Monday, February 25, 2013

We Interrupt This Blog To Bring You An Important Message

One of the key points of this blog is that the health care debate has never been about health care. Never. Money isn’t the prime driver. Money is the only driver. How do the hospitals, doctors and other medical providers get paid, and how much, are the real issues.

Except for a couple of purists, no one really cares who pays the doctor or hospital as long as it isn’t you, the patient. Do you really care if your $300,000 bill from the Cleveland Clinic or University Hospital is paid by Anthem Blue Cross or the federal government? Honestly? No. All you really want to know is how much, if anything, you will owe once the dust settles. And the providers? The insurers pay more, but have a lot of paperwork. Medicare pays less, but quickly. Based on the number of medical providers that accept Medicare (darn near everyone), I’m guessing that there are no serious complaints. The hospitals may even like having two major funding sources to play against each other.

I have tried to teach my clients what I know of the game. My senior clients learn about the origins of Medicare Parts A and B, the backroom deals that gave us Part D (Rx), and why costs are out of control. Countless clients have been clued in that those obscene charges are negotiable before and after services have been rendered.

Your perception of our system changes today thanks to Time magazine. Blessed with budget, time, and amazing persistence, Steven Brill has given us Bitter Pill, Why Medical Bills Are Killing Us. Mr. Brill tracked claims and laid bare the abomination that is our system of billing for services – real or imagined. Straightforward in his prose, laborious in his detail, Mr. Brill presents a system of overpaid executives and hyper profitable not-for-profits.

The real issue isn’t whether we have a single payer or multiple payers. It’s whether whoever pays has a fair chance in a fair market. Congress has given Medicare that power when it comes to dealing with hospitals and doctors, and we have seen how that works to drive down the prices Medicare pays, just as we’ve seen what happens when Congress handcuffs Medicare when it comes to evaluating and buying drugs, medical devices and equipment. Stripping away what is now the sellers’ overwhelming leverage in dealing with Medicare in those areas and with private payers in all aspects of the market would inject fairness into the market. We don’t have to scrap our system and aren’t likely to. But we can reduce the $750 billion that we overspend on health care in the U.S. in part by acknowledging what other countries have: because the health care market deals in a life-or-death product, it cannot be left to its own devices. Steven Brill – Bitter Pill, Why Medical Bills Are Killing Us

You won’t agree with all of Brill’s conclusions. I certainly don’t. But read his work. This should be the new starting point of our national conversation.   DAVE   ***  

Wednesday, February 20, 2013

Water Falls From Sky. People Get Wet.

Cause and effect. Stand in the rain and you will get wet. We get that. We aren’t surprised, normally, when 1 plus 1 gets us 2. But human nature will, at times, have us rooting for a different result. There are times when we desperately want to be able to walk between the rain drops or somehow add 1 plus 1 and get 5. Or even 6! And we are surprised, shocked, when we get wet.
The Cleveland Plain Dealer carried a wire story yesterday by Noam N. Levey. The P.D. headline was Health care premiums to rise? In the Los Angeles Times it was States worry about rate shock during shift to new health law. You’ll want to read the Times’ version. It is fifteen paragraphs longer.

Some of the biggest proponents of the Patient Protection and Affordable Care Act (PPACA) have suddenly realized that health insurance premiums are about to increase. A lot. How much? No one really knows for certain. The plan’s advocates are openly nervous even though they appear to be soft-peddling the full extent of the problem.

Affordable care is in the eye, or wallet, of the beholder.

Oregon’s insurance commissioner, another supporter of the law, said new regulations could push up premiums for young customers by as much as 30% next year. He urged administration officials to slow enactment of the new rules.
          Noam N. Levey

State insurance commissioners across the country have focused on the increased benefits built into all of the policies, the elimination of underwriting, and the new age/rate ration as particularly troublesome. Young, healthy males in their early 20’s now pay about 1/5 the price of healthy males in their early 60’s. The new law reduces the ratio to 1:3. Will the rates decrease for the 60+ year olds? Maybe a little. So to hit the ratio, the rates for the young must increase.

