Vt. would allow ‘bronze plan’ to encourage health

cbsnews.com
February 6, 2012
Vermont Gov. Peter Shumlin and legislative leaders said Monday they wanted to make it possible for more of the state’s small businesses to offer lower premium health insurance plans sometimes known as “bronze plans” until the state can implement its single payer health care system.
Speaking Monday in Montpelier, Shumlin and leaders from the House and Senate, all Democrats, said they would also allow businesses with more than 50 employees to remain outside the federally-mandated health care exchange until 2016.
“This was a hard decision, a very hard decision because there are people who will not have the opportunity to get into that market and they’ll have to wait two years and their employees will have to wait two years as well,” (House Speaker Shap Smith) said.
http://www.cbsnews.com/8301-505245_162-57372163/vt-would-allow-bronze-plan-to-encourage-health/

Vermont is providing us with very important lessons on just how difficult it is to set up a single payer program on a state level. The legislation that passed – hailed as the first single payer system in the United States – is primarily an enactment of a state health insurance exchange as called for in the Affordable Care Act, along with future proposals that are not much more than a wish list at this point.
When they enacted the insurance exchange, they deliberately eliminated the bronze plan since it has an actuarial value of only 60 percent, which would leave 40 percent of covered health care costs to be paid by the patient out-of-pocket, minus income-related subsidies which are inadequate to prevent financial hardship for many of those with health care needs. They wanted better coverage than that.
The problem they faced was that the premiums for the silver and gold plans (70 and 80 percent actuarial values) would be too expensive for many individuals and small businesses in Vermont, thus the trade off of lower premiums for spartan plans.
What doesn’t appear in this article is that these high-deductible bronze plans are very profitable for insurers, and they certainly would want to maintain and grow this sector of their market. It is likely that the insurers’ message to the governor and the legislature was that they couldn’t provide silver and gold plans at the level of premium that many businesses could afford, and the insurers likely didn’t need to resort to threats of withdrawing from markets. (BlueCross BlueShield of Vermont is the dominant insurer and can write its own ticket, and, though a nonprofit, it still depends on profits.)
The governor and the legislature are to be commended for doing their very best to try to bring a single payer system to Vermont, though they are finding many of the barriers to be insurmountable. While they are patching together what they can, they should join our growing movement demanding that Congress enact a national single payer program. That would solve the health care financing problems for all states.

Hospitals Flout Charity Aid Law

By Nina Bernstein
The New York Times, February 12, 2012

New York’s charity care system, partly financed by an 8.95 percent surcharge on hospital bills, is one of the most complicated in the nation, but many states have wrestled with aggressive debt collection by hospitals in recent years. Like New York, several passed laws curbing hospitals’ pursuit of unpaid bills, including Illinois, California and Minnesota.

But a new study of New York hospitals’ practices and state records finds that most medical centers are violating the rules without consequences, even as the state government ignores glaring problems in the hospitals’ own reports.

Hospitals are not legally barred from seeking judgments or liens, but must first offer an aid application, help the patient complete it, and wait while it is pending. Instead, many hospitals turn to collection agencies, and sue when that fails. The unpaid bills — typically reflecting much higher rates than what insurers pay — are then treated as the equivalent of charity care.

Change is now urgent, health care experts agree, because the state pool stands to lose hundreds of millions of federal dollars in 2014, when provisions of the health care overhaul will no longer treat so-called bad debt, based on uncollected bills, as if it were charity care.

http://www.nytimes.com/2012/02/13/nyregion/study-finds-new-york-hospitals-flout-charity-rules.html?_r=1&emc=eta1&pagewanted=all

Comment: 

By Don McCanne, MD

How much charity care should hospitals be expected to provide? Contrary to the prevailing view, the answer should be, “None.” Let me explain.

With our fragmented, dysfunctional system of financing health care it is inevitable that some individuals will receive essential health care services in hospitals, often on an urgent or emergency basis, even though they lack both the funds and insurance coverage to pay for those services. Charity always has been expected of hospitals, so much so that some even have included “Charity” in their names.

