PNHP

The good news about single-payer health care

The good news about single-payer health care

By Maria Termini
The Bay State Banner, March 17, 2011

Health care in the United State  is in a crisis. Our present health care system is fragmented between multiple private insurance companies and government programs such as Medicare and Medicaid. The system is controlled by the profit making insurance industry and based on each person’s ability to pay and not based on needed medical care. Fifty million people do not have insurance at all. At least 25 million people are underinsured and do not have their medical needs covered. Some plans won’t cover important services, such as prescription drugs, and most plans impose out-of-pocket expenses such as co-payments and high deductibles. The costs of insurance premiums are rising rapidly and consume a huge part of the household budget, and medical costs have led to foreclosures and bankruptcy.

Our current system discriminates against low-income people and leads to poorer health in these communities. The U.S. spends more money on health care per person than any other country in the world, but the sad reality is that we do not have high quality care. Among industrialized nations, the U.S. ranks near the bottom in infant mortality, life expectancy, and the number of people receiving protective vaccines.          

The good news is that we can get out of this spiraling crisis by working together to create a system of single-payer health care that will cover everyone under a single publicly financed insurance plan. Single-payer health care will provide affordable, comprehensive health care, including vision and dental care. Everyone would be free to choose which doctors, hospitals and community health centers to use. All other developed countries have some form of single-payer health care, which has allowed them to guarantee health care for all their citizens and spend about half of what we spend in our country.

The incentive for a single-payer health care system is to keep people healthy with access to preventive care and a focus on early intervention that would catch illness and injury before they become serious and difficult to treat. The incentive for the private insurance industry is to avoid taking care of sick people because it costs them money and results in less corporate gain. Insurance companies make their money by denying policies to people with pre-existing conditions, by dropping coverage for those running up a big bill or having a serious illness and by choosing to insure the healthiest.            

The promise of single-payer health care in Massachusetts is within our grasp. A single-payer health care bill called “Medicare for All Massachusetts” has recently been filed in the legislature. This bill would provide every resident with first class health care and reduce costs to the state, employers, and households.  It will create a comprehensive, public plan, like improved Medicare for all, saving 15.7 percent of Massachusetts’ current health care funding.  Costs would be controlled by eliminating the middle men and administrative bureaucracy of private profit-making insurance companies and by creating one large risk group that includes all the residents of the state to bargain for the best prices for medical services, goods and drugs.  There would also be less overhead costs for providers and hospitals that will no longer need huge billing departments to deal with paperwork. With the current system the administrative costs are about 30 percent of the money spent on health care.  Medicare already works for senior citizens, with a 3 percent overhead cost.  Administrative savings, plus a small payroll tax as well as federal and state money already being used for Medicare, Medicaid and other programs, can fund single-payer health care and save money!

Let’s have Medicare for everyone! Imagine having a health insurance card granting you a full range of medical benefits, with no out-of-pocket expenses and bills! Families of middle and low-income earners would take home 7.3 percent to 15 percent more income after lifting the burden of premiums and other health care costs from their pay.   Single-payer health care can happen if we become educated about it and understand how only single-payer health care can control skyrocketing costs.

Maria Termini is a volunteer with Mass-Care, a coalition of more than 100 groups in Massachusetts working to make health care a right.

http://www.baystatebanner.com/local14-2011-03-17

Vermont House to begin health reform debate Tuesday

By Nancy Remsen
Burlington Free Press, March 21, 2011

MONTPELIER — Tuesday the Vermont House of Representatives begins debate on health-care reform — one of the most important bills of the session for Democratic Gov. Peter Shumlin and the Democratic majorities in the Legislature.

Originally touted as an initiative that would head the state to a single-payer system, the 96-page bill now carries a new, less controversial name: “Road map to a universal and unified health system.”

The name change hasn’t eliminated the strong feelings the bill evokes.

The bill emerged from the House Health Care Committee on a party line, 8-3 vote. Six Democrats, a Progressive and one independent, formerly a Democrat, supported the bill; the three Republicans voted against.

“There are just way too many unknowns for me,” said Rep. Jim Eckhardt, R-Chittenden.

Eckhardt said he wasn’t persuaded a single-payer system, by whatever name it’s given, was the remedy for the current, broken payment system. That’s why he worried about committing the state to that solution.

“My feeling is, once it is on its way, you can’t pull back,” Eckhardt said. “How do you say start over?”

Rep. Paul Poirier, I-Barre, voted for the bill and sees it as much more benign. “I’m the sponsor of a single-payer bill, and this isn’t a single-payer bill,” he said. “Change scares people, but this bill doesn’t really do that much.”

The measure, he said, creates a process that could lead to a reformed health-care system. “We are going to be back next year with Health Care Reform Two,” he said. “There are so many places in this process where there are safety checks.”

Steve Kimbell, commissioner of the Department of Banking, Insurance, Securities and Health Care Administration, praised the House bill and said it sets in motion two important changes:

• It creates a health benefit exchange, an insurance marketplace required by the recent federal health reform law. Kimbell said having an exchange that complies with federal specifications would make Vermont eligible in 2014 for as much as $400 million a year to provide insurance subsidies and tax credits to low and moderate-income Vermonters.The exchange could transform — with federal waivers — into Green Mountain Care, a unified, state-coordinated health-insurance program open to all Vermonters.

• The bill establishes a board with authority to regulate health-care costs. For example, the board is charged with reforming the way medical providers are paid to encourage preventive treatment and chronic disease management rather than encouraging procedures.

“We have implemented a strategy that fundamentally, and for the first time, promotes cost control,” said House Health Care Committee Chairman Mark Larson, D-Burlington. “We aren’t talking about shifting costs. We are talking about controlling skyrocketing costs.”

The board, which would be created this summer, long before it could assume its regulatory role, also would be charged with laying the groundwork for a more unified health-insurance system. It would, for example, develop the health benefit package for Green Mountain Care.

Rep. Christopher Pearson, P-Burlington, who voted for the bill in committee, said the House vote is a measure of lawmakers’ political courage to move toward the more unified system that studies in 2000, 2006 and this year all say would save money.

“This bill alone doesn’t deliver the kind of reform many people want to see and some people are afraid of,” Pearson said. “But it puts in place a process so we can get there and do it right.”

For critics and skeptics, the biggest unanswered question is the cost of reform.

Rep. Tom Koch, R-Barre, sees the cost controls that supporters are touting as “nothing but rent control. It doesn’t work,” he said. “We are going to ruin a good health-care system.”

“Our members said they want to understand the cost and impact,” said Cathy Davis of the Lake Champlain Regional Chamber of Commerce. The bill gives the Shumlin administration until January 2013 to deliver a plan to pay for Green Mountain Care.

“Waiting two years is difficult,” Davis said. Businesses want more certainty about what the change would mean.

Rep. George Till, D-Jericho, said the bill sets out a backward process. He would have preferred if the financial model had been developed before the Legislature committed the state to a path of change. Still, Till voted for the bill, because the Legislature’s financial experts are to provide lawmakers with a fiscal analysis by April 21.

Till also called significant the elimination of references to a single-payer system. It recognizes the reality that the state can’t set up such as system. The state can simplify and centralize claims administration, but it can’t force businesses that self-insure their workers to abandon that coverage because of federal law.

