By I. Guessous, J.M. Gaspoz, J.M. Theler, H. Wolff
Preventive Medicine
In press – Draft published online August 23, 2012

Health insurance is compulsory for all citizens in Switzerland and insurance premiums are paid independently of income. Health insurance covers the costs of medical treatment and hospitalization for the insured. The insured person pays part of the cost of treatment: an annual flat deductible, called the franchise, chosen by the insured person (with premiums adjusted accordingly) and a 10% co-pay of the costs up to a stop-loss annual amount of CHF 700 (1CHF≈1$). Between 1099 and 2010, health insurance premiums increased by 77%, coupled with increasing out-of-pocket payments. Increasing out-of-pocket spending may, at least in some settings, reduce the use of clinically important services and drugs to prevent the onset and progression of chronic disease (Paez et al., 2009).

We aimed to determine the characteristics of participants who report forging healthcare and to describe the past 4-year trend for forgoing healthcare for economic reasons.

Abstract

Objective

To investigate the determinants and the 4-year evolution of the forgoing of healthcare for economic reasons in Switzerland.

Method

Population-based survey (2007–2010) of a representative sample aged 35–74 years in the Canton of Geneva, Switzerland. Healthcare forgone, socioeconomic and insurance status, marital status, and presence of dependent children were assessed using standardized methods.

Results

A total of 2601 subjects were included in the analyses. Of the subjects, 13.8% (358/2601) reported having forgone healthcare for economic reasons, with the percentage varying from 3.7% in the group with a monthly income ≥ 13,000CHF (1CHF ≈ 1$) to 30.9% in the group with a monthly income < 3000CHF. In subjects with a monthly income < 3000CHF, the percentage who had forgone healthcare increased from 22.5% in 2007/8 to 34.7% in 2010 (P trend = 0.2). Forgoing healthcare for economic reasons was associated with lower income, female gender, smoking status, lower job position, having dependent children, being divorced and single, paying a higher deductible, and receiving a premium subsidy.

Conclusion

In a Swiss region with universal health insurance coverage, the reported prevalence of forgoing healthcare for economic reasons was high and greatly dependent on socioeconomic factors. Our data suggested an increasing trend among participants with the lowest income.

Highlights
– Forgoing healthcare for economic reasons is frequent in a region of Switzerland.
– This prevalence varies with reported monthly household income category from 3.7% to 30.9%.
– Data suggest an increasing 2007–2010 trend among participants with the lowest income.
– Risk factors include gender, smoking, occupation, children, being divorced, and insurance status.
– Forgoing healthcare is associated with worse self-rated health status.

http://www.sciencedirect.com/science/article/pii/S0091743512003787

Comment: 

By Don McCanne, MD

Conservatives in the United States often praise the Swiss health care financing system largely because it is composed of a choice of private health plans (although they may not like the facts that it is compulsory, that it is heavily regulated, and that it is one of the most expensive financing systems in the world). So what is the policy lesson from this study of the Swiss system?

The out-of-pocket deductibles and coinsurance result in a high prevalence of forgoing health care for economic reasons. The prevalence is inversely related to household income, but even at the highest income levels, some do forgo health care for economic reasons. Forgoing health care is associated with worse self-rated health status, and reduces the use of clinically important services and drugs.

Other nations have shown that you do not have to have deductibles, co-payments, and coinsurance to control health care spending. Since these cost sharing measures do have the detrimental effect of reducing the use of clinically important services and drugs, they should be rejected as bad policy. The other measures inherent in a well designed single payer system obviate the necessity of patient cost sharing.

High  prevalence of forgoing healthcare for economic reasons in Switzerland: A population-based study in a region with universal health insurance coverage

By I. Guessous, J.M. Gaspoz, J.M. Theler, H. Wolff
Preventive Medicine
In press – Draft published online August 23, 2012
Health insurance is compulsory for all citizens in Switzerland and insurance premiums are paid independently of income. Health insurance covers the costs of medical treatment and hospitalization for the insured. The insured person pays part of the cost of treatment: an annual flat deductible, called the franchise, chosen by the insured person (with premiums adjusted accordingly) and a 10% co-pay of the costs up to a stop-loss annual amount of CHF 700 (1CHF≈1$). Between 1099 and 2010, health insurance premiums increased by 77%, coupled with increasing out-of-pocket payments. Increasing out-of-pocket spending may, at least in some settings, reduce the use of clinically important services and drugs to prevent the onset and progression of chronic disease (Paez et al., 2009).
We aimed to determine the characteristics of participants who report forging healthcare and to describe the past 4-year trend for forgoing healthcare for economic reasons.
Abstract
Objective
To investigate the determinants and the 4-year evolution of the forgoing of healthcare for economic reasons in Switzerland.
Method
Population-based survey (2007–2010) of a representative sample aged 35–74 years in the Canton of Geneva, Switzerland. Healthcare forgone, socioeconomic and insurance status, marital status, and presence of dependent children were assessed using standardized methods.
Results
A total of 2601 subjects were included in the analyses. Of the subjects, 13.8% (358/2601) reported having forgone healthcare for economic reasons, with the percentage varying from 3.7% in the group with a monthly income ≥ 13,000CHF (1CHF ≈ 1$) to 30.9% in the group with a monthly income < 3000CHF. In subjects with a monthly income < 3000CHF, the percentage who had forgone healthcare increased from 22.5% in 2007/8 to 34.7% in 2010 (P trend = 0.2). Forgoing healthcare for economic reasons was associated with lower income, female gender, smoking status, lower job position, having dependent children, being divorced and single, paying a higher deductible, and receiving a premium subsidy.
Conclusion
In a Swiss region with universal health insurance coverage, the reported prevalence of forgoing healthcare for economic reasons was high and greatly dependent on socioeconomic factors. Our data suggested an increasing trend among participants with the lowest income.
Highlights
– Forgoing healthcare for economic reasons is frequent in a region of Switzerland.
– This prevalence varies with reported monthly household income category from 3.7% to 30.9%.
– Data suggest an increasing 2007–2010 trend among participants with the lowest income.
– Risk factors include gender, smoking, occupation, children, being divorced, and insurance status.
– Forgoing healthcare is associated with worse self-rated health status.
http://www.sciencedirect.com/science/article/pii/S0091743512003787

