Monday, September 30, 2013

Fwd: qotd: Is tailoring enrollment strategies to match dynamics of uninsured a solution?

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-------- Original Message --------
Subject: qotd: Is tailoring enrollment strategies to match dynamics of
uninsured a solution?
Date: Mon, 30 Sep 2013 09:02:19 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Health Affairs
September 2013 (online)
Understanding State Variation In Health Insurance Dynamics Can Help
Tailor Enrollment Strategies For ACA Expansion
By John A. Graves and Katherine Swartz


The number and types of people who become eligible for and enroll in the
Affordable Care Act's (ACA's) health insurance expansions will depend in
part on the factors that cause people to become uninsured for different
lengths of time. We used a small-area estimation approach to estimate
differences across states in percentages of adults losing health
insurance and in lengths of their uninsured spells. We found that nearly
50 percent of the nonelderly adult population in Florida, Nevada, New
Mexico, and Texas—but only 18 percent in Massachusetts and 22 percent in
Vermont—experienced an uninsured spell between 2009 and 2012. Compared
to people who lost private coverage, those with public insurance were
more likely to experience an uninsured spell, but their spells of
uninsurance were shorter. We categorized states based on estimated
incidence of uninsured spells and the spells' duration. States should
tailor their enrollment outreach and retention efforts for the ACA's
coverage expansions to address their own mix of types of coverage lost
and durations of uninsured spells.

Policy Implications

The planning for implementing the ACA's coverage expansions has largely
focused on the percentage of people in each state who are uninsured at a
certain point in time. In particular, attention has centered on
decomposing these state percentages into people eligible for Medicaid
coverage and people eligible for premium subsidies if they purchase
plans in an exchange. Two states with the same percentage of uninsured
people could have quite different proportions of people who are eligible
for Medicaid, for premium subsidies, or neither.

Two states with similar uninsurance rates could also have very different
uninsured populations in terms of how long adults had been without
coverage. Differences in length of time without insurance are just as
important as differences in income for policy makers. They must
determine whether to focus more on efforts to minimize possible Medicaid
churning or on efforts to reduce potential adverse selection—that is,
efforts to encourage healthy uninsured people to buy exchange plans, so
the plans do not have a disproportionate share of enrollees who require
expensive medical care in the near future. States with a high incidence
of people losing public coverage, for example, could have more reason to
worry about Medicaid churning than states with a high proportion of
uninsured spells that last more than two years, where possible adverse
selection in their exchanges would be a more likely problem.

Comment: This study shows that it is not only the income level but it
is also the length of time that an individual has been uninsured that
affects the probability of whether the individual would be eligible for
Medicaid or for the state insurance exchanges instead. Since there is
considerable variation between states, the authors suggest that
enrollment strategies be tailored to target the uninsured based not just
on the types of coverage lost but also on the duration of being
uninsured. What?

The dynamics of public or private insurance eligibility are forever
changing. Eligibility depends on employment, income, age, geographical
location, level of state participation in Medicaid, immigration status,
and other factors that are frequently in flux. The navigator program was
established to help individuals sort out the eligibility criteria in
order to move them into appropriate health care coverage.

It does not seem logical that states should measure durations of being
uninsured and then change enrollment strategies simply because people
who previously had been in public programs had shorter periods of being
uninsured. Navigators help all uninsured (except the tens of millions
not able to enroll in any program) whereas targeted programs are aimed
at only selected populations of the uninsured, tacitly acknowledging the
difficulties of getting everyone covered and retaining that coverage.

We are making this too complicated. Much of this is due to the fact that
we are merely expanding a highly fragmented and dysfunctional system of
financing health care that is too costly and doesn't work very well. It
is ridiculous that we should consider looking at all of the fluid
variables and then target some individuals while leaving others behind.
Instead of trying to sort all of this out we should merely switch to a
single payer national health program in which everyone is simply
enrolled once, for life.

Friday, September 27, 2013

Fwd: qotd: Peter Morici on an American National Health Service

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-------- Original Message --------
Subject: qotd: Peter Morici on an American National Health Service
Date: Fri, 27 Sep 2013 12:22:39 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

September 27, 2013
First Obamacare, Then a Single Payer System
By Peter Morici

Republicans must live with Obamacare. They have few prospects for
electing 60 senators needed to repeal the law, and unless they work to
make it more palatable — something they have few ideas to accomplish —
the nation is headed for socialized medicine.

The burden to find solutions will take congress to places that
Republicans are very reluctant to go.

The German and other European systems accomplish lower costs and
universal coverage by imposing tight controls on prices for services,
drugs, and devices. Britain's National Health Service doesn't bother
with insurance companies and claims forms — by eliminating insurance
company overhead it accomplishes much lower costs than even the German

Even before Obamacare, federal and state governments, through Medicare,
Medicaid, and other programs, paid more than 50 percent of U.S. health
care bills. That was more than the 9 percent of GDP, and the amount
Britain spends to accomplish universal coverage — without the additional
$4,600 per person American businesses and individuals pony up.

Reducing U.S. doctors fees and drug and device prices down to German
levels won't be easy or likely possible, but politicians, providers, and
businesses still providing health insurance will need a solution —
likely a scapegoat.

Enter the insurance companies that have been screwing down doctor's
fees, hassling everyone with mindless paperwork, and paying executives
like royalty.

The federal government could probably pay doctors, drug companies, and
device manufactures pretty reasonably directly, and without the
insurance company middlemen, through an American National Health Service.

(Peter Morici is an economist and professor at the Smith School of
Business, University of Maryland, and a widely published columnist.)

Comment: Professor Peter Morici, an expert on international trade, is
known for holding no punches. Here he suggests that Republican
intransigence could lead us to an American National Health Service -
true socialized medicine.

In the full article, available at the link above, he explains why
Obamacare is unsatisfactory, likely with the intent of cajoling
Republicans into working with Democrats to improve it. He seems to be
using the prospect of a national health service as a threat to
Republicans as to what could happen if they failed to cooperate. In
doing so, he does present some very persuasive arguments for making the

Maybe he's serious. He does make private insurance companies the
scapegoat. Get rid of them and then what options do we really have?

Wednesday, September 25, 2013

Fwd: qotd: Canadian businessmen perplexed by U.S. health care

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-------- Original Message --------
Subject: qotd: Canadian businessmen perplexed by U.S. health care
Date: Wed, 25 Sep 2013 09:30:10 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

The Washington Post

September 25, 2013

Canadians don't understand Ted Cruz's health care battle

By Matt Miller

When you're being forced to endure another rabid Sen. Ted Cruz (R-Tex.)
on Obamacare's threat to human freedom, it's easy to forget how absurd
our health-care debate seems to the rest of the civilized world. That's
why it's bracing to check in with red-blooded, high testosterone
capitalists north of the border in Canada — business leaders who love
Canada's single-payer system
(a regime far to the "left" of Obamacare) and see it as perfectly
consistent with free market capitalism.

Take David Beatty
a 70-year-old Toronto native who ran food processing giant Weston Foods
and a holding company called the Gardiner Group during a career that has
included service on more than 30 corporate boards and a recent
appointment to the Order of Canada, one of the nation's highest honors.
By temperament and demeanor, Beatty is the kind of tough-minded,
suffer-no-fools wealth creator who conservatives typically cheer.

Yet over breakfast in Toronto not long ago, Beatty told me how baffled
he and Canadian business colleagues are when they listen to the U.S.
health-care debate. He cherishes Canada's single-payer system for its
quality and cost-effectiveness (Canada boasts much lower costs per
than the United States). And don't get him started on the system's
administrative simplicity — you just show your card at the point of
service, and that's it. Though he's a well-to-do man who can pay for
whatever care he wants, Beatty told me he's relied on the system just as
ordinary Canadians do, including for a recent knee replacement
operation. The one time he went outside the system was to pay extra for
a physical therapist closer to his home than the one to which he'd been

It's just "common sense" in Beatty's view that government takes the lead
in assuring basic health security for its citizens. He's amazed at the
contortions of the debate in the United States, and wonders why big U.S.
companies "want to be in the business of providing health care anyway"
("that's a government function," he says simply). Beatty also marvels at
the way the U.S. regime's dysfunction comes to dominate everyday
conversation. He shakes his head recalling how much time and passion
American friends devoted one evening to comparing notes on their various
supplemental Medicare plans. Talk about your sparkling dinner conversation.

