For Profit Insurance
Bill Moyers, Ezra Klein and the NY Times: The Best of This Weekend
Published July 26, 2009 @ 07:54PM PT
The best part of being semi-obsessed with health care policy and politics is we’re truly living in a flood of information. Every Sunday morning talk show, every newspaper, every political blog is talking about health care to one extent or another. The bad part is that a lot of the stories are “the same old stuff” – political theater and horserace stuff that doesn’t actually contribute to a greater understanding. Do we really need to know that President Obama is saying the same things in private to Chuck Grassley that he said back publicly back in March? Did anyone learn anything new from David Axelrod? Do we really need another, “Gosh, Obama has a lot to lose if he doesn’t get health care” article?
So every Sunday, I want to post the best of the best – the three must-reads or must-watches that will really help you parse what’s going on.
1.) Bill Moyers Journal – “Debating Healthcare Reform”
Bill Moyers has consistently showcased the voices in our national debate that we should listen to more. Two weeks ago, he hosted a riveting interview with former Cigna executive Wendell Potter, who’s made it his mission to make transparent the workings of a private insurance that’s focused more on Wall Street than its customers.
This week, he held a but no less important discussion with Dr. Marcia Angell, former editor-in-chief of the New England Journal of Medicine and one of the best-spoken proponents of single-payer reform in health care, and Trudy Lieberman of Consumer Union and the Columbia Journalism Review. Since so much of the debate this week has focused on whether Obama is looking to change too much about health care, Moyers turns the tables to talk about whether the reform plans being offered will actually change too little. As Moyers reports:
Meanwhile, supporters who want to scrap the present system for fundamental change are staring glumly through the fog of war at a battlefield in total disarray. They fear that in the White House's desire to get a bill -- any bill -- passed by Congress, it will have been so compromised, so bent to favor the big interests, that it will be less Waterloo than water down, a steady diluting of what they'd hoped for, or America needs.
PBS does not allow for embedding videos (come on, folks! It’s 2009!), but you can view the whole episode on their site.
2.) Ezra Klein, “The Ghosts of Clintoncare”
Folks like William Kristol are openly hoping for a repeat of the defeat of Bill Clinton’s health care plan, which helped spike a Republican resurgence and the Gingrich Revolution. Democrats in Congress are openly worried that pushing too hard on health care reform and losing will lead to a backlash like what they went through in 1994. Everyone wants to analyze the current health care fight in the light of Bill Clinton’s political wake.
But until Ezra Klein wrote his piece in the Washington Post this week, few paid attention to the other fallout of health care reform’s failure in 1994 – how we as patients and consumers actually got all of the demerits of Clinton’s plan anyway, but with none of the benefits.
But then a funny thing happened: Managed care came anyway. By last year, only 7 percent of American workers were in "traditional" indemnity health plans, while the rest of us -- or at least those of us fortunate enough to have insurance -- were swimming in the alphabet soup of HMOs and PPOs and HDHPs. We're all in networks now. We don't get our choice of doctor. There's no appeals process. No out-of-pocket caps. Nothing to stop insurers from rejecting our coverage applications based on preexisting conditions. And if we don't like our insurer? Tough.
"We got managed care," says Chris Jennings, who was one of Clinton's top health-care staffers. "But we didn't get the things that would protect us from managed care. We got the Wild West version of it."
Read all of Ezra’s aricle here.
3.) The New York Times editorial, “Health Care Reform and You”
If my inbox and some of the comments sections are any indication, people are hungry for details on the proposals coming out of the House and Senate. But they don’t want spin and they don’t want legislative language. They want to know what’s in it for them. The New York Times offers the longest editorial you’re every likely to read – and they break it down in as simple language as I’ve seen done anywhere:
The health care reform bills moving through Congress look as though they would do a good job of providing coverage for millions of uninsured Americans. But what would they do for the far greater number of people who already have insurance? As President Obama noted in his news conference last week, many of them are wondering: “What’s in this for me? How does my family stand to benefit from health insurance reform?”
Many crucial decisions on coverage and financing have yet to be made, but the general direction of the legislation is clear enough to make some educated guesses about the likely winners and losers.
Read the whole editorial here.
