PNHP

Proof that individuals game the individual mandate

Proof that individuals game the individual mandate

Short-term insurance buyers drive up cost in Mass.

By Kay Lazar
The Boston Globe
June 30, 2010

The number of people who appear to be gaming the state’s health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a long-awaited report released yesterday from the Massachusetts Division of Insurance.

The result is that insured residents of Massachusetts wind up paying more for health care, according to the report.

“The active members subsidize some of the costs tied to those individuals who terminate within one year,” the report says.

http://www.boston.com/news/health/articles/2010/06/30/short_term_insurance_buyers_drive_up_cost_in_mass/?rss_id=Boston.com+–+Health+news

Report:
http://www.mass.gov/Eoca/docs/doi/Companies/adverse_selection_report.pdf

Comment: 

By Don McCanne, MD

During the reform process the concern was expressed repeatedly that an individual mandate – requiring individuals to purchase their own health insurance – would result in gaming the system. People would enroll when they needed expensive care, and then drop out after the care was completed. The experience in Massachusetts has demonstrated that it did not take long for the public to learn this game, for this is precisely what has happened. Nevertheless, the individual mandate is now the law of the land.

Options being considered to reduce this form of adverse selection include, as examples, allowing open enrollment for only one month per year, or increasing the penalty for remaining uninsured. Although such measures might reduce this tendency to game the system, they will not eliminate it.

It is the structure of the financing system that is fundamentally flawed. It cannot be fixed merely by tweaking the mandate, nor by tweaking the thousands of other provisions in this dysfunctional system. It needs to be replaced with a structurally sound system.

With a single payer national health program the issue of an individual mandate would be moot since everyone would be enrolled, automatically, throughout life.

Scare Tactics, Spin and Health Care

Liberals and Single-Payer

By HELEN REDMOND
Counterpunch, June 29, 2010

Liberals are on a mission to convince a skeptical public the Patient Protection and Affordable Care Act (known by the last three letters, ACA) should not only be supported, it’s actually a good piece of legislation, a step in the right direction. Nothing could be further from the truth.

In their article on the website Salon.com last month titled “A Practical Guide Forward for Progressives on Health Care,” authors Ellen R. Shaffer and Judy Norsigian admonish health care activists, particularly supporters of single-payer, for not enthusiastically promoting the ACA. Then they warn if we don’t stop “simmering” because we’re “convinced that it [the ACA] did too much for private insurers and too little for average Americans,” we’re playing into the “right’s hand.”   

It is incomprehensible how two long-standing feminists, articulate champions of a women’s right to control their bodies, Norsigian’s Our Bodies Ourselves — a seminal book that launched the movement for women’s rights in health care — could compromise away their core values and beliefs and shill for a piece of legislation that further restricts women’s reproductive rights. The Stupak-Pitts Amendment should have been an automatic deal breaker for anyone pro-choice. In a second slap in the face to women, President Obama signed an executive order ensuring no federal money could be used for elective abortions even though the Hyde Amendment already guarantees it. Shaffer and Norsigian should have been outraged at Obama’s placating of anti-abortion fanatics. These fierce advocates for women’s health should have publicly denounced and withdrawn their support for the misogynist legislation. Instead, they supported the Democrats who bargained away a woman’s right to control her own body to rabid Blue Dogs and religious plankton, thus eroding abortion rights even further.  

No mention of the restriction on abortion in their article (except to say they were “disappointed”), or the life changing impact it will have on women, especially poor women. Instead they recommend: “Progressives should appreciate that he [Obama] overcame obstacles that have sunk every reform effort over the past 10 years and managed to sign a bill into law.”

Shaffer and Norsigian, in one of America’s longest and most politically toxic traditions aimed exclusively at the left, tell us to suck it up, stop criticizing the president, the Democratic Party and inadequate legislation no matter how disgusted or disappointed you feel. Or else! Or else you, yes you the two women write, are “… handing control of the country back to the most extremist Republican Party in history.”

Really? More extreme than Reagan or the Bushes?   

When Democrats in power sell out to corporate interests, pass legislation that falls far short of campaign promises and their populist rhetoric resonates less and less with an angry electorate, “progressives” in the Democratic Party set themselves two tasks: scare and spin. They create panic and fear of the Republican Party regaining congressional seats, the presidency and exaggerate, lie (or lies of omission) about the effects of reform legislation.

The passage of the ACA is a classic example. In the end, desperate for a victory no matter how hollow, establishment liberals were willing to concede anything in order to pass anything.

Norsigian and Shaffer assert the insurance industry is “predatory, dishonest and parasitic” and admit “we would be better off without it.” They’re right, but they don’t believe it’s possible to put them out of business. Instead, we must always and everywhere be vigilant, forever engaged in thousands of battles against every insurer, in every state, as well as ready to fight with employers who eliminate benefits, increase cost sharing, discriminate against women or drop coverage.

These separate battles have been going on for decades. It’s a divide and conquer loser strategy. The predatory, dishonest and parasitic insurance industry has to be eliminated. That is the lesson we have learned the hard way over decades in this country and that is the prerequisite to create the health care system Norsigian and Shaffer say they want. Yet the authors were not active in the nation-wide, grassroots single-payer movement. Instead they supported the public option: another dead end proposal and diversion from the struggle for single-payer.

Their article struggles unconvincingly and in a patronizing tone to convince those of us who wanted fundamental change (single-payer) to abandon that goal and work to improve the ACA.

Norsigian and Shaffer tell us there are four myths about the legislation that have duped us into less than sanguine support of ACA.

Myth: “Progressive activists should ignore or undermine the new law which will get us to single payer more quickly.”

Single-payer activists aren’t ignoring the new law, we are vocal critics of it. We unapologetically opposed the passage of the ACA because it enriches and further entrenches the insurance industry. Our mission is to continue exposing insurance company abuses. It’s not hard to do because of their sheer audacity. A few days after the bill was signed, insurers argued coverage of children with disabilities wouldn’t begin immediately as President Obama had publicly announced. In Massachusetts, the predators tried to increase premiums up to 30 percent. This month Obama summoned the parasites to a private meeting at the Whitehouse and warned them not to use the bill “as an opportunity to enact unjustifiable rate increases that don’t boost care and inflate their bottom lines.” Does anyone believe the insurers won’t?    

Ron Pollack of Families USA, Kathleen Sebelius, the Secretary of Health and Human Services, the remnants of Health Care for America Now (HCAN) have launched a national campaign to sell the bill to the public. Single-payer supporters need to be similarly engaged but in the opposite direction, to expose and explain the not-so-fine print of the ACA: no caps on premiums; allows for gender rating in large group plans with more than 100 hundred employees; permits employers and insurers to charge three times more based on age and certain health conditions; Stupak-Pitts anti-abortion amendment; and millions of undocumented immigrants denied health care.     

Myth: “The new law won’t save money because the insurance industry is still standing.”   

The reality is the legislation cannot control costs. The cost drivers of the current system remain in place: no regulation on insurance premiums; excessive and wasteful administrative costs; Medicare forbidden to negotiate drug prices; and outrageous insurance and pharmaceutical profits.

Myth: “The insurance industry is still standing because President Obama made a backroom deal.”

Norsigan and Shaffer argue Obama made transparent-to the-public deals with the insurance and drug industries. What planet are they on? The fact is Obama, Kennedy, and Baucus met privately and made deals with America’s Health Insurance Plan’s (AHIP) CEO Karen Ignagi and Billy Tauzin, the former CEO of PhRMA. C’mon. The health industry spent $3 billion lobbying members of Congress from 2008-2009. That money buys behind the scenes access, influence and agreements. Like a thief in the night, Tauzin went to the Whitehouse and demanded and got from President Obama the extension of patents for biotech drugs to 12 years; no drug reimportation from Canada; and no negotiating for drug prices in the Medicare program. I don’t recall the health care summit at the Whitehouse with all the “players” at the table, cameras flashing and videos recording when that billion dollar deal
went down.  

Myth: “The country is ready to go for a Medicare-for-all single-payer system, run by the government.”

The authors believe the public has “mixed feelings about the government.” Not according to numerous polls.

A Kaiser Poll in July, 2009 found 58 percent of Americans support “A national health plan in which all Americans would get their insurance through an expanded, universal form of Medicare for all.” Another Kaiser poll found 49 percent of Americans support “Having all Americans get their insurance from a single government plan.” Doctors want single-payer, too. In 2008, a survey of physicians in the Annals of Internal Medicine found 59% agreed either “strongly” or “generally” with the statement: “In principle, do you support or oppose government legislation to establish national health insurance.”

The authors have “mixed feelings” about a single-payer, government-run health system, it’s not the American people.

At the end of the article the authors assert, “With the new law, we have won policy space to further challenge corporate control, including control of the health care system.” Again, what planet are Shaffer and Norsigian on? How does giving the predatory, dishonest and parasitic insurance industry $447 billion in taxpayer money and a mandate to punish those who don’t buy their defective product help our side to challenge or control them?

John Nichols, a liberal writer for The Nation and some time supporter of single-payer, engages in scare and spin, too. In his article titled, “The Unexpected Winning Issue for Democrats: Healthcare,” he warns Republicans are gearing up to repeal the ACA. Nichols reports Republican Senate candidate Carly Fiorina still has a “Repeal It!” petition on her campaign website. We’re supposed to be afraid of that? Republican nutjob Ron Johnson who is challenging Russ Feingold is a credible threat to overturning the legislation because he asserts, “The health care bill is the greatest assault on our freedom in my lifetime. It must be repealed.” Please! LOL.

Scare tactics applied, Nichols goes on to celebrate a recent poll showing increased support for the ACA, “as imperfect as it may be.” Imperfect is an understatement. Moreover, he’s happy 51 percent of Americans trust Democrats to do a better job [than Republicans] of responding to health care issues. Should undocumented workers, women who want abortions and the 23 million who still won’t be insured in 2019 trust the Democrats?  

Nichols counsels, “Smart Democrats will run as savvy backers of reform who talk about it as a first step…” The legislation is not a first step, it is a step backwards and to argue otherwise is simply dishonest.  

Millions of Americans don’t support the bill because they don’t understand its implications (it’s 2000-pages and regulations are still be written), or they flat out reject the ACA because it doesn’t go far enough; it’s not change they can believe in. And those who oppose the bill are not all Teabaggers, either.

Ultimately for liberals like Shaffer, Norsigian and Nichols the reelection of Democrats trumps the needs of Americans literally dying for fundamental health care reform. Years from now when the ACA is completely discredited and understood as yet another failed attempt to reform the health care system, liberals that engaged in scare and spin tactics and provided cover for a very bad bill that betrays the majority of people will have much to answer for.   

Helen Redmond is a single-payer activist with the Chicago Single-Payer Action Network. She can be reached at: redmondmadrid@yahoo.com

http://www.counterpunch.org/redmond06292010.html

Vermont attorney general’s office must reconsider Leddy decision

Editor’s note: What follows is an open letter from James Marc Leas, an attorney in Burlington to the Vermont Attorney General’s office. The letter is followed by the AG office’s original response.

June 27, 2010

Dear Attorney General Sorrell and Deputy Attorney General Janet C. Murnane:

Thank you for the letter dated June 25, 2010 from Deputy Attorney General Janet C. Murnane. I was very concerned when I submitted my June 21, 2010 letter to you. But now I am far more concerned about violation of the Vermont Commission on Health Care Reform statute than I was then. I request further reconsideration based on the following points.

