Who Will Get Locked Out of the Health Exchange?

by Tim Foley

categories: National Health Exchange, Obama and Congress

Published July 03, 2009 @ 09:12PM PT

Another question from emails I’ve received:  Everyone knows the mantra of those proposing these health care reform bills is, “If you have insurance and you like it, you can keep it.”  But there’s a flip-side question – what happens if you don’t like the insurance you have through an employer?  Can you ditch it for the friendly ground of the National Health Exchange (House version) or the Health Gateways at the state level (Senate Health, Education, Labor and Pensions Committee version) and maybe even get yourself a piece of that ultra-competitive public plan everyone keeps talking about?  Unfortunately, the answer is “it depends.” Depending on what makes it into the final bill, many of us could get locked out.

Remember that part of the reason the Senate HELP bill came in at the bargain rate of $611 billion over 10 years is because the Congressional Budget Office estimated only around 20-30 million people would use the Gateways.  That's not a lot of people!  Take a look at the HELP bill and follow along.  It defines employer eligibility for the Gateways on pg. 111 – these are the standards for small businesses who would want to provide benefits for their employers through the Gateways, paying a percentage of the premiums and allowing the employees to each choose their own plan, public or private.  However, the number of businesses who could do so is very limited.  After saying the Secretary of HHS will make a determination as to the maximum number of employees the business can have, the bill specifies that the default number will be 10, unless the Secretary says otherwise.  That means only tiny microbusinesses will get to escape the rough and tumble small business private insurance markets (although some of the new regulation on those markets will blunt the more capricious business practices that small business owners currently endure.)

Individuals without coverage get to participate in the Gateway, but not anyone who has coverage through Medicare, Medicaid or something like the VA.  Also, those who are currently “eligible for coverage under… employer-sponsored coverage” (pg. 115) are likewise excluded unless the Secretary of HHS makes a determination that their employer-coverage is either not comprehensive or not affordable.  If it’s merely “sucky,” sorry, you’re stuck with it.

The House bill is a different story.  The National Health Exchange it establishes would have increasing eligibility that phases in over three years (pg 46).  In Year 1, it’s individuals who don’t have coverage, and microbusinesses (10 employees or fewer).  In Year 2, it’s individuals and small businesses under 20 employees.  But by Year 3, it’s individuals and any other employer (although if we’re talking Microsoft, the Commissioner of the Exchange may have the hugest businesses phase in over time).

Which individuals are also different story in the House bill.  If an individual “does not have coverage,” they’re in.  That’s a different consideration than merely being “eligible” for coverage – you could be eligible under a new job, but reject that new plan and wait until the Health Exchange is available, with its subsidies and public plan as an option.  Moreover, the House has a clause on “continued eligibility” (pg. 51) – if I’m working as a temp without benefits when the Exchange is set up, and I sign myself up for a good, affordable plan, but then get a permanent job month later at which I’d be eligible for benefits, I’m not forced out of the Exchange automatically.   I can keep the plan I’m comfortable with.  There’s no such provision in the Senate bill.

All of this is prologue to answering the real question – once the public health insurance option is up and running, can I drop my employer-based coverage, sign up for the Exchange and lock myself into my own little piece of Medicare-like coverage?  In the Senate bill, the answer looks to be no – I’d still be “eligible” for my employer’s plan, and so ineligible for the Gateway.  This is what Ezra Klein calls “a so-called ‘firewall’”, keeping out large businesses and individuals who could have coverage through their employer.  If the House bill is what we get, I have more options.  After all, the contract we sign with our employers and their insurer usually has different options for opting out.  Some allow for “open enrollment” periods once or twice a year, most allow for “qualifying events” like marriage or divorce to add or remove dependents.  A few are even more open-ended.  And in many you could sign up for other benefits (401(k), life insurance, etc.) but pass on health coverage.

The success of these Exchanges and the public health insurance option (which would only be offered within these Exchanges) depends largely on how many people can participate.  How much choice we’d really have in the new health care system depends on whether the House or the Senate prevail in the fight to come.

(Photo credit:  dagbo on Flickr.)

