PNHP

"Big Health Care Lobby" by Mike Thompson

False promise of choice

For Many Workers, Insurance Choices May be Limited

By Mary Agnes Carey and Julie Appleby
Kaiser Health News
July 15, 2009
President Obama and leading Democrats have stressed that people who like their employer-sponsored insurance would be able to keep it, under a health care overhaul. But they haven’t emphasized the flip side: That people who don’t like their coverage might have to keep it.
Under the main health bills being debated in Congress, many people with job-based insurance could find it difficult to impossible to switch to health plans on a new insurance exchange, even if the plans there were cheaper or offered better coverage. The restrictions extend to any government-run plan, which would be offered on the exchange.
The provisions could change, and there are a few exceptions: Workers would be allowed to buy insurance through the exchange if their job-based coverage gobbled up too much of their incomes or was too skimpy. Also, under the House proposal, people could get insurance through the exchange if they paid their entire premiums ā€” a cost that would be prohibitive for many workers.
Democratic lawmakers and administration officials say the restrictions are critical to maintaining a strong employer-based insurance system, which covers 158 million Americans.
But critics argue that the rules run counter to suggestions from health care reform advocates that an overhaul could provide people with a broader choice of insurance options. The rules, they say, could be especially unfair to some lower-income workers who are enrolled in costly job-based insurance. Also, they argue, the restrictions would hurt the proposed public plan by limiting enrollment.
Jonathan Oberlander, associate professor at the University of North Carolina at Chapel Hill, said the restrictions create a “big gap between the rhetoric and the reality” of health reform.
“The rhetoric is that Americans will gain new alternatives,” he said. “But the reality is that they are putting up firewalls that are going to restrict the access of people with employer-sponsored insurance to the exchange.”
One result, he said, is that any public plan would be substantially smaller than what many backers are envisioning. That would reduce the public plan’s power to compete with private insurers and hold down costs, he said. The Congressional Budget Office estimates that nine million to 10 million people would enroll in the public plan by 2019.
http://www.kaiserhealthnews.org/Stories/2009/July/15/Firewall.aspx

Imagine presidential candidate Barack Obama telling his audiences during the campaign, “We promise you choice. For most of you already receiving your health insurance through your place on employment, we will provide you with the choice of keeping that insurance plan or paying heavy financial penalties for dropping off the plan, no matter how unhappy you are with it. For a select few of you, we will offer the choice of private plans within an insurance exchange, even if you can’t afford them, and maybe even throw in a public plan that a couple of you may be able to purchase, if you meet our rigid enrollment criteria.”
Choice? Over a year ago in a Quote of the Day I discussed the decision to market health reform as a matter of choice – of keeping the plan you have if that’s your choice. The title of that qotd was “Message trumps policy?”
This isn’t an “I told you so.” Er… uh… I guess it is.
If reform is to be effective, it must be based on sound policy science. Instead, it is being based on political messaging. It may sound good, but nothing fits together. What a disaster.

False promise of choice

For Many Workers, Insurance Choices May be Limited

By Mary Agnes Carey and Julie Appleby
Kaiser Health News
July 15, 2009

President Obama and leading Democrats have stressed that people who like their employer-sponsored insurance would be able to keep it, under a health care overhaul. But they haven’t emphasized the flip side: That people who don’t like their coverage might have to keep it.

Under the main health bills being debated in Congress, many people with job-based insurance could find it difficult to impossible to switch to health plans on a new insurance exchange, even if the plans there were cheaper or offered better coverage. The restrictions extend to any government-run plan, which would be offered on the exchange.

The provisions could change, and there are a few exceptions: Workers would be allowed to buy insurance through the exchange if their job-based coverage gobbled up too much of their incomes or was too skimpy. Also, under the House proposal, people could get insurance through the exchange if they paid their entire premiums Ć¢ā‚¬ā€ a cost that would be prohibitive for many workers.

Democratic lawmakers and administration officials say the restrictions are critical to maintaining a strong employer-based insurance system, which covers 158 million Americans.

But critics argue that the rules run counter to suggestions from health care reform advocates that an overhaul could provide people with a broader choice of insurance options. The rules, they say, could be especially unfair to some lower-income workers who are enrolled in costly job-based insurance. Also, they argue, the restrictions would hurt the proposed public plan by limiting enrollment.

Jonathan Oberlander, associate professor at the University of North Carolina at Chapel Hill, said the restrictions create a “big gap between the rhetoric and the reality” of health reform.

“The rhetoric is that Americans will gain new alternatives,” he said. “But the reality is that they are putting up firewalls that are going to restrict the access of people with employer-sponsored insurance to the exchange.”