Conservatives in the United States often praise the Swiss health care financing system largely because it is composed of a choice of private health plans (although they may not like the facts that it is compulsory, that it is heavily regulated, and that it is one of the most expensive financing systems in the world). So what is the policy lesson from this study of the Swiss system?
The out-of-pocket deductibles and coinsurance result in a high prevalence of forgoing health care for economic reasons. The prevalence is inversely related to household income, but even at the highest income levels, some do forgo health care for economic reasons. Forgoing health care is associated with worse self-rated health status, and reduces the use of clinically important services and drugs.
Other nations have shown that you do not have to have deductibles, co-payments, and coinsurance to control health care spending. Since these cost sharing measures do have the detrimental effect of reducing the use of clinically important services and drugs, they should be rejected as bad policy. The other measures inherent in a well designed single payer system obviate the necessity of patient cost sharing.

By Timothy Jost
Health Affairs Blog, August 31, 2012

Employment Status And Waiting Periods

On August 31, 2012, the IRS released Notice 2012-58 addressing the question of how full-time employment status is to be determined for deciding whether an employer owes a tax penalty for under section 4980H for failing to provide health insurance (or adequate or affordable health insurance) to full-time employees who consequently receive premium tax credits.  On the same day, the IRS, Department of Labor, and Department of Health and Human Services jointly released notice 2012-59 addressing the question of how the ninety-day waiting period limit for employment-based health insurance enacted by the Affordable Care Act as section 2708 of the Public Health Services Act would be applied.

The application of both the penalty and waiting period is quite straightforward for employees hired on a full-time basis.  An employer that offers health insurance must cover a new full-time employee no later than 90 days after employment.  A large employer (with more than 50 full-time-equivalent employees) must offer adequate and affordable coverage to employees hired as full-time employees or risk owing a tax penalty if an employee goes to the exchange to obtain a premium tax credit.

The problem is how to handle employees who work variable hours and seasonal employees.   Full-time employment is defined as 30 hours a week (or 130 hours a month), but many employees work 20 hours one week and 45 hours the next, or may work 40 hours a week but only for two months a year during the growing or holiday seasons.  The notices address how this situation should be handled.

Notice 2012-58  defines three time periods—measurement periods, stability periods, and administrative periods.  New employees who are not expected to work full time (variable hour or seasonal employees) can be employed without health insurance for an “initial measurement period” of between 3 and 12 months, as determined by the employer, during which the employees hours are tracked.  If at the end of that period it becomes clear that the employee has been working an average of 30 hours a week or more, the employer must offer health insurance to the employee for a “stability period” of at least 6 months or for the length of the initial measurement period, whichever is longer.

Alternatively, if the employee worked on average less than 30 hours a week, the employer can treat the employee as a part-time employee for a subsequent stability period and not offer insurance. The employer can take up to 90 days for an “administrative period” before the stability period begins during which the employer can determine eligibility and add the employee to its health insurance program.  In no event, however, can the combined measurement period and administrative period extend beyond the last day of the first calendar month beginning on or after the one-year anniversary of the employee’s start date.

Ongoing employees with variable hours can also be made subject to measurement periods and stability periods, with the measurement periods lasting 3 to 12 months and the stability periods lasting for the same period of time but in no event less than 6 months. If an ongoing employee is determined to be part-time during any measurement period, the employer can deny coverage to that employee without risking a penalty for the next stability period.  If the employee is determined to be full-time during the measurement period, the employer must insure the employee for the following stability period or risk paying a tax penalty.

In sum, variable-hour employees may be insured one year, not insured the next, depending on their hours of work during the prior “measurement period.”  An employer can take up to 90 days following the measurement period for an administrative period before coverage begins, but if an employee is already covered under a stability period, the employer must make the continuing eligibility determination before the stability period ends to avoid gaps in coverage.