The AMA Neither Supports Nor Opposes the Public Plan

by Tim Foley

categories: Doctors and Nurses, National Health Exchange, Public Plan

Published July 03, 2009 @ 03:10PM PT

I didn’t really want to write about the American Medical Association at all after the president’s speech a few weeks ago.  As Harold Pollack notes in a recent blog post, “I’m struck by extent that the AMA seems stuck in a narrow interest-group model that represents a shrinking segment of the medical profession.”  But I’ve received so many emails about a recent CNN report on new AMA president Dr. J. James Rohack, that I’m writing this one post just to clarify what happened.

It’s fair to say that the AMA is in support of health care reform in a very general way.  It is not accurate to say they support a public health insurance option.  CNN got it wrong.

The official AMA position, as reported by the Daily Dose and others, was voted on at their convention in Chicago.  It supports a broad definition of “health system reform” but explicitly leaves out any mention of a public plan.  The Daily Dose article provides some fascinating context as to the parliamentary maneuvering that went on during June 17.  After the controversy of the previous two months, where the AMA seemed increasingly against a public plan and then softened that position to say they were against a public plan that forced Medicare providers to participate, the shock of the day was that they passed a resolution in support of the public plan!   But then-president Dr.  Nancy Neilsen essentially took the podium to say, “Not so fast, bub!”  She made an appeal to not peg their support of reform to one policy, and as a result they soon they passed an amendment to that resolution to punt on the question of a public plan.

This was basically a vote of “We want reform – but we’re not going to tell you what kind.”

Fast forward to the CNN interview with Dr. Rohack from July 1.  Most of his comments were strongly pro-reform, but vague on details.  The only thing he seemed die-hard against was, “expanding Medicare coverage for senior citizens into a broader general public plan” – not a shock, since the AMA has been the sworn enemy of single-payer since the days of FDR.   (For colorful commentary on the AMA’s intransigent past, check out this column by Nicholas Kristof.)  But how could they then be for a public plan similar to Medicare if they're dead-set on Medicare for All?  The confusing quote in the article which prompted the misleading headline says that the AMA supports “an ‘American model’ that includes both ‘a private system and a public system, working together.’”  But that’s not a public plan – that’s the National Health Exchange as envisioned by the House bill or the state-level Gateways envisioned by the Senate Health, Education Labor Pensions Committee.  The “private system” is the current insurance marketplace.  The “public system” is the Exchange.  Dr. Rohack makes it clear he’s looking at the Federal Employee Health Benefit Program and wonders why Congress doesn’t just expand that.  The FEHBP is the model of a transparent marketplace, but it’s all private insurance.  The public plan, if it makes it through the process, would be one option among many private options.  But the marketplace itself is not the same as the public plan.

So it was either the reporter or the editor who missed the boat on this one.  The AMA still seems to be living by the mantra of “We don’t want to get pinned down” or as Dr. Nielsen put it, “The AMA did not close doors. The AMA said we will evaluate all alternatives in keeping with our principles.” (What they’re saying in private is anyone’s guess.)

So pro-health reform in a fuzzy, hard to define way?  Sure.  Pro- an expansion of public coverage either through single-payer or a public health insurance option?  Nope.  Pro- a “level playing field” flavor of the public plan, like the one suggested by Sen. Schumer and the HELP committee?  Remains to be seen, but actions speak louder than words. I wouldn’t be singing the AMA’s praises just yet.

(Photo credit:  this lovely piece of the AMA's history with health care reform is by exakta on Flickr.)

What’s $1 Trillion Get You These Days?

by Tim Foley

categories: Enemies of Reform, Obama and Congress

Published July 02, 2009 @ 10:26PM PT

When the hubbub of Independence Day weekend dies down, you can expect the criticism over the price tags of health care reform bills currently in Congress to ramp up.  I would have thought the criterion would have been “Does this increase coverage, make health care more affordable, and reduce the chance that those needing medical care will go into bankruptcy – including those who have insurance?” not "So how much does this cost and will I look stupid on TV trying to defend it?"  Shows what I know.  But, you know, in this day and age, what’s $1 trillion between friends?

