PNHP

The MMI proves that PPACA is already a failure

The MMI proves that PPACA is already a failure

2010 Milliman Medical Index

Milliman, Inc.
May 2010
The annual Milliman Medical Index (MMI) reports total annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program. The MMI represents the total cost of payments to healthcare providers, and excludes the non-medical administrative component of health plan premiums.
The total 2010 medical cost for a typical American family of four is $18,074.
This is an increase of 7.8%. This is the third year in a row that the annual rate of increase has been below 8%; however, the dollar increase of $1,303 is still the highest we have seen in the last 10 years and since the inception of this index.
Cost Implications of Healthcare Reform on Family of Four
While employers are making the immediate changes required to their benefit plans and adapting their longer-term benefit strategy to the new regulatory environment, healthcare costs continue to increase at rates exceeding most other costs of doing business. Debate continues on the extent to which the changes from healthcare reform have potential to bend the long-term cost curve; however, for the near term, the underlying drivers of increasing healthcare costs are not expected to immediately change.
Efforts to enforce insurance rate controls may have indirect impact on the growth in healthcare costs but still do not address the underlying cost of care. For now, the onus of control remains with insurers, who will attempt to put pressure of providers to lower costs to a level that approved premium rates can support. There may be more extensive shift in market dynamics in 2014, when the government takes on an even larger proportion of payment responsibility due to expansion in Medicaid, the creation of exchanges, and the availability of subsidies for certain lower-income individuals.
While underlying cost drivers as yet remain relatively unchanged, there are some changes that will have a predictable effect on cost. The most immediate changes, such as increasing dependent coverage up to age 26 and elimination of lifetime and annual benefit maximums, will cause a direct shift in costs from employees to employers. Other options that will be implemented later, such as federally-mandated state health exchange plans, require much deeper analysis before an employer can make an informed decision. Because the practical implementation of this new legislation has not yet been defined, many employers are choosing to delay changes to their benefit plans for future annual benefit cycles, although it is very possible that those changes could be dramatic.
Looking into the future for the “typical family of four” represented by this analysis, the cost implications of reform are unclear. Much depends on the underlying medical cost that is dissected in this report. When it comes to cost control, the status quo is not encouraging. If reform or some other factors can motivate a reduction in the underlying cost of care, it will have important implications for the future cost of care for American families.
http://www.milliman.com/expertise/healthcare/publications/mmi/pdfs/milliman-medical-index-2010.pdf

The Milliman Medical Index (MMI) is especially significant this year because it proves that the Patient Protection and Affordable Care Act (PPACA) is already a miserable failure even before the provisions of the act take place. The MMI for 2010 is $18,074. Let’s look at what that means under the PPACA.
It’s important to understand precisely what the MMI is. It is the average amount that is already being spent on actual health care for a typical family of four enrolled in an employer-sponsored Preferred Provider Organization (PPO) plan. It does not include any of the administrative expenses or profits of the private insurers.
Already there’s a problem. Since the MMI represents the amounts being paid by PPOs, the discounts for network physicians and hospitals and other products and services are already built in. The MMI represents a lower level of spending made possible by contracting payment rates with the physicians and hospitals that are included in the networks. That means that families for whom the spending is at MMI levels have lost their right of free choice of physicians and hospitals unless they are willing and able to pay significant financial penalties for obtaining care outside of the networks. The plans that will be available in the state insurance exchanges will be network-restricted managed care plans – mostly PPOs with some HMOs. Health care reform that takes away choice is not the reform that we wanted.
One of the most important measures in PPACA attempts to address the problem of high costs and the poor coverage of the plans currently available in the individual and small group markets. Individuals and small employers who are having problems finding adequate affordable plans will be able to buy plans in the insurance exchanges that theoretically have the same benefits and cost efficiencies of the large group market currently available to larger employers. If these exchanges actually work as intended, then the MMI will represent the average cost of health care for a family of four enrolled through the exchanges. This assumes that the insurers will cooperate and not continue to use deceptive innovations that have resulted in lower-value products in the individual insurance markets.
Assuming that the exchanges work as intended, keep in mind that the insurers offering individual and small group plans within the exchanges will be required to maintain a medical loss ratio of 80 percent. That is the amount that must be spent on actual health care – the amount that is represented by the MMI, minus the out-of-pocket expenses. They will keep 20 percent for their own administrative costs and profits (or even more if they are successful in their current efforts to shove some of their administrative costs into the medical loss ratio by reclassifying these administrative costs as “health care).
So let’s look at the numbers. The standard Silver plans offered by the exchanges will have an actuarial value of 70 percent. That means that the plans will pay an average of 70 percent of the costs and the other 30 percent will be paid out-of-pocket by individuals and families, partially offset by subsidies for those who qualify. Using the 2010 MMI, the plans will pay for a family of four an average of $12,652 (70 percent of $18,074). The twenty percent for administrative costs and profits will add another $3,163 ($12,652 is 80 percent of the premium) which means that the premium that the insurer will have to charge will be $15,815 ($12,652 plus $3,163). The out-of-pocket portion for the family will be $5,422 (30 percent of $18,074). The the total average cost for the family for both the premium and out-of-pocket expenses combined will be $21,237 ($15,815 plus $5,422).
These are averages. To determine what each family actually would pay is more difficult because of several variables, including sliding scale subsidies for the premiums, sliding scale subsidies for the out-of-pocket expenses, opt-out eligibility based on the level of household income, and out-of-pocket spending, especially for those whose incomes exceed the eligibility thresholds for the subsidies.
Nevertheless, let’s look at a family of four with an income at 400 percent of the federal poverty level – the threshold at which they qualify for neither the subsidies for premiums nor the subsidies for out-of-pocket costs. That income level is $88,200. That family would pay an average of $21,237, or 24 percent of their income, for health care, leaving them $66,963 for all of their other expenses. But since that is average, those with greater health care needs would face even larger out-of-pocket costs, which could be staggering. Even if the plan is promoted as having a stop-loss, private insurers are infamous for leaving patients stuck with charges for non-covered services and out-of-network providers. The bottom line is that PPACA has not ensured that the hard-working American family is protected from financial hardship or even personal bankruptcy should significant medical needs arise.
There are those who say that health care reform is done; we now have PPACA. They say that although it will likely require some adjustments along the way, our task now is to make it work. To those individuals I can only say, step back and look at the confounded mess! It will never insure everyone. It will never make health care affordable for each and every individual and family. It will never control administrative waste as it continues to add on more and more administrative complexity.
We need to keep and build on some of the health system reforms in PPACA, such as the reinforcement of our primary care infrastructure. But we desperately need to dump the sick, fragmented financing system that wastes so much in resources and perpetuates the profound inequities and physical and financial suffering experienced in our system. We need to enact an improved Medicare for all, and do it ASAP!

