Tag Archives: health care

Sacrificing the Public Option, Expanding Medicare and Universal Coverage

By Marc Seltzer; originally published on December 13, 2009, at care2.com
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How does the latest health-care proposal in the U.S. Senate measure up on Progressive principles?

The Progressive movement has rallied behind single payer and public option reform proposals in the belief that not only is universal coverage a fundamental right, but not-for-profit medicine is a better way to get quality health care at a reasonable price.

Unlike most developed nations, the United States has a sizeable part of its population that goes without health insurance.  President Obama took up the cause of greatly expanding coverage in his presidential campaign. He also spoken firmly of reform in terms of bending the cost-curve, making insurance and medical care more affordable to individuals and to the nation, in light of fast-rising health-industry costs.  However, Mr. Obama stopped short of embracing single payer, leaving in question what type of structural changes would be used to achieve reform goals.

The political reality is that both the House of Representatives and Senate are split among those who want to change the system towards government-run health insurance and those intent on maintaining a mostly private system.  In the House of Representatives, the Democratic majority was able to pass legislation substantially expanding coverage and including a limited public option, a small government-run insurance program for those not insured through their employer.  The vote was fairly close and may have reflected inclusion of a controversial abortion-funding restriction, such that the exact count of Representatives who would support a public option if the anti-abortion funding provision were not part of the final bill is uncertain.

In the Senate, Democrats need sixty votes to close debate and move forward.  They have close to, but not quite, that many, who will accept some form of a public option.  Thus, negotiations have continued to explore what types of limited government insurance programs would be acceptable to at least a few conservative Democrats, independents or moderate Republicans.

This week a Senate group reached a compromise that attempts to replace the public option with a public/private non-profit insurance program like that which is currently offered to Congressional legislators and federal employees.  The compromise proposal did not stop there, however.   It also included a provision to significantly expand Medicare, by lowering the age of participation from 65 to 55.

How should Progressives look on this proposal?

All the proposals under consideration push towards universal coverage.  It is really the structure that makes them different.  The use of a public/private program is not equivalent to the public option, or government-run program.  However, the federal authority sets rates, controls profits, and guides provision of health care.  It is a strong control on profit-driven insurance.

Moreover, expanding Medicare is a major step in the direction of single payer.  The Medicare program is single payer for its participants.  Private insurance does not participate except in supplemental programs.  There are approximately 35 million additional Americans who would be eligible to participate, if the age requirement was lowered — more than 10% of the population.  Those under fifty-five would remain in their current employer-provided plans and a small number would participate in the new public/private plan.

Given that there is not political power to create a nationwide single-payer program, the expansion of Medicare to include 35 million additional participants and the coverage of uninsured by a public/private program is much more than could have been achieved by the limited public option as it was contemplated.  The small public option is replaced by a public/private plan, which covers those currently uninsured.  The vast expansion of Medicare offers many more Americans a single payer model of insurance.  Whether this shifts the political equation in the Senate or House is the big question, and this should become known in coming days.

Care2.com/causes blogger Jessica Pieklo and I discussed the new proposal as soon as we got word.  You can hear our conversation by following this link and clicking the December 11, 2009, podcast, and more information should become available as soon as the Congressional Budget Office provides “scoring” or budget estimates.

December 14, 2009, UPDATE: First responses — Senator Lieberman

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Health Care Politics

Originally published at care2.com on June 23, 2009

Consistent with his free-market approach to all things economic (emergencies aside), President Barack Obama has given some suggestions on how he believes reforms can make health care more affordable and efficient.  Mr. Obama has endorsed the creation of a public insurance entity from which Americans could choose to buy their health insurance, and which would offer competition to private insurers.

This approach is par-for-the-course for a President who addressed the financial crisis with public-private solutions instead of wholesale nationalization, and who believes in helping all Americans obtain health insurance but rejects the Canadian and European approaches to socialized medicine.

Mr. Obama has also smartly pressed for putting medical records on line as a way to track care and results in order to find ways to reduce costs and provide superior care.  A much-talked-about article by New Yorker writer and M.D., Atul Gawande, has illustrated that high costs in health care sometimes serve private financial interests at the patient’s and public’s expense rather than primarily reflecting patient needs.  Reformers hope that a public insurer could seek to both lower costs and provide high-quality care, inducing private insurers to match better care for lower cost.