Keep in mind that all of the Congressional Budget Office estimates you’ll see for any bill will be spread out over 10 years.  So the $600 billion for the Senate Health, Education, Labor and Pensions draft (which doesn’t take into account Medicaid expansion) translates to about $60 billion per year.  On the other end, the original $1.6 trillion price tag for the Senate Finance Committee draft is really around $160 billion a year.  Considering this country’s total yearly health care expenditure (public and private) is $2.4 trillion, we’re talking chump change – 2.4 to 7% of the total each year.

But still, those who want to sink the plan as too expensive will come up with some fairly wacky analogies to suggest $1 trillion is a big, wasteful amount of spending.  My favorite so far comes from Senate Minority Leader Mitch McConnell, who came up with this gem: “To put a trillion dollars in context, if you spend a million dollars every day since Jesus was born, you still wouldn't have spent a trillion.”  Sassy!

But maybe we should pay attention.  After all, if there’s a political party that knows how to spend a lot of money quickly, it’s our esteemed minority party:

• The prescription drug program Medicare Part D is estimated to be $1.2 trillion over the next 10 years.  And that’s just adding one benefit to a segment of the population who already had coverage.
• The Bush tax cuts – those things we absolutely had to have while fighting two wars and increasing domestic spending – are estimated to cost $1.8 trillion by the time they expire next year.  (And even at the time they were enacted, we knew they would cost at least $1.3 trillion.)
• Remember the good old days, when the Iraq War was only going to cost $60 to $95 billion?  Apparently we were a little bit off.  The total cost so far for operations in Iraq and Afghanistan over the past 8 years are already over $870 billion.  We should hit $1 trillion easy this year.
• And then there was that time in 2003 when the Department of Defense lost $1 trillion worth of assets.  File under, “time to get a new accountant.”

2008 of course was the year we stopped being freaked out about spending hundreds of billion dollars in a single year.  After all, with a deficit that under the best of circumstances had been in the $300-$500 billion range each year for several years, why the hell not?  The famous TARP program from President Bush and former Secretary Paulson came in at $700 billion, which seems downright paltry by comparison.  It certainly was for Sen. John McCain in September of 2008, who actively advocated for spending $1 trillion immediately and without Congressional buy-in:

But I'm going to go out on a limb and say he'll be one of the loudest voices saying we can't afford quality, affordable health care for all this year.

Just food for thought the next time someone tells you that the fact that 60% of all personal bankruptcies involve medical debt (and 78% of those were people who had insurance) isn’t worth $60 billion to $120 billion per year.

CBO-KAY! Senate HELP Bill Rebounds

by Tim Foley

categories: For Profit Insurance, Medicare and Medicaid, National Health Exchange, Obama and Congress, Public Plan

Published July 01, 2009 @ 10:35PM PT

Republicans have made hay for the past few weeks on how Ted Kennedy’s bill cost too much ($1 trillion dollars) and covered too few (only an additional 16 million).  Of course, that score was on a partial bill, one that the Congressional Budget Office itself claimed “[does] not represent a formal or complete cost estimate for the draft legislation” (italics theirs.)  It also lacked the details on the individual mandate, the employer “pay or play” mandate, and the public health insurance option.  But Kennedy and Chris Dodd have kept at it, undeterred from the catcalls, and have finally delivered the goods.  According to Jon Cohn on The Treatment, the new, full bill is in.

The results?  A price tag of $600 billion over ten years (chew on that, Senate Finance Committee!) and coverage for an estimated 97% of the uninsured.

Imagine that – you actually include shared responsibility in an individual mandate and an employer mandate, new revenue, a robust public option competing on cost and generous expansions of public coverage through Medicaid, and the damn thing works.

