PNHP

Message to Congress: Immigrants Pay More Than Their 'Fair Share' of Medicare

Message to Congress: Immigrants Pay More Than Their 'Fair Share' of Medicare

By Steffie Woolhander and David U. Himmelstein
Roll Call, June 6, 2013

Immigrants don’t just pick our fruit, deliver our take-out food and design our computers — they pay for our medical care.

As Congress debates immigration reform, some would have us believe that immigrants are draining the Treasury. But it turns out that closing the borders would deplete Medicare’s trust fund.

We, along with colleagues at Harvard Medical School, studied who pays into the Medicare trust fund vs. who uses Medicare coverage. As we report in the current issue of the journal Health Affairs, over a seven-year period, immigrants paid in $115.2 billion more than they took out. Meanwhile, native-born Americans drained $28.1 billion from Medicare. In other words, immigrants are keeping Medicare afloat. And it’s non-citizen immigrants who make the biggest contribution. On average, each one subsidizes Medicare by $466 annually.

It’s not just Medicare that profits from immigrants. Social Security’s chief actuary estimated that undocumented immigrants contributed a net surplus of $12 billion to the Social Security retirement trust fund in 2007 alone.

In essence, without immigrants’ contributions, the financial pressure on Medicare and Social Security would be far greater, and threatened cuts for the elderly far more severe.

Why do immigrants generate surpluses for Medicare and Social Security? Most of them are young, working adults, who pay the payroll taxes that feed the trust funds. Immigrants with legal status pay these taxes under valid Social Security numbers. Many undocumented immigrants also pay these taxes, under invalid or borrowed Social Security numbers (under federal law, employers must report, but needn’t verify, a Social Security number for each employee). Meanwhile, most immigrants are too young to draw Medicare benefits. Even once they pass 65, many don’t qualify for benefits because they lack legal status or proof of their payroll tax contributions. And others retire to their country of origin.

While immigrants heavily subsidize Medicare, millions of them are denied care. Our research has found that foreign-born children get shockingly little care, often skipping routine well-child visits. And immigrant adults with mild conditions such as hypertension often don’t get the care they need to prevent serious (and expensive) complications such as strokes and heart attacks.

But dry statistics don’t tell the story. We’ve cared for a young immigrant mother who died of tuberculosis shortly after giving birth; out of fear, she had avoided earlier lifesaving care. Another of our patients, a 47-year-old immigrant truck driver, stayed home for two days with heart attack symptoms and died because he never got the clot-busting drugs that could have saved him. Some patients work two, even three, jobs but remain uninsured and unable to afford care.

What should Congress and the president do? In the short term, cuts to Medicare Disproportionate Share funding for safety net hospitals (Sections 2551 and 3133 of the Affordable Care Act) should be reversed; support for community and migrant health centers needs to be amped up; and restrictions on immigrants’ enrollment in public programs such as Medicare and Medicaid should be lifted. In the longer term, only a truly universal, single-payer program will do.

And Obamacare won’t do much to help. Even many legal immigrants won’t be eligible for Medicaid and will be prohibited from buying coverage through the new insurance exchanges. Meanwhile, Obamacare will sharply cut funding for safety net hospitals, threatening the solvency of institutions that will care for the 31 million (including 8 million immigrants) who will remain uninsured. The effect will be especially severe in places such as New York City and Los Angeles, where nearly 2 of every 5 residents were born outside the U.S.

Scare-mongering about the cost of immigration has become a staple of political debate. We started our research on immigrants’ health because as doctors we believe that health care is a human right, a right that we too often saw violated even in liberal Massachusetts. But our findings indicate that economic fairness, not just morality, argues for immigrants’ rights to care.

Steffie Woolhander and David U. Himmelstein are internists, professors at the City University School of Public Health at Hunter College and visiting professors of medicine at Harvard Medical School.

http://www.rollcall.com/news/message_to_congress_immigrants_pay_more_than_their_fair_share_of_medicare-225395-1.html

Evidence Supports Medicare For All

By Ida Hellander
Health Affairs blog, June 7, 2013

Dana Goldman and Adam Leive’s effort to discredit the single payer, Medicare-for-All model of financing health care — or as they put it, make “any conclusion decidedly more nuanced” — is sorely lacking in nuance, defined by Merriam-Webster as “made or done with extreme care or accuracy.”

Acknowledging Medicare’s greater success at controlling costs than private insurance plans, Goldman and Leive raise the specter of “underprovision of services” and doctors leaving the system if Medicare were universal.  But Medicare patients are significantly less likely to have problems with access to care and medical bills than non-elderly adults with private insurance, according to a recent study by The Commonwealth Fund. The same study found that Medicare beneficiaries are also more satisfied with their coverage than people with private insurance. Only 6 percent of beneficiaries in traditional Medicare rated their coverage as fair or poor in 2010, compared with 20 percent with employer-sponsored private insurance.

Among physicians who treat Medicare patients, 90 percent of all physicians and 96 percent of specialists are accepting new Medicare patients according to the Medicare Payment Advisory Commission.  In contrast to the limited networks of doctors available to the privately insured, and the appalling “underprovision of services” to those left uninsured and underinsured by today’s for-profit, market driven system, a Medicare-for-All system would expand choice and access.

Distinguishing current Medicare from Medicare for All.  Goldman and Leive confuse today’s Medicare program (not a single payer but just one plan in a marketplace of multiple public and private plans) with Medicare for All (single payer), and imply that negotiating fee schedules with doctors is the only way a single-payer system controls costs.  On the contrary, other proven-effective cost-control methods, such as globally budgeting hospitals, negotiating drug prices, and planning capital investment are made possible by expanding the program to everyone and eliminating the private insurance middlemen.  Canada’s spending on the elderly under its single-payer program has grown much more slowly than U.S. spending on the elderly since 1980, despite a 1984 law in Canada banning co-payments and deductibles.