(Photo credit: World Economic Forum on Flickr.)
What's In It for Me? (At $45,000 a Year.)
Published July 25, 2009 @ 05:08PM PT
On a previous post, Mark Barnes wrote in the comments, “No matter where I go, I never find details pertinent to the individual. Could someone please tell me what the House Democrat plan will cost me?” I emailed Mark and asked if I could get some more information in order to answer his question in depth. The results are below. Big disclaimer – I only asked enough questions of Mark to get a rough idea of his life situation. So my answers are about someone generally in Mark’s situation and may not be his exact situation. I’m applying the most likely -- and usually the most conservative -- numbers in evaluating what health care reform means for Mark based on the House Bill HR 3200. This is a thought exercise based on the proposals on the table, and a thousand variables could change between now and the implementation of a health care reform bill -- including what's in the bill!
Keep in mind the reason that I was motivated to write about his case is because it’s atypical. Mark is single and uninsured, but works full time and makes over $45,000 per year, placing him solidly between 400% and 500% of federal poverty. I’m counting Mark as an individual – if you’re a family of four, it’s the equivalent of making $91,728 a year. The majority of the uninsured are under 400% of poverty, and the House bill is set up to address their situation directly. People who make just $3,000 less than Mark does will see huge benefits.
But this is the challenge – what are the benefits in health care reform for someone like Mark? What’s in it for him?
The Present
First, let’s explore Mark's situation in the here and now. How atypical is it to be uninsured at this income level, exactly? Well, there are approximately 2.5 million Americans in the same boat according to the studies done by the Department of Health and Human Services – that’s the smallest uninsured rate for all of the income “bands” measured by HHS. Nevertheless, you may be surprised that someone so solidly middle class who works full-time is uninsured – so is HHS: “That the uninsured comprise non-trivial percentages of middle and upper income individuals is surprising. Those with incomes above 300% of poverty should generally find employer insurance affordable.”
Ah, but there’s one of the big problems with employer-based insurance. Mark is what’s colloquially called a “permatemp” – someone working full-time on an ongoing, permanent basis, but as a “contract” employee. The number one reason why companies hire permatemps is to avoid giving them benefits, including health insurance. Why? The high cost of health care. Mark is above the age of 50 and lives in San Francisco. I googled through some online insurance brokers. To get a comprehensive plan that includes primary care, has a deductible under $2,500 and no office visits, the bids ranged from $4,560 for Kaiser to $7,404 for Anthem Blue. (By the way, Mark, I’d warn you against buying from Anthem Blue as an individual, as those in the Bay Area were socked with a 30% increase in premiums this year.) That’s between 10% and 16% of Mark’s salary. Quick note – I’m not doing a check on insurance plans with super-high deductibles or that don’t include doctor’s visits. That’s the very definition of “underinsured,” and I want Mark to actually benefit from having health care.
For-Profit Insurance Needs a Hug
Published July 23, 2009 @ 10:17PM PT
Much to the chagrin of those who have championed a single-payer system for years or even decades, the mantra of the debate in Washington is “If you like what you have, you can keep it.” But of course opponents of reform are telling anyone who listens that you won’t be able to keep your private insurance, that Big Government is coming to beat on private insurance unfairly, and that the real solution to our health care woes is to leave what Jon Stewart of the Daily Show referred to (tongue-in-cheek) as a “benevolent free market operator” alone. Are the forces of the status quo onto something? Should we have more sympathy for private insurance?
Claim #1: Private insurance is in rough enough shape in this economy – it shouldn’t be forced to compete with a public health insurance option.
Of all the sectors in the economy, health insurance seems to be doing pretty damn good. I’m basing this on the story two days ago that UnitedHealth Group, the largest commercial insurer in the country, more that doubled its profits from Q1 to Q2 and completely beat all Wall Street expectations. At $859 million of pure, red-blooded profit, it’s more than double the $337 million it made over the same quarter last year. That’s right, the bellwether for for-profit insurance has made more profits since the financial crisis than it did before – a 154% increase, in fact. Of course, some might claim this number is misleading. After all, last year’s Q2 profit might have been even higher – if it weren’t for those pesky class action lawsuits that cost it an additional $922 million in fines.