First of all, this kills the sticker shock stories, at least for a few days.  Second, it restores the notion that you can have health care reform without some version of pay or play or the public plan, but it’s cheaper to include them, no matter how politically problematic.  Third, it shows the Senate Finance Committee’s reaction to the initial incomplete estimate was, to be blunt, wrong.  They immediately began to cut subsidies and then cut them some more.  But if I’m reading this correctly, the HELP bill hasn’t cut any subsidies – they’re still funded on a sliding scale at up to 400% of the Federal Poverty Line.  The cost of the bill is down anyway.  This is also good news for the House draft bill’s ultimate score, since the two bills have much in common.

The most intriguing news of all: according to Jon’s analysis, this CBO score doesn’t take into account any of the Obama Administration’s proposals for cost-savings in Medicare or new revenue – meaning we already have concrete proposals on the table from the White House to pay for nearly the whole thing, presuming that Medicaid expansion (which for jurisdiction reasons cannot be in this bill) costs an additional $400-$600 billion.

I’ll post a link to the full bill as soon as someone uploads it (updated -- see below).  From my perusal and first reaction, these revisions make the bill somewhat less generous than the first released “principles” document (which is looking more and more like it was a trial balloon).  The subsidies up to 500% of poverty are out, as is the public plan that would force providers to participate if they accepted Medicare and charge them 110% Medicare rates.  But for all that, this is a strong bill which covers most of the bases of the common blueprint that most of the 2008 presidential candidates laid out.

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GOP Senators Will Keep America Safe from Jungle Gyms!

by Tim Foley

categories: Enemies of Reform, Obama and Congress

Published July 01, 2009 @ 05:03PM PT

I sincerely hope the Senate Finance Committee is watching what went on in the Health, Education, Labor and Pensions Committee this month.  Much has been made of the need to act in a bipartisan way, or at least to make a sincere attempt.  But lately Finance has been obsessed more with what will get votes in their committee and the Senate as a whole than what will actually build a workable package.  Looking at what bipartisanship has bought the HELP committee, it's hard to see how that strategy will be worth it in the end.

I was looking at the HELP Committee Web site for something else when I was suddenly struck by how large the gulf between the two parties really is.  After all, as many commenters on this blog have remarked, this is the moment for a true, robust, national debate on what fixing our health care system will really entail.  Nebulous concepts need to be defined and refined.  We must pay attention not just to coverage, where there are somewhat easier - or at least more familiar - arguments, but also to thorny issues payment reform, reconfiguring our health care workforce development pipeline to adapt to future need, and making the hard decisions that will restore fiscal sanity to our bloated, $2.4 trillion a year system.  Based on the most recent press releases, the Democratic leadership is somewhat interested in that.  You'll see releases on eliminating discrimination on the basis of pre-existing conditions, on the FDA being able to regulate tobacco, and on the urgent need for health reform.  Sure, it's way too general, but it's at least focused and issue-based.

The Republican side of press releases on the site is another matter entirely.  For one thing, either "Democrat" or "Bipartisan" is part of every headline - as in "Democrats Reject Proposal to Limit Size of Bloated Washington Bureaucracies" or "Democrats Block Efforts to Cut Wasteful Spending, Expand Health Care Coverage to Low-Income Americans" or "Democrats' Prescription for Health Reform:  More Pork!"  From the headlines, you might have no idea what some of these releases are talking about, but in the end they're all amendments to the Kennedy Bill.  Given that Sen. Tom Coburn is on the committee, many of them are purely obstructionist without a legitimate point towards making health care more affordable, accessible or better.  For example, the "Bloated Washington Bureaucracies" press release laments that "In a party-line vote" Democrats rejected Coburn's amendment to force the firing of a federal employee to match every new employee that would have to be hired at HHS to implement health care reform.  "Block Efforts to Cut Wasteful Spending" mourns the failure of an amendment to prohibit "funds from being used on wasteful construction projects like farmers' markets and jungle gyms."  The "Pork" press release is similarly obsessed with jungle-gyms.

This is the level of debate in the world's greatest deliberative body, folks.  One side is wrestling with constructing a workable public health insurance option, determining how to make coverage more affordable, and instituting employer pay or play over the strenuous objections of the U.S. Chamber of Commerce.

The other wants to save American health care from jungle gyms.

