PNHP

Joe Lieberman and his Medicare Gift

Joe Lieberman and his Medicare Gift

The press needs to untie the bow—and quickly

By Trudy Lieberman
Columbia Journalism Review, July 11, 2011

Leave it to Connecticut Sen. Joe Lieberman to speed along the process of making seniors on Medicare pay more for their care—the cost control method of choice at the moment, since it doesn’t disturb the profits of major stakeholders. After all, it was Lieberman who sealed the death warrant for the public option during the health reform debate. So the legislation he has proposed along with Senator Tom Coburn is consistent with his political MO. Lieberman’s proposal along with others like it may well slip into the bill, authorizing an increase in the debt ceiling with nary a word from the seniors who depend on the program. It would be grand if they knew what was afoot.

The plan is deceptively referred to as “Medicare benefit simplification,” says Joe Baker, who heads the Medicare Rights Center, a New York City advocacy group. “What they are proposing is not simplifying the benefit to help consumers but to save the federal government money, and they do that by increasing costs to consumers and providing a disincentive to use medical services.” Lieberman et al want to create a single deductible of $550 for all Medicare services, replacing the separate hospital deductible—this year $1132—and the separate medical deductible of $162. They also want to cap out-of-pocket spending for people with low to middling incomes at $7500.

Those with higher incomes would have to pay more out-of-pocket in a further effort to means-test the program. There’s already some means testing in Medicare, but Lieberman’s proposal would add more. For example, under his plan, people with an income of $85,000 would have to pay $12,500 out-of-pocket, or about 15 percent of their income before collecting benefits. Experts have long feared that as those with higher incomes pay more, they will lose their support for the program and opt out for private market coverage—thus weakening Medicare’s risk pool, which makes it possible to insure sick people in their old age.

Baker says a lower, combined deductible is not a good idea. It would raise out-of-pocket costs for millions of beneficiaries who don’t use hospital services during the year. But nearly all seniors go to the doctor, often several times a year, and Lieberman’s plan would require them to pay a $550 deductible instead of the $162 deductible they pay now for physician services. Under current law, they also pay 20 percent of the bills for doctor services, but Medigap policies, the popular ones at least, cover that amount.

That brings up another goal of Lieberman’s plan—to reduce the amount of coverage Medigap insurance can provide. His plan would forbid Medigap policies, which are owned by some ten million seniors, from paying that deductible. All Medigap policies now cover the hospital deductible, and two of them—Plans F and C—cover the medical deductible. Two-thirds of seniors who have Medigaps buy these plans because they want to reduce their risk of out-of-pocket expenses. Over the last few years, under the guise of consumer choice, Congress has authorized insurers to sell new Medigap plans that cost less but don’t cover as many of the holes. Guess what? Older people don’t seem to buy them. “Seniors are very risk averse,” says Bonnie Burns, a policy specialist with California Health Advocates.

It’s worth noting that Congress also pulled a fast one during the health reform debate. It slipped into the law a provision that will make seniors who buy Plans C and F assume more costs for their medical services. The law calls on the National Association of Insurance Commissioners to draft rules that would make seniors who choose Plans C and F pay a greater percentage of the Part B coinsurance. So, for example, instead of policies paying the entire 20 percent coinsurance as they now do, they may cover only a fraction of it. Campaign Desk has repeatedly noted that the pols haven’t been eager to promote this, but there has been little press interest, too.

Under Lieberman’s bill, Medigap policies could cover only half of a senior’s out-of-pocket costs up to the $7500. In other words, they would have to pay $3750 right off the bat before any insurance would be allowed to kick in. And if they have an existing Medigap plan that does pay those costs, the government would slap them with an excise tax. One couple I know now pays $3720 for two Medigap policies that covers each of them and pays for everything. They would have to pay the tax, drop their policies, and each cough up the first $3750 to pay expenses, plus a premium for the new policy and a higher Medicare premium for Part B, which covers doctor services and hospital outpatient care. Lieberman’s plan would raise that, too.

Making people pay a lot more is precisely what Lieberman and other pols want. He cites studies showing that when people have to pay more for their care, they will use less of it, and claims his proposal will reduce the debt and “save more than $600 billion over 10 years.” In his press release he says: “We can only save Medicare if we change it. Our plan contains some strong medicine but that’s what it will take to keep Medicare alive.”

What will it take to keep seniors alive? That’s a good question for the press to explore. Half have annual incomes under $22,000, and the median income for older women on Social Security is only about $15,000. A recent RAND study, also missed by the press,found consumers with high-deductible insurance and lots of cost sharing did economize on going to the doctor even for preventive care covered by their policies.

“This has a perverse effect,” says Burns. “The older you are the more likely you’ll pay those high out-of-pocket expenses. They would hit women the hardest and shift more of them into Medicaid.” Given that states are having trouble paying for Medicaid and there’s talk of cutting the feds’ contribution through block grants, it’s fair to ask how will these women pay for their care. It’s also fair to ask how they will pay for it if proposed changes in Social Security’s cost-of-living formula now discussed as part of the deficit reduction package, become law. COLA changes are likely to result in smaller increases for many. Folks, this is really about the kitchen table connection.

http://www.cjr.org/campaign_desk/joe_lieberman_and_his_medicare_gift.php?page=all

HHS’s proposed rule on risk adjustment

Insurers Will Share Revenue Under U.S. Health Market Rules

By Alex Wayne and Drew Armstrong
Bloomberg, July 11, 2011

Insurers with healthier, lower-cost patients would share revenue with rivals whose customers run up higher bills under U.S. rules to stabilize insurance markets within the 2010 health-care law.

