PNHP

Single-payer model is the only answer to outrageous price hikes

Single-payer model is the only answer to outrageous price hikes

By Robert Rosofsky
The Boston Globe, Letters, Aug. 31, 2016

As both an EpiPen carrier and a public health informatics consultant, I closely follow facts and opinions regarding medication pricing. The Boston Globe’s editorial about Mylan’s pricing of its EpiPens (“EpiPen maker sticks it to patients — again”) provides only a mild call to action — that of modifying provisions in the Affordable Care Act and calling for consumers and elected officials to rail against Mylan.

But Mylan does exactly what it is supposed to do — namely, to take advantage of any market opportunities to enhance shareholder value. Ranting, raving, guilt-tripping, and holding hearings will be ignored, and will likely have minimal effect on Mylan or any other medical product manufacturer engaged in outrageous price increases.

We need another solution — we, the people, need to change the market. We can do this through implementation of a national single-payer financing system for health care. Only through this market change will manufacturers rightly be forced to negotiate with the government — with us — to change their pricing. Otherwise, they will have little other market in which to sell.

As a short-term solution, the laws need to be changed to promote and allow a consortium of Medicare, state Medicaid programs, the military, and the VA to engage in such negotiation.

These are not radical ideas, as they have been implemented throughout the rest of the world and work quite successfully. The United States needs to catch up.

Robert Rosofsky resides in Milton, Mass.

https://www.bostonglobe.com/opinion/letters/2016/08/30/single-payer-model-only-answer-outrageous-price-hikes/qxeP8k6svgrvZrHgLoNPgI/story.html

Aetna proves it: It’s time for the US to adopt single-payer health care

By Pamela Brick
Chicago Tribune, Letters, Aug. 26, 2016

Faced with escalating losses, Aetna and several other major insurance companies have announced that they will stop selling individual Obamacare plans next year in 11 states. This predicament highlights the folly of having a health care payment system based on for-profit insurance companies. The money collected from insurance premiums should not contribute toward the profit of a company, but instead should be applied to the health care needs of those covered. The solution is that the U.S. should adopt a single-payer health care system. Every other industrialized country in the world already has.

Pamela Brick resides in Chicago.

http://www.chicagotribune.com/news/opinion/letters/ct-aetna-prove-it-it-s-time-for-the-us-to-adopt-single-payer-health-care-20160826-story.html

Assessing the ACA in the Political Fog

By Steffie Woolhandler, M.D., M.P.H., Adam Gaffney, M.D., and David Himmelstein, M.D.
MedPage Today, Aug. 26, 2016

In the current overheated political climate, the Affordable Care Act (ACA) has garnered harsh criticism from some quarters and extravagant praise from others. Both miss the mark.

Critics from the political right seem to ignore the fact that the law has substantially reduced the number of uninsured, and propose alternatives that would sharply increase uninsurance, underinsurance, and healthcare inequality.

On the other hand, President Obama’s recent defense of the ACA in the Journal of the American Medical Association papered over its flaws — notably the fact that 29 million remain uninsured, a figure that the Congressional Budget Office predicts will not change much in the years ahead, even if all states were to accept the ACA’s Medicaid expansion.

While persistent uninsurance is the ACA’s most glaring deficiency, it has other shortcomings: failure to slow the hollowing out of already inadequate coverage; further stimulation of the already overgrown healthcare bureaucracy; lack of effective cost controls; and Medicare payment reforms that tilt the playing field towards giant corporate organizations and have triggered a surge of mergers and acquisitions.

There can be no doubt that the ACA improved both coverage and access to care. The number of uninsured has fallen by 41%, with the largest gains among the poor, near-poor, and minorities. The percentage of Americans unable to afford medications or needed care has also fallen, although more modestly.

Yet post-ACA, more than a quarter of poor non-elderly adults remains uninsured. Moreover, high out-of-pocket costs continue to deter many of those with coverage from seeking care when they need it.

Unfortunately, many of those who received insurance under the ACA simply cannot afford to use it. …

full: http://www.medpagetoday.com/Blogs/SlowMedicine/59887

The Sticking Points in Obamacare

By Elizabeth R. Rosenthal, M.D.
The New York Times, Letters, Aug. 25, 2016

Re “U.S. Prepares Enrollment Push as Insurers Balk on Health Law” (front page, Aug. 18):

How many times must it be demonstrated that health care cannot be treated like any other market commodity before our legislators get the point? This article once again confirms that affordable health care can’t be delivered using a private, for-profit system.

One cannot make a profit insuring sick people. Therefore, health insurance companies are most profitable when they avoid sick people while continuing to collect premiums from healthy customers. When this does not work, raising prices is necessary to keep profits up.

But health insurance premiums are already unaffordable for most of us. That is why the young and healthy are not buying. The only way to make health care affordable is to have everyone paying into the pot in proportion to their income while eliminating the unnecessary expensive middleman: health insurance companies.

Must we wait until only the billionaires will be able to afford health care before we join all the other industrialized countries and switch to such a government-funded single-payer system (Medicare for All)?

