Senators push bipartisan state healthcare waiver

Reuters
November 18, 2010

A Democrat and a Republican teamed up in the Senate on Thursday to offer legislation that would give states the flexibility to implement their own healthcare approaches when the federal overhaul goes into full effect in 2014.

The proposal by Democrat Ron Wyden and Republican Scott Brown moves up the date when states can apply for waivers from the federal law in order to implement their own approaches.

The law, which passed in March, currently allows states to apply for waivers in 2017.

Under the Wyden and Brown proposal, states could apply for an exemption from some requirements of the reform law — including the mandate that everyone purchase insurance and the employer penalty for not providing coverage — if they offer an alternative that is considered at least as effective and affordable.

http://www.reuters.com/article/idUSTRE6AH4NT20101118

And…

S. 3958 (the entire bill)

To allow an earlier start for State health care coverage innovation waivers under the Patient Protection and Affordable Care Act.
IN THE SENATE OF THE UNITED STATES
NOVEMBER 17, 2010

Mr. WYDEN (for himself and Mr. BROWN of Massachusetts) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL
To allow an earlier start for State health care coverage innovation waivers under the Patient Protection and Affordable Care Act.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.
This Act may be cited as the “Empowering States to Innovate Act”.

SEC. 2. EARLIER START FOR STATE HEALTH CARE COVERAGE INNOVATION WAIVERS.
Section 1332(a) of the Patient Protection and Affordable Care Act is amended—

(1) by striking ‘‘January 1, 2017’’ in paragraph (1) and inserting ‘‘January 1, 2014’’, and
(2) by inserting ‘‘beginning not later than 180 days after the date of the enactment of the Empowering States to Innovate Act’’ after ‘‘application’’ in paragraph (4)(B)(ii).

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:s3958is.txt.pdf

And…

Patient Protection and Affordable Care Act (excerpts):

PART IV–State Flexibility to Establish Alternative Programs

Sec. 1332. Waiver for State innovation.

(a) Application.
(3) Pass through of funding.–With respect to a State waiver under paragraph (1), under which, due to the structure of the State plan, individuals and small employers in the State would not qualify for the premium tax credits, cost-sharing reductions, or small business credits under sections 36B of the Internal Revenue Code of 1986 or under part I of subtitle E for which they would otherwise be eligible, the Secretary shall provide for an alternative means by which the aggregate amount of such credits or reductions that would have been paid on behalf of participants in the Exchanges established under this title had the State not received such waiver, shall be paid to the State for purposes of implementing the State plan under the waiver.

(b) Granting of Waivers.
(1) In general.–The Secretary may grant a request for a waiver under subsection (a)(1) only if the Secretary determines that the State plan–
(A) will provide coverage that is at least as comprehensive as the coverage defined in section 1302(b) and offered through Exchanges established under this title as certified by Office of the Actuary of the Centers for Medicare & Medicaid Services based on sufficient data from the State and from comparable States about their experience with programs created by this Act and the provisions of this Act that would be waived;
(B) will provide coverage and cost sharing protections against excessive out-of-pocket spending that are at least as affordable as the provisions of this title would provide;
(C) will provide coverage to at least a comparable number of its residents as the provisions of this title would provide; and
(D) will not increase the Federal deficit.

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_public_laws&docid=f:publ148.111

And…

Sen. Bernie Sanders: ‘Vermont stands a chance to be the first state in the nation to pass single-payer’

By Ezra Klein
The Washington Post
November 18, 2010

Ezra Klein:  So what happens if Scott Brown and Ron Wyden get their way and the waiver moves up to 2014? Will Vermont use it?

Bernie Sanders:  We believe Vermont stands a chance to be the first state in the nation to pass single-payer. The governor-elect campaigned on it, and we have support in the House and Senate. We’re not asking for one nickel more than we’d otherwise get. The other thing we think we have an opportunity to do is reach out to our conservative friends and say, hey, Vermont wants to go forward with a single-payer system, and Mississippi and Alabama don’t, but maybe they have other ideas. Now, we’re conscious of the need to make sure that the health-care reform bill’s standards aren’t diminished. So everyone needs to provide the same quality of health care as the bill provides and at the same, or lower, price. But if they can do that, then they should be able to go for it.