Ten Things You Can Do for Healthcare Reform

 

Drs. David U. Himmelstein and Steffie Woolhandler, longtime advocates for single payer with Physicians for a National Health Program, have sifted through the mounds of information and misinformation to bring you ten things you need to know about the new law and a few actions to bring true reform to the healthcare industry.

By The Editors
The Nation, May 5, 2010

The Patient Protection and Affordable Care Act signed by President Obama is, we hope, a first step on the way to a Medicare-for-all type program, which would offer better coverage at a lower cost by cutting out private insurers. Under the new healthcare system, however, private insurance companies are guaranteed millions of new customers, and regulations on the industry aren’t as tough as they should be. Big Pharma and HMOs were also able to secure lavish subsidies and concessions in the bill. Drs. David U. Himmelstein and Steffie Woolhandler, longtime advocates for single payer with Physicians for a National Health Program, have sifted through the mounds of information and misinformation to bring you ten things you need to know about the new law and a few actions to bring true reform to the healthcare industry.

1. The act risks ensconcing skimpy coverage as the norm. Participating plans are required to cover only 60 percent of expected healthcare costs, leaving families responsible for huge out-of-pocket expenses. The law will also tax “Cadillac plans,” hitting millions of working families. Work with union activists to repeal the tax, maintain comprehensive healthcare benefits and fight for Medicare for all.

2. The law reduces Medicare’s out-of-pocket costs for drugs by closing the infamous “donut hole,” covering 75 percent of these costs by 2020. But the deal is even better for drug firms, who’ll be getting paid full price for their products. Push to replace the privatized Medicare drug-coverage program with a fully public plan that would use its bargaining power to force down drug prices by about 40 percent.

3. HMOs were allowed into Medicare on the promise that they would save money, but over time they successfully lobbied Congress to increase their Medicare payments to 14 percent above costs. The new healthcare law cuts about $136 billion from these overpayments. Advocate for eliminating them entirely and phasing out investor-owned health providers that deliver inferior care at inflated prices.

4. The law will reduce federal subsidies to public and other safety-net hospitals. Yet 23 million Americans will remain uninsured and tens of millions more will continue to rely on safety-net providers because hospitals often shun insured patients with unprofitable illnesses. Unless the assault on public hospitals is stopped, millions of sick Americans may find they have nowhere to go. Advocate on behalf of Safety Net Hospitals.

5. Insurance and Big Pharma lobbyists’ fingerprints are all over the new law. It’s time to curb their influence. Join efforts for public funding of political campaigns. Support the Fair Elections Now Act. Ask your elected officials to stop taking funds from the health insurance lobby and push for tougher regulation of Big Pharma.

6. Expose and agitate against insurance firms’ abuse of their customers and the outrageous incomes paid to their executives. Share your story at the excellent site maintained by the California Nurses Association.

7. The law excludes undocumented immigrants from buying insurance in the new exchanges, even if they can pay full price, and bars green-card holders from receiving any publicly subsidized insurance for five years. Defend the right to healthcare for everyone. Sign the petition at The Center for Immigrant Healthcare Justice.

8. Keep up to date on reform at PNHP or Trudy Lieberman’s blog. Show Michael Moore’s “Sicko” in your community, and start a dialogue about what true reform should look like.

9. Work with state-based single-payer groups. Vermont passed a law that mandates the design of new healthcare models, including the possibility of single payer. Similar bills have been introduced in California, Maryland and Minnesota.

10. Exercise, eat right and advocate for public policies that facilitate healthier lives. Learn how to get active as a physician, a medical student, a citizen or labor advocate. The fight for real national health insurance will carry on into the 2010 election cycle and beyond. We need you around for the long haul.

This article appeared in the May 24, 2010 edition of The Nation.

CONCEIVED BY Walter Mosley with research by Rae Gomes

“Ten Things” is a monthly feature. Readers who wish to propose ideas for it should e-mail NationTenThings@gmail.com.