Despite his support, Till said there are risks to the bill. One area of concern is whether the changes would result in doctors’ leaving the state.

Till has been conducting an online survey among physicians licensed in Vermont and had received 469 responses as of Friday. He said 62 percent support a single administrative pipeline, but those responding were nearly evenly split about a single-payer system. Some 28.3 percent said they would stop practicing in Vermont if the state adopted a single-payer system.

“Removing the single-payer language hopefully helps with that,” Till said.

Koch spoke for many in the House Republican caucus last week when he tried to win an extra day to review the bill. He objected to Democratic leaders’ plan to hold a “token session” today, when most lawmakers wouldn’t be in town. That session would allow debate to begin Tuesday.

“It was being rushed,” Koch said. “It is complicated. It affects everybody in the state. We need time to read it, to analyze it, to write any amendment we may have.”

Even given time to study the bill, however, Koch said he doesn’t expect to find answers to the many questions he has.

“The bill is putting the train on the tracks and pushing it down the hill without any brakes,” he said.

Shumlin countered that criticism.

“We can’t move fast enough,” Shumlin said, noting how fast health-care costs have escalated in recent years and the projected trend for growth in the future if nothing changes.

“Criticism about pace is strictly designed to kill the bill,” Commissioner Kimbell said. “I find the too-fast criticism incredibly ironic. The main criticism voters have is that government can’t get anything done.”

http://www.burlingtonfreepress.com/article/20110321/NEWS03/110320013/1029/sports05/Vermont-House-begin-health-reform-debate-Tuesday

Med students to rally at Vermont Statehouse for single-payer health system on Saturday, March 26

One year after passage of federal health law, health professional students will urge Vermont lawmakers to go further by swiftly creating a state single-payer system and blazing a trail for truly universal, cost-effective care

FOR IMMEDIATE RELEASE
March 17, 2011

Media Advisory

Contact:
Danielle Alexander, Albany (N.Y.) Medical College
Ali Thebert, Physicians for a National Health Program, ali@pnhp.org
Connie Yip, Columbia University School of Nursing
Barbara Power, Vermont rally media liaison

What
Medical and health professional student rally in support of single-payer health reform in Vermont. Speakers include Sen. Bernie Sanders and Gov. Peter Shumlin; students from medical schools, nursing schools, universities and colleges; and physicians and single-payer advocates in Vermont. Many students will be available for interview during and after the rally. (See end of this release for names, contact information, and link to 12 student statements.)

Who
Students from Vermont, the Northeast and other parts of the U.S. — future physicians, physician assistants, nurses and other health care professionals. This event will be hosted by health professional students from across the Northeast with support from Physicians for a National Health Program (pnhp.org) and the American Medical Student Association (amsa.org).

Speakers at the rally include the following:
Sen. Bernie Sanders
Gov. Peter Shumlin
Student representing Physicians for a National Health Program (PNHP)
Student representing the American Medical Student Association (AMSA)
Student from the University of Vermont (UVM)
Other students from throughout the Northeast and the nation

When
1 p.m. – 4 p.m., Saturday, March 26
Program starts at 1:00 p.m.
PHOTO OP at 12:45 p.m. Sen. Sanders and Gov. Shumlin with students in lab coats and scrubs, plus many posters and banners all afternoon.

Where
Vermont Statehouse, Statehouse steps followed by rally in House Chamber, 115 State Street, Montpelier, Vt.

Why
Health professional students envision a future in which they can practice medicine in an environment that treats all patients equally, removes financial barriers to care, and eliminates private-insurance-company paperwork and meddling in medical decision making. They applaud Vermont for taking steps that could lead to a cost-effective single-payer system which, if implemented, would likely become a model for other states and the entire nation. Some out-of-state students say they would seriously consider moving to Vermont to practice medicine if it were to implement a single-payer system.

Link to statements of 12 medical and other health professional students: “Why the Vermont student rally is important to me.”

Considering Canada's edge

Editorial
Bennington (Vt.) Banner, March 18, 2011

Part of the blame for the demise of Bennington Iron Works, which announced this week it will close by May after 43 years, was that it faced “relentless” competition from Canadian firms in the manufacture of steel products for construction and other uses.

One comment heard estimated that those firms were selling steel products at a hefty percentage less than BIW could manage. If that is true, we can think of one major cost of doing business that those Canadian firms are not paying — employee health insurance. Of course, the reason is that unlike the United States, most industrialized nations have a health care system that is mostly or wholly funded by the government.

For all their grousing about taxes and environmental and other regulations, pro-business conservatives rarely complain about the huge cost of our health care system — the world’s most expensive — and the fact it is still dominated by private, for-profit insurance firms. And when a single-payer, Medicare-style system is proposed, they rail against that — contending it would be more costly.

But what is the cost of doing business for U.S. firms competing in ruthless global markets, in which foreign companies either have few or no obligations toward employee insurance and/or their workers are paid far less than the average American? Single-payer systems are designed and operated by governments, made up of human beings, and therefore they are not perfect. But in better controlling health care and drug costs, reducing paperwork and keeping profit margins of any private entities within the sanity range, they are far superior.

And they provide a boost to economic development here by dramatically lowering the cost of doing business.

Coincidentally, the Vermont Legislature is now considering a single-payer health care insurance system that would be the nation’s first to cover every resident of a state. It has the strong backing of Governor Peter Shumlin, and initial legislation has emerged from the House Health Care Committee with a favorable vote.

While funding for the system and other details aren’t likely to be decided in the near future, the changeover could be set in motion during this session. Business interest groups and lobbyists, which have generally opposed single-payer systems, should think again about the high and rising costs businesses must shoulder versus the option of a tax-based system that spreads those costs and is better able to reduce insurance overhead and the cost of care.

It is unclear today how a Vermont single-payer system would be put together, but if it is an option citizens or companies could choose in place of competing private insurance firms, we think it could not fail to improve upon to what we have today. We think even those now skeptical would come around in short order, especially those firms competing with Canada and beyond.

http://www.benningtonbanner.com/opinion/ci_17648538

Health insurers initiating a takeover of health care

Health Insurers Respond To Reform By Snapping Up Less-Regulated Businesses

By Christopher Weaver
Kaiser Health News
March 19, 2011

Here’s one change few were talking about when the health overhaul law passed: It’s sent insurers – worried the law could stunt profits and growth – looking for new types of business.

Where are they investing? In less-regulated companies that could yield strong profits and make the main business – insurance – more lucrative. The purchases also could increase insurers’ control over more parts of the health system.

Insurers have moved into technology, health-care delivery, physician management, workplace wellness, financial services and overseas ventures in wide-ranging efforts to mitigate the new rules imposed by the law.

The current trend is largely driven by the health law, said Ana Gupte, an analyst with Sanford C. Bernstein & Co.

The newer ventures will not replace the core business of selling health coverage.

“They’re very synergistic with the health-insurance

,” Gupte said, giving insurers more tools to control medical costs while potentially increasing earnings.

As more people receive insurance under the law, insurers would welcome 15 million new customers, according to the Congressional Budget Office. But the companies worry that the rules requiring most Americans to obtain coverage will prove too weak and allow many to go uncovered, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.

That could leave insurers with slim gains, even as they face regulations that could limit profits, prohibit the practice of charging sick people higher rates, and funnel individuals and small businesses into government-created exchanges to buy policies.

