Thursday, December 18, 2014

Fwd: qotd: Americans prefer public option to single payer

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From: Don McCanne <don@mccanne.org>
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Subject: qotd: Americans prefer public option to single payer
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The New York Times
December 18, 2014
How the High Cost of Medical Care Is Affecting Americans
By Elisabeth Rosenthal

The Times designed a questionnaire with CBS News and conducted a
national poll this month.

Americans are eager for relief.

There seems to be widespread agreement that medical prices are
burdensome for American patients, and new solutions are needed. But will
the answer be a market-based approach involving greater price
transparency? More regulation, focusing on price? A government-sponsored
single-payer health system, like that in Canada? Or allowing younger
people to join Medicare, the popular health insurance program for
seniors? Many readers surprised me by saying they could not wait to turn
65. As one reader from Texas said: "I bought medicine in Mexico for 23
years before I became eligible for the promised land of Medicare."

NYTimes/CBS Poll

Would you favor or oppose a government-administered health insurance
plan — something like the Medicare coverage that people 65 and older get
— that would compete with private health insurance plans?

59% Favor
34% Oppose
8% No opinion

Would you favor or oppose a single-payer health care system, in which
all Americans would get their health insurance from one government plan
that is financed by taxes?

43% Favor
50% Oppose
7% No opinion

http://www.nytimes.com/interactive/2014/12/18/health/cost-of-health-care-poll.html

****


Comment by Don McCanne

During the health care reform debate there was considerable support for
a "public option" - providing individuals an option of choosing a
Medicare-like program, administered by the government, that would
compete with the private health plans. During the legislative process it
received much publicity, but it was eventually eliminated from
consideration under pressure from the insurance industry that did not
want any competition from the government. A vote on a single payer
proposal also was promised by the Democratic leadership in the House,
but eventually the opportunity for that vote was traded away in politics
as usual.

We still hear calls for a public option that many contend would address
the high costs of health care, though few seem to understand that it
would hardly have any impact on costs since it would be only one more
player in our dysfunctional multi-payer financing system. But we also
hear calls for a single payer system - an improved Medicare for all -
that actually would slow spending while meeting other important goals
such as universality and equity.

How are these messages resonating with the public? The competitive
public option concept is supported by 59% of those polled, whereas the
single payer concept is supported by only 43%, with 50% opposed.

Although some might dispute this polling based on the phrasing of the
questions or whatever, to me these results seem to suggest a much more
serious problem. Instead of the national debate that we should be having
- single payer versus our fragmented multi-payer system - the debate is
being shifted to our private insurance-dominated multi-payer system
versus a multi-payer system with a public option - a Medicare-like
program that you can purchase in place of private insurance.

What does that shift in the debate do? Well, first of all, it ensures
that single payer will continue to be left off of the table as we move
forward. Second, it allows the insurers to exercise damage control by
ensuring, through their ownership of Congress, that the public option
would be prohibited from gaining an "unfair" competitive advantage
against the private insurers. During the reform debate the insurance
lobby was successful in selling the concept that the public option had
to be removed from the control of government and have restrictions
placed on it that would make it worse than the private plans. Just
opening that door was still too much for the insurers, and so the
concept was tabled. But when it comes back up again, the insurers want
to have that debate rather than the single payer debate, and they are
ready for it.

Another concern about the public option debate is that the concept is
being deliberately conflated with the premium support concept as a means
of ensuring that there is strong public support for improving health
care value through competition - competition of private health plans,
that is. The government would provide support for the insurance premiums
through virtual vouchers that would provide an option to purchase
various plans through the public exchanges. Thus the insurance industry
gets precisely what it wants with the debate being limited to how much
damage can be done to the free-standing public option, public in name
only, to be sure that it does not unfairly compete with the private
insurers (inadequate funding of reserves, prohibition of "advertising,"
increasing adverse selection through the requirement of being the
safety-net insurer, requirement to maximize cost sharing, requirement of
using ultra-narrow networks, etc.).