Ezra Klein:  And then the various models can compete with one another and, presumably, spread to other states if successful?

Bernie Sanders:  Absolutely. And that’s what we wanted from it. In my state, it’ll be single-payer. In California, I think there’s a chance it could be single-payer. In other states, it will be something else. This makes the states laboratories for the system, and then other states can copy them. Now, you need a minimum level for coverage and quality. You can’t go lower than health-care reform.

http://voices.washingtonpost.com/ezra-klein/2010/11/sen_bernie_sanders_vermont_sta.html

The initial reaction to S. 3958, The Empowering States to Innovate Act, sponsored by Sen. Ron Wyden (D-OR) and Sen. Scott Brown (R-MA), is that the bill will enable states to bypass the requirements of the Patient Protection and Affordable Care Act (PPACA) and set up their own state-based programs, even single payer should the states prefer. But what does the bill actually say?

PPACA already authorizes a program for state waivers, but not until 2017. The Wyden/Brown bill does only one thing. It moves the state waiver program forward to 2014, the same year that the individual mandate and insurance exchanges go into effect. It does not change the waiver in any other way.

For those states that wish to establish their own programs, advancing the eligibility date removes the very burdensome task of complying with the insurance exchanges, mandates and other requirements for an interval of only three years, and then facing the additional costs and burdens of transitioning to their own programs. If you agree with the policy that states should be able to set up their own programs, then this is a very wise move.

Massachusetts already has a program similar to PPACA. Sen. Brown would much rather modify what they have by complying with the waiver than to have to comply with all details of PPACA for the first three years. For Sen. Wyden, his preferred model of reform was rejected by Congress, but he would still like to experiment with his model, as much as possible, within the state of Oregon, while protecting what innovative programs they already have.

So just how much leeway does the PPACA state waiver allow? It does allow innovations as long as coverage is at least as comprehensive, cost sharing is at least as affordable, at least as many residents would be covered, and as long as the federal deficit would not be increased. It also passes through to the state the funds that would have been used for premium tax credits, cost-sharing reductions, and small business credits. Is that enough funding to establish a single payer system?

What about the funds for Medicare? Medicaid? CHIP? Taft-Hartley plans? What about ERISA requirements? What about the multitude of other funding requirements such as the VA system, academic institutions, safety-net institutions, community health centers, the Indian Health Service, the U.S. Public Health Service, and the many others?

There is no authorization in the Wyden/Brown bill, PPACA, nor any other existing law or regulation to fold many or all of these programs into one single payer system. Think of trying to run a partial single payer system (an oxymoron) while still having to deal with the massive Medicare and Medicaid programs. The point is, don’t let up on your advocacy, thinking that Wyden/Brown is our entry to single payer. We would still have a highly fragmented financing system.

Our best option remains enacting a national single payer bill such as HR 676, which will be re-introduced in the next session of Congress. In lieu of that, we should continue with our efforts to enact single payer systems on the state level. Just don’t be fooled into thinking that a bill such as Wyden/Brown is the ticket. The enabling federal legislation that would be required for state programs would be as complicated, if not more so, than a bill establishing a national single payer program – an improved Medicare for everyone.

Vermont is a test. Without enabling comprehensive federal legislation, I’m already apprehensive.

By Chris Fleming
Health Affairs Blog
November 18, 2010

As the United States begins implementing health reform, how does the U.S. experience compare with that of other high-income countries? To answer that question, The Commonwealth Fund conducted its thirteenth annual health policy survey, this year focusing on access, cost, and care experiences. The survey findings were published today in a Health Affairs Web First article by Commonwealth Fund Senior Vice President Cathy Schoen and coauthors.

Overall, the survey identified significant differences between countries and found that US adults — even when insured — were the most likely to incur high medical expenses, spend more time on paperwork, and have more claims denied.

The countries surveyed were Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States.

Key findings include the following:

*  Twenty percent of US adults surveyed said they had had serious problems paying medical bills in the previous year. Responses to the same question from the other ten countries were in the single digits. US respondents were also significantly more likely than adults in other countries to have gone without care because of cost.