Washington Post Discussion on America's New Health Care Law

Washington Post Discussion on America's New Health Care Law

Kaiser Foundation
May 10, 1010

Jackie Judd, vice president and senior advisor for communications, Kaiser Family Foundation:

“You wrote the… opening, overview chapter (of “Landmark” – a new book by the reporting staff of the Washington Post on the new health care law), and in there you said that while the law is complex, it’s also moderate and incremental, and it’s that very moderation that makes it complicated. What do you mean?”

Alec MacGillis, reporter for the Washington Post: 

“Well, it’s something I tried to say often during this whole debate. When people complained about the length of the bill – a two thousand page monstrosity, so complicated – and I wrote a piece back in the Fall that tried to address that argument and pointed out that, you know, if you really wanted a simple bill, then you could just blow this whole thing up.

“And, you know, single payer is very simple. You just, you know – government-run health insurance – get rid of all the health insurance companies, and there are a lot fewer rules to write. That’s simpler, but, obviously, we were not going to do that.

“We were going to take a much more moderate, market-based approach to this. And that means preserving the foundations of our existing system. And that means ending up with something with a law that’s much more complex, because you’re sort of tweaking here and there. You’re not just – it’s not tabula rasa – you’re not starting over.

“But in its main elements it really is a quite moderate and incremental approach. We are preserving the private health insurance system. It’s modeled – no matter what Mitt Romney tells you now – this is modeled on the plan that he passed in 2006 as a Republican governor of Massachusetts; it’s modeled on the Republican alternative to the Clinton plan in the early nineties; it’s modeled on Richard Nixon’s plan in the seventies; it’s modeled on the idea put forward by the Heritage Foundation early last decade, although they’re trying to distance themselves right now from that; but it really is an attempt to build on what we have now, and because you’re doing it that way, you end up with this messy thing. But it’s really not that… but the main elements are not that complicated.

“What we basically have – the best way to think of it is kind of a three legged stool. We are expanding coverage by requiring that everyone get coverage. We’re also telling the insurance companies that they have to provide everyone coverage who comes and asks for it. So they have to take you; you have to get it. That way you get the healthy people into the pool so that they can afford to take the sick people as well. And then to help people afford to get the coverage that they’re required to get, you provide subsidies. But that’s it, and you need all three legs of that stool. That’s why you need have a mandate.”

http://www.c-span.org/Watch/Media/2010/05/10/HP/A/32795/Washington+Post+Discussion+on+Americas+New+Health+Care+Law.aspx

Comment:

By Don McCanne, MD

So by pursuing a moderate, market-based, Republican-based approach, the health care law was made much more complicated. But the greater tragedy is that it wasn’t only made more complicated, it failed in our goals of covering everyone with a financing system that we could afford. The complicated reform proposal that is now law is the most expensive model of reform ever devised, not to mention being one of the least effective.

As Alec MacGillis states, “… single payer is very simple. You just, you know – government-run health insurance – get rid of all the health insurance companies, and there are a lot fewer rules to write.”

We still can “blow this whole thing up,” and enact single payer. Not only would there be fewer rules, everyone would have the health care that they need, and we would be able to pay for it. That will never happen under the new law.

Washington Post Discussion on America’s New Health Care Law

Washington Post Discussion on America’s New Health Care Law

Kaiser Foundation
May 10, 1010

Jackie Judd, vice president and senior advisor for communications, Kaiser Family Foundation:

“You wrote the… opening, overview chapter (of “Landmark” – a new book by the reporting staff of the Washington Post on the new health care law), and in there you said that while the law is complex, it’s also moderate and incremental, and it’s that very moderation that makes it complicated. What do you mean?”

Alec MacGillis, reporter for the Washington Post: 

“Well, it’s something I tried to say often during this whole debate. When people complained about the length of the bill – a two thousand page monstrosity, so complicated – and I wrote a piece back in the Fall that tried to address that argument and pointed out that, you know, if you really wanted a simple bill, then you could just blow this whole thing up.

“And, you know, single payer is very simple. You just, you know – government-run health insurance – get rid of all the health insurance companies, and there are a lot fewer rules to write. That’s simpler, but, obviously, we were not going to do that.

“We were going to take a much more moderate, market-based approach to this. And that means preserving the foundations of our existing system. And that means ending up with something with a law that’s much more complex, because you’re sort of tweaking here and there. You’re not just – it’s not tabula rasa – you’re not starting over.

“But in its main elements it really is a quite moderate and incremental approach. We are preserving the private health insurance system. It’s modeled – no matter what Mitt Romney tells you now – this is modeled on the plan that he passed in 2006 as a Republican governor of Massachusetts; it’s modeled on the Republican alternative to the Clinton plan in the early nineties; it’s modeled on Richard Nixon’s plan in the seventies; it’s modeled on the idea put forward by the Heritage Foundation early last decade, although they’re trying to distance themselves right now from that; but it really is an attempt to build on what we have now, and because you’re doing it that way, you end up with this messy thing. But it’s really not that… but the main elements are not that complicated.

“What we basically have – the best way to think of it is kind of a three legged stool. We are expanding coverage by requiring that everyone get coverage. We’re also telling the insurance companies that they have to provide everyone coverage who comes and asks for it. So they have to take you; you have to get it. That way you get the healthy people into the pool so that they can afford to take the sick people as well. And then to help people afford to get the coverage that they’re required to get, you provide subsidies. But that’s it, and you need all three legs of that stool. That’s why you need have a mandate.”

http://www.c-span.org/Watch/Media/2010/05/10/HP/A/32795/Washington+Post+Discussion+on+Americas+New+Health+Care+Law.aspx

Comment:

By Don McCanne, MD

So by pursuing a moderate, market-based, Republican-based approach, the health care law was made much more complicated. But the greater tragedy is that it wasn’t only made more complicated, it failed in our goals of covering everyone with a financing system that we could afford. The complicated reform proposal that is now law is the most expensive model of reform ever devised, not to mention being one of the least effective.

