PNHP

PPACA’s redistributive aspects are at great risk

PPACA’s redistributive aspects are at great risk

The Political Challenges That May Undermine Health Reform

By Theda Skocpol
Health Affairs
July 2010

Abstract

As with all major social legislation, years of decisions and disputes over implementation lie ahead for the Patient Protection and Affordable Care Act. Opponents at the state and national levels may seek the law’s judicial overturn or repeal. However, a far more serious effort to undermine the law will come about through challenges to various administrative arrangements, taxes, and subsidies to fund expansions of coverage. The redistributive aspects of health reform will be especially at risk, as business interests and groups of more-privileged citizens press for lower taxes, looser regulations, and reduced subsidies for low-income people.

The Staying Power Of Redistributive Reform

As the New York Times reporter David Leonhardt has observed, the new health reform legislation “is the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago.” The American rich have been getting richer; meanwhile, in contrast to the situation in many other nations attempting to mitigate rising market inequalities, the U.S. government in recent decades has exacerbated them through tax cuts that disproportionately benefit the rich. But the 2010 health reform promises subsidies to millions of working people of modest means, whose employers do not provide health insurance and who cannot afford to buy it themselves in the existing marketplace. Most of the revenues to pay for coverage expansion come from Americans making more than $250,000 a year, as well as from fees on businesses and cuts in subsidies to private insurers involved in Medicare.

Anti-Reform Interests

Cheering as this aspect of reform may be to analysts concerned about rising inequality in the United States, the political storms to come should not be underestimated. Many aspects of the U.S. political system give vastly disproportionate leverage to the privileged and well-organized wealthy interests. These are the very groups and interests that Obama is asking to pay for health care for their less-fortunate fellow citizens. They don’t like it, and they have potent weapons at their disposal to fight back: money for media campaigns, legions of lobbyists, and now, with the recent Supreme Court Citizens United decision that the government may not ban political spending by corporations in elections, an unlimited ability to contribute to candidates.

With every resource at their disposal, these groups will weigh in as regulations are written at the federal level—and also as rules for insurance exchanges are devised in multiple states. They will use the system to elect representatives, senators, governors, and state legislators who share their sympathies. They will lobby politicians’ staffs to make changes in taxes, subsidies, and rules. Much of this will happen out of public view; it will be complicated and might not gain much attention from the news media.

Subtle Efforts To Undermine The Law

In the end, the clamorous campaign to have provisions of health reform declared unconstitutional may distract attention from subtler efforts to undermine the law. We will not know for a decade or so how far opponents will succeed in stripping away fees and higher taxes on the privileged, undercutting regulations on private insurers, and reducing redistributive subsidies to the less privileged. But we can predict that much of the intended redistribution will be reversed, because it is so easy and tempting for public officials of either party to enact tax breaks for the rich or to adjust regulations and subsidies as demanded by well-heeled business interests. Each individual change will seem small enough so that particular legislators, even Democrats, can rationalize their votes, but the changes will add up.

Redistribution

The generational redistribution implied in the new health reform will also work to the advantage of those who seek leverage to reverse key provisions. Americans slated to get more help tend to be younger and poorer. Meanwhile, seniors on Medicare, especially rich ones, are not only relatively satisfied with the pre-2010 status quo, but they are also responsive to claims that reforms will hurt their health care. Senior citizens are reliable voters, and over the coming months, they may become even more anxious if discussions are launched about how to cut the deficit by reducing spending growth on Social Security or Medicare. Republicans may face difficulties if they have to explain how the nation can simultaneously oppose any tax increases and prevent cuts to Medicare. In short, the arguments they are using now to fight “Obamacare” may come back to haunt them.

But the logic here may be political, not fiscal. The preferred course for both Republicans and the increasing numbers of senior citizens who may vote for them in 2010 and 2012 may be to get rid of or greatly reduce federal subsidies for the uninsured. These subsidies could shrink well before they are delivered in 2014 and beyond, thus making reform much less redistributive in the end.

Battle Is Not Over

In short, the bitter U.S. war over comprehensive health reform is far from finished. It remains to be seen if the promise of the legislation can be realized in a polity divided by class and generation. A century-long quest for reform may have achieved an uneasy breakthrough. But no one who follows the politics of U.S. health care should think that the battle is over.