Roger Martin <>, another Toronto native and
avowed capitalist, spent years as a senior partner at the consulting
firm Monitor before becoming dean of the Rotman School of Management at
the University of Toronto, where he recently completed a 15-year stint.
He advises U.S. corporate icons like Proctor & Gamble and Steelcase. He
lived in the United States for years and has experienced both systems
first hand.

Martin told me that Canada's lower spending, better outcomes and
universal coverage make it superior by definition. Plus, it's
"incredibly hassle-free." In the United States every time he took his
kids in for an earache his wife spent hours fighting with the health
plan or filling out reams of paperwork. In Canada, he says, "the entire
administrative cost is pulling your card out of your pocket, giving it
to them and putting it back."

There's more. Canadian divisions of multinational firms love Canada's
system because when they bid on projects they have no health costs to
load in. Also, there's no crazy "job lock" as with the employer-based
system in the United States — where people with (say) a sick child cling
to their job for fear of being pronounced uninsurable. His peers, he
says, view the U.S. debate as "ideological and not based on economics."

"The whole single payer thing just makes sense," Martin adds. "You don't
spend time trying to shift costs." It's hardly perfect: a few folks go
to the United States to jump the line on certain elective procedures,
and Canada, like others, free rides on American's investment in
pharmaceutical innovation (funded by higher U.S. drug prices). But, he
adds, "I literally have a hard time thinking of what would be better
than a single-payer system."

The moral of the story? Don't let the rants of cynical demagogues like
Cruz confuse you — it is entirely possible to be a freedom loving
capitalist and also believe in a strong government role in health care.
Remember, Obamacare features a much smaller such role than does Canada's
approach — or England's, where Margaret Thatcher would have been chased
from office for proposing anything as radically conservative as the
Affordable Care Act.

One well-known billionaire told me a few years back that the right
answer for the United States was single payer for basic coverage, with
the ability for folks to buy additional private supplements atop that.
But he won't say this in public; the gang at the club just wouldn't
understand. Maybe when U.S. business leaders muster the common sense of
their Canadian counterparts, they'll deliver the message the Ted Cruzes
of the world need to hear: sit down and shut up.

/Matt Miller writes a weekly column on economic and other domestic
policy issues. He is a senior fellow at the Center for American
Progress, the voice of the political "center" on public radio's "Left,
Right & Center," the host of the new podcast "This...Is Interesting." /

Comment: Businessmen in the United States need to listen to their
colleagues in Canada. They see single payer as being "perfectly
consistent with free market capitalism." "The whole single payer thing
just makes sense."

It should be noted that this Washington Post article was written by a
"voice of the political center" - Matt Miller. That single payer is
appropriately a centrist concept is demonstrated by the fact that it
fulfills the fundamental business principles of being efficient (lower
costs per person), effective (everyone is included), and of high quality
(better health outcomes).

(As an aside, regarding the well-known billionaire who recommended
single payer for basic coverage with private supplementary coverage for
other care, I should say that I wrote such a proposal right after the
failure of the Clinton reform effort. I submitted it to Claudia Fegan,
then president of PNHP, and she returned it smothered in red ink. That
is when I learned that I knew very little about health policy, so I have
studied it on a daily basis since. Simply stated, single payer needs to
be comprehensive enough such that no supplemental coverage would be

Incidentally, the hotlinks in the article on "Canada's single payer
system" and "lower costs per person" lead to two great articles on these
topics. If the links are not live in this email, they can be accessed in
the original article at the link above.

Tuesday, September 24, 2013

Fwd: qotd: Benefits consulting firms move in for their cut of the action

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Benefits consulting firms move in for their cut of the
Date: Tue, 24 Sep 2013 12:46:21 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

September 20, 2013
Analysis: Benefit firms create tremors for insurers in U.S. healthcare
By Caroline Humer and Lewis Krauskopf

American companies are sending shockwaves through the healthcare
industry by moving a rapidly growing number of employees onto privately
run online exchanges for their medical coverage.

In a business already bracing for major change because of President
Barack Obama's healthcare reforms, the decisions are threatening to
shift more power in the market to the benefit consulting firms opening
many of the exchanges.

"It's important to the insurance companies to sell through the private
exchanges to maintain their biggest customers," said Mike Nugent,
managing director of the healthcare practice at business consulting firm
Navigant Consulting.

The exchanges received their biggest boost yet when Aon Plc insurance
broker said on Wednesday it signed up 18 companies to participate in its
Aon Hewitt Corporate Health Exchange, including the country's largest
drug store operator Walgreen Co, resulting in coverage for an estimated
600,000 people next year.

The announcement drove up the shares of Aon and other benefits
consulting firms, such as Towers Watson and Marsh & McLennan, which owns
Mercer, one of the largest consulting firms in the world.

All three have easily outpaced the broader market in the past year, with
Towers Watson shares up 79 percent and Aon up 42 percent.

Corporations are hoping the move to the private exchanges will keep
healthcare spending in check and force employees to manage more of their
own healthcare costs. Companies still directly pay a portion of the
premium and deduct premium payments from employee wages for the
difference between the employer contribution and the cost of a plan, but
employees can choose a plan from a menu of low to high cost offerings.

Insurers have been preparing for this possible shift to private
exchanges. In some cases they are investors and in other cases, like
Aetna Inc, they are building their own.

But plans offered by large, household name insurers such as UnitedHealth
Group, Aetna and WellPoint Inc are likely to be among the most prominent
choices for consumers selecting a plan on a private exchange, Windley said.

Some experts say moving to an exchange prevents companies from
"over-buying" insurance. Alan Cohen, chief strategy officer of private
exchange company Liazon, said that based on the 200,000 transactions
processed at his companies, employees spent on average 25-30 percent
less when they chose the plan compared with what the company would have

On the other hand, the Aon exchange and others shift the risk associated
with providing health insurance to the insurers from the large companies
that have traditionally being bearing the risk, or self-insuring, which
can be more profitable.

Self-insured members generate $4 of pre-tax profit monthly, compared to
$18 in pre-tax profit for each fully insured member, according to Credit
Suisse analyst Ralph Giacobbe.

The coming year is the first time in which a significant number of
larger employers will use private exchanges for their workers' benefits.
Companies, which start unveiling benefit plans this month, are sending
at least 1 million employees to private exchanges in 2014 versus a few
hundred thousand now.

More growth is expected in 2015 with nearly 1 in 3 large companies
saying they were considering a move. By 2015, 6.5 million people could
be on these exchanges for active employees, according to forecasts by
analysts at William Blair.

The possible market is much larger. About 170 million people received
employer-based health insurance in 2012, 156 million of whom were under 65.

Aon, Towers Watson and Mercer already dominate the market for consulting
for the top 1,000 U.S. companies about benefits, putting them in a
position to promote their exchanges.

The expansion of private exchanges is expected to add significantly to
revenues of the benefit companies. Rates from exchange contracts bring
in more revenue per employee than current administrative ones, according
to William Blair analysts. Also, once the exchanges are established with
a fixed cost base, new corporate clients become highly profitable,
according to William Blair.

Comment: Although these private insurance exchanges which resemble
Obamacare's state insurance exchanges are just getting off the ground,
they seem to be providing an out for employers who are tired of managing
their employee health benefit programs and who want relief from the
seemingly uncontrollable increases in health care costs. What an
opportunity this provides for the benefits consulting firms.

These consulting firms are not replacing the insurers, but they are
inserting themselves as another layer of administration in our system
already greatly overburdened with administrative waste. Their
administrative costs are not counted in the 15 to 20 percent allowed for
the insurers under Obamacare. No, these costs are in addition to the
administrative waste of the insurers and the waste of the administrative
burden that insurers place on physicians, hospitals and other health
care providers. It is part of our uniquely American health care system
that is designed to finance administrative services while seeming to pay
for health care services only as an aside - an exaggeration but it does
emphasize the priorities of these administrative corporations.

Since health care policies should be designed to take care of patients,
in this case employees who are moved from employer benefit plans to
these private exchanges, we should look at the impact that this will
have on the employees.

* Since employee health benefits and the costs to administer them are
paid by employees in the form of forgone wage increases, this additional
layer of administrative costs will be borne by employees with no
commensurate increase in health care services.

* This shift from defined benefit health plans to defined contributions
is one more example of our current trend of shifting risk and costs onto
the backs of employees.