As Alec MacGillis states, “… single payer is very simple. You just, you know – government-run health insurance – get rid of all the health insurance companies, and there are a lot fewer rules to write.”

We still can “blow this whole thing up,” and enact single payer. Not only would there be fewer rules, everyone would have the health care that they need, and we would be able to pay for it. That will never happen under the new law.

Senate kills drug sample tracking

By DANIEL BARLOW
Times Argus, Vermont Press Bureau
Published: May 5, 2010

MONTPELIER – The Vermont Senate easily passed a major health care reform bill Tuesday night, but first lawmakers jettisoned a provision that would have allowed the state to track free drug samples given to doctors.

The health care bill, S.88, passed with strong support in a voice vote shortly after 7 p.m., but much of the debate focused on a plan that would require the drug companies to report to the Vermont Attorney General when they give out free pharmaceutical samples.

Lawmakers approved an amendment offered by Sen. Richard Sears, D-Bennington, that removed the free sample provision from the bill in a vote of 18-10. It’s not clear yet how House lawmakers, who included the language in the bill, will respond.

Sears said he worried that the provision would have a “chilling effect” on doctors in Vermont, leading them to no longer accept the free drug samples from the pharmaceutical companies.

“Some people have suggested that I am doing this because of the drug companies,” Sears said. “Nothing could be further from the truth.”

The defeat was a disappointment for lawmakers who say that the free samples given out to doctors – while beneficial when given out to some patients, especially those who are low-income – is nothing more than a marketing attempt to promote new and more expensive medications.

Sen. Jeanette White, D-Windham, said that a survey by the Vermont Medical Society last year found that only 38 percent of doctors might stop accepting samples if that information was made public. White pointed out that under the bill the information would only be given to the Attorney General’s Office.

“Pharmaceutical companies do this because they are in the business of selling drugs and making money,” said Sen. Doug Racine, D-Chittenden, the chairman of the Senate Health and Welfare Committee and the main sponsor of S.88.

“I don’t believe that [doctors] will stop giving out samples,” Racine added.

Ken Libertoff, the executive director of the Vermont Association for Mental Health, has pushed for more transparency between the drug companies and physicians. He said free samples are such a “brilliant marketing device that it actually blinds people who need to consider the role they play in access to affordable health care.”

“From our perspective, the pharmaceutical industry had a victory today,” Libertoff said. “That’s disappointing, but it doesn’t affect the positive changes that were made last year.”

Last year lawmakers passed one of the strongest laws in the country banning most financial contact between the companies that make drugs and the physicians that prescribe them. A report from the Attorney General this year showed that drug companies spent $2.6 million lobbying Vermont doctors in 2009 before the ban took effect.

Many lawmakers said they heard concern about the provision from their local doctors. One of the most vocal critics of the provision was Dr. Deb Richter of Montpelier, who said the proposal implies that doctors are doing something unethical.

“We also must tell you we find it offensive at the implication that our prescribing patterns are influenced by the samples we receive,” Richter and five other doctors wrote in a letter to Attorney General William Sorrell.

Much of the rest of the health care bill was less controversial than the free sample provision.

The portion of the bill written by Racine, one of five Democrats running in the gubernatorial primary this year, focuses on designing three new health care models for Vermont – including a single-payer system and a public health insurance option.

The bill also caps annual hospital budget increases, expands the popular Blueprint for Health program and sets up three pilot programs to investigate payment reform options in the state.

Racine said Vermont needs to address health care costs now before the price tag rises. The cost of health care in the state is expected to increase by another $1 billion between now and 2012.

“There is a real imperative for us to figure out new ways to pay for health care in Vermont,” said Racine.

An amendment offered by Sen. Tim Ashe, D-Chittenden, to reduce the compensation for Blue Cross – Blue Shield’s Board of Directors failed in a vote of 19-10. The insurance company found itself at the center of a political controversy last year when it was revealed that the outgoing president was paid millions of dollars in bonuses.

Daniel.Barlow@timesargus.com.

http://www.timesargus.com/article/20100505/NEWS02/5050338/1003/NEWS02

Universal health care advocates rally in Vermont

By John Curran, Associated Press Writer
Boston Globe
May 1, 2010

MONTPELIER, Vt. — Hopeful that Montpelier can do what Washington didn’t, hundreds of people who want single-payer health care gathered in Vermont’s capital Saturday, staging a noisy, sign-waving march and rally.

The medium was the message — bussing or driving in from Rutland, Brattleboro, Burlington and elsewhere, they sang songs on the steps of City Hall and then walked about a half-mile through downtown to the Statehouse waving signs that read “Help the Needy, Not the Greedy,” “Vermont Can Lead the Way” and “Medicare for All.”

There, they swarmed over the capitol steps and camped out to listen as organizers of the “Healthcare is a Human Right” campaign and U.S. Sen. Bernie Sanders said Vermont could lead the way in establishing a universal health care system under which government agency would administer and make all payments for health care.