While Congressional Republicans, some Democrats and insurance companies are speaking out against the public plan, saying it will undermine private insurers, recent public-opinion polls show popular support for a public insurance entity. Seventy-two percent of respondents in a nationwide poll supported the idea, including one in four Republicans. The President is going on the offensive, going so far as to mock lobbyists and legislators for protecting the insurance industry from competition.

Congressional Democratic leaders Henry Waxman, Charles Rangel and George Miller have unveiled a house bill containing the outlines of a public plan and proposal to insure 95% of Americans.  Senate legislation, being spearheaded by Democrat Max Baucus and separately in the offices of Senator Kennedy and others, is still being developed.

Any reform of such a massive sector of the economy is bold.  But with health care costs eating up an ever-greater share of public and private resources, change is required.  It will take years for the new legislation to transform our health care system, but the mantra of “more for less” is a good guiding principle.  Our spending on health care is unsustainable, damaging to public sector budgets and private business competativeness.  If we don’t want to give up the excellent care a majority of us enjoy, we will have to innovate.  Looking to competition, even that created by the introduction of a public insurance entity, and trying to bring more people into an efficiently-managed program, makes sense.

It’s about time Mr. Obama and Democratic leaders on health care received some bipartisan support for their efforts.

Pre-existing Conditions and Health Care Reform

Originally published at Politicsunlocked.com on July 1, 2009

Neccessary reforms or free-market intrusions?

There are three different classes of people in the health care marketplace in the United States: those receiving employer provided-health insurance, those who individually acquire health plans and those who remain uninsured.

Each group has a different stake in the outcome of health care reform. While costs impact all three, some crucial issues only affect one segment of the health care population, and “exclusions” and “rescissions” are important issues for those who purchase health care individually.

So-called “exclusions” typically relate to pre-existing conditions. Thus, in buying a health care policy, the insured is typically unable to obtain coverage that will pay for medical care as it relates to a pre-existing condition. This is less frequently an issue for the younger segment of the individual insurance market, such as college graduates, who are young and, statistically speaking, not yet burdened with many illnesses. Although if you are 22 and have a medical condition, you will face the reality of not having insurance for that condition unless you are employed by a company that provides insurance. Employer-provided plans generally do not have any pre-existing illness exclusions, but such employment may not be available in all fields or areas of the country, and especially in the current economic climate, many young people are graduating from college without full-time employment prospects in the near term.

Older Americans, not yet eligible for Medicare, are in a very difficult situation when in comes to purchasing individual insurance. They seek insurance in order to protect them from high costs in case of catastrophic illness, but also to aid in the payment for care related to typical illnesses and conditions that afflict people as they age.

Insurance companies are private, for profit, businesses. They compete to obtain clients who are healthy and who will pay the most premiums while requiring the least care, doing this through marketing campaigns, but also through exclusion of pre-existing conditions. Customers do not have good options, and deciding to not purchase insurance and relying on public health facilities and emergency room care can be risky and inconvenient.

One of the goals of President Barack Obama’s reform proposals is to eliminate exclusions for pre-existing conditions in individual insurance plans. This will interfere in the free-market private decision making of insurance companies, but it will be a risk born by all equally. In fact, insurance company executives have at times spoken out in favor of elimination of exclusions so long as it was done in a way that affected all insurers equally.

“Rescission” relates to “exclusion” because it refers to the cancellation of insurance when the insurer determines that the insured was not accurate in the insurance application. This is typically done when the insurer discovers that the insured person seeks payments for conditions that were pre-existing but were not revealed in the application. However, insurers also cancel contracts when they find technicalities in the applications that do not relate to pre-existing illnesses. For example, if someone failed to mention that he/she had a knee condition in his/her application, but then submitted an insurance claim related to heart surgery that was otherwise covered, the insurance company might research the insured’s medical history in search of any inconsistencies which would allow them to cancel insurance and avoid payment on the costly heart surgery.

During testimony by insurance company executives last week, outraged congressmen demanded that insurance companies stop rescissions based on technicalities. However, all three executives at the hearing refused to make that commitment. This is another issue likely to be worked over by legislators as they craft reform packages.

