By Marshall Allen
ProPublica, July 19, 2019

Health insurers are regarded as fierce defenders of health care dollars. But the case of David Williams shows one reason America’s health care costs continue to rise. The personal trainer spent years posing as a doctor and billing the nation’s top insurers, making off with millions.

There are a host of reasons health care costs are out-of-control and routinely top American’s list of financial worries, from unnecessary treatment and high prices to waste and fraud. Most people assume their insurance companies are tightly controlling their health care dollars. Insurers themselves boast of this on their websites.

In 2017, private insurance spending hit $1.2 trillion, according to the federal government, yet no one tracks how much is lost to fraud. Some investigators and health care experts estimate that fraud eats up 10% of all health care spending, and they know schemes abound.

Williams’ case highlights an unsettling reality about the nation’s health insurance system: It is surprisingly easy for fraudsters to gain entry, and it is shockingly difficult to convince insurance companies to stop them.

Williams’ spree also lays bare the financial incentives that drive the system: Rising health care costs boost insurers’ profits. Policing criminals eats away at them. Ultimately, losses are passed on to their clients through higher premiums and out-of-pocket fees or reduced coverage.

Insurance companies “are more focused on their bottom line than ferreting out bad actors,” said Michael Elliott, former lead attorney for the Medicare Fraud Strike Force in North Texas.

(This article provides details on the extensive acts of insurance fraud committed by David Williams for which he was eventually convicted, but. more importantly, it shows the lack of diligent responsiveness on the part of insurers in spite of repeated notifications of the extent of his fraud. – DMc)

Many health care experts and fraud investigators said they weren’t surprised to hear that insurers were slow to stop even such an outlandish case of fraud.

“It’s just not worth it to them,” said Dr. Eric Bricker, an internist who spent years running a company that advised employers who self-funded their insurance.

For insurance behemoths pulling in billions, or hundreds of billions, in revenue, fraud that sucks away mere millions is not even a rounding error, he said.

And perhaps counterintuitively, insurance companies are loath to offend physicians and hospitals in their all-important networks — even those accused of wrongdoing, many experts have said. They attract new clients by providing access to their networks.

This ambivalence toward fraud, Bricker and others said, is no secret. Scammers like Williams are “emblematic of gazillions of people doing variants of the same thing,” Bricker said. Insurers embolden them by using a catch-and-release approach to fraud, in which the insurers identify criminals, then let them go.

Joe Christensen has pursued fraud for both government and commercial insurers, serving as a director in Aetna’s Special Investigations Unit, a team of more than 100 people ferreting out fraud, from 2013 to 2018 and as the director of Utah’s insurance fraud division for 13 years. Fraud in government programs, like Medicare and Medicaid, gets more publicity, he said, and has dedicated arms of agencies pursuing fraudsters. But the losses may be even greater in the commercial market because the dollar levels are higher, he said.

Some commercial insurers take a passive approach, Christensen said, in part because it’s expensive to press a fraud case. At Aetna, he said, investigators would identify cases of apparent fraud, but it was up to the executives and legal team to decide how to handle them. Taking fraudsters to civil or criminal court requires resources, so the company often settled for trying to get repaid through settlements or blocking a suspect provider from billing, he said.

Christensen said while he was at Aetna, investigators almost never sought to partner with law enforcement agencies to pursue criminal cases.

ProPublica asked Aetna how many criminal cases it had pursued in 2017 and 2018. A company official said the question could not be answered because it does not track such cases.

Williams’ trial began in the United States District Court for the Northern District of Texas. Without irony, the prosecutor, P.J. Meitl, argued that Williams had preyed on a health insurance system that relies “on trust, relies on honesty” when it pays claims.

He called fraud investigators from Aetna, Cigna and United, who testified that their companies auto-pay millions of claims a year. It’s not cost effective to check them, they said. “Aetna relies on the honesty of the person submitting the claim verifying that it’s true,” testified Kathy Richer, a supervisor in Aetna’s Special Investigations Unit.