“We have Medicare, and it should be Medicare for all,” said Ellen Tenney, 54, of Saxtons River, who was among the marchers. “And that’s basically what single-payer would be. Everybody pays into the system but it’s a reasonable premium and it goes totally to health care.”

Her motivation was more personal than most. Her brother died in December of a heart attack because he couldn’t afford his medications, she said.

Tenney, who owns a Brattleboro bookstore, said she sees people regularly in similar straits.

“Our store is next door to a pharmacy, and I have people coming in to sell us books so they can afford their prescriptions next door at the pharmacy,” she said. “There are times I have to say no because it’s total junk they bring in. But a number of times, people have walked out of there and I think `Jesus, what a country, this is America?'”

The state Legislature has passed legislation that could result in a “public option” health insurance rejected by Washington or the Canadian-style single-payer system.

The bills passed by the House and Senate call for designing a single-payer system. Both would require federal approval.

The Senate’s bill focuses on single-payer as the goal, but also calls for two alternative designs. Differences will have to be worked out in negotiations between the chambers. It isn’t clear whether Gov. Jim Douglas, a Republican, will sign the bill, veto it or let it become law without his signature. His spokesman has said Douglas likes parts of the bill but has “strong concerns” about others.

Sanders, a longtime advocate of universal care, called it a “moral disgrace” that the U.S. is the only industrialized country in the world that doesn’t guarantee health care for all of its people.

“I want you to pass a single-payer health care program in Vermont” he said.

“And when you do that, I will go to the president of the United States and say `Mr. President, this is what Vermont has done, let `em go forward.’ And I’m going to go to my conservative friends in the Congress and say `You believe in states’ rights, well here’s a state that has passed single-payer, let `em go forward,'” he said, eliciting cheers.

The Vermont Workers Centers, which sponsored the event, estimated that about 1,500 people participated, though Montpelier police would give no estimate of the crowd size. The number in the march appeared to be less than 1,000.

http://www.boston.com/news/local/vermont/articles/2010/05/01/thousands_expected_for_vt_health_care_rally/

Pennsylvania Medical Students to Endorse Single Payer Bills SB 400 and HB 1660 on Harrisburg Capitol Steps

AMSA-PA Calls for Immediate Passage of Economic Impact Study Resolution, SR 267, to Determine Precise Cost Savings, Job Growth, and Healthcare Outcomes

Health Care for All Pennsylvania
http://healthcare4allpa.org

PRESS RELEASE

May 3, 2010

Contact:
Devin Oller, 925.286.6882, devin.oller@gmail.com
Chuck Pennacchio,215.828.5055, cpennacchio@gmail.com

Medical students from Penn State, Penn, and Temple will convene a press conference on the State Capitol steps, Monday, May 3, 2010 to rally their support behind the Family and Business Healthcare Security Act (SB 400/HB 1660), a cost-saving, job-generating, outcomes-based bill that would provide comprehensive health care for all Pennsylvanians through a single risk-pool mechanism – a publicly-funded, privately-delivered healthcare system.

Health care for all would be paid for by a fair-share 3% personal tax that replaces the current average costs of 8% for premiums, co-pays, and deductibles. Businesses would pay a fair-share tax of 10% on payroll, as compared to a current average of 22% on businesses for premiums, co-pays, and deductibles. Moreover, additional cost savings accrue with 90% streamlined administrative overhead, bulk-purchasing of prescription drugs, reduced “defensive” medicine procedures, and anticipated cuts in property taxes, auto insurance premiums, workers compensation, and more.

Aside from meeting family, business, and all citizens’ health care needs, including mental, dental, preventive and primary care, SB 400 and HB 1660 would provide two years of severance pay and job retraining for individuals who become unemployed because of changes to the system. The careful transition of some 65,000 displaced insurance workers will complement the predicted growth of 140,000 new health delivery jobs.

As future physicians, we recognize the need for a sustainable plan that puts the health of all Pennsylvanians first, while expanding jobs, business opportunities, and the ability for providers and patients to address medical needs on the basis of clinical evidence and evaluation. With a public option absent from the most recent federal healthcare bill, it is upon the states to take the role of providing high-quality, affordable coverage for all their residents.

We will be asking our senators and representatives, as a matter of economic and moral urgency, to pass Senate Resolution 267 in order to authorize an economic impact study on SB 400 and HB 1660. SR 267 has broad bipartisan support from 34 of our 50 state senators and is a critical first step to establishing the economic logic of this bill – a cure for that which ails our broken healthcare system and those who suffer economically, physically, and mentally.

http://www.opednews.com/articles/Pennsylvania-Medical-Stude-by-Press-Release-100503-37.html

Vermont House Passes Single Payer Bill: Why It Can’t Opt-Out Of Federal Health Reform To Implement It

By Igor Volsky
Wonk Room, Think Progress
Apr 27th, 2010

Last Friday, the Vermont House approved “its own version of legislation passed earlier by the Senate” that would allow the state to design “a single-payer system, in which a government agency would administer and make all payments for health care” or a public option. California passed similar legislation earlier this year, and theoretically, under a provision added to the new health care law by Sen. Ron Wyden (D-OR), both states could opt-out of the requirements of federal health care reform and establish a single-payer structure.

