PNHP

Disabled on Medicare may not be eligible for Medigap

Disabled on Medicare may not be eligible for Medigap

Buying Supplemental Insurance Can Be Hard For Younger Medicare Beneficiaries

By Susan Jaffe
Kaiser Health News, February 3, 2016

Federal law requires companies to sell Medigap plans to any Medicare beneficiary aged 65 or older within six months of signing up for Part B, which covers doctor visits and other outpatient services. If they sign up during this guaranteed open enrollment, they cannot be charged higher premiums due to their medical conditions.

But Congress left it to states to determine whether Medigap plans are sold to the more than 9 million people younger than 65 years old who qualify for Medicare because of a disability.

In 20 states and the District of Columbia, home to more than 2 million disabled Medicare beneficiaries, insurers are not required to sell Medigap policies to customers under 65. In other states, insurers cannot reject applicants if they enroll when they first join Medicare. Companies in some states, including Virginia, can still charge higher premiums to younger beneficiaries or those with kidney disease, often making policies unaffordable.

In California, Massachusetts and Vermont, insurers are required to sell Medigap policies to anyone with Medicare, except to people… who are under 65 and have end stage renal disease.

The federal health law provides no relief for these younger Medicare beneficiaries. One of its most popular provisions prohibits discrimination by insurance companies in the non-Medicare market based on pre-existing conditions or age, but the law is silent on Medigap.

Prospects for a nationwide solution are dim because expanding Medigap coverage could lead to these beneficiaries with disabilities receiving more care and raising costs for the Medicare program. Congress is looking for strategies to curb Medicare spending, not increase it.

The health insurance industry’s trade association opposes expanding Medigap to include all Medicare beneficiaries younger than 65 with end stage renal kidney disease. Since treatment for those patients can be so expensive, adding them could increase Medigap premiums for everyone, said Cindy Goff, a vice president at America’s Health Insurance Plans.

Older adults are “super price-sensitive” and raising premiums “would basically price them out of being able to get the Medigap protection they want,” said Goff.

http://khn.org/news/buying-supplemental-insurance-can-be-hard-for-younger-medicare-beneficiaries-2/

***

Comment:

By Don McCanne, M.D.

It has long been recognized that the benefits of the Medicare program are inadequate, leaving too many exposed to financial hardship and impaired access due to financial barriers. Some are protected with retiree health benefit plans or with backup by the Medicaid program, but for others, the private Medigap insurance plans were developed. This article shows that the rules for Medigap plan eligibility may still leave vulnerable those who quality for Medicare based on a disability – some of the most neediest of Medicare beneficiaries.

Medigap plans are a poor solution for the inadequacies of Medicare coverage. They are overpriced when considering the benefits received, and are usually unaffordable for those who do not quite qualify for dual Medicare/Medicaid coverage. They add significantly to the administrative complexity of administering Medicare, wasting funds that would be better spent on health care. It would be far more efficient to roll the Medigap benefits into the Medicare program. That would be an important component of the “Improved” in an “Improved Medicare for All” which could be the basis of a single payer national health program.

Congress has left to the states decisions on whether or not private insurers selling Medigap plans must do so on a guaranteed issue basis (plans must be sold to any applicant regardless of medical status), and also if the plans can be subject to medical underwriting (charging higher premiums for those with greater health needs). Just as we see with Medicaid, states under the rule of heartless politicians frequently decide to turn these disabled patients over to the marketplace – further exposing them to a life of physical suffering and financial hardship.

Generally, individuals must purchase their Medigap plans soon after enrolling in Medicare. This applies to both those over 65 and those under 65 with disabilities. The high premiums charged for these plans are one of the many reasons that individuals decide to forgo initial enrollment and then become ineligible later on when medical needs may be even greater. This is yet one more example of a policy that prevents individuals from having access to coverage when our national policies should be designed to achieve the opposite – ensuring enrollment of absolutely everyone, throughout life.

Medigap is another bad idea brought to us by the private insurance industry. It works well for insurers, but not so well for too many patients. We should dump it along with the rest of the private insurance industry and establish our own equitable, publicly-funded and publicly-administered single payer system. How can we leave so many of our disabled residents hanging like we do?

Policymakers should be listening to doctors

By Stephen B. Kemble, M.D.
Honolulu Star-Advertiser, Feb. 3, 2016

Hawaii has a severe doctor shortage and we are losing more doctors every year than we can train.

Doctors also have become increasingly reluctant to accept new patients with Medicare and Medicaid, and now a legislative bill has been introduced to require doctors to accept Medicare as a condition of licensure.

What many fail to understand is that these are not problems with greedy doctors refusing to care for the poor or elderly.

The real issue is abusive managed care practices by many health plans, including the Medicaid- and Medicare-managed care plans.

Now Medicare is pushing payment and delivery system reforms referred to as “value-based” payment, designed to reward doctors financially for delivering less care.

“Value-based” payment can encourage unethical behavior, and so far it is adding administrative burdens but not achieving any of its stated goals of improved care, improved health or reduced cost.

Doctors who fail to adequately computerize and report detailed data to Medicare will receive a 2 percent reduction in fees starting this month, escalating to 9 percent over the next five years.

Prior authorization and documentation demands have been worst for Medicaid managed care and Medicare, and now HMSA is jumping on the same bandwagon for the commercially insured. Physicians now must obtain prior authorizations for almost all advanced imaging studies and a high percentage of the prescriptions they write, including many generics.

Conversion to a much more complex diagnostic coding system last October, complex evaluation/management procedure codes, and data demands for pay-for-performance and risk adjustment, required by “value-based” payment, are forcing doctors to spend much more time on documentation at the expense of listening to and paying attention to their patients.

In my own practice, documentation time has increased by an hour a day since two years ago. My options are to see fewer patients, spend much of each visit charting instead of paying attention to the patient, or stay at work until 8-9 p.m. every night.

A recent Mayo Clinic study found that 55 percent of U.S. doctors suffer from “burnout,” up 10 percent since 2011. Another study showed 28 percent of physicians in training have clinical depression. These are frightening statistics for anyone needing medical care. They also explain why we are losing so many doctors to premature retirement.

Antitrust laws prevent doctors from negotiating collectively with health plans, so their only recourse is to restrict acceptance of abusive plans. If doctors were forced to accept Medicare or Medicaid, the plans would be free to slash fees below cost and implement any managed care policies they wanted, no matter how abusive or unethical.

Instead of forcing doctors to accept health plan abuse, the Legislature and major health plans should be listening to doctors about policies that would enhance their ability to provide better care to their patients. Successful health care reforms anywhere have always been led by physicians, not health insurers or hospitals.

The Abercrombie and Ige administrations and certain legislators have been listening only to the health insurers, resulting in recent health policy initiatives that are piling on administrative burdens, stripping physicians of their professional autonomy and ability to respond to patient needs, restricting access to care for patients, and driving Hawaii doctors out of practice. Meanwhile, the cost of health insurance is rising unabated.

The Hawaii Medical Association has repeatedly offered a physician advisory panel to assist the Ige administration with health policy, but there has been no response so far. The administration and Legislature need to be informed of the effects of policy on the actual care of patients.

Every Hawaii resident will need a doctor someday, so let’s stop driving them out of practice.

Stephen B. Kemble, M.D., is past president of the Hawaii Medical Association.

http://www.staradvertiser.com/editorial/policymakers-should-be-listening-to-doctors/

Disabled on Medicare may not be eligible for Medigap

Buying Supplemental Insurance Can Be Hard For Younger Medicare Beneficiaries

By Susan Jaffe
Kaiser Health News, February 3, 2016

Federal law requires companies to sell Medigap plans to any Medicare beneficiary aged 65 or older within six months of signing up for Part B, which covers doctor visits and other outpatient services. If they sign up during this guaranteed open enrollment, they cannot be charged higher premiums due to their medical conditions.

But Congress left it to states to determine whether Medigap plans are sold to the more than 9 million people younger than 65 years old who qualify for Medicare because of a disability.

In 20 states and the District of Columbia, home to more than 2 million disabled Medicare beneficiaries, insurers are not required to sell Medigap policies to customers under 65. In other states, insurers cannot reject applicants if they enroll when they first join Medicare. Companies in some states, including Virginia, can still charge higher premiums to younger beneficiaries or those with kidney disease, often making policies unaffordable.

In California, Massachusetts and Vermont, insurers are required to sell Medigap policies to anyone with Medicare, except to people… who are under 65 and have end stage renal disease.

The federal health law provides no relief for these younger Medicare beneficiaries. One of its most popular provisions prohibits discrimination by insurance companies in the non-Medicare market based on pre-existing conditions or age, but the law is silent on Medigap.

Prospects for a nationwide solution are dim because expanding Medigap coverage could lead to these beneficiaries with disabilities receiving more care and raising costs for the Medicare program. Congress is looking for strategies to curb Medicare spending, not increase it.

