Health Insurance

REFORM: Health and Taxes -- VAT's That?

Joanne Kenen — Thu, 15 May 2008 17:22:00 -0400

Ordinary Americans may not realize how closely linked their health care is to the U.S. tax code, but a bevy of analysts and economists could give them an earful. The major health reform plans on the table involve changes—in some cases pretty significant changes to tax treatment of health insurance, particularly the tax breaks for insurance we get through our jobs. Over at the Taxvox blog, sponsored by a joint program of the Urban Institute and the Brookings Institution, Howard Gleckman explains some of the options in a post nicely titled, "Forget Death and Taxes, How About Health and Taxes?"

Gleckman focuses on proposals for a Value Added Tax or VAT, a model seen in several European countries. VAT scenarios are circulating more in the academic/think tank world right now than in the political discourse about health care, but as Gleckman points out:

"The expiration of the Bush tax cuts and the ongoing Alternative Minimum Tax mess will surely drive big tax changes in 2009 or 2010. Health reform is also on the table, although short-term odds for reform may be longer. The question is: How will these two mega-issues fit together?"

A second question, of course, is how would a VAT be implemented—what other subsidies, refunds, credits, exemptions, etc. would cushion poor people from what would otherwise be a regressive tax? VAT isn't the focus of the New America health policy program but we're open to all sorts of ideas that could help us cover all Americans, control costs, and improve quality.

POLITICS: The Pollsters Are Calling! How Americans See Health Care Reform

Julie Barnes — Wed, 14 May 2008 15:29:00 -0400

This week we attended a Health Affairs event on Health Reform and the 2008 Election at the Willard (excellent coffee), where Celinda Lake (Lake Research Partners) and Bill McInturff (Public Opinion Strategies) entertained the crowd with the good, the bad, and the ugly stories of polling Americans' great thoughts on health care reform. The pollsters represent different sides of the aisle but agreed that: 1) Americans believe that health care costs are linked to the well-being of our overall economy; and 2) The next American president has a "unique window" to change the health care system early in the first term.

Lake, the Democrat, offered many interesting tidbits about what Americans want in their health care reform:

Prevention (not wellness)
Provider choice (they definitely don't want to lose access to their doctors)
Peace of mind about plan choice (they want to keep their policy and benefits if they like them)
Control (this is related to the previous two elements)
An American Solution (not Canadian-style reform—they want something uniquely American).

Lake also discovered what Americans do not want to hear:

Cost-shifting (people don't understand this concept)
Losing employer-sponsored coverage that they like
Government-run clinics
Scarce resources—people are worried about too-short appointments and being 30th in line for surgeries or tests
Their doctors are part of the problem—people love their doctors and do not believe that many tests are "waste" in the system. People think that the administrative burdens on doctors are the waste in the system.

McInturff, the Republican, offered his sense that the country is poised to undergo radical health care system change. He noted that more than half (55 percent) of Americans want government to do more in health care and a third (36 percent) say they want radical health care change—despite the fact that people are concerned about disrupting the current system that is working for them. McInturff also feels that Americans are not interested in trade-offs (paying more for insurance so their neighbor will have insurance too). Mostly, Americans want the next President to compromise with the next Congress so that they can pick coverage they like, keep it when they leave a job or move away, in a way that creates a more competitive marketplace to bring down health care costs.

McInturff also recently did a poll for the Robert Wood Johnson Foundation, released yesterday, showing that while jobs and the economy has replaced health care as the top domestic concern for most voters, Americans still see a close and clear link between economic security and affordable health care. In fact, given 10 options for how to best improve the economic wellbeing of an average American, making health care more affordable and providing health care coverage for all Americans ranked the top two. (By a more than 2-to-1 margin, voters were more interested in making health affordable than covering the uninsured. )

Sure, no problem. We'll get right on it.

COST: Want It 'Made in America?' Fix Health Care

Joanne Kenen — Tue, 13 May 2008 19:58:00 -0400

Representing the economically troubled state of Michigan, home to the auto industry, Democratic Sen. Debbie Stabenow just has to look around her to see how sky-high health care costs have eroded the global competitiveness of U.S. industry. Still, she told a New America-sponsored forum on Capitol Hill the other day, it's "nice to be joined by the data in something that I have been talking about for a long time."

Stabenow, the opening speaker at our forum about employer health costs in a global economy, described how the "most expensive and crazy structure in the world"—aka the U.S. health care system—was damaging the economy, hurting industry, threatening the middle class. "We are literally losing jobs," she said, spending more than our competitors on health but having less to show for it. (Click here for the webcast, here for the study, here for our earlier post.)