Goldman and Leive make note of single payer’s greater administrative efficiency (e.g., traditional Medicare’s overhead was recently pegged at 1.4 percent), but criticize Medicare for not doing more to reduce fraud. But they offer no figure for how much fraud the insurance industry suffers from, or how much of the extra 16 percent of premiums devoted to private insurance overhead is spent on fraud detection as opposed to expenditures on marketing, underwriting, CEO salaries, profits, and utilization review aimed at denying care to their enrollees.

Furthermore, private insurers are not the scrupulous conservers of scarce resources that Goldman and Leive imply. Practices like “upcoding” (making patients appear sicker on paper so insurers can collect higher premiums) and “cherry picking” by private Medicare Advantage plans raise the cost of caring for their enrollees 14 percent higher than under the traditional Medicare program, according to MedPAC.

The poor US performance on preventable mortality.  The United States ranks last out of 16 countries in deaths that might have been prevented with timely and effective medical care, leading to an estimated 91,000 excess deaths annually. In this context, Goldman and Leive’s claim that high U.S. health spending is buying more effective treatment of breast and prostate cancer compared to other countries is of questionable significance as well as accuracy. Earlier diagnosis from greater screening improves survival times for cancers, especially at five years, but has very little impact on mortality.  At any rate, Medicare for All would not reduce spending on cancer treatment. The whole point of single payer is to shift resources we are squandering on bureaucracy (including the administrative burden on physicians and hospitals) into clinical care, increasing the amount available to care for patients by about $380 billion annually, according to the authors of a landmark New England Journal of Medicine study.

As it currently stands, Medicare needs to be improved to eliminate cost-sharing, and cover medications and long-term care as part of the basic program. A properly designed single-payer system would also have these attributes.

As Goldman and Leive note, the Affordable Care Act will not control rising costs. In addition, the Congressional Budget Office estimated last week that even after it is fully implemented, the ACA will leave 31 million Americans uninsured. The support of Nobel Prize-winning economists like Paul Krugman and Joseph Stiglitz, the former chief economist at the World Bank, along with Professor Robert Reich, the former U.S. secretary of labor, reflects a broad consensus that the only way to provide universal coverage and control costs is a single-payer system.

Who will remain uninsured after ACA implemented?

The Uninsured After Implementation Of The Affordable Care Act: A Demographic And Geographic Analysis

By Rachel Nardin, Leah Zallman, Danny McCormick, Steffie Woolhandler, and David Himmelstein
Health Affairs Blog, June 6, 2013

The Affordable Care Act (ACA) proposed expanding health insurance coverage by: 1) requiring states to offer Medicaid to people with incomes up to 138 percent (133 percent plus a 5 percent income disregard) of the federal poverty level (FPL), with most of this expansion funded federally; and 2) offering subsidies to help those with incomes up to 400 percent FPL purchase private insurance through newly created insurance exchanges.

In June 2012, however, the Supreme Court ruled that states may opt-out of Medicaid expansion. Since then, the governors of 14 states have announced their intention to opt-out, 6 are undecided, 3 are leaning against, and 2 toward the expansion. Opt-outs will likely leave several million more uninsured, but little is known about who is likely to remain uninsured under the ACA.

To estimate the number and characteristics of US residents who will remain uninsured in 2016, we analyzed data from the Census Bureau’s 2012 Current Population Survey, a nationally representative survey of the non-institutionalized US population.

Results

We found that if all currently undecided states opt-in, 29.8 million people will remain uninsured, whereas if all opt-out, the number of uninsured will total 31.0 million, 1.2 million above the opt-in scenario.

For states that are opting out, this choice will lead to a decrease in the number of uninsured of only approximately 17 percent, rather than the approximately 50 percent decrease had they opted in.

Overall, the ACA will minimally alter the demographic composition of the uninsured, regardless of whether undecided states opt-in or out. While Blacks and Hispanics will continue to be overrepresented among the uninsured, the majority will be non-Hispanic, white, low-income, working-age adults, many of them employed. The majority (around 80 percent) of the uninsured will be US citizens, irrespective of states’ acceptance of Medicaid expansion. More than 4.3 million children and nearly 1.0 million veterans will remain uninsured under either scenario.

Implications

The Supreme Court’s decision to allow states to opt-out of Medicaid expansion weakens the ACA’s impact. Because the ACA also reduces funding to safety-net hospitals, states’ refusal to expand Medicaid will likely result in both medical and financial hardship for vulnerable Americans.

Our finding that, following the ACA, only 20 percent of the uninsured will be non-citizens (some of whom reside here legally) runs counter to the common perception that the ACA will cover virtually all legal residents.

The ACA will leave tens of millions uncovered. It will do little to alter racial disparities in coverage. It will also perpetuate disparities in access based on state of residence. The ACA, whatever its merits, will fall well short of its stated goal of providing affordable care for all Americans.

http://healthaffairs.org/blog/2013/06/06/the-uninsured-after-implementation-of-the-affordable-care-act-a-demographic-and-geographic-analysis/

Comment:

By Don McCanne, M.D.

Who will remain uninsured after the Affordable Care Act is fully implemented? Roughly 30 million individuals, mostly U.S. citizens, predominately non-Hispanic, white, low-income, working-age adults, with many of them employed. Blacks and Hispanics will continue to be over-represented among the uninsured.