Under notice 2012-59, new employees reasonably expected to work full-time cannot be required to wait more than 90 days to be enrolled in coverage offered by an employer.  An employer may, however, impose a measurement period on variable-hour employees of up to 12 months, consistent with the scheme described in Notice 2012-58, before determining that an employee is in fact a full-time employee.  An employer may also impose other conditions before enrolling the employee, such as requiring an employee to complete enrollment forms or work a reasonable number of hours (not exceeding 1200) before coverage begins, as long as the condition is not designed to avoid compliance with the 90 day waiting period.

Finally, Notice 2012-58 continues the expressed IRS policy of allowing an employer to avoid penalties as long as the employee’s contribution for premiums does not exceed 9.5 percent of the employee’s W-2 wages, regardless of the employee’s actual household income.  The Notice does not address the important question, currently open, of whether affordability is to be calculated based on the employee’s premium share for self-only or family coverage.  Employers can rely on the safe harbors provided by both notices through 2014.

Some method is necessary for determining when employees who are hired without an expectation that they will be full-time employees in fact become full-time employees.  But giving employers more than a year to figure out whether an employee is working full-time seems excessive.  Under previous proposed guidance, a maximum of 6 months was allowed for this determination.  This approach will end up increasing the number of the uninsured, or at least those insured through the exchanges without employer assistance, and is to that extent a disappointment to consumers.

http://healthaffairs.org/blog/2012/08/31/implementing-health-reform-a-summer-lull/

Comment: 

By Don McCanne, MD

The administrative nightmare created by the Affordable Care Act not only adds to the expensive public and private bureaucratic waste that characterizes our health care system, it also fails to adequately address fundamental issues such as equity and universality. This brief summary of the rules establishing whether or not an employer must provide coverage for employees based on a variable number of hours worked and on seasonal variations in employment, and how soon the coverage must be offered, demonstrates not only the complexity of just this one issue, but also demonstrates how easy it is for an individual to fall through the cracks.

Under a single payer system, everyone is covered. There would be no need to be concerned about part time and seasonal work in determinations of eligibility. And there would be no need for all of the rest of the administrative complexity that this law creates – complexity that shoves patients in and out of different programs and will leave 30 million with no coverage at all. Insane.

Implementing Health Reform: A Summer Lull

By Timothy Jost
Health Affairs Blog, August 31, 2012
Employment Status And Waiting Periods
On August 31, 2012, the IRS released Notice 2012-58 addressing the question of how full-time employment status is to be determined for deciding whether an employer owes a tax penalty for under section 4980H for failing to provide health insurance (or adequate or affordable health insurance) to full-time employees who consequently receive premium tax credits.  On the same day, the IRS, Department of Labor, and Department of Health and Human Services jointly released notice 2012-59 addressing the question of how the ninety-day waiting period limit for employment-based health insurance enacted by the Affordable Care Act as section 2708 of the Public Health Services Act would be applied.
The application of both the penalty and waiting period is quite straightforward for employees hired on a full-time basis.  An employer that offers health insurance must cover a new full-time employee no later than 90 days after employment.  A large employer (with more than 50 full-time-equivalent employees) must offer adequate and affordable coverage to employees hired as full-time employees or risk owing a tax penalty if an employee goes to the exchange to obtain a premium tax credit.
The problem is how to handle employees who work variable hours and seasonal employees.   Full-time employment is defined as 30 hours a week (or 130 hours a month), but many employees work 20 hours one week and 45 hours the next, or may work 40 hours a week but only for two months a year during the growing or holiday seasons.  The notices address how this situation should be handled.
Notice 2012-58  defines three time periods—measurement periods, stability periods, and administrative periods.  New employees who are not expected to work full time (variable hour or seasonal employees) can be employed without health insurance for an “initial measurement period” of between 3 and 12 months, as determined by the employer, during which the employees hours are tracked.  If at the end of that period it becomes clear that the employee has been working an average of 30 hours a week or more, the employer must offer health insurance to the employee for a “stability period” of at least 6 months or for the length of the initial measurement period, whichever is longer.
Alternatively, if the employee worked on average less than 30 hours a week, the employer can treat the employee as a part-time employee for a subsequent stability period and not offer insurance. The employer can take up to 90 days for an “administrative period” before the stability period begins during which the employer can determine eligibility and add the employee to its health insurance program.  In no event, however, can the combined measurement period and administrative period extend beyond the last day of the first calendar month beginning on or after the one-year anniversary of the employee’s start date.
Ongoing employees with variable hours can also be made subject to measurement periods and stability periods, with the measurement periods lasting 3 to 12 months and the stability periods lasting for the same period of time but in no event less than 6 months. If an ongoing employee is determined to be part-time during any measurement period, the employer can deny coverage to that employee without risking a penalty for the next stability period.  If the employee is determined to be full-time during the measurement period, the employer must insure the employee for the following stability period or risk paying a tax penalty.
In sum, variable-hour employees may be insured one year, not insured the next, depending on their hours of work during the prior “measurement period.”  An employer can take up to 90 days following the measurement period for an administrative period before coverage begins, but if an employee is already covered under a stability period, the employer must make the continuing eligibility determination before the stability period ends to avoid gaps in coverage.
Under notice 2012-59, new employees reasonably expected to work full-time cannot be required to wait more than 90 days to be enrolled in coverage offered by an employer.  An employer may, however, impose a measurement period on variable-hour employees of up to 12 months, consistent with the scheme described in Notice 2012-58, before determining that an employee is in fact a full-time employee.  An employer may also impose other conditions before enrolling the employee, such as requiring an employee to complete enrollment forms or work a reasonable number of hours (not exceeding 1200) before coverage begins, as long as the condition is not designed to avoid compliance with the 90 day waiting period.
Finally, Notice 2012-58 continues the expressed IRS policy of allowing an employer to avoid penalties as long as the employee’s contribution for premiums does not exceed 9.5 percent of the employee’s W-2 wages, regardless of the employee’s actual household income.  The Notice does not address the important question, currently open, of whether affordability is to be calculated based on the employee’s premium share for self-only or family coverage.  Employers can rely on the safe harbors provided by both notices through 2014.
Some method is necessary for determining when employees who are hired without an expectation that they will be full-time employees in fact become full-time employees.  But giving employers more than a year to figure out whether an employee is working full-time seems excessive.  Under previous proposed guidance, a maximum of 6 months was allowed for this determination.  This approach will end up increasing the number of the uninsured, or at least those insured through the exchanges without employer assistance, and is to that extent a disappointment to consumers.
http://healthaffairs.org/blog/2012/08/31/implementing-health-reform-a-summer-lull/

