Doctors Complain They Will Be Paid Less By Exchange Plans

By Roni Caryn Rabin
Kaiser Health News, November 19, 2013 Many doctors are disturbed they will be paid less — often a lot less — to care for the millions of patients projected to buy coverage through the health law’s new insurance marketplaces. Some have complained to medical associations, including those in New York, California, Connecticut, Texas and Georgia, saying the discounted rates could lead to a two-tiered system in which fewer doctors participate, potentially making it harder for consumers to get the care they need. “As it is, there is a shortage of primary care physicians in the country, and they don’t have enough time to see all the patients who are calling them,” said Peter Cunningham, a senior fellow at the nonpartisan Center for Studying Health System Change in Washington D.C. If providers are paid less, “are [enrollees] going to have difficulty getting physicians to accept them as patients?” Physicians are uncomfortable discussing their rates because of antitrust laws, and insurers say the information is proprietary. But information cobbled together from interviews suggests that if the Medicare pays $90 for an office visit of a complex nature, and a commercial plan pays $100 or more, some exchange plans are offering $60 to $70. Insurance officials acknowledge they have reduced rates in some plans, saying they are under enormous pressure to keep premiums affordable. They say physicians will make up for the lower pay by seeing more patients, since the plans tend to have smaller networks of doctors. http://www.kaiserhealthnews.org/Stories/2013/November/19/doctor-rates-marketplace-insurance-plans.aspx

Comment:

By Don McCanne, M.D. Insurers will be paying physicians less through their exchange plans than they do through their existing commercial plans. If the rates turn out to be typically 30 or 40 percent less, as this article suggests, they will have problems maintaining adequate provider networks. An insurance card is of little value if you cannot find physicians who will accept it. As we said from the start, those designing health care reform were making a terrible mistake when they decided to make health insurance premiums affordable while largely ignoring health care costs. Look what they did: * They assigned very low actuarial values to the plans that most individuals will select, leaving 30 to 40 percent of health care costs to be paid by the patient, though some will receive inadequate subsidies. * They designed plans with very high deductibles, causing the large percentage of patients who need less care to receive virtually no sickness or injury benefits from their plans. * They reduced the size of their provider networks which will reduce spending by making care less accessible, especially specialized care. * Now it appears that they will be reducing provider payments to levels that will be rejected by many physicians. Although employer-sponsored plans are moving in the same direction, it is likely that many physicians will limit their practices to these plans and cash-paying patients, while avoiding patients in the exchange plans and the chronically-underfunded Medicaid program. * As part of the SGR fix, legislators are considering not allowing any inflationary increases in the Medicare program for the next ten years – keeping the payment rates flat. If so, physicians are apt to leave the Medicare program as payment rates approach that of Medicaid. As we approach $3 trillion in health care spending, this is criminal! For that kind of spending, everyone could have high quality health care. Instead, we get a system that perpetuates disparities in health care while creating financial burdens for precisely those individuals who most need health care. The entire health care system will not collapse, but this experiment will perform so miserably that most will consider it to be a failure. We don’t need to go back to the drawing boards. We merely need to enact a system that we already know will achieve our goals – an improved Medicare for all.

