Obamacare’s health plan choice benefits are vastly overrated
Posted May 14, 2015, at 10:11 a.m.
It is well documented that many other countries have created health care systems that are more popular than ours, cover everybody, are more effective as measured by better health outcomes, are better able to restrain increases in costs and, therefore, have per-capita costs that are a fraction of ours.
One of the reasons for the popularity of universal health care systems elsewhere in the developed world is that when everybody is in the same system, everybody has an incentive to make that program work. The people of those countries have a sense of ownership and responsibility for their common system.
That contrasts sharply with the situation here in the U.S., where people primarily and often exclusively are concerned with their own little piece of the system, such as Medicare, the Veterans Affairs, their own employment-based or veteran’s insurance, plans purchased on the Obamacare exchanges, Medicaid and so on.
Americans also are confused about who owns the system. Is it the government, their employer or their union? Or, as more Americans are coming to believe, health insurance companies, the pharmaceutical industry or the increasingly consolidated corporate providers of health care such as large hospital systems?
In other words, we lack the solidarity that both is an expression of and created by the existence of a single common way of dealing with the challenges of providing affordable health care coverage for all.
I’m a great fan of the goals of the Affordable Care Act — expanding coverage, restricting the most anti-social practices of health insurance companies and attempting to control overall costs. But I’m not a fan of how it tries to accomplish them.
Obamacare is based on the concept of choice among insurance plans. Such choice is greatly overrated.
In order to provide choice among insurance plans, something most people don’t care much about, we are losing choice among healers, something we care a lot about. We are discovering that choice of insurance plans comes at the cost of losing our choice of doctors and hospitals, as insurance companies vainly attempt to control their premium prices by restricting their networks of “providers.”
The financial price of giving people choice of insurance plans, the very reason for the existence of the problem-plagued health insurance exchanges, is very high. A recent Washington Post article documents the financial struggles of most of the state-run exchanges, struggles that are expected to last indefinitely.
There are other costs, as well. The complex nature of the health insurance “marketplaces” has created unnecessary anxiety and confusion among those using them. That in turn has spawned the creation of armies of consultants, “navigators” and other helpers to assist people in finding their way through the maze of choices created by the health insurance industry and exacerbated by Obamacare. This only adds to our national health care bill and does not buy one doctor visit, lab test, Band-Aid or aspirin.
Complexity is a huge drag on the popularity of our health care system as a whole. I have written before about the barriers to further reform of our health care system — fear, anger, ignorance, ideology, apathy and greed.
Apathy often characterizes people who already are well covered and don’t see any reason to worry about those who aren’t. They include the 55 million beneficiaries of Medicare and roughly 140 million covered by employment-related insurance who like it so much that they are frightened and angered by any program designed to expand coverage for others, fearful that it will reduce their own benefits.
Our obsession with “choice” among health plans not only is misplaced but economically costly and confusing and itself is a huge barrier to political solidarity. The infighting among groups covered by different plans is a powerful ally of those profiting from and wedded to the status quo. It is an important barrier to the one common sense idea most bolstered by evidence of fairness and of effectiveness — improved Medicare for all.
We urgently need fundamental reform of the way we finance health care in the U.S.
Fundamental change is extremely difficult in politics. But as the race to the bottom created by the folly of attempting to interject more choice and competition among insurance plans becomes clearer, the public becomes better informed about the alternatives and frustration grows, and people in Maine and elsewhere will come to demand it.
Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com or through his website at philcaper.net.
Court case shows how health insurers rip off you and your employer
by Wendell Potter
f you think you’re paying too much for employer-sponsored health coverage, you might want to forward this to the HR department. It’s possible, maybe even likely, that your health insurer has been ripping off both you and your employer—to the tune of several million dollars every year—for decades.
Many Americans, according to various polls, blame Obamacare for every hike in premiums despite the fact that the rate of increase for most folks was actually greater before 2010, the year the law went into effect.
Health insurers are delighted that many folks blame Obamacare for rate increases because it deflects attention away from them and, according to documents made public in a recent lawsuit against a big Blue Cross plan, the questionable activities they’ve been engaging in for years to boost profits.
It turns out that one of the reasons workers have been paying more for their coverage is allegedly a common practice among insurers: charging their employer customers unlawful hidden fees.