Insurers promote themselves as guardians of health care dollars. United says on its website it wants to “help employers manage” medical expenses, resulting in “lower costs.” Aetna promises employers “affordability.” Cigna promises “increased savings.”

But private health insurers allow so much fraud that prosecutors use an idiom to describe the rare person who gets caught: “Pigs get fat, hogs get slaughtered.”

“Pigs” can steal millions, if they bill just enough to avoid notice. But if they get greedy and bill too many millions, they “become a data outlier,” said Elliott, the former fraud task force prosecutor. “You get slaughtered.”

Williams took years to reach hog status.

Part of the problem, experts say, is that health care fraud is often misunderstood as shafting greedy insurers — not the folks paying for health insurance. Ultimately, insurers don’t bear the cost. For their self-funded clients, like Southwest, they merely process the claims. For their traditionally insured clients, they can recover any losses by increasing deductibles and premiums and decreasing coverage.

https://www.propublica.org…

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Comment:

By Don McCanne, M.D.

One of the arguments frequently made against single payer Medicare for All is that fraud and abuse are rampant in Medicare and that alone would make expanded Medicare unaffordable. It is known that Medicare fraud does occur, especially since we keep reading about it, and it is reported in the media because our public stewards are more diligent at ferreting it out and rectifying it. What this article contributes is an understanding that fraud is rampant in the plans administered by the private insurers, but that there is a deliberate effort to turn a blind eye to the problem.

Fraud in taxpayer-funded government programs quite appropriately creates public outrage and is not tolerated. Fraud in private insurance programs is just a cost of doing business. It does not harm the insurers since the costs are born by the purchasers of the plans in the form of higher premiums. Rarely is any publicity given to it since the insurers would not want their clients to think that they might not be adequately diligent in the oversight of their own trillion dollar industry, and they especially don’t want us to know that we might be bearing the costs of fraud.

Thus the existence of fraud and abuse is actually an argument in favor of enacting and implementing single payer Medicare for All since our public stewards would be much more effective in ferreting it out than would be the private insurers who merely want to keep it out of our sight as they pay off the crooks. Suppressing public knowledge of fraud might be a cool business move on the part of the insurers. but it’s our money that they are giving away.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

We are business owners who believe our health insurance costs should not increase every year by double digits. Our payments to profiteering health insurers have swelled as our employees have been offered worse health care coverage. At our companies, rising costs paired with declining performance is unacceptable. So why should we accept this exploitation of our companies from health insurers?

We believe a new system that guarantees health care coverage for Americans regardless of where they work is critically important to maintain our profits, grow wages for working families, spur entrepreneurship and compete globally. It is time to cut the middle man — health insurance companies — out of our health care system and pass those savings on to employers of all sizes and their workers.

There is a better way.

These are the core principles we believe in at Business for Medicare for All. All of our members have signed on to support these underlying principles guiding any reform to how we pay for health care:

• We believe Medicare-for-All must be the top policy priority of American business.
• We believe the current profit-driven health insurance system poses an existential threat to American business.
• We believe the current system lowers employee wages and business profits.
• We believe the current system threatens American innovation and competitiveness.
• We believe health care guaranteed, regardless of where someone works, is the only business-friendly, economically sustainable way to achieve universal health care in America.

President

Wendell Potter

Business Advisors

Richard Master, CEO and Chairman, MCS Industries
Ben Cohen, Founder, Ben and Jerry’s
Jerry Greenfield, Founder, Ben and Jerry’s
Joe Sanberg, Founder, Working Hero Action
Jen Kimmich, CEO and Co-Founder, Alchemist Beer
Bruce Waldman, Owner, A & H Sportswear
Dan Wolf, CEO, Cape Air
Bastian Lehmann, CEO, Postmates
David Steil, CEO and Owner Micro Trap Corporation
Joe Scott, CEO and President, Easton Coach

Health Care Advisors

Donald Berwick, Co-founder of the Institute for Healthcare Improvement (IHI)
Gerald Friedman, Professor of Economics at the University of Massachusetts Amherst
Dr. Carol Paris, Psychiatrist and immediate past President of PNHP
Dr. Ed Weisbart, Missouri Chair of PNHP, and past CMO of Express Scripts
Gabriel Levitt, Co-founder of PharmacyChecker.com

http://www.businessformedicareforall.org

To sign up:
http://www.businessformedicareforall.org…

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Comment:

By Don McCanne, M.D.