Insurers such as UnitedHealth Group Inc. (UNH) would also qualify for $20 billion in subsidies from 2014 to 2016 when they take on the sickest patients, according to the regulations. The money would come from fees levied on the insurance industry.

Rules issued by the Obama administration today attempt to make good on the law’s goal of discouraging private health plans from cherry-picking patients while easing market disruptions when top changes in the medical system take effect in 2014.

The rules create a “risk-adjustment” program that would take money from insurers in a state with low-cost patients and give it to plans whose customers run up the highest bills. The policy applies both to insurers selling coverage within the exchanges and those operating independently.

http://www.bloomberg.com/news/2011-07-11/states-face-new-rules-to-establish-markets-for-health-coverage.html

And…

Affordable Insurance Exchanges: Standards Related to Reinsurance, Risk Corridors and Risk Adjustment

HealthCare.gov (HHS)
July 11, 2011

Risk Adjustment

The Affordable Care Act provides for a program of risk adjustment for all non-grandfathered plans in the individual and small group market both inside and outside of the Exchange. Under this provision, the Secretary of Health and Human Services, in consultation with the States, will establish criteria and methods to be used by States in determining the actuarial risk of plans within a State. The risk adjustment program serves to level the playing field, both inside and outside of the Exchange. Risk adjustment ends the incentive for issuers to avoid the sick and market only to the healthy by transferring excess payments from plans with lower risk enrollees to plans with higher risk enrollees. For this reason, plans will have to compete on the basis of price, quality and service. This allows consumers the ability to pick the plan that best meets his or her needs. The proposal suggests that a constant set of data for risk adjustment be considered, preventing a health insurer that offers qualified health plan in different States from having different reporting requirements. It proposes that risk adjustment calculations occur at the State, rather than plan or Federal level, given States’ role in the system. And while a Federal risk adjustment methodology would be developed, States could use an approved alternative. We welcome comments on the risk adjustment program design.

http://www.healthcare.gov/news/factsheets/exchanges07112011e.html

And…

Patient Protection and Affordable Care Act; Standards Related to Reinsurance, Risk Corridors and Risk Adjustment

Department of Health and Human Services

Proposed rule

(Excerpt)

§153.320 Federally-certified risk adjustment methodology.
(a) General requirement. Any risk adjustment methodology used by a State, or HHS of behalf of the State, must be established as a Federally-certified risk adjustment methodology. A risk adjustment methodology may become Federally-certified by one of the following processes:
(1) A risk adjustment methodology developed by HHS, with its use authorized and published in a forthcoming annual Federal notice of benefits and payment parameters; or
(2) An alternative risk adjustment methodology submitted by a State in accordance with §153.330, and reviewed and certified by HHS. After HHS approves a State alternative risk adjustment methodology, that methodology is considered a Federally-certified risk adjustment methodology.
(b) Publication of methodology in notices. A State must use one of the Federally-certified risk adjustment methodologies that will be published by HHS in a forthcoming annual Federal notice of benefits and payment parameters or that has been published by the State in the annual State notice described in §153.110(b). Each methodology will include:
(1) A complete description of the risk adjustment model, including –
(i) Factors to be employed in the model, including but not limited to demographic factors, diagnostic factors, and utilization factors if any;
(ii) The qualifying criteria for establishing that an individual is eligible for a specific factor;
(iii) Weights assigned to each factor; and
(iv) The schedule for collection of risk adjustment data and determination of factors; and
(2) Any adjustments made to the risk adjustment model weights to determine average actuarial risk.
(c) Use of methodology for States that do not elect an Exchange. HHS will specify in the forthcoming annual Federal notice of benefits and payment parameters the Federally-certified risk adjustment methodology that will apply in States that do not elect to operate an Exchange.

Proposed rule (103 pages):
http://www.ofr.gov/OFRUpload/OFRData/2011-17609_PI.pdf

Private insurers have been gaming the system for many decades. They have been selectively marketing their products to the healthy workforce, their young, healthy families, and to healthy individuals who purchase their coverage in the individual market. The costs of higher needs patients have been shifted to the taxpayers through programs such as Medicare end-of-life care, Medicare long-term disability care, Medicaid nursing home and other care, and safety-net institutions for the uninsured. So what has changed that requires us to now look at risk adjustment?

Congress and the President decided to cover a larger percentage of our population by expanding the market of private health plans, plus expanding Medicaid for low-income individuals. It is the expansion of private insurance that has forced the realization that these plans now will have to include individuals with higher health care costs.

Since the model chosen for reform is a market of private plans competing within and outside of the exchanges, insurers have great incentives to market to the healthy while dumping the more costly patients onto their competitors. The higher costs that their competitors would face would have to be reflected in higher premiums, causing a plunge in market share and an eventual exit from the market – a process known as the death spiral. Pro-market enthusiasts certainly understand the consequences of this anti-competitive behavior.

The solution that has been promoted is risk adjustment. Those insurers that have been successful in enrolling a healthier population are required to take some of the savings and pass that on to insurers who have had to cover the higher costs of less healthy beneficiaries. This transfer of funds penalizes insurers who have deliberately avoided covering those with greater needs, while protecting the insurers who have included in their rolls a disproportionate share of these high cost patients. The alleged advantage is that it preserves a competitive market, even if not through a true laissez-faire free market.