1. Deputy Attorney General Murnane’s letter admits that “the AARP itself appears to have substantial financial arrangements or relations with several insurance companies; however, we are not aware of any information which shows that Mr. Leddy himself has any relation to any insurance company, official or otherwise.”

I would also respectfully ask you to consider that Ms. Murnane’s letter admits that Mr. Leddy serves as President of the Vermont AARP and servers on an advisory council of the national AARP. That role is what gives him the relation to the insurers.

Since organizations are not alive, it is the people who run organizations who carry out the official relations for the organization. In his role as top officer of the Vermont AARP Mr. Leddy has the responsibility for official relations of the Vermont AARP with the insurers with which the AARP holds lucrative contracts. In fact, the AARP itself admits that the AARP mission includes providing the health care products and that the Vermont AARP President’s job includes achieving this mission [1].

2. Subsection 901(b)(2)C recognizes that a person can have a connection with the operation of a health care insurer without being an employee of a health care insurer. Ms. Murnane’s letter does not address this possibility though she correctly quotes its terms: “the two nonvoting members with experience in health care shall not … in any manner, be connected with the operation of a health care provider or insurer…”

I would respectfully ask you to consider that facilitating sales of health care insurers connects AARP with the operation of health care insurers. While the AARP states that it does not itself sell health insurance, the AARP does offer health insurance products and license its trademark for the sale of health insurance products by the insurers. By offering itself as the public face that facilitates sales of insurance company products AARP is connected with the operation of health care insurers and is performing an operation of the health care insurers.

The President of the Vermont AARP is responsible for achieving the caring and trustworthy public face the insurers require to sell their wares and for achieving the mission of the AARP, which includes offering these health insurance products for health insurers and licensing the AARP name to health insurers in exchange for hundreds of millions of dollars of licensing revenue from the insurers.

AARP portrays itself as so caring and trustworthy that, not just Jim Leddy, but all of AARP’s state presidents, its entire national board of directors, and all its national officers serve as unpaid volunteers. Where, as here, hundreds of millions of dollars are at stake for the organization, such volunteering appears to be a strategic policy to maintain the needed kind, caring, trustworthy public face that makes the AARP name valuable for its lucrative trademark licensing and its extensive lobbying.

One cannot be a top official of the AARP and not in at least some manner be connected with its offering, licensing and public face operations. The AARP receives half its income from insurers for these operations so this is a substantial part of its efforts. The issue is whether the President of the Vermont AARP is connected with the real and substantial AARP operation of being the public face for the insurers.

Instead of addressing whether the President of the Vermont AARP is “in any manner” involved in the high dollar connection of AARP with health insurers in his role as top official of the Vermont AARP and a member of the AARP national policy council, Ms. Murnane’s letter goes elsewhere. Her letter states, “his unpaid positions with the AARP do not include the authority or responsibility to operate a health care provider or insurer, and the audited records of the AARP make it reasonably clear that the AARP itself is neither a health care provider nor an insurer.”

Her letter does not address the statutory issue of how the President of the Vermont AARP can possibly avoid any connection with the AARP offering, licensing, and public face operation of health care insurers with whom the AARP has hundreds of millions of dollars of revenue from licensing contracts. I would respectfully ask you to consider that it is the fundamental job of the President to act vigorously to ensure the success of the lucrative AARP offering, licensing, and public face operation.

3. Ms. Murnane’s letter admits that the AARP holds contracts with health care insurers. Top officers, including the President of an organization, are responsible for making and performing contracts of the organization. The President of the Vermont AARP is the top responsible person in Vermont [2].

Not only would he be responsible for making or performing business contract with health care insurers, he would also have a fiduciary responsibility to the AARP to keep such lucrative contracts going while offering advice to the commission. This is not a matter of integrity. This is a matter of fiduciary responsibility in his role as AARP President.

Nothing in Ms. Murnane’s letter recognizes or addresses how a President of the Vermont AARP can be said to be free of all such relations, connections, and responsibility for making and performing the lucrative contracts that AARP has with heath care insurers. And how the President can avoid his fiduciary responsibility to AARP to maintain those contracts for that organization while serving on the Commission.

Finally, Ms. Murnane’s letter includes a point that raises a very troubling question about the rule of law in our state. I am shocked by her statement that the level of observance of the law by government officials is determined by what a court would allow, and that in this case a court would allow a substantial level of violation, as long as it is not “a gross departure.” I believe that the public demands the highest level of respect for the rule of law and the highest standard of observing each and every one of the requirements of the law by government officials. Government officials have a duty to set an example for the rest of us. Particularly where political considerations may apply or where the individual has a good reputation for service to the community, the temptation to depart from the requirements of law may be strongest and should be more firmly resisted. The office of the Attorney General weakens his case by resorting to putting on the public record the view that government officials need only observe the absolute lowest possible standard that a court would enforce. Resort to this argument is acknowledgment that Vermont has a problem in the participation of an individual on the commission while he simultaneously serves as the President of the Vermont AARP.

I would ask you to reconsider. I urge you to issue an opinion that an individual cannot serve as the top official of the AARP while serving on the Commission, and that if Jim Leddy wishes to serve on the Commission he should step down as President of the Vermont AARP. Thank you very much for your reconsideration of this important matter.
_________________________________

[1] When Jim Leddy was named AARP Vermont State President in 2008 a news release stated that it was “a vol
unteer position working closely with both staff and volunteers throughout the state to help AARP achieve its mission in Vermont.”

The “AARP mission statement” states, “What Is the Mission of AARP? AARP is a nonprofit, nonpartisan membership organization for people age 50 and over. AARP is dedicated to enhancing quality of life for all as we age. We lead positive social change and deliver value to members through information, advocacy and service. AARP also provides a wide range of unique benefits, special products, and services for our members.”

The “wide range of unique benefits, special products, and services” includes health care insurance products.

[2] No one disputes that the President of BP has an official relation with, a connection with, and is responsible for the contract with the actual drilling company. And not just because he is paid.

Sincerely,
James Marc Leas

Law Office of James Marc Leas

37 Butler Drive, South Burlington, Vermont 05403

The letter from Jane Murmane, deputy attorney general follows:

June 25, 2010

Dear Mr. Leas and Professor Nicosia:

This is in reply to your recent messages to the Attorney General’s Office about the appointment of James Leddy to the Vermont Commission on Health Care Reform. I have reviewed your concerns with Attorney General Sorrell.

As you are aware, Act 128 created this Commission to monitor health care reform initiatives and to make recommendations to the General Assembly. The Act authorized the Speaker of the House to fill one of the nonvoting positions on the Commission. Absent a gross departure from the appointment standards established by the Legislature — something very remote from the circumstances here — the Speaker’s appointment would not be disturbed by the courts.

Nor is the Speaker’s decision subject to approval by the Attorney General. The Attorney General’s Office reviewed Act 128 and the Leddy appointment in response to a citizen complaint. We responded in a public way to the original complaint because the complaint itself was widely publicized. Your messages repeat concerns raised in the prior complaint and add to them by citing other subsections of the appointment statute. The purpose of this message is to respond to your concerns and to confirm our view that there is nothing in any subsection of the statute that would prohibit Mr. Leddy’s appointment to the Commission. The statutory prohibitions and our comments are as follows:

2 V.S.A. § 901(b)(2)(A) provides that “the two nonvoting members with experience in health care shall not … be in the employ of or holding any official relation to any health care provider or insurer or be engaged in the management of a health care provider or insurer…”

Comment: Mr. Leddy is not employed by an insurance company because the AARP is not an insurance company, nor is he “employed” by the AARP. We are informed that he holds an official relation to the AARP in the sense that he is the unpaid president of the Vermont AARP entity and serves as an unpaid member of an AARP advisory council. But, again, the AARP is not an insurance company. The AARP itself appears to have substantial financial arrangements or relations with several insurance companies; however, we are not aware of any information which shows that Mr. Leddy himself has any relation to any insurance company, official or otherwise. Nor are we aware of any information which shows that Mr. Leddy is employed by or holds any official relation to any health care provider.

2 V.S.A. § 901(b)(2)(B) provides that “the two nonvoting members with experience in health care shall not …own stock, bonds, or other securities of a health care provider or insurer, unless the stock, bond, or other security is purchased by or through a mutual fund, blind trust, or other mechanism where a person other than the member chooses the stock, bond, or security …”

Comment: We are not aware of any information which shows that Mr. Leddy owns any securities as described in this subsection.

2 V.S.A. § 901(b)(2)(C) provides that “the two nonvoting members with experience in health care shall not … in any manner, be connected with the operation of a health care provider or insurer…”

Comment: We are not aware of any information which shows that Mr. Leddy is connected with the operation of a health care provider or insurer. His unpaid positions with the AARP do not include the authority or responsibility to operate a health care provider or insurer, and the audited records of the AARP make it reasonably clear that the AARP itself is neither a health care provider nor an insurer.

2 V.S.A. § 901(b)(2)(D) provides that “the two nonvoting members with experience in health care shall not … render professional health care services or make or perform any business contract with any health care provider or insurer if such service or contract relates to the business of the health care provider or insurer, except contracts made as an individual or family in the regular course of obtaining health care services.”

Comment: We are not aware of any information which shows that Mr. Leddy renders health care services or makes or performs contracts with health care providers or insurers. Mr. Leddy holds volunteer positions with the AARP and the AARP makes contracts with health insurers. However, by its terms the subdivision (D) prohibition applies only to persons who themselves provide health care services or perform tasks fairly described as making (negotiating, drafting, signing) business contracts with care providers and insurers, or performing those contracts. It does not apply to every person “holding any official relation to” any entity that renders the services or makes or performs the contracts described in subsection (D). That broad prohibition applies only to persons having an official relation to health care providers and insurance companies, see 2 V.S.A. § 901(b)(2)(A) above, and Mr. Leddy is not such a person.

In summary, we are not aware of any information that would disqualify Mr. Leddy for service on the Vermont Commission on Health Care Reform.

You do note Jim Leddy’s long history of dedicated and honorable public service. We have little doubt that Speaker Smith weighed Mr. Leddy’s considerable experience and expertise in deciding to make the appointment that, again, was his alone to make.

We have opined and reopined that the Leddy appointment did not violate the letter of the law. You remain free to disapprove of and be disappointed by the appointment. You also remain free to express such feelings directly to the Speaker.

Sincerely, Janet Murnane

cc: Speaker Shapleigh Smith (by mail)
Janet C. Murnane
Deputy Attorney General
Vermont Attorney General’s Office
109 State Street
Montpelier, VT 05609-1001

Leas: Attorney general’s office must reconsider Leddy decision

Proof that individuals game the individual mandate

Short-term insurance buyers drive up cost in Mass.

By Kay Lazar
The Boston Globe
June 30, 2010
The number of people who appear to be gaming the state’s health insurance system by purchasing coverage only when they are sick quadrupled from 2006 to 2008, according to a long-awaited report released yesterday from the Massachusetts Division of Insurance.
The result is that insured residents of Massachusetts wind up paying more for health care, according to the report.
“The active members subsidize some of the costs tied to those individuals who terminate within one year,” the report says.
http://www.boston.com/news/health/articles/2010/06/30/short_term_insurance_buyers_drive_up_cost_in_mass/?rss_id=Boston.com+–+Health+news
Report:
http://www.mass.gov/Eoca/docs/doi/Companies/adverse_selection_report.pdf

During the reform process the concern was expressed repeatedly that an individual mandate – requiring individuals to purchase their own health insurance – would result in gaming the system. People would enroll when they needed expensive care, and then drop out after the care was completed. The experience in Massachusetts has demonstrated that it did not take long for the public to learn this game, for this is precisely what has happened. Nevertheless, the individual mandate is now the law of the land.
Options being considered to reduce this form of adverse selection include, as examples, allowing open enrollment for only one month per year, or increasing the penalty for remaining uninsured. Although such measures might reduce this tendency to game the system, they will not eliminate it.
It is the structure of the financing system that is fundamentally flawed. It cannot be fixed merely by tweaking the mandate, nor by tweaking the thousands of other provisions in this dysfunctional system. It needs to be replaced with a structurally sound system.
With a single payer national health program the issue of an individual mandate would be moot since everyone would be enrolled, automatically, throughout life.

