Wednesday, September 30, 2009
Universal cover via private insurance
in the Netherlands is done with private insurance companies and an individual mandate. And lots of regulation. A good, short description.
Sen. Carper
is said to be shopping an amendement that would give states the option of adding a public plan in their state exchange. Would be full discretion for states to allow one, and to set up the policies (such as what rates to pay providers). New York could decide to have one, and Oklahoma wouldn't have to, etc.
Watching the Senate Finance Comittee it has been interesting to see Democratic Senators being open to other state choice elements.....like a state deciding to not have an individual mandate....if they can provide coverage levels similar to what an individual mandate would provide.
Interesting to watch the Dems round into states rights, competition and choice as the watch words for arguing for reform. The Republicans are left with 'government takeover of health care' but anyone watching the Senate Finance Committee has quickly realized there aren't so many crazy lefties on that committee....
Watching the Senate Finance Comittee it has been interesting to see Democratic Senators being open to other state choice elements.....like a state deciding to not have an individual mandate....if they can provide coverage levels similar to what an individual mandate would provide.
Interesting to watch the Dems round into states rights, competition and choice as the watch words for arguing for reform. The Republicans are left with 'government takeover of health care' but anyone watching the Senate Finance Committee has quickly realized there aren't so many crazy lefties on that committee....
Medicaid and the recession
Report showing Medicaid enrollment rose by even more than expected....enrollment always rises when the economy is bad....at same time it is hardest for states to pay for their share.
My spending is a benefit, yours is a cost
Good article summing up this notion, that is rampant in our culture. We all say we want health care spending increases to slow, just not our spending! And he is right on about how the tax on high value plans would work....the point is to pass the costs down to consumers of health care. I would still prefer tax exclusion of employer provided insurance, it more clearly links the issue of cost to individual behavior.
And this is a useful post, illustrating rate of cost increase in Medicare v. private insurance. Medicare is going to bankrupt us if we do nothing, but will do so slower than will private insurance.
And this is a useful post, illustrating rate of cost increase in Medicare v. private insurance. Medicare is going to bankrupt us if we do nothing, but will do so slower than will private insurance.
Tuesday, September 29, 2009
Public Option defeated in Senate Finance Committee
This is not exactly a shocker, but two public option amendements to the Baucus bill were voted down today in the Senate finance committee. The amendments were offered by Rockefeller (the more expansive one) and Schumer (more pared back one). Sen Finance Committee more conservative than the Senate as a whole. If the House passes some sort of Public Option, then it could make its way back in a conference bill.
Baucus, Carper, Conrad, Lincoln and Nelson (of Florida) joined all Repubs in voting against Rockefeller amendment (15 no, 8 yes). Carper and Nelson voted yes on the Schumer amendement, which lost 13 to 10.
Next big issue is Ron Wyden's free choice amendment that should come up tomorrow....this would allow more americans to purchase private insurance via the exchanges (markets) to be set up if they want to do so.
The Dems are getting their feet in making arguments about giving people choice... Wyden Amendment and public option. A pretty good cultural symbol to invoke. And I think the Repubs overplayed their hand in August....once you have said Obama wants to kill your grandmother and then say 'well, not really, but you know what I mean' people probably stop paying attention to you as much.
The most interesting thing would be if Wyden Amendement passed....would the insurance industry revolt? Because as written, they (insurance industry) getting new customers that they now have little interest and/or ability to sign up (only 14 Million non group policies in US out of 307 Million people). But, if people with employer based can bail from that and go into the exchange and buy their own policy, this could be quite disruptive to employer market. Insurance won't like that. And if they did revolt over Wyden, would it be too late and transparent? Still, they have mighty big guns (and one of them is named Baucus).
Baucus, Carper, Conrad, Lincoln and Nelson (of Florida) joined all Repubs in voting against Rockefeller amendment (15 no, 8 yes). Carper and Nelson voted yes on the Schumer amendement, which lost 13 to 10.
Next big issue is Ron Wyden's free choice amendment that should come up tomorrow....this would allow more americans to purchase private insurance via the exchanges (markets) to be set up if they want to do so.
The Dems are getting their feet in making arguments about giving people choice... Wyden Amendment and public option. A pretty good cultural symbol to invoke. And I think the Repubs overplayed their hand in August....once you have said Obama wants to kill your grandmother and then say 'well, not really, but you know what I mean' people probably stop paying attention to you as much.
The most interesting thing would be if Wyden Amendement passed....would the insurance industry revolt? Because as written, they (insurance industry) getting new customers that they now have little interest and/or ability to sign up (only 14 Million non group policies in US out of 307 Million people). But, if people with employer based can bail from that and go into the exchange and buy their own policy, this could be quite disruptive to employer market. Insurance won't like that. And if they did revolt over Wyden, would it be too late and transparent? Still, they have mighty big guns (and one of them is named Baucus).
