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The “Cadillac” health plan is a myth

The “Cadillac” health plan is a myth

A doctor explains that limiting the scope of employer-based health care has long been a dream of the establishment

By Adam Gaffney
Salon, August 16, 2013

What would a gold-plated Cadillac health care plan look like to you? By the sound of it, you might think it’d cover such superfluities as annual trips to Swiss medical spas, cosmetic surgery on demand and weekly thermal seaweed wraps.

Alas, that appears to be far from the case. As the New York Times reported last week, municipal unions across the country are facing pressure to accept worse health care plans, before the so-called “Cadillac tax” on expensive health care plans kicks in in 2018.  Not surprisingly, workers are displeased with the prospect of being downgraded to inferior plans with more out-of-pocket spending.

Before concluding that such luxurious plans are the sole preserve of supposedly greedy city workers, keep in mind that by the estimate of one health economist, as many as 75 percent of employer health plans could fall under the “Cadillac” umbrella over the next decade. Reasonably good insurance – you know, the kind that covers all of your medical needs, without making you pay an arm and leg out-of-pocket every time you need to use it – has stealthily become the new Cadillac. However much the reputation of General Motors may have fallen in recent years, this seems like a bit of a stretch.

A reasonable observer might be enticed to ask: What on earth is going on here? From whence came this health care Cadillac?

To begin, the nationwide trend towards lower-value health insurance – now enshrined in law in the form of the Cadillac tax – is not, contrary to appearances, some newfangled, desperate cost-saving measure. On the contrary, limiting the scope of employer-based health insurance has been a dream of health policy wonks for decades.

The academic taproots of the idea stretch at least back to the year 1968, with the publication of the economist Mark Pauly’s highly influential paper “The Economics of Moral Hazard” in the American Economic Review. “The effect of an insurance which indemnifies against all medical care expenses,” Pauly wrote, “is to reduce the price charged to the individual at the point of service from the market price to zero.”  As a result, “no individual will be motivated to restrain his own use … since the incremental benefit to him for excess use is great, while the additional cost of his use is largely spread over other insurance holders.” Although others had made note of this phenomenon previously, Pauly’s contribution was to calculate the loss to society as a result of this “excess use,” which he found to be quite substantial.

Thus was the idea of health care “moral hazard” born, otherwise known as the doctrine of: “it’s included, so we might as well take it!” We could also more colloquially label it the “salad bar” hypothesis.

From “moral hazard,” in turn, came the idea that that the fundamental, “original sin” of the American health care system was not our failure to enact universal health care, but was instead our creation of a system of tax-favored, overly generous employer-based insurance. Several years after the Pauly paper, along this line of thinking, the prominent economist Martin Feldstein – future chief economist of the Reagan administration – would argue in another important paper that “American families are in general overinsured against health expenses,” and that the right medicine was more deductibles and coinsurance.

It was not until the early 1980s, in the face of persistently rising health care costs, that this academic concern for “moral hazard” began to hit the pocketbooks of Americans: Between 1982 and 1984, for instance, the percentage of insurance plans requiring some deductible for hospitalization more than doubled, from 30 percent to 63 percent. During the 1990s, on the other hand, the central importance of “cost sharing” was sidelined as corporatized “managed care” took central stage, and insurance companies sought to decrease costs (and thereby increase profits) by limiting care on the supply side.

But with the widespread revolt against managed care in the late 1990s (and with health care costs continuing to rise in spite of it), “moral hazard” again became a prime target for “reform.” The solution was in line with the recommendations of Pauly and Feldstein – higher deductible insurance. President George W. Bush’s 2003 Medicare prescription drug law gave us the “Health Savings Account” (HSA) – a tax-free account that could be used for out-of-pocket medical expenses, but which had to be attached to a high-deductible insurance plan. “Consumer-driven” health care plans – not much more than high-deductible plans with the capacity to be coupled with an HSA – quickly became all the rage.

Yet even for those outside these new plans, cost-sharing soared over the decade. Copayments for expensive drugs skyrocketed, sometimes to the tune of hundreds or thousands of dollars, while the percent of employer plans with $1,000 deductibles (or more) tripled.

But this was not enough – the alleged culprit for our continuously rising health care costs was still that dreaded “moral hazard.” Once you paid for the salad bar, after all, why not heap on larger and larger portions of colonoscopies, all-nighters in the emergency room or chemotherapy infusions? By 2008, John McCain was essentially centering his entire health care platform on the vilification of those “gold-plated Cadillac plans,” as he called them, which covered, among other things, such absurdities as “transplants.”

And in 2010, despite opposition from House Democrats and organized labor, a somewhat limited but still highly controversial “Cadillac tax” made its way into the Affordable Care Act, creating a 40 percent excise tax for family plans valued at greater than $27,500, or individual plans greater than $10,200.

The Age of the Cadillac, it seemed, was finally coming to a close. Health care “consumers” would now have to play with their own damn money. A golden age of improved quality and reduced costs was about to dawn.

Unfortunately, however, we didn’t live happily ever after.

For over these very s
ame years, the idea that we were a nation “overinsured” began to collide with several lines of hard evidence. First, the very existence of a large societal net loss from “overinsurance” was called into question in the academic health economic literature, most prominently by the economist John Nyman. Nyman argued that while there may be some cost to moral hazard, it was far smaller than what Pauly, Feldstein and others had calculated. We use more health care when we are sick, he demonstrated, not because health care becomes free, but because we gain “income” in the form of insurance transfers, which we rationally use to pay for “otherwise unaffordable procedures.”

Second, there was an accumulating body of data in the academic medical literature suggesting that “underinsurance,” not “overinsurance,” was the more serious problem facing Americans. More and more families were seeing higher and higher percentages of their family income consumed by their health care service burden and by out-of-pocket medical expenses. In fact, we were increasingly going bankrupt as a result of our health care expenses – according to one study, in 2007 62 percent of all bankruptcies had a medical cause, despite the fact that in a majority of those cases, those going bankrupt actually already had health insurance. Not much evidence for “overinsurance” in that department, either.

And looking at the problem from another angle, it became increasingly appreciated that the rise in deductibles, copays and coinsurance was having significant effects on our very health. As I described in a recent article, there are clear downsides to becoming “Copay Country.” There is evidence, for instance, that cost sharing may increase the risk of death for the most vulnerable, perhaps because it reduces expenditure on both “inappropriate” and “appropriate” care. In one recent experiment that randomized patients to copays or to full coverage for prescriptions after they suffered heart attacks, those with full coverage took their medications more regularly – and had less strokes and other cardiovascular complications as result. And all told, there was still no overall increase in cost, either way.

