PNHP

Des Moines Register says government should not rely on private insurers

Des Moines Register says government should not rely on private insurers

Government should not rely on private insurers

By The Editorial Board
The Des Moines Register, August 22, 2016

Aetna announced last week that it was reducing participation in health insurance exchanges created by the Affordable Care Act. It will sell plans in only four states next year, including Iowa, down from 15 this year. This follows similar market exits from UnitedHealth Group and Humana.

This is yet another reminder of why government should not rely on private companies to deliver health insurance to Americans. History has repeatedly shown this is a costly, dangerous and unsustainable idea. Yet politicians refuse to listen to history.

When Medicare was created in 1965, the goal was to insure seniors through a program administered by the government. In traditional Medicare, Uncle Sam directly pays providers for health services. The program is reliable, predictable and has low administrative costs. But politicians saw an opportunity to funnel public money to for-profit insurers to take over the job of administering benefits.

In the 1990s, private “Medicare+Choice” plans saved taxpayers no money while insurers demanded more and more money from the government. The companies failed to turn a healthy profit and disappeared. Fortunately, seniors could return to traditional, government-run Medicare.

Instead of learning from that experience, Congress embraced private insurers again in 2003. Medicare Advantage plans resulted in taxpayers paying 14 percent more per senior than the cost of care in traditional Medicare. Yet these plans are popular with seniors, who pay lower monthly premiums — and vote. Earlier this year, the GAO reported the feds improperly paid Medicare Advantage companies $14.1 billion in 2013. That’s billion with a “b.”

Lucky private insurers. Unlucky taxpayers. Reckless politicians.

Then there are governors, including Terry Branstad, who insist on handing over Medicaid administration to for-profit companies. Let’s take a look at how this has worked in Florida, where former Gov. Jeb Bush pushed the idea, arguing the cost of Medicaid operated by the state was “unsustainable.”

Privatization was rolled out statewide in 2014. Almost immediately, insurers complained they were losing money. They asked the state for a $400 million raise and a 12 percent increase in rates. This, of course, jeopardized any savings taxpayers may have realized. Two months ago Florida received a surprise Medicaid bill: It owed $433 million in unpaid reimbursements to insurers.

Then there is the Affordable Care Act.

One of the law’s fundamental flaws is its reliance on private insurers to provide coverage to millions of Americans through exchanges. With no “public option” safety net to offer government coverage if companies jump ship, the insurers have incredible political and financial power. They can, in fact, try to hold the government hostage. Pay higher reimbursements, don’t dispute our business decisions, do what we say or we are dropping out of exchanges.

Enter Aetna.

In a July 5 letter, Chief Executive Mark Bertolini informed the Justice Department that if it sued to block Aetna’s dealt to acquire Humana Inc., the insurer would reduce its presence in exchanges. The Obama administration says such a merger would increase consumer costs.

“If the deal were challenged and/or blocked we would need to take immediate actions to mitigate public exchange and ACA small group losses,” he wrote.

Is that a warning? A threat? And how is the Obama administration supposed to respond?

The Justice Department sued to block the merger. Then Aetna announced it was scaling back its offerings in exchanges.

Americans’ access to health insurance should not depend on the profit margins, business dealings, or mergers of for-profit companies. Not in Medicare. Not in Medicaid. And not in exchanges created by health reform law. Instead of funneling tax dollars to private companies, government is better equipped to administer insurance. It is not beholden to stockholders. It does not seek to turn a profit. And it will not abandon the responsibility of providing health coverage to Americans.

http://www.desmoinesregister.com/story/opinion/editorials/2016/08/22/editorial-government-should-not-rely-private-insurers/89107404/

***

Comment:

By Don McCanne, M.D.

There is much discussion today about moving forward with reform by introducing a public option – a competing government insurance plan – into the ACA insurance exchanges. Yet that would leave in place the current health care financing system, including the multitude of private insurers. As this editorial explains, the government “should not rely on private companies to deliver health insurance to Americans” as “this is a costly, dangerous and unsustainable idea.”

Under our current system, the design of a public option would be very similar to existing private plans. That would perpetuate the flaws of the individual insurance model when what we need is a universal, prepaid health care system. Also, a public option designed as an individual plan to compete with private plans would fail to capture almost all of the efficiencies of a single payer national health program, leaving in place our dysfunctional, fragmented system of a multitude of public and private plans.

The editorial provides a very powerful message on why private insurers should be excluded from our health care financing. Once the public clearly understands that then we can explain to them why we should not accept even a fragmented system of public programs, even if dominated by a “public option” individual insurance plan. We need one single, efficient government financing program like Medicare, except even better.

Aetna CEO doesn’t get sympathy

By Kay Tillow
The Courier-Journal (Louisville, Ky.), letters, Aug. 23, 2016

No one should cry for Aetna CEO Mark Bertolini over his claim of losses in the Obamacare exchange plans. Bertolini raked in $27.9 million in total compensation in 2015.

Just last May, he was positive about the Affordable Care Act, stating that Aetna’s losses were nothing in comparison to the $2 billion Aetna would have had to spend to acquire those customers without the health care law.

