PNHP

More Than One In Four Workers Will Be Uninsured In 2013

More Than One In Four Workers Will Be Uninsured In 2013

EMBARGOED for release
Tuesday, April 5, 2004, 12:01 EDT

Contact: Jon Gardner
jgardner@projecthope.org
301-347-3930

More Than One In Four Workers Will Be Uninsured In 2013

As Coverage Becomes More Unaffordable, Health Affairs Article Says

Researchers Base Findings On Relationship Between Growth In Health Care Spending And Personal Income

BETHESDA, MD�More than one in four American workers under age 65 will be uninsured in 2013 (nearly 56 million people); the increase will be driven by workers� increasing inability to afford health insurance, according to new projections posted today on the Health Affairs Web site.

Authors Todd Gilmer and Richard Kronick of the University of California, San Diego, base their estimates of the uninsured on federal projections of health spending, personal income and other population characteristics. Their work was supported by the California HealthCare Foundation.

Because growth in per capita health spending is expected to outpace median personal income by 2.4 percentage points per year, health care coverage will continue to decline, because more Americans will find it unaffordable. While factors such as changes in employment patterns and demographic shifts have some mild effects on health care coverage, cost has the biggest effect.

For each 1 percent increase in health spending relative to personal income, the number of uninsured people increases by 246,000, the researchers say. As a result, according to their projections, 11 million more people will lack coverage in 2013 than in 2003. Based on estimates from the Institute of Medicine, this is expected to lead to an increase of 4,500 deaths annually and an increased annual loss of human capital of $16-$32 billion.

�Regardless of whether health care benefits are being paid out of employer�s or employee�s pocket, and without regard to the amount of premium contribution that employees are required to make, there is a remarkably tight relationship between affordability and coverage rates,� the authors say.

�It is unlikely that we will be able to solve the problem of the uninsured without some form of universal health insurance requiring contributions from some combination of employers, employees, and taxpayers,� they continue. �It is also unlikely that either our current system of employer-sponsored coverage or an alternative system of universal coverage will be sustainable without more effective efforts at cost containment.�

The authors add that the accuracy of their estimates of health care coverage will depend on how closely actual health spending and personal income mirror the federal government�s projections.

The ten-year projections show a smaller differential between health care spending and personal income than in the recent past. Between 1999 and 2002, per capita health care spending spiked 9.8 percent a year while median personal income rose only 2.2 percent. As a result, the authors say, uninsurance among nonelderly workers rose 1.5 percentage points, from 22.3 percent in 1999 to 23.8 percent in 2002.

Gilmer is an assistant professor in the UCSD School of Medicine�s Department of Family and Preventive Medicine. Kronick is a professor in that department and chief of the Division of Health Care Sciences at UCSD.

You can read the article at content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.143.

Health Affairs, published by Project HOPE, is the leading journal of health policy. Peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at www.healthaffairs.org.

The full text of this Health Affairs Web Exclusive is available free of charge to all Web site visitors for a two-week period following posting, after which it will revert to pay-per-view for nonsubscribers. The abstracts of all articles are free in perpetuity. Support for the publication of this Web Exclusive was provided by the California HealthCare Foundation; Web Exclusives are also supported in part by a grant from the Commonwealth Fund.

You are receiving this e-mail because you registered on the Health Affairs Web site. If you do not wish to receive such notifications in the future, please go to www.healthaffairs.org/1260_opt_in.php to change your e-mail notification options. If the above links are not activated, please highlight the link and press Ctrl-c (Command-c on a Mac) to copy it. Then place your cursor in the address window of your browser, press Ctrl-v (Command-v) to paste.

Where's outcry over the lack of health care?(Baltimore Sun )

Letters to the Editor
Originally published April 2, 2005

Where’s outcry over the lack of health care?

The Terri Schiavo case cut to the core of American hearts and souls. In part, the outpouring of passionate support for her parents’ position was about the individuals involved. In a larger sense, it was about deep concerns many Americans have about the direction our moral life is taking (“As Schiavo saga winds down, leaders pursue broader debate,” March 29).

But one aspect of this moral tension that was not given full consideration in the Schiavo case is access to medical care. More than 45 million Americans lack health care insurance. The Institute of Medicine has estimated that the lack of health insurance is the direct cause of death for more than 18,000 Americans every year.

These 18,000 Americans die because of complications from very treatable diseases, such as hypertension and diabetes. In the Schiavo case, there was conflicting evidence as to whether Terri Schiavo would have wanted to continue chronic tube feedings with her degree of brain damage.

There is absolutely no conflicting evidence about the 45 million Americans who are excluded from health care insurance. They want it, and reside in a nation that denies it to them.

There is absolutely no moral ambiguity about the 18,000 Americans who are sentenced to death every year because our health care system refuses to address their needs.

Why is there no moral outcry about these Americans who unnecessarily die every year? Do they matter as much as Mrs. Schiavo? Where is emergency action by our president and our Congress? Where is the righteous rage from those who fear God?

Terri Schiavo’s care cost, at a conservative estimate, $100,000 per year for 15 years. How many Americans could have been kept alive if equal monies had been spent in treating routine diseases? How can our president and Congress try to pass budget cuts for Medicaid at a time when lack of health insurance benefits is pushing more and more workers into Medicaid?

Does the suffering of millions of the working poor have any meaning to our leaders? I have a deep respect for Christians who saw vital moral issues in continuing the tube feedings for Terri Schiavo. I pray they will be equally able to see the vital moral issues in caring for everyone who needs medical care.
Terri Schiavo’s greatest gift to her country may be in wakening its conscience.

Dr. James A. Cockey
Salisbury

Where’s outcry over the lack of health care?(Baltimore Sun )

Letters to the Editor
Originally published April 2, 2005

Where’s outcry over the lack of health care?

The Terri Schiavo case cut to the core of American hearts and souls. In part, the outpouring of passionate support for her parents’ position was about the individuals involved. In a larger sense, it was about deep concerns many Americans have about the direction our moral life is taking (“As Schiavo saga winds down, leaders pursue broader debate,” March 29).