There is some controversy over the effectiveness of risk adjustment. Most proposals do not transfer the full difference in spending caused by the variation in risk exposure, still leaving those insurers with higher risks at a disadvantage. Also, the insurers who find that their gaming operations are under attack can be quite innovative in finding new games to play. One of the more common is to upcode to make their patient population appear sicker than they really are. Although auditing can be used in an attempt to discover such chicanery, it is an expensive and not very effective process. Proving that each patient was not as sick as the insurer claimed is arduous and very frequently does not exceed the benefit-of-the-doubt threshold.

Because of these problems, we have been anxiously awaiting HHS’s proposed rule on how they were going to approach risk adjustment that would be fair to all and not cause yet further increases in health care costs. Unfortunately, the proposed rule doesn’t help much. They have not yet presented their model for actuarial risk adjustment, merely stating that “a Federal risk adjustment methodology would be developed.”

Regarding costs, the transfer would be budget neutral (the amount taken from some insurers and given to others would not change total spending on actual health care), but the costs of administering the program, including extensive data collection and the high costs and complexity of the auditing processes, would be assessed against the insurers and passed on to patient/consumers in the form of higher insurance premiums.

Risk adjustment is yet one more expensive, administratively burdensome, and often inequitable consequence of insisting on using private insurers to provide health care coverage. Nefarious risk gaming would not occur in a single payer national health program. But games the private insurers play, and with our money!

HHS releases the proposed rule for insurance exchanges

Patient Protection and Affordable Care Act: Establishment of Exchanges and Qualified Health Plans

Department of Health and Human Services

Proposed rule.

(Excerpt)

In paragraph (d)(1), we propose that the Exchange permit a qualified individual and any dependents to enroll in a QHP (Qualified Health Plan) due to loss of other minimum essential coverage. We interpret loss of coverage to include any event that triggers a loss of eligibility for other minimum essential coverage. We further propose that a dependent of a current enrollee in a QHP and the enrollee are each eligible for a special enrollment period if the dependent loses other minimum essential coverage. Examples of loss of coverage include decertification of a QHP that occurs outside of the annual open enrollment period. In such cases, an enrollee would be allowed to select and enroll in a new QHP upon notification of plan decertification. If the enrollee does not select a new QHP before the effective date of plan termination, he or she would be provided 60 days from the date of plan termination, which is the triggering event, to select a new QHP.

Other examples of events that would qualify as loss of coverage include but are not limited to the following: legal separation or divorce ending eligibility of a spouse or step-child enrolled in other minimum essential coverage as a dependent; end of dependent status (such as attaining the maximum age to be eligible as a dependent child under the plan); death of an individual enrolled in minimum essential coverage ending eligibility for covered dependents; termination of employment or reduction in the number of hours of employment necessary to maintain coverage; or relocation outside of the service area of the QHP. Examples of relocation include relocation to the United States (US) in the case of a US citizen, national, or lawfully present individual who was not previously eligible for Exchange participation while residing outside of the US; release from incarceration; moving from the jurisdiction of one Exchange to another; or relocating outside of the individual’s QHP’s service area.

In accordance with section 9801(f) of the Code, we propose that loss of coverage also include: termination of employer contributions for a qualified individual or dependent who has coverage that is not COBRA continuation coverage by any current or former employee, exhaustion of COBRA continuation coverage, reaching a lifetime limit on all benefits in a grandfathered plan, and termination of Medicaid or CHIP.

HHS News Release:
http://www.hhs.gov/news/press/2011pres/07/20110711a.html

Proposed Rule (244 pages):
http://www.ofr.gov/OFRUpload/OFRData/2011-17610_PI.pdf

Comment: 

By Don McCanne, MD

The excerpt above from today’s HHS release of the proposed rule for the insurance exchanges to be established under the Patient Protection and Affordable Care Act was selected to make a point. The fragmentation and instability of coverage is only one of the great many highly flawed features of the model of reform foisted off on us by our politicians.

I have little more to say now. Having just skimmed through these 244 pages and those of other supporting documents, I am thoroughly depressed. We could have had health reform that would be so much better than this. (But my inner voice says, “Don, don’t waste your time moping. We can still have a system that will work for all of us, but that will take a lot of work, and we need to move on to fulfill our role as a major driving force in that effort.”

Improve Medicare and Expand It to All

By Jim Recht, M.D.
CommonDreams, July 6, 2011

In honor of its 46th birthday this month, here is a brief history of Medicare: of the bitter controversy surrounding its creation, its subsequent achievements, and its current position at the center of congressional budget debates. I believe that once they understand the deep differences between this institution and our country’s more recent attempts at health care reform, most reasonable individuals will conclude that a national insurance system like Medicare offers a solution to the health care crisis, and that it should be fully funded and extended to cover all Americans from birth.

During the contentious debate that preceded its adoption in 1965, Medicare was attacked by powerful special interests — among them, the insurance industry and the American Medical Association — who decried it as “socialized medicine” and warned that it would destroy our health care system and even threaten our basic freedoms. It seems difficult today to imagine how such fear-mongering could have been taken seriously. Over the past half-century, by affording hundreds of millions of Americans access to high-quality health care, Medicare has played a major role in increasing life expectancy and overall quality of life in this country. Funded via a progressive tax mechanism that asks incrementally more of our wealthiest neighbors, and boasting better service and far lower administrative costs than the “leanest” private insurance, Medicare has become along with Social Security one of the most popular government programs in history.

