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President Obama needs to be President and not Supreme Court critic

4 Apr

The President Warns the Supreme Court

Our President is a smart man; he is a lawyer and a former law professor. He should know how our government works and why there are three distinct branches with checks and balances.

Official photographic portrait of US President...

Apparently he does not know or care about these things, perhaps he missed Civics class while community organizing. He criticizes the Supreme Count as “an unelected group of people.”

Whatever the reason for his behavior, I find it very disturbing.

Most recently he called on the Supreme Court not to be an activist court and strike down the health care law.  He said he is confident the Court will not legislate from the bench. He claims the law “passed with a strong majority of a democratically elected Congress.”

Notwithstanding he is distorting the facts; the law passed 219-212 (51%) in the House and with 60 votes in the Senate and with virtually no votes from outside his party, his chastising the Supreme Court as he did in the campaign contribution ruling is inappropriate at best and extremely irresponsible.

You can tell the fundamental character of a person by what they say and how they act. In this case I believe we should have concerns. His priorities seem to be mostly focused on getting his way any  way he can.

The issue before the Supreme Court is whether or not a law passed by Congress and signed by the President is constitutional.  Twenty-six of our states don’t think it is. It does not matter if the law is benefiting many people, it does not matter that billions have already been spent implementing it, what matters is the integrity of the Constitution of the United States.  It is up to the judicial branch of our government to make that determination, not a politician running for reelection.

We can only hope that the Supreme Court judges exercise their best and honest judgment. However, regardless of their decision, it will be the law of the land and if the people and Congress don’t like the decision, they are free to pass a new law that constitutionally accomplishes their goals.

A true leader may be disappointed in a court ruling as have some past Presidents, but his reaction should be to support the process and the constitution and let his comments be private.  It is not the job of the President to lobby the Supreme Court or to chastise it.

If we were to deviate from the rule of law and the interpretation of the Constitution, there would be no Affordable Care Act because the majority of Americans still oppose the law.  In a recent CNN/ORC International poll forty-three percent of Americans say they favor the Affordable Care Act.

Forty-three percent of Americans want some parts of the law overturned and 30 percent want the entire law overturned.  When it comes to the individual mandate to carry health insurance, a Kaiser survey found no group (Democrats, Republicans or Independents) where a majority of people looked favorably on the mandate.

Perhaps the President should focus on this “strong majority,” stronger than the majority that enacted the law.

Affordable health care and personal responsibility…we have long way to go baby

3 Apr

Twenty-five percent of Americans do not take their medication as prescribed (upwards of 75% for psychotic disorders), young, healthy (for now) people do not buy health insurance, 75% of black babies are born to unwed mothers, over thirty percent of Americans are clinically obese (the highest of any developed nation), depending on whose data you accept between 45 and 52 million Americans smoke, more than 22 million Americans age 12 and older – nearly 9% of the U.S. population – use illegal drugs, according to the government’s 2010 National Survey on Drug Use and Health and only 31% of Americans do enough regular leisure-time physical activity; about 40% do no regular leisure-time physical activity, government statistics show, the U.S. has the highest teen pregnancy rate in the industrialized world costing $9 billion a year in welfare and public health expenditures.

Hey, I’m a conservative kind of guy, I favor personal responsibility and accountability, including for the consequences of ones actions. However, if you want to know why making health care “affordable” is such a challenge, keep all the above in mind.

And guess what, these personal choices by fellow Americans cost you money, a great deal of money in both health insurance premiums and in taxes. There really is a price for freedom (to act irresponsibly).

Insurance coverage mandates are nothing new

2 Apr

The United States Supreme Court. The individual mandate to carry health insurance is under the microscope with a very basic question as to whether Congress has the authority to make such a requirement. Frankly, I don’t know the legal answer and given a unanimous verdict by the Supreme Court is unlikely, I guess no one else is 100% certain either. However, it seems to me that there is more than one way to create a mandate.

Take Medicare for example. Do you really have a choice of enrolling in Medicare? The obvious answer is yes you do, but hold on, is it a real choice? If you don’t want Medicare, can you buy other coverage instead? No you can’t, nobody can sell such coverage. Even coverage that supplements Medicare is regulated by the federal government and there is talk of trimming the coverage you can buy to pay your Medicare co-pays and deductibles.

Some people in Congress think too much insurance coverage leads to higher costs … they may have a point.