Dr. Elizabeth R. Rosenthal is a dermatologist. She resides in Larchmont, N.Y.

http://www.nytimes.com/2016/08/26/opinion/the-sticking-points-in-obamacare.html?ref=opinion

Americans deserve better than choosing among crummy insurance plans

By Ed Weisbart, M.D.
St. Louis Post-Dispatch, Letters, Aug. 26, 2016

When I read that Aetna was pulling out of the Missouri health insurance marketplace, I immediately reached for my wallet (“Aetna is pulling back,” Aug. 17) to see which insurance company I have this year.

The past four years, I’ve been purchasing my insurance through the online marketplaces that were established by the Affordable Care Act. Prior to the ACA, I received letters from two health insurance companies denying me the ability to purchase insurance because my hypertension rendered me “uninsurable.” The ACA made such profit-driven barriers illegal.

Every one of the past four years I’ve made a different choice: first Anthem, then UnitedHealth, Coventry and now Cigna. Or was it Aetna? That’s why I had to reach for my wallet — I frankly could not remember which one I chose this year. I appreciate having these choices because each of the choices is crummy, so I’m glad I can select the least-crummy version.

But I can imagine a world where I would no longer have to make those kinds of choices. I can imagine a world more like traditional Medicare, where I and all my fellow Americans will have the freedom to get care from virtually any physician or hospital.

I can imagine this because I could get this today were I living in any other modern nation. Ours is the only country that allows these freedoms to be stolen from us by for-profit, publicly traded commercial conglomerates.

The ACA is a hard-fought dramatic step forward that is helping tens of millions of Americans get insurance. But much work remains: tens of millions more remain uncovered, and a great many of us have to settle for inadequate insurance.

Aetna’s decision reveals the fundamental foolishness of abdicating to profit-driven conglomerates our constitutional responsibility to “promote the general welfare,” especially when those conglomerates repeatedly demonstrate they will never favor the public’s access to health care over any opportunity to make another buck off us.

Dr. Ed Weisbart is chair of the Missouri chapter of Physicians for a National Health Program. He resides in Olivette.

http://www.stltoday.com/news/opinion/mailbag/americans-deserve-better-than-choosing-among-crummy-insurance-plans/article_ea5d9127-29e2-5bc7-8301-1f7d3bf2535d.html

Government pays for 71 percent of health care in California

Public Funds Account for Over 70 Percent of Health Care Spending in California

By Andrea Sorensen, Narissa J. Nonzee, and Gerald F. Kominski
UCLA Center for Health Policy Research, Health Policy Brief, August 2016

Summary

In California, personal health care expenditures are estimated to total more than $367 billion in 2016. Approximately 71 percent of these expenditures will be paid for with public funds (i.e., taxpayer dollars). This estimated contribution of public funds to health care expenditures is much higher than estimates that include only major health insurance programs such as Medicare and Medicaid. Several additional public funding sources also contribute to health care expenditures in the state, including government spending for public employee health benefits, tax subsidies for employer-sponsored insurance and the Affordable Care Act (ACA) insurance exchange, and county health care expenditures. As health care reform continues to take effect, it will be important to monitor the public versus private contributions to state health care expenditures to ensure that funds are being distributed both efficiently and equitably.

Health Care Expenditures in California

In California, health care expenditures in 2016 are estimated to total more than $367 billion; our estimates suggest that 71 percent of these expenditures will be paid for with public funds. Medi-Cal/Healthy Families will comprise the largest proportion of total spending (27 percent), followed by Medicare (20 percent). Tax subsidies for ESI (12 percent); government spending for public employee insurance (4 percent); county health expenditures (3 percent); other government programs—Veterans Affairs (VA) health care, Indian Health Services, and Maternal and Child Health (3 percent altogether); and ACA marketplace exchange subsidies (2 percent) will account for the remainder of total expenditures. Private expenditures for covered benefits will comprise approximately 29 percent of total health care spending in California in 2016. These expenditures include employer share of premiums (16 percent), employee share of premiums (6 percent), out-of-pocket expenditures for covered benefits (4 percent), and premium contributions for individually purchased insurance (3 percent).

Conclusion and Recommendations

Public funds in California contribute to approximately 71 percent of total state health care expenditures. As an increasing number of individuals gain health insurance coverage under the ACA, as health care expenditure growth rates continue to increase, and as policy debates continue to mount around introducing a public insurance option, it is important that public funding for health care expenditures be monitored. Comparable to national-level analyses, these findings run contrary to the assumption that U.S. health care expenditures are funded primarily by private payers. If public funds continue to comprise the majority of total health care expenditures, it will be increasingly important for policymakers to consider whether these public funds are being distributed efficiently and effectively, and whether alternatives such as a state single-payer system would be a more effective use of public and private health spending.

http://healthpolicy.ucla.edu/publications/Documents/PDF/2016/PublicSharePB_FINAL_8-31-16.pdf

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Public money accounts for more than two-thirds of health care spending in California

By Gwendolyn Driscoll
UCLA Center for Health Policy Research Newsroom, August 31, 2016

Contrary to the notion that the country’s health care is primarily a privately funded system, 71 percent of health care expenditures in California are paid for with public funds, according to a new analysis by the UCLA Center for Health Policy Research.

