Friday, April 17, 2015

Fwd: qotd: Drew Altman on public versus private control of spending

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-------- Forwarded Message --------
Subject: qotd: Drew Altman on public versus private control of spending
Date: Fri, 17 Apr 2015 04:01:48 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Wall Street Journal
April 16, 2015
Public vs. Private Health Insurance on Controlling Spending
By Drew Altman

The Federal Office of the Actuary in the Centers for Medicare and
Medicaid Services has charted the annual rate of increase in spending
for Medicare, Medicaid, and private health insurance. As the chart (at
the link below) shows, by cumulative growth in per capita spending,
Medicare and Medicaid have generally grown more slowly than private
insurance and are projected to continue doing so through 2023. Per
capita spending is an especially useful measure for comparing public and
private health insurance spending because it shows how much Medicare,
Medicaid, and private insurers spend on each person irrespective of the
number of people covered.

Overall… it appears that public programs control per capita spending
somewhat more effectively than private coverage does. That may be just
the opposite of what many would presume in a country where the private
market is generally expected to outperform the public sector.

Here's another way to think about it: While Medicare and Medicaid are
far from perfect, the purchasing power and policy levers available to
large public programs appear to give them an edge over our fragmented
private insurance system when it comes to controlling spending.

(Drew Altman is president and chief executive officer of the Kaiser
Family Foundation.)

http://blogs.wsj.com/washwire/2015/04/16/public-vs-private-health-insurance-on-controlling-spending/

****


Comment by Don McCanne

One of the primary purposes of the Affordable Care Act was to control
health care spending. After five years, the impact on spending appears
to be negligible except for a slight decline in use of beneficial
services as a result of higher deductibles and less accessible provider
networks - exactly the wrong way to control health care spending.

The data is right out front for all the world to see: large public
programs are clearly more effective than our fragmented private
insurance system when it comes to controlling spending.

The Affordable Care Act experiment has already failed. It's time for
single payer.

Wednesday, April 15, 2015

Fwd: qotd: Florida and Texas should be ashamed, but what about New York and California?

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-------- Forwarded Message --------
Subject: qotd: Florida and Texas should be ashamed, but what about New
York and California?
Date: Wed, 15 Apr 2015 05:10:13 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Commonwealth Fund
April 10, 2015
Health Care Coverage and Access in the Nation's Four Largest States
By Petra W. Rasmussen, Sara R. Collins, Michelle M. Doty, Sophie Beutel

In this brief we use data from the Biennial Survey to examine
differences in health insurance coverage, cost-related problems getting
needed care, and medical bill problems and debt among adults ages 19 to
64 in the nation's four largest states.

The four largest states in the U.S.—California, Florida, New York, and
Texas—fall into two distinct categories. The first group is represented
by California and New York, both of which are operating their own health
insurance marketplaces and have expanded eligibility for Medicaid to
adults who earn at or below 138 percent of the federal poverty
level—about $16,000 for an individual or $32,000 for a family of four.3
Florida and Texas, the second group, are using the federal marketplace
to enroll residents in health plans and have declined to expand Medicaid
eligibility. In this new analysis of data from the Commonwealth Fund
Biennial Health Insurance Survey, we find that, in 2014, there were
larger shares of uninsured adults in Florida and Texas compared with
California and New York. In addition, adults in Florida and Texas were
more likely to report not getting needed care because of cost and to
report having problems paying medical bills.

Percent of adults ages 19-64 who are uninsured

12% - New York
17% - California
21% - Florida
30% - Texas

Percent of adults ages 19-64 who experienced cost-related access problems

30% - New York
31% - California
43% - Florida
43% - Texas

Percent of adults 19-64 reporting medical bill problems or medical debt

29% - New York
24% - California
42% - Florida
41% - Texas

Conclusion

The analysis suggests that the health policy decisions made by state
leaders matter. Of the four states studied, New York has had the longest
history of legislation aimed at enhancing the availability of affordable
coverage. California also implemented an early expansion of Medicaid
eligibility and, based on federal survey data, both states began
achieving declines in their adult uninsured rate earlier than other
states. Both have taken advantage of opportunities granted by the
Affordable Care Act to further expand the reach of coverage and access.
Alternatively, Florida and Texas, while experiencing robust enrollment
in private plans through the federal health insurance marketplace, have
not expanded Medicaid eligibility and have made less headway in reducing
their uninsured populations.