* When employees select their own plans, they will buy the plans with
the lowest premiums since most of them and their families are healthy.
That means plans with high deductibles and spartan health benefits. For
those who develop serious medical problems, financial hardship will be
an inevitability because of excessive out-of-pocket costs, and impaired
access is very likely because of the shift to narrow networks of providers.

* The private exchanges will not be eligible for the subsidies provided
for plans in the state-run Obamacare exchanges, so low and moderate
income individuals will not be receiving the same help that those who
enroll through the state exchanges will have. Those employers now
selecting the private exchange option will be contributing to the
employees' premiums, though, unlike the state exchanges, that
contribution will not be equitable since it is not based on income.

* For employers who currently self insure and thus have lower
administrative costs, the administrative costs will be much greater in
the private exchanges, but those extra costs will be borne by the
employees, either directly of indirectly.

* The benefit consulting firms are entering these ventures with visions
of great profits. This is one more sad saga of the American approach of
scooping up profits from patient care dollars while designing health
coverage to maximize business goals and minimize health care services.

* These business intermediaries seek even more profits by catering to
Wall Street investors, pushing up the price of their shares while
appeasing Wall Street by demonstrating that they will limit as much as
possible the diversion of revenues to patient care.

Not only do we need to remove private insurers from their nefarious role
in all of this, it appears that it is time to remove the employers and
their benefit managers as well. By switching to a single payer financing
system and funding it through equitable taxes, we can be sure that
everyone would be paying their fair share, including members of the
business community, while nobody is wasting funds on the middleman money

Monday, September 23, 2013

Fwd: qotd: New York Times exposes the injustices of private insurers' narrow networks

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: New York Times exposes the injustices of private
insurers' narrow networks
Date: Mon, 23 Sep 2013 10:52:43 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

The New York Times
September 22, 2013
Lower Health Insurance Premiums to Come at Cost of Fewer Choices
By Robert Pear

Federal officials often say that health insurance will cost consumers
less than expected under President Obama's health care law. But they
rarely mention one big reason: many insurers are significantly limiting
the choices of doctors and hospitals available to consumers.

From California to Illinois to New Hampshire, and in many states in
between, insurers are driving down premiums by restricting the number of
providers who will treat patients in their new health plans.

Some consumer advocates and health care providers are increasingly
concerned. Decades of experience with Medicaid, the program for
low-income people, show that having an insurance card does not guarantee
access to specialists or other providers.

Consumers should be prepared for "much tighter, narrower networks" of
doctors and hospitals, said Adam M. Linker, a health policy analyst at
the North Carolina Justice Center, a statewide advocacy group.

Insurers say that with a smaller array of doctors and hospitals, they
can offer lower-cost policies and have more control over the quality of
health care providers. They also say that having insurance with a
limited network of providers is better than having no coverage at all.

In a new study, the Health Research Institute of PricewaterhouseCoopers,
the consulting company, says that "insurers passed over major medical
centers" when selecting providers in California, Illinois, Indiana,
Kentucky and Tennessee, among other states.

"Doing so enables health plans to offer lower premiums," the study said.
"But the use of narrow networks may also lead to higher out-of-pocket
expenses, especially if a patient has a complex medical problem that's
being treated at a hospital that has been excluded from their health plan."

In California, the statewide Blue Shield plan has developed a network
specifically for consumers shopping in the insurance exchange. Juan
Carlos Davila, an executive vice president of Blue Shield of California…
said the new network did not include the five medical centers of the
University of California or the Cedars-Sinai Medical Center near Beverly

Daniel R. Hawkins Jr., a senior vice president of the National
Association of Community Health Centers, which represents 9,000 clinics
around the country, said: "We serve the very population that will gain
coverage — low-income, working class uninsured people. But insurers have
shown little interest in including us in their provider networks."

Dr. Bruce Siegel, the president of America's Essential Hospitals,
formerly known as the National Association of Public Hospitals and
Health Systems, said insurers were telling his members: "We don't want
you in our network. We are worried about having your patients, who are
sick and have complicated conditions."

"If a health plan has a narrow network that excludes many doctors, that
may shoo away patients with expensive pre-existing conditions who have
established relationships with doctors," said Mark E. Rust, the chairman
of the national health care practice at Barnes & Thornburg, a law firm.
"Some insurers do not want those patients who, for medical reasons,
require a broad network of providers."

NYT reader response:

Don McCanne
San Juan Capistrano, CA

By designing reform that leaves the private insurers in charge, it was
inevitable that their business model would be directed to selling their
own insurance product by trying to keep their premiums competitive.
Instead of controlling health care costs, they are shifting the costs to
people who actually need health care - defeating the purpose of insurance.

Private insurers will continue to search for innovative ways to keep
their premiums competitive, such as narrow networks, high deductibles,
and selling in only healthy, profitable markets. Their waste of our
health care dollars can be demonstrated by last week's report from the
Office of the Actuary of CMS that projects that, in 2022, government
administrative costs for health care (Medicare, Medicaid, CHIP, VA, IHS,
Department of Defense, etc.) will be $70 billion, whereas the
administrative costs of the private insurers will be $313 billion! (That
doesn't even include the cost of the tremendous administrative burden
placed on the health care delivery system.) What a waste!

We need to throw out the outrageously priced and administratively
burdensome private insurance industry that merely screws up our health
care and replace it with an improved version of Medicare that covers

Comment: This article featured prominently in The New York Times
explains the adverse consequences of the private insurers' decisions to
restrict access to narrow networks of physicians and hospitals. When you
look at the very large number of responses to this article, it is
somewhat reassuring that the responses endorsed by the readers
acknowledge that we need to replace the private insurers with a single
payer system.

Use the link above to read the full article, and then clink on "Reader
Picks." We need to translate this into citizen action.

Friday, September 20, 2013

Fwd: qotd: Health care coverage for the homeless

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Health care coverage for the homeless
Date: Fri, 20 Sep 2013 02:27:38 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Health Affairs
September 2013
Medicaid Expansion: Chronically Homeless Adults Will Need Targeted
Enrollment And Access To A Broad Range Of Services
By Jack Tsai, Robert A. Rosenheck, Dennis P. Culhane and Samantha Artiga

Prior to health reform, eligibility for Medicaid was limited to
low-income people in certain categories, including children, pregnant
women, parents with dependent children, people who qualified as
disabled, and elderly adults. The Medicaid expansion in 2014 extends
eligibility to low-income, nonelderly, nondisabled adults without
dependent children—often called "childless adults"—who were historically
excluded from the program.

Among other people who could gain coverage under the Affordable Care
Act's Medicaid expansion are the estimated 1.2 million people across the
country who are homeless in a given year, including roughly 110,000
chronically homeless adults. Given their low incomes, many currently
uninsured or underinsured homeless adults will gain from the Medicaid
expansion a new pathway to coverage and new health care opportunities.


The Medicaid expansion under the Affordable Care Act will likely
increase coverage options and provide broader access to care for many
chronically homeless adults who are uninsured or rely solely on state or
local assistance programs. Moreover, states that expand Medicaid may
experience offsetting cost savings, as chronically homeless adults who
previously relied on state and local assistance transition to Medicaid.
Conversely, in states that do not expand Medicaid coverage, poor
uninsured adults will not gain a new coverage option, and many will
likely remain uninsured and continue to face barriers to accessing
needed care.

The findings of this study illustrate the broad and varied health care
needs of chronically homeless adults. Ensuring access to preventive and
mental health services is particularly important for addressing the
needs of this population, and the services available to this group
should include case management and other supportive services, such as
help with housing.

Comment: For those states that expand Medicaid, many of the chronically
homeless will have an opportunity to obtain health care coverage - much
needed in this vulnerable population. However, these individuals face
many hurdles in both initial enrollment and maintaining enrollment in
Medicaid. Many will still be without adequate coverage. This is
unfortunate since we could have eliminated the coverage problem by
establishing a single payer national health program - enroll once and it
is for life. We could still do that.

For more information on health care for the homeless, see the website of
National Health Care for the Homeless Council:

Wednesday, September 18, 2013

Fwd: qotd: Gaps in public understanding of Medicare

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Gaps in public understanding of Medicare
Date: Wed, 18 Sep 2013 12:22:15 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

The New England Journal of Medicine
September 12, 2013
The Public and the Conflict over Future Medicare Spending
By Robert J. Blendon, Sc.D., and John M. Benson, M.A.

