Tag Archives: health care reform

Billions Left on the Table

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North Carolina is one of the states that didn’t expand its Medicaid program after the passage Obamacare. According to this little item from the Wonkblog there are a BUNCH of states that are reconsidering their decisions to opt out:

Money talks: Medicaid expansion makes headway in Republican states. “Two things have led to a change of heart for some Republican politicians. Most of the 27 states that are already expanding the program have begun to reap billions in federal subsidies for insurers, hospitals and healthcare providers, putting politicians elsewhere under intense pressure to follow suit. As demonstrated by Pennsylvania’s deal with Washington, the Obama administration has also proved willing to accept tweaks that give the private sector a greater role in providing healthcare and place new responsibilities on beneficiaries. All of that has got as many as nine states talking to the administration about potential expansion terms.” David Morgan in Reuters.

According to the Reuters article referenced above, North Carolina is one of the states looking at what it can do:

Some states with Republican governors, such as Indiana, are negotiating with Washington for agreements that could pass political muster with conservatives back home. Others such as North Carolina, South Dakota and Wyoming are exploring options.

One of the reasons that North Carolina’s leaders said they didn’t want to opt for expansion is that they feared the Feds wouldn’t pick up the vast majority of the cost as they’d promised (I’m paraphrasing). Now that they’re seeing what kind of money they’re leaving on the table they seem to be second guessing their decision, but they’re likely going to slow-play their hand because things might change in November.

According to the Reuters article if the Democrats lose control of the Senate then the wave of Republican states reconsidering their Medicaid expansions might ebb. Here’s the irony for North Carolina Republicans, many of whom might benefit from Medicaid expansion: on this particular issue they might be better off if Dem. Senator Kay Hagan wins reelection. And if you think the only Republicans who might benefit are those who are eligible for Medicaid then you’re forgetting all the Republicans who work in the health care industry. Just look at the projections for Pennsylvania:

A study by the RAND Corp predicted a $3 billion economic boost and the creation of 35,000 jobs – big advantages for a state that has struggled for decades to make up for jobs lost from the decline of the coal and steel industries.

Unfortunately for the Democrats this kind of issue is far too complex to make an effective campaign tactic. After all, this is a country full of people who said things like “Keep the government’s hands off my Medicare” when Obamacare was being debated. You can’t possibly expect them to back a candidate out of enlightened self interest when they don’t even know what their self interest is.

Four Health System Fixes Neither Party Will Touch

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Here’s an interesting article at Vox that outlines four ways the US health system could be improved, but neither political party will dare touch.  They are:

  1. Let in more immigrant doctors
  2. Curtail pharmaceutical monopolies
  3. Let non-doctors treat patients
  4. All-payer rate setting

Those first three are fairly self-explanatory, but the fourth is a little more complex. This excerpt helps explain it:

In Germany, the Netherlands, and the exotic foreign land known as Maryland they practice what’s calledall-payer rate setting. That means that instead of each insurance company negotiating separately with each hospital group on prices, a government commission sets a price that everyone pays. And it works. Maryland has curtailed cost growth without inducing any noteworthy shortages of health care facilities

Another advantage to all-payer rate setting beyond the simple ability to set low rates is that it would eliminate some of the necessity of doing everything through an insurance company middleman. Right now, one of the services your health insurer provides is a real insurance function that helps you hedge against risk. But for many people, the insurer’s most important practical role is as a negotiator. Since the insurance company has a lot of scale, it can get a good price from a doctor or a hospital. An uninsured person would have to pay at a much higher rate.

Reducing the insurance company’s role as a negotiator would let insurers focus more on the insurance function, and allow routine care to be handled in a more consumer-focused way. And by eliminating some of the advantages to sheer scale on the insurance side, it could also promote more competition in the health insurance industry.