Yet, in the face of this growing body of solid evidence, we simply continue to hear more and more about how patients (apologies, “consumers”) need to have more “skin in the game” – as if having their physical hearts, lungs or – in some instances – their skin on the line wasn’t enough already.

So don’t be surprised if you find, in the coming years, that your semi-reasonable-quality heath insurance – perhaps won through hard-fought negotiation, or maybe earned in exchange for lower pay or other benefits – somehow transforms itself into a taxed “Cadillac” plan. From the perspective of much of the health policy establishment, you’ve had it too good, for too long, already. And however nice it might sound, they say we simply can’t afford truly universal health care, with comprehensive benefits for all and with little or no cost sharing (even if other industrialized countries magically manage to do so, at a lower price, and with better results).

Instead, it’s time we tightened our belts, stopped our whining and traded in our Cadillacs, or – depending on which metaphor you find less loathsome – that we finally got off of the salad bar.

Adam Gaffney is a physician and writer in Massachusetts.

http://www.salon.com/2013/08/16/the_cadillac_health_plan_is_a_myth/

Texans don't like Obamacare, but what are the alternatives?

By Jack Bernard and Barbara Carr
Abilene (Texas) Reporter-News, Aug. 18, 2013

Supreme Court finds “Medicare For All!” constitutional.

No, this is not what is on the horizon. But Obamacare is on the minds of Texans, who ask: What about 10 or 20 years from now?

Let’s take a look at the health expenditure trends in Texas over the past decade.

A recent Commonwealth study showed that family premiums are at record highs in Texas — $14,526 in 2010. What is even more disturbing is that premiums were just $9,575 in 2003. That constitutes a rise of 52 percent in a few short years. But Texas is not alone.

Nationally, family premiums were $13,847 in 2010, a 50 percent increase from 2003. Projections are that, using the same rate of increase, it will rise to $23,793 by 2020. The study’s writers hope that the Affordable Care Act (ACA, Obamacare) will lay the foundation for slowing this rate of growth. But will it?

Why are these costs increasing? It’s certainly not because more people have health insurance, as the opposite is true. More people are losing insurance every year.

The problem is we have a fee-for-service system, where the more you use the more you pay, regardless of the outcome. Health care, in many ways, is still a cottage industry, where every hospital designs its own disease care framework. Health care needs to work smarter, not harder, and take a look at best practices “not invented here.”

In the words of Dr. Cosgrove, CEO of the Cleveland Clinic: “We do not have a system of health care delivery in the U.S. It’s a series of mom-and-pop shops all over the country, and it has not been systematized.”

Congratulations to Obama for doing what no other president has been able to do: get near universal coverage into law (that is if Medicaid is eventually expanded by heavily politicized “red” states such as Texas).

According to Harvard studies, about 50,000 Americans die each year due to lack of insurance. Many others suffer. Is this the America that we want to pass on to our children? No. Even if half the uninsured become covered, per the latest CBO projection, it is a very good thing.

Our position is that there is a lot to like in the ACA (Obamacare) when it comes to expanding access, though its benefits will be limited if states such as Texas choose against their own interests and refuse to expand Medicaid, letting the federal funds go to the blue states in the northeast and far west. And the recent decision by Texas and five other states to refuse to enforce the ACA’s regulations is strange, at best.

On the other hand, we see very little in the ACA that will constrain long-term cost increases.

For arguments’ sake, let’s assume we have a continuing rise in health care expenses. What alternatives are left?

The Ryan approach embraced by the Republican Party only deals with public expenditures, Medicare and Medicaid. It wants to make Medicare a voucher program, pushing costs onto the elderly, and Medicaid a block grant, forcing states to cut programs/recipients or raise taxes.

Neither of these budgetary gimmicks addresses the cause of health care inflation, private insurance and practice patterns being key. Therefore, neither will slow the private sector premium increases, rather than simply limiting government expenditures.

At that point, Medicare For All, with reimbursement based on need and accepted medical practice norms, will be the only answer that the nation can reasonably consider.

Under Medicare as it is currently run in Canada, there is universal budgeting and no opt out by physicians and hospitals. Costs of pharmaceuticals are controlled and much less than here. The per capita health care expenditure in Canada is only $4,363 whereas it is $7,960 in the U.S. under our current system.

Long term, Medicare For All will be enacted here if not for humanitarian reasons, then simply for cost containment.

Jack Bernard is a retired senior level executive who has worked for several major for-profit health care firms, including NME (now Tenet) in Dallas. He also worked with Hendrick Medical Center on cost. Barbara Carr is an adjunct professor at Eastfield College in Dallas and has 20 years of experience in Texas health care firms and hospitals.

http://www.reporternews.com/news/2013/aug/18/jack-bernardbarbara-carr-texans-dont-like-but/

The fallacy of balancing cooperation and competition

Coordination versus Competition in Health Care Reform

By Katherine Baicker, Ph.D., and Helen Levy, Ph.D.
The New England Journal of Medicine, August 14, 2013

Many current proposals to increase the value of care delivered in the U.S. health care system focus on improved coordination — and with good reason. Badly coordinated care, duplicated efforts, bungled handoffs, and failures to follow up result in too much care for some patients, too little care for others, and the wrong care for many. A host of current reform efforts aim to reduce these inefficiencies in both public and private markets. These efforts range from penalizing hospitals with higher-than-expected readmission rates, to rewarding primary care providers when patients receive higher-value care, to providing incentives for the adoption of electronic health records. Accountable care organizations (ACOs) and bundled payments are designed to create monetary incentives for coordinated care. The hope is that coordination will improve value by ensuring that the right care is provided in the right place at the right time.

These laudable efforts, however, may unintentionally be at odds with another strategy for improving value: promoting competition in health care markets. In general, less competition means higher prices; one well-publicized symptom of the lack of competition in U.S. health care is providers’ ability to charge different prices for the same service. Competition may drive higher quality, particularly when prices are constrained. The benefits of competition in private markets may even spill over to higher quality in Medicare, for which the Centers for Medicare and Medicaid Services (CMS) sets prices. A number of policy interventions, such as quality-reporting and price-transparency initiatives, are based on the idea that better information can promote competition and lead to greater value, and these initiatives have the potential to be very effective when patients have a choice of providers.