If you continue to work and have employer health coverage, you must keep your employer coverage even when you turn 65, you can’t use Medicare as your primary coverage even if you wanted to. Before this requirement was part of the Medicare law employers generally required you to use Medicare with the employer plan as supplemental.

If you delay enrolling in Medicare beyond your initial enrollment period, there is a penalty to pay. For Part B that penalty is ten percent for each year of delayed coverage; for Medicare Part D the penalty is 1% for each month you delay enrollment. In addition, you may enroll only during a three-month enrollment period held once each year. The reason for all this is simple; to prevent adverse selection when people enroll in coverage only when they anticipate using the benefits.

It seems that rules and regulations and penalties abound regarding your choices of health care, at least when you are as old as I am.

Granted the above are implicit mandates, but in the final analysis are they much different from the requirement to carry health insurance contained in the Affordable Care Act? This is the same logic used for the individual mandate under the Affordable Care Act; if you don’t take coverage, you pay a penalty to partially offset the additional cost created by those who enroll only when they expect to use the coverage. I am still free to not enroll for health insurance, but rather than pay a surcharge or suffer a delay in coverage when I decide I need it, I am required to pay an upfront penalty.

Such limitations and penalties are designed not to protect the individual, but the pool of insured that must eventually carry the cost burden for less responsible citizens. Boy, I’m glad I am not on the Supreme Court.

This debate all comes down to these rather simple words crafted by our Founders in the Constitution outlining the rights of Congress:

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

The essence of the argument seems to be whether Congress is creating commerce by requiring coverage and then regulating what it created.  Frankly, I think I could argue this either way and that’s scary. What is even scarier is that a one sided Congress hell bent on getting its way could not craft a better way to reach the same goal of expanded coverage without creating a Constitutional crisis. Arrogance has its unintended consequences too.

How the Affordable Care Act may affect your premiums

30 Mar

In the latest post on Health Insurance Illuminated I reflect on changes in health care coverage as a result of the Affordable Care Act. This is not a commentary on the changes themselves, but rather the purpose is to illustrate the likely impact such changes will have on health insurance premiums and the cost to employers of providing coverage for employees (and in some situations on your out of pocket costs).

Keep in mind that if you have employer subsidized coverage, that cost is part of your wages and the more that is needed to pay for the cost of your coverage, the less is available for your paycheck. That has always been true if course, but now we have a flurry of mandates, regulations, and other requirements that is unprecedented.

Take a look at this review of provisions of the law and their likely impact.

Affordable health care is still illusive

29 Mar

Following is a press release from the American College of Physicians. This release is in support of the Affordable Care Act mainly because it expands insurance coverage and makes things “free.” That’s fine if that is your point of view and main objective. However, what is not fine is linking all that with the idea of affordability. We seem to be hung up on the idea that something is suddenly affordable simply because we are not paying for it. Someone else is always not only paying, but paying more and more. This is not unlike individual’s who lease a car they cannot afford to buy or who take a vacation but pay for it over time with high interest. Both may create the illusion of affordability, yet neither truly is.

When you have learned, educated people writing things like this, you know there is something wrong, but the ACP is far from alone. A constant stream of press releases from the Department of Health and Human Services tries to convince Americans of the successes of the Affordable Care Act.

When we have affordable health care or even when we can define that, it will be time for celebration. For now we have a large, complex and extremely costly attempt to solve one aspect of the problem facing American health care. If a co-payment for a contraceptive is unaffordable to American women, how can even subsidized premiums ever be “affordable” as we seem to define that word?

“When these and other programs enacted by the ACA become fully implemented by 2014, it is estimated that 94 percent of legal residents in the United States

    will have access to affordable health insurance coverage,

with 32 million persons who now have no health insurance being able to obtain coverage. This will be a historic achievement in improving the health of the American people. Studies show that people without health insurance live sicker and die younger than people with coverage.”

News Release March 26, 2012

Contact: David Kinsman, (202) 261-4554
dkinsman@acponline.org
Jacquelyn Blaser, (202) 261-4572
jblaser@acponline.org

The Present and Future of the Affordable Care Act

Attribution:
Virginia L. Hood, MBBS, MPH, FACP
President, American College of Physicians

Washington — The American College of Physicians (ACP), representing 132,000 internal medicine specialists and medical student members, is pleased to report that the Affordable Care Act (ACA) has resulted in major improvements in access and coverage for tens of millions of Americans seen by internal medicine physicians. Considering that it is just a little over two years since the ACA was enacted into law, and many of its programs are not yet fully effective, the ACA has had notable success in improving health insurance coverage. Looking to the future, the ACA will ensure that nearly all legal residents in the United States will have access to affordable coverage beginning in 2014—if the law is allowed to be fully implemented.