But there are at least two problems that could deter states from leaving national reform and developing their own initiatives. First, sates can’t implement their own “innovative solutions” until 2017, after they’ve already spent time and energy establishing the new state-based exchanges and regulating insurers. Democrats may have moved back the date to allow for a smoother and more uniform implementation process, but delaying the opt-out date will only discourage states from establishing their own systems. States that still chose to pursue their own plan, will have to reconcile their programs with the federal requirements for Medicare, Medicaid, FEHBP, Indian Health Service and, most importantly ERISA — a 1974 law that, among other things, preempts states from enacting legislation that is “related to” employee benefit plans. Under Wyden’s provision, states could easily obtain a waiver from participating in the new federal exchanges if their innovative reform meets certain requirements, but states will have to go to Congress if their reform affects the health insurance offered by large employers.

As the Center for Policy Analysis’ Ellen Shaffer suggests, this is a major set back for single-payer advocates:

Section 1332 [see text below] provides that they can apply to the Secretary of HHS to opt out of the Exchanges beginning in 2017, if they have a plan to provide comparable benefits to at least as many people as the Exchange would have been estimated to cover, at no greater cost. At that point, if the Secretary grants the waiver, the states are guaranteed the transfer of federal funds that would have gone to pay for premium subsidies through the Exchanges. However, states have to apply to coordinate funds and programs with all the other federal programs. The bill offers each state a streamlined process to coordinate its waiver requests, but the Secretary can only grant funds for those programs where she has existing authority. For example, HHS does not have jurisdiction over ERISA, which is administered by the Department of Labor, so an ERISA waiver is not possible under this legislation. Within HHS, the Secretary already has waiver authority for some programs, but not all.

During the House Education and Labor Committee’s mark-up, Rep Dennis Kucinich (D-OH) introduced an amendment that would authorize and require “the Secretary of Labor, in consultation with the Secretary of Health and Human Services” to waive the ERISA pre-emption (Sec. 514) for states that have enacted a state single payer system. The committee adopted the amendment, but it was left out of the final House bill.

Kucinich characterized health care reform as a “detour” from the single-payer cause when he publicly announced that he would support the bill; Vermont and California will soon learn that it’s certainly of no great help.

Health Reform Timelines

From The Commonwealth Fund

Timeline for Health Care Reform Implementation: Health Insurance Provisions
http://www.commonwealthfund.org/Content/Publications/Other/2010/Timeline-for-Health-Care-Reform-Implementation.aspx

Timeline for Health Care Reform Implementation: Revenue Provisions
http://www.commonwealthfund.org/Content/Publications/Other/2010/Timeline-for-Health-Care-Reform-Implementation-Revenue-Provisions.aspx

Timeline for Health Care Reform Implementation: System and Delivery Reform Provisions
http://www.commonwealthfund.org/Content/Publications/Other/2010/Timeline-for-Health-Care-Reform-Implementation-System.aspx

Consumers Guide To Health Reform

By Phil Galewitz
Kaiser Health News
Apr 13, 2010

The new health reform law is the most far-reaching health legislation since the creation of the Medicare and Medicaid programs.

The following is a look at the impact of the law, which will extend insurance coverage to 32 million additional Americans by 2019, but which will also have an effect on almost every citizen.

Here are some commonly-asked questions about how you might be affected:

Q: I don’t have health insurance. Will I have to get it, and what happens if I don’t?

A: Under the legislation, most Americans will have to have insurance by 2014 or pay a penalty. The penalty would start at $95, or up to 1 percent of income, whichever is greater, and rise to $695, or 2.5 percent of income, by 2016. This is the individual limit; families have a limit of $2,085 or 2.5 percent of household income, whichever is greater. Some people can be exempted from the insurance requirement, called an individual mandate, because of financial hardship or religious beliefs or if they are American Indians, for example.

Q: I want health insurance, but I can’t afford it. What do I do?

A: Depending on your income, you might be eligible for Medicaid, the state-federal program for the poor and disabled, which will be expanded sharply beginning in 2014. Low-income adults, including those without children, will be eligible, as long as their incomes didn’t exceed 133 percent of the federal poverty level, or $14,404 for individuals and $29,326 for a family of four, according to current poverty guidelines.

Q: What if I make too much for Medicaid but still can’t afford coverage?

A: You might be eligible for government subsidies to help you pay for private insurance that would be sold in the new state-based insurance marketplaces, called exchanges, slated to begin operation in 2014.

Premium subsidies will be available for individuals and families with incomes between 133 percent and 400 percent of the poverty level, or $14,404 to $43,320 for individuals and $29,326 to $88,200 for a family of four.

The subsidies will be on a sliding scale. For example, a family of four earning 150 percent of the poverty level, or $33,075 a year, will have to pay 4 percent of its income, or $1,323, on premiums. A family with income of 400 percent of the poverty level will have to pay 9.5 percent, or $8,379.

In addition, if your income is below 400 percent of the poverty level, your out-of-pocket health expenses will be limited.

Q: How will the legislation affect the kind of insurance I can buy? Will it make it easier for me to get coverage, even if I have health problems?

A: If you have a medical condition, the law will make it easier for you to get coverage; insurers will be barred from rejecting applicants based on health status once the exchanges are operating in 2014.

In the meantime, the law will create a temporary high-risk insurance pool for people with medical problems who have been rejected by insurers and have been uninsured at least six months. This will occur this year.

Starting later this year, insurers can no longer exclude coverage for specific medical problems for children with pre-existing conditions nor deny coverage to children with pre-existing illnesses.

Insurers later this year will also be barred from setting lifetime coverage limits for adults and kids. In 2014, annual limits on coverage will be banned.

New policies sold on the exchanges will be required to cover a range of benefits, including hospitalizations, doctor visits, prescription drugs, maternity care and certain preventive tests.

