PNHP

Regence BlueShield’s bait-and-switch

Regence BlueShield’s bait-and-switch

Gulp! Regence rate boost averages 19 percent for individual plans

By Kyung M. Song
The Seattle Times
May 16, 2007

Regence BlueShield on Tuesday began notifying 137,000 individual-plan customers that their premiums are rising an average of 19 percent in July in the steepest increase for individual plans this year by a Washington health insurer.

And for 16,000 of those enrollees, the rate increase will total 40 percent because they also happen to be moving into an older, more expensive age group.

The rate jump is a sharp change from last year, when Regence proposed — then rescinded — raising premiums by 5 percent. Since leaving the rates unchanged last July, Regence has gained 30,000 new customers, bringing its total individual members to 137,000.

The rate boost does not apply to people who buy their coverage through employer plans or small-group plans. But both Regence’s rate reversal last year and the size of this latest premium increase have outraged Washington Insurance Commissioner Mike Kreidler, who accuses the insurer of a bait-and-switch.

“I have serious concerns that consumers may have been whipsawed in an effort by Regence to increase market share,” Kreidler wrote in a letter sent Tuesday to state legislative leaders.

But Kreidler has no power to stop the increase.

Charlie Fleet, a spokesman for Regence, said it needed to raise premiums to cover higher claims costs.

“We offer good value to our members,” Fleet said.

http://seattletimes.nwsource.com/html/localnews/2003708848_regence16m.html

Comment:

By Don McCanne, MD

Some years insurers will hold their premiums down in order to gain market share. After their enrollment increases and their competition is diminished, they then raise premiums sharply to recover deferred profits plus provide an additional generous profit margin for current insurance sales. Wall Street dignifies this process by calling it the insurance underwriting cycle, but it is nothing more than a devious bait-and-switch scheme.

Those facing a 40 percent premium increase are not only aging, but many of them have developed significant medical problems. By making premiums unaffordable for this high-cost sector, many will have to drop their coverage. This advances Regence’s business plan to selectively insure the healthy. This totally defeats the very purpose of health insurance: preventing financial hardship for those with medical needs.

A national health insurance program would accomplish this crucial goal by automatically including everyone.

U.S. health care ranks last again

Mirror, Mirror on the Wall: An International Update on the Comparative Performance of American Health Care

By Karen Davis, Ph.D., Cathy Schoen, M.S., Stephen C. Schoenbaum, M.D., M.P.H., Michelle M. Doty, Ph.D., M.P.H., Alyssa L. Holmgren, M.P.A., Jennifer L. Kriss, and Katherine K. Shea
The Commonwealth Fund
May 15, 2007

Despite having the most costly health system in the world, the United States consistently underperforms on most dimensions of performance, relative to other countries. This report — an update to two earlier editions — includes data from surveys of patients, as well as information from primary care physicians about their medical practices and views of their countries’ health systems. Compared with five other nations — Australia, Canada, Germany, New Zealand, the United Kingdom — the U.S. health care system ranks last or next-to-last on five dimensions of a high performance health system: quality, access, efficiency, equity, and healthy lives. The U.S. is the only country in the study without universal health insurance coverage, partly accounting for its poor performance on access, equity, and health outcomes. The inclusion of physician survey data also shows the U.S. lagging in adoption of information technology and use of nurses to improve care coordination for the chronically ill.

The findings indicate room for improvement across all of the countries, especially in the U.S. If the health care system is to perform according to patients’ expectations, the nation will need to remove financial barriers to care and improve the delivery of care. Disparities in terms of access to services signal the need to expand insurance to cover the uninsured and to ensure that all Americans have an accessible medical home.

http://www.commonwealthfund.org/publications/publications_show.htm?doc_id=482678&#doc482678

Full report:
http://www.commonwealthfund.org/usr_doc/Davis_mirrormirrorinternationalupdate_1027.pdf?section=4039

Comment:

By Don McCanne, MD

To really understand this report, you do need to read it in full. Based on the performance measures surveyed, of the six nations studied, the United States does have the least equitable and most expensive system, and places last in overall ranking. Clearly, the American health care system is NOT the best in the world.

The opponents of single payer national health insurance will be quick to point out that Canada’s ranking is next to last, drawing the spurious conclusion that single payer would be the worst model for us to adopt. That is why, if you wish to be prepared to respond to it, you should read the full report. Many of the deficiencies noted have little, if any, relationship to the method of financing health care.

No country could possibly have a perfect score on every parameter. But it is important for the stewards of each health care system to identify their deficiencies and then adopt policies that would rectify them.

More importantly, many of the major deficiencies noted in the United States are specifically due to our highly flawed system of financing health care. We will always be at the bottom until (1) we remove financial barriers to care by providing comprehensive health insurance for everyone, and (2) we reinforce our primary care infrastructure, ensuring an accessible medical home for everyone.

Then we really could have the best health care system in the world.

Marsha Gold on Medicare Advantage and the market

Medicare Advantage In 2006-2007: What Congress Intended?