Since Obamacare passed in March 2010, Aetna’s stock has soared 270 percent. Cigna and Humana have risen about the same. UnitedHealth Group, which is also pulling out of the exchanges, is up 371 percent. During that time the S&P 500 Index has increased only 99 percent.

Under the ACA, the insurers are getting billions each year to subsidize their insurance plans. No matter how much money we throw at these companies, the market will never work to fix our health care system.

No other industrialized country in the world allows private insurers to control their health care. Those countries have better health outcomes than the U.S. while spending, on average, about half as much per capita as the U.S.

Fixing health care means we must move to a single payer system as proposed by Congressman John Conyers in HR 676. We will save both lives and money.

Kay Tillow resides in Louisville.

http://www.courier-journal.com/story/opinion/readers/2016/08/22/letter-aetna-raking-soaring-profits/89097118/

Des Moines Register says government should not rely on private insurers

Government should not rely on private insurers

By The Editorial Board
The Des Moines Register, August 22, 2016

Aetna announced last week that it was reducing participation in health insurance exchanges created by the Affordable Care Act. It will sell plans in only four states next year, including Iowa, down from 15 this year. This follows similar market exits from UnitedHealth Group and Humana.

This is yet another reminder of why government should not rely on private companies to deliver health insurance to Americans. History has repeatedly shown this is a costly, dangerous and unsustainable idea. Yet politicians refuse to listen to history.

When Medicare was created in 1965, the goal was to insure seniors through a program administered by the government. In traditional Medicare, Uncle Sam directly pays providers for health services. The program is reliable, predictable and has low administrative costs. But politicians saw an opportunity to funnel public money to for-profit insurers to take over the job of administering benefits.

In the 1990s, private “Medicare+Choice” plans saved taxpayers no money while insurers demanded more and more money from the government. The companies failed to turn a healthy profit and disappeared. Fortunately, seniors could return to traditional, government-run Medicare.

Instead of learning from that experience, Congress embraced private insurers again in 2003. Medicare Advantage plans resulted in taxpayers paying 14 percent more per senior than the cost of care in traditional Medicare. Yet these plans are popular with seniors, who pay lower monthly premiums — and vote. Earlier this year, the GAO reported the feds improperly paid Medicare Advantage companies $14.1 billion in 2013. That’s billion with a “b.”

Lucky private insurers. Unlucky taxpayers. Reckless politicians.

Then there are governors, including Terry Branstad, who insist on handing over Medicaid administration to for-profit companies. Let’s take a look at how this has worked in Florida, where former Gov. Jeb Bush pushed the idea, arguing the cost of Medicaid operated by the state was “unsustainable.”

Privatization was rolled out statewide in 2014. Almost immediately, insurers complained they were losing money. They asked the state for a $400 million raise and a 12 percent increase in rates. This, of course, jeopardized any savings taxpayers may have realized. Two months ago Florida received a surprise Medicaid bill: It owed $433 million in unpaid reimbursements to insurers.

Then there is the Affordable Care Act.

One of the law’s fundamental flaws is its reliance on private insurers to provide coverage to millions of Americans through exchanges. With no “public option” safety net to offer government coverage if companies jump ship, the insurers have incredible political and financial power. They can, in fact, try to hold the government hostage. Pay higher reimbursements, don’t dispute our business decisions, do what we say or we are dropping out of exchanges.

Enter Aetna.

In a July 5 letter, Chief Executive Mark Bertolini informed the Justice Department that if it sued to block Aetna’s dealt to acquire Humana Inc., the insurer would reduce its presence in exchanges. The Obama administration says such a merger would increase consumer costs.

“If the deal were challenged and/or blocked we would need to take immediate actions to mitigate public exchange and ACA small group losses,” he wrote.

Is that a warning? A threat? And how is the Obama administration supposed to respond?

The Justice Department sued to block the merger. Then Aetna announced it was scaling back its offerings in exchanges.

Americans’ access to health insurance should not depend on the profit margins, business dealings, or mergers of for-profit companies. Not in Medicare. Not in Medicaid. And not in exchanges created by health reform law. Instead of funneling tax dollars to private companies, government is better equipped to administer insurance. It is not beholden to stockholders. It does not seek to turn a profit. And it will not abandon the responsibility of providing health coverage to Americans.

http://www.desmoinesregister.com/story/opinion/editorials/2016/08/22/editorial-government-should-not-rely-private-insurers/89107404/

There is much discussion today about moving forward with reform by introducing a public option – a competing government insurance plan – into the ACA insurance exchanges. Yet that would leave in place the current health care financing system, including the multitude of private insurers. As this editorial explains, the government “should not rely on private companies to deliver health insurance to Americans” as “this is a costly, dangerous and unsustainable idea.”

Under our current system, the design of a public option would be very similar to existing private plans. That would perpetuate the flaws of the individual insurance model when what we need is a universal, prepaid health care system. Also, a public option designed as an individual plan to compete with private plans would fail to capture almost all of the efficiencies of a single payer national health program, leaving in place our dysfunctional, fragmented system of a multitude of public and private plans.

The editorial provides a very powerful message on why private insurers should be excluded from our health care financing. Once the public clearly understands that then we can explain to them why we should not accept even a fragmented system of public programs, even if dominated by a “public option” individual insurance plan. We need one single, efficient government financing program like Medicare, except even better.

