Health Insurance

COVERAGE: Connecticut Examines Gender Disparities In Insurance Rates

Meredith Hughes — Thu, 12 Feb 2009 16:20:00 -0500

Risk-adjusted rates or a case of gender discrimination?

That's exactly what Connecticut lawmakers are trying to figure out, according to the Hartford Courant. This week, lawmakers heard testimony on a proposal to ban the consideration of gender in determining health insurance rates on the individual market.

A report released by the National Women's Law Center in September found that 40-year-old women in Connecticut pay an average of four to 48 percent more for health insurance than 40-year-old males enrolled in the exact same plan. The range of variation in premiums increases for women over 55—they can pay anywhere between 37 percent more or 22 percent less than their male counterparts. Connecticut Attorney General Richard Blumenthal has spoken out against such disparities, arguing that it should be just as illegal to base rates on gender as it would be to base rates on considerations such as race or religion.

Not everyone agrees that gender disparities are a form of bias. Health insurance industry lobbyists have argued that they're not discriminating—they're just looking at the numbers. Speaking on behalf of the Connecticut Association of Health Plans, Keith Stover warned that eliminating the consideration of gender from rate determination wouldn't stop rates from going up for some and down for others, potentially leaving low-risk groups without insurance because their premiums will increase.

Last year, the New York Times reported on the NWLC study, warning that problems with individual health insurance rates are going to become more pronounced in the current economic downturn, as more people lose their jobs and have to find health care coverage on their own. Insurers have argued that women under 55 are simply more costly to insure, because they use more health care services, especially in relation to pregnancy. However, as we have discussed previously, most individual market health insurance plans do not actually include coverage for pregnancy. Women also face other obstacles in acquiring coverage—those who have had cesarean sections and survivors of domestic violence are also frequently denied coverage.

If the Connecticut measure passes, the state will join Maine, Montana and New York, who have already passed similar legislation prohibiting the consideration of gender in the determination of individual health insurance rates.

HEALTH REFORM: President Obama Outlines the Message and the Mission

Joanne Kenen — Wed, 11 Feb 2009 15:54:00 -0500

President Obama, with Florida Republican Gov. Charlie Crist at his side in a bipartisan example that maybe some folks in Washington might want to pay attention to, held a town meeting in Fort Myers on Tuesday and told the crowd how and why health reform was part of his economic recovery agenda. He made the connections between the cost to families and the cost to the whole strained economic system, and pointed out the waste and frustration that could be reduced if we moved from massive paperwork to streamlined computerized health records. Here's the exchange:

QUESTION: Welcome to southwest Florida. In light of the fact that you've inherited an economic crisis, where does your priority lie with health care reform?

OBAMA: Well, it's a great question.

And I think it is — there are some people who are making the argument that, well, you can't do anything about health care because the economy comes first. They don't understand that health care is the biggest component of our economy and, when it's broken, that affects everything.

I mean, we've got a system right now where the average person has seen — even if they've got health insurance, the average family has seen their premiums double over the last eight years. Folks are paying twice as much. Co-payments have gotten higher; deductibles have gotten higher. And now, with people losing their jobs, they're also losing their health care.

Businesses are also less competitive because of the fact that, here in the United States, we spend more than anybody else does. Any other nation on Earth per capita we spend more on health care, but we don't get better results, and companies are paying for that.

So when they're competing against —you know, if a U.S. carmaker is competing against a foreign carmaker, they've got all these extra health care costs that they've got to deal with.

And, finally, Medicare and Medicare— or Medicare and Medicaid are draining state budgets and federal budgets in a way that's unsustainable over the long term. So health care has to be part of the solution.

Now, in the recovery package, there are a couple of things that we do immediately. Number one, we're providing some help to Governor Crist and the state, because now they are getting more Medicaid claims and we've got to make sure that they can just meet the basic needs of citizens here in Florida.

Number two is, what we have in this bill is a mechanism so that we will subsidize people to keep their health care even if they lose their job. How many people here know what COBRA is?

All right, now, COBRA is the law that says that, if you lose your job, you can keep your health care and you go through COBRA. Here's the only problem: If you've lost your job, who can afford $1,000 a month or $1,200 a month for health care? You can't afford it.