Vermont Joint Fiscal Committee approves single payer study

Vermont health reform panel recommends analyst

By Nancy Remsen
Burlington Free Press
June 29, 2010

The Health Care Reform Commission recommended Monday that the Legislature hire the Harvard economist who helped Taiwan revamp its health-care system for a six-month, $300,000 health research project for Vermont.

The consultant’s task: Give lawmakers three roadmaps the state could follow to achieve a more efficient and accessible but less-expensive health-care system. One must be a government-financed system, and another must include a public option for health coverage along with private insurance.

The commission received proposals from three consultants, interviewed representatives of two Monday morning and made a unanimous choice after lunch.

Today the Legislature’s Joint Fiscal Committee is to decide whether it agrees with the commission’s choice of William S. Hsiao, professor of economics at the Harvard School of Public Health and his associates, Jonathan Gruber, an economics professor at Massachusetts Institute of Technology, and Steven Kappel, a health policy analyst who previously worked for the state and for the Legislature.

Details of the Hsiao, Gruber, Kappel proposal — and the rival bids from Lewin Group of Falls Church, Va., and Mathmatica Policy Research Inc. of Washington, D.C. — remain confidential until an agreement is signed.

“All three proposals were good on the analytical front,” said Commission Co-Chairman Rep. Steve Maier, D-Middlebury. Still, he and others agreed Hsiao’s proposal stood out, and his presentation clinched his selection.

“Dr. Hsiao’s proposal offers us the greatest value,” said Rep. Mark Larson, D-Burlington.

“His group has a track record all over the work designing health-care systems,” said Rep. Francis “Topper” McFaun, R-Barre. “He knows what works.”

The designs the winning consultant must deliver by next winter are intended to guide the Legislature’s next steps.

Hsiao had spoken to the Legislature’s health-care committees last winter about the potential savings and shortcomings of a single-payer system. Many lawmakers came away impressed.

Sen. Kevin Mullin, R-Rutland, noted some people might suggest the “fix” was in to select Hsiao to do the study. Mullin said he tried hard to find reasons to pick one of the other consultants. In the end, he agreed with the rest of the commission: “This one is the best for Vermont.”

http://www.burlingtonfreepress.com/article/20100629/NEWS03/100628014/1009/RSS01

And…

TO: All interested parties
FROM: Jim Hester, Director, Health Care Reform Commission
DATE: 6/29/10
SUBJECT: Selection of Health Care Reform Study Contractor

On June 28, the Health Care Reform Commission voted unanimously to hire the team of William Hsiao, Ph.D, Steven Kappel, and Johnathan Gruber, Ph.D to conduct the health care reform design study as laid out in Act 128 of 2010. On June 29th, the Joint Fiscal Committee voted to approve the recommendation of the Health Care Reform Commission. It is expected that a contract will be signed on or about July 15th.

http://www.leg.state.vt.us/jfo/Healthcare/Contractor%20Selection%20-%20Health%20Care%20Reform%20Design%20Study.pdf

Comment: 

By Don McCanne, MD

Today the Vermont Joint Fiscal Committee gave the final approval for a study of health care reform for the state of Vermont. The study, to be done by William Hsiao, Ph.D, Johnathan Gruber, Ph.D, and Steven Kappel, will look at three models, including a government-financed system. Especially noteworthy is the fact that this study has received the support of Republican legislators. Single payer is on the table!

America Speaks Back: The Effort to Gut Social Security and Medicare Takes a Hit

By Dean Baker
TPM Café, June 28, 2010

The opponents of Social Security and Medicare are getting in high gear. After all, it makes perfect sense that after the collapse of a housing bubble has just destroyed the life savings of near retirees that we would cut their Social Security and Medicare. Okay, at least in Washington that makes perfect sense.

President Obama’s deficit commission is moving forward with Social Security and Medicare explicitly in their sights. They got a dry run for how this effort is likely to sell with the public on Saturday as the Peter Peterson funded group America Speaks sponsored a series of 19 “21st Century Town Meetings.” It seems that events didn’t quite go as planned.

The exercise was intended to show convince people that there were no options other than large cuts to Social Security and Medicare to hit their deficit targets. To ensure this result, the America Speaks crew put together a booklet that exaggerated future budget problems (the exercise was for the year 2025) by assuming a worse budget path than the country is currently facing.

America Speaks also excluded the possibility that the Fed would buy and hold more debt, in effect continuing its current course. This would substantially reduce the interest burden facing the country in 2025. While in normal times this could cause inflation, that is unlikely to be a problem in the foreseeable future. In comparable circumstances, Japan’s central bank has bought an amount of debt nearly equal to the country’s GDP (the equivalent of $14 trillion for the U.S.) and its economy is still facing deflation. There is no reason that the Fed could not follow the same path, unless the goal is to force cuts in Social Security and Medicare.

The America Speaks folks also denied participants the option of reducing public sector health care costs by reforming the U.S. health care system. As they say at America Speaks, everything is on the table, except reforms that would hurt powerful industry lobbies. The America Speaks crew also neglected to mention the Social Security trust fund and that it would have enough assets to pay all benefits through the year 2043, according to the Congressional Budget Office.

Given this stacked deck the participants rose up in revolt. They demanded the option to vote on a single-payer type health care system. The idea being to reduce costs by making health care more efficient rather than just cutting services in Medicare and other public sector programs. They also voted overwhelmingly for defense cuts and for every progressive tax option in the book, even though many had been seriously mischaracterized. For example, they listed the potential revenue from a financial speculation tax in 2025 as $30 billion a year even though there is good reason, based on the experience of other countries, to believe that we could raise close to ten times this amount.

Remarkably, even after spending more than 6 hours with the America Speakers, participants were still very poorly informed on several key budget issues. For example, more than 80 percent of the participants thought that the country had large budget deficits in the years immediately before the recession. (The budget deficits were less than 2.0 percent of GDP in the two years prior to the downturn.)

Less than a quarter of the participants realized that average wages are projected to increase substantially over the next three decades. The fact that real wages are projected to be more than 30 percent higher in 2040 would be an important consideration in an issue like increasing the payroll tax. And, less than a quarter of participants realized that the Social Security trust fund is projected to be fully solvent for more than 25 years into the future.

All in all, this was a good day for democracy. The America Speaks gang tried to shove their agenda down the public’s throat and the public pushed back. Let’s hope that the deficit commission gets the message.

http://tpmcafe.talkingpointsmemo.com/2010/06/28/america_speaks_back_the_effort_to_gut_social_secur

Questions and Answers about benefits under the Patient Protection and Affordable Care Act (PPACA)

June 23, 2010

Claudia Detwiler M.S.W., M.P.H.
Coordinator of Outreach, Western PA Coalition for Single-Payer Healthcare

1. Question: I have a re-existing condition. When can I get an insurance policy?

2. Question: Is it true that when the high risk pool is discontinued insurance plans cannot discriminate based on pre-existing conditions?

3. Question: I heard that an insurer can still refuse my application based on my health status or my claims experience or medical history. How can this be if they have to accept anyone with a pre-existing condition?

4. Question: Is it true that there will no longer be lifetime limits?

5. Question: I heard that insurance companies can’t cancel policies anymore (recission). Is this true?

6. Question: I understand that I will now be able to receive preventive services, like immunizations or cancer screenings, or well baby care without having to pay a co-pay.

7. Question: If all plans can no longer discriminate based on pre-existing conditions, is it also true that all insurance companies can no longer increase premiums based on pre-existing conditions?

8. Question: Is it true that this new law allows the government to control my health care?

9. Question: If I can’t find a plan that I can afford, can I get subsidy for a plan?

10. Question: Will cost sharing for all plans be limited to the upwardly adjusted HSA (Health Savings Account) maximum, which in 2010 is $5,950 for individuals and $11,900?

11. Question: If I don’t qualify for any subsidy, but qualify for the Exchange, what is the least expensive plan I can get?

12. Question: If my income is between 133% and 400% of the FPL and I qualify for participation in the Exchange, what amount of subsidy can I get?

13. Question: Is it true that I will need to pay over $2085 in penalties even if I can’t find insurance that I can afford?

14. Question: Is it true that no one can force me to give up my employer insurance?

15. Question: Why does reform have to add so much to the bureaucracy? This is what is bad about government in health care.

16. Question: Will every state now have to provide Medicaid to everyone up to 133% of the FPL?

17. Question: How will this be paid for and how will it reduce costs?

18. Question: Since the medical products manufacturers, pharmaceutical and insurance industries are going to be assessed fees, what’s to stop them from passing the costs on to consumers?

19. Question: I heard that my Medicare will be cut under this plan. Is that true?

20. Question: Is it true that Illegal immigrants will now get healthcare and I will pay for it?

21. Challenge: You single payer people don’t like anything. I challenge you to list something good about this plan.

Introduction:

This brief summary is intended to be a tool for single payer advocates to use when discussing the new law in conjunction with the single payer option. In using this, it is important to explain that criticism about the new law is not the same as  antipathy towards government involvement in health care.  Critical analysis of the PPACA is grounded in our vision of what government involvement in health care access looks like when it is truly for the common good.

The summary includes positive aspects to the law, as well as its more dubious aspects.  The idea is to build  bridges to audiences which have heard about the “good stuff”, while helping them to understand that the benefits are considerably fewer, and far less secure, than what is being presented-and many, many, times less than what a single payer plan would bring.

These summary is not intended to present the PPACA is a “stepping stone” to single payer. The intent is to encourage people to think critically about what they will (and won’t) receive and what they could yet have with single payer.

This paper focuses on aspects to the law of interest to a general audience.

The web sites below provide additional summary information for people wanting to learn about the dozens of sections of the law not discussed here.

Kaiser Foundation Summary of bill-Focus on Health Reform
http://www.kff.org/healthreform/upload/housesenatebill_final.pdf
 
British Medical Journal, March 30, 2010
Obama’s reform: no cure for what ails us: By David U. Himmelstein and Steffie Woolhandler
http://www.bmj.com/cgi/content/full/bmj.c1778?ijkey=qLFfFBwLmfvN8vo&keytype=ref

Congressional Research Service
http://bingaman.senate.gov/policy/crs_privhins.pdf

Note: Before beginning a discussion, explain to your audience/acquaintances about “grandfathered” plans.  This is critical to understanding the actual benefits of the PPACA.

A Grandfathered Plan is any group health plan or health insurance coverage in which an individual was enrolled on the date of enactment (March 23rd, 2010). Policies that are renewed, or which add family members or new employees are included as “grandfathered”. This means that all current employer plans are exempt from many of the benefits of the new law. “Interim final regulations” have been issued to establish conditions which will cause a plan to lose its “grandfathered” status but it is not clear how many plans will be affected by this. Also, insurance companies are setting aside billions to lobby for final regulations to make grandfathered status  as generous to insurance companies as possible. Where a benefit does include grandfathered plans, it is also important to note whether the benefit includes all grandfathered plans or only group grandfathered plans but not individual plans.