“I’ve seen a big trend in getting further down the supply chain towards the point of care,” said Sarah James, an insurance industry analyst at Los Angeles-based Wedbush Securities. “Everybody’s looking to add on staff physicians and clinics” that can help control medical spending.

For instance, OptumHealth, a UnitedHealth subsidiary, has quietly taken control of Memorial Healthcare IPA, a Los Angeles company that manages more than 400 doctors, according to a document filed with the California Secretary of State’s office. OptumHealth declined to discuss details of the deal.

With its recent acquisitions, Humana is dipping its hand directly into patient care, gaining more control over doctors. That’s what makes acquisitions such as Concentra a “two-for-one deal,” Kusserow said. Concentra will continue to generate “great margins” for the company as a stand-alone business, he said, but also will give Humana a workforce of physician gatekeepers controlling access to costly services.

In a sign of Aetna’s interest in future acquisitions, the company hired Charles Saunders, a physician and recent veteran of the private equity firm Warburg Pincus, in January to oversee “strategic diversification.”

Some analysts do not see much of a future for companies that just stick with the business of selling insurance policies.

“If you’re a health plan, you either become a care delivery system or an information services company,” said David Brailer, a former George W. Bush administration health official who now leads an investment firm. “The traditional business is dead.”

http://www.kaiserhealthnews.org/Stories/2011/March/20/health-insurers-reform-business.aspx

Comment: 

By Don McCanne, MD

One of the claims made by those supporting the health care legislation that placed the private insurers in the drivers seat is that these private firms would be masters at innovation. Well, we are now seeing some of that innovation as they are making their early moves to take over the health care delivery system. It might not be good for our personal finances nor our health, but it is going to give a spectacular boost to Wall Street.

Vermont’s Single-Payer Salvation

The Green Mountain State is poised to abolish most forms of private health insurance

By Lauren Else
In These Times, March 18, 2011

Three weeks after the House of Representatives voted to repeal last year’s landmark healthcare reform legislation, and one week after a federal judge ruled the bill’s insurance mandate unconstitutional, Vermont’s leaders decided to take matters into their own hands.

On February 8, newly inaugurated Democratic Gov. Peter Shumlin unveiled his plan for a publicly funded single-payer healthcare system, which was introduced into the state’s legislature. If enacted, which appears likely, it will be the first system of its kind in the United States and Vermont would become the first state to abolish most forms of private health insurance.

“In five years, I predict the United States will go through another major debate of how to reform the healthcare system,” Harvard School of Public Health Professor William Hsiao told the state’s legislators in January, noting his belief that the federal reform legislation passed in March 2010 will not solve the nation’s healthcare crisis. “The question for Vermont is, do you want to walk ahead of the United States? Do you want to be a model for the United States?”

Last year, lawmakers passed a bill to hire a team of consultants led by Hsiao—an economist who helped to develop universal healthcare plans in China and reform Medicare and Medicaid in the 1970s—to design a new healthcare system for the Green Mountain State. According to Hsiao’s research, about 32,000 people, or roughly five percent of the state’s population, would still be uninsured after federal reform measures take full effect in 2014. (Fifty seven thousand, or 9 percent, of Vermonters are currently uninsured.)

What Hsiao and his team ended up recommending to the state was a single-payer system that would ensure coverage for all residents. An independent public body would oversee the system and contract out administration of all claims. Private insurers could compete for this work, as they have done for years to administer the state’s Medicare program. The bill, currently in committee, would take an estimated three to six years to implement.

“I know what I’m going to present is not necessarily popular for everyone,” Hsiao said as he began his January presentation in Montpelier. “A health system is a complex system.” The annual savings that would be created by the system, however, do appear to be popular among lawmakers and public officials. Hsiao’s team estimates the single-payer system could save the state at least $580 million yearly, or $1.2 billion by 2019, and create 4,000 jobs because the burden of rising healthcare costs would be lifted from businesses.

On February 24, the Republican Mayor Christopher Louras, of Rutland, urged the state to adopt the single-payer legislation, noting that more than a third of the city’s $7 million annual payroll is consumed by healthcare costs. “The only way to fix the problem is to blow it up and start over,” Louras said.

The introduction of the healthcare bill comes in the first months of Democratic Gov. Peter Shumlin’s first term in office, which follows eight years of Republican rule under Gov. Jim Douglas. Shumlin supported a single-payer healthcare system during his campaign, calling Vermont’s current system “broken.” Anya Rader Wallack, the special assistant to Shumlin on healthcare, cited waste and “craziness” as factors troubling the state’s current healthcare system during testimony before Vermont House and Senate committees on February 8. Three private insurance carriers operate in Vermont, along with Medicare and Medicaid and various suppliers of workers’ compensation insurance, a structure Wallack called “misguided.”

Dr. Deborah Richter, president of Vermont for Single Payer, which has advocated for a new health system since 2003, says that “on the whole” the group supports Hsiao’s plan. “Estimates are that [Hsiao’s system] will not only be able to cover everybody, but for less money,” Richter says. “Vermont is uniquely poised to get this done.”

The state cannot “get this done,” however, unless it receives a waiver from the federal government to bypass the federal reform legislation. Shumlin thinks that won’t be a problem; Vermont’s entire congressional delegation—Sens. Bernie Sanders (I) and Patrick Leahy (D) and Rep. Peter Welch (D)—support the single-payer effort and introduced a measure to allow states to receive waivers from federal reform requirements as soon as 2014, as long as they cover as many uninsured people as federal law would. (They currently have to wait until 2017.) On February 28, President Barack Obama told state governors he would support the earlier date.

Hsiao seems optimistic. “I can say with full confidence that your broken system can be fixed,” Hsiao counseled Vermont lawmakers. “But we require you to…adopt the right solution.”

http://www.inthesetimes.com/article/7052/vermonts_single-payer_salvation

Health insurers initiating a takeover of health care

Health Insurers Respond To Reform By Snapping Up Less-Regulated Businesses

By Christopher Weaver
Kaiser Health News
March 19, 2011

Here’s one change few were talking about when the health overhaul law passed: It’s sent insurers – worried the law could stunt profits and growth – looking for new types of business.

Where are they investing? In less-regulated companies that could yield strong profits and make the main business – insurance – more lucrative. The purchases also could increase insurers’ control over more parts of the health system.

Insurers have moved into technology, health-care delivery, physician management, workplace wellness, financial services and overseas ventures in wide-ranging efforts to mitigate the new rules imposed by the law.

The current trend is largely driven by the health law, said Ana Gupte, an analyst with Sanford C. Bernstein & Co.

The newer ventures will not replace the core business of selling health coverage.

“They’re very synergistic with the health-insurance

,” Gupte said, giving insurers more tools to control medical costs while potentially increasing earnings.

As more people receive insurance under the law, insurers would welcome 15 million new customers, according to the Congressional Budget Office. But the companies worry that the rules requiring most Americans to obtain coverage will prove too weak and allow many to go uncovered, said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans.

That could leave insurers with slim gains, even as they face regulations that could limit profits, prohibit the practice of charging sick people higher rates, and funnel individuals and small businesses into government-created exchanges to buy policies.