Ripple Effect

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Rex Hammock has 10 Bold Small Business Predictions for 2014 and #9 is dead on:

This is a non-partisan prediction. If you love Obamacare, or hate Obamacare, this prediction doesn’t care. With the bungled launch of the Healthcare.gov online insurance market and the non-stop accusations slinging back and forth between the political parties, it’s been hard for small busines owners to separate fact from vitriol. But here’s one fact: millions of “nonemployee businesses” (a census bureau segment that are independent free lancers, developers, consultants, authors, artisans, etc., who, collectively, account for 4% of all U.S. sales and receipts, but represent the largest number business entities) are now able to obtain healthcare insurance at a competitive price, even if they have pre-existing health condition. Not having access to such insurance has held back lots of employees of lots of big companies from setting up their own shop. Here’s another fact: If a small business has less than 50 employees, the only requirement they have under the Affordable Care Act is to inform employees of the availability of private healthcare insurance sold through marketplaces administered through (depending on the option of a state) federal or state healthcare insurance marketplaces. As Mark Cuban recently told the Wall Street Journal, “As someone who owns chunks of small businesses, the one thing all those companies have in common is [that] buying and providing health care is not a core competency,” he says. “It’s expensive.” By removing the responsibility to provide coverage from these firms and giving it to the government, he says, “You’ve freed up money and time.”

My long-besieged wife has heard me say this for years – if the health care system in the US was fixed there would be an explosion of entrepreneurialism. It's hard to overstate how many people have been tethered to a deadend job because they needed the benefits. Imagine what they would do if that wasn't hanging over their heads and I'm sure that thought is a big motivator in the fight against health care reform.

Saving Money By Not Using Health Insurance

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Wall Street Journal piece found via Freakonomics explains how not using your health insurance can save you some serious bucks:

I explained that just because he had health insurance didn’t mean he had to use it in every situation. After all, when people have a minor fender-bender, they often settle it privately rather than file an insurance claim. Because of the nature of this man’s policy, he could do the same thing for his medical procedure. However, had I been bound by a preferred-provider contract or by Medicare, I wouldn’t have been able to enlighten him….

Most people are unaware that if they don’t use insurance, they can negotiate upfront cash prices with hospitals and providers substantially below the “list” price. Doctors are happy to do this. We get paid promptly, without paying office staff to wade through the insurance-payment morass.

So we canceled the surgery and started the scheduling process all over again, this time classifying my patient as a “self-pay” (or uninsured) patient. I quoted him a reasonable upfront cash price, as did the anesthesiologist. We contacted a different hospital and they quoted him a reasonable upfront cash price for the outpatient surgical/nursing services. He underwent his operation the very next day, with a total bill of just a little over $3,000, including doctor and hospital fees. He ended up saving $17,000 by not using insurance.

 

Young Adults and Obamacare

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We've all heard our fill about Obamacare, but because it is so complex most of us don't have a clue what's going to happen as its implementation kicks into gear next year. That's beginning to change as all kinds of research is being done and reports on the results of that research starts to hit the news.

Earlier this week we saw plenty of coverage of the Rand Corporation's analysis of the 14 states that have opted not to implement the Medicaid expansions called for in Obamacare, and the projections aren't good for those states which include North Carolina. Now comes this fascinating interview with the executive director of Young Invincibles, a group that studies young adults' role in health reform. The interview is about how young adults view health insurance and the likelihood that they will opt in to Obamacare, which everyone seems to agree is a critical factor in the success of the program. Here are the most interesting tidbits:

About 19 million young adults 18 to 34 lack health insurance. Our polling shows that less than 5 percent of young people choose not to have it. The number one reason they don’t have it is the cost. Most young people don’t qualify for Medicaid right now even if they have very low incomes because most states just don’t give childless adults Medicaid. That’s one of the biggest changes under Obamacare. If every state expanded Medicaid, about 8 million would qualify for Medicaid. Another 9 million would qualify for subsidies because they make less than 400 percent of poverty.

So then 17 of the 19 million uninsured young people are, in theory, eligible for either subsidies or Medicaid under Obamacare?