(Theda Skocpol is the Victor S. Thomas Professor of Government and Sociology at Harvard and an internationally recognized analyst of comparative and American politics. Skocpol’s books on social revolution and the state are considered fundamental texts and have been translated into several languages.)

http://content.healthaffairs.org/cgi/content/full/29/7/1288

Comment: 

By Don McCanne, MD

Today’s comment is very brief in order to give you more time to read these important excerpts from Theda Skocpol’s article. The redistributive aspects of any health financing reform are absolutely crucial, yet under the Patient Protection and Affordable Care Act, redistribution is at great risk. A single payer national health program would have much greater immunity against the vicious but opaque assault that will be taking place under the current law.

PPACA's redistributive aspects are at great risk

The Political Challenges That May Undermine Health Reform

By Theda Skocpol
Health Affairs
July 2010

Abstract
As with all major social legislation, years of decisions and disputes over implementation lie ahead for the Patient Protection and Affordable Care Act. Opponents at the state and national levels may seek the law’s judicial overturn or repeal. However, a far more serious effort to undermine the law will come about through challenges to various administrative arrangements, taxes, and subsidies to fund expansions of coverage. The redistributive aspects of health reform will be especially at risk, as business interests and groups of more-privileged citizens press for lower taxes, looser regulations, and reduced subsidies for low-income people.
The Staying Power Of Redistributive Reform
As the New York Times reporter David Leonhardt has observed, the new health reform legislation “is the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago.” The American rich have been getting richer; meanwhile, in contrast to the situation in many other nations attempting to mitigate rising market inequalities, the U.S. government in recent decades has exacerbated them through tax cuts that disproportionately benefit the rich. But the 2010 health reform promises subsidies to millions of working people of modest means, whose employers do not provide health insurance and who cannot afford to buy it themselves in the existing marketplace. Most of the revenues to pay for coverage expansion come from Americans making more than $250,000 a year, as well as from fees on businesses and cuts in subsidies to private insurers involved in Medicare.
Anti-Reform Interests
Cheering as this aspect of reform may be to analysts concerned about rising inequality in the United States, the political storms to come should not be underestimated. Many aspects of the U.S. political system give vastly disproportionate leverage to the privileged and well-organized wealthy interests. These are the very groups and interests that Obama is asking to pay for health care for their less-fortunate fellow citizens. They don’t like it, and they have potent weapons at their disposal to fight back: money for media campaigns, legions of lobbyists, and now, with the recent Supreme Court Citizens United decision that the government may not ban political spending by corporations in elections, an unlimited ability to contribute to candidates.
With every resource at their disposal, these groups will weigh in as regulations are written at the federal level—and also as rules for insurance exchanges are devised in multiple states. They will use the system to elect representatives, senators, governors, and state legislators who share their sympathies. They will lobby politicians’ staffs to make changes in taxes, subsidies, and rules. Much of this will happen out of public view; it will be complicated and might not gain much attention from the news media.
Subtle Efforts To Undermine The Law
In the end, the clamorous campaign to have provisions of health reform declared unconstitutional may distract attention from subtler efforts to undermine the law. We will not know for a decade or so how far opponents will succeed in stripping away fees and higher taxes on the privileged, undercutting regulations on private insurers, and reducing redistributive subsidies to the less privileged. But we can predict that much of the intended redistribution will be reversed, because it is so easy and tempting for public officials of either party to enact tax breaks for the rich or to adjust regulations and subsidies as demanded by well-heeled business interests. Each individual change will seem small enough so that particular legislators, even Democrats, can rationalize their votes, but the changes will add up.
Redistribution
The generational redistribution implied in the new health reform will also work to the advantage of those who seek leverage to reverse key provisions. Americans slated to get more help tend to be younger and poorer. Meanwhile, seniors on Medicare, especially rich ones, are not only relatively satisfied with the pre-2010 status quo, but they are also responsive to claims that reforms will hurt their health care. Senior citizens are reliable voters, and over the coming months, they may become even more anxious if discussions are launched about how to cut the deficit by reducing spending growth on Social Security or Medicare. Republicans may face difficulties if they have to explain how the nation can simultaneously oppose any tax increases and prevent cuts to Medicare. In short, the arguments they are using now to fight “Obamacare” may come back to haunt them.
But the logic here may be political, not fiscal. The preferred course for both Republicans and the increasing numbers of senior citizens who may vote for them in 2010 and 2012 may be to get rid of or greatly reduce federal subsidies for the uninsured. These subsidies could shrink well before they are delivered in 2014 and beyond, thus making reform much less redistributive in the end.
Battle Is Not Over
In short, the bitter U.S. war over comprehensive health reform is far from finished. It remains to be seen if the promise of the legislation can be realized in a polity divided by class and generation. A century-long quest for reform may have achieved an uneasy breakthrough. But no one who follows the politics of U.S. health care should think that the battle is over.
(Theda Skocpol is the Victor S. Thomas Professor of Government and Sociology at Harvard and an internationally recognized analyst of comparative and American politics. Skocpol’s books on social revolution and the state are considered fundamental texts and have been translated into several languages.)
http://content.healthaffairs.org/cgi/content/full/29/7/1288