“I’ve seen a big trend in getting further down the supply chain towards the point of care,” said Sarah James, an insurance industry analyst at Los Angeles-based Wedbush Securities. “Everybody’s looking to add on staff physicians and clinics” that can help control medical spending.

For instance, OptumHealth, a UnitedHealth subsidiary, has quietly taken control of Memorial Healthcare IPA, a Los Angeles company that manages more than 400 doctors, according to a document filed with the California Secretary of State’s office. OptumHealth declined to discuss details of the deal.

With its recent acquisitions, Humana is dipping its hand directly into patient care, gaining more control over doctors. That’s what makes acquisitions such as Concentra a “two-for-one deal,” Kusserow said. Concentra will continue to generate “great margins” for the company as a stand-alone business, he said, but also will give Humana a workforce of physician gatekeepers controlling access to costly services.

In a sign of Aetna’s interest in future acquisitions, the company hired Charles Saunders, a physician and recent veteran of the private equity firm Warburg Pincus, in January to oversee “strategic diversification.”

Some analysts do not see much of a future for companies that just stick with the business of selling insurance policies.

“If you’re a health plan, you either become a care delivery system or an information services company,” said David Brailer, a former George W. Bush administration health official who now leads an investment firm. “The traditional business is dead.”

http://www.kaiserhealthnews.org/Stories/2011/March/20/health-insurers-reform-business.aspx

One of the claims made by those supporting the health care legislation that placed the private insurers in the drivers seat is that these private firms would be masters at innovation. Well, we are now seeing some of that innovation as they are making their early moves to take over the health care delivery system. It might not be good for our personal finances nor our health, but it is going to give a spectacular boost to Wall Street.

'Obamacare won't solve the problems'

By Robert Speer
Chico (Calif.) News and Review, March 17, 2011

To understand why the Patient Protection and Affordable Care Act has fallen short of what President Obama envisioned for health-care reform, consider the story of Billy Tauzin, as told by Dr. Jeff Lobosky.

Lobosky, a Chico neurosurgeon and the author of a new book, The Doctor Won’t See You Now: The Failure of American Health Care and a Prescription for the Cure, was one of four health-care professionals who participated in a forum titled “Health Care Reform: Mission Accomplished?” last Wednesday (March 9) at the Enloe Conference Center.

The others were Mike Wiltermood, CEO of Enloe Medical Center; Dr. Henry Abrons, board president of the California Chapter of Physicians for a National Health Program; and Dr. Richard Thorp, a Paradise internist and former president of the Butte-Glenn Medical Association.

Tauzin, Lobosky related, was a Democratic congressman from Louisiana who, after the Republican takeover of Congress in 1994, switched parties. As chairman of the committee that oversees the drug industry, in 2005 Tauzin played a central role in creating President Bush’s Medicare Prescription Drug Bill, or Medicare Part D, which included a provision that Medicare could not use its massive buying power to negotiate drug prices—a prohibition worth many billions to the pharmaceutical industry.

Two months later, Tauzin resigned and took a job, at a salary of $2 million, as chief lobbyist for PhRMA, a powerful drug industry trade group. In that role, in 2009, he cut a backroom deal with the Obama administration during health-care-reform negotiations that traded industry support for the bill and $80 billion in other savings in return for keeping the ban on negotiating drug prices.

But, as Lobosky said, Obama had campaigned on a health-care-reform platform that included ending the ban on Medicare drug-price negotiations, among other worthy goals, such as a public option to compete with private insurers. No sooner did he try to implement these goals, however, than the “special interests raised their ugly heads” and screamed about “socialized medicine.”

To get a bill through, Obama was forced to abandon an open process and start making backroom deals, including the one he cut with Tauzin.

A major problem with the bill, Lobosky said, is that, while it will expand access to Medicaid, it will decrease access to care. That’s because it will pay for that expansion by reducing Medicaid and Medicare reimbursements to providers. In turn, fewer doctors will accept Medicaid and Medicare patients. As many Medicaid patients already know, having insurance means nothing if they don’t have access to care.

Abrons, a pulmonologist and clinical-care doctor by training, sought to refocus the discussion. Before we talk about services and costs, he said, we need to talk about morality and what kind of society we want to be.

Do we hold the free-market view that each individual is responsible for his or her own health care, or do we recognize—as all other advanced nations do—that health care is a right, not a product?

The market view of health care ignores a fundamental aspect of the transaction: The buyer doesn’t have a choice. A sick person can’t just walk away.

The current system is money-driven, he said, but most providers are primarily service-driven. They went into medicine because they care. Only a single-payer system—essentially an expansion and upgrading of Medicare—has the simplicity of design that would free them from the stranglehold of the money-driven system.

Obama’s Affordable Care Act is an improvement, Abrons said, but it “will achieve only mediocre, expensive health care for some.” About 25 million people will remain uninsured; it will foster under-insurance; fail to provide financial security; have high deductibles; and continue the burdensome administrative waste and paperwork that now costs about $400 billion a year.

And the requirement that people buy insurance, he said, “is a mandate to purchase a defective corporate product.”

From his perspective as a hospital CEO, Wiltermood doesn’t have high hopes for the Affordable Care Act. It’s “just rearranging the chairs on the Titanic,” he said.

His biggest concern is that it will reduce reimbursement rates. “As payments become squeezed, it drives the best and the brightest from health care.”

It also forces hospitals to charge private insurers more—“cost shifting,” it’s called—leading insurance premiums to go up.

Nor is Wiltermood optimistic about single-payer. His experience with Medicare is that lawmakers are constantly rewriting the codes, and “now we have thousands and thousands of codes.” Every time a new code is written, he said, a “cottage industry of former Medicare employees springs up to teach hospitals how to deal with the change.”

Americans now pay 18 percent of their gross domestic product to health care, twice as much as any other country, “and that’s wrong,” Wiltermood said. “We have to do something.”

But he offered no direction, other than to say that “We have to work together locally.” With state budget cuts and the downturn in the economy, the hospital’s charity care has gone from an average of $10 million per year to nearly $20 million, and bad debt has risen, too. “The next four years are going to be tough. … We need the community’s support.”

Thorp devoted most of his talk to showing charts and graphs that illustrated the country’s finances from a business perspective. His goal was to illustrate something he said at the beginning of his talk: “It concerns me when they talk about Medicare-for-everyone when the Medicare program is going broke.”

Sure enough, the charts showed that we’re spending more on Medicare than we’re taking in from Medicare taxes, an unsustainable situation.

“We’re going to have difficult decisions to make,” Thorp said. “As a society we can’t afford to give everyone everything.”

He stopped short of endorsing any particular approach to solving the problem, though he did say, during the question-and-answer period, that he would like to see all insurance providers become nonprofits.

Responding to a question about single-payer, Abrons stressed that it wouldn’t cost more than the present system and could cost less. “We don’t have all the answers, but we have learned a lot from other countries. … Right now it’s a game of ‘get the money any way you can.’ ”

http://www.newsreview.com/chico/content?oid=1940233

Heading North To Rally In Single-Payer-Land

By Carey Goldberg
WBUR, Boston NPR, March 17, 2011

There’s a new cause that calls for getting on the bus. Next Saturday morning, (3/26), dozens of Boston-area medical students and others heading into health care careers plan to board buses for Montpelier, to rally at the State House in support of the single-payer system that Vermont leaders aim to create.