*  Thirty-five percent of US adults had out-of-pocket medical spending of $1,000 during the previous year, a far higher percentage than in any other country.

*  A lower proportion of adults in the United States (70 percent) than in all other countries except Sweden (67 percent) and Norway (70 percent) were confident that they would receive the most effective treatment when needed.

*  When asked about access to prompt medical care, 57 percent of US adults said they had seen a doctor or nurse the same or next day the last time they were sick and needed care. Switzerland had the most rapid access (93 percent). Adults in three other countries (Canada, Norway, and Sweden) reported longer waits than US adults.

*  Nearly one third of US adults (31 percent) reported either denial of payments by insurers or time-consuming interactions with insurers, a higher rate than in all other countries. Twenty-five percent of US respondents reported that their insurance company denied payment or did not pay as much as expected; 17 percent said they spent a lot of time on paperwork or disputes for medical bills or insurance — the highest rates in the survey.

*  The United States had the widest and most pervasive differences in access and affordability by income of the eleven countries. The United Kingdom had the least.

http://healthaffairs.org/blog/2010/11/18/consumers-and-insurance-experiences-in-eleven-countries/

And…

How Health Insurance Design Affects Access To Care And Costs, By Income, In Eleven Countries

By Cathy Schoen, Robin Osborn, David Squires, Michelle M. Doty, Roz Pierson and Sandra Applebaum
Health Affairs
November 18, 2010

US Insurance Reforms: Challenges Ahead
 
Concerns expressed by US respondents were concentrated in the working-age population that is the target of insurance reforms. In this age group, wide disparities by income for those insured throughout the year underscore the importance of the Affordable Care Act’s emphasis on benefits with income-related provisions. The law will expand eligibility for Medicaid to those earning 133 percent of the federal poverty level. It will also provide subsidies for premiums for people up to 400 percent of poverty and for cost sharing for people up to 250 percent of poverty.

However, by international standards, the United States will remain an outlier for cost sharing. The annual limits for the least expensive benefit option will range from $2,000 per person ($4,000 per family) for those with incomes just above 133 percent of poverty, to $6,000 per person above subsidy thresholds. Families can opt for lower cost exposure, but only if they can pay higher premiums.

As US reforms unfold, it will be important to monitor access and affordability. The Affordable Care Act will provide billions of dollars in subsidies for premiums and cost sharing to address affordability for individuals and families with low or modest incomes. Even so, it is still possible that some of the insured will remain at substantial financial risk for care they cannot afford when sick and bills they cannot pay.

Even after the enactment of health reform, the United States will also remain unique among countries in that it covers low-income people in a separate program. This poses the dual challenge of promoting equity across programs and ensuring continuity of insurance. In the other ten countries in our survey, providers were typically paid the same amount regardless of patients’ incomes, which is not currently the case in the United States. Nor is it likely to be the case after full implementation of health reform. Avoiding coverage gaps as patients’ circumstances change will require creative efforts to enable single portals of entry for people to enroll in publicly sponsored and private insurance, and smooth transitions as families gain or lose eligibility for insurance. To the extent that provider networks also differ for those low-income insurance programs, continuity of care as well as insurance will remain at risk after reforms take effect.

http://content.healthaffairs.org/cgi/content/full/hlthaff.2010.0862v1

Comment: 

By Don McCanne, MD

Compared to other high-income nations, the health care financing system in the United States does not perform well. We pay more; we have greater problems paying medical bills; we have excessive out-of-pocket spending; we have greater hassles with insurers; and we have the greatest disparities in access and affordability based on income levels.

We clearly needed reform, but will the Patient Protection and Affordable Care Act (PPACA) correct these deficiencies? It looks grim. The law has perpetuated the flawed system that we already have, one based on the U.S. version of dysfunctional private insurance plans plus a welfare program – Medicaid.

PPACA does include some important insurance regulations such as guaranteed issue and removal of annual and life-time spending caps, but it doesn’t do much to end the administrative hassles that are designed to protect the insurers from loss (i.e., protect them from having to pay medical bills). In fact, by making plans with low actuarial values the new standard, patients will face even greater out-of-pocket expenses and administrative hassles when they access health care. The government subsidies are not adequate to reduce the problems that patients already have with paying their medical bills.