That’s right. It’s a pretty phenomenal percentage. So if we do our jobs right, young people will be one of the biggest winners in the health-care law…

 But the cost does matter. So is Obamacare actually going to make insurance affordable for this group? Or will it make insurance more expensive for young, healthy people by making it easier for sicker, older people to buy insurance without getting discriminated against? 

The first important point is the huge percentage of unemployed young people who get access to either subsidies or Medicaid. So you saw in California that many young people will end up having insurance options that cost them less than $100 or less than $50 simply because their income is low enough to qualify for subsidies. For someone making $20,000 a year, they’re going to have to pay $40 a month for health insurance. That’s a very good deal. And in a state like California, there are also millions of young people who qualify for Medicaid.

Now we’ve identified a population between 300 percent and 400 percent of the federal poverty level that’s going to have more problems. The subsidies aren’t that rich for them, and so whether to buy is a tougher question. They’ll have financial strain. They have financial strain now. That’s why they’re uninsured. If you’re just getting by, then $200 a month can be a lot. That’s where education can be key. It can still make good financial sense to be covered because there are real risks. But I think, in general, it will be a good enough deal to sign up. We saw that in Massachusetts where youth uninsurance dropped in half in the first year…

So given all the issues of implementation and the political opposition to the law and the difficulties in various states and the early information about premiums, where do you think this will end up in 2014 and 2015? Do you think young people will sign up or stay away?

I’m pretty hopeful, in part because the experience in Massachusetts showed this model can work. But it will play out differently in different states. A state like California is following the playbook. They’ll do a big promotional campaign. They’re investing in on-the-ground outreach and education. They’re expanding Medicaid so really low-income folks will qualify for health insurance. So I could see it being a huge success in a state like that. But not every state will do that. An important point for young people is that some of the states with the highest rates of youth uninsurance are in the south and some of those states aren’t expanding Medicaid or building their own exchanges. My fear is what happens in those states. So I could see some states coming out and looking much better than other states.

As a father of three children a couple of years away from entering the working world and as a resident of North Carolina, one of those southern states not "following the playbook", that last paragraph truly worries me.

The Unfortunate 14

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North Carolina is one of 14 states that has opted out of the new Medicaid funds linked to Obamacare. What does that mean? According to a new Rand Corporation study it means those states are sailing into a stiff healthcare wind:

The study, by the Rand corporation, looks at the 14 states that have said they will opt out of the new Medicaid funds. It finds that the result will be they get $8.4 billion less in federal funding, have to spend an extra $1 billion in uncompensated care, and end up with about 3.6 million fewer insured residents.

So then, the math works out like this: States rejecting the expansion will spend much more, get much, much less, and leave millions of their residents uninsured. That’s a lot of self-inflicted pain to make a political point.

It’s a truism of health-care politics that the uninsured are impossible to organize. But Obamacare creates an extraordinarily unusual situation. The Affordable Care Act will implemented in states that reject Medicaid. There will be huge mobilization efforts in those states, too, as well as lots of press coverage of the new law. The campaign to tell people making between 133 and 400 percent of poverty that they can get some help buying insurance will catch quite a few people making less than that in its net. And then those people will be told that they would get health insurance entirely for free but for an act of their governor and/or state legislature.

North Carolina is already seeing political activism spearheaded by the state's NAACP chapter against policies of the Republican legislature. Just yesterday the NAACP's ongoing "Moral Monday" campaign led to more than 150 arrests at the state capitol. Quite frankly that action is easy for a lot of people to dismiss as just more of the same from a group trying to justify its existence (when doesn't the NAACP protest?), but if people who normally sit on the sidelines are suddenly spurred to action because their government denied them the opportunity for cheaper (or free!) health coverage then things could get very interesting for the next election cycle here in the Tarheel state.

(h/t to Fec for the link to the story).

Priorities

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The Affordable Care Act (ACA), a.k.a. Obamacare, is starting to kick into gear and states are having to make decisions about how they are going to participate. Here in North Carolina the state legislature is considering opting-out of the expansion of Medicaid called for by the ACA:

Legislation is moving forward in the General Assembly to opt out of the Medicaid expansion under the Affordable Care Act. The expansion would provide health insurance to people living in households with incomes below 133 percent of the poverty line. The federal government would cover 100 percent of the costs for the first three years and 90 percent of the costs thereafter.

