National Health Exchange
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Does the New Senate Health Care Bill Get the Job Done?, Conclusion
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Does the New Senate Health Care Bill Get the Job Done?, Pt 2
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Does the New Senate Health Care Bill Get the Job Done?, Pt 1
6 Treats in the New House Health Care Bill
Published October 31, 2009 @ 08:38PM PT
For a bill introduced during Halloween week, there was very little to shock and alarm us in the new combined House health care bill, HR 3962, the Affordable Health Care for America Act.
As much as progressive reform advocates rejoiced, there was a touch of anticlimax in the mainstream reporting. The only two parts that attracted media attention -- the price tag and the configuration of the public option -- haven’t moved at all from where we left them at the end of July. I know it doesn’t feel that way, in that said news coverage has made the evolution of the bill both seem like seat-of-the-pants, anything-can-happen toss-up on both issues. But we began August with a negotiated rates public option and a price tag just above $1 trillion -- and end with a negotiated rates public option and a price tag just above $1 trillion. From that point of view, ain't nothing new under the sun.
But that’s a deceptive way of looking at the House bill. Look closely and you’ll see some big surprises -- some vast improvements over the previous version, HR 3200, that was passed out of committee this summer. Here are 6 examples that we’re just not talking about enough when evaluating the impact of this bill, were it to pass.
- CLASS ACT joins the party -- This is a huge win for advocates for the disabled, and a huge cost-saver for the bill as a whole. Where currently Medicare’s reimbursement incentives all point towards institutionalization, either in a hospital or nursing home, and private insurance often has no provisions for long-term care, the CLASS ACT would create a new, voluntary, publicly run long-term care program that individuals can buy into with payroll reductions. This will allow more and more disabled Americans who can stay in their homes with regular visits from a nurse or aide to do so, and save a lot of money in the process.
- Take THAT prescription drugs! -- Pharma has really had an easy time in this season of reform. Few have been taking their name in vain or burned them in effigy. More to the point, we know Sen. Max Baucus and the White House struck a deal with Pharma over the summer to cap their contribution to reform at some $80 billion over 10 years – enough to partially close the Medicare Part D doughnut hole but not to wring even greater savings out of the system. Well, as Speaker Pelosi was fond of saying, the House wasn’t party to that deal -- and the new bill shows it. Not only does it completely eradicate the payment gap for Medicare Part D seniors over 10 years, but it requiring the Secretary of HHS to actually negotiate for the best drug prices in Medicare, rather than allowing Pharma to name its own price. Imagine that!
The Red Flags on Taxing "Cadillac" Insurance Plans
Published October 28, 2009 @ 10:42AM PT
There are some relatively popular things I just don't get. The NHL, for example. Jon & Kate Plus 8, for another. But I've been somewhat surprised with the extent to which many wonkish bloggers I enjoy reading have embraced the Senate bill's method of paying for a chunk of reform through an excise tax on so-called "Cadillac" insurance plans -- an idea that I've repeatedly called "lame." Less surprising but still fretful to me is the White House's embrace of the idea, with economic advisor Christina Roemer yesterday calling it, "probably the number one item that health economists across the ideological spectrum believe is likely to stem the explosion of health-care costs."
Will the insurance plan tax raise money for reform? No question. Will it stem costs? Well, I've got some red flags on that which I haven't seen adequately explained.
Now the forebear of this policy idea did made a lot of sense. Currently, employers don't pay taxes on health benefits like they do on salary for their employees -- a historical accident left over from WWII that fosters our dependence on employer-based insurance, with its inefficiencies and drag on our wages. The original idea was to remove some or all of this exemption and use the money to help pay for subsidies for people buying insurance through the Health Exchange -- not a bad trade-off when combined with an employer mandate to get companies to think twice before just dumping their employee benefits because they had to pay taxes on them. When that idea proved politically unpopular, Sen. Max Baucus suggested maybe they'd only remove the exemption for plans whose dollar value is well above the average -- hence, "Cadillac" because they're more expensive.