We really do need a single payer national health program that truly covers everyone. Let’s start that process now.

30 million to remain uninsured under Obamacare: new state-by-state estimates at Health Affairs blog

Harvard and CUNY researchers say 4.9 million Texans and 3.7 million Californians will still be uninsured in 2016

FOR IMMEDIATE RELEASE
June 6, 2013

Contact:
Mark Almberg, PNHP communications director, (312) 782-6006, mark@pnhp.org

A study released today on the Health Affairs blog finds that between 29.8 million and 31.0 million people will remain uninsured after the implementation of the Affordable Care Act in 2016 and breaks down those figures by state.

The research team from Harvard Medical School and the City University of New York School of Public Health projects that the demographic composition of today’s uninsured population will change little under Obamacare.

The share of the uninsured who are U.S. citizens will rise slightly from 80 percent to 81 percent. White persons (of all ethnicities) will continue to constitute 74 percent of all uninsured Americans. About 59 percent of the uninsured will have incomes between 100 percent and 399 percent of poverty, while 27 percent will have incomes below poverty.

The researchers also estimated uninsured figures for each state (see table below).

The study analyzed Census Bureau data on current patterns of uninsurance, and used a coverage prediction model based on the model used by the Congressional Budget Office.

The researchers projected two coverage scenarios for each state. One assumed that the state turns down a Medicaid expansion and the other assumed that the state implements Medicaid expansion despite the Supreme Court ruling that such expansion is optional. The national estimates use the Advisory Board Company’s latest summary of which states are likely to participate in the Medicaid expansion.

Study co-author Dr. Steffie Woolhandler, a professor at CUNY and visiting professor of medicine at Harvard, said: “Many people believe that Obamacare will cover everyone. But the reform is so deeply flawed that 30 million or more will still be uninsured after it’s fully implemented. Even if the Supreme Court hadn’t let states of the hook for Medicaid expansion, 26 million would have been uninsured. We need to replace Obamacare with a simple single-payer system that would cover everyone.”

Lead author Dr. Rachel Nardin, chief of neurology at Cambridge Health Alliance and assistant professor of neurology at Harvard, commented: “Even in Massachusetts, where a reform like Obamacare has been in place since 2006, too many patients still can’t get the care they need. Hundreds of thousands are still uninsured, and many more have such skimpy coverage that they face unaffordable co-payments.”

“The Uninsured After Implementation of the Affordable Care Act: A Demographic and Geographic Analysis,” Rachel Nardin, M.D., Leah Zallman, M.D., M.P.H., Danny McCormick, M.D., M.P.H., Steffie Woolhandler, M.D., M.P.H., David Himmelstein, M.D. Health Affairs blog, June 6, 2013.

Number of Uninsured Persons by State, pre- and post-ACA

Physicians for a National Health Program is a nonprofit research and educational organization of more than 18,000 doctors who support single-payer national health insurance, an improved Medicare for all. PNHP had no role in funding or otherwise supporting the study described above.

Calls for Universal Health Care in Colorado and Nation

By Stephanie Carroll Carson
Public News Service – Colorado, June 3, 2013

DENVER — Efforts toward universal health care in Colorado were highlighted over the weekend at an event in Denver, part of a push to establish a constitutional right to health care in the state.

Appearing at the gathering was Congressman John Conyers of Michigan, who is seeking to build support for his “Medicare for All Act,” which proposes health care coverage for the uninsured, particularly those not covered by policies in the Affordable Care Act.

“Because more and more people are asking about this, what we’re looking for is a good way to get this through as soon as possible,” the veteran lawmaker said.

Also at the Saturday event, a petition drive was launched seeking to put a measure on the Colorado ballot that would establish a state constitutional right to health care.

There are currently 750,000 people in Colorado who do not have health insurance. After the Affordable Care Act is implemented next January, 400,000 will continue to lack coverage. Organizations like Health Care for All Colorado hope the state ballot measure, or the passage of Conyers’ bill, can result in coverage for everyone.

According to Donna Smith, the executive director for Health Care for All Colorado, the Affordable Care Act is necessary, but is largely about insurance reform, rather than universal health coverage. Congressman Conyers’ legislation provides coverage immediately.

“The moment you’re born, you’re in, and the moment you die, you’re out,” she declared. “There’s no question about you being covered; you are covered. It’s a publicly funded, privately and publicly delivered plan.”

The Medicare for All legislation establishes one publicly-owned, nonprofit health insurance plan. It would change the current model of private insurance in the country. Under the new system, private insurance companies would be able to create supplemental policies to cover things like cosmetic procedures not covered by the universal coverage.

Conyers said his legislation is supported by many in the medical field, including the Physicians for a National Health Program.

“The assistance and support and encouragement we get from doctors, health providers, medical scholars and people that work in hospitals is very fundamental to us making this happen as soon as possible,” he said.

The Medicare for All Act is currently under review in a House committee.

http://www.publicnewsservice.org/index.php?/content/article/32744-1

A right to health care in Colorado?

Ballot drive would establish constitutional right in Colorado

By Peter Marcus
The Colorado Statesman, May 31, 2013

Proponents of a universal health care system in Colorado are expected to kick off a ballot drive Saturday that would establish a state constitutional right to health care.

The question would appear on the 2014 ballot, asking Colorado voters to approve, “As a matter of human right and public good for all residing in Colorado, access to an appropriate single standard of high quality health care without financial barrier.”

The single health insurance program would essentially put out of business the for-profit, private health insurance industry in Colorado, which includes about a dozen providers.