While there have been significant declines in the number and share of
uninsured adults since the major provisions of the Affordable Care Act
went into effect in 2014, coverage gaps are leaving millions uninsured
and without access to affordable coverage. An estimated 3.7 million
people have fallen into the Medicaid coverage gap in states that have
not yet expanded eligibility for Medicaid.

In addition, the law does not provide access to any new coverage options
for unauthorized immigrants. They are ineligible for Medicaid coverage
and cannot purchase private plans through the marketplace, either
subsidized or unsubsidized. The Congressional Budget Office estimates
that by 2020, 30 percent of the remaining uninsured will be unauthorized
immigrants, or about 9 million people. Another part of the law that is
leaving people uninsured is the so-called "family coverage glitch,"
which defines affordability—and eligibility for subsidies—based on the
cost of individual, rather than family, coverage. Currently, an
estimated 2 million to 4 million people are uninsured because of this issue.

The analysis also indicates that expanded coverage is necessary to
improve access to care and reduce medical financial burdens among U.S.
families. But the quality and comprehensiveness of coverage across all
sources of insurance (marketplace plans, individual plans,
employer-provided coverage, and Medicaid), will ultimately determine the
degree to which these problems are lessened for U.S. families.

http://www.commonwealthfund.org/publications/issue-briefs/2015/apr/coverage-and-access

****


Comment by Don McCanne

New York and California have fully implemented the provisions of the
Affordable Care Act whereas Florida and Texas have not. As a result,
Florida and Texas have more people who are uninsured, more people who
experience cost-related access problems, and more people with medical
bill problems or medical debt.

Although the leaderships of Florida and Texas should be ashamed for
failing to implement the programs that would ensure that more residents
receive the health care that they need, the leaderships of New York and
California should be ashamed as well for not demanding changes in our
health care financing system that would ensure health care for everyone.
The numbers in the tables above for these two "exemplary" states are
disgraceful and would not be tolerated by any other wealthy nation.

Incremental patches are grossly inadequate. We need a single payer
national health program.

Tuesday, April 14, 2015

Fwd: qotd: John Geyman: Why the private health insurance industry has to go

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-------- Forwarded Message --------
Subject: qotd: John Geyman: Why the private health insurance industry
has to go
Date: Tue, 14 Apr 2015 05:19:18 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



PNHP Blog
April 8, 2015
Why the Private Health Insurance Industry Has to Go
By John Geyman, MD

The private health insurance industry in the U.S. has had a long run
since shifting to medical underwriting and a for-profit status in the
early 1960s. It finds itself increasingly dependent on the government as
the costs and prices of health care have continued upward since the
1980s. Its many perks from government include tax exemptions for
employer-sponsored insurance (ESI), privatized Medicare and Medicaid
programs, and longstanding over-payments to Medicare Advantage programs.
The Affordable Care Act (ACA) has added to these perks since 2010 with
subsidized premiums through the exchanges, a "risk corridor system" to
protect insurers from losses, and allowing automatic self-renewal for
2015 plans.

Incremental attempts to contain health care costs and reform the system
since the 1990s have built upon our current multi-payer financing
system. After five years' experience with the ACA, we now know that
insurers themselves are a major barrier to achieving the kind of access
to affordable care that our population so desperately needs.

Here are some of the major reasons why private health insurers warrant
no further bailout by government and taxpayers.

1. Continued discrimination against the sick.

Despite the supposed consumer protections in the ACA, a 2014 letter from
more than 300 patient advocacy groups to the Secretary of Health and
Human Services described continuing ways that insurers still
discriminate against the sick, including benefit designs that limit
access, high cost-sharing, restrictive drug formularies, inadequate
provider networks, and deceptive marketing practices. A recent study by
Kaiser Family Foundation found that only one-third of households with
incomes between 100 percent and 250 percent of poverty have enough
liquid assets to pay their deductibles, while only about one-half can
meet out-of-pocket limits. As other examples, Wellpoint developed an
algorithm to search its database for patients with breast cancer with an
intent to cancel their policies, while many insurers place all drugs
used to treat such complex diseases as cancer, multiple sclerosis and
HIV in the highest drug formulary cost-sharing tiers, thereby reducing
insurers' costs but making the drugs unaffordable for many patients.