(APPLAUSE) So part of this plan says we will subsidize a significant portion of what your health insurance costs so that you can actually afford to keep your health care. That's number two.

Number three —and this is an example of using a crisis and converting it into an opportunity. One of the problems with our health care system, it is so inefficient, you go into the hospital, and what's the first thing you've got to do? You've got to —even if you've got insurance, what do you have to do? You've got to fill out so many forms, and there's paperwork, and there's this, there's that.

Then you go and you get your examination, and they've got a clipboard with all this paper on it. And then the doctor's writing out something and the nurse can't read it.

And, you know, the fact is, is that it causes huge amounts of medical errors. We've got all this bureaucracy. One of the simplest, most effective things that we could do is to convert from a paper system to an electronic data system.

Now, think about it. Health care's the only area where we still use paper. I mean, the banks, that's all computerized. So if you've got a credit card, that's all on a computer so they can find you any time you don't make a payment, and that computer's calculating every dime of interest you've got to pay and — right? It's all very efficient.

But when it comes to health care, it's a disaster. So what we did is — in this plan, in the House bill that— that passed, one of the things that we do is we say we are going to computerize our health care system, institute health I.T. That creates jobs right now for people to convert from a paper system to a computer system, but it also pays a long-term dividend by making the health care system more efficient.

So, now, those are things that we're doing immediately. We are also then— got to deal with the long-term problem of both cost and coverage. You've got over 45 million people who don't have health insurance and people who do have health insurance are seeing their costs rise too fast.

OBAMA: And so, in addition to—to computerizing the health care system, we've got to emphasize prevention. We've got to make sure that people have regular checkups.

We made a down payment on it this week— and I did it, by the way, with the help of a lot of these members of Congress -- by passing a new SCHIP— that's the children's health insurance bill— that provides millions of children, who didn't have health insurance, health insurance.

(APPLAUSE)

My hope is, over the course of the year, I'm going to be able to work with Congress to move forward a bill that gets us on track to every single person in America being able to get affordable, decent health care coverage.

We are a wealthy enough country to do it, and that's going to be one of my top priorities as president of the United States.

COST: Cancer Costs Can Be A Killer Too...

Joanne Kenen — Thu, 05 Feb 2009 20:38:00 -0500

Michael Courtney was 41 years old when he was diagnosed with a rare form of lymphoma. It started on his tongue, but spread quickly. He has had radiation and chemotherapy. Treatment will continue indefinitely. So will his bills.

An auto mechanic, Courtney was hesitant about changing jobs because he didn't want to lose his health insurance. But a new employer promised immediate benefits so he took the job. He was even able to stay with the same insurance company that he had at his old job. But a month into the new job, he found that the new policy wouldn't cover his cancer for three months. His disease was a pre-existing condition. Already strapped with medical bills, he postponed treatment.

Courtney's story is one of 20 real-life experiences of patients that gives the human dimension to a new report by the American Cancer Society and the Kaiser Family Foundation released Thursday. Based on calls to the Cancer Society's insurance help line, the study called "Spending to Survive" concluded that after a cancer diagnosis, the financial implications may not be the first concern "but for many, it soon becomes one." Even people with health insurance face enormous financial obstacles to care.

"This should set off alarm bells," said Kaiser president Drew Altman. People tend to think their insurance covers them when they become seriously ill. That is not always the case.

Cancer patients too often find out that their insurance doesn't protect them when they need care the most," said John Seffrin, CEO of the Cancer Society. "High out-of-pocket costs coupled with the high cost of insurance premiums can force cancer patients to incur huge debt, and to delay or forgo life-saving treatments."

Here are some of the common problems cancer patients face:

High cost-sharing. Deductibles and co-pays can add up fast, and it doesn't take much to send a struggling family into bankruptcy.
With treatments costing tens of thousands of dollars, cancer patients can breeze through insurers' annual or lifetime caps on benefits.
People who become too sick to work may lose their employer-sponsored coverage, and COBRA is expensive.
Individual policies generally have less comprehensive benefits than job-linked plans—if the patient can even get coverage in the individual market. Both patients and long-time survivors often find it impossible to get coverage.
State high-risk pools are not open to all cancer patients. Some have waiting lists to get in, waiting periods for certain treatments, and very high costs. Waiting can mean the difference between life and death for some cancers.

