PNHP

WellPoint’s “downgrade options”

WellPoint’s “downgrade options”

U.S. House of Representatives

Committee on Energy and Commerce
February 24, 2010

Memorandum
From: Committee on Energy and Commerce Majority Staff
Re: Questions Raised by Internal WellPoint Documents

As part of the Committee’s investigation into premium increases proposed by Anthem Blue Cross, a subsidiary of WellPoint, Inc., the Committee has received over 3,000 documents from WellPoint and its regulators, including internal WellPoint correspondence, presentations to senior corporate management, company-produced actuarial assessments, and regulatory filings. Committee staff also spoke to representatives of the company; received briefings from regulators, including the California Department of Insurance and the National Association of Insurance Commissioners; and spoke to outside experts in the field of health finance.

As summarized below, a review of the documents provided to the Committee and the other information received by the Committee raises multiple questions that members may wish to pursue during today’s hearing.

Question 4: Is WellPoint pushing people into less generous plans?

According to Ms. Braly’s testimony (Angela Braly, WellPoint President and CEO), “Another dynamic in our current challenging economy is that a higher proportion of healthy individuals move to lower cost coverage, such as coverage with a higher deductible, than in more robust economic times.”

Internal documents suggest that WellPoint’s business plan includes moving consumers into less generous plans. This strategy appears to have three components.

First, WellPoint’s highest rate increases seem to apply to their most comprehensive insurance plans. Maternity care is a marker for a more comprehensive package of benefits. A chart of proposed rates shows that WellPoint’s highest rate increases apply to the only two product families regulated by the Department of Insurance with maternity coverage. The chart also shows that for the most part, WellPoint proposed lower increases within specific product lines for the versions with higher deductibles than for the versions with lower deductibles.

Second, WellPoint is developing new products, called “downgrade options,” to promote to consumers facing the high rate increases. In one e-mail, David Shea, the Vice President for Individual Pricing, states: “Jim has asked Bryan to price 5-6 downgrade options to be made available in conjunction with the upcoming rate action.” In another internal e-mail, Mr. Curley, the Regional Vice President and Actuary, proposed that WellPoint “create 5-6 CA look-alike plans for CA with a benefit or two removed to create a downgrade option upon renewal.”

WellPoint also introduced a completely new product line called CoreGuard, advertised to have “some of our lowest monthly rates” and a “higher percentage of member cost-sharing in exchange for lower premiums.” One of the CoreGuard plans has a $20,000 deductible for a family for in-network services and a separate $20,000 deductible for non-network services. On top of that, a family can spend an additional $15,000 for co-payments for non-network services. Enrollees can be liable for another $4,500 in prescription drug costs. This adds up to a potential $59,500 out-of-pocket maximum for a family, who are still liable for the cost of drugs not on the formulary and maternity services.

Third, company officials discussed scaling back benefits for existing plans. In an e-mail, Mr. Shea states: “During our Plan review this morning Brian was mentioning that, in CA in the past, we mitigated rate increases by introducing product changes for existing members. We brought up the introduction of new products but he wanted to pursue existing product changes.” In another e-mail, Mr. Curley described scenarios that would produce a 6% to 10% reduction in benefits for four plans. The options included raising deductibles in three of the four plans and adding 25% coinsurance payments.

http://energycommerce.house.gov/Press_111/20100224/Questions.Raised.by.Internal.WellPoint.Documents.pdf

Testimony of Angela Braly, WellPoint President and CEO:
http://energycommerce.house.gov/Press_111/20100224/Braly.Miller.Testimony.pdf

Comment: 

By Don McCanne, MD

When most of us are concerned about skyrocketing health care costs, the private insurers have concentrated on their more immediate concern: How can they maintain a market presence by making their health plans more affordable?

To keep premiums at a level that maintains their market, the insurers have reduced benefits and and have increased cost sharing, especially through much higher deductibles and greater coinsurance. Compared to copayments, coinsurance, as a percentage of charges, shifts much more of the costs to those who need a greater amount of health care.

These innovations are resulting in a transformation of the market into a choice of new options, referred to internally by the insurance industry as “downgrade options.” The consumer facing outrageous premium increases would have new choices – either deceptive “look-alike” plans with reduced benefits, or new innovative products such as CoreGuard. With CoreGuard, for a reduced premium, you can have a plan with family cost sharing of only $59,500 plus the cost of products and services that are not included as a benefit.

Of course, these downgrade options represent an expansion in the market of underinsurance products. Downgrade options are a devious method of shifting health care cost increases to those individuals who need health care. It is bad enough to be sick or injured without having to face intensifying financial hardship and perhaps bankruptcy, even if insured.