The ratio change impacts the young disproportionately. Ending underwriting and adding maternity, and lots of other new benefits described in previous posts, will also escalate premiums. Still, fans of the PPACA maintain that young people will gain enough in benefits to offset the cost.

How does a 25 year old afford a $250 to $300 monthly premium? Subsidy! Americans who don’t receive their health insurance from their employers may qualify for a federal subsidy. The subsidy is available to people earning up to four times the federal poverty level which is about $92,000 for a family of four. Curious about how much subsidy you might get? Check out the online calculator created by the Kaiser Family Foundation. It is really easy to use.

So the government passed a law, makes a lot of rules and regulations, pushes up insurance premiums, and then lots of us get a subsidy. It would appear that everything is in balance. For once, a happy ending!

Not so fast. The money for the subsidy has to come from someplace.

$101,700,000,000 over ten years is a good down payment for the PPACA. $101.7 billion doesn’t cover the actual cost of the President’s plan, but the Health Insurance Tax (HIT) is a key element. The HIT is a tax charged to insurance companies on fully insured health policies. These are the policies covering individuals, the self-employed, and small businesses. Medicare Advantage and Medicare Part D (Rx) contracts are also affected. This tax will be passed directly to the consumer.

The 2011 Oliver Wyman projection was ugly. The ten year total cost projections:
  • $2,150 – Single coverage
  • $5,080 – Family coverage
  • $2,760 – Small group single employee
  • $6,830 – Small group family
  • $3,590 – Medicare Advantage beneficiary
  • $161 – Medicare Part D (Rx) participant
Adding $15 to $20 per month for a single or $40 to $45 per month for a family won’t help to make insurance more affordable. But at least we know where the government is getting all that money for those subsidies. For now.

Representative Charles Boustany (R-LA) and Representative Jim Matheson (D-UT) have introduced bi-partisan legislation to repeal the Health Insurance Tax.

The President’s health care law is full of hidden tax increases. Beginning in 2014, millions of American small businesses will be subjected to a new health insurance tax (HIT) coming at a cost over $100 billion. This tax will close many small businesses and kill jobs once implemented. The HIT will cost each affected family an average of $5,000 in higher premiums over the next decade. The Jobs and Premium Protection Act prevents premium increases for small businesses and protects jobs by repealing this unfair tax. It keeps more money in the hands of small business owners and employees instead of levying higher taxes on job creators and American workers. I encourage my colleagues to join in honoring our commitment to protect small businesses and the millions of workers and families depending on them.

Congressman Charles W. Boustany, Jr., M.D., (R-South Louisiana) after introducing “The Jobs and Premium Protection Act”

Will the tax close small businesses? Probably not. Will Boustany/Matheson pass the House? Probably. Would a similar bill pass the Senate? NO! If the cost of insurance is your biggest concern, this tax and the legislation to repeal it are relevant. If the government spending money it doesn’t have is your major concern, then you will want to see the tax enacted.

New benefits, the elimination of underwriting, the age/rate ratio, and the new Health Insurance Tax all add significantly to the cost of health insurance as of January 1, 2014.

Surprised? Really? Let me get you an umbrella.


Monday, February 11, 2013

The Great Imposition

Women are imprisoned in their homes, and are denied access to basic health care and education. Food sent to help starving people is stolen by their leaders. The religious monuments of other faiths are destroyed. Children are forbidden to fly kites, or sing songs... A girl of seven is beaten for wearing white shoes.
-- President George W. Bush, Remarks to the Warsaw Conference on Combating Terrorism, November 6, 2001

Regular readers of this blog are all too aware that the health care debate has very little to do with the delivery of health care, the prevention of illness, or even curing the sick. The majority of the legislation and the debate is about money – How do we pay the doctors, hospitals and other medical providers? And how much? So this is really a political and financial discussion. But not today. Today, religion invades Health Insurance Issues With Dave. And religion never takes any prisoners.