But one aspect of this moral tension that was not given full consideration in the Schiavo case is access to medical care. More than 45 million Americans lack health care insurance. The Institute of Medicine has estimated that the lack of health insurance is the direct cause of death for more than 18,000 Americans every year.

These 18,000 Americans die because of complications from very treatable diseases, such as hypertension and diabetes. In the Schiavo case, there was conflicting evidence as to whether Terri Schiavo would have wanted to continue chronic tube feedings with her degree of brain damage.

There is absolutely no conflicting evidence about the 45 million Americans who are excluded from health care insurance. They want it, and reside in a nation that denies it to them.

There is absolutely no moral ambiguity about the 18,000 Americans who are sentenced to death every year because our health care system refuses to address their needs.

Why is there no moral outcry about these Americans who unnecessarily die every year? Do they matter as much as Mrs. Schiavo? Where is emergency action by our president and our Congress? Where is the righteous rage from those who fear God?

Terri Schiavo’s care cost, at a conservative estimate, $100,000 per year for 15 years. How many Americans could have been kept alive if equal monies had been spent in treating routine diseases? How can our president and Congress try to pass budget cuts for Medicaid at a time when lack of health insurance benefits is pushing more and more workers into Medicaid?

Does the suffering of millions of the working poor have any meaning to our leaders? I have a deep respect for Christians who saw vital moral issues in continuing the tube feedings for Terri Schiavo. I pray they will be equally able to see the vital moral issues in caring for everyone who needs medical care.
Terri Schiavo’s greatest gift to her country may be in wakening its conscience.

Dr. James A. Cockey
Salisbury

Minnesota Medical Association's universal insurance bill

Star Tribune
March 30, 2005
Bill mandates health coverage for Minnesotans
By Patricia Lopez

Every Minnesotan would be required to have at least minimal health insurance and every insurer would have to offer such a plan under a far-ranging health care overhaul bill offered by the Minnesota Medical Association on Tuesday… which was introduced with bipartisan support in the House and Senate…

Dr. Michael Gonzalez-Campoy, MMA president, said that the plan was the result of “months of work,” and that health providers briefed on it had been enthusiastic.

At its core, the plan would set out an as yet undefined set of “essential benefits” that would provide minimal coverage with an emphasis on prevention.

Dr. Judith Shank, a dermatologist and former MMA president who led the organization’s health reform committee, said that while no guarantee of a subsidy exists in the bill, there is a presumption that “there would have to be subsidies for people who cannot afford” even the essential benefits coverage on their own.

Some additional money would come from the thousands of young people who are uninsured either by chance or choice. Shank has argued that “it is unfair for people who assume they are young and healthy to opt out” of health insurance, as some do. By requiring them to have some type of coverage, risk would be spread as broadly as possible, she said.

(Sen. Sheila) Kiscaden said that under the bill Minnesotans might be required to offer proof of coverage when they filed their income taxes or applied for a driver’s license. By the same token, insurers would have to offer the essential benefits and could not reject anyone because of age, gender or health history. Preexisting health conditions, a common reason for rejection for traditional policies, could not be taken into account.

Gonzalez-Campoy said the mandatory requirement would bring another 374,000 uninsured Minnesotans into the system, resulting in earlier treatment, more prevention and more affordable care. Ultimately, he said, “health care costs will be lower.”

http://www.startribune.com/stories/587/5318643.html

Comment: The Minnesota Medical Association and the Minnesota state legislature are to be commended for placing comprehensive health care reform on the political agenda. My critique of their proposal should not be allowed to detract from their sincere support of much needed reform. But we should look at what their “months of work” on the policy issues has produced.

The plan begins with a core of “‘essential benefits’ that would provide minimal coverage” for everyone. But this presumes that there are additional beneficial health care services to which lower-income individuals are not entitled. Rather than defining a core of basic benefits, it would be more appropriate to define those health care services that should not be universally accessible.

Once you list items such as vanity cosmetic surgery or hospital penthouse suites, it becomes more difficult to define the care that you would deny. Since the purpose of reducing access to care is to control spending, it would be much more rational to use mechanisms that shift spending from useless or detrimental services to spending on all beneficial services for everyone. The spending on useless administrative services, on high tech excesses, and on other inappropriate services have been estimated to be 50% of our health care budget. Single payer policies would recover more of that waste than would be required to pay for the current gap in universal access to beneficial services.

Perhaps the most difficult political hurdle is to broker an agreement on how you pay for universal coverage. Acknowledging that subsidies will be necessary for people who cannot afford even the essential benefits is important, but there already is near universal agreement on that point. Leaving funding out of the bill reveals the fear of advancing a proposal that involves the government and taxes. Again, there is agreement across the political spectrum that reform must involve both government and taxes since there is no other way to equitably fund access to reasonably comprehensive services. That bull is charging us, and we have no choice but to grab it by the horns… now!

It would be nice to believe that a significant source of funding would be the young and healthy who are uninsured by choice. But since most of them actually are uninsured because they cannot afford coverage, no juice will be forthcoming from that turnip. For the few free riders who can afford to pay, an equitable system would ensure their compliance.

Requiring individuals to offer proof of coverage is the equivalent of requiring uninsured individuals to pay for their own coverage (individual mandate), an impossibility for those who do not have the funds yet fall above the levels qualifying for subsidies. An effective policy would be to automatically cover everyone, then the need to provide proof of coverage would be eliminated.

With our current system of multiple private plans, community rating and guaranteed issue drive up premiums, making plans unaffordable for those with low or even modest incomes. Again, the problems of community rating and guaranteed issue would be eliminated by the adoption of a single payer system.

The primary reason for providing comprehensive coverage for the uninsured is that it does improve health care outcomes. But does it really save money? Earlier intervention does prevent spending on some more expensive interventions that would otherwise result from deferred access to essential care, but there is an offset through the costs of improved access to care.

