For Profit Insurance
For-Profit Insurance and Creative Accounting
Published August 05, 2009 @ 02:54PM PT
Thanks to the “let’s work with everybody” public persona of Karen Ignagni, America’s Health Insurance Plans (AHIP) has gotten a lot of press for their “restraint” in the face of impending health care reform. It’s a great PR strategy that has paid off for them – the NY Times can marvel that the insurance industry isn’t running negative ads (good cop), while AHIP and its members can continue to run their sub rosa anti-public plan Web sites and phone calls (bad cop). You may have even started to see “Fact Checks” that suggest private insurance isn’t all that bad. Not that they don’t discriminate on the basis of pre-existing conditions, practice rescissions to kick those with health needs off the plan, and charge different rates based on age, gender, health status and even employment. They change the topic rather than talk about those. No, instead you’re seeing reports that private insurance is actually better and more efficient than advertised.
However, it takes some interesting omissions to get there.
I follow healthy policy expert John Goodman, the self-professed “Father of Health Savings Accounts,” because I like to see what new arguments are likely to pop up. A guest blogger today has a link to AHIP’s new study that suggests that without the provider rates of private insurance, California would fall into the sea… or at least their hospitals would. “An analysis by America's Health Insurance Plans found that if all the patients treated in California hospitals were enrolled in a public plan paying rates 10 percent higher than Medicare, virtually none of the hospitals could cover their costs.” It’s the sort of thing you might expect me to spend over a thousand words rebutting.
Actually – it’s not worth it. The whole premise is flawed. For one thing, it’s predicated on a public health insurance option that pays Medicare rates +10%. Thanks to the deal with the Blue Dogs in the House, no such public option proposal exists. The Senate HELP Committee’s “community health insurance option” will negotiate rates like any other insurance plan. Now, so will the public option in the House (something I’ve actually been OK with since April, although the Congressional Progressive Caucus disagrees with me. That’s cool, though. We’re still friends and stuff.) So the payment structure they’re modeling on doesn’t exist. And the population size also doesn’t exist – since the public option is only open to those in the Exchange, the Congressional Budget Office estimates only 10, maybe 15 million nationwide will sign up. Let’s say the Lewin Group – a wholly owned subsidiary of Ingenix and UnitedHealth – is closer to the mark with their estimate of 34.9 million nationwide. That still doesn’t equal the population of California.
On to another popular talking point – that profits for private insurers only equal 1% of all health care spending. Perhaps you heard that private insurance administrative costs were an average of 12% of their health care dollars, with some as high as 30%? (This in contrast to Medicare’s average of 3%.)
Well stop, you’re both right! For one thing, a lot goes into administrative costs – marketing, underwriting (hiring people to evaluate which claims to deny), lobbying costs (about $2 million for April-June of this year alone), or executive compensation ($30 million total compensation for Cigna, $38 million for Aetna). For another, AHIP has very cleverly created their ratio not using the amount of health care dollars in private insurance, but in the entirety of the American health care system, including Medicare, Medicaid, the VA, the Department of Defense, SCHIP, etc. as well as individual’s out-of-pocket costs. As explained on NPR:
Fortune magazine economists calculate insurance company profits this way:
For the 10 biggest insurers in the year 2006 (the year the insurers used for the 1 cent out of every dollar depiction above), profits were anywhere from 2 to 10 percent, or two to 10 pennies on the dollar. That's two to 10 times as much as what the insurance industry group suggests in its illustrations.
It’s really pretty clever – hide about $3 billion in profits for UnitedHealth Group alone last year as an innocuous 1%. Say this for the for-profit insurance industry, they’re excellent at making dollars disappear – particularly out of your wallet.
(Photo credit: mary_thompson on Flickr.)
How Many More Have to Die Before We Fix Health Care?, Part 2
Published August 03, 2009 @ 09:58PM PT
Between the work of the Institute of Medicine and the nonpartisan Urban Institute, we know that between 18,000 and 22,000 people die each year for no other reason than because they didn’t have health insurance. It’s a staggering number considering so many of those deaths could have been prevented. Each one of those numbers is a name. Each one of those names was a family member, a friend, a co-worker, a student, a person. For each of them, reforming health care so more people could afford to get the treatment they need when they needed wasn’t something politicians were rushing.
In fact, if we succeed this year, it will still come too late.