The health insurance industry’s trade association opposes expanding Medigap to include all Medicare beneficiaries younger than 65 with end stage renal kidney disease. Since treatment for those patients can be so expensive, adding them could increase Medigap premiums for everyone, said Cindy Goff, a vice president at America’s Health Insurance Plans.

Older adults are “super price-sensitive” and raising premiums “would basically price them out of being able to get the Medigap protection they want,” said Goff.

http://khn.org/news/buying-supplemental-insurance-can-be-hard-for-younger-medicare-beneficiaries-2/

It has long been recognized that the benefits of the Medicare program are inadequate, leaving too many exposed to financial hardship and impaired access due to financial barriers. Some are protected with retiree health benefit plans or with backup by the Medicaid program, but for others, the private Medigap insurance plans were developed. This article shows that the rules for Medigap plan eligibility may still leave vulnerable those who quality for Medicare based on a disability – some of the most neediest of Medicare beneficiaries.

Medigap plans are a poor solution for the inadequacies of Medicare coverage. They are overpriced when considering the benefits received, and are usually unaffordable for those who do not quite qualify for dual Medicare/Medicaid coverage. They add significantly to the administrative complexity of administering Medicare, wasting funds that would be better spent on health care. It would be far more efficient to roll the Medigap benefits into the Medicare program. That would be an important component of the “Improved” in an “Improved Medicare for All” which could be the basis of a single payer national health program.

Congress has left to the states decisions on whether or not private insurers selling Medigap plans must do so on a guaranteed issue basis (plans must be sold to any applicant regardless of medical status), and also if the plans can be subject to medical underwriting (charging higher premiums for those with greater health needs). Just as we see with Medicaid, states under the rule of heartless politicians frequently decide to turn these disabled patients over to the marketplace – further exposing them to a life of physical suffering and financial hardship.

Generally, individuals must purchase their Medigap plans soon after enrolling in Medicare. This applies to both those over 65 and those under 65 with disabilities. The high premiums charged for these plans are one of the many reasons that individuals decide to forgo initial enrollment and then become ineligible later on when medical needs may be even greater. This is yet one more example of a policy that prevents individuals from having access to coverage when our national policies should be designed to achieve the opposite – ensuring enrollment of absolutely everyone, throughout life.

Medigap is another bad idea brought to us by the private insurance industry. It works well for insurers, but not so well for too many patients. We should dump it along with the rest of the private insurance industry and establish our own equitable, publicly-funded and publicly-administered single payer system. How can we leave so many of our disabled residents hanging like we do?

On Kenneth Thorpe’s Analysis of Senator Sanders’ Single-Payer Reform Plan

By David Himmelstein and Steffie Woolhandler
The Huffington Post, January 29, 2016

Professor Kenneth Thorpe recently issued an analysis of Senator Bernie Sanders’ single-payer national health insurance proposal. Thorpe, an Emory University professor who served in the Clinton administration, claims the single-payer plan would break the bank.

Thorpe’s analysis rests on several incorrect, and occasionally outlandish, assumptions. Moreover, it is at odds with analyses of the costs of single-payer programs that he produced in the past, which projected large savings from such reform (see this study, for example, or this one).

We outline below the incorrect assumptions behind Thorpe’s current analysis:

1. He incorrectly assumes administrative savings of only 4.7 percent of expenditures, based on projections of administrative savings under Vermont’s proposed reform.

However, the Vermont reform did not contemplate a fully single-payer system. It would have allowed large employers to continue offering private coverage, and the continuation of the FEHBP and Medicare programs. Hence, hospitals, physicians’ offices, and nursing homes would still have had to contend with multiple payers, forcing them to maintain the complex cost-tracking and billing apparatus that drives up providers’ administrative costs. Vermont’s plan proposed continuing to pay hospitals and other institutional providers on a per-patient basis, rather than through global budgets, perpetuating the expensive hospital billing apparatus that siphons funds from care.

The correct way to estimate administrative savings is to use actual data from real world experience with single-payer systems such as that in Canada or Scotland, rather than using projections of costs in Vermont’s non-single-payer plan. In our study published in the New England Journal of Medicine we found that the administrative costs of insurers and providers accounted for 16.7 percent of total health care expenditures in Canada, versus. 31.0 percent in the U.S. – a difference of 14.3 percent. In subsequent studies, we have found that U.S. hospital administrative costs have continued to rise, while Canada’s have not. Moreover, hospital administrative costs in Scotland’s single-payer system were virtually identical those in Canada.

In sum, Thorpe’s assumptions understate the administrative savings of single-payer by 9.6 percent of total health spending. Hence he overestimates the program’s cost by 9.6 percent of health spending — $327 billion in 2016, and $3.742 trillion between 2016 and 2024. Notably, Thorpe’s earlier analyses projected much larger administrative savings from single-payer reform — closely in line with our estimates.

2. Thorpe assumes huge increases in the utilization of care, increases far beyond those that were seen when national health insurance was implemented in Canada, and much larger than is possible given the supply of doctors and hospital beds.

When Canada implemented universal coverage and abolished copayments and deductibles there was no change in the total number of doctor visits; doctors worked the same number of hours after the reform as before, and saw the same number of patients. However, they saw their healthy and wealthier patients slightly less often, and sicker and poorer patients somewhat more frequently. Moreover, the limited supply of hospital beds precluded the kind of big surge in hospitalizations that Thorpe predicts. In health policy parlance, “capacity constraints” precluded a big increase in system-wide utilization.

Thorpe bases his estimates on what has happened when a small percentage of people in a community have had copayments eliminated or added. But in those cases there are no capacity constraints, so it tells us little about what would happen under a system-wide reform like single-payer.

Thorpe does not give actual figures for how many additional doctor visits and hospital stays he predicts. However, his estimates that persons with private insurance would increase their utilization of care by 10 percent and that those with Medicare-only coverage would increase utilization by 10 to 25 percent suggest that he projects about 100 million additional doctor visits and several million more hospitalizations each year – something that’s impossible given real-world capacity constraints. There just aren’t enough doctors and hospital beds to deliver that much care.

Instead of a huge surge in utilization, more realistic projections would assume that doctors and hospitals would reduce the amount of unnecessary care they’re now delivering in order to deliver needed care to those who are currently not getting what they need. That’s what happened in Canada.

3. Thorpe assumes that the program would be a huge bonanza for state governments, projecting that the federal government would relieve them of 10 percent of their current spending for Medicaid and CHIP — equivalent to about $20 billion annually.

No one has suggested that a single-payer reform would or should do this.

4. Thorpe’s analysis also ignores the large savings that would accrue to state and local governments — and hence taxpayers — because they would be relieved of the costs of private coverage for public employees.

State and local government spent $177 billion last year on employee health benefits – about $120 billion more than state and local government would pay under the 6.2 percent payroll tax that Senator Sanders has proposed. The federal government could simply allow state and local governments to keep this windfall, but it seems far more likely that it would reduce other funding streams to compensate.

5. Thorpe’s analysis also apparently ignores the huge tax subsidies that currently support private insurance, which are listed as “Tax Expenditures” in the federal government’s official budget documents.

These subsidies totaled $326.2 billion last year, and are expected to increase to $538.9 billion in 2024. Shifting these current tax expenditures from subsidizing private coverage to funding for a single-payer program would greatly lessen the amount of new revenues that would be required. Thorpe’s analysis makes no mention of these current subsidies.

6. Thorpe assumes zero cost savings under single-payer on prescription drugs and devices.

Nations with single-payer systems have in every case used their clout as a huge purchaser to lower drug prices by about 50 percent. In fact, the U.S. Defense Department and VA system have also been able to realize such savings.

In summary, professor Thorpe grossly underestimates the administrative savings under single-payer; posits increases in the number of doctor visits and hospitalizations that exceed the capacity of doctors and hospitals to provide this added care; assumes that the federal government would provide state and local governments with huge windfalls rather than requiring full maintenance of effort; makes no mention of the vast current tax subsidies for private coverage whose elimination would provide hundreds of billions annually to fund a single-payer program; and ignores savings on drugs and medical equipment that every other single-payer program has reaped.

In the past, Thorpe estimated that single-payer reform would lower health spending while covering all of the uninsured and upgrading coverage for the tens of millions who are currently underinsured. The facts on which those conclusions were based have not changed.

Drs. David Himmelstein and Steffie Woolhandler are professors of health policy and management at the City University of New York School of Public Health and lecturers in medicine at Harvard Medical School. The opinions expressed here do not necessarily reflect the views of those institutions.

http://www.huffingtonpost.com/david-himmelstein/kenneth-thorpe-bernie-sanders-single-payer_b_9113192.html?1454092127

PNHP note: Physicians for a National Health Program (PNHP) is a nonprofit, nonpartisan, educational and policy research organization that neither supports nor opposes any candidate for public office nor any political party.