Although other countries have special provisions for low-income individuals, Medicaid is unique in that beneficiaries are enrolled in an entirely different program that generally pays much lower rates than do private insurers. Thus the Medicaid networks of willing providers can be quite different from the networks for the private insurers, which in themselves also can vary greatly from plan to plan. Care can be very disruptive as individuals move in and out of the Medicaid program because of fluctuations in their eligibility, or move between various private plans based on such factors as employment, place of residence, or premium affordability. Such disruptions can aggravate the access problems noted in this study.

Another important observation in this study is the protection
that is afforded by Medicare. Quoting from Schoen et al, “US adults under age sixty-five were significantly more likely to report insurance paperwork, disputes, or insurance surprises than were those sixty-five and older and covered by Medicare (35 percent compared to 16 percent). The high rates of insurance concerns among younger adults may stem from unstable coverage as well as complex benefit designs.”

What we needed was a program that includes everyone, funds care equitably, eliminates financial barriers to care, provides automatic life-long enrollment, provides choice of any health care professionals and facilities, and has public funding that would ensure adequate capacity in the system. A single payer, improved Medicare for all would have those goals.

Instead, we’ll be pouring even more money into the system we have, and still compare unfavorably to these other high-income nations, that is unless we are willing to do something about it. We need to tell our policy makers, “It’s the insurance, stupid!”

Consumers and Insurance: Experiences In Eleven Countries

By Chris Fleming
Health Affairs Blog
November 18, 2010

As the United States begins implementing health reform, how does the U.S. experience compare with that of other high-income countries? To answer that question, The Commonwealth Fund conducted its thirteenth annual health policy survey, this year focusing on access, cost, and care experiences. The survey findings were published today in a Health Affairs Web First article by Commonwealth Fund Senior Vice President Cathy Schoen and coauthors.

Overall, the survey identified significant differences between countries and found that US adults — even when insured — were the most likely to incur high medical expenses, spend more time on paperwork, and have more claims denied.

The countries surveyed were Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States.

Key findings include the following:

*  Twenty percent of US adults surveyed said they had had serious problems paying medical bills in the previous year. Responses to the same question from the other ten countries were in the single digits. US respondents were also significantly more likely than adults in other countries to have gone without care because of cost.

*  Thirty-five percent of US adults had out-of-pocket medical spending of $1,000 during the previous year, a far higher percentage than in any other country.

*  A lower proportion of adults in the United States (70 percent) than in all other countries except Sweden (67 percent) and Norway (70 percent) were confident that they would receive the most effective treatment when needed.

*  When asked about access to prompt medical care, 57 percent of US adults said they had seen a doctor or nurse the same or next day the last time they were sick and needed care. Switzerland had the most rapid access (93 percent). Adults in three other countries (Canada, Norway, and Sweden) reported longer waits than US adults.

*  Nearly one third of US adults (31 percent) reported either denial of payments by insurers or time-consuming interactions with insurers, a higher rate than in all other countries. Twenty-five percent of US respondents reported that their insurance company denied payment or did not pay as much as expected; 17 percent said they spent a lot of time on paperwork or disputes for medical bills or insurance — the highest rates in the survey.

*  The United States had the widest and most pervasive differences in access and affordability by income of the eleven countries. The United Kingdom had the least.

http://healthaffairs.org/blog/2010/11/18/consumers-and-insurance-experiences-in-eleven-countries/

And…

How Health Insurance Design Affects Access To Care And Costs, By Income, In Eleven Countries

By Cathy Schoen, Robin Osborn, David Squires, Michelle M. Doty, Roz Pierson and Sandra Applebaum
Health Affairs
November 18, 2010

US Insurance Reforms: Challenges Ahead
 
Concerns expressed by US respondents were concentrated in the working-age population that is the target of insurance reforms. In this age group, wide disparities by income for those insured throughout the year underscore the importance of the Affordable Care Act’s emphasis on benefits with income-related provisions. The law will expand eligibility for Medicaid to those earning 133 percent of the federal poverty level. It will also provide subsidies for premiums for people up to 400 percent of poverty and for cost sharing for people up to 250 percent of poverty.