Angel “Inqy” Yates was an incredible artist with a stirring imagination (you can see her portfolio here). She created a whole mythology of a post-World War III world for her series of Web-based comics, entitled “Wicked Alchemy.” A small group of devoted fans knew she was gifted. What they probably didn’t know was how many balls she was juggling at once. As learned in a cartoon tribute by one of her instructors, “Even though she took a full course load, worked a full-time job, raised a family, and worked as a freelance artist, she always raised the bar and excelled in every course I had her in.”
This June -- less than 2 months ago -- she graduated, got her degree, and began working full-time doing what she loved. She was in a situation common to artists – without health insurance from her employer and without enough money to buy her own plan. In a note to her fans on her Web site – the last such note she would write – she revealed a new problem:
I'm also having odd health problems, which make me exhausted for no reason whatsoever. Hopefully.. hopefully.. we'll find a house soon, the health problems will go away on their own (since I have no health insurance at the moment to otherwise deal with them), and free time will return to me. It's going to be a long summer.
That was her public face. On her personal blog, she was confused and frightened by her health problems, but didn’t have the money or the insurance to see a doctor.
After a month and a half, it grew to the point of being winded by even smaller walking spurts. I could climb two flights of stairs, but my chest felt as if someone were crushing it from all sides, and I couldn't get enough air. Which was silly, because I'd be listening to myself breathe hard, and the air was coming and going, it's just as if my lungs weren't registering that. It's a very hard thing to describe... Not like chest pain, although my chest hurt unbearably. Not like heart problems, although my heart would be pounding in my ears. Not like asphyxiating, since the air was coming and going. But for some minutes after exerting myself over two lousy flights of stairs, I could do nothing but stand there and gasp and pant heavily….
I just don't know what to do. I really don't... Can it still be from stress? I still have plenty of it... I graduated, and got a job, and things are falling into place. But there's still so much to worry about... the lack of health insurance, for one thing, or that I'm away from my family for five days a week, or all the driving I do every day, or the crack in my windshield, or trying to find/buy a house...
She had a whole new life ahead of her. Things were falling into place. But the health problems did not go away, the answers didn’t come, and Inqy died on July 7.
One last story.
Eric De La Cruz lived in Las Vegas, came from a loving family and had a good future. What he didn’t have was health insurance. At only 22, he was diagnosed with severe dilated cardiomyopathy, which is primarily a genetic condition – he didn’t ask for it, didn’t do anything to deserve it. The remedy was as severe as it gets – a heart transplant at a relatively young age. In addition to the intense preparation and the arduous nature of transplant surgery, it’s literally a life-changing experience. Transplant recipients need to be on medication to suppress the immune system to prevent their bodies from rejecting the foreign organ. The lifestyle changes are permanent and daunting. And because heart transplants are still relatively infrequent – only around 2,000 per year -- the frustration and uncertainty for families is stressful beyond measure. However, there is good news. As explained on About.com, “Today, almost 90% of heart transplant recipients survive for at least one year after transplant, and up to 75% survive for five years.”
Because of his relative youth, Eric had excellent prospects, as daunting as his health challenges would be. But what he didn’t have was health insurance through his employer, compounded by his being a student. The small business he worked for simply couldn’t afford it. So before he could fight for his life, he had to fight for the opportunity to fight for his life.
You can guess some of what followed – he could not buy insurance now because he had a pre-existing condition. Even if he had miraculously found a plan that would take him, he would have been charged a prohibitively expensive premium based on health status. By shedding his assets and giving up on working, he was able to qualify for Medicaid but, as we know all too well, Medicaid is a hybrid federal-state program. Normally that wouldn’t make a difference – but there are no transplant centers in Nevada. None. In order to be covered for transplant surgery in California, he needed to apply for Medicare coverage with his heart condition as a disability. Medicare is a program designed to give wonderful care to seniors over 65. It gives decent care for those with disabilities. But a heart condition in need of a transplant meant that Eric didn’t get the care he needed. Instead, he got more red tape than he could deal with as he was rejected for Medicare – twice. He appealed one more time – the appeal took over a year to be heard, a year during which his heart function continued to deteriorate.
Eric’s family did what any of us would hope our family would do for us – they fought. Hard. Eric’s sister Veronica, a CNN reporter who had specialized as an Internet correspondent, following the latest stories in social media, took his story public and turned to Twitter for support. You can still follow Eric’s Twitter Army using hashtags #Eric and #ETA, or at www.WeLoveEric.com and www.Tweet4Eric.com. Unlike your average transplant patient, the De La Cruz family had harnessed the Internet, and people they had never met created petitions, web sites and grassroots communities to rally support.