Majority in U.S. Say Healthcare Not Gov’t Responsibility

By Joy Wilke
Gallup, November 18, 2013 Poll: Do you think it is the responsibility of the federal government to make sure all Americans have healthcare coverage, or that it is not the responsibility of the federal government? Year   Yes No
2001   62  34
2002   62  35
2003   59  39
2004   64  34
2005   58  38
2006   69  28
2007   64  33
2008   54  41
2009   47  50
2010   47  50
2011   50  46
2012   44  54
2013   42  56
(Polls were taken in November each year) The 56% of U.S. adults who now say it is not the federal government’s responsibility to make sure all Americans have healthcare coverage continues to reflect a record high. Prior to 2009, a clear majority of Americans consistently had said the government should take responsibility for ensuring that all Americans have healthcare. The most recent data were collected in Gallup’s annual Health and Healthcare poll, conducted Nov. 7-10. The percentage of U.S. adults who said it is the federal government’s responsibility to ensure all Americans have healthcare coverage peaked at 69% in 2006. Attitudes began to shift significantly in 2007, and continued to change through the time President Barack Obama took office in 2009. Americans who feel healthcare coverage is not the federal government’s responsibility have been in the clear majority the past two years. Attitudes across all three partisan groups have shifted away from the view that ensuring healthcare coverage is a proper role of government, but most significantly among Republicans and independents. In September 2000, 53% of Republicans believed the government should not be responsible for ensuring all Americans had health coverage; today, 86% feel that way, an increase of 33 percentage points in 13 years. Over the same period, the percentage of Republicans believing the government should ensure healthcare coverage for all has fallen from 42% to 12%. Fifty-five percent of independents currently say the government should not be involved with healthcare — an increase of 28 points since 2000. The percentage of Democrats who hold this view is now 30%, its highest level since Gallup first asked the question and an 11-point increase since 2000 — with the largest change in opinion occurring between 2006 and 2008. Implications Americans’ attitudes toward the government’s role in ensuring all Americans have access to affordable healthcare have changed substantially over the past decade. These changes began before the Affordable Care Act was passed in 2010, and concurrently with the financial crisis of 2008 and Obama’s first presidential campaign and election. Although Democrats are now somewhat more likely compared with 2000 to say the government should stay away from healthcare, much of the shift in attitudes against government intervention has stemmed from changes among Republicans and independents. It is possible that this sharp change has been caused by a politicization of the issue as it became a major part of Obama’s campaign platform, and as he and other Democratic leaders pressed for and passed the ACA, sometimes called “Obamacare,” in 2010. The continuing implementation of the ACA over the coming months and years will surely continue to shape Americans’ attitudes toward the federal government’s role in this area. It is not clear how the ACA’s troubled rollout to date will affect attitudes over the next year. But as the debate about the implementation of the new healthcare law has unfolded, Americans have become less likely than ever to agree that the federal government should be responsible for making sure that all Americans have healthcare. http://www.gallup.com/poll/165917/majority-say-healthcare-not-gov-responsibility.aspx Link for graph of trend since 2000: http://content.gallup.com/origin/gallupinc/GallupSpaces/Production/Cms/POLL/fplxc0ofzkq4zsfgrlrtka.png

Obama’s Gift to the Republicans

By Robert Kuttner
Huff Post Politics, November 17, 2013 The Affordable Care Act, as a government mandate for people to purchase private insurance with an array of possible subsidies, had too many moving parts. It was an accident waiting to happen. As many of us wrote at the time, Medicare for All would be simpler to execute, easier to understand, and harder for Republicans to oppose. But this was not to be. Instead we got a program that was poorly understood by the public because it was almost impossible to explain and even harder to execute. At the time the law was passed, administration leaders and many commentators compared the Affordable Care Act to Social Security and Medicare. The analogy was never apt. These great achievements are public programs, efficient to administer and testament to the fact that government can serve social objectives far more effectively than the private sector. Obamacare, by contrast, is the inefficiency of “public-private partnerships” at its worst. It is a public subsidy for the private insurance industry. No fewer than 55 separate contractors were hired to design the software. Yet though it is not a true public program worthy of the name, Obamacare is being used to discredit government. http://www.huffingtonpost.com/robert-kuttner/obamacare-republicans_b_4293314.html?wpisrc=nl_wonk

Comment:

