qotd: What should the candidates tell us about controlling costs?

Modern Healthcare

September 24, 2016

Editorial: Thank you for that question, Lester

By Merrill Goozner

(Question for candidates, proposed by the New York Times): "Health insurance premiums and out-of-pocket costs are rising rapidly. What would you do to control them?"

If I were advising a candidate on how to respond to that question, here's what I'd recommend he or she say:

(Excerpts)

"Thank you for that question, Lester. I understand why many Americans think their insurance premiums are rising rapidly. There's been a lot of attention paid to next year's increases for the individual policies sold on the Obamacare insurance exchanges, which will rise about 9% on average, according to the latest Kaiser Family Foundation survey."

"Employers are forcing individuals to pick up more of the cost of their plans."

"The employer portion of your health insurance is going up just 4% next year on average. That means the family share has to go up more than 5.5% to make up the difference."

"Employers are doing that by putting more of us in high-deductible plans. They're asking more of us to pay higher co-pays and deductibles. They are raising our portion of the premiums."

"So what can we do about it? First, we have to recognize this is a big experiment that has been endorsed by economists associated with both political parties. They say by forcing patients and consumers to have more skin in the game, they will become wiser healthcare shoppers."

"I say, to make that work, we have to have total transparency — in healthcare prices, in insurance prices, in which doctors and hospitals are in health plan networks, in quality ratings, and with good, easy-to-understand information about what constitutes the most effective and cost-effective care. I pledge to work night and day to give consumers the information they need to make smarter choices in the healthcare marketplace."

"And if some people simply can't afford to put money into the health savings accounts accompanying these plans, let's remove some of the tax subsidies given high-income people for their health insurance so we can finance a generous federal match for what lower-income people contribute."

"Let me now turn to what can we do about those rising individual rates for plans sold on the exchanges. The bottom line is we need more people to sign up. The No. 1 reason why rates are rising is that not enough healthy uninsured people signed up for coverage."

"We need everyone who is uninsured to jump into the individual insurance pool."

http://www.modernhealthcare.com/article/20160924/MAGAZINE/309249985/editorial-thank-you-for-that-question-lester

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Comment by Don McCanne

Merrill Goozner certainly understands the political realities about health policy. To a question on health costs that could be part of tonight's presidential debate, he suggests an answer for the candidates that aligns with the current financing system under the Affordable Care Act. Unfortunately, because of the restrictions he apparently placed on himself, it's a terribly deficient answer.

For the problem of high-deductibles he suggests making patients better shoppers through greater transparency in prices, in network composition and in quality ratings. But that would have almost no impact on making the deductibles and other cost sharing more affordable.

He accepts the dubious concept that health savings accounts should accompany these high-deductible plans, and further suggests that the accounts for lower-income individuals be subsidized. Health savings accounts are strictly an administrative tool that increases the complexity and waste in health care financing. When the accounts are depleted, beneficial health care services are forgone - not a desirable outcome. If you are going to have first dollar coverage built into the HSAs, why not instead save administrative hassles and expenses by building first dollar coverage into the insurance program itself?

For the high premiums of the exchange plans, he suggests enrolling more of the healthy to dilute the risk pool. But the low-lying fruit has been picked. The policy community is beside itself in trying to figure out how to bring more into the exchange plans, while having only negligible success in doing so.

Goozner is certainly highly respected by me and others, but we wish that he and others like him would move beyond feeble patchwork solutions and support a program that would make health care accessible and permanently affordable for all. Of course that would be a single payer national health program - an improved Medicare for all. Goozner understands that we won't hear that from either candidate tonight, but that doesn't mean that we shouldn't be asking for that response.

qotd: Bernie Sanders is not giving up on Medicare for all

Senator Bernie Sanders

August 16, 2016

Sanders Statement on Aetna's Decision to Withdraw from Health Insurance Exchanges

U.S. Sen. Bernie Sanders (I-Vt.) issued the following statement Tuesday after Aetna announced plans to withdraw from Affordable Care Act health exchanges in 11 of 15 states where it currently operates:

"It is disappointing that Aetna has joined other large for-profit health insurance companies in pulling out of the insurance marketplace. Despite the Affordable Care Act bringing them millions more paying customers than ever before, these companies are more concerned with making huge profits than ensuring access to health care for all Americans.  

