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Archive for November, 2009

Many of our health insurance clients and prospects are happy enough to wait for the so called Health Care Reform Bill to spastically make its way through Congress, with the hope that as soon as it passes they will be able to piggy back onto the Public Option thus saving money on purchasing an individual health insurance plan.

The fact is that only 1 out of 10 Americans will even be eligible for the plan, and even they will have to qualify.  Furthermore, the GAO only expects 6 million Americans total to qualify for the plan at the final count.  The insurance exchange as it exists in Massachusetts will not be available to most Americans as they will have to stay with their employer plan.

Only certain categories of people could use the exchange: the self-employed, small businesses, lower-income people who qualify for tax credits to purchase insurance and those who are otherwise unable to find affordable private coverage. (from Politico)

170 Million Americans would have to stay with their current health plan as the Exchange would not be for them.  Not to mention that the Public Option won’t even be available until 2013 at the earliest.

The Peter G. Peterson Foundation recently predicted the House bill would add more than $1 trillion to the deficit over the next 20 years

So, at this point armed with this information you might be asking yourself, “why even bother with the public option, why not just expand Medicaid or Medicare?”

And you would be right!  There is simply no reason to reinvent another Medicaid.  Medicare and Medicaid are slowly bankrupting the nation with administrative costs and fraud.

But the real reason for this nonsensical plan is because Obama promised health reform and needs to deliver to save political face.  That’s right, this ridiculous plan that will further rack up deficits for no reason is so Obama and Company can look good.

I am by no means a Republican either and fully support anyone willing to fix this health care system, but it has to be for the right reasons with the right solution.  And that solution is only a Single Payer plan.  The rich can keep their expensive plans but will still have to pay the same Single Payer tax as everyone else.

Members of the organization MoveOn.org hold a rally in Nebraska in support of a public option for health insurance. The reform debate has emphasized the public option, but only about 10 percent of the population would be eligible. Photo: AP

Americans are beginning to doubt the economics and the effectiveness of the ObamaCare legislation and by all rights they should!  According to a new poll 43% oppose and 41% support it with the rest not knowing what we are even talking about because they are worried about how they are going to pay rent.

And seemingly, the supporters of Obamacare are less enthusiastic than the opposers.  Worse, they are more vocal.  From the Dittoheads to the Crazy Christian right they are screaming bloody murder everyday.

The latest survey was conducted by Stanford University with the nonprofit Robert Wood Johnson Foundation.

Very surprising to me was the fact that the Opinion Poll demonstrated that most Americans seemed happy to allow the discriminatory health insurance practices of denying coverage to the sick to continue unabated.  In fact, rather then help their fellow citizens which would make them have to pay higher premiums to cover the uninsured sick people most people surveyed vocally announced their support for the continuation of the prejudicial underwriting practices.

In the AP poll, when told that such a ban would probably cause most people to pay more for their health insurance, 43 percent said they would still support doing away with pre-existing condition denials but 31 percent said they would oppose it.

In Massachusetts where they currently have mandatory health insurance and New York, the costs for a 20 year old healthy male can be over a $1000.  In Florida where insurance is not mandatory they are usually under $100.  By forcing the acceptance of the sick by health insurance companies, it will push up the premiums for the healthy 20 year olds and such by a considerable percent much like it did in New York and Massachusetts.

I am not opposed to this in theory but in practice it is downright silly!  The only way to fix this issue entirely is to have everyone pay taxes on a Universal Health Care, Single Payer Plan.  Otherwise, we will keep seeing health care costs escalate as well as billions of dollars of fraudulent claims and administraitive costs pushing health care costs up to becoming the only significant output of our economy.  We are becoming the joke of the civilized world with our absolute archaic health insurance laws.

“These trade-offs really matter,” says Robert Blendon, a professor at the Harvard School of Public Health who follows opinion trends. “The legislation contains a number of features that polls have shown to be popular, but support for the overall legislation is less than might be expected because people are worried there are details about these bills that could raise their families’ costs.”

Another important fact is that these polls don’t make a difference at all because the average American is totally uneducated about Health Care.  They have no idea what is the right thing and believe that Rush Limbaugh is descended from Angels.  To let average American’s decide the health care issue is bordering on ludicrous.   Their job is to elect their Representatives to make the policy decisions on their behalf.  Not to write the freakin thing.

Paul B. Ginsburg, Ph.D.

No issue has dominated the health care reform debate as much as whether the U.S. government should offer a health insurance plan to compete with private insurers — the so-called public option. Congress has discussed two approaches to the public option, one of which would have the public plan pay providers at rates close to Medicare rates (generally, substantially below those of private insurers). Opposition by insurers, providers, and the business community, as well as fears that such a payment structure would lead to a single-payer system, has pushed this “robust” public option off the table. Instead, both the House bill and, presumably, a final Senate bill will call for the public plan to negotiate rates with providers. There is little reason to expect that such a plan would bring much, if any, competition to the market, since anticipated enrollment levels would give the public plan less negotiating clout than private insurers boasting many more enrollees. Clearly, whatever decision is made about a public option is much less important than decisions about the level of subsidies for expanding coverage, as well as details of the regulatory reform of the individual insurance market (including enforcement of an individual mandate), reform of the delivery system, and financing of reform.