However, by international standards, the United States will remain an outlier for cost sharing. The annual limits for the least expensive benefit option will range from $2,000 per person ($4,000 per family) for those with incomes just above 133 percent of poverty, to $6,000 per person above subsidy thresholds. Families can opt for lower cost exposure, but only if they can pay higher premiums.

As US reforms unfold, it will be important to monitor access and affordability. The Affordable Care Act will provide billions of dollars in subsidies for premiums and cost sharing to address affordability for individuals and families with low or modest incomes. Even so, it is still possible that some of the insured will remain at substantial financial risk for care they cannot afford when sick and bills they cannot pay.

Even after the enactment of health reform, the United States will also remain unique among countries in that it covers low-income people in a separate program. This poses the dual challenge of promoting equity across programs and ensuring continuity of insurance. In the other ten countries in our survey, providers were typically paid the same amount regardless of patients’ incomes, which is not currently the case in the United States. Nor is it likely to be the case after full implementation of health reform. Avoiding coverage gaps as patients’ circumstances change will require creative efforts to enable single portals of entry for people to enroll in publicly sponsored and private insurance, and smooth transitions as families gain or lose eligibility for insurance. To the extent that provider networks also differ for those low-income insurance programs, continuity of care as well as insurance will remain at risk after reforms take effect.

http://content.healthaffairs.org/cgi/content/full/hlthaff.2010.0862v1

Comment: 

By Don McCanne, MD

Compared to other high-income nations, the health care financing system in the United States does not perform well. We pay more; we have greater problems paying medical bills; we have excessive out-of-pocket spending; we have greater hassles with insurers; and we have the greatest disparities in access and affordability based on income levels.

We clearly needed reform, but will the Patient Protection and Affordable Care Act (PPACA) correct these deficiencies? It looks grim. The law has perpetuated the flawed system that we already have, one based on the U.S. version of dysfunctional private insurance plans plus a welfare program – Medicaid.

PPACA does include some important insurance regulations such as guaranteed issue and removal of annual and life-time spending caps, but it doesn’t do much to end the administrative hassles that are designed to protect the insurers from loss (i.e., protect them from having to pay medical bills). In fact, by making plans with low actuarial values the new standard, patients will face even greater out-of-pocket expenses and administrative hassles when they access health care. The government subsidies are not adequate to reduce the problems that patients already have with paying their medical bills.

Although other countries have special provisions for low-income individuals, Medicaid is unique in that beneficiaries are enrolled in an entirely different program that generally pays much lower rates than do private insurers. Thus the Medicaid networks of willing providers can be quite different from the networks for the private insurers, which in themselves also can vary greatly from plan to plan. Care can be very disruptive as individuals move in and out of the Medicaid program because of fluctuations in their eligibility, or move between various private plans based on such factors as employment, place of residence, or premium affordability. Such disruptions can aggravate the access problems noted in this study.

Another important observation in this study is the protection that is afforded by Medicare. Quoting from Schoen et al, “US adults under age sixty-five were significantly more likely to report insurance paperwork, disputes, or insurance surprises than were those sixty-five and older and covered by Medicare (35 percent compared to 16 percent). The high rates of insurance concerns among younger adults may stem from unstable coverage as well as complex benefit designs.”

What we needed was a program that includes everyone, funds care equitably, eliminates financial barriers to care, provides automatic life-long enrollment, provides choice of any health care professionals and facilities, and has public funding that would ensure adequate capacity in the system. A single payer, improved Medicare for all would have those goals.

Instead, we’ll be pouring even more money into the system we have, and still compare unfavorably to these other high-income nations, that is unless we are willing to do something about it. We need to tell our policy makers, “It’s the insurance, stupid!”

Consumers and Insurance: Experiences In Eleven Countries

By Chris Fleming
Health Affairs Blog
November 18, 2010

As the United States begins implementing health reform, how does the U.S. experience compare with that of other high-income countries? To answer that question, The Commonwealth Fund conducted its thirteenth annual health policy survey, this year focusing on access, cost, and care experiences. The survey findings were published today in a Health Affairs Web First article by Commonwealth Fund Senior Vice President Cathy Schoen and coauthors.

