Congressman John Kline is fond of bashing Obamacare with all he is worth. He has voted dozens of times to repeal it or defund it. Now he cites five anecdotal examples of individuals who have had difficulty with their insurance. Without interviewing Linda, and Kurt, and Debbie, and Jim and Mark, it is hard to know the details of their circumstances, other than as filtered through Mr. Kline’s anti-Obamacare lens. However, just for the sake of argument, let’s find some contrary examples.
On Facebook, there is a page entitled ACA "Obamacare" Signup Success Stories. Check it out.
A resident of New Hampshire got health and dental insurance for $127 per month, down from the $600 per month he was quoted in the private market. He was previously denied coverage because he is a cancer survivor.
Terry Mitchell writes he got much better pricing on his exchange than he could get in the private market. And his two sons are back on his policy, after being off for more than 6 years. Sherry Davis, whose son has asthma, says the same thing.
Laura Quigley writes about a man from Walmart who signed up in 30 minutes in California. His premium went from $550 per month to $90 per month.
Patrick McSwain in Georgia got health insurance for the first time at age 31. Cost: $287.32 per month.
Curt Welty in Colorado describes how his son and girlfriend have health insurance for the first time at $130 for both of them.
Mr. Kline: call you, and raise you. Let us talk to the five people you wrote about. Let’s see if we can’t help them, rather than just complain about them. After all, your job is to help them. Haven’t seen you try yet.
Taking care of people with disabilities and the elderly is a difficult and important job. Many do it out a feeling of service, others do it because it's a passion. But for too long the pay for these workers has remained flat. This legislative session, disability advocates are kicking off the 5% campaign, asking legislators for a 5% increase in there pay. The hope is this will provide enough for the workers to stay out of poverty and curb the high turnover rate among this workforce, which is tough on the people they serve.
Yesterday we discussed the perception by patients that health care costs are increasing exorbitantly. While that may not be true overall, it certainly is true when it comes to out of pocket dollars. Regardless of whether and how much health care costs are increasing, we need to do everything we can to bring these costs under control. All sectors of health care must participate in bringing these costs into line.
First, with the increase of deductibles and co-pays, consumers are paying more for medical care out of their own pockets. If a free market system is to truly work, consumers must be able to make proper economic decisions about what they purchase. Thus, there must be price transparency for the provision of medical services. Price transparency can have some effect on the costs of health care. For example, price transparency already is at work in elective medical care, such a Lasik surgery, eyeglasses, some dental care, some cosmetic surgery. In non-catastrophic care, this model likely can have some influence: do I really need—and want to pay for—an MRI to diagnose tennis elbow? In catastrophic and emergency care, price will not be influential. There will not be time to make economic decisions in emergency care; in catastrophic circumstances, the deductible will be used whether the price of care is $100,000 or $1,000,000.
Second, the vehicles for providing medical services need to change. Dr. Molly Cooke, President of the American College of Physicians recommended the following changes to the Medicare reimbursement formula:
- Development of evidence based clinical guidelines to prevent over use of ineffective and harmful care
- Payments based on usefulness of care, rather than fee for service
- Creation of new, patient based methods of health care delivery
- Measurement of physician results based on clinical success
- Reducing federal spending based on realistic rather than arbitrary budget cuts (sequester)
Of course, an ounce of prevention is worth a pound of cure.
Next, drug costs under Medicare Part D must be brought under control. In 2011, 47 percent of Medicare spending on Part D was co According to Joe Baker, President of the Medicare Rights Center, there are some straightforward solutions to the prescription drug excesses now faced by Medicare:
- Require the same drug manufacturer discounts be paid to Medicare as paid to Medicaid and private health insurers. This could save $141 billion over ten years.
- Create a Medicare drug formulary, again similar to private health insurance, which allows Medicare to control drug pricing
Finally, focus on the health care payment system. There are frequent reports of fraud in the Medicare system. One study suggests that the rate of fraud in Medicare is between 3% and 10%. Others have estimated the amount at $50 billion to $90 billion. There is already law on the books called the Medicare Secondary Payer Act which includes a provision permitting a “private cause of action” for recovery on behalf of Medicare. However, Courts have construed this provision narrowly, to the point where such claims cannot be brought. Congress should fix this problem, and turn the lawyers loose on behalf of Medicare, and bring back all those fraudulently obtained payments.
It is probably true that each of these components of the health care system must participate in bringing down overall health care costs. And each has a variety of vested interests that would likely oppose change. It would take a truly bipartisan, thoughtful Congress to make these solutions happen. Can we elect one in 2014?