Interestingly, the public policy discussion of the improvements made by the ACA on its two-year anniversary is taking place in a context when the Supreme Court is hearing oral arguments this week on lawsuits challenging the law’s constitutionality. ACP did not submit an amicus brief on the constitutional questions being considered by the Supreme Court because our expertise is in evidence-based assessment of the policies required to ensure that our patients have access to health insurance, not in constitutional law. But the evidence leads us to firmly believe that the ACA’s programs to expand health insurance coverage—including subsidies, health exchanges, essential benefits packages, an individual insurance requirement, and a single national eligibility standard for Medicaid—are necessary to help protect and ensure the health of the American people.

The ACA Already is Helping Millions of People

As a direct result of the ACA:

Ø 2.5 million young adults kept their health insurance coverage because they were allowed to stay on their parents’ plans. The percentage of people between ages 19 and 25 being carried as a dependent on a parent’s employment-based coverage increased from 24.7 percent in 2009 to 27.7 percent in 2010. The number of young adults with employment-based coverage as a dependent increased from 7.3 million to 8.2 million.

Ø Through the end of July 2011, 1.28 million Americans with Medicare received discounts on brand name drugs in the Medicare Part D coverage gap — up from 899,000 through the end of June and 478,000 through the end of May. These discounts have saved seniors and people with disabilities a total of $660 million. Figures released a week ago from the Department of Health and Human Services indicate 5.1 million seniors have saved more than $3.2 billion on prescription drugs because of the ACA.

Ø More than 18.9 million Medicare beneficiaries, or 55.6 percent, have received one or more preventive services at no out-of-pocket cost to them.

Ø The National Health Service Corps, which receives mandatory funding under the ACA, has awarded nearly $900 million in scholarships and loan repayment to health care professionals to help expand the country’s primary care workforce and meet the health care needs of communities across the country. There are nearly three times the number of NHSC clinicians working in communities across America than there were three years ago—increasing access to health care. In 2008, approximately 3.7 million patients were provided service by 3,600 NHSC clinicians. With field strength of more than 10,000 clinicians, NHSC now provides health care services to about 10.5 million patients.

The ACA will Help Many Millions More over the Next Two Years

Many patients seen by internal medicine specialists have multiple chronic diseases (often labeled as “pre-existing conditions” by health insurers), which makes it very difficult for them to find health insurance at a premium they can afford. Under the ACA, insurers won’t be allowed to exclude them from coverage, charge them an excessive premium, or refuse to renew their coverage. These protections, already in effect for children, will become effective for adults on January 1, 2014.

Studies suggest that an individual requirement is needed for such reforms to work. Without an individual insurance requirement, some people may wait to obtain insurance until they are sick, aware that insurers will not turn them down or charge them higher premiums (except for family size and tobacco use). This will drive up premiums for everyone else, causing more persons to drop coverage, and potentially, resulting in millions more uninsured persons.

ACP also strongly supports requiring Medicaid to cover all persons with incomes up to 133 percent of the Federal Poverty Level. This change, which initially will be paid for by the federal government, is the most effective way to ensure that low-income persons have access to coverage. Some 16 million vulnerable Americans will receive coverage from this change.

When these and other programs enacted by the ACA become fully implemented by 2014, it is estimated that 94 percent of legal residents in the United States will have access to affordable health insurance coverage, with 32 million persons who now have no health insurance being able to obtain coverage. This will be a historic achievement in improving the health of the American people. Studies show that people without health insurance live sicker and die younger than people with coverage.

ACP fervently hopes that the Supreme Court will chart a course that does not derail implementation of the ACA’s key programs to expand coverage, while responsibly carrying out the court’s constitutional obligation to clarify the constitutional questions. And we hope that a day will come when Congress will be able to move beyond a partisan debate over “repeal and replace” of the ACA to discussion of bipartisan improvements that could be made in the law, without sacrificing the commitment it made to helping nearly all Americans obtain affordable health insurance coverage.

***
The American College of Physicians is the largest medical specialty organization and the second-largest physician group in the United States. ACP members include 132,000 internal medicine physicians (internists), related subspecialists, and medical students. Internists specialize in the prevention, detection, and treatment of illness in adults. Follow ACP on Twitter and Facebook.

