PNHP

Provider rate cuts and new benefit restrictions in Medicaid

Provider rate cuts and new benefit restrictions in Medicaid

Hoping for Economic Recovery, Preparing for Health Reform: A Look at Medicaid Spending, Coverage and Policy Trends

by Vernon K. Smith, Ph.D., Kathleen Gifford and Eileen Ellis
Kaiser Family Foundation
September 2010

In FY 2010, 48 states implemented at least one new policy to control cost and 46 states plan to do so in FY 2011 with some states reporting program reductions in multiple areas. While many states mentioned that ARRA (American Recovery and Reinvestment Act of 2009) helped to avoid or mitigate provider rate cuts, states still took action in this area. In FY 2010, 39 states implemented a provider rate cut or freeze compared to 33 states in FY 2009. In FY 2011, 37 states have planned provider rate restrictions. More than any other area, provider rates are linked to economic conditions. Under budget pressure, states turn to rate cuts to have an immediate budget impact and when conditions improve states are able to restore or enhance rates. States must balance the need to control costs with ensuring that provider rates are sufficient to maintain participation and access to services for enrollees.

In FY 2010, 20 states implemented benefit restrictions, the largest number in one year since the surveys began in 2001 and double the number from FY 2009. In addition to this record level of benefit restrictions in FY 2010, 14 states have planned benefit restrictions in FY 2011. These benefit restrictions include the elimination of covered benefits as well as the application of utilization controls or limits for existing benefits.

Under health reform, Medicaid will be expanded to cover nearly all individuals with incomes below 133 percent of poverty resulting in a large adult expansion in most states, particularly adults without dependent children who had historically been barred from coverage under the program. This expansion provides the foundation for new coverage under health reform. Not surprisingly, Medicaid officials are playing a lead role in preparing for health reform implementation, in many cases alongside insurance commissioners. Some of the key challenges that states will face in implementing reform include implementing the Medicaid expansion, transitioning to a new income eligibility methodology for Medicaid, setting up Health Insurance Exchanges and re-designing eligibility systems to coordinate with the Exchanges. These challenges are magnified by recent administrative cuts and state workforce reductions limiting states’ capacity to focus on new responsibilities. Many states said that they need
timely regulations and guidance as well as financial support to help them move forward and meet tight implementation timelines.

http://www.kff.org/medicaid/upload/8105_ES.pdf

Comment:

By Don McCanne, MD

In spite of the infusion of funds from the American Recovery and Reinvestment Act of 2009 (ARRA), states are implementing Medicaid provider rate cuts and implementing Medicaid benefit restrictions. Yet with the enactment of the Patient Protection and Affordable Care Act (ACA), the Medicaid program will be greatly expanded to include almost everyone with incomes below 133 percent of poverty.

Medicaid always has been and always will be a welfare program for low-income individuals. Serving a population that lacks an adequate political voice, it also has been and always will be a chronically underfunded program.

Most physicians who do accept Medicaid patients do so, in spite of inadequate reimbursement, because they believe that everyone should have health care. With a much greater volume of Medicaid patients some physicians will certainly face the dilemma of crowd-out of privately insured patients because of the Medicaid overload in their appointment schedules.

Imagine a physician facing Medicaid overload, declining net revenues, and frustrations of trying to help patients negotiate a system with diminishing benefits and with impaired access to specialized services because of a lack of willing providers.

Certainly some physicians will feel that they have no other choice than to close their practices to Medicaid patients. What will that do to other physician practices that are already overloaded with Medicaid patients?

Adverse selection can sink insurers, but it would be much more tragic to see adverse selection sink the practices of those physicians who are trying their hardest to do the right thing.

If everyone were in the same health care program, say an improved Medicare for all, an underfunded, segregated sector of stigmatized and humiliated welfare patients wouldn’t even exist. They would have access to the same care the rest of us have. Wouldn’t that be nice for a change.

Provider rate cuts and new benefit restrictions in Medicaid

Hoping for Economic Recovery, Preparing for Health Reform: A Look at Medicaid Spending, Coverage and Policy Trends

by Vernon K. Smith, Ph.D., Kathleen Gifford and Eileen Ellis
Kaiser Family Foundation
September 2010

In FY 2010, 48 states implemented at least one new policy to control cost and 46 states plan to do so in FY 2011 with some states reporting program reductions in multiple areas. While many states mentioned that ARRA (American Recovery and Reinvestment Act of 2009) helped to avoid or mitigate provider rate cuts, states still took action in this area. In FY 2010, 39 states implemented a provider rate cut or freeze compared to 33 states in FY 2009. In FY 2011, 37 states have planned provider rate restrictions. More than any other area, provider rates are linked to economic conditions. Under budget pressure, states turn to rate cuts to have an immediate budget impact and when conditions improve states are able to restore or enhance rates. States must balance the need to control costs with ensuring that provider rates are sufficient to maintain participation and access to services for enrollees.

In FY 2010, 20 states implemented benefit restrictions, the largest number in one year since the surveys began in 2001 and double the number from FY 2009. In addition to this record level of benefit restrictions in FY 2010, 14 states have planned benefit restrictions in FY 2011. These benefit restrictions include the elimination of covered benefits as well as the application of utilization controls or limits for existing benefits.