What will President Obama’s proposal do to rectify the injustices of these downgrade options? For most individuals, almost nothing. They will remain in their employer-sponsored plans or other programs such as Medicare or Medicaid. For the minority who will be able to purchase plans through state insurance exchanges, the plans will have prescribed benefits and an actuarial value at a relatively low 70 percent (60 percent for some), meaning that cost sharing can still pose a major burden. Because these relatively Spartan plans will still be more generous than the downgrade options, the premiums will be higher.

The Obama plan specifies that a family will not have to contribute more than 9.5 percent of income to the premium (less for lower income families), as long as they don’t upgrade to a plan with the benefits that they should have. If they upgrade, they pay the entire difference. Obama’s plan also would limit cost sharing to current HSA limits ($11,900 per family in 2010), but that is misleading since considerable costs can be racked up outside of the plan.

With higher premiums than current individual plans, with some limits placed on the exposure of the family to costs, and with impotent measures to slow cost escalation, an increasing burden will be placed on the taxpayers who are subsidizing this system. That’s us. So we’ll pay, one way or another.

Why is President Obama forcing on us this profoundly expensive, administratively complex, and comparatively ineffectual system when we could have an improved Medicare for all of us that would ensure that we get the care we need while keeping it affordable? More to the point, why aren’t we mounting a rebellion (with civility)?

President Obama's Concession Proposal

From Ben Day, Executive Director, Mass-Care
Mon, 22 Feb 2010

Dear Single Payer Supporters – At 10AM today, the White House released the outlines of President Obama’s health reform proposal “incorporating and improving on ideas from the House and the Senate, along with some new ones,” in anticipation of a summit this Thursday with Congressional Republicans.

Many supporters of comprehensive health reform had hoped that the President and the Democratic leadership would turn to the “reconciliation process” – a way of passing certain types of provisions through the budget that does not allow filibusters on the Senate – to pass a more robust health reform bill than the sad beast that had emerged in the Senate even prior to the election of Senator Scott Brown in January. The Senate bill offered virtually no cost relief for households, taxpayers, and businesses facing spiraling health costs, and attempted to pay for subsidized care for low-income people through a tax on workers’ benefits. Polls following the January 25 election show clearly that Massachusetts voters strongly oppose this approach to health reform, particularly in a state facing the highest premiums in the nation, but that – perhaps not intuitively – they felt that Congress was not going far enough on health reform, not that they were going too far.

The President’s proposal, which you can read more about at whitehouse.gov, unfortunately does not address these concerns, and by and large adopts the Senate bill’s approach to health reform. Here are the details as far as we can tell at this early date:

  • The President’s proposal drops the public option, making no mention it.
  • The proposal adopts the Senate’s approach to financing, relying on an ‘excise tax’ on workers benefits instead of taxing high-income taxpayers, as the House bill did. It delays implementation of the excise tax until 2018 and lifts the premium threshold slightly, but like the Senate bill it links the tax to general inflation – not medical inflation – virtually guaranteeing that a larger and larger percentage of workers’ benefits will face steep taxes, and will likely have their co-pays and deductibles hiked to avoid the tax threshold.
  • The proposal follows the Senate in not imposing an employer pay-or-play tax, which would require businesses to cover their employees or face a fine.
  • The proposal is closer to the Senate in imposing a fine on individuals who do not purchase health insurance of $695 per year OR a percentage of their income, whichever is higher.
  • The proposal does follow the House in closing the Medicare ‘donut hole’ for seniors, but not fully until 2020, when the hole would be covered at 25% coinsurance.
  • The proposal sticks with both House and Senate proposals to outlaw ‘recissions’ (insurance companies retroactively canceling coverage of sick patients), extending dependent coverage, and starting in 2014 disallowing exclusion based on pre-existing conditions, as well as lifetime or annual caps on benefits.
  • The proposal includes a concept new to national health reform of establishing a ‘Health Insurance Rate Authority,’ which would provide oversight of insurance plans’ proposed premium increases, and potentially have the power to block premium hikes if they were considered unfair. This is clearly an attempt to replace the public option with something else that promises to control costs. There are states that currently and in the past have implemented what’s called ‘prior approval’ for premium increases in the individual and small group markets (people or small businesses buying insurance on their own) – there is very little evidence about whether this is effective. It has the potential to prevent price gouging by insurers if it’s implemented aggressively, which would be a good thing, but not much promise of controlling the underlying drivers of health care costs, which is that we waste too much money on overhead, overuse certain goods and procedures, and that the cost of individual procedures is much higher than it should be.
  • There is no mention in the initial documentation put out by the White House of where the President’s plan stands on some key “wedge issues” such as women’s access to reproductive health services, or how immigrants – both documented and undocumented – would be affected.