Why do my health insurance premiums keep going up?

28 Mar

Why do health insurance premiums keep rising? Good question; the answer is simple and complicated. The simple part is because health care costs keep rising, the complicated part is why.

I have written a lengthy discussion on this topic on the Health Insurance Illuminated blog.

I urge you to take a look here.

Are we serious about health care REFORM or just the promotion of “more?”

27 Mar
Nancy-Ann DeParle, director of the White House...

Nancy-Ann DeParle, director of the White House Office for Health Reform, at a senior staff meeting in the Oval Office. (Photo credit: Wikipedia)

I have long maintained that health care is too emotional for any of us to look at costs and efficiency objectively. We see or hear that a person was fully covered by their insurance and it’s a good thing.  An insurer was made to pay for this or that and it’s a good thing.  The idea that we care about cost is questionable and when it comes to ourselves or a loved one, there is no question that we do not care about the cost of health care at all.  It’s human nature after all and the very reason external control of some type is necessary if we are to seriously manage costs.  That control may come in the form of managed care, following certain guidelines for care, etc.

 
That human nature factor in health care does not go unnoticed by our politicians who cannot resist playing up the individual benefits of health care reform without regard to the cost.  At the same time that the Secretary of HHS trumpets the Department declining “unreasonable” premium rate increases, the White House promotes all the aspects of the affordable Care Act that increase costs.  This is not to say helping individuals is a bad thing, but it is also a costly thing and that simply cannot be pushed under the rug as if it does not matter.
 
We all know certain individuals are benefiting from the Affordable Care Act. Any time you give people more stuff and “free” stuff somebody is going to benefit and somebody else is going to pay for it.
 
If we can’t look at the cost of our own health care objectively, we should expect our most senior policymakers to do so for us collectively.  Good luck with that as it appears their main objective is promotion of all the goodies.   That is a great disservice to us all.
 
Text of e-mail from the White House:

Good afternoon – 

Too often in Washington, politicians tell compelling stories about individuals when they are trying to make a point. But once the news cycle moves on, those people keep living their lives and confronting the same problems. 

Health reform is different. 

We met Nathan and his son, Thomas, in 2009. Thomas was born with hemophilia, and he hit lifetime limits on his health coverage with two different insurance companies before he turned seven years old. Two years ago, Nathan was hopeful about what the Affordable Care Act would mean. 

Last week we spoke with Thomas’s family again and they made it clear: Health reform has improved their quality of life. It means they can focus on making sure Thomas has the best possible care. It’s changing their lives for the better. 

It’s a powerful thing to watch. Go check it out. 

Thomas is not alone. He’s just one of the 105 million Americans who no longer have lifetime dollar limits on their coverage. 

The Affordable Care Act gives hardworking, middle class families the security they deserve. Because of health reform, 54 million Americans with private insurance have been able to access more preventive services. In the 2011 tax year, two million workers will benefit from the small business health insurance tax credit. And 2.5 million young people under age 26 have gained coverage on their parents’ plan. 

Behind each of those numbers is a person like Thomas. Two years after President Obama signed the Affordable Care Act, life is a little better for millions of Americans from all over the country. 

So take a moment to hear some of their stories and hear why this matters for Americans across the country: 

http://www.whitehouse.gov/health-care-story 

Thanks,

Nancy-Ann 

Nancy-Ann DeParle
Deputy Chief of Staff 

P.S. — Learn about more individuals who are benefiting from the Affordable Care Act with our map that shows the impact of reform, state by state.

 
 
 
Related articles

Your employer based health care benefits are going to change. Intentional or not the Affordable Care Act will change your benefits

26 Mar

The great debate about health care reform for millions of Americans with employer based coverage is whether they can keep the coverage they have and like. It is true that there is nothing in the Affordable Care Act that takes employer-based coverage away. However, there is much in the Act and because of the Act that will cause employer based coverage to degenerate and ultimately vanish in its current form.

The most recent factor is the attempt to accommodate religious organizations with regard to contraception. Proposed rule making tries to accommodate insured and self-insured plans but in the process is turning the entire idea of self-insured coverage (and in fact, the very concept of insurance) on its head which may well disrupt the existing process. Here is a link to the proposed rule.

Collectively the new mandates, compliance rules and other requirements are adding additional cost and complexity to employer plans thus providing additional incentive to escape the health care benefit business.

The change in tax status for employer sponsored retiree prescription plans has already caused restructuring of those plans.