If you’ve been reading, the obvious question is how, at a time when more and more employers are dropping health benefits and millions have lost their coverage with their jobs, how is UnitedHealth actually doing better? Their explanation: “’We expect this year's revenue growth in public and senior business to continue to more than offset the potential for further pressure from the employer market,’ UnitedHealth CEO Stephen J. Hemsley said in a conference call with analysts.” Yes, that’s right. They’re making up for a 6% dip in employer-based customers with Medicare Advantage plans – which already compete directly with standard government-run Medicare – and through administering Medicaid HMOs.
So the industry that needs to be protected from government health programs is currently leveraging government health programs to achieve record-setting profits.
Claim #2: People love their for-profit insurance.
Yesterday’s Washington Post mentions how often Karen Ignagni of AHIP mentions that 77% of people like their insurance and presumably want to keep it. But then it goes one step further – and actually provides the context:
But the polls are not that simple, and her assertion reveals how the industry's effort to defend its turf has led it to cherry-pick the facts. The poll Ignagni was citing actually undercuts her position: By 72 to 20 percent, Americans favor the creation of a public plan, the June survey by the New York Times and CBS News found. People also said that they thought government would do a better job than private insurers of holding down health-care costs and providing coverage.
In addition, data from a Kaiser Family Foundation poll last year, compiled at the request of The Washington Post, suggest that the people who like their health plans the most are the people who use them the least.
Those who described their health as "excellent" -- people who presumably had relatively little experience pursuing medical care or submitting claims -- were almost twice as likely as those in good, fair or poor health to rate their private health insurance as excellent.
That, of course, is the funny thing about something like health insurance – it’s impossible to tell how good it is until you actually need it. And then the lesson can be painful, if not deadly.
Claim #3: People should be allowed to continue purchase individual plans outside of the Exchange.
This is what the “Page 16” brouhaha is about – the conspiracy theory that private insurance will be made illegal if the House bill passes. Not at all. When the Health Exchange is set up for individuals and small businesses to purchase coverage, most of the plans offered will be private insurance – they’ll just be more tightly regulated, required to provide a minimum standard of benefits and spend a fixed percentage on health care costs, and come with a subsidy from Uncle Sam if you can’t afford it. If the individual insurance market plans have the same minimum standard of benefits, the company can keep selling those as well. Now keep in mind, the individual insurance market only has about 16 million customers right now – and almost all of the companies that offer it are likely to have an Exchange plan post-reform. How shifting 16 million customers from one private insurance plan to another (and a subsidized one at that) will put private insurance out of business is beyond me.
People have still rushed to individual insurance market’s defense. So let me make this clear – it doesn’t deserve it. The L.A. Times reports on some findings from the Commonwealth Fund:
…among adults ages 19 to 64 with individual coverage or who tried to buy individual coverage in the past three years:
-- 47% found it very difficult or impossible to find coverage they needed.
-- 57% found it very difficult or impossible to find affordable coverage.
-- 36% were turned down, charged a higher price, or excluded because of a preexisting condition.Ultimately, 73% never bought a plan.
The report also found that:
"Even people enrolled in employer-based plans are spending larger amounts of their income on health care and curtailing their use of needed services to save money."
Even if you believe that for-profit insurance as a whole gets a bad rap, there is nearly nothing defensible about this niche of the market. If only 27% of customers who need your products can actually buy them, you’re a failure – pure and simple.
Let’s not pretend. Private, for-profit insurance will almost certainly continue to make a profit – at worst, it won’t be able to double its profit margin each year. It will be able to compete with a public health insurance option, particularly the somewhat hamstrung variants that have made it into the actual legislation. The more people have to use their insurance, the less they like their insurance company. And the individual marketplace probably ranks among the most fundamentally broken markets operating in our economy.
Save your hugs for those who are struggling with the high cost of health care in this economy, those who lost their family’s coverage because they lost their jobs, and the families of the 18,000 Americans who will lose their lives unnecessarily this year for no other reason than because they couldn’t afford health insurance.
(Photo credit: kalandrakas on Flickr.)