In his speech announcing the new plan, then-President Johnson reminded the country that “there is a tradition we share today. It calls upon us never to be indifferent toward despair. It directs us never to ignore or to spurn those who suffer untended…[it] is as old as the day it was first commanded: ‘Thou shalt open thine hand wide unto thy brother, to thy poor, to thy needy, in thy land.'”

The current administration’s health reform legislation, and our own Massachusetts Health Reform that preceded and inspired it, are part of a very different story. That one begins in 2006 when, largely in response to Bush administration pressure, then-Governor Mitt Romney signed into law legislation that dismantled our extensive health care safety net, partially replacing it with an “ownership culture” that has required hundreds of thousands of low- and middle-income residents to purchase insurance policies sold by private corporations through a state-run exchange.

Five years on now, despite our mainstream media’s oddly strained attempts to suggest otherwise, we face overwhelming evidence that the Massachusetts Reform has failed. According to the comprehensive report released this month by Mass Care (masscare.org), Massachusetts reform has certainly forced many more Massachusetts residents to purchase health insurance policies – a boon to insurance companies, whose revenues have increased dramatically. But the difference between having insurance and having adequate access to quality health care has grown more oppressive than ever. For most individuals and families except for the very poorest and the wealthiest, out-of-pocket payments and insurance premiums have continued to skyrocket. Wait times for primary care appointments have increased, while ever fewer primary care doctors accept new patients — they simply cannot cope with the administrative costs and frustrations of a system dominated by private insurance companies, each with its own system of authorizations, denials and appeals. Finally, with state spending continuing to increase at alarming rates, it is now beyond question that the reform is financially unsustainable.

And now that the entire country has adopted legislation largely patterned on the Massachusetts reform, we brace ourselves for similar or worse developments on a national scale: increasingly unaffordable or unavailable medical services, runaway profits for insurance companies, and continued spikes in overall costs. Adding insult to injury, some politicians have proposed balancing these tremendous public losses by cutting Medicare benefits. Fortunately, Americans strongly oppose such measures; recognizing this, one prominent Tea Party leader has dismissed them as a “public policy nightmare.”

Rather than weakening Medicare, we ought to build on its strengths and correct its flaws:

* By replacing the current physician fee schedule with a system of negotiated payments, we can eliminate the critical shortages of skilled primary care providers and encourage the type of integrated practice exemplified by the Mayo Clinic and others;
* By instituting global budgets, we can avoid wasteful duplication of high-cost technology and fully fund the clinical services that we, as patients, want and need;
* By legislating price negotiating authority and bulk purchasing power for pharmaceuticals and medical devices, we can immediately begin saving taxpayers hundreds of billions of dollars annually.

This improved-and-expanded Medicare would simultaneously eliminate “mandates” and corporate profiteering.  In consequence, the billions we already spend each year would be more than enough to provide excellent health care automatically to everyone who needs it. A sustainable system that actually reduces our anxiety over the health care of ourselves and our children: now who wouldn’t appreciate a birthday gift like that?

Jim Recht, M.D., is a psychiatrist living and working in Cambridge, Massachusetts. He is also Massachusetts chapter co-chair of Physicians for a National Health Program.

http://www.commondreams.org/view/2011/07/06-12

Strengthen, don't privatize, Medicare

By Chris Gibbar
Letters, The Coloradoan, July 9, 2011

On July 30, Medicare will be 46 years old.

Prior to Medicare’s creation, insurance companies routinely denied coverage to the elderly. Because the U.S., unlike other industrialized countries, never designed a universal healthcare plan for its citizens, untold numbers of seniors during their most vulnerable years were forced out of their homes and bankrupted by medical costs. Since its enactment, anyone over 65 qualifies for coverage, regardless of income or health status.

Medicare is less expensive to administer than private programs. Yet this wildly popular program is under attack. The Democratic Obama administration has offered to cut tens of billions of dollars from Medicare and Medicaid, and Republicans in Congress are making serious attempts to privatize not only Medicare but Social Security. Both parties are failing the American people.

It is up to each of us to save our vital public programs. We must step out of our partisan clothing and inform our elected officials, regardless of party affiliation, that their jobs are in jeopardy unless they stand with us. We must pay attention to their votes instead of their rhetoric.

If you care, as I do, about not only saving Medicare but offering it to all Americans as a right of citizenship under an “Improved Medicare for All” program, contact Cory Gardner, Michael Bennet and Mark Udall. Tell them that you will neither contribute to their campaigns nor vote for them unless they work to strengthen Medicare and Social Security, not privatize them.

Chris Gibbar lives in Fort Collins, Colo.

http://www.coloradoan.com/article/20110710/OPINION03/107100331

Advocating universal, single-payer health care in Minnesota

By Lisa Peterson-de la Cueva
Twin Cities Daily Planet, July 8, 2011

Senator John Marty contacted the TC Daily Planet after he read our June coverage of health care, specifically a Q&A with Senator Dave Durenberger on his support for federal health care legislation. Senator Marty let us know that he respectfully disagreed with Senator Durenberger’s view of solutions for our health care system. This is to be expected, since he’s the chief author of the Minnesota Health Plan, the only proposal for universal, single-payer coverage in Minnesota.

The TC Daily Planet had conducted a series of community conversations on health care, so we decided to ask Senator Marty questions that participants in our conversations had raised about what a universal, single-payer system would look like.

In a nutshell, what is the MN Health Plan and why do we need it?

The MN Health Plan is a single-payer health plan and it would cover all Minnesotans for all their medical needs. It’s a health care system instead of a health insurance system. The bottom line is if you need to go to the doctor or the dentist or the chiropractor and you get the care you need.