In California, public funds will pay for 71 percent ($260.9 billion) of a projected $367.5 billion spent on health care in 2016, according to the study.

“The public sector is the primary player in health care spending,” said Gerald Kominski, director of the UCLA Center for Health Policy Research who led the study. “But monies are disbursed in a fragmented way through numerous different entities, each of which has their own system and way of doing things. The question for policy makers is, ‘does this fragmented approach make sense?’”

“For a majority of Californians, a public-run system is already the reality,” said Andrea Sorensen, a graduate student at the UCLA Fielding School of Public Health, who co-authored the study. “A single-payer system could unite all these various programs and expand them to the entire population, resulting in a more streamlined and cost-effective approach to health care spending.”

http://healthpolicy.ucla.edu/newsroom/press-releases/pages/details.aspx?NewsID=252

David Himmelstein and Steffie Woolhandler on the national taxpayer share of health costs:
http://ajph.aphapublications.org/doi/abs/10.2105/AJPH.2015.302997

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Comment:

By Don McCanne, M.D.

Over two-thirds of health care in California – 71 percent –  is paid for by the government, using our taxes. That is even greater than the national taxpayer share of health care – 64 percent (increasing to 67 percent in 2024) – as demonstrated by Himmelstein and Woolhandler.

As Himmelstein and Woolhandler have stated previously, U.S. taxpayers are already paying for a national health program, but not getting it. And that is even more true for Californians.

California has previously made efforts to adopt a single payer program, but they have failed – in the election booth, in the state legislature, and on the governor’s desk. As we continue to shift more of health care costs to the government, we have brought along our terribly wasteful, fragmented health care financing system. The California taxpayers are getting a bad deal, and a very expensive one at that ($261 billion for 2016 in public spending alone).

Without enabling federal legislation, states are limited in how close they can come to a much more efficient single payer system, but that does not mean that we should not proceed with whatever is possible now.

California, and every other state for that matter, should do two things simultaneously: 1) Advocate vigorously for a national single payer program – an improved Medicare for all, and 2) Move forward on a state level with improving the health care financing system so that eventual transition to a national program will be that much simpler, not to mention providing some limited interim relief.

HHS department: Fear not, Obamacare will remain competitive

An estimated 80 percent of Texas healthcare.gov consumers will be able to purchase a plan for less than $75 per month, HHS says, even if all final rates from insurers were to increase by double digits

By Sabriya Rice
The Dallas Morning News, Aug. 24, 2016

Despite recent decisions by several health insurers to stop offering plans in Texas on the Obamacare marketplace in 2017, federal officials say consumers will continue to have low-cost options.

An estimated 80 percent of those who purchase health coverage on HealthCare.gov during open enrollment should be able to purchase a plan for less than $75 per month. That’s even in a hypothetical scenario where final rates from insurers increase 50 percent, the U.S. Department of Health and Human Services said Wednesday.

Nearly 1.1 million Texans are covered by plans purchased on the marketplace. In a report focused on the affordability of coverage nationwide, HHS said tax credits designed to protect consumers from rate increases will offset the costs for 7 of 10 purchasers.

While the costs may be low, the report did not specifically address another factor affecting Texas consumers: dwindling options.

This month alone, Aetna and Scott & White Health announced that they would no longer offer plans in Texas on the marketplace next year, and Oscar said it would pull out of Dallas and Fort Worth.

Around 60 counties of the 254 in the state will have just one option in 2017 unless another health insurer enters the market in those areas.

“It’s always the folks that are leaving that get the headline, not the folks that are entering,” argued Mandy Cohen, chief of staff for the Centers for Medicare & Medicaid Services.

She pointed to Cigna, which in June announced plans to offer insurance on the Obamacare marketplace in cities in Illinois, North Carolina and Virginia.

Entries and exits are expected in this type of marketplace, and the recent departures do not undercut the ability of the exchange to remain competitive and keep prices low, HHS said. However, not everyone agrees with the positive assessment or the approach.

The idea that health care coverage has been adequately addressed by the Affordable Care Act “is really a fallacy,” says Dr. Leonard Zwelling. He’s a retired oncologist in Houston and member of Physicians for a National Health Program, a group that has long advocated for health care to be a basic right.

“As long as market forces stay in place, insurers are going to go where the money is. That’s just the way it is,” Zwelling said. Simply having a low-price policy does not give patients access to all doctors, hospitals or specialty care, he added.

Still, the HHS notes that before the law passed, people with pre-existing conditions had no option and others faced lifetime limits, coverage caps and high costs.

In rural areas of Texas, where insurance choices may be few, rates of uninsured residents continued to drop, said Ben Wakana, HHS deputy assistant secretary for public affairs. In rural areas nationwide, uninsured rates fell by a third in 2015, he said.

“Limited choice has not hampered one of the fundamental goals of the Affordable Care Act, which was to drive down the uninsured rate and give people access to coverage they didn’t have before,” he said.

Insurers are needing to adjust rates as many plans were priced as much as 20 percent lower than what the government originally estimated would be needed to be sustainable. Also, a program created to supplement payments to insurers for enrolling patients who need high-cost care is ending after next year.