Although the net financial impact is difficult to quantify, any savings would not be enough to rely on to fund the gaps in coverage. Either we will have to spend much more money, or we will have to adopt a system that spends what we already have much more effectively, providing us with greater health care value. Of course, that’s what a single payer system is all about.

Another quote from this article is appropriate:

“Rep. Jim Abeler, R-Anoka, the bill’s House sponsor, said that even if the MMA proposal does not pass this year, it ‘puts a whole lot of ideas on the table for us to look at.'”

We just hope that their aversion to politically charged policies do not prevent them from looking at all policy options, including those that would provide affordable, comprehensive health care coverage for everyone.

Health Biz: Advancing national healthcare

Health Biz: Advancing national healthcare
By Ellen Beck
United Press International

Washington, DC, Mar. 29 (UPI) — National or universal health-coverage proposals go nowhere on Capitol Hill if they mandate business participation. Two plans proffered recently, however, either eliminate the need for employers to provide health benefits — which would cause many to breath a sigh of relief — or work through existing employer-based coverage.

What kills these plans, however, is another show-stopper: They rely on a value-added tax all Americans would pay.

The “Prescription for a Healthy America” is published in the journal Health Affairs and the “Prosperity Project” is found in the New England Journal of Medicine. Both come from highly respected experts in the health-policy field and both are destined for oblivion — at least while Congress and the White House are in Republican hands and possibly much longer.

What the proposals do, however, is to continue the national discussion of what kind of healthcare system Americans want in the future, allowing it to bubble up between the bigger controversies over Medicaid, Medicare and Social Security. They all weave together financially, but politically speaking, reforming any of the three big entitlement programs is easier for lawmakers and the public to grasp than is dumping the entire U.S. healthcare-financing system in favor of something that would look at lot like the British or Canadian alternative.

Congress is not going to move on the uninsured until the costs of doing nothing hit the middle class or upper-middle class squarely in the pocketbook and there is a resulting public outcry or mandate for change. That is just beginning to happen as Americans feel the side effects of 45 million uninsured citizens in the form of higher premiums and co-payments for their own insurance plans — the healthcare industry passing on the cost of unreimbursed care.

John Podesta, former White House chief of staff under President Bill Clinton and now president of the Center for American Progress, told a news briefing that the center’s “Prescription for a Healthy America” would build on the employer-based coverage and expand Medicaid.

The proposal would create new purchasing pools for individuals and employers to draw from. People who did not join a plan would be assessed an income-related fee for the cost of their future care under Medicaid. The plan would cost from $100 billion to $160 billion per year, not including any savings such a system might reap. It also would require a dedicated value-added tax of 3 percent to 4 percent, with small business, food, education, religion and medical care exempted.

“We believe Americans are ready for a bold solution to the real problems they and their neighbors struggle with every day,” Podesta said. “Such a solution, if designed to be practical, to be fair and responsible, can overcome the political obstacles.”

Dr. Ezekiel Emanuel of the National Institutes of Health, where he chairs the Department of Clinical Ethics, along with Dr. Vic Fuchs at Stanford University, proposed in NEJM the “Prosperity Project,” based the idea the healthcare system is broken and cannot be fixed — so dump it.

They also espouse a VAT as a funding mechanism, but their plan retains the private insurance industry, while getting rid of the employer-based system with its tax breaks for companies, as well as Medicare and Medicaid. Instead, it uses a voucher system, giving each American a government-paid voucher, with which to purchase a basic health plan. If a person wants more than the voucher affords, he or she can pay out-of-pocket for better coverage.

“We rely on the private sector to deliver care just as it does now,” Emanuel said. “We believe there will be some shake-out in the private sector. It can’t continue with 1,300 insurance and health plans in this country. It doesn’t make any sense, but we don’t mandate that.”

Dr. Jim Morgan, president of the Partners Health System in Boston, said the biggest obstacle to overcome is the anti-tax sentiment in Congress.

“Make no mistake about it, increasing taxes to pay for health insurance will run into the teeth of the strongest political force of the last 40 years — the anti-tax movement,” Morgan said. “This obstacle will only be overcome when we as a nation answer the question, ‘What happened to social justice as a moral value?'”

That moral or social responsibility theme has existed in the background of national healthcare discussions, but not as a banner anyone in Washington would carry when delivering a proposal to Congress. Far easier to arm one’s self with statistics and forecasts and just imply the moral implications.

“In my judgment, morality will not be a compelling selling tool unless the United States is on the heels of a virtual economic collapse and true fear pervades the majority of American families,” said Wally Maher, a former vice president for public policy at DaimlerChrysler.

Maher said national coverage, with a VAT that spreads the financial burden, actually would be good for U.S. businesses — as the cost of providing healthcare benefits weighs heavily on the corporate bottom line.

“I would be far less than candid if I did not point out that our board (back in the 1980s) was also keenly aware of the fact that were the United States to develop universal coverage — particularly with cost containment as part of the solution — it would help moderate (DaimlerChrysler’s) healthcare cost and improve its global competitiveness,” he said.

National healthcare proposals that mandate business participation — for example one supported by at least one health plan and former Sen. John Breaux, D-La. — requiring them to provide the benefit to all employers or pay a percentage of their payroll into a national insurance fund, get a cold shoulder from the business sector.

“We keep in place the policies that are there to date that sustain employer coverage,” said Jeanne Lambert, a senior fellow at the Center for American Progress and the lead author of its proposal. “We create this new pool — that is small employers, large employers — any employer can come into to purchase coverage through. And in fact, if they do so, they qualify for some reinsurance or federal subsidy for their high-cost cases. So we kind of give a new option with some choices. We actually hope that there may be some employers who are not offering today that will do so.”

“If you’re interested in political feasibility, it seems me an employer mandate kills your plan,” Emanuel added. “Business wants out of healthcare. They don’t want to be locked into it and if you put an employer mandate, you can be sure they’re going to oppose you.”