Many have said that if only we could get the business community behind the Medicare for All movement then we would have it made. Well, some of our friends and colleagues are launching “Business for Medicare for All.” Let’s see how much interest we can help generate.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Drs. James G. Kahn and Elliot Marseille
The Hill, July 17, 2019

The discussion of “Medicare for all” in June’s two Democratic primary debates was both gratifying and confusing. While it was heartening to see agreement on the principle of universal health care as a human right, the debate format eliminated any opportunity for nuance.

That’s why we’re clarifying seven critical issues raised in the debates, and which will likely return during the campaign. Full disclosure: We support Medicare for all and we think that with a clear understanding of the facts, most people will too.

1. What is Medicare for all?

It’s a system with a single, public, nonprofit health insurer, instead of the dozens of private and public insurers we have now. It is not “government-run health care.” It is “government-run health insurance.” Like with Medicare today, health care would be provided by independent doctors and hospitals.

Everyone would be covered for life by a single comprehensive benefit package and would choose their own doctors. Private insurance premiums and out-of-pocket costs would disappear, replaced by taxes that are fair and progressive (richer people pay more). Simplified insurance rules and billing would reduce paperwork costs while negotiations would reduce drug prices. Overall, we would save money while covering everyone.

2. What is a Medicare expansion, as opposed to Medicare for all?

Several candidates (e.g., Michael Bennet and Pete Buttigieg) mentioned a public option, such as a Medicare buy-in. A public option could be offered on state health insurance exchanges, providing what might appear to be a cheaper alternative to private insurance. But it won’t solve our problems. A buy-in would leave the complicated multi-payer system in place, so the opportunities for savings on paperwork and pharmaceuticals would disappear. Moreover, the health insurance industry would use every tactic it knows to push the sickest people into the public option, jeopardizing the financial stability of the program.

3. How do you define “working” when it comes to health care?

Rep. John Delaney (D-Md.) said, let’s “keep what’s working” in our current system. What does that mean? Today, millions of Americans remain uninsured or underinsured — with exorbitant deductibles and out-of-pocket costs on top of their ever-rising insurance premiums.

Medical bankruptcy is common, even among the insured — as Sen. Elizabeth Warren (D-Mass.) noted. And people with employer-sponsored private insurance? They lack health-care security. If they lose their job, they lose their insurance. If “working” means decent and reliable coverage, private health insurance is definitely not cutting it.

4. Which health-care choices really matter?

Beto O’Rourke said “Choice is fundamental” as an argument to retain commercial insurance. Yet it is our choice of doctor (not insurance company) that is fundamental to our care and that’s exactly the freedom that commercial insurance denies us — for profit.

5. What do we mean by private insurance under Medicare for all?

When asked, “Who would get rid of private insurance?” Bernie Sanders, Warren, Bill de Blasio, and Kamala Harris raised their hands. Harris later clarified that she wouldn’t want to abolish private insurance altogether. She has a point: Medicare for all could co-exist with private insurance for supplemental services, like fancier hospital rooms, or alternative therapies. However, private insurance for core medical benefits would be unnecessary. In fact, keeping it would undercut the savings we could enjoy from reducing insurance complexity and pharmaceutical prices.

6. What’s a “glide path?”

Buttigieg endorsed a “glide path,” that is, taking intermediate steps to Medicare for all. This makes sense if the timeline is short and the steps are direct. For example, filling in Medicare’s existing coverage gaps and adding all 50-65 year-olds would be excellent first steps. Alternatively, we could move quickly to help everyone suffering today. It only took about a year to roll out Medicare in 1966, without the use of the Internet or computers.

