Health Care Reform Articles - October 22, 2019

Can Warren Escape the Medicare Trap?

by Paul Krugman - NYT - October 21 2019

On Sunday, Elizabeth Warren said that she would soon release a plan explaining how she intends to pay for “Medicare for all.” Like many policy wonks, I’ll be waiting with bated breath; this could be a make or break moment for her campaign, and possibly for the 2020 election.
There are three things you need to know about Medicare for all, which in the current debate has come to mean a pure single-payer health insurance system, in which the government provides all coverage, with no role for private insurers.
First, single-payer has a lot to recommend it as a way to achieve universal health care. It’s not the only route — every major advanced country besides the United States achieves universal coverage, but many of them get there via regulations and subsidies rather than by relying solely on public insurance. Still, single-payer is clean and simple, and many health economists would support it if we were starting from scratch.
But we aren’t starting from scratch, which is the second thing you need to know. More than half of Americans are covered by private health insurance, mainly through employers.

Not many people love their insurance companies, but that doesn’t mean that they’re eager to trade the coverage they know for a new system they don’t. Most people probably would end up better off under single-payer, but convincing them of that would be a hard sell; polls show much less support for Medicare for all than for a “public option” plan in which people could retain private insurance if they chose to.
Which brings me to the third point: In reality, single-payer won’t happen any time soon. Even if Democrats win in a landslide in 2020, taking control of the Senate as well as the White House, it’s very unlikely that they will have the votes to eliminate private insurance.
Warren, who has made policy seriousness a key part of her political persona — “Warren has a plan for that” — surely knows all of this. And early this year she seemed to recognize the problems with a purist single-payer approach, saying that she was open to different paths toward universal coverage.
Since then, however, she seems to have gone all in for the elimination of private insurance.
I have no inside information about what led her to take that plunge, but my guess is that she was trying to protect her left flank — to avoid alienating supporters of Bernie Sanders, who have made single-payer a kind of purity test one must pass to be considered a true progressive. And I’m not going to criticize her for engaging in a bit of political realism; after all, the case against Medicare for all is itself basically political.
At this point, however, it’s looking as if Warren may have painted herself into a corner.

Part, but only part, of the issue involves cost.
Journalists have been badgering Warren to get specific about how much taxes would have to go up to pay for Medicare for all. She has, with considerable justice, insisted that this is a bad way to frame the discussion, since any additional taxes would be offset by savings on the huge premiums workers and their employers now pay for private insurance — on average, more than $20,000 a year for a family plan.
The right question is whether the overall costs facing U.S. families would go up or down. Warren has been claiming that for most families, they would go down, but she hasn’t offered specifics. And this vagueness, which has started to seem like evasiveness, is more of a problem for her than it might be for other politicians. As I said, Warren has made policy seriousness a key aspect of her political persona, so her fogginess on health care really stands out.
The plan in the works will presumably try to dispel that fog, but doing so will be tricky. An independent estimate from the Urban Institute (which is, for what it’s worth, left-leaning) suggests that a highly comprehensive Medicare-for-all plan, similar to what Sanders is proposing, would substantially increase overall health spending, although a more modest plan wouldn’t.
But cost isn’t the only issue — in fact, I’m not sure how important it really is, given that full abolition of private insurance remains unlikely in practice. Also, let’s get real: If Warren gets the Democratic nomination, the outcome of the general election isn’t going to hinge on dueling think tank estimates.
The election might, however, hinge on the support of people who have good private coverage and would be nervous about making a leap into the unknown, no matter how many facts and figures Warren deploys.
So what I’ll want to see is whether Warren gives herself and her party enough flexibility to assuage these concerns. I’m not sure what form that flexibility might take. Maybe something like an extended transition period, with greatly enhanced Obamacare (which might actually be politically doable) in the interim?
Whatever Warren comes up with, this is a crucial moment. There are many excellent things in her overall policy agenda; but she won’t get a chance to do those things unless she can extricate herself from what looks like a health policy trap.
https://www.nytimes.com/2019/10/21/opinion/warren-medicare-for-all.html?smid=nytcore-ios-share

Health care debate shows the lies I told for insurance companies about 'Medicare for All' worked

by Wendell Potter - THINK - October 16, 2019

Our propaganda duped Americans into believing that the free market can work in health care and that progressives want a government-run system.

by Wendell Potter - Think - October 16, 2019

Soon after newly sworn-in President Bill Clinton announced in 1993 that his wife would lead an effort to make sure every American had access to health care, I was on a plane from Louisville, Kentucky — where I led public relations for Humana, one of America’s largest health insurance companies — to Washington, D.C. I had a clear mandate: Make sure the Clintons’ “Health Security Act” never became law.
I began working behind the scenes to help craft a strategy to protect the bottom line of the health insurance industry.
Health care costs back then were rising, tens of millions of people were uninsured, and opinion polls revealed strong public support for a national, publicly financed insurance system. Candidate Clinton had promised sweeping reforms. When he announced that Hillary Clinton would lead the reform effort, I began working behind the scenes to help craft a strategy to protect the bottom line of the health insurance industry — by manipulating and misrepresenting democratic will so that the public rejected the very policies that would have delivered the reform they sought.
My destination in D.C. was the office of the Healthcare Leadership Council, a little-known group that the CEOs of big insurance, hospital, drug and medical device companies had formed a few years earlier to kill any health care reform proposals they didn’t like. Our efforts paid off. Thanks largely to the council’s multipronged attack, which included lobbying by corporate chief executives and PR efforts to persuade reporters and television news anchors to use the industry’s preferred language about the Clinton plan, Congress never even voted on the Health Security Act.
A quarter-century after my first trip to Washington to derail reform, we are right back where we were then. Health care costs continue to exceed overall inflation by wide margins, and, despite gains made under the Affordable Care Act, the number of people without health insurance is once again increasing at a fast clip: It’s back up to around 30 million. Polls in the last year once again show similar levels of support for what we now call “Medicare for All,” just as they did for the equivalent idea at the start of the Clinton health care debate.
And we are seeing the same dynamic play out in terms of the politics and policy conversation. After watching the first three Democratic debates and accompanying media coverage, I find that the industry strategy has been more effective in manipulating journalists and pollsters than I could have ever predicted. I feel compelled to speak up and help set the record straight when so many politicians and journalists are using talking points that come straight from health insurance central casting scripts.

