By Jennifer E. DeVoe, MD, DPhil; Carrie Tillotson, MPH; Lorraine S. Wallace, PhD
JAMA
October 22/29, 2008

The association between coverage for parents and their children has been widely reported. When entire families have access to health insurance, children and adolescents not only benefit from more consistent insurance coverage but also have improved access to a regular source of care and higher rates of preventive services. If entire families cannot gain consistent coverage, it is most often their children who have insurance while the parents go uncovered, especially since the creation of the State Children’s Health Insurance Program (SCHIP). Less is known, however, about how commonly this pattern is reversed.

Although the weighted results of this survey indicated that the largest group of uninsured children and adolescents had uninsured parents, an estimated 27.9% of the uninsured children and adolescents had parents with health insurance. When weighted, these estimates represent 3 million children who had a coverage gap despite having at least 1 parent who had full-year coverage. More than a million of these children were without coverage for the entire year.

Evidence suggests that when family members are covered separately under different plans or when certain individuals have coverage and others do not, children’s health declines. Furthermore, if the assumption that insurance coverage is a “household good” is abandoned and the system shifts toward defining it as an “individual good,” we add layers of complexity for vulnerable families who must simultaneously learn different systems for enrollment and utilization of multiple insurance plans. Discordant patterns of family health insurance may become the norm rather than the exception; the current trend is certainly moving in that direction.

If families are better off covered under one plan but US society rejects a public health insurance program for all members of the family, the question of whether the employer-based model is sustainable may need to be revisited. In this study, the private system did not do a good job of providing coverage for entire families.

Incremental expansions in public insurance programs for children will continue to improve insurance rates in the short term. However, the longer-term solutions to keeping all children insured are likely to be more complicated. Unless health insurance coverage models are designed to keep entire families covered, some children will continue to get left behind.

http://jama.ama-assn.org/cgi/content/full/300/16/1904

Comment:

By Don McCanne, MD

It has long been recognized that one of the deficiencies of the children’s health insurance program (SCHIP) is that parents in these lower income families often remain uninsured. This study demonstrates that the reverse also occurs. Even though one or both parents may be insured, often through their employment, the children may be left without coverage, primarily due to eligibility and affordability issues.

This study also reinforces the principle that simply increasing the numbers of insured through patchwork programs is not an adequate goal. Our goal should be to ensure comprehensive, coordinated, continuous care for each individual and each family by establishing equitably-financed medical homes for everyone.

Stable, continuous, coordinated family care is almost impossible under the current system. Both employer-sponsored and individual private plans continue to change based on employment status, employer decisions on plans, variations in participation in provider networks, comprehensiveness of the benefits, employee ability to contribute to the premium, and other factors largely not under control of the individual. Public programs also have similar variations in networks and coverage, and, in addition, have changing eligibility requirements for enrollment sometimes related to legislative and administrative budget decisions.

Today almost no family has the same stable coverage for all family members from birth until the children leave the home (and for the parents after the children have left). Nor can they be assured that they will be able to continue their care with the same physicians, hospitals and other health care professionals.

The future looks bleak. Congressional leaders have promised to expand the SCHIP program, which will tend to perpetuate the instability and fragmentation of care. Then they will begin the effort to patch together the great multitude of private plans into some semblance of a social insurance program. They will fail miserably because the U.S. private plans, based on a business model, have no glue to hold them together. The private insurers will continue to fight to insure only the healthy – the eighty percent of people who use only twenty percent of health care – while selling us an excess of superfluous administrative services. They will dump on us most of the actual costs of health care – the eighty percent of health care spending – through taxes, cost shifting, or simply relying on our stretched-thin charity.

It is astounding that the policy community continues to pursue these fragmented, incremental reforms that pump up costs while leaving health care in a tattered, dysfunctional state. With a single payer national health program, at least the entire family would have affordable access to the professionals and hospitals of their choice. That would be a great start.

By Marcia Angell, MD
Canadian Medical Association
CMAJ
October 21, 2008

There are strong moves within Canada to make the Canadian health care system more like the US system by partially privatizing it. Those who favour this approach claim that the US system offers more choice and better quality of care and spares the public purse. Some proponents even go so far as to claim that it is more efficient. My purpose here is to disabuse Canadians of these myths by taking a close look at how the US system works and comparing it with the Canadian system.

http://www.cmaj.ca/cgi/content/full/179/9/916?etoc

PDF version:
http://www.cmaj.ca/cgi/reprint/179/9/916

Comment:

By Don McCanne, MD

Those who are well informed on health policy are quite aware of the advantages and disadvantages of the health care financing systems in both the United States and Canada. Although the greater effectiveness and efficiency of the Canadian single payer system are well understood by supporters of a national health program in the United States, there has been a reluctance to use the positive features of the Canadian experience as an example of what we could achieve here. Why? Inevitably, bringing up Canada results in challenges that are a distraction from the primary message on reform.