Sunday, September 27, 2009
Malpractice, defensive medicine and politics of reform
The News and Observer has a front page story today on medical malpractice and tort reform. Several points from my perspective. [note, I wrote about this in N and O on Aug 7, but the 'new and improved' online version appears to not link to past articles....trying to work this out]
*I think defensive medicine likely raises the cost of the health system by 1-3%. 5% would be $125 Billion per year (this year total spending will be around $2.5 Billion, the $2.1 B the article notes is last year). The biggest estimate I have seen is $168 B per year (Charles Krauthammer wrote $200 B per year in a column this past summer, but I think he was just rounding up; will dig it up later).
*The article shows that rates of suits have been dropping. Several lawyers have written me saying so based on stuff I have written in the past saying we needed tort reform, mostly as a political tool to bring the docs along (and to respond to their true obessession with getting sued, even if the rate of such is dropping).
*Even if the data show that we won't save much money from tort reform (I don't think we will), if ONE doctor gets up wearing white coat and says defensive medicine is key cost driver, most folks will put more credence in that than they will the testimony of 100 lawyers plus 100 health policy guys.
*So, we need tort reform to (1) get the docs to be able to focus on providing care; (2) ease the way into a patient safety system in which errors are looked into to learn from; (3) docs will use this as 'escape clause' for any cost saving efforts in the system.....they retort will be 'what about malpractice?'
*And given that it is apparently quite hard to sue anyway, we aren't losing much by way of a deterrent for errors and poor quality.
Again, if you think docs are money grubers only (I don't), then heavy tort reform will be the only way to call their bluff. If reform comes about and defensive medicine doesn't drop, it will be something else. And tort reform could be the lead into a real patient safety approach that will improve quality in a way that tort law hasn't been able to do.
*I think defensive medicine likely raises the cost of the health system by 1-3%. 5% would be $125 Billion per year (this year total spending will be around $2.5 Billion, the $2.1 B the article notes is last year). The biggest estimate I have seen is $168 B per year (Charles Krauthammer wrote $200 B per year in a column this past summer, but I think he was just rounding up; will dig it up later).
*The article shows that rates of suits have been dropping. Several lawyers have written me saying so based on stuff I have written in the past saying we needed tort reform, mostly as a political tool to bring the docs along (and to respond to their true obessession with getting sued, even if the rate of such is dropping).
*Even if the data show that we won't save much money from tort reform (I don't think we will), if ONE doctor gets up wearing white coat and says defensive medicine is key cost driver, most folks will put more credence in that than they will the testimony of 100 lawyers plus 100 health policy guys.
*So, we need tort reform to (1) get the docs to be able to focus on providing care; (2) ease the way into a patient safety system in which errors are looked into to learn from; (3) docs will use this as 'escape clause' for any cost saving efforts in the system.....they retort will be 'what about malpractice?'
*And given that it is apparently quite hard to sue anyway, we aren't losing much by way of a deterrent for errors and poor quality.
Again, if you think docs are money grubers only (I don't), then heavy tort reform will be the only way to call their bluff. If reform comes about and defensive medicine doesn't drop, it will be something else. And tort reform could be the lead into a real patient safety approach that will improve quality in a way that tort law hasn't been able to do.
Saturday, September 26, 2009
Flexible Spending Accounts
New York Times article on the debate around fleixible spending accounts. I have one via Duke. My wife says Duke has a maximum of $4,000 you can put in each year, meaning that the amount put into it is shielded from taxes and allows all $4,000 to be spent on health care (actually, for us this year, $3,100 is going to our oldest childs orthodontic braces).
Flexible spending accounts figure in the minutiae of the Baucus bill. First, the tax on high premium health benefits (35% on amount above $21,000 family; $8,000 individual; if you had $24,000 then tax is on $3,000, paid by insurance company but certainly passed on and/or benefits will move just below tax; that is the goal of the tax) includes the following:
*employer paid premiums for health insurance;
*employee paid premiums for health insurance;
*total premiums for dental (I have it, but Duke pays none, family pays $100%)
*total amount put into flexible spending accounts.
All this addes to $16,000 for me, below the $21,000....but Duke's benefit levels given my families choices would eventually 'inflate into' this tax.....unless of course health care cost inflation slowed to general inflation, or whatever the tax limit is inflated by.
Back to flexible spending account. Baucus also has provision to cap amount that can be put into the account at $2,500. So, that would mean for me that I couldn't do the total costs of my kids braces this year ($3,100) on a pre-tax basis. In fairness, I could also be putting in $4,000 for life saving drugs, etc. but I am blessed that my family is not now in that situation.
The political question, is it a tax increase to take away a prefential aspect of the tax code?