The fees came to light when Hi-Lex Controls, an automotive technology company, took Blue Cross Blue Shield of Michigan (BCBSM) to court in 2013 after becoming suspicious that the company had been systematically cheating it over 19 years. After reviewing evidence in the case, a judge ordered that BCBSM stop charging the hidden fees and pay Hi-Lex $6.1 million.
Documents filed in the case showed that in 1993 BCBSM implemented a scheme through which it would collect additional revenue by adding certain mark-ups to hospital claims paid by its self-insured customers. Most of the country’s largest employers self-insure, which means that they are on the hook for medical claims when employees and their dependents get sick or injured. Self-insured companies hire firms like BCBSM to do the paperwork. It is the employer’s money—not the insurance company’s—that is “at risk” in such arrangements.
After suing and getting documentation from BCBSM, attorneys for Hi-Lex were able to show the court that BCBSM marked up hospital claims by as much as 22 percent. BCBSM didn’t disclose the markups, however. As part of the scheme, regardless of the amount BCBSM was required to pay a hospital for a given service, it reported a higher amount to Hi-Lex and pocketed the difference.
The hidden fees were listed in internal BCBSM documents under a variety of names: provider network fees, contingency/risk fees, retiree surcharges, and—my personal favorite—other-than-group subsidy fees. Internal company emails showed that BCBSM knew customers were unaware of the markups and that the company actually trained its employees to downplay the hidden fees should customers suspect they were being gouged.
One of the documents that came to light was a survey BCBSM conducted that found that 83 percent of its self-insured customers were completely unaware of the fees. Other documents revealed a course of conduct designed to conceal evidence of the company’s wrongdoing. For example, after rumors began circulating in the early 2000s that BCBSM was charging hidden fees, the company told insurance brokers, falsely, that its customers got 100 percent of the hospital discounts it negotiated.
Amid slower growth, California's Obamacare exchange cuts proposed spending
After using most of $1 billion in federal start-up money, California's Obamacare exchange is preparing to go on a diet.
That financial reality is reflected in Covered California's proposed budget, to be released Wednesday, as well as a reduced forecast calling for 2016 enrollment of fewer than 1.5 million people.
The recalibration comes after tepid enrollment growth for California during the second year of the Affordable Care Act. The state ended open enrollment in February with 1.4 million people signed up, far short of its goal of 1.7 million.
A number of factors contributed to the shortfall, but health policy experts said that some uninsured folks still find health insurance unaffordable despite the health law's premium subsidies.
Those pocketbook issues make holding the line on costs an imperative for state officials. Covered California can't draw on the state general funds, and its primary source of revenue is a $13.95 monthly fee tacked onto every individual policy sold.
The fee is unchanged in the proposed $332.9-million budget for the fiscal year starting July 1. The exchange's four-member board is expected to take a final vote next month on the financial plan.
"This budget marks a turning point for Covered California of moving from a start-up with federal support to demonstrating we can operate under our own steam for years to come," said Peter Lee, Covered California's executive director.
The budget details include proposals to:
• Spend $58 million less compared with the current fiscal year, a 15% reduction.
• Devote the largest portion, $121.5 million, to outreach, sales and marketing. That's down 33% from the current year.
• Maintain the monthly $13.95 fee for each individual policyholder, which would raise $233.2 million in revenue.
The state also would draw on $100 million in federal money in reserves — the last of the start-up grant. No further federal funding is expected.
Some consumer advocates would support a slightly higher fee on policyholders to invest more in outreach and the service center. Many consumers have complained about long wait times, erroneous notices and other enrollment glitches with Covered California.
"We don't want to short-shrift customer service or outreach," said Anthony Wright, executive director of Health Access, a consumer advocacy group.
But health insurers are pressing the exchange to be frugal to keep costs within reach of the average consumer.
"Holding fees flat like they did is an important safeguard for the affordability of Covered California coverage," said Nicole Evans, a spokeswoman for the California Assn. of Health Plans.
"As the myriad of interest groups pressure the board to fund their projects, they need to stand firm in protecting premium prices and holding down the budget," she said.
Health plans have submitted initial rates for 2016, and negotiations are underway with exchange officials. An announcement on next year's rates could come as soon as July.
One of the biggest changes in the budget blueprint is a more gradual increase in projected enrollment compared with previous state estimates.
Covered California projects 1.48 million people enrolled and paying on their premiums next year. It wants to reach nearly 2 million by 2019.
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