Overall, the survey identified significant differences between countries and found that US adults — even when insured — were the most likely to incur high medical expenses, spend more time on paperwork, and have more claims denied.

The countries surveyed were Australia, Canada, France, Germany, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States.

Key findings include the following:

*  Twenty percent of US adults surveyed said they had had serious problems paying medical bills in the previous year. Responses to the same question from the other ten countries were in the single digits. US respondents were also significantly more likely than adults in other countries to have gone without care because of cost.

*  Thirty-five percent of US adults had out-of-pocket medical spending of $1,000 during the previous year, a far higher percentage than in any other country.

*  A lower proportion of adults in the United States (70 percent) than in all other countries except Sweden (67 percent) and Norway (70 percent) were confident that they would receive the most effective treatment when needed.

*  When asked about access to prompt medical care, 57 percent of US adults said they had seen a doctor or nurse the same or next day the last time they were sick and needed care. Switzerland had the most rapid access (93 percent). Adults in three other countries (Canada, Norway, and Sweden) reported longer waits than US adults.

*  Nearly one third of US adults (31 percent) reported either denial of payments by insurers or time-consuming interactions with insurers, a higher rate than in all other countries. Twenty-five percent of US respondents reported that their insurance company denied payment or did not pay as much as expected; 17 percent said they spent a lot of time on paperwork or disputes for medical bills or insurance — the highest rates in the survey.

*  The United States had the widest and most pervasive differences in access and affordability by income of the eleven countries. The United Kingdom had the least.

http://healthaffairs.org/blog/2010/11/18/consumers-and-insurance-experiences-in-eleven-countries/

And…

How Health Insurance Design Affects Access To Care And Costs, By Income, In Eleven Countries

By Cathy Schoen, Robin Osborn, David Squires, Michelle M. Doty, Roz Pierson and Sandra Applebaum
Health Affairs
November 18, 2010

US Insurance Reforms: Challenges Ahead

Concerns expressed by US respondents were concentrated in the working-age population that is the target of insurance reforms. In this age group, wide disparities by income for those insured throughout the year underscore the importance of the Affordable Care Act’s emphasis on benefits with income-related provisions. The law will expand eligibility for Medicaid to those earning 133 percent of the federal poverty level. It will also provide subsidies for premiums for people up to 400 percent of poverty and for cost sharing for people up to 250 percent of poverty.

However, by international standards, the United States will remain an outlier for cost sharing. The annual limits for the least expensive benefit option will range from $2,000 per person ($4,000 per family) for those with incomes just above 133 percent of poverty, to $6,000 per person above subsidy thresholds. Families can opt for lower cost exposure, but only if they can pay higher premiums.

As US reforms unfold, it will be important to monitor access and affordability. The Affordable Care Act will provide billions of dollars in subsidies for premiums and cost sharing to address affordability for individuals and families with low or modest incomes. Even so, it is still possible that some of the insured will remain at substantial financial risk for care they cannot afford when sick and bills they cannot pay.

Even after the enactment of health reform, the United States will also remain unique among countries in that it covers low-income people in a separate program. This poses the dual challenge of promoting equity across programs and ensuring continuity of insurance. In the other ten countries in our survey, providers were typically paid the same amount regardless of patients’ incomes, which is not currently the case in the United States. Nor is it likely to be the case after full implementation of health reform. Avoiding coverage gaps as patients’ circumstances change will require creative efforts to enable single portals of entry for people to enroll in publicly sponsored and private insurance, and smooth transitions as families gain or lose eligibility for insurance. To the extent that provider networks also differ for those low-income insurance programs, continuity of care as well as insurance will remain at risk after reforms take effect.

http://content.healthaffairs.org/cgi/content/full/hlthaff.2010.0862v1

Compared to other high-income nations, the health care financing system in the United States does not perform well. We pay more; we have greater problems paying medical bills; we have excessive out-of-pocket spending; we have greater hassles with insurers; and we have the greatest disparities in access and affordability based on income levels.

We clearly needed reform, but will the Patient Protection and Affordable Care Act (PPACA) correct these deficiencies? It looks grim. The law has perpetuated the flawed system that we already have, one based on the U.S. version of dysfunctional private insurance plans plus a welfare program – Medicaid.