When income is too high for a subsidy for ACA plans

Without a subsidy, couple faces higher insurance premiums

By Carla K. Johnson
Associated Press, August 20, 2016

With a household income too high for a federal subsidy, Bruce Mainzer and Beth Shadur are bracing for higher health insurance premiums in 2017.

As in other states, many insurers in Illinois have requested double-digit rate increases. Americans ineligible for the government subsidies that help cover their premiums will be hit hardest.

Health insurance already takes a hefty bite out of the couple’s budget. They pay $1,200 a month for a bronze plan with high deductibles, which means they pay $13,000 annually out of pocket before their coverage even kicks in.

“It has been a challenge, and it causes us to dip into our retirement savings and increase our debts,” Mainzer said.

On top of the cost, they’ve experienced the hassles of major disruptions in the Illinois insurance market. For one, their insurance company recently folded. It was one of the struggling co-ops set up under the federal health care law.

They are switching to Aetna in October but will start shopping again for another insurer a month later because Aetna recently said it is bailing out of the Illinois exchange-based marketplace.

They are in good health, but Mainzer has a blood disorder, a pre-existing condition that led insurers to reject him before the Affordable Care Act took effect. He was able to get coverage only through Illinois’ high-risk pool, at about the same price he pays today.

Mainzer rejects the “repeal and replace” Republican solution, in part because getting rid of the law would mean that insurance companies could go back to denying coverage for people with pre-existing conditions.

“Ultimately, it’s clear that health care is not something that can be efficiently provided by the private sector,” he said. “The rest of the Western world has figured out that health care is a right and is intrinsically a government, public-sector activity.”

http://bigstory.ap.org/article/900bafbce1e44be2a0f2f9c30a76f634/without-subsidy-couple-faces-higher-insurance-premiums

***

Experts Predict Sharp Decline in Competition across the ACA Exchanges

By Dan Mendelson
Avalere, August 19, 2016

A new analysis from Avalere finds that nearly 36 percent of exchange market rating regions may have only one participating insurance carrier offering plans for the 2017 plan year and there may be some sub-region counties where no plans are available. Nearly 55 percent of exchange market rating regions may have two or fewer carriers.

“Lower-than-expected enrollment, a high cost population, and troubled risk mitigation programs have led to decreased plan participation for 2017,” said Dan Mendelson, president of Avalere.

http://avalere.com/expertise/life-sciences/insights/experts-predict-sharp-decline-in-competition-across-the-aca-exchanges

***

Comment:

By Don McCanne, M.D.

An important measure of the success of the Affordable Care Act is how well it is working for middle and upper middle income working families who are not eligible for employer-sponsored health plans. The experience of the two-income couple described in this AP article demonstrates that it is not working so well for some.

Bruce Mainzer and Beth Shadur received their coverage through the ACA exchange in Illinois, but it was with one of the co-ops that failed (giving us a hint of what might happen to a “public option” once the private insurers provide their input into the design of such an option).

They had then applied for coverage with Aetna, but now it is pulling out of the Illinois exchange. Fewer plans will be available. In fact, according to the Avalere report, over one-third of exchange market rating regions throughout the United States will have only one plan available, eliminating competition as a means of holding down premiums (not that it was particularly effective anyway).

Because insurers in the exchanges have been experiencing losses, typical premium increases are expected to be in the double digits for 2017. For their bottom-tier bronze plan which has high deductibles, this couple has been paying $1,200 per month for coverage. Next year it will certainly be higher. Also the instability of plan coverage destabilizes access to health care because of the incongruity of the narrow provider networks.

In rejecting single payer, progressive politicians say that we should build on the success of ACA. What changes would you make in the system so that it would work well for Bruce and Beth? When you think about it, it is obvious that mere tweaks will not work. The changes that they need would require comprehensive reconstruction of the health care financing infrastructure.

Well, Bruce Mainzer has figured it out. As he says, “Ultimately, it’s clear that health care is not something that can be efficiently provided by the private sector. The rest of the Western world has figured out that health care is a right and is intrinsically a government, public-sector activity.”

Departure of health insurers from exchanges demonstrates need for single payer

Physicians for a National Health Program founder Dr. Steffie Woolhandler: the fundamental problem is our reliance on market-based solutions to healthcare

The Real News Network, Aug. 19, 2016

The following transcript has been provided by The Real News Network. You can watch the video of the interview here.

JAISAL NOOR, TRNN: Welcome to the Real News Network. I’m Jaisal Noor in Baltimore.

AETNA, the nation’s third-largest insurance provider, announced this week it was pulling out of a majority of the Affordable Care Act’s health exchanges next year, citing hundreds of millions of dollars in losses. But then the Huffington Post obtained a letter Aetna had sent to the Department of Justice in July in which the insurance giant had threatened this exact move if its merger with rival Humana was blocked. And this is exactly what anti-trust regulators with the DOJ did in late July.

Now joining us to discuss all of this is Steffie Woolhandler. She’s a physician and public health professor at the City University of New York. She co-founded Physicians for a National Health Program, whose 20,000 member advocates demand single-payer health insurance. Thanks so much for joining us.

STEFFIE WOOLHANDLER: My pleasure.