Blue Cross Blue Shield of Texas has the most expansive footprint in Texas and is one of the few large providers that, so far, has not announced plans to pull out. It is in the process of negotiating the rate for individual plans it sells on the exchange market.

Many issuers are making one-time adjustments to bring premiums in line with costs and to reflect the uncertainties of the new market, HHS said. All marketplace premiums will be finalized and public in October.

“This is a new market, with businesses participating and making business decisions,” said Cohen. For insurers, that means a learning curve about how to be successful in this market.

However, a potential downside to the business model is the disruption to continuity of care, as provider networks can vary dramatically from plan to plan.

Patients who have to switch plans may find that the doctors they know and trust are not part of their new coverage. For people with chronic illnesses, consistency in treatment is critical to ensuring that nothing falls through the cracks.

It’s a concern for many hospital, physician and other health care industry groups. And it’s not new. The Texas Academy of Family Physicians noted that disruptions in providers on insurance policies were a problem long before the ACA went into effect.

“We’re hopeful the changes in the marketplace won’t cause too much disruption,” said Jonathan Nelson, TAFP’s director of communications. “The relationships patients and their family physicians develop over time are extremely important to keeping those patients healthy.”

And those relationships are what might be lost in the focus on selling coverage, Zwelling said. “Coverage is not the issue; the real issue is access to care,” he said. “And this puts that care right back out of reach.”

http://www.dallasnews.com/business/health-care/20160824-hhs-department-fear-not-obamacare-will-remain-competitive.ece

Why Mylan’s Alleged Solution to Its EpiPen Price-Gouging Scandal Is a Scam

The only solution for expanding access to the life-saving EpiPen is to reduce the price

By Sarah Lazare
AlterNet, Aug. 25, 2016

The pharmaceutical giant Mylan has a public uproar on its hands over its 500 percent price increase for a life-saving device known as EpiPen, which delivers emergency shots of the hormone epinephrine to treat potentially deadly anaphylaxis.

In response to the Martin Shkreli-style PR disaster, the company announced Thursday it has devised a supposed solution to the prohibitively high costs of the essential medicine. According to a statement from the corporation, the company plans to “further enhance access to EpiPen” by establishing a discount card and patient assistant system. Here’s how it’s described:

The company is reducing the patient cost of EpiPen® Auto-Injector through the use of a savings card which will cover up to $300 for their EpiPen 2-Pak®. For patients who were previously paying the full amount of the company’s list price for EpiPen®, this effectively reduces their out-of-pocket cost exposure by 50%. Mylan also is doubling the eligibility for its patient assistance program, which will eliminate out-of-pocket costs for uninsured and under-insured patients and families as well.

However, there is a key problem. The reform will not change the base-level cost of EpiPen for consumers. Since Mylan acquired EpiPen from Merck KGaA in 2007, it has hiked the price from $93.88 to $608.61. Under the company’s new plan, the dramatic price increase will not be reversed.

The high price is exacerbated by the fact that EpiPens generally have to be replaced annually, due to expiration.

Robert Weissman, the president of the corporate watchdog organization Public Citizen, was not impressed by the company’s supposed solution. “If the company wants to calm public outrage over its contemptible and unconscionable price spikes for EpiPens, there’s only one course of action: actually lower the price,” he said in a statement released Thursday.

“Coupons, discount cards and patient assistance programs are a false solution for consumers hit with gigantic out-of-pocket costs,” Weissman continued. “First, many consumers will not use the coupons or the programs. Second, many consumers with high deductibles or no insurance will still need to pay far too much for EpiPens—$300 for a set of two—a problem made worse by the facts that many families purchase multiple sets of EpiPens and that EpiPens must be replaced every year.”

Ida Hellander, director of health policy and programs at Physicians for a National Health Program, told AlterNet that she agrees.

“This is not a solution at all,” said Hellander. “Pharmaceutical companies do this for a lot of products. They say that if anyone needs help, we will provide assistance. But they make the guidelines about who can be helped and under what circumstances. And there are so many hoops to jump through that it is a totally inadequate, false solution.”

“The real solution,” said Hellander, “is that they need to drop the price dramatically, but of course they are not going to do that because they are having record profits, and that is their goal. Voluntarily they are not going to do anything. This is another reason we need a single-payer health system where we can negotiate prices with drug companies.”

In Canada, where pharmaceutical prices are subject to regulation by the Patent Medicine Prices Review Board, EpiPen sells for just over $100 per device, distributed by Pfizer Canada via a license from Mylan. According to Weissman, even $100 per pen is “an excessively high price, but at least within the bounds of reasonability.”

EpiPens are commonly used by people with life-threatening allergies, with nearly 4 million prescriptions written last year alone. The spike in prices is forcing people living with allergies, as well as EMTs and other first responders, to resort to more affordable manual syringes—a development that doctors warn presents public health dangers, including an increased risk of the wrong dosage.

Meanwhile, according to Hellander, “you see people hanging on to old EpiPens, not getting new ones when they expire or not having them at all.”

While the price of EpiPen has climbed dramatically, this spike has been outpaced by the salaries of top executives. Heather Bresch, the CEO of Mylan, saw her compensation jump 671 percent from 2007 to 2015.