The administrative nightmare created by the Affordable Care Act not only adds to the expensive public and private bureaucratic waste that characterizes our health care system, it also fails to adequately address fundamental issues such as equity and universality. This brief summary of the rules establishing whether or not an employer must provide coverage for employees based on a variable number of hours worked and on seasonal variations in employment, and how soon the coverage must be offered, demonstrates not only the complexity of just this one issue, but also demonstrates how easy it is for an individual to fall through the cracks.
Under a single payer system, everyone is covered. There would be no need to be concerned about part time and seasonal work in determinations of eligibility. And there would be no need for all of the rest of the administrative complexity that this law creates – complexity that shoves patients in and out of different programs and will leave 30 million with no coverage at all. Insane.

Employer Survey on Purchasing Value in Health Care
Towers Watson, 2012 

Performance in an Era of Uncertainty

** Affordability issues are a growing challenge

Trends remain double the rate of inflation. Employees’ share of premium costs increased 9.3% between 2011 and 2012, with the dollar burden rising from $2,529 to $2,764. In fact, employees contribute nearly 40% more for health care than they did five years ago, compared with 34% for employers. Likewise, out-of-pocket expenses increased over the last year from 16% to 18%. That increase is partly due to subsidy shifts for dependents, as nearly half of companies increased employee contributions in tiers with dependent coverage. About a quarter of companies (24%) are using spousal surcharges, with another 13% planning to do so next year. 

• The total employee cost share, including premiums and out-of-pocket costs, has climbed from 33.2% in 2011 to 34.4% in 2012.

** Employers confirm their commitment to providing health care benefits for active employees, but long-term confidence declines sharply

Many employers are steadfast in their commitment to their active health care benefits as a central component of their employee value proposition. Through 2015, most employers will remain focused on optimally managing the design and delivery of their programs, with a select number tailoring their designs to facilitate the availability of federal subsidies in the Exchanges for a portion of their workforce. Looking to the end of the coming decade, employers are much less confident that health care benefits will be offered at their organization. 

• Only 3% of employers are somewhat or very likely to discontinue health care plans for active employees with no financial subsidy in 2014 or 2015. 

• 45% are somewhat to very likely to offer an employer-sponsored health plan to only a portion of their population and direct ineligible employees to the Exchanges. 

• Today, 23% of companies are very confident that they will continue to offer health care benefits for the next 10 years, down from a peak of 73% in 2007. 

** Use of ABHPs is surging but must be part of a broader strategy to be effective

Account-based health plans (health savings accounts and health reimbursement arrangements) can be an important element in an organization’s health benefit management if the right incentives and employee education are attached. Today, 59% of companies have an ABHP in place, with another 11% expecting to add one by 2013. But ABHPs will not necessarily result in lower costs without significant enrollment. Our results show that employers that take a comprehensive approach to ABHPs (e.g., increasing employee and provider accountability while at the same time helping to cultivate smarter health care consumers) are the ones that have gained the greatest advantage. Using a health savings account (HSA) can also effectively align with an employer’s retirement strategy by providing employees with a tax-advantaged vehicle to pay for current costs while accumulating wealth for retirement. 

• Total replacement ABHPs are also on the rise, representing nearly 12% of companies with an ABHP — up from to 7.6% in 2010. 