In 2014, when insurers will be required to maintain a single risk pool for all of their individual market policies in a state and a single risk pool for all of their small group market policies in a state, grandfathered plans will not be required to be included in those single risk pools. This will have the effect of eliminating the healthier (employed) people from the risk pool, thereby increasing the cost
of insurance available through the Exchange.

Please see the last section of this paper for a summary of PPACA exemptions regarding grandfathered plans.

1. Question: I have a re-existing condition. When can I get an insurance policy?

Response: People with pre-existing conditions are to have access to insurance through a high risk pool. This is to be available 90 days from passage-June 21. Access to the pool will continue until 2014. To be eligible, you must be a citizen of the U.S. who has a pre-existing condition and has not been covered under creditable coverage during the 6‐month period prior to the date on which you are applying for the pool.

Beginning six months after passage, (September 23), children (those under age of 19) with pre-existing conditions cannot be denied coverage

Also six months after passage, you can add dependant coverage for children through age 26 for all plans (except for grandfathered plans where the dependent is eligible for employer‐based insurance)

Cautions worth knowing:

(a) Based on the amount of money allocated for this pool, only a small percentage of those expected to need this support will be covered.

(b) The high risk pool is permitted to rate premiums by age on a 4:1 factor.

(c) A person in the high risk pool can be required to cover as much as 35% of any treatment out-of-pocket. Insurers are only required to cover 65% of the cost.

(d) Maximum cost-sharing will be limited to the current law HSA (Health Savings Account) out-of-pocket limit ($5,950/individual and $11,900/family in 2010) but this does not include premiums.

2. Question: Is it true that when the high risk pool is discontinued insurance plans cannot discriminate based on pre-existing conditions?

Response: Yes…but

As of 2014, all plans, including group (but not individual) grandfathered plans, will no longer be permitted to discriminate based on pre-existing conditions.

Cautions worth knowing:

(a) A plan can still deny a treatment approved by your doctor, including treatment for a pre-existing condition.

For example, plans in the Exchange-and new individual and small group plans outside the exchange- must include an essential benefits package that includes preventive and wellness services, chronic disease management, maternity and newborn care, mental health and substance use disorder services, and pediatric services, among other things. This is good but it is not the same as a standard list of treatments for a particular condition. Your plan could deny a claim for an expensive treatment while not actually denying coverage for a “pre-existing condition”.

(a) Also, grandfathered group plans (current employer plans), while prohibited from denying applications for pre-existing conditions as of 2014, are not required to offer even the essential benefits package. This gives them even more flexibility in denying treatment while still meeting the requirement of not discriminating based on pre-existing conditions.

(b) An industry might also attempt to limit their financial exposure-while still being within the law-by offering a lot of low premium, high deductible, high co-pay policies. People with modest incomes will buy them in spite of the limited benefits but not be able to afford the deductible and/or co-pays- in which case, the insurance company receives revenue from premiums without having to pay out claims.

(c) Insurance companies will try to reinterpret anything and everything:  Only a few days after the bill was passed, insurers denied that they were obligated to issue coverage to children with pre-existing conditions. They argued that they were only prohibited from denying care to a child with a pre-existing condition who was already covered. Under pressure, they reversed their decision, but this indicates that a for-profit industry will continue to undermine requirements anyway they can.

3. Question: I heard that an insurer can still refuse my application based on my health status or my claims experience or medical history. How can this be if they have to accept anyone with a pre-existing condition?

Response: Good Question! Grandfathered plans (current plans) are not included in prohibitions on eligibility rules based on health status related factors. These are different from pre-existing conditions. Health status factors include: health status, medical condition (mental or physical illness), claims experience, receipt of healthcare, medical history, genetic information, evidence of insurability (including conditions arising out of acts of domestic violence), disability, or any other health status‐related factor as determined by the HHS Secretary.

Guaranteed Issue and Renewability are related requirements for which grandfathered (current) plans are also exempted. Guaranteed Issue and Renewability mean that a plan in a state must accept every employer and individual that applies for coverage in the State.  New Individual plans or small group plans must comply as of 2014, but current plans do not need to comply.

These exceptions for grandfathered plans means that they cannot deny you a policy based on a pre-existing condition but they can deny a policy for a number of other factors pertaining to your medical condition.

4. Question: Is it true that there will no longer be lifetime limits?

Response: Lifetime limits will no longer be permissible as of six months (Sept 23) for new individual and group plans and for grandfathered group plans (but not grandfathered individual plans), however annual limits are only “restricted” at the 6 month period-not eliminated until 2014-and then only for all new plans and grandfathered group plans-but not grandfathered individual plans.

Cautions worth knowing:

(a)  The prohibitions of lifetime and, eventually, annual limits are limited to “essential health benefits”-a category not yet fully defined by the DHHS.  Also, grandfathered individual and group plans do not have to include “essential health benefits”.

(b) Presumably, if a person had reached their annual limit for treatment in a given year they could be denied treatment until the beginning of the next plan year.

(c) Many people, whether in the Exchange or not, will find the premiums, deductibles, co-pays and other out-of-pocket expenses sufficiently burdensome that they will declare bankruptcy or simply stop getting care before ever reaching their lifetime caps.

5. Question: I heard that insurance companies can’t cancel policies anymore (recission). Is this true?

Response: Yes…and no.

As of the six month period (Sept 23rd) all plans (including grandfathered plans) will no longer be allowed to cancel policies arbitrarily.

Cautions worth knowing:

(a) They are still allowed to cancel policies based on findings of fraud and intentional misrepresentation, as defined by them. This is the most common reason now for cancelling policies. In the past, companies have used this freedom expansively to limit payments and cancel policies.

(b) Recission (cancelling policies to avoid expenses) has always been illegal but this was not enforced by state regulators. Going forward, already financially overburdened states will be required to take on the cost of the Exchanges, expanded Medicaid and additional regulation, which could mean that oversight for abuses such as recission will be spread very thin.

6. Qu
estion: I understand that I will now be able to receive preventive services, like immunizations or cancer screenings, or well baby care without having to pay a co-pay.

Response: Yes…and no. This only applies to new individual and group plans. Existing grandfathered plans (current employer) do not have to offer this.

7. Question: If all plans can no longer discriminate based on pre-existing conditions, is it also true that all insurance companies can no longer increase premiums based on pre-existing conditions?

Response: No

Only new individual and small group plans (less than 100 employees) are prohibited from increasing premiums based on pre-existing conditions. Large group plans and all grandfathered plans are not prohibited from raising premiums based on pre-existing conditions.

Cautions worth Knowing:

(a). Even the individual and small group plans are permitted to vary premiums based on age (3:1), geography, family size, and tobacco use. These are all indirect ways to regulate based on pre-existing conditions.

(b)  Large group and grandfathered plans are also permitted to increase premiums based on gender, as well as pre-existing conditions-and any other factors they choose. Many summaries of the new law mistakenly pronounce gender rating as prohibited but it is only prohibited in the individual and small group markets.This allowance for gender rating will have an especially harmful impact in workplaces where women predominate.

(c )  Employers can offer increased incentives to employees for participation in a wellness program or for meeting certain health status targets beginning in 2014 under the Patient Protection and Affordable Care Act. The law will permit rewards or penalties such as premium discounts of up to 30 percent of the cost of coverage. While this might appear to be a worthwhile goal, it can be a back door way to permit increased premiums for people who, for whatever reason, cannot achieve that goal, coming close to a form of premium discrimination for pre-existing conditions.

(d) Insurance commissioners in 27 states already have the power to regulate premium hikes, but have been ineffective in controlling them.

(e) Stock prices for virtually all the leading private insurers remain high and have been trending upward. Investors are also bullish on the promising prospects for the drug companies and for-profit hospitals, suggesting that premium increases are a real possibility.

8. Question:  Is it true that this new law allows the government to control my health care?

Response: Your health care will continue to be provided by private medical providers, just as it is now. What the law does is limit (not not eliminate) the ways in which private insurance companies get between you and your health care. The law puts some restrictions on insurance company practices that have limited or denied access to coverage.

Cautions worth knowing: As described above, these restrictions are subject to much manipulation and many do not apply to grandfathered (current) plans.  By contrast, in a single payer Medicare for All plan, government involvement would actually be less because the goal of government, unlike private industry, is not to make a profit from your need for health care. The government is the greatest protector of your doctor patient relationship. In a single payer plan developed by public and private stakeholders, the shared goal is to maintain and restore people’s health. In a private insurance, fragmented model, the goal is to manage costs by denying care and shifting sicker patients who limit profits to public plans-a much more intrusive approach.

9. Question: If I can’t find a plan that I can afford, can I get subsidy for a plan?

Response: Not necessarily:

-If the lowest cost plan available is greater than 8% of your income, that plan would be considered “unaffordable” and you would not have to pay a penalty for not purchasing a plan, , but that doesn’t guarantee you a subsidized plan. Subsidies are referred to as “premium credits and cost sharing”. Your income level must be between 133% and 400% of the FPL to qualify for subsidy.

Even if you choose to purchase a policy in the Exchange (state created and regulated markets for purchasing plans) and the policy premium is greater than 8% of your income, you still do not qualify for a subsidy unless you are within the FPL guidelines.

-Also, the level of mandated minimal coverage for policies offered in the Exchange still leaves individuals and families with a sizable financial exposure. The two lowest cost levels in the Exchange provide coverage for only 60% or 70% of “benefit costs”. Exposure for the remaining 30% or 40% includes deductibles and co-pays. It does not include the several thousand dollar premium for the policy itself, a cost in addition to the 30 or 40% exposure.  Independent researchers predict that insurance premiums will, at best, be not much lower than they are currently. Out of pocket expenses in the Exchange are capped in 2014. The cap is based on the HSA (Health Savings Account) maximum which will be adjusted upward from the 2010 amounts of $5,950 for individuals and $11,900.
              
-If you are employed and your employer offers a plan, the standard for a plan being “unaffordable” is different. Instead of 8%, it is 9.5% and you can then choose to purchase a plan in the Exchange as an alternative. However, this still does not guarantee you a subsidy. Your income must be less than 400% of the FPL to qualify for a subsidy even if your employer plan is 9.5% of your premium. You also have the option of purchasing a plan in the Exchange if your employer provided plan covers less than 60% of the cost, but the same income limitation applies regarding a subsidy for that plan.

-If your income is below 400% of the FPL and if your employer premium is greater than 8% but less than 9.8% (some sources say 9.5%) of your income, you can choose to purchase a plan in the Exchange and receive a subsidy. In addition, your employer is required to provide a voucher to offset the government subsidy of your plan. The voucher will be for the amount that your employer would have contributed to your premium.

10. Question: Will cost sharing for all plans be limited to the upwardly adjusted HSA (Health Savings Account) maximum, which in 2010 is $5,950 for individuals and $11,900?

Response: No. Grandfathered plans (all current plans) do not have to provide limits on your out-of-pocket expenditures or their premiums and only new plans in the Exchange do.

One provision in the law bars insurers in the Exchange from “unreasonable premium increases” and requires large increases to be submitted to federal and state officials, but “unreasonable” is undefined and the insurance industry is setting aside billions of dollars to lobby for the most relaxed definitions possible.

11. Question: If I don’t qualify for any subsidy, but qualify for the Exchange, what is the least expensive plan I can get?

Response: The least expensive qualifying plan is the Bronze plan, which covers 60% of the benefit costs of the plan with an out-of-pocket limit, based on the current $5,950 for individuals and $11,900 for families in 2010. This is effective in 2014, at which time the limit will be adjusted upward from the 2010 amount.

