Drew Altman, President and CEO of the Henry J. Kaiser Family Foundation
The Washington Post
November 2, 2009

MS. ROMANO: In your view, what must a bill have in order to be a step forward in health care reform.

MR. ALTMAN: Well, you know, we’re having this debate because the American people, average working Americans, became really worried about and are having real problems just paying their health care bills, and that’s having a real impact also on their family budgets and their ability to pay for other things, pay their rent and mortgage or put a kid through college.

We’ve forgotten a little bit that that’s where this came from. That’s why health got traction again as a political issue.

So the main thing I actually want to see–us health care people tend to talk about this in terms of health care goals, access to care and the quality of care. The first thing I look for is, is this legislation actually responsible–responsive in a meaningful way to the meat-and-potatoes pocketbook problems that average Americans are having, paying for their health care which brought us this debate in the first place. That’s number one for me.

*****

MS. ROMANO: With President Obama trying to cap the cost of these plans at $900 billion over ten years, does that make the discussion about subsidies very important?

MR. ALTMAN: It is a really important discussion, and one of the things that’s happened is, as so much of the debate lately has focused on this hot-button issue [of] the public option. Flying under the radar screen and not getting as much attention are these bread-and-butter consumer issues about will the policies be affordable for people who now have to buy health insurance coverage, are the subsidies high enough, is the coverage that people are going to get going to be adequate.

And I think, as we get to two bills and then one bill that the country can really focus on and that people in the media can really focus on, that issue of the affordability of the coverage will rise to the surface and will become a really big issue.

*****

MR. ALTMAN: I think the public option issue has diverted attention from lots of other issues, and I think this issue of affordability will emerge as a big issue. And there’s a tradeoff as they design this legislation between keeping the overall sticker shock, the price tag of the legislation down and the generosity of the subsidies they can give to people and the comprehensiveness of the coverage that people get, how high–how big those deductibles will be that average middle-class families are going to be asked to pay.

And that’s a very big issue. It’s going to be a big issue not just for the people who are in these exchanges, who get these policies, but for the American people generally who look at this and say is this a fair deal, is this a good deal for people who now have to have health insurance coverage.

I think this is the sleeper issue still. This affordability issue.

And it’s hard to understand. They’re focused on the public option. They haven’t gotten to it yet. So this issue of affordability, I think, is a sleeper issue because it’s complicated, hard to understand how coverage works, what an actuarial value is, how the subsidies work at different income levels, and because they’re focused on the public option. Everyone is so focused on the public option right now, but I think as they get to one bill that everyone can put under a microscope, then this issue of the subsidies and the coverage will really rise to the surface, and we’ll have a much bigger debate about that.

And that’s the consumer issue. It’s the real meat-and-potatoes consumer issue in this legislation.

*****

MS. Romano: Is there a way to hold private insurers accountable on costs other than a government option?

MR. ALTMAN: Well, you know, there are comprehensive reforms of the insurance industry in the legislation, but the one thing they didn’t do in this legislation which was proposed in the Clinton health reform plan, which as we all know failed, they did not propose this time around caps on the increases in insurance premiums. They didn’t say, “Your premiums can only go up two times inflation in the general economy.” That–those–that kind of price controls or regulation, they just didn’t think that would work this time, or they didn’t think it would fly. Anyway, it’s not in the legislation this time.

So, no, there aren’t–I mean, one of the characteristics of the legislation this time is there are not strong controls over the increases that can occur in premiums in the future.

*****

MS. ROMANO: Health care costs are a huge burden on American businesses. Are there enough incentives in these different legislations to help the businessmen pay for this, pay for it for employees, or are we fast approaching a point where businesses will be no longer offering health insurance to employees?

MR. ALTMAN: Well, it’s a big problem in this. The reason we’ve seen a sort of slow drip-drip-drip of coverage out of the employment-based health care system is simply that business can’t pay the cost any longer.

I did a projection the other day that showed that if current trends continue, in 20 years the average cost of a family premium could be 30,000 bucks a year. So we’re not on a good trajectory.

MS. ROMANO: Wow!

*****

MS. ROMANO: Do you see a time when the U.S. will ever drift towards a single-payer system?

MR. ALTMAN: You know, I don’t know for sure, but I certainly think it will be a long time, and I know the single-payer people, you know, don’t like to hear that because they believe so strongly in that approach, but we’re at a point in time now when the approach is favored by the two wings, an all-market approach–people get a voucher, and they shop for themselves–and a single-payer approach are not in the cards.

And so what we’re really looking at, if you view it through that lens, is we’re looking at some form of a centrist deal that brings together elements that the right likes and that the left likes and builds on the existing system. It’s a little bit messy, but that’s all that can fly right now in our political system.

