Vol. 178 October 1, 2017 What is Single-Payer Health Insurance?

October 1, 2017

Now that Bernie Sanders is again firing up the discussion about single-payer health insurance, it might be a good idea to review this complex issue. So, here’s a short self-test for you to gauge your understanding of what Bernie, and a lot of other people, are talking about.  The correct answers are supplied right away, so you won’t stay confused for long. Since this is an internet-based test, YOUR ANSWERS, of course, WILL BE COMPLETELY ANONYMOUS. Nothing will  be recorded by NSA , Equifax, or the Russians.

 

“Single-payer” means:

  1. socialized medicine
  2. 100% of health care costs are paid for with taxes
  3. Pop-Pop picks up the dinner bill for everyone
  4. none of the above

Answer: 4. none of the above – In socialized medicine health care facilities and providers are owned by the government. “Socialized medicine” is a pejorative term which is now irrelevant since at least 70% of U.S. healthcare costs are already met by tax dollars  from Medicare, Medicaid, or the Veterans Administration. “Single-payer” is just an insurance scheme for public or privately owned services. In countries with universal health care insurance 77%-87% of costs are met by taxes. In the U.K. private insurance pays for about 13%. Pop-Pop gladly picks up the dinner bill for his children, but health insurance is still on them.

The number of countries with universal health insurance are:

  1.  1
  2.  2
  3.  3
  4. 58

Answer: 4. 58 – Germany in 1883, France in 1945, UK in 1946, Australia in 1975, Canada in 1984, Israel in 1995.

A basic tenet of single-payer insurance is that everyone will be covered without regard to income level:

  1. true
  2. false
  3. true, but …

Answer: 3. True, but … it will take years to bring everyone in the U.S. under “Medicare For All”.  Each year or so another decade of ages will be added to the coverage. States will need to coordinate their income-based Medicaid programs with “Medicare For All”.  Some states could request and receive waivers from the national program. Etc., etc., as incrementally we always go.

Universal health care insurance in other countries is administered:

  1. nationally
  2. regionally
  3. locally (municipalities)
  4. all of the above

Answer: 4. all of the above – Germany has 1100 public and private “sickness funds” with a national standard level of coverage. In the Netherlands health insurance is administered by municipalities that levy local taxes to pay the costs. This  apparently enhances transparency and both taxpayer and patient satisfaction. Conclusion: If you have seen one system of universal health coverage, you have seen ONE. By the way, isn’t “sickness fund” a much more honest name for insurance which pays for medical care and does not necessarily buy “health”. (Leave it to the Germans to say it like it is).

Universal health insurance is based on which basic insurance principles:

  1. spread the risk over the greatest number of people
  2. use education and regulation (i.e.. fire laws) to reduce the highest risks of loss
  3. if you win (stay healthy), you “lose” (your premiums). If you “lose” (get sick), you win (care is paid for)
  4. use excess premium revenue to build fancy office buildings and pay for expensive lobbyists .

Answer: 1-3 (see subsequent question for further information on #4)

Single payer health insurance will cost less to administer than our present system:

  1. true
  2. false
  3. true, but …

Answer: 3. true, but… maybe not as much reduction as we hope. Administrative costs for the individual provider will probably remain the same because “meaningful criteria” compliance, complex diagnostic coding, need for medical necessity justification, and need for data showing that quality is not being eroded will continue to require significant personnel time and computer capability. Remember also that Medicare is currently administered in large part by “fiscal intermediaries” like Blue Cross. That probably won’t change. Some predict that because of continued pressure on a single-payer to reduce costs, it may, if fact,  get even more complicated for providers to get paid for their services. Of course, the huge consumer advertising, employer marketing, and lobbying expenses of private health insurance companies will be greatly reduced when the market share of private insurance is reduced to 10-15% as has occurred in other countries. If only we could get Visa to run Medicare’s fraud protection system!

Why not “Medicaid For All”;  could individual states institute universal health insurance so that we wouldn’t have to wait for a national consensus?