Today’s comment is very brief in order to give you more time to read these important excerpts from Theda Skocpol’s article. The redistributive aspects of any health financing reform are absolutely crucial, yet under the Patient Protection and Affordable Care Act, redistribution is at great risk. A single payer national health program would have much greater immunity against the vicious but opaque assault that will be taking place under the current law.

PPACA’s redistributive aspects are at great risk

The Political Challenges That May Undermine Health Reform

By Theda Skocpol
Health Affairs
July 2010

Abstract

As with all major social legislation, years of decisions and disputes over implementation lie ahead for the Patient Protection and Affordable Care Act. Opponents at the state and national levels may seek the law’s judicial overturn or repeal. However, a far more serious effort to undermine the law will come about through challenges to various administrative arrangements, taxes, and subsidies to fund expansions of coverage. The redistributive aspects of health reform will be especially at risk, as business interests and groups of more-privileged citizens press for lower taxes, looser regulations, and reduced subsidies for low-income people.

The Staying Power Of Redistributive Reform

As the New York Times reporter David Leonhardt has observed, the new health reform legislation “is the federal government’s biggest attack on economic inequality since inequality began rising more than three decades ago.” The American rich have been getting richer; meanwhile, in contrast to the situation in many other nations attempting to mitigate rising market inequalities, the U.S. government in recent decades has exacerbated them through tax cuts that disproportionately benefit the rich. But the 2010 health reform promises subsidies to millions of working people of modest means, whose employers do not provide health insurance and who cannot afford to buy it themselves in the existing marketplace. Most of the revenues to pay for coverage expansion come from Americans making more than $250,000 a year, as well as from fees on businesses and cuts in subsidies to private insurers involved in Medicare.

Anti-Reform Interests

Cheering as this aspect of reform may be to analysts concerned about rising inequality in the United States, the political storms to come should not be underestimated. Many aspects of the U.S. political system give vastly disproportionate leverage to the privileged and well-organized wealthy interests. These are the very groups and interests that Obama is asking to pay for health care for their less-fortunate fellow citizens. They don’t like it, and they have potent weapons at their disposal to fight back: money for media campaigns, legions of lobbyists, and now, with the recent Supreme Court Citizens United decision that the government may not ban political spending by corporations in elections, an unlimited ability to contribute to candidates.

With every resource at their disposal, these groups will weigh in as regulations are written at the federal level—and also as rules for insurance exchanges are devised in multiple states. They will use the system to elect representatives, senators, governors, and state legislators who share their sympathies. They will lobby politicians’ staffs to make changes in taxes, subsidies, and rules. Much of this will happen out of public view; it will be complicated and might not gain much attention from the news media.

Subtle Efforts To Undermine The Law

In the end, the clamorous campaign to have provisions of health reform declared unconstitutional may distract attention from subtler efforts to undermine the law. We will not know for a decade or so how far opponents will succeed in stripping away fees and higher taxes on the privileged, undercutting regulations on private insurers, and reducing redistributive subsidies to the less privileged. But we can predict that much of the intended redistribution will be reversed, because it is so easy and tempting for public officials of either party to enact tax breaks for the rich or to adjust regulations and subsidies as demanded by well-heeled business interests. Each individual change will seem small enough so that particular legislators, even Democrats, can rationalize their votes, but the changes will add up.

