to bodily integrity, and to refuse medical care within the vague right to “due process” contained in the Constitution. The Court has also constructed a right to decide to terminate a pregnancy, although it has also ruled that the government has no obligation to subsidize the exercise of this right. When this line of cases is considered together, it would appear that the U.S. Constitution provides scant affirmative obligation to provide health care.

Despite the absence of a universal right to health care in the Constitution, Congress and the Supreme Court have incrementally crafted an incomplete web of health care rights during the past 50 years. In prisons and emergency rooms across the country, physicians and medical institutions have for decades been required to provide medical care. In a 1976 landmark decision in Estelle v. Gamble, for example, the Supreme Court found a right to adequate medical care for prisoners grounded in the Eighth Amendment of the Constitution.

THE COURTS, THE CONGRESS, AND HEALTH CARE RIGHTS

It is notable that all three of these litigation efforts against the ACA — the 2012 ruling on the individual mandate, the 2014 ruling in Hobby Lobby, and the forthcoming ruling on subsidies for exchange participants — arise from the devolved structures of American health governance; none of the three issues would be valid constitutional or statutory objections to a taxpayer-financed single-payer system. As the Court ruled in Hobby Lobby, religious objections to general taxation used to finance national imperatives are not protected as strongly as the specific claim of Hobby Lobby against the regulatory mandate of the ACA. Perhaps paradoxically, under the Court framework, a completely single-payer system is more constitutionally sound than the ACA statutory design, which aims to preserve a private institutional role in the health care system.

http://www.nejm.org/doi/full/10.1056/NEJMhle1412262?query=TOC

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Comment:

By Don McCanne, MD

According to the Supreme Court, Congress’s plan was “to improve health insurance markets, not to destroy them,” and thus they upheld the subsidies for the plans offered through the state insurance exchanges. But Congress has failed to establish a process through which absolutely everyone is assured of health care when needed. That is, Congress has established health care as a right only in selected circumstances, but not for everyone. In contrast, as the authors of the NEJM article state, “…under the Court framework, a completely single-payer system is more constitutionally sound than the ACA statutory design…” Enacting a single payer system would finally establish health care as a right throughout the United States.

Physicians for a National Health Program release on the King v. Burwell decision by the Supreme Court: https://www.pnhp.org/news/2015/june/%E2%80%98subsidies-upheld-but-health-needs-still-unmet%E2%80%99-doctors-group

‘Subsidies upheld, but health needs still unmet’: doctors group

Although the Supreme Court has upheld the premium subsidies under the Affordable Care Act, the law remains incapable of remedying the U.S. health crisis, physician group says

FOR IMMEDIATE RELEASE
June 25, 2015

Contact:
Mark Almberg, PNHP communications director, 312-782-6006

Physicians for a National Health Program, an organization of 19,000 doctors who support single-payer national health insurance, released the following statement today:

Today’s decision by the Supreme Court in King v. Burwell to uphold the Affordable Care Act’s premium subsidies in about three dozen states will spare more than 6 million Americans the health and financial harms associated with the sudden loss of health insurance coverage.

For that reason alone the decision must be welcomed: Having health insurance is better than not having coverage, as several research studies have shown.

That said, the suffering that many Americans are experiencing today under our current health care arrangements is intolerable, with approximately 35 million people remaining uninsured, a comparable number underinsured, and rapidly growing barriers to medical care in the form of rising premiums, copayments, coinsurance and deductibles, and narrowing networks.

The unfortunate reality is that the ACA, despite its modest benefits, is not a remedy to our health care crisis: (1) it will not achieve universal coverage, as it will still leave at least 27 million uninsured in 2025, (2) it will not make health care affordable to Americans with insurance, because of high copays, deductibles and gaps in coverage that leave patients vulnerable to financial ruin in the event of serious illness, and (3) it will not control costs.

Why is this so? Because the ACA perpetuates a dominant role for the private insurance industry. Each year, that industry siphons off hundreds of billions of health care dollars for overhead, profit and the paperwork it demands from doctors and hospitals; denies care in order to increase insurers’ bottom line; and obstructs any serious effort to control costs.