Despite all the distracting rhetoric about the public option, congressional consideration of reform appeared to be nearing a climax until Senate Majority Leader Harry Reid (D-NV) recently signaled that the Senate may not vote on a bill until next year. As of early November, the full House had narrowly passed a reform bill, while Senate leaders had reportedly combined two committees’ bills into a single proposal. Although details of the combined Senate bill were not yet public, the House and Senate proposals are likely to be broadly similar but to differ in important details. Each will have four major components: expansion of the number of people with insurance, reform of the individual and small-group insurance markets to provide more people with affordable options, changes to the health care delivery system to encourage high-value care and slow the rate of cost increases, and tax increases and spending reductions to finance reform.

The proposals have followed the Massachusetts approach to expanding coverage — a blend of Medicaid-eligibility expansion for the lowest-income people and subsidies for purchasing insurance for those with somewhat higher incomes. Medicaid expansion would have the largest effect on low-income people, such as young adults and the near-elderly, who do not qualify for Medicaid today because they have no dependent children or disability. The federal government would fund a much higher proportion of the costs for the newly eligible than for the currently eligible, but states, overwhelmed by existing fiscal responsibilities for Medicaid, are resisting. Subsidies for private insurance would be provided on a sliding scale, but the Senate bill is likely to be less generous than the House bill. And the desire to keep the cost of reform down has led to questions about whether insurance will really be affordable for those targeted for assistance.

Both proposals would revamp regulation of the individual and small-group insurance markets, with the House favoring a national insurance exchange and the Senate presumably supporting state exchanges in which at least those Americans receiving subsidies would have to purchase insurance. Carriers would offer a limited number of products standardized by actuarial value (a measure of the comprehensiveness of coverage), a step intended to increase competition by facilitating comparison and choice for consumers. Medical underwriting — denying coverage or varying the premium on the basis of the enrollee’s medical history — would be banned, and insurers would have to accept all applicants. Rates could vary with the enrollee’s age but only by a prescribed ratio that is less than the expected age-related variation in claims.

Individuals would be required to carry coverage. As compared with continuing the voluntary coverage system, mandating coverage will lead to an increased number of insured people — for any schedule of federal subsidies. But it is also essential to insurance-market reform. Without a mandate, many people would buy insurance only when they got sick, as they have in states that require insurers to sell to everyone at the same premium regardless of health status. Subsidies for low-income people will limit the magnitude of adverse selection, which will be influenced by the size of the subsidies — a factor that will also affect Congress’s willingness to support strong enforcement of the mandate. The House bill probably has larger subsidies and stronger mandate enforcement than those that will be included in whatever bill emerges from the Senate. Both chambers would require that employers over a certain size offer employees coverage and pay a portion of their premiums. The House bill would require employers who do not offer such an option to pay taxes amounting to as much as 8% of their payroll; the final Senate bill is expected to require much smaller payments.

Policies that are designed to improve the efficiency of care delivery are related to expanding coverage and reforming the insurance market mainly in the sense that if spending continues to increase much faster than incomes, declining affordability of insurance will undo much of the gain in coverage, and costs will exceed the fiscal capacity of government. Many observers believe that the delivery system is inefficient enough that spending growth can be slowed without sacrificing quality. But it will not be easy.

Provider-payment reform and changing the tax treatment of health insurance probably hold the greatest potential for slowing cost trends. Proposed payment reforms would affect only Medicare directly — but with the expectation that other payers would follow — and would consist primarily of piloting broader reforms that would introduce elements of capitation and payment per episode. How much of a difference such changes would make depends on the degree to which Congress grants authority and resources to the executive branch or an independent board to implement successful approaches more broadly. But even with full support, success will also depend on whether the ideas for payment reform turn out to be worthy.

The reform bills include provisions for advancing health information technology and supporting comparative-effectiveness research. Many experts believe that both efforts will improve the quality of care, but it is hard to predict whether the gains will be substantial and whether costs will rise or fall as a result. The reform proposals would also expand prevention efforts, but Congress now recognizes that even though prevention may improve health outcomes, it is unlikely to reduce costs.

To avoid increasing the federal deficit, both chambers rely on a combination of tax increases and reductions in the growth of Medicare spending and other cuts — reductions in the growth of payments for providers other than physicians and payment cuts to Medicare Advantage plans. Although some observers have criticized these reductions for diminishing Medicare benefits, a more important criticism is that in the absence of reform, these policies would probably have been enacted to address the budget deficit but will no longer be available for that purpose. The House has emphasized tax increases for high-income families, and the Senate has emphasized taxing health insurance plans costing more than $21,000 per year for family coverage. The Senate approach is likely to have a powerful effect on health care costs by inducing people to shift to less-comprehensive insurance.

If combined House–Senate reform legislation makes it to the President’s desk for signature, enactment would be only a start to the reform process. Regulations will need to be written, organizations (such as exchanges) will need to be built, and midcourse corrections will need to be legislated to deal with unforeseen consequences. And since only tentative steps will have been taken to reform care delivery, policymakers will inevitably have to return to battle on that front.

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