Well-integrated provider networks may promote coordinated care that improves the allocation of health care resources, but they are likely to undermine competitive pressures to keep prices down while maintaining high quality. Coordinated systems may thus deliver the right care to the right patient at the right time, but at the wrong price. Competitive markets may do a better job of keeping prices low, but with the well-documented drawbacks of fragmentation.

The current suite of policies for addressing the ills of the health care system does not embody a unified approach to the roles of coordination and competition. In part, this lack of coherence reflects the fact that our insurance “system” is really several different systems, including moderately competitive private insurance markets for the nonelderly, nondisabled population and a single government payer, Medicare, for the elderly and disabled that largely pays providers set prices on a fee-for-service basis. These two payers currently pursue different approaches to reform. The most recent round of Medicare reform initiatives focuses on coordination, with ACOs as the prime example. In fact, the FTC has signaled that it will weigh the benefits of integration in improving quality against the potential harms of reduced competition. For the privately insured sector, the current focus is on enhancing competition through price transparency and “skin in the game” for consumers.

So what should policymakers do? We offer three broad prescriptions that may help strike the right balance between coordination and competition. First, we can look for the win–win opportunities to enhance both competition and coordination. As noted, health IT may be an example of such an opportunity if it is implemented well. There may also be win–draw opportunities in which either coordination or competition may be enhanced without harming the other. For example, the contracting processes that CMS uses for Medicare Advantage plans, Medicare Part D, and durable medical equipment have some competitive aspects but do not fully leverage the forces of competition to promote quality without sacrificing coordination. These processes could be improved.

Second, the courts and regulatory agencies that are tasked with enforcing antitrust law could focus explicitly on this trade-off when they examine health care and health insurance markets. After decades of relatively unsuccessful attempts to prevent hospital mergers, the FTC has recently had a string of successes in that arena. Similar vigilance is needed in other areas, particularly in the new realm of ACOs. As we gain insight into the reasons for the price dispersion in health care markets that transparency initiatives are bringing to light, we should explore whether this dispersion results not just from variation in quality and efficiency but potentially from anticompetitive behavior.

Third, policymakers could systematically look across silos to consider the effects that an initiative in one sector will have on consumers in another — and on providers overall. To do so, they must have a clear understanding of the trade-offs at hand and the interaction of multiple policies and regulations aimed at improving quality and value. Coordination may foster delivery of the right quantity of care to each patient, while competition may help keep the prices for that care as low as possible. It is not obvious a priori what point on the competition–coordination spectrum provides the highest value in terms of quality of care and health benefit per dollar of spending. But total spending depends on both quantity and price. We need to evaluate the net effect of the suite of new public and private insurance-market policies on both price and quantity as we consider which policies might restore federal health care spending to a fiscally sustainable path.

http://www.nejm.org/doi/full/10.1056/NEJMp1306268

Competitive bidding is no Medicare fix

By John Teevan
Milwaukee Journal Sentinel, August 12, 2013

Recently, the Centers for Medicare and Medicaid Services (CMS) substituted its current pricing methodology with an unfair new process for setting prices known as “competitive bidding.” The idea behind this policy is to lower costs and reduce fraud in the system, and these are commendable goals. But what resulted was bad public policy that not only fails to fix the problems it was meant to solve but also creates a host of new problems.

When round 1 of this program was put into place, it was limited to just a few test markets. But in July, it expanded to about 100 more, including one in southeastern Wisconsin. The effects will be devastating for health care providers, health care systems and the patients we serve. If round 1 was any predictor of the future under round 2, numerous providers will go out of business.

Even more troubling, this “competitive bidding” program will lead to less freedom of choice and access for our patients, and, I believe, a possible decrease in the quality of care for them. Many Medicare beneficiaries — seniors over 65 and disabled Americans — have come to rely on their local health care provider to be there for them when they are at their most vulnerable. Local providers are there for their patients during power outages, equipment malfunctions and other potentially life-threatening moments. When many of these local providers are put out of business by “competitive bidding,” it will be the patients who suffer the most.

As smaller, local providers disappear, patients will potentially be forced to rely on providers many miles away. This may mean a delay in Medicare approval of regular services, as well as longer wait times in the case of emergency or equipment failure that could leave the patient stranded, waiting for critical equipment like a wheelchair or oxygen tank.

Not only will this unfair pricing scheme be harmful to health care providers, he
alth care systems and patients, it also will be more expensive for taxpayers. Reducing access to in-home medical care will result in more emergency room visits, delayed discharges and unnecessary hospital stays. Keeping patients in their homes means significant savings to the Medicare trust fund; “competitive bidding” does just the opposite.

http://www.jsonline.com/news/opinion/competitive-bidding-is-no-medicare-fix-b9974040z1-219335911.html

Comment:

By Don McCanne, M.D.

Many policies today are aimed at providing cooperation/integration/coordination as a means of improving quality while obtaining greater value in health care. Although some of the models are inappropriately directed more to business aspects and less to patient care quality, nevertheless, everyone working together seems like a good idea. Free market ideologues may also agree that these efforts are laudable, but they remain emphatic that, above all, marketplace competition must be relied upon to drive higher quality and lower prices.

This is not an idle, intellectual exercise. Pro-market enthusiasts are driving much of our health care system today with the result that health care is outrageously priced, is of mediocre quality, and has impaired access for tens of millions due to financial barriers that the market model has erected. Let’s look a little bit closer at the call of ideologues Katherine Baicker and Helen Levy to “fully leverage the forces of competition” by injecting more competition into coordinated systems.

They mention Medicare Advantage, Medicare Part D, and the purchase of durable medical equipment as CMS programs that have introduced supposedly beneficial competition, although not enough in their opinion. We already know that Medicare Advantage costs more than the traditional Medicare program, while taking away patients’ choices of their health care providers. The Medicare Part D drug program was designed to promote competition between drug plans, yet we are paying much more than we would be with government purchasing programs such as we have with Medicaid and the VA system.

Now CMS is expanding its competitive bidding program for durable medical equipment. The suppliers who win the bids will likely do well when measured by business standards. But many of the losing firms will be forced out of business simply because CMS will take away the largest sector of their clientele – the Medicare beneficiaries. Many patients will lose the services of their own medical suppliers and have to rely on other suppliers who may not be readily accessible because of distances that must be traveled, or who may provide inferior services simply because they cut back too much in order to win the bid based strictly on lower prices.