All in all, we are disappointed that the fundamental problems with the Senate reform bill – that there is little promise of effective cost control, and it pays for reform on the backs of working people – are being replicated in the President’s proposal. This seems likely to lead to further voter backlash and alienation from workers and workers’ organizations.

Mass-Care will continue fighting for fundamental reform that addresses the root causes of the health care crisis we all face, and we are looking forward in particular to advancing the Campaign for Health Care Justice in the coming year. We will keep you informed as we learn more about national health reform efforts.

http://www.masscare.org/

President Obama’s Concession Proposal

From Ben Day, Executive Director, Mass-Care
Mon, 22 Feb 2010

Dear Single Payer Supporters – At 10AM today, the White House released the outlines of President Obama’s health reform proposal “incorporating and improving on ideas from the House and the Senate, along with some new ones,” in anticipation of a summit this Thursday with Congressional Republicans.

Many supporters of comprehensive health reform had hoped that the President and the Democratic leadership would turn to the “reconciliation process” – a way of passing certain types of provisions through the budget that does not allow filibusters on the Senate – to pass a more robust health reform bill than the sad beast that had emerged in the Senate even prior to the election of Senator Scott Brown in January. The Senate bill offered virtually no cost relief for households, taxpayers, and businesses facing spiraling health costs, and attempted to pay for subsidized care for low-income people through a tax on workers’ benefits. Polls following the January 25 election show clearly that Massachusetts voters strongly oppose this approach to health reform, particularly in a state facing the highest premiums in the nation, but that – perhaps not intuitively – they felt that Congress was not going far enough on health reform, not that they were going too far.

The President’s proposal, which you can read more about at whitehouse.gov, unfortunately does not address these concerns, and by and large adopts the Senate bill’s approach to health reform. Here are the details as far as we can tell at this early date:

  • The President’s proposal drops the public option, making no mention it.
  • The proposal adopts the Senate’s approach to financing, relying on an ‘excise tax’ on workers benefits instead of taxing high-income taxpayers, as the House bill did. It delays implementation of the excise tax until 2018 and lifts the premium threshold slightly, but like the Senate bill it links the tax to general inflation – not medical inflation – virtually guaranteeing that a larger and larger percentage of workers’ benefits will face steep taxes, and will likely have their co-pays and deductibles hiked to avoid the tax threshold.
  • The proposal follows the Senate in not imposing an employer pay-or-play tax, which would require businesses to cover their employees or face a fine.
  • The proposal is closer to the Senate in imposing a fine on individuals who do not purchase health insurance of $695 per year OR a percentage of their income, whichever is higher.
  • The proposal does follow the House in closing the Medicare ‘donut hole’ for seniors, but not fully until 2020, when the hole would be covered at 25% coinsurance.
  • The proposal sticks with both House and Senate proposals to outlaw ‘recissions’ (insurance companies retroactively canceling coverage of sick patients), extending dependent coverage, and starting in 2014 disallowing exclusion based on pre-existing conditions, as well as lifetime or annual caps on benefits.
  • The proposal includes a concept new to national health reform of establishing a ‘Health Insurance Rate Authority,’ which would provide oversight of insurance plans’ proposed premium increases, and potentially have the power to block premium hikes if they were considered unfair. This is clearly an attempt to replace the public option with something else that promises to control costs. There are states that currently and in the past have implemented what’s called ‘prior approval’ for premium increases in the individual and small group markets (people or small businesses buying insurance on their own) – there is very little evidence about whether this is effective. It has the potential to prevent price gouging by insurers if it’s implemented aggressively, which would be a good thing, but not much promise of controlling the underlying drivers of health care costs, which is that we waste too much money on overhead, overuse certain goods and procedures, and that the cost of individual procedures is much higher than it should be.
  • There is no mention in the initial documentation put out by the White House of where the President’s plan stands on some key “wedge issues” such as women’s access to reproductive health services, or how immigrants – both documented and undocumented – would be affected.

All in all, we are disappointed that the fundamental problems with the Senate reform bill – that there is little promise of effective cost control, and it pays for reform on the backs of working people – are being replicated in the President’s proposal. This seems likely to lead to further voter backlash and alienation from workers and workers’ organizations.