Here is a cheat sheet:
*(A) If you want to argue against a change in the tax treatment of health benefits, call it a tax increase. If we capped the flexible spending account amount at $2,500, then someone (like me) putting in $4,000 this year, would have $1,500 more income exposed to taxes. It is also the case that this would reduce the deficit ever so slightly, because when I get that tax preference, all the other taxpayers pay for it.
* (B)If you want to argue for it, call it the closing of a tax loophole, that differentially benefits one group of taxpayers compared to others. So, if we capped the tax exclusion of employer paid insurance benefits, it would be the closing of a tax loophole that would reduce the deficit by around $450-$500 Billion dollars over the next 10 years.
Arguing from the (A) perspective point above, it would be a crushing tax increase on the hardworking men and women of America. Arguing from point (B) above, the current tax codes harms the hardworking men and women who don't enjoy this tax preference because they don't have employer provided insurance.
You can make an argument in either direction. [However, the deficit is not theoretical, it actually exists!]. Often arguments will be couched in terms of fairness (it is not fair for one group to get it if another does not), and such arguments will often be refuted with the concept that a given aspect of the tax code, makes society better off on the basis of net benefits, even if some individuals are differentially benefitted.
You could have the exact same argument around: the home interest deduction (this plus tax exclusion of employer paid health insurance premiums are by far the two largest tax expenditures that operate in this way), child tax credits, tax credits for purchasing long term care insurance, making your home more energy efficient, and literally hundreds and hundreds of other (much smaller in tersm of the deficit) smaller examples.
Flexible spending accounts figure in the minutiae of the Baucus bill. First, the tax on high premium health benefits (35% on amount above $21,000 family; $8,000 individual; if you had $24,000 then tax is on $3,000, paid by insurance company but certainly passed on and/or benefits will move just below tax; that is the goal of the tax) includes the following:
*employer paid premiums for health insurance;
*employee paid premiums for health insurance;
*total premiums for dental (I have it, but Duke pays none, family pays $100%)
*total amount put into flexible spending accounts.
All this addes to $16,000 for me, below the $21,000....but Duke's benefit levels given my families choices would eventually 'inflate into' this tax.....unless of course health care cost inflation slowed to general inflation, or whatever the tax limit is inflated by.
Back to flexible spending account. Baucus also has provision to cap amount that can be put into the account at $2,500. So, that would mean for me that I couldn't do the total costs of my kids braces this year ($3,100) on a pre-tax basis. In fairness, I could also be putting in $4,000 for life saving drugs, etc. but I am blessed that my family is not now in that situation.
The political question, is it a tax increase to take away a prefential aspect of the tax code?
Here is a cheat sheet:
*(A) If you want to argue against a change in the tax treatment of health benefits, call it a tax increase. If we capped the flexible spending account amount at $2,500, then someone (like me) putting in $4,000 this year, would have $1,500 more income exposed to taxes. It is also the case that this would reduce the deficit ever so slightly, because when I get that tax preference, all the other taxpayers pay for it.
* (B)If you want to argue for it, call it the closing of a tax loophole, that differentially benefits one group of taxpayers compared to others. So, if we capped the tax exclusion of employer paid insurance benefits, it would be the closing of a tax loophole that would reduce the deficit by around $450-$500 Billion dollars over the next 10 years.
Arguing from the (A) perspective point above, it would be a crushing tax increase on the hardworking men and women of America. Arguing from point (B) above, the current tax codes harms the hardworking men and women who don't enjoy this tax preference because they don't have employer provided insurance.
You can make an argument in either direction. [However, the deficit is not theoretical, it actually exists!]. Often arguments will be couched in terms of fairness (it is not fair for one group to get it if another does not), and such arguments will often be refuted with the concept that a given aspect of the tax code, makes society better off on the basis of net benefits, even if some individuals are differentially benefitted.
You could have the exact same argument around: the home interest deduction (this plus tax exclusion of employer paid health insurance premiums are by far the two largest tax expenditures that operate in this way), child tax credits, tax credits for purchasing long term care insurance, making your home more energy efficient, and literally hundreds and hundreds of other (much smaller in tersm of the deficit) smaller examples.
Friday, September 25, 2009
Choice of Plans in Employer Provided Insurance
Bottom line: 47% of those covered by job-related health insurance have only 1 choice of plan; 33% have 2 choices; 19% have 3 or more choices.
Here is a slide from Kaiser Family Foundation showing percent of firms offering insurance, who offer, 1, 2 or 3+ choices of plan (89% of firms offering cover offer 1 plan). Here is another slide showing the proportion of covered (insured) workers covered by firms offering 1, 2 or 3+ plans (47% of workers covered by workplace policies had 1 choice, or no choice; 33% had two choices; and the balance, 19% had 3 or more choices.
Here is the full report, The Annual Employer Health Benefits survey, done by Kaiser Family Foundation and the Hospital Research and Educational Trust. Here is a list of the exhibits and tables....lots of stuff here.