Redistribution

The generational redistribution implied in the new health reform will also work to the advantage of those who seek leverage to reverse key provisions. Americans slated to get more help tend to be younger and poorer. Meanwhile, seniors on Medicare, especially rich ones, are not only relatively satisfied with the pre-2010 status quo, but they are also responsive to claims that reforms will hurt their health care. Senior citizens are reliable voters, and over the coming months, they may become even more anxious if discussions are launched about how to cut the deficit by reducing spending growth on Social Security or Medicare. Republicans may face difficulties if they have to explain how the nation can simultaneously oppose any tax increases and prevent cuts to Medicare. In short, the arguments they are using now to fight “Obamacare” may come back to haunt them.

But the logic here may be political, not fiscal. The preferred course for both Republicans and the increasing numbers of senior citizens who may vote for them in 2010 and 2012 may be to get rid of or greatly reduce federal subsidies for the uninsured. These subsidies could shrink well before they are delivered in 2014 and beyond, thus making reform much less redistributive in the end.

Battle Is Not Over

In short, the bitter U.S. war over comprehensive health reform is far from finished. It remains to be seen if the promise of the legislation can be realized in a polity divided by class and generation. A century-long quest for reform may have achieved an uneasy breakthrough. But no one who follows the politics of U.S. health care should think that the battle is over.

(Theda Skocpol is the Victor S. Thomas Professor of Government and Sociology at Harvard and an internationally recognized analyst of comparative and American politics. Skocpol’s books on social revolution and the state are considered fundamental texts and have been translated into several languages.)

http://content.healthaffairs.org/cgi/content/full/29/7/1288

Today’s comment is very brief in order to give you more time to read these important excerpts from Theda Skocpol’s article. The redistributive aspects of any health financing reform are absolutely crucial, yet under the Patient Protection and Affordable Care Act, redistribution is at great risk. A single payer national health program would have much greater immunity against the vicious but opaque assault that will be taking place under the current law.

Why patients disenroll from private Medicare Advantage plans

Why Consumers Disenroll from Medicare Private Health Plans

Medicare Rights Center
Summer 2010

This report analyzes data and case notes from the 475 cases presented in 2009 by consumers who called us about disenrolling from Medicare private health plans.

Reasons for Disenrollment (percentage of calls)

24.8% – Provider access problems
21.5% – Misinformation/marketing abuse
19.4% – Coverage problems for medical services
19.4% – Systems/data transfer problems
8.6% – Cost-sharing too high
7.2% – Part D coverage problems
3.2% – Premium increase

Provider Access Problems

The consumer problems in this category incorporate a wide range of provider access issues. They include general complaints and lack of understanding about the limits on provider access imposed by network-based plans, as well as specific concerns, such as the potential interruption of a valued relationship with a doctor who is being dropped from the plan’s network. Provider access problems are often prompted by an acute episode of illness or diagnosis; consumers seek to disenroll when their current plan will not cover care from a home health agency, skilled nursing or other rehabilitation facility, or from a particular specialist, such as a facility or doctor specializing in cancer treatment. This category also includes cases where consumers were misinformed about the limits on provider access before joining.

Disenrollment Due to Cancer 
 
Cancer diagnoses are implicated in a relatively small percentage — less than 5 percent — of the disenrollments, but these cases are some of the most heart-wrenching and most difficult to resolve for Medicare Rights Center caseworkers.

The majority of cancer disenrollment cases — 63.6 percent —  however, involve provider access. The limitations of the private plan networks become apparent after the consumer is referred to a hospital or cancer specialist that is out of network. Treatment of rare or advanced cancers in particular triggers referrals to specialty facilities, such as M. D. Anderson in Houston or Memorial Sloan-Kettering in New York City. During the open enrollment periods, the disenrollments are generally effective the following month. When a person is diagnosed with cancer outside of the open enrollment periods, however, rules that lock consumers into their Medicare Advantage plans for the year generally prevent disenrollment (unless the case also concerns misrepresentation or marketing fraud, as is sometimes the case), and therefore may impede access to the most appropriate cancer treatment facility.

http://www.medicarerights.org/pdf/Why-Consumers-Disenroll-from-MA.pdf

Comment: 

By Don McCanne, MD

This survey does not quantify the extent of patient dissatisfaction with Medicare Advantage plans since it was limited to individuals calling the Medicare Rights Center to find out about disenrolling from the private Medicare Advantage plans. But it does provide us with an understanding of why patients want out of their plans. First and foremost patients complain of a “lack of understanding about the limits on provider access imposed by network-based plans.”