The Physicians’ Proposal for Single-Payer National Health Insurance — offered up in 2003 by physicians and published in the Journal of the American Medical Association — went to another extreme. It all but eliminated the health insurance industry — a major nemesis of physicians — for a single-payer, government run system based on Medicare. The plan, its authors envisioned, would not cost more than what the United States now spends on healthcare because it would implement a system that would ensure best practices and reduce overhead, administration, inefficiency and waste.

An extreme shift, Lambrew said, was something the “Prescription for a Healthy America” plan tried to avoid.

“We learned in 1994 that people can easily be scared by people like Harry and Louise to think that they’re going to lose what they have today,” she said, “and even though you can argue that a more ideal system would be more seamless with one source of coverage, talking to seniors about losing their Medicare (as in the Prosperity Project plan), I think, might even scare them more.”

Some of what’s been proposed for national healthcare actually was included in Sen. John Kerry’s Democratic Party health platform when he ran for president last year. The public had a tough time grasping it, compared to the relatively simple idea of tax credits or health savings accounts supported by President George W. Bush.

Like any policy, however, the more the public hears about an issue — and Bush is banking on this in his Social Security proposals — the more likely people will latch on to an idea and push it forward — forcing Congress to act.

That moment is not here yet for national health insurance, but proponents will keep the discussion alive until that political time arrives.

Minnesota Medical Association’s universal insurance bill

Star Tribune
March 30, 2005
Bill mandates health coverage for Minnesotans
By Patricia Lopez

Every Minnesotan would be required to have at least minimal health insurance and every insurer would have to offer such a plan under a far-ranging health care overhaul bill offered by the Minnesota Medical Association on Tuesday… which was introduced with bipartisan support in the House and Senate…

Dr. Michael Gonzalez-Campoy, MMA president, said that the plan was the result of “months of work,” and that health providers briefed on it had been enthusiastic.

At its core, the plan would set out an as yet undefined set of “essential benefits” that would provide minimal coverage with an emphasis on prevention.

Dr. Judith Shank, a dermatologist and former MMA president who led the organization’s health reform committee, said that while no guarantee of a subsidy exists in the bill, there is a presumption that “there would have to be subsidies for people who cannot afford” even the essential benefits coverage on their own.

Some additional money would come from the thousands of young people who are uninsured either by chance or choice. Shank has argued that “it is unfair for people who assume they are young and healthy to opt out” of health insurance, as some do. By requiring them to have some type of coverage, risk would be spread as broadly as possible, she said.

(Sen. Sheila) Kiscaden said that under the bill Minnesotans might be required to offer proof of coverage when they filed their income taxes or applied for a driver’s license. By the same token, insurers would have to offer the essential benefits and could not reject anyone because of age, gender or health history. Preexisting health conditions, a common reason for rejection for traditional policies, could not be taken into account.

Gonzalez-Campoy said the mandatory requirement would bring another 374,000 uninsured Minnesotans into the system, resulting in earlier treatment, more prevention and more affordable care. Ultimately, he said, “health care costs will be lower.”

http://www.startribune.com/stories/587/5318643.html

Comment: The Minnesota Medical Association and the Minnesota state legislature are to be commended for placing comprehensive health care reform on the political agenda. My critique of their proposal should not be allowed to detract from their sincere support of much needed reform. But we should look at what their “months of work” on the policy issues has produced.

The plan begins with a core of “‘essential benefits’ that would provide minimal coverage” for everyone. But this presumes that there are additional beneficial health care services to which lower-income individuals are not entitled. Rather than defining a core of basic benefits, it would be more appropriate to define those health care services that should not be universally accessible.

Once you list items such as vanity cosmetic surgery or hospital penthouse suites, it becomes more difficult to define the care that you would deny. Since the purpose of reducing access to care is to control spending, it would be much more rational to use mechanisms that shift spending from useless or detrimental services to spending on all beneficial services for everyone. The spending on useless administrative services, on high tech excesses, and on other inappropriate services have been estimated to be 50% of our health care budget. Single payer policies would recover more of that waste than would be required to pay for the current gap in universal access to beneficial services.

Perhaps the most difficult political hurdle is to broker an agreement on how you pay for universal coverage. Acknowledging that subsidies will be necessary for people who cannot afford even the essential benefits is important, but there already is near universal agreement on that point. Leaving funding out of the bill reveals the fear of advancing a proposal that involves the government and taxes. Again, there is agreement across the political spectrum that reform must involve both government and taxes since there is no other way to equitably fund access to reasonably comprehensive services. That bull is charging us, and we have no choice but to grab it by the horns… now!

It would be nice to believe that a significant source of funding would be the young and healthy who are uninsured by choice. But since most of them actually are uninsured because they cannot afford coverage, no juice will be forthcoming from that turnip. For the few free riders who can afford to pay, an equitable system would ensure their compliance.

Requiring individuals to offer proof of coverage is the equivalent of requiring uninsured individuals to pay for their own coverage (individual mandate), an impossibility for those who do not have the funds yet fall above the levels qualifying for subsidies. An effective policy would be to automatically cover everyone, then the need to provide proof of coverage would be eliminated.

With our current system of multiple private plans, community rating and guaranteed issue drive up premiums, making plans unaffordable for those with low or even modest incomes. Again, the problems of community rating and guaranteed issue would be eliminated by the adoption of a single payer system.

The primary reason for providing comprehensive coverage for the uninsured is that it does improve health care outcomes. But does it really save money? Earlier intervention does prevent spending on some more expensive interventions that would otherwise result from deferred access to essential care, but there is an offset through the costs of improved access to care.

Although the net financial impact is difficult to quantify, any savings would not be enough to rely on to fund the gaps in coverage. Either we will have to spend much more money, or we will have to adopt a system that spends what we already have much more effectively, providing us with greater health care value. Of course, that’s what a single payer system is all about.