Obama Power Source — Centrism and Pragmatism

By Marc Seltzer; originally published on July 21, 2009, at care2.com

In a fairly strong critique of the direction of Democratic party leadership, New York Times columnist David Brooks tells us Democrats in Congress and President Obama are going too far in a liberal direction (Liberal Suicide March, July 21).  Comparing their “out of touch-ness” with that of the Republican party’s loose deficit spending in the Bush years, Brooks asserts that the current President risks losing moderate support for his agenda, if liberals hold sway.

Mr. Brooks cites the $878 billion stimulus, the 2009 federal budget and now proposed health care legislation as three examples of where the President has abandoned the moderate center, inhabited by a majority of Americans.

I have to disagree on the stimulus count.  Such stimulus was offered up by moderate economists as one reasonable approach to protecting the economy from a Depression.  Other options, such as Republicans’ suggested payroll tax cut or Professor Roubini’s capital gains tax cut, were likewise logical, but no more certain to work or free of political problems (each could also have raised the short-term deficit and might been saved rather than spent).

The U.S. economy experienced an unprecedented financial freeze in the midst of a cyclical recession.  If we escape this disaster with only a severe recession and some unfair sharing of the burdensome bailout, contributors in the economic rescue will be the heros of the early 21st century.  The fact that people cannot fathom what could have happened or gloss over it for political gain does not change financial reality.

In this light, Brook’s impatience with the speed of stimulus spending is unwarranted.  Only 10% so far?  The spending was intended to be rolled out over two years and there is no question that this is happening.  Wasn’t the clamor in April that it was going out too quickly, without enough record-keeping?

Of course, there are few things as difficult as the loss of a job and financial safety, but that doesn’t mean that the unemployment rate can be kept below 10% or even 15% by force of will.  There is no magic wand — only reasonable policies that support the private economy and time for supply and demand to correct itself.  Republicans calling the stimulus a failure, at this point, or blaming Obama for the rising unemployment rate, play politics at the expense of their integrity.

The federal budget was a closer call.  It contained many earmarks and spending habits that did not fit with the President’s campaign rhetoric.  On the other hand, the bill was prepared during the previous year and Obama only took office weeks before Congress sent it to him for approval.  It might have been a great symbol of “change,” if the President had vetoed the bill and demanded that Congress change its ways from the start of his administration.  On the other hand, in the midst of financial devastation, a budget fight and potential government shutdowns would have caused further economic harm.  This would have been the more irresponsible, if emotionally satisfying, route.

But the health care debate is President Obama’s chance to demonstrate his leadership and vision.  Here, I agree with Mr. Brooks that pragmatic centrist leadership is necessary.  If the President doesn’t tackle the very real problems with health care costs, any solution will be unsustainable.

Mr. Brooks refers to polls showing that Americans are losing confidence in Democratic proposals for health care reform. Americans are savvy enough to know that additional deficit spending is irresponsible.  Thus, while many Americans support the President’s vision of providing insurance to nearly all and forcing change upon a powerful insurance industry, the public still needs to see a coherent financial plan.  Tax increases on upper-income Americans may be part of that plan, but large tax hikes would represent a change in policy beyond what President Obama spoke of in his campaign, and too fast or two great an increase could damage the economy.

The other option is to cut costs.  After efficiency, cutting costs equals cutting back on covered medical care.  Rationing already goes on, across the system as public and private insurers choose what procedures to cover.  After that, only those with enough money are able to purchase additional care. Those without insurance or funds have only what is offered in emergency rooms and subsidized or charitable clinics.

Somehow, many Americans have come to view raising taxes and cutting costs as bad options.  That’s why we find ourselves (Congress) legislating programs and services that we can’t pay for.

Brooks credits Obama for having ideas that go in the right direction, citing his proposed cost-cutting, limits on tax hikes, and an independent commission on Medicare spending.  But Brooks laments that Obama is not feared by the Congressional leadership, and he believes they have the power in the current battle, unless “Blue Dog” conservative Democrats can force a moderate compromise.

One such idea would be to lower the subsidy for employer-provided insurance.  The current system encourages overspending, exactly what we need to remove from the system.  Another would be to provide clearer limits on coverage for end of life treatment, which is very costly and often of debatable value.

I have hope that the President is up for a fight on health care.  He can speak to the nation like few others at this time, and his forceful leadership could shape a responsible compromise.  The President may be afraid that asking too much of Congress risks failing to achieve any reform.  But there is no reason for this to be a repeat of President Clinton’s experience.