The second most common complaint was about misinformation and marketing abuse. This was the primary reason for provider access complaints – the Medicare beneficiaries did not understand that their access would be limited to physicians in plan networks.

This has certainly been infuriating for those who have lost their choice of physicians by enrolling in the Medicare Advantage plans, but it has much greater implications under the Patient Protection and Affordable Care Act. Virtually all plans will have network-based restrictions.

President Obama promised us choice of health plans, but the marketing of his proposal was silent on the fact that virtually all of the plans would have limited access – limited choice of physicians and hospitals – because of provider network restrictions.

With the traditional Medicare program, everyone has free choice of their health care professionals and institutions. That should have been a prime goal of health care reform. It still can be should we decide to enact a single payer national health program – an improved Medicare for everyone.

Improve and strengthen Medicare by expanding it to all

The following text is the testimony that Dr. Margaret Flowers presented to the National Commission on Fiscal Responsibility and Reform at its June 30 hearing in Washington. Dr. Flowers is congressional fellow for Physicians for a National Health Program.

I am Dr. Margaret Flowers and I am here today on behalf of Physicians for a National Health Program, the leading physician research, education and advocacy organization in support of a truly universal single-payer health system in the United States. I will speak specifically about the contribution of health care costs to our national deficit and the evidence-based remedy to control these costs.

When compared to health care in other advanced nations, the United States excels in only one area – the amount of money spent per capita per year. Despite our high spending, the U.S. leaves a third of the population either uncovered or underinsured and thus vulnerable to financial ruin.

Medical debt is a leading cause of bankruptcy and foreclosure in our nation despite the fact that most families declaring medical bankruptcy had insurance when they began incurring such debt.

Our health outcomes are relatively poor, placing us 37th in the world, and we rank the highest in preventable deaths, over 100,000 preventable deaths per year, when compared to other advanced nations. It is clear that we are getting poor value in return for our health care dollar.

Health care costs, which are rising 2.5 percent faster than our GDP, are a leading driver of our financial deficit. In fact, if our health care costs were comparable to those in other advanced nations, which provide nearly universal health care with better outcomes, we would currently experience a budget surplus.

The recent health legislation, misleadingly titled the Patient Protection and Affordable Care Act (PPACA), lacks proven cost controls and is predicted to cause U.S. health care costs to rise faster than if there had been no reform at all (Centers for Medicare and Medicaid Services, April 2010) despite continuing to leave tens of millions out.

Given the impact of health care costs, members of this commission may attempt to decrease the deficit by cutting our public health insurance programs, Medicaid and Medicare; however, doing this would be a mistake because it would increase poverty, worsen health outcomes and increase costs.

Since its enactment nearly 45 years ago, Medicare has substantially lowered poverty among the elderly. Studies show that health disparities in the U.S. start decreasing when our population reaches the age of 65. And the cost of health care per beneficiary is rising more slowly for those on Medicare than for those with private health insurance.

Medicaid and Medicare have not caused our rising health care costs but are victims of our fragmented and failed market-based model of health care financing. Shifting the cost of health care from the taxpayer to the patient will not magically make these health care costs disappear or become sustainable.

The solution to our economic crisis is to jettison the costly failed market model of health care and adopt a publicly financed and independently delivered national improved Medicare for All. This is commonly known as “single payer.” A national improved Medicare for All system has myriad benefits:

* Administrative savings of approximately $400 billion per year, which is enough to provide comprehensive high quality health care to all who are uninsured and underinsured.

* Ability to negotiate for pharmaceutical prices as a monopsony which would lower costs by about 40 percent and bring our prices in line with those of other advanced nations.

* Inherent cost controls of global budgeting for health facilities, negotiated fees, bulk purchasing and rational, rather than profit-driven, allocation of capital expenditures and health resources.

* Ability to identify outliers and develop quality improvement tools.

* Eliminate the burden of rising employee health care costs on businesses.

* Enhance the competitiveness of U.S. products in international markets.

* Liberate our population to pursue advanced education or entrepreneurial enterprises.

* Allow older workers to retire which would increase job opportunities for our younger workers.

* Stimulate the economy because families would have more money for discretionary spending.

* Improve the health, and therefore the productivity, of our workforce.

* Eliminate bankruptcy and foreclosure due to medical debt.

* Eliminate the spend-down required for those who need long-term care funded by Medicaid.