The coming health insurance exchanges will provide more employers with the incentive to drop coverage and pay the fine. Even if employers boost earnings to partially compensate for this loss of benefits, future wage costs are far easier to manage than health care costs thus enhancing the incentive.

In addition, there is an initiative starting private exchanges for large employers that has indirectly been advanced the Affordable Care Act. These exchanges will be offered to employers in lieu of operating their own plans. The employer provids a defined amount toward the cost of coverage and the employee selects coverage from among the insurance plans in the exchange. The bottom line is that employees do not get to keep their current coverage in concept or in practice.

Add to this the fact that health care costs are going to continue to increase more than general inflation or wages and you have the perfect storm to undue seventy-five years of employer health benefits. No, it’s not going to happen over night, but within the next ten years your health care coverage will be very different.

Just as with retirement benefits, remember the words “defined contribution.”

The five real problems with the health care reform law

23 Mar

May_30_Health_Care_Rally_NP (397)

Left, right or center, you can find people who have major problems with the Affordable Care Act.  Then at one end of the extreme are people who see it as the greatest thing since sliced bread and at the other a near end to our republic.  But all those folks are missing the point.  While there are attempts to tweak the health care system (with regard to Medicare) contained within the Act, the primary goal is expanding coverage above all other considerations. 

And that leaves us with the real problems.

  1. The Affordable Care Act reinforces the idea that much of our health care should be “free” or at virtually no cost. 
  2. The Act promotes the idea that health care costs are the premiums we pay rather than the cost of the health care we receive. 
  3. The Act falsely transfers blame from individuals (patients) and the system to insurance companies
  4. The Act creates the impression that costs can be managed while maintaining the status quo in terms of access to unlimited health care or merely by cutting payments to some health care providers
  5. The Act deceives Americans with employer-based coverage by claiming their coverage will not change as a result of the Law.

 It is for these reasons that it is unlikely the Act will make health care truly “affordable” to individuals or to the government, or raise the quality of our health care.   

Related articles

To understand the lies (about the Affordable Care Act), you first have to understand the truth.

22 Mar

In a March 18 opinion column in the New York Times Paul Krugman writes about the success of the Affordable Care Act in “Hurray for Health Reform.”

He writes in part:

To understand the lies (about the Affordable Care Act), you first have to understand the truth. How would ObamaRomneycare change American health care?

For most people the answer is, not at all. In particular, those receiving good health benefits from employers would keep them. The act is aimed, instead, at Americans who fall through the cracks, either going without coverage or relying on the miserably malfunctioning individual, “non-group” insurance market.

He goes on to pan the critics, call them liars and claim that costs are not understated and that there has actually been some mitigation of health care costs even before the most significant sections of the Act are implemented.

Mr Krugman is known as a smart man and I suppose he is, but he is also an ideologue.

In his article he ignores key points and focuses on the most obvious supposed benefits of health care reform – adding millions more to a very flawed unsustainable system. He picks and chooses “facts” and I suspect he has not read many of the reports from the Congressional Budget Office nor is he apparently aware of what is happening among employers and eventually to employees as a result of this Act.

No matter, he makes the key point for anyone seriously concerned about the impact (or lack thereof) of the Affordable Care Act in the above quote. “How would ObamaRomneycare change American health care?” “For most people the answer is, not at all.”

You see, the primary goal should never have been to expand coverage, but rather to change the system to truly make health care more affordable so that the need to expand government subsidized health care was minimized. In true liberal fashion we have gone at this ass backwards.

And no, those with good health benefits from employers will not keep them because employers are seeing an opportunity to make major changes in their benefits and in the employer role in providing coverage as a direct result of the Affordable Care Act. They are also seeing increasing costs despite the temporary lull in the rate of escalation for health care premiums.

At this stage it is impossible to say the Affordable Care Act is a success or failure no matter how smart you may be. It will be many years before we know the real results of the scores of initiatives started through Medicare or the full cost of new mandates and government subsidizes or the ultimate impact on workers with good coverage today and especially the final impact on the federal budget.

Politicians oppose Medco merger – for all the wrong reasons

21 Mar

The following is from a resolution of the NJ. Assembly urging the governor to oppose the merger of Medco, the pharmacy benefit manager, and Express Scripts:

“This market dominance will leave customers with limited bargaining power, allowing pharmacy benefit managers to charge more for their services. The increased cost will inevitably be transferred to the patient. The merged entity would also have greater power to steer plan participants to its own mail-order pharmacy by providing incentives such as lower co-payments, by limiting the pharmacies in the participant’s network or by requiring mandatory mail-order prescriptions, thereby preventing the patient from using the pharmacy of their choice and restricting their access to community pharmacists,” the resolution said. “Lastly, the merged entity would have a greater ability to drive down the reimbursement rates for community pharmacies, forcing pharmacies to raise prices and cut back on hours, services and employees, thereby threatening the existence of community pharmacies.”