7. How will doctors and hospitals fare under Medicare for all?

Delaney suggested that if hospitals were paid Medicare reimbursement rates, they’d go bankrupt. This is a misrepresentation. First, under most Medicare for all plans, hospitals would be paid lump sums to cover operating costs. Second, payments would be negotiated to assure financial viability. Raising the specter of hospital closures is a scare tactic.

While Medicare for all may sound complex, it boils down to this: Everyone would get comprehensive health coverage for less money than we’re spending now. Don’t let the confusing debate rhetoric fool you. It really is that simple.

James G. Kahn, M.D., is an emeritus professor of health policy at the University of California San Francisco. Dr. Elliot Marseille, DrPH, is CEO of Health Strategies International.

https://thehill.com…

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Comment:

By Don McCanne, M.D.

Polls have shown that the majority of the public at large supports Medicare for All, but they also show a poor understanding of the all-important nuances of the single payer model of Medicare for All. Even members of the media do not always grasp the subtle but crucially important features of the model that make it so effective in ensuring affordable, accessible, comprehensive health care for absolutely everyone. Drs. Kahn and Marseille clarify for us some of the important nuances behind the rhetoric.

(A parenthetical comment on the “glide path”: There may be important logistical considerations for phasing in the implementation of a single payer Medicare for All program, but we must be certain that 1) the process is more efficient and effective than implementing the entire program all at once, 2) the transition of phasing out the current fragmented system while phasing in single payer does not result in precarious difficulties in winding down operations while simultaneously providing essential services to those still in transition, 3) any delay is based on crucial policy considerations rather than the politics of ideology, and 4) most important, the entire transition needs to be precisely specified in the original enabling legislation rather than merely defining the first steps with the intent of crafting later legislation for additional incremental steps in the glide path to reform. Half a century ago, Medicare for our retired population was to be the first step toward a Medicare program for all, but we never progressed beyond the first increment of including individuals with long-term disabilities and chronic kidney disease. We do not want to make that mistake again. If a glide path proves to be beneficial, it is imperative that it includes the landing lest we end up with another disaster on our hands.)

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Fred Schulte and Lauren Weber
Kaiser Health News, July 16, 2019

Health insurers that treat millions of seniors have overcharged Medicare by nearly $30 billion the past three years alone, but federal officials say they are moving ahead with long-delayed plans to recoup at least part of the money.

Officials have known for years that some Medicare Advantage plans overbill the government by exaggerating how sick their patients are or by charging Medicare for treating serious medical conditions they cannot prove their patients have.

Getting refunds from the health plans has proved daunting, however. Officials with the Centers for Medicare & Medicaid Services repeatedly have postponed, or backed off, efforts to crack down on billing abuses and mistakes by the increasingly popular Medicare Advantage health plans offered by private health insurers under contract with Medicare. Today, such plans treat over 22 million seniors, more than 1 in 3 people on Medicare.

Now CMS is trying again, proposing a series of enhanced audits tailored to claw back $1 billion in Medicare Advantage overpayments by 2020 — just a tenth of what it estimates the plans overcharge the government in a given year.

At the same time, the Department of Health and Human Services Inspector General’s Office has launched a separate nationwide round of Medicare Advantage audits.

As in past years, such scrutiny faces an onslaught of criticism from the insurance industry, which argues the CMS audits especially are technically unsound and unfair and could jeopardize medical services for seniors.

America’s Health Insurance Plans, an industry trade group, blasted the CMS audit design when details emerged last fall, calling it “fatally flawed.”

Insurer Cigna Corp. warned in a May financial filing: “If adopted in its current form, [the audits] could have a detrimental impact” on all Medicare Advantage plans and “affect the ability of plans to deliver high quality care.”

But former Sen. Claire McCaskill, a Missouri Democrat who now works as a political analyst, said officials must move past powerful lobbying efforts to hold health insurers accountable and demand refunds for “inappropriate” billings.

“There’s a lot of things that could cause Medicare to go broke. This would be one of the contributing factors,” she said. “Ten billion dollars a year is real money.”