The industry knows from years of focus group message testing that terms like “socialized medicine” and “government-run health care” scare many Americans and that many of us respond favorably to terms like “choice” and “competition.” Based on this knowledge, there were several big lies I helped craft — and that are still in circulation today.
The first was industry propaganda that duped Americans into believing that the free market can work in health care as it does in other sectors of the economy. The reality is that U.S. health care is a classic example of market failure. For a free market to function, consumers need to know how much a good or service will cost them and then decide whether to purchase it accordingly. But price transparency is largely nonexistent in health care. Moreover, patients often lack agency in the treatment they receive. An unconscious victim of a car accident, for instance, has no ability to decide on the procedures being done or caregivers operating on them. Yet when they are revived, they will be responsible for whatever bill is sent out.
A second deception was persuading voters that reforms the industry opposed would result in “a government takeover of health care” — a claim that Republican pollster Frank Luntz popularized in 2009 building off similar language we crafted in the 1990s. The Clinton plan’s “managed competition” would have resulted in more regulation but not the elimination of insurance companies; nothing close to a government takeover. That false claim was repeated so often in the debate over the Affordable Care Act that PolitiFact chose it as 2010’s “Lie of the Year,” since the ACA did not seize control of hospitals or even include a public health plan to compete with private insurers.
This time, the outfit running the industry’s propaganda campaign is a Washington PR firm that last year launched a group called the Partnership for America’s Health Care Future (of which the Healthcare Leadership Council is listed as a member). In ads and press releases, the partnership has peddled a third tried-and-true industry lie that I helped craft years ago: that Medicare for All is “one-size-fits-all health care.”
The reality is that Medicare for All legislation in the House and Senate would give people many more options. That’s because, unlike a private health insurance plan, Medicare does not limit the choice of health care providers to ever-changing “networks” of doctors and hospitals. Instead, you could go to any doctor or hospital that accepts Medicare (which is virtually all of them). And current Medicare for All proposals would provide a means of budgeting to ensure that all hospitals, including rural hospitals currently closing by the dozens in the private insurance marketplace, remain open.
And finally there’s the industry lie that Medicare for All would be too expensive and disruptive. The reality is that the current system, controlled and frequently disrupted by private insurance companies and aided by the lawmakers over which they hold sway, is the one that’s too expensive and unsustainable. Legislators over the years have enacted bills that have benefited large companies at the expense of consumers. As just one example, in 2003 Congress passed a bill adding a pharmacy benefit to the Medicare program that prohibited the government from negotiating directly with drug companies for lower prices.
Americans also spend more on health care than people in other countries because of the high administrative costs unique to our system. Approximately 30 percent of our health care expenditures are the result of administration, about twice what it is in Canada. And private insurers in the United States devote 17 percent or more of their revenues on average to administration, compared to Medicare’s 2 percent.
Ditch the “government-run” and “government takeover” language because this isn’t what they’re advocating.
Journalists, media organizations and polling companies — but especially politicians on both sides of the aisle — have an obligation to drop the insurance industry’s framing. There are much more accurate terms that can be used.
These include referring more accurately to what Bernie Sanders and Elizabeth Warren are proposing by calling it a publicly financed, privately delivered health care system. Ditch the “government-run” and “government takeover” language because this isn’t what they’re advocating. And don’t refer to what we have now as a free market system, either, since it’s not.
Changing the framing would allow us to have an authentic public debate about what kind of health care system the American people need.
https://www.nbcnews.com/think/opinion/health-care-debate-shows-lies-i-told-insurance-companies-about-ncna1067331?

Baker introduces new health care bill, proposing sweeping changes

By Priyanka Dayal McCluskey-  Globe Staff - October 18, 2019

Governor Charlie Baker on Friday introduced a sweeping health care bill that reins in physician and hospital billing practices, penalizes drug companies that sharply increase prices, and infuses struggling community hospitals with new funds.

His proposal, the most ambitious health care bill of his five-year tenure as governor, puts a new focus on primary and mental health care and attempts to tackle several complex issues.

It would prohibit surprise medical bills for emergency and unplanned services, and limit the use of hospital facility fees. It also would define and regulate urgent care centers, requiring them to accept low-income patients on Medicaid and provide behavioral health services.

Baker said health systems need to start prioritizing primary and behavioral health care — not just shiny new medical technology.
“For far too long, we’ve neglected preventive services that keep individuals out of our emergency rooms, services like primary and behavioral health care,” the governor said at a State House news conference Friday. “We’re proposing to flip the script.”

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Baker’s proposal seeks more limits on the rising cost of prescription drugs. It subjects drugs priced at more than $50,000 per patient per year to more state oversight, and penalizes companies that raise the price of any drug more than 2 percent a year, on top of inflation.
The plan drew an immediate rebuke from the pharmaceutical industry, which is already facing new drug price controls for the state Medicaid program. Other health care industry groups were more receptive to the omnibus plan.
Baker, a former state health secretary and onetime health insurance company CEO, is particularly passionate about health care policy and brings a unique knowledge of its complexities.
Unlike past health care legislation, his new bill doesn’t directly target hospital prices — a significant driver of costs. But it requires hospital systems to rethink their priorities.
It takes the unusual step of requiring hospitals and insurers to increase spending on primary care and behavioral health care by 30 percent over three years. To achieve this and meet existing requirements to control health spending, they would need to scale back in other areas, such as expensive hospital services.
Essentially, administration officials are betting that by spending more on preventing disease and managing health conditions, pricey emergency room visits and hospitalizations will decline, saving costs in the long run.
“We are really trying to take the long view of health care, acknowledging the complexity of our market in Massachusetts, and that all of us have responsibility — payers, providers, government, and consumers,” Baker’s secretary of health and human services, Marylou Sudders, told the Globe.
Danna Mauch, president of the Massachusetts Association for Mental Health, appeared alongside Baker at the State House and called his proposal a “significant step forward to frame a fairer and more cohesive behavioral health system in the Commonwealth.”
Baker’s bill may serve as a blueprint for state lawmakers, who said earlier this year that they expected the governor to take the first crack at health care legislation this session.
Senate President Karen E. Spilka applauded Baker’s efforts.
”The important issues of controlling health care costs overall, especially the rising cost of prescription drugs, and expanding access to mental and behavioral health services are priorities the Senate are actively working on,” she said in a statement.
A spokeswoman for House Speaker Robert A. DeLeo didn’t comment on Baker’s bill, but noted that House lawmakers are already working on their own health care legislation.
Last year, the House and Senate each drafted very different health care bills, and they failed to find a compromise. Baker — who was running for reelection at the time — didn’t wade into that debate.
Now, Baker said Friday, “I think we should try and get this done.”
The governor’s legislation combines several ideas that are part of bills already pending at the State House. For example, it would expand authority for nurse practitioners to independently care for patients, and it would create a new kind of midlevel dental provider.
The bill sets aside $20 million a year for financially struggling providers — half of that for independent community hospitals and half for health centers.
Additionally, the legislation takes steps to give small businesses more affordable health care options.
The governor’s proposed changes to medical billing could significantly reduce what some patients pay out of pocket. Currently, patients can get surprise bills from specialists who are outside their insurance network — even if the facility where they receive care is in-network. Baker’s bill would stop this practice for emergency services by establishing a default payment rate for out-of-network providers.
The legislation also bans hospital “facility fees” for certain services, and for any care more than 250 yards from a hospital campus.
Amy Rosenthal, executive director of Health Care For All, said she was pleased the bill includes strong provisions to help consumers, including measures to boost primary care, curb drug costs, and tackle out-of-network billing.
Steve Walsh, president of the Massachusetts Health & Hospital Association, called the bill “incredibly robust and comprehensive.”
Hospitals support Baker’s proposed controls on drug spending and the expansion of telemedicine, among other measures. “This legislation is a tremendous opportunity to evolve and improve the best health care system in the world,” Walsh said in a statement.
Insurers are also pleased with the legislation, said Lora Pellegrini, president of the Massachusetts Association of Health Plans.
“Primary care and behavioral health are the backbone of our health care delivery system,” Pellegrini said in a statement. “It is necessary that these investments are made within the confines of the state’s cost growth benchmark.”
Pharmaceutical industry lobbyists, however, panned the legislation. Tiffany Haverly, spokeswoman for the Pharmaceutical Research and Manufacturers of America, or PhRMA, released a statement saying the group is “deeply disappointed that Governor Baker is attempting, once again, to implement dangerous price controls that would have a devastating impact on patients.”
Robert K. Coughlin, president of the Massachusetts Biotechnology Council, said Baker’s proposal “misses the mark by not including any proposals that would directly control skyrocketing health insurance premiums and patient out-of-pocket costs.”
Tim Foley, executive vice president of 1199SEIU United Healthcare Workers East, a union representing thousands of hospital workers, called the bill a good start. But he said it should have included even more help for community hospitals and health centers.
The last major health care bill in Massachusetts became law under Governor Deval Patrick in 2012. That legislation aimed to control costs by setting a benchmark for total spending and creating new state agencies to monitor health costs. The Baker administration’s proposal expands on that by adding new penalties for health care providers and insurers that fail to keep spending growth under the benchmark, which is currently 3.1 percent a year.
In 2006, Governor Mitt Romney signed a landmark law mandating insurance coverage for all state residents.
Sudders said the administration’s proposal builds on those past reforms.
“This is a year for us to really think about the next iteration of health care in Massachusetts,” she said.
https://www.bostonglobe.com/metro/2019/10/18/baker-health-care-bill-reins-medical-billing-penalizes-drug-companies-for-price-increases/YaMlJXqIMisRK8jVRpMAUP/story.html

Hey, Democrats, why not talk about health-care delivery, not just about costs?

by Megan McArdle - Washington Post - October 18, 2019

 

A few things have changed in the health-care debate since the Great Health Care Wars of 2007-2013. For one thing, advocating a government-run, single-payer system was a distinctly minority view a decade ago. This time around, two of the three top Democratic presidential contenders have committed to Medicare-for-all, by which they mean a universal system that would functionally outlaw private insurance.