George Mitchell once famously said that the only people who take the arguments of Republican Senators seriously are Democratic Senators.  I understand the logic of a bipartisan process as an appeal to squirmish, centrist Democrats like Evan Bayh, Kay Hagan, Kent Conrad and others.  It counts in a close vote to say, "At least we tried."  But clearly our health care debate is operating on two fundamentally irreconcilable levels.  Bipartisanship would be nice, but reality is better. It would be foolish to negotiate away the very mechanisms for keeping health care affordable for lower and middle class Americans just to satisfy a party who'll use any excuse to oppose real reform.

(Photo credit:  Official White House Photostream on Flickr.)

Private Insurance Begins Its Propaganda War

by Tim Foley

categories: Enemies of Reform, For Profit Insurance, Public Plan

Published June 30, 2009 @ 09:41PM PT

As if it wasn’t bad enough that private, for-profit insurance routinely makes its money by getting between us and our doctor, now they want to get between us and real health care reform.  They’ve put a Web site to advocate for keeping things exactly as they are, thank you very much, and they're not afraid to cherry-pick facts like they cherry-pick customers.  The propaganda war has begun.

We’ve known that this day must come.  Yes, we’ve heard Karen Ignagni, CEO of America’s Health Insurance Plans, tell President Obama that “we understand we need to earn a seat at the table” on health care reform.  But few of us thought it would last.  We heard her at a Senate Finance Committee hearing talk about how the insurance industry needed more regulation, and even claim that with additional regulation, our reform plan wouldn’t need the public health insurance option, designed to compete with private insurance and “keep it honest.”  It seemed rational.  We knew that couldn’t last, either.  After all, there was too much money in it for them.

Today, an email went out from a new Web site, GetHealthReformRight.org, warning in spooky terms that because of the current House bill, “Many Americans would lose their current employer-sponsored coverage as millions of people are shifted into a government plan.”  It urges, “Congress should build on the current employer-sponsored healthcare system that is already working for more than 160 million Americans.”  Presumably this means Congress should not follow the will of 72% of the American people and 50% of Republicans and create a public competitor to private insurance.

This of course is the same employer-sponsored and profit-drive health care system that one of its former executives admitted to Congress is “a Wall Street-run system that has proven itself an untrustworthy partner to its customers, to the doctors and hospitals who deliver care, and to the state and federal governments that attempt to regulate it.”

The Web site in question is beautifully done.  If I put together a parody site, it would look a lot like this.

• Picture of doctors and nurses who sort of look nice but also vaguely sinister?  Check!
• A “Myths vs. Facts” page that relies on half-truths and exaggeration?  Check out this most excellent sentence:  “A recent study estimates that up to 119 million people with private coverage would be shifted into the new government plan almost overnight.”  If you read this blog, you know  a.) this would be people choosing the plan, not shifting into it, b.)  the Lewin Group study only says 119 million would shift if the public plan had straight-up Medicare rates, was open to everyone, and forced doctors to participate – three conditions that are in zero of the Congressional proposals on the table, and c.) overnight is a laughable exaggeration.  Buddy, ain’t nothing happening overnight, no matter how successful the public plan is.  (More myths debunked by Jason Rosenbaum – go check his post out!)
• A “What’s at Stake” page more interested in scaring people than being factual?  Try this opening sentence on for size:  “If you are one of the over 160 million American workers receiving healthcare from your employer, you should know your coverage may be at risk.”  There's a germ of truth here -- but it’s called “You’ve got private insurance, and that’s how they make their profits.”
• A “Media Center” page that cherry-picks press stories on reform?  Well, let’s see: articles and editorials in praise of Republicans “plan,” articles suggesting Obama is rushing or misguided, an article on those poor nasty reform advocates beating up on poor Conservatives for Patients Rights mastermind Rick Scott… need I say anymore?
• And the coup de grace – their sponsorship page lists “organizations whose shared mission is to ensure consumers continue to have access to employer-sponsored healthcare plans” – plans that they happen to sell.  From America’s Health Insurance Plans to the National Association of Insurance and Financial Advisors, the gang’s all here!

I guess we can stop waiting for the insurance industry to earn that seat at the table...