In contrast, a single-payer system – an improved Medicare for All – would achieve truly universal care, affordability, and effective cost control. It would put the interests of our patients – and our nation’s health – first.

Single payer is simple: everyone in the U.S. would be covered for all medically necessary care in a single program financed by equitable taxes.

By replacing multiple private insurers with a single, nonprofit agency like Medicare that pays all medical bills, we would save approximately $400 billion annually by slashing the administrative bloat in our current private-insurance-based system. That money would be redirected to clinical care. Copays, coinsurance and deductibles would be eliminated.

Further, such a single, streamlined system would be able to rein in costs for medications and other supplies through the system’s strong bargaining clout – again, to our patients’ benefit.

A single-payer system would also be legally robust.

Because of the ACA’s administrative complexity and flaws – largely reflecting its accommodation to the private health insurance industry and other corporate, profit-oriented interests in U.S. health care – it is particularly vulnerable to the kind of legal challenge we saw today.

Our patients, our people and our national economy cannot wait any longer for an effective remedy to our health care woes. The stakes are too high. We need to move beyond the administratively wasteful, complex and inadequate ACA to a more fundamental, rational single-payer national health program.

Contrary to the claims of those who say we are “unrealistic,” a single-payer system is within practical reach. The most rapid way to achieve universal coverage would be to improve upon the existing Medicare program – which is celebrating its 50th anniversary this year, showing it has stood the test of time – and expand it to cover people of all ages. There is legislation before Congress, notably H.R. 676, the “Expanded and Improved Medicare for All Act,” which would do precisely that.

What is truly unrealistic is believing that we can provide universal and affordable health care in a system dominated by private insurers and Big Pharma.

The American people desperately need a universal health system that delivers comprehensive, equitable, compassionate and high-quality care, with free choice of provider and no financial barriers to access. Polls have repeatedly shown an improved Medicare for all, which meets these criteria, is the remedy preferred by two-thirds of the population. A solid majority of the medical profession now favors such an approach, as well.

We pledge to step up our work for the only equitable, financially responsible and humane cure for our health care ills: single-payer national health insurance, an expanded and improved Medicare for all.

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization of more than 19,000 doctors who support single-payer national health insurance.

Losing Obamacare OK if it leads to single-payer system

By Alan Shay
Palm Beach Post, June 24, 2015

I am growing in favor of abolishing the Affordable Care Act. In a recent letter, “Obamacare doesn’t set insurance costs,” the writer discussed the structure and costs associated with medical insurance policies. He is correct when he states that the insurance companies are responsible for the development and pricing of the current offerings of policies through the marketplace.

The ACA sets the guidelines and mandates associated with certain policy provisions, associated costs and profits.

One should remember that the ACA was introduced as a compromise proposal to appease and to recruit assistance from the opposition, while keeping the insurance companies in the loop to underwrite the risk.

The proposal that was most popular initially was a single-payer plan, similar to the comprehensive and very excellent Medicare program that seniors enjoy. In retrospect, however, the single-payer option would probably have been the better choice, since the ACA’s current options have evolved to offerings of high-cost/low-benefit plans — similar to the offerings that existed pre-Obamacare.

The potential “good” that could come from a court ruling against the ACA would be the possible development of a single-payer system, similar to Medicare, for all Americans — including our elected representatives in the U.S. House and Senate.

This “socialistic” plan (read: Medicare) currently provides a very adequate and acceptable level of benefits to the masses. I feel certain that our politicians would now view and welcome this structure, especially if their current plans were to disappear and the lawmakers were given the same options as their constituents.

Alan Shay is a retired financial planner and a licensed insurance agent. He resides in West Palm Beach.

http://www.palmbeachpost.com/news/news/opinion/point-of-view-losing-obamacare-ok-if-it-leads-to-s/nmjfP/

How Undocumented Immigrants Help Strengthen Our Health Care System

By Esther Yu-Hsi Lee
Think Progress, June 24, 2015

Undocumented immigrants provided a surplus of $35.1 billion to the Medicare Trust Fund between 2000 and 2011, according to a new Journal of General Internal Medicine study recently published. The findings challenge concerns that undocumented immigrants are financially burdening the health care system.