  1. no
  2. yes
  3. yes, but…

Answer: 3. Yes, but … the hallmark of universal health insurance in other countries is a consistent standard of coverage for all residents. Medicaid programs are state-specific and coverage is extremely variable, as is provider payments. If you see one, you have seen one. Attempts to waive the Obamacare national standards by those wishing to repeal it spotlighted the potential glaring inequities. But, Massachusetts has done it for 90% of its population, and there are bills in its legislature to do it for all. California is attempting to do it. Most California families and businesses, a University of Massachusetts study has said, would pay less for health care than they do now, even with the new taxes, because they would no longer pay premiums, deductibles or co-pays. As Samantha Bee recently noted: “You don’t have to be racist anymore to believe in States’ Rights .”

Why is a single-payer sometimes described as a “double-edged sword”?

  1.  a single-payer could have much greater negotiating leverage with both suppliers (drug companies) and providers (doctors and hospitals)
  2. a single-payer would be perched on the sharpest edge of the cost-quality equation
  3. the standardization of payments by a single-payer could dampen innovation and hamper medical progress
  4. all of the above

Answer: 4. all of the above – More leverage against the drug companies is “good”. More leverage against the providers could be “bad”.  Despite studies that show that good quality care is less costly, many still see a dichotomy between cost and quality. Concern about hampering innovation (“new ways of doing things”) with excessive standardization (“the old ways”) was one reason Obamacare created a Center for Innovation within Medicare as part of the ACA .

Who is in favor of single-payer health insurance?

  1. 60% of those polled
  2. 38% of those polled
  3. depends on the nature of the poll
  4.  all of the above

Answer: 4. all of the above – The 60% in favor of single-payer health insurance dropped to 38% when the question was tied to one about increased taxes. The most recent Harris-Harvard poll (9/17/17) showed that 52% were in favor of single-payer insurance. 69% believe that it would provide more coverage, including 54% of Republicans. . Most of the other questions about a governmental single-payer were 50/50 pro and con. Some physicians, hospitals, and other providers are in favor of single-payer insurance.

What are some of the barriers to implementing single-payer, universal health insurance in the U.S.?:

What does President Trump think?:

 

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Vol. 172 June 1, 2017 Why Republicans Dislike Obamacare (simplified)

June 2, 2017

“You pays yer money,
and you takes yer choice.”

 

 

The #1 reason is that the Affordable Care Act (ACA) expanded health insurance to at least 23 million voters in the name of Obama, a Democrat.

The #2 reason is that Obamacare is costing the federal government more than the Congressional Budget Office (CBO) predicted.

That is because more of the uninsured enrolled in Medicaid than predicted and less than predicted bought policies through the health insurance exchanges. I am sure that there are all sorts of complex economic reasons for that, but to my mind it seems pretty simple.  If Medicare is the Gold Card of health insurance, Medicaid is at least the Silver Card.  The Medicaid card is accepted by all hospitals and ERs (by law) and many physician specialists. Even some behavioral health services can be paid for with the card. Medicaid insurance is always state-funded, and each state develops their own program.”If you know one Medicaid program, you know just one Medicaid program.”

Obamacare increased federal subsidies to states that expanded people’s eligibility ( i.e.; by raising eligible income levels) for Medicaid insurance. Federal subsidies existed for the first few years, but Medicaid costs would eventually be borne by the individual states’ taxpayers. If you are the Republican governor of a state running for reelection every four years you’re probably not enthusiastic about that. However, one Republican Governor ( Romney of Massachusetts) had already expanded that state’s Medicaid eligibility to achieve nearly 100% insured. The present Republican Governor (Baker of Massachusetts) will be very unhappy if he loses the federal subsidies to Medicaid under Trumpcare.

Health insurance exchanges were supposed to recruit into the health insurance risk pool a lot of healthy young people not covered by employer-based plans. These healthy young people would need less health care than their elders, so their premiums would be a “net plus revenue” to the insurance companies. When that “net revenue” did not appear as large as expected several companies withdrew from the exchanges with much media attention. The “individual mandate” tax which was supposed to “incentivize” the uninsured to buy policies through the exchanges was apparently too low to work.

So, the essential elements of the Republican “replacement” of Obamacare are to:
1) roll back federally subsidized Medicaid expansion and
2) do away with the health insurance exchanges with their federal subsidy of premiums and the associated “individual mandate”.