There are some people with the constitutional right to health care right now, like prisoners. But I happen to think that every Minnesota deserves the same health care that inmates might get. So why should some people have health insurance and some people don’t? The Minnesota Health Plan is the only proposal out there, period, that covers everybody and everything.

Why do universal, single-payer advocates think the Affordable Care Act is not good enough?

Federal health care reform takes a huge step in terms of covering more people. But at the end of a decade, if it works the way that proponents hope it’ll work, there will still be 23 million Americans with no health insurance. And there will still be people who have health insurance but they can’t go to the dentist because, oh, dental isn’t included. Or they’ve got a $10,000 deductible and they can’t get the MRI they need because they can’t afford the deductible. So in the long run, all the talk of what we’re going to do with insurance exchanges and the expansion of medical assistance— from a broader scale, all those things look like tinkering because it still leaves so many people in the dust.

If we know all the problems with the health care system, and we see the solutions in other countries, why is it so hard for people to talk about universal, single-payer?

I don’t use the word single-payer very often, though I don’t object to it. It’s just not very helpful. A lot of people love or hate “single-payer.” But the term’s not very descriptive. Yes, the MN Health Plan is a single-payer system, but it’s a universal health care system that provides care to all Minnesotans.

The bottom line is in our campaign finance system, and I really hate to say it, but the reality is money talks. If there’s some interest that has all the money behind it, you’re going to have a perspective that’s going to be heard. There’s no big, well-funded advocacy group doing this. It’s the political difficulty in passing this without money. How do you get the message out there? How do you take on the insurance system?

If we don’t have a system of competing insurers, how can we ensure that we keep health care costs down?

When people have a choice of what doctors and clinics and hospitals they go to it will create more competition among providers than the current system. Right now people say, “Oh, I can’t go to that doctor, it’s not in my plan.” That’s not competition. People should be spending their time looking for the best doctor or chiropractor or nurse or care, not spending their time sifting through insurance plans, which is what people do now.

The current competition between health plans isn’t a logical competition in any way. And it’s simply not keeping costs down. Our system shifts the competition from the insurance companies to the providers.

What would happen to all the people who work in various insurance companies now?

That’s a really good question. And it’s actually a little bit bigger than that, because there are a lot of hospitals that wouldn’t need administrators who deal with all the different insurance companies, too. At some hospitals we have billing departments with hundreds of people. There are plenty of other of things that hospitals could use these people for if they had retraining.

Not to be flippant about it, because the serious thing about this is that any kind of change is tough, and people don’t want to lose their jobs. But the MN Health Plan includes dislocated worker benefits, retraining, and so on for the people who are working in the health insurance industry. And that’s not cheap, but it’s our responsibility and I think you have to take it very seriously and that’s why we included it in the health plan.

One more thing, dislocated workers would have one advantage over people who have lost their jobs in other eras—they would all be covered with health care…every one of them. But, that’s why we’re going to have a major cost study done to look at all the costs of things like this.

Some say, “I like the idea of universal, single-payer, but it’ll never pass so why push it?” What’ll it take to push this through?

It’s going to take 45,000 Americans dying every year because of lack of health care. It’s the number one cause of bankruptcy: There are more people who go bankrupt from health care costs even though they already have insurance, than go bankrupt from every other cause in the country…combined! I think 52 percent of bankruptcies of in this country are caused by health care and three-fourths of those people had insurance. And it’s getting worse!

I’m very critical of politicians who say, well this might be the best way we can do this, but it’s never going to pass. Where is your democracy if you never think anything can pass? Why don’t we define what we want, and then move forward with that?

So what’s it going to take? People dying should be enough, and frankly that’s why I’m confident that we’ll be able to pass it; not with this legislature, but hopefully in the next few years.

Lisa Peterson-de la Cueva is the project manager for the New Normal project at the Twin Cities Daily Planet.

http://www.tcdailyplanet.net/news/2011/07/08/senator-john-marty-advocating-universal-single-payer-health-care-minnesota

HHS releases the proposed rule for insurance exchanges

Patient Protection and Affordable Care Act: Establishment of Exchanges and Qualified Health Plans

Department of Health and Human Services

Proposed rule.

(Excerpt)

In paragraph (d)(1), we propose that the Exchange permit a qualified individual and any dependents to enroll in a QHP (Qualified Health Plan) due to loss of other minimum essential coverage. We interpret loss of coverage to include any event that triggers a loss of eligibility for other minimum essential coverage. We further propose that a dependent of a current enrollee in a QHP and the enrollee are each eligible for a special enrollment period if the dependent loses other minimum essential coverage. Examples of loss of coverage include decertification of a QHP that occurs outside of the annual open enrollment period. In such cases, an enrollee would be allowed to select and enroll in a new QHP upon notification of plan decertification. If the enrollee does not select a new QHP before the effective date of plan termination, he or she would be provided 60 days from the date of plan termination, which is the triggering event, to select a new QHP.

Other examples of events that would qualify as loss of coverage include but are not limited to the following: legal separation or divorce ending eligibility of a spouse or step-child enrolled in other minimum essential coverage as a dependent; end of dependent status (such as attaining the maximum age to be eligible as a dependent child under the plan); death of an individual enrolled in minimum essential coverage ending eligibility for covered dependents; termination of employment or reduction in the number of hours of employment necessary to maintain coverage; or relocation outside of the service area of the QHP. Examples of relocation include relocation to the United States (US) in the case of a US citizen, national, or lawfully present individual who was not previously eligible for Exchange participation while residing outside of the US; release from incarceration; moving from the jurisdiction of one Exchange to another; or relocating outside of the individual’s QHP’s service area.