According to the study, undocumented immigrants contributed $2.2 and $3.8 billion more than they withdrew annually between 2000 and 2011 to a Medicare program known as the Hospital Insurance Trust fund. The total contribution of their surplus was $35.1 billion.

Medicare consists of two trust funds. The Hospital Insurance Trust Fund (HITF), mostly paid through payroll taxes (and interest on past surpluses), pays for inpatient care. The Supplemental Medical Insurance Trust Fund (SMITF), mostly funded through enrollee premiums and Congressional appropriations from general revenues, pays for outpatient care.

“If unauthorized immigrants had not contributed to nor drawn HITF funds from 2000 to 2011, the HITF would become insolvent in 2029 — 1 year earlier than is currently predicted by Medicare’s Trustees based on their intermediate cost assumptions,” the study concluded.

The study found that in 2011 alone, undocumented immigrants paid in $3.5 billion more than they needed in care. “Unauthorized immigrants generated an average surplus of $316 per capita to the Trust Fund, while other Americans generated a deficit of $106 per capita,” the study’s press release indicated.

The report was a collaborative effort from researchers at Harvard Medical School, the Institute for Community Health, and the City University of New York School of Public Health at Hunter College. Researchers took data from 201,398 respondents in 2012 using the Current Population Survey.

If undocumented immigrants were allowed to get legal status and get on a path to citizenship like the one laid out in the Senate’s 2013 comprehensive immigration reform bill, the study estimated that the group at large could “contribute a cumulative surplus of $45.7 billion, as compared to $44.1 billion in the absence of this policy, from 2012 to 2019.”

Undocumented immigrants contribute the most to the HITF since they pay taxes with the jobs they have, sometimes on a borrowed or invalid Social Security number. That group also consists of undocumented immigrants shielded from deportation relief under President Obama’s 2012 executive action known as the Deferred Action for Childhood Arrivals (DACA) program, who have valid Social Security numbers and also contribute into Social Security taxes. Meanwhile, they typically don’t benefit from the program. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 imposed restrictions that barred undocumented immigrants from from accessing Medicare benefits. While they can collect on Medicare if they ever legalize, about one-third of undocumented immigrants leave the U.S.

Beyond Medicare, undocumented immigrants incur an estimated $5.5 billion in non-Medicare publicly funded health care expenses annually, but they also contribute to state and local taxes that help to offset those expenses. An Institute on Taxation and Economic Policy study found that undocumented immigrants paid an estimated $10.6 billion in 2010.

The lack of access to primary and preventative care can result in higher use of emergency room services and poor quality of care for immigrants who otherwise can’t find or afford care. As a result, undocumented immigrants are at disproportionate risk for chronic health issues like diabetes, tuberculosis, obesity, and drug and alcohol abuse. Poverty and social exclusion are also factors that perpetuate unhealthy living habits that can exacerbate those health issues.

Some state lawmakers are now trying to give undocumented immigrants the opportunity to sign up for health insurance. Earlier this month, the California Senate approved a bill to allow undocumented immigrants to buy health insurance on a state exchange under the federal Affordable Care Act. The bill still needs support from the General Assembly, a gubernatorial signature, and a federal waiver. A 2014 poll of California voters surveyed by the California Endowment found that 54 percent of voters want health coverage for undocumented immigrants.

http://thinkprogress.org/immigration/2015/06/24/3673064/undocumented-surplus-medicare-trust-fund/

Unauthorized immigrants reinforce Medicare trust funds

Unauthorized Immigrants Prolong the Life of Medicare’s Trust Fund

By Leah Zallman MD, MPH, Fernando A. Wilson PhD, James P. Stimpson PhD, Adriana Bearse MS, Lisa Arsenault PhD, Blessing Dube MPH, David Himmelstein MD, Steffie Woolhandler MD, MPH
Journal of General Internal Medicine, June 18, 2015

Abstract

Background and Objective

Unauthorized immigrants seldom have access to public health insurance programs such as Medicare Part A, which pays hospitals and other health facilities and is funded through the Medicare Trust Fund.