“We’re going up there trying to hammer home the message that as students and other health professionals from out of state, we want to see Vermont lead the way, and be able to point to Vermont as an alternative,” said Sim Kimmel, a third-year Harvard medical student and one of the buses’ organizers. “Some people have gone as far as saying that if Vermont were to have a single-payer system, they would pledge to move there.”

Click here for information on the rally, which is slated to include Sen. Bernie Sanders and Governor Peter Shumlin (who was on Radio Boston last week explaining the state’s plans.) Here, students explain why the rally is important to them.

Sim says the Boston contingent hopes to gather about 100 students for the 8 a.m. buses from Back Bay and Harvard Square, and they’ll be joined by colleagues from around the Northeast at the rally.

“It’s quite clear from the experience in Boston and in Massachusetts and around the country that we’re not organizing health care in a reasonable or rational way,” he said.

But, I asked, wouldn’t a single-payer system — the government-controlled type used in Canada or England — mean that as a future doctor, he’d earn less money?

“That’s not exactly clear, but even if it meant that, I would still support it,” Sim said. “Physicians spend so much time fighting with insurance companies and filling out paperwork, and so much of the cost of health care is lost in administrative waste. Having a single-payer system would essentially reduce that work so I could spend time doing what I actually want to be doing, which is seeing patients.”

For anyone tempted to dismiss the bus-riders as idealistic youth, it’s worth noting that support for a single-payer system among American physicians is surprisingly strong, surveys have found. The rally is being organized by Physicians for a National Health Program and the American Medical Students Association.

What is Universal Healthcare?

By Annie Brown
EDGE (Boston), March 18, 2011

Patients, doctors and health insurance companies are engaged in a historic debate surrounding the future of healthcare in America. Most of the discussions surrounding healthcare are led by politicians who either celebrate President Obama’s Patient Protection and Affordable Care Act (2010) as a necessary first step towards equal access or view it as a direct assault on constitutional rights.

However, there are millions of patients and physicians who aren’t pleased with either party’s response to the healthcare crisis.

Dr. Susan Miller, a family physician and Virginia’s representative for Physicians for a National Health Program, is one of these individuals.

Dr. Miller’s perspective on the healthcare issue is informed by extensive experience as a physician, a small business owner, and an individual who has witnessed first-hand the inequality and inefficiency of modern American healthcare. She, like many Americans, is frustrated with the rhetoric politicians are using to describe the current state of healthcare to their constituents.

Miller believes that politicians are manipulating this debate to support personal goals. In the process, they are also distracting Americans from the facts and making the road to universal healthcare longer and more complicated than it should be. Rhetorical speeches don’t effectively explain healthcare legislation and rarely present possible solutions. It is my hope that this article will fill in the blanks left by politicians.

Miller has practiced family medicine for over 25 years. In the process she has participated in many aspects of the medical profession from safety-net clinics, to running her own private practice in the Richmond suburbs and, for the past five years, working with people from the inner city of Richmond. “I understand what it means to be a small business…I also understand the needs of [insured] middle-class patients and I know the problems of people who don’t have insurance.”

During our interview, I asked Miller to explain her perspective on American healthcare and why she supports a single-payer plan. I also spoke with her about resistance to The Patient Protection and Affordable Care Act (PPACA) in her home state of Virginia and the possibility of universal healthcare in states like Vermont. The intention of this article is to explore solutions beyond rhetoric and move towards a healthcare system that provides affordable and quality care to all Americans.

Improved Medicare for All

Miller supports the idea of “improved Medicare for all,” also known as a single-payer plan because she entered the field of medicine to help people. She continues, “I was into medicine and politics from the very beginning. I have been a single-payer supporter since I was first involved in medicine because I believe that healthcare is a human right.”

As the Virginia representative for Physicians for a National Health Program (PNHP), Miller educates others about a single-payer plan that could solve America’s healthcare crisis. PNHP is a single-issue organization that supports a universal, comprehensive single-payer national health program and has been advocating for healthcare reform since 1987.

The organization has over 18,000 members and chapters across the United States. Miller explains the concept of a single-payer plan as “taxpayers pool together money to fund a national health plan. With a single-payer system, insurance is nationalized, but healthcare is delivered by private practices.”

This plan would essentially be an improved and expanded Medicare system. Medicare for all means that ideally everyone born in the U.S. would be given a health insurance card or number when they are born or, for immigrants, when they gain citizenship. A quote used often by PNHP is, “Everybody in. Nobody out.”

Since the passage of PPACA, PNHP continues to lobby state and federal legislators to consider a single-payer national health program as a cost-effective and health beneficial program. However, PNHP lobbyists are going up against health insurance companies who, according to a 2010 article in the Huffington Post, supplied an average of eight healthcare lobbyists per every one member of Congress in 2009.

In 2010, Aetna spent $4,845,894 on lobbying expenditures, while Blue Cross/Blue Shield contributed $916,719 to political campaigns. The majority of Blue Cross/Blue Shield’s contributions supported Democratic candidates.

Health reform is a hot topic in Washington because it is an issue that affects all Americans and reform of the healthcare system is much needed.

In September of 2010, approximately 50.7 million people did not have health insurance. As a reformative bill, the 2010 PPACA aims to reduce this number and provide health coverage to over 30 million currently uninsured Americans “by expanding Medicaid and providing federal subsidies to help lower and middle-income Americans buy private coverage,” according to a recent article in the New York Times.

The law also forces health insurance companies to stop practices that prevent people from purchasing insurance. However, this most recent attempt at healthcare reform disappointed single-payer supporters. The PPACA “was health insurance reformed.”

“Single-payer supporters never even got to the table … Obama made a pragmatic political decision. Obama was a single-payer supporter before he ran for office … he abandoned that because he would have been labeled a socialist,” Miller explains.

As Miller sees it, Obama’s plan “cut back on some of the excesses, where these companies were denying people care and refusing to cover people if they had a preexisting illness. However, it is not healthcare reform.”

Although the final version of the bill did expand Medicare and provides more Americans with coverage, it bolsters the problematic private insurance industry and leaves 23 million Americans still uninsured by 2019, according to a recent Congressional Budget Office estimate

Deconstructing Healthcare Rhetoric

Despite the amount of conservative compromise that shaped the bill as it passed through both houses of congress, politicians are still debating the role of government in medicine. Many prominent political leaders have publically stated that one of their primary goals this year is to repeal Obama’s healthcare legislation on the basis that government should be separate from medicine.

Since the PPACA was passed, the Republican Party has turned to misleading rhetoric as they work to have the bill repealed. Although Republicans do support national healthcare plans, such as veteran’s insurance and Medicare, much of the party’s rhetoric attacks the PPACA as well as a single-payer system for being socialist and anti-business.

Miller explains that Obama’s bill is far from socialist. She says the act is “merely insurance reform, built on the privately owned profit making health insurance industry.” Although the solution of a single-payer plan, or Medicare for all, eliminates the need for private health insurance providers, it does not deserve the term socialist.

The single-payer system would not be socialized medicine, it would be social insurance, says Miller, “this means that society pools the risk, so that the people who are really ill get treatment…In this system healthcare is still delivered privately by your local doctor.”

Miller clarified that the only socialized healthcare we have in this country is insurance provided by the VA [the U.S. Department of Veterans Affairs], because it is supported by taxpayers as well as delivered by the government. Unlike in the single-payer system, healthcare provided though the VA is funded and delivered by the government.