Our thesis is that there exists today a wide gap in beliefs between
experts on the financial state of Medicare and the public at large.
Because of the potential electoral consequences, these differences in
perception are likely to have ramifications for policymakers addressing
this issue.

There are concerns about Medicare today and current cost-containment
efforts. Most respondents see Medicare in some cases already withholding
treatments and prescription drugs to save money, including 63% who
believe this happens very often or somewhat often. Also, the public sees
the bigger problem for Medicare beneficiaries as not getting the health
care they need (61%) rather than as receiving unnecessary care (21%).
Medicare pays about half the total personal health care expenditures for
beneficiaries, but many people are confused about what proportion is
paid by Medicare, whether it pays for most of recipients' bills or
substantially less.

When given a dozen possible causes for rising Medicare costs that have
been suggested either by experts or in the media, the majority do not
identify any one of them as the most important. However, the three most
often cited reasons relate to poor management of Medicare by government,
fraud and abuse in the health sector, and excessive charges by
hospitals. The lowest ranked reason was the cost of new drugs and
treatments being offered to seniors.

Although Medicare is popular, it is not seen as better run than private
insurance plans, nor is it seen as particularly different from private
coverage with respect to quality of care or access to physician care.

The one area of clear support for the future is the growing preference
for Medicare Advantage–type private health coverage among persons less
than 65 years of age.

In conclusion, two points are important. It would aid the long-term
resolution of these issues if there were a nonpartisan, broad-based
public education campaign launched focusing on how Medicare works
financially. Second, it would be advantageous if discussions of the
financial sustainability of Medicare could be separated from public
debates over reducing budget deficits or enacting tax cuts. Until these
concerns are better addressed, the gaps in perception are likely to remain.

MedPage Today
September 11, 20133
Public Often Clueless About Medicare
By David Pittman

Because of a high level of misunderstanding about Medicare's financing,
lawmakers in Congress are hesitant to enact changes to the program
fearing voter backlash, Bob Blendon, ScD, and John Benson, MA, both of
Harvard University, wrote in a special report in Wednesday's New England
Journal of Medicine.

Ted Marmor, PhD, professor emeritus of public policy at Yale University,
said it's misleading to imply public opinion is a shaper of public
policy. He called it more of a protector than a promoter.

"The public is almost never well informed about details," Marmor told
MedPage Today in a video interview. "What's important about public
opinion is what its values are and what it would be threatened by, not
what it means in terms of shaping public policy in terms of direction on

Harvard School of Public Health
Poll - May 13-26, 2013
Public Attitudes about Medicare

10. Which do you think is better run, (the federal Medicare program) or
(private health insurance plans that people get through their jobs), or
do you think they are about equally well run?

15% - The federal Medicare program
41% - Private health insurance plans
39% - About equally well run
5% - Don't know/ Refused

19. (When you retire,) If you had a choice, would you prefer to get your
Medicare health insurance benefits from the current government Medicare
program, or from a private health plan, such as a PPO or HMO, offered
through Medicare?

34% - From the current government Medicare program
56% - From a private health plan, such as a PPO or HMO, offered through
10% - Don't know/ Refused

Comment: The public is not well informed on the details of Medicare. A
plurality believe that private insurance plans are better run than
Medicare, and a majority would prefer private plans when they retire.,

We should think about the political implications of this. Is "Medicare
for All" really a good slogan for single payer? Medicare has some very
serious defects, like it pays only about half of beneficiaries' health
expenditures. Yet we certainly don't want a slogan that would suggest
that single payer would be like private insurance for everyone.

We shouldn't change course based on the results of a single poll, but we
should continue to think about how we can improve our messaging so that
people do understand that single payer is what they really want. That's
true when the facts are presented, but too many still don't understand
that. As Ted Marmor implies, perhaps we should be placing more emphasis
on values.

Tuesday, September 17, 2013

Fwd: qotd: New Census data on the uninsured - still 48 million

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-------- Original Message --------
Subject: qotd: New Census data on the uninsured - still 48 million
Date: Tue, 17 Sep 2013 11:14:23 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

United States Census Bureau
September 2013
Income, Poverty, and Health Insurance Coverage in the United States: 2012
By Carmen DeNavas-Walt, Bernadette D. Proctor, Jessica C. Smith


• In 2012, the percentage of people without health insurance decreased
to 15.4 percent from 15.7 percent in 2011. The number of uninsured
people in 2012 was not statistically different from 2011, at 48.0 million.

• Both the percentage and number of people with health insurance
increased in 2012 to 84.6 percent and 263.2 million, up from 84.3
percent and 260.2 million in 2011.

• The percentage of people covered by private health insurance in 2012
was not statistically different from 2011, at 63.9 percent. This is the
second consecutive year that the percentage of people covered by private
health insurance was not statistically different from the previous
year's estimate. The number of people covered by private health
insurance increased in 2012 to 198.8 million, up from 197.3 million in 2011.

• The percentage and number of people covered by government health
insurance increased to 32.6 percent and 101.5 million in 2012 from 32.2
percent and 99.5 million in 2011.

• The percentage and number of people covered by employment-based health
insurance in 2012 were not statistically different from 2011, at 54.9
percent and 170.9 million.

• The percentage and number of people covered by Medicaid in 2012 were
not statistically different from 2011, at 16.4 percent and 50.9 million.
The percentage and number of people covered by Medicare increased in
2012 to 15.7 percent and 48.9 million, from 15.2 percent and 46.9
million in 2011.

• Since 2009, Medicaid has covered more people than Medicare.

• In 2012, the percentage and number of uninsured children under age 18
decreased to 8.9 percent and 6.6 million, down from 9.4 percent and 7.0
million in 2011. In 2012, the uninsured rate for children in poverty,
12.9 percent, was higher than the uninsured rate for children not in
poverty, 7.7 percent.

• The rate and number of uninsured non-Hispanic Whites in 2012 were not
statistically different from 2011, at 11.1 percent and 21.6 million. The
rate and the number of uninsured Blacks in 2012 were also not
statistically different from 2011, at 19.0 percent and 7.6 million.

• The percentage of uninsured Hispanics decreased in 2012 to 29.1
percent, down from 30.1 percent in 2011. The number of uninsured
Hispanics in 2012 was not statistically different from 2011, at 15.5

Comment: Supporters of the Affordable Care Act (Obamacare) have been
touting the improvement in our health care system since the legislation
was signed into law three years ago. Well, that improvement does not
apply to the numbers remaining uninsured since the minimal gains have
been offset by losses, and so we still have 48 million people uninsured.
That doesn't even consider all of the injustices that remain in the
maldistribution of coverage.

Of course, next year's numbers should be different. The introduction of
state health insurance exchanges with government subsidies to help
purchase plans and pay medical bills, plus the expansion in the Medicaid
program, will reduce the numbers of uninsured. However, when Obamacare
is fully implemented, the CBO estimates that 31 million people will
remain uninsured. That's a reduction of only slightly over one-third of
today's 48 million - hardly a success story for health care reform that
was supposed to provide everyone with some form of insurance coverage.

If we had a single payer improved-Medicare-for-all program, the number
of uninsured would not be 48 million, it would not be 31 million, it
would be zero!

(The full Census Bureau report also includes unsettling income and
poverty data. Although PNHP's activism is limited to health care, there
is so much more that needs to be done. All Americans need to make social
justice our leading national priority.)

Read PNHP's press release for a brief analysis of the health insurance
implications of today's Census Bureau report:

'Stronger medicine than Obamacare needed to end uninsured crisis':
health expert

Monday, September 16, 2013

Fwd: qotd: Exchange plans have sharply limited networks

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-------- Original Message --------
Subject: qotd: Exchange plans have sharply limited networks
Date: Mon, 16 Sep 2013 11:44:44 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Los Angeles Times
September 14, 2013
Insurers limiting doctors, hospitals in health insurance market
By Chad Terhune

The doctor can't see you now.

To hold down premiums, major insurers in California have sharply limited
the number of doctors and hospitals available to patients in the state's
new health insurance market opening Oct. 1.

New data reveal the extent of those cuts in California, a crucial test
bed for the federal healthcare law.

Consumers could see long wait times, a scarcity of specialists and loss
of a longtime doctor.