He got his Medicare coverage after all, but the hospital refused to accept Medicare only – they needed supplemental insurance. They wouldn’t admit him. Despite the well-known fact that no hospital can turn someone away, Eric was a state away and could not be taken off IVs. If the hospital didn’t send a transport for him, he could never get there. So they began to raise the money, attracting the attention of singer Trent Reznor and popular rock band Nine Inch Nails.
Eric had tremendous advantages not available to most in this country. He had a sister with connections who was willing to move heaven and earth to give her brother a new heart. He had a community of strangers who loved, supported and raised money for him on Twitter and on the Web. He had celebrities rally to his cause. He raised nearly $900,000 in two weeks. But it was all too late. Eric passed away on the 4th of July.
What the hell does it say about the state of health care in America that all of that wasn’t enough to get him the care he needed to stay alive when he needed it?
If we had HR 3200 10 years ago, Eric would never have had to even look at Medicare or Medicaid. He would have had quality health insurance, either public or private, either affordable (through a tax credit) for his small business employer to provide or affordable (through subsidies) for him to buy. He would have had guaranteed benefits that would never have been taken away and his catastrophic care would have been covered. Instead of raising a million dollars, he would have needed to raise 10% of his income for out-of-pocket expense.
If we had HR 3200 10 years ago, Inqy wouldn’t have had to worry about pinching pennies and worrying about how she would pay for car repairs or saving money for a house before seeing a doctor. Her primary care doctor’s visit would have had no co-pay. She would have had an insurance plan, public or private, that was affordable to her.
If we had single payer 30 years ago, neither one of them would have had to think of anything else except getting better. But we didn’t – we decided an industry’s profit and the libertarian impulse of individualism was worth more than thousands of human lives.
Remember their stories the next time someone tries to tell you an eight month long legislative process is moving too fast. Delay has consequences.
(Photo credit: stimpy89 on Flickr.)
How Many More Have to Die Before We Fix Health Care?, Part 1
Published August 03, 2009 @ 05:20PM PT
In the movie Excalibur, the wizard Merlin intones, “When a man lies, he murders some part of the world.” Dramatic, but rarely true. That’s perhaps what makes the current “hold no stops/make up what you have to” tactic of the enemies of reform so galling. By now, you’ve heard the fabrications. You’ve seen career political opportunist, corporate schill and “close reading” policy hack Betsy McCaughey proclaiming that the health care reform bill would pressure senior citizens to die faster – causing NPR’s On the Media to report, “That is shocking — also, utterly untrue.” That didn’t stop Rep. Virginia Foxx from proclaiming on the House floor that the Republican alternative to health care reform (anyone know what that is today? It changes so frequently… Is it just more tax cuts again?) “is pro-life because it will not put seniors in a position of being put to death by their government.” Politics is a rough and tumble sport, but it is the height of irresponsibility to purely frighten senior citizens based entirely on a lie.
What makes it even worse, though, is this political posturing ignores the fact that people are dying this year, this month, today because we keep putting off fixing our broken health care system. If these smear tactics succeed, then lies truly will have killed part of our worlds.
I want to tell you the story of three people. They didn’t know each other. I didn't know them. They were young, they were beautiful, and they were loved. And they have all died within the past two months because they could not afford health care.
You can read the story of Edith Speed in her own words right here on Change.org. She had insurance for over 10 years when she was diagnosed with breast cancer – specifically intraductal and infiltrating duct carcinoma. It was bad enough going through the terrifying experience of dealing with breast cancer. But that wasn't all she was forced to deal with.
The bills began to arrive, from 10 different entities, my surgeon, her assistant (whom I'd never even met, and who I learned was not a preferred provider for my health plan), the anesthesiologist, the hospital, radiology, the lab, you name it, they're billing me. I learned more than I ever wanted to know about the adversarial relationship between hospitals and the insurance company, I learned that there are many necessary procedures that the insurance company won't pay for, leaving the patient holding the bag after the fact, I learned that my deductible which on paper is $2,500.00 per year, is actually a $5,000.00 per year maximum out of pocket expense. My 2 hour procedure cost $35,000.00.