By Don McCanne, M.D Although we always have to be careful that we don’t read too much into polls, this particular result showing that a majority of Americans have decided that health care is not the responsibility of the federal government does provide support to Robert Kuttner’s statement, “Obamacare is being used to discredit government.” Looking at the graph (link above, or use the columns of numbers above), in November of 2009 opinions shifted. This was close to the completion of the enactment of the Affordable Care Act, following a summer of vicious, partisan and tea party “death panel” attacks on the proposed reform legislation. In the past two years, as opponents kept up their shrill attack on Obamacare, the divide became even greater. The last poll showing a 14 percent margin for those believing that health care coverage should not be a responsibility of the federal government was taken one month after the bungled rollout of Healthcare.gov. Many have suggested that once the computer glitches are ironed out, people will be very pleased with Obamacare, and the surge in anti-government views will subside. Anyone who has followed the reform process knows that couldn’t be true. Anger will increase when people find out that their deductibles are unaffordable, that some of their hospitals and physicians have been shut out of the provider networks, and that costs will continue to escalate for lack of adequate policies to contain costs. For us to remain on the sidelines to let this play out can only intensify the view of the public that the federal government should not be involved, considering how badly our leaders have screwed up this effort. Especially at this time of intense anger and disgust over the botched rollout, it is imperative that we immediately intensify our efforts to get the public to understand that they are right when they critique Obamacare. Much more importantly, we need for them to understand the differences between good governance, bad governance, and too little governance, when it comes to health care. Decades of too little governance is why our health care system is in the mess it is. Further reducing the role of government can only compound the problems of high co sts, poor quality, and impaired access. We need government to be involved, but in the right way, not the wrong way. Since the neo-liberals took over the Democratic party, “the era of big government is over.” They rejected a model based on the most popular health care program this nation has seen – Medicare. They decided that we needed a public/private solution – private insurance with a welfare program for those who couldn’t financially support the insurance industry. The progressives lost their spine and joined in, realizing that the neo-liberals controlled their party. This set us up for bad governance. The blame does not lie with the institution of government, but it lies with bad decisions made by the people we selected to run the government. So what should our message be to those who say that it is not government’s responsibility? The private insurers have had over half of a century to prove their worth, and they’ve failed us miserably. We need the government, but it needs to be OUR government. We need to demand Medicare for all from our politicians, or, failing that, we need to replace them. We need the support of the people – the majority who now believe that the government isn’t the solution. Our most intensive efforts must be directed to educating people that they are spending far too much on the private insurers for too little in return. In contrast, Medicare offers us a much better deal, but it can be improved. After all, it is our government, and we should have control. The responsibility lies with the people. We need to exercise that responsibility through a government that is of the people, by the people and for the people. We need to dump the anti-government rhetoric because we’re talking about ourselves.

A Conservative Cure for Obamacare

By Paul Howard & Yevgeniy Feyman
Bloomberg View, November 18, 2013 The Patient Protection and Affordable Care Act is floundering. Conservatives who take satisfaction in that should be careful not to get ahead of themselves. The rollout problems – however serious and continuing – shouldn’t be confused with the law’s outright collapse. The reality is that large constituencies are in place to work to preserve Obamacare. What strategy, then, would move us closer to the patient and consumer-focused health-care system that conservatives desire while also recognizing the facts on the ground? The answer might be simple: Propose changes that will make plans more affordable and drive enhanced competition among insurers and providers. In other words, make Obamacare a Trojan horse for conservative health-care reform. The administration of President Barack Obama has quietly introduced regulatory decisions that have made the exchanges a viable market for high-deductible, health-savings-account-eligible health plans. Shortly after the law passed, it looked like the administration would use regulatory rule-making to kill health savings accounts. But subsequent rules clarified that HSA-qualified plans were actually the default structure for bronze plans on the exchanges. (Some silver plans qualify, too.) Far from being driven to extinction, high-deductible, HSA-eligible plans have an opportunity to capture significant new market share on the exchanges. Conservatives aren’t going to repeal or replace Obamacare anytime soon. But they can propose smart fixes that build on the HSA-friendly exchange architecture to make the law more consumer- and patient-friendly. Reform from the inside can set the stage for even bigger changes in the not-too-distant future. http://www.bloomberg.com/news/2013-11-18/a-conservative-cure-for-obamacare.html

Comment:

By Don McCanne, M.D. In recent months, many conservatives have been attacking Obamacare as being a Trojan horse that will open up health care to single payer, even though actually it has taken us further in the wrong direction to a private insurance-dominated market. This article from the Manhattan Institute more accurately describes Obamacare as a Trojan horse taking us to high-deductible, health-savings-account-eligible health plans, often referred to as consumer-directed health plans. But let me clarify that. The low actuarial value plans that will dominate the Obamacare exchanges are high-deductible plans that already are or with very little tweaking will be eligible for associated health savings accounts (HSAs). HSAs work well for wealthier people who can take advantage of the tax incentives, and who remain healthy so that they can use the accumulated tax-advantaged funds in retirement. But families with more modest incomes will be selecting the low-actuarial value bronze and silver plans only because of the lower premiums. They will receive little or no tax benefit, and if major illness strikes, they may not be able to afford the out-of-pocket expenses, even if qualified for subsidies. From a health policy perspective, the HSA component can be ignored. Except for tax incentives for the rich, the HSA is really only cash to be used for out-of-pocket payments. Even if funded by the employer, it is still paid by the employee in the form of forgone wage increases. So it is the high-deductible and not really the HSA that has such perverse consequences – patients forgoing care because of not having the money to pay the deductible, – whether having an empty pocket or an empty HSA. What is particularly disconcerting is that it always was intended that the exchange plans be high-deductible plans, simply to control premium costs. Also, employers are now rapidly converting to high-deductible plans for the same reason. The consumer-directed advocates no longer need to hide in a Trojan horse since the deductibles are already highly visible. Right before our eyes, it has been the Trojan army of deductibles that has been conquering our health security, placing those with health care needs in servitude. The Trojan horse came, and the neo-liberals pretend they didn’t even see it.

Access, Affordability, And Insurance Complexity Are Often Worse In The United States Compared To Ten Other Countries

By Cathy Schoen, Robin Osborn, David Squires, and Michelle M. Doty
Health Affairs, December 2013 (online November 13, 2013) The United States is in the midst of the most sweeping health insurance expansions and market reforms since the enactment of Medicare and Medicaid in 1965. Our 2013 survey of the general population in eleven countries — Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States — found that US adults were significantly more likely than their counterparts in other countries to forgo care because of cost, to have difficulty paying for care even when insured, and to encounter time-consuming insurance complexity. Signaling the lack of timely access to primary care, adults in the United States and Canada reported long waits to be seen in primary care and high use of hospital emergency departments, compared to other countries. Perhaps not surprisingly, US adults were the most likely to endorse major reforms: Three out of four called for fundamental change or rebuilding. Insurance Design And Affordability In this study, US adults — both the insured and the uninsured — were more likely than adults in other countries to report going without care because of costs, having high out-of-pocket costs, and having difficulty paying medical bills. Reforms scheduled under the Affordable Care Act provide for subsidies to lower cost sharing for those with incomes below specified thresholds as well as reductions in premiums for people with low or modest incomes. However, by international standards, cost-sharing exposure will remain high for those with low incomes. Also, states will have considerable leeway in insurance design for middle- and high-income families, with annual out-of-pocket maximums and deductibles that will continue to be high compared to those in other countries. For people with chronic, ongoing conditions, the result could be continued high medical cost burdens. Insurance And Primary Care Insurance design and payment policies also matter for access and countries’ primary care infrastructure. The high rates of ED use associated with long waits for primary care in the United States (including among insured patients) and several other countries underscore the importance of 24/7 primary care coverage in terms of overall system cost and resource allocation. Insurance Complexity The experiences of patients and physicians in other countries regarding the time-consuming complexity of insurance also provide potential insights for the United States. A recent Institute of Medicine study estimated that administrative layers throughout the US health insurance and care system add as much as $360 billion per year to the cost of health care — and much of that sum was deemed to be wasted, with little or no return in value. Evidence from other countries suggests opportunities to reduce such costs. Cost Control A key challenge for the United States is its already high level of health spending, which is 50–167 percent higher per capita than in the other study countries. These costs undermine the financial protections offered by insurance and drive premiums up. Support For Reform Polls in the United States show mixed public support and lack of knowledge about the provisions of the Affordable Care Act. Yet in the survey most US adults called for major change, with a minority preferring the status quo. People who had experienced problems with access to or affordability of care or who had time-consuming insurance problems had more negative views than people who had not had such problems. http://content.healthaffairs.org/content/early/2013/11/12/hlthaff.2013.0879.full.pdf+html?ijkey=7LvT

Comment:

