National Health Exchange
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6 Treats in the New House Health Care Bill
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The Red Flags on Taxing "Cadillac" Insurance Plans
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Senate Finance Committee Weakens Insurance Exchanges
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)
What Does Reform Do to Your Member of Congress’s Plan?
Published September 22, 2009 @ 05:41PM PT
It’s one of the weirder pieces of snark or vitriol you'll here among those skeptical of the health reform plans moving through Congress. “If this health reform plan is so good,” someone will snarl, “then why do members of Congress make an exception for themselves so they don’t have to participate?” The question is mystifying. For one thing, it’s drop-dead wrong -- the Federal Employee Health Benefits Plan would be affected by health care reform the same way any big employers’ benefits plan would. No exceptions for your Senator. For another, the question misses the larger point -- we’re talking about a reform plan that would actually make your insurance options look more like what your Senator already enjoys.
NPR has a good Q&A on how the FEHBP works, but here are the essentials. Every federal employee, be they a postal worker, a paper-pusher, a Cabinet Secretary, or a Senator, is given a menu of insurance plans based on where they live. Some of the plans are national, some of them are regional, but all of them are transparent -- you can compare like to like on coverage. Every plan meets a minimum level of coverage, including primary care and prevention, and no one can be turned away on the basis of pre-existing conditions. The federal government, as your employer, picks up a big chunk of the premiums -- 72% on average, which is equivalent to the average for all private employers who supply benefits. As an extra bonus, most of the standard plans have a cap on your out-of-pocket spending on medical care in terms of co-pays, deductibles, etc.: $5,000 per family for in-network providers and $7,000 overall. The coverage is pretty great, and the costs are relatively low -- the kind of rates you get when you happen to have 8 million members in your plan.
It’s a pretty good array of options. Uncle Sam turns out to be a generous boss. It’s also pretty egalitarian -- every full-time worker and qualified retiree gets basically the same deal. By the way, this is really going to bake your noodle: unionized employees, like postal workers, have actually used the collective bargaining process to negotiate for the federal government to pick up even more of the share of the premiums. So that means your letter carrier may actually have a better deal than your Senator. Now ain’t that America?
If this plan sounds familiar, it should. It’s the same basic principles as the Health Exchange. Array of private insurance options at affordable rates? Check. Regulations against exclusion on the basis of pre-existing conditions or age? Check. Coverage for primary care and prevention? Check. A cap on out-of-pocket expenses? Check. Putting the choice in your hands to choose what’s best for you and your family? Double check. The idea of giving uninsured Americans the option of enrolling in the FEHBP itself or an FEHBP-like set of options (the Health Exchange) has been at the heart of Democrats’ health care reform proposals since John Kerry ran for president. It’s the controlling idea for the plans offered by Wyden, Edwards, Clinton, Obama and more. Now the Exchange isn’t an identical twin to the FEHBP -- the FEHBP has better cost-sharing, while the Exchange has the public option, which could significantly reduce costs for all the plans in the Echange through competition -- but it’s at least fraternal.
One last bit, now that this idea is taking legislative shape. What about eventually requiring employers outside the Exchange to match the plans in the Exchange in terms of coverage, cost and regulations, as the House bill does? Ah, here’s the crux of the matter. The federal government would eventually have to match those plans in the Exchange, like any big employer would. However, Uncle Sam is going to have a much easier time. Why? The plans in the Exchange are based on the plans in the FEHBP already! If the excise tax on high-cost insurance plans in the Baucus bill goes through, the FEHBP right now would be subject to that. If the FEHBP opts not to cover an eligible full-time employee, Uncle Sam is on the hook for the employer mandate, like any employer would. Same-same. The main difference is you're now talking about a pool of some 30 million people instead of 8 million -- imagine what those rates will look like.
So it’s less that the United States Senate is working on a plan that they won’t be bound by themselves. It’s that they’re working on a plan to give you what they already have.
(Photo credit: http://www.flickr.com/photos/nostri-imago/ / CC BY 2.0)
Blame Joe Wilson, Not the Immigrants
Published September 11, 2009 @ 10:31PM PT
Too many people wanted to know what I thought about Rep. Joe Wilson for my taste. The answer is I didn’t think anything much of him before President Obama’s address on Wednesday, and think even less of him now. Aside from heckling the sitting President of the United States during a nationally televised address, he hadn’t done anything of substance. His one contribution to the health care debate –- proclaiming the president was lying when he said illegal immigrants would benefit from health care reform –- was all anger and no accuracy. Despite the national fascination, he was utterly irrelevant to health care reform.
Until today, of course, when first the centrist Democrats of the “gang of six” and then the White House capitulated to the concerns of the heckler. Apparently we reward you in the United States Congress for being an ass clown. (Some would joke it’s probably a requirement.)
Wilson’s continued assertion that he was set against health care reform because it would benefit those here illegally was false in a way that defies logic. The House bill expressly reserves the tax credits for low- and middle-income people to afford insurance premiums in the Exchange to “an individual who is lawfully present in a State in the United States” (Sec. 242 (a) (1). Sec. 246 takes it a step further and proclaims, “Nothing in this subtitle shall allow Federal payments for affordability credits on behalf of individuals who are not lawfully present in the United States.” This is as open-and-shut as it gets, and even nonpartisan sites like FactCheck.org, prompted by Wilson’s outburst to check again, concluded, “They receive no government funds for this and cost the taxpayers nothing.” This was a net political win. The opposition to health care reform embodied in Wilson looked both unreasonable and wrong.