12. Question: If my income i
s between 133% and 400% of the FPL and I qualify for participation in the Exchange, what amount of subsidy can I get?

Response: Subsidy will be in the form of “advanceable and refundable” premium credits. This means you will receive a refund even if you have no tax liability and your “credit” is available when you purchase the plan. The credit is calculated on a sliding scale beginning at two percent of income for those at 100 percent FPL and phasing out at 9.5 percent of income at 300-400 percent FPL.

The Treasury Dept will pay the premium credit amount directly to the insurance plan in which you are enrolled. You will then pay to the plan the dollar difference between the premium tax credit amount and the total premium charged for the plan.

The credits will be tied to the second lowest cost “silver plan” in the area and will be set on a sliding scale. The silver plan has an “actuarial value” of 70%, meaning that the plan (not you) pays 70% of benefit costs. You pay 30% plus premium costs.

Premium contributions are limited to the following percentages of income for specified income levels: Provisions related to the premium and cost sharing subsidies are effective January 1, 2014.

Up to 133% FPL: 2% of income

133-150% FPL: 3 – 4% of income

150-200% FPL: 4 – 6.3% of income

200-250% FPL: 6.3 – 8.05% of income

250-300% FPL: 8.05 – 9.5% of income

300-400% FPL: 9.5% of income

Cost-sharing subsidies for deductibles, co-pays and co-insurance are also provided to eligible individuals and families, but only up to 250% of the FPL. These subsidies reduce the 30% cost-sharing exposure. Above 30%, the cost sharing exposure remains at the 70%/30% level.

Premiums are not included in the cost-sharing limitations but are subsidized separately as described above.

Out of pocket maximums ($5,950 for individuals and $11,900 for families in 2010) are reduced to one-third for those with income between 100-200 percent FPL, one-half for those with incomes between 200-300 percent FPL, and two-thirds for those with income between 300-400 percent FPL. Credits are available for eligible citizens and legally-residing aliens. 

13. Question: Is it true that I will need to pay over $2085 in penalties even if I can’t find insurance that I can afford?
 
Response: No.  That amount is the maximum anybody would be required to pay; it is based on income and it is not in effect until 2016.  Also, it is waived if the only coverage available is greater than 8% of your income.

Here is a summary of the law: “Those without coverage pay a tax penalty of the greater of $695 per year up to a maximum of three times that amount ($2,085) per family or 2.5% of household income. The penalty will be phased in according to the following schedule: $95 in 2014, $325 in 2015, and $695 in 2016 for the flat fee or 1.0% of taxable income in 2014, 2.0% of taxable income in 2015, and 2.5% of taxable income in 2016. Beginning after 2016, the penalty will be increased annually by the cost-of-living  adjustment.”  The flat fee is applied to all members of the family, but at the ½ rate for children under 19. That is how a family could have a fee of $2085 in 2014 and not $695.

So if your taxable income in 2016 was $150,000, 2.5% of that would be $3,750. However, you would only be required to pay $2085, not $3750-and not until 2016. If you income was $50,000, (and again, this is only by 2016) you would be required to pay $1,250-the greater of 2.5% of income or the minimum of $695.  If you are very low income, you can be exempted from any payment if the least expensive plan available is 8% or greater of your income or if your income is below the tax filing threshold (in 2009 the threshold for taxpayers under age 65 was $9,350 for singles and $18,700 for couples).

Other exemptions are for those without coverage for less than three months, undocumented immigrants, incarcerated individuals, and other hardship wavers.

14. Question: Is it true that no one can force me to give up my employer insurance?

Response: Yes

Cautions worth knowing:

(a).  Another way to look at this, though, is that people with employer-based coverage will be locked into their plans’ “preferred providers’ networks.”

(b). Also, you can keep your plan until you can’t afford the (highly likely) ever-increasing prices or your employer drops the plans. Remember that grandfathered plans (current employer plans) are exempt from the premium limitations of plans in the Exchange.

(c). The penalties for employers who do not provide coverage are too small to discourage them from canceling or cutting back on increasingly costly employee benefits and several large corporations are considering just this.

15. Question: Why does reform have to add so much to the bureaucracy? This is what is bad about government in health care.

Response:  The huge new bureaucracy is the result of trying to provide increased access to care while keeping in place the entire “middleman” private insurance industry. A private insurance industry is not in the business of providing care or expediting access to care. Its reason for existence is to make a profit off of your need for care by standing between you and your care.

The bureaucracy, then, is the result of needing to build a complex, expensive structure to regulate a private, largely for-profit industry which must, as a for-profit industry- find ways to not comply with regulation. It is a very, very expensive cat and mouse game that drives up costs while maintaining a barrier between you and your medical care.

A single payer program would eliminate the huge financial burden to consumers, employers and the country of accessing care through a private industry that takes its costs and profits off the top and increases the costs for every provider.

16. Question: Will every state now have to provide Medicaid to everyone up to 133% of the FPL?

Response: Eligibility is extended to all individuals underage 65 (children, pregnant women, parents, and adults without dependent children) with incomes up to 133% FPL, but the fact that eligibility has been extended does not mean that states must provide the benefit to that extent. The states are allowed to demonstrate hardship to reach this goal. States are financially overloaded already, and are now facing additional pressures for financing the new exchanges and greater insurance oversight. Medicaid is financed with matching state and federal funds. While the federal government may have the money to pay for expanded eligibility, most states don’t. States can also extend the eligibility but reduce payments to physicians, limiting access to care for low income people.

Also, public hospitals that treat the uninsured will have their federal funding slashed by $36 billion, adding to state burdens to provide care to lower income people who previously received care here.

17. Question: How will this be paid for and how will it reduce costs?

Response: The plan is reported to be cost neutral, meaning that the increases in public spending (the $447 billion to the insurance industry and the $551 billion for regulations and management of this complex arrangement), will be offset by savings in the system. Paying for this is a combination of cost savings and increased revenue.

The revenue side: Increase the threshold f
or the itemized deduction for unreimbursed medical expenses from 7.5% of adjusted gross income to 10% of adjusted gross income for regular tax purposes (waive the increase for individuals age 65 and older for tax years 2013 through 2016. (Effective January 1, 2013)

Increase the Medicare Part A (hospital insurance) tax rate on wages by 0.9% (from 1.45% to 2.35%) on earnings over $200,000 for individual taxpayers and $250,000 for married couples filing jointly and

Impose a 3.8% tax on unearned income for higher-income taxpayers (thresholds are not indexed). (Effective January 1, 2013)-plus limitations on HSA s

Increase revenue by the elimination of some forms of tax subsidy of employer plans, such as the double pharmacy benefit where employers get a subsidy for managing a plan that provides access to Medicare Part D for their employees and (used to) be able to not declare the subsidy as income while writing off the subsidy as expenses for the plans to reduce their taxable income.

Cost Savings:

The stated plan is to reduce existing health care costs through increased emphasis on reducing fraud & abuse, administrative simplification (although the law does not specifically address the need for comprehensive uniformity of all data and information requirements), demonstration projects around areas of coordination of care, computerization of medical records, tort reform reducing excess provider/insurance payments.

Cautions worth knowing:

(a) The evidence on the above areas is that they are marginal at best at reducing costs, sometimes just the opposite. For example, tort reform is an emotional issue, but studies show that it is very marginal in its impact on costs of medical care.

Also, countries with a true, publicly financed universal healthcare system like single payer have almost no issue around excessive medical law suits. People don’t sue for lifetime potential medical care costs because they always will have that. Physicians pay a fraction of what our doctors pay for liability insurance.

(b).These presumed efficiencies are dependent on the insurance industry not fighting them. The health care industry spent a record $266.8 million last year making sure nothing got into the bill that would seriously threaten its profits. It will be even better funded going forward to oppose sections most detrimental to insurance company interests.

(c) Savings are also dependent on the insurance industry not raising premiums -which is already happening. The law imposes oversight on “unreasonable” premium increases but does not define “unreasonable”. Insurance companies are organizing to push for a generous definition of “unreasonable” in the rule making process to implement the PPACA. The rationale for mandated purchase of insurance is that insurance companies would not have to increase premiums if plans covered younger, healthier people as well as sicker people. Soon mandated coverage of pre-existing conditions will become the “explanation” for why they have to increase premiums substantially.

(d) The wealthiest Americans will resist increased taxation and the insurance and pharmaceutical industries will resist fees.

(e)  All of these potential savings are extremely minor compared to the elephant in the living    room:  the private, for-profit insurance industry that takes its profits and high costs off the top.

(f). This law does nothing to decrease the 31% of healthcare costs ($400 billion) that we spend pushing paper to figure out who’s going to pay for care. With a single payer system, this reduction for allow us to not only cover ALL people, not leaving out 23 million, but cover us all with expanded services.

18. Question: Since the medical products manufacturers, pharmaceutical and insurance industries are going to be assessed fees, what’s to stop them from passing the costs on to consumers?

Response: There will be a fee oversight process… but

Cautions worth knowing:

(a) Premium oversight in the past has not been very effective. Insurance commissioners in 27 states already have the power to regulate premium hikes, but have been ineffective in controlling health care costs.

(b) The fees will be an incentive for insurance companies to find as many ways as they can to get around the new regulations in order to maintain their profits, in addition to increasing premiums.  Drug makers have raised wholesale prices on brand name drugs by 9 percent this year alone in anticipation of reform. The same thing happened prior to the implementation of Medicare Part D.

(c) Wall Street loves the law. Mutual fund analysts say it is beneficial for health industry stocks, particularly for pharmaceutical and medical equipment companies, because there are no “onerous cost controls.” Health insurance company stocks continue their upward trend, and CEO salaries remain astronomical.

(d) By contrast, with Improved Medicare for All, pharmacy and medical care prices will be set by a national body of stakeholders-including the pharmaceutical industry and medical care providers-and your needs would be covered. A private industry could not unilaterally raise prices to increase profits.

19. Question: I heard that my Medicare will be cut under this plan. Is that true?

Response: There are two changes that have led to this concern.

The first is the gradual reduction in payment to Medicare Advantage plans. This has been intentionally misrepresented to oppose any reform. These are private plans that have been given permission to sell Medicare policies. They have been receiving at least 15% more per enrollee (for some plans the added payment is up to 18%) above what the government spends per enrollee for regular Medicare.  Much of this goes to high management salaries and profit to shareholders for doing the same job that the government is doing for much less. Many plans only provide minimal “preventive” services to justify this added cost- and there is minimal oversight of Medicare Advantage plans to justify these higher payments.

This is public funding which should be re-directed into expanded Medicare for all enrollees.

The second change that has led to concern is the requirement to establish an Independent Payment Advisory Board to submit legislative proposals containing recommendations to reduce the per capita rate of growth in Medicare spending if spending exceeds a target growth rate. The Board is prohibited from submitting proposals that would ration care, increase revenues or change benefits, eligibility or Medicare beneficiary cost sharing (including Parts A and B premiums), or would result in a change in the beneficiary premium percentage or low-income subsidies under Part D

However, much touted “Delivery system reforms” will produce almost no savings according to both the Congressional Budget Office and the chief actuary of the Medicare program. There is reason to be concerned that cuts could be made to Medicare payment rates for those providing services to the beneficiaries and this is a cause of real concern.

There are a number of Medicare changes that should benefit beneficiaries. Here are a few of them.