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Congressional attention has finally turned to long term budget issues. Central to this discussion is the cost of health care in the coming decades. The Congressional Budget Office issued a Long Term Budget Outlook Report in September, 2013 which put the cost of health into the perspective of the overall budget. Here's the bottom line:
- Federal spending for the major health care programs and Social Security will increase to a total of 14 percent of GDP by 2038, twice the 7 percent average of the past 40 years.
- In contrast, total spending on everything other than the major health care programs, Social Security, and net interest payments will decline to 7 percent of GDP, well below the 11 percent average of the past 40 years and a smaller share of the economy than at any time since the late 1930s.
The report assumes that the provisions of the Budget Control Act of 2011, which brought sequestration, remain in place.
And, most important, the report assumes that the United States continues to operate in a free and open market for health care. Single payer care, like Canada and Europe, is not on the horizon, so we must follow this assumption.
The dual conclusions described by the CBO raise several questions:
- Can we control the impact of Social Security on deficit spending? I have already addressed that issue.
- Can we control the impact of health care costs on deficit spending? I will address that issue in this piece.
- Can we make the sequester work? I will cover that next time.
CBO notes that health care costs, as a share of economic output, have risen significantly since 1985. However, it also notes “[Through market forces] even in the absence of changes in federal law, growth in per capita spending on Medicaid and on health care financed through the private sector will gradually slow. The rate of growth of Medicare spending per beneficiary is also likely to slow.” This is consistent with a recent Kaiser Family Foundation survey. First, they note:
“Ask any American about what direction health costs are moving, and you'll likely get a completely different story. Preliminary results for a forthcoming Kaiser Family Foundation poll show that most Americans think that health care costs are actually growing faster than usual right now.”
However, the reality is different. The rate of increase in health care costs has slowed substantially since its high in 2002:
The reason people feel that health care costs are rising is because deductibles and co-pays are rising, and that is true. So, with this backdrop, what can Congress do to reign in health care costs? All sectors of the health care world need to participate: patients, doctors, clinics, drug companies and payers of health care benefits.
Come back tomorrow for more on the proposed solutions.
Even proponents of the Affordable Care Act agree that it’s the start, not the end, of improving health-care access in the United States. One area in which current ACA provisions fall notably short is employer-based family coverage for families of modest incomes.
If your employer offers insurance that is considered “affordable” under ACA standards, your household is not eligible for assistance paying for your insurance. You, your spouse* and your dependent children may not receive tax credits or MinnesotaCare (Medicaid is the exception—we’ll get to that in a moment). You may choose to shop on the exchange rather than enroll in your employer’s policy, but the entire cost is yours to pay.
At first glance this makes sense—taxpayers shouldn’t be subsidizing health insurance for workers whose employers are offering to do the same. The problem lies with the affordability standard. An employer’s plan is considered affordable if the premium for individual coverage costs is no more than 9.5 percent of the employee’s gross household income. Even if the employee is purchasing coverage for her whole family, that total cost isn’t held to any affordability standard—just the cost of her individual coverage.
This loophole affects a lot of people, since employers often subsidize individual insurance coverage but don’t offer much help for adding family members to the plan. Let’s say Susan’s employer offers her individual coverage for $150 a month, but when her husband loses his job, he and their two children also join Susan’s insurance. That could add $1000 a month to the cost of the plan, but they won’t be eligible for any tax credits to help absorb the blow of a lower income and a higher insurance premium.
Low-income families are offered a reprieve from this loophole. Medicaid (known as MA or Medical Assistance in Minnesota) will provide coverage even if the enrollee technically has other options. In Minnesota, children qualify for MA until their household’s income surpasses 280 percent of the federal poverty limit (FPL), which is nearly $66,000 annually for a family of four. However, this is only because Minnesota has been a leader in expanding MA eligibility. In neighboring North Dakota, children lose access to state-sponsored health insurance at 170 percent FPL, or $40,035 for a family of four. If these families didn’t have access to employer-sponsored coverage, they could be eligible for at least some tax-credit assistance up to $94,200 (depending on the cost of insurance in their area).
Affordability standards are a good thing, but they fall short in ensuring that children have access to sufficient health insurance and medical care. Current standards account for the entire family’s income but not the entire family’s insurance costs. Perhaps in the future we’ll see expanded tax-credit access for working families whose employer-sponsored insurance is out of reach for their modest incomes.