Mass-Care will continue fighting for fundamental reform that addresses the root causes of the health care crisis we all face, and we are looking forward in particular to advancing the Campaign for Health Care Justice in the coming year. We will keep you informed as we learn more about national health reform efforts.

http://www.masscare.org/

Doctors group: Obama plan leaves millions uninsured, boosts private insurers

FOR IMMEDIATE RELEASE    
Feb. 24, 2010

Contact:
Steffie Woolhandler, M.D., M.P.H.
Margaret Flowers, M.D.
Quentin Young, M.D., (312) 782-6006
Mark Almberg, PNHP, (312) 782-6006

President Obama’s health care proposal, preserving as it does a central role for the for-profit, private health insurance industry, is incapable of achieving the kind of universal, comprehensive and affordable reform the country needs, a spokesman for a national doctors’ group said Wednesday.

“Regrettably, the president’s proposal is built on some of the worst aspects of the Senate bill,” said Dr. Quentin Young, national coordinator of Physicians for a National Health Program, an organization of 17,000 doctors who support a single-payer, Medicare-for-All approach to reform. Young’s statement comes on the eve of the president’s bipartisan summit in Washington.

“For example, the president’s proposal would ship hundreds of billions of taxpayer dollars to the private health insurance industry in the form of subsidies,” Young said. “And to help finance this, it would impose a new tax on health benefits of workers, especially those in high-cost states.

“Its individual mandate would force millions of middle-income uninsured Americans to buy insurers’ skimpy products – insurance policies full of gaps like ever-rising co-pays, deductibles and premiums. Such policies already leave middle-class American families vulnerable to economic hardship and medical bankruptcy in the event of a serious illness like cancer,” continued Young, citing a recent study.

“Even so, at least 23 million people would remain uninsured,” he said. “We know that being uninsured raises your chance of dying by about 40 percent,” he continued, citing another recent study. “That translates into about 23,000 unnecessary deaths each year. As physicians, we find this completely unacceptable.”

“In short,” Young said, “this proposal is an insurance company bonanza, not good, evidence-based health reform. The president would do better by abandoning the insurance and drug companies and instead taking up the single-payer approach.” His group has estimated that such an approach could save hundreds of billions of dollars annually by simplifying health administration.

“By building on and improving the already popular Medicare program, we could put our patients’ interests first,” he said. “Were President Obama to do so, he would meet with strong public support, including from the medical community.”

Although the physicians’ group requested an invitation to Thursday’s summit at Blair House, no reply from the White House has been forthcoming, Young said. Similarly, requests from Reps. Dennis Kucinich of Ohio, Anthony Weiner of New York and Peter Welch of Vermont that single-payer advocates be included in the meeting have apparently gone unanswered.

Outside the Blair House on Thursday, a grassroots “Sidewalk Summit for Medicare for All” will underscore popular support for the measure.

*******

Physicians for a National Health Program (www.pnhp.org) has a number of national spokespersons who can talk about President Obama’s health reform proposal, along with local spokespersons in virtually every state. To arrange for an interview, call (312) 782-6006 or (312) 622-0996, or write info@pnhp.org.

WellPoint's "downgrade options"