Of course, Republicans propose to keep the more popular benefits like required coverage for pre-existing conditions and coverage for children up to age 26 living at home. Obamacare also established a new standard definition of “essential benefits” such as pregnancy and other maternal benefits and put a maximum cap on premiums for the elderly. One Republican proposal would define pregnancy as a “preexisting condition” and deny coverage. Watch for further developments in evolving Senate proposals.

The predictions of the CBO in the past (since Nixon created it on the way out the Oval Office door) have been more nearly correct than those of most other agencies and organizations. It’s reputation as bipartisan and objective remains intact. The publication of Republican “replacements” before the CBO’s analysis could be carried out clearly hurt the credibility of their proposals.

Multiple evidence-based studies and the experience of all other developed countries with government-based health insurance (does NOT have to be a “single payer”) have shown that providing universal health insurance in the long run saves money;
-by providing access to medical care for all citizens,
-by enhancing the cost-effective introduction of new technology,
-and by rationalizing the resource allocation of a defined budget.

We have a history of difficulty in taking the long view. For example, the initial enthusiasm for preventative/wellness programs exhibited by the early HMOs eroded considerably when they realized that the policy holder might not be with the same insurance company when the time came years later to reap the benefits of good health (less medical care expenses).  Certainly Governors, congressmen, and other public officials with short 2, 4, or 8-year terms have little incentive to always appreciate the long-term cost benefits down the road. (“No regulations to fight against climate change” comes to mind)

So as “they”say, being either the British magazine Punch in 1846 or Mark Twain in 1884 in “Huckleberry Finn”,
“You pays yer money, and you takes yer choice.” 


Vol. 169 April 15, 2017 “Free-market Health Care Doesn’t Work”

April 17, 2017

“Nobody knew health care could be so complicated.”
-Donald Trump 2/27/17

Stephen Colbert responded with: “There was at least one person who knew that it was complicated, that tall, thin, greying guy who used to be in your office, Donald.”

Of course, there are lots of people who know how complicated it is. One of them is my old boss, Jim Lyons, founder and past-CEO of Cape Cod Healthcare, Inc. He is retired now and hasn’t lost his knack of making sense of the morass. He did just that in a recent Op Ed piece in the Cape Cod Times, and I’m shamelessly plagiarizing parts of it (in bold) for today’s blog.

“The fallacy [of the health care debate] is that necessary healthcare services is a free-market choice, as with buying a car, a house, or a kitchen table. If you have a stroke, break your hip or have an automobile accident [you don’t make] the same free-market choice for service”.

You could argue that if you want an elective procedure like a new knee, a new hip, or cancer treatment there is the opportunity for more choice, and that is true. Just take a look at the burgeoning advertising budgets of competing medical centers. The say they are competing on “quality”, and they are competing for your dollar, or more nearly correct the insurance company’s and the federal Medicare dollar. So far, in no U.S. health care market region has this “competition” led to lower costs. We recently wrote about the growing “lower-cost” market of medical tourism.

The two biggest reasons that health care costs keep rising are 1) we are all living longer and 2) better medical technology (both electronic and “better living through chemistry”).

 “New technology in health care almost always results in increased costs. In industry, new technology often lowers the cost of production. This is not the case for health care innovations.”

In fact, The Hastings Center estimates that 50% of our increasing health care costs is due to new technology. MRI exams have replaced  CT scans and other x-ray procedures in many instances, even in mammography; coronary surgery is being replaced in some instances by “simpler” medical devices inserted through a blood vessel; newer drugs with marginally better effects for heart disease and cancer are selling at much higher prices; PET scans are becoming the standard of care in certain cancer treatment protocols, etc.

Many years ago I remember the responses of a delegation of physicians and administrators from Great Britain who were touring American medical centers looking at our health care facilities. They were impressed, of course, with the MRIs and cardiac surgery units in Boston, but they “were just like what we had in London.” But, then they saw the same facilities in Worcester, Springfield, even Winchester and Burlington, and impossibly, Cape Cod, and they were impressed.

Efforts to control health care costs continue to be futile. “Republicare” was a political disaster and only attained a 17% approval rate in public polls. “Medicare For All” which calls for an incremental extension of Medicare coverage to those below 65 years of age has been in the House of Representatives (HR 676) since 2015. In Massachusetts there are now no less than four separate bills in the legislature calling for a single-payer Medicare For All in Massachusetts.