Policy experts debate viability of Sen. Bernie Sanders’ health care plan

Airtalk with Larry Mantle
Southern California Public Radio, KPCC, Jan. 28, 2016

PNHP note: The following are excerpts from an unofficial transcript of a debate between Dr. Steffie Woolhandler of Physicians for a National Health Program, a practicing primary care physician and professor in the City University of New York School of Public Health at Hunter College, and Avik Roy, senior fellow at the Manhattan Policy Institute and current health care adviser to Marco Rubio. Only the remarks of Dr. Woolhandler, PNHP’s co-founder, have been transcribed here. A link to the full audio of the debate is provided at the end.

Host Larry Mantle (LM): So Bernie Sanders’ claim is that if you take the profit out of American health care on the insurance side that there are huge savings there. If the government can negotiate with a position of great leverage drug manufacturers, you can drive down prescription drug rates. And without Americans having to pay health premiums, that the taxes would essentially even out with the savings that would be provided. We’re going to examine that claim and talk about what impact overall Sanders’ proposal would have on the American health care system.

With us is Dr. Steffie Woolhandler with Physicians for a National Health Program, an organization that advocates universal, comprehensive, single-payer national health care. Dr. Woolhandler, thank you for being with us. We appreciate it.

Steffie Woolhandler (SW): My pleasure.

LM: So first of all, let’s talk about, just real briefly, how a system like this would work. It sounds like he’s saying this would work for everybody the way Medicare works for seniors.

SW: Yes, and actually it would work a little bit better than Medicare works. Canada does have a single-payer program. It covers 100 percent of health care costs, first dollar to last dollar, for doctors’ care, for hospital care. Some provinces have pharma care, some don’t. When you have pharma care then drugs are folded in as well. The reason Canada can do this affordably is because they get such huge administrative cost savings by eliminating private health insurance. Total administrative costs in health care are only about 16 percent of spending in Canada. You have to compare that to 31 percent of total U.S. health spending that goes for overhead and paperwork and administration. So the difference between those percentages is about 14 percent of total health spending that you can save through administrative simplification with a single payer is a huge amount of money, about $400 billion annually that would be freed up to improve care.

LM: Let’s talk about what the federal government, in expense, would have to do ramp up though, because already Medicare fraud is a huge expense to taxpayers. So presumably you’d have to bulk up the federal government’s capacity to investigate fraud considerably, you’d have to build a much larger federal infrastructure for health care. How would that cost compare to what the costs are for the private insurers.

SW: You’re absolutely wrong on that. In fact, if you have a single-payer system it’s potentially easier to identify fraud. So there was, for instance, a doctor in Canada who was billing for $125,000 worth of urinalysis tests, which is a ridiculous number of tests. That’s fraud. It was very easy to detect because all of the bills were sent to the single payer, and you could see what’s going on. So actually you’re in a much better position to identify and eliminate fraud if you have a single payer that sees all of the bills that the doctors and the hospitals send. The other thing I want to say is that we know how much a public bureaucracy costs. We can look at Canada, where the overhead on insurance is about 1 percent. We can look at our Medicare program, our traditional fee-for-service Medicare program. That overhead is about 2 percent. And you have to compare that to the overhead in private insurance firms which averages about 14 percent, but sometimes rises as high as 20 percent. So you get huge insurance overhead savings due to single payer, that’s not theoretical – we know it’s true from the data from our own Medicare program and the Canadian single payer.

LM. OK. Also, on the issue of doctor and hospital reimbursements, because the government wouldn’t employ physicians directly or hospitals, but that’s where the reimbursements would come from. How would the government keep doctors from opting out, at least some of them, in setting up boutique sorts of practices as we’re already seeing with some physicians leaving Medicare?

SW: Well Canada has a rule that if you accept any money from the public Medicare system, you have to be completely in the system, you have to take any patient in the system. There’s a handful of doctors who have opted out of Canada’s single payer, I think less than a dozen, but the overwhelming majority of doctors end up participating in the system because of the rule of 100 percent in, or 100 percent out. Now there are a couple of cosmetic surgeons who do things that aren’t covered by the single payer, but that’s a different story, but for most routine medical care the doctors are pretty much 100 percent participating in Canada.

LM: So the doctors would all – they couldn’t really set their rates. They’d all be paid the same, the great doctors, the mediocre doctors. Everybody gets paid the same under this.

SW: Well, that’s true at some level. Different specialties doing different things get paid slightly different amounts in Canada. What happens in Canada is that doctors’ fees are set by some combination of negotiation and regulation. The provincial medical society, which is like our state medical society, comes up with a fee schedule for the entire set of doctors in the province and they negotiate that with the provincial government. It’s rather contentious, but at the end of the day the Canadian doctors have done extremely well. Canadian primary care doctors are paid just as much as primary care doctors in the United States, and specialty doctors in Canada are paid somewhat more than primary care doctors in Canada, but not the huge kind of salaries that some high-paid specialists can reap in the United States. But the doctors are doing just fine financially; we know that because Canadian doctors can immigrate to the United States, and the net immigration is zero. They’re simply not crossing the border to come to the U.S. at this point.

LM: In Canada, if you’ve got a really expensive city like Vancouver to live in, do doctors there get an extra bump in their reimbursement for their overhead?

SW: The rates are set at the provincial level, and I assume there’s some bump for very high costs – when it’s expensive to run a practice. I’m not sure of that, but it does vary from province to province.

LM: We’re talking with Dr. Steffie Woolhandler of Physicians for a National Health Program. Talking about Sen. Bernie Sanders’ proposed Medicare for all, single-payer health care program. If you have questions about Bernie Sanders’ proposal, I know there’s a lot of you who are pro or con on it, and we are most interested in questions that you may have about it – the economics of it, how it would work, as opposed to just saying yea or nay. If you want to call in and take part, I welcome your questions. …

[At this point Mantle speaks with Avik Roy, who argues, inter alia, that under a single-payer program doctors and hospitals would have to take significant cuts in reimbursements, that Canadians face very long wait times to see a doctor or get treatment, can’t get the care they need and therefore travel to the U.S. to get it.]

LM: Let’s take the first point that doctors and hospitals would have to take significant cuts in reimbursements.

SW: The doctors in Canada are doing just fine. Their incomes are similar to primary care doctors in the United States. The hospitals are doing just fine. They’re not in bankruptcy, they have big modern hospitals that provide care. The insurance companies took a major hit under single payer. They were more or less put out of the health care business. The drug companies took a major hit under single payer. Their prices ended up being cut in half. And the device industry takes a bit hit – their prices are cut in half. So it’s bad for insurers, the drug industry and device manufacturers, but it is not bad for doctors and hospitals, and frankly, it is not bad for patients. I was an attending physician at the Massachusetts General Hospital at Harvard Medical School, a world leader in medical care. We had patients from all over the world come to Mass General to get our services, but we did not see patients from Canada, despite being less than a 4-hour drive from the border. Canadian patients do not come to the United States in droves and that’s not just my anecdotal impression, that’s what’s been found when people have studied it. Avik’s figures about waiting lists are wildly exaggerated. The provinces post their wait times on the Internet; you can go and look at how long it would take, for instance, a prostate surgery. In British Columbia, it’s something like days to weeks. We’re not talking about months and years the way he’s implying. The Canadian public would not tolerate this kind of wait, and it’s a rumor that has been perpetrated by The Wall Street Journal, by conservative analysts like Avik, that everybody’s waiting for care, that they’re streaming across the border to get in the U.S. – it’s simply not the reality on the ground.

LM: Why do people then come to the U.S. for health care? What’s driving them?

SW: OK. There was a giant survey of 18,000 Canadians. Fewer than 100 had received health care in the United States in the past year. And all but 18 of those had been in the United States on vacation or business when they got acutely ill and had to get emergency care. There were only 18 cases of people who come to the United States in order to get medical care, and in many of those cases their own province had given them the money and said, “You can go across the border because you live near the border and the service is available there that you need.” So we’re not talking about a massive number of not being able to get the care that they need, in fact, the overwhelming majority of Canadians do get the care that they need, which is why the overwhelming majority of Canadians support their national single-payer program.

…

[A medical student in Houston calls in to ask if single payer would reduce reimbursements to doctors, exacerbating the problem of medical student debt because of high tuition rates.]

SW: I am a medical school faculty member, I have two children in medical school and we’re paying tuition, so I’m aware of the problem. Physicians for a National Health Program, the group I work with, put out a proposal and said medical school tuition should be free, because those costs are eventually paid back by the payers, by the single payer. You can pay for the tuition up-front – make med schools free – or you can make the students go into debt and pay it off over time. One way or another it’s going to be paid by the taxpayers under single payer. And we think it’s fair and more efficient and better for everyone if you just make medical school free. I would point out that Sen. Sanders has also advocated free tuition, but I’m not speaking on behalf of Sen. Sanders, I’m speaking on behalf of single payer here today.

http://www.scpr.org/programs/airtalk/2016/01/28/46098/policy-experts-debate-viability-of-senator-bernie/

PNHP note: Physicians for a National Health Program (PNHP) is a nonprofit, nonpartisan, educational and policy research organization that neither supports nor opposes any candidate for public office nor any political party.