NOOR: So it’s not just Aetna that has pulled out. United Health Group has pulled out. Humana has also pulled out of some of the exchanges. Let’s start off by talking about the impact on people that have many–you know, for the first time have been able to get insurance, or more affordable insurance, through these health exchanges, also known as Obamacare.

WOOLHANDLER: Right. Well, hundreds of thousands of people are going to lose their current insurance. Many of them are going to be left in counties with only one or even zero options. There’s a county in Arizona that has no plans participating as of today. So the people are going to be left with one option, meaning there’s no competition and they have no choice whatsoever. It’s kind of take it or leave it on the insurance. And of course if they decided to leave it they have to pay a fine under the Obamacare legislation.

I think the thing that’s really stunning is how arrogant these insurance giants have become, that they have been invited into the Obamacare system, and then they feel that they can actually threaten the federal government that if you want to take an antitrust action against us, on the behalf of consumers, we’re going to threaten you, we’re going to pull out of Obamacare altogether.

So I think this really shows that it’s a very bad idea to try to get to universal coverage through private insurance companies. Private insurance companies are there to make a profit, and the minute they stop making profit, they want to pull out. And of course, they have a lot of trouble making a profit if the enrolees get sick. So instead of having a system that provides care to sick people, we have a system where insurance companies want to run away from providing care for people who need it.

NOOR: And so this, you know, the Obamacare Affordable Care Act, has been defended by Hillary Clinton during the Democratic primary. Bernie Sanders said we need universal healthcare and the only way we can do that is single-payer. Clinton said, you know, it’s not possible to achieve it. We can use Obamacare as a start to help expand coverage. Respond to that argument, because that–you know, Hillary Clinton is now the Democratic nominee, and she’s going to be putting forward those policies if she wins the White House. And it goes without saying, the Republicans have vowed to repeal Obamacare.

WOOLHANDLER: Look, Hillary Clinton has been pushed to the left during this election campaign, and she can be pushed more to the left. Polls are showing that 58 percent of the American people now endorse the idea of Medicare for all. So as soon as Senator Sanders started talking about Medicare for all, the majority of Americans said, gee, that sounds pretty good. In fact, about 40 percent of the people who hate Obamacare, who feel Obamacare should be repealed, and most of those people are Republicans, 40 percent of them support a Medicare for all system.

So the American people want this. The thing that’s blocking it are the insurance companies and the drug companies. The insurance companies blocked Medicare for all. They blocked the public option. And now Aetna is pulling out of Obamacare basically in retaliation for the Justice Department trying to stop them from forming a monopoly.

So what I would say to that is what’s possible is what people believe is possible. If the president, if the Demomcrats go back there and say, we’re going to work for single-payer, we’re going to challenge the insurance industry and drug company, then it’s really possible. As long as politicians are shrugging their shoulders and saying there’s nothing I can do, that’s a problem.

NOOR: And another issue that many have come across is that even through the exchanges, the price of getting insurance can be very, very high and unaffordable for many even working people.

WOOLHANDLER: Well, absolutely. For someone my age, if I went on the New York State exchange to buy insurance my premium for a bronze plan, the cheapest plan, my premium would be $5,000. And then if I got sick I would have another $5,000 deductible. So I’d be $10,000 out of pocket before my insurance paid one penny.

So you know, that’s not affordable care for people, and it’s not fair to ask people to pay that kind of money if they’re a low-income person. That’s why we really need a Medicare for all system, that would be based on a fair tax funding, and be available to everyone on an equal basis.

And of course, the beauty of Medicare for all, the beauty of single-payer, is that you save so much on administrative overhead that you can improve coverage for people, get rid of those copayments, deductibles, get 100 percent universal care without increasing total spending. Aetna last year had overhead of 19.9 percent. Nearly 20 percent overhead. Which mean for every dollar in premiums you handed them they held on to 20 cents. They never gave it to a doctor or a hospital or a drug company. They hold on to 20 cents right there for their overhead and profit. And we simply can’t afford to cover everyone if we’re going to waste all this money on that overhead and profits of these insurance giants.

NOOR: And so, you know, supporters of the current system would say this is better than what existed before. Millions of people now have insurance that didn’t have it before. And that weekend, you know, we can work to reform it. But it’s just not possible in the current climate, with Republicans controlling Congress, to get the proposal you have put forward.

WOOLHANDLER: Well, remember, there is an election coming up. So if the politicians say let’s go for Medicare for all, maybe we can get it. Certainly Bernie Sanders surprised all of us with the resonance that his message had with the American people. Really very–before he was a little-known senator from a tiny state, and next thing you know he’s really a contender in the presidential race because of the force of his ideas, including his idea for Medicare for all.

So by putting those ideas out to the American people, that would help us build the movement that would get us to a single-payer. There’s not another way to get there. A movement is really the only thing that’s going to defeat these insurance giants and these pharmaceutical giants.

NOOR: All right. Well, Steffie Woolhandler, thanks so much for joining us.

WOOLHANDLER: My pleasure.

NOOR: And thank you for joining us at the Real News Network.

http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=17051

When income is too high for a subsidy for ACA plans

Without a subsidy, couple faces higher insurance premiums

By Carla K. Johnson
Associated Press, August 20, 2016

With a household income too high for a federal subsidy, Bruce Mainzer and Beth Shadur are bracing for higher health insurance premiums in 2017.