U.S. House of Representatives

Committee on Energy and Commerce
February 24, 2010
Memorandum
From: Committee on Energy and Commerce Majority Staff
Re: Questions Raised by Internal WellPoint Documents
As part of the Committee’s investigation into premium increases proposed by Anthem Blue Cross, a subsidiary of WellPoint, Inc., the Committee has received over 3,000 documents from WellPoint and its regulators, including internal WellPoint correspondence, presentations to senior corporate management, company-produced actuarial assessments, and regulatory filings. Committee staff also spoke to representatives of the company; received briefings from regulators, including the California Department of Insurance and the National Association of Insurance Commissioners; and spoke to outside experts in the field of health finance.
As summarized below, a review of the documents provided to the Committee and the other information received by the Committee raises multiple questions that members may wish to pursue during today’s hearing.
Question 4: Is WellPoint pushing people into less generous plans?
According to Ms. Braly’s testimony (Angela Braly, WellPoint President and CEO), “Another dynamic in our current challenging economy is that a higher proportion of healthy individuals move to lower cost coverage, such as coverage with a higher deductible, than in more robust economic times.”
Internal documents suggest that WellPoint’s business plan includes moving consumers into less generous plans. This strategy appears to have three components.
First, WellPoint’s highest rate increases seem to apply to their most comprehensive insurance plans. Maternity care is a marker for a more comprehensive package of benefits. A chart of proposed rates shows that WellPoint’s highest rate increases apply to the only two product families regulated by the Department of Insurance with maternity coverage. The chart also shows that for the most part, WellPoint proposed lower increases within specific product lines for the versions with higher deductibles than for the versions with lower deductibles.
Second, WellPoint is developing new products, called “downgrade options,” to promote to consumers facing the high rate increases. In one e-mail, David Shea, the Vice President for Individual Pricing, states: “Jim has asked Bryan to price 5-6 downgrade options to be made available in conjunction with the upcoming rate action.” In another internal e-mail, Mr. Curley, the Regional Vice President and Actuary, proposed that WellPoint “create 5-6 CA look-alike plans for CA with a benefit or two removed to create a downgrade option upon renewal.”
WellPoint also introduced a completely new product line called CoreGuard, advertised to have “some of our lowest monthly rates” and a “higher percentage of member cost-sharing in exchange for lower premiums.” One of the CoreGuard plans has a $20,000 deductible for a family for in-network services and a separate $20,000 deductible for non-network services. On top of that, a family can spend an additional $15,000 for co-payments for non-network services. Enrollees can be liable for another $4,500 in prescription drug costs. This adds up to a potential $59,500 out-of-pocket maximum for a family, who are still liable for the cost of drugs not on the formulary and maternity services.
Third, company officials discussed scaling back benefits for existing plans. In an e-mail, Mr. Shea states: “During our Plan review this morning Brian was mentioning that, in CA in the past, we mitigated rate increases by introducing product changes for existing members. We brought up the introduction of new products but he wanted to pursue existing product changes.” In another e-mail, Mr. Curley described scenarios that would produce a 6% to 10% reduction in benefits for four plans. The options included raising deductibles in three of the four plans and adding 25% coinsurance payments.
http://energycommerce.house.gov/Press_111/20100224/Questions.Raised.by.Internal.WellPoint.Documents.pdf
Testimony of Angela Braly, WellPoint President and CEO:
http://energycommerce.house.gov/Press_111/20100224/Braly.Miller.Testimony.pdf

When most of us are concerned about skyrocketing health care costs, the private insurers have concentrated on their more immediate concern: How can they maintain a market presence by making their health plans more affordable?
To keep premiums at a level that maintains their market, the insurers have reduced benefits and and have increased cost sharing, especially through much higher deductibles and greater coinsurance. Compared to copayments, coinsurance, as a percentage of charges, shifts much more of the costs to those who need a greater amount of health care.
These innovations are resulting in a transformation of the market into a choice of new options, referred to internally by the insurance industry as “downgrade options.” The consumer facing outrageous premium increases would have new choices – either deceptive “look-alike” plans with reduced benefits, or new innovative products such as CoreGuard. With CoreGuard, for a reduced premium, you can have a plan with family cost sharing of only $59,500 plus the cost of products and services that are not included as a benefit.
Of course, these downgrade options represent an expansion in the market of underinsurance products. Downgrade options are a devious method of shifting health care cost increases to those individuals who need health care. It is bad enough to be sick or injured without having to face intensifying financial hardship and perhaps bankruptcy, even if insured.
What will President Obama’s proposal do to rectify the injustices of these downgrade options? For most individuals, almost nothing. They will remain in their employer-sponsored plans or other programs such as Medicare or Medicaid. For the minority who will be able to purchase plans through state insurance exchanges, the plans will have prescribed benefits and an actuarial value at a relatively low 70 percent (60 percent for some), meaning that cost sharing can still pose a major burden. Because these relatively Spartan plans will still be more generous than the downgrade options, the premiums will be higher.
The Obama plan specifies that a family will not have to contribute more than 9.5 percent of income to the premium (less for lower income families), as long as they don’t upgrade to a plan with the benefits that they should have. If they upgrade, they pay the entire difference. Obama’s plan also would limit cost sharing to current HSA limits ($11,900 per family in 2010), but that is misleading since considerable costs can be racked up outside of the plan.
With higher premiums than current individual plans, with some limits placed on the exposure of the family to costs, and with impotent measures to slow cost escalation, an increasing burden will be placed on the taxpayers who are subsidizing this system. That’s us. So we’ll pay, one way or another.
Why is President Obama forcing on us this profoundly expensive, administratively complex, and comparatively ineffectual system when we could have an improved Medicare for all of us that would ensure that we get the care we need while keeping it affordable? More to the point, why aren’t we mounting a rebellion (with civility)?

WellPoint’s “downgrade options”

U.S. House of Representatives

Committee on Energy and Commerce
February 24, 2010

Memorandum
From: Committee on Energy and Commerce Majority Staff
Re: Questions Raised by Internal WellPoint Documents

As part of the Committee’s investigation into premium increases proposed by Anthem Blue Cross, a subsidiary of WellPoint, Inc., the Committee has received over 3,000 documents from WellPoint and its regulators, including internal WellPoint correspondence, presentations to senior corporate management, company-produced actuarial assessments, and regulatory filings. Committee staff also spoke to representatives of the company; received briefings from regulators, including the California Department of Insurance and the National Association of Insurance Commissioners; and spoke to outside experts in the field of health finance.