I was glad I had kept my insurance, which I'd had for over 10 years. I'd never had occasion to use it and had been thinking it was a huge waste of money, only a month before, I'd considered dropping it. I put one of my two cars up for sale, cashed in my U.S. Treasury bonds, left to me by my aunt, and began to dip into the savings account I'd started towards a down payment on my house.
But then the cancer got worse, and Edith needed a radical double mastectomy. And she was flat broke. She thought of just giving up the fight and letting the cancer take its course. Instead, she found the inner strength to found the Bowling for Boobies charity event. After her own medical debts were paid, she organized it every year to help more women in her condition, and went on to found the Busted Foundation to financially support women with breast cancer.
So it’s a painful tragedy that someone who gave so much would be faced with breast cancer again. In April, Edith wrote, “Six years later, I am glad to have made the choices in care that I did, happy to be well and so immeasurably grateful to have had the support network that I do. Still, six years later, my husband and I have not recovered from the financial hit. Our savings remains depleted and I have come to terms with the fact that we may never own a house. Time has passed, my life has gone on and while I am happier than ever, a dark cloud looms in the distance of my consciousness.”
Fighting here own dark clouds, Edith inspired so many people. Her friend Christa Faust wrote, "She was a breast cancer survivor, a strong, beautiful Domina and a warm, supportive and generous friend for over fifteen years. She was there for me during a very hard time in my life and I can’t stop thinking I should have done more to be there for her."
In the words of her friend Lisa Derrick, “On June 7th that dark cloud became overwhelming and Edith killed herself.”
In no other industrialized country is the amount you can spend on out-of-pocket health care costs infinite, even for those with insurance. In no other industrialized nation do you have to give up your financial security to save your life. Only here. Only because we still haven't fixed health care.
Go to Part 2, and learn about Angel "Inqy" Yates and Eric De La Cruz.
(Photo credit: bethboya on Flickr.)
My "Freedom" Is More Important Than Your Health: Privilege vs. Progress in Health Care
Published August 02, 2009 @ 11:24PM PT
People have been emailing me a piece by Shawn Tully, the Editor-in-Chief of Fortune Magazine, entitled “5 Freedoms You’ll Lose Under Health Care Reform,” which was featured on the Drudge Report last week. In sending, they've asked for me to respond. I struggled most of the weekend with a response, not because I agree with Mr. Tully – I don’t – but because the world Mr. Tully describes is not one that’s accessible to most Americans, and certainly not accessible to me. Although he’s been able to tap into the scary narrative of “health reform will cause you to give something away,” he’s particularly focused on what the rich will have to give away, and doesn’t seem to have a real sense of the hazards of the current abusive insurance marketplace. Every single one of the freedoms he defends either will continue to exist under health reform or, most often, currently only exists to the tiniest percentage of hardworking Americans.
Shoring up the foundation is apparently not a good idea if it rattles the penthouse. Any student of history should immediately recognize the dynamic – it is the sense of entitlement and privilege standing in the way of progress, yet again.
Now I don’t for a second think that the supporters of Mr. Tully’s work will be won over by my arguments. After all, Mr. Tully wrote a piece in March of 2008 entitled, “Why McCain Has the Best Health-Care Plan.” Indeed just about every position Mr. Tully takes in his new editorial reflects something cherished about John McCain’s plan or, in the case of Health Savings Accounts, George Bush before him. If Mr. Tully had been John McCain’s speechwriter, perhaps the plan would have been better received. Or perhaps, as always, it’s easier to trigger the public's fear of loss than it is to trigger their hope for a better future, particularly on a topic as complicated as health care.
In the end, I can’t help but look at what he calls “freedoms” and think “Who, exactly, has these now?”
His first is “Freedom to choose what’s in your plan.” But 160 million Americans don’t have that – their benefits are offered through their employer and determined by their employer. Millions more have some government program – Medicare, Medicaid and SCHIP, or perhaps the VA or the Department of Defense – whose benefits are determined by law. The remaining people are either uninsured and have no choice on what’s in their absence-of-a-plan, or are in the individual insurance market. The individual insurance market is one that Mr. Tully championed explicitly in his support for John McCain’s plan. However, the experience of those purchasing from this free market ideal on Earth tell a different tale. A large portion of them do not get to choose what’s in the plan either. A recent report by the Commonwealth Fund found:
Seventy-three percent of people who tried to buy insurance on their own in the last three years did not purchase a policy, primarily because premiums were too high. In addition, among adults with individual coverage or who tried to buy coverage in the past three years, 57 percent said it was very difficult or impossible to find coverage they could afford, 47 percent said it was very difficult or impossible to find a plan with the coverage they needed, and 36 percent were denied coverage or charged more because of a pre-existing condition, or had the condition excluded from their coverage.