Under health reform, Medicaid will be expanded to cover nearly all individuals with incomes below 133 percent of poverty resulting in a large adult expansion in most states, particularly adults without dependent children who had historically been barred from coverage under the program. This expansion provides the foundation for new coverage under health reform. Not surprisingly, Medicaid officials are playing a lead role in preparing for health reform implementation, in many cases alongside insurance commissioners. Some of the key challenges that states will face in implementing reform include implementing the Medicaid expansion, transitioning to a new income eligibility methodology for Medicaid, setting up Health Insurance Exchanges and re-designing eligibility systems to coordinate with the Exchanges. These challenges are magnified by recent administrative cuts and state workforce reductions limiting states’ capacity to focus on new responsibilities. Many states said that they need
timely regulations and guidance as well as financial support to help them move forward and meet tight implementation timelines.

http://www.kff.org/medicaid/upload/8105_ES.pdf

In spite of the infusion of funds from the American Recovery and Reinvestment Act of 2009 (ARRA), states are implementing Medicaid provider rate cuts and implementing Medicaid benefit restrictions. Yet with the enactment of the Patient Protection and Affordable Care Act (ACA), the Medicaid program will be greatly expanded to include almost everyone with incomes below 133 percent of poverty.

Medicaid always has been and always will be a welfare program for low-income individuals. Serving a population that lacks an adequate political voice, it also has been and always will be a chronically underfunded program.

Most physicians who do accept Medicaid patients do so, in spite of inadequate reimbursement, because they believe that everyone should have health care. With a much greater volume of Medicaid patients some physicians will certainly face the dilemma of crowd-out of privately insured patients because of the Medicaid overload in their appointment schedules.

Imagine a physician facing Medicaid overload, declining net revenues, and frustrations of trying to help patients negotiate a system with diminishing benefits and with impaired access to specialized services because of a lack of willing providers.

Certainly some physicians will feel that they have no other choice than to close their practices to Medicaid patients. What will that do to other physician practices that are already overloaded with Medicaid patients?

Adverse selection can sink insurers, but it would be much more tragic to see adverse selection sink the practices of those physicians who are trying their hardest to do the right thing.

If everyone were in the same health care program, say an improved Medicare for all, an underfunded, segregated sector of stigmatized and humiliated welfare patients wouldn’t even exist. They would have access to the same care the rest of us have. Wouldn’t that be nice for a change.

New single-payer actions, Annual Meeting coming up Nov. 6

Sept. 30, 2010

Dear PNHP colleagues and friends,

We write to cordially invite you to PNHP’s upcoming Annual Meeting on November 6 in Denver (details below) and to update you on a recent burst of activity in support of single-payer national health insurance.

  • PNHP members will be marching alongside tens of thousands of others in the “One Nation Working Together” march in Washington, D.C., this Saturday. While the primary emphasis of the Oct. 2 march is on “Demanding the change we voted for” on the jobs issue, PNHP members will be marching under the banner of “Single Payer – Improved Medicare for All” with allies like Healthcare-Now and National Nurses United. If you’re in D.C. that day, wear your white coat and join us!

  • Princeton professor Tsung-Mei Cheng, PNHP’s Dr. Olveen Carrasquillo and nurses’ union staffer Michele Evermore were featured at a successful congressional briefing on Capitol Hill last Thursday, Sept. 23. Several dozen legislative aides, along with Reps. John Conyers and Lynn Woolsey (Woolsey and Rep. Raul Grijalva were the honorary co-hosts of the event), participated in the session. Professor Cheng’s slide show and Dr. Carrasquillo’s remarks give a flavor of the meeting, the themes of which were (1) protecting the Medicare program from cuts by the Deficit Commission, and (2) promoting an improved Medicare for all as the best way to provide universal and affordable care. A video of the session should be available soon.

  • Only a few days before, PNHP leaders Dr. Quentin Young and Dr. Margaret Flowers spoke at the Congressional Black Caucus Foundation’s annual legislative meeting, where, Dr. Young says, the sentiment in their breakout room – packed with about 150 people – was overwhelmingly in support of the single-payer solution. Rep. Conyers, Sen. Bernie Sanders, the NAACP’s Hilary Shelton, TV and radio host Ed Schultz, and Dr. Julianne Malveaux of Bennett College also spoke. The next day, Dr. Flowers appeared on Schultz’s radio program and The Ed Show on MSNBC (skip to 21:00).

  • There’s more: Dr. Hank Abron’s fine op-ed in the San Francisco Chronicle … an excellent letter to the editor by Dr. Nancy Crumpacker of Oregon … the continuing 24-city tour by the Mad as Hell Doctors through California … many state PNHP chapter activities, too numerous to mention here … PNHP booths at meetings of the American Academy of Family Physicians, the American Academy of Pediatrics and the American College of Emergency Physicians … a recent AP poll showing that twice as many Americans (40 percent) believe the health reform law doesn’t go far enough to change the health system as those who believe the federal government shouldn’t be involved in health care (20 percent)… and single-payer candidates running for office across the nation, including the remarkable gubernatorial campaign of Peter Shumlin in Vermont.

  • Finally, PNHP’s 2010 Annual Meeting is getting closer (Nov. 6), and the deadline for getting the best deal on a room at the Sheraton Denver Downtown Hotel is next Tuesday, Oct. 5. ($149 single/double; “senior” room rate is $125; call 1-800-325-3535.) Democracy Now host Amy Goodman will be joining us in Denver, along with pharmaceutical industry critics Donald Light and Joel Lexchin, American pediatric surgeon practicing in Canada Sherif Emil, activist Rose Roach, journalist T.R. Reid and PNHP leaders in the national and state single-payer movements.

Don’t miss this extraordinary gathering. Please sign up today! Note: the meeting will be preceded by our popular Leadership Training course on Nov. 5.

» Click here to register for the Annual Meeting

» Click here to learn more about the Leadership Training

Cordially,

Quentin Young Sig
Quentin Young, M.D.
National Coordinator

Ida Hellander Sig
Ida Hellander, M.D.
Executive Director

P.S. If you definitely can’t make it to Denver, please contribute financially toward its success, including by underwriting some of our scholarships to medical students who will be attending.

What if everyone had Medicare?