Here is a slide from Kaiser Family Foundation showing percent of firms offering insurance, who offer, 1, 2 or 3+ choices of plan (89% of firms offering cover offer 1 plan). Here is another slide showing the proportion of covered (insured) workers covered by firms offering 1, 2 or 3+ plans (47% of workers covered by workplace policies had 1 choice, or no choice; 33% had two choices; and the balance, 19% had 3 or more choices.
Here is the full report, The Annual Employer Health Benefits survey, done by Kaiser Family Foundation and the Hospital Research and Educational Trust. Here is a list of the exhibits and tables....lots of stuff here.
Column in today's News and Observer--Choice and Competition
Column in today's News and Observer tries to step back from the gory details and consider the big idea of Baucus: define the uninsured problem as a market failure, and instead of only expanding insurance via government programs, try and create a robust and functioning individual-sale (non employer) insurance market in which individual consumers do the shopping. And in doing so, harness market competition to bid down premiums and make insurance more affordable. Doing this successfully would be a radical departure from what we now have in the USA.
160 Million people get insurance form their employer, and many have no choice--only the policy arranged by their employer. And employers are spending someone elses money (their employees, and the taxpayers as a whole because of the tax exclusion of employer paid premiums) when they do the shopping. There are just 14 Million people covered by non-group private insurance policies in the US.
Here are others noting benefits of Wyden amendment (noted in the column) that would open up the insurance markets created by Baucus bill. Here is link to Ezra Klein's interview with Ron Wyden.
Also, I was watching a bit of the Senate Finance Committee mark up last night (I know, get a life) and there was interesting discussion about providing newly eligible Medicaid beneficiaries choice of whether to stick with Medicaid or be able to purchase policies through the exchange. Sen. Enzi, (R-WY) offered such an amendment, with Sen. Wyden voting for it, and Sen. Conrad and Sen. Cantwell saying they would favor a similar amendment to be offered later....they voted against Enzi's because of the 'pay for' that would make this amendment budget neutral...it would pay for this expansion of Medicaid folks into private insurance by reducing the subsidies given to people between 133%-400% of poverty. Sen. Snowe also voted against the amendment.
We will see if there is an emerging move toward opening up the exchanges in the Baucus bill, in the name of choice.
Note: The News and Observer has changed its website, and the links of past columns to the right are now broken. I will work on fixing this....if you want to read past columns if you put Donald H. Taylor, Jr. into google it will get to most of them on the first page that comes up.
160 Million people get insurance form their employer, and many have no choice--only the policy arranged by their employer. And employers are spending someone elses money (their employees, and the taxpayers as a whole because of the tax exclusion of employer paid premiums) when they do the shopping. There are just 14 Million people covered by non-group private insurance policies in the US.
Here are others noting benefits of Wyden amendment (noted in the column) that would open up the insurance markets created by Baucus bill. Here is link to Ezra Klein's interview with Ron Wyden.
Also, I was watching a bit of the Senate Finance Committee mark up last night (I know, get a life) and there was interesting discussion about providing newly eligible Medicaid beneficiaries choice of whether to stick with Medicaid or be able to purchase policies through the exchange. Sen. Enzi, (R-WY) offered such an amendment, with Sen. Wyden voting for it, and Sen. Conrad and Sen. Cantwell saying they would favor a similar amendment to be offered later....they voted against Enzi's because of the 'pay for' that would make this amendment budget neutral...it would pay for this expansion of Medicaid folks into private insurance by reducing the subsidies given to people between 133%-400% of poverty. Sen. Snowe also voted against the amendment.
We will see if there is an emerging move toward opening up the exchanges in the Baucus bill, in the name of choice.
Note: The News and Observer has changed its website, and the links of past columns to the right are now broken. I will work on fixing this....if you want to read past columns if you put Donald H. Taylor, Jr. into google it will get to most of them on the first page that comes up.
Thursday, September 24, 2009
4 Question Interview with Barbara Morales Burke
Another installment of the '4 Question Interview', this time with Barbara Morales Burke, Vice President of Health Policy, Blue Cross and Blue Shield of North Carolina. I posed the questions via email, and these are her answers, unedited by me. I appreciate her taking the time to answer the questions.
Question 1. What is the biggest problem facing the U.S. health care system?
The most pressing issue in our health care system is cost. Health care is simply unaffordable for many Americans. Any health reform effort that provides coverage to more people without addressing costs won’t work. Here’s the heart of the problem: we don’t get a good return in better health for the trillions of dollars we spend on health care. Our current system is geared toward treating illnesses and performing procedures. It does not do such a good job at helping people stay well.