More insurance carriers could come to the state as part of the Connect for Health Colorado exchange, an online marketplace for health insurance made possible by the federal Patient Protection and Affordable Care Act and by subsequent state legislation. The exchange is scheduled to launch on Oct. 1.

But proponents say it is time for the private health insurance industry to find other ways to make its money. “Quality health care as a part of our individual and collective quality of life shall not be treated as a private, for-profit commodity in Colorado,” states the final text of the proposed “Right to Health Care” initiative.

Proponents are modeling their drive similar to how marijuana activists designed Amendment 64 last year. The question would simply ask voters to make health care a constitutional right. It would then be up to the legislature to implement a framework for operating a universal system.

Premiums would be collected by the Department of Revenue and controlled by the state. Proponents expect that a 9 percent income tax would cover costs. The initiative would cap premium costs at 9 percent of an individual’s income, but the legislature could ratchet that down, if possible. Lawmakers would need to send to voters a separate tax question under the Taxpayer’s Bill of Rights.

The state would still be eligible for federal assistance, including Medicaid and Medicare, but it would need to apply for a waiver, which it can do in 2017 under the Affordable Care Act.

Proponents must collect 86,105 valid signatures to place the question on the ballot. They will kick off that effort Saturday at First Plymouth Congregational Church in Englewood.

“I do think that voters will see that there will be some improvements under the Affordable Care Act… but a lot of people are going to see that their costs are going to keep rising, and what they’re able to get is going to be backing off, and folks are not going to be happy about that,” explained Donna Smith, author of the proposed ballot question and executive director of Health Care for All Colorado. “They’re going to be wanting something different.

“Coloradans are basically fair people,” she continued. “We don’t like to see people suffer when it’s not their fault.”

Smith knows something about suffering. She is a two-time cancer survivor, most recently battling carcinoid syndrome.

She and her husband have been married 37 years. They have six kids and 15 grandchildren. The couple always had health insurance, which helped her husband with heart complications and her through cancer treatment. But even with the insurance, it wasn’t enough. The couple became flooded by copayments and deductibles.

“We hung on as long as we could, but then we went under,” described Smith.

Her heart-wrenching story caught the attention of documentarian Michael Moore, who featured the saga in “Sicko,” his 2007 brutal expose on the health insurance industry. Smith and her husband were forced to sell their house in order to pay for bills and everyday living expenses. Still, they went bankrupt.

“That’s not something folks aspire to do in life, to be featured in a Michael Moore film, because that usually means something pretty horrible has happened in your life,” declared Smith. “He didn’t shoot us because we were unique… he chose us because we represent so many Americans who are struggling — even with insurance — and not able to have the care they need, and not have the financial coverage they need.”

Nathan Wilkes, co-author of the proposed ballot initiative, has a similar heartbreaking story to tell. His drama began in 2003 when his son, Thomas, was born with severe hemophilia. The illness quickly exceeded $1 million in treatments.

“The struggle that we dealt with in maintaining coverage and keeping him healthy was mind boggling,” explained Wilkes, who was also appointed to the Colorado Health Benefits Exchange Board.

His story caught President Barack Obama’s attention in 2009 while the administration pushed the Affordable Care Act. Wilkes introduced the president at a town-hall meeting in Grand Junction in August of that year and he was flown the next month to Washington by the White House to be a guest at Obama’s address to a joint session of Congress on health care reform. Wilkes sat in the presidential box, directly two rows behind First Lady Michelle Obama.

He said parts of the Affordable Care Act helped, including a ban on lifetime benefit caps. But Wilkes believes there are still significant gaps that need to be addressed, which is why he is pushing for the ballot question. Much of that has to do with cost as insurance premiums continue to rise.

“Nothing has addresses the medical costs… nothing has addressed the exorbitant administrative bureaucracy,” he explained. “Still, our biggest fight day in, day out is dealing with medical bills and denials and insurance problems…”

Wilkes said universal health care in Colorado is necessary from an economic standpoint. Proponents point out that health care expenditures in the United States are about 18 percent of gross domestic product. Also, of 1.2 million personal bankruptcy filings in 2012, about 62 percent were linked to a medical crisis. Of those, about 75 percent had insurance.

“The fiscally responsible position is to fix this health care crisis,” said Smith. “It’s not fiscally responsible to continue to throw money at a system that’s broken. That’s not good.”

Insurance industry expresses concern

The health insurance industry says that it doesn’t disagree that the system is in need of repair. It just doesn’t believe a universal system is the answer.

“The reforms aren’t perfect, but we’ve been on record now for years saying the system was broken and has to be fixed,” explained Ben Price, executive director of the Colorado Association of Health Plans. “The changes being implemented now are a great start.”

The industry is concerned that a proposal for universal health care is premature given the fact that the Affordable Care Act is still being implemented, including an exchange. Recent filings show that providers in Colorado have gone all-in with the new Connect for Health Colorado exchange.

“On Oct. 1, Coloradans will be able to begin comparing plans, and on Jan. 1, many Coloradans who couldn’t get insurance before will be able to get covered,” said Price.

“The work isn’t done — health care costs are skyrocketing and health insurance premiums are simply a reflection of those costs — we have to work together to tackle cost if the health care system is going to be sustainable,” he continued. “Clearly, our work is cut out for us.”

Rather than eliminate for-profit health insurance, Price believes the answer is free market economics. He said that is evident in Colorado.

“In many states, only one or two insurance carriers are operating, but in Colorado, consumers have a dozen major carriers, each offering multiple different types of plans
, all competing for Coloradans’ business,” described Price. “In fact, we’re the fourth most competitive state in the nation in terms of health insurance.”