The government is in a unique position to administer pricing on a take-it-or-leave-it basis. The process is based on an analysis of actual costs plus fair margins. Health care providers would be foolish to reject fair prices. If pricing proved to be too low, threatening sustainability of the providers, it would be the responsibility of government to adjust prices to make sure that services and products were there when patients needed them. For those who say that this process results in $1000 toilet seats, all you need to do is compare costs in the traditional Medicare program with the higher costs through private insurance plans, including Medicare Advantage, or compare VA drug pricing with pricing through Part D plans or even higher pricing through the open competitive market.

Baicker and Levy offer three policy prescriptions that have a goal of being sure that competition remains the driving force, yet they seem to muddle through delivery system reform in order to protect competition. To no surprise, they remain totally silent on a far more effective solution – dump price competition and establish a universal program of government administered fair pricing. It works in all other wealthy nations; it should certainly work here.

Are nurse practitioners a solution for the cognitive/procedural pay gap?

Medicare Payment for Cognitive vs Procedural Care

By Christine A. Sinsky, MD and David C. Dugdale, MD
JAMA Internal Medicine, August 12, 2013

Conclusions and Relevance

Our analysis indicates that Medicare reimburses physicians 3 to 5 times more for common procedural care than for cognitive care and illustrates the financial pressures that may contribute to the US health care system’s emphasis on procedural care. We demonstrate that 2 common specialty procedures can generate more revenue in 1 to 2 hours of total time than a primary care physician receives for an entire day’s work.

The medical literature has highlighted the decline in the number of physicians entering cognitive specialties, with accompanying warnings about the impending collapse of primary care. The number of physicians in training who choose the primary care field of internal medicine dropped by 50% from 1998 to 2003, and primary care physicians (PCPs) in practice are leaving at a faster rate than other specialties. Increased workloads, administrative hassles, demanding time commitments, and low compensation relative to other specialties are major contributing factors.

Fewer physicians are choosing primary care fields while the needs of an aging population with multiple chronic diseases are projected to require an increase in the supply of primary care by at least one-third. This mismatch between supply and demand for PCPs has serious implications for the future of US health care. Health care costs in the United States are among the highest in the world and continue to rise. The quality of health care that Americans receive has been questioned. Worldwide and within the United States, health care costs are lower and quality is higher in regions with more PCPs. In addition, the quality of care is higher and costs are lower for patients whose first contact with the medical system is with a PCP.

The US health care reimbursement system rewards procedural services while providing financial disincentives for physicians to spend time on cognitive care, the main professional activity of PCPs and other nonprocedural specialists. In a comparison of international health payment systems, Wilson concluded that “the current system in the United States offers little incentive for PCPs to provide the kind of care coordination that is known to improve health quality.”

Several proposed or implemented changes, including an increase in the relative value of evaluation and management (E&M) codes, pay-for-performance programs, and primary care adjustment, may modestly address this issue, but each of these policy changes is projected to increase PCP compensation by only 1% to 10%. Herein we identify the magnitude of the payment gap for physician time spent on common procedures vs cognitive tasks.

http://archinte.jamanetwork.com/article.aspx?articleID=1726999

Wonkbook: Doctors for higher health-care costs!

By Ezra Klein and Evan Soltas
The Washington Post, August 15, 2013

Everyone knows American health care costs too much.

Identifying the problem is easy. Doing anything about it is hard. But there’s one thing states can do that isn’t particularly hard: Allow more nurse practitioners — who charge much less than doctors — to treat patients directly, without a physician’s oversight.

Doctor’s groups oppose this strenuously. They say patient safety is at risk. What’s really at risk is their incomes.

This is a protection racket. Any state legislature that extends it is choosing higher health-care prices — and health-care costs — for no good reason.

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/08/15/wonkbook-doctors-for-higher-health-care-costs/

Perspectives of Physicians and Nurse Practitioners on Primary Care Practice

By Karen Donelan, Sc.D., Catherine M. DesRoches, Dr.P.H., Robert S. Dittus, M.D., M.P.H., and Peter Buerhaus, R.N., Ph.D.
The New England Journal of Medicine, May 16, 2013

Proposals that focus on the potential for nurse practitioners to help meet current and expected future gaps in the supply of primary care providers have met with wide interest and considerable controversy. At the core of the controversy is whether nurse practitioners have the education and experience to provide high-quality services and lead clinical practices without supervision by a physician.

Respondents in the two groups were far apart in their views on equal pay for providing the same services. Physicians’ opposition to equal pay is consistent with their perception, expressed in these data, that for any given service, they provide a higher quality of care than do nurse practitioners. Nurse practitioners’ support for equal pay is consistent with their majority view that physicians do not provide a higher quality of care for any given service. These survey data cannot provide evidence of the relative value of the training and expertise of these professionals. Nevertheless, the data suggest that physicians do not think that increasing the supply of nurse practitioners would have a positive effect on either the cost or the effectiveness of care, whereas more than 80% of nurse practitioners believe that increasing their numbers would improve the cost savings and quality of health care. From a societal perspective, we might consider whether expanding the supply of nurse practitioners and paying them equally for the same services that physicians provide would negate current savings from the disproportionately lower payments nurse practitioners now receive. More information is needed on the economic implications of the division of work between physicians and nurse practitioners before policymakers can definitively answer the question of whether employing a greater number of nurse practitioners and expanding their role would result in overall cost savings.

Our data provide evidence to inform ongoing public debates among physicians and nurse practitioners about their roles, responsibilities, and scope of practice. Both physicians and nurse practitioners will be needed to address the many challenges of developing a workforce that is adequate to meet the need for primary care services. It is our hope that the stark contrasts in attitudes that this survey reveals will not further inflame the rhetoric that has been offered by some leaders of the two professions but rather will contribute to thoughtful solutions for health care workforce planning and policy.

http://www.nejm.org/doi/full/10.1056/NEJMsa1212938#t=articleTop

Comment:

By Don McCanne, M.D.

With concerns about our very high health care costs, we have to ask if procedure-oriented specialists are overpaid, or if the cognitive services of primary care physicians are underpaid? Further, are nurse practitioners underpaid when they are providing many of the same services as primary care physicians?

It seems that the consensus in the popular literature is that specialists are overpaid for procedures, whereas, listening to cynics like Klein and Soltas, primary care physicians are also overpaid when you consider that they can be replaced by nurse practitioners “who charge much less than doctors.” They contend that limiting the independence of nurse practitioners is a “protection racket.”

Yet nurse practitioners want their pay to be comparable to that of primary care physicians, “equal pay for equal work.” They do not want pay for cognitive services to be decreased; they want their own pay for these services to be increased.