"Outlawing Private Insurance" Is the New "Obama Birth Certificate"
Published July 21, 2009 @ 08:52PM PT
Did you hear about how the constant mantra of "If you like what you have, you can keep it?" isn't true? That President Obama, or the House Democrats, or the Romulans somehow snuck a clause onto page 16 of HR 3200 (America's Affordable Health Choices Act) which would effectively outlaw private insurance? That private insurance would be forced not only to compete with the private plan but become no different than the public plan? It's insidious - how did they think we wouldn't notice?
Well, for starters, because it ain't there.
This is not a new strategy for killing reform. Betsy McCaughey in the 1990s performed a hideously inaccurate "close reading" of Bill Clinton's reform bill, complete with section number citations, that seemed to suggest that everything you could possibly fear about Clinton care really was true. Of course, it still wasn't, and the idea that a politician who had popped out of nowhere (but soon would be running for Lt. Gov. of New York on the Republican ticket) had found hidden passages that every policy wonk had missed was always a little fairy tale-ish. But once her article hit The New Republic, it couldn't be retracted, and the forces of a status quo were able to effectively scare the bejeesus out of the general populace.
In 2009, however, we have the blogosphere, including yours truly. Two stylistic points before we hit the heart of the matter:
1.) Much like the president's birth certificate, which suddenly is in the news again (in addition to being right here), this is a manufactured controversy. Not only that, it strains the bonds of credulity. First Read asks of the birthers: "Let's get something straight: If Obama weren't a United States citizen, don't you think the Clinton campaign (first) or the McCain camp (second) would have said something during the two-year-long presidential campaign?" Ditto with HR 3200. If it actually outlawed private insurance, don't you think the Eric Cantors and Paul Ryans of the Right would be bringing it up every chance they got - and don't you think the John Conyers and the Dennis Kuchinichs of the Left would be doing an end zone dance?
2.) Honestly, if the Romulans were going to hide something that explosive in a 1,018 page bill, don't you think they would have made sure to hide it outside the first 20 pages? (Personally, I'd hide it in page 898, which is the section on the Public Health Workforce. Just seeing that page number makes me sleepy.
So what is on this page 16? This describes what happens to the completely unregulated individual insurance market which, not for nothing, is where the abusive parts of private insurance are on most frequent display, including exclusions on the basis of pre-existing conditions. If you already have a health insurance plan - nothing happens for the first five years. And by nothing, I mean nothing - they can't accept new customers but they also can't jack up your rates (individual market plan customers for Anthem Blue saw their premiums jump 30-40% this year). After year 5, the ground rules change. If the plan you're enrolled in as an individual meets the minimum standards offered in the Health Insurance Exchange, that's fine. If not, the private insurance company is required to offer you a plan that does meet the minimum standard benefits.
What determines what goes into this minimum standard benefits? You might want to keep on reading to page 27. The qualified benefits package includes coverage for hospitalization, doctors visits, prescription drugs, mental health, maternity, etc. that is defined to be "equivalent to the average prevailing employer-sponsored coverage." So right from the start, the definition is what private employer-sponsored plans are already providing. The Health Insurance Exchange is itself populated with private insurance options and, according to page 81, anyone buying from this transparent marketplace, whether because their employer doesn't offer them insurance or because they work for a small business "may choose coverage under any such plan" both for themselves and for their dependents. And, of course, those who cannot afford a plan are subsidized so they only pay a fraction of their income, and Uncle Sam picks up the rest.
Read that again. Not only is private insurance not being outlawed, it's receiving subsidies from the federal government.
Some of the folks who have emailed me presume that the House is trying to rig the game in favor of the public health insurance option, which is already widely expected to give the private insurance market real competition particularly on cost and quality. But they've got it backwards. If the measure of the benefits is that they're equivalent to prevailing employer-sponsored private coverage, it's private insurance that's driving the conversation. (And believe me, this drives progressives who were hoping for a stronger public option up the wall! That frustration and outrage can't be feined.)
So I suppose it may be somewhat misleading to say, "If you like your coverage you can keep it." It would be more fair to say, "If you like your coverage, and it isn't so insufficient and abusive that even most private insurers would have qualms screwing you over that badly, you can keep it."
Update: (7/23/09 at 9:05 am PT)
Ezra Klein's says the same thing shorter and funnier.