When that idea, too, proved unpopular, the senators hit upon the idea of taxing insurance companies. It sounds great (yes! Tax those greedy insurers!), but the intent is the same. If your company's benefits plan for an individual costs $9,000 (the national average is $4,500), then the portion above the threshold of $8,000 would be taxed at 40% -- your insurance company would get hit with a $400 tax on your plan. Of course, they're just going to pass that tax on to their customer -- your boss. Your company then has to decide a.) if they make you pay for that out of your employee contribution, b.) they just pay for it themselves, or c.) they go shopping for a cheaper plan that covers less. Those predicting cost control are betting on Option C winning more often than not. (By the way, the Senate Finance bill ultimately lacked the employer mandate to prevent dumping as well, which created a whole host of other problems, but that's for another day.)
Let me first mention the problem you hear the most: just because you have a "Cadillac" plan doesn't mean you have the money to buy a Cadillac car. For decades, unionized workers have negotiated for better health care benefits, particularly as a concession when their employers were intractable on raising salaries. Similarly, the excise tax does not take into account areas that are already high-cost on insurance plans. Combine those two factors and you have a lot of middle-class people whose insurance plans are about to be taxed. That's a big political problem.
Senate Finance Committee Weakens Insurance Exchanges
Published October 06, 2009 @ 06:00AM PT
Goings-on in Maine are taking a deserved media hammering this week. First Brave New Films puts out a hard-hitting clip about Wellpoint suing the state to increase its profits. Then it leaks out that last Thursday, Maine Senator Olympia Snowe was the main reason Massachusetts Senator John Kerry's amendment to strengthen insurance exchange consumer protections in the Senate Finance Committee (SFC) bill didn't pass. I'd hate to find out those two things are related.
First, a little background. Maine is a guaranteed issue state, meaning insurers may not deny you coverage based on health status. They must also offer policies with standard benefits, co-payments, and co-insurance, and may only exclude pre-existing conditions for 6 months (this is sounding pretty good, no?) Anthem, a Wellpoint subsidiary, in return asked the state of Maine to guarantee it at least a 3% profit margin off its just 12,000 members. Maine said no. So Anthem is suing the state.
Now, about Kerry's proposed SFC bill amendment. Called "Empowering State Exchanges to be Prudent Purchasers," it sought to protect consumers with stronger state standards for insurance exchanges. HR 3200 and the Senate HELP bill have these protections built in; the SFC bill creates more of a Wild West of insurance exchanges. Just what we need.
If You Don't Like What You Have... Tough
Published October 02, 2009 @ 04:02PM PT
If you’ve been anywhere near a TV these past two weeks when the goings-on at the Senate Finance Committee were discussed, you likely saw committee-member Sen. Ron Wyden of Oregon hocking something called the “Free Choice Amendment.” Last night, the amendment was dismissed without even the benefit of a vote. It took with it an opportunity to solve a major problem in the health care reform plan moving through Congress: how do we answer those who have stable benefits through their employer when they ask, “What’s in it for me?”
Of course, I would argue there are myriad ways that everyone's experience with health care will be better after reform: from more primary care doctors to investments in quality to the protections of insurance market reform. But I understand how those benefits may not feel immediate; many of them may take years before those who have good insurance already even noticed the system was better. But Wyden’s amendment would have been an immediate change for the better. The official mantra for the reform effort is the now cliché, “If you like the coverage you have, you can keep it.” But there’s never been an answer to the question, “What if I don’t like the coverage I have, but it’s all my boss offers me?” Wyden’s amendment would have fixed that, too.
The simplest explanation is that Wyden’s amendment would open up the Exchange to anyone who wanted it, rather than limiting it to individuals or businesses of a certain size. Your choice of health insurance plan wouldn’t be limited by who your employer wanted to negotiate with, and the coverage and costs wouldn’t be limited to how successfully your employer negotiated. You don’t want the unreliable customer service and hassles of Pain in the Butt Insurance? Go find a comprehensive plan that fits your needs on the Exchange, be it Aetna, United, or (dare we dream?) the public health insurance option. As Ezra Klein puts it, “If the Free Choice Act had passed, politicians could have made a very simple argument to the insured: When this bill becomes law, you will have insurance choices just like those enjoyed by a member of Congress or a government employee.” If you’ll recall, that’s the bargain Democratic candidates have offered the American people since John Kerry in ’04.