As summarized below, a review of the documents provided to the Committee and the other information received by the Committee raises multiple questions that members may wish to pursue during today’s hearing.

Question 4: Is WellPoint pushing people into less generous plans?

According to Ms. Braly’s testimony (Angela Braly, WellPoint President and CEO), “Another dynamic in our current challenging economy is that a higher proportion of healthy individuals move to lower cost coverage, such as coverage with a higher deductible, than in more robust economic times.”

Internal documents suggest that WellPoint’s business plan includes moving consumers into less generous plans. This strategy appears to have three components.

First, WellPoint’s highest rate increases seem to apply to their most comprehensive insurance plans. Maternity care is a marker for a more comprehensive package of benefits. A chart of proposed rates shows that WellPoint’s highest rate increases apply to the only two product families regulated by the Department of Insurance with maternity coverage. The chart also shows that for the most part, WellPoint proposed lower increases within specific product lines for the versions with higher deductibles than for the versions with lower deductibles.

Second, WellPoint is developing new products, called “downgrade options,” to promote to consumers facing the high rate increases. In one e-mail, David Shea, the Vice President for Individual Pricing, states: “Jim has asked Bryan to price 5-6 downgrade options to be made available in conjunction with the upcoming rate action.” In another internal e-mail, Mr. Curley, the Regional Vice President and Actuary, proposed that WellPoint “create 5-6 CA look-alike plans for CA with a benefit or two removed to create a downgrade option upon renewal.”

WellPoint also introduced a completely new product line called CoreGuard, advertised to have “some of our lowest monthly rates” and a “higher percentage of member cost-sharing in exchange for lower premiums.” One of the CoreGuard plans has a $20,000 deductible for a family for in-network services and a separate $20,000 deductible for non-network services. On top of that, a family can spend an additional $15,000 for co-payments for non-network services. Enrollees can be liable for another $4,500 in prescription drug costs. This adds up to a potential $59,500 out-of-pocket maximum for a family, who are still liable for the cost of drugs not on the formulary and maternity services.

Third, company officials discussed scaling back benefits for existing plans. In an e-mail, Mr. Shea states: “During our Plan review this morning Brian was mentioning that, in CA in the past, we mitigated rate increases by introducing product changes for existing members. We brought up the introduction of new products but he wanted to pursue existing product changes.” In another e-mail, Mr. Curley described scenarios that would produce a 6% to 10% reduction in benefits for four plans. The options included raising deductibles in three of the four plans and adding 25% coinsurance payments.

http://energycommerce.house.gov/Press_111/20100224/Questions.Raised.by.Internal.WellPoint.Documents.pdf

Testimony of Angela Braly, WellPoint President and CEO:
http://energycommerce.house.gov/Press_111/20100224/Braly.Miller.Testimony.pdf

When most of us are concerned about skyrocketing health care costs, the private insurers have concentrated on their more immediate concern: How can they maintain a market presence by making their health plans more affordable?

To keep premiums at a level that maintains their market, the insurers have reduced benefits and and have increased cost sharing, especially through much higher deductibles and greater coinsurance. Compared to copayments, coinsurance, as a percentage of charges, shifts much more of the costs to those who need a greater amount of health care.

These innovations are resulting in a transformation of the market into a choice of new options, referred to internally by the insurance industry as “downgrade options.” The consumer facing outrageous premium increases would have new choices – either deceptive “look-alike” plans with reduced benefits, or new innovative products such as CoreGuard. With CoreGuard, for a reduced premium, you can have a plan with family cost sharing of only $59,500 plus the cost of products and services that are not included as a benefit.

Of course, these downgrade options represent an expansion in the market of underinsurance products. Downgrade options are a devious method of shifting health care cost increases to those individuals who need health care. It is bad enough to be sick or injured without having to face intensifying financial hardship and perhaps bankruptcy, even if insured.

What will President Obama’s proposal do to rectify the injustices of these downgrade options? For most individuals, almost nothing. They will remain in their employer-sponsored plans or other programs such as Medicare or Medicaid. For the minority who will be able to purchase plans through state insurance exchanges, the plans will have prescribed benefits and an actuarial value at a relatively low 70 percent (60 percent for some), meaning that cost sharing can still pose a major burden. Because these relatively Spartan plans will still be more generous than the downgrade options, the premiums will be higher.