2. Fragmentation, inefficiency, and exorbitant administrative overhead.

There are some 1,300 private insurers still trying to maximize their
income by avoiding the costs of sicker patients. Their administrative
overhead is more than five times higher than that of the single-payer
program in two Canadian provinces; the overhead of private Medicare
Advantage plans averages 19 percent vs. the 1.5 percent for traditional
Medicare. Although the ACA set limits of 20 percent for overhead in the
individual market and 15 percent in large-group markets, a recent study
has found that those requirements had no effect on insurers' overhead
spending over the first three years of the ACA.

3. Increasing costs for less coverage

The ACA provided insurers with four levels of coverage—the so-called
"metals"—with actuarial values (what insurers pay vs. what patients pay)
ranging from 60 percent (bronze) 70 percent (silver) to 80 percent
(gold) and 90 percent (platinum). Not content with those levels of
coverage, the industry through its trade group, America's Health
Insurance Programs (AHIP), has been lobbying hard for copper plans with
only 50 percent actuarial value. Silver plans have been the most popular
on the exchanges, so that patients are left with almost one-third of
their costs, plus the cost-sharing that was required to get and maintain
their policies. All this has led to an epidemic of underinsurance,
whether the plans are purchased through the ACA exchanges or through the
private insurance markets. The ACA has made the mistake of focusing on
raising the numbers of Americans with "insurance", but has not been
effective in containing prices or costs of health care, with the result
that an increasing proportion of these costs are shifted to patients and
families. One-half of bronze plans in seven large U.S. cities require
enrollees to pay the deductible (often $5,000) before covering a
doctor's visit.

4. Gaming the ACA for profits more than service to patients

There are many examples of this, starting with Medicare Advantage. Many
insurers have been cited by the Centers for Medicare & Medicaid Services
(CMS) for serious violations of Medicare's patient protection
requirements, including inappropriate denial of coverage and failure to
consider physicians' clinical information. Humana, one of the largest
Medicare Advantage insurers in the country, is facing scrutiny from the
U.S. Department of Justice for its risk-adjustment practices, which
"upcode" the severity of patients' illnesses in order to gain increased
reimbursement, even as they lobby Congress for continued high
over-payments. Meanwhile, some insurers are marketing short-term plans
that last less than 12 months, evading any of the ACA's requirements.

5. Private insurance has priced itself out of the market.

Premiums keep going up at rates much higher than the cost of living,
with little or no containment by regulators. As examples, MetroPlus, a
popular new entrant on the New York exchange in 2014, has requested rate
hikes of up to 28 percent in 2015 for some of its enrollees, while
Florida Blue, the state's largest insurer, has announced an average rate
increase of 17.8 percent for 2015. One can argue that the private
insurance industry should be regarded as obsolete and not worth saving.
However, the ACA has extended its life, including almost $2 trillion in
federal subsidies over the next ten years (if these subsidies survive a
U.S. Supreme Court ruling on their legality in coming months). Insurers
have focused on attracting enrollees with low premiums, high
cost-sharing, and low levels of actual coverage. Large insurers such as
Wellpoint (Anthem) and Humana expect to receive $5.5 billion in 2015
through the ACA's "risk corridor" provision that protects them from
"losses."

6. As their business plan dictates, insurers are leaving unprofitable
markets without regard for patients' needs.

Private health insurers are all about making money, so they leave
unprofitable markets regardless of the public's needs. A recent example
is Blue Shield of California (which just lost its state tax-exempt
status with a surplus of more than $4 billion), which withdrew from 250
zip codes in California throughout the state in 2014.

Based on the above, the time has come for us to replace private health
insurers with a more efficient, not-for-profit single-payer financing
system—national health insurance (NHI)—which could be enacted by passage
of H. R. 676, Expanded and Improved Medicare for All.

Reference:

Geyman, JP. How Obamacare Is Unsustainable: Why We Need a Single Payer
Solution for All Americans. Friday Harbor, WA, Copernicus Healthcare,
2015, http://www.johngeymanmd.org

Other references are available at either link below.

PNHP Blog:
http://pnhp.org/blog/2015/04/08/why-the-private-health-insurance-industry-has-to-go/

Huffington Post (Same article):
http://www.huffingtonpost.com/john-geyman/why-the-private-health-in_b_7029594.html

****


Comment by Don McCanne

Those supporting further implementation of the Affordable Care Act (ACA)
while rejecting more comprehensive reform are trying to make the
overpriced and inadequate private health plans work for us. John Geyman
reminds us of some of the reasons why the private plans are actually the
cause of several of the problems we face today. We need to replace them
with a single payer national health program.