So why, then, did both Sens. Kent Conrad and Max Baucus publicly re-open the issue as though Wilson had made a legitimate claim? Baucus’ framework document already said, “No illegal immigrants will benefit from the health care tax credits.” That’s pretty damn clear. But when confronted with an unsubstantiated, inappropriate, angry outburst from an idiot, Conrad began a-thinking: “We really thought we’d resolved this question of people who are here illegally, but as we reflected on the President’s speech last night we wanted to go back and drill down again.” In their totally improvised new regulation, when you apply for a tax credit, you’ll need proof of citizenship... because apparently using your previous year’s tax return as proof that you qualify for a tax credit isn’t enough paperwork or proof that you’re a tax-paying resident. If it’s just to really double-dog guarantee that no undocumented worker gets an affordability tax credit, it’s redundant and needlessly bureaucratic. If it’s a move to prevent that immigrants aren’t paying for health insurance even with their own money, it’s a libertarian’s nightmare. As Ezra Klein writes, “there's a reason Best Buy doesn't have a citizenship requirement and Safeway doesn't ask for papers. It's cumbersome and inefficient and, at the end of the day, we want people to spend money on things anyway.”
Conrad later clarified to say he only meant there’d be a citizenship requirement for the tax credit –- so he’s merely being redundant. But honestly, combined with the hugely problematic and needlessly weak ideas negotiated into Baucus’ framework document, it makes me wonder who Baucus and Conrad won’t roll over for. What's next -- specific legislative language that forbids an assassination squad going after Sarah Palin's baby?
But then, it got worse. Baucus and Conrad, I understand. But this leaves me speechless:
A White House spokesman, Reid Cherlin, said that the president’s proposals would bar illegal immigrants from purchasing private insurance through the new government marketplace, known as an exchange, and that verification of immigration status would be required for anyone seeking to purchase coverage.
Yes, that would be the White House overreacting worse than conservative Democrats. And you know what? Joe Wilson is still wrong! He will continue railing against funding the health care for undocumented workers even despite these redundant and potentially oppressive changes. His argument had zero basis in fact -- you can’t have less than a zero basis in fact. This nets no new vote for reform. And it makes the health care bill that Joe Wilson wasn’t going to vote for anyway a little worse for all of us -- including those of us who were born here, were naturalized, or are here through work visas, who now must verify our own papers before buying health insurance.
I guess you can get pretty far in life just being an ass clown.
(Photo credit: http://www.flickr.com/photos/notionscapital/ / CC BY 2.0)
For more on health care reform as it relates to immigration reform, please see these previous posts:
9 New Surprises in President Obama's Speech
Published September 09, 2009 @ 11:09PM PT
A week ago, before tonight’s presidential address before Congress was even confirmed, I asked if President Obama had anything new to say about health care reform. I asked it even knowing that in many ways, it was the wrong question. The reality was he didn’t need to say anything new -- all it needed to be was new for most of the country. All he needed to do was say it better.
Not that the content of the speech being mostly rehash is at all a bad thing. If you read this blog regularly, or even every-so-often, you’re far more deeply enmeshed in the contours of this debate than, I believe, most Americans are. Although Obama’s town halls have been televised, although there was the press conference dedicated to health care, and the night of Q&A on ABC, although there have been op-eds, and blog posts, and Web casts and radio interviews a-plenty, most people just haven’t had the time to follow it. As a result, not everyone knows that the uninsured aren’t just sad unfortunate folks completely unconnected to us, but that our skin is in that game as well, with at least $1,000 hidden cost for uncompensated care for those of us with insurance.
People may know about pre-existing conditions, but they haven’t heard the story of Robin Beaton, the Texas nurse whose acne years prior was used an excuse to drop her health insurance precisely when she needed it the most to fight breast cancer. People know costs are going up but don’t realize, as the president said, “Our health care problem is our deficit problem -- nothing else even comes close.”
And they don’t hear nearly enough, nowhere nearly enough about the moral deficit of not fixing health care reform: “That is heart-breaking, it is wrong, and no one should be treated that way in the United States of America.”
Health care reform doesn’t exist in a vacuum. It’s not a good idea because it’s ideological or because the Obama plan is how anyone would build a system from scratch. It’s a good idea only to the extent that it solves an immediate problem. The structure of Obama’s speech was therefore elementary: you need to know the problem first, then you need to know how the solution relates to it, and then you need to be shown how all the stuff the media fixates on -- bipartisanship, “death panels,” illegal aliens, you name it -- how that doesn’t even relate to either the solution or the problem. Did Obama get a big enough audience or make a big enough impression to sway public opinion? Time will tell.
But since novelty is the spice of life, I have to share the nine things that I had legitimately not heard before, either from a policy or political perspective. Not all of them were positive, mind you, but I have to confess that the answer to the question of my earlier post -- does Obama have anything new to say about health care -- is yes.