One result, he said, is that any public plan would be substantially smaller than what many backers are envisioning. That would reduce the public plan’s power to compete with private insurers and hold down costs, he said. The Congressional Budget Office estimates that nine million to 10 million people would enroll in the public plan by 2019.

http://www.kaiserhealthnews.org/Stories/2009/July/15/Firewall.aspx

Comment:

By Don McCanne, MD

Imagine presidential candidate Barack Obama telling his audiences during the campaign, “We promise you choice. For most of you already receiving your health insurance through your place on employment, we will provide you with the choice of keeping that insurance plan or paying heavy financial penalties for dropping off the plan, no matter how unhappy you are with it. For a select few of you, we will offer the choice of private plans within an insurance exchange, even if you can’t afford them, and maybe even throw in a public plan that a couple of you may be able to purchase, if you meet our rigid enrollment criteria.”

Choice? Over a year ago in a Quote of the Day I discussed the decision to market health reform as a matter of choice – of keeping the plan you have if that’s your choice. The title of that qotd was “Message trumps policy?”

This isn’t an “I told you so.” Er… uh… I guess it is.

If reform is to be effective, it must be based on sound policy science. Instead, it is being based on political messaging. It may sound good, but nothing fits together. What a disaster.

Health Insurance Whistle-Blower Knows Where the Bodies Are Buried

By Amy Goodman
TruthDig.com
Posted on Jul 14, 2009

Wendell Potter is the health insurance industry’s worst nightmare. He’s a whistle-blower. Potter, the former chief spokesperson for insurance giant CIGNA, recently testified before Congress, “I saw how they confuse their customers and dump the sick–all so they can satisfy their Wall Street investors.”

Potter was deeply involved in CIGNA and industrywide strategies for maintaining their profitable grip on U.S. health care. He told me: “The thing they fear most is a single-payer plan. They fear even the public insurance option being proposed; they’ll pull out all the stops they can to defeat that to try to scare people into thinking that embracing a public health insurance option would lead down the slippery slope toward socialism … putting a government bureaucrat between you and your doctor. They’ve used those talking points for years, and they’ve always worked.”

In 2007, CIGNA denied a California teenager, Nataline Sarkisyan, coverage for a liver transplant. Her family went to the media. The California Nurses Association joined in. Under mounting pressure, CIGNA finally granted coverage for the procedure. But it was too late. Two hours later, Nataline died.

While visiting family in Tennessee, Potter stopped at a “medical expedition” in Wise, Va. People drove hours for free care from temporary clinics set up in animal stalls at the local fairground. Potter told me that weeks later, flying on a CIGNA corporate jet with the CEO: “I realized that someone’s premiums were helping me to travel that way … paying for my lunch on gold-trimmed china. I thought about those men and women I had seen in Wise County … not having any idea [how] insurance executives lived.” He decided he couldn’t be an industry PR hack anymore.

Insurance executives and their Wall Street investors are addicted to massive profits and double-digit annual rate increases. To squeeze more profit, Potter says, if a person makes a major claim for coverage, the insurer will often scrutinize the person’s original application, looking for any error that would allow it to cancel the policy. Likewise, if a small company’s employees make too many claims, the insurer, Potter says, “very likely will jack up the rates so much that your employer has no alternative but to leave you and your co-workers without insurance.”

This week, as the House and Senate introduce their health care bills, Potter warns, “One thing to remember is that the health insurance industry has been anticipating this debate on health care for many years … they’ve been positioning themselves to get very close to influential members of Congress in both parties.” Montana Sen. Max Baucus chairs the Senate Finance Committee, key for health care reform. Potter went on, “[T]he insurance industry, the pharmaceutical industry and others in health care have donated … millions of dollars to his campaigns over the past few years. But aside from money, it’s relationships that count … the insurance industry has hired scores and scores of lobbyists, many of whom have worked for members of Congress, and some who are former members of Congress.”

The insurance industry and other health care interests are lobbying hard against a government-sponsored, nonprofit, public health insurance option, and are spending, according to The Washington Post, up to $1.4 million per day to sway Congress and public opinion.

Don’t be fooled. Profit-driven insurance claim denials actually kill people, and Wendell Potter knows where the bodies are buried. His whistle-blowing may be just what’s needed to dump what’s sick in our health care system.

Denis Moynihan contributed research to this column.

Amy Goodman is the host of “Democracy Now!,” a daily international TV/radio news hour airing on more than 750 stations in North America. She is the co-author of “Standing Up to the Madness: Ordinary Heroes in Extraordinary Times,” recently released in paperback.

Going for the Gold

The Redistributive Agenda behind Market-Based Health Care Reform

By Robert G. Evans.
Journal of Health Politics
Vol. 22. No. 2, April 1997

Click here to download the pdf.