What about the fundamental issue of filling the void in primary care with independent nurse practitioners? Even if medical schools increased the numbers of graduating physicians who would want want to become primary care physicians, there is a lack of residency programs and clinical training sites t
o train the numbers that we need. So does that mean that there is a plethora of comparable clinical training programs for nurse practitioners that would fill the void? Where are those programs that will produce an adequate number of nurse practitioners through training that will provide them with the same level of competence as primary care physicians? It is specious to assume that there is a paucity of clinical training programs for primary care physicians in a country that supposedly has a great abundance of comparable comprehensive training opportunities that are limited to nurse practitioners, while excluding physicians.

Try this mind game. Define primary care physician. Define nurse practitioner. Except for the duration and intensity of their training programs, are they exactly the same? If not, what are their differences? Should these differences be reflected in either their clinical independence or in their pay?

There is absolutely no dispute that nurse practitioners are an important addition to the clinical team that includes primary care physicians, specialists, and other health care professionals. It should not be difficult to integrate all clinical health services into a well oiled machine, as long as we can set aside turf issues. But we need to chastise the Ezra Klein’s of the nation who would throw a monkey wrench into the machine by characterizing this as a “protection racket.” It’s the patients who need protection through improved integration of our health care system.

Massachusetts shows us that we can have higher premiums with fewer benefits

Annual Report on the Massachusetts Health Care Market

Commonwealth of Massachusetts
Center for Health Information and Analysis, August 2013

In a continuing trend, the health coverage available through Massachusetts employers in 2011 cost more and had lower benefit value. Between 2009 and 2011 premiums rose by 9.7% to pay for benefits that decreased by 5%. Consistent with this trend, employees are paying increasingly more out-of-pocket for their health care. Deductibles have grown in Massachusetts by more than 40% between 2009 and 2011.

This dual trend – increasing premiums and decreasing benefit levels – was consistent across market sectors, but the effect was not the same for all sectors. The effect of increased premiums coupled with benefit declines was most pronounced in the small group market sector, where the benefit value started out lower and decreased faster (-7.5%) than in other market sectors. Although the small group market sector accounted for just 16% of the Massachusetts commercial insurance market, it included the greatest number of businesses. This sector is one of the most vulnerable to cost increases and has been the focus of policy interventions at both the state and federal levels.

http://commonhealth.wbur.org/files/2013/08/0815_ar-ma-health-care-market-2013.pdf

Many Health Insurers to Limit Choices of Doctors, Hospitals

By Anna Wilde Mathews
The Wall Street Journal, August 14, 2013

The new consumer marketplaces created by the federal health law… Many of the plans will include relatively few choices of doctors and hospitals.

Insurers are betting that consumers who buy plans on the exchanges will be willing to trade some choice and flexibility in order to get cheaper premiums. Smaller networks of providers generally translate to lower premiums.

A spokeswoman for the federal Department of Health and Human Services said that in the new marketplaces, “plans will compete side by side, and consumers can compare based on the factors that are important to them to find the plan that best fits their needs and budget.”

http://online.wsj.com/article/SB10001424127887323446404579010800462478682.html

Comment:

By Don McCanne, M.D.

Under Massachusetts health care reform, the largest sector of health insurance – employer-sponsored plans – continues to cost more while benefits decrease in value. Just in the two years from 2009 to 2011, the average increase in premiums along with the decrease in benefits resulted in a decline in value of 14.7 percent!

Nationally, the same process is underway, and it is fully predictable that it will increase under Obamacare – a model of reform very similar to that in Massachusetts. We will all be paying more to get less.

Worse yet, we will have even fewer choices of our physicians and hospitals as insurers shift more to narrow-network plans.

Don’t worry though. HHS assures us that with competitive plans we will be able to “to find the plan that best fits (our) needs and budget.” We will have our choice of a selection of plans with higher premiums, lower benefits, and less choice of our health care providers.

Of course we could have had, and still can have, an improved Medicare for everyone that would replace premiums with equitable taxes, provide comprehensive benefits, and give us free choice of our health care professionals and institutions. Too bad that we believe our politicians when they tell us that single payer isn’t politically feasible. Come to think of it, whose politics is that anyway?

Rochester's growth owes a lot to Medicare

By Mark Liebow, M.D.
Rochester (Minn.) Post-Bulletin, Aug. 2, 2013

Medicare, a program that has transformed health care and Rochester, celebrates its 48th birthday this week.

Before 1965, the federal government provided care for active-duty servicepeople and their dependents, some veterans, some native Americans and merchant sailors. As an employer, it provided health insurance for federal employees and their dependents.

However, it did nothing to help most people in the country pay for health care.

The revolution of the 1940s and 1950s in health insurance coverage meant most employees of larger companies and their dependents had health insurance, but, with some exceptions, coverage stopped at retirement. Most seniors, at an age when they usually needed health care more than ever, no longer had health insurance.

There was a limited private market for health insurance for seniors, but even those who qualified often found the cost unaffordable. Seniors without coverage paid for care out of savings, got help from their children, depended on charity care — or went without care. Going without care was dismayingly common.

Medicare changed all that. It had been a Democratic dream for a generation, and it finally passed in 1965 after the Johnson landslide in 1964 gave Democrats overwhelming control of Congress.

Starting Jan. 1, 1966, Medicare covered hospital care, physician care and tests for seniors. Seniors could go to doctors and hospitals without risking bankruptcy or asking other people for financial help.

This meant medical advances often needed for seniors, such as heart bypass surgery, joint replacement and cataract surgery, became available in hospitals across the country. It made hospitals far less dependent on fundraising to pay for day-to-day operations and so less vulnerable to failure. It helped raise incomes for most health professionals.

Since Medicare started, the United States has become one of the countries with the highest life expectancy for those who reach age 65. The program was the first time the federal government paid directly for care provided by private doctors and hospitals. It worked out very well. Administrative costs for the government, as well as for doctors and hospitals, were lower than for private insurance programs. It proved a large, single-payer insurance program could work in the United States, at least for part of the population.

Medicare changed Rochester, too. Since Medicare began, Mayo Clinic has grown almost tenfold, and Rochester’s population has more than doubled. The Rochester we have today would be unimaginable without Medicare. The flow of money into clinics and hospitals, and then out to their employees, has helped make Olmsted County the wealthiest county in Minnesota outside of the Twin Cities metropolitan area.