Design and Main Measures

We tabulated annual and total Trust Fund contributions and withdrawals by unauthorized immigrants (i.e., outlays on their behalf) from 2000 to 2011 using the Current Population Survey and Medical Expenditure Panel Surveys. We estimated when the Trust Fund would be depleted if unauthorized immigrants had neither contributed to it nor withdrawn from it. We estimated Trust Fund surpluses by unauthorized immigrants if 10 % were to become authorized annually over the subsequent 7 years.

Key Results

From 2000 to 2011, unauthorized immigrants contributed $2.2 to $3.8 billion more than they withdrew annually (a total surplus of $35.1 billion). Had unauthorized immigrants neither contributed to nor withdrawn from the Trust Fund during those 11 years, it would become insolvent in 2029—1 year earlier than currently predicted. If 10 % of unauthorized immigrants became authorized annually for the subsequent 7 years, Trust Fund surpluses contributed by unauthorized immigrants would total $45.7 billion.

Conclusions

Unauthorized immigrants have prolonged the life of the Medicare Trust Fund. Policies that curtail the influx of unauthorized immigrants may accelerate the Trust Fund’s depletion.

http://link.springer.com/article/10.1007/s11606-015-3418-z?wt_mc=email.event.1.SEM.ArticleAuthorOnlineFirst

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Unauthorized immigrants prolong the life of Medicare Trust Fund: JGIM study

PNHP, June 23, 2015

Unauthorized immigrants pay billions more into Medicare’s Hospital Insurance Trust Fund each year than they withdraw in health benefits, according to research from Harvard Medical School, the Institute for Community Health and the City University of New York School of Public Health at Hunter College.

In 2011 alone, unauthorized immigrants paid in $3.5 billion more than they utilized in care.  Unauthorized immigrants generated an average surplus of $316 per capita to the Trust Fund, while other Americans generated a deficit of $106 per capita. The authors conclude that reducing unauthorized immigration would worsen Medicare’s financial health.

Payroll taxes are the major revenue source for the Trust Fund, which mostly pays hospital bills. Unauthorized immigrants often pay these taxes, usually under a borrowed or invalid Social Security number. Unauthorized immigrants are mostly working age, have high rates of labor force participation, and hence contribute substantial payroll taxes. Medicare outlays for unauthorized immigrants are low because they are ineligible for Medicare benefits.

Senior author Dr. Steffie Woolhandler, professor of public health at City University of New York and lecturer in medicine at Harvard, said: “The numbers contradict the myth that unauthorized immigrants are a drain on the health system. Reducing immigration would worsen Medicare’s financial woes.”

https://www.pnhp.org/news/2015/june/unauthorized-immigrants-prolong-the-life-of-medicare-trust-fund-jgim-study

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Comment:

By Don McCanne, MD

Discussions of expanding health care coverage to everyone frequently result in expressions of concern about immigration policy. That unauthorized immigrants place a burden on our public resources has become a meme that is not substantiated in fact. This study adds to the evidence that unauthorized immigrants contribute more toward our public resources than they consume in benefits. Their contributions have reinforced our Medicare trust funds.

Under a single payer system, everyone is included. Studies such as this should allay fears that the nation cannot afford the costs of including unauthorized immigrants. Acknowledging that they are here and are important contributors to our economy should ease concerns about the need to move them from non-compliant use of Social Security numbers to a transparent system of accurate identification. Under single payer, they would openly contribute their equitable share to our pooled health care funds.

Everyone should have health care whenever needed. Let’s fix our system.