“One reason that it’s probably not politically possible to make a change to a single-payer system at this time is the more than 1,000 great buildings for servicing health insurance companies all over the country, full of many workers, many executives, and billions of forms.”

“Whether health care is a privilege or a right, we have made such great progress in the past 50 years that I don’t want to see any new health care plan that slows or reverses our progress. Please remember, health care is not a free-market choice like many of our other important decisions.”


Vol. 167 March 15, 2017 AHCA (RepubliCare) Revealed

March 15, 2017

WINNERS: Young, Wealthy, Healthy, “Blue States” (urban millennials)
LOSERS: Older, Poor, Sick, “Red States” (rural working poor)

The American Health Care Act (AHCA) was developed by Paul Ryan (R) who has been publicly promising a Republican health care act since 2009!  He apparently does not want his name attached to this one. Neither does Trump. So I choose to call it “RepubliCare”.

The Congressional Budget Office’s “quick and dirty” analysis of the American Health Care Act (actually two bills still in committee) estimates that 14 million people will lose their health insurance in 2018 if it “replaces” the Affordable Care Act (Obamacare). Of all the projections, this one is probably the most crucial, since it will be a factor in the mid-term elections.

The CBO is a non-partisan, independent body created by President Richard Nixon in his last act before resigning in 1974. The CBO aids Congress in developing their own budget proposals, in objectively costing out their proposed bills, and in analyzing budgets developed by the Executive branch. The Commonwealth Fund (a liberal think tank) has determined that all financial projections of ACA costs were inaccurate, but that the CBO was closest to the actual. This current CBO report was done in association with the Congressional Joint Committee on Taxation. It is “quick and dirty” because the sudden appearance of the two bills surprised them. The CBO states it had insufficient time to project the cost effects on states and other “macroeconomic” effects, as required by the House of Representative rules for any “major legislation”.  The published projections actually represent the mid-point between low and high estimates, neither of which have been made public.

RepubliCare is projected to trim $337 Billion off the federal deficit over 10 years. According to the CBO most of the increase in the uninsured and the cost savings (federal only) would result from repealing the individual mandate, lowering the federal subsidies for low-income non-group policies, decreasing the federal subsidy to Medicaid by going to “block grants” to states, and stopping any expansion of Medicaid coverage after 2020.

CBO had three weeks to analyze the ACA. They had 5 days with RepubliCare. CBO 2010 projections of the ACA costs were lower than actual because 1) more people opted for Medicaid coverage than expected, 2) actual Medicaid costs per enrollee were higher than expected,  3) the individual mandate (currently a $695 yearly penalty for not buying health insurance) proved too weak an incentive for young people to buy insurance, 4) health insurance exchanges (the private insurers market place) attracted only about half of the projected number of people, and 5) the general economy improved slower than estimated (“did not match the Ronald Reagan Recovery curve.”)

Rather than boring you with repeats of the number of “millions losing health insurance per year” under RepubliCare, here are some “fun facts” about it you can use to punctuate chats with your friends and colleagues:

  • It is 66 pages long. (That calculates out to about 8.25 pages per year for the writing pace of Paul Ryan (R).
  • 6 pages are devoted to changes in Medicaid eligibility rules, including the interesting item prohibiting any Lottery winner from being eligible for Medicaid.
  • replaces the individual mandate ($695 penalty tax) with tax credits worth about 1/12th of the average yearly insurance premium (for anyone, of course, who has a taxable income).
  • eliminates the 2.3% tax on medical devices. (The Advanced Medical Technology Association is the only Massachusetts medical organization that has expressed support of RepubliCare so far)
  • eliminates the 10% tax on tanning stores (Probably a blatant try for support from Trump and ex-senator John Boehner (R). Actually, pale Paul Ryan (R) could use a visit or two, though universities and colleges across the country are limiting student access to tanning stores because of the increased risk of melanoma).
  • removes coverage for substance abuse and mental health services by 2020.
  • eliminates tax surcharge on insurance executives “earning” more than $500,000 a year.
  • eliminates tax on big pharma-manufacturing companies
  • delays implementation of 40% tax on “Cadillac” health insurance policies for high income people until 2025.
  • prohibits Medicaid reimbursement to Planned Parenthood for any of their services. (a major source of revenue for the 97% of preventative and non-abortion treatment services PP provides)
  • retains prohibition against denying pre-existing conditions (but imposes a 30% surcharge for such for 1 year).
  • retains coverage of children under 26 on parents’ policy.
  • retains coverage for contraceptive and maternity benefits.
  • retains prohibition of any surcharges on women’s policies (“gender equivalence”)
  • allows elders to be charged 5 times the premium of younger people. (AARP is all over this one as age discrimination) ACA allowed a 3:1 premium ratio.
  • increases maximum contributions to Health Savings Account (HSA) from $3,400 to $6,500. ( Great , if you are making enough money to save.)