"In my view, the provision of health care cannot continue to be dependent upon the whims and market projections of large private insurance companies whose only goal is to make as much profit as possible. That is why we need to join every other major country on earth and guarantee health care to all as a right, not a privilege. That is also why we need to pass a Medicare-for-all single-payer system. I will reintroduce legislation to do that in the next session of Congress, hopefully as part of the Democratic Senate majority."

http://www.sanders.senate.gov/newsroom/press-releases/sanders-statement-on-aetnas-decision-to-withdraw-from-health-insurance-exchanges

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Comment by Don McCanne

Since the Clinton Camp was successful in keeping single payer out of the Democratic Party platform, much of the media seems to believe that it has completely gone away as an issue. The good news is that Bernie Sanders assures us that it hasn't. We need to do our part to be sure that the nation knows that.

qotd: What changes in ACA might the election bring?

Modern Healthcare

August 6, 2016

Could Trump loss spur ACA deal with Clinton?

By Harris Meyer

With Donald Trump's presidential campaign faltering, Republican health policy experts are gaming out Plan B for working with a Hillary Clinton administration to achieve conservative healthcare goals.

Their focus is on a possible "grand bargain" that would give conservative states greater flexibility to design market-based approaches to make coverage more affordable and reduce spending in exchange for covering low-income workers in non-Medicaid expansion states. A key element, conservative experts say, would be for a Clinton administration to make it easier for states to obtain Section 1332 waivers under the Affordable Care Act. Those waivers allow states to replace the law's insurance exchange structure with their own innovative models.

To win GOP backing for measures to stabilize the exchanges, Republicans will seek changes to make ACA coverage more attractive and affordable for younger people, said James Capretta, a conservative health policy expert at the American Enterprise Institute. That includes allowing lower premiums for young people, a wider range of benefit designs and premium subsidies for plans bought outside the exchanges and easing minimum benefit requirements.

Clinton's best opportunity might be to persuade GOP governors and lawmakers in non-expansion states to accept Medicaid expansion by giving them more leeway on program design.

http://www.modernhealthcare.com/article/20160806/MAGAZINE/308069967

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Comment by Don McCanne

Although elections can be unpredictable, this time we can make a couple of predictions that are a near certainty.

Donald Trump will not be able to change his image as a dangerous incompetent before the election, and Hillary Clinton will be elected by default, even though she will remain unpopular.

Gerrymandering as a result of the 2010 Census will remain unchanged in this election, so the Republicans will maintain control of the House of Representatives with Paul Ryan as the Speaker. Although the Tea Party faction will have been diminished in numbers, enough will be reelected such that Ryan will have to include them in legislative negotiations.

Although it is uncertain which party will hold the majority in the Senate, it is clear that each of the two major parties will still have the ability to block most legislation through the filibuster. For the Democrats, that means that they can forget about a Medicare buy-in starting at age 55, and they can forget about a government-administered public option to compete with the private plans. For the Republicans, that means that they can forget about a repeal of the Affordable Care Act, and they can forget about completing privatization of Medicare through premium support.

So for the time being, the Affordable Care Act is here to stay. Both sides will want changes in it, but only modest incremental changes will be possible, and they must satisfy both sides or they will not clear Congress.

Democrats will want expanded enrollment in the ACA exchanges and in Medicaid. Republicans will want less regulation in these programs. For the exchange plans both will want lower premiums to make insurance more affordable, and they may do that by easing the minimum benefit requirements, by allowing more flexible innovations in insurance design, by reducing premiums for young adults, and perhaps even by allowing premium subsidies for plans outside of the exchanges. For Medicaid, through waivers or through new legislation they may allow greater flexibility and further privatization to encourage non-participating states to join in the program to expand Medicaid.