Warning – If you are easily offended, stop now. Come back and visit next week.

Next month marks the third anniversary of the Patient Protection and Affordable Care Act (PPACA). The hundreds of pages linked above are the framework, the goals, that serve as the outline that will be fleshed out in thousands of rules and regulations in the years to come. Heavily promoted, from day 1, was that Preventive Care was going to be covered with no copays or fees under all health insurance plans.

Why cover Preventive Care? I don’t call State Farm when I need to get the oil changed on my car. But suddenly we are all going to get our annual physicals for FREE. We love free stuff. Now, if I get my annual exam and you don’t, then this works for me. You are helping to pay for my exam. If, however, we all get annual exams, then we are all paying for our own exams and it’s not really free. But let’s not mix facts into this feel good moment. Three years ago we learned that we were going to get something out of this – FREE Preventive Care.

What we didn’t know, in March of 2010, was that Preventive Care included Birth Control Pills, IUD’s, and the Morning After Pill. Who knew that the something for nothing section of the PPACA would become the most controversial portion of the legislation?

Allow me to summarize this issue by citing one of its most intemperate spokesmen, Kevin O’Brien of the Cleveland Plain Dealer.
This isn’t just about big, church-affiliated institutions like schools and hospitals, although they’re an important part of the argument. It’s not even about contraception. That’s just the issue that sparked the argument.

It’s about an individual right to live according to one’s faith.

What Barack Obama thinks about contraception is of no consequence whatsoever.

What each business owner who would be absorbed into a federal scheme to make contraception more widely and more cheaply available – factors that will encourage its increased use – thinks is the only thing that matters.

Those who believe that the government’s plan offends G-d should not have to participate in it. The free-exercise clause in the First Amendment – is in effect everyday, not just Sundays – says so.
And there you have it. My religion, or how I happen to interpret my religion, or the Truth as revealed to me be my spiritual leader will now determine which taxes I pay and what I give or withhold from my employees.

Start with Mr. O’Brien’s fixation on Sundays. For millions and millions of Americans, Sunday is no different than Tuesday. The USA is home to Jews (Saturday), and Muslims (Friday), and, Atheists (no Sabbath at all). And of course, he assumes that all Christian denominations choose to follow, this time, the teachings of the Catholic Church. Do 100% of all Catholics abstain from Birth Control, IUD’s, and the Morning After Pill? 50%? According to Gallup, the number of Catholics who accept the use of Birth Control is 82%.

We would laugh at the idea of Orthodox Rabbis trying to outlaw shellfish.

Can we tailor each law to bend to the religious prerogatives of each citizen without devolving into total chaos? Ten years ago we chose to invade a defenseless country that supposedly had weapons of mass destruction. IT DIDN’T. Many a religious leader fought this second war and claimed that it was immoral. Did millions of Americans get to opt out and stop paying their taxes? Of course not.

The paragraph that opens this post deals with our reaction to the Taliban.

Even by Muslim standards, the Taliban is considered extreme in the way they interpret the Koran and how they apply the rules to day to day living. But our friends the Saudis still don’t let women drive.

Would a Saudi, living in the USA, be forced to hire a woman for a driving position? Pay property tax for a school district that had a coed driver’s education program? Pay women the same as men?

Where is the line? Catholicism can make rules, but not Methodists? Shall we poll the Hindus amongst us about our beef price supports? Once you open this door, it will be very hard to close it.

The Patient Protection and Affordable Care Act has more than a few problems. We need to determine how we are going to pay for all of the changes that were once thought to be covered. We need to decide whether Birth Control Pills, IUD’s, and the Morning After Pill should be considered Preventive Care and covered without cost to the user. Each person’s personal morality may inform his/her opinion and play a part in the discussion, but religion won’t rule the day.

Not in 2013. Not in the United States of America.