Abstract

Political conflict over the respective roles of the state and the market in health care has a long history. Current interest in market approaches represents the resurgence of ideas and arguments that have been promoted with varying intensity throughout this century. (In practice, advocates have never wanted a truly competitive market, but rather one managed by and for particular private interests.) Yet international experience over the last forty years has demonstrated that greater reliance on the market is associated with inferior system performance–inequity, inefficiency, high cost, and public dissatisfaction. The United States is the leading example. So why is this issue back again? Because market mechanisms yield distributional advantages for particular influential groups. (1) A more costly health care system yields higher prices and incomes for suppliers–physicians, drug companies, and private insurers. (2) Private payment distributes overall system costs according to use (or expected use) of services, costing wealthier and healthier people less than finance from (income-related) taxation. (3) Wealthy and unhealthy people can purchase (real or perceived) better access or quality for themselves, without having to support a similar standard for others. Thus there is, and always has been, a natural alliance of economic interest between service providers and upper-income citizens to support shifting health financing from public to private sources. Analytic arguments for the potential superiority of hypothetical competitive markets are simply one of the rhetorical forms through which this permanent conflict of economic interest is expressed in political debate.

“Going for the Gold: The Redistributive Agenda behind Market-based Health Care Reform,” Journal of Health Politics, Policy and Law, Vol. 22. No. 2, April 1997.

Click here to download the pdf.

For-profit industry is killing U.S. system

Letter to the Editor
Honolulu Advertiser
July 15, 2009

Health care

President Obama has said he wants health care reform that does three things: reduces costs, ensures free choice of providers for patients and ensures universal access. He also said we need to “build on what works” in health care and, “If you’re happy with the insurance you have, you can keep it.”

However, the only ones who are happy with their health insurance these days are the ones who have not had to use theirs recently. If Obama really wants to know what is not working, he should spend an hour reading some of the thousands of “Health Care Stories for America” submitted to his own Web site. They add up to a devastating indictment of the health insurance industry. The for-profit health insurance industry is not “what works,” it is the cancer that is killing U.S. health care and driving its cost into the stratosphere.
The only reform that will actually achieve Obama’s goals of reduced cost, free choice and universal access is more than just a “public option,” it is single-payer public financing of private care delivery and elimination of the U.S. health insurance industry.

Stephen Kemble, MD
Honolulu

Consider single-payer

Letter to the editor
Milwaukee Journal-Sentinel
July 14, 2009

People who believe a public option will make health insurance companies and health maintenance organizations more accountable should look at Medicare’s Part C Medicare Advantage privatization option. Forbes found insurance companies and HMOs cherry-picking healthy seniors for their plans and lemon-dropping sickly seniors into Medicare Parts A and B.

One goal of health insurance reform should be to broaden the pool to spread and reduce risk. By insuring everyone, single-payer health insurance would be the largest possible insurance pool. No more slicing and dicing of Americans into market shares: middle class (health insurance companies and HMOs), uninsured (potential public option enrollees), old (Medicare), poor (Medicaid), etc.

The naysayers say there is little support for single-payer health insurance, but no Republican probably will campaign to abolish Medicare Parts A and B (single-payer health insurance for seniors) in the 2010 midterm election. The health care sector contributed $167 million to candidates in last year’s election. Congress and President Barack Obama should overcome their addictions to campaign contributions and pass and enact S. 703 and H.R. 676 to ensure every American good, affordable health care and the freedom to choose our doctors.

Daniel Lee
Milwaukee

Action Alert: Support the single-payer amendment

From PNHP

July 15, 2009

Dear Colleagues,

PNHP has learned that as early as this Friday or Monday (July 17 or 20), Rep. Anthony Weiner (D-N.Y.) will introduce, in the House Energy and Commerce Committee, an amendment to the so-called Tri-Committee health care bill. The amendment would replace the private health insurance industry with a single-payer national health insurance program.

In effect, the Weiner amendment would substitute Rep. John Conyers’ (D-Mich.) single-payer bill, H.R. 676, for the proposed Tri-Committee legislation.

The vote on the amendment will take place the same day it is offered – again, most likely this Friday or Monday.

If your representative is a member of the Energy and Commerce Committee, please call your congressperson today and ask that he or she support Rep. Weiner’s single-payer amendment. A list of Committee members can be found here: http://tinyurl.com/dhxq65

The Congressional Switchboard can be reached toll-free at 800-473-6711.

If your representative is not a member of the Committee, please call Committee Chair Henry Waxman at 202-225-3976 and ask him to support Weiner’s single-payer amendment.

This important legislative initiative was inspired in part by Rep. Weiner’s meeting with Dr. Quentin Young of PNHP at the time of Dr. Young’s testimony in support of single payer before the House Ways and Means Committee in June. It is also a reflection of the grassroots demand that single payer be on the table in Congress.
Please call today.