So I’m afraid if you’re not a CEO or in human resources, you’re not enjoying this “freedom,” unless you happen to be the lucky fraction of a percentage who makes a deal with an insurance company for the coverage you want. The irony with Mr. Tully’s argument is that it ignores that in both the Senate Health, Education, Labor and Pensions bill as well as HR 3200, individuals and employees at small businesses will in fact be able to determine whether they want the standard level of coverage or some additional items at higher cost (the "premium" level benefit options). Apparently he only counts it freedom if you can remove some of your coverage, not gain more coverage that is currently unaffordable to you.
In this, Mr. Tully’s spirit of self-determinism truly takes an odd shape. He decries the fact that a minimum standard of benefits will be set by the government. “The Senate bill would require coverage for prescription drugs, mental-health benefits, and substance-abuse services,” he says – perhaps unaware of the fact that mental-health benefits and substance-abuse services are already a federal mandate. Freedom to choose your plan, in his mind, means the ability to chuck coverage to save money. To be sure, both the insurance industry and business have spent several years trying to do just that. American citizens, on the whole, have not. It is extraordinarily difficult to go onto the blogosphere, attend a town hall, or find a feature story in the mainstream media whose thesis is, “Woe is me. I have too much coverage for health care.”
Krugman, Sarcasm and Soylent Green: The Best of the Weekend
Published August 02, 2009 @ 05:53PM PT
Every Sunday, I’ve taken to posting the best of the best – the three must-reads or must-watches that will really help you parse what’s going on. During the presidential campaign, we took to calling the period where the importance of what was covered was in inverse proportion to the frequency with which it was covered “silly season.” This week, the focus seemed to be on – well – beers at the White House. ‘Nuff said.
So here are the three weekend articles you won’t want to miss to remove some of the silliness from your coverage. As we move into August, the misinformation begins to fly. Most of it will be reported as “he says/she says” by the news – two sides of an argument that deserve equal weight. But as these writers show, there’s a big difference. One side is looking to address the problems of our broken health care system, and the other is trying to make it seem as confusing and hopeless as possible.
If there’s a silver lining, it’s that so many great writers are determined not to let the agents of the status quo have the last word.
1.) Paul Krugman – “Health Reform Made Simple”
I’ve lost track of the number of people who have asked why there can’t be a simple 2 page description of what’s going on in health care reform and then, when I start to explain it in as simple terms as I know how, stop me with questions that get both deep and technical. Of course, the deep, technical questions are how it’s supposed to be – participatory democracy should involve meat and not just baby food. But it does point out an interesting fact – it’s easy enough to debate health care reform in a couple of hours or in a 100-page document. It’s tough to debate it in a few minutes and 500 words.
But just as I comforted myself with that notion, Paul Krugman delivers the best and most succinct explanation of health care reform you can imagine. And yes, it’ll take you minutes to read:
The essence is really quite simple: regulation of insurers, so that they can’t cherry-pick only the healthy, and subsidies, so that all Americans can afford insurance. Everything else is about making that core work…
That’s it. Any commentator who whines that he just doesn’t understand it is basically saying that he doesn’t want to understand it.
Read the whole blog post here.
2.) Jonathan Alter, “What’s Not to Like?”
Satire is the art of turning a preposterous argument on its head to demonstrate its truly silly core. With this Newsweek article, subtitled “Reform? Why do we need health-care reform? Everything is just fine the way it is,” Alter undresses what is beginning to become a popular argument of saying the convoluted, wasteful, prohibitively expensive and abusive American health care system doesn’t need fundamental change. It’s an argument so at odds with the experience of most Americans when dealing with an illness or injury that it deserves what Alter gives it – sarcasm:
I had cancer a few years ago. I like the fact that if I lose my job, I won't be able to get any insurance because of my illness. It reminds me of my homeowners' insurance, which gets canceled after a break-in. I like the choice I'd face if, God forbid, the cancer recurs—sell my house to pay for the hundreds of thousands of dollars in treatment, or die. That's what you call a "post-existing condition."