By Henry Abrons
San Francisco Chronicle, Friday, September 24, 2010

The Census Bureau released its annual report on income, poverty and health insurance coverage in the United States earlier this month, and it’s no surprise to learn that we’re in bad shape. The number of people living in poverty was 43.6 million (14.3 percent), up sharply from 2008, and real per capita income declined 1 percent.

Looking at health insurance, the situation is truly dire. There was a dramatic spike in the uninsured – 4.3 million more, to a record 50.7 million – in spite of the expansion of government health insurance rolls by nearly 6 million.

Those opposing government health insurance should ponder the fact that private health insurance coverage dropped to the lowest level since comparable data were first collected in 1987. On the other hand, those who look to the new health reform law – the Patient Protection and Affordable Care Act (PPACA) – for a solution should be deeply disturbed.

PPACA was not designed to provide universal coverage. In fact, if the new law works as planned, in 2019 there will still be 23 million uninsured. Yet the consequence of being uninsured can be lethal: Research published last year shows about 45,000 deaths annually can be linked to lack of coverage. That number is probably more than 50,000 today.

As Don McCanne, senior health policy fellow at Physicians for a National Health Program, has observed, PPACA is an underinsurance program. Employers, seeing little relief, will expand the present tr
end of shifting more insurance and health care costs onto employees.

Individuals buying plans in the new insurance exchanges (which won’t start until 2014) will discover that subsidies are inadequate to avoid financial hardship. Inevitably, they will end up with underinsurance, spotty coverage and high deductibles.

And workers who are unemployed or without employment-based insurance will move into Medicaid (Medi-Cal in California), where providers are reimbursed at such low rates that many will not accept patients.

When Congress passed the new law last spring, it based its decision on a faulty assumption – namely, that the rest of the population will have sustainable private health insurance. But between 2008 and 2009, the number of people covered by private health insurance decreased from 201.0 million to 194.5 million, and the number covered by employment-based health insurance declined from 176.3 million to 169.7 million.

If this trend continues, as it’s bound to do under current economic conditions, the ranks of the uninsured will expand and the new law will fall far short of the mark – either the cost will exceed projections, or coverage will need to be reduced.

The Census Bureau report underscores the urgency of going beyond the Obama administration and swiftly implementing a more fundamental reform – a single-payer national health insurance program – improved Medicare for all.

Improved Medicare-for-all, by replacing our dysfunctional patchwork of private health insurers with a single, streamlined system of financing, would save about $400 billion annually in unnecessary paperwork and bureaucracy. That’s enough to cover all of those now uninsured and to provide every person in the United States with quality, comprehensive coverage.

A single-payer plan would also furnish us with effective cost-control tools, like the ability to negotiate fees and purchase medications in bulk. It would permit patients to go to the doctor and hospital of their choice.

Short of a full national plan, some states, like ours, are eyeing a state-based single-payer model. The new health law allows states to experiment with different models of reform, but not until 2017. Congress should move that date forward. There is no time to waste.

Henry Abrons, M.D., is a member of Physicians for a National Health Program-California (www.pnhpcalifornia.org).

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/09/24/EDRK1FFRST.DTL

We need health care for all

Letters to the editor
The Oregonian, Sept. 28, 2010

Regence BlueCross BlueShield and other large insurers canceled their policies for children just before they would have had to accept any patient regardless of his or her medical condition (“Regence drops child-only coverage,” Sept. 23). This confirms what we have long known: Since 20 percent of the population use up 90 percent of health care expenses in any given year, insurance companies make money by not insuring these costly patients.

We need an insurance system that pools the risk evenly and spreads out the costs of the sickest 20 percent of us. Other rich nations have versions of a single-payer system to finance health service payments. It is time we adopt a single-payer national health program in the United States. Such a system would provide affordable access to medical services for everyone. No one would have to worry about pre-existing conditions, deductibles, provider networks, medical debt, losing insurance with a job loss or a doctor rejecting them as a patient because they are on Medicaid. Instead, the sick would simply choose their doctor and hospital.

Nancy Crumpacker, M.D.
Northwest Portland
Crumpacker is affiliated with Physicians for a National Health Program

http://blog.oregonlive.com/myoregon/2010/09/we_need_health_care_for_all.html

What if everyone had Medicare?

What if everyone had Medicare?

By Henry Abrons
San Francisco Chronicle
September 24, 2010

The Census Bureau released its annual report on income, poverty and health insurance coverage in the United States earlier this month, and it’s no surprise to learn that we’re in bad shape. The number of people living in poverty was 43.6 million (14.3 percent), up sharply from 2008, and real per capita income declined 1 percent.

Looking at health insurance, the situation is truly dire. There was a dramatic spike in the uninsured – 4.3 million more, to a record 50.7 million – in spite of the expansion of government health insurance rolls by nearly 6 million.

Those opposing government health insurance should ponder the fact that private health insurance coverage dropped to the lowest level since comparable data were first collected in 1987. On the other hand, those who look to the new health reform law – the Patient Protection and Affordable Care Act (PPACA) – for a solution should be deeply disturbed.

PPACA was not designed to provide universal coverage. In fact, if the new law works as planned, in 2019 there will still be 23 million uninsured. Yet the consequence of being uninsured can be lethal: Research published last year shows about 45,000 deaths annually can be linked to lack of coverage. That number is probably more than 50,000 today.

As Don McCanne, senior health policy fellow at Physicians for a National Health Program, has observed, PPACA is an underinsurance program. Employers, seeing little relief, will expand the present trend of shifting more insurance and health care costs onto employees.

Individuals buying plans in the new insurance exchanges (which won’t start until 2014) will discover that subsidies are inadequate to avoid financial hardship. Inevitably, they will end up with underinsurance, spotty coverage and high deductibles.