As in other states, many insurers in Illinois have requested double-digit rate increases. Americans ineligible for the government subsidies that help cover their premiums will be hit hardest.

Health insurance already takes a hefty bite out of the couple’s budget. They pay $1,200 a month for a bronze plan with high deductibles, which means they pay $13,000 annually out of pocket before their coverage even kicks in.

“It has been a challenge, and it causes us to dip into our retirement savings and increase our debts,” Mainzer said.

On top of the cost, they’ve experienced the hassles of major disruptions in the Illinois insurance market. For one, their insurance company recently folded. It was one of the struggling co-ops set up under the federal health care law.

They are switching to Aetna in October but will start shopping again for another insurer a month later because Aetna recently said it is bailing out of the Illinois exchange-based marketplace.

They are in good health, but Mainzer has a blood disorder, a pre-existing condition that led insurers to reject him before the Affordable Care Act took effect. He was able to get coverage only through Illinois’ high-risk pool, at about the same price he pays today.

Mainzer rejects the “repeal and replace” Republican solution, in part because getting rid of the law would mean that insurance companies could go back to denying coverage for people with pre-existing conditions.

“Ultimately, it’s clear that health care is not something that can be efficiently provided by the private sector,” he said. “The rest of the Western world has figured out that health care is a right and is intrinsically a government, public-sector activity.”

http://bigstory.ap.org/article/900bafbce1e44be2a0f2f9c30a76f634/without-subsidy-couple-faces-higher-insurance-premiums

***

Experts Predict Sharp Decline in Competition across the ACA Exchanges

By Dan Mendelson
Avalere, August 19, 2016

A new analysis from Avalere finds that nearly 36 percent of exchange market rating regions may have only one participating insurance carrier offering plans for the 2017 plan year and there may be some sub-region counties where no plans are available. Nearly 55 percent of exchange market rating regions may have two or fewer carriers.

“Lower-than-expected enrollment, a high cost population, and troubled risk mitigation programs have led to decreased plan participation for 2017,” said Dan Mendelson, president of Avalere.

http://avalere.com/expertise/life-sciences/insights/experts-predict-sharp-decline-in-competition-across-the-aca-exchanges

An important measure of the success of the Affordable Care Act is how well it is working for middle and upper middle income working families who are not eligible for employer-sponsored health plans. The experience of the two-income couple described in this AP article demonstrates that it is not working so well for some.

Bruce Mainzer and Beth Shadur received their coverage through the ACA exchange in Illinois, but it was with one of the co-ops that failed (giving us a hint of what might happen to a “public option” once the private insurers provide their input into the design of such an option).

They had then applied for coverage with Aetna, but now it is pulling out of the Illinois exchange. Fewer plans will be available. In fact, according to the Avalere report, over one-third of exchange market rating regions throughout the United States will have only one plan available, eliminating competition as a means of holding down premiums (not that it was particularly effective anyway).

Because insurers in the exchanges have been experiencing losses, typical premium increases are expected to be in the double digits for 2017. For their bottom-tier bronze plan which has high deductibles, this couple has been paying $1,200 per month for coverage. Next year it will certainly be higher. Also the instability of plan coverage destabilizes access to health care because of the incongruity of the narrow provider networks.

In rejecting single payer, progressive politicians say that we should build on the success of ACA. What changes would you make in the system so that it would work well for Bruce and Beth? When you think about it, it is obvious that mere tweaks will not work. The changes that they need would require comprehensive reconstruction of the health care financing infrastructure.

Well, Bruce Mainzer has figured it out. As he says, “Ultimately, it’s clear that health care is not something that can be efficiently provided by the private sector. The rest of the Western world has figured out that health care is a right and is intrinsically a government, public-sector activity.”

Still hope for health care?

By Steve Sebelius
Las Vegas Review-Journal, Aug. 20, 2016

During the Democratic primary, as Bernie Sanders battled Hillary Clinton for the nomination, a strong disagreement emerged over health care.

Sanders — who has supported a single-payer health care system similar to those in Canada and Great Britain — asked voters why America can’t do the same thing.

Clinton replied that she supported the progress made in extending access to health insurance under the Affordable Care Act, and wanted to expand that legislation to cover more people.

Clinton’s approach is consistent with history. In the 1990s, she was working on a “managed competition” plan that some of the larger insurance companies found quite favorable, although their smaller competitors objected. That plan was never consummated.

By the way, Donald Trump pledges to repeal the entire Affordable Care Act. Although Trump once had kind words for single-payer health care in foreign lands, he’s come out against it for Americans.

So, now the election is a choice between Clinton’s extend-the-ACA and Trump’s kill-the-ACA.

But what if it didn’t have to be?

There is a plan that would take the existing Medicare system and gradually extend it to all Americans. (In fact, that was the original idea when President Lyndon Johnson signed the law in 1965.)

The fact that most Americans are already familiar with Medicare is one of its chief selling points as an alternative to insurance-based coverage, says Dr. Ed Weisbart, chairman of the Missouri chapter of the Physicians for a National Health Program.