Of course for the uninsured, it's even worse. There's long been data that uninsured people with cancer fare worse than the insured. But the discrepancies can be truly shocking. Seffrin said that an insured person diagnosed with stage two colon cancer has a better prognosis than an uninsured person with stage one. Stage one is the earliest and most treatable stage which, he said, "one could argue no one should die of."

So as we as a nation get to work at fixing our health care system, we have to remember the underinsured, as well as the uninsured. We need to address the cost of care and develop ways of learning more about what works and what doesn't work for cancer patients. And we need to remember, as Georgetown University health policy expert and 13-year cancer survivor Karen Pollitz said at the panel discussion at Kaiser, that "pretty good" insurance isn't good enough if it leaves people broke. "We need to look at health insurance first through the lens of people who get really sick," she said, recalling how stressed she was during her treatment even though she had excellent coverage. People need insurance that "won't leave them in a lurch, that won't leave them bankrupt, that won't leave them stressed out and crying on their kitchen floor." Or as Seffrin put it, "We need a rational health care system that gives people what they need, when they need it."

COVERAGE: Jobless Scramble to Find Massachusetts Insurance Niche

Joanne Kenen — Mon, 02 Feb 2009 21:32:00 -0500

Our readers know that we give Massachusetts a lot of credit for forging ahead with its program to cover everyone, although we recognize the economic and logistical challenges. The Boston Globe takes a closer look at how families are cobbling together coverage, even in Massachusetts, where unemployment has reached a 15 year high. Here are three stories that the Globe's Kay Lazar found when she looked "at the people behind the statistics."

Vivian Izuchi, 53, a married mother of three, lost her job as director of a church after-school program. She got another similar job fairly quickly, a blessing in this economy. But the last one had health coverage. This one doesn't. "I am investigating everything and anything I can," she told the newspaper, as she sorts through a "maze of state-subsidized programs" to see if her family qualifies. Her husband is now unemployed, so no on-the-job insurance option there.

Cynthia MacPherson, 46, lost her part-time job as a manager at a restaurant and her husband Jim, 50, lost his at a construction equipment firm. She estimates she has spent 100 hours calling around trying to get coverage for their family of five. It's particularly frustrating because they thought his severance package had them covered through May for $300 a month. But a paperwork mix-up got in the way, and they have received huge bills for their diabetic daughter's treatment. The paperwork snafu seems to be fixed now, and a state-subsidized MassHealth will fill in some of the coverage gaps. They hope. "It's scary to think that this could still fail," she said.

Aria Weissman is a recent college grad who had been working at a nonprofit helping troubled kids. Then the economy crashed, and she was laid off. She's now facing $30,000 in student loans, $500 in unpaid medical bills, plus the usual day-to-day expenses. She is "waitressing full time, sending out resumes, and hoping she doesn't get sick."

The stimulus bill being considered in Congress would help some of the newly-jobless get coverage through COBRA subsidies or Medicaid eligibility. SCHIP expansion can also help some of these families. Those are stop gaps though. Long-term solutions will be found in the entwined tasks of reviving our economy and repairing our health care system.

HEALTH REFORM: Krugman's View on Why It's So Urgent

Joanne Kenen — Fri, 30 Jan 2009 17:10:00 -0500

"The whole world is in recession. But the United States is the only wealthy country in which the economic catastrophe will also be a health care catastrophe—in which millions of people will lose their health insurance along with their jobs, and therefore lose access to essential care."

That's how Paul Krugman began his latest column, reminding us what's at stake. Today's economic indicators are grim, and the headlines are full of more job cuts.

Krugman asks, "Why has the Obama administration been silent, at least so far, about one of President Obama's key promises during last year's campaign—the promise of guaranteed health care for all Americans?" We aren't quite as impatient. The inauguration was only 10 days ago, HHS Secretary-designate Tom Daschle hasn't been confirmed, we know there's a ton of preparatory work being done on the Hill, and we've been hearing for a while that health reform wouldn't really start moving until March anyway.

But it's still worth listening to Krugman's reminder of why we can't be lulled into thinking health reform can wait:

Let me address three arguments that I suspect Mr. Obama is hearing against moving on health care, and explain why they're wrong.