• ABHP enrollment has nearly doubled in the last two years — surging from 15% in 2010 to 27% in 2012, and the move toward total replacement ABHPs is continuing. 

• About 10% of respondents say employees and dependents enrolled in an ABHP are better at reducing lifestyle risks than those enrolled in non-ABHPs. 

• Nearly four out of 10 companies currently consider their HSA for actives part of their retiree medical strategy, and another 20% are planning or considering such a strategy over the next three years. 

Regardless of the future of health care reform, providing a cost-effective health benefit plan will remain a differentiator for many companies when it comes to attracting and retaining top talent.

http://www.healthreformgps.org/wp-content/uploads/Towers-Watson-NBGH-2012.pdf

Comment:  

By Don McCanne, MD

Health benefit programs of large employers have been the mainstay of health care coverage for working families. The Affordable Care Act relies heavily on the stability of these programs. However, only 23 percent of these employers are very confident that they will continue to offer health care benefits ten years from now.

Although this report discusses many observations and strategies for the future, one trend that is of concern is the greater reliance on high-deductible health plans with health savings accounts or health reimbursement arrangements (aka account-based health plans or ABHPs). Although these plans seem to be satisfactory for the healthy workforce and their young healthy families who really don’t need much care, there remains the serious concern that such accounts deter patients with significant needs from receiving the care that they should have.

Quoting from this report, “An important question is whether ABHPs are having a positive or negative effect on employees’ utilization of health care services and ultimately on improving health outcomes. There are significant information gaps about health behaviors and outcomes for employees and dependents enrolled in an ABHP, compared with non-ABHPs.”

The prevailing attitude seems to be that conditions in health care financing are so bad that we have to do something, no matter what. It doesn’t seem to matter whether or not the changes are known to be beneficial, just so long as we don’t enact a single payer system.

Everyone understands that a single payer system would work, but it’s just not feasible. Not feasible? That’s nonsense. We know that single payer would be highly beneficial, creating much greater value in health care spending. Enacting single payer is the only feasible approach we have.

17th Annual Towers Watson/National Business Group on Health

Employer Survey on Purchasing Value in Health Care
Towers Watson, 2012 
Performance in an Era of Uncertainty
** Affordability issues are a growing challenge
Trends remain double the rate of inflation. Employees’ share of premium costs increased 9.3% between 2011 and 2012, with the dollar burden rising from $2,529 to $2,764. In fact, employees contribute nearly 40% more for health care than they did five years ago, compared with 34% for employers. Likewise, out-of-pocket expenses increased over the last year from 16% to 18%. That increase is partly due to subsidy shifts for dependents, as nearly half of companies increased employee contributions in tiers with dependent coverage. About a quarter of companies (24%) are using spousal surcharges, with another 13% planning to do so next year.
• The total employee cost share, including premiums and out-of-pocket costs, has climbed from 33.2% in 2011 to 34.4% in 2012.
** Employers confirm their commitment to providing health care benefits for active employees, but long-term confidence declines sharply
Many employers are steadfast in their commitment to their active health care benefits as a central component of their employee value proposition. Through 2015, most employers will remain focused on optimally managing the design and delivery of their programs, with a select number tailoring their designs to facilitate the availability of federal subsidies in the Exchanges for a portion of their workforce. Looking to the end of the coming decade, employers are much less confident that health care benefits will be offered at their organization.
• Only 3% of employers are somewhat or very likely to discontinue health care plans for active employees with no financial subsidy in 2014 or 2015.
• 45% are somewhat to very likely to offer an employer-sponsored health plan to only a portion of their population and direct ineligible employees to the Exchanges.
• Today, 23% of companies are very confident that they will continue to offer health care benefits for the next 10 years, down from a peak of 73% in 2007.
** Use of ABHPs is surging but must be part of a broader strategy to be effective
Account-based health plans (health savings accounts and health reimbursement arrangements) can be an important element in an organization’s health benefit management if the right incentives and employee education are attached. Today, 59% of companies have an ABHP in place, with another 11% expecting to add one by 2013. But ABHPs will not necessarily result in lower costs without significant enrollment. Our results show that employers that take a comprehensive approach to ABHPs (e.g., increasing employee and provider accountability while at the same time helping to cultivate smarter health care consumers) are the ones that have gained the greatest advantage. Using a health savings account (HSA) can also effectively align with an employer’s retirement strategy by providing employees with a tax-advantaged vehicle to pay for current costs while accumulating wealth for retirement.
• Total replacement ABHPs are also on the rise, representing nearly 12% of companies with an ABHP — up from to 7.6% in 2010.
• ABHP enrollment has nearly doubled in the last two years — surging from 15% in 2010 to 27% in 2012, and the move toward total replacement ABHPs is continuing.
• About 10% of respondents say employees and dependents enrolled in an ABHP are better at reducing lifestyle risks than those enrolled in non-ABHPs.
• Nearly four out of 10 companies currently consider their HSA for actives part of their retiree medical strategy, and another 20% are planning or considering such a strategy over the next three years.
Regardless of the future of health care reform, providing a cost-effective health benefit plan will remain a differentiator for many companies when it comes to attracting and retaining top talent.
http://www.healthreformgps.org/wp-content/uploads/Towers-Watson-NBGH-2012.pdf