Stabenow, a cosponsor of the bipartisan Healthy Americans Act also known as the Wyden-Bennett bill, took issue with lawmakers (presumably including presumptive Republican presidential nominee Sen. John McCain) who say that we have to tackle cost before coverage. "You can't get to cost," Stabenow said, unless you also deal with the uninsured who show up in emergency rooms, who can't get access to decent primary care. The two are related.

"I want to deal with access. I want to deal with cost," she said, adding that she wants America and its trading partners to be in a race to the top, not a race to the bottom. To get to the top, to preserve the middle class and improve the economic wellbeing of our trading partners as well, we need to fix health care.

The challenge is both moral and economic. "This isn't working," she said. "We're spending way too much for the results we're getting. We're losing jobs and fundamentally this is about who we are as Americans. We can do better in the greatest country in the world."

IN THE STATES: Health Reform Wrap-Up

Joanne Kenen — Thu, 08 May 2008 20:16:00 -0400

Lots of health reform activity recently in states. Here's some help in catching up:

Connecticut. The state legislature has approved a Democratic bill permitting municipalities, nonprofits, and small businesses to join the state employee health insurance pool. Unclear whether Gov. Jodi Rell will support it. Some leading Republicans object to a "government-run" health system, while Democrats and labor backers say the greater buying power of the pool will save municipalities money. Not a comprehensive solution but we'll be interested in watching how this plays out.

Alabama. We posted a few weeks ago about Birmingham's plan to cover children—which we confess was a pleasant surprise to us given the state's history, poverty, and health status. Now we see the state has a new $3 million, five-year grant for the University of Alabama's initiative to reduce health disparities among older blacks.

"It's a huge agenda...There's lots of work to be done," said Dr. Richard Allman, who will head the new Deep South Resource Center for Minority Aging Research, noting that the elderly black rural population is growing fast. The program will start with a focus on three areas—how to help families make decisions about nursing home services, social support for patients with chronic heart failure, and cytomegalovirus infections in older blacks.

Minnesota. The legislature has approved a bill that would stop a hospital from using a patient's medical debt history to decide whether to treat the patient. The governor is expected to sign it.

"It hasn't been a problem here yet, but we do know that some companies were working on gathering that information to sell to health care providers," state Sen. Linda Scheid told the Star Tribune.

Under the bill, a health care provider can't share or obtain medical debt information about a patient seeking care until after the care is delivered.

Florida. This is the biggie, and the devil is in the details, which have yet to be figured out.

With nearly 4 million uninsured, Florida has one of the highest rates of uninsured in the nation, a bit more than 20 percent. Republican Governor Charlie Crist pushed hard this year for an affordable alternative health plan that people can purchase in the individual market, and state legislators gave him much of what he wanted.

The plans will be free of most state coverage mandates and regulations, and will be "no frills." And that's what we worry about. We appreciate Crist's effort to act—and the financial limits his state faces. And he's said the plan will cover prescription drugs, screening, even mental health. But for $150 a month,we're not yet sure how comprehensive these benefits can be. Will the young and healthy go for bare bones plans, making prices of more traditional insurance plans even more costly for the older and sicker? The details are going to be decided by the insurers, who will negotiate with the state. Still, we're sympathetic to states who are trying to help people even in economic tough times -- and one reason we're pushing a national comprehensive solution is that we recognize the states can't do it all on their own.

We've read several state newspaper accounts, (Here, among others) and called on an expert who tracks Florida but if our readers have any insights into where the Florida program is likely to go, please free to comment.

COST: Impact of Health Care Costs on Global Economy and U.S. Jobs

Elizabeth Carpenter — Wed, 07 May 2008 15:33:00 -0400

Throughout the primary season we have heard two things consistently from voters: they are worried about the economy and concerned about affording health care. Today, New America's own Len Nichols and Sarah Axeen analyzed one linkage between these two domestic priorities: the impact of rising health care costs on global competitiveness and U.S. jobs.

As the LA Times' Lisa Girion explains this morning in her report on their work, “Many economists have pooh-poohed the idea that U.S. businesses are hurt by their comparatively high healthcare costs. Instead, they have suggested that companies would pass those costs onto workers by lowering wages or onto consumers by raising prices.” Not likely, according to Nichols and Axeen, who argue that employers face various constraints and labor market realities that make it unlikely for them to be able to shift health care costs into wages in the short run, especially since health care costs have grown so rapidly and unpredictably for decades. Plus, it’s the 21st century and being able to compete globally means low prices. Manufacturers can’t just push the price of health care into goods because of stiff international competition. This is not good news for U.S. manufacturers who spend $2.38 per worker per hour for health benefits compared to their foreign trading partners who spend $0.96.As Jane Sarasohn-Kahn of HealthPopuli posted, “[this all] adds up to one big competitive disadvantage which ultimately results in lost jobs for Americans.”