First, some people are arguing that a major expansion of health care access would just be too expensive right now, given the vast sums we're about to spend trying to rescue the economy.

But research sponsored by the Commonwealth Fund shows that achieving universal coverage with a plan similar to Mr. Obama's campaign proposals would add "only" about $104 billion to federal spending in 2010—not a small sum, of course, but not large compared with, say, the tax cuts in the Obama stimulus plan...

...Second, some people in Mr. Obama's circle may be arguing that health care reform isn't a priority right now, in the face of economic crisis.

But helping families purchase health insurance as part of a universal coverage plan would be at least as effective a way of boosting the economy as the tax breaks that make up roughly a third of the stimulus plan—and it would have the added benefit of directly helping families get through the crisis, ending one of the major sources of Americans' current anxiety.

Finally—and this is, I suspect, the real reason for the administration's health care silence —there's the political argument that this is a bad time to be pushing fundamental health care reform, because the nation's attention is focused on the economic crisis. But if history is any guide, this argument is precisely wrong.

Precisely wrong is right on target.

COVERAGE: Medical Mallrats

Tom Emswiler — Thu, 29 Jan 2009 13:03:00 -0500

Although the name might lead you to think of retail clinics, Lola Butcher's new article from HealthLeaders Magazine titled "Medicine at the Mall" actually talks about taking over THE WHOLE mall. Yes, really.

But it's not as crazy as it seems. The article highlights the experience of Vanderbilt University Medical Center, who after watching the costs and headaches rise from expanding its downtown campus, looked at the cost of taking over an aging, half-vacant shopping center. They could get quite a bang for their buck, it turned out.

Cost was only the beginning, as Ms. Butcher writes. Vandy serves the large Nashville metropolitan area but is downtown and can be difficult to reach by car. The new facility, on the other hand, is right off the interstate and near some of the residential areas served by the medical center. Bucking the NIMBY trend, all the property values near the new center have risen. Residents viewed the old mall space as "underdeveloped." It may turn out to very convenient for patients to be able to access a variety of services under one roof. Even parking will be easier. Much of it is already constructed.

Surprisingly, this idea is nearly 15 years old:

One of the nation's most successful medical malls was started in the mid-1990s when a Jackson, MS, physician recruited University of Mississippi Medical Center to convert a desolate shopping center into a healthcare hub for the city's urban poor. Today, the Jackson Medical Mall houses more than 30 clinics and other medical services, along with restaurants, educational institutions, and human services organizations.

Since then, at least 50 medical malls have emerged across the country, Hunter (a developer) says, with more on the way. On behalf of Prince George's County in Maryland [nearv Washington, DC], Hunter's firm studied the feasibility of converting four underperforming shopping centers into medical malls to increase access to healthcare services for inner-city residents. Such projects might reduce the burden on the county-owned hospital, which is overtaxed by patients using its emergency department for services that could be providing in an outpatient setting.

With 440,000 square feet of leased space to be completed in April, "Vanderbilt Health at One Hundred Oaks" will house nearly 20 clinical programs and nearly 750 Vanderbilt employees. With health care one of very few sectors weathering our recession better than most other industries, it is excellent to see so many health systems revitalizing old space near the residents they seek to serve.

COVERAGE: COBRA Out of Reach For More Jobless

Joanne Kenen — Wed, 28 Jan 2009 12:15:00 -0500

It's worse than we thought. No not just the economy, although we say that pretty much every time we look at the headlines. We're talking about the cost of COBRA.

We've posted recently on the high cost of COBRA, and the relatively few people who lose their jobs who can afford to extend their job-linked health insurance this way (here and here). Congress is likely to include significant COBRA subsidies as well as more short-term Medicaid and SCHIP options in the stimulus package to help more people stay covered in the economic crisis. A recent Commonwealth Fund study suggests the problem is more severe than we thought; earlier studies put the COBRA take-up rate at about 12 to 15 percent, but Commonwealth finds that 2007 data suggests that only about one in 9 or 10 percent of unemployed workers have COBRA coverage. (Some are able to get on a spouse's health plan, or find alternative health coverage). Here's the summary:

As the U.S. economic downturn continues and job losses mount, more working Americans are likely to lose access to affordable health benefits subsidized by their employers. Analysis of the 2007 Commonwealth Fund Biennial Health Insurance Survey finds that two of three working adults would be eligible to extend job-based coverage, under the 1985 Consolidated Omnibus Budget Reconciliation Act (COBRA) if they became unemployed. Under COBRA, however, unemployed workers would have to pay four to six times their current contribution at a time of sharply reduced income. In fact, the latest national figures indicate that, because of high premiums, only 9 percent of unemployed workers have COBRA coverage.