The opponents of reform in the United States, along with their reactionary Canadian colleagues, are driven by ideology. They will not allow health policy science to interfere with their anti-government message. They do not seek the truth. Instead, they craft messages that paint a terribly inaccurate picture of the Canadian health care system. Sometimes their messages are based on exceptions or on minutia that may represent real problems, but then they present those facts as if they taint the entire health care system with rot. Other times, they simply do not tell the truth. You can cite several examples of lies that have been told so often about the Canadian system that they have been accepted as the truth here in the United States.

This is why Marcia Angell’s article is so important. She presents a broad overview of the two systems, explaining why the U.S. system is so expensive yet ineffective when compared to the Canadian system. She does address some of the failings in Canada, but also explains why the Canadian financing system is better equipped to address those problems than is the dysfunctional, fragmented U.S. financing system.

This article should be downloaded so that it can be used to help inform those who have been misled by the intense anti-government propaganda campaign of the opponents of single payer reform.

Hawaii ending universal child health care

By Mark Niesse
The Miami Herald
October 17, 2008
Hawaii is dropping the only state universal child health care program in the country just seven months after it launched.
Gov. Linda Lingle’s administration cited budget shortfalls and other available health care options for eliminating funding for the program. A state official said families were dropping private coverage so their children would be eligible for the subsidized plan (Keiki Care).
“People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. “I don’t believe that was the intent of the program.”
http://www.miamiherald.com/living/health/healthAP/story/729860.html

Although Hawaii’s Keiki Care for uninsured children was promoted as a program that would ensure that all children had health care coverage, it never would have achieved universality, partly because of various eligibility and enrollment issues. Also the coverage was not as comprehensive as coverage under Medicaid. Nevertheless, it did provide limited coverage for about 2,000 of the state’s uninsured children (out of an uncertain number estimated between 3,500 and 16,000).
In designing incremental reform measures, many in the policy community insist that programs must be designed to prevent crowd out. Crowd out is a phenomenon in which individuals will drop out or be pushed out of an existing program, such as employer-sponsored coverage, in order to be enrolled in another program, such as Keiki Care. Administrators who wish to minimize spending in public programs frown upon crowd out.
Although this program is only seven months old, and, to be eligible, children must have been uninsured for at least six months, it is unlikely that crowd out was a significant contributor to the very modest enrollment rates.
Most economists consider crowd out to be undesirable because the numbers of individuals crowded out of existing coverage are subtracted from the total in the alternative program to determine the net gain in numbers covered. That might be important if your only goal were to increase the numbers with coverage, but aren’t there other desirable goals? Hint: In 1966, was it really detrimental that Medicare crowded out coverage in the private insurance sector for those over 65?
Keiki Care is yet another example of an incremental program designed to approach the goal of universal coverage a single step at a time. Although these programs are reported as successes, the long-term trend is that almost all measurements continue to demonstrate deterioration in affordability and coverage.
As long as we continue down the path of patch-work incremental reform, we are going to continue to hear alarms sounded over crowd out, adverse selection, moral hazard, medical loss ratios, investor return, lack of price transparency, high premiums due to excess regulation of private plans, and on and on, and we will never reach our goal of affordable health care for everyone.
It’s time to dump the perverse policies that serve the interests of others, and adopt policies that would serve the interests of patients – a single payer national health program.

Hawaii ending universal child health care

By Mark Niesse
The Miami Herald
October 17, 2008

Hawaii is dropping the only state universal child health care program in the country just seven months after it launched.

Gov. Linda Lingle’s administration cited budget shortfalls and other available health care options for eliminating funding for the program. A state official said families were dropping private coverage so their children would be eligible for the subsidized plan (Keiki Care).

“People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. “I don’t believe that was the intent of the program.”

http://www.miamiherald.com/living/health/healthAP/story/729860.html

Comment:

By Don McCanne, MD

Although Hawaii’s Keiki Care for uninsured children was promoted as a program that would ensure that all children had health care coverage, it never would have achieved universality, partly because of various eligibility and enrollment issues. Also the coverage was not as comprehensive as coverage under Medicaid. Nevertheless, it did provide limited coverage for about 2,000 of the state’s uninsured children (out of an uncertain number estimated between 3,500 and 16,000).