In accordance with section 9801(f) of the Code, we propose that loss of coverage also include: termination of employer contributions for a qualified individual or dependent who has coverage that is not COBRA continuation coverage by any current or former employee, exhaustion of COBRA continuation coverage, reaching a lifetime limit on all benefits in a grandfathered plan, and termination of Medicaid or CHIP.

HHS News Release:
http://www.hhs.gov/news/press/2011pres/07/20110711a.html

Proposed Rule (244 pages):
http://www.ofr.gov/OFRUpload/OFRData/2011-17610_PI.pdf

The excerpt above from today’s HHS release of the proposed rule for the insurance exchanges to be established under the Patient Protection and Affordable Care Act was selected to make a point. The fragmentation and instability of coverage is only one of the great many highly flawed features of the model of reform foisted off on us by our politicians.

I have little more to say now. Having just skimmed through these 244 pages and those of other supporting documents, I am thoroughly depressed. We could have had health reform that would be so much better than this. (But my inner voice says, “Don, don’t waste your time moping. We can still have a system that will work for all of us, but that will take a lot of work, and we need to move on to fulfill our role as a major driving force in that effort.”

How well is the Utah health insurance exchange working?

Utah Health Exchange Is Geared To Small Business Employees

By Juan E. Gastelum
Kaiser Health News, July 6, 2011

Utah’s exchange is one of only two operating in the country; Massachusetts has the other. Utah’s approach has been called the conservative “bookend” of the two because it favors a free-market in which multiple insurers compete with minimal intervention from the state.

(Utah), which had experimented with public programs to expand coverage to low-income adults, created its exchange in 2007 through state legislation signed by former Gov. John Huntsman, a Republican who is now seeking the party’s nomination for president.  The exchange was designed to insure small business employees, who make up the majority of Utah’s workers. It launched to a limited group in 2009, and then opened to all small employers at the start of this year. It now provides coverage for about 3,583 people working for 139 employer groups.

http://www.kaiserhealthnews.org/Stories/2011/July/07/Connor-q-and-a-health-law-exchange-small-business.aspx

Comment: 

By Don McCanne, MD

Utah’s state health insurance exchange is now in full operation. It is a very loosely regulated system organized as what they call a “defined contribution market.” It is designed to cater especially to small businesses which include the majority of Utah’s workers. How successful has this program been?

Currently 3,583 people have been insured through the exchange. With a population of 2.9 million people, that amounts to a mere 0.12 percent who are covered by through the exchange. Though Utah does not yet have a mandate to have insurance coverage, it still raises the question, if states build insurance exchanges, will people come?

How well is the Utah health insurance exchange working?

Utah Health Exchange Is Geared To Small Business Employees

By Juan E. Gastelum
Kaiser Health News, July 6, 2011

Utah’s exchange is one of only two operating in the country; Massachusetts has the other. Utah’s approach has been called the conservative “bookend” of the two because it favors a free-market in which multiple insurers compete with minimal intervention from the state.

(Utah), which had experimented with public programs to expand coverage to low-income adults, created its exchange in 2007 through state legislation signed by former Gov. John Huntsman, a Republican who is now seeking the party’s nomination for president.  The exchange was designed to insure small business employees, who make up the majority of Utah’s workers. It launched to a limited group in 2009, and then opened to all small employers at the start of this year. It now provides coverage for about 3,583 people working for 139 employer groups.

http://www.kaiserhealthnews.org/Stories/2011/July/07/Connor-q-and-a-health-law-exchange-small-business.aspx

Utah’s state health insurance exchange is now in full operation. It is a very loosely regulated system organized as what they call a “defined contribution market.” It is designed to cater especially to small businesses which include the majority of Utah’s workers. How successful has this program been?

Currently 3,583 people have been insured through the exchange. With a population of 2.9 million people, that amounts to a mere 0.12 percent who are covered by through the exchange. Though Utah does not yet have a mandate to have insurance coverage, it still raises the question, if states build insurance exchanges, will people come?

When health insurance isn't enough

New studies suggest that coverage doesn't protect Americans from going bankrupt over medical costs

By David Sirota
Salon.com, July 6, 2011

While the contest for the 2012 Republican presidential nomination is already revolving around conservative-themed attacks on “Obamacare,” back when the health care bill was being legislated, the most important debate was within the Democratic Party, which held large majorities in both houses of Congress. On one side were the drug companies, the insurance companies and President Obama — the latter who had not only disowned his prior support of single-payer health care but had also worked with his corporate allies to actively undermine a modest public insurance option. On the other side were progressives who opposed any bill which further cemented the private insurance industry as the primary mediator between doctors and patients.

Ultimately, Obama and his corporate-backed allies organized enough conservative Democrats in Congress to win, effectively turning health care “reform” into a blank-check TARP-style bailout for the health industry. But, of course, to even whisper that last truism is to now run the risk of being labeled a blasphemer in a conversation that can only tolerate misleading red-versus-blue analyses. In today’s national political debate, there are Republicans who insist “Obamacare” is a Canadian-style “takeover” of America’s health care system, and there are Democrats who insist that the health bill is a major Medicare-like achievement — any other argument, no matter how valid, has been vaporized by election-season pressure to fall in ideological line.