Jane Sarasohn-Kahn notes in Health Populi the COBRA dilemma "illustrates the difference between need and demand." Without substantial subsidies, being unemployed will mean being uninsured. Commonwealth estimates that the subsidies need to be 75 percent to 85 percent of premiums. The stimulus bill is at 65 percent . That could still go up—or down—as the stimulus bill winds its way through Congress, although the COBRA provisions look pretty set at the moment. For the potential impact of subsidies on COBRA take-up rates see the chart below from the Commonwealth study:

The House is supposed to vote as early as today. The New York Times wraps up the COBRA and Medicaid components of the bill as it now stands, and analyzes how the crisis is changing the social contract..

HEALTH REFORM: The Way We Are is the Way to Where We Could Be

Joanne Kenen — Tue, 27 Jan 2009 22:08:00 -0500

We are a bit late getting to Atul Gawande's New Yorker article on health reform, and we wondered whether to post, or whether many of you had read it. But then we remembered a lesson from a complicated pregnancy: even during three months of strict bedrest, it's impossible to keep up with the New Yorker. So for those of you who still have the magazine with this excellent piece on your bedside table, here goes:

The essay, "Getting There From Here," starts with the obvious: people who don't have health insurance have sad stories to tell, and sad stories can compel a society to change. At least it compelled every other major industrialized democracy (and some non-industrialized, non-democracies, but Gawande doesn't dwell on those) to make sure people get health care. But maybe we are at the point finally when we, as a society, with a new leader, will find those stories not just sad but unconscionable.

Gawande makes the case for pragmatism, for building on the current system. Not because the current system is flawless. It is deeply flawed. But it works well for some people. And it's what we have. And contrary to what many believe, other countries including postwar France and Britain built their health systems on what they had, not through radical changes imposed by a bold legislative stroke. Their systems evolved because of the peculiar quirks of history, geography and circumstance, what social scientists call "path-dependence."

Every industrialized nation in the world except the United States has a national system that guarantees affordable health care for all its citizens. Nearly all have been popular and successful. But each has taken a drastically different form, and the reason has rarely been ideology. Rather, each country has built on its own history, however imperfect, unusual, and untidy.

In our country, however, we get sidetracked in part because we get polarized, caught between different visions of an ideal system.

This is the trouble with the lure of the ideal. Over and over in the health-reform debate, one hears serious policy analysts say that the only genuine solution is to replace our health-care system (with a single-payer system, a free-market system, or whatever); anything else is a missed opportunity. But this is a siren song.

Yes, American health care is an appallingly patched-together ship, with rotting timbers, water leaking in, mercenaries on board, and fifteen per cent of the passengers thrown over the rails just to keep it afloat. But hundreds of millions of people depend on it. The system provides more than thirty-five million hospital stays a year, sixty-four million surgical procedures, nine hundred million office visits, three and a half billion prescriptions. It represents a sixth of our economy. There is no dry-docking health care for a few months, or even for an afternoon, while we rebuild it. Grand plans admit no possibility of mistakes or failures, or the chance to learn from them. If we get things wrong, people will die. This doesn't mean that ambitious reform is beyond us. But we have to start with what we have.

In the real world, radical change isn't always better; Gawande reminds us of the mess at the start of the Medicare drug benefit, which was a complicated market structure rather than a natural graft onto existing Medicare. He reminds us that our modern phone system is a jerry-rigged antique, "shaggy" and convoluted. It keeps getting fixed and patched, but it "made the twenty-first century possible. A health care system built on the current one, dependent on our own historical path, "will undoubtedly be messier than anything an idealist would devise," he says. "But the results would almost certainly be better."