*****

MS. ROMANO: Is the U.S. obligated to provide every citizen with health insurance–health care–let me ask that again. Is the United States obligated to provide health care to all of its citizens?

MR. ALTMAN: The way I would answer that question is to say that it is certainly something that we should do. And I don’t know anybody–you know, right, left, or center–who doesn’t believe that at some level. The debate is about how we get there, and, unfortunately, that debate about how we get there has been a really bitter and difficult debate in our country. And the tough part of it is, if you scratch beneath the surface and look at the difficult part of it, it is fundamentally about redistributing wealth in our country; that, ultimately, it means, as some of us who have more, have to pay, you know, a little bit more, so that others who have less can have health care. You can slice it and dice it a million ways with this kind of tax or that kind of mandate, but, at the end of the day, that’s what’s involved, and we don’t do that too easily in our country, too happily, or too willingly.

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/02/AR2009110201285.html

Comment:

By Don McCanne, MD

Drew Altman is a very intelligent and very well informed advocate of a health care system that works well for all of us. His only handicap is that, as President and CEO of the Henry J. Kaiser Family Foundation, he must maintain his reputation as a highly credible but impartial voice on health care reform. That requires diligently negotiating his way through the minefield of Washington politics.

Setting ideology and politics aside, Altman makes it clear that wealth redistribution is absolutely essential if everyone is going to have the health care that they need. By far the simplest, most efficient, and most equitable method of doing that would be to enact a single payer system. But this is where ideology and politics enter.

How do you meld the ideology of single payer with the ideology of consumers shopping in a market of private health plans? After all, there’s that redistribution problem. The solution currently being advanced is to perpetuate the market of private health plans while superimposing government policies to achieve redistribution of wealth, without which it would be impossible to finance care for everyone.

The combination of private health plans and government policies requires a complex, difficult balancing act. Some of the variables that must be brought into balance include the package of benefits to be covered by the plans, the premiums to be charged for the plans, annual premium increases not limited by regulation, actuarial values of the plans, eligibility for the insurance exchanges, the value of the vouchers used to purchase the plans, the eligibility for the vouchers as related to income or as to wealth as some suggest, the size of the deductibles, copayments and coinsurance, financial support for out-of-pocket expenses, caps on yearly or life-time spending, payment for non-covered or out-of-network products and services, the variable contribution rates for employers, caps on federal and state budgets that limit the level of government funding, extensive corrections in the Medicare program, eligibility for and financing of taxpayer-financed Medicaid programs, financing the complex administrative services for a program in constant flux because of ever-changing eligibility status and contribution levels, balancing income taxes, payroll taxes, possibly VAT taxes, payroll deductions, taxes on health care products, taxes on insurance plans… (continue with your own additions to this list).

Once you have the full list, just try changing any variable and see what happens to the rest of the variables. What will be the most shocking is to observe what happens to middle-income Americans. They will be clobbered by health care costs!

The primary reason for these complex adjustments is that health care is now so expensive that redistribution is essential if everyone is to have the care they need. The private insurance market by itself is totally incapable engineering redistribution. Drew Altman says that this would be “a little bit messy,” and that, at the end of the day, we won’t do it “too easily, too happily, or too willingly.” But that’s as far as Drew Altman’s job description will allow him to go.

We are not so constrained. Soon we will have “one bill that the country can really focus on and that people in the media can really focus on; that issue of the affordability of the coverage will rise to the surface.”

We can take Drew Altman’s astute observations on “the meat-and-potatoes pocketbook problems that average Americans are having in paying for their health care,” and we can run with it. We know how to fix it, even if he can’t publicly endorse our model of an improved Medicare for all. When we succeed, Drew Altman certainly will be at least a little bit smug. Let’s go!

Changing Numbers Make Meaning Even More Elusive

By David M. Herszenhorn
The New York Times
November 1, 2009
Once Ms. Pelosi realized that she could not get a robust public option, she needed another way to reduce the bill’s cost. The answer was a wider expansion of Medicaid, the state-federal insurance for the poor.
In just one of the counterintuitive concepts in the health care debate, enrolling more people in Medicaid saves money because it is cheaper than subsidizing private insurance, and because states share the cost.
The House bill would increase total Medicaid costs for states by $34 billion. States, of course, object to such added expenses.
http://prescriptions.blogs.nytimes.com/2009/11/01/changing-numbers-make-meaning-even-more-elusive/