Unauthorized immigrants prolong the life of Medicare Trust Fund: JGIM study

Harvard and CUNY researchers find unauthorized immigrants generated surplus contributions of $35.1 billion from 2000-2011, prolonging the Trust Fund’s solvency

FOR IMMEDIATE RELEASE, June 23, 2015
Contact: Mark Almberg, (312) 782-6006, mark@pnhp.org

Unauthorized immigrants pay billions more into Medicare’s Hospital Insurance Trust Fund each year than they withdraw in health benefits, according to research from Harvard Medical School, the Institute for Community Health and the City University of New York School of Public Health at Hunter College. The study appeared last Thursday as an “online first” article in the Journal of General Internal Medicine.

In 2011 alone, unauthorized immigrants paid in $3.5 billion more than they utilized in care.  Unauthorized immigrants generated an average surplus of $316 per capita to the Trust Fund, while other Americans generated a deficit of $106 per capita. The authors conclude that reducing unauthorized immigration would worsen Medicare’s financial health.

Payroll taxes are the major revenue source for the Trust Fund, which mostly pays hospital bills. Unauthorized immigrants often pay these taxes, usually under a borrowed or invalid Social Security number. Unauthorized immigrants are mostly working age, have high rates of labor force participation, and hence contribute substantial payroll taxes. Medicare outlays for unauthorized immigrants are low because they are ineligible for Medicare benefits.

The study authors examined Medicare Trust Fund contributions and expenditures for each year from 2000 through 2011. They analyzed data from the Census Bureau’s Current Population Survey to calculate tax contributions, and used the Medical Expenditure Panel Survey to determine medical expenses paid by Medicare.

The study found that immigrants contributed a surplus of between $2.2 billion and $3.8 billion per year, or a total of $35.1 billion from 2000-2011. Had unauthorized immigrants neither contributed to nor withdrawn from the Trust Fund during those 11 years, it would become insolvent in 2029 – one year earlier than currently predicted.

“For years I have seen my unauthorized immigrant patients be blamed for driving up health care costs,” said lead author Dr. Leah Zallman, a faculty member at Harvard Medical School, researcher at the Institute for Community Health and primary care physician at Cambridge Health Alliance. “Yet few acknowledge their contributions. Our study demonstrates that in one large sector of the U.S. health care economy, unauthorized immigrants actually subsidize the care of other Americans.”

Senior author Dr. Steffie Woolhandler, professor of public health at City University of New York and lecturer in medicine at Harvard, said: “The numbers contradict the myth that unauthorized immigrants are a drain on the health system. Reducing immigration would worsen Medicare’s financial woes.”

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“Unauthorized Immigrants Prolong the Life of Medicare’s Trust Fund,” by Leah Zallman, M.D., M.P.H., Fernando A. Wilson, Ph.D., James P. Stimpson, Ph.D., Adriana Bearse, M.S., Lisa Arsenault, Ph.D., Blessing Dube, M.P.H., David U. Himmelstein, M.D., Steffie Woolhandler, M.D., M.P.H. Journal of General Internal Medicine, June 18, 2015.

A PDF of the article is available to media professionals upon request from Mark Almberg at mark@pnhp.org.

Physicians for a National Health Program (www.pnhp.org) is a nonprofit research and education organization of more than 19,000 doctors who support single-payer national health insurance. PNHP had no role in funding or otherwise supporting the study described above.

Medicare at 50: Strengths to Build On

By John Geyman, M.D.
The Huffington Post, June 22, 2015

Traditional, or Original, Medicare turns 50 on July 30, having had many challenges and achievements from the days of its passage to today. It is time to celebrate its many successes, note some of its current challenges and threats to its future, and briefly discuss how it gives us a strong foundation upon which to build still-needed health care reform.