Catching Overbilling With A Wider Net

In the overpayment dispute, health plans want CMS to scale back — if not kill off — an enhanced audit tool that, for the first time, could force insurers to cough up millions in improper payments they’ve received.

For over a decade, audits have been little more than an irritant to insurers because most plans go years without being chosen for review and often pay only a few hundred thousand dollars in refunds as a consequence. When auditors uncover errors in the medical records of patients they paid the companies to treat, CMS has simply required a rebate for those patients for just the year audited — relatively small sums for plans with thousands of members.

The latest CMS proposal would raise those stakes enormously by extrapolating error rates found in a random sample of 200 patients to the plan’s full membership — a technique expected to trigger many multimillion-dollar penalties. Though controversial, extrapolation is common in medical fraud investigations — except for investigations into Medicare Advantage. Since 2007, the industry has successfully challenged the extrapolation method and, as a result, largely avoided accountability for pervasive billing errors.

“The public has a substantial interest in the recoupment of millions of dollars of public money improperly paid to health insurers,” CMS wrote in a Federal Register notice late last year announcing its renewed attempt at using extrapolation.

Penalties In Limbo

In a written response to questions posed by Kaiser Health News, CMS officials said the agency has already conducted 90 of those enhanced audits for payments made in 2011, 2012 and 2013 — and expects to collect $650 million in extrapolated penalties as a result.

Though that figure reflects only a minute percentage of actual losses to taxpayers from overpayments, it would be a huge escalation for CMS. Previous Medicare Advantage audits have recouped a total of about $14 million, far less than it cost to conduct them, federal records show.

Though CMS has disclosed the names of the health plans in the crossfire, it has not yet told them how much each owes, officials said. CMS declined to say when, or if, they would make the results public.

This year, CMS is starting audits for 2014 and 2015, 30 per year, targeting about 5% of the 600 plans annually.

This spring, CMS announced it would extend until the end of August the audit proposal’s public comment period, which was supposed to end in April. That could be a signal the agency might be looking more closely at industry objections.

Health care industry consultant Jessica Smith said CMS might be taking additional time to make sure the audit protocol can pass muster. “Once they have their ducks in a row, CMS will come back hard at the health plans. There is so much money tied to this.”

But Sean Creighton, a former senior CMS official who now advises the industry for health care consultant Avalere Health, said payment error rates have been dropping because many health plans “are trying as hard as they can to become compliant.”

Still, audits are continuing to find mistakes. The first HHS inspector general audit, released in late April, found that Missouri-based Essence Healthcare Inc. had failed to justify fees for dozens of patients it had treated for strokes or depression. Essence denied any wrongdoing but agreed it should refund $158,904 in overcharges for those patients and ferret out any other errors.

Essence also faces a pending whistleblower suit filed by Charles Rasmussen, a Branson, Mo., doctor who alleges the health plan illegally boosted profits by overstating the severity of patients’ medical conditions. Essence has called the allegations “wholly without merit” and “baseless.”

Essence started as a St. Louis physician group, then grew into a broader holding company in 2007 backed by prominent Silicon Valley venture capitalist John Doerr with his brother, St. Louis doctor and software designer Thomas Doerr. Neither would comment on the allegations.

How We Got Here

CMS uses a billing formula called a “risk score” to pay for each Medicare Advantage member. The formula pays higher rates for sicker patients than for people in good health.

Congress approved risk scoring in 2003 to ensure health plans did not shy away from taking sick patients who could incur higher-than-usual costs from hospitals and other medical facilities. But some insurers quickly found ways to boost risk scores — and their revenues.

In 2007, after several years of running Medicare Advantage as what one CMS official dubbed an “honor system,” the agency launched “Risk Adjustment Data Validation,” or RADV, audits. The idea was to cut down on undeserved payments that cost CMS nearly $30 billion over the past three years.

The audits of 37 health plans revealed that on average auditors could confirm just 60% of the more than 20,000 medical conditions CMS had paid the plans to treat.