PPACA does include some important insurance regulations such as guaranteed issue and removal of annual and life-time spending caps, but it doesn’t do much to end the administrative hassles that are designed to protect the insurers from loss (i.e., protect them from having to pay medical bills). In fact, by making plans with low actuarial values the new standard, patients will face even greater out-of-pocket expenses and administrative hassles when they access health care. The government subsidies are not adequate to reduce the problems that patients already have with paying their medical bills.

Although other countries have special provisions for low-income individuals, Medicaid is unique in that beneficiaries are enrolled in an entirely different program that generally pays much lower rates than do private insurers. Thus the Medicaid networks of willing providers can be quite different from the networks for the private insurers, which in themselves also can vary greatly from plan to plan. Care can be very disruptive as individuals move in and out of the Medicaid program because of fluctuations in their eligibility, or move between various private plans based on such factors as employment, place of residence, or premium affordability. Such disruptions can aggravate the access problems noted in this study.

Another important observation in this study is the protection that is afforded by Medicare. Quoting from Schoen et al, “US adults under age sixty-five were significantly more likely to report insurance paperwork, disputes, or insurance surprises than were those sixty-five and older and covered by Medicare (35 percent compared to 16 percent). The high rates of insurance concerns among younger adults may stem from unstable coverage as well as complex benefit designs.”

What we needed was a program that includes everyone, funds care equitably, eliminates financial barriers to care, provides automatic life-long enrollment, provides choice of any health care professionals and facilities, and has public funding that would ensure adequate capacity in the system. A single payer, improved Medicare for all would have those goals.

Instead, we’ll be pouring even more money into the system we have, and still compare unfavorably to these other high-income nations, that is unless we are willing to do something about it. We need to tell our policy makers, “It’s the insurance, stupid!”

Congresswoman Jan Schakowsky
November 16, 2010

Today Rep. Jan Schakowsky (D-IL), a member of the bipartisan National Commission on Fiscal Responsibility and Reform, offered a comprehensive proposal to reduce the federal deficit without making middle class Americans foot the bill.  Schakowsky’s plan is an alternative to the Simpson-Bowles plan and would reduce the deficit by $427.75 billion in 2015, surpassing President Obama’s $250 billion target. Critically, the Schakowsky plan accomplishes deficit reduction without making cuts to essential federal expenditures that benefit the middle class.

http://schakowsky.house.gov/index.php?option=com_content&view=article&id=2777:schakowsky-alternative-to-simpson-bowles-deficit-reduction-plan&catid=21:2010-press-releases&Itemid=58

And…

Reviving the Economy, Cutting Spending and Debt, and Creating a Simple, Pro-Growth Tax System

By The Debt Reduction Task Force, Senator Pete Domenici and Dr. Alice Rivlin, Co-Chairs
Bipartisan Policy Center
November 2010

Strengthen Medicare for the Long Term: Transition to a Premium Support Option

Like today, Medicare enrollees will be in the traditional fee-for-service program unless they choose a private plan. However, if federal spending per enrollee for the benefits specified in legislation rises faster than GDP growth plus one percent, beneficiaries will have to pay an additional premium to cover the difference. They can avoid that additional premium, however, and potentially get higher quality health care, if they choose a private health plan offered on a new Medicare Exchange. The expectation is that increased competition among plans fostered by the Medicare Exchange, and increased beneficiary interest in these plans, will keep costs from rising rapidly and result in higher quality, more cost-effective health care.

This proposal will limit growth in federal support for Medicare per beneficiary to one percentage point per year higher than a five-year moving average of GDP growth. If Medicare spending per enrollee for the benefits specified in legislation rises at a faster rate, enrollees will have the option of paying an additional premium to cover the difference and remaining in the traditional Medicare program, or selecting a private insurance plan from the Medicare Exchange.

While the proposed premium support option resembles the current structure of Medicare Advantage, there are differences. Competition among plans will be enhanced by creating a federal Medicare Exchange, which will facilitate beneficiary choice and enrollment and increase the competitiveness of the market, leading to lower premiums.