To lower costs, reform should do three things:
Improve the quality and effectiveness of care. At BCBSNC, we’ve created Centers of Excellence for cancer care, heart surgery and obesity surgery to encourage hospitals and physicians to adopt nationally accepted quality standards. Our aim is to reward doctors and hospitals based on their demonstrated expertise, improve patients’ health outcomes and reduce the incidence and cost of medical complications. We’ve also partnered with North Carolina hospitals to improve safety and reduce avoidable medical errors.
Promote preventive care and lifestyle changes.
Provide better care to patients, not more care. We believe health care providers should be rewarded for what they do to help patients improve or maintain their health, not just for the number of procedures they perform.
Question 2. What do you most want to see preserved about the U.S. health care system?
Our system now provides consumers a choice in doctors, hospitals and other health care providers. We believe consumers will continue to demand that kind of choice. Choice needs to be preserved.
We believe that employer-based health insurance, which serves more than 160 million Americans today, should be strengthened as a primary means of health coverage. For those who do not have coverage through their work, we support reforms to help them get access to the care that they need.
By building on what works today, we believe we can achieve a system that covers all Americans, promotes health, and uses financial resources effectively.
Question 3. What is the most important health policy priority for North Carolina (or the USA)? [answer which ever you want to answer]
The immediate priority is to get everyone covered. Americans should be required to be insured, and the government should help those who can’t afford their premiums. With everyone in the insurance pool, the system can work the way it was intended to - with medical costs spread across both the healthy and the sick. We must do this is in a way that promotes affordability in general, being careful that we do not overly burden healthy people with higher premiums as we work to cover those who have difficulty affording premiums currently because of their health circumstances. We are also concerned about some proposed taxes and fees on health plans and benefits that would serve to make coverage more expensive.
The longer-term priority is to foster a culture that promotes healthy lifestyles. That’s a priority no matter what health reform legislation Congress passes. Without a focus on health promotion, we will be dealing with the same problems – or worse – in the coming decades.
Question 4. If you could design a health system from scratch, what would it look like?
That’s a great question. We want a system in which consumers can chose from a variety of health care plans, without regard to their health circumstances or financial condition. All Americans should be required to get coverage, with the government providing assistance to those who can’t afford their premiums.
We believe in a system in which patients get the right care at the right time, from skilled providers using the best medical evidence available. Doctors, hospitals and other health care providers should be rewarded financially for their expertise and for their patients’ health outcomes. The system would expand the collaboration already going on between doctors, hospitals and insurers to reduce costs and provide better care. We want to see technology used as effectively as possible to help providers collaborate to improve the health of their patients and to help consumers choose quality health plans, providers and treatments.
Question 1. What is the biggest problem facing the U.S. health care system?
The most pressing issue in our health care system is cost. Health care is simply unaffordable for many Americans. Any health reform effort that provides coverage to more people without addressing costs won’t work. Here’s the heart of the problem: we don’t get a good return in better health for the trillions of dollars we spend on health care. Our current system is geared toward treating illnesses and performing procedures. It does not do such a good job at helping people stay well.
To lower costs, reform should do three things:
Improve the quality and effectiveness of care. At BCBSNC, we’ve created Centers of Excellence for cancer care, heart surgery and obesity surgery to encourage hospitals and physicians to adopt nationally accepted quality standards. Our aim is to reward doctors and hospitals based on their demonstrated expertise, improve patients’ health outcomes and reduce the incidence and cost of medical complications. We’ve also partnered with North Carolina hospitals to improve safety and reduce avoidable medical errors.
Promote preventive care and lifestyle changes.
Provide better care to patients, not more care. We believe health care providers should be rewarded for what they do to help patients improve or maintain their health, not just for the number of procedures they perform.
Question 2. What do you most want to see preserved about the U.S. health care system?
Our system now provides consumers a choice in doctors, hospitals and other health care providers. We believe consumers will continue to demand that kind of choice. Choice needs to be preserved.
We believe that employer-based health insurance, which serves more than 160 million Americans today, should be strengthened as a primary means of health coverage. For those who do not have coverage through their work, we support reforms to help them get access to the care that they need.
By building on what works today, we believe we can achieve a system that covers all Americans, promotes health, and uses financial resources effectively.
Question 3. What is the most important health policy priority for North Carolina (or the USA)? [answer which ever you want to answer]
The immediate priority is to get everyone covered. Americans should be required to be insured, and the government should help those who can’t afford their premiums. With everyone in the insurance pool, the system can work the way it was intended to - with medical costs spread across both the healthy and the sick. We must do this is in a way that promotes affordability in general, being careful that we do not overly burden healthy people with higher premiums as we work to cover those who have difficulty affording premiums currently because of their health circumstances. We are also concerned about some proposed taxes and fees on health plans and benefits that would serve to make coverage more expensive.
The longer-term priority is to foster a culture that promotes healthy lifestyles. That’s a priority no matter what health reform legislation Congress passes. Without a focus on health promotion, we will be dealing with the same problems – or worse – in the coming decades.