Q: How will the legislation affect young adults?

A: If you’re an adult younger than 26, you’ll be able to stay on your parent’s insurance coverage as long as you are not offered health coverage at work. This provision officially takes effect in September, but insurers may not have to comply until the beginning of a new health plan year – which often happens in January.

In addition, people in their 20s will be given the option starting in 2014 of buying a “catastrophic” plan that will have lower premiums. The coverage will largely only kick in after the individual has $6,000 in out-of-pocket expenses

Q: I own a small business. Will I have to buy insurance for my workers? What help can I get?

A: It depends on the size of your firm. Companies with fewer than 50 workers won’t face any penalties if they don’t didn’t offer insurance.

Companies can get tax credits to help buy insurance if they have 25 or fewer employees and a workforce with an average wage of up to $50,000. Tax credits of up to 35 percent of the cost of premiums will be available this year and will reach 50 percent in 2014. The full credits are for the smallest firms with low-wage workers; the subsidies shrink as companies’ workforces and average wages rise.

Firms with more than 50 employees that do not offer coverage will have to pay a fee of up to $2,000 per full-time employee if any of their workers get government-subsidized insurance coverage in the exchanges. The first 30 workers will be excluded from the assessment.

Q: I’m over 65. How will the legislation affect seniors?

A: The Medicare prescription-drug benefit will be improved substantially. This year, seniors who enter the Part D coverage gap, known as the “doughnut hole,” will get $250 to help pay for their medications.

Beyond that, drug company discounts on brand-name drugs and federal subsidies and discounts for all drugs will gradually reduce the gap, eliminating it by 2020. That means that seniors, who now pay 100 percent of their drug costs once they hit the doughnut hole, will pay 25 percent. Beginning in 2011, drug companies will be required to give a 50 percent discount on brand-name drugs for prescriptions filled in the doughnut hole.

And, as under current law, once seniors spend a certain amount on medications, they will get “catastrophic” coverage and pay only 5 percent of the cost of their medications.

Meanwhile, government payments to Medicare Advantage, the private-plan part of Medicare, will be frozen starting in 2011, and cut in the following years. If you’re one of the 10 million enrollees, you could lose extra benefits that many of the plans offer, such as free eyeglasses, hearing aids and gym memberships. To cushion the blow to beneficiaries, the cuts to health plans in high-cost areas of the country such as New York City and South Florida — where seniors have enjoyed the richest benefits — will be phased in over as many as seven years.

Beginning this year, the law will make all Medicare preventive services, such as screenings for colon, prostate and breast cancer, free to beneficiaries.

Q: How much is all this going to cost? Will it increase my taxes?

A: The package is estimated to cost $938 billion over a decade. But because of higher taxes and fees and billions of dollars in Medicare payment cuts to providers, the package will narrow the federal budget deficit by $143 billion over 10 years, according to the Congressional Budget Office.

If you have a high income, you will face higher taxes. Starting in 2013, indivi
duals with earnings over $200,000 and married couples earning more than $250,000 will pay a Medicare payroll tax of 2.35 percent, up from the current 1.45 percent. In addition, high-income taxpayers will face a 3.8 percent tax on unearned income such as dividends and interest over the threshold.

Starting in 2018, the law will also impose a 40 percent excise tax on the portion of most employer-sponsored health coverage (excluding dental and vision) that exceeds $10,200 a year for individuals and $27,500 for families. The tax is often referred to as a “Cadillac” tax.

The law also will raise the threshold for deducting unreimbursed medical expenses from 7.5 percent of adjusted gross income to 10 percent.

The law also will limit the amount of money you can put in a flexible spending account to pay medical expenses to $2,500 starting in 2013. Those using an indoor tanning salon will pay a 10 percent tax starting this year.

Q: What will happen to my premiums?

A: That’s hard to predict and the subject of much debate. People who are sick might face lower premiums than otherwise because insurers won’t be permitted to charge sick people more; healthier people might pay more. Older people could still be charged more than younger people, but no more than three times as much.

The bigger question is what happens to rising medical costs, which drive up premiums. Even proponents acknowledge that efforts in the legislation to control health costs, such as a new board to oversee Medicare spending, won’t have much of an effect for several years.

http://www.kaiserhealthnews.org/Stories/2010/March/22/consumers-guide-health-reform.aspx

Problems and Challenges in the New Healthcare Act

By Peter Knowlton, President, UE Northeast Region

(Published in the May 2010  edition of the UE News.  UE is the abbreviation for the United Electrical, Radio, and Machine Workers of America.)

UE locals bargaining for their members’ healthcare will get little help from the Health Care and Education Reconciliation Act (HCERA) passed by Congress and signed by the president. While millions of uninsured will gain access to coverage, and for the first time the U.S. government will prohibit health insurance companies to deny coverage because of pre-existing conditions, there are harmful aspects to the new law. Much as NAFTA legitimized cross-border corporate exploitation of workers, HCERA confirms the domination of healthcare in the U.S. by private health insurance corporations, whose own maximum profit remains their overriding priority.

The new law endorses the insurance industry and employer push for high-deductible plans, health savings accounts and flexible spending accounts. Such schemes require working people to pay the first several thousand dollars of health service costs out of pocket before the insurer pays a dime.