This proposal will provide incentives for Medicare Exchange plans to develop products that will save beneficiaries money. Today, if a Medicare Advantage plan has very low costs, it cannot pay a rebate to enrollees; instead, it must increase benefits. Under this proposal, Medicare Exchange plans can offer beneficiaries relief from rising Medicare premiums. The Task Force plan might also increase political support – by Medicare beneficiaries, their children, and those approaching Medicare eligibility – for federal policies that promote cost containment in health care.

Asking beneficiaries to pay more for their Medicare coverage (or shift to a lower-cost plan) mirrors what has happened in private insurance over the past decade, with increases in patient cost-sharing to keep premium growth from exceeding income growth by too large a margin. Employers have generally opted to increase patient cost-sharing rather than increase the percentage of the premium that employees contribute. The former keeps employees enrolled in the plan and encourages more judicious use of health services.

http://bipartisanpolicy.org/system/assets/drupal/FINAL%20DRTF%20REPORT%2011.16.10.pdf

Comment: 

By Don McCanne, MD

The co-chairmen of President Obama’s deficit commission advanced a proposal that disappointed those of us who believe that the government has an important role in promoting a healthy and secure future for all of us. Erskine Bowles and Alan Simpson recommend reducing the deficit by cutting back on important social programs such as Medicare and Social Security, while failing to recommend tapping obvious potential revenue sources in our upside-down economy. Two members of their committee, Jan Schakowsky and Alice Rivlin, have now released alternative proposals.

Alice Rivlin is also co-chair, along with Pete Dominici, of The Debt Reduction Task Force from the Bipartisan Policy Center (BPC), an organization founded by Howard Baker, Tom Daschle, Bob Dole, and George Mitchell. Frankly, their report is also disappointing for basically the same reasons. It is very heavy on program reductions (though some are appropriate) and very light on seeking new revenues.

Discussed here is only one feature of the BPC recommendation: converting Medicare to a premium support program. This had been mentioned only cryptically in the Bowles/Simpson report, but more details are provided in the Rivlin/Domenici report (excepts above).

Premium support was a proposal advanced a dozen years ago by John Breaux, Bill Thomas, Bill Frist, and Bobby Jindal that barely failed to receive a super-majority vote in their Bipartisan Medicare Commission, and is now being trotted out again. It is a proposal to convert Medicare from a defined benefit to a defined contribution.

Premium support places a limit on the amount that the government contributes toward the Medicare beneficiaries’ premiums, exposing individuals to the increasing costs of health care. It then uses the leverage of higher individual premiums to encourage “voluntary” purchase of less expensive private plans in the marketplace.

Since private plans have much higher administrative costs, they can achieve lower premiums only by reducing benefits or increasing out-of-pocket costs for the beneficiaries, making coverage worse than under the traditional Medicare program. Instead of overpaying private plans as with the current Medicare Advantage program, the premium support underpays the private plans but allows them to obtain the balance from the Medicare beneficiaries. It is a plan to privatize Medicare that can have only disastrous consequences for Medicare beneficiaries.

In sharp contrast is the proposal of Jan Schakowsky. She would balance revenues and expenditures with the goal of reducing the deficit, as opposed to the unstated goals of Bowles/Simpson and Rivlin/Domenici to reduce government. Her recommended reductions in spending are carefully targeted to programs that many in America believe should be reduced anyway. Her proposed increased revenues not only would help wipe out the deficit, but they also would provide corrections to the current massive income transfer from middle-income workers to the very wealthy – one of the greatest social injustices in modern history.

Other than improving the way we would purchase pharmaceuticals, she has little to say about Medicare. Her position is that of protecting what we do have. We can go her one better on that. We can improve Medicare and then provide it for everyone. That frankly won’t reduce the deficit much, but it would provide us with much greater value for our health care taxes.

What more could we ask for out of our government than sustainable budgets that provide us with real value?

ACTION ALERT:  The heavy hitters are out in force, and they intend to dismantle as much of government as they can, in the name of “fiscally responsible hard choices.” It is imperative that President Obama and members of the Senate receive our clear and unrelenting message that we must both protect and improve our public programs dedicated to social justice. The House alone cannot take those away from us if we have the President and the Senate on our side.