It’s a radical change, to be sure. But it’s one that would make the rest of the bill work better. The effectiveness of the Exchange depends on how many people are in it. The more people buying from it, the bigger the bargaining clout and the better deals we’d be offered. We’ve spent a lot of time arguing whether a public option should have negotiated rates or rates based on Medicare, but neither one of those choices would make a public option as strong as making it available to everyone. Critics of the amendment claim that it will lead to young, healthy workers spurning their employer’s plan, leaving behind a population of older sicker, workers, making the plan more expensive for the company, and increasing the temptation to drop it. Opening up the Exchanges, they argue, will lead to catastrophe for employer-based insurance. Maybe. I haven’t seen numbers to support this argument (the Congressional Budget Office thinks this result is pretty unlikely). But I’m personally unconvinced. Isn’t the much better answer to this concern to apply the consumer protections and insurance market reforms that are so highly touted -- including risk adjustment, not allowing companies to charge different rates based on health, and severely limiting variance in rates by age -- to employer-based insurance?
Wyden’s amendment fell not because Republicans don’t like it (Sen. John Ensign gave an impromptu speech in favor of it), and not because Democrats don’t like it, since many have often used the inherent inefficiencies and inequalities of the employer-based system when they’ve argued for a Medicare for All single-payer approach. No, the people who really hate it are special interests. “Employers don’t like it,” Jon Cohn writes, “benefits managers don’t like it, unions don’t like it -- in each case, because it means these groups have less control over, or stand to derive less loyalty from, workers over health care decision-making.” It's also one of the casualties of bending over to make the pledge "If you like what you have, you can keep it" as close to being fulfilled as possible. Ironically, the same catchphrase designed to assuage us that our coverage won't get worse is getting in the way of making our coverage better.
There is a silver lining in that Wyden is likely to try again from the floor of the Senate. And even if he fails there, too, this isn’t the type of idea to go away. Once we have a stable, functioning Exchange, it can always be expanded at a future date. And rest assured, if we’re only reserving choice and competition to those who are currently uninsured, it’s only a matter of time before the rest of us say, “Yo, what about us?!”
(Photo credit: http://www.flickr.com/photos/pirateyjoe/ / CC BY-SA 2.0)
Can't Make Your Policy Federal? Empower the States.
Published October 01, 2009 @ 05:54PM PT
It’s been a dominant theme in how Congress has handled health care since the creation of Medicaid. Can’t find a way to federalize your policy? Then downscale it to empower states to take it on themselves. That strategy was on full display today as members of the Senate Finance Committee, unable to overcome stiff resistance from a more-or-less unified Republican nay-saying, and the strangely conservative votes of one Sen. Blanche Lincoln, opted to kick it to the states. It’s like sending a baseball player to the minors -- flourish there, and you may actually make it back to the Big Show to become federal law.
Two amendments and one proposal yet to be drafted as an amendment made this “Empower the States” day in the Senate Finance Committee.
Sen. Ron Wyden (D-OR), a creative and progressive force on the issue of health care, got an amendment pass that might well be called the “You show us how it’s done” amendment. In the Baucus bill, states are given a certain amount of federal money to create the Exchanges. Rather than one big Exchange, each state has its own -- granting it greater autonomy in terms of design, making sure all plans abide by state-level regulations, etc. Wyden’s amendment takes it a step further. So long as the states create coverage for all of its citizens that’s as affordable, comprehensive and high-quality as an Exchange would have been, and has all the protections in terms of insurance reform and caps on out-of-pocket expenses that the plans in the Exchange would have had, and the legislature and the governor agree to apply for a waiver to the Secretary of HHS... you can do whatever you want.
So your state could create an Exchange, like Massachusetts. It could add the uninsured into the existing program for state workers and retirees, like Sustinet in Connecticut. It could create a state-level public option. Hell, it could create a statewide single-payer plan like many states (including New York) are already contemplating. Those with long memories will remember this was a scarcely-noticed but important provision of the Wyden-Bennett health care bill as well. It’s not just punting the tough decisions to the states. It’s giving them the ball and giving them the money to make it happen.
Not quite as comprehensive is the amendment by Sen. Maria Cantwell (D-WA), which passed with the support of all Democrats except -- you guessed it -- Lincoln. Washington State doesn’t have a public option or anything remotely like it. What they have instead is something called Washington Basic Health, where the most likely to be uninsured are eligible to purchase private insurance. Essentially, the State of Washington acts like a mega-employer, with the uninsured below 200% of the poverty line (about $44,000 for a family of four) as its “employees.” The state uses the size of its pool to negotiate great rates on premiums from four insurance companies -- much cheaper than this population could afford on the open market, with better coverage and smaller deductibles and out-of-pocket expenses. The individual or family gets to choose which plan they want.