The lesson of BC/BS of NC on special enrollment periods

Obamacare Pummels Blue Cross Blue Shield Of NC–What Can We Learn From This?

By Chris Conover
Forbes, January 30, 2016

Blue Cross and Blue Shield of NC is expecting to lose more than $400 million on its first two years of Obamacare business. In response to its bleak experience with the Obamacare exchange, the company has decided to eliminate sales commissions for agents, terminate advertising of Obamacare policies, and stop accepting applications on-line through a web link that provides insurance price quotes–all moves calculated to limited Obamacare enrollment.

BCBSNC reported an operating loss of $50.6 million in 2014–the first such loss in 15 years. Why? Because its Obamacare policies lost $123 million despite $343 million in various insurer bailouts (the so-called “Three R’s“–risk adjustment, reinsurance, and risk corridors).

What makes this shocking is that BCBSNC is the state’s dominant insurer, covering 72% of the large group market. If a deep-pocketed insurer such as this cannot make a go of Obamacare, that does not bode well for many smaller carriers who do not have large profits on other lines of business with which to absorb whatever losses are generated by policies sold on the Obamacare exchanges.

The fact that one of the nation’s largest insurers, UnitedHealthcare also has raised doubts about its ability to carry plans on the healthcare law’s exchanges beyond 2016 makes clear that this problem is not unique to North Carolina.

The Problem is Getting Worse, Not Better

A large carrier such as BCBSNC can afford to absorb a temporary hit to its profits. But the evidence in NC is that Obamacare losses are growing over time rather than shrinking–a clearly unsustainable business model.

Because of its enormous losses, BCBSNC was able to convince the state’s insurance commissioner to allow a 32.5% average increase in its rates for the 2016 Obamacare policies now being sold.

Special Enrollment Period Enrollees Are a Problem

The special enrollment period is open to people whose circumstances have changed, such as getting married, having children, losing/changing jobs or similar situations. However, many such individuals evidently are staying insured only for several months, generating a lot of medical bills and then discontinuing their coverage.

People who buy their coverage during these special enrollment periods cost twice as much as Obamacare customers who secure their coverage during open enrollment.

Again, this is not unique to NC: earlier this month, in response to complaints by insurance companies, Obamacare administrators eliminated six additional conditions that allowed people to sign up for health coverage outside of the general enrollment period.  According to UPI, these steps will ”make it more difficult for persons without health coverage to financially manipulate or abuse the Affordable Care Act.”

These steps presumably will be good news for the bottom line of insurers such as BCBSNC. But they by no means eliminate various ways in which people have figured out to game the system.

University of Minnesota economist Stephen Parente has calculated that the cost of the least expensive policies on the Obamacare exchanges will more than triple in NC between 2016 and 2017!

http://www.forbes.com/sites/theapothecary/2016/01/30/obamacare-pummels-blue-cross-blue-shield-of-nc-what-can-we-learn-from-this/#6ead235634f6

***

Insurer Aetna Lays out Concerns About ACA Exchange Business

By Tom Murphy, AP
ABC News, February 1, 2016

Aetna has joined other major health insurers in sounding a warning about the Affordable Care Act’s public insurance exchanges.

The nation’s third-largest insurer said Monday that it has been struggling with customers who sign up for coverage outside the ACA’s annual enrollment window and then use a lot of care. This dumps claims on the insurer without providing enough premium revenue to counter those costs.

Both Aetna and UnitedHealth Group Inc. said the exchange customers they get outside the annual enrollment window use more health care than those who sign up within it. This includes some cases where it appears that a customer bought coverage, used it and then dropped it.

“Insurance systems tend to get stressed when people can buy coverage when they know they need it and then drop it when they know they don’t,” Chief Financial Officer Shawn Guertin told The Associated Press.

The Centers for Medicare and Medicaid Services recently outlined several changes it said it was making to help shore up exchange enrollment windows.

Blue Cross-Blue Shield insurer Anthem Inc. also is paying close attention to how the government deals with special enrollment periods as it judges how sustainable the exchange business will be in the future, CEO Joseph Swedish said recently.

UnitedHealth Group has said it will decide this year whether to participate in the public exchanges in 2017.

HealthCare.gov CEO Kevin Counihan said in a Jan. 19 blog post that special enrollment periods will not be available for “the vast majority of consumers.” HealthCare.Gov operates public insurance exchanges in 38 states.

“For example, special enrollment periods are not allowed for people who choose to remain uninsured and then decide they need health insurance when they get sick,” he wrote.

http://abcnews.go.com/Business/wireStory/insurer-aetna-lays-concerns-aca-exchange-business-36647397

***

Sustaining the marketplace for a healthier America

By former Sen. Tom Daschle (D-S.D.)
The Hill, January 29, 2016

To ensure the affordability of healthcare services, we must help individuals not only access health insurance coverage, but also stay covered.
Instead, our current regulatory framework seems to be having the opposite effect.  

For example, there are over 30 “special enrollment periods” – more than that of any other federal government program, including Medicare Advantage.  Rightfully so, these periods are intended to help individuals seek coverage outside of the normal enrollment period due to certain qualifying life events, such as relocating or losing prior coverage.  However, there is little oversight in place to ensure that special enrollment period requirements are satisfied. The unintended consequence is that special enrollment periods enable individuals to only seek coverage when they need care the most – a more costly proposition for the patient and the health care system.

Fortunately, the Centers for Medicare & Medicaid Services (CMS) is already taking an important first step to help address these concerns.  CMS is eliminating six special enrollment periods that are either no longer needed or subject to abuse.

The marketplace will also require greater opportunity for innovation. 

The Affordable Care Act has demonstrated great potential for establishing a high quality, affordable health care market.  Now is the time to leverage that progress and ensure its sustainability by removing barriers that discourage market participation and incentives that make it easier to not seek care.

http://thehill.com/opinion/op-ed/267412-sustaining-the-marketplace-for-a-healthier-america

***

Comment:

By Don McCanne, M.D.

The losses experienced by Blue Cross and Blue Shield of North Carolina represent a problem prevalent throughout the nation wherein patients, when they become ill, enter the system during special enrollment periods and then exit once their health care needs are met. The insurers along with CMS have diagnosed the problem. There is nothing wrong with our system of private insurers. It is the patients who are to blame because they are gaming the system.

The solution? Reduce special enrollment periods that were designed to assist patients who fell through the cracks. Instead, protect the insurers by preventing these people from getting coverage for the care that they need. Bankrupt them. That’ll show them.

Reducing special enrollment periods is being touted as one of the improvements that we need in the Affordable Care Act – the type of incrementalism that we should pursue as we reject overtures to establish a single payer national health program. We should pay no regard to the fact that this incremental tweak is designed to assist the private insurers and enhance their profits, at a cost of impairing access and affordability for far too many patients.

Wasn’t the Affordable Care Act designed to provide everyone with affordable access to health care? No. Single payer has such a design, but that was rejected to the benefit of the private insurers.

So now we are supposed to tweak the system to make it work better for patients? No. We are tweaking it to make it work better for private insurers. Damn those patients who try to cheat the insurers by gaming the system.

Oh wait. Under single payer the goal is to deliberately include absolutely everyone. The idea that someone is cheating by trying to sneak into the system is totally foreign to the stewards of egalitarian universal systems. How could anyone even think about devising methods of keeping people out? Perhaps it’s American Exceptionalism at work.

Why Medicare for all is the best plan

By Robert Zarr, M.D.
The Washington Post, Letters, Feb. 1, 2016

Regarding the Jan. 29 editorial “The real problem with Mr. Sanders ”:

Single-payer expanded and improved Medicare for all would provide universality, affordability and cost containment. Single-payer would allow doctors to focus on their patients’ health needs, rather than on patients’ ability to pay. What Americans want is choice of doctor, not choice of health insurance. Americans want comprehensive, lifelong insurance that assures them they will get the care they deserve.

Although it may seem fantastical to provide more care to more people for less money, there is a preponderance of scientific data to support this claim. In the United States, we waste $375 billion a year on billing and insurance-related bureaucracy, and not a dime of it goes toward a doctor’s visit, vaccination, procedure or medication. In contrast with private insurance with double-digit administrative overhead, Medicare runs at less than 3 percent. The vast majority of Americans and physicians favor expanding and improving Medicare.

So what’s stopping us? Certainly not the facts, because the facts are on our side.