But as you know, here at New America we are about solutions. So here are our thoughts: We need to make the health care system more citizen-based, rather than employer-based. This means we need to think about new insurance market rules that make private markets work for all Americans (not just the healthy and wealthy) and we need to make sure that lower income people have subsidies so insurance is affordable. Bottom line: we must reform our health system in a way that allows U.S. employers to thrive and Americans to keep their jobs.

Want to know more? Join us on Capitol Hill on Friday, where Senator Stabenow (D-MI), the WSJ’s Laurie McGinley, and representatives from the business, labor, and economic communities will discuss this important topic. See you there!

COST: The Specialists Gap

Joanne Kenen — Mon, 05 May 2008 20:37:00 -0400

Just about everybody who writes about health care has weighed in on the relative scarcity of primary care docs (including geriatricians) and the relative abundance of extremely well-paid specialists. Now the Wall Street Journal reports that we are even running low on certain specialists—the ones that don't make as much money.

The Journal story focuses (no pun intended) on neuro-ophthalmologists who treat complex, baffling visual disorders connected to the brain. They spend a lot of time testing, examining and talking to each patient. But our payment system doesn't reward time-consuming low-tech procedures. High-volume and high-tech is the way to go to maximize income. A neuro-opthalmologist has more training than a general ophthalmologist, but he makes about a third less money.

"Many in health-policy circles have focused on how the current health-care payment system is helping create shortages among primary-care doctors, internists and others on the front lines of medicine. But often lost is how the system is endangering some of the country's most highly trained specialties as well," the article continues, citing endocrinologists, rheumatologists, and pulmonologists.

It's even worse when looking for subspecialists who treat kids in fields like pediatric rheumatology. And the system contributes to what the paper called "the relentless rise in health-care costs" by driving patients and doctors alike into more expensive tech-heavy care. And sometimes, doctors have told me, a battery of high tech tests tells you less than you could have learned by sitting down and having a nice long chat with a patient.

Several other bloggers picked up on this item—the Journal's of course, and the Health Care Blog. But we particularly liked Gooznews reminding us that if you let highly paid specialists set payment policy, it really isn't any mystery that the result favors highly paid specialists.

There are a lot of ideas floating around about how to fix the system—bundled payments, pay for performance, medical homes and the like. Not much chance we'll see big changes before the 2008 elections but this needs to be a priority for the next Congress.

COVERAGE: Just the Facts Ma'am

Joanne Kenen — Thu, 01 May 2008 16:47:00 -0400

Fifty-five percent of insured people don’t understand the “critical details” of their health policies, a new survey tells us. We ask ourselves: who are the 45 percent who do understand them?

We worry about this because we have begun a national dialogue this year about health care reform. And it’s really easy to scare off the public if they don’t understand what they’ve got today, let alone what they will or won’t have under the various reforms being proposed.

Bloomberg reports on a J.D. Power & Associates survey that found that 55 percent did not understand their insurance including prescription benefits, how to find the right doctor and appeal-coverage denials. Additionally, consumers ranked health plans lower in customer satisfaction than hospitals and pharmacies.

"Health care is very complicated in our country, and the process of accessing it is very complicated," David Stefan, executive director of J.D. Power's health-care practice, told Bloomberg. “When you get materials from a plan, they're written to be complete and, in some cases, almost legal-like agreements, and they can be very hard for members to understand." Nonprofit health plans, including regional Blue Cross/Blue Shield organizations, more frequently scored highest on overall satisfaction (though that wasn’t uniformly true in all regions).

We understand why health plans need the legalese. But we’d love a version in clear and simple English as well. Yet another reason for national health reform where everyone is covered in a system where the rules of the insurance game are fair – and clear – and people know and understand what they are getting. Complexity and confusion was one of the reasons (OK one of many, many reasons) that health reform died in the early 90s. We hope everyone speaks more clearly this time around.

PS: We figure the uninsured understand what they’ve got: Too little. Too late. Too expensive.

COVERAGE: Bipartisan Senate Plan to Cover All Americans Would Pay for Itself

Elizabeth Carpenter — Thu, 01 May 2008 15:36:00 -0400

No, your eyes aren't deceiving you. We CAN guarantee all Americans quality health coverage and improve our delivery system without breaking the bank, according a report released today by the Congressional Budget Office (CBO).