Cantwell’s amendment allows states to set up their own version of Washington Basic Health. The rest of the Baucus bill already provides Medicaid for up to 133% of the federal poverty line, so this Basic Health plan would cover those between 133-200% where, as Sen. Cantwell notes, “75 percent of the uninsured population lives.” There would be extra protection for individuals -- participating plans would have to spend 85% of the cost of premium on health care, more stringent than plans in the Exchange. The state would get the subsidies that would normally go to individuals of that income range in the Exchange and use them to subsidize the cost of the Basic Health plans. On the plus side, this has dramatically saved money in Washington State, as they’ve negotiated for fantastic discounts. On the minus, if a state set up a Basic Health system of their own, people in that income window couldn’t opt-out and get a plan on the Exchange. The state gets the subsidies, not them. Plus Washington Basic Health itself is demonstrating the problem with relying on a state solution during a time of economic crisis. Go to its Web site and you’ll see a waiting list to get into Washington Basic Health and a warning of jacked up rates – both the results of the state’s fiscal crisis.
Finally, we’re hearing more and more of a proposal by Sen. Tom Carper to empower states to produce state-level public options -- a much less effective version that has popped up from time to time from the likes of Secretary Sebelius, Tom Daschle, and Bob Dole, among others. Carper’s exact plan is as yet vague, but it reinforces the trend of the day.
Relying on state governments for what you can’t push through at a federal level may have some downside, but its biggest upside is it allows the more progressive states the opportunity to lead. We could look to Canada, where their single-payer system spread province-by-province. But better examples are right here in the U.S. After all, Medicaid is set to federalize coverage to 133% of the poverty line -- a threshold that some states have already reached. The concept of the Health Exchange is liberally borrowed from Massachusetts (Utah has its own Exchange, and California tried to get one in its health care reform attempt in 2007-2008). Today’s minor league players may be tomorrow’s rookie of the year.
(Photo credit: http://www.flickr.com/photos/aurenh/ / CC BY 2.0)
What Tax Credit Would Your Family Get in the Exchange?
Published September 25, 2009 @ 09:09PM PT
Look, if you’re an individual or a breadwinner struggling to maintain costs for a health insurance plan on your own, or looking to see how you can trade in your affordable but largely worthless high-deductible plan, there are two burning question that doesn’t get answered enough: how much is my premium going to be? Am I going to be able to afford it? It’s been a tricky question because, frankly, every health care bill has a slightly different answer. But thanks to Kaiser Family Foundation, we’ve got a slightly better idea.
This non-partisan nonprofit has put together a handy subsidy calculator, allowing you to compare and contrast the bills as written by the Tri-Committee in the House, as modified by the Blue Dogs in the House Energy and Commerce Committee, as passed by the Senate Health, Education, Labor and Pensions Committee, and as currently constituted in the Senate Finance Committee -- at least this week. All of these figures are subject to change, but it helps ground the whole process of getting subsidies into something resembling reality.
The set-up is the same for all the bills. Individuals would be able to buy from an Exchange or a Gateway, which is a one-stop marketplace of comprehensive plans with comparable benefits, and fixed regulations on who they can accept and what they can charge. Individuals who make under $43,000 and families under $88,000 (less for Senate Finance) would be entitled to a tax credit or a subsidy. Whatever you want to call it, it would fix your premium to a percentage of your income. You could always pay more for better cost-sharing (read: less co-pays) or for more benefits, but this would put a high-quality plan within reach of nearly all low- and middle-income families.
So of course, I’ve been playing with the calculator for the past hour. Here’s a real-world example. When I graduated from college, my first job’s salary (adjusted for inflation) was about $24,000. The average plan for an individual, per America’s Health Insurance Plans data, is about $5,000 today -- tough to manage on that salary. But I’d have been able to pick up a plan on the House version of the Exchange for a little less than 6% of my income, or $1,407 -- not bad! The Senate Health, Education, Labor and Pensions Committee would have given me an even better deal -- $1,031.