Health benefit programs of large employers have been the mainstay of health care coverage for working families. The Affordable Care Act relies heavily on the stability of these programs. However, only 23 percent of these employers are very confident that they will continue to offer health care benefits ten years from now.
Although this report discusses many observations and strategies for the future, one trend that is of concern is the greater reliance on high-deductible health plans with health savings accounts or health reimbursement arrangements (aka account-based health plans or ABHPs). Although these plans seem to be satisfactory for the healthy workforce and their young healthy families who really don’t need much care, there remains the serious concern that such accounts deter patients with significant needs from receiving the care that they should have.
Quoting from this report, “An important question is whether ABHPs are having a positive or negative effect on employees’ utilization of health care services and ultimately on improving health outcomes. There are significant information gaps about health behaviors and outcomes for employees and dependents enrolled in an ABHP, compared with non-ABHPs.”
The prevailing attitude seems to be that conditions in health care financing are so bad that we have to do something, no matter what. It doesn’t seem to matter whether or not the changes are known to be beneficial, just so long as we don’t enact a single payer system.
Everyone understands that a single payer system would work, but it’s just not feasible. Not feasible? That’s nonsense. We know that single payer would be highly beneficial, creating much greater value in health care spending. Enacting single payer is the only feasible approach we have.

By Theodore R. Marmor
Tampa Bay Online, August 18, 2012

Before Medicare began in 1965, many American senior citizens — and their children — struggled to pay for their doctor bills. Ever since, Medicare’s been an American success story.

Why, then, do so many Beltway pundits and members of Congress — including Mitt Romney’s new running mate, Rep. Paul Ryan, R-Wis. — go after it?

Some of its critics claim that slashing Medicare is the only way to control the deficit. Like most attacks on Medicare, this one is based on ideology, not evidence. Medicare’s critics often claim that rising federal health care spending is America’s biggest fiscal challenge. In fact, the federal deficit is bloated today primarily due to the Bush administration’s irresponsible tax cuts, economic mismanagement, costly wars and increased defense spending.

Of course large numbers of retiring boomers mean Medicare will need more revenue. But Medicare costs won’t need to spiral out of control. The new Affordable Care Act includes steps to limit per-person health care price hikes. It’s already saving Medicare money. Yet Romney and Ryan promise they would work to repeal it.

What’s their alternative? The Ryan Budget Plan calls for extremely deep cuts to Medicare, while promising more and longer-lasting tax cuts for a few very wealthy Americans. Most House Republicans have already voted for that. It would end Medicare as we know it, and instead force seniors to buy private insurance with vouchers that would cover less of their healthcare costs each year.

These vouchers would reduce seniors’ choices, not their costs. Why? Republican voucher plans assume that if government ends Medicare, private insurance companies will start to deliver cheaper, more efficient plans. But what’s their evidence?

When the nonpartisan Congressional Budget Office analyzed vouchers, it found that even a slight dip in future federal spending on health care for older Americans would drive costs up. Vouchers with slowly rising buying power would simply leave seniors and their loved ones to pay more out of pocket for bigger medical bills.

In fact, Uncle Sam’s already lost money on Medicare contracts with competing private health insurance plans. Although they spent more per patient, those private plans didn’t improve coverage or quality of care. Meanwhile, Medicare has shown it bargains more effectively for better prices than most private insurers say that they can afford to do.

How are frail older people — one in three with cognitive impairments — supposed to wade through pages of fine print to understand new, complicated and often confusing “choices”? Is that what seniors really want? Surveys show most people care much more about being free to choose their doctors than to do complex comparison shopping.

Consumer choice, it turns out, is just a fig leaf that Medicare’s critics use to try to hide what would truly be in store for seniors if Medicare were to be gutted over time: fewer benefits, higher costs and the loss of Medicare’s guarantee of access to a wide range of doctors and hospitals. What’s more, its supporters aim to mask their true aim by grandfathering in those over 55, keeping them from having to face a transformed Medicare program.

The Ryan Budget Plan wouldn’t really control Medicare’s costs. It would simply shift them to future senior citizens and make Medicare less efficient.

There’s no good reason to weaken and eventually dump a program that’s met the needs of America’s seniors and disabled citizens so well for decades. Instead of wasting time and money pushing snake oil schemes to replace Medicare, let’s tackle the real problem of rising health care costs with sensible cost controls, paid for by taxing — not cutting taxes for — those who can best afford it. That way, Medicare can survive and succeed for a long time to come.