Liberals, Democrats, many Republicans, many governors, hospitals, physicians, the AARP, and even conservatives don’t like the bill.

“The AHCA does what it was intended to do; it lowers federal spending and reduces the number of people with health insurance.” (Michael Chernew, MD, Harvard University)

“ It would repeal far less of ObamaCare than the bill Republicans sent to President Obama one year ago. The House Republican leadership bill does not replace ObamaCare. It merely applies a new coat of paint to a building that Republicans themselves have already condemned.” Cato Institute 

Republicans in Congress are claiming that the CBO did not cover the “whole” plan. “What was not covered was what else we are going to do in terms of ‘regulation reforms’, state Medicaid rules, and future bills.”

I believe we are being asked to buy a hastily produced “pig in a poke”, an even bigger pig in a bigger poke than Obamacare.


Vol. 163 January 16, 2017 From Zero to $7,500: One Consequence of Obamacare Repeal.

January 16, 2017

Hub thumbnail 2015

“As a doctor, I will take it and make it my mission
to heal the nation, reverse the course of Obamacare,
and repeal every last bit of it. ”
-Rand Paul

What exactly could happen if Obamacare was taken away? My daughter’s recent landing of a second part-time job offered an opportunity for me to understand the possible result in one case.

As a singer-songwriter, energy healer, and part-time retail clerk my daughter shares a common situation with many on Cape Cod; an annual income of less than $16,000, which is the current federal definition of poverty.  She is therefore eligible for Medicaid in Massachusetts. She pays no premium, has no deductible, and except for some named prescription medicines she has no co-pays. Preventative, pre-natal, and behavioral health services are covered. Her out-of-pocket cost per year is essentially zero. Some Obamacare repealers want to roll back the extension of Medicaid eligibility financed by federal subsidies. In many states that would strip this kind of  coverage from many of those newly covered under the ACA, but that is not a possibility in Massachusetts.

In my daughter’s case her new, second part-time job may push her annual income over $16,000. If so, she will no longer be eligible for Medicaid. As a part-time worker she is not be eligible for an employer-sponsored (and partially paid for) health plan. Her employer’s HR department told her she could buy a basic policy with a $2700 annual deductible for $226 a month through the school. “Co-pays varied and are difficult to predict.”  For her that is a new potential cost of $5400 out-of-pocket per year.

She got married last year and her spouse is in the same “low-income” bracket, so she inquired about a family policy (“for 2”). The answer: $400 a month at the same $2700 deductible amount for a $7,500 potential out-of-pocket cost. A $7,500 out-of-pocket cost “exposure” per year is a big nut for a family earning less than $22,000 a year.

Her other choice (besides going uninsured and paying a fine of $300-$2,085 in 2017 depending on income level) is buying an individual policy through an ACA Health Insurance Exchange. Under Obamacare any individual that is making less than 138% of the federal poverty level (about $22,000) can shop for a policy via a state or federal health insurance marketplace (also called health insurance exchange).  The exchanges can offer federally-financed subsidies of up to 60% of premium for eligible “working poor”. After lengthy website surfing, face-to-face help from the Health Connecter facilitator at a local hospital, and several phone calls with prolonged holding periods, she discovered that she could buy about the same basic policy of $2700 deductible for $226 a month through the health insurance exchange. BUT, despite providing all sorts of financial info they could not tell her…”yet” … what the premium would be and whether she was eligible for a premium subsidy. She was told that “things were in flux”, and that she could get a “call back in a week or two about that”. The enrollment deadline for signing up is January 31.