"These narrow networks won't work because they cut off access for
patients," said Dr. Richard Baker, executive director of the Urban
Health Institute at Charles Drew University of Medicine and Science in
Los Angeles.

To see the challenges awaiting some consumers, consider Woodland
Hills-based insurer Health Net Inc.

Across Southern California the company has the lowest rates, with
monthly premiums as much as $100 cheaper than the closest competitor in
some cases. That will make it a popular choice among some of the 1.4
million Californians expected to purchase coverage in the state exchange
next year.

But Health Net also has the fewest doctors, less than half what some
other companies are offering in Southern California, according to a
Times analysis of insurance data.

In Los Angeles County, for instance, Health Net customers in the state
exchange would be limited to 2,316 primary-care doctors and specialists.
That's less than a third of the doctors Health Net offers to workers on
employer plans.

Other major insurers have pared their list of medical providers too, but
not to Health Net's degree. Statewide, Blue Shield of California says
exchange customers will be restricted to about 50% of its regular
physician network.

"We are nervous about these narrow networks," said Donald Crane, chief
executive of the California Assn. of Physician Groups. "It was all about
price. But at what cost in terms of quality and access? Is this contrary
to the purpose of the Affordable Care Act?"

Insurers and their number of doctors in L.A. County for state health

2,316 Health Net
3,009 Molina
3,855 Anthem Blue Cross
4,946 L.A. Care
5,705 Kaiser
6,559 Blue Shield PPO
8,839 Anthem EPO

28,181 Number of licensed physicians in L.A. County (MBC),0,6433104,full.story

Comment: These new data on use of narrow provider networks in state
insurance exchanges, using Los Angeles County as an example, are
important because they show us the extent to which this concept is being
applied. Narrow provider networks reduce health care spending by
limiting patient access to low cost providers - taking away choice - and
by impairing access though supply-side contractions, that is, rationing
care by limiting the supply of covered health care providers.

Another table accompanying the Los Angeles Times article (available at
the link above) lists premiums for typical policies issued by these
insurers for the benchmark silver plans. When comparing premiums with
the numbers of physicians in the network, there are several interesting
observations. Health Net, with the fewest number of physicians in their
network, has the lowest premiums - no surprise. Blue Shield,
California's nonprofit Blues plan, has premiums on the lower end though
it has a much larger number of physicians than does for-profit Anthem
Blue Cross, yet their premiums are similar. The nonprofit seems to be
more concerned about patient access whereas the for-profit seems to be
concerned more about profits. However, Anthem's EPO (exclusive provider
organization) offers a larger choice in providers but extracts a much
larger premium for that coverage. Comparing Anthem's two products, it
looks like if you want an accessible doctor, you're going to have to pay
for that right. Considering that Kaiser is a closed, integrated health
system, it does have a fairly decent number of physicians, but it also
has the highest premiums. It is likely that Kaiser's premiums are not
high because of the number of physicians, but rather they are high to
prevent destabilization of their business model by allowing too many new
enrollees which might strain their capacity.

Health Net's silver plan premiums are set far enough below the others
such that they will be very attractive for shoppers in the insurance
exchange. The bronze plans have even lower premiums and will also be
attractive. Most shoppers will be relatively healthy and will select
their plans based on the premium - not on the physician networks nor on
the out-of-pocket costs they would face if major health problems were to
develop. Some of these people will become ill or suffer significant
injuries. At that time they will discover that their choices of
providers are too limited, that access may be impaired because the
physicians are too busy or because they are too far away, and that the
out-of-pocket expenses to which they are exposed will cause financial

Leave policy decisions to private insurers and they will always select
policies that will advance their business models as opposed to policies
that would provide optimal access, quality and affordability for
patients. Having cheap premiums is no solution when you can't get a
doctor when you need one, and, when you finally do, you're left broke.

Single payer would have avoided all of this, and it still can.

Friday, September 13, 2013

Fwd: qotd: Sen. Bernie Sanders on single payer

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Sen. Bernie Sanders on single payer
Date: Fri, 13 Sep 2013 11:50:21 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

The Hill
September 10, 2013
A single-payer system makes economic sense
By Sen. Bernie Sanders (I-Vt.)

Americans spend about twice as much per capita on healthcare as almost
any other developed nation, but our outcomes are not as good as others
that spend much less. We can do better. We must do better.

Today, some 50 million Americans lack health insurance. Many others
delay going to the doctor because of high deductibles and unaffordable
copayments. While the number of uninsured Americans will go down with
the implementation of the Affordable Care Act, widely known as
ObamaCare, tens of millions of Americans will remain uninsured.

The goal of an effective healthcare system is to do everything possible
to enable people to live long and healthy lives. Sadly, the American
system fails to do that and falls behind many other countries. While we
devote 18 percent of our gross domestic product to healthcare, we rank
33rd in life expectancy and 34th in infant mortality, and trail in many
other health outcomes. A Harvard University study indicated that,
incredibly, some 45,000 Americans die needlessly each year because they
do not get to a doctor in time.
I start my approach to healthcare from a very basic premise: healthcare
is a right, not a privilege. Unfortunately, uniquely among major
nations, that statement is not true for the United States, where access
to healthcare depends on how much money you have and what your employer
is willing to provide.

It is simply unconscionable that the most advanced nation in the world
has so many people who lack health insurance. It makes no sense that
millions more are one diagnosis or car accident away from financial
disaster. And, despite the trillions of dollars we spend on healthcare,
the disparity in the quality of care between the rich and everyone else
grows wider.

Our system doesn't make economic sense, and it certainly doesn't make
moral sense. In a civilized, democratic society, every man, woman and
child must be able to get the medical care they need regardless of income.

It is incomprehensible that drug companies still get away with charging
Americans twice as much — or more — than citizens of Canada or Europe
for the exact same drugs manufactured by the exact same companies. It is
an outrage that insurers still want to hike premiums by as much as 60
percent a year on individual policyholders.

It boggles the mind that approximately 30 percent of every healthcare
dollar spent in the United States goes to administrative costs rather
than to delivering care. Taiwan, for example, spends only a little over
6 percent of its GDP on healthcare, while achieving better health
outcomes on some key indicators than we do. The reason, of course, is
that they spend a fraction of what we do on administrative costs.

If our goal is to provide high-quality healthcare in a cost-effective
way, what should we be doing?

Clearly, we must move toward a single-payer system.

The health insurance lobby and other opponents of single-payer care make
it sound scary. It's not. In fact, a large-scale single-payer system
already exists in the United States. It's called Medicare. People
enrolled in the system give it high marks. More importantly, it has
succeeded in providing near-universal coverage to Americans over the age
of 65.

Establishing a single-payer system will mean peace of mind for all
Americans. When health insurance is no longer tied to employment, people
will not fear losing both their job and their family's access to
healthcare. Millions of Americans won't have to stay in jobs they don't
like because their family needs healthcare. Entrepreneurs and small
businesses will be free to develop their business plans without worrying
about the cost and complexity of providing healthcare for themselves and
their employees.

For these reasons and more, Rep. Jim McDermott (D-Wash.) and I have
introduced the American Health Security Act, which would guarantee
healthcare as a human right and provide every U.S. citizen and permanent
resident with healthcare coverage and services through a
state-administered, single-payer program.

I am very proud that my home state of Vermont is now taking big steps to
lead the nation in healthcare by moving forward on a plan to establish a
single-payer healthcare system that puts the interests of patients over
corporate profits. The American Health Security Act would make sure
every state does the same.

The goal of real healthcare reform must be high-quality, universal
coverage in a cost-effective way. We must ensure, to as great a degree
as possible, that the money we put into health coverage goes to the
delivery of healthcare, not to paper-pushing, astronomical profits and
lining CEOs' pockets.

Comment: Although the nation is distracted with the implementation of
the Affordable Care Act, the single payer concept is not going to go
away. Soon the nation will understand why.