The Obama plan specifies that a family will not have to contribute more than 9.5 percent of income to the premium (less for lower income families), as long as they don’t upgrade to a plan with the benefits that they should have. If they upgrade, they pay the entire difference. Obama’s plan also would limit cost sharing to current HSA limits ($11,900 per family in 2010), but that is misleading since considerable costs can be racked up outside of the plan.

With higher premiums than current individual plans, with some limits placed on the exposure of the family to costs, and with impotent measures to slow cost escalation, an increasing burden will be placed on the taxpayers who are subsidizing this system. That’s us. So we’ll pay, one way or another.

Why is President Obama forcing on us this profoundly expensive, administratively complex, and comparatively ineffectual system when we could have an improved Medicare for all of us that would ensure that we get the care we need while keeping it affordable? More to the point, why aren’t we mounting a rebellion (with civility)?

Where's the Single-Payer Advocate?

By Michael McAuliff
New York Daily News
February 23, 2010

Reps. Anthony Weiner and Peter Welch are reprising a question that proved thorny for President Obama’s last health care summit: Where’s the single-payer advocate?

Weiner and Welch — single-payer advocates who are not invited, yet — argue in a letter to the President today that someone from the single-payer side should be at the Blair House summit on Thursday.

“Dear Mr. President,” they write. “During the State of the Union address, you stated, ‘But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.’

“We’d like to take you up on the offer.”

Their idea is pretty easy to understand: Medicare for all.

The letter is after the jump.

Dear Mr. President:

During the State of the Union address, you stated, “But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.”

We’d like to take you up on the offer. The best way to advance these goals is to expand what we know already works. We and many Americans propose Medicare for All. We would urge you to make sure that someone is invited to the summit that supports this position.

Building on Medicare, which has a 1% overhead rate, would reduce costs by eliminating insurance company profits and cut administrative costs which currently consume 31%, nearly double that of other nations. A universal Medicare for All system would provide Americans with complete autonomy in choosing their health care provider without regard to provider networks or referrals from primary care doctors. Patients would no longer be responsible for premiums, deductibles or co-payments. Government safety net programs, such as Medicaid and SCHIP, as well as the State and local government portions for these programs, would no longer be needed.

Furthermore, a Medicare for All system would be easily understandable by the American public. Medicare has been an enormous success for seniors and there is no reason, we believe, to not expand Medicare coverage to all Americans.

Thank you in advance for your consideration.

Read more: http://www.nydailynews.com/blogs/dc/2010/02/wheres-the-single-payer-advoca.html#ixzz0gSzOv63O

Where’s the Single-Payer Advocate?

By Michael McAuliff
New York Daily News
February 23, 2010

Reps. Anthony Weiner and Peter Welch are reprising a question that proved thorny for President Obama’s last health care summit: Where’s the single-payer advocate?

Weiner and Welch — single-payer advocates who are not invited, yet — argue in a letter to the President today that someone from the single-payer side should be at the Blair House summit on Thursday.

“Dear Mr. President,” they write. “During the State of the Union address, you stated, ‘But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.’

“We’d like to take you up on the offer.”

Their idea is pretty easy to understand: Medicare for all.

The letter is after the jump.

Dear Mr. President:

During the State of the Union address, you stated, “But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know.”

We’d like to take you up on the offer. The best way to advance these goals is to expand what we know already works. We and many Americans propose Medicare for All. We would urge you to make sure that someone is invited to the summit that supports this position.

Building on Medicare, which has a 1% overhead rate, would reduce costs by eliminating insurance company profits and cut administrative costs which currently consume 31%, nearly double that of other nations. A universal Medicare for All system would provide Americans with complete autonomy in choosing their health care provider without regard to provider networks or referrals from primary care doctors. Patients would no longer be responsible for premiums, deductibles or co-payments. Government safety net programs, such as Medicaid and SCHIP, as well as the State and local government portions for these programs, would no longer be needed.

Furthermore, a Medicare for All system would be easily understandable by the American public. Medicare has been an enormous success for seniors and there is no reason, we believe, to not expand Medicare coverage to all Americans.

Thank you in advance for your consideration.