Just “for the fun of it” and to satisfy my curiosity I masqueraded online as my daughter to experience the health insurance application process via the Mass Health Connector. Over three different days I persisted on the internet and on the telephone to try to get the answer to : ”What would it cost to buy a basic individual health insurance policy?”  After reviewing and clicking on 5 to 7 different logos with unfamiliar company names, after entering the same information on multiple screens, after holding for more than 20 minutes on three separate phone calls, after being passed on to three different “responders” on one phone call, and after twice being hung up on after saying that “I was currently on Medicaid, but was looking for insurance to start February 1 when I would become ineligible”, I GAVE UP THE QUEST WITHOUT AN ANSWER.

Different sites had different definitions of “basic” and most had three or more different levels of benefits (coverage). Descriptions of benefits were quite lengthy and often complex.  For instance, the Bronze (basic) Level of “Access Blue Saver II“ (from Blue Cross; the easiest comparison charts to read) offered a 9 page policy offering no preventative or prenatal care with a $3,350 deductible and $60 co-pay for office visit and $1000 co-pay for an ER visit. Silver, Gold, and Platinum “Access” policies had different benefits. I could not get any information about actual premiums without further phone calls to “licensed brokers.”

Why is this so convoluted and confusing in contrast to the simpler processes of Medicaid and Medicare? One answer is that individual insurance policies are a gamble. For instance, a life insurance policy is really a bet between you and the insurance company. If you lose (die), you win (receive all the premiums back). If you win (out live the term), you lose and the company wins (keeps all the premiums). Another answer is that 400,000 people more than 2015  are flocking to sign up through health insurance exchanges.(1)

Obamacare has not changed the basic premise of individual health insurance policies, and the insurance companies are trying to make their  “best bets”. The betting odds are not as clear as the 1:6 of Russian Roulette, though we know that lack of health insurance can be lethal. The betting odds are more like those of Black Jack. The dealer (health insurance company) is using multiple decks, other players (consumers) at the table can affect your odds, the best odds are not always intuitively obvious, and the dealer (health insurance company) can change the betting rules every year.

Medicaid and Medicare are insurance programs based on large populations and therefore need less of the gambling “tricks of the trade” of writing individual polices. Hence my support for a health insurance program based on a large population, sometimes called a single-payor system. If not “Medicare For All”, then how about state-based programs of “Medicaid For All.” (2)

References:
1. Boston Globe, pg.2, December 22, 2016, from the NY Times.
2. NEJM, 375;26, December 29, 2016, “Maintaining Insurance Access Under Trump – A Strategy”


Vol. 160 December 15, 2016 ACA or Not ACA, That Is The Question.

December 15, 2016

Hub thumbnail 2015

As Trump continues to form his cabinet and Obama counts the days left while Hillary remains hidden in the woods, speculation about what will happen to the Affordable Care Act (ACA) is wide-ranging. Will it be repealed? CAN it be repealed? What will replace it? What if nothing replaces it?

It may help to remember that the vast majority of citizens who had health insurance before ACA were already heavily subsidized by government funds via Medicare, Medicaid, and tax subsidies for employer-sponsored insurance ($300 billion for the employer-sponsored policies alone). Studies have shown that 5% of the population accounts for 50% of health expenditures. The least costly half of our population accounts for 3% of the expenditures. (This is, of course, the essential element of risk spreading that makes insurance of anything “work”.)

ACA accomplishments since 2010

23 million citizens have gained health insurance coverage
-coverage that is not denied due to pre-existing conditions
-coverage of children up to 26 yo. on parents’ policy
-more than half of those (13.7 million) gained coverage under expanded Medicaid (by increasing the eligible income levels)
-all but 19 states took the federal subsidy to expand Medicaid coverage

Uninsured citizens dropped from 16% in 2010 to 9% in 2016
91% of U.S. citizens now have health insurance coverage (Spoiler Alert: in our big, or should I say “Hu-u-y-ge”, country that 9% translates into 29 million citizens still un- or underinsured.)

All this without additional net cost over the cost of medical services that was predicted in the U.S. without the ACA, i.e “no net increased cost due to the ACA.” (The largest single source of spending increase since 2013 was “retail pharmaceuticals”.)

Reduced “gender bias” by mandating maternal health benefits (coverage of contraception) as part of essential benefits package.