* Provide true health security to our population so that nobody has to choose between necessary medical care and other necessities such as housing, food, education and clothing.

Given these multiple economic benefits – and I have not begun to describe the ways in which national improved Medicare for All would improve patient choice and quality of health care – it is no surprise that the single payer approach is supported by the majority of those in the U.S. and the majority of American physicians. This was evident once again last Saturday in the town meetings sponsored by America Speaks when participants across the nation demanded single payer as an option to solving the health care crisis and 71 percent voted not to cut Medicaid and Medicare.

Private health insurance is rapidly becoming a thing of the past. There is a steady trend in fewer people being enrolled in employee-sponsored health plans. This is expected to increase under PPACA as businesses have an incentive to drop insurance benefits and pay the lower cost penalty.

There is a steady trend in people choosing high deductible plans which leave them financially vulnerable in their time of need. As people enter the individual market, those with health conditions will find it difficult to afford adequate insurance.

The trends for those who are uninsured and underinsured will continue upward. Under PPACA, billions of public dollars will be used to subsidize rising private insurance premiums for policies that cover fewer and fewer services. The result is a flow of patient and public dollars into the coffers of private insurance corporations with declining return in terms of health care. This trend is not sustainable.

The alternative scenario of a national improved Medicare for All will save lives and save money. National improved Medicare for All will place our nation on the path of becoming one of the best health systems in the world – something of which we can all be proud.

This commission has the ability to recommend creating a financially sustainable universal health system. I urge the members of this commission to recommend addressing the deficit through adopting this most popular approach: national improved Medicare for All. Don’t cut Medicare. Protect it, improve it and expand it to cover everyone.

Why patients disenroll from private Medicare Advantage plans

Why Consumers Disenroll from Medicare Private Health Plans

Medicare Rights Center
Summer 2010
This report analyzes data and case notes from the 475 cases presented in 2009 by consumers who called us about disenrolling from Medicare private health plans.
Reasons for Disenrollment (percentage of calls)
24.8% – Provider access problems
21.5% – Misinformation/marketing abuse
19.4% – Coverage problems for medical services
19.4% – Systems/data transfer problems
8.6% – Cost-sharing too high
7.2% – Part D coverage problems
3.2% – Premium increase
Provider Access Problems
The consumer problems in this category incorporate a wide range of provider access issues. They include general complaints and lack of understanding about the limits on provider access imposed by network-based plans, as well as specific concerns, such as the potential interruption of a valued relationship with a doctor who is being dropped from the plan’s network. Provider access problems are often prompted by an acute episode of illness or diagnosis; consumers seek to disenroll when their current plan will not cover care from a home health agency, skilled nursing or other rehabilitation facility, or from a particular specialist, such as a facility or doctor specializing in cancer treatment. This category also includes cases where consumers were misinformed about the limits on provider access before joining.
Disenrollment Due to Cancer
Cancer diagnoses are implicated in a relatively small percentage — less than 5 percent — of the disenrollments, but these cases are some of the most heart-wrenching and most difficult to resolve for Medicare Rights Center caseworkers.
The majority of cancer disenrollment cases — 63.6 percent —  however, involve provider access. The limitations of the private plan networks become apparent after the consumer is referred to a hospital or cancer specialist that is out of network. Treatment of rare or advanced cancers in particular triggers referrals to specialty facilities, such as M. D. Anderson in Houston or Memorial Sloan-Kettering in New York City. During the open enrollment periods, the disenrollments are generally effective the following month. When a person is diagnosed with cancer outside of the open enrollment periods, however, rules that lock consumers into their Medicare Advantage plans for the year generally prevent disenrollment (unless the case also concerns misrepresentation or marketing fraud, as is sometimes the case), and therefore may impede access to the most appropriate cancer treatment facility.
http://www.medicarerights.org/pdf/Why-Consumers-Disenroll-from-MA.pdf