Thousands of people make their livings from having Medicare patients come to our area for care. Even the training of young physicians in Rochester has been boosted by Medicare, which has always paid for graduate medical education and now is the primary payer for that.

Medicare has taken on new responsibilities over the years. It now covers people with end-stage renal disease and many people with long-term disabilities, even if younger than 65, since few of these people can get private insurance. It also provides greater coverage for seniors than it did in 1965. Neither preventive services (most of which didn’t exist in 1965) nor most drugs were covered in 1965, but drug coverage was added in the last few years, and preventive service coverage has been added bit by bit over the years.

Like most 48-year-olds, Medicare has more aches and pains than it did in its youth. The aging of the baby boom generation will put increasing pressure on the Medicare Trust Fund, which pays for hospital care for seniors, but a small change in the payroll tax that supports the Trust Fund can keep it going. For a while it looked as if the rising cost of physicians services and tests, 75 percent of which is paid for out of federal general revenues, would put severe strain on the rest of the federal budget, but the rate of cost increase has slowed considerably, and there’s hope the slower rate of increase will continue into the future. We won’t stop worrying about how to pay for Medicare, but this isn’t as big a concern as it was a few years ago.

Medicare has been good for America and particularly good for southeast Minnesota.

Mark Liebow is a Rochester doctor and the chairman of the Senate District 26 DFL.

http://www.postbulletin.com/opinion/mark-liebow-rochester-s-growth-owes-a-lot-to-medicare/article_53723f28-c03d-5050-bb97-5a3b7e81cb86.html?mode=story

Medicare, Medicaid anniversary raises fears, hopes for future

Advocates celebrated Medicare's birthday while calling for universal care

By Christen McCurdy
The Lund Report (Portland, Ore.), Aug. 14, 2013

The end of July marked the 48th anniversary of the signing of the Social Security Act which turned Medicare and Medicaid into law.

Now – with talk of Medicare becoming a voucher program, and threats to Medicaid, Social Security and other entitlements – local activists are fighting to protect the program and potentially to expand it.

“What would sum it up is that we would like to see Medicare for all. We’d not only like to see Medicare protected and improved but expanded for the entire population,” said Dr. Camilo Marquez, co-chair of the health committee of Jobs with Justice, which along with several other groups, helped organize a Medicare birthday party last week at the Hollywood Senior Center in Portland, attended by about 50 people.

The event was organized to celebrate and also raise awareness about threats to Medicare and other programs that affect seniors and low-income people – and to push for single-payer healthcare.

“We’re in support of all healthcare reform but some reforms are better than others,” Marquez said. “Healthcare should be universal.”

“I’m one of those people over 50 looking for a job right now,” said Lisa Stiller, who also serves on Jobs with Justice’s health committee. Stiller has been without health insurance for five and a half years, and is concerned about the limitations of the Affordable Care Act, noting that people who earn too much to qualify for subsidies may end up paying a quarter of their income to cover the cost of monthly premiums.

Marquez said activists feel confident that the single-payer study authorized by the Oregon Legislature earlier this year “will show single payer is the best way to go,” and are optimistic —  despite the expected  hurdles – about getting a single-payer program in place.

Steve Weiss, a board member of United Seniors of Oregon, which also helped organize last week’s event, has been in favor of universal healthcare since the early 1960s, when friends came back from visiting England and told him after they got sick overseas, they could get care without having to pay. He thought, “We’ve got to get this here within 10 years.”

Weiss, who is eligible for both Medicare and Medicaid, said he’s concerned about the fate of both programs.

“I have a number of concerns. The Republicans, some months ago, and their proposal still on the table, is to voucherize Medicare. Voucherizing of the program is one more step toward privatization,” Weiss said, noting the institution of Medicare Advantage plans was a first step in that direction, and a successful one at that.

Weiss is actually more concerned about the Medicaid’s future. While the number of providers who accept Medicare patients has increased in recent years, the converse has occurred with Medicaid with the number of providers willing to see Medicaid patients has gone down – which could create a crisis after the Affordable Care Act’s Medicaid expansion next January when people earning up to 138 percent of the federal poverty level will qualify in Oregon. U.S. Rep. Paul Ryan has proposed funding Medicaid with a block grant program, which could eliminate Medicaid in states with conservative leadership, Weiss said.

“I really don’t know what’s going to happen here. It’s such a pressing problem, we wanted to let folks know about it,” Weiss said. “It’s nice to have celebrations like we did, but eternal vigilance is the price of maintaining these programs.”

Christen McCurdy can be reached at christen@thelundreport.org.

http://www.thelundreport.org/resource/medicare_medicaid_anniversary_raises_fears_hopes_for_future

Cost sharing in Massachusetts is growing fast

By John McDonough
Boston Globe, August 14, 2013

Fine story in today’s Globe by Liz Kowalczyk on the new state health data report showing, once again, the dominant economic power of Partners Healthcare in our health market. One beef — if you read you the story, you would have assumed that the annual report from the State’s Center for Health Information and Analysis (CHIA)  was all about Partners. There is  much more — go see for yourself.  and congrats to CHIA for an excellent report.

Here’s what struck me the most:

From the report:

“In a continuing trend, the health coverage available through Massachusetts employers in 2011 cost more and had lower benefit value. Between 2009 and 2011 premiums rose by 9.7% to pay for benefits that decreased by 5%. Consistent with this trend, employees are paying increasingly more out-of-pocket for their health care. Deductibles have grown in Massachusetts by more than 40% between 2009 and 2011, approaching the national average.”

Massachusetts has always been one of the most resistant states to high levels of patient cost sharing in the form of deductibles, co-pays, and coinsurance. If these new data are on the mark, no more. We’re just average — and a 40% uptick over three years! Ouch!! On average, with premiums up 9.7% and benefits down by 5%, that’s a 14.7% drop in value for consumers between 2009 and 2011, reinforcing the point, it’s not just about the premiums, even if that’s what gets all the attention.

Yes, Partners is big: see this pie chart for the evidence. And their 31% in 2012 share is rising, up from 28% in 2011:

And, let’s not forget, our major insurance carriers are pretty big, too.  Blue Cross, Harvard Pilgrim, and Tufts represent nearly 80% of the state’s commercial health insurance market, and their premiums are the highest among all carriers in the Massachusetts market. Whether it’s insurance, hospitals, or physicians, big means more costly.