*I use “spouse” rather than “partner” intentionally in this discussion. While some employers offer insurance for unmarried partners, unmarried partners file their taxes separately and are therefore considered two separate households under IRS and ACA provisions.
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We are hearing a lot about health care lately especially how bad Obamacare will be for the country. My goal is not to defend Obamacare, but rather point out the faults of our current system and why change is necessary. Those who attack Obamacare never suggest changes to make it better or suggest an alternative other than keeping our current system, a system that provides poor results at a high cost.
Many will now stand up and say we have the best health care system in the world. It is time to look at the actual facts. We certainly have the most expensive health care in the world. In 2010 the Organisation for Economic Co-operation and Development (OECD) reported US per capita spending for health care at $8,233 while the next highest country was Norway at $5,388. For results we can look at life expectancy or infant mortality. According to the CIA’s (yes that CIA) 2012 The World Factbook the US ranks 51st in Life Expectancy right behind Guam and Portugal. If we lived in Japan we could expect an additional five years of life in Canada three years. We rank 49th in infant mortality just ahead of Croatia and behind Greece, and Taiwan. Infant mortality in the US is more than twice that Japan and Sweden. The net is we pay more and get less, not something we should be proud of.
Much of the debate about changing the health care system in the US is the affordability, but we need to look more closely how health care is paid for today. David Wessel in Red Ink reports “About $1 of every $4 the federal government spends goes to health care today, and that share is rising inexorably.” Wessel also points out that about half of all spending on health already comes from federal, state and local governments. In the end whether the funding for health care comes from our pockets, the government, from businesses and insurance companies; the basic source of that funding is the nation’s businesses and us. Individuals and companies pay: our own costs, for the insurance, and the taxes.
The real concern today is that if we provide better care for the poor either through subsidized insurance or care that the overall health care costs will rise. The other possibility is that if the economically disadvantaged have access to regular care the total burden on the system will decrease. Since the US spends more on health care than any other country it is likely that the latter will be the case.
Our current health care system is too expensive and the results are near the bottom of developed nations. As a nation we should be open to ideas that will provide better results with lower costs, but calls to repeal Obamacare without alternatives are simply political gamesmanship. We the voters need to demand results rather than political strategies to gain votes.
I know this reveals my geekiness, but my first few weeks as a MNsure Navigator have been pretty exciting. Now that the worst of the website issues have smoothed out (thank goodness Minnesota built its own exchange rather than relying on Healthcare.gov) I’ve been helping all sorts of folks enroll in new health insurance plans. Some are switching from other insurance plans that cost more, while some haven’t had insurance coverage in years.
For many folks, MNsure has offered a lot of hope: hope that they can save some money, hope that they can access adequate medical care, hope that they can take control of their situation. Most of my clients walk away from their MNsure experience feeling excited about the possibilities it offers. Here are true stories of two folks I’ve worked with this week (identifying information changed, of course).
Jorge had to stop working last year due to a serious health crisis; for now his only income is Social Security Disability. He’s currently spending $700 a month for health insurance through COBRA, but that consumes over half of his income. Not surprisingly, he’s quickly drained his savings. (Medicare isn’t an option until he’s received Social Security for two years, and his pre-existing condition disqualifies him from many individual plans until that practice is outlawed in 2014.) Thanks to the Affordable Care Act and Minnesota’s leadership in expanding Medicaid access, Jorge qualifies for Medicaid (known as Medical Assistance in Minnesota). Starting on January 1, his premium will drop from $700 a month to zero.
Cheryl has always worked, but her current nonprofit job is only part-time and doesn’t pay much. After her COBRA ran out from her prior job, she ended up with an individual insurance policy costing $1000 a month. Could she have found cheaper? I don’t know enough about her particular plan, but I do know that shopping around and comparing costs pre-MNsure was pretty hard. Because MinnesotaCare eligibility is being expanded, Cheryl’s income allows her to switch to MinnesotaCare starting in 2014. Her premium? About $35 a month.
Not everyone I’ve worked with is enrolling in public insurance programs. Many are still accessing the private insurance market, but finding more affordable plans there. Most of my clients have been lifetime workers and taxpayers who find themselves in the situations that can happen to any of us: a pay cut, a job loss, a health crisis, a divorce. That doesn’t make them undeserving of affordable, quality health insurance.
I know that this may sound expensive to the taxpayer, but access to affordable insurance makes a difference for all of us, not just people like Jorge and Cheryl. The people I’ve worked with are at risk of foreclosure, eviction, or complete poverty. They’re draining their life savings just to keep their health insurance, or they’re risking not having insurance at all. We know that offering affordable coverage will save us money long-term, since it improves access to preventative care, lowers the amount of uncompensated care hospitals provide, and protects people from needing expensive crisis intervention when they just can’t make ends meet anymore.