In designing incremental reform measures, many in the policy community insist that programs must be designed to prevent crowd out. Crowd out is a phenomenon in which individuals will drop out or be pushed out of an existing program, such as employer-sponsored coverage, in order to be enrolled in another program, such as Keiki Care. Administrators who wish to minimize spending in public programs frown upon crowd out.

Although this program is only seven months old, and, to be eligible, children must have been uninsured for at least six months, it is unlikely that crowd out was a significant contributor to the very modest enrollment rates.

Most economists consider crowd out to be undesirable because the numbers of individuals crowded out of existing coverage are subtracted from the total in the alternative program to determine the net gain in numbers covered. That might be important if your only goal were to increase the numbers with coverage, but aren’t there other desirable goals? Hint: In 1966, was it really detrimental that Medicare crowded out coverage in the private insurance sector for those over 65?

Keiki Care is yet another example of an incremental program designed to approach the goal of universal coverage a single step at a time. Although these programs are reported as successes, the long-term trend is that almost all measurements continue to demonstrate deterioration in affordability and coverage.

As long as we continue down the path of patch-work incremental reform, we are going to continue to hear alarms sounded over crowd out, adverse selection, moral hazard, medical loss ratios, investor return, lack of price transparency, high premiums due to excess regulation of private plans, and on and on, and we will never reach our goal of affordable health care for everyone.

It’s time to dump the perverse policies that serve the interests of others, and adopt policies that would serve the interests of patients – a single payer national health program.

The Impact of Health Reform on Underinsurance in Massachusetts: Do the insured have adequate protection?

By Sharon K. Long
Urban Institute
October 2008
In an attempt to protect individuals from underinsurance, as part of that health reform effort Massachusetts established a standard for “minimum creditable coverage” (MCC) that outlines the key benefits that must be included in an individual’s health insurance plan if it is to satisfy the state’s new individual mandate for health insurance coverage. The required benefits, which are intended to protect those with insurance from high health care costs, include preventive and primary care, prescription drugs, a maximum on the annual deductible and a maximum on out-of-pocket spending, among other things.
In brief, underinsurance means that an individual’s health insurance does not adequately protect him or her from high health care costs in the event of a serious illness or accident. A complete assessment of the adequacy of insurance coverage requires detailed information on the coverage and cost-sharing provisions of the individual’s health insurance plan. Given the data available in our survey, we are limited to a narrower focus that considers the individual’s out-of-pocket (OOP) heath care costs. (Note that this is OOP costs for health care beyond the premium that the individual pays to purchase private coverage.) High OOP health care costs provides a conservative, lower-bound estimate of underinsurance as it only captures inadequate insurance coverage for those who had high health care costs in the last year. Consequently, this measure of underinsurance does not include any of the individuals with similar health insurance coverage who did not have high health care costs during the year.
We follow the approach used by Schoen et al. (2005, 2008) and use two standards to assess underinsurance:
(1) Having OOP costs of 10 percent or more of family income–a threshold that has been used in prior studies of underinsurance, and
(2) Having OOP costs of 5 percent or more of family income for low-income families (defined as those with family income less than 200 percent of poverty)–a threshold for financial risk that is consistent with cost-sharing provisions in the State Children’s Health Insurance Program (SCHIP).
Given the limitations of our data, the measure of underinsurance reported here provides a conservative measure of the extent of underinsurance in Massachusetts.
Drop in Underinsurance. In fall 2006, at least 4 percent of all working-age adults with full-year insurance coverage in Massachusetts were underinsured under the first definition of underinsurance (10 percent or more of family income in OOP health care costs) and at least 7 percent were underinsured under the second definition. Under health reform, the share of insured adults who were underinsured under both definitions dropped by about 2 percentage points between fall 2006 and fall 2007, down to about 3 percent and 6 percent underinsured, respectively.
http://www.urban.org/UploadedPDF/411771_mass_underinsurance.pdf
Results restated in a summary by The Commonwealth Fund:
In fall 2006, 7.3 percent of all Massachusetts adults were underinsured (using the definitions above: out-of-pocket costs equal to 10% or more of income for higher-income people, 5% or more for lower-income people). After the enactment of health reform, that share declined to 5.6 percent.
http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=711279