But the more interesting difference between then and now is less ideological than technocratic: The entire Democratic debate seems mostly focused on how to finance health care, not on how to deliver it. Possibly because their proposals on the finance side are so radical, Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) — and by extension, everyone else in the race — have spent a great deal of time reassuring everyone that nothing about their health care will change except for the cost. That’s a pretty significant shift from the Obama era, when we heard how government would make care not just cheaper but better, too.
After attending the Democratic presidential debate in Westerville, Ohio, on Tuesday, I drove from Columbus to Cleveland, where I spent a day at the Cleveland Clinic, which served as one of the models for Obamacare’s reforms. Founded in 1921 by doctors who thought medical experts should work as a team, rather than as rugged individualists or siloed academics, the Cleveland Clinic has kept true to that mission for nearly a century. Its doctors are salaried and get no reward for doing more procedures; its administration pursues both innovation and integration of care.
Almost all the things that are broken about the U.S. health-care system actually work at the Cleveland Clinic. The doctors focus narrowly on one thing; in the kidney and urology institute, for example, one specialist will handle just prostate cancer, another incontinence, a third kidney disease. Research has shown that this type of specialization produces better outcomes than a broader practice. The specialists work closely in teams with other equally specialized experts, in institutes organized around diseases — and thus the affected patients — rather than in departments organized around the kind of specialists who work in them.
But that’s just one example of the ways in which Cleveland’s integrated-care model differs from what’s available to most Americans. Health-care IT is usually startlingly inept and hard to use; the Cleveland Clinic’s is user-friendly and offers patients easy access to high-tech features such as virtual office visits. The clinic’s very buildings are designed to make the system easy for patients to navigate, to minimize the number of visits and the number of buildings visited, and to speed up the time between diagnosis and treatment.
These things are possible only because of Cleveland’s highly integrated model. Two years ago, I switched from the traditional fee-for-service system into Kaiser Permanente, which takes Cleveland’s salaried-doctor-and-integrated-facility model one step further by also functioning as your health insurer. Choosing Kaiser over a traditional insurer was a deliberate experiment by someone who often writes about health care and knew quite a bit about their model — and even so, I was stunned when I experienced firsthand how much easier such systems make life for patients.
If you offered sick people a choice between reforming the payment side of the system so that everything functions more like Medicare, or reforming the delivery side so that all hospitals function more like the Cleveland Clinic or Kaiser, they might well choose to reform the delivery side. Medical bills are scary, of course, but so is navigating through the fractured mazes of different systems that most very sick people end up caught between — in which vulnerable patients often feel like a lost package, or else an industrial input. So it’s worth asking why Democratic politicians — like too many health systems — seem so relentlessly focused on the money rather than the patients.
One answer is that reforming delivery systems is hard. The government can’t command other health systems to replicate the cultural values, or the institutional expertise, of a Kaiser Permanente or a Cleveland Clinic or a Mayo Clinic. All the government can do is alter payment schedules. And when the Obama administration tried to use that financial lever, it turned out that in the absence of a better institutional culture, patients saw, at best, marginal improvements. At worst, the results were perverse: New Medicare rules that penalized hospital readmissions seem to have resulted in the deaths of some patients.
Unfortunately, if Democrats aren’t going to reform the delivery system, then they probably can’t reform the payment system, either. Because unless America gets a handle on how patients are cared for, we can’t care for millions more of them at a price the American taxpayer will accept.
https://www.washingtonpost.com/opinions/2019/10/18/hey-democrats-why-not-talk-about-health-care-delivery-not-just-about-costs/

Insight: Rural health care problems not covered by Medicare for All

By Leana S. Wen - The Washington Post - October 19, 2019

At Tuesday’s Democratic presidential debate, talking about health care pretty much meant talking about “Medicare for All” – again. The controversial idea of abolishing private insurance in favor of a single, government-run program certainly deserves some rigorous back-and-forth. But not at the expense of issues with a much greater impact on our health.
As an emergency physician, I can tell you that the best health insurance in the world means nothing if patients can’t reach a hospital in their moment of need. But more than 100 hospitals in rural areas have closed since 2010, and hundreds more are at risk. When hospitals close, ambulance times can increase dramatically, and the additional wait often means the difference between life and death. Candidates, what do you think about that?
Many of the remaining hospitals have cut high-cost services such as obstetrics. Between 2004 and 2014, hospitals serving 179 rural counties stopped being able to care for pregnant women, directly resulting in increases in preterm births and births outside of hospitals. Today, less than half of rural counties have hospitals that provide obstetric care. When laboring women have to drive four hours to get to a hospital, it’s not surprising that some deliver on the way and many women have to forgo prenatal care. Debate moderators, a question perhaps?
Health insurance also means nothing if there aren’t enough doctors. In Texas, a span of 11,000 square miles is served by just one doctor. More than 60 percent of all U.S. counties – and 80 percent of rural counties – lack a single psychiatrist. Some 34 million Americans live in areas short on dental health professionals, and 19 million live in reproductive health care deserts, without access to providers of basic services such as contraception and testing for sexually transmitted infections. Voters, isn’t this something you want to know more about?
To be fair, multiple candidates have proposals for stabilizing rural hospitals, funding community health centers, protecting women’s health care and incentivizing health professionals to work in underserved areas. But you wouldn’t know it from the substance of the campaign so far. The American people need to hear more about these ideas on how – literally – to access care, which is a prerequisite to discussion of how to pay for it.
And beyond that, we need to hear that candidates understand people’s everyday health concerns. In the urgent-care clinic where I practice, patients routinely come to me with kidney damage and heart problems because of untreated high blood pressure. Even with insurance, they have to ration prescription medications. Two weeks ago, I treated a patient who cut her blood-pressure pills into halves, then quarters, before she stopped taking them altogether.
I know my patients would be eager to hear how those vying to be the next president would address their struggle to afford prescription drugs. Would they press Congress to allow the federal government to negotiate directly with drug companies? Would they use executive powers to force Big Pharma to cut prices of key life-sustaining medications, such as insulin for diabetes treatment and naloxone, the opioid antidote?
Speaking of the opioid epidemic, candidates must be hearing what I hear: the devastating toll that opioids wreak in rural and urban communities alike, compounded by the tragedy of limited treatment availability. Addiction is a disease for which treatment exists. Yet only 10 percent of Americans with addictions are getting the care they need. Imagine the outcry if only 10 percent of Americans who need chemotherapy were getting it.
Marc Lacey, national editor at The New York Times, did ask about the opioid crisis Tuesday. That’s good. Many candidates have thoughtful proposals for addressing the crisis. Let’s dig into this urgent, on-the-ground health-care issue to the same degree we’ve analyzed the high-altitude pros and cons of Medicare for All. More than a hundred people die every day after overdosing on opioids. How will our next president save lives today?
Finally, we need to hear candidates talk about how to prevent illness in the first place. At the next debate, how refreshing would it be if someone answered a Medicare for All question with a quick pivot: “Let’s talk about policies that keep people healthy instead.” Prevent our children from getting lead-poisoned. Stop the release of pollutants that worsen asthma. Empower communities to provide healthy food options and walkable spaces. Invest in education, affordable housing and accessible transportation. All these things have as much of an effect on overall health as health-care services themselves.
Sound health policy is about so much more than the mechanics of insurance. Let’s stop letting Medicare for All dominate the conversation. The United States’ patients – the voters – expect much more.
https://www.pressherald.com/2019/10/20/insight-rural-health-care-problems-not-covered-by-medicare-for-all/
 

The PR Campaign to Hide the Real Cause of those Sky-High Surprise Medical Bills

by Eileen Appelbaum - Counterpunch - October 18, 2019

Most people assume that if they are treated at a hospital in their insurance network, the doctors they see will accept their insurance. But that’s not always the case. Since 2010, an increasing number of hospitals have outsourced their emergency rooms, radiology, anesthesiology, and other specialized services to physician staffing firms. Patients who need these critical services may inadvertently receive care from a doctor outside of their insurance network and find that they owe thousands or even tens of thousands of dollars in surprise medical bills.