By Marsha Gold, senior fellow at Mathematica Policy Research
Health Affairs
May 15, 2007

This analysis shows that MMA (Medicare Modernization Act) has succeeded, at least in the short term, in expanding MA (Medicare Advantage) options nationwide and making MA more available in rural areas. The policy question is what value to place on this.

Much of the gain, especially for beneficiaries in areas with limited prior choice, has been achieved through expansion of the least-managed of MA options. Although the industry responded to congressional interest by offering R-PPOs (regional PPOs), firms offered PFFS (private fee-for-service) plans more extensively, and enrollment has gravitated toward this arrangement. We cannot tell from the information available how much this reflects beneficiaries’ preferences versus the ways in which firms have marketed these options.

Perspectives on current MA trends are largely in the eye–and orientation–of the beholder. If one believes that all choice is good and competition brings prices down, MMA has clearly been successful in expanding choice and competition. Because higher payments are driving the market, beneficiaries who enroll also benefit because benefits, even in the more limited plans, probably compare favorably against those of Medicare alone for not that much more premium. It could be that once attracted to MA, enrollees can be moved to more managed products, as some firms have indicated that they want to do.

If one tends to believe less in the market, some aspects of current trends are a concern. Most narrowly, the current expansion is fueled by MA payment rates that exceed what traditional Medicare now pays. At least in the short run, this means that Medicare pays more for each beneficiary that is attracted to MA. The added fiscal burden on Medicare is especially high for PFFS plans, because firms are benefiting from “floor” payments. Although individual enrollees may gain, beneficiaries as a whole may be harmed if higher payments add to the fiscal stress on Medicare, making the program less viable in the long run. Choice also makes demands on beneficiaries’ time, is challenging for many not familiar with the issues or those with cognitive limits, and adds the risk that coverage will be unstable if the forces that facilitate firms’ development of PFFS plans also make it easy for them to exit MA.

Do the benefits exceed the risk? Although people will differ in their calculations, I suggest that the answer could well be negative. The additional PFFS plan choices essentially allow firms to “piggyback” on Medicare’s existing investment and policies and do relatively little to improve care management because they are precluded from doing so by both Medicare and their own reservations. To the extent that PFFS enrollment grows, Medicare’s risk pool is fragmented, and the program’s purchasing power with providers is diluted.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.26.4.w445v1

Comment:

By Don McCanne, MD

Paying these private, fee-for-service Medicare Advantage plans 119 percent of the costs of the traditional Medicare program, and then pretending that this represents market competition, is utter nonsense.

This account by a highly respected and very credible authority should lay to rest forever the debate over the wisdom of this program. These wasteful private plans need to be dumped, and our legislators need to move forward with genuine health financing reform.

The Future of Healthcare in California

by State Senator Leland Yee

The single biggest issue that the State Legislature will address in 2007 is California’s healthcare system. The most significant problems with our current healthcare system are the exorbitant cost and the operational inefficiency. These factors work to exclude many average working people from having access to essential care. Without affordable healthcare, families are forced to depend on emergency rooms for basic health care and struggle with exorbitant bills, while our entire economy suffers. This has created a growing crisis for patients, healthcare providers, and taxpayers alike.

The Problem

Currently, at least 6.5 million Californians are uninsured, and many more do not have adequate insurance. This means that more than 1 in 5 Californians do not have access to preventative care, medical advice and basic treatments, and do not have a safety net if they become seriously ill or gravely injured. These people are average working people whose employers do not provide healthcare and who don’t make enough money to pay for an individual policy for themselves and their families.

This is due in large part to the rising cost of health care. Health insurance premiums have risen 87 percent since the year 2000. In the same time period, wages have increased by only 20 percent. Even those with health insurance are often surprised to find that their policies do not cover a large portion of their costs. Even with these high costs, people with pre-existing conditions often cannot qualify for coverage, even for issues as minor as having asthma when they were a child. It is a startling fact that a full half of all personal bankruptcies in the U.S. are due to health care costs.

With so many uninsured or underinsured Californians we are jeopardizing the health of our residents and the viability of our economy. Lower productivity and lost income tax revenue are among the consequences of having unhealthy California residents. If the breadwinner of a family without health insurance gets injured, the entire family will suffer. It is a shame for any of us to live in a society where someone who needs treatment will not receive it, even though there is a hospital with all the right supplies right down the street.

Our Resources

The problems we have with our healthcare system do not stem from a lack of funding. Californians spend $186 billion a year on healthcare. This is more than enough to cover the needs of every Californian.

The problem is that currently 30 percent of every healthcare dollar is spent on administration. There is paperwork for purchasing and maintaining your insurance, paperwork and processing when you arrive at the doctor’s office, more paperwork when your doctor’s office files with your insurance company. Much more paperwork — and the possibility of extra costs being passed on to the patient — if your insurance provider and your doctor disagree about what treatments were actually covered in your insurance policy.