(Theodore R. Marmor is professor emeritus of public policy and political science at Yale University and has testified before Congress about Medicare reform. He is a member of the Scholars Strategy Network, a new national organization that brings together many of America’s leading scholars to address pressing public challenges at the national, state and local levels.)

http://www2.tbo.com/news/opinion/2012/aug/18/naopino2-turning-medicare-into-vouchers-wont-work-ar-467518/

Comment: 

By Don McCanne, MD

Medicare is under political attack. In this article, Professor Theodore Marmor, one of the nation’s leading experts on Medicare, explains concisely the issues and the potential consequences. It can serve as a valuable resource for explaining to others just what is at stake. For single payer advocates, educating the public on this debate is a must if we are to continue to advocate for an “improved Medicare for all.”

Turning Medicare into vouchers won’t work

By Theodore R. Marmor
Tampa Bay Online, August 18, 2012

Before Medicare began in 1965, many American senior citizens — and their children — struggled to pay for their doctor bills. Ever since, Medicare’s been an American success story.

Why, then, do so many Beltway pundits and members of Congress — including Mitt Romney’s new running mate, Rep. Paul Ryan, R-Wis. — go after it?

Some of its critics claim that slashing Medicare is the only way to control the deficit. Like most attacks on Medicare, this one is based on ideology, not evidence. Medicare’s critics often claim that rising federal health care spending is America’s biggest fiscal challenge. In fact, the federal deficit is bloated today primarily due to the Bush administration’s irresponsible tax cuts, economic mismanagement, costly wars and increased defense spending.

Of course large numbers of retiring boomers mean Medicare will need more revenue. But Medicare costs won’t need to spiral out of control. The new Affordable Care Act includes steps to limit per-person health care price hikes. It’s already saving Medicare money. Yet Romney and Ryan promise they would work to repeal it.

What’s their alternative? The Ryan Budget Plan calls for extremely deep cuts to Medicare, while promising more and longer-lasting tax cuts for a few very wealthy Americans. Most House Republicans have already voted for that. It would end Medicare as we know it, and instead force seniors to buy private insurance with vouchers that would cover less of their healthcare costs each year.

These vouchers would reduce seniors’ choices, not their costs. Why? Republican voucher plans assume that if government ends Medicare, private insurance companies will start to deliver cheaper, more efficient plans. But what’s their evidence?

When the nonpartisan Congressional Budget Office analyzed vouchers, it found that even a slight dip in future federal spending on health care for older Americans would drive costs up. Vouchers with slowly rising buying power would simply leave seniors and their loved ones to pay more out of pocket for bigger medical bills.

In fact, Uncle Sam’s already lost money on Medicare contracts with competing private health insurance plans. Although they spent more per patient, those private plans didn’t improve coverage or quality of care. Meanwhile, Medicare has shown it bargains more effectively for better prices than most private insurers say that they can afford to do.

How are frail older people — one in three with cognitive impairments — supposed to wade through pages of fine print to understand new, complicated and often confusing “choices”? Is that what seniors really want? Surveys show most people care much more about being free to choose their doctors than to do complex comparison shopping.

Consumer choice, it turns out, is just a fig leaf that Medicare’s critics use to try to hide what would truly be in store for seniors if Medicare were to be gutted over time: fewer benefits, higher costs and the loss of Medicare’s guarantee of access to a wide range of doctors and hospitals. What’s more, its supporters aim to mask their true aim by grandfathering in those over 55, keeping them from having to face a transformed Medicare program.

The Ryan Budget Plan wouldn’t really control Medicare’s costs. It would simply shift them to future senior citizens and make Medicare less efficient.

There’s no good reason to weaken and eventually dump a program that’s met the needs of America’s seniors and disabled citizens so well for decades. Instead of wasting time and money pushing snake oil schemes to replace Medicare, let’s tackle the real problem of rising health care costs with sensible cost controls, paid for by taxing — not cutting taxes for — those who can best afford it. That way, Medicare can survive and succeed for a long time to come.

(Theodore R. Marmor is professor emeritus of public policy and political science at Yale University and has testified before Congress about Medicare reform. He is a member of the Scholars Strategy Network, a new national organization that brings together many of America’s leading scholars to address pressing public challenges at the national, state and local levels.)

http://www2.tbo.com/news/opinion/2012/aug/18/naopino2-turning-medicare-into-vouchers-wont-work-ar-467518/

Comment: 

By Don McCanne, MD

Medicare is under political attack. In this article, Professor Theodore Marmor, one of the nation’s leading experts on Medicare, explains concisely the issues and the potential consequences. It can serve as a valuable resource for explaining to others just what is at stake. For single payer advocates, educating the public on this debate is a must if we are to continue to advocate for an “improved Medicare for all.”