Cordially,

Ida Hellander, M.D.
Executive Director

Mark Almberg
Communications Director

House bill includes transfer from wealthy

House of Representatives
July 14, 2009
H.R.____
To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.
SHORT TITLE.–This Act may be cited as the “Americaā€™s Affordable Health Choices Act of 2009”.
TITLE IV–AMENDMENTS TO INTERNAL REVENUE CODE OF 1986
Subtitle D–Other Revenue Provisions
PART 1–GENERAL PROVISIONS
SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.
(a) IN GENERAL.–Part VIII of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as added by this title, is amended by adding at the end the following new subpart:
“Subpart B–Surcharge on High Income Individuals
“SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.
“(a) GENERAL RULE.–In the case of a taxpayer other than a corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to–
“(1) 1 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $350,000 but does not exceed $500,000,
“(2) 1.5 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $500,000 but does not exceed $1,000,000, and
“(3) 5.4 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $1,000,000.
http://energycommerce.house.gov/Press_111/20090714/aahca.pdf

Health insurance and health care are no longer affordable for average-income individuals. Any reform proposal that would make health care affordable for everyone must include a transfer from the wealthy to average- and low-income individuals.
The authors of the House tri-committee reform bill explicitly acknowledge this fundamental principle by including a policy for a surtax on high income individuals to help finance the subsidies that will be required to assist individuals of more modest incomes with the mandated purchase of health plans. Has this taken care of the affordability issue?
Let’s go through the numbers again. Average health care costs for a family of four with an employer-sponsored PPO are now $16,771. That is the average cost for a relatively healthy sector of society. Many with greater needs pay more than that. That is the average health care spending under the best of conditions in our current multi-payer system, and it doesn’t even include insurer administrative costs.
Under this legislation, no subsidies are provided for individuals or families over 400 percent of the federal poverty level. For a family of four, that threshold is an income of $88,200. Thus average costs would be 19 percent of family income, and more for those with greater needs. By no stretch could that be considered affordable.
It’s great that the concept of income transfer has been accepted by the policymakers in Congress, but they need to go back to the drawing board to craft a plan that would actually work. (Hint: Provide all necessary services for everyone, and pay for those services through a single universal risk pool that is funded equitably using progressive tax policies.)

House bill includes transfer from wealthy

House of Representatives
July 14, 2009
H.R.____

To provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.

SHORT TITLE.–This Act may be cited as the “AmericaĆ¢ā‚¬ā„¢s Affordable Health Choices Act of 2009”.

TITLE IV–AMENDMENTS TO INTERNAL REVENUE CODE OF 1986

Subtitle D–Other Revenue Provisions

PART 1–GENERAL PROVISIONS

SEC. 441. SURCHARGE ON HIGH INCOME INDIVIDUALS.

(a) IN GENERAL.–Part VIII of subchapter A of chapter 1 of the Internal Revenue Code of 1986, as added by this title, is amended by adding at the end the following new subpart:

“Subpart B–Surcharge on High Income Individuals

“SEC. 59C. SURCHARGE ON HIGH INCOME INDIVIDUALS.

“(a) GENERAL RULE.–In the case of a taxpayer other than a corporation, there is hereby imposed (in addition to any other tax imposed by this subtitle) a tax equal to–

“(1) 1 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $350,000 but does not exceed $500,000,

“(2) 1.5 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $500,000 but does not exceed $1,000,000, and

“(3) 5.4 percent of so much of the modified adjusted gross income of the taxpayer as exceeds $1,000,000.

http://energycommerce.house.gov/Press_111/20090714/aahca.pdf

Comment:

By Don McCanne, MD

Health insurance and health care are no longer affordable for average-income individuals. Any reform proposal that would make health care affordable for everyone must include a transfer from the wealthy to average- and low-income individuals.

The authors of the House tri-committee reform bill explicitly acknowledge this fundamental principle by including a policy for a surtax on high income individuals to help finance the subsidies that will be required to assist individuals of more modest incomes with the mandated purchase of health plans. Has this taken care of the affordability issue?

Let’s go through the numbers again. Average health care costs for a family of four with an employer-sponsored PPO are now $16,771. That is the average cost for a relatively healthy sector of society. Many with greater needs pay more than that. That is the average health care spending under the best of conditions in our current multi-payer system, and it doesn’t even include insurer administrative costs.

Under this legislation, no subsidies are provided for individuals or families over 400 percent of the federal poverty level. For a family of four, that threshold is an income of $88,200. Thus average costs would be 19 percent of family income, and more for those with greater needs. By no stretch could that be considered affordable.

It’s great that the concept of income transfer has been accepted by the policymakers in Congress, but they need to go back to the drawing board to craft a plan that would actually work. (Hint: Provide all necessary services for everyone, and pay for those services through a single universal risk pool that is funded equitably using progressive tax policies.)