MNsure isn’t perfect, nor are the Affordable Care Act policies that drive it. There are definite issues, but that's for next time. I’ll keep sharing about what I discover, both good and bad, as MNsure marches on.
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Yesterday, we laid out the rationale for the Affordable Care Act, and the laundry list of conservative arguments in opposition to it. Let's examine the rest of their claims in more details.
They say the medical device tax will eliminate jobs. For example, device manufacturer Welch Allyn purportedly laid off 250 workers as a result of the ACA. However, a review of the company’s website shows that they are hiring. And looking further, the company discusses the impact of the ACA on the medical device industry. In the article cited by the company, they conclude “the changes included in health reform include both positives and negatives for the industry, but, on balance, the industry is likely to thrive in the new era.” The Economist declared that the effect of this tax on the medical device industry will be “trivial.”
Conservatives also contend that the ACA will add substantially to the federal deficit in years to come. Senator Jeff Sessions cherry picks a a number for a GAO report that he commissioned, claiming the ACA will increase the long term deficit by $6.2 trillion over a 75 year period.
However, the report itself declares: “The effect of the Patient Protection and Affordable Care Act (PPACA), enacted in March 2010, on the long-term fiscal outlook depends largely on whether elements in PPACA designed to control cost growth are sustained. ...[T]here was notable improvement in the longer-term outlook after the enactment of PPACA under GAO's Fall 2010 Baseline Extended simulation, which assumes both the expansion of health care coverage and the full implementation and effectiveness of the cost-containment provisions over the entire 75-year simulation period.” As with most such studies, one can choose the conclusion one wants to believe. Indeed, conservatives included Obamacare savings in their own budget proposal.
Finally, the purported intrusion by the ACA into personal liberty is also fallacious. There is nothing in ACA that will dictate an individual person’s medical care. There is nothing in ACA that will determine an individual’s choice of physician.
The alternatives to the ACA seem to be threefold: a) eliminate it and replace it with something else; b) enact a single payer program comparable to various European plans; or c) iron out the difficulties with the ACA.
Conservatives have recently proposed a plan of individual tax deductions for health insurance. As noted, this plan will only get 9 million uninsured individuals into the market, compared to the estimated 25 million likely to participate under the ACA. And, under either scenario, the short-fall of those remaining uninsured results from the failure by many states (particularly Texas) to extend the Medicaid program to those who fall outside the parameters of the ACA. (Time Magazine, October 7, 2013).
Given the nature of conservatives' arguments against the Affordable Care Act, the best alternative is to stay the course, and work through the issues the law will create. As Nicholas Kristof noted recently in the New York Times, “these same arguments we hear today against health reform were used even earlier, to attack President Franklin Roosevelt’s call for Social Security. It was denounced as a socialist program that would compete with private insurers and add to Americans’ tax burden so as to kill jobs…. Similar, ferocious hyperbole was unleashed on the proposal for Medicare. President John Kennedy and later President Lyndon Johnson pushed for a government health program for the elderly, but conservatives bitterly denounced the proposal as socialism, as a plan for bureaucrats to make medical decisions, as a means to ration health care.”
When compared to Medicare, Kristof asks a very poignant question: “Why is it broadly accepted that the elderly should have universal health care, while it’s immensely controversial to seek universal coverage for children?” There is no good conservative answer to this question. We should work through the issues raised by conservatives and let the market place dictate what modifications should be made.
The federal government has been shuttered by conservatives who, calling it a “train wreck,” want to undermine the Affordable Care Act. Their move begs the question: at this point in time, what should we do differently with health care in this country?
Put aside the facts that Congress passed the Act, the Supreme Court declared it constitutional, and conservatives failed in the electoral process to generate sufficient support to overturn it. The real question is whether we can do better, and how we accomplish that.
Remember the goals of ACA:
- Eliminate pre-existing condition exclusions from health care plans
- Eliminate life time caps on coverage
- Extend to age 26 the ability of children to remain on their parents’ health insurance plans
- Create a marketplace where people can buy coverage at affordable prices
- Bring 46 million previously uninsured individuals into the marketplace to spread the cost of health care across the entire country
- Provide subsidies for those who cannot afford coverage
- Provide tax credits for small employers to acquire health insurance coverage
Even Fox News supports these principles. Still, conservatives continue to oppose the ACA because:
- It will reduce jobs
- Employers will reduce the hours of employees so that employers need not provide health insurance
- Health care premiums will rise
- Costs of health care will be shifted to the young
- Mandatory health care is an intrusion into individual liberties
- The cost of the program will increase the budge deficit
- The medical device tax will eliminate jobs
These claims will prove illusory, as we will discuss in more detail over the next two days. Regardless of their legitimacy, they can be addressed in their own right, without the conservative right holding the entire government hostage to prove their point.