The writer is president of Physicians for a National Health Program. He resides in Washington.

https://www.washingtonpost.com/opinions/why-medicare-for-all-is-the-best-plan/2016/02/01/bf3804f6-c7b8-11e5-b933-31c93021392a_story.html

Sanders’ math is not fuzzy

By Johnathon Ross, M.D.
The Blade (Toledo, Ohio), Jan. 31, 2016

Calculations on the affordability of an improved and expanded Medicare as proposed by Sen. Bernie Sanders (I., Vt.) are not “fuzzy” (“Mr. Sanders’ fuzzy math,” Jan. 22).  They are based on health economic research.

The General Accountability Office, the Congressional Budget Office, several highly respected health econometric firms, and research published in peer-reviewed journals all agree: Using single-payer financing, and traditional Medicare, we could provide comprehensive benefits, minimal out-of-pocket payments, and allow patients total choice of doctor and hospital for substantially less than we spend now. Public spending (taxes) would be increased, but private spending such as insurance premiums and out-of-pocket payments would be eliminated.

Currently, we have a bewilderingly complex system of hundreds of insurance entities with an army of paper-pushers, billing clerks, and bureaucrats to process the premiums and bills. Under a single-payer, hospitals would not bill individual patients, but would receive an operating and capital budget from the Medicare trust fund with both local and national public oversight.

Hospitals would continue to be managed by local boards accountable for these budgets. Management of doctors’ offices would be simplified with only one entity to bill, which would use a negotiated fee schedule covering the care for all patients. There would be no bad debt or co-payments so fees could be lower and still provide the same income to caregivers. Alternatively, caregivers could work under institutional budgets for a salary as many do now. Experts agree savings from eliminating bureaucracy would adequately cover all the uninsured and improve benefits for all.

All of our wealthy allies have similar systems in place. Their health outcomes are better and they all spend much less than we spend now.

Dr. Johnathon Ross resides on Brookside Road. He is a past president of the Physicians for a National Health Program.

http://www.toledoblade.com/Opinion/2016/01/31/lt-div-class-libPageBodyLinebreak-gt-Ecologist-supports-Metroparks-deer-killings-lt-div-gt.html

PNHP note: Physicians for a National Health Program (PNHP) is a nonprofit, nonpartisan, educational and policy research organization that neither supports nor opposes any candidate for public office nor any political party.

The lesson of BC/BS of NC on special enrollment periods

Obamacare Pummels Blue Cross Blue Shield Of NC–What Can We Learn From This?

By Chris Conover
Forbes, January 30, 2016

Blue Cross and Blue Shield of NC is expecting to lose more than $400 million on its first two years of Obamacare business. In response to its bleak experience with the Obamacare exchange, the company has decided to eliminate sales commissions for agents, terminate advertising of Obamacare policies, and stop accepting applications on-line through a web link that provides insurance price quotes–all moves calculated to limited Obamacare enrollment.

BCBSNC reported an operating loss of $50.6 million in 2014–the first such loss in 15 years. Why? Because its Obamacare policies lost $123 million despite $343 million in various insurer bailouts (the so-called “Three R’s“–risk adjustment, reinsurance, and risk corridors).

What makes this shocking is that BCBSNC is the state’s dominant insurer, covering 72% of the large group market. If a deep-pocketed insurer such as this cannot make a go of Obamacare, that does not bode well for many smaller carriers who do not have large profits on other lines of business with which to absorb whatever losses are generated by policies sold on the Obamacare exchanges.

The fact that one of the nation’s largest insurers, UnitedHealthcare also has raised doubts about its ability to carry plans on the healthcare law’s exchanges beyond 2016 makes clear that this problem is not unique to North Carolina.

The Problem is Getting Worse, Not Better

A large carrier such as BCBSNC can afford to absorb a temporary hit to its profits. But the evidence in NC is that Obamacare losses are growing over time rather than shrinking–a clearly unsustainable business model.

Because of its enormous losses, BCBSNC was able to convince the state’s insurance commissioner to allow a 32.5% average increase in its rates for the 2016 Obamacare policies now being sold.

Special Enrollment Period Enrollees Are a Problem

The special enrollment period is open to people whose circumstances have changed, such as getting married, having children, losing/changing jobs or similar situations. However, many such individuals evidently are staying insured only for several months, generating a lot of medical bills and then discontinuing their coverage.

People who buy their coverage during these special enrollment periods cost twice as much as Obamacare customers who secure their coverage during open enrollment.

Again, this is not unique to NC: earlier this month, in response to complaints by insurance companies, Obamacare administrators eliminated six additional conditions that allowed people to sign up for health coverage outside of the general enrollment period.  According to UPI, these steps will ”make it more difficult for persons without health coverage to financially manipulate or abuse the Affordable Care Act.”

These steps presumably will be good news for the bottom line of insurers such as BCBSNC. But they by no means eliminate various ways in which people have figured out to game the system.

University of Minnesota economist Stephen Parente has calculated that the cost of the least expensive policies on the Obamacare exchanges will more than triple in NC between 2016 and 2017!

http://www.forbes.com/sites/theapothecary/2016/01/30/obamacare-pummels-blue-cross-blue-shield-of-nc-what-can-we-learn-from-this/#6ead235634f6

***

Insurer Aetna Lays out Concerns About ACA Exchange Business

By Tom Murphy, AP
ABC News, February 1, 2016

Aetna has joined other major health insurers in sounding a warning about the Affordable Care Act’s public insurance exchanges.

The nation’s third-largest insurer said Monday that it has been struggling with customers who sign up for coverage outside the ACA’s annual enrollment window and then use a lot of care. This dumps claims on the insurer without providing enough premium revenue to counter those costs.

Both Aetna and UnitedHealth Group Inc. said the exchange customers they get outside the annual enrollment window use more health care than those who sign up within it. This includes some cases where it appears that a customer bought coverage, used it and then dropped it.

“Insurance systems tend to get stressed when people can buy coverage when they know they need it and then drop it when they know they don’t,” Chief Financial Officer Shawn Guertin told The Associated Press.

The Centers for Medicare and Medicaid Services recently outlined several changes it said it was making to help shore up exchange enrollment windows.

Blue Cross-Blue Shield insurer Anthem Inc. also is paying close attention to how the government deals with special enrollment periods as it judges how sustainable the exchange business will be in the future, CEO Joseph Swedish said recently.

UnitedHealth Group has said it will decide this year whether to participate in the public exchanges in 2017.

HealthCare.gov CEO Kevin Counihan said in a Jan. 19 blog post that special enrollment periods will not be available for “the vast majority of consumers.” HealthCare.Gov operates public insurance exchanges in 38 states.

“For example, special enrollment periods are not allowed for people who choose to remain uninsured and then decide they need health insurance when they get sick,” he wrote.

http://abcnews.go.com/Business/wireStory/insurer-aetna-lays-concerns-aca-exchange-business-36647397

***

Sustaining the marketplace for a healthier America

By former Sen. Tom Daschle (D-S.D.)
The Hill, January 29, 2016

To ensure the affordability of healthcare services, we must help individuals not only access health insurance coverage, but also stay covered.
Instead, our current regulatory framework seems to be having the opposite effect.

For example, there are over 30 “special enrollment periods” – more than that of any other federal government program, including Medicare Advantage.  Rightfully so, these periods are intended to help individuals seek coverage outside of the normal enrollment period due to certain qualifying life events, such as relocating or losing prior coverage.  However, there is little oversight in place to ensure that special enrollment period requirements are satisfied. The unintended consequence is that special enrollment periods enable individuals to only seek coverage when they need care the most – a more costly proposition for the patient and the health care system.

Fortunately, the Centers for Medicare & Medicaid Services (CMS) is already taking an important first step to help address these concerns.  CMS is eliminating six special enrollment periods that are either no longer needed or subject to abuse.

The marketplace will also require greater opportunity for innovation.

The Affordable Care Act has demonstrated great potential for establishing a high quality, affordable health care market.  Now is the time to leverage that progress and ensure its sustainability by removing barriers that discourage market participation and incentives that make it easier to not seek care.

http://thehill.com/opinion/op-ed/267412-sustaining-the-marketplace-for-a-healthier-america

The losses experienced by Blue Cross and Blue Shield of North Carolina represent a problem prevalent throughout the nation wherein patients, when they become ill, enter the system during special enrollment periods and then exit once their health care needs are met. The insurers along with CMS have diagnosed the problem. There is nothing wrong with our system of private insurers. It is the patients who are to blame because they are gaming the system.

The solution? Reduce special enrollment periods that were designed to assist patients who fell through the cracks. Instead, protect the insurers by preventing these people from getting coverage for the care that they need. Bankrupt them. That’ll show them.

Reducing special enrollment periods is being touted as one of the improvements that we need in the Affordable Care Act – the type of incrementalism that we should pursue as we reject overtures to establish a single payer national health program. We should pay no regard to the fact that this incremental tweak is designed to assist the private insurers and enhance their profits, at a cost of impairing access and affordability for far too many patients.

Wasn’t the Affordable Care Act designed to provide everyone with affordable access to health care? No. Single payer has such a design, but that was rejected to the benefit of the private insurers.