· Provide a 10% bonus payment to primary care physicians in Medicare from 2011 through 2015. (Effective for five years beginning January 1, 2011)

· Provide Medicare beneficiaries access to a comprehensive health risk assessment and creation of a personalized prevention plan. (Health risk assessment model developed within 18 months following enactment)

· PPACA increases Part D premiums for higher income enrollees; the income thresholds are to be set at the sam
e level and in the same manner as those used to establish Part B premiums. Also, starting in 2011, Part D enrollees will be provided discounts of 50% for brand-name drugs during the coverage gap. In addition, the Reconciliation Act provides a rebate of $250 to enrollees who enter the coverage gap in 2010 and phases out the Part D doughnut hole by gradually reducing the cost sharing during the coverage gap for both brand-name and generic drugs until it equals 25% of the negotiated price of the drug in 2020.

· Medicare Part D coverage gap (phased in beginning in 2011); Between 2014 and 2019, reduce the out-of pocket amount that qualifies an enrollee for catastrophic coverage; Make Part D cost-sharing for full-benefit dual eligible beneficiaries receiving home and community-based care services equal to the cost-sharing for those who receive institutional care (Effective no earlier than January 1, 2012);

· Prohibit Medicare Advantage plans from imposing higher cost-sharing requirements for some Medicare covered benefits than is required under the traditional fee-for-service program. (Effective January 1, 2011)

20. Question: Is it true that Illegal immigrants will now get healthcare and I will pay for it?

Response: No, they will not get care as a result of this act.

Cautions worth knowing: Many people argue that restricting care in this way is not in our self-interest. Our country and our health are better off when people who are here are not sick with potentially contagious diseases.

The bill imposes a 5-year waiting period on permanent, legal residents before they are eligible for medical assistance, and prohibits undocumented workers even to use their own money to purchase health insurance through an exchange. These provisions are also counterproductive in terms of controlling health care costs.

21. Challenge: You single payer people don’t like anything. I challenge you to list something good about this plan.

Response: Here are some of the better aspects to this law:

Increased funding for community health centers is a good thing (although public hospitals that treat the uninsured will have their federal funding slashed by almost $40 billion).

Increasing the eligibility for MA is a good thing.

Simplifying enrollment for MA and CHIP is a good thing

Increasing reimbursement for MA and Medicare in some areas is a good thing.

Requiring Medicare to offer annual physicals with no cost sharing is a good thing.

Limiting contributions to HSAs is a good thing. HSAs shift taxes from wealthier to middle income  people.

Charging people with high incomes more is a good thing

Encouraging more primary care physicians and greater use of physician assistants and nurse practitioners is a good thing.

Reining in some of the abuses of the health insurance industry is a good thing.

Easing and eventually eliminating the donut hole is a good thing

Reducing the excess payment for private Medicare Advantage plans is a good thing.

Allowing young adults to remain on their parents plan

BUT-all of this, and much, much more in terms of expanded care, could happen through an improved Medicare for All plan. The end result would be direct access to health care through a much less complicated plan that covers everybody, automatically, equally, and in a simple but comprehensive plan, based on ability to pay. This would be based on our current Medicare but with expanded benefits, from prevention through long term care. Also, unlike current Medicare, there would be no co-pays or deductibles. And Expanded Medicare for All would cost no more than we now spend instead of increasing health care costs by billions of dollars.

This is not too good to be true. In fact, every other industrialized country, and many countries that struggle more financially, provide this for their people.

Your money and mine would be going to pay for our care and not for (1) the bloated costs of an insurance industry that gets a claim on your money before it goes to the providers, with no value added (2) a complicated and expensive bureaucracy overlay to control that same industry (that adds nothing to health care delivery) (3) the major costs that doctors and hospitals incur as a result of  billing to hundreds of insurance companies, often multiple times for each claim before the claim is finally paid and (4) complicated exchanges and multiple separate funding and qualifying categories to provide care to people with middle and lower incomes and a variety of special needs.

You could simply send your money, based on ability to pay, directly to a government pool that sends it to the providers and eliminates these four huge cost areas. Presently 1/3 of each health care dollar goes to the paperwork and claims shuffling costs of the current approach. With a single payer system, most of these costs would disappear for providers and for administration of the plan. The estimated savings of $400 billion would go directly to providing more services for all of us.

The new law not only keeps this $400 billion of wasted dollars in the system-with no increase in services, it adds another $447 billion over the next ten years to the same private insurance industry which now wastes our money processing and denying claims. This is nothing more than another corporate bailout of a failed system.  It also adds another $551 billion of tax dollars to fund the expensive regulatory mechanism and exchanges, and other changes in the private and public system. All of this additional funding could instead go to funding expanded services to all of us.

Radical?  No. Untried? No

Literally dozens of other counties, with better health outcomes than the US, and costing less individually and nationally than the U.S., provide care for their people based on the following principles:

1. Strong central public process for planning for comprehensive healthcare and for annual review

2. Widely shared cultural belief that all people should take care of one another

3. Shared belief that no one should go bankrupt, or suffer financially, in order to receive medical care

4. Belief that profit should play no role, or a very minimal role, in the design of a healthcare program.

5. Commitment to equal access to quality care regardless of income.

7. Strong protections for doctor patient privilege

8. Comprehensive Care and uniform benefits: prevention through long term care

9. Premiums or contribution to the system is based on ability to pay.

10.The sicker you are, the less you pay. This applies to major illness and multiple illnesses within a family.

Additional Information Regarding “Grandfathering”

Grandfathering of Health Insurance Coverage; Minnesota Dept of Commerce Insurance Gateway. (http://www.state.mn.us/portal/mn/jsp/content.do?id=536896358&contentid=536919681&contenttype=EDITORIAL&programid=null&agency=Insurance)

The legislation does specifically apply a number of provisions to grandfathered plans from which they would otherwise be exempt.  These provisions include:

    * Section 2708 (relating to excessive waiting periods);
    * Provisions of section 2711 relating to lifetime limits (but not those dealing with annual limits);
    * Section 2712 (relating to rescissions); and
    * Section 2714 (relating to
extension of dependent coverage) 

Other provisions are applied only to group plans that are grandfathered.  These provisions are:

    * Provisions of section 2711 relating to annual limits;
    * Section 2704 (relating to pre-existing condition exclusions); and
    * Section 2714 (relating to coverage of adult children) only if the adult child is not eligible for their own employer-sponsored coverage.

Grandfathered plans are exempt from all other provisions of subtitles A (immediate reforms) and C (market reforms).  These provisions include the following reforms that go into effect prior to 2014:

    * First-dollar coverage of preventive health benefits (§2713)
    * Utilization of uniform explanation of coverage documents and standardized definitions (§2715)
    * Provision of additional information (§2715A)
    * Prohibition of discrimination based upon salary (§2716)
    * Ensuring the quality of care (§2717)
    * Bringing down the cost of health care coverage (§2718)
    * Internal and external appeals (§2719)
    * Patient protections (§2719A)
    * Health insurance consumer information (§2793)
    * Ensuring that patients get value for their dollars (§2794)

Grandfathered plans are also exempt from the main market reforms that go into effect on January 1, 2014.  These provisions include:

    * Fair health insurance premiums (§2701)
    * Guaranteed availability of coverage (§2702)
    * Guaranteed renewability of coverage (§2703)
    * Prohibition on discrimination based upon health status (§2705)
    * Nondiscrimination in health care (§2706)
    * Comprehensive health insurance coverage (§2707)
    * Coverage for individuals participating in approved clinical trials (§2709)

Vermont health reform panel recommends analyst

By Nancy Remsen
Burlington  (Vt.) Free Press, June 29, 2010

MONTPELIER — The Health Care Reform Commission recommended Monday that the Legislature hire the Harvard economist who helped Taiwan revamp its health-care system for a six-month, $300,000 health research project for Vermont.

The consultant’s task: Give lawmakers three roadmaps the state could follow to achieve a more efficient and accessible but less-expensive health-care system. One must be a government-financed system, and another must include a public option for health coverage along with private insurance.

The commission received proposals from three consultants, interviewed representatives of two Monday morning and made a unanimous choice after lunch.

Today the Legislature’s Joint Fiscal Committee is to decide whether it agrees with the commission’s choice of William S. Hsiao, professor of economics at the Harvard School of Public Health and his associates, Jonathan Gruber, an economics professor at Massachusetts Institute of Technology, and Steven Kappel, a health policy analyst who previously worked for the state and for the Legislature.

Details of the Hsiao, Gruber, Kappel proposal — and the rival bids from Lewin Group of Falls Church, Va., and Mathmatica Policy Research Inc. of Washington, D.C. — remain confidential until an agreement is signed.

“All three proposals were good on the analytical front,” said Commission Co-Chairman Rep. Steve Maier, D-Middlebury. Still, he and others agreed Hsiao’s proposal stood out, and his presentation clinched his selection.

“Dr. Hsiao’s proposal offers us the greatest value,” said Rep. Mark Larson, D-Burlington.

“His group has a track record all over the work designing health-care systems,” said Rep. Francis “Topper” McFaun, R-Barre. “He knows what works.”

The research project was described in a health-care bill enacted during this past session. With an economic downturn and a budget crisis, lawmakers concluded this wasn’t the year to take another giant step in reforming health care. Still, a majority wanted to keep up the momentum — especially given what they saw as shortcomings of the final package passed by the U.S. Congress.

The designs the winning consultant must deliver by next winter are intended to guide the Legislature’s next steps.

Hsiao had spoken to the Legislature’s health-care committees last winter about the potential savings and shortcomings of a single-payer system. Many lawmakers came away impressed.

Sen. Kevin Mullin, R-Rutland, noted some people might suggest the “fix” was in to select Hsiao to do the study. Mullin said he tried hard to find reasons to pick one of the other consultants. In the end, he agreed with the rest of the commission: “This one is the best for Vermont.”

“I’m absolutely ecstatic,” said Dr. Deb Richter, an advocate of moving to a government-financed health-care system. “This gives me hope we really will come to some solution for Vermont, that this will advance us to some meaningful solution beyond where the national bill would have brought us.”

Richter recounted an image Hsiao had offered of health care in Vermont today: “He likened it to having pieces of a quilt. You have to sew them all together. That is what he can do.”

In a brief telephone interview, Hsiao said he and his colleagues were excited about the prospect of developing designs to guide the state: “Vermont could be in the vanguard for the nation.”

Contact Nancy Remsen at 651-4888 or nremsen@burlingtonfreepress.com. To have Free Press headlines delivered free to your e-mail, sign up at www.burlingtonfreepress.com/newsletters.