All the other advanced countries in the world are able to provide all their residents with quality care. The only reason the U.S. seems unable to manage universal coverage is because of our excessively inefficient system.

Proposals

This legislative session, many proposals have been brought forward to address these problems.

Insurance market reforms could help to shape the insurance industry and provide better care for a more affordable price. However, these reforms are a piecemeal process and it is difficult to achieve the desired solutions by applying band-aids one at a time to a system with so many holes. Insurance market reforms can help to solve some problems in the short-term, but they do not solve the underlying problems with our system.

Governor Schwarzenegger suggested requiring every Californian to purchase health insurance as is now required in Massachusetts. However, this proposal does not solve the problem of exorbitant premiums and incomplete policies. It would leave many Californians still suffering from a lack of access to preventative care and uncovered in case of severe injury or illness.

The President pro Tem of the Senate and the Speaker of the Assembly have also proposed solutions. Both proposals involve shared responsibility between employers and employees. These proposals, like the others, unfortunately don’t fully address the problem of the unnecessarily exorbitant cost of healthcare.

Despite the high cost of healthcare, the U.S. healthcare outcomes rank at the bottom of all industrial nations. Clearly, there is a problem with our healthcare system, not with who is paying for it or who’s required to have it. We have the money and the resources to fully serve every Californian, and yet even those who have current health insurance are not fully covered and face excessive costs.

The Solution

Single-payer health insurance is the only solution on the table that will address all the underlying problems with our system. Single-payer healthcare means that one entity — the state of California — would be responsible for providing healthcare to its citizens. This eliminates the majority of the paperwork and administrative inefficiencies. It eliminates the power that the drug companies have to charge small medical facilities exorbitant prices for life-saving medicines.

Single-payer healthcare is financially smart. Instead of using 30 percent of every dollar on administration, the state can require that 95 percent of each dollar be spent on care. Instead of wasting billions on paperwork, universal healthcare will save Californians $25 billion a year by simplifying the process.

Single-payer health insurance means that the State of California can leverage economies of scale to provide greater access for all. Costs can be kept low because California will be one large pool of people able to negotiate competitive prices for medical services and life-saving medicine.

Single-payer healthcare means a healthier economy. With this system, California can invest heavily in health education and preventative care. While health providers may benefit from having more sick patients to see, the State would be interested in keeping everyone as healthy as possible to prevent unnecessary illness and injury. And when a person does become ill or injured, there won’t be any questions about what their insurance policy covers or whether they can afford care — every person will be treated.

I am proud to be a co-author of Senate Bill (SB) 840, which will establish a universal, single-payer healthcare system. The Universal Healthcare Act will provide every California resident with healthcare. In a state with such abundant resources, it would be a shame to provide anything less.

California has always been a leader in ideas and progress. It’s time to lead the way once again. Please join me in advocating for the rights of all residents to have access to our healthcare resources.

Sincerely,

Leland Y. Yee, Ph.D.
Assistant President pro Tempore
California State Senate

Health care plan veto won't stop lawmaker

Kuehl calls state-run program ‘gold standard,’ works to gain support

Tom Chorneau
San Francisco Chronicle, Sacramento Bureau
Tuesday, May 15, 2007

Sacramento — The debate over health care reform in California has focused on proposals from the governor and legislative leaders aimed at expanding private insurance coverage to more residents.

But there’s another idea — one with the support of legions of enthusiastic voters and a majority of the Legislature: Replace private insurance with a system managed by the state, the so-called single-payer system.

“Single-payer is the gold standard; it’s the right answer,” said state Sen. Sheila Kuehl, D-Santa Monica, author of SB840, which has already been vetoed once by Republican Gov. Arnold Schwarzenegger.

The idea, borrowed from health care plans used in many parts of the world including Europe and Canada, would provide universal coverage, including dental and vision, to all Californians.

Supporters contend that by cutting out the private insurance companies — their profits and overhead — costs will actually fall. They say the dollars now spent by workers, employers and government in California — estimated at about $186 billion last year — would be more than enough to pay for the universal service.

But Schwarzenegger and many Republican lawmakers oppose putting the state in charge of the system. Thus Democratic leaders, some of whom also support Kuehl’s bill, are working out a compromise with the governor that would leave the existing system dominated by private insurance in place.

Kuehl said she’s skeptical about what may emerge from closed-door negotiations.

There had been expectations that she would push her bill along and on to the governor’s desk later this summer as a popular alternative to any other deal that might be worked out. But Kuehl said she wants to keep her bill around another year even though she knows it has virtually no chance of ever getting Schwarzenegger’s signature.

“I don’t want it to be vetoed this year,” Kuehl said. “I want it to be vetoed in 2008, if he’s going to veto it — when we’ve got a national election going on and it gives me a whole other year to build support for it.

“People might say, why are you doing this if we passed that other bill? And I’ll say I still think this is the better answer,” said Kuehl. “This is will not go away because someone passed a half-assed bill.”