So now we are supposed to tweak the system to make it work better for patients? No. We are tweaking it to make it work better for private insurers. Damn those patients who try to cheat the insurers by gaming the system.

Oh wait. Under single payer the goal is to deliberately include absolutely everyone. The idea that someone is cheating by trying to sneak into the system is totally foreign to the stewards of egalitarian universal systems. How could anyone even think about devising methods of keeping people out? Perhaps it’s American Exceptionalism at work.

A PNHP response to recent criticisms of single payer, Medicare for All

By Ida Hellander, M.D.
Director of Health Policy and Programs, PNHP

Misinformation about single payer is nothing new. When the U.S. was at war with Germany in WWI, national health insurance was attacked as “the Kaiser’s health plan.” President Johnson’s Medicare program – which turned 50 last year – was aggressively red-baited as “socialized medicine” by the right.

Responses to 10 recent attacks on single payer in the news are below.

1. Single payer is an expensive “tax hike on the middle class.”
   
By eliminating the waste and bureaucracy associated with the private insurance industry, single payer saves over $400 billion (yes, that’s with a “b”) a year on administrative costs that can be funneled into patient care. That’s enough money to cover all the uninsured and to eliminate co-pays and deductibles for everyone. Negotiating drug prices with pharmaceutical companies, as other nations do, will save even more. As a result, single payer is able to cover everyone with no increase in national health spending, and is the only reform that pays for itself. A recent attack by Ken Thorpe that single payer will raise costs is refuted here.

Over the long term, single payer’s ability to control health care costs will generate even more savings compared to the status quo. At the current rate of medical inflation (5.6 percent), health care is projected to consume 20 percent of GDP in 2024 year, about double the share of GDP other wealthy nations devote to health care. Single payer controls costs with proven effective strategies such as negotiated fees with doctors, global budgets for hospitals and other institutions, bulk purchasing from drug and device companies, and real health planning for capital investment. Since Canada adopted a single-payer program, their health care costs have grown more slowly than costs in the U.S. One study estimated that U.S. could have saved over $2.2 trillion between 1980 and 2009 in the Medicare program alone if costs had grown at Canadian rates.

A new study shows that taxes already fund 64.3 percent of U.S. health spending. As a result, the tax increase necessary to fund a national health program is relatively low. Americans spend more public dollars per capita ($5,960 per capita in 2013) on health care than the citizens of other nations pay – including those with universal health systems – except Switzerland. In that sense, Americans are paying for national health insurance, but not getting it.

In terms of how single payer would be financed, PNHP does not have a specific plan, but advocates replacing most private funding from households and businesses – about one-third of health spending – with progressive taxes. Taxes would replace health benefit costs by employers and the heavy burden of current health care spending by families on insurance premiums, co-pays, and deductibles for medically necessary care.

In addition to replacing premiums and other health spending with income-based taxes, single payer redistributes the current burden of health care costs from the poor and sick (who often fall into bankruptcy from medical debt and job loss) to the wealthy. Health care costs must be redistributed because they are so high that people of low and middle-incomes can no longer afford health care. This is evidenced by research showing that medical bankruptcy was unaffected by ACA-like reforms in Massachusetts. The Milliman actuarial firm estimated the cost of health care for an average family of four in a PPO to be $23,215 in 2014, while average household income was $53,657. By redistributing health care costs, single payer helps reduce income equality.

The reason health care costs are so high in the U.S. is because we have a market-driven health care system. This is especially obvious with medications, as drug companies price their products as high as the market will allow, irrespective of how much it cost to develop and produce a drug. But it’s true across the medical-industrial complex: From hospitals to hospice care, studies show that for-profit health care raises costs and lowers quality. And among insurers, overhead is sevenfold high in private insurance than in the traditional Medicare program, where it is less than 2 percent.

Two possible financing schemes have been proposed for single payer, one for H.R. 676, single-payer legislation in the House, and another by Sen. Bernie Sanders. Both plans would raise household incomes for the vast majority of families. An attack on the Sanders financing plan is refuted here.

The Sanders plan would institute a small payroll tax or “income-based health premium” that would replace current health care spending by middle-class families on insurance premiums, co-pays, and deductibles for medically necessary care. (Goods and services that would not be covered include over-the-counter medications – $44 billion in 2014, or 1.5 percent of health spending – as well as luxury eyeglasses, cosmetic surgery, and some dental. Long-term care services would require case management.) In his financing plan, this tax is 2.2 percent of income. As a result, net household incomes for the vast majority of families would rise under single payer. Employers would also pay a payroll tax of 6.2 percent for health care for their workers that would replace what they are currently spending on health benefits (private employers pay 7.7 percent of total compensation towards health benefits, while state and local government pays 11.6 percent).

The Sanders plan redistributes the burden of health care costs from low- and middle-income households to the wealthy by raising marginal tax rates on incomes above $250,000, taxing capital gains, dividends, and estates, and closing some tax loopholes. The top one-tenth of 1 percent of households (average incomes of $2 million – $10 million) and in particular, the 1,300 wealthiest households (average incomes over $10 million) would pay the highest marginal tax rates (48 percent and 52 percent, respectively). The average middle-class household would pay less in taxes than they are already paying for care.

2. Single payer would “eliminate the ACA” and its protections for people with preexisting conditions.

In fact, single payer would replace current skimpy policies that are inadequate and require very high cost sharing (e.g. a $10,545 deductible for a “bronze” family plan, a $6,010 deductible for a “silver” plan) with guaranteed lifelong coverage regardless of age, income, or health status. It would also eliminate co-payments and deductibles, which is important for people with preexisting and chronic conditions, and anyone with a serious illness. A recent article by oncologists advocated for single payer because of the burden of the high cost of cancer care on their patients.

Single payer does not “eliminate” the ACA or require that we “re-litigate” old health debates. It moves the country forward, replacing the ACA and other public and private programs with a program that works by addressing the underlying cause of the health care crisis – a market-based health care system driven by profits, not patients.

3. Single payer would require that we pay physicians and hospitals less.

No. Single payer is not financed by reducing physician incomes and hospital revenues, but by slashing administrative overhead and bureaucracy associated with the private insurance industry and funneling those resources – $400 billion annually – into patient care. Currently, one-quarter of hospital spending goes to billing and insurance related overhead, and administrative work consumes one-sixth of physicians’ time. Doctors in the U.S. spend four times as much ($82,975) as Canadian physicians on overhead due to the complexity of our payment system. Private insurance overhead is sevenfold as much as Medicare’s. By slashing administrative costs, and monopsony purchasing of drugs and devices, single payer frees up enough money to expand coverage to the uninsured and eliminate co-pays and deductibles for everyone.

While physicians on the whole won’t make less, the gap between what the various specialties earn may narrow. In Canada, physician income has increased under their single-payer plan.

Single payer is also a potent tool for improving quality and detecting fraud in health care because health care utilization and payment information is all in one database, instead of hundreds of proprietary databases run by insurance companies. This makes it easy to identify outliers (e.g. a physician billing for many more tests than their peers) and to track what’s going on (e.g. the UK was able to easily track down every patient who had received a certain type of defective hip implant, and Medicare was able to detect inappropriate anti-psychotic prescribing to seniors in nursing homes).

4. Single payer will put state governors in charge of health care.

No. The ACA did that with Medicaid, after the Supreme Court ruled that the Medicaid expansion contained in the ACA was, in effect, optional. As a result of the opposition of Republic governors and legislatures, 5 million poor Americans in 19 states remain uninsured.

Single payer would be administered at the federal level, as Medicare is today. In some single-payer proposals, starting with the late Sen. Paul Wellstone and in earlier versions of Sen. Sanders’ plan, single payer would have been administered at the state level, like Canada’s provincial health plans, but the federal government would have taken over running the health system for any state that did not do so. Sen. Sanders’ current plan is administered at the federal level.

 5. Vermont decided not to adopt single payer because it was too expensive.

The Vermont plan, known as Green Mountain Care, was not a single-payer plan. The ultimate design for GMC retained multiple payers, and would have continued to pay hospitals and other institutional providers on a per-patient basis, perpetuating the expensive billing apparatus that siphons funds from care. Hospitals would have continued to rely on surpluses from day-to-day operations as their main source of capital funds, forcing hospital administrators to identify and pursue profit opportunities. Single payer pays hospitals via lump-sum budgets with separate grants for capital costs. Even so, it was political will, not cost, that defeated the Vermont health reform. The health exchange the state set up under the ACA didn’t work (as happened in several other states as well), draining political capital, and the governor barely squeaked through his re-election. A contributing factor was that the financing plan developed by the governor’s own team was not very progressive or diversified. Finally, making formerly hidden health care costs transparent by replacing them with taxes, even if the taxes are lower, is a heavy political lift.

6. Moving to a single-payer system would be a “tumultuous” experience. Single payer would require a massive transformation of the health care system.