Miller defends nationalized insurance against anti-business rhetoric by emphasizing the bur
den that providing insurance places on employers. “You would think people who support businesses should support a single-payer healthcare system. … Why is Toyota the best car company in the world? Because our companies in Detroit have to take $15,000 from the sale of each vehicle to pay for employee health benefits.” In a single-payer system, citizens would no longer have to rely on their employer to provide healthcare.

Today the United States remains the only industrialized country without a national health insurance plan. Medicare and Medicaid are the closest the country has ever come to a national health insurance program, but neither of these government programs were ever expanded to cover all Americans.

Understanding Cuccinelli’s Arguments

Some of the most intense arguments over government’s role in healthcare have occurred in Miller’s home state of Virginia.

On March 2, Attorney General Ken Cuccinelli stood before the House Judiciary Committee and explained his concerns about the PPACA. “The litigation is not so much about healthcare as it is about liberty,” Cuccinelli says. He took this same argument to Virginia Courts.

In the lawsuit, The Commonwealth of Virginia vs. Kathleen Sebelius, the Attorney General argues the federal law is unconstitutional due to the bill’s individual mandates provision, which requires that all Americans must purchase healthcare by 2014, or face a federal penalty. Kathleen Sebelius, Secretary of the U.S. Department of Health and Human Services, is defending her motion to dismiss Cuccinelli’s claim against individual mandates. Cuccinelli is acting as Plaintiff and representative of the Eastern District of Virginia.

“In this case, I agree with Cuccinelli. When else have we required Americans to buy a defective product?” Miller explains, “Individual mandates where the only way that the health insurance companies would agree to certain regulations, such as not eliminating people who had preexisting conditions.” With individual mandates, health insurance companies can maintain profits and also (using the money paid by insured customers) pay for more American’s healthcare.

In December, Virginia federal district judge Henry E. Hudson agreed with Cuccinelli’s argument stating, “The law’s central requirement that most Americans obtain health insurance exceeds the regulatory authority granted to Congress under the Commerce Clause of the Constitution.”

In his final ruling, Hudson ruled in favor of Cuccinelli, rejecting the federal government’s motion to dismiss the Commonwealth’s lawsuit and thereby allowing Cuccinelli to continue his efforts to have the PPACA repealed. A Circuit Court of Appeals in Richmond is scheduled to hear the government’s appeal this spring, unless the U.S. Supreme Court decides to take on the case first. If the Supreme Court rules that individual mandates are unconstitutional, the entire PPACA would be repealed since the mandates are a requirement of the law.

While the individual mandate clause may be the central focus of the healthcare debate in Virginia, Miller suspects that Cuccinelli’s argument against this one provision is representative of a broader conservative stance.

“The argument in this country is whether healthcare is a human right or if healthcare is a profit center,” says Miller, “Republicans want to make people cost sensitive so people won’t go to the doctors all the time…by making costs transparent and asking patients to be responsible when they choose providers. But the problem with this is that when someone needs their appendix out, they can’t shop around.”

In many ways, the competitive nature of capitalism doesn’t benefit patients. Miller elaborated on this point by citing several studies, including a Harvard study that showed for-profit dialysis centers to have higher death rates than nonprofit centers, as well her own experience as a doctor.

“Just before speaking with you,” Miller said after a brief pause in our interview, “I had a patient on the phone. I could tell that she was wheezing. I told her she should go to the emergency room, but she says she couldn’t afford the co-pay…We need to remove barriers to care.”

The Future of Universal Healthcare

While PPACA is being resisted in some states, such as Virginia and Florida, other states are taking this as an opportunity to discover sustainable solutions to America’s healthcare problem. For states to implement their own version of “Obamacare” the law requires they obtain federal waivers that relieve them of particular requirements specified by the plan.

The waiver provision was included in the original bill to allow states to test alternative ways of making health care accessible to the millions of Americans who need it. Waivers were not supposed to be available to states until 2017, but recently Obama stated he would support an amendment that would grant early waivers so that new healthcare models could be implemented as soon as possible.

Vermont is one of the states requesting an early waiver. After Obama announced his support of the early waivers amendment, Vermont Democratic Senator, Patrick Leahy stated, “Vermont has already been working hard to improve the state’s system of health care, and passage of the delegation’s waiver bill will move our state one step closer to that goal.”

Miller is hopeful about the future of healthcare in America. “They are moving forward with single-payer program legislation in states like Vermont, Oregon and California,” she says with excitement, “once states begin using a single-payer system, we will have a national experiment. We will see which states have better healthcare.”

There is already a federal bill written that lays out the steps needed to implement a single-payer program. The Expanded and Improved Medicare for All Act (HR676) established “a unique American universal health insurance program with single payer financing.” The summary written by Representative John Conyers Jr. (D-MI) continues,

“The bill would create a publicly financed, privately delivered health care system that improves and expands the already existing Medicare program to all U.S. residents…The goal of the legislation is to ensure that all Americans will have access, guaranteed by law, to the highest quality and most cost effective health care services regardless of their employment, income or health care status.”

The bill failed to make it past committee, but was reintroduced on February 11 of this year as “The United States National Healthcare Act,” with 28 co-sponsors. “The bill gradually transitions the whole healthcare system from profit to not for profit,” says Miller.

According to the Healthcare-NOW website, the program established in HR676 “will cover all medically necessary services. … Patients have their choice of physicians, providers, hospitals, clinics, and practices. No co-pays or deductibles are permissible under this act.”

With so much resistance towards the idea of a single-payer program coming from both the moderate left and the right, there is little chance that this bill will pass through either house any time soon, even if it is a potential solution to America’s healthcare crisis. “Americans need improved Medicare for all.”

“Of course Medicare is not perfect,” she adds, “but it’s a great platform to start from.” Miller speaks openly about the single-payer option with her colleagues because she wants to separate the facts from the rhetoric politics have built up around them.

Justifiably, she worries when politicians complicate the issue of healthcare reform. Circular rhetorical arguments cause Americans to tune out, even though this debate and its outcome is critical to national prosperity and personal health.

1. http://www.huffingtonpost.com/2010/02/25/eight-health-care-lobbyis_n_477215.html

2. http://www.opensecrets.org/
industries/indus.php?ind=H03#lobtotals2

3. http://topics.nytimes.com/top/news/health/diseasesconditionsandhealthtopics/health_insurance_and_managed_care/health_care_reform/index.html

4. http://www.cbo.gov/publications/collections/health.cfm4

5. http://www.wtop.com/?nid=120&sid=22744035

6. http://thomas.loc.gov/cgi-bin/query/F?c111:7:./temp/~c111xl6p71:e81188: Section 1311, b(1)

7. http://www.washingtonmonthly.com/archives/individual/2010_12/027059.php

8. http://www.forensic-psych.com/articles/artDialysis.php6

9. http://www.reformer.com/localnews/ci_175438787

10. https://pnhp.org/news/2011/february/summary-hr-676-the-expanded-improved-medicare-for-all-act

http://www.edgeboston.com/index.php?ch=health_fitness&sc=health&sc2=features&sc3=&id=117433

State-Based, Single-Payer Health Care — A Solution for the United States?