Although recent statewide polls show weak support for the concept, Kuehl’s bill has strong backing in the Legislature. Last year, the same bill passed out of the Assembly with a near-unanimous vote among majority Democrats and in a similar fashion in the Senate.

This year, the bill has 41 co-authors including Senate President Pro Tem Don Perata, D-Oakland, and Assembly Speaker Fabian Núñez, D-Los Angeles.

Still, Schwarzenegger remains opposed, dismissing the notion that government can efficiently run a health care system.

“We have watched what they have done to the health care system in the prisons,” said Schwarzenegger during a speech before the California Medical Association just last month. “And what did the government do? The prison health care system has been such a disaster that the federal court had to take over that system.

“Now they want to tell us they want to use that same system and provide health care for 37 million people — now, think about that,” he said. “What do they think, we are crazy? No, it’s not going to happen.”

More to the point, argued Chris Ohman, president of the California Association of Health Plans, is that single-payer does nothing to rein in the escalating cost of care, which he said has been increasing far faster than the rate of inflation in recent years.

“The cost issue precipitates an affordability issue, which in turn creates a coverage issue,” he said. “The concern we have with single-payer is that it doesn’t address the causes of medical cost inflation.”

Single-payer supporters say insurance companies’ profits are among the fastest-growing components of health care costs. Ohman said that overall, his members’ profits are similar to other industries.

Kuehl’s bill would require workers to contribute about 4 percent of earnings to the funding pool and employers to contribute about 8 percent. But if costs exceed available funds, critics point out, the state would be forced to either cut services, impose co-pays or deductibles, or raise taxes.

Kuehl said health care costs have generally tracked closely to the rise in income taxes so the need for new money would be unlikely. Besides, she argues, the existing system is already on a runaway track.

“What have you got now that’s rational? Nothing. We are now all completely at risk,” she said.

Looming on the horizon, too, is the specter of a single-payer ballot initiative — something that the California Nurses Association and some of the big labor unions have talked about in the past. Currently there is no measure in the works to put the proposal on the ballot, but that could change quickly.

The Service Employees International Union, which is a strong supporter of Kuehl’s bill and a potential sponsor of a ballot measure, is looking for compromises as part of a group that includes insurers like Blue Shield and Health Net, as well as providers like Kaiser and Catholic Healthcare West and groups including the teachers union and the medical association.

Despite her passionate support for single-payer for many years, Kuehl acknowledged the challenges it faces and conceded the time might not be right.

Indeed, a Field Poll conducted in late 2006 found increasing anxiety among voters over health care costs and strong support for the idea that government should be responsible for providing access to care.

Still, 52 percent said they favored reforming the existing system while 24 percent said they would support a new government-run program.

“I’m one of the major spokespeople of single-payer, and I’ll continue to be that,” Kuehl said. “I’ll do that next year, I’ll do it after I’m termed out, until we get another governor or an initiative.”
Comparing proposals

Here’s a comparison of some features of Gov. Arnold Schwarzenegger’s health care plan and the single-payer proposal from state Sen. Sheila Kuehl.

Who’s covered?

Governor’s plan aims at expanding coverage to 6.5 million uninsured residents. Kuehl’s plan would establish a new system for all California residents.

How do the plans work?

The governor’s plan requires all Californians to get coverage from a private insurer or from an existing government program. Kuehl’s plan would replace private insurance with a single-payer system managed by the state.

Cost

Governor’s plan requires that individuals have a minimum policy with a $5,000 deductible and out-of-pocket maximum of $7,500 per person. Employers with 10 or more workers must offer coverage or contribute 4 percent of payroll into a purchasing pool.

Kuehl’s plan imposes a payroll tax of 8 percent on employers and 4 percent on workers.

Key criticism

Governor’s plan would tax doctors, hospitals and other providers to help pay for new coverage. Insurance companies would also be required to accept any applications, regardless of preconditions. Kuehl’s plan might require new taxes to pay for services if planned sources of revenue cannot keep pace with medical inflation.

E-mail Tom Chorneau at tchorneau@sfchronicle.com.

Health care plan veto won’t stop lawmaker

Kuehl calls state-run program ‘gold standard,’ works to gain support

Tom Chorneau
San Francisco Chronicle, Sacramento Bureau
Tuesday, May 15, 2007

Sacramento — The debate over health care reform in California has focused on proposals from the governor and legislative leaders aimed at expanding private insurance coverage to more residents.

But there’s another idea — one with the support of legions of enthusiastic voters and a majority of the Legislature: Replace private insurance with a system managed by the state, the so-called single-payer system.

“Single-payer is the gold standard; it’s the right answer,” said state Sen. Sheila Kuehl, D-Santa Monica, author of SB840, which has already been vetoed once by Republican Gov. Arnold Schwarzenegger.

The idea, borrowed from health care plans used in many parts of the world including Europe and Canada, would provide universal coverage, including dental and vision, to all Californians.