HCERA also subtly sets the dangerous benchmark that 10 percent or more of your income should go toward the cost of healthcare. The legislation sets a threshold in 2014 that, only after you pay more than 9.5 percent of your income for health insurance do you qualify for a “premium tax credit”. In 2013 the legislation increases the threshold for the itemized deduction for unreimbursed medical expenses on your income tax return from the present 7.5 percent of adjusted gross income, to 10 percent of adjusted gross income.

The private health insurance industry will not only survive, but thrive, under this legislation which mandates everyone not covered by an employer plan to purchase health insurance. In my home state of Massachusetts, where the state legislated an individual mandate in 2006, we have the highest private insurance premium rates in the country.

An extremely troubling provision of HCERA says that, starting in 2014, an employer with 50 or more full-time employees will pay a $2,000 per employee penalty for not providing affordable health insurance. That could be the beginning of the end for employer-provided healthcare. It is hard to imagine that employers won’t notice that the fine for not providing insurance is a lot lower than the cost of premiums to insure employers. It’s not clear what will happen to those workers who lose coverage.

The so-called “Cadillac” tax will be imposed on plans that would have been considered “Chevys” just a few years ago. Most workers’ health plans have not gotten better or more luxurious – they’ve just gotten a lot more expensive. That’s not the workers’ fault, and the rise in overall premium costs is not really our employers’ fault either. It is the insurance companies, along with the pharmaceutical industry and big hospitals, that have made good health coverage so expensive that it seems like a luxury. But starting in 2018 HCERA levies a tax penalty on decent health insurance plans above a certain dollar limit – another subtle and dangerous message that there should be a financially penalty for having decent healthcare. In my part of the country, the Northeast, many employers’ health premiums are already high enough to qualify for the tax penalty.

The conversion of our health insurance system from managed care (HMOs) to high deductible plans and health savings accounts will continue to harm workers forced to make higher and higher up-front payments when they or their children need care. In the last four years the number of companies offering high-deductible plans has nearly tripled, from 4 to 10 percent in 2005, to 11 to 28 percent in 2009.

Healthcare reform did not have to turn out this way. The organization Physicians for a National Health Plan (PNHP) says that, with a payroll tax of just 3 to 5 percent, we could have a medicare-for-all single payer system that would cover every U.S. resident, and put an end to deductible, co-pays, and the insurance companies’ controlling our healthcare system. Employers would also have to contribute 6 to 8 percent of their total payroll to finance such a plan, but that is a lot less than the 20 to 30 percent of payrolls that they now hand over to the private insurance
companies in the form of premiums.

The bill approved by Congress and the White House does some good, but will also cause us many problems. But because we are organized, we are not powerless. UE locals have the ability to shape how much we pay for health insurance. Whether we have a fee-for-service plan, an HMO, PPO, or HSA, we can fight to set limits on what our members pay for healthcare each year. Keeping our health insurance affordable, while it’s controlled by profit-driven insurance corporations, will continue to be very difficult, but with membership involvement and action we will find ways to make healthcare more affordable and accessible to our members, regardless of their health condition.

As is so often the case, when the government fails to adequately protect us, UE members must act together to win some relief and fairness. In the area of health insurance, our collective vigilance and militance are still going to be necessary.

Single-Payer Candidate Wins NC Primary

By David Swanson
Posted on 05 May 2010

North Carolina house candidate Marcus Brandon defeated a 30-year incumbent tonight, by 60% to 40%, to become the Democratic nominee in an overwhelmingly Democratic district in Greensboro, North Carolina.

Brandon has pledged to introduce a bill to create single-payer healthcare in North Carolina, and now he’ll be able to do it.

Brandon has promised that the first piece of legislation he will introduce will be the “North Carolina Healthcare Act” which will provide universal single-payer healthcare to every citizen of the state.

I spoke with Brandon back in February, and he said that he remains a supporter of national single-payer healthcare and will continue lobbying for passage of HR 676, Congressman John Conyers’ bill:

“The HR 676 fight is definitely not over, but we must now strategically shift the focus to the state level. When other states see that we can cut the cost of healthcare, streamline our medical industry, and still provide universal coverage to all North Carolinians, then all of the sudden, single-payer health care doesn’t look so bad.”

Brandon argues that a single-payer system could save over $1.5 billion per year in reduced bureaucracy in the state of North Carolina alone. And he speaks confidently about making this happen:

“North Carolina is poised to be the first state to adopt single-payer, once I am able to introduce it. North Carolinians are ready for real solutions to healthcare. North Carolina has the third highest healthcare cost of any state, while it sags at 37th in average income. This is a disparity that most North Carolinians feel when they have to think about healthcare. Every day, as I am knocking on doors to talk to voters, I hear stories of people who cannot afford insurance and become victims of this for-profit industry.”

Brandon says his bill is similar to other states’ initiatives such as the “Minnesota Health Act” or the “California Universal Healthcare Act.” Brandon points to these two bills as excellent examples of how a single payer healthcare system could be both fiscally sound and provide full coverage.

Brandon served in 2007 and 2008 as Dennis Kucinich’s National Finance Director and Deputy Campaign Manager. He says that Kucinich inspired him:

“Dennis urged me to run for office so we could build a state-by-state grassroots movement for single payer and other progressive issues. My campaign for the North Carolina House is an extension of the work I did with Dennis Kucinich.”

While Kucinich has struggled unsuccessfully thus far to pass federal legislation facilitating the state creation of single-payer healthcare systems, states are pressing ahead and will deal with lawsuits from “health” corporations when and if they arise.

http://www.davidswanson.org/node/2655