By Julie Rovner
NPR
November 24, 2009

Lawmakers debating health care on Capitol Hill have spent months worrying about the potential cost. But mostly it’s been the total cost of the bill, not how much individual families who could soon be required to buy insurance for the first time might have to pay.

That could be a costly miscalculation, says health economist Jonathan Gruber of the Massachusetts Institute of Technology. “Let’s put it this way: It is 10 times as important as the public option and has received one one-hundredth of the coverage,” he says.

Gruber says economists have different ways of defining exactly what is and is not affordable for people. One way is by looking at disposable income, or whether people have money left over after paying for other necessities. “We think no one should have to go without food or shelter to have health insurance,” he says.

Another test is whether people would buy something voluntarily. “And if they would then clearly it’s affordable,” Gruber says.

But there’s also a third test — and it’s that affordability is in the eye of the beholder. And for a lot of beholders in the real world, health insurance costs are quickly becoming unaffordable.

(Under the proposed legislation) no family would have to spend more than 10 percent of its income on health insurance premiums; poor families wouldn’t have to spend more than 2 percent on premiums.

But premiums are only the start of what people spend on health insurance. There are also deductibles, copayments and other out-of-pocket costs. And Gruber says that when it comes to that sort of spending, the House bill is far more generous than the Senate bill.

For example, someone making two times the poverty level, or about $22,000 a year, in the House bill would get “something like a $500 deductible plan,” he says. “On the other hand in that same range in the Senate … now we’re talking a $2,500 deductible plan.”

Gruber says he’s a “big believer” in the concept that people should pay more for their health care so they’ll know what it really costs and have an incentive to save money. “I’m a believer in consumer skin in the game,” he says. “But a $2,500 deductible is a lot to ask for someone making $22,000 a year.”

And it brings Gruber to the ultimate test of affordability, which he says is a political test — “which is, do people revolt if you say, ‘I’m going to mandate you to pay this much’?”

http://www.npr.org/templates/story/story.php?storyId=120723411

And…

A Milestone in the Health Care Journey

By Ronald Brownstein
The Atlantic
November 21, 2009

When I reached Jonathan Gruber on Thursday, he was working his way, page by laborious page, through the mammoth health care bill Senate Majority Leader Harry Reid had unveiled just a few hours earlier. Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties. He was one of almost two dozen top economists who sent President Obama a letter earlier this month insisting that reform won’t succeed unless it “bends the curve” in the long-term growth of health care costs. And, on that front, Gruber likes what he sees in the Reid proposal. Actually he likes it a lot.

“I’m sort of a known skeptic on this stuff,” Gruber told me. “My summary is it’s really hard to figure out how to bend the cost curve, but I can’t think of a thing to try that they didn’t try. They really make the best effort anyone has ever made. Everything is in here….I can’t think of anything I’d do that they are not doing in the bill. You couldn’t have done better than they are doing.”

http://politics.theatlantic.com/2009/11/a_milestone_in_the_health_care_journey.php

Comment

By Don McCanne, MD

Regular readers of these messages are no doubt saturated with the concerns expressed about affordability of health care for individuals and families. For those who have or will have health care needs, even with subsidies, the premiums, deductibles, other cost sharing, out-of-network costs, and the costs of services that are not a benefit of the plans will be unaffordable for all but the relatively wealthy.

Today’s message is significant because MIT economist Jonathan Gruber, one of the most influential proponents of the current legislation, also understands that the issue of affordability has not received the attention it deserves. As he points out, a $2,500 deductible is a lot to ask of an individual making $22,000 a year. He wants them to have “skin in the game,” but even he understands that you can’t ask for their entire hide.

So how would he suggest that we reduce out-of-pocket costs so that health care is affordable? It appears that he would use the measures in the Senate bill to bend the cost curve so excessive costs allegedly aren’t passed on to patients. It seems to matter little to him that the CBO was unable to project a bend in the curve when it did its analysis.

Of course, Gruber is also an advocate of “let’s pass this bill now and then we can fix it later on” – a tacit acknowledgment that affordability will remain a crucial issue.

Gruber says that he can’t think of anything more to do that isn’t in the Senate bill. But you readers know better. We need to dump this plan and  immediately go to work on one that will make health care affordable for everyone – an equitably-financed, single payer, improved Medicare for all. Do really we need to wait for Gruber’s ultimate test for affordability – a revolt?