Supporters contend that by cutting out the private insurance companies — their profits and overhead — costs will actually fall. They say the dollars now spent by workers, employers and government in California — estimated at about $186 billion last year — would be more than enough to pay for the universal service.

But Schwarzenegger and many Republican lawmakers oppose putting the state in charge of the system. Thus Democratic leaders, some of whom also support Kuehl’s bill, are working out a compromise with the governor that would leave the existing system dominated by private insurance in place.

Kuehl said she’s skeptical about what may emerge from closed-door negotiations.

There had been expectations that she would push her bill along and on to the governor’s desk later this summer as a popular alternative to any other deal that might be worked out. But Kuehl said she wants to keep her bill around another year even though she knows it has virtually no chance of ever getting Schwarzenegger’s signature.

“I don’t want it to be vetoed this year,” Kuehl said. “I want it to be vetoed in 2008, if he’s going to veto it — when we’ve got a national election going on and it gives me a whole other year to build support for it.

“People might say, why are you doing this if we passed that other bill? And I’ll say I still think this is the better answer,” said Kuehl. “This is will not go away because someone passed a half-assed bill.”

Although recent statewide polls show weak support for the concept, Kuehl’s bill has strong backing in the Legislature. Last year, the same bill passed out of the Assembly with a near-unanimous vote among majority Democrats and in a similar fashion in the Senate.

This year, the bill has 41 co-authors including Senate President Pro Tem Don Perata, D-Oakland, and Assembly Speaker Fabian Núñez, D-Los Angeles.

Still, Schwarzenegger remains opposed, dismissing the notion that government can efficiently run a health care system.

“We have watched what they have done to the health care system in the prisons,” said Schwarzenegger during a speech before the California Medical Association just last month. “And what did the government do? The prison health care system has been such a disaster that the federal court had to take over that system.

“Now they want to tell us they want to use that same system and provide health care for 37 million people — now, think about that,” he said. “What do they think, we are crazy? No, it’s not going to happen.”

More to the point, argued Chris Ohman, president of the California Association of Health Plans, is that single-payer does nothing to rein in the escalating cost of care, which he said has been increasing far faster than the rate of inflation in recent years.

“The cost issue precipitates an affordability issue, which in turn creates a coverage issue,” he said. “The concern we have with single-payer is that it doesn’t address the causes of medical cost inflation.”

Single-payer supporters say insurance companies’ profits are among the fastest-growing components of health care costs. Ohman said that overall, his members’ profits are similar to other industries.

Kuehl’s bill would require workers to contribute about 4 percent of earnings to the funding pool and employers to contribute about 8 percent. But if costs exceed available funds, critics point out, the state would be forced to either cut services, impose co-pays or deductibles, or raise taxes.

Kuehl said health care costs have generally tracked closely to the rise in income taxes so the need for new money would be unlikely. Besides, she argues, the existing system is already on a runaway track.

“What have you got now that’s rational? Nothing. We are now all completely at risk,” she said.

Looming on the horizon, too, is the specter of a single-payer ballot initiative — something that the California Nurses Association and some of the big labor unions have talked about in the past. Currently there is no measure in the works to put the proposal on the ballot, but that could change quickly.

The Service Employees International Union, which is a strong supporter of Kuehl’s bill and a potential sponsor of a ballot measure, is looking for compromises as part of a group that includes insurers like Blue Shield and Health Net, as well as providers like Kaiser and Catholic Healthcare West and groups including the teachers union and the medical association.

Despite her passionate support for single-payer for many years, Kuehl acknowledged the challenges it faces and conceded the time might not be right.

Indeed, a Field Poll conducted in late 2006 found increasing anxiety among voters over health care costs and strong support for the idea that government should be responsible for providing access to care.

Still, 52 percent said they favored reforming the existing system while 24 percent said they would support a new government-run program.

“I’m one of the major spokespeople of single-payer, and I’ll continue to be that,” Kuehl said. “I’ll do that next year, I’ll do it after I’m termed out, until we get another governor or an initiative.”
Comparing proposals

Here’s a comparison of some features of Gov. Arnold Schwarzenegger’s health care plan and the single-payer proposal from state Sen. Sheila Kuehl.

Who’s covered?

Governor’s plan aims at expanding coverage to 6.5 million uninsured residents. Kuehl’s plan would establish a new system for all California residents.

How do the plans work?

The governor’s plan requires all Californians to get coverage from a private insurer or from an existing government program. Kuehl’s plan would replace private insurance with a single-payer system managed by the state.

Cost

Governor’s plan requires that individuals have a minimum policy with a $5,000 deductible and out-of-pocket maximum of $7,500 per person. Employers with 10 or more workers must offer coverage or contribute 4 percent of payroll into a purchasing pool.

Kuehl’s plan imposes a payroll tax of 8 percent on employers and 4 percent on workers.

Key criticism

Governor’s plan would tax doctors, hospitals and other providers to help pay for new coverage. Insurance companies would also be required to accept any applications, regardless of preconditions. Kuehl’s plan might require new taxes to pay for services if planned sources of revenue cannot keep pace with medical inflation.