Once again politicians miss the point and in the process don’t help the health care cost situation. Pharmacy benefit managers (PBMs) such as Medco work for insurance companies and large employers (the customers) who are the entities that determine the design of their benefits such as use of mail order, co-pays, penalties for not using generics, etc. Employers negotiate for these services and encourage use of mail order, formulary drugs and overall the least expensive prescription possible and appropriate. The big players in the PBM field must have a large number of participating pharmacies to make their plans work. True, small local pharmacies will struggle especially as there is a squeeze on the wholesale price of a drug and the dispensing fee paid by the PBM on behalf of the health plan to fill a script. Those who cannot survive with ever lower fees will not exist.

However, the same is true for hospitals and doctors as Medicare and others seek to reduce fee payments. This is exactly why you are seeing more and more consolidation and more doctors seeking employment in hospitals. Lower payments to all health care providers whether it be for each fee or by paying for fewer services is how you lower health insurance premiums … period.

So, what exactly are our priorities and goals in all this? Do we want the lowest possible price for drugs from whatever source, do we want lower health insurance premiums, do we want lower cost-sharing options for patients or do we want to preserve the existence of community pharmacies that may provide highly desirable personal service but cannot compete on cost just as your local market cannot compete with the Walmart’s of the world? Heck your local pharmacy cannot compete with a Walmart pharmacy.

All the political rhetoric in the world will not change the hard facts. The self-serving organizations trying to preserve the status quo (quite understandably of course) are working against the very kind of changes we need …. that is, if we really do care about health care costs.

The Affordable Care Act expanded coverage and increased benefits, but it did not change the fundamental system.

Here is the real question. Is America up to that challenge?

How much health care can $10 a week buy?

20 Mar

In the 1980s while negotiating a union contract I was trying to make the case for raising the deductible and coinsurance in the health benefits plan. As part of my pitch I made an analogy with other forms of insurance.  What I said was that if you look at auto insurance, it doesn’t pay for an oil change or new tires.  One union representative said his wife had just had surgery and did I expect him to pay for that. The point was that not everything is insurable and some cost sharing is fair and desirable.  What I got back from the other side of the table was, “Are you comparing my wife to a car?”

The Health Lottery

Actually, I was comparing spending $20 on an oil change and $20 on an office visit coinsurance, but that didn’t matter.  That “Are you comparing my wife to a car?” syndrome is not unusual because we cannot get past the attitude that paying for health care is not the top priority for spending our money.

Here is another way to look at this.

Georgia residents spent an average $470.73 on the lottery in 2010, or 1 percent of their personal income.  Only Massachusetts (STOMA1) had higher spending, $860.70 per adult, more than three times the U.S. average. Georgia had per capita income of $34,800 in 2010, below the national average of $39,945, while Massachusetts’s was higher at $51,302, according to data compiled by Bloomberg.

In fact, in Georgia the median household income 2006-2010 was $49,347 and 15.7% of the population is below the poverty level. Under the Affordable Care Act a family with an income of $50,000 will receive a premium subsidy a little over $12,000 per year plus cost-sharing subsidies up to an additional $3,600 per year.

Clearly spending several hundred dollars on the lottery is not equal to the cost of health insurance, but the lottery is not the only non-necessity people spend money on. In other words, what is unaffordable is a lot more than health care, but we tend to reset our priorities so that the $80 office visit is unaffordable, but the lottery ticket is not.  Go figure.

Logically our priorities would be more like this:

  1. Food
  2. Shelter
  3. Health care
  4. Clothing
  5. Saving
  6. Retirement
  7. Education
  8. Other stuff
  9. Vacations
  10. Gambling

Exactly where are our priorities?  What is affordable?

Related articles

The contraception under the table cost shift

19 Mar

If you think the Obama administration has extricated itself fom the “pill” problem, you would be wrong. It appears there really is no alternative for religious employers that has been finalized. However the direction is clear, you are going to pay for this “free” health care twice.