Another quote from this article is appropriate:

“Rep. Jim Abeler, R-Anoka, the bill’s House sponsor, said that even if the MMA proposal does not pass this year, it ‘puts a whole lot of ideas on the table for us to look at.'”

We just hope that their aversion to politically charged policies do not prevent them from looking at all policy options, including those that would provide affordable, comprehensive health care coverage for everyone.

Gov. Richardson signs Insure New Mexico initiative

The Albuquerque Tribune
March 28, 2005
Sign of change
By Mike Tumolillo

The big news on the health front is the signing of the governor’s Insure New Mexico initiative. The legislation is four-fold and is aimed at reducing the number of uninsured people in the state.

The four bills are:

. Small Employer Health Care Coverage Access, which provides options for employers with 50 or fewer workers to buy into the state’s health insurance
program.

. Health Insurance Rates and Alliance Membership, which the governor’s office says will make health insurance more affordable for individuals and small businesses. The measure lowers premium rates offered by carriers through the Health Insurance Alliance.

. Health Coverage for Unmarried Dependents, which allows single people to remain on their parents’ health plan until they turn 25.

. Part-time Employee Insurance Coverage, which requires insurers to offer a plan to part-timers working more than 20 hours a week should their employers choose to extend coverage to them.

Pahl Shipley, a spokesman for the governor, said the bills will help expand access to health insurance to more than 35,000 New Mexicans. The state estimates the number of uninsured to top 414,000.

http://www.abqtrib.com/albq/bu_local/article/0,2565,ALBQ_19838_3656256,00.html

Comment: New Mexico’s Democratic governor, Bill Richardson, has steadfastly
opposed single payer reform, supporting instead incremental approaches to
covering the uninsured. It is likely that his Insure New Mexico initiative, that he just signed into law, will not provide enough coverage to offset the increases in the numbers of uninsured due to failing private coverage.

But let’s assume that his optimistic prediction of 35,000 newly insured will be met without any other decline in coverage. What does he plan to do about the other 91% of the uninsured in his state?

After two decades of incremental policies for reform, the results are in. The numbers of uninsured continue to increase, and the financial security of those who have insurance is under ever greater threat. Let’s get out of the reverse gear of incrementalism and put our reform movement in Drive, or we’ll never get to where we want to go.

Health-insurance rates grab attention

By Bruce Pringle
Coast Press Reporter
UNHEALTHY PRICES?

The cost of health care leads to efforts to provide adequate, affordable insurance to more Delaware residents. Lloyd Mills, who has spent years studying the high cost of medical care, says there is at least one benefit of rising health-insurance prices: They keep people focused on trying to make those prices lower.

So far, the effort has paid few dividends. Insurance premiums continue to rise yearly by double-digit percentages.

“What’s encouraging is we have a lot of initiatives on the table,” said Mills, of Lewes, president of Delaware Small Business Health Care Coalition.

* Last week, state Rep. Joe Booth, R-Georgetown, formally reintroduced his proposal to allow businesses with fewer than 1,000 employees to obtain insurance coverage through the health-care plan for Delaware state workers. House Bill 66 is essentially the same as a proposal that stalled last year amid complaints that it would be too costly for the state to administer.

* In February, state Insurance Commissioner Matt Denn announced that a group of legislators, business and medical leaders and others were meeting to propose legislation to enable businesses to form an insurance purchasing pool. The pool would buy insurance for its members much as governments and huge corporations do for their employees.

* On Tuesday, a statewide committee was to resume discussion of how to make affordable health care available to every Delaware resident, possibly through a government-run “single-payer” system like those in Canada and much of Europe.
* And around April 1 a new, nonprofit, Sussex County-based player in the health-insurance field, First Healthy Choices, is to begin offering local chamber-of-commerce members coverage in which rates would be lower for people who follow their doctors’ orders. The cost of that coverage has yet to be announced.

Meanwhile, Mills said, many businesses and individuals are trying to cut costs by opting for policies that can require a patient stricken by a major illness or injury to pay up to $10,000 annually toward his own medical care.

“Moderate-income people don’t have the wherewithal to come up with $5,000 or $10,000,” he said.

A recent Harvard University study found that medical bills are the most common reason people file for bankruptcy. More than half the people surveyed cited a major family illness or injury as the reason they went into debt. Of those who blamed medical bills for their bankruptcies, more than 70 percent said they had health insurance.

“They think they’re safe,” Mills said of workers whose coverage proves insufficient when catastrophe strikes. “That’s the crime of it.”

BOOTH VS. DENN?

Booth said 270,000 people in private industry potentially could benefit from his bill. But he admits he’s in for a hard fight.

“My proposal was derailed (in 2004) by the threat that it would cost the state some money,” he said.

Critics of his plan say it could drive up the state’s health-insurance cost if private workers need more medical care than state employees. In addition, the state would bear the cost of serving as the go-between for insurers and private employers.

“The bottom line, I think, is (H.B. 66) will be amended to chop away at cost,” Booth said, predicting that other legislators will eliminate larger companies from potential eligibility to participate. Even with that change, he conceded, he will have to combat charges that the state would be overburdened by administrative costs.

Booth’s bill may be in competition with one crafted by the group backed by Denn, the insurance commissioner. The group is to present a formal proposal during the General Assembly’s current session, which runs through June 2006.

Attempts to reach Denn for comment were unavailing.

A third proposal for health-insurance reform in Delaware could promote a single-payer proposal to ensure health care for virtually every resident. It would place the state in the role now played by insurance companies. While the system might raise state expenses, its advocates say, it would reduce overall health-care costs by reducing paperwork and inefficiency.

Such a proposal was sponsored last year by state Rep. Dennis Williams, D-Wilmington. He wasn’t available to discuss whether he will introduce a similar bill.

While the General Assembly considers possible long-term, statewide health-insurance reform, a local initiative could result in a new line of coverage within the next several weeks. First Healthy Choices, a fledgling nonprofit that has attracted the attention of the Rehoboth Beach-Dewey Beach Chamber of Commerce, is to unveil its complete program soon, according to the chamber’s executive director, Carol Everhart.