William C. Hsiao, Ph.D.
NEJM, March 16, 2011

The United States faces two major problems in the health care arena: the swelling ranks of the uninsured and soaring costs. The Patient Protection and Affordable Care Act (ACA) makes great strides in addressing the former problem but offers only modest pilot efforts to address the latter. Experience in countries such as Taiwan and Canada shows that single-payer health care systems can achieve universal coverage and control inflation of health care costs. Because of strong political opposition, however, the U.S. Congress never seriously considered a single-payer approach during the recent reform debate. Now Vermont, wishing to solve the intertwined problems of costs and access through systemic reform, is turning in that direction. Vermont Governor Peter Shumlin campaigned on a platform of single-payer health care, and Democratic legislative leaders are committed to this approach.

In Vermont, the status quo in health care has become untenable. Despite numerous reforms over the past 15 years, Vermont’s health care costs are escalating rapidly, straining the state budget, household incomes, and employers’ bottom lines. More than 7% of Vermonters are uninsured, and another 15% have inadequate insurance.

The Vermont Legislature passed Act 128 in May 2010 authorizing a study to find the most viable and practical systemic solutions to these problems.1 The goals are clear and ambitious: Vermont wants to achieve universal coverage, reduce the rate of cost increases, and create a primary care–focused, integrated delivery system. The question is how to achieve those goals. My team of health system analysts at the Harvard School of Public Health was commissioned by the Vermont Legislature to develop and evaluate three options for health system reform and determine which option would best achieve the stated goals.

We conducted extensive fiscal, legal, institutional, and stakeholder analyses in Vermont to gain an in-depth understanding of the hurdles confronting any such plan and to design ways of overcoming or navigating around them. Our findings presented a striking picture. Vermont faces a $150 million budget shortfall. Employers argue that health care costs jeopardize their businesses’ financial viability, while families struggle to pay out-of-pocket health care costs. Vermont businesses and workers are unwilling to spend more for health care.

On the other hand, Vermonters are also largely unwilling to reduce their level of benefits. Our analysis found that, on average, Vermonters have rich insurance benefits approaching the ACA’s “platinum” standard. Similarly, physicians and hospitals are unwilling to accept reductions in their net incomes.

Our analyses led us to adopt several design principles that shaped our recommended design. First, we wanted to design a system capable of achieving universal coverage and reducing the cost inflation rate. Any increases in spending to cover the uninsured and underinsured would have to come from savings generated by systemic reforms. Any financing mechanism should not increase the costs to the state, businesses, and households. Second, we aimed to maintain Vermonters’ current average benefits. Third, we sought to maximize federal revenues from all sources. Fourth, we would not reduce overall net income of physicians, hospitals, or other providers. Finally, we sought to eliminate the perverse incentives inherent in the fee-for-service system, through risk-adjusted capitation payment plus performance bonuses, to provide incentives for the formation of accountable care organizations and care integration.

We found that the system capable of producing the greatest potential savings and achieving universal coverage was a single-payer system — one insurance fund that covers everyone with a standard benefit package, paying uniform rates to all providers through a single payment mechanism and claims-processing system. Our analysis showed that Vermont could quickly save almost 8% in health care expenditures through administrative simplification and consolidation, plus another 5% by reducing fraud and abuse.

We recommended that the single payer be a public–private partnership. An independent board with representation from both the major health care payers (employers, the state, and workers) and the major beneficiaries and recipients of payment (providers and consumers) would negotiate updates to the benefit package and payment rates. We also proposed contracting out claims administration through a competitive bid to create incentives to develop more efficient systems.

This system reduces the rate of cost increases over time by insulating major decisions about health care spending from politics, as well as by paying providers through capitation rather than fee for service, promoting delivery-system integration, and reducing the practice of defensive medicine by implementing a no-fault medical malpractice system. All told, we estimated that Vermont could save 25% in health care expenditures over 10 years (estimated savings for the first 5 years are shown in the table).


Estimated Impact of the Recommended Single-Payer Plan for Vermont.

Eligibility for coverage in the system would be based solely on proof of Vermont residency, the same requirement currently used by Vermont Medicaid; this approach effectively divorces health benefits from employment. However, we proposed to finance the system through a payroll contribution on all Vermont wages, split between employer and employee, to preserve the federal tax treatment of health benefits — a tax expenditure worth $400 million to $500 million in Vermont. We recommended delaying the implementation of the single-payer system until after Vermont’s insurance exchange has been operating for a year, at which point the state will have a basis for arguing for a waiver from the ACA requirements and estimating the amount of a federal block grant it would receive before 2017, when current ACA law allows for waivers.1

We used two economic models to estimate the impact of the proposed system. We fed estimated savings and costs under the single-payer system into a MicroSimulation Model, developed by the Massachusetts Institute of Technology’s Jonathan Gruber, which simulated the likely responses to the ACA by employers and low-income workers and estimated the amount of state and federal spending under the law, as well as computing the payroll contribution rates necessary to finance our plan. We then fed those results into a macroeconomic model developed by Regional Economic Models to estimate the effects on jobs and the gross state product that would result from additional spending for health care when more people were covered and the increase in household income and consumption when insurance premiums decreased with a single-payer plan. The models predicted that, as compared with implementing the ACA, the single-payer system would result in lower spending by employers, the state, and households and in the creation of more jobs in Vermont. For example, without single-payer reforms, we predict that employers would pay 12% of their payrolls in health insurance premiums in the first year, with further increases to follow.

The governor has already introduced legislation establishing the first building blocks of a single-payer system: payment reform, the creation of the independent board, and the mandate to build Vermont’s health insurance exchange as a platform for a single-payer infrastructure. Legislation establishing universal coverage and its
financing will follow, when the state can obtain waivers from Medicare’s and Medicaid’s provider-payment rules and the ACA’s individual mandate and subsidy rules. Innovative state reforms are being encouraged, as illustrated by President Obama’s support for the Wyden–Brown bill,2 which would grant waivers from ACA requirements in 2014 if states can meet the ACA’s goals. The Vermont single-payer plan certainly can.

Perhaps we are at the dawn of systemic reform in U.S. health care. The Vermont single-payer plan will never be as efficient as Taiwan’s or Canada’s because it must work within the bounds of federal laws and programs and the realities of porous state borders. Nevertheless, it can produce substantial savings to fully fund universal coverage, reduce health care costs for most businesses and households over time, and reform a fragmented delivery system. Of course, someone will bear the burden — mostly the private insurance industry and high-wage businesses that don’t currently offer insurance. But if Vermont can navigate its political waters and successfully implement this plan, it will provide a model for other states and the country as a whole.

Disclosure forms provided by the author are available with the full text of this article at NEJM.org.

This article (10.1056/NEJMp1100972) was published on March 16, 2011, at NEJM.org.

Source Information

From the Department of Health Policy and Management, Harvard School of Public Health, Boston.

References

1. Act 128 Health System Reform Design Final Report. (http://www.leg.state.vt.us/jfo/healthcare/FINAL%20REPORT%20Hsiao%20Final%20Report%20-%2017%20February%202011_3.pdf.)