Many news reports now tout the success of the Massachusetts health care reform program in reducing the numbers of the uninsured, even though falling far short of universal coverage. This new report also suggests that the rate of underinsurance may have declined, an important point since it was feared that efforts to make the plans more affordable would defeat the financial security that the plans should provide.
Massachusetts already had higher regulatory standards for their insurance products, but to be certain that coverage would be adequate under this program, they established a standard for “minimum credible coverage,” with benefits “intended to protect those with insurance from high health care costs.” How well has that worked?
Using estimates that omit many instances of underinsurance, this study shows that the rate of underinsurance is still over three-fourths of the rate that existed before the program was initiated. A program that eliminates less than one-fourth of the problem targeted should not be considered a successful program.
Of particular concern is that those individuals who are currently healthy, the majority of all insured, were not considered to be underinsured even if their coverage is not adequate to protect them against financial hardship should they develop significant medical problems in the future. Since one of the most important functions of insurance is to protect against unforeseen losses, the incidence of underinsurance is far greater than this study would indicate.
Massachusetts really needs to take another look at the single payer model of reform. By design, single payer includes everyone and eliminates the financial hardships of underinsurance. Their current reform model will always fall short of those goals.

By Sharon K. Long
Urban Institute
October 2008

In an attempt to protect individuals from underinsurance, as part of that health reform effort Massachusetts established a standard for “minimum creditable coverage” (MCC) that outlines the key benefits that must be included in an individual’s health insurance plan if it is to satisfy the state’s new individual mandate for health insurance coverage. The required benefits, which are intended to protect those with insurance from high health care costs, include preventive and primary care, prescription drugs, a maximum on the annual deductible and a maximum on out-of-pocket spending, among other things.

In brief, underinsurance means that an individual’s health insurance does not adequately protect him or her from high health care costs in the event of a serious illness or accident. A complete assessment of the adequacy of insurance coverage requires detailed information on the coverage and cost-sharing provisions of the individual’s health insurance plan. Given the data available in our survey, we are limited to a narrower focus that considers the individual’s out-of-pocket (OOP) heath care costs. (Note that this is OOP costs for health care beyond the premium that the individual pays to purchase private coverage.) High OOP health care costs provides a conservative, lower-bound estimate of underinsurance as it only captures inadequate insurance coverage for those who had high health care costs in the last year. Consequently, this measure of underinsurance does not include any of the individuals with similar health insurance coverage who did not have high health care costs during the year.

We follow the approach used by Schoen et al. (2005, 2008) and use two standards to assess underinsurance:

(1) Having OOP costs of 10 percent or more of family income–a threshold that has been used in prior studies of underinsurance, and

(2) Having OOP costs of 5 percent or more of family income for low-income families (defined as those with family income less than 200 percent of poverty)–a threshold for financial risk that is consistent with cost-sharing provisions in the State Children’s Health Insurance Program (SCHIP).

Given the limitations of our data, the measure of underinsurance reported here provides a conservative measure of the extent of underinsurance in Massachusetts.

Drop in Underinsurance. In fall 2006, at least 4 percent of all working-age adults with full-year insurance coverage in Massachusetts were underinsured under the first definition of underinsurance (10 percent or more of family income in OOP health care costs) and at least 7 percent were underinsured under the second definition. Under health reform, the share of insured adults who were underinsured under both definitions dropped by about 2 percentage points between fall 2006 and fall 2007, down to about 3 percent and 6 percent underinsured, respectively.

http://www.urban.org/UploadedPDF/411771_mass_underinsurance.pdf

Results restated in a summary by The Commonwealth Fund:

In fall 2006, 7.3 percent of all Massachusetts adults were underinsured (using the definitions above: out-of-pocket costs equal to 10% or more of income for higher-income people, 5% or more for lower-income people). After the enactment of health reform, that share declined to 5.6 percent.

http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=711279

Comment:

By Don McCanne, MD

Many news reports now tout the success of the Massachusetts health care reform program in reducing the numbers of the uninsured, even though falling far short of universal coverage. This new report also suggests that the rate of underinsurance may have declined, an important point since it was feared that efforts to make the plans more affordable would defeat the financial security that the plans should provide.

Massachusetts already had higher regulatory standards for their insurance products, but to be certain that coverage would be adequate under this program, they established a standard for “minimum credible coverage,” with benefits “intended to protect those with insurance from high health care costs.” How well has that worked?

Using estimates that omit many instances of underinsurance, this study shows that the rate of underinsurance is still over three-fourths of the rate that existed before the program was initiated. A program that eliminates less than one-fourth of the problem targeted should not be considered a successful program.

Of particular concern is that those individuals who are currently healthy, the majority of all insured, were not considered to be underinsured even if their coverage is not adequate to protect them against financial hardship should they develop significant medical problems in the future. Since one of the most important functions of insurance is to protect against unforeseen losses, the incidence of underinsurance is far greater than this study would indicate.

Massachusetts really needs to take another look at the single payer model of reform. By design, single payer includes everyone and eliminates the financial hardships of underinsurance. Their current reform model will always fall short of those goals.