Vermont Joint Fiscal Committee approves single payer study

Vermont health reform panel recommends analyst

By Nancy Remsen
Burlington Free Press
June 29, 2010
The Health Care Reform Commission recommended Monday that the Legislature hire the Harvard economist who helped Taiwan revamp its health-care system for a six-month, $300,000 health research project for Vermont.
The consultant’s task: Give lawmakers three roadmaps the state could follow to achieve a more efficient and accessible but less-expensive health-care system. One must be a government-financed system, and another must include a public option for health coverage along with private insurance.
The commission received proposals from three consultants, interviewed representatives of two Monday morning and made a unanimous choice after lunch.
Today the Legislature’s Joint Fiscal Committee is to decide whether it agrees with the commission’s choice of William S. Hsiao, professor of economics at the Harvard School of Public Health and his associates, Jonathan Gruber, an economics professor at Massachusetts Institute of Technology, and Steven Kappel, a health policy analyst who previously worked for the state and for the Legislature.
Details of the Hsiao, Gruber, Kappel proposal — and the rival bids from Lewin Group of Falls Church, Va., and Mathmatica Policy Research Inc. of Washington, D.C. — remain confidential until an agreement is signed.
“All three proposals were good on the analytical front,” said Commission Co-Chairman Rep. Steve Maier, D-Middlebury. Still, he and others agreed Hsiao’s proposal stood out, and his presentation clinched his selection.
“Dr. Hsiao’s proposal offers us the greatest value,” said Rep. Mark Larson, D-Burlington.
“His group has a track record all over the work designing health-care systems,” said Rep. Francis “Topper” McFaun, R-Barre. “He knows what works.”
The designs the winning consultant must deliver by next winter are intended to guide the Legislature’s next steps.
Hsiao had spoken to the Legislature’s health-care committees last winter about the potential savings and shortcomings of a single-payer system. Many lawmakers came away impressed.
Sen. Kevin Mullin, R-Rutland, noted some people might suggest the “fix” was in to select Hsiao to do the study. Mullin said he tried hard to find reasons to pick one of the other consultants. In the end, he agreed with the rest of the commission: “This one is the best for Vermont.”
http://www.burlingtonfreepress.com/article/20100629/NEWS03/100628014/100…

And…

TO: All interested parties
FROM: Jim Hester, Director, Health Care Reform Commission
DATE: 6/29/10
SUBJECT: Selection of Health Care Reform Study Contractor
On June 28, the Health Care Reform Commission voted unanimously to hire the team of William Hsiao, Ph.D, Steven Kappel, and Johnathan Gruber, Ph.D to conduct the health care reform design study as laid out in Act 128 of 2010. On June 29th, the Joint Fiscal Committee voted to approve the recommendation of the Health Care Reform Commission. It is expected that a contract will be signed on or about July 15th.
http://www.leg.state.vt.us/jfo/Healthcare/Contractor%20Selection%20-%20Health%20Care%20Reform%20Design%20Study.pdf

Today the Vermont Joint Fiscal Committee gave the final approval for a study of health care reform for the state of Vermont. The study, to be done by William Hsiao, Ph.D, Johnathan Gruber, Ph.D, and Steven Kappel, will look at three models, including a government-financed system. Especially noteworthy is the fact that this study has received the support of Republican legislators. Single payer is on the table!

In Deficit “Town Meetings,” People Reject America Speaks Stacked Deck

By Roger Hickey
TPM Café, June 27, 2010

On Saturday, the group known as America Speaks (funded by Wall Street mogul Peter G. Peterson and two other foundations) brought together several thousand people in meetings in 60 cities. They gave participants misleading background information about the federal deficit and economic options to achieve fiscal “balance” and future prosperity.

But Peterson cannot be pleased with the participants’ mainly progressive policy choices, which will be presented on June 30 to the Deficit Commission that Peterson encouraged President Obama to create.

According to America Speaks’ own press release, when a scientifically selected group of participants picked up their electronic voting devices, they overwhelmingly supported proposals to

* Raise tax rates on corporate income and those earning more than1 million,

* Reduce military spending by 10 to 15 percent,

* Create a carbon tax AND a securities-transaction tax.

This pretty progressive set of solutions emerged from the process many feared would be skewed to the solutions of conservative deficit hawks.

America Speaks was certainly not pushing the discussion in a progressive direction. The background materials — and policy options — provided to participants were anything but fair and balanced, as analysis by economist Dean Baker demonstrated. Most egregious were the following:

Social Security. America Speaks gave participants no explanation of the fact that Social Security has its own source of funding, and thus does not contribute a dime to the deficit. Americans actually have been paying extra payroll taxes to create a trust fund that will make sure full benefits can be paid for decades into the future — and thus there is no rational reason to cut Social Security benefits (or raise the retirement age) in order to reduce the federal deficit. But you wouldn’t know that from the America Speaks materials or explanations. The Social Security program is simply presented as another big spending program and participants were presented with various ways to cut benefits. Given all this, a majority endorsed raising the retirement age for full benefits to 69 — a benefit cut for future retirees. But they also chose the progressive plan to raise the cap on taxable earnings subject to Social Security taxes, thus producing income for the system from greater portion of higher income peoples’ wages.

Medicare and Medicaid. The America Speaks background materials actually did acknowledge that the rising budgetary costs of Medicare and Medicaid are driven by the fact that our whole health care system is broken — and costing both the private sector and government programs much more per person than in countries that have much better health outcomes. They even acknowledged that thoroughgoing reform — like single-payer health care system — is the only way to control those rising costs. However, when it came to options the participants were allowed to vote on, they were all variations on how much people wanted to cut Medicare and Medicaid benefits. At this point in the proceedings, the America Speaks founder and president, Carolyn Lukensmeyer, had to acknowledge a rebellion in the ranks. People were demanding to have the option of voting for “single-payer” reform instead of cutting Medicare and Medicaid, and when she announced a complicated process of writing in that alternative, a roar of approval went up from the crowd in several locations. Their press release doesn’t report how many people chose this difficult to select option, but the organization clearly had had to scramble to quell a revolt by participants. (Note: their press release states that people chose to “cut health care spending by at least 5 percent,” but the choice was really to cut government health programs 5 percent — and my reading of the charts online was that only 21 percent of participants chose that option, with 71 percent choosing “no change.”)

Austerity vs. Growth. Finally, the organizers had heard enough protests from the Economic Policy Institute and the AFL-CIO that they felt they had to assure the audience that they were not prioritizing deficit reduction over the need for economic stimulus to get the economy to start producing jobs. But after that ritual disclaimer, they went on to devote the vast majority of the day to deficits as our defining economic program.

David Dyen, an LA participant, wrote in a post on firedoglake,

While the cumulative effect of all this tends towards social safety net cuts rather than tax fairness, the crowd in Los Angeles, at least, wasn’t biting at first. In surveying the discussion groups, most people seemed more concerned about the desperate need for more stimulus spending to move the economic recovery forward. They feared a double dip recession without job creation, and fretted about the lack of unemployment insurance extensions to help the less fortunate. “No one is talking about the long-term unemployed,” said one participant. In the nationwide instant survey, taken by participants through electronic devices at all 19 America Speaks sites, 61 percent said the government needed to do more to strengthen the recovery, with only 25 percent opposed. Even with a push poll question asking if participants supported government programs to increase growth “if it increases the deficit,” got a majority, 51 percent, of the nation-wide group of participants.

My next day posting here — claiming participants mostly rejected conservative nostrums – is based on watching the process online, from reports from people who attended events around the country — and on a fairly sketchy press release put out by America Speaks on Thursday, just after the town meetings. But America Speaks billed these events as a nation-wide scientific experiment in finding out what the “American people” think about the economic way forward. They are thus duty bound to publish a full report on the details of every single question — and voting results — that participants were asked to make decisions about. It is especially important that they put out this comprehensive report because they are also scheduled to summarize their findings before a special public meeting of the White House Deficit Commission on June 30. Only then can the people who participated in the process judge whether their surprisingly progressive decisions are being accurately presented to the Commission.

Note: Click here for a blog post on the Augusta, Maine America Speaks event by participant Barbara Burt, director of the Frances Perkins Center.

http://tpmcafe.talkingpointsmemo.com/2010/06/27/in_deficit_town_meetings_people_reject_america_spe/

Not all single payer bills are equal: Why private insurers and investor-owned, for-profit providers must be excluded from single payer legislation

Comparison of John Conyers’ “U.S. National Health Care Act” (H.R. 676), John Dingell’s “National Health Insurance Act” (H.R. 15), and Jim McDermott’s “American Health Security Act.” (H.R. 1200)

By Nicholas Skala, June 2009

In the following short article, I evaluate and provide PNHP’s position on the “National Health Insurance Act” (H.R. 15), introduced by Rep. John Dingell and the “American Health Security Act” (H.R. 1200), introduced by Rep. Jim McDermott; particularly in comparison the “U.S. National Health Care Act” (H.R. 676), introduced by Rep. John Conyers. I also provide our thoughts on the politics of the various proposals.

SUMMARY

These points summarize our main thoughts on the pieces of legislation under consideration.

1) Both H.R. 15 and H.R. 1200 are defective and will fail to remedy the U.S. health care crisis. We strongly feel that both the Dingell bill and the McDermott bill are structurally defective and fail to contain fundamental provisions required to implement a comprehensive, sustainable, universal health care system. PNHP hence cannot support H.R. 15 or H.R. 1200. Specific defects of the bills include:

a) H.R. 15 and H.R. 1200 fail to proscribe duplicative private insurance: The cornerstone of a workable single-payer system is a ban on private insurance that duplicates the coverage provided by the single-payer entity. Without specific proscription, private insurance companies will continue to attempt skim healthy, profitable patients and leave the sick and costly to the public plan. In the process they will generate billions of dollars in administrative waste, diverting funds from care. (Appears as Sec. 104 of H.R. 676).

b) H.R. 15 and H.R. 1200 fail to proscribe investor ownership of health delivery facilities: For-profit investor ownership of hospitals, clinics and other delivery facilities have been shown to provide worse care at a higher cost than their non-profit counterparts. Their presence has a parasitic effect upon the parallel public system, and they prevent the implementation cost-saving measures such a global budgeting and capital planning. (Appears as Sec. 103 of H.R. 676).

2) Both H.R. 15 and H.R. 1200 will require massive new taxes and will fail to control costs. H.R. 676 is self-financing and implements effective cost controls: Because they fail to proscribe competing private insurance, H.R. 15 and H.R. 1200 are structurally unable to realize the $400 billion in administrative savings that H.R. 676 achieves by eliminating private insurers. Without this built-in financing, expanded coverage can only be achieved by raising taxes. This makes H.R. 15 and H.R. 1200 much more vulnerable to political attack than H.R. 676.

3) The national single payer movement will not support H.R. 15 or H.R. 1200: The national movement for single payer has been built around principles of equity and universality, principles which – by their failure to ban private insurance and investor ownership – H.R. 15 and H.R. 1200 fall short of achieving. Should one of these bills become the basis for the amendment to H.R. 3200, the support of a millions-strong movement would be lost.

4) While PNHP only supports true single payer or “Medicare for /All/” legislation, we are open to proposals for more progressive financing than H.R. 676. H.R. 15 and H.R. 1200 can be more accurately described as “Medicare for Some” or “Medicare for the Poor.” While the single payer movement cannot accept retention of the private insurance industry or investor-owned delivery systems, we are not wedded to the financing provisions of H.R. 676, but seek the
most progressive financing of health care possible.

OVERVIEW OF THE LEGISLATIVE PROPOSALS

“The U.S. National Health Care Act” (H.R. 676 – Rep. John Conyers)

H.R. 676 establishes a federal universal, comprehensive health care program which would provide coverage for everyone in the United States. A full range of benefits is provided, including doctor, hospital, long-term care, mental health, prescription drugs and durable medical supplies. Beneficiaries are enrolled at birth and coverage is continued throughout their lives. Patients are afforded free choice of doctor and hospital. Private insurance which duplicates that provided by the national health insurance program is prohibited to ensure universality, equitability, and sustainability of the system. Investor-ownership of health delivery facilities is likewise proscribed to minimize wasteful duplication and allow for rational health planning.

H.R. 676 is self-financing and for all practical purposes budget neutral. Roughly $400 billion in administrative savings are recovered by eliminating private insurers. This money is redirected back into the health system for care, requiring no net increase in health spending. The portion of health spending currently paid in the form of premiums and out-of-pocket costs by individuals and businesses is replaced by a modest progressive tax structure. The bill suggests increased taxes on the top 5 percent of income earners and a modest payroll tax. H.R. 676 provides an array of effective cost control mechanisms, including a negotiated fee schedule with physicians, global budgeting of hospitals, wholesale purchasing of prescription drugs, and planned capital expenditures.