2. Stolberg SG, Sack K. Obama backs easing state health law mandates. New York Times. February 28, 2011.

A Medicare lesson for Dick Armey

Civil Action No. 08-1715 (RMC)

United States District Court for the District of Columbia

BRIAN HALL, et al. (including Richard Armey), Plaintiffs,
v.
KATHLEEN SEBELIUS, Secretary, Department of Health and Human Services, et al., Defendants.

Plaintiffs are retired Federal employees who have reached age 65 and have applied for, and are receiving, Social Security Retirement benefits. As a result, they are “entitled” to Medicare Part A, coverage. They do not, however, want Medicare coverage. And the only avenue provided to Plaintiffs to un-entitle themselves is to cease receiving Social Security Retirement benefits – and to repay all such benefits already received. Plaintiffs declaim that such a requirement is contrary to the Social Security Act, of which Medicare is a part. The Court concludes that Plaintiffs’ claims are without merit.

FACTS

Plaintiffs Brian Hall, John Kraus, and Richard Armey share the following characteristics:

• They are retired from Federal employment and have attained the age of 65.
• They applied for, and are receiving, Social Security Retirement benefits.
• They are entitled to benefits under Medicare Part A.
• They had previously been enrolled in health plans under the Federal Employees Health Benefit (FEHB) program and wish to continue that coverage in full.
• They do not want to be covered by Medicare Part A and want to disenroll from Medicare Part A.
• They want to continue receiving their monthly Social Security Retirement benefits.

These facts are all undisputed and, for purposes of resolving this dispute, are the only facts that pertain.

ANALYSIS (excerpts)

Every individual who –

(1) has attained age 65, and
(2)(A) is entitled to monthly insurance benefits under section [42 U.S.C. § 402] of this title . . .

shall be entitled to hospital insurance benefits under part A of title XVIII [of this chapter] for each month for which he meets the condition specified in paragraph (2) . . . .

42 U.S.C. § 426(a). What this means is that an individual who has applied for Social Security Retirement benefits and qualifies to receive such benefits, so that he is “entitled” to Social Security Retirement benefits, automatically becomes “entitled” to Medicare Part A upon his 65th birthday. The only way to avoid entitlement to Medicare Part A at age 65 is to forego the source of that entitlement, i.e. Social Security Retirement benefits. There are but two ways to forego Social Security Retirement benefits: (1) fail to apply even though qualified, see 42 U.S.C. § 402(a) (requiring the filing of an application); or (2) withdraw one’s application and repay all retirement benefits already received, see 20 C.F.R. § 404.640.

Social Security regulations provide a means of avoiding entitlement to monthly Social Security Retirement benefits and thereby also provide a means of avoiding entitlement to Medicare Part A benefits. An individual may withdraw an application for Social Security Retirement benefits after it has been filed by submitting a written request and either repaying “[a]ll benefits already paid” or upon the SSA being “satisfied that they will be repaid.” See 20 C.F.R. § 404.640.3 These regulations are of no assistance to Plaintiffs, however, since they want to avoid Medicare Part A and retain their Social Security Retirement benefits.

There is a “dis-enrollment” possibility, albeit very unattractive, that allows a 65 year-old beneficiary to make himself un-entitled for Medicare Part A by foregoing one of the essential requirements to become entitled to Medicare Part A – receipt of Social Security Retirement benefits.

That Medicare entitlement has very specific consequences for a retired Federal employee: If a Federal retiree who has attained age 65 is “not covered” by Medicare Part A, perhaps because he withdrew his application for Social Security Retirement benefits, his FEHB “plan, other than a prepayment plan described in” 5 U.S.C. § 8903(4), “may not provide benefits . . . to pay a charge imposed by any health care provider, for inpatient hospital services which are covered for purposes of benefit payments” by Medicare Part A, “to the extent that such charge exceeds applicable limitations on hospital charges established for Medicare purposes.” 5 U.S.C. § 8904(b)(1)(A). Thus, even if Plaintiffs were to forego and repay all Social Security Retirement benefits, their FEHB-paid benefits would be no more, and no less, than what Medicare Part A would provide.

Plaintiffs argue that “entitled” to Social Security Retirement benefits does not mean “required to accept” so that “entitled” to Medicare Part A benefits does not mean “required to accept.” While the Plaintiffs’ plain-English reading of the word “entitled” has its attractions, in context the Medicare “entitled” does not actually mean “capable of being rejected.” An individual is “entitled” to Social Security Retirement benefits only after he has worked the requisite quarters, attained age 62 (or more), and filed an application. See 42 U.S.C. § 402. There being no affirmative filing of an application necessary for a Medicare Part A entitlement, it is a different type of entitlement because of its automatic nature. The Medicare Part A entitlement is tied exclusively to the fulfilment of two requirements: (1) receiving Social Security Retirement benefits; and (2) being age 65 – the removal of either having the effect of disestablishing that entitlement.

CONCLUSION

Plaintiffs are trapped in a government program intended for their benefit. They disagree and wish to escape. The Court can find no loophole or requirement that the Secretary provide such a pathway. Defendants’ Motion for Summary Judgment [Dkt. # 42], which was previously denied without prejudice, is reconsidered and will be granted and Plaintiffs’ Motion for Summary Judgment [Dkt. # 51] will be denied. A memorializing Order accompanies this Memorandum Opinion.

Date: March 16, 2011

ROSEMARY M. COLLYER
United States District Judge

https://ecf.dcd.uscourts.gov/cgi-bin/show_public_doc?2008cv1715-54

Comment: 

By Don McCanne, MD

Although this looks like another cute trick that Dick Armey tried to pull off, it is much more serious than that. This is a another blatant effort to try to destroy Medicare as a social insurance program to which all people over 65 who are receiving Social Security benefits are entitled.

This was not a broad anti-government stance. Medicare was targeted specifically. In this civil action, the plaintiffs wanted to specify that they had the right to reject Part A of Medicare, but they weren’t rejecting government programs in general because, in the same civil action, they wanted to keep their Social Security benefits, and they wanted to keep their government-sponsored federal employee retirement health benefits program (as their primary coverage and not secondary to Medicare).

When Medicare was enacted, a decision was mode to be certain that absolutely everyone over 65 on Social Security would be enrolled in Part A – the hospital component. Enrollment would be totally automatic, so much so that an individual could refuse enrollment only by refusing Social Security benefits and refunding to the government any payments already made.

What Dick Armey was trying to do was to establish the principle that individuals could decline Medicare completely and choose a private option (though in this case his private option was a government-sponsored private plan). Thi
s would be another step beyond merely selecting a private Medicare Advantage plan, still subject to Medicare regulations. This would totally divorce private plans from Medicare. The intent of the conservatives all along has been to move Medicare patients into private plans and then destroy Medicare by drastically underfunding it (and “drowning it in a bathtub”).

One of the most fundamental principles of the single payer model is that absolutely everyone is automatically enrolled. Opting out is not an option for anyone. People would still have the freedom to not use the health care system, but they couldn’t opt out of enrollment any more than pacifists like me can opt out of paying for our wars.

The conservatives and libertarians oppose single payer, and they fear that Medicare will be improved and then provided to everyone, as a single payer system. They will not stop in their efforts to shred Medicare into tatters, and walk away with their affluent friends to obtain their boutique health care on their own, leaving the rest of us to fend for ourselves – as if “personal responsibility” could buy a ticket to health care.

Let’s fool them. Let’s fix Medicare and then enroll absolutely everyone – automatically!