(Photo credit: alvy on Flickr.)
Then There Were Two - Senate HELP Votes Bill Out of Committee
Published July 16, 2009 @ 12:29AM PT
The Senate Health, Education, Labor and Pensions Committee voted along party lines to advance its bill for comprehensive health care reform to the floor of the Senate. This makes it the first of three – although the House will be working on its bill through 3 committees, they’ll be working on the same bill. There were lots of sage congratulatory words and even a pensive release from Sen. Ted Kennedy, who has not been able to attend any of the hearings or mark-ups in person because of his illness. But because so much of the week has been focused on what the President had to say or about the House bill, the Senate HELP proceedings have largely flown under the radar. So the obvious question is – how did they do?
Well, if you haven’t seen any of the mark-ups, let me show you the single best three minutes.
No, this isn’t a parody scene on The Office. Sen. Chris Dodd and the Democrats offered to accept without revision 65 amendments authored by Republican committee members. The Republican members didn’t want them accepted – they wanted votes. Why? Pretty much just to run out the clock.
And the kick in the pants is after scores of non-preposterous Republican amendments were accepted (check out some of the amusing ones here and here) were accepted, all the Republicans on the committee voted against the bill so they could loudly complain the process wasn’t “bipartisan.” Classy.
So how much did the bill improve or decline under this marathon month of mark-up? The short version is it’s largely the same bill, with changes so minute that I’m having trouble telling the difference. That’s a great thing, by the way – Dodd could easily have given away the farm for a bipartisan vote that would never have been forthcoming. The most intriguing amendment was a requirement that federal elected officials would be required to enroll in the public plan (called the “Community Health Insurance Option” in the bill) once it’s created. Republicans thought they were being clever when they offered it, but Dodd and others called their bluff. (For the record, I think this is a phenomenal idea -- I’d throw the whole Federal Employee Benefits Program pool in there while you’re at it!)
How different is the Senate HELP bill from what’s being worked on in the other committees? Well, we can’t compare it yet to the Finance bill, which doesn’t yet exist. The general structure of the House and HELP bills may not be identical twins, but clearly they’re fraternal. A lot of people say the HELP bill is watered down – certainly, the initial principles outline released by Kennedy was bolder than the detailed bill we actually have. The employer pay (contribute to a fund) or play (give your employees benefits) is weaker than what’s in the House: Wall Street Journal did some estimations and found that a 50-person company with a $2.5 million payroll would pay $200,000 as part of the employer mandate in the House bill, but only $37,500 in the HELP bill. The cost of premiums in the Gateway/Exchange for families at 400% of poverty is a little higher than the House. The cap on how much you spend out-of-pocket is higher, too. The eligibility for people to get their insurance through the Gateway/Exchange would be more closed (the Congressional Budget Office thinks we’d be talking 20 million+ in the Gateways instead of the 30 million + for the House, with those extra millions staying in employer-provided insurance). The “community health insurance option” would need to negotiate rates with providers from the get-go, meaning it’d take longer to set-up and would have less of an immediate effect on costs – although hey, the Senate HELP bill doesn’t suggest that it will push off creating a public plan until 2013, so it may be faster after all.
All true. But considering that the Senate is traditionally the place where a good reform goes to get crushed or die, it’s remarkable all the same that we’re really talking about degrees rather than a fundamentally different or even a gutted plan. The HELP bill’s new regulations on insurance is just as strong, its commitment to developing the provider workforce we need is just as strong, the ideas for improving quality for insured and uninsured alike are just as strong, and its focus on primary and prevention to transform us from a mediocre quality “disease care system” instead of a high-performing health care system is just as extensive.
The Senate HELP bill, for reasons of jurisdiction, can’t outline how it would pay for reform or modify anything relating to Medicare and Medicaid. But presuming Senate Finance sticks to the script, the CBO estimates it will cover 97% of Americans. You may or may not agree with the approach Congress and the President have taken, but it can’t be denied that this is a pretty significant milestone on the road to reform.
Jungle gyms and all.
Why Does the House Push Off Full Reform Until 2013?