Rates of surprise billing are highest for insured patients treated in emergency rooms. A Stanford University study of millions of ER visits found that more than 2-in-5 (43%) visits resulted in a surprise medical bill in 2016. A person who urgently needs care is in no position to argue and has no choice about either the ambulance, the hospital, or the ER they are taken to. One estimate is that almost 65 percent of U.S. hospitals have ERs staffed by outside firms. As might be expected, surprise billing is most likely to occur in these hospitals.

Horror stories abound. A woman in Hoboken left the emergency room of a hospital when she discovered that the plastic surgeon who would see her was not in her insurance network, and sought treatment at an in-network facility instead. Despite not having received a diagnosis at the first hospital and having left the ER without receiving any treatment, she got a bill from the hospital for $5,751. Her insurance plan paid the hospital $862, which it deemed a “reasonable and appropriate” fee for the services the woman received. That left her stuck with a bill for $4,989.

Patients stuck with surprise bills from out of network doctors are likely to be shocked at the fees they are being charged and angry at their insurance company. But they are unlikely to be aware of the Wall Street firms behind these bills.

Private equity firms have been busy gobbling up physicians’ practices and consolidating them into large national staffing firms. The two biggest physician staffing firms – Envision and TeamHealth – are owned by two of the biggest private equity firms – KKR and Blackstone Group. By 2013, these private equity-owned staffing firms had cornered 30 percent of the market for outsourced doctors, and private equity ownership of doctors’ groups has continued to grow. Private equity firms also own two of the three largest emergency ambulance and emergency air transport services – another major source of surprise medical billing.

Private equity loads these staffing firms up with debt and it promises its investors high returns. It keeps the doctors’ practices it owns out of insurance networks so it can collect high fees from patients. Or it uses the threat that its doctors will go out of network to bully insurance companies into paying its doctors much more for procedures than is paid to other doctors. Either way, health care costs and insurance premiums go up, and consumers pay the price.

Recently, bipartisan legislation passed through committees in both the House and the Senate that would prevent doctors and hospitals from sending big bills to patients for care provided by out-of-network doctors, most often by emergency room physicians. President Donald Trump called on Congress to protect patients from surprise medical bills. It looked like patients were going to be protected from surprise medical bills.

But legislation to roll back surprise medical bills will cut into the heady profits enjoyed by the Wall Street firms behind surprise billing. It didn’t take long for Envision and TeamHealth to reach into the deep pockets of their private equity owners to fund a dark money campaign and spend $28 million on ads intended to keep any legislation from passing. The ads don’t mention surprise billing. Instead, they claim that patients will be harmed if the government steps in to set rates – that is, limit how much out-of-network doctors can charge. Or they claim that big insurance doesn’t want to pay doctors and hospitals, without mentioning that these providers are out-of-network and can charge however much they want.

Medical debt is a leading cause of bankruptcy for families, and surprise medical bills are a major contributor to rising levels of medical debt. Patients need to be protected from unreasonable fees that don’t improve medical care but simply line the pockets of Wall Street investors. Congress needs to act.

https://www.counterpunch.org/2019/10/18/the-pr-campaign-to-hide-the-real-cause-of-those-sky-high-surprise-medical-bills/ 

Beware, Pete Buttigieg Is a Sharp Corporate Tool

by Norman Solomon - Common Dream - October 21, 2019

 

Pete Buttigieg burst on the national scene early this year as a new sort of presidential candidate. But it turns out he’s a very old kind—a glib ally of corporate America posing as an advocate for working people and their families. That has become apparent this fall as Buttigieg escalates his offensive against Medicare for All.
A not-funny thing has happened to Buttigieg on the campaign trail. As he kept collecting big checks from corporate executives and wealthy donors, he went from being “all for” a single-payer Medicare for All system in January to trashing it in the debate last week as a plan that would kick “150 million Americans off of their insurance in four short years.” The demagoguery won praise from corporate media outlets.
"Buttigieg has joined with Joe Biden to open up a well-funded, double-barreled assault on Medicare for All."
Those outlets have often lauded Buttigieg for his fundraising totals this year without scrutiny of the funding sources. They skew toward the wealthy—and toward donors with a vested interest in protecting the status quo.
“Of course, from a voter’s point of view, what really matters is not how much financial support a candidate is getting, but who they’re getting it from—because those supporters may not have the same interests as the voter,” Jim Naureckas at the media watchdog FAIR pointed out this summer. “In the case of Buttigieg, the two main sources of funds seem to be the tech industry . . . and the financial industry, that traditional source of funds for corporate-oriented Democrats.”
So far this year, Buttigieg has reported $27 million in contributions of $200 and above—accounting for 52.5 percent of his total dollars raised. Compare that to Elizabeth Warren at 29.6 percent and Bernie Sanders at 24.9 percent.
And major sources of Buttigieg’s funding are in harmony with his recent hostility toward Medicare for All. “Pharmaceutical, health insurance, and hospital industry donors have flocked to Mayor Pete all year,” journalist Alex Kotch reported last week. “As of mid-2019, he was second only to Donald Trump in overall campaign cash from donors in the health sector. Among Democratic candidates, he was second to former Vice President Joe Biden in terms of pharmaceutical and health insurance donations.”
Reporting for the investigative website Sludge, Kotch wrote: “Over 100 individuals in leadership, legal, consulting, or financing roles in health sector donated $200 or more to Pete for America between July and September. These donors include pharmaceutical industry leaders such as the chief corporate affairs officer at drugmaker Pfizer, the president of Astex Pharmaceuticals, a state lobbyist for Biogen, a vice president of public policy at Novartis, and the deputy vice president at the nation’s largest pharmaceutical trade association, PhRMA, as well as attorneys for AbbVie, Johnson & Johnson, and Merck.”
Buttigieg’s reversal of avowed support for Medicare for All is classic opportunism. In early 2018, he was unequivocal via Twitter: “I, Pete Buttigieg, politician, do henceforth and forthwith declare, most affirmatively and indubitably, unto the ages, that I do favor Medicare for All.”
Eight months ago, as The Hill noted, “Buttigieg also appeared to defend single-payer [Medicare for All] health insurance in a February 2019 interview on MSNBC's ‘Morning Joe.’” But now, on its website, the Buttigieg campaign is engaged in a herculean pretzel effort at doubletalk, declaring that his “affordable public plan will incentivize private insurers to compete on price and bring down costs. If private insurers are not able to offer something dramatically better, this public plan will create a natural glide-path to Medicare for All.”
Left unexplained is how Buttigieg is providing any sort of “glide-path” to Medicare for All by now deploying insurance-industry talking points to denounce Medicare for All. Buttigieg is trying to poison the well by conjuring up an effort to precipitously dump people off of health coverage and deprive them of “choice”—deliberately confusing the current “choice” of predatory for-profit insurance plans with the genuine full choice of healthcare providers that enhanced Medicare for everyone would provide.
“The efficiencies of a single-payer system would make universal coverage affordable and give everyone in the United States their free choice of doctors and hospitals,” David Himmelstein and Steffie Woolhandler wrote this month in The Nation. “But that goal will remain out of reach if private insurers are allowed to continue gaming the system.”
Himmelstein and Woolhandler, who are professors of public health and cofounders of Physicians for a National Health Program, assessed the healthcare scenarios being touted by the two most prominent candidates now attacking Warren and Sanders: “Some proposals, including those by Joe Biden and Pete Buttigieg, would offer a Medicare-like public plan for sale alongside private plans on the insurance exchanges now available under the Affordable Care Act. These buy-in reforms would minimize the need for new taxes, since most enrollees would be charged premiums. But tens of millions would remain uninsured or with coverage so skimpy, they still couldn’t afford care.”
The sordid story of Buttigieg’s about-face on Medicare for All was well-documented and deftly analyzed days ago by Jezebel writer Esther Wang under the headline “A Brief History of Pete Buttigieg Faking It on Medicare for All.” She observed:

Buttigieg is not the only Democratic presidential candidate who has switched positions on supporting Medicare for All, or is just generally using the public and political confusion around the issue to undermine real efforts to move to a universal system. Kamala Harris, who co-sponsored Bernie Sanders’ Senate bill, has consistently waffled, and has settled on a plan that continues to let private insurers play a role. But Buttigieg is the only candidate who is now making opposition to the Sanders- and Warren-backed Medicare for All a central focus of his campaign.

With the mutual alignment of Buttigieg and his corporate healthcare-industry donors, Mayor Pete’s approach seems to be a case of a flimflamming candidate who poses as a forthright leader. For the general public, instead of “Mayor Pete,” a more apt nickname might be “Mayor Elite.”
As for Buttigieg’s slippery slogan of “Medicare for all who want it,” Rep. Ro Khanna pointed out that such a setup “won't bring the administrative costs down of private insurers or maximize negotiation with Big Pharma and hospitals.” And: “This means higher premiums, higher drug costs, higher deductibles, and more denied claims for the middle class.”
"As part of a campaign strategy that aims to undermine both of his progressive opponents, the mayor continues to falsely characterize Medicare for All—no matter how much confusion and disinformation he creates along the way."
An in-depth report from the Political Economy Research Institute—“Economic Analysis of Medicare for All”—concluded that “Medicare for All has the potential to achieve major cost savings in its operations relative to the existing U.S. health care system. We estimate that, through implementation of Medicare for All, overall U.S. health care costs could fall by about 19 percent relative to the existing system.”
Yet Buttigieg has joined with Joe Biden to open up a well-funded, double-barreled assault on Medicare for All.
“I am tired of seeing Democrats defend a dysfunctional healthcare system where 87 million people are uninsured or underinsured and 30,000 people die every year because they lack adequate coverage,” Bernie Sanders wrote last Friday in an email to supporters. “So I was disappointed this week to see that Joe Biden used the talking points of the health insurance industry to attack Medicare for All and our campaign.”
While Buttigieg is not strong in national polls right now, he’s polling notably well in Iowa, where the first voting for the Democratic presidential nomination will occur in early-February caucuses. And with $23.4 million in the bank, he’s got much more money in hand than Biden ($9 million). The only rivals with more money than Buttigieg are the two he’s assailing for their resolute support of Medicare for All—Sanders ($33.7 million) and Warren ($25.7 million).
While I personally support Sanders, I’m equally appalled by Buttigieg’s attacks on Warren. As part of a campaign strategy that aims to undermine both of his progressive opponents, the mayor continues to falsely characterize Medicare for All—no matter how much confusion and disinformation he creates along the way.
Whether or not Pete Buttigieg can win the nomination, he has certainly emerged as a sharp corporate tool.
https://www.commondreams.org/views/2019/10/21/beware-pete-buttigieg-sharp-corporate-tool

Would ‘Medicare for All’ Save Billions or Cost Billions?

By JOSH KATZ, KEVIN QUEALY and MARGOT SANGER-KATZ - NYT - October 16, 2019

U.S. Health Care Expenditures in 2019

Under current law, the government estimates that the U.S. will spend about one-sixth of G.D.P. on health care this year, with those costs divided between the federal government, individuals, employers and state governments.
This estimate, from an economist close to the Bernie Sanders 2016 campaign, estimates the largest savings from converting to Medicare for all.
This estimate assumes that Medicare for all will pay all medical providers the same amounts Medicare pays now. That decision means it would lower total health spending, but its author thinks the real system would have to pay higher prices.
This estimate assumes that Medicare for all would need to pay all medical providers higher rates than Medicare pays them now.
The Urban Institute estimate includes a limit on how many more doctors’ visits people will be able to make. Even so, it projects a substantial increase in spending under Medicare for all.
Even without including all the costs for long-term care, which some Medicare for all proposals include, this estimate still finds that Medicare for all would cost substantially more than the current system.

How much would a “Medicare for all” plan, like the kind endorsed by the Democratic presidential candidates Bernie Sanders and Elizabeth Warren, change health spending in the United States?
Some advocates have said costs would actually be lower because of gains in efficiency and scale, while critics have predicted huge increases.
We asked a handful of economists and think tanks with a range of perspectives to estimate total American health care expenditures in 2019 under such a plan. The chart at the top of this page shows the estimates, both in composition and in total cost.
In all of these estimates, patients and private insurers would spend far less, and the federal government would pay far more. But the overall changes are also important, and they’re larger than they may look. Even the difference between the most expensive estimate and the second-most expensive estimate was larger than the budget of most federal agencies.

Estimates of U.S. health care expenditures under Medicare for all in 2019, as a share of G.D.P.

0%2%4%6%8%10%12%14%16%18%20%FriedmanMercatusRANDThorpeUrbanInstitute0%2%4%6%8%10%12%14%16%18%20%

Other 2019 budget estimates as a share of G.D.P.

0%2%4%6%8%10%12%14%16%18%20%Nat. Sci.FoundationNASAH.U.D.HomelandSecurityEducationVeterans’AffairsDefenseDept.The big differences in the estimates of experts reflect the challenge of forecasting a change of this magnitude; it would be the largest domestic policy change in a generation.
The proposals themselves are vague on crucial points. More broadly, any Medicare for all system would be influenced by the decisions and actions of parties concerned — patients, health care providers and political actors — in complex, hard-to-predict ways. But seeing the range of responses, and the things that all the experts agree on, can give us some ideas about what Medicare for all could mean for the country’s budget and economy.
These estimates come from:
Gerald Friedman, a professor of economics at the University of Massachusetts, Amherst, whose estimates were frequently cited by the Bernie Sanders presidential campaign in 2016.
Charles Blahous, a senior research strategist at the Mercatus Center at George Mason University, and a former trustee of Medicare and Social Security.
Analysts at the RAND Corporation, a global policy research group that has estimated the effects of several single-payer health care proposals.
Kenneth E. Thorpe, the chairman of the health policy department at Emory University, who helped Vermont estimate the costs of a single-payer proposal there in 2006.
Analysts at the Urban Institute, a Washington policy research group that frequently estimates the effects of health policy changes.
Right now, individuals and employers pay insurance premiums; people pay cash co-payments for drugs; and state governments pay a share of Medicaid costs. In a system like one introduced as a bill by Mr. Sanders or another from Representative Pramila Jayapal and the Congressional Progressive Caucus, nearly all of that would be replaced by federal spending. That’s why some experts describe such a system as single-payer. (Other Democrats who are supporting coverage expansion through Medicare have offered more modest proposals that would preserve some out-of-pocket spending and a role for private insurance.)
The economists made their calculations using different assumptions and methods, and you can read more about those methods at the bottom of this article.
These two estimates, for example, from the Mercatus Center and the Urban Institute, differ by about $730 billion per year, roughly 3 percent of G.D.P. The two groups don’t often agree on public policy — Mercatus tends to be more right-leaning and Urban more left-leaning.