In terms of the Commonwealth’s goal to eliminate most fee-for-service payment in favor of global payment – embodied in the State’s 2012 cost containment law, signed just one year ago — we have a high hill to climb. Fully 60% of commercial spending and 64% of private plan enrollment is fee-for-service. Global budgeting represents between 35 and 39% of the market. Is that high or low? That’s a judgment call, but here’s the benchmark to judge success or failure.

Helpful information and analysis from CHIA.

Expansion of Medicare is best health care solution

By Lynn Moses Yellott
The Journal (Martinsburg, W.Va.), Aug. 14, 2013

My husband, family physician Dr. Chess Yellott, and I celebrated Medicare’s 48th birthday on Capitol Hill, attending a congressional briefing by Dr. Gerald Friedman, University of Massachusetts professor of economics. Friedman showed how the U.S. could save enough — $592 billion in the first year alone — to provide health care for all and eliminate premiums, co-pays, and deductibles by expanding Medicare to everyone. Financing would be entirely tax-based, and 95 percent of us would pay lower taxes for our health care than we now pay in premiums and out of pocket expenses.

Some of the savings from expanding Medicare comes from eliminating private insurance companies, each with their own billing, claims, marketing and huge CEO salaries.

Doctors and hospitals would also save a huge amount on billing and overhead by dealing with only one insurer instead of thousands of different insurance plans. Additional savings would be found in negotiated pharmaceutical prices.

We are often asked “how can you advocate Medicare for all when Medicare will run shortfalls in the near future?”

Because Medicare for all — as embodied in HR 676, the Expanded and Improved Medicare for All Act — is so much more administratively efficient (overhead just 1.4 percent of revenues, compared to 20 percent for private plans). It is also better able to control costs than today’s Medicare, by globally budgeting hospitals (that is, eliminating per-patient hospital bills and paying the hospital in lump sums monthly), negotiating reasonable drug prices and negotiating fees with doctors. We could save $1.8 trillion over the next decade alone just through reducing health care costs inflation. This would make Medicare for all sustainable for future generations.

For more information: read the study, www.pnhp.org/system/assets/drupal/Funding HR 676-Friedman-7.31.13-proofed.pdf or the summary, www.pnhp.org/news/2013/july/’medicare-for-all’-would-cover-everyone-save-billions-in-first-year-new-study, or e-mail epspan@gmail.com.

Lynn Moses Yellot resides in Shepherdstown.

http://www.journal-news.net/page/content.detail/id/597631/Expansion-of-Medicare-is-best-health-care-solution.html?nav=5061

The anniversary of Medicare: A time to reflect and act

By State Sen. John Marty (DFL)
Spring Grove (Minn.) Herald, Aug. 13, 2013

Forty eight years ago this summer, President Lyndon Johnson signed Medicare into law, providing healthcare for millions of older Americans. As our state begins full implementation of the Affordable Care Act, it is appropriate to reflect on the progress we have made on giving healthcare access to Americans, and commit to delivering Medicare for All.

At the signing of the Medicare law, President Johnson said, “No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years.”

The Medicare program has largely succeeded in fulfilling that promise. Seniors get the healthcare they need, when they need it. It still doesn’t cover all medical needs, but over the years, it has been expanded several times to increase the number of people covered, and the number of services provided. In 1972, people under age 65 who had long-term disabilities were included in Medicare. In 2003, prescription drug coverage was added.

More recently, the Affordable Care Act (often called ObamaCare) added preventive care services to Medicare, as well as mammograms and other health screenings, and it reduced the co-payments seniors pay for prescription drugs.

For older Minnesotans, Medicare has been a lifesaver.

Minnesotans under 65, however, have been covered – or not covered – under a fragmented and broken system of employer-based health insurance, private plans, public programs, or no insurance at all.

Fortunately, during the next five months, many previously uninsured Minnesotans will receive healthcare coverage through the MNSure insurance exchange of the Affordable Care Act (ACA). Those who were denied coverage because of preexisting conditions should no longer face that problem. Young adults whose parents have good coverage are now eligible for coverage through them.

Minnesota, under Gov. Dayton and the DFL legislature this year, is leading the nation in its thoughtful and comprehensive implementation of the ACA. By upgrading MinnesotaCare and expanding Medicaid, Minnesota will make healthcare accessible to hundreds of thousands of additional people.

However, the ACA is not Medicare. It does little to eliminate the bureaucratic waste in our current system or reduce the overall costs of our health care system – and it will not cover everyone.

Nationally, about two thirds of the low income people eligible for coverage under the ACA will not be covered because their states have chosen not to expand Medicaid. Minnesota is doing much better than those states, but there will still be a couple hundred thousand Minnesotans without coverage, and many more who have coverage will not have affordable access to some needed services. Although the ACA will close some gaps in our dysfunctional healthcare system, gaps will remain, and many people needing care will fall into those cracks.

As soon as the ACA is fully implemented, it is time to turn our attention to completing the promise of Medicare for all. Legislation to enact a proposed Minnesota Health Plan (MHP), a Medicare-style plan for everyone, is the only solution to rapidly rising medical costs.

The MHP would beef up the coverage that Medicare recipients get – including nursing home care and many other needed services – and extend those same benefits to everyone, regardless of age. The Minnesota Health Plan would cover all Minnesotans for all of their medical needs.

Yet the MHP would save money, eliminating the costly bureaucratic insurance system and delivering healthcare directly. And, in providing healthcare to all instead of health insurance for some, we would leave medical decision-making with patients and their doctors, not subject to government or insurance company interference. A growing number of Minnesota physicians and nurses are supporting the MHP, because they are tired of patients who get inferior treatment based on insurance company restrictions.

Two years from now, when the nation celebrates the 50th anniversary of Medicare, we want to be on the verge of passing the Minnesota Health Plan. Five decades after Medicare covered people over 65, it is time for Minnesota to cover people under age 65 as well, finally delivering Medicare for All.

John Marty is a Minnesota state senator affiliated with the Apple Pie Alliance, which works to strengthen the democratic process and promote ethics and integrity in public service. The alliance seeks to increase thoughtful discussion and to promote policies that will build a better society and healthy communities for the 21st century.

http://www.hometown-pages.com/main.asp?SectionID=26&SubSectionID=186&ArticleID=49829

Obamacare's pregnant politics

By Dan Carpenter
Indianapolis Star, Aug. 13, 2013

Republicans and their media allies may be feeling heightened urgency as they saddle up Obama-Scare for 2014, according to a guy who has his own reasons for dissatisfaction with the Affordable Care Act.