Sarah Lazare is a staff writer for AlterNet. Follow her on Twitter at @sarahlazare.

http://www.alternet.org/personal-health/why-mylans-alleged-solution-its-epipen-price-gouging-scandal-scam

Indiana’s phony Medicaid health savings accounts

Healthy Indiana 2.0 Is Challenging Medicaid Norms

By Seema Verma and Brian Neale
Health Affairs Blog, August 29, 2016

Last year, the State of Indiana launched the latest version of the Healthy Indiana Plan (HIP), made possible through a series of Medicaid waivers sought by Governor Mike Pence and approved by the Obama Administration.

HIP 2.0’s approval ignited a national conversation about the implications of its consumer-driven design for able-bodied adults in Indiana and potentially other reform-minded states. Having served as Governor Pence’s main advisors throughout the waiver’s development, negotiation, and implementation, we understand the crucial role states play in driving sensible Medicaid reforms.

HIP’s consumer-driven design familiarizes its members with the concepts of commercial health insurance and encourages them to be prudent consumers, comparing cost and quality of health care services. In light of the “churn” present in the Medicaid program, HIP’s policies are structured to be as consistent as possible with standard provisions found in commercial health plans, including Marketplace plans.

In line with commercial market consumer-driven plans, HIP members receive a $2,500 deductible health plan (HDHP) paired with a $2,500 “POWER” account, similar to a health savings account (HSA). The POWER account is HIP’s paramount feature. It acts as both a payment mechanism and a terminal through which HIP’s incentive structure flows. Members use the POWER account to pay for health care services until the deductible amount is met, at which point the HDHP becomes solely responsible for paying any further claims. Preventive services are provided outside the deductible and members do not face any barriers to seeking these services.

Contributions To Savings Accounts

HIP members begin coverage in HIP Plus, which offers benefits similar to those found in the commercial market and also includes modest dental and vision coverage. To maintain enrollment in HIP Plus, members are required to make monthly contributions in the amount equal to 2 percent of their income, comparable to the Marketplace’s premium formula. Unlike premiums, members own these contributions and are refunded their pro-rata share when they leave the program. The member’s pro-rata share is also rolled over from one plan year to the next, thereby reducing the contribution amount required for the upcoming plan year. Rollover amounts are increased for members who complete requisite preventive care services.

HIP respects the dignity of each member by setting a fair expectation of personal investment and engagement in his or her own well-being. Contributions are a way for members to demonstrate personal responsibility, but they also encourage members to stay engaged with their health plan, providers, and overall personal health. Because HIP Plus members’ own dollars are at stake, they have “skin in the game” and therefore an incentive to make cost-conscious health care decisions.

HIP Plus members who fail to make contributions within a 60-day grace period are terminated from the plan. Terminated HIP Plus members below the poverty line are transferred to the HIP Basic plan, which offers a more limited benefit package that excludes dental and vision coverage. HIP Basic members also are subject to co-payments for services, which can easily wind up being costlier than the contribution amounts required to maintain HIP Plus enrollment. Because HIP Plus represents the superior value proposition, members have a strong incentive to avoid falling back into HIP Basic. Terminated HIP Plus members above the poverty line must wait six months to re-enroll, with a few limited exceptions.

The delivery system functions more effectively when people seek and receive care in the right setting, as HIP incentivizes its members to do. When members choose the emergency room (ER) for care that could have been more appropriately provided in a primary care setting, they are subject to an $8 co-pay, which rises to $35 dollars for each subsequent inappropriate use of the ER.

HIP 2.0 Is Just The Beginning

HIP has been successful in meeting its policy objectives, but it also continues to demonstrate the potential for consumer-driven health care as an alternative to the traditional Medicaid model. While HIP has never touted itself as some sort of national silver bullet, it continues to serve as an example for states having similar interest in re-aligning Medicaid with the broader objective of individual empowerment.

http://healthaffairs.org/blog/2016/08/29/healthy-indiana-2-0-is-challenging-medicaid-norms/

Indiana Q&A on HIP 2.0:
http://www.in.gov/fssa/hip/2445.htm

Lewin Group evaluation of HIP 2.0:
https://www.medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Waivers/1115/downloads/in/Healthy-Indiana-Plan-2/in-healthy-indiana-plan-support-20-interim-evl-rpt-07062016.pdf

Center on Budget and Policy Priorities critique:
http://www.cbpp.org/research/health/indiana-medicaid-waiver-evaluation-shows-why-kentuckys-medicaid-proposal-shouldnt-be

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Comment:

By Don McCanne, M.D.

Health savings accounts (HSAs) have been touted by conservatives as a way of placing the health care consumers (i.e., patients) in control of their health care spending. As they say, “having skin in the game” (cringe) makes the patients more efficient health care shoppers. But it is not the HSAs, rather it is the very high deductibles of the associated insurance plans that cause patients to forgo often beneficial health care services because of the lack of affordability, thus reducing total health care spending.

With high deductibles, patients have to use their own funds before the deductible is met whether those funds come out of their pockets or out of designated HSAs. The HSA is merely a tax advantaged account that favors the healthy and wealthy. Tax expenditures are applied regressively with the wealthy receiving considerable taxpayer support and lower income individuals receiving little or nothing in the way of tax advantages.