He said proponents would be better off waiting to see how the exchange is implemented.

“We’re ahead of the curve here in Colorado, one of the few states that will be launching a state and not federal-run exchange in 2014, putting the real numbers and real information in front of consumers and employers, offering them a clearer picture of what they are choosing,” said Price. “In our opinion, choice and competition is a positive, with this alternative proposal being ‘same care’ for all.”

Markets impact community rating

Geography affects premiums on California health insurance exchange

By Jim Sanders
The Sacramento Bee, June 5, 2013

For the same health coverage from the same insurer, a 40-year-old Sacramentan will pay $78 more per month than a Los Angeles County resident through the state’s new insurance exchange.

In rural Mono County, the disparity will be even larger: $150 per month, nearly 60 percent higher than for identical benefits and co-pays offered in Los Angeles County.

The premiums provide relatively basic coverage from Anthem Blue Cross, but similar regional differences exist in plans proposed by other insurers. The numbers reflect new rate-setting standards: How sick you are no longer matters, but where you live does.

A 25-year-old can buy the least expensive level of coverage – bronze – at prices ranging from $147 to $274 per month, depending on location.

For the first time, Californians soon will be able to compare regional pricing because federal law requires insurers selling policies on state exchanges to offer identical benefits with rates based only on age, location and household size.

A key factor in premium price differences, within a region or in comparison to other California communities, is the provider network created by each insurer, officials said.

The willingness of doctors or hospitals to join a network can be affected by rates that insurers agree to pay them. Those are negotiated privately and tend to vary based on the number of health care providers within a region and the intensity of competition for patients.

Tom Epstein, vice president of public affairs for Blue Shield of California, said costs for medical care generally are higher in Northern California than in Southern California.

“There are a number of large hospital systems that dominate the Northern California market, whereas there are many smaller hospitals and hospital systems in Southern California that compete,” Epstein said.

http://www.sacbee.com/2013/06/04/5471469/geography-affects-premiums-on.html

Comment:

By Don McCanne, M.D.

Although, with guaranteed issue, health plans will no longer be able to adjust premiums based on the health status of the applicant, they will still be able to adjust them through community rating.

Insurers can charge higher premiums in communities that have a less healthy population enrolled in their plans. But market forces also play a major role. In communities in which physicians and hospitals have greater market clout, they can demand higher payment rates when contracting to become part of the insurers’ networks. The differences can be very significant.

This is yet one more example of why it is irrational to try to fund our health care system through a specific premium assigned to each individual or family and administered by an expensive administrative intermediary – a private insurer.

As many other studies have shown, the private insurers have not been very effective in controlling health care spending anyway. Why would we want to keep them in charge?

We should replace these wasteful, ineffective intermediaries with a publicly-administered single payer program. Payments would be based on legitimate costs with fair margins, using global budgeting and various forms of administered pricing or capitation. Our public stewards would sit down with the health care professionals and administrators and see what they really need, and pay that – no more, no less.

For those who don’t believe that would work, simply look at the other OECD nations. They all have government oversight through some form of social insurance and are able to provide health care to everyone at an average of half the price that we are paying for a system that leaves tens of millions out.

Who says this isn’t feasible? It’s the status quo under Obamacare that isn’t feasible.

NHIS: Problems paying medical bills

Problems Paying Medical Bills: Early Release of Estimates From the National Health Interview Survey, January 2011–June 2012

By Robin A. Cohen, Ph.D.; Whitney K. Kirzinger, M.P.H.; and Renee M. Gindi, Ph.D.
National Center for Health Statistics, CDC, June 2013

The percentage of persons under age 65 who were in families having problems paying medical bills decreased from 21.7% (57.8 million) in the first 6 months of 2011 to 20.3% (54.2 million) in the first 6 months of 2012.

In the first 6 months of 2012, among persons under age 65, 36.3% of those who were uninsured, 14.0% of those who had private coverage, and 25.6% of those who had public coverage were in families having problems paying medical bills in the past 12 months. (Coverage status applies only to the day of the interview.)

The “private health insurance coverage” category includes persons who had any comprehensive private insurance plan (including health maintenance and preferred provider organizations).

The “public health plan coverage” category includes Medicaid, Children’s Health Insurance Program (CHIP), state-sponsored or other government-sponsored health plans, Medicare, and military plans.

Problems paying medical bills in past 12 months—Based on the following question: “In the past 12 months did [you/ anyone in the family] have problems paying or were unable to pay any medical bills? Include bills for doctors, dentists, hospitals, therapists, medication, equipment, nursing home or home care.”

http://www.cdc.gov/nchs/data/nhis/earlyrelease/problems_paying_medical_bills_january_2011-june_2012.pdf

Comment:

By Don McCanne, M.D.

As we already knew, about one-fifth of people under 65 are in families that have problems paying medical bills. In the United States we are used to that. But why should people in public plans have greater problems than those with comprehensive private insurance?

Most people under 65 with comprehensive private plans have incomes and can bear some limited out-of-pocket expenses for health care, though 14 percent still have problems paying medical bills.

Most people under 65 who have public health plan coverage qualify for those plans partly on the basis of having inadequate incomes. Their eligibility can vary throughout the year and many of them have intervals with no coverage at all and yet still face medical bills. Even when they have public coverage, they often face out-of-pocket expenses for services and products that may not be included such as medications, dental care, physical therapy, equipment, home care, or care obtained outside of networks (such as Medicaid managed care). These expenses are a problem for one-fourth of those with public coverage.