The issue became more acute with a differentiation between nonprofit and for-profit hospitals. Nonprofit hospitals were relieved of tax obligations on retained revenues exceeding their costs in exchange for fulfilling their obligation to provide charity care. These retained excesses could then be used for capital improvements, or for charity care.

For-profit hospitals, as entrepreneurial entities, are taxed on these retained revenues as profits. As such, they usually are not expected to provide free care as part of their mission to profitably serve the health care needs of the community.

Members of Congress have expressed concerns over the fact that many nonprofit hospitals seem to be shirking their responsibilities to provide charitable services. They have been acting more like the for-profit hospitals in that much of their uncompensated care is not for prearranged charitable services but rather represents charges that patients were unable to pay. They then write this off as their charitable obligation, but usually only after vigorous attempts to collect the bills – efforts which often leave those patients in financial ruin forever.

It seems ironic that members of Congress pursue an investigation of the charity practices of nonprofit hospitals while paying their respects to market principles by exempting the for-profit hospitals from such an investigation, though it is understandable when you realize that Congress allows tax policy to trump health policy.

The fundamental flaw in all of this is our dysfunctional health care financing system. Everyone should have comprehensive health care coverage that pays all appropriate costs. There should never be a situation in which a person would require charity care. This is a fundamental principle common to most other wealthier nations in that their systems are designed to see that everyone receives appropriate care without the necessity of negotiating financial barriers. Services outside of the system, such as vanity cosmetic surgery, would be available based on the ability to pay, but would never require a need for charity.

Once again, it’s clear that we need to move forward with enacting an efficient, comprehensive, equitable single payer national health program. Why do we keep putting it off when the need is so clear?

Hospitals Flout Charity Aid Law

By Nina Bernstein
The New York Times, February 12, 2012
New York’s charity care system, partly financed by an 8.95 percent surcharge on hospital bills, is one of the most complicated in the nation, but many states have wrestled with aggressive debt collection by hospitals in recent years. Like New York, several passed laws curbing hospitals’ pursuit of unpaid bills, including Illinois, California and Minnesota.
But a new study of New York hospitals’ practices and state records finds that most medical centers are violating the rules without consequences, even as the state government ignores glaring problems in the hospitals’ own reports.
Hospitals are not legally barred from seeking judgments or liens, but must first offer an aid application, help the patient complete it, and wait while it is pending. Instead, many hospitals turn to collection agencies, and sue when that fails. The unpaid bills — typically reflecting much higher rates than what insurers pay — are then treated as the equivalent of charity care.
Change is now urgent, health care experts agree, because the state pool stands to lose hundreds of millions of federal dollars in 2014, when provisions of the health care overhaul will no longer treat so-called bad debt, based on uncollected bills, as if it were charity care.
http://www.nytimes.com/2012/02/13/nyregion/study-finds-new-york-hospitals-flout-charity-rules.html?_r=1&emc=eta1&pagewanted=all

How much charity care should hospitals be expected to provide? Contrary to the prevailing view, the answer should be, “None.” Let me explain.
With our fragmented, dysfunctional system of financing health care it is inevitable that some individuals will receive essential health care services in hospitals, often on an urgent or emergency basis, even though they lack both the funds and insurance coverage to pay for those services. Charity always has been expected of hospitals, so much so that some even have included “Charity” in their names.
The issue became more acute with a differentiation between nonprofit and for-profit hospitals. Nonprofit hospitals were relieved of tax obligations on retained revenues exceeding their costs in exchange for fulfilling their obligation to provide charity care. These retained excesses could then be used for capital improvements, or for charity care.
For-profit hospitals, as entrepreneurial entities, are taxed on these retained revenues as profits. As such, they usually are not expected to provide free care as part of their mission to profitably serve the health care needs of the community.
Members of Congress have expressed concerns over the fact that many nonprofit hospitals seem to be shirking their responsibilities to provide charitable services. They have been acting more like the for-profit hospitals in that much of their uncompensated care is not for prearranged charitable services but rather represents charges that patients were unable to pay. They then write this off as their charitable obligation, but usually only after vigorous attempts to collect the bills – efforts which often leave those patients in financial ruin forever.
It seems ironic that members of Congress pursue an investigation of the charity practices of nonprofit hospitals while paying their respects to market principles by exempting the for-profit hospitals from such an investigation, though it is understandable when you realize that Congress allows tax policy to trump health policy.
The fundamental flaw in all of this is our dysfunctional health care financing system. Everyone should have comprehensive health care coverage that pays all appropriate costs. There should never be a situation in which a person would require charity care. This is a fundamental principle common to most other wealthier nations in that their systems are designed to see that everyone receives appropriate care without the necessity of negotiating financial barriers. Services outside of the system, such as vanity cosmetic surgery, would be available based on the ability to pay, but would never require a need for charity.
Once again, it’s clear that we need to move forward with enacting an efficient, comprehensive, equitable single payer national health program. Why do we keep putting it off when the need is so clear?