This survey does not quantify the extent of patient dissatisfaction with Medicare Advantage plans since it was limited to individuals calling the Medicare Rights Center to find out about disenrolling from the private Medicare Advantage plans. But it does provide us with an understanding of why patients want out of their plans. First and foremost patients complain of a “lack of understanding about the limits on provider access imposed by network-based plans.”
The second most common complaint was about misinformation and marketing abuse. This was the primary reason for provider access complaints – the Medicare beneficiaries did not understand that their access would be limited to physicians in plan networks.
This has certainly been infuriating for those who have lost their choice of physicians by enrolling in the Medicare Advantage plans, but it has much greater implications under the Patient Protection and Affordable Care Act. Virtually all plans will have network-based restrictions.
President Obama promised us choice of health plans, but the marketing of his proposal was silent on the fact that virtually all of the plans would have limited access – limited choice of physicians and hospitals – because of provider network restrictions.
With the traditional Medicare program, everyone has free choice of their health care professionals and institutions. That should have been a prime goal of health care reform. It still can be should we decide to enact a single payer national health program – an improved Medicare for everyone.

RECOMMENDATION: HMO exemption in state single-payer legislation must be specific and narrow

By David Himmelstein, Kip Sullivan & Steffie Woolhandler
PNHP 2010 Spring Newsletter

The single-payer model precludes private insurance that duplicates the public coverage – a measure required both to control costs and to avoid the emergence of two-class care. The question of how to treat nonprofit, staff- and group-model HMOs is complex because they combine a nonprofit provider of care (clearly acceptable in a single-payer model) with a private insurance plan (which is not acceptable). After much debate, PNHP decided to include such organizations in its proposals, but with tight restrictions to minimize the problems inherent in the insurance component of HMOs.

Because the term “HMO” has been used to cover a wide variety of insurers, it is important that legislation clearly define the parameters for HMOs that could participate in a single-payer system, and spell out the restrictions on participating HMOs. Failing this, private insurers would surely exploit any exemption for HMOs to maintain their stranglehold on the health care system.

Both PNHP’s proposals and H.R. 676 (the single-payer legislation sponsored by Rep. John Conyers; you can find the legislation on the PNHP website at: https://pnhp.org) have spelled out the key features that distinguish HMOs allowed to continue under a single-payer system from those that would be proscribed. Specifically, participating plans must:

(1) be nonprofit;
(2) “actually deliver care in their own facilities” through salaried
physicians who are employees (not contractors) of the HMO;
(3) not use their capitation or budget payments to cover hospital services (hospital services would be paid for through a global budget paid directly to the hospital); and
(4) not offer financial incentives based on utilization.

Very few HMOs will qualify under this definition.

When single-payer supporters in California drafted single-payer legislation (the current version is S.B. 810), they inserted language into the bill that was intended to exempt Kaiser Permanente. However, the language used in the bill leaves the door open to many private insurance firms who could label themselves “integrated health care delivery systems,” “independent practice associations,” or “integrated service networks” and hence qualify them to receive global budgets or capitation payments from the single payer.

The potential for confusion was illustrated in Minnesota where legislators introduced legislation (S.F. 2324 / H.F. 2522) modeled on SB 840 (the predecessor to S.B. 810) in May 2007. The drafters stated their intention to exclude private health plans, including HMOs. However, an analysis by the research office for the Democratic Farmer Labor Party caucus in the Minnesota House of Representatives stated that the bill did permit “health plans” to participate.

To avoid confusion, and the possibility that private insurers could slip through a loophole, we recommend that any single-payer legislation that proposes to exempt HMOs use either H.R. 676’s definition of “HMO” or a similarly narrow and specific definition.

What do the revised Anthem Blue Cross prices mean?

WellPoint Scales Back Rate Increases Sought in California

By Avery Johnson
The Wall Street Journal
July 1, 2010

Health insurer WellPoint Inc. is backing off its plan to increase prices by as much as 39% for individuals in California, instead seeking rates for this year that it said would result in a $100 million loss for the company there.

On Wednesday, WellPoint’s Anthem Blue Cross unit told the California Insurance Department that it wants to increase prices for individual policyholders by an average of 14%, down from the 25% average it had previously sought.

“The actual rates we would need are higher than this, but we made a business decision to get a rate implemented,” said Brian Sassi, WellPoint’s president and chief executive of its consumer business unit.

Wellpoint had been hammered for months by the Obama administration and consumer advocates over the size of its initial rate proposal. Angela Braly, its chief executive, and other insurance executives contend that the rising cost of care and demands for higher reimbursement from providers are driving premiums—and that the federal health-overhaul law didn’t do enough to control costs.

WellPoint plans to file 2011 rates in California that do cover costs, they said.