Estimates of U.S. health care expenditures in 2019 under a Medicare for all system

The biggest difference between the Mercatus estimate and the Urban one is related to how much the new system would pay doctors, hospitals and other medical providers for health services. Mr. Friedman’s estimate, the least expensive of the group, assumed that the government could achieve the largest cost savings on both prescription drugs and administrative spending.

How much would doctors and hospitals and other providers be paid?

Pay too little, and you risk hospital closings and unhappy health care providers. Pay too much, and the system will become far more expensive. Small differences add up.

Estimated increase in Medicare payment rates paid to medical providers

friedman	blahous	thorpe	urban	rand
6%	0%	5%	7%	9%

In our current system, doctors, hospitals and other health care providers are paid by a number of insurers, and those insurers all pay them slightly different prices. In general, private insurance pays medical providers more than Medicare does. Under a Medicare for all system, Medicare would pick up all the bills. Paying the same prices that Medicare pays now would mean an effective pay cut for medical providers who currently see a lot of patients with private insurance.
For a Medicare for all system to save money, it needs to reduce the health care industry’s income somewhat. But if rates are too low, hospitals already facing financial difficulties could be put out of business.
Neither Mr. Sanders’s legislation nor the Jayapal House bill specify what the Medicare for all system would pay, but they say that Medicare would establish budgets and payment rates. So our estimators offered their best guess of what they thought such a plan might do.
Mr. Thorpe said he picked a number higher than current Medicare prices for hospitals, because he thought anything lower would be unsustainable. Mr. Blahous said he constructed his starting estimate at precisely Medicare rates, though he thought the real number would most likely be higher. He also reran his calculations with a more generous assumption: At 111 percent of Medicare, around the average amount all health insurers pay medical providers now, the total shot up by hundreds of billions of dollars, about an additional 1.5 percent of G.D.P.

How much lower would prescription costs be?

By negotiating directly on behalf of all Americans, instead of having individual insurance companies and plans bargain separately, the government should be able to pay lower drug prices.

Estimated reduction in drug spending

friedman	blahous	thorpe	urban	rand
31%	12%	4%	20%	11%

Patients in the United States pay the highest prices in the world for prescription drugs. That’s partly a result of a fractured system in which different payers negotiate separately for drug benefits. But it also reflects national preferences: An effective negotiator needs to be able to say no, and American patients tend to want access to the widest array of cutting-edge drugs, even if it means paying more.
A Medicare for all system would have more leverage with the drug industry because it could bargain for the whole country’s drug supply at once. But politics would still be a constraint. A system willing to pay for fewer drugs could probably get bigger discounts than one that wanted to preserve the current set of choices. That would mean, though, that some patients would be denied the medications they want.
All of our economists thought a Medicare for all system could negotiate lower prices than the current ones. But they differed in their assessments of how cutthroat a negotiator Medicare would be. Mr. Friedman thought Medicare for all could reduce drug spending by nearly a third. The Urban team said the savings would be at least 20 percent. The other researchers imagined more modest reductions.

How much more would people use the health care system?

By expanding coverage to the uninsured, adding new benefits and wiping out cost sharing, Medicare for all would encourage more Americans to seek health care services.

Estimated increase in use of health care

friedman	blahous	thorpe	urban	rand
7%	11%	15%	—	8%

Medicare for all would give insurance to around 28 million Americans who don’t have it now. And evidence shows that people use more health services when they’re insured. That change alone would increase the bill for the program.
Other changes to Medicare for all would also tend to increase health care spending. Some proposals would eliminate nearly all co-payments and deductibles. Evidence shows that people tend to go to the doctor more when there’s no such cost sharing. The proposed plans would also add medical benefits not typically covered by health insurance, such as dental care, hearing aids and optometry services, which would increase their use.
The economists differ somewhat in how much they think people would increase their use of medical services. (Because of the way the Urban Institute team’s estimate was calculated, it couldn’t easily provide a number for this question.)

What would Medicare for all cost to run?

Right now, the health care system is complicated, with lots of different payers and ways to negotiate prices and bill for services. A single payment system could save some money by simplifying all that.

Estimated administrative costs as a share of all spending

friedman	blahous	thorpe	urban	rand
2%	—	6%	6%	5%

The complexity of the American system means that administrative costs can often be high. Insurance companies spend on negotiations, claims review, marketing and sometimes shareholder returns. One key possible advantage of a Medicare for all system would be to strip away some of those overhead costs.
But estimating possible savings in management and administration is not easy. Medicare currently has a much lower administrative cost share than other forms of insurance, but it also covers sicker people, distorting such comparisons. Certain administrative functions, like fraud detection, can have a substantial return on investment.
The economists all said administrative costs would be lower under Medicare for all, but they differed on how much. Those differences amount to percentage points on top of the differing estimates of medical spending. On this question, there was rough agreement among our estimators that administrative costs would be no higher than 6 percent of medical costs, a number similar to the administrative costs that large employers spend on their health plans. Mr. Blahous said a 6 percent estimate would probably apply to populations currently covered under private insurance, but did not calculate an overall rate.

But what will it cost me?

All of these estimates looked at the potential health care bill under a Sanders-style Medicare for all plan. In some estimates, the country would not pay more for health care, but there would still be a drastic shift in who is doing the paying. Individuals and their employers now pay nearly half of the total cost of medical care, but that percentage would fall close to zero, and the percentage paid by the federal government would rise to compensate. Even under Mr. Blahous’s lower estimate, which assumes a reduction in overall health care spending, federal spending on health care would still increase by 10 percent of G.D.P., or more than triple what the government spends on the military.
How that transfer takes place is one of the least well explained parts of the reform proposals. Taxation is the most obvious way to collect that extra revenue, but so far none of the current Medicare for all proposals have included a detailed tax plan. Even if total medical spending stayed flat over all, some taxpayers could come out ahead and pay less; others could find themselves paying more.
Raising revenue would require broad tax increases that are likely to be partly borne by the middle class, potentially impeding passage. Advocates, including Mr. Sanders, tend to favor funding the program with payroll taxes.
For some people, any increase in federal taxes might be more than offset by reductions in their spending on premiums, co-payments, deductibles and state taxes. There is evidence to suggest that premium savings by employers would also be returned to workers in the form of higher salaries. But, depending on the details, other groups could end up paying more in tax increases than they save in those reductions.
After Mr. Sanders’s presidential campaign released a tax proposal in 2016, the Urban Institute tried to calculate the effects on different groups. But it found that the proposed taxes would pay for only about half of the increased federal bill. That means that a real financing proposal would probably need to raise a lot more in taxes. How those are spread across the population would change who would be better or worse off under Medicare for all.

About the estimates

Our economists differed somewhat in their estimation methods. They also examined a couple of different Medicare for all proposals, though all the plans had the same major features.
Gerald Friedman calculated the cost of Medicare for all by making adjustments to current health care spending using assumptions he derived from the research literature. His measurements didn’t capture the behavior of individual Americans, but estimated broader changes as groups of people gained access to different insurance, and as medical providers earned a different mix of payments. A 2018 paper with his analysis of several different variations on Medicare for all is available here.
Kenneth E. Thorpe calculated the cost of Medicare for all by making adjustments to current health care spending using assumptions he derived from the research literature. His measurements didn’t capture the behavior of individual Americans, but estimated broader changes as groups of people gained access to different insurance, and as medical providers earned a different mix of payments. A 2016 paper with more of his findings on Mr. Sanders’s presidential campaign proposal is available here.
The Urban Institute built its estimates using a microsimulation model, which estimates how individuals with different incomes and health care needs would respond to changes in health insurance. The model does not consider the effects of policy changes on military and veterans’ health care or the Indian Health Service, so its totals assumed those programs would not change. It also measures limits on the availability of doctors and hospitals using evidence from the Medicaid program. The team at Urban that prepared the calculations includes John Holahan, Lisa Clemans-Cope, Matthew Buettgens, Melissa Favreault, Linda J. Blumberg and Siyabonga Ndwandwe. Its detailed report on Mr. Sanders’s presidential campaign proposal from 2016 is available here.
Charles Blahous calculated the cost of Medicare for all by making adjustments to current health care spending using assumptions he derived from the research literature. His measurements didn’t capture the behavior of individual Americans, but estimated broader changes as groups of people gained access to different insurance, and as medical providers earned a different mix of payments. His calculations were made based on Mr. Sanders’s 2017 Medicare for All Act, which indicated that states would continue to pay a share of long-term care costs. A 2018 paper with more of his findings is available here, and includes both sets of estimates for Medicare provider payments.
The RAND Corporation built its estimates by making adjustments to previous single-payer analyses. The original estimates used a microsimulation model, which estimates how individuals with different incomes and health care needs would respond to changes in health insurance. The RAND model, which it uses to estimate the effects of various health policy changes, is called RAND COMPARE. Calculations were made assuming a Medicare for all plan that offers coverage with no cost sharing and long-term care benefits. The RAND team that prepared the estimate includes Christine Eibner and Jodi Liu. A copy of the report is available here; Ms. Liu’s 2016 study of how different approaches to single-payer might affect its costs is here.