The version of the House health care reform bill released last week would further expand Medicaid eligibility to individuals with incomes up to 150 percent of the federal poverty level. This expansion was prompted by the self-imposed requirement to avoid any deficit spending as a result of this legislation. It will cost the government less to enroll these individuals in Medicaid than it would cost to provide them with subsidies to purchase private health plans.
Some implications of this policy:
* Medicaid benefits are more comprehensive than private plans and cost sharing is negligible, unlike private plans. Medicaid patients have more care covered with much less in out-of-pocket costs.
* Taxpayers will be paying less to provide these individuals with Medicaid than they would have paid in subsidies to purchase private plans. Private plans are more expensive even though they provide less coverage.
* As a welfare program, representing a population without an audible political voice, Medicaid is chronically underfunded.
* Inadequate reimbursement rates due to inadequate funds results in a lack of willing providers. Too many physicians are not willing to accept the losses under this program. This lack of providers impairs access to care.
* Many states are struggling with budgets burdened by massive Medicaid spending. Although this expansion would use federal funds initially, some of the financing burden would be shifted to the states even though they do not have the budget flexibility of the federal government.
On paper, Medicaid looks like a great program. It provides a generous benefit package for lower-income individuals who cannot afford to purchase private health plans. In reality, most Medicaid patients do not have the same access to essential specialized services that wealthier privately insured individuals do, and access to even basic services is often compromised.
Expanding the Medicaid program further locks in a tiered health care system, effectively providing less for the least amongst us. In health care, that’s simply not acceptable.

By David M. Herszenhorn
The New York Times
November 1, 2009

Once Ms. Pelosi realized that she could not get a robust public option, she needed another way to reduce the bill’s cost. The answer was a wider expansion of Medicaid, the state-federal insurance for the poor.

In just one of the counterintuitive concepts in the health care debate, enrolling more people in Medicaid saves money because it is cheaper than subsidizing private insurance, and because states share the cost.

The House bill would increase total Medicaid costs for states by $34 billion. States, of course, object to such added expenses.

http://prescriptions.blogs.nytimes.com/2009/11/01/changing-numbers-make-meaning-even-more-elusive/

Comment:

By Don McCanne, MD

The version of the House health care reform bill released last week would further expand Medicaid eligibility to individuals with incomes up to 150 percent of the federal poverty level. This expansion was prompted by the self-imposed requirement to avoid any deficit spending as a result of this legislation. It will cost the government less to enroll these individuals in Medicaid than it would cost to provide them with subsidies to purchase private health plans.

Some implications of this policy:

* Medicaid benefits are more comprehensive than private plans and cost sharing is negligible, unlike private plans. Medicaid patients have more care covered with much less in out-of-pocket costs.

* Taxpayers will be paying less to provide these individuals with Medicaid than they would have paid in subsidies to purchase private plans. Private plans are more expensive even though they provide less coverage.

* As a welfare program, representing a population without an audible political voice, Medicaid is chronically underfunded.

* Inadequate reimbursement rates due to inadequate funds results in a lack of willing providers. Too many physicians are not willing to accept the losses under this program. This lack of providers impairs access to care.

* Many states are struggling with budgets burdened by massive Medicaid spending. Although this expansion would use federal funds initially, some of the financing burden would be shifted to the states even though they do not have the budget flexibility of the federal government.

On paper, Medicaid looks like a great program. It provides a generous benefit package for lower-income individuals who cannot afford to purchase private health plans. In reality, most Medicaid patients do not have the same access to essential specialized services that wealthier privately insured individuals do, and access to even basic services is often compromised.

Expanding the Medicaid program further locks in a tiered health care system, effectively providing less for the least amongst us. In health care, that’s simply not acceptable.

Preliminary Analysis of the Affordable Health Care for America Act

Congressional Budget Office
October 29, 2009
The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have completed a preliminary analysis of H.R. 3962, the Affordable Health Care for America Act, as introduced on October 29, 2009.
The options available in the insurance exchange would include private health insurance plans as well as a public plan that would be administered by the Secretary of Health and Human Services (HHS). The public plan would negotiate payment rates with all providers and suppliers of health care goods and services; providers would not be required to participate in the public plan in order to participate in Medicare. The public plan would have to charge premiums that covered its costs, including the costs of paying back start-up funding that the government would provide.
Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.
That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)
http://www.cbo.gov/ftpdocs/106xx/doc10688/hr3962Rangel.pdf

And…

Affordable Health Care for America Act

H.R. 3962 (replaces H.R. 3200)
Introduced October 29, 2009
SEC. 321. (b) (2) ENSURING A LEVEL PLAYING FIELD
Consistent with this subtitle, the public health insurance option shall comply with requirements that are applicable under this title to an Exchange-participating health benefits plan, including requirements related to benefits, benefit levels, provider networks, notices, consumer protections, and cost-sharing.
H.R. 3962 (1990 pages)
http://docs.house.gov/rules/health/111_ahcaa.pdf