“The American Health Security Act” (H.R. 1200 – Rep. Jim McDermott)

H.R. 1200 requires states to develop their own individual health care systems based on federal standards administered by a new federal agency. H.R. 1200 requires states to develop a fairly comprehensive benefits package and ensure the portability of coverage. Beneficiaries are automatically enrolled at birth. The bill amends the Employee Retirement Income Security Act to prohibit “employee benefits” duplicative of state health security program benefits, but apparently continues to allow non-employer private coverage. The bill does not proscribe investor ownership of health delivery facilities. On paper, patients are afforded free choice of doctor and hospital, but it is difficult to see how this will be achieved while maintaining the private insurance industry.

H.R. 1200 is financed by a tax increase: an 8.7 percent payroll tax, an 8.7 percent tax on employee representatives, and a 2.2 percent personal income tax. H.R. 1200 includes some, but not all of the cost control measures found in H.R. 676, such as hospital budgeting and wholesale purchasing of pharmaceuticals.

“The National Health Insurance Act” (H.R. 15 – Rep. John Dingell)

H.R. 15 provides for the creation of a federal Medicare-like program for most people in the United States. H.R. 15 provides for a benefits package that is fairly comprehensive, but not nearly as much as H.R. 676 or H.R. 1200 (e.g., only prescription drugs that are “unusually expensive” are covered). The bill does not proscribe private insurance coverage that duplicates that provided by the national system. It also does not proscribe investor-ownership of health delivery facilities.

H.R. 15 is financed by a tax increase: a value-added tax of 5 percent on most taxable transactions. The bill contains virtually no cost-control mechanisms, only calling for “a study analyzing various methods to control the costs of providing personal health benefits under this Act.”

ANALYSIS OF LEGISLATIVE PROPOSALS

Coverage and Equitability

H.R. 676: All persons would be covered in one single-tier system offering the same comprehensive benefits. A ban on duplicative private insurance means that coverage is equitable regardless of ability to pay.

H.R. 1200: All persons would be covered by private insurers or one of 50 state-based health programs required to meet criteria defined by the federal government. While competing private employer-based coverage would be banned, private insurance carriers could continue to offer non-employer coverage. This would provide an incentive for insurance companies to offer services to wealthy and profitable patients to the detriment of the public system. Bad risks would quickly accrue to the public system, rendering it a second-class care system for the poor and sick.

H.R. 15: All persons would be covered by private insurers or a federal Medicare-like program. Private insurance companies would continue to operate. This would provide an incentive for insurance companies to offer services to wealthy and profitable patients to the detriment of the public system. Bad risks would quickly accrue to the public system, rendering it a second-class care system for the poor and sick.

Benefits

H.R. 676: Offers comprehensive coverage for all medically necessary treatments, including doctor, hospital, long-term care, mental health, prescription drugs and durable medical supplies.

H.R. 1200: Offers comprehensive public benefits at the outset of the program, however the participation of private insurers ensures that this will be short-lived. As private insurers enroll the healthy and profitable, bad risks will quickly accrue to the public system. Facing financing shortfalls, the only choice will be to raise taxes or reduce benefits.

H.R. 15: Offers a substantial benefits package at the outset of the program, however the participation of private insurers ensures that this will be short-lived. As private insurers enroll the healthy and profitable, bad risks will quickly accrue to the public system. Facing financing shortfalls, the only choice will be to raise taxes or reduce benefits.

Financing / Savings

H.R. 676: H.R. 676 is self-financing and for all practical purposes budget neutral. Roughly $400 billion in administrative savings are recovered by eliminating private insurers. This money is redirected back into the health system for care, requiring no net increase in health spending. The portion of health spending currently paid in the form of premiums and out-of-pocket costs by individuals and businesses is replaced by a modest progressive tax structure. The bill suggests increased taxes on the top 5 percent of income earners and a modest payroll tax (estimated at 3.3 percent on employers and employees, respectively) and a small tax on stock and bond transactions. H.R. 676 provides an array of effective cost control mechanisms, including a negotiated fee schedule with physicians, global budgeting of hospitals, wholesale purchasing of prescription drugs, and planned capital expenditures.

HR 1200: H.R. 1200 is financed by a tax increase: an 8.7 percent payroll tax, an 8.7 percent tax on employee representatives, and a 2.2 percent personal income tax. H.R. 1200 includes some, but not all of the cost control measures found in H.R. 676, such as hospital budgeting and wholesale purchasing of pharmaceuticals. Because the private health insurance industry is retained, there are no administrative savings, and the cost of expanding coverage is more costly. Higher costs threaten coverage gains and would lead to benefit cuts, tax increases, or both.

H.R. 15: Program will be financed through a National Health Care Trust Fund. The trust fund will be funded with a value-added tax of 5 percent imposed on certain transactions. Because the private health insurance industry is retained, there are no administrative savings and no effective cost-containment. As a result, rising costs threaten any expansion of coverage achieved under the bill, and the health care crisis continues to escalate, threatening American families and the economy.

(This article was adapted by Dr. Ida Hellander and published on-line posthumously)

Winner-Take-All Politics

Invisible Hands

By Kim Phillips-Fein

This book is about those determined few, those ordinary businessmen from companies of different sizes and from various industries, who worked for more than forty years to undo the system of labor unions, federal social welfare programs, and government regulation of the economy that came into existence during and after the Great Depression of the 1930s.

http://www.amazon.com/Invisible-Hands-Making-Conservative-Movement/dp/0393059308

And…

Winner-Take-All Politics: Public Policy, Political Organization, and the Precipitous Rise of Top Incomes in the United States

By Jacob S. Hacker and Paul Pierson
Politics and Society
June 2010

Too many economists and political scientists have treated the American political economy as an atomized space, and focused their analysis on individual actors, from voters and politicians to workers and consumers. But the American political economy is an organized space, with extensive government policies shaping markets, and increasingly powerful groups who favor winner-take-all outcomes playing a critical role in politics. Finding allies in both political parties, organized groups with a long view have successfully pushed new initiatives onto the American political agenda and exploited the opportunities created by American political institutions to transform U.S. public policy — through new enactments and pervasive policy drift. In the process, they have fundamentally reshaped the relative economic standing and absolute well-being of millions of ordinary Americans. Politics and governance have been central to the rise of winner-take-all inequality.

http://pas.sagepub.com/cgi/reprint/38/2/152

(The entire special June issue of Politics and Society is devoted to the Winner-Take-All article by Hacker and Pierson, and to six responses. It can be downloaded for free at: http://pas.sagepub.com/)

And…

One response to Hacker and Pierson: The Public’s Role in Winner-Take-All Politics

By Andrea Louise Campbell

Through its political dominance and cagey understanding of esoteric and complicated economic and regulatory policies, the top 1 percent has enjoyed stunning success in shaping public policy to its advantage. But it’s not enough to examine the strategies of the economic elite; to understand fully how they have achieved such a remarkable degree of inequality it is necessary to examine why ordinary citizens have failed to act as an effective counterweight. One chief problem is that citizens simply don’t pay attention to such complex policies; another is that even if they did, they can’t figure out what their stances should be, and no one is helping them. Low salience and great ignorance make for a disastrous democratic brew. The brilliant organizing strategies of the rich tell half the story; the lack of organization and hence information among ordinary Americans tells the other crucial half.

http://pas.sagepub.com/cgi/reprint/38/2/227

And…

Six Things to Know About Health Care Coverage

A Study of the Media and the Health Care Debate

Pew Research Center
Project for Excellence in Journalism
June 21, 2010

Conclusion

Last summer, as tempers flared in town halls throughout the country, CBS correspondent Wyatt Andrews described the environment as a “show of August heat.” And in many ways, it was the heat of the health care battle that most interested and influenced the media.

Coverage peaked when the public got the most passionate and when the politics got the most partisan. The press focused far more on the horserace aspects of the legislative struggle than on examining the system it was designed to reform. No one lavished more attention on the subject than the talk show hosts, who spend much of their time engaging in ideological warfare. And the terms that resonated in the media narrative, perhaps most notably “death panels,” were those that packed a polarizing punch.

All of which raises the question of the extent to which the media shed light versus heat when it came to health care reform. Certainly, many outlets did good work covering the numerous layers of the complex issue. But it’s also true that the public seemed consistently confused by the health care debate and had a difficult time sorting out fact from fiction.

http://www.journalism.org/node/20966

Comment: 

By Don McCanne, MD

People who understand health policy have difficulty understanding why there has not been massive public demand for reform that will make health care affordable and accessible for all of us. Why did we settle for the most expensive model of reform when it falls so short of our goals – leaving tens of millions with impaired access and potentially exposed to financial hardship should they require health care? Today’s quotes are particularly important because they provide some insight as to what hit us.

Anyone who has been paying any attention at all is certainly aware of the proliferation of very well funded conservative and libertarian organizations. What is not commonly realized is the ability of these organizations and the individuals behind them to permeate the political process. They have been highly effective in transforming U.S. public policy.

The conservative/libertarian faction has certainly been very influential in assisting the creation of inequality-inducing policies and laws, but what has caught most of us off guard is the phenomenon of “drift,” as explained by Hacker and Pierson:

“A second mechanism, which we call ‘drift,’ is equally, if not more, important. Drift describes the politically driven failure of public policies to adapt to the shifting realities of a dynamic economy and society. Drift is not the same as simple inaction. Rather, it occurs when the effects of public policies change substantially due to shifts in the surrounding economic or social context and then, despite the recognition of alternatives, policy makers fail to update policies due to pressure from intense minority interests or political actors exploiting veto points in the political process. Thus, drift requires (1) policies whose effects change due to shifting circumstances, (2) recognition of this change, (3) availability and awareness of viable alternatives, and (4) nonmajoritarian reasons why those alternatives are not adopted.”

Ouch! We have drifted into a health care morass, and the rigid conservative/libertarian public policy agenda – gradually formulated over the past half century – has resulted in both Democrats and Republicans adopting policies that merely expand the the mess in the morass. (Keep in mind that the financing system in the Accountable Care Act was originally promoted by conservative economists and think tanks.)

Hacker and Pierson emphasize the precipitous rise of income confined at the very top, and they demonstrate it with impressive graphs and tables. For our purposes, it serves as a proxy for the public policy flaws that have perpetuated profound dysfunction in our tremendously expensive health care system.

We would like to think that the solution would be found in our democratic process. But we have an uninformed electorate that doesn’t even realize that they are victims of the failed public policies of the drift. The Pew report confirms that even the media focused on the heat rather than the light during the health care debate. How is the average citizen going to b
e able to understand health policy when the primary source for most is cable and network news and talk radio?

If you think that the average voter is smarter than that, look at the results this weekend of the Peter G. Peterson Foundation-sponsored AmericaSpeaks national town hall meetings. The majority believe that the answer to our high health care costs is simply to reduce spending by 5 percent. They also believe that we should increase retirement age for Social Security to 69. The prevailing public policy of government budget neutrality – with adjustments made primarily on the spending side and not on the revenue side – has trumped the public policies of social solidarity.

Drift works to the advantage of anti-government forces. Effective public policies – such as single payer – are merely left out of the conversation. And the rich get richer – much, much richer.

How do you counter drift? Educate and organize at the grassroots level. New public policies require action.