President Obama should go to the mat for a bill that restrains costs, targets fiscal balance, aids the underserved, and corrects inefficiencies in the system.  If he fails to get the bill, he should start over after the recess, asking less.  Legislators will not want to go home empty handed a second time with a popular President telling the American people that they deserve more. The President has tremendous national goodwill and strong majorities in the Congress.  Americans will accept compromise, but not without fighting for what is right.  This is the time for the President to spend his political capital.

Drafting New Health Care Legislation

Legislation will be needed for most of the health care plans currently being talked about in the United States. Insurers, doctors groups, and medical organizations have come together to propose voluntary cost-savings measures. However, this has not stopped President Barack Obama or legislators from moving forward on proposals that would substantially change the health care marketplace.

Primarily, it is Democrats that have taken the lead in drafting legislation. Senator Ted Kennedy has long been a proponent of major health care reform. His recent illness has removed him from day-to-day leadership, but his office is continuing to advance legislation for comprehensive reform including a public insurance entity to compete with private insurers. The other substantial Senate proposal will come from fellow Democrat Max Bacaus. Republican Senator Olympia Snowe is working on a proposal that would introduce public insurance only as a punishment to the private insurers if they fail to meet legislated goals for cost savings and good care.

President Obama campaigned aggressively for change in the health care system. He argued for continuation of employer-provided insurance and assistance to individuals who could not acquire health insurance because of pre-existing conditions or the high cost of premiums. Mr. Obama also recognized that rising costs across the U.S. health care system were doomed to bankrupt public financing of Medicare, damage American employers’ competitiveness in the global marketplace and increase the number of people unable to afford private insurance.

The president has continued to weigh in during his first months in office, although he has deferred tolegislative process for the development of detailed proposals. As a result of Mr. Obama’s direction, legislators have overlooked the option of nationalized health care, despite a vocal minority in the public who support adopting the Canadian or European-styled public model.

In the House, the Ways and Means, Energy and Commerce, and Education and Labor committees have come together to present their proposal as the Tri-committee Health Reform Draft. It contains a public insurance entity, requirements for continuation of employer-provided health insurance and aid to individuals seeking to purchase insurance.

Common themes in all proposals are to require at least major employers to provide health care insurance options. This will prevent the new reforms from encouraging employers to abandon heath insurance for their employees. This still may be a problem for employers below, a yet undetermined size. Individuals will be able to buy insurance without exclusions for pre-existing illnesses, although costs may differ based on some criteria, such as age. Public funds will be used to assist local income individuals in the purchase of insurance.

The President has also stated that health care reform must be paid for by cuts in other parts of the budget or efficiency within the health care system. This may be the harder part of the legislative accomplishment. It is not clear how the different proposals will deal with this issue.

Why Health Care is So Expensive

Originally published at politicsunlocked.com on June 29, 2009

As the health care debate moves forward, the mess of issues surrounding why health care is so expensive is finally being fleshed out.

Private insurance and costs for health care make up great deal of our national economy. If we were all receiving excellent care and had few complaints about the system, the fact that it costs so much might not be a problem.

However, companies can ill-afford insurance costs when they offer insurance to employees and compete in a global economy. Some of our most successful corporations, those that have “adapted” to international competition such as Walmart, have dropped health care insurance for their employees. Others such as automobile manufacturers and airlines could not compete partly because of the growing costs of health care plans for current and retired workers. Bankruptcies have resulted and health care plans for retired workers have been trimmed or eliminated in the process.

About eighteen percent of the population is uninsured and are likely to avoid some care that would be important for good health and then pay for private care on their own or use expensive public resources without paying for care.

Even the insured have complaints about the system. The public often blames the insurance companies for skimping on coverage and profiting unfairly. While Americans who have employer-provided insurance are most often satisfied with their health care, those who have to obtain insurance privately have great concerns about exclusions of pre-existing illness and recession of contracts for insurance after they become ill.