For Public, Affordability A Key Issue In Health Bill

By Julie Rovner
NPR
November 24, 2009
Lawmakers debating health care on Capitol Hill have spent months worrying about the potential cost. But mostly it’s been the total cost of the bill, not how much individual families who could soon be required to buy insurance for the first time might have to pay.
That could be a costly miscalculation, says health economist Jonathan Gruber of the Massachusetts Institute of Technology. “Let’s put it this way: It is 10 times as important as the public option and has received one one-hundredth of the coverage,” he says.
Gruber says economists have different ways of defining exactly what is and is not affordable for people. One way is by looking at disposable income, or whether people have money left over after paying for other necessities. “We think no one should have to go without food or shelter to have health insurance,” he says.
Another test is whether people would buy something voluntarily. “And if they would then clearly it’s affordable,” Gruber says.
But there’s also a third test — and it’s that affordability is in the eye of the beholder. And for a lot of beholders in the real world, health insurance costs are quickly becoming unaffordable.
(Under the proposed legislation) no family would have to spend more than 10 percent of its income on health insurance premiums; poor families wouldn’t have to spend more than 2 percent on premiums.
But premiums are only the start of what people spend on health insurance. There are also deductibles, copayments and other out-of-pocket costs. And Gruber says that when it comes to that sort of spending, the House bill is far more generous than the Senate bill.
For example, someone making two times the poverty level, or about $22,000 a year, in the House bill would get “something like a $500 deductible plan,” he says. “On the other hand in that same range in the Senate … now we’re talking a $2,500 deductible plan.”
Gruber says he’s a “big believer” in the concept that people should pay more for their health care so they’ll know what it really costs and have an incentive to save money. “I’m a believer in consumer skin in the game,” he says. “But a $2,500 deductible is a lot to ask for someone making $22,000 a year.”
And it brings Gruber to the ultimate test of affordability, which he says is a political test — “which is, do people revolt if you say, ‘I’m going to mandate you to pay this much’?”
http://www.npr.org/templates/story/story.php?storyId=120723411

And…

A Milestone in the Health Care Journey
By Ronald Brownstein
The Atlantic
November 21, 2009
When I reached Jonathan Gruber on Thursday, he was working his way, page by laborious page, through the mammoth health care bill Senate Majority Leader Harry Reid had unveiled just a few hours earlier. Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties. He was one of almost two dozen top economists who sent President Obama a letter earlier this month insisting that reform won’t succeed unless it “bends the curve” in the long-term growth of health care costs. And, on that front, Gruber likes what he sees in the Reid proposal. Actually he likes it a lot.
“I’m sort of a known skeptic on this stuff,” Gruber told me. “My summary is it’s really hard to figure out how to bend the cost curve, but I can’t think of a thing to try that they didn’t try. They really make the best effort anyone has ever made. Everything is in here….I can’t think of anything I’d do that they are not doing in the bill. You couldn’t have done better than they are doing.”
http://politics.theatlantic.com/2009/11/a_milestone_in_the_health_care_journey.php

Regular readers of these messages are no doubt saturated with the concerns expressed about affordability of health care for individuals and families. For those who have or will have health care needs, even with subsidies, the premiums, deductibles, other cost sharing, out-of-network costs, and the costs of services that are not a benefit of the plans will be unaffordable for all but the relatively wealthy.
Today’s message is significant because MIT economist Jonathan Gruber, one of the most influential proponents of the current legislation, also understands that the issue of affordability has not received the attention it deserves. As he points out, a $2,500 deductible is a lot to ask of an individual making $22,000 a year. He wants them to have “skin in the game,” but even he understands that you can’t ask for their entire hide.
So how would he suggest that we reduce out-of-pocket costs so that health care is affordable? It appears that he would use the measures in the Senate bill to bend the cost curve so excessive costs allegedly aren’t passed on to patients. It seems to matter little to him that the CBO was unable to project a bend in the curve when it did its analysis.
Of course, Gruber is also an advocate of “let’s pass this bill now and then we can fix it later on” – a tacit acknowledgment that affordability will remain a crucial issue.
Gruber says that he can’t think of anything more to do that isn’t in the Senate bill. But you readers know better. We need to dump this plan and immediately go to work on one that will make health care affordable for everyone – an equitably-financed, single payer, improved Medicare for all. Do really we need to wait for Gruber’s ultimate test for affordability – a revolt?