This demonstrates that it is not enough that we have public plans that serve as safety-nets. These are unstable, fragmented, and incomplete methods of financing health care. Even the private plans are as well, to some extent.

Imagine how this contrasts with a system that would cover everyone, throughout life, and with no deductibles nor coinsurance. You simply get the care you need when you need it. Why do we keep just imaging this? We can have such a system if enough of us demand it.

Obamacare: a fundamentally broken system

Our Continuing Healthcare Crisis, Part 3: The Obamacare Scorecard

By Richard Eskow
Campaign for America’s Future, May 30, 2013

(This is Part 3 of a series on our ongoing – and worsening – national healthcare crisis.)

Conclusion

We’ll be updating this “scorecard” as its provisions take effect, but one thing’s already clear: While the law does some good things, it will only marginally improve upon a fundamentally broken system.

http://blog.ourfuture.org/20130530/introducing-the-obamacare-scorecard

Comment:

By Don McCanne, M.D.

In this article, Richard Eskow of Campaign for America’s Future scores the effectiveness of several features of the Affordable Care Act (Obamacare) as it is being implemented. His take is that Obamacare provides only marginal improvements to a “fundamentally broken system.”

The importance of this observation is that it comes from a prominent and respected organization that provides strategy for the progressive movement. They provided crucial support to Health Care for America Now! (HCAN), a coalition of over 1000 organizations dedicated to achieving quality, affordable health care for all.

HCAN was part of the massive shift of progressives away from single payer to the “politically feasible” Clinton/Obama/Edwards version of the conservative reform model of the Heritage Foundation. They were distracted by the concept that if we could just get a public option, we would be well on our way towards achieving a truly universal, affordable system. Little did it matter that the public option would not have been much different from a traditional Blue Cross/Blue Shield plan. It would have been only a marginal improvement, if that, on a “fundamentally broken system.”

We can’t back up history, but we can assess where we are now, where we are headed, and, most importantly, where we need to go instead. Now that more individuals in the progressive community are acknowledging that Obamacare can have no more than a marginal impact on a  “fundamentally broken system,” we need to dump it and enact a single payer national health program – an improved Medicare for all.

Health benefits should not be tied to jobs

By Pamella S. Gronemeyer, M.D.
St. Louis Post-Dispatch, Letters, June 1, 2013

Last week, physicians and a pharmacy student who are members of Physicians for a National Health Program (Illinois and Missouri chapters) and the Illinois Single Payer Coalition joined thousands of United Mine Workers of America members to support their demand for continuation and fulfillment of the health and pension benefits that the miners have earned as benefits from their long years of working in mines while being exposed to the harmful effects of coal dust, which include the development of black lung disease or carcinomas.

The story of Patriot Coal and its pending bankruptcy hearing is not new but represents another effort of a corporation to both destroy a union and to deprive the laborers of their earned health and pension benefits. As physicians, we have all seen the lung disease created by mining and know how much coal miners need their health benefits. We strongly support them in their continued actions to secure their much-deserved earned benefits.

Once again, this fight points out the need for a Medicare for All program in the United States. If health benefits were not tied to jobs, no one would lose their benefits because an industry felt the need to manipulate the structure of interrelated companies and corporations to insure shareholder return and to subsequently inflict pain and suffering on workers who toiled for many years in underground mines.

Unions have worked very hard to make sure that their members have health benefits. However, they are facing increasing obstructions to their efforts. Deductibles and co-pays are being raised. Plans that eliminate coverage for hospital care are being developed.

If single-payer health care became a reality (HR 676), the American people would be the organized bargaining unit demanding and insuring that health care is a human right for all.

Dr. Pamella S. Gronemeyer resides in Glen Carbon, Ill.

http://www.stltoday.com/news/opinion/mailbag/letters-to-the-editor/health-benefits-should-not-be-tied-to-jobs/article_27a24bd9-9151-5cb7-8c23-fa0c6461321b.html

Medical Debt: A Curable Affliction Health Reform Won’t Fix

By David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H.
Communities & Banking, Summer 2013   

Millions of Americans are deep in medical debt. Unfortunately, the Affordable Care Act (ACA) will throw a lifeline to very few. According to the Congressional Budget Office, even after health reform is fully implemented in 2014, 30 million to 36 million people will remain uninsured. And tens of millions who do have insurance will have coverage that is too limited to ensure financial protection against an expensive illness. Many families will remain just one serious illness away from bankruptcy.

Medical Bankruptcies

In 2001, we began studying medical bankruptcy along with our colleagues Elizabeth Warren and Deborah Thorne. We directly surveyed debtors soon after they’d filed for personal bankruptcy. Back then, illness and medical bills contributed to about 50 percent of all personal bankruptcies and involved about 2.2 million debtors and their dependents.[1]

By 2007, when we repeated our study nationwide, medical bankruptcies had risen to 62 percent.[2] Significantly, most medical debtors were middle class. They had owned homes, had attended college, and had held responsible jobs. Seventy-eight percent even had health insurance, mostly private coverage — at least when they first got sick.

Why are so many middle-class, privately insured Americans swamped by medical costs? The reason is that private coverage has holes — unaffordable deductibles and copayments, as well as brief or nonexistent coverage of medical services like physical therapy. Moreover, since illness often reduces work-related income, families may experience a double whammy, as medical bills arrive just when the paychecks stop.