Question 4. If you could design a health system from scratch, what would it look like?
That’s a great question. We want a system in which consumers can chose from a variety of health care plans, without regard to their health circumstances or financial condition. All Americans should be required to get coverage, with the government providing assistance to those who can’t afford their premiums.
We believe in a system in which patients get the right care at the right time, from skilled providers using the best medical evidence available. Doctors, hospitals and other health care providers should be rewarded financially for their expertise and for their patients’ health outcomes. The system would expand the collaboration already going on between doctors, hospitals and insurers to reduce costs and provide better care. We want to see technology used as effectively as possible to help providers collaborate to improve the health of their patients and to help consumers choose quality health plans, providers and treatments.
Medicare as centerpiece of Finance Committee
Yesterday's Senate Finance committee talk focused on Medicare. Interesting discussion of physician payment changes and their importance.
Wednesday, September 23, 2009
Needs more Sage
The sausage factory was in full tilt yesterday. Lots of speeches about historic opportunities, stunning assaults on liberty and the like. NYTimes has a bit. WSJ describes a bit of it. And some more. And Politico.
Biggest substantive changes by Baucus as they start sorting through amendments: (1) affordability standard dropped a bit (12% of AGI between300- 400% poverty (down from 13%), with sliding scale percent of total premium paid down to 2% (down from 3%) at 134% of poverty; just above Medicaid eligibility; (2) Penalty, fee, tax, money you have to pay, etc. if you do not comply with the individual mandate dropped in half; max at $1,900/year for family.
Big issues are given the mandate, is it affordable? Probably not. Answer is to increase subsidy. Second big (and bigger) issue is how do you pay for increasing the subsidy? Best answer is to cap exclusion for employer paid insurance at avg. national premium (will easily pay for it and more importantly, will actually introduce a cost saving measure into the system).
Lost in the horse race is a basic reality. Regarding people being uninsured, there are really 3 basic apporaches you can take.
(1) Do nothing.
(2) Cover people automatically via gov't insurance
(3) attempt to insure people via private insurance using subsidies, exchanges and the like.
Lots of details and different ways you can do (3). But, this effort is first and foremost an attempt to create a market for health insurance where one has failed to develop. If you don't like the general approach, see options (1) and (2). You could of course like approach (3) and want the details to be different.
Biggest substantive changes by Baucus as they start sorting through amendments: (1) affordability standard dropped a bit (12% of AGI between300- 400% poverty (down from 13%), with sliding scale percent of total premium paid down to 2% (down from 3%) at 134% of poverty; just above Medicaid eligibility; (2) Penalty, fee, tax, money you have to pay, etc. if you do not comply with the individual mandate dropped in half; max at $1,900/year for family.
Big issues are given the mandate, is it affordable? Probably not. Answer is to increase subsidy. Second big (and bigger) issue is how do you pay for increasing the subsidy? Best answer is to cap exclusion for employer paid insurance at avg. national premium (will easily pay for it and more importantly, will actually introduce a cost saving measure into the system).
Lost in the horse race is a basic reality. Regarding people being uninsured, there are really 3 basic apporaches you can take.
(1) Do nothing.
(2) Cover people automatically via gov't insurance
(3) attempt to insure people via private insurance using subsidies, exchanges and the like.
Lots of details and different ways you can do (3). But, this effort is first and foremost an attempt to create a market for health insurance where one has failed to develop. If you don't like the general approach, see options (1) and (2). You could of course like approach (3) and want the details to be different.
Tuesday, September 22, 2009
Stuff from CBO
Letters from CBO today, looking at the premium levels projected in 2016 for plans purchased in the proposed exchange as compared to those purchased under indivdiual purchase as well as those obtained via group purchase.
More on changes
Wash Post has nice article that clearly summarizes the economics and distributional realities of paying for expanding coverage.
Washington Post has story of changes to increase subsidy for persons forced to buy insurance via individual mandate in Senate finance committee bill. This is easy to do, but it costs money, so the calculus is figure out what you think is affordable and then figure how you pay for it. The high premium tax on health insurance is wobbling. I would scrap it in favor of more simply and clearly saying that we will limit the tax exlcusion of employer paid premiums. I would put it at the average premium, which is a lot bigger whack than what they are talking about now. Without the tax on higher premium plans or capping the tax exclusion, you lose the only, completely predictable cost saving attribute of this approach. I get that this hits you worse if you live in a high cost state.....but high cost states are part of the problem that make our current system unsustainable.
For comparison, my back of the envelope noodling shows the following affordability amounts in Baucus as written now, Senate HELP, and what Massachusetts has in their connector.
Amount family of 4 has to pay if income around 300% of poverty level ($60,000ish).