Unfortunately for the political class, however, reality doesn’t take orders from partisans — it persists irrespective of talking points, press releases and Twitter mobs. And on health care, the original progressive criticism is now being validated in a new study from Arizona. Going beneath the superficial rhetoric about health insurance and to the reality of actual health care and health costs, the study published by the American Journal of Public Health found:

Health insurance is not protecting Arizonans from having problems paying medical bills, and having bill problems is keeping families from getting needed medical care and prescription medicines, a new study has found… After taking age, income and health status into account, simply being insured does not lower the odds of accruing debt related to medical care or medications. In addition, says University of Arizona College of Pharmacy research scientist Patricia M. Herman, ND, PhD, who directed the study, medical debt is a separate and better predictor of whether people will delay or forgo needed medical care than their insurance status.

“On average, insurance coverage in Arizona is not protecting families from experiencing medical debt,” Herman says. “From other studies we knew that paying medical bills is a problem for a substantial portion of both insured and uninsured Americans. This study helped clarify that the fact of medical debt is an additional and larger barrier to getting needed health care than whether a person is insured or not.”

With 60 percent of all bankruptcies related to medical costs; with many of those medical-related bankruptcies occurring among those who have private insurance; and with the fear of medical bankruptcy encouraging the insured to unduly skimp on medical services, the Obama health care bill did purport to address the issue via caps on out-of-pocket expenses. But those weak caps — and the bill’s failure to achieve universal coverage — promise to allow the medical debt problem to continue, just as they have in the state whose “reforms” most closely mimic Obama’s bill.

As the Los Angeles Times recently reported:

“Studying medical bankruptcies in Massachusetts, whose recent health care reform was a model for national reform, researchers found that while new insurance rules increased the number of people who had coverage, those rules did not improve coverage — leaving many still struggling with medical debt… Proponents of the national health care reform passed into law last year have claimed that it would reduce medical bankruptcy in the United States by helping more Americans get insurance. This new study, which was published Tuesday in the American Journal of Medicine, suggests that a reduction in bankruptcies is unlikely.”

Add to all of this a new Center for Public Integrity report about how American wages are still being eaten up by private health insurance premium increases, and the trajectory is clear: Events are proving that “real reform” and strengthening insurance industry power are mutually exclusive goals. That is, they are proving the veracity of progressives’ original criticism of President Obama’s health care legislation. This is, to be sure, a politically inconvenient truth to both parties and their insurance industry benefactors — but alas, it is the truth. The longer we simply stare at it — or pretend it doesn’t exist — the longer the health care crisis will continue.

David Sirota is a best-selling author of the new book “Back to Our Future: How the 1980s Explain the World We Live In Now.” He hosts the morning show on AM760 in Colorado.

http://www.salon.com/news/healthcare_reform/index.html?story=/news/david_sirota/2011/07/06/health_insurance_problem

What did we learn from the Oregon HIE?

The Oregon Health Insurance Experiment: Evidence from the First Year

By Amy Finkelstein, Sarah Taubman, Bill Wright, Mira Bernstein, Jonathan Gruber, Joseph P. Newhouse, Heidi Allen, Katherine Baicker, The Oregon Health Study Group
The National Bureau of Economic Research, July 2011

NBER Working Paper No. 17190

In 2008, a group of uninsured low-income adults in Oregon was selected by lottery to be given the chance to apply for Medicaid. This lottery provides a unique opportunity to gauge the effects of expanding access to public health insurance on the health care use, financial strain, and health of low-income adults using a randomized controlled design. In the year after random assignment, the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected. We find that in this first year, the treatment group had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations), lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported physical and mental health than the control group.

http://www.nber.org/papers/w17190

Comment: 

By Don McCanne, MD

Although innumerable studies have shown that health insurance provides both health security and financial security, some have contended that insurance is not necessary, especially for low income individuals, since they can find care through our safety-net institutions. As President George W. Bush stated, “After all, you just go to an emergency room.” This study, the Oregon Health Insurance Experiment (Oregon HIE), puts an end to that contention. Low income Oregon residents who were selected by a random lottery to be enrolled in Medicaid fared significantly better than those who were randomly excluded.

The Oregon Medicaid lottery provided a great if disconcerting opportunity for policy researchers. It would be unethical for them to have designed and carried out a study that randomly provided health care benefits to one group while leaving uninsured another group serving as a control. This unique opportunity arose when Oregon received more funds for their Medicaid program, but not nearly enough to cover everyone eligible. They decided to randomly select by lottery those whom they could fit into the program while leaving many more out in the cold.

It is ironic that politicians created a study opportunity that is clearly unethical by policy research standards, yet doesn’t seem to violate the ethical standards of the politicians. If you need any more proof of that, just look at the Affordable Care Act (ACA) where policy decisions were made that will leave 23 million individuals without any health care coverage, but they can go to the emergency room.

Although much of the media coverage of the Oregon HIE implies that it was a wise decision to include in ACA the expansion of coverage under Medicaid, there are many other factors not covered in this study. Two important considerations stand out.

Having Medicaid is better than having no coverage at all, but access is still impaired under the program because of a lack of willing providers, especially for specialized services. Bringing millions more into the program will certainly exceed the already inadequate capacity. With the low level of funding for this program, it is unlikely that funds will be available in the near future to expand capacity. Adequate capacity for everyone does exist within our entire health care delivery system, but not when providers are allowed to opt out of an underfunded component of it.

Another important element in this study is that Medicaid eliminates most cost sharing by the patients. If the patients are able to find providers who will accept them then they do not have to face financial barriers that would prevent them from receiving recommended care, tests, prescriptions, and preventive services that they should have. This is one of the major advantages of the Medicaid program (though some states are now considering cost sharing as a means of reducing Medicaid spending).