By Don McCanne, M.D. This 2013 survey sponsored by the Commonwealth Fund is very helpful during the Affordable Care Act transition because it tells us how the United States is doing compared to ten other industrialized nations with universal systems. Our results are terrible, and when we look ahead at the changes yet to be implemented, it is clear that they will have an almost negligible impact on correcting the serious deficiencies in the United States. Our per capita costs will remain far higher than those of other nations. Our insurance products will remain very expensive yet highly flawed in design since they leave those individuals who have significant health care needs with high medical cost burdens. The excessive complexity of our insurance products will continue to waste hundreds of billions of dollars that could be used on health care. Measures intended to provide much needed reinforcement of our primary care infrastructure are all too meager, so timely access to care will remain impaired for too many. Three-fourths of Americans believe that we need fundamental changes or complete rebuilding of our health system. We have a far greater percentage dissatisfied than are in the other developed nations. Although it will be several weeks before the exchange plans and the Medicaid expansions will be in effect, most Americans will not be able to detect any improvements in their health care financing and access. In fact, many will have greater out-of-pocket costs because of increased shifting of costs to patients through measures such as high deductibles, and others will lose access to their current health care professionals and institutions because of the greater use of narrow provider networks – further reducing choices in health care. In spite of the noble intentions of the Affordable Care Act, most of us will not see any correction of the serious flaws demonstrated in this international survey which shows how costly and dysfunctional our system is, and too many of us will be even worse off. As we watch the 2014 implementation unfold, we have to keep in mind that it didn’t have to be this way. We could have had and still can have a single payer national health program – an improved Medicare covering everyone. With what we spend, we should be at the top in these international comparisons. Single payer would get us there.

AHIP Statement on Consumers Keeping Their Current Coverage

America’s Health Insurance Plans (AHIP), November 14, 2013 America’s Health Insurance Plans’ (AHIP) President and CEO Karen Ignagni released the following statement on today’s announcement by the administration related to policy cancellations: “Making sure consumers have secure, affordable coverage is health plans’ top priority.  The only reason consumers are getting notices about their current coverage changing is because the ACA requires all policies to cover a broad range of benefits that go beyond what many people choose to purchase today. “Changing the rules after health plans have already met the requirements of the law could destabilize the market and result in higher premiums for consumers.  Premiums have already been set for next year based on an assumption of when consumers will be transitioning to the new marketplace.  If due to these changes fewer younger and healthier people choose to purchase coverage in the exchange, premiums will increase in the marketplace and there will be fewer choices for consumers.  Additional steps must be taken to stabilize the marketplace and mitigate the adverse impact on consumers.” http://www.ahipcoverage.com/?p=12831

Comment:

By Don McCanne, M.D. President Obama’s decision today to allow individuals to keep the insurance they have has devastating policy implications. It is no wonder that AHIP released this statement only minutes after the President’s announcement. The insurance plans that were to be cancelled are plans that have fewer benefits than are now required by the Affordable Care Act. If the replacement plans have more comprehensive benefits, then why would people want to keep their old plan? Individuals place a high priority on the premium to be paid when they select their plans. They will almost always select the plan with the lowest premium that at least superficially seems to meet their needs. If they have major health care needs, they will select plans with more comprehensive benefits, even if they are more expensive. On the other hand, healthy individuals who are watching their budgets will often select the cheapest plan – their old plan in this case, even though it has fewer benefits. So what will happen when people are allowed to keep their old plans? Younger, healthier individuals will stay with those plans whereas older individuals with greater heath care needs will move into the new plans available in the exchanges. This adverse selection that concentrates expensive patients in the new plans will drive premiums up. When the premiums go up, more will drop out, causing the premiums to go up even further – so high that the plan has to be pulled from the market – the death spiral of adverse selection. Karen Ignagni is right when she says that allowing people to keep the insurance they have will destabilize the insurance market and cause premiums to rise, but only for the new insurance marketplaces (exchanges) that the insurance industry is counting on for their expanded business opportunities, made possible by the insurance-industry-designed Affordable Care Act. Although the spinmeisters are busy trying to discredit the President and his administration for the false promise of allowing you to keep your insurance, and for the rollout of the exchange website before it was ready, this noise is a distraction from the real problem here. The Affordable Care Act is an irreparably flawed model of financing health care, and no amount of patching is going to fix it. It is and always will be an unstable, expensive and inequitable model of financing health care. You know what is stable? Medicare. And it is less expensive and more equitable. Yes, it needs continual oversight and refinements, but it has the support of the public. If it were our only health care financing program, in an improved single payer version, virtually all of us would be demanding to keep the insurance that we would then have – an Improved Medicare for All.