What happened to that public option that the liberals promised us when they decided not to try to enact the golden standard of a single payer national health program? You know, that government program, like Medicare, designed to be less expensive, more efficient and more equitable, and that each of us could choose in place of private health plans. Really, what happened to it?
Well, Congress plowed it under. Their first priority never was about patients. It was always about taking care of the private insurance industry. Instead of enacting policies that would provide everyone with affordable health care, they have crafted reform that provides a robust insurance market, and then patients are crammed into whatever niches that market creates.
A prime example of their approach is that they have insisted that the public option be prohibited from using policies that provide the greater efficiency and effectiveness of government health care financing programs such as Medicare. To protect the private insurers from “unfair” competition from the government, they have included in the legislation policies to “ensure a level playing field.”
What does the CBO predict will be the outcome of these policies? The public option would have “premiums that are somewhat higher than the average premiums for the private plans in the exchanges,” and fewer than 2 percent of our nation will be enrolled in our own Medicare-like plan that was promised as a choice for all of us.
The golden standard? This public option is not even made of brass. It’s merely the slag cast off while the private insurers walk away with the ingots.
(NB: Do not assume that this message is a plea for a “robust” public option. Adding a robust option to our dysfunctional, fragmented system of health care financing would have very little impact in reducing the waste, inequities, and inefficiencies in our system. This message is a plea to dump the private insurers into the slag pit and use our taxpayer ingots to purchase our own improved Medicare-for-all system.)

Congressional Budget Office
October 29, 2009

The Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) have completed a preliminary analysis of H.R. 3962, the Affordable Health Care for America Act, as introduced on October 29, 2009.

The options available in the insurance exchange would include private health insurance plans as well as a public plan that would be administered by the Secretary of Health and Human Services (HHS). The public plan would negotiate payment rates with all providers and suppliers of health care goods and services; providers would not be required to participate in the public plan in order to participate in Medicare. The public plan would have to charge premiums that covered its costs, including the costs of paying back start-up funding that the government would provide.

Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.

That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)

http://www.cbo.gov/ftpdocs/106xx/doc10688/hr3962Rangel.pdf

And…

Affordable Health Care for America Act

H.R. 3962 (replaces H.R. 3200)
Introduced October 29, 2009

SEC. 321. (b) (2) ENSURING A LEVEL PLAYING FIELD

Consistent with this subtitle, the public health insurance option shall comply with requirements that are applicable under this title to an Exchange-participating health benefits plan, including requirements related to benefits, benefit levels, provider networks, notices, consumer protections, and cost-sharing.

H.R. 3962 (1990 pages)
http://docs.house.gov/rules/health/111_ahcaa.pdf

Comment:

By Don McCanne, MD

What happened to that public option that the liberals promised us when they decided not to try to enact the golden standard of a single payer national health program? You know, that government program, like Medicare, designed to be less expensive, more efficient and more equitable, and that each of us could choose in place of private health plans. Really, what happened to it?

Well, Congress plowed it under. Their first priority never was about patients. It was always about taking care of the private insurance industry. Instead of enacting policies that would provide everyone with affordable health care, they have crafted reform that provides a robust insurance market, and then patients are crammed into whatever niches that market creates.

A prime example of their approach is that they have insisted that the public option be prohibited from using policies that provide the greater efficiency and effectiveness of government health care financing programs such as Medicare. To protect the private insurers from “unfair” competition from the government, they have included in the legislation policies to “ensure a level playing field.”

What does the CBO predict will be the outcome of these policies? The public option would have “premiums that are somewhat higher than the average premiums for the private plans in the exchanges,” and fewer than 2 percent of our nation will be enrolled in our own Medicare-like plan that was promised as a choice for all of us.

The golden standard? This public option is not even made of brass. It’s merely the slag cast off while the private insurers walk away with the ingots.

(NB: Do not assume that this message is a plea for a “robust” public option. Adding a robust option to our dysfunctional, fragmented system of health care financing would have very little impact in reducing the waste, inequities, and inefficiencies in our system. This message is a plea to dump the private insurers into the slag pit and use our taxpayer ingots to purchase our own improved Medicare-for-all system.)

Nancy Pelosi starts clock on House health bill

By Patrick O’Connor and Chris Frates
Politico
October 29, 2009
(House Speaker Nancy Pelosi) backed down from a deal granting liberals a vote to establish single-payer government-run health care. She cut the deal with New York Rep. Anthony Weiner to break a last-minute logjam on the Energy and Commerce Committee. But, in the end, party leaders were concerned the final cost would be astronomical and the vote would fail to garner votes from even half the caucus.
http://www.politico.com/news/stories/1009/28884.html

What the… !?