And workers who are unemployed or without employment-based insurance will move into Medicaid (Medi-Cal in California), where providers are reimbursed at such low rates that many will not accept patients.

When Congress passed the new law last spring, it based its decision on a faulty assumption – namely, that the rest of the population will have sustainable private health insurance. But between 2008 and 2009, the number of people covered by private health insurance decreased from 201.0 million to 194.5 million, and the number covered by employment-based health insurance declined from 176.3 million to 169.7 million.

If this trend continues, as it’s bound to do under current economic conditions, the ranks of the uninsured will expand and the new law will fall far short of the mark – either the cost will exceed projections, or coverage will be need to be reduced.

The Census Bureau report underscores the urgency of going beyond the Obama administration and swiftly implementing a more fundamental reform – a single-payer national health insurance program – improved Medicare for all.

Improved Medicare-for-all, by replacing our dysfunctional patchwork of private health insurers with a single, streamlined system of financing, would save about $400 billion annually in unnecessary paperwork and bureaucracy. That’s enough to cover all of those now uninsured and to provide every person in the United States with quality, comprehensive coverage.

A single-payer plan would also furnish us with effective cost-control tools, like the ability to negotiate fees and purchase medications in bulk. It would permit patients to go to the doctor and hospital of their choice.

Short of a full national plan, some states, like ours, are eyeing a state-based single-payer model. The new health law allows states to experiment with different models of reform, but not until 2017. Congress should move that date forward. There is no time to waste.

(Henry Abrons, M.D., is a member of Physicians for a National Health Program-California – www.pnhpcalifornia.org.)

http://articles.sfgate.com/2010-09-24/opinion/24086986_1_health-insurance-health-reform-law-universal-coverage

Comment:

By Don McCanne, MD

Henry Abrons’ message is certainly very familiar to supporters of an improved Medicare for all, but we have to keep repeating it over and over until more people start listening.

We need health care for all

Letters to the editor
The Oregonian, Sept. 28, 2010

Regence BlueCross BlueShield and other large insurers canceled their policies for children just before they would have had to accept any patient regardless of his or her medical condition (“Regence drops child-only coverage,” Sept. 23). This confirms what we have long known: Since 20 percent of the population use up 90 percent of health care expenses in any given year, insurance companies make money by not insuring these costly patients.

We need an insurance system that pools the risk evenly and spreads out the costs of the sickest 20 percent of us. Other rich nations have versions of a single-payer system to finance health service payments. It is time we adopt a single-payer national health program in the United States. Such a system would provide affordable access to medical services for everyone. No one would have to worry about pre-existing conditions, deductibles, provider networks, medical debt, losing insurance with a job loss or a doctor rejecting them as a patient because they are on Medicaid. Instead, the sick would simply choose their doctor and hospital.

Nancy Crumpacker, M.D.
Northwest Portland
Crumpacker is affiliated with Physicians for a National Health Program

http://blog.oregonlive.com/myoregon/2010/09/we_need_health_care_for_all.html

What if everyone had Medicare?

What if everyone had Medicare?

By Henry Abrons
San Francisco Chronicle
September 24, 2010

The Census Bureau released its annual report on income, poverty and health insurance coverage in the United States earlier this month, and it’s no surprise to learn that we’re in bad shape. The number of people living in poverty was 43.6 million (14.3 percent), up sharply from 2008, and real per capita income declined 1 percent.

Looking at health insurance, the situation is truly dire. There was a dramatic spike in the uninsured – 4.3 million more, to a record 50.7 million – in spite of the expansion of government health insurance rolls by nearly 6 million.

Those opposing government health insurance should ponder the fact that private health insurance coverage dropped to the lowest level since comparable data were first collected in 1987. On the other hand, those who look to the new health reform law – the Patient Protection and Affordable Care Act (PPACA) – for a solution should be deeply disturbed.

PPACA was not designed to provide universal coverage. In fact, if the new law works as planned, in 2019 there will still be 23 million uninsured. Yet the consequence of being uninsured can be lethal: Research published last year shows about 45,000 deaths annually can be linked to lack of coverage. That number is probably more than 50,000 today.

As Don McCanne, senior health policy fellow at Physicians for a National Health Program, has observed, PPACA is an underinsurance program. Employers, seeing little relief, will expand the present trend of shifting more insurance and health care costs onto employees.

Individuals buying plans in the new insurance exchanges (which won’t start until 2014) will discover that subsidies are inadequate to avoid financial hardship. Inevitably, they will end up with underinsurance, spotty coverage and high deductibles.

And workers who are unemployed or without employment-based insurance will move into Medicaid (Medi-Cal in California), where providers are reimbursed at such low rates that many will not accept patients.

When Congress passed the new law last spring, it based its decision on a faulty assumption – namely, that the rest of the population will have sustainable private health insurance. But between 2008 and 2009, the number of people covered by private health insurance decreased from 201.0 million to 194.5 million, and the number covered by employment-based health insurance declined from 176.3 million to 169.7 million.

If this trend continues, as it’s bound to do under current economic conditions, the ranks of the uninsured will expand and the new law will fall far short of the mark – either the cost will exceed projections, or coverage will be need to be reduced.

The Census Bureau report underscores the urgency of going beyond the Obama administration and swiftly implementing a more fundamental reform – a single-payer national health insurance program – improved Medicare for all.

Improved Medicare-for-all, by replacing our dysfunctional patchwork of private health insurers with a single, streamlined system of financing, would save about $400 billion annually in unnecessary paperwork and bureaucracy. That’s enough to cover all of those now uninsured and to provide every person in the United States with quality, comprehensive coverage.

A single-payer plan would also furnish us with effective cost-control tools, like the ability to negotiate fees and purchase medications in bulk. It would permit patients to go to the doctor and hospital of their choice.