Thursday, September 12, 2013

Fwd: qotd: AFL-CIO reaffirms support of single payer

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: AFL-CIO reaffirms support of single payer
Date: Thu, 12 Sep 2013 09:13:13 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

2013 Convention

September 11, 2013
Adopted Resolutions

Resolution 54: AFL-CIO Convention Resolution on the Affordable Care Act

WHEREAS, in 2009, the AFL-CIO Convention passed two health care
resolutions—Health Care Reform Now and the Social Insurance Model for
Health Care Reform—which reaffirmed the labor movement's commitment to
health care for all, ultimately through a single-payer system. In 2010,
Congress passed the Affordable Care Act (ACA);

(23 more WHEREASs)

NOW, THEREFORE, BE IT RESOLVED, that the AFL-CIO reaffirms the health
care resolutions adopted by the 2009 convention, including the
commitment to pursue health care for all ultimately through a
single-payer system;


Comment: There are two important health care reform issues before us
today. The most important by far is that this nation desperately needs a
single payer system. The other is that the Affordable Care Act is well
on its way to being fully implemented, with all of its intolerable
flaws. Yesterday, AFL-CIO passed a resolution dealing with both of these.

The first WHEREAS and the first BE-IT-RESOLVED reaffirmed organized
labor's support of single payer reform. It is an imperative.

The other twenty-three WHEREASs and eight BE-IT-FURTHER-RESOLVEDs can be
accessed at the link above. They concern very serious flaws in the
Affordable Care Act, especially applicable to union members, which will
be very difficult to correct. They are important to understand because
flaws such as these permeate the entire Act.

Maintaining and expanding our highly dysfunctional health care financing
system while adding administrative complexity is precisely what we did
not need. All of this could have been avoided by moving directly to a
single payer system. We can still do that, even if we have already
wasted much time and money, while prolonging hardship and suffering.

Although organized labor's targeted attack on the Affordable Care Act is
making headlines today, they passed another resolution that is also very

Resolution 15: Protecting and Expanding Medicare Benefits


Instead of cuts and cost shifting, we call for improvements to Medicare.
Doing so is an essential prerequisite to establishing it as a model for
a universal, single-payer system.

Instead of looking for ways to destroy Medicare, which has been a leader
in improving our dysfunctional health care system, we must build on its
experience as a single-payer program, demonstrating that single payer is
the most cost-effective and equitable way to provide quality health care.

Wednesday, September 11, 2013

Fwd: qotd: Michael Hiltzik: To fix health law, go single-payer

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-------- Original Message --------
Subject: qotd: Michael Hiltzik: To fix health law, go single-payer
Date: Wed, 11 Sep 2013 10:27:00 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Los Angeles Times
September 10, 2013

Health law's ailments can be cured by single-payer system

All the shortcomings of the healthcare restructuring result from the
decision to leave it in the hands of private insurers.

By Michael Hiltzik

With the Oct. 1 rollout of a major facet of the Affordable Care Act on
the horizon, you'll be hearing a lot about the glitches, loopholes and
shortcomings of this most important restructuring of America's
healthcare system in our lifetimes. Here are a couple of things to keep
in mind:

First, the vast majority of these issues result from one crucial
compromise made in the drafting of the 2010 law, ostensibly to ease its
passage through Congress. That was to leave the system in the hands of
private health insurance companies.

Second, there's an obvious way to correct this flaw: The country should
progress on to a single-payer system.

The idea that the ACA is a logical precursor to single-payer, in which
the government would be the source of all medical reimbursement, has
been gaining traction as key thresholds for healthcare reform approach.
The biggest milestone is the Oct. 1 launch of open enrollment for the
health insurance exchanges that will offer individual insurance starting
Jan. 1.

Last month, Senate Majority Leader Harry Reid made that point in a
Nevada news broadcast, calling the ACA "a step in the right direction"
but adding that the U.S. would have to "work our way past" private
insurance-based healthcare. "We're far from having something that's
going to work forever," he said.

"There isn't a popular groundswell yet" for a single-payer plan "because
most people haven't seen the ACA at work in detail yet," says David
Himmelstein, a professor of public health at the City University of New
York and co-founder of Physicians for a National Health Program, the
leading advocacy group for single-payer healthcare. But he anticipates
that discontent will start in October "and accelerate through the winter."

Among the law's shortcomings, he says, are the lack of effective
provisions to control healthcare costs and insurance premiums. Premium
regulation remains in the hands of the states, and many don't have
strong regulatory oversight of health insurance. In California, health
insurance premiums are exempt from prior approval by the insurance
commissioner, unlike home and auto insurance. (An initiative to remove
the exemption will appear on the November 2014 ballot.)

That's not to say that the ACA won't make health insurance more
affordable and accessible to millions of Americans now excluded from the
market. Published exchange premiums in 18 states have generally come in
below expectations, and the federal subsidies available to most buyers
will make them cheaper still.

In some cases the premiums may be higher than those of plans on the
market now. But because of exclusions for preexisting conditions — which
will no longer be legal — they're actually unavailable at any price to
people who will have no trouble qualifying for the exchange plans.

The ACA's critics observe that a plurality of Americans still view the
ACA unfavorably (43%, according to an opinion poll released in June by
the Kaiser Family Foundation). They rarely acknowledge, however, that
nearly 1 in 5 of those critics think the law doesn't go far enough —
that is, further toward single-payer.

In its earliest incarnation, the Affordable Care Act included a
prototype government single-payer provision — the "public option," a
government-sponsored plan to compete with commercial insurers in the
exchanges. The public option was deleted at the insurance industry's

But the U.S. does offer a healthcare program that resembles
single-payer. It's Medicare, the broadly popular health plan that covers
all Americans over 65. Medicare's administrative costs are only about
2%, and its size gives it the clout to extract large discounts from
doctors and hospitals. That's why one oft-proposed version of
single-payer is "Medicare for all" — simply expand its coverage beyond
the 65-plus.

Canada's single-payer system is another model. It's popular and
efficient and costs about one-third of America's system to administer.
Don't believe the myths purveyed about Canada's healthcare by the U.S.
insurance industry's minions.

As health economist Aaron Carroll has documented, Canadian patients and
doctors are satisfied with the program. As for the contention that it
"rations" care, he points out that care in the U.S. is rationed by cost:
one-third of adult Americans surveyed by the Commonwealth Fund in 2010
said they had put off important treatment because of the cost. In
Canada, the figure was 15%.

There's little question that taking private insurers out of the American
healthcare system would save hundreds of billions of dollars a year.
Dozens of studies of federal and state single-payer proposals have found
that single-payer plans could provide universal coverage — not even the
ACA does that — and still save money.

Estimates of the administrative costs of commercial health insurers
exceed 10%. That doesn't include the costs to doctors and hospitals of
maintaining billing staffs to deal with insurers and keep all their
rules and peculiarities straight, or the time lost to individuals and
their employers of navigating this unnecessarily byzantine system.

Add those, and the overall administrative costs embedded in the U.S.
healthcare system come to 31% of all spending, according to a 2003
article co-written by Himmelstein for the New England Journal of
Medicine. Administrative and clerical workers accounted for nearly 44%
of all employees in doctors' offices, they calculated.

What do Americans receive in return for all this overhead? Practically
nothing. The insurance industry says its role is to hold down costs by
negotiating for preferential fees from doctors and hospitals and
trolling for abuses, but the truth is they're totally ineffective at
cost control.

Just last year I reported on an admission by Aetna and United
Healthcare, two of our biggest insurers, that they had been snookered to
the tune of $60 million by one chain of small surgical clinics in
Northern California. That happened because the insurers didn't hire
enough staff to give the claims from those clinics decent scrutiny — in
other words, their administrative costs, high as they were, didn't buy
adequate oversight.

The result, to cite just one example, was that United paid the chain
more than $97,000 for a kidney stone operation that it usually covers
for $6,851.

"Private insurance is a parasite in the system," says Arnold S. Relman,
the former editor of the New England Journal of Medicine and an advocate
of healthcare reform. "It adds nothing of value commensurate with its cost."

Relman believes that fixing the healthcare system will require more than
single-payer. The delivery of care needs to be reorganized by promoting
the formation of more "accountable care organizations" — medium- and
large-scale group practices with hospital affiliates whose physicians
would be salaried to discourage the overuse fostered by the
fee-for-service system.

What's really needed is political will. It would help if big companies,
which grouse incessantly about the rising costs of covering their
employees, would throw their weight behind a system that would relieve
them of that burden.

The forces of opposition won't lie down; the insurance industry won't
give up its central role in the healthcare system without a costly and
bruising fight, as it showed in Congress and in numerous states,
including California, where single-payer plans were on the table.