 https://www.nytimes.com/interactive/2019/04/10/upshot/medicare-for-all-bernie-sanders-cost-estimates.html?

Health Care Policy and Marketplace Review 

Bob Laszewski - Health Care Policy and Marketplace Review - October 21, 2019

IF the Democrats capture the White House, keep the House and take over the Senate, no matter who they elect as President, this Biden health care outline, not Medicare for all, will likely be the plan Democrats embrace in 2021

The Biden health care proposal directly takes on the big things that haven't worked in Obamacare.
Here are the things that are most broken in Obamacare:

• The individual health insurance premiums and deductibles are, and have from the beginning of the program, been unaffordable for many but the most subsidized consumers.
• That has led to dramatic anti-selection in the risk pool––particularly among those who get little or no subsidy. 
• That in turn has led to a cycle of ever higher and more unaffordable premiums and deductibles––it isn't uncommon to now see unsubsidized family premiums in the $15,000 to $20,000 annual cost range with deductibles of $7,000 per person.
• That has led to dramatic shrinkage in the number of those covered in recent years––particularly among the unsubsidized where the number of those covered fell by 40% during 2016 and 2017.
• To counter substantial underwriting losses early in the insurance exchanges, the insurance companies dramatically increased premiums until the most highly subsidized and premium insulated consumers dominated the enrollment and the carriers had the premiums high enough that they made record profits––they are slated to rebate $800 million this year because they exceeded the law's profit limitations.

What has worked is the Medicaid expansion where 12 million people have gained coverage in the 33 states that have expanded it––likely more states will do so shortly because public support in one traditionally Republican state after another––such as Virginia, Nebraska, Maine, Idaho, and Utah––has grown.
With that backdrop, here is what Democratic presidential candidate Joe Biden is proposing.
First, he is proposing to fix what he sees as wrong with the Obamacare individual health insurance market––not proposing a single-payer Medicare for all plan and thereby not doing away with employer-based care or tinkering with Medicare as we now have it for seniors.
Biden has a comprehensive plan to make the Obamacare individual market policies more affordable.
He would:

• Base policy subsidies on the more expensive "Gold" plans that have relatively low deductibles, rather then the "Silver" plans that have higher deductibles. This would dramatically reduce the deductibles and co-pays subsidized people now face.
• Make most families and individuals eligible for premium subsidies by removing the current cap limiting subsidies to only those who make less than 400% of the federal poverty level––under his plan all individual market consumers would pay no more than 8.5% of their income on health insurance premiums. 
• Make coverage available to the 5 million low-income consumers in states that have not expanded Medicaid by offering access to a federal premium-free option.

The Biden plan directly takes on the most problematic parts of Obamacare by making individual market coverage affordable––particularly for the middle-class who are now the ones most hurt by the existing program.
The fundamental reason the Obamacare individual market policies have seen a long succession of more and more unaffordable rate increases is because of "anti-selection"––as the prices increase more, and more healthy people find the coverage unaffordable, and as a result take the risk of dropping out, leaving the sickest participants behind, and the prices even higher.
A healthy and efficient risk pool requires about 75% of the market to participate in order to ensure there are enough healthy people paying into the pool to pay the claims of the sick. It is likely that as much as 40% of today's high rates are directly the result of premium loading to counter the fact that less than 40% of the eligible market ever enrolled. That loading essentially amounted to the big Obamacare rate increases in recent years that were in excess of baseline health cost inflation.
Ultimately, as enrollment would ramp up under the Biden plan to an efficient level, the anti-selection premium-load carriers have had to apply to Obamacare in recent years, because healthy consumers fled the program, could be reversed as those same healthy consumers returned.
That is a process that would likely take a few renewal cycles as the risk pool improved and health plans were able to recognize better results. And, I would expect Democrats would reinstate an incentive for people to carry insurance as they have done in a number of Democratic states. Separately, premiums would continue to rise to offset annual health care inflation.
Biden also deals with a number of other health care system issues:

• Medicare could negotiate directly with drug companies for lower prices in that program.
• Launch prices for drugs that face no competition would have their Medicare and individual market prices tied to a process called "external reference pricing"––based on what a market basket of other nations are willing to pay thereby bringing U.S. prices more in line with what is paid in other industrialized economies.
• Biden would increase the community health center budget to improve care for underserved populations.

Biden would pay for his plan by:

• Eliminating the 20% flat tax on capital gains for those with incomes over $1 million and have them pay the top tax rate of 39.6% on capital gains.
• Roll back the Trump tax cuts for the "very wealthy" and restore the top bracket to 39.6%.

Biden is also proposing a public option to be marketed alongside the private individual health insurance options in the insurance exchanges:

"Whether you're covered through your employer, buying your insurance on your own, or going without coverage altogether, the Biden Plan will give you the choice to purchase a public option health insurance option like Medicare...by negotiating lower prices from hospitals and other health care providers."

Biden goes beyond the historic definition of a public option by making it available to people beyond the individual health insurance market––even letting those participating in employer-based care to opt out of their coverage to take advantage of it.
This is the most controversial part of his plan. Insurance companies, hospitals, doctors, and other health care providers are likely to cheer his proposed efforts to make individual market policies more attractive––and thereby enable insurers to sell more policies in a more stable market and have those private policies pay providers for more care at commercial reimbursement rates.
But effectively putting Medicare in direct competition with the insurance companies and paying providers at Medicare rates––about 50% lower than commercial rates for hospitals and 20% less on average for doctors, and much less for certain specialties––will be a much heavier political lift.
But, most Democrats now regret that they didn't include the public option when they passed Obamacare in 2010 and found themselves in bed with the insurance industry as Obamacare floundered in the face of unaffordable premiums for the middle-class.
If Democrats can't get to Medicare for all in 2020, and as I said in an earlier post I don't believe they can, they will surely settle for nothing less than a public option.
IF the Democrats capture the White House, keep the House and take over the Senate, no matter who they elect as President, this Biden health care outline, not Medicare for all, will likely be the plan Democrats embrace in 2021.
More on how I see the public option playing out if Democrats are able to capture the White House, hold the House, and gain a working majority in the Senate, in my next post.
You might be surprised by my conclusions.
http://healthpolicyandmarket.blogspot.com/

 

Medicaid Now Covers a Million Fewer Children

The uninsured rate for children is climbing as families run afoul of new paperwork from states and as fear rises among immigrants.