When it was enacted in 1965, about one-half of seniors in the U.S. lacked health insurance, and many could not afford necessary health care. When it was passed with strong bipartisan support (313-116 in the House, and 70-24 in the Senate), 20 million Americans age 65 and older gained health insurance.1

From the start, Medicare was a political football raising strong arguments for and against any kind of universal health insurance, quite similar to those we hear today, including from the American Medical Association, hospitals, and the health insurance industry. But a “corporate compromise” was struck in 1965 whereby private insurers were relieved of their worse health risks, hospitals could expect assured payments for their costs of serving a previously disadvantaged population, and physicians gained a permissive “usual, customary, and reasonable” reimbursement policy.2 Claims processing and bill auditing were contracted out by the government to private fiscal intermediaries, especially Blue Cross and Blue Shield plans.3

From the beginning, Medicare has provided a broad set of benefits, defined by law, protecting all seniors, many of whom could not afford health insurance in the private market. Part A provides hospital insurance, while Part B provides supplementary medical insurance for 80 percent of physician services (initially with a $50 deductible and 20 percent coinsurance), X-ray and laboratory tests, and some home health and outpatient and mental health services. Some additional benefits were added in later years to this basic program, including coverage for the disabled and patients with end-stage renal disease in 1972 and partial coverage for prescription drugs in 2003 (Part D). Medicare’s benefits have always been considered an earned right, not an entitlement, since all beneficiaries pay into the program through mandatory contributions from individuals and/or employers.4

Today, Medicare is a very large program, covering more than 55 million Americans, including all seniors and 9 million people with permanent disabilities under age 65. It accounted for 14 percent of the federal budget in 2014 and about 20 percent of total personal health expenditures in 2013.5 Since the 1990s, we have seen an increasing trend toward privatized Medicare plans (Part C), starting with Medicare + Choice HMOs in the 1990s and their sequel, Medicare Advantage (MA) since 2003. These plans have been promoted by conservative policymakers and think tanks with a goal to replace Medicare as an “entitlement program” with private market plans, health savings accounts and vouchers. Almost one-third of seniors are now enrolled in MA plans.

The Many Strengths of Traditional Medicare over 50 Years

Traditional Medicare has performed much better over the years than any of these private plans, which operate with the goal of profits more than service. Table 1 summarizes the major differences between traditional Medicare and privatized plans.6

Source: Adapted from Geyman, JP. Shredding the Social Contract: The Privatization of Medicare. Monroe, ME. Common Courage Press, 2006, p. 206.

These comparisons are supported by many studies over the years. As just four examples:

A literature review by the Kaiser Family Foundation of 40 studies since 2000 found that beneficiaries rated access and quality of care better in traditional Medicare than in Medicare Advantage, especially by those who were sick.7

An analysis by the Urban Institute over three decades found that private Medicare plans cost the government more than fee-for-service traditional Medicare, which contained costs better than private plans over those years.8

Traditional Medicare operates with an administrative overhead of 2 percent, compared to overhead of Medicare Advantage about seven times higher.9

The Centers for Medicare and Medicaid Services (CMS) took 35 enforcement actions against Medicare Advantage plans and Medicare Part D plans in 2014, particularly for inappropriate denials of care and requiring unnecessary preauthorization of services and medications that resulted in more cost shifting to beneficiaries.10

Some Major Challenges Facing Medicare Today

As in 1965, Medicare remains a lightning rod for intense political debates over its future. Despite its proven track record for efficiency, reliability, and responsible service over these last 50 years and widespread public support, Republicans are united in their attempts to dismember it, convert it to a voucher program, and shift patients to the private marketplace, all under the guise of reining in federal spending and austerity. Some Democrats are amenable to raising the eligibility age for Medicare and increasing cost sharing. These ideas are a complete disconnect with the needs of our aging society in a time of increasing inequality of incomes. More than 25 million seniors and people with disabilities live on annual incomes of $23,500 or less, many of whom cannot afford premiums and cost-sharing in either traditional or privatized Medicare. And as our population ages, pensions that in the past assured defined benefits are shifting to defined benefit pensions, without such assurances.11 There are still many gaps in coverage, even within traditional Medicare, including for long-term care and dental care.

Future funding for Medicare is seriously threatened and murky at best. The Obama administration has told us that the Affordable Care Act (ACA) will be financed in part by $716 billion in Medicare cuts over 10 years, with the unbelievable claim that these cuts will not result in reduction of services. The recently passed H. R. 2, the “doc fix” bill, has provisions in it that will require new deductibles in first-dollar supplemental Medigap plans (held by 40 percent of Medicare beneficiaries) and expand means-testing for Medicare Part D, both of which will increase costs for seniors and further undermine traditional Medicare.