Besides extending coverage to about 400,000 poor NC residents who wouldn't get health insurance otherwise, the expansion would bring in $40 billion on net (about $50 billion in total spending), which would jolt the economy and create jobs.

A new report by Regional Economic Models, Inc. forecasts that the expansion would add nearly 6,000 jobs to the NC economy in the first year of the expansion, as participation in Medicaid starts to grow, and 20,000 to 25,000 jobs in subsequent years, as participation stabilizes at a higher level.

It's no secret, or a surprise, that the newly empowered Republican majority in the NC legislature is opposed to the ACA. Most conservatives I've talked to would like to see entitlements of all varieties cut rather than expanded, and if you avoid getting all hot and bothered and really listen to them you realize it's not out of meanness. Many of them truly believe that we're robbing an entire generation of any incentive to improve their own lot. Most I've talked to absolutely believe we should help the truly helpless, but defining who the truly helpless are and determining how best to help them can get you into some heated debates faster than you can say Obamacare.

On the flip side most liberals I know truly believe that as a society it's in our best interest to make sure that all people have access to good health care. Most I've talked to view it as a moral issue – we should do it because it's right. 

Here's where I get frustrated: I think there's a middle ground between the two groups. I too think there's a moral obligation to do everything we can to make sure all members of our society have access to health care, but I also think there's a solid "business case" to be made for it. A healthy society by definition will be more efficient than a sick society, and the resources tied up in caring for very sick people could be better spent elsewhere.

Put simply sick people have a hard time working or contributing to society in a meaningful way, and if you want to institute reforms in other areas of our entitlement programs – for instance requiring X hours of community service in return for Y dollars of aid – then you need to make sure they are healthy at a bare minimum. We can debate the details all day long, but in terms of priorities I don't know how you can put health care anywhere below the very top tier.

No Need for Healthcare Reform? Really?

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Two months ago our daughter was in Myrtle Beach for beach week and while there make the regrettable decision to drive a jet-ski.  The result was an accident that led to a trip to the ER in an ambulance.  Initially our health insurer denied the claim because we hadn't cleared the trip to an out of network ER with them, but once we appealed and pointed out that she was already at the ER before we even knew about it they reversed the decision. That's a good thing, because if they hadn't I'd be writing this from the poorhouse.

The final bills just came in and this is what they show:

  • The original hospital bill totaled: $21,214
  • Our insurer paid $4,151
  • We owed $150
  • The ambulance ride cost over $800, mostly due to a non-resident fee imposed by the county where the accident happened.  We owed $400.

A couple of thoughts here.  Our daughter was discharged hours before we could even get to the beach.  She was in the hospital's care for maybe 2 1/2 – 3 hours, so even taking into consideration that  due to the nature of the accident they treated her in the trauma unit and ran the various MRI-type scans, how can that possibly total over $21,000?  Also, what happens to the poor schlub who doesn't have insurance?  Does $16,000 magically disappear from his bill too?

Believe me, we're very thankful for the care our daughter received.  I'm also not so bitter about the insurance premiums that are deducted from my paycheck because, frankly, our insurance is getting a workout this year.  In addition to this accident we've had a surgery and an illness in our family so we've gone from hardly ever using our insurance to being uber-users.  Of course our premiums are likely to go up again next year, but at least we aren't being bankrupted in the process (at least not yet).

Still this episode drives home the point that there are many people out there who ARE bankrupted by our health care system.  I'm not going to sit here and point the finger at any one person, company or industry, but I am going to say that anyone who thinks our health care system doesn't need fixing has a head full of rocks.  