Turning Medicare into vouchers won’t work

By Theodore R. Marmor
Tampa Bay Online, August 18, 2012
Before Medicare began in 1965, many American senior citizens — and their children — struggled to pay for their doctor bills. Ever since, Medicare’s been an American success story.
Why, then, do so many Beltway pundits and members of Congress — including Mitt Romney’s new running mate, Rep. Paul Ryan, R-Wis. — go after it?
Some of its critics claim that slashing Medicare is the only way to control the deficit. Like most attacks on Medicare, this one is based on ideology, not evidence. Medicare’s critics often claim that rising federal health care spending is America’s biggest fiscal challenge. In fact, the federal deficit is bloated today primarily due to the Bush administration’s irresponsible tax cuts, economic mismanagement, costly wars and increased defense spending.
Of course large numbers of retiring boomers mean Medicare will need more revenue. But Medicare costs won’t need to spiral out of control. The new Affordable Care Act includes steps to limit per-person health care price hikes. It’s already saving Medicare money. Yet Romney and Ryan promise they would work to repeal it.
What’s their alternative? The Ryan Budget Plan calls for extremely deep cuts to Medicare, while promising more and longer-lasting tax cuts for a few very wealthy Americans. Most House Republicans have already voted for that. It would end Medicare as we know it, and instead force seniors to buy private insurance with vouchers that would cover less of their healthcare costs each year.
These vouchers would reduce seniors’ choices, not their costs. Why? Republican voucher plans assume that if government ends Medicare, private insurance companies will start to deliver cheaper, more efficient plans. But what’s their evidence?
When the nonpartisan Congressional Budget Office analyzed vouchers, it found that even a slight dip in future federal spending on health care for older Americans would drive costs up. Vouchers with slowly rising buying power would simply leave seniors and their loved ones to pay more out of pocket for bigger medical bills.
In fact, Uncle Sam’s already lost money on Medicare contracts with competing private health insurance plans. Although they spent more per patient, those private plans didn’t improve coverage or quality of care. Meanwhile, Medicare has shown it bargains more effectively for better prices than most private insurers say that they can afford to do.
How are frail older people — one in three with cognitive impairments — supposed to wade through pages of fine print to understand new, complicated and often confusing “choices”? Is that what seniors really want? Surveys show most people care much more about being free to choose their doctors than to do complex comparison shopping.
Consumer choice, it turns out, is just a fig leaf that Medicare’s critics use to try to hide what would truly be in store for seniors if Medicare were to be gutted over time: fewer benefits, higher costs and the loss of Medicare’s guarantee of access to a wide range of doctors and hospitals. What’s more, its supporters aim to mask their true aim by grandfathering in those over 55, keeping them from having to face a transformed Medicare program.
The Ryan Budget Plan wouldn’t really control Medicare’s costs. It would simply shift them to future senior citizens and make Medicare less efficient.
There’s no good reason to weaken and eventually dump a program that’s met the needs of America’s seniors and disabled citizens so well for decades. Instead of wasting time and money pushing snake oil schemes to replace Medicare, let’s tackle the real problem of rising health care costs with sensible cost controls, paid for by taxing — not cutting taxes for — those who can best afford it. That way, Medicare can survive and succeed for a long time to come.
(Theodore R. Marmor is professor emeritus of public policy and political science at Yale University and has testified before Congress about Medicare reform. He is a member of the Scholars Strategy Network, a new national organization that brings together many of America’s leading scholars to address pressing public challenges at the national, state and local levels.)
http://www2.tbo.com/news/opinion/2012/aug/18/naopino2-turning-medicare-into-vouchers-wont-work-ar-467518/

Medicare is under political attack. In this article, Professor Theodore Marmor, one of the nation’s leading experts on Medicare, explains concisely the issues and the potential consequences. It can serve as a valuable resource for explaining to others just what is at stake. For single payer advocates, educating the public on this debate is a must if we are to continue to advocate for an “improved Medicare for all.”

Letter, The New York Times, August 28, 2012

To the Editor:

Re “Truth and Lies About Medicare” (editorial, Aug. 19):

As a former chief executive and actuary of an insurance company that once sold both individual and group health insurance, I am particularly mystified by the effort to push Medicare participants into the individual health insurance market.

I thought that we wanted to reduce — or at least control — the cost of health insurance, but individual health insurance is by far the most expensive alternative.

Depending on the size of the vouchers, the government itself may save money, but the entire system will pay more. Someone has to pay for the costs of individual underwriting, marketing and so on, and those expenses will fall on the elderly themselves.

You are also correct in assuming that there is likely to be anti-selection, with the healthier people going to the insurance companies, leaving the sickest and most expensive people in the Medicare plan.

It is certainly true that health insurance needs reform and that President Obama is far from having all the answers, but the Romney-Ryan plan will increase the country’s health care bill with little or any of the increase going to more or better health care.

Stephen Brown
Brewster, Mass.

http://www.nytimes.com/2012/08/29/opinion/medicare-voucher-costs.html

Comment: 

By Don McCanne, MD

Today’s message is important because it comes from an insider in the health insurance industry. Not only does he indicate that it is a terrible idea for Medicare beneficiaries to use vouchers to purchase private, individual plans, but, of even greater significance, is “that health insurance needs reform and that President Obama is far from having all the answers.”

For private insurance reform, nobody has all the answers. The nature of the beast is that when you try to fix one defect, others open up. Instead of moving Medicare beneficiaries into private insurance plans, we need to move private insurance victims into Medicare.