"It's going to be a slow and painful process," Relman says. "But sooner
or later we'll have to turn to single-payer. It's the only logical

Comment: This is an article that you should share with your friends and
others who may not have an adequate understanding of single payer. If
this kindles an interest in them, which it certainly should, then let
them know that they can learn more by accessing the website of
Physicians for a National Health Program at

My gosh, who wouldn't want a lifetime of guaranteed, affordable health
care, free of the intrusions and inherent waste of the private insurance

Tuesday, September 10, 2013

Fwd: qotd: Will the Affordable Care Act obviate the need for employer-sponsored insurance?

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Will the Affordable Care Act obviate the need for
employer-sponsored insurance?
Date: Tue, 10 Sep 2013 11:50:07 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

Health Affairs
September 2013

Will Employers Drop Health Insurance Coverage Because Of The Affordable
Care Act?
By Thomas Buchmueller, Colleen Carey and Helen G. Levy


Since the passage of the Affordable Care Act, there has been much
speculation about how many employers will stop offering health insurance
once the act's major coverage provisions take effect. Some observers
predict little aggregate effect, but others believe that 2014 will mark
the beginning of the end for our current system of employer-sponsored
insurance. We use theoretical and empirical evidence to address the
question, "How will employers' offerings of health insurance change
under health reform?" First, we describe the economic reasons why
employers offer insurance. Second, we recap the relevant provisions of
health reform and use our economic framework to consider how they may
affect employers' offerings. Third, we review the various predictions
that have been made about those offerings under health reform. Finally,
we offer some observations on interpreting early data from 2014.

Summing Up And Looking Ahead

For an employer, deciding whether or not to offer health insurance
already requires a complex calculus that takes into account a host of
factors—including employees' preferences, wages, taxes, and regulations.
The Affordable Care Act throws new taxes, subsidies, requirements, and
insurance markets into the mix. But it does not fundamentally change the
economics of the firm's decision. Microsimulation models built on sound
economic principles have for the most part predicted relatively small
declines in employer-sponsored coverage as a result of health reform,
and we believe that these predictions are likely to be correct.

If we are wrong, though, how will we know? Inevitably, reports will come
in that some employers are dropping coverage. Although it will be
tempting to attribute such reported changes to the Affordable Care Act,
it is important to interpret new data on employer-sponsored coverage in
the context of the basic economics of firms' behavior and preexisting
trends. The combination of rising health care costs and stagnant
earnings for middle-income workers has for decades led to a gradual but
steady decline in employer-sponsored insurance. This trend is the
appropriate baseline against which to measure the impact of health reform.

It is, perhaps, stating the obvious to add a caution against reading too
much into anecdotal reports. But for reasons described above, even
surveys with large samples can produce results that are difficult to
interpret. Fortunately, there are several high-quality data sources that
will be useful for monitoring changes in employer-sponsored insurance
and drawing inferences about the effect of health reform.

We expect that the earliest data on rates of coverage will come in
September 2014, when both the National Health Interview Survey and the
Current Population Survey should report on individuals' sources of
coverage in early 2014. If historical patterns hold, the Kaiser Family
Foundation/Health Research and Educational Trust Employer Health
Benefits Survey will be published the same month. In September 2015 the
American Community Survey will provide state and metropolitan-area
estimates of individual-level coverage patterns, and in July 2015 the
Medical Expenditure Panel Survey will provide further information on
employer offerings.

Of course, effects in early 2014 will not be the last word, as
individuals and employers may take a wait-and-see approach. And since
the employer penalty for not offering coverage will not take effect
until 2015, it may be several years before the true effects of health
reform on employer-sponsored insurance become evident.

However, these data will begin to answer the question posed in the title
of our article. Given the historical importance of employer-sponsored
insurance, the attention that is paid to this question is
understandable. However, it is not a question of great economic
significance. There is no efficiency argument for preferring private
insurance facilitated by employers to private insurance facilitated by
the state or any other mechanism that could be used to pool risk and
achieve administrative economies of scale.

It is also important to remember that relying on firms as a mechanism
for pooling insurance risk generates efficiency costs because it
distorts the labor market. A better-functioning individual health
insurance market has the potential to improve labor-market efficiency by
reducing job lock, and thus eliminating a barrier to entrepreneurship
and making it easier for workers to find a job and an insurance plan
that matches their preferences. If the shift from employer-sponsored
insurance to individual coverage is greater than projected, these
labor-market gains may be substantial.

Small Increases To Employer Premiums Could Shift Millions Of People To
The Exchanges And Add Billions To Federal Outlays
By Daniel R. Austin, Anna Luan, Louise L. Wang and Jay Bhattacharya


The Affordable Care Act will expand insurance coverage to more than
twenty-five million Americans, partly through subsidized private
insurance available from newly created health insurance exchanges for
people with incomes of 133–400 percent of the federal poverty level. The
act will alter the financial incentive structure for employers and
influence their decisions on whether or not to offer their employees
coverage. These decisions, in turn, will affect federal outlays and
revenues through several mechanisms. We model the sensitivity of federal
costs for the insurance exchange coverage provision of the Affordable
Care Act using the nationally representative Medical Expenditure Panel
Survey data set. We assess revenues and subsidy outlays for premiums and
cost sharing for individuals purchasing private insurance through
exchanges. Our findings show that changing theoretical premium
contribution levels by just $100 could induce 2.25 million individuals
to transition to exchanges and increase federal outlays by $6.7 billion.
Policy makers and analysts should pay especially careful attention to
participation rates as the act's implementation continues.

Comment: There has been considerable speculation as to whether or not
employers will discontinue their health benefit programs and shift their
employees to the state insurance exchanges established by the Affordable
Care Act (ACA). What is the likely outcome, and, more importantly, does
it even matter?

The majority of studies suggest that the impact of ACA on employers'
decisions regarding the continuation of their employee health benefit
programs will be relatively modest initially.

Examples that predict more extreme shifts, such as that above by Austin
et al - three Stanford medical students and their faculty advisor - are
often based on narrow assumptions. In this case the assumption is that
quite modest differences in net costs of plans offered through the
exchanges compared with employer-sponsored plans could cause large
shifts from employers to the exchanges.That ignores a great many other
considerations that enter the employers' action plans. Another infamous
study by Douglas Holtz-Eakin made questionable assumptions that resulted
in the spurious claim that employers would drop up to 35 million
employees from coverage simply because of the provisions of ACA.

The Health Affairs article by Thomas Buchmueller and his colleagues
provides a much more objective, if nuanced, analysis of the probability
of a shift from employer-sponsored plans to the exchanges. Based on
several more credible microsimulations and based on employer surveys,
they conclude that the more immediate impact of ACA will be quite
modest. They suggest resources that we can follow which should provide
us with better evidence of developing trends in the employer provision
of health benefits.

While much attention is being directed to employer responses,
Buchmueller et al state that employer-sponsored insurance "is not a
question of great economic significance." There is "no efficiency
argument for preferring private insurance facilitated by employers to
private insurance facilitated by the state or any other mechanism that
could be used to pool risk and achieve administrative economies of scale."

Although this study compared employer-sponsored private insurance with
private insurance offered by the state exchanges, the subtle comment
above on the efficiency argument perhaps should be refined: "…no
efficiency argument for preferring… private insurance facilitated by the
state or any other mechanism that could be used to pool risk and achieve
administrative economies of scale." There is, in fact, a very strong
efficiency argument for the state to use another mechanism to pool all
risks and achieve administrative economies of scale; that is, of course,
single payer reform - an improved Medicare for all.

Monday, September 9, 2013

Fwd: qotd: Large employers moving retirees to private exchanges

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Large employers moving retirees to private exchanges
Date: Mon, 9 Sep 2013 11:10:10 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

The Wall Street Journal
September 8, 2013
Time Warner Joins IBM in Health Shift for Retirees
By Spencer E. Ante

Media-company Time Warner Inc. plans to move its U.S. retirees from
company-administered health plans to private exchanges, according to a
person familiar with the matter. The company will allocate funds in
special accounts that retirees can use to go shop for coverage, the
person said.

The news comes as International Business Machines Corp. also plans to
move about 110,000 of its own retirees off its company-sponsored health
plan to a Medicare insurance exchange.

President Barack Obama's health-care overhaul calls for such exchanges,
which will go live next month, and employers are looking at similar,
privately administered exchanges as an alternative to offering their own
health plans.