E-mail Tom Chorneau at tchorneau@sfchronicle.com.

Illinois Needs a Single-Payer Public Insurance Plan

BY QUENTIN YOUNG, M.D.
The Springfield State Journal-Register
May 14, 2007

The crumbling health system in Illinois cries out for fundamental reform.

More than 1.8 million Illinoisans lack health insurance. Millions more have coverage so skimpy that it leaves them without needed care or exposed to high costs. The current fiscal meltdown crisis in Cook County highlights the worsening plight of the poor and uninsured.

Gov. Rod Blagojevich has proposed to raise taxes which Illinoisans would then pay to insurance companies – but private insurers are the problem, not the solution. Hence, the governor’s plan is long on costs to consumer, taxpayers and businesses, and is short on remedies. To simultaneously expand coverage while controlling costs for individuals and businesses, the only effective solution is a single-payer public insurance program.

The $2.1 billon expense the governor’s plan would raise from business is a bad deal for Illinois. By the governor’s own admission, about two-thirds of the currently uninsured will remain that way. Millions of Illinoisans presently paying for inadequate coverage will get a tax credit whose value will quickly be erased by rising premiums. While large employers suffer a tax hike, smaller businesses will enjoy no relief from double-digit annual health cost increases. As these costs explode, employers will be forced to cut benefits or drop coverage altogether. The state is not prepared to take on the financial burden of ever-increasing numbers of uninsured and underinsured. We need a better plan.

To this tax-subsidy template the governor has added a little-noticed provision – the option to make being uninsured a punishable offense. This “get it yourself” approach might be reasonable if the problem wasn’t that existing private policies offer neither access to care nor protection from financial ruin.

Thus, right now, more than one-quarter of the insured go without needed care due to costs; and 75 percent of the 40,000 Illinoisans bankrupted by medical bills each year had insurance when they got sick. With the average family premium now costing $11,000 per year, it will take a steep penalty to force the average uninsured person into ponying up. In Massachusetts, which is currently implementing a similar plan, the penalty for being uninsured is greater than the criminal fines for drunk driving, domestic assault or making a terrorist threat.

Supporters of the Blagojevich’s proposal to redistribute money from businesses to insurance companies have painted the plan as a means to get companies to live up to their responsibilities in the health domain. Recent “fair-share” campaigns have rightly focused on a few large firms, such as Wal-Mart, which provide bad benefits and rely on public programs to pay for the health care of their low-wage workers.

However, rising health-care costs are not the fault of business, and we burden them with further taxes at our own peril. Raising Illinois’ companies health taxes will only encourage them to cut benefits, wages or jobs. The cost of insuring workers on an inefficient firm-by-firm basis has degraded the competitiveness of American businesses compared with nations that provide national health insurance. Thus, Ontario now produces more cars per year than Michigan, and our Big Three auto manufacturers have fall behind while European and Japanese automakers gain.

This international experience should be instructive for us in Illinois. We pay the world’s highest health-care taxes already – at least double the per capita spending of nations that provide comprehensive, universal care. While Canadians live longer and healthier, they spend just over $3,000 per capita, compared to our $7,000.

Other nations not only have healthier economies, they have healthier citizens. A recent survey of 38 high-quality studies comparing patient populations in the United States and Canada found that care quality north of the border is at least as good, and an exhaustive 2004 study of 21 international quality indicators in five countries found that the United States performed noticeably better on only two.

Because we rely on private insurers, we pay more for less care. Rather than compete to reduce costs and improve quality and access, they create expensive bureaucracies that squander money on marketing, fighting claims, issuing denials and screening out the sick. In turn, physicians and hospitals must maintain costly administrative staffs to deal with insurance hassles. Businesses are saddled with the cost of administering their own health benefits. In sum, this administrative waste consumes nearly one-third of our health spending. It is this fragmented, multi-payer system which produces ever-rising costs that burden Illinois families and businesses.

Replacing private insurers with a single public coverage program – a kind of “Medicare for All” – would recover enough funds currently lost to administration to cover all Illinoisans without additional cost to the state, businesses or consumers. Such a system would also control health costs, restoring the competitiveness of our businesses and ensuring that quality health benefits are sustainable.

Unfortunately, the Blagojevich proposal accomplishes neither universal coverage nor cost control because it fails to disconnect from the private insurance model. A healthy future for all Illinoisans will require leaders willing to stand up to insurance companies in the interest of the public.

Dr. Quentin Young is co-founder of Health Care for All Illinois and national coordinator of Physicians for a National Health Program.

Blue Cross settlement on rescission

Blue Cross to settle case in class action

By Julie Appleby
USA TODAY
May 14, 2007

Blue Cross of California — under scrutiny for retroactively canceling health insurance policies leaving patients with unpaid medical bills — has agreed to a class-action settlement that would sharply alter its practice and could set a precedent for other insurers.