A recent New Yorker article attempted to discover why the costs in different areas of the country differ dramatically. The article is a must-read for sorting out one aspect of health care: can costs be lowered while still providing excellent care? The writer, an M.D. himself, Atul Gawande, interviewed doctors in two Texas areas, where statistics show widely different costs per person for about the same health care outcomes for their patients. In one section of the article, Dr. Gawande recounts a conversation with doctors from the more expensive health care area:

Some were dubious when I told them that McAllen was the country’s most expensive place for health care. I gave them the spending data from Medicare. In 1992, in the McAllen market, the average cost per Medicare enrollee was $4,891, almost exactly the national average. But since then, year after year, McAllen’s health costs have grown faster than any other market in the country, ultimately soaring by more than ten thousand dollars per person.

“Maybe the service is better here,” the cardiologist suggested. People can be seen faster and get their tests more readily, he said.

Others were skeptical. “I don’t think that explains the costs he’s talking about,” the general surgeon said.

“It’s malpractice,” a family physician who had practiced here for thirty-three years said.

“McAllen is legal hell,” the cardiologist agreed. Doctors order unnecessary tests just to protect themselves, he said. Everyone thought the lawyers here were worse than elsewhere.

That explanation puzzled me. Several years ago, Texas passed a tough malpractice law that capped pain-and-suffering awards at two hundred and fifty thousand dollars. Didn’t lawsuits go down?

“Practically to zero,” the cardiologist admitted.

“Come on,” the general surgeon finally said. “We all know these arguments are bullshit. There is overutilization here, pure and simple.”  Doctors, he said, “were racking up charges with extra tests, services, and procedures.”

This does not demonstrate that the problems of health care costs are all related to decisions made by doctors. But research shows that the outcomes of care provided in lower-cost areas can be as good as that provided in high cost areas. If this is the case, insurers, the government and the public pay more than what is necessary through premiums, co-pays and taxes. A change in the care prescribed by doctors could save everyone a great deal of money without providing less care. In fact, patients would endure fewer tests, less and medical procedures than they are currently made to face.

Much of the current debate focuses on the politics of health care. People imagine a war between socialism and capitalism fought in the guise of health care reform. Good financial reform will be much more specifically tailored to deal with the problems in the current system and hopefully will give us more for less.

Health Care on the Horizon

Originally published November 17, 2008

President-elect Barack Obama made health care reform a central tenant of his campaign. The fact that so many Americans are not covered and that coverage is so costly for those who are, brought the public together behind Obama’s call for change.

Recent polls confirm a substantial consensus for government action on health care.

Ninety-two percent of Obama supporters, 88 percent of undecided voters, and 57 percent of McCain supporters in an August 2008 WorldPublicOpinion.org poll, recognized that the government bears some responsibility for the health care of its citizens. This may not be a call for nationalized health care as was toyed with during the Clinton administration, but it does signal government involvement in a health care solution will be welcomed. 69 percent of respondents also said the government was “doing a poor job” ensuring basic health care needs are met.

Obama’s proposals, voiced prominently during the campaign, call for federal regulation of insurers and public spending to help uninsured Americans obtain coverage. Keys to any new legislation are likely to be mandatory coverage for pre-existing conditions, tax credits for small businesses that insure their employees, fees for large corporations who don’t, coverage of all children and subsidies for those that need help with premiums.

Obama estimated the costs of reform to be $50-65 billion and suggested that a repeal of Bush tax cuts for upper income Americans would offset increased spending in the federal budget.

The real question now is what shape health care reform will take in light of the financial crisis. President-elect Obama has put economic recovery at the top of his agenda and hinted that other issues will be considered in this light.

The concern on health care reform is that tax increases for the wealthy and for some businesses could negatively impact economic growth. With economic indicators bleak, and all eyes on fiscal stimulus, the country can ill-afford to burden any segment of the economy.

Health care policy experts are speculating on a limited phase-in of reforms, with insurance for children touted as a first step. Longtime advocates for reform, such as Senator Ted Kennedy, are preparing draft legislation in time for inauguration day on January 20th, 2009.

The new president is all about pragmatism, so he will undoubtedly consider any potential harm to the economy before taking action. However, there is reason to expect progress on health care.

Obama has spoken passionately about health care from the very beginning of his campaign and has stated how crucial it is to improving the lives of middle class Americans. His own mother faced “preexisting illness” denial-of-coverage issues for treatment of her terminal ovarian cancer.

This President will begin his term with a substantial electoral victory, strong majorities in the Senate and House of Representatives, and public opinion in support of government action.

This is a mandate for change and the power to see it through.