A single-payer system is vulnerable to being attacked as “socialized medicine.” But under Medicare-for-all, doctors and hospitals would still compete with each other in the open market to offer care, Weisbart said.

But the Medicare program could use its purchasing power to lower costs, say, by negotiating with drug companies to lower prices on mass purchases of prescriptions. In fact, that’s where Weisbart says the expansion ought to begin.

This is not just a theoretical idea, either: It exists in legislative form in HR 676, the Expanded and Improved Medicare for All Act, a bill from Rep. John Conyers, D-Mich. There are 62 co-sponsors, although none from Nevada.

Rep. Dina Titus, the lone Democrat in Nevada’s House delegation, said she hasn’t signed on to Conyers’ bill because she agrees with Clinton — build on the success of the ACA. Implementing a Medicare-for-all system, she said, would require rolling back some of the hard-fought gains of the ACA.
 
But the real issue here is pragmatism, Titus said. In a Republican-controlled Congress, the only ACA-related bills that get votes are those seeking to repeal it, in whole or in part. Medicare for all has virtually no chance of passing with the GOP in charge, Titus said.

But can’t the same thing be said for the Democrats? When the ACA was introduced, the idea of a single-payer approach was rejected almost out of hand. A public option within the law was similarly tossed (couldn’t get the votes, majority Democrats said).

It’s not likely a President Hillary Clinton is going to invest much time and energy in a Medicare-for-all approach, especially when she’s never shown much interest in such a plan during her long career in politics. And it’s even less likely that Trump would move on the idea.

But approaching health care in the same way we’ve always done it — by finding new and exciting ways to funnel money to insurance companies — will produce only more political fights, more campaign contributions to fuel anti-reform efforts and less real change for Americans who pay too much and get far too little when it comes to their health care.

Steve Sebelius is a Review-Journal political columnist. Follow him on Twitter (@SteveSebelius) or reach him at SSebelius@reviewjournal.com.
 
http://www.reviewjournal.com/opinion/columns-blogs/steve-sebelius/still-hope-health-care

America cannot be a superpower with a substandard health care system

By Ahmed Kutty, M.D.
Monadnock Ledger-Transcript (Peterborough, N.H.), Aug. 16, 2016

In July 1965, President Lyndon Johnson had to settle for half a loaf, in lieu of the full loaf that three predecessors in The White House (Teddy Roosevelt in 1912, FDR in 1935 and Harry Truman in 1948) had proposed or attempted to legislate: a national health plan. The compromise reached, accommodating powerful opposing interest groups, gave us the Social Security Title XVIII Act, better known as Medicare, which went into effect 50 years ago this July.

Now in its “middle age,” the program has a proven track record of success in its mission of providing publicly financed health care for America’s seniors. Given its enduring popularity, it is time to review the stance of our two major political parties on health care security in general and Medicare in particular.

The Republicans in their long-awaited plan, recently authored by House Speaker Paul Ryan and offered after acrimonious and divisive attempts at a “repeal and replace” campaign launched in response to the Affordable Care Act (Obamacare) of 2010, seek to gut most of the significant gains achieved by the ACA. Their plan calls for slow, steady and subtle attempts to privatize and eventually kill the Medicare program as we know it today.

Starving by funding cuts to traditional Medicare, generous funding of the part-privatized Medicare Advantage plans and granting rule-making discretion to compliant federal agencies are some of their tools to bring about the demise of the social insurance program for the health care of seniors, who would then be on the hook for huge medical bills when a major or catastrophic illness strikes.

Then “you are on your own,” which is consistent with the zeitgeist as perceived by the Republican Party.

No surprise there!

The Democrats are saying that we have delivered the best reform in 2010 and are now on to other priorities. The fact that about 27 million Americans will remain uninsured and about 30 million underinsured after full implementation of the ACA in 2018, remain just numbers in the political calculus of the party elite. Martin Luther King’s words, “Of all forms of inequality, injustice in health care is the most shocking and inhuman,” fall on deaf ears within today’s Democratic Party. Any party in America that will heed King’s call appeared destined for political extinction until recently.

Among the major party presidential candidates, Sen. Bernie Sanders provided the most powerful, galvanizing and unwavering support for “Medicare for All”: a bold move to establish a national health care plan. Negotiations in July between the campaigns of Clinton and Sanders led to compromise, and the Democratic Party platform now promises (1) to lower the eligibility age for Medicare to 55, (2) to offer a public option in the ACA exchanges, (3) to lift the ban on Medicare from negotiating drug pricing and (4) to increase funding for qualified Community Health Centers. Alas, platform promises are non-binding.

While welcome, the incremental approach of the Democratic establishment, including Obama and Clinton, is a far cry from the much-needed basic structural reform of financing our health care system, as advocated by Sanders and others, and embedded in the bills before Congress: S. 1782 in the Senate by Sanders (and Rep. Jim McDermott’s companion bill on the House side) and H.R. 676, sponsored by Rep. John Conyers of Michigan.

The details in these bills show the plans’ financial viability and fiscal soundness, to cover all 320 million Americans under a universal, comprehensive, publicly funded program for financing health care at a cost to the nation that would be less, by a half a billion dollars, than we spend currently.