“While the Republicans are so incredibly strident about how the ACA will fail, if they really believed it would fail, they wouldn’t make so much noise,” said Robert Stone, M.D., a Bloomington emergency room physician and a high-profile advocate for health-care financing reform. “They obviously fear it won’t fail.”

Stone and his wife, Karen Green Stone, are among the leaders of Hoosiers for a Commonsense Health Care Plan. He also is a board member of Physicians for a National Health Program. Both these organizations of medical professionals and consumers seek a universal “single-payer” approach on the model of Medicare, which just celebrated its 48th anniversary as one of government’s most popular services after a birth greeted with conservative hysteria.

Obamacare is not the expansion of Medicare; in the eyes of Stone and his troops, it is a gift to the for-profit insurance industry that raises huge cost-control worries.

At the same time, it delivers goods for the people — to list just a few highlights, protection from being refused or dropped for being sick, inclusion of dependent coverage up to age 27, purchasing exchanges to help modest-income folks with costs, and the extension of Medicaid to an estimated 35 million poor people now uninsured.

Although he would have written the ACA differently (and feels the insurance companies essentially wrote it), Stone likes these provisions and expects voters will also, as implementation swings into full bore in 2014.

“What Democrats are counting on, Republicans are fearing. It’s all so polarized. Both Republicans and Democrats see how the ACA plays out as crucial to their political ambitions. When I criticize the ACA, I offend my Democrat friends; and when I say something positive, I offend Republicans. I’m an equal opportunity critic.”

So much so, he sees even failure as an opportunity — perhaps.

With understated glee, he cites warnings by various conservatives that Obamacare will in fact lead to government health care because costs will rise to the point where the public will tire of the middleman — the insurance companies that must please their shareholders and enrich their executives on top of the bills they pay.

Or, maybe the middleman will get out on his own. Some health insurers already are diversifying as the law tips the scales more toward the customer and the gravy thins.

“The ultimate answer — and I’m impish here — to ‘Is the ACA a step in the right direction?’ is, yes, because it is a government takeover of medicine. There’s this underlying assumption the free market can do more, and government is inept. And yet, the irony is, in Indiana, for instance, they’re going to let Washington run the exchange.”

Chris Stack, a retired Indianapolis physician and leader in Hoosiers for a Commonsense Health Care Plan, agrees the next couple of years could be decisive in any direction.

“If it’s a fiasco, what will prevail?” he said. “Even conservative people can look at the economics of private insurance and see that it’s not working. It’s never worked. It’s possible the failure of Obamacare could lead to something more radical. There’s a glimmer.”

By “radical,” he actually means “established.”

“Medicare — you set the rules, you buy in bulk to keep costs down. Private insurance is in the game as long as it pays off. Then they’re gone.”

For most adult Americans, it would not be at all difficult to recall when we lived without them.

Carpenter is Star op-ed columnist.

http://www.indystar.com/article/20130813/OPINION/308130046/

Complexity of catastrophic cap on losses causes delay in full implementation

A Limit on Consumer Costs Is Delayed in Health Care Law

By Robert Pear
The New York Times, August 12, 2013

In another setback for President Obama’s health care initiative, the administration has delayed until 2015 a significant consumer protection in the law that limits how much people may have to spend on their own health care.

The limit on out-of-pocket costs, including deductibles and co-payments, was not supposed to exceed $6,350 for an individual and $12,700 for a family. But under a little-noticed ruling, federal officials have granted a one-year grace period to some insurers, allowing them to set higher limits, or no limit at all on some costs, in 2014.

Under the policy, many group health plans will be able to maintain separate out-of-pocket limits for benefits in 2014. As a result, a consumer may be required to pay $6,350 for doctors’ services and hospital care, and an additional $6,350 for prescription drugs under a plan administered by a pharmacy benefit manager.

Some consumers may have to pay even more, as some group health plans will not be required to impose any limit on a patient’s out-of-pocket costs for drugs next year. If a drug plan does not currently have a limit on out-of-pocket costs, it will not have to impose one for 2014, federal officials said Monday.

The health law, signed more than three years ago by Mr. Obama, clearly established a single overall limit on out-of-pocket costs for each individual or family. But federal officials said that many insurers and employers needed more time to comply because they used separate companies to help administer major medical coverage and drug benefits, with separate limits on out-of-pocket costs.

In many cases, the companies have separate computer systems that cannot communicate with one another.

http://www.nytimes.com/2013/08/13/us/a-limit-on-consumer-costs-is-delayed-in-health-care-law.html?ref=politics&_r=0&pagewanted=all

FAQs about Affordable Care Act Implementation Part XII

United States Department of Labor, February 20, 2013

Q2: Who must comply with the annual limitation on out-of-pocket maximums under PHS Act section 2707(b)?

The Departments have determined that, only for the first plan year beginning on or after January 1, 2014, where a group health plan or group health insurance issuer utilizes more than one service provider to administer benefits that are subject to the annual limitation on out-of-pocket maximums under section 2707(a) or 2707(b), the Departments will consider the annual limitation on out-of-pocket maximums to be satisfied if both of the following conditions are satisfied:

a. The plan complies with the requirements with respect to its major medical coverage (excluding, for example, prescription drug coverage and pediatric dental coverage); and

b. To the extent the plan or any health insurance coverage includes an out-of-pocket maximum on coverage that does not consist solely of major medical coverage (for example, if a separate out-of-pocket maximum applies with respect to prescription drug coverage), such out-of-pocket maximum does not exceed the dollar amounts set forth in section 1302(c)(1).

http://www.dol.gov/ebsa/faqs/faq-aca12.html

Comment:

By Don McCanne, M.D.

One of the most important benefits of Obamacare is the establishment of maximum out-of-pocket spending that any individual or family would have to face in any given year. Although the amounts will still be unduly burdensome for far too many, nevertheless, it does provide some protection against catastrophic loss.

For the first year, 2014, the administration is allowing maximums to apply separately to both major medical coverage and prescription drug coverage, so patients could face twice the maximum in out-of-pocket spending. This transitional relaxation of the rules is to allow insurers to coordinate their computers that currently administer medical benefits and drug coverage separately.

We’ve discussed before the fact that losses in excess of the maximums may still occur because of limitations in benefits covered or from services provided outside of health plan networks. This one year transition not only will add to that exposure, but it also provides yet another example of the excessive administrative complexity of Obamacare. Wasting resources on excessive administrative services while exposing patients to potential financial hardship would be greatly diminished by changing to a single payer national health program.