These compromises will further reduce the numbers of uninsured and make health insurance more affordable, but affordable access to actual health care is already a major problem and these measures will make it much worse. Increasing the numbers of individuals who are nominally insured should not be considered a success when the tradeoff is the erection of financial and logistical barriers to essential health care services. Leaving patients sick and broke is not the direction in which we want to be headed.

What are the political prospects for single payer post-election? This January Hillary Clinton said, "I want you to understand why I am fighting so hard for the Affordable Care Act. I don't want it repealed, I don't want us to be thrown back into a terrible, terrible national debate. I don't want us to end up in gridlock… People who have health emergencies can't wait for us to have a theoretical debate about some better idea that will never, ever come to pass."

Never, ever. The political barricade is up. It is up to us to break it down.

qotd: Drug firms gouge taxpayers by gaming Part D catastrophic coverage

Associated Press

July 25, 2016

Pricey Drugs Overwhelm Medicare Safeguard

By Ricardo Alonso-Zaldivar

A safeguard for Medicare beneficiaries has become a way for drugmakers to get paid billions of dollars for pricey medications at taxpayer expense, government numbers show.

The cost of Medicare's "catastrophic" prescription coverage jumped by 85 percent in three years, from $27.7 billion in 2013 to $51.3 billion in 2015, according to the program's number-crunching Office of the Actuary.

Medicare's catastrophic coverage was originally designed to protect seniors with multiple chronic conditions from the cumulatively high costs of taking many different pills. Beneficiaries pay 5 percent after they have spent $4,850 of their own money. With some drugs now costing more than $1,000 per pill, that threshold can be crossed quickly.

Lawmakers who created Part D in 2003 also hoped added protection would entice insurers to participate in the program. Medicare pays 80 percent of the cost of drugs above a catastrophic threshold that combines spending by the beneficiary and the insurer. That means taxpayers, not insurers, bear the exposure for the most expensive patients.

Concerns about catastrophic costs undercut the image of Medicare's prescription program as a competitive marketplace in which private insurers bargain with drugmakers to drive down prices.

"The incentive is to price it as high as they can," said Jim Yocum, senior vice president of Connecture, Inc., a company that tracks drug prices. Medicare is barred from negotiating prices, "so you max out your pricing and most of that risk is covered by the federal government."

http://hosted.ap.org/dynamic/stories/U/US_MEDICARE_PRICEY_DRUGS

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Comment by Don McCanne

When the Medicare Part D program covering drugs was designed, conservatives were in control of the government. As a result it was decided that the ideology of competition in the marketplace should be used to improve value rather than using government administered pricing. Today's message demonstrates once again that markets do not work in health care.

Congress knew that they would have to protect the private insurers from adverse selection - that patients with multiple chronic conditions could place an extra burden on the insurers with whom they enrolled. Thus they established catastrophic coverage with the government (taxpayers) paying 80 percent of the costs over a given threshold. This was not to protect the patients, but rather it was to protect the insurers. That is, it was not to protect the taxpayers who finance much of the program, but rather it was to protect the participants in the marketplace - the drug manufacturers, insurers, and pharmacy benefit managers - using our taxpayer funds.

Under the catastrophic coverage, insurers pay 15 percent, patients pay 5 percent, and the taxpayers pay 80 percent. This allows the drug companies to drive their prices sky high. The 15 percent paid by the insurers is closer to the reasonable price of drugs and so they have less incentive to negotiate better prices, since most of it is being paid by the government anyway. The 5 percent paid by the patient is accepted as a necessary "skin in the game" contribution so patients will not fill prescriptions that they allegedly "do not really need" (a flawed policy concept). The 80 percent paid by taxpayers perpetuates the highly dysfunctional, fragmented financing system in the U.S. - using government money for private solutions - that has driven our health care spending up to levels much higher than all other nations.

The magic of the marketplace in health care is a fraud. Taxpayers pay far less for drugs purchased by the government for Medicaid and the VA system. Other nations with greater government oversight of their health care systems also pay much less.

With a well designed single payer national health program, our nation's pharmacy bill would be fair, and everyone would get the drugs they need. With the price of many drugs now exceeding median household income, you would think there would be a demand to fix our health care financing system. You would think so, but where's the action?