Published July 15, 2009 @ 08:01PM PT
It is the single most frequently asked question I get about the new House bill, HR 3200: why doesn’t it make its major push to expand coverage until 2013? The top two bullet points on the House bill’s summary call for the creation of a Health Insurance Exchange and a public health insurance option. Yet according to a document obtained by The Treatment’s Jon Cohn, those elements won’t be open for business until Year Four. What’s going on here? And what can we expect to get right off the bat to make the health care we currently have better for the insured and uninsured alike?
My own guess is that we’re looking at two real problems of U.S. health care at work – one policy based, the other political.
The policy reason for delaying before opening up a Health Exchange where the uninsured and small businesses alike could purchase standardized, transparent and comprehensive plans – and where all businesses would be able to purchase plans by 2015 – reflects the state of our workforce, and the experience of Massachusetts. Giving everyone coverage does not guarantee there are adequate physicians, health care providers and facilities. In fact, we know there’s not -- shortages, particularly in primary care, are noticeable even today. Massachusetts, for all of its physician density, had rather lengthy wait times for a doctor’s appointment even before it pushed its reform. But once hundreds of thousands of people suddenly had coverage and began calling around, it could no longer be ignored.
The same is true of the U.S. as a whole – particularly if the legislation pushes primary care and prevention as much as the House bill, we’re going to hit a real snag waiting for enough primary care providers to tend to the 37 million+ who suddenly have coverage. Looking at the accomplishments scheduled for 2010-2012, they focus disproportionately on provider development: eliminating the SGR fix in Medicare; increasing primary care reimbursement for Medicare and Medicaid; more funding for the National Health Service Corps for primary care; and jump-starting the programs designed to increase our supply of doctors and nurses are all Year One (2010) priorities. Even the items unrelated to workforce development all have to do with delivery system reform. Community health centers get their investment right away, since they’re going to be important in the delivery of care in rural and out-of-hospital settings. Administrative simplification by regulation and Health IT start up right away. Programs to ramp up preventative care start right away. In fact, the delivery system reforms are the only piece of the puzzle that would all get accomplished in year one! Given the years that it takes to develop primary care doctors and even nurse practitioners, that still won’t be enough time. But any head start is a necessary one to prevent a dysfunctional disconnect between supply and demand.
"We Shouldn't Fear Government Involvement in Our Health Care System"
Published July 12, 2009 @ 04:22PM PT
This is my second post on Wendell Potter’s interview on Bill Moyers Journal. You can read the first part, or you can go straight to PBS.org to watch the whole program online.
Wendell Potter was a top-ranked executive at Cigna when the insurance industry began to bat down the outrage produced by Michael Moore’s Sicko. That playbook of how they pressured Congress to take no action whatsoever in the face of Moore’s documentary should be very familiar to those watching the political dance going on in Washington. Focus on the minority of “disaster” stories from those in England in Canada, even if those stories don’t represent the average experience. Use your lobbying power to influence Democrats, especially centrist Democrats. Threaten political reprisal. Mock those who are advocating reform as being out-of-touch – a neat trick coming from executives who, as Potter mentions in the previous clip, flew in corporate jets and ate lunch with gold-plated silverware.
All of this was to obfuscate the central truth of Moore’s message – a truth that threatened the industry’s profits. As defined by Potter, that truth is “That we shouldn't fear government involvement in our health care system. That there is an appropriate role for government, and it's been proven in the countries that were in that movie.”
It’s a shame that the clip cuts off where it does, as Potter goes on to make an eloquent case that if we don’t reform health care, it will change all the same – just in a direction that none of us want:
You know, we have more people who are uninsured in this country than the entire population of Canada. And that if you include the people who are underinsured, more people than in the United Kingdom. We have huge numbers of people who are also just a lay-off away from joining the ranks of the uninsured, or being purged by their insurance company, and winding up there.
And another thing is that the advocates of reform or the opponents of reform are those who are saying that we need to be careful about what we do here, because we don't want the government to take away your choice of a health plan. It's more likely that your employer and your insurer is going to switch you from a plan that you're in now to one that you don't want. You might be in the plan you like now.
But chances are, pretty soon, you're going to be enrolled in one of these high deductible plans in which you're going to find that much more of the cost is being shifted to you than you ever imagined.