Short of a full national plan, some states, like ours, are eyeing a state-based single-payer model. The new health law allows states to experiment with different models of reform, but not until 2017. Congress should move that date forward. There is no time to waste.

(Henry Abrons, M.D., is a member of Physicians for a National Health Program-California – www.pnhpcalifornia.org.)

http://articles.sfgate.com/2010-09-24/opinion/24086986_1_health-insurance-health-reform-law-universal-coverage

Henry Abrons’ message is certainly very familiar to supporters of an improved Medicare for all, but we have to keep repeating it over and over until more people start listening.

Incomes and health costs

Census Bureau Releases 2009 American Community Survey Data

U.S. Census Bureau
September 28, 2010

Median Household Income

Real median household income in the United States fell between 2008 and 2009 — decreasing by 2.9 percent from $51,726 to $50,221.

http://www.census.gov/newsroom/releases/archives/american_community_survey_acs/cb10-cn78.html

And…

U.S. Health Care Cost Rate Increases Reach Highest Levels in Five Years, According to New Data from Hewitt Associates

Hewitt
September 27, 2010

According to Hewitt’s analysis, the average total health care premium per employee for large companies will be $9,821 in 2011, up from $9,028 in 2010. The amount employees will be asked to contribute toward this cost is $2,209, or 22.5 percent of the total health care premium. This is up 12.4 percent from 2010, when employees contributed $1,966, or 21.8 percent of the total health care premium. Average employee out-of-pocket costs, such as copayments, coinsurance and deductibles, are expected to be $2,177 in 2011—a 12.5 percent increase from 2010 ($1,934). These projections mean that in a decade, total health care premiums will have more than doubled, from $4,083 in 2001 to $9,821 in 2011. Employees’ share of medical costs—including employee contributions and out-of-pocket costs—will have more than tripled, from $1,229 in 2001 to $4,386 in 2011.

http://www.hewittassociates.com/Intl/NA/en-US/AboutHewitt/Newsroom/PressReleaseDetail.aspx?cid=9106

And…

Milliman Medical Index

The annual Milliman Medical Index (MMI) reports total annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program. The MMI represents the total cost of payments to healthcare providers, and excludes the non-medical administrative component of health plan premiums.

The total 2010 medical cost for a typical American family of four is $18,074.

https://pnhp.org/news/2010/may/the-mmi-proves-that-ppaca-is-already-a-failure

Comment:

By Don McCanne, MD

Think about this. Median household income is now back down to $50,000. The average cost of health care for a family of four with an employer-sponsored PPO plan is $18,000. Premiums for employer-sponsored plans have doubled in the last decade, while the employees’ spending on health care has tripled!

The Patient Protection and Accountable Care Act (PPACA) was specifically designed to leave the large market of employer-sponsored private health plans intact – the “you can keep the insurance you have…” strategy for reform. Most individuals and families will see little change as a result of PPACA since they will continue to receive their insurance coverage through their employment.

Very specifically, employees of larger companies will not see premium subsidies like for those who purchase plans in the state exchanges, nor will they see the subsidies for out-of-pocket expenses. The architects of PPACA decided that employer contributions to the premiums would obviate the need for subsidies – glibly suppressing the fact that employer contributions are actually paid by the employees in the form of forgone wage increases.

The health care financing structure of PPACA is an unmitigated disaster. For most families, health care costs will encroach at increasing percentages on their budgets for basic essentials such as housing, food, and transportation, not to mention education, retirement plans, and other discretionary expenses. The $18,000 in average health care costs for a family of four is already over one-third of the median household income of $50,000.

We desperately need to enact policies that will bring costs under control while establishing an equitable method of financing that makes health care affordable for everyone. PPACA doesn’t even come close. What will work is a single-payer national health program – an improved Medicare that includes everyone.

(Why aren’t people talking about this? Why is all of the media coverage about the tweaks to our fragmented, dysfunctional system – tweaks that will never get us there? Doesn’t anyone care?)

Incomes and health costs

Census Bureau Releases 2009 American Community Survey Data

U.S. Census Bureau
September 28, 2010

Median Household Income

Real median household income in the United States fell between 2008 and 2009 — decreasing by 2.9 percent from $51,726 to $50,221.

http://www.census.gov/newsroom/releases/archives/american_community_survey_acs/cb10-cn78.html

And…

U.S. Health Care Cost Rate Increases Reach Highest Levels in Five Years, According to New Data from Hewitt Associates

Hewitt
September 27, 2010

According to Hewitt’s analysis, the average total health care premium per employee for large companies will be $9,821 in 2011, up from $9,028 in 2010. The amount employees will be asked to contribute toward this cost is $2,209, or 22.5 percent of the total health care premium. This is up 12.4 percent from 2010, when employees contributed $1,966, or 21.8 percent of the total health care premium. Average employee out-of-pocket costs, such as copayments, coinsurance and deductibles, are expected to be $2,177 in 2011—a 12.5 percent increase from 2010 ($1,934). These projections mean that in a decade, total health care premiums will have more than doubled, from $4,083 in 2001 to $9,821 in 2011. Employees’ share of medical costs—including employee contributions and out-of-pocket costs—will have more than tripled, from $1,229 in 2001 to $4,386 in 2011.

http://www.hewittassociates.com/Intl/NA/en-US/AboutHewitt/Newsroom/PressReleaseDetail.aspx?cid=9106

And…

Milliman Medical Index

The annual Milliman Medical Index (MMI) reports total annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program. The MMI represents the total cost of payments to healthcare providers, and excludes the non-medical administrative component of health plan premiums.