Mandated some mental health service coverage.

Mandated some coverage of substance abuse services.

What about repeal?

Unlikely, but possible. Outright repeal could immediately create another 23 million people without health insurance which would dump all that cost burden back on the states, the insurance companies, and the health care providers.

Repeal would require 60 votes in the Senate, and the Republicans are 8 short. There is speculation that some Democrats running for reelection in 2018 might join a repeal vote knowing that some of their Democratic colleagues that supported Obamacare lost reelection in 2016. The Gallup poll currently puts the public attitudes toward Obamacare at 50/50 “favorable/unfavorable”.

“Replacement” of selected provisions is more likely since it could be done as part of the “budget reconciliation process” which requires only a simple majority of 51 votes.

Replacement?

Coverage to age 26 on your parent’s policy and ban on denying coverage of pre-existing conditions are so popular that they are here to stay.
What parts might Republicans target to replace?
(An “ACA repeal bill” passed by the Senate in 2015 and vetoed by Obama gives us some clues).

Individual mandate – Even though this was proposed by Republican Mitt Romney and successfully passed the Supreme Court test as a tax, this penalty for not getting health insurance rankles the Republicans, and a sizable portion of the public. Proponents argue that it is essential to incentivize “healthy people” to buy insurance, a fundamental principle of spreading the risk over a large group.

Block grants to the states and/or vouchers for Medicare – Block grants would change this federal standard “entitlement” program into a state-controlled one with variable benefits and premiums. Vouchers, touted as making consumers more “powerful in the marketplace”, really shift the obligations (“unpaid bills”) to the states and health care providers

Reduce income level eligibility for Medicaid from the ACA level of 138% of federal poverty level (about $22,000 for a couple) back down to about $16,000 a year for a couple.

Middle-class subsidies via insurance marketplaces to be replaced by Health Savings Accounts (HSA), tax credits, across-state line insurance policies, and reestablishment of high-risk pools. All of these are advantages to people who have income, often sizable incomes.
-70% of HSAs are currently held by people with over $100,000 annual income.
-Many insurance companies already sell across state lines, but this provision would free companies from state mandated benefits and other state regulations.
-Reestablishment of high risk pools could provide higher premium policies for those with chronic diseases without unduly penalizing healthy individuals. This reflects a trend back toward indemnity or catastrophic insurance policies with few preventative benefits.

Rescind the new taxes to fund the ACA – details on how to pay for replacement provisions TBD.

Maternal health benefits– Trump suggests making contraception available over-the-counter without a prescription, thus avoiding the problem of exempting churches from this mandated benefit. Planned Parenthood would, of course, be defunded.

Medical liability reform – Though a cherished symbol of support of and a psychologically warm and fuzzy concept to physicians, all studies show that no significant cost reductions occur from tort reform because the actual cost of “defensive medicine” is very small compared to the total.

What about ACOs?

Remember them? Accountable Care Organizations are physician groups and hospitals organized together to reduce costs without degrading quality. The first ACOs, so-called “Pioneer” ACOs, could keep a share of any savings if they delivered care to a defined population at a cost below a “target cost” without missing any of the “quality targets.” If they overshot the “target cost”, they would owe money to the federal government at the end of the year.

This is the last year for the original 32 Pioneer ACOs, and only 16 remain in the program. Half have withdrawn from their contracts because of losing money, continuous wrangling over targets, and lack of flexibility in defining risks and benefits. The “Next Generation” ACOs are due to sign up in January 2017, and most will opt for sharing savings without taking financial risk for losses.

Bottom Line:

The vetoed 2015 Senate “ACA repeal bill” had a two-year transition period embedded in it, so even if a repeal bill is passed and Trump signs it the loss of health insurance will not be immediate. Many political experts, if we can still use that label for them after this election, suggest that even “replacement” of ACA provisions will be politically difficult and will take at least two years to pass. A new study by the Urban Institute shows that Paul Ryan’s proposed Republican replacement plan would result in more uninsured citizens than existed before ACA. 80% of those losing insurance would be part of a working family.

How high are the stakes? A 2009 study by Harvard Medical School and the Cambridge Health Alliance estimated that the lack of health insurance led to almost 45,000 unnecessary deaths. “Lack of health insurance can be fatal.”