Also the healthy who do not spend down their accounts can use the HSA funds as additional retirement benefits – benefits of which those with greater health problems are deprived. Thus HSAs represent the opposite of public policies that we should be pursuing since they disfavor the sick and poor to the benefit of the healthy and wealthy. It is perplexing how officials in Indiana ever conceived the idea that HSAs – know there as POWER accounts – would benefit low-income Medicaid patients with their higher than average medical needs.

So how do the POWER accounts work? First it is important to understand the complexity of the establishment and administration of these accounts because there are so many variables depending on whether the recipients are above or below 100 percent of the federal poverty level (FPL), which plan they participate in (Regular Plus, Regular Basic, State Plus, State Basic, plus HIP Link), whether or not they are classified as medically frail, whether they are Native Americans, whether or not they use preventive care services, and so forth. The description that follows applies differentially depending on these variables but will be presented as if it were a uniform program since these features represent the general drift of HIP 2.0. The actual details can be found in the Lewin Group report (link above).

The POWER accounts are funded mostly by the state with a contribution from the patient amounting to about 2 percent of income, up to a combined maximum of $2500 (mostly from the state). They are used to pay for the first $2500 of care (except for preventive services) and then a managed care plan begins paying. The payment by the patient is so small that it has very little impact on the government’s share of the costs. But most of these patients have no discretionary income thus even these small payments can be a financial burden to them, having to displace spending on other essentials.

If the individual uses no medical services, their contributions can accumulate in their POWER accounts and they can take their funds with them when they leave the program. But the maximum in the account can be only $2500, and their contribution is only a fraction of that. It is obvious that the meager amount that would be returned in no way could be used as an additional retirement benefit – defeating one of the purposes of HSAs.

If the patients fail to contribute to the POWER account, and their income is over 100 FPL, they completely lose their coverage and cannot reapply for a minimum of 6 months. If their income is under 100 FPL and they fail to contribute to the POWER account, they are shifted to the Basic plan and then are exposed to copayments, and they lose services such as dental and eye, and are limited in their prescription benefits.

These accounts are supposed to increase consumer awareness, but many of the participants do not know that the accounts exist, and many of those who do don’t really understand them. This hardly advances the conservative concept of consumer-directed health care.

Obviously these POWER accounts are not based on any sound health policy science, but they are merely a fabrication of ideologically-driven bureaucrats who want to pretend or maybe have fooled themselves into believing that they have created a poor man’s version of health savings accounts. HSAs actually provide benefits, albeit primarily for the healthy and wealthy. Medicaid was designed as a prepaid health care system for those with low incomes. The Medicaid Power accounts do the opposite of HSAs in that they penalize those who do not participate, taking away traditional Medicaid benefits, thereby adversely affecting particularly those with the lowest incomes.

This is a perverse program designed to satisfy the ideology of the Indiana stewards. (Kentucky is next.) One of the Indiana stewards and a strong supporter of POWER accounts – the governor – is currently a candidate for the vice-presidency of the United States. Programs like this expose the souls of those who support them.

The tyranny of corporatized health care: Time for single payer

By Craig Klugman, Ph.D.
Bioethics.net Blog, Aug. 24, 2016

In Illinois, Land of Lincoln insurance and Aetna announced that they are pulling out of the health insurance Marketplace. In other states, United HealthCare and Humana have announced pulling out of the exchanges. As a result, many newspaper headlines and political pundits have declared the Affordable Care Act (ACA, also known as Obamacare) to be in a “death spiral.”

Such statements are undermined by the latest studies showing the ACA is working. The Kaiser Family Foundation reported that three-quarters of people who lacked insurance before the ACA now have it. RAND Corp found that more people are receiving medical treatment and getting needed prescriptions as a result of the ACA. The ACA is accomplishing its intent—giving more people insurance coverage so that they can receive medical care and have their diseases managed. Preventive management is cheaper than intensive and expensive interventions after a disease has progressed.

An internal Aetna letter obtained by the Huffington Post and comments from Rep. Frank Pallone (D-NJ) suggest that Aetna’s move was not about losing money, but rather retaliation for the Department of Justice blocking the company’s proposed merger with Humana.

The Affordable Care Act leaves our health care subject to the whims of powerful corporations that exist to maximize profit and shareholder value, not to help policyholders access needed care. The health care of all Americans should not be held hostage by such companies.

In fifteen years as a professor of clinical bioethics and health policy, the one conclusion reached by every class I have taught is that the only long-term viable solution for affordable health care in this country is a single-payer system.

According to the United Nations Declaration of Human Rights, health care is a basic human right recognized by most industrialized nations. Even the U.S.-drafted Iraqi constitution guarantees every citizen a right to health care. In Canada and Sweden, the government is the insurer and provider of health care. In Germany, the government is the main insurer and while the provision of medical care is private, the government regulates reimbursement rates and drug costs. The U.K. has a government system of insurance and hospitals and a parallel private system. In managed systems, government regulation ensures that everyone has access to affordable care.