The total 2010 medical cost for a typical American family of four is $18,074.

https://pnhp.org/news/2010/may/the-mmi-proves-that-ppaca-is-already-a-failure

Think about this. Median household income is now back down to $50,000. The average cost of health care for a family of four with an employer-sponsored PPO plan is $18,000. Premiums for employer-sponsored plans have doubled in the last decade, while the employees’ spending on health care has tripled!

The Patient Protection and Accountable Care Act (PPACA) was specifically designed to leave the large market of employer-sponsored private health plans intact – the “you can keep the insurance you have…” strategy for reform. Most individuals and families will see little change as a result of PPACA since they will continue to receive their insurance coverage through their employment.

Very specifically, employees of larger companies will not see premium subsidies like for those who purchase plans in the state exchanges, nor will they see the subsidies for out-of-pocket expenses. The architects of PPACA decided that employer contributions to the premiums would obviate the need for subsidies – glibly suppressing the fact that employer contributions are actually paid by the employees in the form of forgone wage increases.

The health care financing structure of PPACA is an unmitigated disaster. For most families, health care costs will encroach at increasing percentages on their budgets for basic essentials such as housing, food, and transportation, not to mention education, retirement plans, and other discretionary expenses. The $18,000 in average health care costs for a family of four is already over one-third of the median household income of $50,000.

We desperately need to enact policies that will bring costs under control while establishing an equitable method of financing that makes health care affordable for everyone. PPACA doesn’t even come close. What will work is a single-payer national health program – an improved Medicare that includes everyone.

(Why aren’t people talking about this? Why is all of the media coverage about the tweaks to our fragmented, dysfunctional system – tweaks that will never get us there? Doesn’t anyone care?)

AP/Stanford/RWJ poll – Should health law have done more?

AP Poll: Many think health overhaul should do more

By Ricardo Alonso-Zaldivar and Jennifer Agiesta
The Washington Post
September 26, 2010

A new AP poll finds that Americans who think the law should have done more outnumber those who think the government should stay out of health care by 2-to-1.

The poll found that about four in 10 adults think the new law did not go far enough to change the health care system, regardless of whether they support the law, oppose it or remain neutral. On the other side, about one in five say they oppose the law because they think the federal government should not be involved in health care at all.

http://www.washingtonpost.com/wp-dyn/content/article/2010/09/26/AR2010092600409.html

And…

2010 Health Care Reform Survey

By Stanford University with the Robert Wood Johnson Foundation
The Associated Press

HC1. In general, do you favor, oppose, or neither favor nor oppose the law changing the health care system that the U.S. Congress passed last March?

9% – Favor strongly
21% – Favor somewhat
30% – Neither favor nor oppose
17% – Oppose somewhat
23% – Oppose strongly
0% – Refused

(Ask if HC1 = oppose strongly, oppose somewhat or neither favor nor oppose):

HC1A. Which of the following best expresses your view of the health care law that Congress passed last March?

28% – I oppose most or all of the changes made by the law
20% – I oppose a few of the changes made by the law
23% – I favor most or all of the changes made by the law, but I think that law doesn’t do enough to improve the health care system
28% – I oppose the law because I think the federal government should not be involved in health care at all
1% – Refused

(Ask if HC1 = favor strongly, favor somewhat or neither favor nor oppose):

HC1B. Do you think that the health care law passed last March by Congress should have done more to change the health care system, or do you not think that?

61% – It should have done more
36% – Do not think that
3% – Refused

HC2. How much, if at all, should the health care system in the United States be CHANGED from what it was like in February, 2010, before Congress passed the law to change the system? Would you say it should be changed…

17% – A great deal
22% – A lot
35% – A moderate amount
16% – A little
9% – Not at all
1% – Refused

PR6a. Do you favor, oppose, or neither favor nor oppose a law that would require every American to have health insurance, or pay money to the government as a penalty if they do not, unless the person is very poor?

8% – Strongly favor
17% – Somewhat favor
25% – Neither favor not oppose
16% – Somewhat oppose
33% – Strongly oppose
8% – Refused

Poll results (32 pages):
http://surveys.ap.org/data/KnowledgeNetworks/Health%20Reform%20Topline%20for%20Posting.pdf

Comment: 

By Don McCanne, MD

Twice as many Americans believe that the Patient Protection and Affordable Care Act should have done more to change the health care system than those who believe that the government should not be involved in health care at all, according to a release this weekend on the AP/Stanford/RWJ poll. Framed this way the statement would lead you to believe that the majority of Americans want more reform, when, according to this poll, only about two-fifths hold that view, whereas only one-fifth believe that the government should not be involved at all.

Another confusing result stems from the fact that those favoring reform and those opposing reform were asked two different questions (HC1A and HC1B), yet those neither favoring nor opposed were asked both questions. It would not be surprising to learn that those favoring reform would want to see more done, but it would have been helpful to know how many of those opposed were opposed because not near enough was done. The number probably would have been fairly small since only 23 percent of those opposed plus those neutral wanted more done.

There are some conclusions that we can draw from the poll that do seem to be valid:

*  Nine-tenths of Americans agree that the health care system should be changed from what it was like before the legislation passed.

*  Four-fifths favor “making sure that more Americans get the health care they need.”

*  Four-fifths favor “reducing the amount of money that patients pay for health care.”

*  Half are opposed and only one-fourth favor the individual mandate to either buy health insurance or pay a penalty – an essential element of a system based on private health plans.

*  Those polled were split on their understanding of various measures that may or may not have been included in the legislation. Thus these are the opinions of a relatively uninformed electorate.

The reassuring findings in this poll are that Americans do support the goals of reform: 1) Americans should have the health care that they need, and 2) Health care should be affordable for patients.

The poll also shows that the public is not well informed on health policy, so we need to do a much better job in showing them how they can achieve the health care reform goals that they want by enacting an improved Medicare program that covers everyone.

AP/Stanford/RWJ poll – Should health law have done more?