Medical bankruptcy is actually the tip of a much larger iceberg of medical indebtedness. For years, surveys have found that tens of millions of Americans struggle with medical debts and avoid needed care for fear of the cost. Recent surveys by Consumer Reports, for instance, have found that difficulty paying for medical care (including prescription drugs) is the top financial problem for American households.[3]

The number of Americans who struggle to pay for care has trended upward over time as health-care costs have soared and many health insurance companies have reduced the comprehensiveness of coverage. According to surveys by the Commonwealth Fund, the number of working-age adults (those 19 years old to 64 years old) reporting “problems paying” or “unable to pay medical bills within the past year” rose from 39 million to 53 million between 2005 and 2010.[4] In 2010, 30 million Americans were contacted by a collection agency about a medical bill, and 44 million were paying off medical debts over time.

A survey by the Center for Studying Health System Change estimated that 20.9 percent of all Americans lived in families that experienced a medical bill problem in 2010.[5] As in our bankruptcy surveys, insurance failed to offer enough protection. As many as 20.2 percent of nonelderly insured people lived in a family with medical bill problems.

Even relatively young Americans, few of whom suffer serious illnesses, are at high risk of medical debt. In a 2011 survey of young adults 19 years old to 29 years old, 51 percent of those without insurance reported medical bill or medical debt problems, as did 29 percent of those who were insured all year.[6] Sixteen percent of all young adults reported being contacted by a collection agency about a medical bill within the past year.

Medical bills often compromise more than just financial health. Considerable research, including our own, has found that families that experience medical bill problems are far more likely to delay needed medical care, skip filling a prescription, and report problems paying for other necessities. That is true whether or not the family has health insurance.

The high frequency of medical bankruptcy was often cited by advocates of health reform during the debate over the ACA. Yet the debate largely ignored the fact that most medical debtors actually have coverage. In order to protect Americans from bankruptcy, coverage must be truly comprehensive, that is, it must cover virtually 100 percent of all needed medical care. Unfortunately, the insurance policies mandated under ACA are required to cover only 60 percent of expected health-care costs.

Learning from Massachusetts

Our findings from surveys of debtors in Massachusetts before and after the implementation of that state’s health reform (the prototype of the national reform) make it clear that such limited coverage will do little to prevent medical bankruptcy.

Among Massachusetts bankruptcy filers in 2009, 53 percent cited illness or medical bills as a cause of their bankruptcy, a percentage that was statistically indistinguishable from the 59 percent figure we found before reform. Indeed, because the total number of bankruptcies had risen, the actual number of medical bankruptcies in the state increased from 7,504 in 2007 to 10,093 in 2009.[7] Surveys by others indicate that the reform had little impact on access to care.

Why are so many Massachusetts residents still suffering medical bankruptcies despite health reform? Although health-care reform cut the number of uninsured in the state by more than half (to about 219,000), much of the new coverage is so limited that serious illness still leaves families with medical bills they cannot pay.

Consider that the cheapest coverage available through the state’s health insurance exchange to a single 56-year-old Bostonian who is not eligible for subsidies (in other words, one who has an income above 300 percent of poverty) costs $4,744 and comes with numerous restrictions on which doctors’ and hospitals’ bills it will pay. If the policyholder is sick, the policy doesn’t start paying bills until after the policyholder has taken care of the $2,000 deductible. The patient also is responsible for about 20 percent of the next $15,000 in medical expenses.

Nationally, the Kaiser Foundation estimates that in high-cost regions like New England, the unsubsidized premium in 2014 under the ACA will run $10,585 with additional out-of-pocket costs adding up to $6,250.[8] Such costs will predictably leave tens of millions with large medical debts and drive more than a million into medical bankruptcy every year.

It doesn’t have to be that way. One Canadian study suggested that between 7.1 percent and 14.3 percent of Canadian bankruptcies are attributable to health problems or other misfortunes (such as floods).[9] And when journalist T.R. Reid questioned political leaders and health policy experts in several nations (all of which have some form of national health insurance) about the frequency of medical bankruptcy, he was told that they had none.[10] Other nations have virtually eliminated medical bankruptcy by making coverage both universal (covering everyone) and comprehensive (covering virtually all medical costs).

Given our research, we suggest that single-payer national health insurance should be the ultimate goal. A single tax-funded insurance plan in each region would pay for all needed care, without copayments or deductibles. Tens of billions in savings annually would accrue from reduced insurance overhead as private insurers (whose overhead averages 14 percent) make way for a Medicare-like program. Fee-for-service Medicare’s overhead is 2 percent, and overhead in the single-payer programs in Canadian provinces averages about 1 percent. Health-care providers could redirect the money now spent on billing-related paperwork to expanding and improving care.[11]

A single-payer reform is staunchly opposed by the health insurance industry and by drug companies. Nonetheless, in a recent survey carried out by the Massachusetts Medical Society,
the single-payer approach was the most popular option among Massachusetts physicians.[12] And in 2006, the last time a major poll asked what patients would prefer, 56 percent of the public favored a universal, tax-financed, Medicare-like program.[13]

Alternative health policies could virtually eliminate medical debt and free Americans from the shadow of combined financial ruin and illness — what Edward Kennedy termed the “double disaster.”[14]

David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H., are professors of public health at the City University of New York School of Public Health at Hunter College and visiting professors of medicine at Harvard University. Contact them at swoolhan@hunter.cuny.edu.

Endnotes

[1] David U. Himmelstein, Elizabeth Warren, Deborah Thorne, and Steffie Woolhandler, “Illness and Injury as Contributors to Bankruptcy,” Health Affairs, http://content.healthaffairs.org/content/suppl/2005/01/28/hlthaff.w5.63.DC1.