Len Nichols, a health economist at George Mason University, said that WellPoint has “been asserting the point that, ‘You’ve got to understand we can’t control costs.’ And that point has been made, and the message has been heard.”

http://online.wsj.com/article/SB10001424052748704334604575339284211797328.html?mod=googlenews_wsj

Comment:

Don McCanne, MD

After withdrawing a request for an average 25 percent increase in premiums for individual health plans in California, Anthem Blue Cross is now asking for an average 14 percent increase, which they claim will result in a loss that they will make up with 2011 premium increases. With medical inflation, a further increase in adverse selection, and an adjustment to eliminate losses, next year’s premium increases will be even more intolerable.

The Obama administration and members of Congress are critical of these increases, blaming Anthem Blue Cross for excessive profits – as if a $100 million loss in this market somehow reflects egregious profits (though, of necessity, they are profitable in other markets).

Obama and Congress are totally off target when they blame the private insurers. The private insurance model does not and cannot work to control costs and insure everyone, no matter how much market advocates wish it could. It is Obama and Congress who bear much of the blame because they were the ones who decided to keep the private insurers in charge.

Although we can blame our elected leaders now, if we don’t communicate to them clearly that they must bring us the reform that we need – a single payer national health program – then we will be left with only ourselves to blame.

Single-payer advocate: 'Don’t shred our safety nets'

By Katie Robbins

The following text is the testimony that Katie Robbins, national organizer for Healthcare NOW (www.healthcare-now.org), presented to the National Commission on Fiscal Responsibility and Reform on June 30 in Washington.

Thank you for this opportunity to testify. My name is Katie Robbins and I am here on behalf of Healthcare NOW, an organization founded in 2004 to support bill H.R. 676, “the U.S. National Health Care Act” or Expanded and Improved Medicare for All. With membership in 50 states, Healthcare NOW has broad support for single-payer health care.

Healthcare NOW opposes any consideration of cutting, privatizing or raising age eligibility for Social Security, Medicare, and Medicaid.

We seek to strengthen, not weaken, our social safety net. If passed, H.R. 676 would establish a national single-payer Medicare for All system granting everyone in the United States access to comprehensive, high-quality health care using our existing privately run infrastructure and a progressive financing that will guarantee coverage for all necessary medical care without financial or other barriers.

According to Harvard University studies, eliminating the waste of the multi-payer private insurance industry and moving to a single-payer system will save $400 billion a year. More savings are found in cost controls that a single-payer system can provide such as negotiating drug costs and medical equipment, and global budgeting for hospitals.

Since H.R. 676 was introduced in 2003, it has received tremendous support including endorsements by 582 union organizations in 49 states, the U.S. Conference of Mayors, 63 local governments which include 10 of the nation’s 30 largest cities, the Episcopal Church, the United Methodist Church, the Presbyterian Church, the Unitarian Universalist Church, the Union for Reform Judaism, the United Church of Christ, and the Buddhist Peace Fellowship, and the majority of nurses, patients, and physicians.

Broad support for a single-payer Medicare for All system continues even after the new health law has passed. For example, this past Saturday, June 26, America Speaks, a privately run company, organized “town hall meetings” in 20 cities across the country to discuss the nation’s deficit. America Speaks received funding linked to the Peter Peterson Foundation; the same foundation which is also funding staff to this Fiscal Commission. (Peterson is known to be vocally in support of cutting and privatizing Social Security and Medicare.)

America Speaks claimed that all options would be considered, yet the materials distributed at the events did not include an option to support single-payer health care as a means of controlling health care costs. Despite efforts to silence support for single payer, many participants demanded the option to vote on a single-payer type health care system, which would ultimately reduce costs by making health care more efficient rather than just cutting services in Medicare and other public sector programs. Participants also voted overwhelmingly for defense cuts and for progressive taxation.

Because cost controls are notably absent from the new health law, the National Commission on Fiscal Responsibility and Reform should listen to what the public is urging them to do, and address meaningful cost control in our health care system, which only a single-payer system can provide, as a means to balance the nation’s budget.

We urge you to address cost controls immediately. Healthcare NOW and our network of supporters and allied organizations urge Congress to work to defeat any bill to cut, privatize or dismantle our social safety net – Social Security, Medicare, and Medicaid. We demand the enactment of an expanded and improved Medicare for All, H.R. 676, to fix our economy and our (still) broken health care system.