Transitioning to single payer would be easier than for any other health reform, or dealing with annual insurance changes at work, for that matter. Americans would only need to enroll once for life, and most people could be automatically enrolled through the Social Security System. For those that aren’t enrolled automatically, it should be noted that Medicare enrolled 19 million people in 1966 with index cards, for a cost of $867 million (in today’s dollars), including the cost of beneficiaries’ medical care. In contrast, the transition to the ACA was filled with “glitches” and cost $6 billion.

The major change in the health system would be that patients would be able to choose their doctors and hospitals, and doctors would only need to bill one source. Patients would no longer receive medical bills and doctors and hospitals would no longer have to commit so much time and money to getting paid.

No other reform will actually control costs and get us to universal coverage. What is tumultuous is the health care crisis, which will remain until we have a single-payer system. Providers are rapidly consolidating into large health and hospital systems to gain market power and assure their revenues for the future. This process is raising, not lowering, costs. Consolidation would not be necessary under a single payer. In fact, by simplifying the payment system, single payer enables providers to return to small or solo practice if they choose.

7. A simple, efficient single payer is not politically feasible in the current Congress.

That’s why we need a grassroots mobilization and campaign finance reform, so that Congress can represent the people they are supposed to serve, not the insurance and drug companies. A December 2015 poll found that 58 percent of Americans support Medicare for All, including 81 percent of Democrats, 60 percent of Independents and even 37 percent of Republicans. Women’s suffrage and abolition were once politically infeasible too.

Incidentally, in 2009 the Democrats had the White House, a large majority in the House, and 60 Senators – all the votes needed to pass single payer. What was lacking was political will.

8. Single payer would cause “debate over abortion, contraception, HIV prevention, immigration policy, and other matters.”

This is a red herring. Controversial matters are debated all the time, in the context of health reform, and outside it, as with immigration policy.

As physicians, we advocate that everyone living and working in the U.S. be covered for all medically necessary care, including immigrants. Undocumented immigrants are currently excluded from many state and federal health programs, including the ACA, even though recent research shows that unauthorized immigrants contributed a net of $35.1 billion to the Medicare Trust Fund between 2000 and 2011.

9. Single payer would cut benefits for workers with employer-sponsored coverage.

Employer-sponsored benefits have been steadily eroding for over a decade, with more employees now saddled with unaffordable co-payments and deductibles. The average deductible for a family with HMO coverage is $2,758 and for an individual is $1,318. Also, workers are increasingly limited to a narrow network of providers. In contrast, 83 percent of primary care physicians and 91 percent of specialists nationally report they are accepting new Medicare patients, giving beneficiaries a much wide choice of doctors.

The ACA’s 40 percent excise tax on high-cost workplace private health insurance, the misnamed Cadillac tax, had already begun to drive benefits down when it was postponed late last year. Although the tax wasn’t supposed to go into effect until 2018, unions negotiating multi-year contracts found that employers were using it as leverage at the bargaining table to push for wage and benefit cuts.

Single payer would improve benefits for children, working age-adults, and seniors (see note below) by eliminating out-of-pocket costs and premiums and by giving patients a free choice of providers. It would also end “job lock” whereby people have to stay in a job to keep their benefits.

Note: The current Medicare program requires co-payments and deductibles and requires beneficiaries to purchase drug coverage separately (with federal subsidies). Single payer would eliminate out-of-pocket costs and the need for separate drug coverage and supplemental plans. For that reason, national single payer legislation is called the “Expanded and Improved Medicare for all Act.” It would help seniors, who have average incomes of $23,500 and currently spend an average of $4,734 a year on out-of-pocket medical costs and premiums.

10. Single payer plans “lack details.”

Not all of them. Physicians for a National Health Program’s single-payer plan (cited in the New Yorker recently as a good model) has more details about how single payer would work in practice, and served as the model for national legislation, H.R. 676. PNHP’s proposal appeared in the Journal of the American Medical Association and may be found here.

But the length of a plan is not correlated with its effectiveness. Some single-payer plans, including plans adopted in other countries, have been succinct.

The Canada Health Act was just 8 pages long. It specified the five key principles of Canadian health insurance: Universal (“all insured residents”), Comprehensive (coverage for “all necessary health services”), Portable (from province to province), Accessible (“reasonable access to health facilities” and “reasonable compensation” for providers, and Public Administration. Every provincial health plan must meet these principles, which have stood the test of time.

Rep. John Conyers single payer plan, H.R. 676, is just 30 pages long.

Conversely, the ACA contains 906 pages of details, but it hasn’t solved the health care crisis. The ACA was drafted by a former insurance company executive, Liz Fowler, who left government to become a lobbyist for a drug company.

****

The health care crisis by the numbers – 2016

33.0 million Americans (10.4 percent) are still uninsured, including 5 million children (Census Bureau).

31 million Americans are underinsured (Commonwealth Foundation). 20 percent of insured Americans have trouble paying their medical bills. Among those who reported having problems paying their bills despite having insurance, 63 percent said they used up all or most of their savings; and 43 percent said they skipped medical care they needed in the past year due to the cost (New York Times/Kaiser poll. 1/5/16).

Health care costs are high and rising by 5.6 percent a year. In 2014, health spending was $3.0 trillion, $9,523 per capita, 17.5 percent of GDP. By 2024 health care will be 19.6 percent of GDP, nearly 20 percent of the economy. Deductibles are rising seven times faster than wages. The average employer-based family policy costs $17,545, of which employees are paying $4,955 of the premiums for a plan with a deductible $2,758 for HMO coverage.

Drug prices are skyrocketing. Pfizer raised their list prices on over 60 brand name drugs with at least $10 million in annual U.S. sales by 10.6 percent at the beginning of the year, according to the Wall Street Journal (1/10/16). At least four other large drug firms have similarly raised prices across a broad spectrum of products for no reason other than to boost profits.

Dr. Ida Hellander is director of policy and programs at Physicians for a National Health Program, a 20,000-member nonprofit, nonpartisan organization of doctors headquartered in Chicago. She co-edits PNHP’s newsletter and specializes in teaching clinicians evidence-based health policy and empowering them to become effective advocates for reform.  Dr. Hellander received her B.A. from Yale and her M.D. from the University of Minnesota Medical School.  Before joining PNHP in 1992, she was a research associate with the Public Citizen Health Research Group.  She is a member of the International Association of Health Policy, a frequent contributor to the International Journal of Health Services and co-author of the book “Bleeding the Patient: The Consequences of Corporate Health Care.” 

Voters to decide ColoradoCare in November

By Anne C. Courtright, M.D.
The Pueblo (Colo.) Chieftain, Jan. 30, 2016

I would like to set the record straight regarding the ColoradoCare Amendment 69, which will be on the November 2016 ballot.

The movement for Expanded and Improved Medicare for All formally began in 1987 with the establishment of Physicians for a National Health Program, because a couple of young doctors were irate over the contrast between the lovely one- and two-bed rooms, many of which were empty, in the private hospital to which they were assigned in their training, contrasted with the waiting list and overcrowded wards with multiple beds in the Community Hospital, where they also worked.

State Sen. Irene Aguilar’s Amendment 69 is a variation of but a continuation of the work that Health Care for All Colorado has been doing in Colorado, since July 15, 2003. It is a movement to get affordable, quality health care available to all of the people of Colorado.

HCAC does not like to see people die or become disabled because they cannot afford to get needed health care or, all too often, go bankrupt when they do. Our current system is not working well.

The ColoradoCare Plan would be financed by a government-collected, designated fund, just as Medicare is nationally. Initially, it would be administered by an appointed board, which would be replaced by an elected board for the long term.

HCAC submitted a true single-payer plan to the 208 Commission in 2007. It was found by the Lewin Commission to be the only plan submitted that really covered everyone in the state, and it would have saved the state $4 billion a year. However, it was not recommended to the Legislature by the commission because it “was too disruptive to the present system.” Do you suppose that could have represented the influence of the health insurance companies?

The ColoradoCare plan would replace the Affordable Care Act in Colorado, which the ACA allows, as long as the plan provides care “as good as or better than the ACA.” Amendment 69 would undoubtedly do so and with a far less convoluted system. It would provide everyone in the state affordable, quality care and cost less than we are currently spending. It would not replace Medicare or the VA, but it would serve as a Medicare supplemental plan.

And, yes, it would likely mean the end of for-profit health insurance companies in the state except for cosmetic surgery, high-cost end of life care and such extra things that Amendment 69 would indeed, not cover. But all necessary health care would be covered, and you would no longer have the cost of your health insurance premiums, prescription drugs, deductibles and most co-pays.

Eighty percent of Coloradans would pay less overall for their medical care under Amendment 69 than they do now. There would be no more Medicaid or CHIP, people dying or becoming disabled because they could not afford needed treatment, or going bankrupt all too often if they got the needed care.