By Abby Goodnough and Margot Sanger-Katz - NYT - October 22, 2019

HOUSTON — The baby’s lips were turning blue from lack of oxygen in the blood when his mother, Kristin Johnson, rushed him to an emergency room here last month. Only after he was admitted to intensive care with a respiratory virus did Ms. Johnson learn that he had been dropped from Medicaid coverage.
The 9-month-old, Elijah, had joined a growing number of children around the country with no health insurance, a trend that new Census Bureau data suggests is most pronounced in Texas and a handful of other states. Two of Elijah’s older siblings lost Medicaid coverage two years ago for reasons Ms. Johnson never understood, and she got so stymied trying to prove their eligibility that she gave up.
“I’ve been on this emotional roller coaster,” Ms. Johnson, 34, said of Elijah’s loss of coverage, an error that happened apparently because she didn’t respond quickly enough to a letter asking for new proof of income. “It’s been a very scary month.”
Nationwide, more than a million children disappeared from the rolls of the two main state-federal health programs for lower-income children, Medicaid and the Children’s Health Insurance Program, between December 2017 and June, the most recent month with complete data.

Some state and federal officials have portrayed the drop — 3 percent of enrolled children — as a success story, arguing that more Americans are getting coverage from employers in an improving economy. But there is growing evidence that administrative changes aimed at fighting fraud and waste — and rising fears of deportation in immigrant communities — are pushing large numbers of children out of the programs, and that many of them are now going without coverage. The declines are concentrated in a minority of states; in other places, public coverage has actually increased.
An analysis of new census data by The New York Times shows the number of children in the United States without any kind of insurance rose by more than 400,000 between 2016 and 2018 after decades of progress toward universal coverage for children.
Some of the states that saw the largest increases in uninsured children — like Tennessee and Texas — were those that created rules to check the eligibility of families more frequently or that reset their lists with new computer systems. In some states with large immigrant populations like Florida, doctors and patient advocates report growing concern among parents that signing up their children (who are citizens) may hurt their own chances of getting a green card or increase their risk of deportation.

When asked about the drop in Medicaid enrollment, government officials tend to point first to the improved economy, which has undoubtedly enabled some families to gain jobs with private insurance.

“Unemployment remains low, wage growth is up, & we now see fewer people relying on public assistance,” Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, wrote on Twitter in April. “That’s something to celebrate.”
In many states with large declines, like Tennessee and Missouri, officials cited the stronger job market.
Kelli Weldon, a spokeswoman for the Texas Health and Human Services Commission, cited “record-low employment levels” for its contraction in Medicaid enrollment.
But the census analysis also shows increases in the rate of uninsured children in states with enrollment declines, including Tennessee, Texas, Idaho and Utah.

In Texas, the number of uninsured children rose by around 120,000 between 2016 and 2018. State officials increased paperwork requirements in 2014 for families covered under both Medicaid and CHIP, which serves children whose income is slightly higher than Medicaid’s.

Instead of checking eligibility once a year, as many states do, Texas enrolls children for six months and then checks databases for four consecutive months to ensure family income is still low enough to qualify. If the databases show the income has gone over the limit, families are notified by mail and have 10 days to prove otherwise or lose Medicaid.

A bipartisan bill in the state legislature this spring sought to make income checks annual again after data suggested several thousand eligible children were being dropped from Medicaid each month, but it never got a vote.
Other states have also begun checking family incomes more often, or removing families who may have moved if mail is returned to the state.
“The way they are doing this seems clearly designed to throw people off this program,” said Eliot Fishman, a senior director at the consumer group Families USA, who was a top Medicaid official in the Obama administration.
When Tennessee updated its enrollment computer system in 2016, it generated thousands of errors. Medicaid and CHIP enrollment in the state has declined by more than 55,000 children since January 2018, according to the Georgetown Center for Children and Families.
Tennessee’s Medicaid director, Gabe Roberts, said that besides the improved economy, the decline in enrollment was a result of updating the computer system and clearing up a backlog of old cases.
Gordon Bonnyman, co-founder of the Tennessee Justice Center, which has been helping families struggling with lost coverage, was skeptical, saying the state response has revealed “a remarkable lack of curiosity about what happened to these kids.”

The census shows that about 25,000 more children there have become uninsured since 2016.
A large body of evidence shows that Medicaid coverage for children has lasting effects on their lives, improving their health, educational attainment and even adult earnings. In 2010, the Affordable Care Act made it easier for states to check whether families qualified for Medicaid without requiring them to fill out paperwork, a strategy proven to increase coverage rates. The A.C.A. also made it harder for states to expel poor families for paperwork errors.
The changes helped the uninsured rate among children reach its lowest level ever in 2016, with fewer than 5 percent without coverage.
Trump administration officials have not explicitly tried to limit children’s Medicaid coverage. But Ms. Verma has repeatedly encouraged state officials to safeguard “program integrity,” by doing more vigorous checks of enrollees’ eligibility. More recently, her office reviewed the reductions and concluded that problems with state computer systems may be a factor in some places.
“While the economy is the most consistent driver of enrollment that we observed, we have found evidence that other more state-specific factors may be driving individual state experiences,” an agency spokesman, Johnathan Monroe, said in an email.
Medicaid and CHIP eligibility does depend on household income, meaning that, as wages rise, some families may be earning too much to qualify. Yet the patterns in coverage suggest reasons beyond improved finances. In Tennessee, for example, the biggest declines in Medicaid enrollment have come in counties with the highest unemployment rates, a Justice Center analysis found.

History has shown that when states require more paperwork from Medicaid beneficiaries, more eligible people fall through the cracks. Medicaid beneficiaries tend to move often; to have unstable hours and incomes; and to have literacy challenges that can make it hard to submit detailed renewal packages or verify their incomes frequently.

The specter of a pending “public charge” rule — which could penalize green card applicants who use public benefits like Medicaid — is causing many immigrant patients to decline enrollment, according to a Kaiser Family Foundation survey of community health centers. This month a federal judge temporarily blocked that rule from taking effect.
Texas leads the nation in the number of uninsured children and adults. In Houston, Maricela, a single mother, had carefully filled out the paperwork to re-enroll her younger two children, both citizens, in Medicaid every year since they were born — until now. A permanent resident from El Salvador who earns minimum wage as a hotel maintenance worker, she was so worried about jeopardizing her status that she decided to let their coverage lapse in August. Because of the deportation risk, she agreed to share only her first name.
“My worst fear is that I could end up without my legal status and be separated from my children,” Maricela said this month at Epiphany Community Health Services, a nonprofit group that helps people find health coverage. “That would be fatal for me.”
Her older son, 11, has asthma; at his last doctor’s visit before his coverage ended, she pleaded for extra medicine. His main treatment, a generic version of Singulair, could cost $150 a month without insurance. Listening to him cough at night, she finally decided to take the risk and re-enroll both boys in Medicaid.
“I had to do it,” she said. “But I’m afraid.”
Dr. Sogol Pahlavan, a Houston pediatrician, said the rate of her patients on Medicaid dropped to 70 percent in 2018, from 75 percent a year earlier. The number of uninsured in her practice of 10,000 patients has grown commensurately, with families citing both the impending public charge rule and administrative hurdles.
“It’s definitely going to affect the community, because somebody ultimately has to bear that cost,” she said. “These kids are still here; their chronic disease isn’t going away just because they’re losing health coverage.”
For Ms. Johnson, Elijah’s stay at Texas Children’s Hospital led to an appointment with an enrollment counselor who helped her try to figure out what had happened. Trying to re-enroll her older children earlier this year, she was asked for proof of income and missed the 10-day window to provide it; that may be why Texas dropped Elijah from Medicaid even though he qualified because he was a baby.
All of her children are now re-enrolled. But she has started receiving thousands of dollars in bills from the baby’s hospital stay — bills she is counting on Medicaid to cover retroactively. And she is haunted by what might have happened if the hospital where she took Elijah had considered the case nonurgent and turned them away.
“I went to the E.R. thinking he had insurance,” she said. “If the receptionist had not seen him turning blue, she might have just said, ‘He’s not covered, so we can’t see him today.’ I do think about that.”
https://www.nytimes.com/2019/10/22/upshot/medicaid-uninsured-children.html