*Baucus as written $7,100
*Senate HELP committee $5,800
*Massachusetts $4,400
Easy part is increasing subsidy....harder part is paying for it. My proposal to cap tax exclusion at the mean would do it. In the end, it is unfair that people with employer paid insurance get unlimited subsidy via the tax code, while the uninsured get none. Call it a tax....I think it is closing a tax loophole. But, whatever you call, it leads to some being overinsured, which drives up health care costs.....while others are uninsured and underinsured.
Washington Post has story of changes to increase subsidy for persons forced to buy insurance via individual mandate in Senate finance committee bill. This is easy to do, but it costs money, so the calculus is figure out what you think is affordable and then figure how you pay for it. The high premium tax on health insurance is wobbling. I would scrap it in favor of more simply and clearly saying that we will limit the tax exlcusion of employer paid premiums. I would put it at the average premium, which is a lot bigger whack than what they are talking about now. Without the tax on higher premium plans or capping the tax exclusion, you lose the only, completely predictable cost saving attribute of this approach. I get that this hits you worse if you live in a high cost state.....but high cost states are part of the problem that make our current system unsustainable.
For comparison, my back of the envelope noodling shows the following affordability amounts in Baucus as written now, Senate HELP, and what Massachusetts has in their connector.
Amount family of 4 has to pay if income around 300% of poverty level ($60,000ish).
*Baucus as written $7,100
*Senate HELP committee $5,800
*Massachusetts $4,400
Easy part is increasing subsidy....harder part is paying for it. My proposal to cap tax exclusion at the mean would do it. In the end, it is unfair that people with employer paid insurance get unlimited subsidy via the tax code, while the uninsured get none. Call it a tax....I think it is closing a tax loophole. But, whatever you call, it leads to some being overinsured, which drives up health care costs.....while others are uninsured and underinsured.
Monday, September 21, 2009
Baucus signals changes
Sen. Baucus says he will change bill to make subsidies larger and make tax on high value benefits less. There would seem to be movement toward a deal....and Sen. Snowe has proposed lots of amendments many of which seem as though she is still open to signing on.
Sunday, September 20, 2009
Amendments to be offered in Finance Committee
The Senate finance committee has released a list of the amendments that will be offered to the Chairman's mark of the Senate Finance Committee bill. There are several hundred amendments....senators had to filed planned amendments by Friday.
A quick read shows that I like Sen. Carper's Amendments regarding transitioning from hi value insurance tax to a more straightforward capping of the tax exclusion (and some other things).
A quick read shows that I like Sen. Carper's Amendments regarding transitioning from hi value insurance tax to a more straightforward capping of the tax exclusion (and some other things).
More on 'cadillac insurance plan' tax
More on push back against this aspect (tax levied on insurance companies for value of plans above $8,000 for individuals; $21,000 for family cover) of the Baucus bill. I have been thinking, who has these plans? They interview a guy in Nebraska in a gov't workers union who has a salary of $50,000 and a benefit plan worth $31,000. I think of myself as having pretty good insurance, and total value of what I have is $16,000 (employer and employee share of major medical premiums; I pay total dental premium; plus what I put into a flexible spending account, which is included in determining which persons trigger the tax based on my read of Baucus bill).
If people want lots of insurance that is fine....but it is not fair to provide unlimited subsidy via the tax code for some, while others get none, simply because of who they work for. If you cap the tax exclusion at the national average ($5,000 individual; $13,000 family) then employees would look a bit more closely at their benefits....if they like lots of insurance, then fine, the premiums above the average are taxable income. If they don't, then employers and employees should be able to work it out, and employers should be roughlyneutral on which way employees want to be compensated.
As the article in the WSJ notes, some plans that are high cost may be due to the fact that a small business is providing, so the insurance is more costly.
If people want lots of insurance that is fine....but it is not fair to provide unlimited subsidy via the tax code for some, while others get none, simply because of who they work for. If you cap the tax exclusion at the national average ($5,000 individual; $13,000 family) then employees would look a bit more closely at their benefits....if they like lots of insurance, then fine, the premiums above the average are taxable income. If they don't, then employers and employees should be able to work it out, and employers should be roughlyneutral on which way employees want to be compensated.
As the article in the WSJ notes, some plans that are high cost may be due to the fact that a small business is providing, so the insurance is more costly.
Friday, September 18, 2009
Interview with Ron Wyden
from Ezra Klein Discussing his views on Baucus bill and his free choice amendment proposal.
Tax on high value insurance plans
Here is NY Times article discussing Senate discussion about this. Interestingly, Snowe is quite clear about saying subsidies need to be higher....doesn't sound like someone who has bailed long term...and the longer she holds out, the more powerful she gets.