Supposedly the RAND Health Insurance Experiment (RAND HIE) demonstrated that cost sharing did not have a major impact on health care outcomes, except for low income individuals, even though health care utilization decreased. The problem with the RAND HIE conclusions is that they have only intrinsic validity for a healthy workforce and their young, healthy families for only a brief, healthy interval in their lives. It is inappropriate to expect the same result for a cross section of our population including a fair sampling of those with greater health care needs. Had greater cost sharing been used in the Oregon HIE, utilization certainly would have been less, and it is likely that outcomes would have been worse.

Before we start celebrating the fact that Medicaid is better than nothing at all, let’s keep in mind the facts that Medicaid lacks the capacity to meet the expanded coverage through ACA, that eliminating cost sharing does improve access, and that expanding Medicaid will do nothing for the 23 million remaining uninsured and the tens of millions more who will be underinsured through low actuarial value plans with very high cost sharing.

There is a far better way – a single payer national health program that provides comprehensive benefits for everyone with no cost sharing barriers to care. Other nations have adopted such programs at a far lower cost than our dysfunctional system. We can do it too. (You’ve heard this before.)

What did we learn from the Oregon HIE?

The Oregon Health Insurance Experiment: Evidence from the First Year

By Amy Finkelstein, Sarah Taubman, Bill Wright, Mira Bernstein, Jonathan Gruber, Joseph P. Newhouse, Heidi Allen, Katherine Baicker, The Oregon Health Study Group
The National Bureau of Economic Research, July 2011

NBER Working Paper No. 17190

In 2008, a group of uninsured low-income adults in Oregon was selected by lottery to be given the chance to apply for Medicaid. This lottery provides a unique opportunity to gauge the effects of expanding access to public health insurance on the health care use, financial strain, and health of low-income adults using a randomized controlled design. In the year after random assignment, the treatment group selected by the lottery was about 25 percentage points more likely to have insurance than the control group that was not selected. We find that in this first year, the treatment group had substantively and statistically significantly higher health care utilization (including primary and preventive care as well as hospitalizations), lower out-of-pocket medical expenditures and medical debt (including fewer bills sent to collection), and better self-reported physical and mental health than the control group.

http://www.nber.org/papers/w17190

Although innumerable studies have shown that health insurance provides both health security and financial security, some have contended that insurance is not necessary, especially for low income individuals, since they can find care through our safety-net institutions. As President George W. Bush stated, “After all, you just go to an emergency room.” This study, the Oregon Health Insurance Experiment (Oregon HIE), puts an end to that contention. Low income Oregon residents who were selected by a random lottery to be enrolled in Medicaid fared significantly better than those who were randomly excluded.

The Oregon Medicaid lottery provided a great if disconcerting opportunity for policy researchers. It would be unethical for them to have designed and carried out a study that randomly provided health care benefits to one group while leaving uninsured another group serving as a control. This unique opportunity arose when Oregon received more funds for their Medicaid program, but not nearly enough to cover everyone eligible. They decided to randomly select by lottery those whom they could fit into the program while leaving many more out in the cold.

It is ironic that politicians created a study opportunity that is clearly unethical by policy research standards, yet doesn’t seem to violate the ethical standards of the politicians. If you need any more proof of that, just look at the Affordable Care Act (ACA) where policy decisions were made that will leave 23 million individuals without any health care coverage, but they can go to the emergency room.

Although much of the media coverage of the Oregon HIE implies that it was a wise decision to include in ACA the expansion of coverage under Medicaid, there are many other factors not covered in this study. Two important considerations stand out.

Having Medicaid is better than having no coverage at all, but access is still impaired under the program because of a lack of willing providers, especially for specialized services. Bringing millions more into the program will certainly exceed the already inadequate capacity. With the low level of funding for this program, it is unlikely that funds will be available in the near future to expand capacity. Adequate capacity for everyone does exist within our entire health care delivery system, but not when providers are allowed to opt out of an underfunded component of it.

Another important element in this study is that Medicaid eliminates most cost sharing by the patients. If the patients are able to find providers who will accept them then they do not have to face financial barriers that would prevent them from receiving recommended care, tests, prescriptions, and preventive services that they should have. This is one of the major advantages of the Medicaid program (though some states are now considering cost sharing as a means of reducing Medicaid spending).

Supposedly the RAND Health Insurance Experiment (RAND HIE) demonstrated that cost sharing did not have a major impact on health care outcomes, except for low income individuals, even though health care utilization decreased. The problem with the RAND HIE conclusions is that they have only intrinsic validity for a healthy workforce and their young, healthy families for only a brief, healthy interval in their lives. It is inappropriate to expect the same result for a cross section of our population including a fair sampling of those with greater health care needs. Had greater cost sharing been used in the Oregon HIE, utilization certainly would have been less, and it is likely that outcomes would have been worse.

Before we start celebrating the fact that Medicaid is better than nothing at all, let’s keep in mind the facts that Medicaid lacks the capacity to meet the expanded coverage through ACA, that eliminating cost sharing does improve access, and that expanding Medicaid will do nothing for the 23 million remaining uninsured and the tens of millions more who will be underinsured through low actuarial value plans with very high cost sharing.

There is a far better way – a single payer national health program that provides comprehensive benefits for everyone with no cost sharing barriers to care. Other nations have adopted such programs at a far lower cost than our dysfunctional system. We can do it too. (You’ve heard this before.)