Among the program’s unusual features will be a rate structure in which an individual would pay more if he failed to heed a doctor’s advice to, for instance, avoid gaining weight.

This article contains material from Gannett News Service.

* E-mail Bruce Pringle at bxpringle@gannett.com.

Originally published Wednesday, March 9, 2005

The growing problem of inadequate insurance

American Medical News
April 4, 2005
Underinsured and overlooked: The growing problem of inadequate insurance
By Joel B. Finkelstein

Tens of millions of Americans have coverage that still leaves medical bills they cannot afford to pay, according to estimates by Consumers Union.

Now some physicians fear the problem is growing. They are seeing it regularly in their practices, often in the form of unpaid bills.

The culprit is increasing deductibles and other forms of cost sharing that employers are turning to in the face of steeply rising health care costs.

“Underinsurance is going to become a dramatic issue in the next two or three years,” predicted Thomas Bodenheimer, MD, MPH, an adjunct professor in the Family and Community Medicine Dept. at the University of California, San
Francisco, School of Medicine.

“More and more people are going to have plans that have huge deductibles and very large co-pays. Even HMOs now are beginning to have co-pays for hospital care that are quite significant, in addition to the deductible,” Dr.Bodenheimer said.

Just because someone has health insurance doesn’t necessarily mean they are covered, said Karen Pollitz, project director at the Institute for Health Care Research and Policy at Georgetown University, Washington, D.C. In an anecdotal study conducted in conjunction with the American Diabetes Foundation, Georgetown researchers found that some people with diabetes keep paying their health insurance premiums even if that means they will not be able to afford their routine medical costs, Pollitz said.

They couldn’t simultaneously pay for test strips and their insurance, but were too afraid of going without any coverage to stop paying premiums. In those cases, having insurance actually led to their diabetes worsening, she said.

“Something is not always better than nothing,” Pollitz said. In the future, politics has to play a bigger role in ensuring that people not only have health insurance, but that it offers appropriate coverage, Dr.(Alan) Sager said.

http://www.ama-assn.org/amednews/2005/04/04/gvsa0404.htm

Comment: Although we continue to fret about the tragic consequences of allowing 45 million Americans to remain uninsured, we have not really made the commitment to effect change. But there is a prevailing issue that has provoked major policy changes. Those who are paying for health insurance coverage are very concerned about the dramatic increases in insurance premium prices. Ignoring the problem of the uninsured, and ignoring the problem of the explosion in actual health care costs, almost all policy activity has now been narrowly limited to efforts to control the price of premiums.

The obvious consequence of controlling premium prices in the face of the escalating costs of health care delivery is that out-of-pocket expenses must increase for the individuals utilizing health care services. Thus we are facing a massive epidemic of underinsurance due to this large coverage gap. The irony is that this will largely spare those of us who are healthy but threaten the financial security of those with greater health care needs.

Our policymakers have managed to change the crisis in health care from the single problem of covering the uninsured to the dual problem of both covering everyone and providing financial security for those with health care needs. We can and should have both. But we need to fire our current policymakers and replace them with those who really care.

Vouchers?

The New England Journal of Medicine
March 24, 2005
Health Care Vouchers – A Proposal for Universal Coverage
By Ezekiel J. Emanuel, M.D., Ph.D., and Victor R. Fuchs, Ph.D.

Incremental reforms have been tried, but despite some successes, such as the
State Children’s Health Insurance Program, the system as a whole is getting
worse, not better. Major reform is needed but will not happen immediately. As problems mount, however, the demand for change will intensify. In anticipation of that demand, we propose a voucher system with 10 fundamental features.

* Universality
* Free Choice of Health Plan (Individuals and families would choose which basic insurance program or health plan they wanted among several alternatives.)
* Freedom to Purchase Additional Services
* Funding by an Earmarked Value-Added Tax
* Reliance on a Private Delivery System
* End of Employer-Based Insurance
* Elimination of Medicaid and Other Means-Tested Programs
* Phasing Out of Medicare
* Administration (a Federal Health Board modeled on the structure of the Federal Reserve System)
* Assessment of Technology and Outcomes

Universal Benefits Package

The universal benefits package covered by the voucher should be sufficiently
comprehensive to provide most Americans with most of their care most of the
time. It should not be designed as a safety net to serve only the poor. The
benefits provided should be those typically offered by large employers, including inpatient and outpatient hospital services, visits to physicians’ offices, well-child care and other preventive measures, mental health care, and tiered pharmaceutical benefits, typically with dollar limits. We suggest only modest deductibles and copayments to minimize access barriers for the poor. In 2004, the average annual premium for such coverage in an employer-based program was $9,950 for families and $3,695 for individuals.

Ultimately, the Federal Health Board would structure the benefits package after wide consultation with experts and involvement of the public through various mechanisms. The process would be iterative, with modifications reflecting a balance between the public’s desire for more health care services and its willingness to pay the valued-added tax.

http://content.nejm.org/cgi/content/short/352/12/1255

And an editorial from the same issue of NEJM:

Financing Health Care – Finding the Money Is Hard and Spending It Well Is Even Harder
By Richard Kronick, Ph.D.

…it is not clear whether payments should be made directly from the government to providers or whether risk-bearing intermediaries should be used. Direct payments have the great advantages of simplicity and low transaction costs. Approximately 20 percent of the resources used in health care are devoted to making payments and collecting money, and a single-payer system would allow many of those resources to be used in other ways. Direct-payment systems also promote equity and uniformity in coverage policies.

However, it is hard for the government to determine whether services that physicians provide do much to improve patients’ health. A fee-for-service structure is antithetical to the development of systems capable of providing the kind of well-coordinated, patient-centered care that is needed by the growing number of people with chronic illnesses. And direct payments make it difficult to reallocate resources, because the incumbents – providers who have received funds in the past – are able to hold on to those resources even if they would be better used elsewhere.