AP Poll: Many think health overhaul should do more

By Ricardo Alonso-Zaldivar and Jennifer Agiesta
The Associated Press
September 26, 2010

A new AP poll finds that Americans who think the law should have done more outnumber those who think the government should stay out of health care by 2-to-1.

The poll found that about four in 10 adults think the new law did not go far enough to change the health care system, regardless of whether they support the law, oppose it or remain neutral. On the other side, about one in five say they oppose the law because they think the federal government should not be involved in health care at all.

http://www.google.com/hostednews/ap/article/ALeqM5gSXIViw_RWvU3uweKkhKfhAVGgqgD9IF4ET80

And…

2010 Health Care Reform Survey

By Stanford University with the Robert Wood Johnson Foundation
The Associated Press

HC1. In general, do you favor, oppose, or neither favor nor oppose the law changing the health care system that the U.S. Congress passed last March?

9% – Favor strongly
21% – Favor somewhat
30% – Neither favor nor oppose
17% – Oppose somewhat
23% – Oppose strongly
0% – Refused

(Ask if HC1 = oppose strongly, oppose somewhat or neither favor nor oppose):

HC1A. Which of the following best expresses your view of the health care law that Congress passed last March?

28% – I oppose most or all of the changes made by the law
20% – I oppose a few of the changes made by the law
23% – I favor most or all of the changes made by the law, but I think that law doesn’t do enough to improve the health care system
28% – I oppose the law because I think the federal government should not be involved in health care at all
1% – Refused

(Ask if HC1 = favor strongly, favor somewhat or neither favor nor oppose):

HC1B. Do you think that the health care law passed last March by Congress should have done more to change the health care system, or do you not think that?

61% – It should have done more
36% – Do not think that
3% – Refused

HC2. How much, if at all, should the health care system in the United States be CHANGED from what it was like in February, 2010, before Congress passed the law to change the system? Would you say it should be changed…

17% – A great deal
22% – A lot
35% – A moderate amount
16% – A little
9% – Not at all
1% – Refused

PR6a. Do you favor, oppose, or neither favor nor oppose a law that would require every American to have health insurance, or pay money to the government as a penalty if they do not, unless the person is very poor?

8% – Strongly favor
17% – Somewhat favor
25% – Neither favor not oppose
16% – Somewhat oppose
33% – Strongly oppose
8% – Refused

Poll results (32 pages):
http://surveys.ap.org/data/KnowledgeNetworks/Health%20Reform%20Topline%20for%20Posting.pdf

Twice as many Americans believe that the Patient Protection and Affordable Care Act should have done more to change the health care system than those who believe that the government should not be involved in health care at all, according to a release this weekend on the AP/Stanford/RWJ poll. Framed this way the statement would lead you to believe that the majority of Americans want more reform, when, according to this poll, only about two-fifths hold that view, whereas only one-fifth believe that the government should not be involved at all.

Another confusing result stems from the fact that those favoring reform and those opposing reform were asked two different questions (HC1A and HC1B), yet those neither favoring nor opposed were asked both questions. It would not be surprising to learn that those favoring reform would want to see more done, but it would have been helpful to know how many of those opposed were opposed because not near enough was done. The number probably would have been fairly small since only 23 percent of those opposed plus those neutral wanted more done.

There are some conclusions that we can draw from the poll that do seem to be valid:

*  Nine-tenths of Americans agree that the health care system should be changed from what it was like before the legislation passed.

*  Four-fifths favor “making sure that more Americans get the health care they need.”

*  Four-fifths favor “reducing the amount of money that patients pay for health care.”

*  Half are opposed and only one-fourth favor the individual mandate to either buy health insurance or pay a penalty – an essential element of a system based on private health plans.

*  Those polled were split on their understanding of various measures that may or may not have been included in the legislation. Thus these are the opinions of a relatively uninformed electorate.

The reassuring findings in this poll are that Americans do support the goals of reform: 1) Americans should have the health care that they need, and 2) Health care should be affordable for patients.

The poll also shows that the public is not well informed on health policy, so we need to do a much better job in showing them how they can achieve the health care reform goals that they want by enacting an improved Medicare program that covers everyone.

Want to save lives and money? Strengthen Medicare

The following text contains the remarks of Olveen Carrasquillo, M.D., at a congressional briefing titled “An analysis of proposed changes to Medicare before the Deficit Commission and a better alternative: Improved Medicare for all” held in Washington on Sept. 23.
 
Madam chairperson, members of Congress, legislative aides, colleagues and friends,
 
Thank you so much for assembling this critically important session on the need to preserve and strengthen our nation’s best and highest quality health insurance system, namely Medicare.
 
As data released last week by the Census Bureau shows, the need to enhance our health insurance systems is now more critical than ever.
 
The numbers show that in 2009 in the nation’s uninsured reached the highest levels since the Bureau has been keeping records – 50.7 million without health coverage. That represents 17 percent of the U.S. population. If you add the other 60 million people who are underinsured to that number, we see that we have no choice but to act.
 
Buried in those numbers is the disproportionate impact this crisis has had on the Latino population. In 2009, 32 percent of our Latinos in this country lacked health insurance, i.e. 16 million Latinos were living in the U.S. without health coverage.
 
This is an issue that affects both U.S.-born and immigrant Latinos. Nearly a quarter of U.S.-born Latinos lacked health coverage. But of course the impact is much worse among immigrant Latinos living in the U.S., with 50 percent of those persons lacking health coverage last year.
 
Thus, the problem must be addressed. Of course, there are aspects of the president’s health reform that may not please everybody. The fact that it does nothing for the 10-12 million Latinos who lack formal documentation in the U.S. and the fact the legal immigrants must wait five years for coverage are among my own irritations with the new law.
 