[2] David U. Himmelstein, Deborah Thorne, Elizabeth Warren, and Steffie Woolhandler, “Medical Bankruptcy in the United States, 2007: Results of a National Study,” American Journal of Medicine 122, no. 8 (2009): 741–746, https://pnhp.org/new_bankruptcy_study/Bankruptcy-2009.pdf.

[3] “Sluggish Economy Forces Americans to Cut Corners to Pay for Medication,” Consumer Reports, September 2012.

[4] Sara R. Collins, Michelle M. Doty, Ruth Robertson, and Tracy Garber, “Help on the Horizon: Findings from the Commonwealth Fund Biennial Health Insurance Survey of 2010” (report, Commonwealth Fund, Washington, DC, March 2011), http://www.commonwealthfund.org/Publications/Fund-Reports/2011/Mar/Help-on-the-Horizon.aspx.

[5] Anna Sommers and Peter J. Cunningham, “Medical Bill Problems Steady for U.S. Families, 2007–2010: Results from the Health Tracking Household Survey” (report, Center for Studying Health System Change, Washington, DC, December 2011), http://www.hschange.com/CONTENT/1268/1268.pdf.

[6] Sara R. Collins, Ruth Robertson, Tracy Garber, and Michelle M. Doty, “Young, Uninsured and in Debt: Findings from the Commonwealth Fund Health Insurance Tracking Survey of Young Adults, 2011” (report, Commonwealth Fund, Washington, DC, June 2012), http://www.commonwealthfund.org/ Publications/Issue-Briefs/2012/Jun/Young-Adults-2012.aspx..

[7] David U. Himmelstein, Deborah Thorne, and Steffie Woolhandler, “Medical Bankruptcy in Massachusetts: Has Health Reform Made a Difference?” American Journal of Medicine 124, no. 3 (March 2011): 224–228, http://www.ncbi.nlm. nih.gov/pubmed/21396505.

[8] See Kaiser Foundation Premium Calculator, http://healthreform.kff.org/ subsidycalculator.aspx.

[9] Jacob S. Ziegel, “A Canadian Perspective,” Texas Law Review 79, no. 5 (2001): 241–256.

[10] See “Sick around the World,” http://www.pbs.org/wgbh/pages/frontline/ sickaroundtheworld/etc/script.html.

[11] Steffie Woolhandler, Terry Campbell, and David U. Himmelstein, “Health Care Administration Costs in the U.S. and Canada,” New England Journal of Medicine 349 (2003): 768–775, https://pnhp.org/publications/nejmadmin.pdf.

[12] See Massachusetts Medical Society Physicians Workforce Study, http://www.massmed.org/AM/Template.cfm?Section=News_ and_Publications2&TEMPLATE=/CM/ContentDisplay.cfm&CONTENTID=61512.

[13] See “Health Care in America 2006 Survey,” http://www.kff.org/kaiserpolls/upload/7572.pdf.

[14] 14 Edward M. Kennedy, In Critical Condition: The Crisis in America’s Health Care (New York: Simon & Schuster, 1972).

A PDF version of this article is available here.

Communities & Banking is a quarterly publication of the Federal Reserve Bank of Boston. The views expressed are not necessarily those of the Federal Reserve Bank of Boston or the Federal Reserve System. Information about organizations and upcoming events is strictly informational and not an endorsement.

California exchange plans take away provider choice

Insurers limit doctors, hospitals in state-run exchange plans

By Chad Terhune
Los Angeles Times, May 24, 2013

California’s health insurance rates for a new state-run marketplace came in lower than expected this week, but one downside for many consumers will be far fewer doctors and hospitals to choose from.

People who want UCLA Medical Center and its doctors in their health plan network next year, for instance, may have only one choice in California’s exchange: Anthem Blue Cross. Another major insurer in the state-run market, Blue Shield of California, said its exchange customers will be restricted to 36% of its regular physician network statewide.

Paul Markovich, chief executive of Blue Shield, said renegotiating with hospitals and physician groups for lower reimbursements was a key factor for insurers in holding down rates. Medical providers are sometimes willing to accept lower payments in return for higher patient volume from these narrow networks.

And Cedars-Sinai Medical Center, one of Southern California’s most prestigious and expensive hospitals, said it’s not included in any exchange plans at the moment.

Those types of exclusive arrangements, increasingly tight networks and outright exclusions are becoming more common as insurers and government officials search for ways to hold down rising medical costs.

More employers have been adopting these narrower networks and the government’s overhaul of the individual insurance market is accelerating the trend.

http://www.latimes.com/business/la-fi-health-rates-deals-20130525,0,4396720.story

Comment:

By Don McCanne, M.D.

There was quite a celebration amongst Affordable Care Act (ACA) enthusiasts when California, a leader in health care financing innovation, announced that premiums for plans to be offered through the state exchange would not increase sharply over current health plan rates. What is now evident is that the anticipated increases were at least partially offset by further limiting the number of in-network hospitals and physicians, made possible by insurers negotiating lower provider payments in exchange for a promise of greater volume.

This exposes the big lie of the ACA promise of “Choice.” As has been stated so many times, the choice we really want – the choice of health care professionals and institutions – was taken away by the insurers by means of their restricted networks of providers.

Now choice is being restricted even further by narrowing down these networks of providers. These further restrictions in choice are also being adopted in the employer-sponsored market. It can be anticipated that narrow networks will become the new standard in health plans.

At least the traditional Medicare program does not restrict patients to networks, though the private Medicare Advantage plans do. It is true that physicians can totally opt out of Medicare, but very few do. If an improved version of the traditional Medicare program covered all of us, this injustice of taking away patient choice would not exist.