Paying health plans as intermediaries can potentially solve some of these problems. In theory, health plans can be more flexible in their internal allocation of resources than can governmental direct-payment systems. If changes in technology allow resources to be shifted out of the hospital into the community, it will be difficult for the government to claw funds out of hospital budgets, but it may be more feasible for private plans to do so.

Health plans may be better able than the government to determine which services are most valued by patients and shift resources to those services. In the best plans, doctors have a strong voice in the allocation of resources. A system that is based on competing private health plans could create a dynamic in which physicians and hospitals are rewarded, with more revenue and members, if they do a good job. Health policy analysts and politicians have engaged in intense disputes about whether the government should be a single payer of providers or a single payer of health plans; these debates will doubtless continue.

As messy and difficult as a publicly financed system is likely to be, the alternatives are worse. Under the status quo, expenditures are increasing at a rate that is unaffordable, many resources are used in clinical and administrative activities that do little to improve health, and accountability mechanisms are weak. Voluntary, employer-sponsored insurance will continue to recede as health care expenditures increase more quickly than workers’ wages or productivity. The resulting increase in the number of uninsured people will lead to additional health and financial catastrophes, increase the strain on the safety net, and increase political pressure for change.

We do know how to ensure universal coverage, but we do not know how to ensure that our money will be spent well. We should not let uncertainty about how best to spend money prevent us from supporting proposals for universal coverage in the context of a system that would be less chaotic and more affordable. Emanuel and Fuchs offer a thought-provoking suggestion for moving in that direction.

http://content.nejm.org/cgi/content/short/352/12/1252

Comment: Single payer advocates, merely by reviewing the list of features of the Emanuel/Fuchs proposal, will immediately recognize many disputed policy concepts. No attempt will be made to address most of them here, but rather my comments will be limited to two important issues: (1) basic benefits, and (2) the use of health plans as risk bearing intermediaries.

Last year, in a debate at Stanford School of Medicine, Dr. Fuchs presented his proposal, and I discussed the single payer approach. During Q & A, I asked him how he would define basic care; would total joint replacement in an individual with advanced degenerative hip disease be basic care? He emphatically stated that it would be.

Then what is basic care? What beneficial health care services would we exclude from basic coverage? Single payer advocates would contend that all beneficial services should be included, excluding only those for which costs clearly exceed the benefit (e.g., $10,000 per dose for an antihistamine, an exaggeration to make the point).

The PNHP model of single payer, by design, includes all beneficial services. With a voucher system, the voucher is used to shop for plans with varying benefits, but with a floor of basic coverage. Would the menu of plans include versions that would exclude coverage of joint replacement? That demonstrates the fundamental fallacy of the concept that there is a nebulous cluster of basic benefits that exclude enough beneficial health care services to bring down health care spending without resulting in impaired outcomes due to impaired access because of financial barriers. We need to reject the concept that there is a floor of basic services beyond which lower-income individuals have no entitlement. We need to proceed with reform that provides access to comprehensive services for everyone.

Dr. Kronick seems to concede that we need a publicly financed program, but
he suggests that paying health plans may improve resource allocation compared to paying providers directly. Is that a valid concept?

Integrated health systems such as Kaiser Permanente are effective in improving resource allocation when facing limited budgets. But most health plans are not integrated systems. Coverage restrictions are designed to make premiums competitive, based on market principles, and have virtually nothing to do with resource allocation.

The PNHP single payer model recognizes that a federally administered system
does not function well. That is why we recommend that the federal funds be
distributed to state or regional administrations. The funds can be more precisely directed to ensure appropriate capacity that would enable universal access to comprehensive services. Private health plans would never direct resources toward the health care infrastructure, but would remained involved in their own turf issues such as adverse selection and ratcheting down benefits. We disagree that private plans could be more effective in resource allocation. A public administrator would always have a mission of improving resource allocation for the benefit of all patients, whereas the private plans would always have a mission of enhancing their own business as a vendor of administrative services. The mission really does make a difference.

Spending health care dollars well is hard. But our own public administrators would make far better decisions on health care justice than would the boards
and administrators of private plans.

Limiting choice of physicians and hospitals is the wrong answer

The Center for Studying Health System Change
March 2005
More Americans Willing to Limit Physician-Hospital Choice for Lower Medical Costs
By Ha T. Tu

More Americans are willing to limit their choice of physicians and hospitals to save on out-of-pocket medical costs, according to a new national study by the Center for Studying Health System Change (HSC). Between 2001 and 2003, the proportion of working-age Americans with employer coverage willing to trade broad choice of providers for lower costs increased from 55 percent to 59 percent-after the rate had been stable since 1997. While low-income consumers were most willing to give up provider choice in return for lower costs, even higher-income Americans reported a significant increase in willingness to limit choice. Compared with other adults, people with chronic conditions were only slightly less willing to limit their choice of physicians and hospitals to save on costs. Perhaps as a result of growing out-of-pocket medical expenses in recent years, the proportion of people with chronic conditions willing to trade provider choice for lower costs rose substantially from 51 percent in 2001 to 56 percent in 2003.

http://www.hschange.org/CONTENT/735/

Comment: Respondents to this survey were asked if they agreed with this statement: “I would be willing to accept a limited choice of physicians and hospitals if I could save money on my out-of-pocket costs for health care.”

It is crucial to understand that they were not asked if they agreed with this statement: “I would prefer that my insurance plan restrict my choice of physicians and hospitals.” Yet the conclusion being drawn is that employers should offer more limited-choice insurance options.

Patients do value very highly their right to choose their own health care professionals. Baring your most intimate mental and physical issues to another from whom you seek help requires profound confidence and trust in the professional relationship. And for the great many individuals with chronic disorders, long-term continuity of this relationship is essential.