At issue is an infrequently used but longstanding industry practice: canceling coverage after patients make costly claims, if insurers find mistakes or omissions on application forms completed by policyholders. The practice, called “rescission,” affects people who buy their own insurance, not those covered under group plans, such as job-based coverage.

In the proposed settlement, presented in Los Angeles County Superior Court on Friday, Blue Cross agreed not to retroactively cancel coverage unless policyholders “intentionally misrepresented” information on their applications.

That differs from the stance that Blue Cross and other insurers have taken. They have argued that laws allow them to cancel policies even if applicants had made honest mistakes or unknowingly left out information from their applications.

http://www.usatoday.com/printedition/money/20070514/cancel.art.htm

Comment:

By Don McCanne, MD

The purpose of rescission is to prevent individuals from obtaining a free ride by not purchasing insurance while they are healthy, but then purchasing it when a major problem develops. For insurance to work, the healthy have to pay into the risk pool to cover the costs of the sick.

Will this settlement cause more individuals to purchase insurance while they are still healthy? Of course not. It actually reduces the risk of rescission. Further, Blue Cross has agreed to redesign its application to minimize mistakes (i.e., make it easier to prove intentional misrepresentation on the part of those who deliberately falsify the application). The net result will be that more applicants will be rejected for coverage.

Isn’t this pointing us in the wrong direction? This is a policy that specifically prevents those with greater health care needs from obtaining coverage in the individual private insurance market.

Wouldn’t it be smarter to adopt policies that would automatically insure everyone forever? Can anyone think of a more efficient, more equitable and more effective way than national health insurance? What are we waiting for?

FORMER U.S. SURGEON GENERAL DAVID SATCHER TO SPEAK IN NEW YORK CITY on MAY 16, 2007

on “The Role of Health Care Reform in the Elimination of Health Care Disparities.”

FOR IMMEDIATE RELEASE
May 14, 2007

Contact:
Joanne Landy, MPH
Executive Director, PNHP-NY Metro

NEW YORK, NY – The New York Metro Chapter of Physicians for a National Health Program (PNHP) will hold an open forum on Wednesday, May 16, 2007 at 7:30pm in the Weill Auditorium, 2nd floor, at Weill Medical College of Cornell University1300 York Avenue at 69th Street in Manhattan. The featured speaker is Dr. David Satcher, former Surgeon General of the United States. Dr. Satcher, who completed his four-year term as the 16th Surgeon General in February 2002, will speak on the topic “The Role of Health Care Reform in the Elimination of Health Care Disparities.”

PNHP has long recognized that members of lower income and/or racial and ethnic minority groups are less likely than others to receive appropriate medical care in the United States. A current Annals of Internal Medicine (issue of April 3, 2007) article, for one example, confirms this fact. The article points out that persons with end-stage kidney disease living in predominately Black inner city neighborhoods and using their neighborhood health care facilities for health care have higher than expected mortality rates than those of more affluent white Americans with similar ailments.

PNHP notes that since lack of health insurance falls disproportionately on minorities and the poor, national health insurance, by guaranteeing that everyone is insured for all medically necessary care, will make a major contribution to addressing health care disparities in the U.S. In addition, according to Oliver Fein, MD, Chair of the New York Metro Chapter of PNHP, “National health insurance is necessary but not sufficient if these disparities are to be eliminated. Broader social measures will be needed to redress the deep inequalities that promote health disparities. Moreover, health care providers will need to take steps to counter the pervasive tendency to give even insured members of minority groups lower quality care.”

Dr. Satcher is highly qualified to address the issue of health care disparities. Having served as Assistant Secretary for Health in the Department of Health and Human Services from February 1998 to January 2001, he is only the second person in history to have held both positions of Surgeon General and Assistant Secretary for Health simultaneously. He is currently Director of the Center of Excellence on Health Disparities at the Morehouse School of Medicine (MSM) in Atlanta, Georgia. He occupies the Poussaint-Satcher-Cosby Chair in Mental Health at MSM.

As Surgeon General and Assistant Secretary for Health, Dr. Satcher led the department’s effort to eliminate racial and ethnic disparities in health, an initiative that was incorporated as one of the two major goals of Healthy People 2010.

###

Physicians for a National Health Program is an organization of 14,000 American physicians advocating for non-profit national health insurance. PNHP has chapters and spokespersons across the country. The national organization’s website is www.pnhp.org. The New York Metro Chapter is located at 2753 Broadway, #198, New York, NY 10025. The local website is www.pnhpnyc.org.

New polls on universal, tax-supported health care

CNN Poll
Opinion Research Corporation
May 9, 2007

30. Do you think the government should provide a national health insurance program for all Americans, even if this would require higher taxes?

64% – Yes
35% – No
2% – No opinion

http://i.a.cnn.net/cnn/2007/images/05/09/rel6e.pdf

And…

Health Security in America

Catholic Healthcare West
May 9, 2007

72% – The time has come for universal healthcare in America.