Just as the future of Medicare is unclear, so is that of our entire health care system. The U. S. Supreme Court is expected to rule in coming days on the legality of subsidies under the ACA. A negative ruling will be a serious blow to the ACA and call into question where we should go next. Republicans in Congress will push for repeal or defunding parts of the ACA. As the debate heats up, the leading alternatives will likely be: (1) continuation of the ACA as it unravels, (2) some GOP “plan” based on patients having “more skin in the game” that further threatens access and affordability of care; (3) revival of the “public option” idea, hardly an effective fix as merely adding one more payer to our dysfunctional multi-payer financing system; and (4) long-overdue consideration of single-payer national health insurance that would cover all Americans in a large risk pool with more benefits, less cost, more reliability and equity in a sustainable way, as described in my recent book, How Obamacare Is Unsustainable: Why We Need a Single-Payer Solution for All Americans.11

Traditional Medicare has proven its superiority over any private, market-based alternatives for the last 50 years. It is time to build on this social insurance model as the health care debate continues.

References:

  1. Rosenblatt, B. House passes massive expansion of health care coverage. Washington, DC. National Academy of Social Insurance, April 10, 2015.
  2. Geyman, JP. Shredding the Social Contract: The Privatization of Medicare. Monroe, ME. Common Courage Press, 2006, pp. 49-51.
  3. Oberlander, J. The Political Life of Medicare. Chicago. The University of Chicago Press, 2003, p. 33.
  4. Study Panel on Medicare’s Larger Social Role, Final Report. Washington, DC. National Academy of Social Insurance, 1999, pp. 31-35.
  5. Cubanski, J. A primer on Medicare: Key facts about the Medicare program and the people it covers. Kaiser Family Foundation, March 20, 2015.
  6. Ibid # 2, p. 206.
  7. Gold, J, Casillas, G. What do we know about health care access and quality in the Medicare Advantage versus the traditional Medicare program? Kaiser Family Foundation, November 6, 2014.
  8. Boccuti, C, Moon, M. Comparing Medicare and private insurers: growth rates in spending over three decades. Health Affairs (Millwood) 22 (2): 230, 2003.
  9. Himmelstein, D, Woolhandler, S. The post-launch problem: the Affordable Care Act’s persistently high administrative costs. Health Affairs Blog, May 27, 2015.
  10. Herman, B. Medicare is doing more to police Advantage and Part D lapses, but does it matter? Modern Healthcare, December 4, 2014.
  11. Geyman, JP. How Obamacare Is Unsustainable: Why We Need a Single-Payer Solution for All Americans. Friday Harbor, WA. Copernicus Healthcare, 2015.

http://www.huffingtonpost.com/john-geyman/medicare-at-50-strengths_b_7637296.html

Robert Reich supports Medicare for all, but…

Making the Economy Work for the Many and Not the Few

#11: Medicare Isn’t the Problem; It’s the Solution

By Robert Reich
HuffPost Politics, June 22, 2015

Again and again the upcoming election you’ll hear conservatives claim that Medicare — the health insurance program for America’s seniors — is running out of money and must be pared back.

Baloney. Medicare isn’t the problem. In fact, Medicare is more efficient than private health insurance.The real problem is that the costs of health care are expected to rise steeply.

Medicare could be the solution — the logical next step after the Affordable Care Act toward a single-payer system.

Please see the accompanying video — #11 in our series on ideas to make the economy work for the many rather than for the few. And please share.

Some background: Medicare faces financial problems in future years because of two underlying trends that will affect all health care in coming years, regardless of what happens to Medicare:

The first is that healthcare costs are rising overall — not as fast as they were rising before the Affordable Care Act went into effect, but still rising too quickly.

The second is that the giant post­war baby boom is heading toward retirement and older age. Which means more elderly people will need more health care, adding to the rising costs.

So how should we deal with these two costly trends? By making Medicare available to all Americans, not just the elderly.