Consumers Hit By Higher Out-of-Network Medical Costs

By Julie Appleby
Kaiser Health News, February 8, 2012
Consumers have long complained about the cost of going outside their health plan’s network, but …
Now, instead of paying a percentage of the “usual and customary” charges from physicians and other providers, insurers are basing reimbursements on a percentage of what Medicare pays, which can be much less.  “Every carrier is moving to this,” says Ken Sperling, global health care practice leader at the benefit consulting firm Aon Hewitt.
Many employers welcome the change as a way to slow rising premium increases, but some “employees are going to get stuck shouldering a significant portion of the bill because they don’t understand how it’s done,” Sperling says.
Consumers are responsible for the difference between what the out-of-network doctor charges and what their insurer pays. But few understand the basis on which plans reimburse, let alone the widely varying prices doctors and hospitals charge. As a result, they may be blindsided by big bills, says Lynn Quincy, senior health policy analyst at Consumers Union.
Insurer networks are designed to slow rising health care costs, in part by getting doctors and hospitals who join to agree to negotiated rates, which are generally lower than their usual fees.
Because out-of-network hospitals and doctors are not held to negotiated rates, they can set their own fees and “balance bill” patients for the portion insurers don’t cover.
“One of the most expensive decisions that a customer could make is going out of network,” says Alan Muney, chief medical officer at Cigna.
Medicare strictly limits how much patients can be balance billed by doctors who don’t participate in the program.
Benefit consultants, insurers, patient advocates and actuaries say the shift to Medicare rates began after a national database tracking usual and customary charges — run by UnitedHealthcare subsidiary Ingenix — was shuttered in 2009 following an investigation by the New York Attorney General, who questioned whether the data were skewed in favor of insurers.
While the closure was touted as a consumer win, “unfortunately, it’s worse now,” says Jennifer Jaff, executive director of Advocacy for Patients with Chronic Illness, a Connecticut-based group that helps file insurance appeals for consumers. “Once New York said you can’t use those (Ingenix figures) anymore, the insurers looked at it as an opportunity to pay even less.”
http://www.kaiserhealthnews.org/Stories/2012/February/09/consumers-hit-by-higher-out-of-network-medical-costs.aspx