So why would so many be willing to relinquish this fundamental moral and ethical relationship? Well, this survey does provide that answer. Out-of-pocket expenses have become such a great burden, significantly impairing affordable access to care, that people are willing to give up this right to choose their professionals in order to reduce the personal debt burden of health care.

People want to have their choice of health care providers, and they want health care to be affordable. Offering more restrictive plans is not the answer since such plans would diminish choice, and they would have only a very modest impact on costs.

A single payer system would accomplish both goals. Patients would have free choice of their providers. And costs would be effectively controlled by methods that actually improve allocation of our health care resources. Why do we keep turning to the private plans to ask for highly flawed fixes to our sick health care system? Establishing our own public plan would allow us to apply the right fixes. Or does blind faith in market ideology still trump morality and ethics?

"Plan for a Healthy America"

Health Affairs
March 23, 2005
Change In Challenging Times:
A Plan For Extending And Improving Health Coverage

Health care for every American may be the current test of the strength of our convictions, as civil rights was in the 1960s.

By Jeanne M. Lambrew, John D. Podesta, and Teresa L. Shaw (from the Center for American Progress)

As veterans of previous policy battles, we do not underestimate the political challenge involved in making the U.S. health system accessible to all. Nor do we disagree with the assessment that moral conviction has been lacking in past health policy debates. However, we reject the claims that health reform is doomed by political paralysis and an incapacity for Americans to sacrifice for the greater good. At opportune points in U.S. history, pragmatic ideas have overcome seemingly impossible political odds and become policy. We also believe that the perceived disconnect between values and health reform reflects not a lack of conviction but a failure to express that conviction in a policy environment. In most faiths and value systems, it is wrong to tolerate pain, suffering, and even death that could be prevented with different policy choices. The challenge is to translate these deeply held values into action that ensures a better system and healthier nation.

Abstract:

Some speculate that Americans are neither politically capable of nor morally committed to solving the health system problems. We disagree. We propose a plan that insures all and improves the value and cost-effectiveness of health care by knitting together employer-sponsored insurance and Medicaid; promoting prevention, research, and information technology; and financing its investments through a dedicated value-added tax. By prioritizing practicality, fairness, and responsibility, the plan aims to avoid ideological battles and prevent fear of major change. By emphasizing the moral imperative for change, especially relative to other options on the policy agenda, it aims to create momentum for expanding and improving health coverage for all.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.119

Comment: The leadership of the Center for American Progress is to be commended for challenging the notion that “major change is politically infeasible.” They present very convincing arguments that now is the time to
move forward with a program that would provide comprehensive health insurance coverage for everyone.

Somewhat reminiscent of the Clinton attempt at reform, they have patched together a model that they believe would cross the political divide and receive the support of the various vested interests. The Clinton effort pleased no one.

As we look at a few of the features of this “politically feasible” model, please keep in mind that a critique of their model should not in any way deter us from our efforts to move forward with comprehensive reform. The selected and incomplete comments below about some of the features relate only to whether Center for American Progress has produced the definitive model for reform.

* Employer-sponsored coverage would be left in place, with current tax incentives that would encourage the continued participation of employers

Problem – Funding is regressive, providing a greater tax subsidy for higher income individuals. And this leaves in place our flawed, expensive, administratively inefficient system of funding care

* The Federal Employees Health Benefits Program (FEHBP) would supplement the employer system for those without options for group coverage (Healthy America pool)

Problem – Most FEHBP plans have cost sharing that would impair affordable access for those with modest or low incomes. And it still leaves the private health plans in place

* Medicaid would serve as a safety net for low-income people

Problem – Medicaid is chronically underfunded, reducing the number of willing providers, and that will not change when it continues to be perceived as a welfare program for the poor

* Reinsurance would be used to cover high-cost people

Problem – 20% of people use 80% of health care. Reinsurance would remove this major portion of health care spending from the risk pools of the private insurers and transfer it to the taxpayers. Why leave in place this highly flawed, expensive and wasteful system of private insurers when the taxpayer would be footing much of the bill?

* Refundable, means-tested tax credits would be used to help fund coverage for lower-income individuals

Problem – Unless the tax credit approached 100% of the premium, very few low-income individuals could participate. If the full premium is provided then, once again, why leave in place the superfluous, wasteful private plans?

* Individuals who fail to enroll in one of the programs would pay an income-related assessment and Medicaid would be the default payer

Problem – 80% of the uninsured do not have access to affordable employer-sponsored plans nor the funds to purchase insurance in the individual market. Enacting an individual mandate with the threat of financial penalties for individuals with very little if any disposable income can impact their ability to pay for other essential needs such as food and housing. Higher-income free riders utilize only a very small portion of total health care costs, and it would be more effective to have them contribute their equitable portion through a single, universal system.

* New funding would be through a value added tax (VAT)

Problem – A VAT is administratively complex and expensive to administer, but, much worse, it is highly regressive, shifting even more of the tax burden from the wealthy to the masses

The Center for American Progress proposal also includes recommendations for an emphasis on disease prevention and health promotion, developing better information about high-quality care, and utilizing the benefits of information technology. These are certainly fine. But their proposal fails to seriously address some of the major issues such as the profound administrative waste of our fragmented system of funding care, the costly and ineffective high-tech excesses related to excess capacity, the failure to negotiate excess prices, and the failure to ensure an adequate primary care infrastructure.

There is another model that would ensure that everyone would have access to comprehensive health care that would be funded equitably and that would return the health care decision-making process to the patient and his or her health care professionals. But then the single payer model is designed to spend our health care dollars on patient care rather than on the other vested interests.

The Medicare legislation demonstrated that the only way that we can please the insurance industry is to give them more money than a public system (Medicare) actually costs. Maybe it really is time to give up on bending over backwards in trying to please the insurers and get on with the important task of trying to take care of the needs of patients.

Let’s act on the Center for American Progress’s clarion call to “translate these deeply held values into action that ensures a better system and healthier nation.” But let’s make sure that all options are on the table so that there is no doubt that we are selecting the model that is best for America.