Extra payments to plans that had claimed some of its diabetic patients had complications, such as eye or kidney problems, were reduced or invalidated in nearly half the cases. The overpayments exceeded $10,000 a year for more than 150 patients, though health plans disputed some of the findings.

But CMS kept the findings under wraps until the Center for Public Integrity, an investigative journalism group, sued the agency under the Freedom of Information Act to make them public.

Despite the alarming results, CMS conducted no audits for payments made during 2008, 2009 and 2010 as they faced industry backlash over CMS’ authority to conduct them, and the threat of extrapolated repayments. Some inside the agency also worried that health plans would abandon the Medicare Advantage program if CMS pressed them too hard, records released through the FOIA lawsuit show.

CMS officials resumed the audits for 2011 and expected to finish them and assess penalties by the end of 2016. That has yet to happen amid the continuing protests from the industry. Insurers want CMS to adjust downward any extrapolated penalties to account for coding errors that exist in standard Medicare. CMS stands behind its method — at least for now.

At a minimum, argues AHIP, the health insurers association, CMS should back off extrapolation for the 90 audits for 2011-13. Should CMS agree, it would write off more than half a billion dollars that could be recovered for the U.S. Treasury.

https://khn.org…

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Comment:

By Don McCanne, M.D.

We continue to hear that people like their private Medicare Advantage plans that replace traditional Medicare coverage. The most likely reason is that they have premiums that are competitive compared to the Medigap plans that people would need to protect themselves from potential catastrophic losses which the traditional program fails to cover. Individuals also are attracted by the plans’ marginal expansion of benefits.

It is no secret as to how the plans are able to afford to reduce out-of-pocket spending while adding a few benefits. The plans have been very successful in marketing to healthier patients – favorable selection – leaving more costly patients in the traditional program. Once the degree of favorable selection was acknowledged, CMS decided to introduce risk adjustment so that they could recover overpayments to insurers that were gaming the system. Very soon the insurers learned how to upcode their patients, making them seem to have greater health care needs than they really had, thus escaping risk adjustment reductions. Also, each year the insurers were successful in inducing CMS to use innovative methods to increase the annual adjustments in payment rates, helped by the annual letter from Congress endorsing the excess payment increases.

Today’s article indicates the degree to which the private insurers have been successful in overbilling taxpayers for their Medicare Advantage plans – literally billions of dollars. The article also discusses the efforts CMS has made to identify and then recover these excess payments. But what is most important here is what is written between the lines. The implementation of these programs has not resulted in recovery of these excess payments. Based on the battles that are taking place behind the scenes, once compromises are made it is likely that the amounts recovered will be so minimal that they will have no impact on the insurers’ profit and loss statements. Consequently, this results in a tremendous gift of taxpayer funds to the private insurers, and CMS has been passively complicit in this, as has Congress.

What is particularly objectionable is the unfairness, not only to the taxpayers at large, but also to the beneficiaries enrolled in the traditional Medicare program. The exposure to catastrophic costs in the traditional Medicare program is so great that enrollees must purchase relatively expensive Medigap plans to provide that protection if they’re not fortunate enough to be covered by union or employer-sponsored retiree plans. Even there, retirees are often shoved into the Medicare Advantage plans where they lose their choices in physicians and hospitals because of the restrictive provider networks selected by the Medicare Advantage insurers.

Why should we taxpayers be supporting these dishonest (read today’s article) private Medicare Advantage insurers while those of us in the traditional program are being deprived of the extra benefits that Congress has funded for the private insurers? It seems obvious that just plain fairness would require that Congress fund coverage for catastrophic losses in the traditional Medicare program while also funding the extra benefits that the Medicare Advantage plans use as a lure for enrollment, but there is a problem with this approach. It would be a comparatively modest incremental step that would further delay for perhaps decades enactment of the reform we really need – the single payer model of an improved Medicare for all.