Maybe some of this is a stretch, but we really have to be concerned when
the perception of the public at large is that we don't want a single
payer system but we do want a government plan that competes with private
insurers. The issues are complex. We have a lot of work to do to educate
the nation on the true facts behind reform options. As far as messaging
is concerned, right now the single payer opponents can dismiss our model
with just one word: competition. Now just try to find one word or phrase
that explains why single payer is vastly superior to private plans
competing in the marketplace.

Wednesday, December 17, 2014

Fwd: qotd: Gov. Shumlin regrettably bails

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From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>
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Subject: qotd: Gov. Shumlin regrettably bails
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Mark, I'll call you right away about this. The following is the qotd
that I intend to send out now. I just didn't want it to conflict with
the PNHP release. I don't think there is a problem since it provides a
different but compatible perspective, but I just wanted to be sure first.

I have not yet done the final proofread.


Gov. Shumlin bails

Times Argus
December 17, 2014
Governor says: 'Now is not the time for single payer financing plan'

Gov. Peter Shumlin is backing away from a commitment to pass a single
payer health care financing plan in Vermont in 2015. He just made the
announcement at a press conference in Montpelier.

http://www.timesargus.com/article/20141217/THISJUSTIN/141219995


Comment by Don McCanne

Gov. Shumlin has provided a very valuable lesson for all of us. He did
almost everything possible on a state level to try to establish a single
payer system within Vermont. He has established the fact that, beyond
all doubt, a bona fide single payer system is impossible to enact and
implement on a state level without comprehensive enabling federal
legislation.

We can be thankful to Gov. Shumlin for his valiant efforts. He has shown
us that it is imperative that we continue with our efforts toward a goal
of enactment of federal single payer legislation.

Those of us working on the state level still have very important work to
do. We need to continue our education efforts on a local, statewide, and
national basis. We will not have single payer until the people
understand it and elect a Congress that will bring it to us.

There are other important health care measures that can provide some
improvements in our dysfunctional health care system, and we should
support those. But we cannot be fooled into thinking that these are
incremental steps on the path to single payer. Our health financing
infrastructure must be replaced with a single payer system. Mere
patches, such as we see with the Affordable Care Act, fall far, far
short of what we need, and will only perpetuate health care injustices.

We have plenty of dedicated people who will continue with efforts to
provide the beneficial patches to our system, and we should support
their work. But, above all, we need to regroup and intensify our efforts
to educate the nation on the imperative of a federal solution. That must
be our first and foremost priority. Nobody should become discouraged and
start thinking of leaving our ranks. We need to get busy and recruit
more soldiers for our cause, beginning today. We are fighting for the
health of the nation.

Tuesday, December 16, 2014

Fwd: qotd: Why do insurers set out-of-pocket maximums lower than required?

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From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>
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Subject: qotd: Why do insurers set out-of-pocket maximums lower than
required?
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Kaiser Health News
December 12, 2014
Many Obamacare Plans Set Out-Of-Pocket Spending Limits Below The Cap
By Michelle Andrews

Seventy-four percent of 2015 silver level plans' out-of-pocket spending
caps are below the $6,600 spending limit allowed for individual plans
and $13,200 maximum for family plans, according to Avalere, a consulting
firm. The average out-of-pocket maximum for 2015 individual silver plans
will be $5,853, says Caroline Pearson, a vice president at Avalere.
Silver was the most popular plan type this year, selected by about
two-thirds of enrollees.

After a policyholder reaches the out-of-pocket spending limit during the
year, the insurer pays all the bills, unless, for example, they involve
doctors and hospitals not in the health plan's network.

The vast majority of other plans also feature lower limits on
out-of-pocket spending—which includes deductibles, copayments and
co-insurance, but not premiums. Seventy-one percent of bronze plan
spending limits were below the allowed maximum (with an average spending
limit for single coverage of $6,381), as were 94 percent of gold plans
(average limit, $4,458) and 98 percent of platinum plans (average limit,
$2,145).