So, for a variety of reasons, the next two years will be “vel-l-ly in-ter-esting” In the meantime if you have health insurance through a ACA-based insurance marketplace make sure you re-enroll by January 31 to continue coverage.


Vol. 158 November 15, 2016 REAL Health Care Reform

November 15, 2016

Trump 2Mr. Trump (now that he is President-elect we need to show “Donald” some respect) has recently said that he may keep the Affordable Care Act (Obamacare) ban against denying coverage for preexisting conditions as well the extension of parental policies to  26 -year-old children because “everyone seems to like those provisions”. As President-elect Trump begins to soften his bombastic, total opposition to Obamacare (and replace portions of “the Wall” with a fence) the 1.2 trillion dollar question becomes, “what is he going to do next?”

Since passage of the ACA 20 million Americans have gained health insurance coverage. 63% of that gain was produced by expansion of Medicaid in the half of our states that choose that federally subsidized route under ACA. The other 40% of increased coverage came from the federally subsidized premiums on policies purchased through health insurance exchanges. Not every state established health insurance exchanges, and  those states that did establish exchanges were twice as effective in getting people to enroll in health insurance.

The “individual mandate”  that was resisted so fiercely by Republicans as “another government tax” was originally composed by Governor Mitt Romney and  became law in Massachusetts years before the ACA passed. The  ACA 2014 “individual mandate” was  a $95 fine if you did not obtain coverage, and it proved to be fairly ineffective. In 2016 that fine goes up to $695 (or 2.5% of your taxable income), so it may prove more of an incentive this year. (1)

What about the rest of the ACA? We shall see, but just tinkering with the ACA (“repeal/replace” or “fix”) raises the concern that we may waste a lot of time and energy getting entangled in the trees while losing sight of the forest.

Can we get REAL about health care reform, or do we just continue arguing about health care insurance? It just so happens that a physician colleague of mine wrote a succinct, clear, eminently quotable Op Ed column about that question in our local paper yesterday! (2)  I  am going to shamelessly plagiarise* it.

“We have given providers incentive to ration care and collect data while ignoring non-provider stakeholders responsible for major system expenditures.”
.             Like: big pharma that advertises directly to consumers for great profit
.                       medical device companies with excellent, high-paid, effective lobbyists
.                       health insurance companies with more lawyers, consultants, lobbyists, and way more overhead than Medicare.

“We seem determined to jump through ever more hoops to limit provider options while the rest of the industry revels in the lack of any kind of market control.”

“Resources that used to represent [provider] profit or ability to retain staffing are now spent on fighting insurance claims and bolstering hospital advertising budgets.”

New payment-bundling schemes with buzz words like “pay for value”, “pay for performance”, and “population basis” will “transfer unprecedented financial risk to providers.”

“Constraints placed on health care providers cannot adequately repair our system.”
What actions can repair our system according to Dr. Urbach?
.              “expanding the public option should not be politically toxic” when  50% of Americans are already covered by government
insurance;
.               reforming malpractice tort law to save big dollars by reducing the costs of “defensive medicine”;
.               having thoughtful discussions about appropriate use of resources at end of life;
.               allowing Medicare to negotiate drug and device costs;
.               devoting adequate medical resources to the mentally ill rather than putting them in jail.

“We must stop pretending that exerting ever more financial pressure on our doctors, nurses, and hospitals (while ignoring bigger fish) will get the job done.”

Now, Dr. Urbach is not a disgruntled primary care physician who is whining about poor reimbursement and non-appreciation of his skills and talents. He is an experienced, well-respected cardiologist, a specialty near the top of the payment and prestige pyramids, who shared these reflections on the occasion of his son’s graduation from medical school. He prays that his son and his peers “will not only make themselves into great clinicians, but that they will also do what my generation of providers largely failed to do – make themselves into a courageous political force that can effectively force comprehensive reform of the heath care system by demanding sacrifice from all stakeholders, not only the caregivers.”

And I say, Amen.

References:
1. New England Journal of Medicine, 375;17,  October 27, 2016, p.1605
2. Cape Cod Times, November 14, 2016. “Let’s get real about health care reform”; David Urbach, MD
* “When you copy one person’s words, it is plagiarism. When you copy many persons’ words, it is research.”


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