63% – We need universal healthcare in America, even if it means increasing taxes.

http://www.chwhealth.org/stellent/groups/public/@xinternet_con_sys/documents/webcontent/msys_m068169.pdf

Comment:

By Don McCanne, MD

If these poll numbers were cast at the ballot box, this would constitute a clear mandate from the American public. So why do we keep hearing that national health insurance is not politically feasible?

The market's the problem with health care

Marketplace
NPR
Thursday, May 10, 2007

Some Fortune 500 CEOs this week announced a coalition to push for health care reform. But commentator Jamie Court says what they’re really seeking is a government bailout of insurers and drug companies.

KAI RYSSDAL: There are two things you can mention to almost any CEO in this country that will provoke an immediate response. One’s global warming and how to balance protecting the environment with protecting the economy. The other’s health care and how companies can protect their bottom lines.

Safeway CEO Steve Burd launched a health care reform effort this week. Burd and three dozen other Fortune 500 CEOs are calling for a market solution.

Commentator and consumer advocate Jamie Court says that’s great, but the market is the problem.


JAMIE COURT: Some of the biggest names on the Fortune 500 say they want market forces to fix the problem of high health care costs. So they support the government making every American buy health insurance.

The irony is that if insurers had made health insurance affordable and available, we wouldn’t need the heavy hand of government to force individuals to buy policies.

The likes of Safeway, PepsiCo, General Mills and Pacific Gas and Electric don’t have a plan to effectively rein in health care costs. They don’t do anything about the inefficiency and profiteering of drugmakers or health insurers whose premiums have risen 250 percent more quickly than the rate of medical inflation.

That’s probably because insurers Aetna, Cigna Healthcare, Pacificare and drugmaker Eli Lilly Co. are part of the Safeway coalition too.

If the employers don’t want to pay premiums, fine. They should just admit the market doesn’t work and turn the job over to the government by expanding Medicare. That’s how it’s done in the rest of the industrialized world, where there’s far more efficiency.

The World Health Organization ranked the USA 37th of 191 countries for “overall health system performance,” 72nd for “level of health,” and first for “health expenditures per capita.” And there’s no way that mandatory health insurance is gonna help those numbers.

Real universal health care means getting every patient access to doctors, hospitals and prescription drugs whenever they need it, so that sick patients don’t get sicker. And that saves money.

Instead, these companies back turning government into a collections agent for private insurers. That leaves American citizens bearing the burden of big costs and high-deductible insurance policies that discourage early treatment.

That’s not reform. It’s a bailout for insurers and drug companies that refuse to be accountable for the high prices they charge and the paltry health care they provide.

RYSSDAL: Jamie Court is the president of the Foundation for Taxpayer and Consumer Rights.

The market’s the problem with health care

Marketplace
NPR
Thursday, May 10, 2007

Some Fortune 500 CEOs this week announced a coalition to push for health care reform. But commentator Jamie Court says what they’re really seeking is a government bailout of insurers and drug companies.

KAI RYSSDAL: There are two things you can mention to almost any CEO in this country that will provoke an immediate response. One’s global warming and how to balance protecting the environment with protecting the economy. The other’s health care and how companies can protect their bottom lines.

Safeway CEO Steve Burd launched a health care reform effort this week. Burd and three dozen other Fortune 500 CEOs are calling for a market solution.

Commentator and consumer advocate Jamie Court says that’s great, but the market is the problem.


JAMIE COURT: Some of the biggest names on the Fortune 500 say they want market forces to fix the problem of high health care costs. So they support the government making every American buy health insurance.

The irony is that if insurers had made health insurance affordable and available, we wouldn’t need the heavy hand of government to force individuals to buy policies.

The likes of Safeway, PepsiCo, General Mills and Pacific Gas and Electric don’t have a plan to effectively rein in health care costs. They don’t do anything about the inefficiency and profiteering of drugmakers or health insurers whose premiums have risen 250 percent more quickly than the rate of medical inflation.

That’s probably because insurers Aetna, Cigna Healthcare, Pacificare and drugmaker Eli Lilly Co. are part of the Safeway coalition too.

If the employers don’t want to pay premiums, fine. They should just admit the market doesn’t work and turn the job over to the government by expanding Medicare. That’s how it’s done in the rest of the industrialized world, where there’s far more efficiency.

The World Health Organization ranked the USA 37th of 191 countries for “overall health system performance,” 72nd for “level of health,” and first for “health expenditures per capita.” And there’s no way that mandatory health insurance is gonna help those numbers.

Real universal health care means getting every patient access to doctors, hospitals and prescription drugs whenever they need it, so that sick patients don’t get sicker. And that saves money.

Instead, these companies back turning government into a collections agent for private insurers. That leaves American citizens bearing the burden of big costs and high-deductible insurance policies that discourage early treatment.

That’s not reform. It’s a bailout for insurers and drug companies that refuse to be accountable for the high prices they charge and the paltry health care they provide.

RYSSDAL: Jamie Court is the president of the Foundation for Taxpayer and Consumer Rights.