Would that get rid of the crooks? No, they will always be with us. But a government that is willing to do the right thing by enacting and implementing a health care program that takes care of all of us would also be a government that would be willing to ferret out the crooks and actually eliminate their malfeasance, though that would have to be an ongoing process since this is an industry that touts its innovations even if those innovations have resulted in ripping us off to such a great degree.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

By Benjamin Studebaker & Nathan J. Robinson
Current Affairs, July 14, 2019

At one point, the meaning of “Medicare For All” was quite clear. Under Medicare For All, every American, instead of having to navigate the tangled and inefficient marketplace of for-profit health insurance corporations, would simply be enrolled in Medicare. Instead of people paying premiums and copays to an insurance company, they would pay taxes, and those taxes would be used to pay providers. As Dr. Abdul El-Sayed wrote in this magazine, Medicare For All is “single-payer healthcare that would provide cradle-to-grave government-supported healthcare for all Americans.”

But as Democrats have realized how well the phrase “Medicare For All” polls with voters, its meaning has been deliberately muddied. Most of the Democratic presidential candidates now support something they call “Medicare For All,” but it’s often not clear what they mean by it. Some, when they clarify specifics, make it clear that what they actually want is a “public option,” i.e. a new kind of government insurance plan that you can buy within the structure of the existing healthcare marketplace.

Why abolish private insurance? Why not just have insurance companies compete against a government plan in an open marketplace where people can choose? That way, everyone who wants Medicare gets it, while people who are satisfied with their current insurance can keep it. Everyone wins. The implication here is that anyone who supports a full single-payer plan, in which everyone would just be insured under a government program, must be rigidly ideological, wanting to shutter the private insurance industry for no good reason. Why would we do that instead of just providing a new option?

To understand why full “single payer” health insurance is the left’s goal, rather than just “another insurance plan on the marketplace,” it helps first to understand the left’s vision for how healthcare should work. In an ideal world, your healthcare would not be something you have to think about very much. If you got sick, you would choose a doctor’s office and make an appointment. You would go to that appointment and see the doctor. Then you would leave. You would not have to apply for insurance, not have to pay bills. And this would be the case no matter who you were or how much money you made. Your relationship is between you and your doctor, not you and your doctor and your doctor’s hospital’s billing department and your insurance company. Leftists dream of making healthcare as easy as possible to receive and universally accessible to all regardless of how much money they have.

Private health insurance is an unnecessary part of the healthcare system. Insurance companies are middlemen, and insurance just exists to make sure that providers get paid. It was the federal government that subsidized private insurance companies and encouraged employers to use them. Other countries didn’t build this kind of healthcare system, for two reasons:

1. It doesn’t cover everyone.
2. It creates a bloated, inefficient insurance bureaucracy.

Our government has always been playing catch-up trying to get more people covered. It’s created employer subsidies, Medicaid, CHIP, and the Obamacare exchanges in a desperate bid to get this system to do its job, and despite decades of piecemeal healthcare reforms 13.7 percent of Americans remain without health insurance and millions more have inadequate coverage. Offering to let Americans “buy-in” to Medicare keeps Americans paying premiums, and as long as Americans must personally pay premiums to receive healthcare there are going to be some people who can’t or won’t pay those premiums and go without. It turns Medicare-For-All into a publicly run HMO. Maintaining an employer-sponsored health insurance system means remaining in a situation where large numbers of people go through a period of being uninsured each year, because when you lose your job you lose your insurance. (Currently 1 in 4 Americans go through an uninsured period each year.) Single payer advocates ask the question: “Why have a nightmarish tangle of public and private options, varying by state, with people moving on and off all the time? Why not just pay for healthcare with taxes, cover everyone, and make it free at the point of use?”

Not only will a public option fail to cover everyone, it will do nothing to restrain the growth of healthcare costs. Single payer systems control costs by giving the health service a monopoly on access to patients, preventing providers from exploiting desperate patients for profit. If instead there are a large number of insurance companies, providers can play those insurance companies off each other.

The bloat doesn’t just come from providers. Because insurance works on a profit incentive, the insurance companies must extract rents as well. So the patient is paying to ensure not only that their doctor or hospital is highly-compensated, but that the insurance company generates profit too. Each insurance company has its own managers — its own CEO, its own human resources department, and so on. We have to pay all of these people, and because there are so many private insurance companies, there are so many middle managers to pay.