A majority of health care economists agree that that our health care costs of $3 trillion a year, amounting to 18 percent of our GDP, are unsustainable. All other major advanced economies spend an average of 9 to 10 percent of their GDP and secure coverage for all their residents. Per capita we expend $18,000 per year while Canada, the EU countries, Japan, Taiwan and Australia, among others, get all necessary health care for their citizens at approximately $9,000 per capita annually.

An average family with an annual household income of $55,000, currently paying about $11,000, including premiums and out-of-pocket deductibles, would pay $4,000 a year as taxes under the national plan and get far better, comprehensive coverage with no premiums, deductibles or copays. For about $5,000 to $6,000 – and by some estimates no more than $9,000 a year per household – we could have a publicly funded, privately delivered (as we do now) program in which everybody is in and nobody out. We must agree with President Truman, who said in 1948, that “We as a nation can afford this.”

A century ago, Lloyd George, the British prime minister during World War I, said: “You cannot run an A1 empire with a C3 population.”

We, the people, must send a message, loud and clear, to our elected leaders and candidates for offices from president on down, that America cannot build an A1 21st-century economy, and remain a superpower, with a C3 health care system. For the law stating that the arc of the moral universe bends toward justice to be operational, people must do the bending.

Dr. Ahmed Kutty is a retired physician who lives in Peterborough.

http://www.ledgertranscript.com/

PNHP note: Physicians for a National Health Program is a nonpartisan educational organization. It neither supports nor opposes any candidate for public office.

Dr. Steffie Woolhandler on ‘The Real News Network’

PNHP co-founder Dr. Steffie Woolhandler appeared on “The Real News Network” on Aug. 19, 2016, to discuss Aetna’s decision to withdraw from the Affordable Care Act marketplace in most of the states where it currently operates. A transcript of her interview with host Jaisal Noor is available on The Real News Network website, here.

CMS response to steering dialysis patients to private plans

CMS examines inappropriate steering of people eligible for Medicare or Medicaid into Marketplace plans

Centers for Medicare and Medicaid Services, August 18, 2016

The Centers for Medicare & Medicaid Services (CMS) today issued a request for information seeking public comment on concerns that some health care providers and provider-affiliated organizations may be steering people eligible for, or receiving, Medicare and/or Medicaid benefits into Affordable Care Act-compliant individual market plans, including Health Insurance Marketplace plans, for the purpose of obtaining higher reimbursement rates. CMS also sent letters to all Medicare-enrolled dialysis facilities and centers informing them of this announcement.

The request for information and letters to providers focus on situations where patients may be steered away from Medicare or Medicaid benefits, which can among other concerns, result in beneficiaries experiencing a disruption in the continuity and coordination of their care as a result of changes to their network of providers.

In addition to asking for more information on instances of problematic steering of consumers to individual market plans, CMS is also considering potential regulatory and operational options to prohibit or limit premium payments and routine waiver of cost-sharing for qualified health plans by health care providers, revisions to Medicare and Medicaid provider enrollment rules, the imposition of civil monetary penalties for individuals that fail to provide correct information about consumers enrolling in a plan, and potential changes that would allow issuers to limit their payment to health care providers to Medicare-based amounts for particular services and items of care.

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-08-18-2.html

***

Comment:

By Don McCanne, M.D.

In a previous message we described how some dialysis centers were steering patients away from Medicare and Medicaid and into private plans which have much higher payment rates. CMS is now assessing this problem and considering various measures to address it.

CMS’s primary concern seems to be that they want to protect the private insurers from high cost patients, especially in light of the fact that the nation’s largest private insurers are withdrawing from the ACA exchanges because of their exposure to high needs patients. The punitive interventions they suggest are aimed at the providers rather than the insurers. Particularly noteworthy is the recommendation to allow private insurers to reduce their provider payments down to Medicare rates.

If CMS established the principle that they can have recourse to price controls for privately insured patients, then why should we have to continue to pay the private plans extra for their superfluous administrative excesses and investor returns?  For that matter, why should we continue with an inefficient, fragmented health care financing system wherein our public administrators are bending over backwards to cater to the private insurers at an extra cost to those of us paying the bills?

In these thousands of daily messages on the heaps of rotten policies in health care financing it seems like there must be a pony in here somewhere. Single payer, perhaps?

CMS response to steering dialysis patients to private plans

CMS examines inappropriate steering of people eligible for Medicare or Medicaid into Marketplace plans

Centers for Medicare and Medicaid Services, August 18, 2016

The Centers for Medicare & Medicaid Services (CMS) today issued a request for information seeking public comment on concerns that some health care providers and provider-affiliated organizations may be steering people eligible for, or receiving, Medicare and/or Medicaid benefits into Affordable Care Act-compliant individual market plans, including Health Insurance Marketplace plans, for the purpose of obtaining higher reimbursement rates. CMS also sent letters to all Medicare-enrolled dialysis facilities and centers informing them of this announcement.

The request for information and letters to providers focus on situations where patients may be steered away from Medicare or Medicaid benefits, which can among other concerns, result in beneficiaries experiencing a disruption in the continuity and coordination of their care as a result of changes to their network of providers.