I like the absence of catastrophic insurance today. It meant that my health-insurance plan (one of the better ones, by the way) only covered about 75 percent of the cost of my cutting-edge treatment. That's as it should be—face cancer and shell out huge amounts of money at the same time. Nice…
Speaking of fair, it seems fair to me that cost-cutting bureaucrats at the insurance companies—not doctors—decide what's reimbursable. After all, the insurance companies know best.
Read the whole article on Newsweek's site.
3.) The White Coat Underground, “Health Care Reform – How to Obfuscate, Confuse and Inflame”
I wasn’t following this blog but, after this post, it’s a must have on my RSS reader. PaulMD is an internist in the Great Lakes region, and he knows malarkey when he sees it. The new constant refrain (the new “socialized medicine is bad,” if you will) of those who would like to continue profiting financially and/or politically from the current inefficiencies of our health care system goes something like this: the government will overrule your doctor. The supposed villain is comparative effectiveness research. Well, it just so happens that PaulMD is a doctor. His diagnosis of this fear-mongering argument? It’s baloney:
How does [Betsy McCaughey] justify this unjustifiable conclusion? She doesn't. She simply asserts it. "Comparative effectiveness" is an au courant term used to describe research that looks at medical practices and tried to assess its effects. For example, there are two surgical ways to fix blood flow to the heart muscle: percutaneous coronary interventions (PCIs) such as angioplasty and stenting, and coronary artery bypass grafting (CABG or "heart bypass"). I'm not going to teel you which one is better, because the answer is complicated and still being investigated, but to choose the correct therapy for a patient we must answer a number of questions: which works best in which kind of patient; how long does each last; which has lower complication rates; which leads to longer survival; which leads to longer survival without additional need for a second intervention; which costs more, and over what time period; which makes people feel and function better. These questions and others need to be asked about many of the things we do, and comparative effectiveness research is a reasonable way to approach this.
To ignore these questions because we don't like the answers is so frighteningly ignorant that it's hard to believe an intelligent person could suggest it. Knowing these answers doesn't mean it's time to start making Soylent Green. What we do with the information is where our ethics as individual and as a society are tested. If we find that kidney dialysis in eighty year olds on average does not provide much quality or quantity of life, do we decide to stop covering it? Do we create algorithms for deciding what do offer an individual? Do we make a subjective choice in each case?
(Photo credit: taekwonweirdo on Flickr.)
The Indispensable Henry Waxman -- Energy and Commerce Votes Out Bill
Published July 31, 2009 @ 11:15PM PT
We began with five committees – two in the Senate and three in the House. The early money was on Max Baucus’ Senate Finance Committee to mark-up their bill first. Instead, they’re the only committee without so much as a draft of their proposal. Everyone else is done. Although the House did not have a full floor vote before breaking for the August recess, the fact that all committees with jurisdiction have passed a comprehensive health reform bill out of committee to the House floor is a historical accomplishment – all the more so because of the rollercoaster of the past few days.
Form where I’m sitting, this simply wouldn’t have been possible without two critical events in November. The first was the election of Barack Obama, obviously enough (we wouldn’t be reforming health care right now under John McCain.) But the second was Rep. Henry Waxman emerging the victor in his committee chairmanship fight with Rep. John Dingell. For the past two days, Waxman has been the indispensable man.
First, kudos to the staffs of Ways and Means, Energy and Commerce, and Education and Labor for the leap forward in transparency. Every single one of the committee Web sites allows you to review all materials on HR 3200, including what happened in mark-up. I know it will become incredibly popular to say no legislator knows what’s in these bills as one of those "everybody knows" talking points. But folks, I, Random Blogger Dude, know what’s in these bills. That means it can't be that frakkin' hard. And now so can you:
- Ways and Means Mark-up and Amendments
- Education and Labor Amendments
- Energy and Commerce Mark-Up and Amendments
The path to get us to a vote in Energy and Commerce was, in a word, treacherous.
First, Chairman Henry Waxman made a deal with 4 of the Blue Dogs on Energy and Commerce who had put the breaks on mark-up. As you’ll recall, my bottom line on that deal was, “I just don’t see that the bill has lost anything.” The Congressional Progressive Caucus massively disagreed – with a rally and with a letter signed by 57 Democrats – 7 more than the Blue Dogs have in their whole caucus. What originally seemed like posturing for future fights – Rep. Lynn Woolsey’s pronouncement, “Many of us were for single-payer system standing up here today, but we have compromised. We have rallied because we want a plan with a meaningful public option, and we can compromise no more” seems like a refrain that you'll start to hear again and again during the full House debate in September – turned out to have real matter to it.