This contrasts with the U.S. where except for the VA and Medicare/Medicaid, insurance companies and medical providers dictate the terms and costs. Regulated systems prevent the game that Aetna is playing where people’s health come second to profit.

Critics of the Affordable Care Act state that the U.S. has the best medical care in the world. If by “best” one means the most expensive, then the U.S. does hold that honor. If one means longest life span, lowest infant mortality rate, and highest quality of health, then the U.S. ranks behind most industrialized nations. According to the CIA, we rank 43rd in life expectancy and 58th in infant mortality.

Single-payer saves money by eliminating third party payer administration and profit costs. The American Hospital Association reports that healthcare providers spend millions of dollars in time, technology and personnel managing dozens of competing and contradictory insurance company policies and forms.

To be sure, this would shake up the medical insurance industry, but the same companies complained that they would not survive the Affordable Care Act, which gave them 20 million new subscribers. Similar to the UK and Germany, these companies can offer private insurance plans for those who can afford them or who wish coverage above and beyond what the government insurance would provide.

The most economical and efficient solution is a single-payer system that keeps the goal of caring for people as the highest priority and protects Americans from the tantrums of private companies profiting on human suffering.

Craig Klugman, Ph.D., is a bioethicist and medical anthropologist who teaches at DePaul University.

http://www.bioethics.net/2016/08/the-tyranny-of-corporatized-health-care-time-for-single-payer/

Aetna, other insurance companies exit Obamacare; illustrates need for Medicare For All

By Scott Harris
Between the Lines Radio News, Aug. 24, 2016

The following interview with Dr. Steffie Woolhandler, co-founder of the group Physicians for a National Health Program and a professor at the City University of New York’s School of Public Health at Hunter College, was conducted by Scott Harris and is available as an MP3 file here.

Aetna, based in Hartford, Connecticut and the nation’s third largest insurance company, announced last week that next year it will be pulling out of 11 of 15 states where it offers policies in the Affordable Care Act’s health exchanges. The company says that it has lost $430 million in profits since it began offering individual policies on the ACA exchanges in January 2014. Aetna complained that those purchasing insurance policies are sicker and costlier than expected.

However, news reports and internal company documents indicate that the move to exit Obamacare came in response to the U.S. Justice Department’s decision to block the proposed merger between Aetna and Humana, the nation’s fifth largest insurer. Apart from Aetna, other insurance companies, including United Healthcare, Humana and Blue Cross-Blue Shield also have plans to leave ACA health exchanges in 2017.

Between The Line’s Scott Harris spoke with Dr. Steffie Woolhandler, co-founder of the group Physicians for a National Health Program and a professor at the City University of New York’s School of Public Health at Hunter College. Here, she examines the decision by Aetna to pull out of state ACA exchanges, the problems of coverage created by for-profit medicine and her support for establishing a single-payer, Medicare-for-All system that would provide universal, affordable care to everyone in the U.S. (Rush transcript)

DR. STEFFIE WOOLHANDLER: Well, Aetna’s exodus illustrates what a crazy idea it was to think that you could get to universal coverage through the private health industry. The private health insurance industry makes money by taking your premiums and providing as little care as possible. And they’re only willing to stay in the market as long as they make a profit by doing that, by taking premiums and not paying out too much in care. And then with the ACA, they took the premiums but people were sick and needed the care, and they said “We’re not going to participate. We can’t make a profit and we’re taking our marbles and going home.” So, certainly Aetna pulled out, several of the other major insurers have pulled out of market, a fewer numbers in counties than Aetna just did. And in many parts of the country, there’s only one option under the exchange, and of course that’s not really an option because you have to pay a fine on your taxes if you don’t enroll with the insurance company, so you basically have a “take it or leave it” situation in many parts of the country. There’s currently one big county, Pinal County in Arizona, that has 400,000 people and no insurance company saying they’re going to offer an exchange plan next year.

Now this can change, because the bids on the exchange plans go in October. But it definitely illustrates that this was a crazy idea to think you’re getting to universal health care through profit-seeking, private insurance companies. What we needed to do, what we still need to do is go for a single-payer, Medicare For All type program, where everybody’s in a giant risk pool. Everybody’s in, nobody’s out.

BETWEEN THE LINES: Dr. Woolhandler, what’s the effect of the people looking for insurance on these health exchanges when there is only one company? Does that mean the rates, the premiums paid will go sky high? Is that the net effect here?

DR. STEFFIE WOOLHANDLER: Well, they won’t necessarily go sky high, relative to what they’ve been, which has already been pretty high. They will be higher, there are studies showing that have in markets with only one or two insurance companies vs. markets with three to five insurance companies, the rates are higher. So, yes, the consumer will be paying a higher rate, but the problem of course, is the rates on the Obamacare exchange insurance are very high to begin with. So for someone my age, and I’m in my early in 60s, if I go to buy a bronze plan, which is the cheapest plan available to me in New York state, if I go to buy a bronze plan, I have to take $5,000 out of my pocket and pay the premium. And then if I get sick, I’ve got a $5,000 deductible. I need to take another $5,000 out of my pocket. $10,000 total I’ve paid out of pocket before my insurance pays one penny.