In addition to asking for more information on instances of problematic steering of consumers to individual market plans, CMS is also considering potential regulatory and operational options to prohibit or limit premium payments and routine waiver of cost-sharing for qualified health plans by health care providers, revisions to Medicare and Medicaid provider enrollment rules, the imposition of civil monetary penalties for individuals that fail to provide correct information about consumers enrolling in a plan, and potential changes that would allow issuers to limit their payment to health care providers to Medicare-based amounts for particular services and items of care.

https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2016-Press-releases-items/2016-08-18-2.html

In a previous message we described how some dialysis centers were steering patients away from Medicare and Medicaid and into private plans which have much higher payment rates. CMS is now assessing this problem and considering various measures to address it.

CMS’s primary concern seems to be that they want to protect the private insurers from high cost patients, especially in light of the fact that the nation’s largest private insurers are withdrawing from the ACA exchanges because of their exposure to high needs patients. The punitive interventions they suggest are aimed at the providers rather than the insurers. Particularly noteworthy is the recommendation to allow private insurers to reduce their provider payments down to Medicare rates.

If CMS established the principle that they can have recourse to price controls for privately insured patients, then why should we have to continue to pay the private plans extra for their superfluous administrative excesses and investor returns?  For that matter, why should we continue with an inefficient, fragmented health care financing system wherein our public administrators are bending over backwards to cater to the private insurers at an extra cost to those of us paying the bills?

In these thousands of daily messages on the heaps of rotten policies in health care financing it seems like there must be a pony in here somewhere. Single payer, perhaps?

Medicare Advantage plans pay hospitals less than does traditional Medicare

By Laurence C. Baker, M. Kate Bundorf, Aileen M. Devlin and Daniel P. Kessler
Health Affairs, August 2016

Abstract

There is ongoing debate about how prices paid to providers by Medicare Advantage plans compare to prices paid by fee-for-service Medicare. We used data from Medicare and the Health Care Cost Institute to identify the prices paid for hospital services by fee-for-service (FFS) Medicare, Medicare Advantage plans, and commercial insurers in 2009 and 2012. We calculated the average price per admission, and its trend over time, in each of the three types of insurance for fixed baskets of hospital admissions across metropolitan areas. After accounting for differences in hospital networks, geographic areas, and case-mix between Medicare Advantage and FFS Medicare, we found that Medicare Advantage plans paid 5.6 percent less for hospital services than FFS Medicare did. Without taking into account the narrower networks of Medicare Advantage, the program paid 8.0 percent less than FFS Medicare. We also found that the rates paid by commercial plans were much higher than those of either Medicare Advantage or FFS Medicare, and growing. At least some of this difference comes from the much higher prices that commercial plans pay for profitable service lines.

From the Discussion

Knowing how Medicare Advantage prices compare to those of FFS Medicare is important for public policy. Health spending is the product of price and quantity. If Medicare Advantage prices are lower than those of FFS Medicare, then Medicare can obtain the same quantity of services for less money through Medicare Advantage than through FFS Medicare.

Contrary to conventional wisdom, we found that Medicare Advantage plans paid lower prices for hospital services than FFS Medicare — around 8 percent lower in both 2009 and 2012 — once the DRG and geographic-area mix of FFS Medicare was made comparable to those of Medicare Advantage.

If differences in hospital mix are also accounted for, Medicare Advantage’s hospital prices are about 5.6 percent less than those of FFS Medicare. Thus, about a third of the 8 percent difference is attributable to the narrower hospital networks in Medicare Advantage, compared to FFS Medicare.

Our results also show how Medicare Advantage can be used to get a better deal (at least from hospitals) for the Medicare program as a whole, by adjusting administered prices across geographic areas and DRGs to better reflect the market.

Finally, consistent with previous research, we found that the rates commercial plans pay to hospitals are significantly higher than those of either Medicare Advantage or FFS Medicare and that they are rising.

http://content.healthaffairs.org/content/35/8/1444.abstract

The pro-market authors of this study have shown that the private Medicare Advantage plans pay hospitals less than traditional Medicare pays, concluding that the private plans “get a better deal for the Medicare program.” But that conclusion is not true if you look at the whole picture.

Because the private Medicare Advantage plans were being paid more than what was being paid for comparable care in the traditional Medicare program, Congress included in the Affordable Care Act adjustments to reduce the overpayments. However, the private plans have continued with their mastery of gaming the system to increase their payment rates, such as selective marketing to healthier populations and upcoding to receive greater payments through risk adjustment. This has been with the complicity of the people in HHS who have used innovative administrative tools and creative accounting to more than offset the required reductions. The private plans are still receiving greater payments than are being made for comparable patients in the traditional Medicare program.

Since the private plans are receiving larger payments, and, according to this study, are paying less for health care, the Medicare program is getting a worse deal, and it is the private insurers themselves who are getting a great deal, at a cost to taxpayers. This extra money that the insurers are siphoning out of the system is going to overpriced administrative services and, yes, to extra profits.

Although the private insurers are pulling out of the ACA exchanges because they cannot make their business model work there, they boast to their investors that their commercial accounts are highly profitable (employer-sponsored plans) and that their government accounts – especially the Medicare Advantage plans – are producing extraordinary returns for the investors (and humongous compensation packages for the corporate executives). We are paying for this through higher premiums for private plans and greater taxes for privately-managed government programs. A well designed single payer system should fix that.