Here are two alternatives under consideration (as reported by the WSJ):

Under one scenario, administrators of self-insured plans would be required to cover the costs of providing contraception and recoup the money through revenue they get from sources other than the religious employer.

Another option would involve repaying insurance companies for the contraception coverage through a broader system that will be implemented after 2014 in order to redistribute funds among insurers to compensate those who take on riskier customers.

Given virtually all large employers are self-insured, the first alternative means that administrators will recoupe the cost for contraceptive coverage from their non-religious employer clients, that means the company you work for.

Our policymakers demonstrate time after time their penchant for short term narrow thinking and apparent lack of understand of human nature or how the health care system works.

Hey guys, it’s all connected, there is no “free” but there sure are a lot of unintended consequences to what you are doing these days.

Independent Payment Advisory Board (IPAB) under attack from all sides; who has a better idea? Rationing, you say, you betcha!

16 Mar
OBAMACARE WATCH:.....CONGRESSIONAL BUDGET OFFI...

About that $3.1 billion

The Independent Payment Advisory Board contained in the Affordable Care Act has come under fire since it was first floated as an idea. The purpose of the IPAB is to find ways to control the cost of Medicare when certain expense targets are exceeded. The Board is limited in what it can do to affect this control, but that doesn’t seem to matter to critics. It is perceived as government control over health care and an initiative that is counter to allowing the markets to dictate costs through competition. 

First the IPAB was the dreaded “death panel,” now it will exercise too much bureaucratic control over the health care system and finally there is H.R. 452, the Medicare Decisions Accountability Act of 2011, a bill to repeal the Board entirely. The repeal believe it or not has (or had) some bi-partisan support until Republicans tied other changes to the legislation.  Now there is another snafu because the Congressional Budget Office reported that repealing the IPAB would increase direct spending. Here is what the CBO said on March 7.

SUMMARY 

H.R. 452 would repeal the provisions of the Affordable Care Act (ACA) that established the Independent Payment Advisory Board (IPAB) and created a process by which that Board (or the Secretary of the Department of Health and Human Services) would be required under certain circumstances to modify the Medicare program to achieve certain specified savings.

CBO estimates that enacting H.R. 452 would not have any budgetary impact in 2012 but would increase direct spending by $3.1 billion over the 2013-2022 period. That estimate is extremely uncertain because it is not clear whether the mechanism for spending reductions under the IPAB authority will be triggered under current law over the next 10 years. However, it is possible that such authority would be triggered in one or more of those years; thus, repealing the IPAB provision of the ACA could result in higher spending for the Medicare program than would occur under current law. CBO’s estimate represents the expected value of a broad range of possible effects of repealing the provision over that period.

An opinion piece in the Wall Street Journal, March 9, 2012 is less than friendly to the IPAB and less accurate than one would hope. However, most disturbing about ongoing criticism are both the lack of viable alternatives and a lack of understanding about how the system works. These factors coupled with a misplaced faith in market forces and competition is getting us nowhere fast both with Medicare and the health care system in general.

…IPAB really does embody ObamaCare’s innermost values and beliefs—to wit, that health decisions are too important to leave to the people receiving the care (patients), the people providing the care (doctors and hospitals), the people paying for the care (taxpayers), or even the people who got the government involved in the first place (politicians).

Instead, supposedly independent experts will run a battery of small experiments, figure out which ones “work” and then impose them through Medicare’s price controls on all U.S. medicine. When health spending in a given year exceeds a budget benchmark, as it always does and will, the 15 White House-appointed wise men will work their miracles…

Those “experiments”  will be changes in the way we pay for health care, perhaps similar to what is already being tried in the form of Accountable Care Organizations, bundled payments, hospital readmission programs, medical homes, etc.  Will they all work, probably not, but what’s new. If they don’t work, I can tell you one thing, it will be in large part because neither patients not providers want them to work.

The WSJ also says this:

“It’s also among the reasons Paul Ryan’s Medicare reform is so much better than Mr. Obama’s. Beneficiaries would receive a “premium support” payment to buy insurance, and insurers and providers would compete for business on value for money. What “works” is what millions of consumers decide.”