Today's letter signed by CBO Director, Peter Orszag, and Joint Committee on Taxation Chief of Staff, Edward Kleinbard, says the bipartisan Healthy Americans Act would be budget-neutral in its first year and would get better after that. CBO analysts also predict that the HAA, sponsored by Senators Ron Wyden (D-OR), Bob Bennett (R-UT), and 12 others, would actually, "become more than self-financing and thereby would reduce future budget deficits or increase future surpluses," over time.

Stay tuned for more information from the press conference...

COST: What's Love Got to Do With It?

Joanne Kenen — Tue, 29 Apr 2008 22:30:00 -0400

Forget pheromones. A new poll from the Kaiser Family Foundation found that seven percent of adults reported that in the past year they or someone in their household decided to get married in order to get health insurance from a spouse. (We don't even want to think about what their bridal gift registry looks like.)

The Kaiser poll had lots of somber news as health care costs are taking their toll on American families (including the middle class) during the economic downturn. Twenty-eight percent report that they or their families have had a serious problem paying for health care, behind paying for gas (44 percent) and about tied with getting a good-paying job or raise in pay (29 percent). Smaller shares report serious problems paying their rent or mortgage (19 percent), dealing with credit card or other personal debt (18 percent), paying for food (18 percent) or losing money in the stock market (16 percent). That 28 percent figure was true as well for middle class families, making between $30,000 and $75,000.

"Many people view health and the economy as separate issues, but the cost of health care is a significant pocketbook issue for many families and paying for health care has become a key dimension of the public's economic concerns," Kaiser Family Foundation President and CEO Drew Altman said.

Health costs aren't just sending families reeling; states are also facing huge pressures, according to a separate report this week from the Kaiser Commission on Medicaid and the Uninsured.

Each time the national unemployment rate goes up one point, another 1.1 million people become uninsured. The study's authors also projected that a million people would join either Medicaid or the State Children's Health Insurance Program (to the tune of $3.4 billion) while states have less money to spend on Medicaid, kids, schools and everything else - all of which tends to make the economic hole even deeper. All this when Congress and the White House are battling over new rules that would reduce federal spending on Medicaid, which is a joint federal-state program.

As the report by Stan Dorn and other Urban Institute researchers concluded:

As a new economic downturn unfolds, many states appear headed for serious budget shortfalls. Economic hard times reduce state revenues and increase the number of people who qualify for need-based benefit programs. Because of state balanced budget requirements, these trends eventually cause many states to increase taxes and fees or cut Medicaid, SCHIP, and other services. As a result, economic stimulus and help for vulnerable residents are withdrawn precisely when they are most needed.

Jane Sarasohn-Kahn over at Health Populi blogged about these studies today, tying the concern about health to the growing hard times and a credit crunch that could go on for some time. She noted that stores have been rationing rice - so we probably can't even throw it at those newly-insured newlyweds.

COST: Family Premiums Rose 10 Times Faster Than Income

Joanne Kenen — Tue, 29 Apr 2008 20:44:00 -0400

Speaking of Cover the Uninsured Week—now a word from its sponsors...

Family premiums have risen 10 times faster than income in recent years—30 percent versus 3 percent—, according to a new analysis of government data from 2001 to 2005 released by the Robert Wood Johnson Foundation.

The study by University of Minnesota researchers shows that workers aren't paying a bigger share of the premiums if insurance is offered on the job, but the dollar amount increased a lot. (This particular study didn't look at cost-sharing, higher deductibles, co-pays etc, just the cost of the insurance policy itself.)

Nationally, the average cost of family coverage increased nearly $2,500, from $8,281 in 2001 to $10,728 in 2005. Workers paid about a fourth of that cost, but while that proportion held steady, the dollar amount increased $664, from $1,921 in 2001 to $2,585 in 2005. Meanwhile, the median income of people who hold family health insurance policies increased just $1,250 during the same period, from $40,818 in 2001 to $42,068 in 2005.

"This study makes plain what every working parent knows—that providing insurance coverage takes a bigger bite from the family budget every year," said Dr. Risa Lavizzo-Mourey, head of the foundation.

Other findings:

Fewer employees are working in private-sector jobs that offer insurance.
Nationally, 4.1 million fewer people worked in private-sector jobs that offered health insurance in 2005 than in 2001.
Fewer private-sector businesses offer coverage.
The number of private-sector employers nationwide who offered health insurance benefits to their employees fell by 30,000 from 2001 to 2005.
Fewer people have private health insurance coverage.
Americans with private health insurance fell nearly 2.4 million, or 6 percent, from 2001 to 2005.

The bottom line, as Dr. Lavizzo-Mourey said, is that these numbers explain why the ranks of the uninsured will keep rising "unless our nation's leaders act to reform our health care system." So maybe next year, when Cover the Uninsured Week rolls around, we'll be doing something about it.