These duplicate bureaucracies are expensive to maintain and do nothing to improve the quality of care. The providers make them compete to offer higher compensation, and you pay for it. Getting rid of these middle men makes the system far more efficient. People do not associate government with efficiency, but when it comes to moving money from one place to another — which, after all, is all an insurance company does — it can be quite good, and it makes far more sense to have government handle healthcare payments than to leave it to companies with a direct financial incentive to deny treatment.

Private insurance is inconvenient, inefficient, and continues to leave large numbers of Americans with inadequate insurance or no insurance at all. The Affordable Care Act shored up this system by funnelling more public money into subsidies for private insurance. Now these Democratic candidates are proposing to make a new insurance company, call it “Medicare,” and charge you premiums to use it. That doesn’t get rid of the problem of wasteful duplicative bureaucracies, and will guarantee that some people remain uninsured. It was the federal government’s decision to build this bizarre, burdensome system. Nothing about private health care is natural or inevitable. It doesn’t have to be like this.

A single payer system requires a lot of political commitment, because it means going up against the insurance companies and the ritzy providers and telling them they can’t screw us over anymore. They can’t deny us coverage, extract heavy rents, and keep us on the phone forever. If a Democratic candidate doesn’t see a meaningful difference between a public option and single payer, if that candidate sees these things as two different “paths” to the same place, that candidate cannot be trusted to put an end to this madness. They are offering just one more piecemeal reform to prop up a failing system — not a true overhaul.

Single payer healthcare is a tried and tested system, and it isn’t radical. Trying to cobble together “universal” coverage from a patchwork of giant for-profit bureaucracies and government insurance products is senseless. “Eliminating private insurance” rather than “adding choice” may sound unnecessarily sweeping. But private insurance just gets in the way of efficiently paying healthcare providers and covering everybody. Medicare-For-All makes sense, and we shouldn’t let it be watered down.

Use this link for the full version of this article:
https://www.currentaffairs.org…

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Comment:

By Don McCanne, M.D.

An inordinately large percentage of individuals who seem to support public insurance has bought the concept that we can avoid disruption of the existing private health plans by the incremental addition of a public option – an optional Medicare plan that individuals can choose to purchase. Supposedly everyone would recognize the superiority of the public option Medicare plan and would eventually shift to that coverage thus ending up with a single payer system. This vision of reform is a fantasy, and today’s article describes, once again, why this pathway will not lead to single payer.

Some say, “Well, isn’t this fine? Those who want their private plans can keep them, and those who prefer Medicare would now have that option.” But the Medicare public option is structured like an individual private insurance plan. It would have a premium, which, in itself, creates considerable administrative complexity – determining the amount of the premium, collecting the premium from the individual, determining the amount of a government subsidy, if any, and crediting that amount to the individual, making premium adjustments each year, and keeping track of shifting between the Medicare option, employer-sponsored plans, plans in the marketplace, and the all too common periods of lapsed insurance coverage. The administrative hassles with premiums alone do not begin to account for the half trillion dollars in other recoverable administrative waste, almost all of which would remain in place if we accept the incremental step of merely adding a public option.

Moving all health care funding to a highly efficient, tax-financed single risk pool while removing financial barriers to the access of health care (eliminating deductibles, coinsurance, etc.) are essential features of a single payer model but would not be achieved through incremental steps, including the step of offering a Medicare public option.

Our current health care financing infrastructure has nothing in common with a single payer system. That transition will have to be made sometime. Until then, we will have to put up with uninsurance, underinsurance, personal financial hardship, profound administrative waste, inequity in financing, inequity in health care, and physical suffering and preventable premature death. Merely adding a public option cannot have more than a negligible impact.

As the authors state, the public option and single payer are not two different paths to the same place. One is just one more incremental tweak that leaves us pretty much where we are, and the other is the infrastructure reform that will accomplish our goals of effectiveness, equity, and efficiency so that we all have the health care that we need. No more delay. We need to end the suffering.

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