TAKE ACTION:  Give them a piece of your mind.  Tell the health insurance industry to stop their misinformation campaign – and tell your Representative in the House that you support real health care reform!

Wal-Mart Supports Health Care Reform (No Joke!)

by Tim Foley

categories: Enemies of Reform, National Health Exchange

Published June 30, 2009 @ 03:49PM PT

The sound you just heard was my head exploding.

Today's been a day of surprises.  Al Franken was finally declared the winner of last November's Minnesota Senatorial race.  The National Journal published something nice about Medicare.  The Senate HELP Committee leaked its outline for the public health insurance option, and it looks more like Chuck Schumer's version than what they had floated a month ago.  But the biggest surprise of all is Wal-Mart, the country's largest employer with 2 million employees, coming out in support of the employer mandate.

If you look back at my mini-power analysis of what interest groups were offering to give up what if the public option were to be nixed, I left out big business.  They're not even willing to pretend to concede on their point of concern.  The greatest anathema for the business lobby is unchanged since the Clinton years - they want to avoid any attempt to institute an employer mandate, a.k.a. employer pay-or-play.  The general theory is companies "play" by giving their employees comprehensive benefits or "pay" into a common fund that helps pay for the subsidies given to individuals in a health exchange.  Although small businesses in the 1990s likewise fought like hell against an employer mandate and helped sink reform, these days they are much more likely to be pro-reform (in no small part because the small business insurance market is nearly as stacked against them as the individual market is for individuals).  Groups like the U.S. Chamber of Commerce and the National Federation of Independent Business continue to see the employer mandate as an existential threat.  They're against the public health insurance option too, don't get me wrong, but they are dead-set against the employer mandate.  Big business won't even pretend to be open to talking about it.

Well now there's one huge exception.

Wal-Mart's decades-long reputation as an innovator in unfair labor practices and "race to the bottom" competitive practices precedes it.  It has also been an ally for the forces of the status quo when state-level employer mandates have popped up from time to time.  So it's startling to see it joining with the progressive think-tank Center for American Progress and labor union SEIU (personal disclaimer below) to proclaim in a letter to the president, "We are for shared responsibility. Not every business can make the same contribution, but everyone must make some contribution. We are for an employer mandate which is fair and broad in its coverage, but any alternative to an employer mandate should not create barriers to hiring entry level employees."

That last sentence is somewhat important in the sense that one of the ways Wal-Mart has increased the number of its workers with some health coverage (and thereby rehabilitated some of its worker-hostile image) these past few years has by increasing the number of its lower-income workers signing up for government programs like Medicaid and SCHIP, or buying skimpy but cheap insurance plans.  But it still doesn't deaden the overall impact.  I'm not expecting Wal-Mart to suddenly become a champion of the employer mandate - it takes a special level of character to say, "You know what, go ahead and tax me - I insist!  No, seriously, I mean it!"  But breaking the monolithic block of Big Business resistance to one of the most common-sense approaches to financing health care while maintaining true shared responsibility is not a small deal.  Clearly the Chamber of Commerce, with a snippy statement denouncing Wal-Mart's move as "[using] the government as a weapon against their competition," takes this defection seriously.  And as Jon Cohn points out, "Remember, there's a huge difference between voting for something all businesses oppose and voting for one that includes among its supporters a huge, iconic corporation."  Do we dare to hope that Wal-Mart won't be the only corporation to embrace reform?  Might companies like Starbucks or Google, likewise eager to project a general warm and fuzzy worker-friendly vibe, soon follow?

Employer pay-or-play had faded from the debate, sufficient that many - included me - began to worry that it was on the chopping block.  With the element of surprise, it's now back on the agenda in a big way.

(Note:  Igor Wolsky has more on the employer mandate and Wal-Mart's support of a trigger mechanism to reduce costs.  Check him out.)

(Disclaimer:  although I work for a local of SEIU, I had no knowledge of this event beyond what I read after the fact in news accounts.  The views expressed are entirely my own, and do not reflect any employer, past or present.)

(Photo credit:  code poet on Flickr.)