Read more: http://www.nydailynews.com/blogs/dc/2010/02/wheres-the-single-payer-advoca.html#ixzz0gSzOv63O

The Rise & Fall of the American Medical Empire

A Trench Doctor's View of the Past, Present, and Future of the U.S. Healthcare Systems

by Robert A. Linden, MD, FACP

“Rise and Fall” is written specifically for American citizens and discusses four of the most pressing problems with U.S. healthcare today: healthcare insurance, the disappearing primary care physician, pharmaceutical industry infiltration into the practice and science of medicine, and medical malpractice litigation. Dilemmas along with solutions with the pros and cons for each are reviewed through the eyes of an independent thinking, office/hospital, board-certified internist/geriatrician with hands-on experience and without a personal agenda. Despite this, the single-payer system for healthcare financing and the health court for malpractice reconciliation are both championed.

Purcahse “Rise & Fall” on Amazon.

The Rise & Fall of the American Medical Empire

A Trench Doctor’s View of the Past, Present, and Future of the U.S. Healthcare Systems

by Robert A. Linden, MD, FACP

“Rise and Fall” is written specifically for American citizens and discusses four of the most pressing problems with U.S. healthcare today: healthcare insurance, the disappearing primary care physician, pharmaceutical industry infiltration into the practice and science of medicine, and medical malpractice litigation. Dilemmas along with solutions with the pros and cons for each are reviewed through the eyes of an independent thinking, office/hospital, board-certified internist/geriatrician with hands-on experience and without a personal agenda. Despite this, the single-payer system for healthcare financing and the health court for malpractice reconciliation are both championed.

Purcahse “Rise & Fall” on Amazon.

Towers Watson survey on employer-sponsored wellness programs

Purchasing Value in Health Care

Selected Findings From the 15th Annual National Business Group on Health/Towers Watson Survey Report — 2010

Towers Watson
February, 2010

The prolonged economic downturn is putting additional pressure on companies to change their health care programs to help relieve financial strain. The results of this year’s survey also show employers are frustrated by employees’ poor health habits and are struggling to effectively motivate behavior change. Additionally, they are uncertain about the future of employer-sponsored benefits, especially in light of the potential for health care reform legislation. Against this backdrop, employers are doing more to hold the line on costs and achieve better health and productivity outcomes.

Key Findings

* Annual median health care cost increases rose slightly in 2009 to 7%, compared with 6% in 2008. This pace is still more than twice the rate of inflation.

* Fifty-seven percent of respondents are very confident that employers will continue to offer health care benefits 10 years from now. This figure is down from 2009, when 62% of employers expressed a high level of confidence.

* Employers report that lack of employee engagement is the biggest obstacle to changing health behaviors. Still, they are trying new ways to encourage employees to become healthier and buy health care services more efficiently.

* There is considerable room for improvement in vendor programs designed to change member health habits and encourage efficient use of health care services. Employers rate these programs as ineffective.

* Today, 54% of companies have a consumer-driven health plan (CDHP) in place – a 6% increase over last year’s findings – and is expected to increase to 61% in 2011.

http://www.towerswatson.com/assets/pdf/1258/WT-2010-15571.pdf

Comment:

By Don McCanne, MD

Everyone agrees that it is better to practice good health habits. So who could object to employers providing incentives for their employees to improve their health behaviors?

During the national health reform dialogue, opponents of comprehensive reform frequently attempt to reframe the problem as a lack of individual responsibility for personal health. If people would eat better, exercise, and not smoke, many of the reform proposals would not be necessary.

This concept has now been co-opted by many of the nation’s large employers as they introduce wellness programs into their companies. What has been their experience?

According to this Towers Watson survey (a consolidation of Towers Perrin and Watson Wyatt), “employers are frustrated by employees’ poor health habits.” Employers report that “lack of employee engagement is the biggest obstacle to changing health behaviors.” Regarding their vendor programs that are designed to change employees’ health habits, “employers rate these programs as ineffective.”

Though they rate their wellness programs as ineffective, the sister programs that actually have slowed the growth in employer costs have been the consumer-driven health plans (CHDPs). A majority of large employers have now introduced CHDPs. Although the supporters of CHDPs use the rhetoric of placing the consumer in charge, these plans are nothing more than very high deductible plans which shift more of the responsibility of paying for health care from the employer to the employee.

During the period of employment, most injuries and illnesses for which the employee would require care would not be prevented by the wellness interventions. Employers who shift costs to employees who are unfortunate enough to need health care are being dishonest when they claim that they are doing this to enhance wellness.

During the reform dialogue, we cannot allow the opponents to reframe the debate as the need for wellness programs to address employees’ lack of engagement in correcting poor health habits, while these opponents in truth are supporting passing more costs onto the infirm.

Keep the framing on target. We need to remove financial barriers to care so that absolutely everyone can have the health care that they need. Properly designed wellness programs are fine, but we cannot let them distract us in our efforts to enact a single payer national health program – an improved Medicare for everyone.