For one thing, there was no actual back and forth compromise to the Blue Dog "compromise." It was purely giveaways for the sake of advancing the bill. When the Progressives stood up, they made it clear that those concessions would come at a price. Despite Rep. Woolsey’s pronouncement, the liberal members of the Democratic Party were very much ready to compromise, leading to an amazing thing – this time, the bill actually got better. The deal that liberals struck with conservative Democrats doesn’t roll back the Blue Dog provisions, but does gets two big improvements into the bill. First, a legislative fiat for the public health insurance option to negotiate for the best rates on prescription drugs and hold prescription benefit managers – the middlemen who arrange the deals between the government and Big Pharma – to a much higher standard than the loosey-goosey Medicare Part D program. Secondly, and far more importantly, a restriction on how much private insurance companies can jack up the rates each year.
This is probably the biggest improvement in the bill since it first dropped weeks ago, and represents a big step forward in consumer protection. Currently, private insurance can raise premiums as high as they want whenever they want on individuals, leading to a preposterous 30% jump in premiums for Anthem Blue customers in the Bay Area. They also don’t need to justify such a jump other than by "what the market will bear" – similar to how the number of medical malpractice lawsuits has plummeted in Texas yet malpractice insurance premiums continue to rise. Now, private insurance plans in the Exchange will be restricted to 150% of the rate of medical inflation for that year. So if costs go up 4% from 2014-2015, the Humana plan in the Exchange can raise its premiums 6% in 2015. It cannot raise its premiums 9-15% for the heck of it. Of course, the insurance company can apply for an exception – there may be some strange reason why it’s necessary – but such an exception has to be approved. You have to actually make the case.
The last important gain for the Progressive Caucus is less substantive. It’s mostly symbolic. But it’s an important symbol given the years of passionate advocacy for an American single-payer, Medicare for All solution to our health care crisis. A full House floor vote will allow, for the first time in history, an up or down vote on replacing HR 3200 entirely with a single-payer system.
With no disrespect to the long and storied career of Rep. Dingell, it is almost impossible to imagine him navigating the minefield like Waxman has for the past week. As a sharp contrast to the “let’s all get along now” negotiations of Max Baucus, which have only resulted in endless delays on Senate Finance, Waxman’s negotiating sessions with Mike Ross of the Blue Dogs have been contentious and, at times, explosive. It is likely part of the reason the Blue Dogs’ demands were so meager is because Waxman lived up to his reputation as a relentless negotiator. He was reportedly even willing to have the bill bypass his committee and go to the House floor if the Blue Dogs didn’t step down from their most radical demands. Similarly, Waxman was able to quickly get the Progressive Caucus what they needed to move forward, in no small party because, as Ezra Klein wrote of Ted Kennedy, “[he] has, over the years, given people on both sides of the aisle a pretty clear sense of his core values…. when [he] cuts a deal that seems to diverge from his principles, there's an underlying sense of trust that that was the best deal he could get.” (Ezra explicitly puts Waxman and Sen. Orrin Hatch in the same category). Finally, Waxman had by far the roughest mark-up. The public health insurance option is the most contentious issue in health care right now. Abortion is the most controversial issue in American politics. Waxman navigated his way through both, and got votes to pass the bill out of committee.
There was not a single easy step in that process.
So in Waxman’s short tenure as chair of Energy and Commerce, he’s managed to get cap-and-trade to a successful vote in the House, and he’s been able to get a comprehensive health care bill out of the committee for the first time in history. It’s fitting that the best commentary of all came from the man he replaced – Rep. John Dingell:
“Mr. Chairman, you’ve done a superb job. You have every right to be proud.”
No One Will Be Forced into the Public Plan. Period.
Published July 27, 2009 @ 09:48PM PT
The title of this post isn’t my most frequently-typed pair of sentences this week – but it’s close. So I’m going to type this up, put it up in the “Featured Posts” section so it’s easy to find, and be done with it.