Mark Zandi of Moody’s Analytics says the decrease in jobs claim is not true. Logic suggests that companies will make economic decisions, balancing costs of production with profit. The marketplace will not change demand for products and services. The marketplace, through technology and other factors, has already demanded increased efficiency from the workforce. If there is an impact on jobs, it is likely to be shortlived, since the marketplace for goods and services will ultimately determine employment levels.
There are claims that some employers will reduce hours in order to render some employees ineligible for health insurance benefits. There is anecdotal evidence that this may be true. However, this is nothing new; it has long been a consideration of employers to reduce employee benefits, and eliminating health coverage has long been one such method. A survey conducted by the International Foundation of Employee Benefit Plans found that 15 percent of large employers (over 50) and 20 percent of small employers have adjusted their employees' hours because of ACA. This is consistent with an International Business Daily poll. However, Factcheck.org states that part-time workers seeking full time employment have not been thwarted by ACA.
Senator Rand Paul says health care premiums will rise. A RAND study (no relation) suggests, for the most part, that employees can get coverage for the same or a lower cost through the exchanges. Employer sponsored premiums may have increased—but that may be due to the medical marketplace, not ACA. To be sure, there will be some for whom premiums rise. This is inevitable. But the evidence appears to be that, for the large majority, premiums will remain the same or go down.
The impact of increased premium costs on the young may be accurate. Secretary of Health and Human Services, Kathleen Sebelius, has acknowledged that young persons would likely pay more and older Americans would likely pay less on the insurance exchanges. The ACA changes how insurance companies can price these policies on the individual market—it forbids insurance companies from charging more for persons with pre-existing conditions or based on gender, and limits them to charging older policyholders no more than three times what they charge to younger policyholders.
Tomorrow, we'll tackle claims about the medical device tax, the federal deficit, and incursions on personal liberty.
The MNsure insurance marketplace is open for business, though not without some significant hiccups. As a trained MNsure Navigator, I’ve been doing my best to understand how the system is working for Minnesotans. Here are my impressions so far:
Overall, the MNsure website is quite promising. It makes it fairly easy to compare plans and costs, enroll each family member in a different plan, and see immediate eligibility for Insurance Affordability Programs (including Medical Assistance/Medicaid, MinnesotaCare, and premium tax credits). Once the site has worked out its numerous bugs, it’ll be a great resource.
However, MNsure.org’s design isn’t as user-friendly as I had hoped, at least not yet. There’s a lot of information to digest on every page. It requires a moderate degree of computer competency and overall comprehension of health-care concepts (premium, deductible, co-pay, etc.). I know that these will pose a major barrier to many people, including my clients—but that’s where Navigators come in. Navigators have completed roughly 15 hours of online training preparing them to guide people through their options.
The Navigator system is one black eye for MNsure; it’s been struck by many delays. Those applying as Navigators waited well past MNsure’s stated July 31 timeline to find out if they were approved. Contracts and background checks are still in process, and funding to outreach agencies was delivered late. The training, which was supposed to be available in August, didn’t come online until September 20. As of Thursday afternoon, MNsure had completed background checks on fewer than half of the Navigators who had finished the training, and less than ten percent of Navigator contracts were fully signed (it seems that MNsure has moved for-profit Brokers through the process more quickly than non-profit Navigators).
With insurance coverage starting no earlier than January 1 (and the first year’s open enrollment stretching through March) a few days’ delay isn’t going to make a difference in someone’s health care coverage. The only potential losses are those who become so frustrated with the system that they walk away, never to return. Navigators may also lose a few potential clients who have lost interest or become unreachable by the time MNsure actually gets Navigators fully approved.
I look forward to seeing MNsure develop over time. I hope that once they’ve worked out the glaring bugs, there is continued investment in improving the user experience. This may be a long shot, but I’d like to see planned “upgrades” (such as integrating applications for SNAP and other assistance programs) come quickly. None of this is cheap; MNsure won’t move forward if we quickly turn our backs on it. Let’s stay the course, remain committed to making MNsure work, and keep investing in our new marketplace.
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