Rather than bankrupting the state, it would make Colorado one of the healthiest states in the union and one in which providers would enjoy practicing medicine, rather than having to spend half of their time fighting with the insurance companies over needed care or payments.

Providers, including hospitals, would save a great deal of money from the reduced need for staff in their billing departments, so costs would go down, not up. Individuals could go to the provider and hospital of their choice.

Providers and hospitals would send a simple bill to the elected board of trustees and be reimbursed. No longer would one third of our health care dollar in Colorado, go to administrative costs, huge CEO salaries and shareholder profits.

The only thing that would be better than Amendment 69, would be Expanded and Improved Medicare for All in the United States. Tell U.S. Rep. Scott Tipton to sign on to Rep. John Conyers’ bill, HR 676, which would make that happen. That is what we really need and HCAC and PNHP are working toward.

Amendment 69 would be a step in that direction, and Colorado would have the distinction of being the first state in the union to actually establish a single-payer type of plan. Groups in many other states are also working in this direction.

Anne C. Courtright is a psychiatrist, now retired from the Colorado Mental Health Institute at Pueblo.

http://www.chieftain.com/opinion/4297194-120/care-health-colorado-plan

PNHP note: For an analysis of ColoradoCare by Drs. Ida Hellander, David Himmelstein and Steffie Woolhandler, click here.

Paul Song on the real debate we should be having

The Real Healthcare Debate Democrats Should Be Having

By Paul Y. Song, M.D.
HuffPost Politics, January 31, 2016

Recently, a fierce debate has been ignited within the Democratic Party regarding the merits and feasibility of a single-payer Medicare-for-All universal healthcare system. Some liberal commentators have summarily dismissed Senator Sanders’ proposal as politically unrealistic or as greatly lacking in details while championing a slightly improved status quo, and other political surrogates have spread GOP-like untruths that have no place in any honest discussion.

Regardless of ones’ individual beliefs on Medicare-for-All, it is crucial to note some indisputable facts regarding the Affordable Care Act (ACA) and the current status quo:

1.  While the ACA did indeed do some very positive things like end lifetime caps on medical coverage and do away with discrimination for pre-existing conditions, it was never intended to cover every uninsured individual. In fact, after the ACA is fully implemented, the Congressional Budget Office estimates that up to 29 million residents will still remain uninsured.

2.  The only area of the ACA that both Democrats and Republicans found mutual agreement on was to exclude our undocumented brothers and sisters.

3.  The average insured family still pays an extra $1,017 in premiums (hidden tax) to cover the cost of care for the uninsured.

4.  A recent Commonwealth Fund study revealed that 31 million people with insurance had such high out-of-pocket costs or deductibles relative to their incomes that they were UNDER-insured and that 51% of these adults reported problems with their medical bills, while 44% of all adults reported not getting care because of high co-pays and deductibles despite being insured.

5.  Even after a significant decrease in the total number of uninsured, there were still 1.7 million medical related bankruptcies in 2014 of which 75% were actually insured, and this is only expected to get worse.

6.  Most individuals in the U.S. cannot afford an annual deductible of $6,850 and most families of four cannot afford an annual deductible of $13,700.

7.  Despite premiums increasing over 150% over the past 9 years, there is no federal insurance rate regulation.

8.  Despite the fact that average branded drug prices have increased 127% during the past 8 years to the point that 73% of Americans now find the cost of drugs unreasonable, there was no mechanism to control drug prices.

9.  Many states have huge underfunded retiree healthcare liabilities. California’s alone is $150 Billion.

10.  Healthcare costs are currently 17.5% of GDP with over 1% of GDP spent on Prescription drugs alone, and will only continue to climb as mandatory federal health spending is projected to double in the next 10 Years.

11.  Recent data from the American Journal of Public Health found that tax-funded expenditures accounted for 64.3% of all U.S. health spending. U.S. health spending for 2013 was $9,267 per capita, with government’s share being $5,960.

12.  Prior to the bailout, GM spent more on healthcare for its employees than it did on steel. Rising healthcare costs are making U.S. companies less competitive and taking money away from wages and capital investments.

13.  Most Americans continue to get employer-sponsored healthcare but worker’s contributions to premiums have increased 212% since 2000 while wages have only increased 54% during the same period.

14.  Healthcare benefits have become the biggest source of labor negotiation strife.

So if anything, most health policy experts believe that our current healthcare system is unsustainable for individuals, businesses, states and our federal government, and to continue this status quo is what is really unrealistic.

The real debate Democrats should be having should not be about whether single payer, a highly successful proven system in so many industrialized nations, is the solution, but rather how we can collectively come together to overcome the corporate forces that derailed the ACA from providing a public option, drug price controls and insurance rate regulation, and how we get to the ultimate goal of Medicare for All.

Back in 2003, then Illinois State Senator Barack Obama said in a speech to the AFL-CIO, “I happen to be a proponent of a single payer universal healthcare plan…but first we need to take back the White House, then the Senate, then the house”.

Sadly, when Barack Obama became President and had a supermajority in the Senate and House, single payer was never even introduced as an option. In fact, well before the ACA was even written, the pharmaceutical industry under the guidance of former congressman and Medicare Part D architect, Billy Tauzin, negotiated a sweetheart deal that would provide industry support for the administration’s health reform agenda in exchange for no significant reform of the pharmaceutical industry.

At the same time there were over 3,300 registered healthcare lobbyists for the 535 members of congress who spent more in total than what was spent on the entire Bush-Kerry election to influence the legislation. Many of these lobbyists were former congressional staffers including two former chiefs of staff to then Finance Committee Chairman Senator Max Baucus. Many legislators from both sides of the aisle received lots of money, but it was Baucus who received over $1.4 million and held up the legislation in his committee for so long that Senator Ted Kennedy was not alive to vote for it.

In the end, despite some positive aspects, the ACA looks like it was essentially written by the pharmaceutical and insurance industry. It is not socialism, but rather a $475 billion corporate welfare program that mandated uninsured Americans buy a product from a for-profit industry that only makes money by denying care, and this is why we still have so many of the problems stated above.

Paul Krugman is correct when he says that Senator Sanders’ Medicare-or-All plan is not politically feasible today. As long as we have Democrats who are consistently beholden to the Insurance and Pharma cartels, we will definitely continue the status quo. As long as we do not fight to reverse the awful cloud of Citizens’ United and the grossly disproportionate influence of money in politics, we cannot achieve any meaningful progress in healthcare or any other critical challenge facing our country and world.

Far beyond any Medicare-For-All proposal, what the Senator is really calling for is a transformational movement, much larger than any one individual, which can come together to fight against the Super PACs and suffocating corporate influences. His campaign is the personification of this fight.

58 percent of Americans currently favor Medicare-for-All once they learn more about it, and 81% of Democrats already believe it is the best solution. So, rather than demonize it with lies and scare tactics, we should be educating more and more people who are disillusioned with their current healthcare so that more and more of us can demand something better from our representatives.

Sadly, the biggest major insurers also recognize the benefits and efficiencies of a single payer system and have begun to rapidly consolidate through huge mergers, which further eliminates what little competition consumers have. So the question is not whether we will have single payer, but whether it will be administered by one ruthless for-profit entity that will keep all realized savings for its shareholders while continuing to gauge, deny, and shortchange its patients. Or whether it will be a Medicare-for-all, which will use the cost savings of administrative efficiency and bulk purchasing power to increase coverage and benefits for everyone, to provide the humane and comprehensive health care system we as a society truly deserve and already pay for.

Above all, we need to remember that we ARE the party that rejected the status quo and created a very bold disruptive new program called Medicare at a time when 44% of seniors were uninsured and 1/3 were living in poverty. We are the party for the least among us and for those without a voice. We are the party of “Yes, we can”.

Paul Y. Song, is a board certified radiation oncologist and the Executive Chair of the Courage Campaign, Co-Chair for a Campaign for a Healthy California, and Board Member of Physicians for a National Health Program.

http://www.huffingtonpost.com/paul-y-song-md/the-real-healthcare-debat_b_9121210.html

***

Comment:

By Don McCanne, M.D.

Currently the two leading candidates for the Democratic nomination for president are debating whether or not a single-payer Medicare-for-All universal healthcare system is politically feasible. Paul Song provides us with evidence that our current system is inadequate and unsustainable, so the real debate we should be having is whether we should leave our health care system under the control the industries and policies that are responsible for much of what is wrong, or if we should initiate a transformational movement that will include Medicare-for-All so that we can have “the humane and comprehensive health care system we as a society truly deserve and already pay for.”

This debate is not just for members of the Democratic Party. It is a debate that the entire nation should be having. It is important that the debate be informed with facts such as those presented here by Paul Song.

Physicians for a National Health Program (PNHP) is a nonprofit, nonpartisan, educational and policy research organization that neither supports nor opposes any candidate for public office nor any political party. Although Paul Song is a board member of PNHP, any partisan views expressed in this article are his own and not those of PNHP.