The public health insurance option, as envisioned in the health care legislation that we’ve seen in the House and the Senate, would be one option out of many. You’d have a range of qualifying plans, from Aetna to UnitedHealth, and “Plan USA” or “Community Health Insurance” or whatever they decide to call it will be listed alongside it. Same subsidies, same rules of the road, same basic benefits (which standard is actually set by the private insurance marketplace – as in “equivalent to the average prevailing employer-sponsored coverage”). It’s one out of many options – most of them private. Nevertheless, the persistent myth that gets kicked around is that unless you have benefits through your employer, you’ll get the public plan. There’s a secondary persistent myth that the public plan is tantamount to single-payer. Believe me, no one will quickly set you straight on that point than an advocate for single-payer! (By the way, if you are advocate for single-payer, you might want to stop reading now. The rest of this post is probably just going to make you really, really angry all over again that a plan that basically coddles for-profit insurance is what’s moving in Congress.)
In the past, I’ve tried to refute that by pointing out the logical fallacy – that if you choose to go with a plan with a cheaper rate and better quality, you’re not being forced to do anything. You’re just being a smart consumer (wassup, Free Market Boyz!) If you want to be a dumb consumer and buy from WellPoint, no one stops you.
I’m still getting the question, though, so let me try a simpler argument – math.
It’s not even fancy math. It’s subtraction.
Simply put, there are exactly zero studies that show the public plan coming putting private insurance out of business. Not the Lewin Group, not the Commonwealth Fund and, most important, not the CBO.
Let’s start with Lewin – which I’ll quickly mention “is wholly owned by UnitedHealth Group, one of the nation's largest insurers.” Lewin’s vision of the public plan is twofold – 1.) what if it’s open to all individuals and business, a configuration that no body of Congress has proposed, and 2.) what if it’s open to uninsured individuals and small businesses, the configuration envisioned in the Senate HELP bill and for the first few years of the House bill. If it’s 2 – the version actually in pending legislation, private plan enrollment would decrease by 83.4 million. Does that seem like a lot? Well, in 2006-2007, there were 159.3 million people in employer-based insurance.
159.3 million
- 83.4 million
75.9 million people who would still have private insurance, in the rosiest of scenarios for the public plan.
Suffice to say, when you get closer to what’s in the bill, the argument becomes even less conclusive. Lewin Group says that option 1 – the one that actually bears resemblance to what’s in the legislation -- would decrease private plan enrollment by 34.9 million, leaving 124.4 million people in private insurance. Anything that leaves 78% of people right where they are is a pretty crummy attempt to force anyone to do anything.
But the Lewin Group can say what they want – the real umpire is the Congressional Budget Office. Their analysis is not ambiguous. The House bill's version of an Exchange with a public plan would actually lead to a net increase in people enrolled in private insurance, including employer-based coverage:
All told, we estimate that, in 2016, about 9 million people who would otherwise have had employer coverage would not be enrolled in an employment-based plan under the proposal.
The net effect of the proposal on employment-based health insurance reflects larger changes in the other direction, however. We estimate that about 12 million people who would not be enrolled in an employment-based plan under current law would be covered by one in 2016, largely because the mandate for individuals to be insured would increase workers’ demand for insurance coverage through their employer. On net, therefore, about 3 million more people would have their primary coverage through an employer [emphasis mine] under the proposal than under current law...
And why doesn’t the public plan force all of the U.S. into its low-administrative-cost arms? Because the barriers to entry are so low (individuals and microbusinesses) that CBO just doesn’t see more than 10 million people signing up.
So if you think that you’ll be forced to have the public plan if you don’t want it – I’m sorry, your numbers don’t add up.
And by the way, this is a phenomenally frustrating post to write. To have to point out basic arithmetic is rubbing my nose in how week the proposal for the public plan is compared to what Jacob Hacker once dreamed up and what Obama, Edwards and Clinton ran on. The proposals for the public plan in legislation haven’t been gutted, but they’ve been severely hampered. Only individuals without insurance and employees at small businesses will even be eligible for at least three years, and possibly longer. Our legislators have catered so much to those on the “If you like your coverage, you can keep it” end of the spectrum, that those who don’t like their coverage are high and dry. More to the point, as the CBO has scored, even this weak public option is a cost-saver as part of the total health care reform package. Even tying one hand behind its back, it gets the job done.
How much money would we be saving -- and how many more customers fed up with their insurance plans would finally have an option -- if we’d allowed it to be strong?
(Photo credit: Patrick Haney on Flickr.)