Medicare Reform

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Health care reform ain't for the faint of heart, and it's also an issue that I think will define the modern era of American politics.  Having just renewed our small group health insurance with BCBSNC to the tune of a 28% increase in premiums I'm going to throw my two cents in and say that I agree that this is a defining issue for our country.  Unfortunately I'm nowhere near smart enough to know what the solution to our health care issue is, but I also suspect that such a person doesn't exist considering the issue is so complex.  Thus I think we're destined for an extended period of sausage making as we try to figure out a better mouse trap and that's why I'm not exactly surprised at what's going on in Washington these days. 

From this Tax.com article on Rep. Ryan's proposed changes to funding for Medicare:

So what happens if we buy the Ryan plan? For those age 55 and older, not so much. But a lot changes starting in 2022, when today's 54-year-olds turn 65, through 2084, the end of the 75-year period covered by Social Security trustee projections.

David Rosnick and Dean Baker, economists at the Center for Economic Policy and Research, crunched the numbers. Whether you like their liberal views or hate them, Rosnick and Baker are just spreadsheet mechanics in this exercise.

Reduced to net present value, Ryan's plan would save $4.9 trillion in taxes from 2022 through 2084, the numbers reveal. That's not chicken feed. In fact, it is within range of the close to $6 trillion shortfall in Social Security between now and 2084…

So for every dollar Americans would save in taxes, they would shell out $5 more from their own pockets using Ryan's preferred baseline, and nearly $8 using the standard baseline. When you stack a plan in favor of its advocate and the additional costs are five times the savings, like the story of the mechanic trying to keep getting paid for fixing up a clunker, the plan should be greeted with laughter, derision, or disgust. I go for all three — in that order.

Rosnick and Baker call this net extra spending of between $20 trillion to $34 trillion waste. That's their political judgment. I'll stick to the facts: The Ryan plan shifts costs and raises them at the same time. Spending $5 to save $1 is nuts. Spending $8 to save $1 is lunacy. (Emphasis mine).

I've become so accustomed to getting smacked in the side of the head with healthcare expenses that I can't really say the numbers shock me at all, but I do find them disheartening. My family pays what I consider a healthy chunk of change just to insure ourselves against medical disaster, and we've been blessed with relatively good health so I don't even want to think about what that insurance would cost if we had real issues.  That said I was hoping that I could pay the piper now and then some day have a "Medicare" party so that I'd at least be able to enjoy "Cadillac benefits" in my waning years, but I'm beginning to think that's a pipe dream.

 

Why Maybe Progressives Aren’t Bat—t Crazy

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Lex offers a detailed assessment of why the progressives might not be bat—t crazy. I'm so confused.

Here's just a taste of what Lex had to say:

Just how bad has Joe Lieberman crapped all
over the whole debate on health-care reform? Bad enough that right now,
I think it’s time he not only gets no health care, it’s time he gets
intestinal cancer in a part of the world where morphine is as yet
undiscovered. I mean, really, what kind of sociopath do you have to be
to disregard those 45,000 annual deaths and singlehandedly chop up a
bill to create something that:

  • Mandates that every American buy expensive insurance from private
    companies without the choice of a public option and lets the IRS fine
    you if you don’t
  • Severely taxes middle-class health care plans, rather than wealthy individuals
  • Increases insurance premiums about $1,000 a year
  • Increases health care costs
  • Continues to exempt health-insurance companies from antitrust laws, inhibiting competition
  • Provides a sweet deal for pharmaceutical manufacturers while
    denying the government the ability to negotiate for lower drug prices
    for Medicare, something Democrats actually promised three years ago.
  • Apparently won’t let the government import drugs from cheaper foreign sources. I’m told my own junior senator, Kay Hagan, was arguing tonight that this was a “safety” issue, which must come as a surprise to the dozens of other countries that do this every day.
  • Grants monopolies on new biologic drugs so they will never become generics
  • Offers NO public option
  • Offers NO Medicare expansion, even in return for payment, for 55- to 64-year-olds.
  • Limits insurance-company payouts, contrary to President Obama’s promise in September
  • Raises taxes in January while not beginning benefits until 2014.

Really, I'm sooooo confused which makes me believe that the powers-that-be have us just where they want us.