A few times now, I’ve cited a fictional family from Luzerne County, PA, who I call the Sullivans. These imaginary friends are basically a composite of the financial situations of a number of people I met doing campaign work -- working families who have suddenly lost their benefits and, all too often, their jobs. The Sullivans make about $50,000, and would have trouble affording the average cost of $13,000 for an average family plan. They’re exactly in the demographic that’s most likely to be working full time but have recently lost their benefits -- or struggling to work multiple jobs with no benefits at any of them. Even under the Baucus Senate Finance bill -- widely chided as the one that does the least to address affordability -- the Sullivans receive a lot of help. Their premium for a comprehensive plan -- one that covers primary care, their kid’s pre-existing conditions, and a sizeable chunk of their needs -- is a mere $4,169.
So play around with the tool. And if you know a family making under $88,000 and making the tough choice each month between paying for the bills or paying for their premiums, let them know we’ve got a good guess about how much health care reform means to them.
(Photo credit: http://www.flickr.com/photos/andrec/ / CC BY 2.0)
Immediate Help for Pre-Existing Conditions in the Baucus Bill
Published September 24, 2009 @ 11:25PM PT
If you’ve read this blog lately, you know I’ve been tough on the Baucus bill. Other bloggers have been inclined to give it a fair shake and have pointed out some excellent features (most of them paralleling features in the House and Senate Health, Education, Labor and Pensions bill). So in the interest of fairness, it’s worth point out a feature I initially was initially skeptical of but am now very encouraged by, even though it's not present in any other bill: setting up immediate high-risk pools for those currently excluded from affordable insurance on the basis of pre-existing conditions.
Denying a health insurance plan to someone because they’re likely to need medical care crosses the line between thrifty business and cruelty. Most Americans are understandably repulsed by the practice. America’s Health Insurance Plans, the industry organization for insurers, haven’t even made an attempt to deny the practice and instead have merely tried to trade it for an individual mandate requiring everyone to buy coverage. Every progressive bill on the table would add new regulation on the insurance industry to outlaw the practice. Just as good, they would also prevent insurers charging someone more because of a pre-existing condition (because the difference between denying a policy outright and pricing it so high that you can’t afford it is academic). If we get any reform bill passed, this odious practice will change once and for all.
The problem: in the Baucus bill and the House bill, the Exchange -- the “one-stop shopping” marketplace for comprehensive plans with tax credits to make them affordable to individuals and small businesses -- doesn’t open for business until 2013, and the insurance regulations don’t kick in ‘til then.
Baucus’ solution is to create high-risk pools for those intervening three years. That immediately tripped my “sucky idea” alarm. After all, we have these state-based high-risk pools for those refused insurance now. As the NY Times notes, 200,000 people are already enrolled in them with decidedly mixed results. John McCain plugged them heavily in his presidential campaign health care plan as an alternative to regulating insurers (of course). He called it “GAP” for Guaranteed Access Plan. But the trend in the states is for these types of plans to not be widely used because they’re not affordable. You just can’t get a lower deductible than $1,000, and most of those plans have monthly premiums in the range of $650-$1,300. A high-risk pool plan in Chicago, for instance, will run you over $10,000 per year for an individual. Sure, they don't turn you down, but who can afford it?
But to paraphrase Obi-wan Kenobi, “These aren’t the high-risk pools you’re looking for.” Baucus’ bill instead creates an option that’s more like a pre-cursor of what will be available in the Exchange. Although some of the details aren’t fully fleshed out, the bill calls for a high-risk pool plan that’s as comprehensive as the most affordable insurance plan in the Exchange (the so-called “Bronze plan” which covered primary care, hospitals stays, mental health, you name it). There won’t be an increased price on the basis of your health status, and the premium will be “100 percent of the standard premium rate for a Bronze plan.” There’s no mention of subsidies, which is the other element that makes plans in the Exchange affordable for those who are middle- or low-income. But still, that’s a much better option than exists today. The cost would be a mere $5 billion to create these pools in each state (or possibly supplement existing ones).
Even $5 billion dollars won't help everyone. Without subsidies, they’d presumably have to be able to afford a market-rate standard plan, which is about $5,000/year for an individual. But considering many people with pre-existing conditions have zero options today, even this would be a help to bridge the gap between now and 2013.
(Photo credit: http://www.flickr.com/photos/colorloose/ / CC BY 2.0)