Gawande lives and practices medicine in Massachusetts. And we all know the strengths of that state's experiment (it is covering people) and the weaknesses (it is costing more than expected, due in part though not completely to health cost trends outside the control of a single state.) It is imperfect. But since it was implemented Gawande has not had a single patient put off cancer surgery because he or she was uninsured. "That's a remarkable change: a glimpse of American health care without the routine cruelty."

"We're not going to get perfection," he writes. "But we can have transformation—which is to say, a health-care system that works. And there are ways to get there that start from where we are. "

WORLDVIEW: We'll Have Health Care for 1.3 Billion, Please

Joanne Kenen — Tue, 27 Jan 2009 19:38:00 -0500

You may have seen reports last week (New York Times, Wall Street Journal, among others) that China is planning to dedicate $123 billion by 2011 to covering its 1.3 billion people. Analysts saw it as both a move to protect and improve health care in both rural and urban China as well as a stimulus to domestic spending in a country with a high savings rate. One reason the Chinese save: concern about high out-of-pocket health costs.

The state news agency Xinhua reported. "Growing public criticism of soaring medical fees, a lack of access to affordable medical services, poor doctor-patient relationship and low medical insurance coverage compelled the government to launch the new round of reforms." Sound familiar? Alas, in China the health insurance subsidies cost around $17 per person. The goal is to cover 90 percent of the population by 2011, and get that last 10 percent by 2020. (We've read several articles about the plan but aren't sure who the uncovered 10 percent are.)

Today, the International Herald Tribune has an article that starts out being about Euro-bashing at at the World Economic Forum in Davos, Switzerland but then analyzes how the Western Eureopean social welfare system may turn out to be a model for both China and the U.S.

The IHT argued that it's no coincidence that this change is occurring simultaneously in America and China:

In the United States, the crisis exposed an unsustainable credit culture and undid a highly sophisticated financial system that accounted for 8 percent of GDP and now needs rebuilding from scratch.

In China, where 65 million jobs have been lost in recent years, the export-led model of the past two decades has faltered, in part because America's insatiable demand for Chinese goods has cooled. With Chinese families committed to saving for retirement, health care and education, domestic consumption in China is stuck at 35 percent, half the share in the United States.

"The crisis has accelerated things and made domestic demand even more of a priority," said Victor Chu, chairman of First Eastern Investment Group in Hong Kong, the No. 1 direct investment group in China. "Therefore China is strengthening and deepening the social safety net."

As Pascal Lamy, director general of the World Trade Organization and another Davos regular, told the IHT, "It's a cultural revolution."

COST: "A Big Premium Sucker Punch"

Joanne Kenen — Mon, 26 Jan 2009 14:32:00 -0500

Not a subtle headline in Sunday's Washington Post Business section. But then it's not a subtle problem. The article, "A Premium Sucker Punch: Soaring Insurance Costs are a Blow, Even When Employers Cover More of the Tab" told us that, guess what, what we are saving on cheaper gas is not coming anywhere near what we are spending on higher health insurance costs.

Premiums are rising. So are out-of-pocket costs and deductibles. Overall, health costs are rising faster than wages.

A growing number of workers in 2009 will pay more for health benefits—and in some cases receive less coverage—as their employers grapple with the financial fallout of rising medical expenses and diminished revenue and profits, recent surveys of human resource officials show.

The Corporate Executive Board found in its survey that a quarter of officials from 350 large corporations said they had increased deductibles an average of 9 percent in 2008. But 30 percent of the employers said they expected to raise deductibles an average of 14 percent in 2009. Mercer, a global benefits consulting firm, surveyed nearly 2,000 large corporations in a representative poll and found that 44 percent planned to increase employee-paid portion of premiums in 2009, compared with 40 percent in 2008.

Even employers trying to be generous in a tight economy aren't able to cushion workers. The Post story focused on Donna Carter, a married mother of three teens, who is a technical editor for a consulting firm in Washington, D.C. Her employer is paying a bigger share of the premium for the family, half instead of a third a few years ago. But because health care costs are rising so much, Carter is still paying $200 a month more in premiums, plus higher co-pays. Her story is another reminder of how our broken health care system is holding back our middle class, and hurting our overall economy. Carter said her family has cut vacations and restaurants, and trimmed spending on food and clothing to keep up with the health expenses. Exactly what our economy doesn't need at the moment.