Remember, Medicare is more efficient than private health insurers ­­ whose administrative costs and advertising and marketing expenses are eating up billions of dollars each year.

If more Americans were allowed to join Medicare, it could become more efficient by using its growing bargaining power to get lower drug prices, lower hospital bills, and healthier people.

Allowing all Americans to join Medicare is the best way to control future healthcare costs while also meeting the needs of the baby boomer and other Americans.

Everyone should be able to sign up for Medicare on the healthcare exchanges set up under the Affordable Care Act. This would begin to move America away from its reliance on expensive private health insurance, and toward Medicare for all – a single­ payer system.

Medicare isn’t a problem. It’s part of the solution.

http://www.huffingtonpost.com/robert-reich/medicare-solution-for-making-economy-work_b_7635620.html

Video: https://www.facebook.com/moveon/videos/vb.7292655492/10152825520900493/

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Public Plan Option in a Market of Private Plans

By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.
Physicians for a National Health Program, March 26, 2009

The “public plan option” won’t work to fix the health care system for two reasons.

1. It forgoes at least 84 percent of the administrative savings available through single payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians offices, and nursing homes, which would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the vast majority of bureaucratic waste. Hence, even if 95 percent of Americans who are currently privately insured were to join the public plan (and it had overhead costs at current Medicare levels), the savings on insurance overhead would amount to only 16 percent of the roughly $400 billion annually achievable through single payer — not enough to make reform affordable.

2. A quarter century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan — which started as the single payer for seniors and has now become a funding mechanism for HMOs — and a place to dump the unprofitably ill. A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan.

https://www.pnhp.org/news/2009/march/himmelstein_and_wool.php

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Comment:

By Don McCanne, MD

In his enthusiastic endorsement of single payer Medicare for all, Robert Reich also renews the call for the “public option” of allowing people to purchase Medicare through the exchanges established by the Affordable Care Act. During the health care reform process, the public option had wide support, but was first weakened considerably and then eventually rejected by Congress in a power play by Sen. Joseph Lieberman.

In spite of the modest benefits of the Affordable Care Act, nothing has changed that would alter the concerns about the public option expressed by David Himmelstein and Steffie Woolhandler and others of us at PNHP.

At the time the public option was being considered, I wrote the following: “The option to purchase a public plan within a market of private health insurance plans would merely provide one more player in our inefficient, dysfunctional, fragmented, multi-payer system of financing health care, that is if the public option even survives the political process. It would leave in place the deficiencies that have resulted in very high costs with the poorest health care value of all nations (i.e., overpriced mediocrity in health care).”

Even if Medicare were offered for purchase in the exchanges, the premiums would not be competitive with the low-actuarial-value silver and bronze plans with their very high deductibles, especially since the Medicare risk pool includes higher cost elderly and disabled individuals. If Medicare were revised to make it competitive, benefits would have to be reduced when what we need instead is an improved Medicare with expanded benefits.

One possibility would be to provide subsidies for those electing the Medicare option, but either the beneficiaries’ share would still be too great, certainly making the plan non-competitive, or the public subsidies would have to be greater than those for the private low-actuarial-value insurance plans – an approach that would be vigorously opposed by the all-powerful private insurers.

Besides, it is unlikely that Congress would support higher subsidies for a public option Medicare when their agenda has been the opposite – providing higher subsidies for the private Medicare Advantage plans, sending us in the direction of a privatized Medicare.

Although Robert Reich proposes a public option version of Medicare as a way to begin moving us toward a single payer Medicare for all, it is difficult to perceive how the transition would take place. Offering an option to purchase Medicare is a very small step that leaves everything else in place. As Medicare Advantage demonstrates, one-third of beneficiaries have moved in the opposite direction – from traditional Medicare to private insurance options. That would continue as long as Congress continues to advance policies that cater to the insurers more than they do to the public.

Reich seems to be recommending a two step path to reform – one step offering the Medicare option and a second step of converting to single payer Medicare for all. Quentin Young has compared that to taking two steps to cross a chasm. That first step can lead to a serious misadventure, but it should not be a surprise.