The tradeoff for lower out-of-pocket spending maximums may be a higher
deductible, says Pearson. The average deductible for silver plans will
increase 7 percent in 2015, to $2,658. Other metal-level average plan
deductibles are increasing as well.

Higher deductibles are likely helping keep premiums low, and low
premiums are what consumers are looking for, Pearson says.

Kaiser Health News
http://kaiserhealthnews.org/news/many-obamacare-plans-set-out-of-pocket-spending-limits-below-the-cap/

Avalere
http://avalere.com/expertise/managed-care/insights/avalere-analysis-consumers-should-look-at-maximum-out-of-pocket-limits-dedu

****


Comment by Don McCanne

This Avalere report reminds us that, at a given actuarial value of a
health plan (average percent of the health care costs covered by the
plan), there is a reciprocal relationship between the maximum
out-of-pocket spending for which the insured is responsible and the
deductible that must be met before the plan begins paying for health care.

Ignoring other variables, such as waiving the deductibles for certain
preventive services, let's look at the 2015 average deductibles and
average maximum out-of-pocket spending (MOOP) for the four metal tiers
representing different levels of actuarial values (AV) in the insurance
exchanges. The numbers are for individual plans that must be capped at a
MOOP of $6,600 or less.

* The bronze plans (AV 60%) have an average deductible of $5,249 with
an average MOOP of $6,381.

* The silver plans (AV 70%) have an average deductible of $2,658 with
an average MOOP of $5,853.

* The gold plans (AV 80%) have an average deductible of $1,080 with an
average MOOP of $4,458.

* The platinum plans (AV 90%) have an average deductible of $189 with
an average MOOP of $2,145.

It is obvious that, in these examples, as AVs increase, both the
deductibles decrease and the MOOPs decrease. The higher the AV value,
the more complete is the coverage. But then why are both adjusted? Why
didn't the actuaries set the MOOP for each plan at the statutory maximum
($6,600) and simply adjust the deductibles? That way the higher the
premium paid, the lower the deductible would be.

If you look at the platinum plan (90% AV) the average deductible is only
$189. With the essential health benefits and the networks remaining the
same, in order to push the AV up to 90%, the actuaries had to reduce the
maximum out-of-pocket to an average $2,145. For the gold plans, in order
to have a product with a standard $1000 deductible ($1,080 with 2015
adjustment), the actuaries also had to lower the MOOP to meet the 80% AV.

The bronze plans, with the lowest AV (60%), had to push their MOOP up to
close to the statutory maximum - $6,381, just below $6,600 - but then
that required an average deductible of a whopping $5,249 - quite a blow
for the low-income individuals and the young invincibles who would be
attracted to the low premiums of these plans.

The silver plans, which about two-thirds of exchange purchasers select,
have a more balanced deductible and MOOP. So why didn't they push the
MOOP up to the maximum ($6,600) so that they could offer a more
reasonable deductible? For one reason, having greater cost sensitivity
through higher deductibles advances the consumer-directed approaches of
those ideologues who place more importance on the theory of moral hazard
than they do on patients getting the care that they need.

Another reason is that, since about 80% of the population uses only
about 20% of health care, most insurance plan enrollees would never meet
their deductible. With the silver plan deductible of $2,658, insurers
would be paying for almost no care for about four-fifths of their
enrollees (except preventive services - a very small part of our health
care services). The extra that would have to be paid by the insurers for
having a modestly lower MOOP would apply to only about one-fifth of
their enrollees, most of whom would far exceed their deductibles anyway.

Left out of this are considerations of the consequences of obtaining
care out-of-network, even if inadvertent, and of being required to pay
retail prices for services that are later determined to not be covered
benefits.

Seems like a pretty good deal for the insurers. Isn't it our turn to get
a good deal? We would have to get rid of the insurers first.