Yet while these efforts are just ramping up—and creating a good deal of
anxiety in the process—hundreds of thousands of retirees are already
using exchanges to pick Medicare plans, and many more are likely to do
so in the months ahead as companies look for ways to fix their
health-care costs by moving to the "defined contribution" model they
adopted for pensions years ago.

Extend Health, the Utah-based exchange owned by Towers Watson & Co. that
IBM picked for its retirees, was founded in 2004 but has grown quickly
recently as more employers have signed up.

Extend Health has signed up around 300 companies, and the pace is
quickening. It had just three corporate customers at the end of 2007 and
just 76 at the end of 2010. About a third have joined in this year alone.

Bryce Williams, managing director of Towers Watson Exchange Solutions,
which runs Extend Health, said the exchange has moved more than 500,000
retirees over to its service. IBM will add to that total when it starts
moving retirees over next year.

Instead of subsidizing retiree health premiums directly, IBM will give
retirees an annual contribution through a health-retirement account that
they can use to buy Medicare Advantage plans and supplemental Medicare
policies on the exchange, as well as to pay for other medical expenses.

IBM retirees have a big incentive to pick insurance through plans
offered by Extend Health: Retirees who are eligible but don't enroll in
a plan through Extend Health won't receive the company contribution.

Extend Health said nearly 50 companies in the Fortune 500 have become
clients, including Caterpillar Inc. and DuPont Co.

The approach was adopted for active employees last year by Sears
Holdings Corp. and Darden Restaurants Inc.

Comment: We already knew that employers were canceling retiree coverage
in their company-administered health plans and switching to defined
contribution approaches which place the risk of future health care
increases onto the backs of their retirees. What is new is the
acceleration of this shift by large employers who are taking the easy
way out by using private insurance exchanges - a new intermediary that
adds to the profound administrative waste already inherent in our health
care system.

What is next? Sears Holdings and Darden have already adopted these
defined contribution approaches for their active employees. When IBM,
Time Warner, Caterpillar, DuPont, and the others that are sure to follow
find that these new retiree programs are so successful in controlling
the employers' costs, how soon will it take them to shift their active
employees into these plans? Even the union-negotiated plans are at risk
since unions have lost much of their negotiating clout.

Middle-income Americans are already feeling the crunch. They realize
that juggling cost-of-living, education expenses, defined contribution
retirement funds, housing and transportation, and other costs is
becoming much more difficult as the American Dream is being slowly
chiseled away. They know that it is happening, but their lack of taking
an activist stance seems to suggest that they don't know what to blame
it on.

Well, it's pretty obvious. We have a government of, by and for the one
percent. Unless the ninety-nine percent wake up, we'll soon see virtual
moats around their castles. In fact, just try to get close enough to
knock on their doors today, and you'll see what a private police state
for the one percent is like.

Friday, September 6, 2013

Fwd: qotd: IRS reporting requirements for managing ACA subsidies and penalties

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: IRS reporting requirements for managing ACA subsidies
and penalties
Date: Fri, 6 Sep 2013 11:13:02 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

U.S. Department of the Treasury
September 5, 2013
Treasury Issues Proposed Rules for Information Reporting by Employers
and Insurers Under the Affordable Care Act

The ACA provides for information reporting (under Internal Revenue Code
section 6055) by insurers, self-insuring employers, and other parties
that provide health coverage. It also provides for information
reporting (under Code section 6056) by employers that are large enough
to be subject to the employer shared responsibility provisions regarding
the health coverage they offer their full-time employees. These proposed
regulations reflect comments received and an ongoing dialogue with
stakeholders, including plan sponsors, many of whom already offer their
full-time workforce coverage far exceeding the minimum employer shared
responsibility requirements. Nearly 95 percent of employers with more
than 50 full-time employees already offer coverage to their employees.

The proposed rules issued today describe a variety of options to
potentially reduce or streamline information reporting, such as:

* Replacing section 6056 employee statements with Form W-2 reporting on
offers of employer-sponsored coverage to employees, spouses, and dependents.

* Eliminating the need to determine whether particular employees are
full-time if adequate coverage is offered to all potentially full-time

* Allowing employers to report the specific cost to an employee of
purchasing employer-sponsored coverage only if the cost is above a
specified dollar amount.

* Allowing self-insured group health plans to avoid furnishing employee
statements under both section 6055 and section 6056 by furnishing a
single substitute statement.

* Limited reporting for certain self-insured employers offering no-cost
coverage to employees and their families.

* Permitting health insurance issuers to forgo reporting under section
6055 on individual coverage offered through a Marketplace because that
information will be provided by the Marketplace.

* Permitting health insurance issuers, employers, and other reporting
entities under section 6055 to forgo reporting the specific dates of
coverage (instead reporting only the months of coverage), the amount of
any cost-sharing reductions, or the portion of the premium paid by an

The statute calls for employers, insurers, and other reporting entities
to report, among other things:

For section 6055:

* Information about the entity providing coverage, including contact

* A list of individuals with identifying information and the months they
were covered.

For section 6056:

* Information about the applicable large employer offering coverage
(including contact information for the employer and the number of
full-time employees).

* A list of full-time employees and information about the coverage
offered to each, by month, including the cost of self-only coverage.

Once the final rules have been published, reporting entities will be
encouraged to voluntarily implement information reporting in 2014 (when
reporting will be optional), in preparation for the full application of
the reporting provisions in 2015. Real-world testing of reporting
systems in 2014 will contribute to a smoother transition to full
implementation in 2015.

Press Release:

Information Reporting by Applicable Large Employers on Health Insurance
Coverage Offered Under Employer-Sponsored Plans:

Information Reporting of Minimum Essential Coverage:

Comment: Here it is folks. These are the proposed ACA rules on reports
that insurers and employers must file with the IRS - rules that proved
to be so complex that the Obama administration deferred for a year the
requirement that these reports be filed. Without these reports, the
employer mandate could not be enforced. Though this announcement is
about the simplification of the rules, that's not the real story here.

When the Act was crafted, it was recognized that health insurance and
health care was now so expensive that a majority would require subsidies
for insurance premiums and out-of-pocket expenses. It was also
recognized that plans would have to provide a defined set of minimal
"essential health benefits." It was also recognized that many
individuals would not buy health plans for themselves unless they were
threatened with a financial penalty for failing to do so.

It was decided that the Internal Revenue Service was best suited to
administer these subsidies and penalties since they already had income
information that would establish eligibility for the income-indexed
subsidies. They were also in a position to use the tax system to assess
penalties for non-compliance. But there are so many variables that the
rule making process was overwhelmed. Even these new rules issued
yesterday are not yet final and are open to public comment.

If you just glance at the few changes to simplify the rules (listed
above), you will see that even they are quite complex. By the time that
the multitude of variables for each individual are taken into
consideration, you will see that the bureaucracy is living up to its
reputation for complexity that induces intolerable frustrations. This
isn't even necessary. This system is yet another administrative
nightmare in a health care system that is unique in all the world for
its profound administrative waste.

If you are masochistic and want to research this yourself, here are some
resources. Sec. 1502 of the Affordable Care Act amends Part III of
Subchapter A of Chapter 61 of the Internal Revenue Code of 1986 by
adding Subpart D - Sec. 6055 on the reporting of health insurance
coverage. Sec. 1514 of the Affordable Care Act amends Subpart D that was
just added by Sec. 1502, by inserting after Sec. 6055 the new section -
Sec. 6056. So look up Sec. 1502 and Sec. 1514 in the Affordable Care
Act. The newest proposed rules, which are the subject of the Department
of the Treasury release on simplification of the rules (reported above),
are available now online and will be formally published in the Federal
Register on September 9, 2013. The proposed rules, "Information
Reporting by Applicable Large Employers on Health Insurance Coverage
Offered Under Employer-Sponsored Plans," are 72 pages (link above). The
proposed rules, "Information Reporting of Minimum Essential Coverage,"
are 42 pages (link above).

Think of how much simpler it would be if we established a single
national fund to pay for all reasonable health care for everyone and
then funded it with progressive taxes. The tax system is already in
place. We could tweak it so that it is even more equitable. Just think
of the administrative simplification that we could have, as opposed to
the exceedingly meager changes announced yesterday in the highly complex
system established by ACA.

Yes, the more we see of the implementation of the Affordable Care Act,
the more we realize that a single payer national health program is an
imperative. All we have to do is fix Medicare so it works better, and
then include everyone.