The most effective cost containment tool introduced during the managed care revolution was the ability of insurers to contract for set rates with networks of health care providers, eliminating arbitrarily high rates by those providers, rates that seemed to have no end in sight. Although health plan purchasers benefited by the slowing of the rate of premium increases, the trade-off was that care obtained outside of the networks either required larger out-of-pocket costs, or was not covered at all.
A universal single payer system would apply rate controls to all health care no matter where is was obtained. The obvious advantage would be that patients would then have their choice of any and all health care providers. With the current provider networks established by the private insurers, care outside of the networks may not be available because of prohibitive out-of-pocket costs.
Networks may not include centers of excellence, specialists with greater expertise of complex problems, an adequate network of primary care physicians, care that is provided by non-network physicians called in during a hospitalization, or care that is accessible within reasonable geographic boundaries. There are many reasons, not always under the control of the patient, as to why care is obtained out of the network.
Although the insurer may not provide any coverage for out-of-network care, it is more common to provide coverage that will cost the insurer no more or even less that would be paid to in-network providers. The patient could bear the brunt of the costs when the amount of the allowed charges not covered is higher, but the greater risk is that the patient is responsible for the full amount of charges over the allowed amount since the providers’ charges are not bound by a network contract.
Those supporting the private insurance industry tout the application of insurer innovations as being one of the great advantages of market solutions. But these are not social institutions that serve the public good. These are private businesses that serve their own interests. The innovations are designed to leverage markets in their favor.
This latest innovation is particularly repulsive because it is a new deception that was designed to replace the fraudulent rate-setting perpetrated by Ingenix, a UnitedHealthcare subsidiary. Ingenix and the insurers using them were caught cheating patients by manipulating downward the usual fees charged by out-of-network providers so that they would pay less out-of-network, while the patients had to take up the slack. The insurance industry paid hundreds of millions of dollars in legal settlements and shut down the Ingenix program.
Not to be outdone, without fanfare, they replaced the phony usual fee determination for out-of-network care with an allowable fee based on a percentage of Medicare fees. In most cases, this shifts even more of the costs away from the insurers and onto the patients receiving care. So these Ingenix-driven scam artists have shifted to a worse-than-Ingenix system of manipulating prices, but one that will pass legal muster since it’s in the fine print of the insurance contract (as an example, on page 108 of the 126 page booklet of the Oxford/UnitedHealthcare plan mentioned in the article).
Another newer innovation that compounds the injustice of this scheme is that insurers are increasing the number of limited network plans – smaller networks which increase the probability that patients will be stuck with the much higher costs of out-of-network providers.
Also compounding this problem is that the high-deductible plans that flooded the individual market are now being adopted wholesale by employers. Insurers benefit because they can keep their premiums more competitive, even if still outrageous. Employers have complicity with these strategies because they want the lower premiums made possible by protecting the insurers from the costs that are shifted to the patients.
Under the Affordable Care Act, we’ll continue to see more of these abuses. Employers will continue to shift more payment responsibilities to their employees. Insurers will continue to innovate to bring them the highest return possible using this sick financing system. And the patients will be exposed to ever greater financial hardship.
Most employers would prefer not to introduce these innovations that stiff their employees, but the very high cost of private plans almost force them to do so. We should relieve employers of the obligation to sponsor their employees’ health plans. Above all, we need to eliminate the industry that uses health care payment innovations to enrich themselves at a great cost to patients.
For those who have not yet watched Lawrence O’Donnell’s video on employer-sponsored plans and single payer, do it now, and then share it with others:
http://www.msnbc.msn.com/id/45755883/vp/46320398#46321122

The Last Word with Lawrence O’Donnell
MSNBC, February 8, 2012

In this seven minute video, Lawrence O’Donnell uses the current controversy over coverage of contraception as a platform to launch his message on why single payer is the imperative.

http://www.msnbc.msn.com/id/45755883/vp/46320398#46321122

We often ask what we can do to advance the single payer cause. Besides the “be there and do it” rule, a very simple, immediate step is to help this video go viral by sharing it with your friends, colleagues, social websites, email lists, and anywhere else that people may want to hear the message that there is real HOPE for the future of health care in America.

And…

It is important to understand that the rationale of the single payer model is not only in the purview of progressives like Lawrence O’Donnell. Here is a statement from Michael Brendan Dougherty of Business Insider and The American Conservative (Democracy Now!, Feb. 8, 2012):

Michael Brendan Dougherty:  And most of the people who want to enforce this rule (employer-sponsored coverage of contraception) would prefer a single-payer system of healthcare anyway, where you’re not actually forcing employers to violate their conscience in buying this.

Amy Goodman:  So you’re saying a single-payer system would solve the problem.

Michael Brendan Dougherty:  Well, I’m saying it would solve this particular problem of conscience, as it has in Europe.

http://www.democracynow.org/2012/2/8/as_contraceptives_rule_enters_gop_race

Comment:

By Don McCanne, MD

CALL FOR ACTION:  Share the O’Donnell video NOW! GO VIRAL!