“Premium” and “support” are two words that also mean “defined contribution”, a tact now being taken by more and more employers which is merely a form of cost shifting.  Simply put, the beneficiary gets a fixed amount of money to spend on health care or the purchase of insurance.  They are then free to buy what they want with the fixed amount of money while any additional expenses come from their pocket.  In the case of Medicare the theory is that with this payment beneficiaries will be free to buy traditional Medicare or any of a number of other private plans that will “compete” for the fixed pool of money.  But how does all this competition save money?  Medicare is already the lowest payer except for Medicaid. Do we expect private plans to exert stronger oversight over claims and services provided, like tighter medical necessity controls, tighter networks, etc?  Sounds like another form of the dreaded rationing, either that or more interference between patient and their doctor.  Isn’t that what we have been accusing insurers of doing and what we don’t like?

We have well-intentioned dreamers out there who sincerely believe that empowered patients will seek efficiency forcing prices down and that somehow private insurers have a magic bullet that allows them to control costs.  If all that is true and if we are truly concerned about health care costs why hasn’t competition already worked?  Insurers compete for business among employers, there are many different insurers in a given area, patients are free to change coverage and in large employers to choose among several health plans. In many cases spouses can choose between two different employer plans. In other words, there is a lot of choice out there already.  Is cost a motivator?  Employees of employers large and small are paying thousands of dollars a year in premiums and that’s only a small portion of the cost, but you would think that paying $4,000 to $6,000 in premiums would provide motivation to shop around.

In addition to the fact that health care purchases are like no other purchases, there is one factor none of the current proposals consider. Pricing is left to the health care providers.  Medicare and Medicaid set prices which are 20% or so below market, each private carrier then negotiates an acceptable fee with providers and providers who do not accept an in-network fee charge the patient whatever they want and the patient has no recourse.  It’s the pricing stupid!

The only alternative, and the IPAB’s true end game, is harsher and more arbitrary price controls and eventually limits on the care patients are allowed to receive. The New England Journalists (of Medicine) deny this reality because ObamaCare has a clause that prohibits “rationing,” even as the law leaves that term undefined. But reducing treatment options will be inevitable as government costs explode.

Yes, WSJ, that is the end game.

Note to America: Whether it is price controls, premium support, or limits on what will be paid for, it is all “rationing.”  If we are going to save money and lower the future trend for health care costs, we must spend less money.  If anyone thinks we are all going to get the same, unlimited, open-ended health care we now think we need, or that providers will have the same level of income, then we are just kidding ourselves or we are outright fools… go ask the rest of the world.

Related articles

Is an Accountable Care Organization in your future? Let’s hope so

15 Mar

The New York Times, March 13, 2012 contains an article on the growth of Accountable Care Organizations (ACO) spurred by the Affordable Care Act with regard to Medicare patients. The article says in part:

A.C.O.’s, as they are known, are collections of medical providers who band together under one business umbrella. The organization can include primary care doctors, specialists, social workers, pharmacists and nurses. The difference is in how these providers are paid: Instead of an insurance company or the government reimbursing each provider for each service provided to each patient, the A.C.O. is paid simply to care for a group of patients.

If the ACO can reduce the cost of caring for the patients while maintaining their health, it gets to keep and divide up some of the savings — a powerful incentive to do things differently, experts hope. But if the A.C.O. cannot meet quality measures and costs rise, the providers in the organization may well receive lower payments.

For those of you who have been around awhile this may sound strikingly like an HMO and in many ways it is. HMOs paid either salaries to physicians or a capitation, a fixed fee per patient per month to provide all needed care. One big difference with the ACO is that the patient is free to seek medical care outside the ACO at any time without prior approval. However, this freedom may be a shortcoming as it violates this main goal of coordinated care.

Medicare patients will be placed into an ACO without their knowledge and may never know their providers are within the ACO. ACOs are slowly growing for the non Medicare population as well.

Before you jump all over this as a violation of your Constitutional rights, consider the benefits to better coordinated, more efficient care. Forget the potential cost savings, what you should really care about is better health care, less duplicate tests and unnecessary care, more coordination among your doctors and other providers. Saving money is a side benefit.

Will the ACO model work? That is open to debate. However, in my view changing the system in this way is the last best hope before outright price controls as used in most other countries. The problem is that it will be a decade or more before ACOs are sufficiently widespread to measurably affect health care quality and cost for the general population.

HMOs failed because patients didn’t like closed networks and because we perceived skimping on care to save money (a sad commentary on the faith we put in our health care providers). Let’s hope the same questionable allegations do not kill the ACO before it gets a fair chance. Some providers see it unfair to place the financial risk mostly on providers and fear payments will be insufficient to cover costs. Only time will tell if we get it right this time.

Price fixing may save money in the short run, but it will do nothing to improve or perhaps even sustain our quality of health care.

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