And of course the fact that we could have done this at much lower cost (about $1 trillion less) and provided truly universal coverage with Medicare for all – through a publicly funded but privately delivered health care system – is a real travesty.
 
That said, it is clear that a few million uninsured Latinos will benefit from the enacted health reform, and something is definitely better than nothing.
 
At the same time, it is ironic that after our nation’s brave steps to improve coverage, proposals have rapidly emerged that would weaken that coverage by undermining our nation’s best health care insurance system, namely Medicare. It makes no sense.
 
Here we pass a plan to potentially insure 32 million persons, and now we are seriously considering barring million of seniors from coverage by upping the Medicare eligibility age to 67 or even 70.
 
As a provider, I see firsthand what happens when people reach the “magic” age of 65. Suddenly all those health conditions they had been waiting to take care of because they were uninsured or underinsured can now be addressed: the poorly controlled hypertension and cholesterol, or preventive measures like colonoscopy that had been deferred because they couldn’t afford it.
 
Indeed, if we are truly interested in bettering the health of our country and potentially saving money, I would argue the exact opposite of those who advocate upping the eligibility age. Let’s extend coverage downward to age 60 or even better to age 50, when we can catch those conditions early and treat them.
 
Treating that high blood pressure or cholesterol early, or removing that pre-cancerous polyp in the colon early, is much more pound-wise than the penny-foolish notion that we can save money by allowing these conditions to fester until the person turns 67, when the patient may now face a $20,000 coronary stent procedure or colorectal surgery and chemotherapy.
 
You want save money? Reduce the Medicare eligibility age. Want to spend more? Let people get sicker from preventable conditions to the point where it will cost them and us exorbitantly.
 
Another terrible idea is increasing co-payments and deductibles. Every study shows that doing this will decrease costs, but much of that savings is achieved by reducing necessary health services.
 
Do we really want that diabetic not to see me three to four times a years because of co-payments? Do we want him to cut down on the average of five medicines he needs to take? Do we want him not to get the needed tests and screening he needs? Do we really want to let him end up on dialysis due to uncontrolled diabetes, or end up on disability because of an amputation, or end up blind because we tried to save a few dollars by increasing his co-payments and deductibles?
 
Equally terrible is the idea of substituting private vouchers for Medicare. We know that private insurers cannot compete on an equal footing with Medicare. The needs of their stockholders, outrageous administrative overhead, and CEOs making tens and sometimes even hundreds of millions of dollars mean they are much less efficient than Medicare.
 
From my end, I see the private insurers’ outrageous paperwork demands, pre-approvals for anything I want to do for my patients, limited participating sub-specialists, automatic denials.
 
I am so happy when a patient has straight Medicare. I know the hassles to get them the care they need will be minimal. This and Medicare’s provider payment structure makes many private plans quite unattractive to physicians like myself, and explain why my practice accepts so few of these of these privately managed Medicare plans.
 
So now some members of the Deficit Commission and others around it are proposing to move all of our seniors into highly bureaucratic, expensive and inefficient private plans to save us money. Come again?
 
Last is the idea of means testing, like we do for Medicaid. Yes Medicaid is better than nothing, but look at Medicaid. The administrative hassles created through means testing means millions of children who are eligible for the program don’t enroll in it. Millions more children are kicked off the rolls every year because they could not gather all the documents required to prove they still qualified for the program.
 
Most notably, as a program for the poor, Medicaid is chronically underfunded and often pays providers less than half of what Medicare pays – which is why less than half of all doctors in this country don’t even consider taking Medicaid patients. This means these patients are often segregated and have to get care at community clinics and public hospitals. So if you really want to dismantle Medicare, new means testing would be an extremely effective mechanism to do this.
 
Granted, we need to save money in Medicare. But the question is how do we do it? We certainly don’t need ill-informed, retrograde ideas that will destroy the health of our elders and likely save us little money or, even worse, end up costing us more.
 
Well, I am from south Florida and I can give you some stories about Medicare fraud and abuse. So yes, there is some fat there. Increased surveillance and enforcement, which the new health law calls for, will definitely help a little.
 
Second, as noted, we overpay private Medicare Advantage plans for the inefficient and burdensome care they deliver. We should build on the steps that have already been taken and compel these plans to meet the same efficiency criteria as Medicare. Of course their CEOs and stockholders may not like the fact that we are ending their outrageous welfare-like subsidies, but if the goal is to improve care and reduce costs, taking this kind of action is a no-brainer.
 
But here is an even bolder idea. Rather than dismantling Medicare, why don’t we improve Medicare and extend
it all persons living in the United States? Why don’t we eliminate the bureaucratic, private-insurance middlemen?
 
Doing so would save us money. Every health economist will tell you that a Medicare-for-all system would the most efficient mechanism to reduce our national health expenditures. Savings estimates are in the $200 billion to $400 billion range. In fact, estimates are that we may be able to cover the entire U.S. population without even increasing our annual health expenditures with a Medicare-for-all system.
 
This of course would mean angering very well-connected constituencies, namely the medical insurance and pharmaceutical industries. But that’s what is called for.
 
I hope for the day when Congress will realize that their job here in Washington is here to help the American people and not to enrich private corporations.
 
Until Congress gets enough courage to do the right thing, we have to hold briefings like this one to dissuade Congress from undermining our best health insurance system, Medicare. As a start, let’s dismiss the harmful ideas for weakening the Medicare program floating around the National Commission for Fiscal Responsibility and Reform.
 
Thank you.
 
Dr. Carrasquillo is a national authority on health disparities, minority health, health services research, health policy, access to care and national health insurance. He is presently chief of the Division of General Internal Medicine in the Department of Medicine at the Miller School of the University of Miami and a board member of Physicians for a National Health Program (www.pnhp.org).