So, it’s an extremely expensive insurance for a middle-income person to be thinking about paying that kind of money out for care. So yes, having a monopoly, as will occur in many counties and states, makes matters worse, it makes the premiums higher. The premiums are quite high even in places like New York, where there’s not a monopoly at this point.

BETWEEN THE LINES: Dr. Woolhandler, as you’ve pointed out, the United States stands alone in the industrialized world of countries that don’t have a universal health care system in place; therefore, we have one of the most expensive systems with an enormous number of people left out. But as I understand it, the ACA, the Obamacare system in place now, has covered an additional 21 million people. But that leaves 29 million or 30 million people still uninsured and many more underinsured even among that number. What can you tell us about the issue of the United States and its unique situation here? Not such a good situation here.

DR. STEFFIE WOOLHANDLER: Well you’re absolutely right with those numbers. Less than half of the uninsured have received coverage so that 20 million have been covered; about 27 million remain uninsured. And to me, as a physician, 27 million uninsured people is not acceptable. And furthermore, even if the Obamacare legislation had been rolled out as initially enacted, if all 50 states had enacted Medicaid, there still would have been tens of millions of people uninsured. And not just in the short term. Over the long term, the Congressional Budget Office is saying 26 million people remain uninsured. So we have not gotten to universal health care and we’re not getting there with the Obamacare legislation, which is why we need to go with Medicare for All.

All other developed countries do use some form of national health insurance. Most of them rely on nonprofit national health insurance. They spend 40 percent less per capita than we do on health care. People in other developed nations, like Canada or the Netherlands, live two to three years longer. So where they have these national health programs, you get more care, better health, and you spend less. You know, the United States is really unique among the developed countries in having a subsidized private insurance system that is extremely expensive and doesn’t cover everyone.

Learn more about the merits and cost of a single-payer health care by visiting Physicians for a National Health Program at pnhp.org.

http://www.btlonline.org/2016/seg/160902af-btl-woolhandler.html

Slow Medicine: Assessing ACA in the Political Fog

First in a new series on healthcare delivery reform

By Steffie Woolhandler, MD, MPH
Adam Gaffney, MD
David U. Himmelstein MD
MedPage Today / USC Gehr Family Center for Implementation Science, August 26, 2016

The Gehr Center/Slow Medicine series “Disruption or Distraction: A Critical Look at Healthcare Delivery Reform” unpacks the data behind healthcare delivery system interventions, highlighting well-intended reforms that have yet to achieve the impact many have assumed. The series is edited by Slow Medicine columnists Pieter Cohen, MD, Michael Hochman, MD, MPH, and Rachael Bedard, MD. This first article in the series is written by three prominent experts in healthcare financing and offers a counterpoint to President Barack Obama’s recent article describing the benefits of the Affordable Care Act.

In the current overheated political climate, the Affordable Care Act (ACA) has garnered harsh criticism from some quarters and extravagant praise from others. Both miss the mark.

Critics from the political right seem to ignore the fact that the law has substantially reduced the number of uninsured, and propose alternatives that would sharply increase uninsurance, underinsurance, and healthcare inequality.

On the other hand, President Obama’s recent defense of the ACA in the Journal of the American Medical Association papered over its flaws — notably the fact that 29 million remain uninsured, a figure that the Congressional Budget Office predicts will not change much in the years ahead, even if all states were to accept the ACA’s Medicaid expansion.

While persistent uninsurance is the ACA’s most glaring deficiency, it has other shortcomings: failure to slow the hollowing out of already inadequate coverage; further stimulation of the already overgrown healthcare bureaucracy; lack of effective cost controls; and Medicare payment reforms that tilt the playing field towards giant corporate organizations and have triggered a surge of mergers and acquisitions.

(Twelve paragraphs discuss the specific deficiencies of the Affordable Care Act – link below)

In sum, the ACA was a useful but inadequate step forward for American healthcare. Tens of millions remain uninsured, and at least as many others have grossly inadequate coverage. Costs are again rising rapidly, and the corporate takeover of care proceeds apace. By any reasonable measure we remain in last place among wealthy nations for coverage, and an outlier for our high costs. The need for more fundamental reform is clear.

Steffie Woolhandler, MD, MPH, is a primary care physician at the CUNY School of Public Health at Hunter College. Adam Gaffney, MD, is a research fellow at Massachusetts General Hospital. David Himmelstein, MD, is a professor at the CUNY School of Public Health at Hunter College. Woolhandler and Himmelstein are co-founders of Physicians for a National Health Program.

http://www.medpagetoday.com/Blogs/SlowMedicine/59887#

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Comment:

By Don McCanne, M.D.

As the first in a series on healthcare delivery reform, this article sets the stage by describing the profound deficiencies that remain after implementation of the Affordable Care Act. Although ACA did improve coverage and access, the authors note, “The need for more fundamental reform is clear.”

This article was merely to assess ACA in the “political fog” and not to suggest solutions. But the problems presented are not amenable to mere tweaks and patches. Since the authors are the nation’s leading experts on single payer reform, we can assume that the fundamental reform they would call for would be single payer. And they would be right since anything less, such as adopting a public option, would leave in place most of the deficiencies.