Also, the tax on high value insurance policies NEEDS to be passed on to consumers so they won't remain over-insured. If you want more health insurance, you need to pay for it. The problem with the current approach (current since World War II) is that the tax code allows unlimited tax subsidy of employer paid insurance premiums. It is an upside down subsidy, whereby the uninsured get none of it (because they don't have employer paid premiums) while people with higher incomes get most of it. The sidebar by Jon Gruber in the NEJM is a good overview of how it works.
The Baucus bill addresses the uninsured with Medicaid expansions and subsidies to purchase insurance. It will address some of the under-insured, who are disproportionately in small businesses. And by limiting the unlimited subsidy of employer paid insurance premiums (via the high value tax) it does something to lessen the problem of over-insurance. This tax should be expanded downward to the mean value of plans, or preferably, just be direct and cap the tax exclusion at the mean ($13,000 family cover; $5,000 individual). The money raised by this....about twice as much as the high value tax should be put into expanding subsidies between 133%-400% of poverty. Doing it this way would maintain the deficit reducing nature of the overall bill.
Also, the tax on high value insurance policies NEEDS to be passed on to consumers so they won't remain over-insured. If you want more health insurance, you need to pay for it. The problem with the current approach (current since World War II) is that the tax code allows unlimited tax subsidy of employer paid insurance premiums. It is an upside down subsidy, whereby the uninsured get none of it (because they don't have employer paid premiums) while people with higher incomes get most of it. The sidebar by Jon Gruber in the NEJM is a good overview of how it works.
The Baucus bill addresses the uninsured with Medicaid expansions and subsidies to purchase insurance. It will address some of the under-insured, who are disproportionately in small businesses. And by limiting the unlimited subsidy of employer paid insurance premiums (via the high value tax) it does something to lessen the problem of over-insurance. This tax should be expanded downward to the mean value of plans, or preferably, just be direct and cap the tax exclusion at the mean ($13,000 family cover; $5,000 individual). The money raised by this....about twice as much as the high value tax should be put into expanding subsidies between 133%-400% of poverty. Doing it this way would maintain the deficit reducing nature of the overall bill.
Column in today's News and Observer
is a comment on the provisions of the Senate Finance Committee aka Baucus Bill. I suspect alot of the discussion will be about no public option v. public option. I would support public option but don't think it can pass the Senate. A more fruitful line of amedments would be to focus on actually increasing competition in the bill. In North Carolina and in some other states, it will be hard to get competition because we have one dominant insurer, Blue Cross and Blue Shield (96.8% of the individual market; 72.5% of the group market). However, opening up the exchanges to more persons, and even to larger employers might actually shake things up in the group purchase market, in addition to insuring more of the uninsured.
The status quo is bad. Costs are unsustainable. Health insurance premiums are rising 3-4 times faster than wages, and there is evidence this process is accelerating. Do nothing and the next 10 years of wage growth will likely be totally consumed by health insurance costs. And the baby boomers are coming to Medicare. There is nothing we can do about that, but we have got to slow the rate of cost inflation in the health care system. All of this money being spent and we still have Millions of uninsured persons and under-insured persons (and also over insured persons). And we aren't getting our money's worth from our high level of spending.
We could go with a goverment insurance approach of everyone having Medicare. I would prefer this, but it seems clear that a majority of folks don't want gov't insurance (until they turn 65, of course). Instead, we are saying we want market forces to reign in health care costs. OK. We can try that and it might even be able to work, but we have actually got to TRY IT.
The Baucus bill is a useful vehicle to move ahead. It sets up a reasonable structure for private insurance markets for the individual purchase market. The subsidies are likely too low for many between 133%-300% of poverty, especially if only the uninsured and those in small businesses are allowed in. And the CBO says that the provisions of the bill actually reduce the deficit by $49 Billion over the next 10 years. So, as it is amended, holding the fiscal line (meaning balance spending with cuts or new revenue) can lead to a responsible way forward.
So, what we need to do if we are going to go this (market) way, is to let more people into these health insurance markets.
The status quo is unsustainable. We have got to shake things up.
The status quo is bad. Costs are unsustainable. Health insurance premiums are rising 3-4 times faster than wages, and there is evidence this process is accelerating. Do nothing and the next 10 years of wage growth will likely be totally consumed by health insurance costs. And the baby boomers are coming to Medicare. There is nothing we can do about that, but we have got to slow the rate of cost inflation in the health care system. All of this money being spent and we still have Millions of uninsured persons and under-insured persons (and also over insured persons). And we aren't getting our money's worth from our high level of spending.
We could go with a goverment insurance approach of everyone having Medicare. I would prefer this, but it seems clear that a majority of folks don't want gov't insurance (until they turn 65, of course). Instead, we are saying we want market forces to reign in health care costs. OK. We can try that and it might even be able to work, but we have actually got to TRY IT.
The Baucus bill is a useful vehicle to move ahead. It sets up a reasonable structure for private insurance markets for the individual purchase market. The subsidies are likely too low for many between 133%-300% of poverty, especially if only the uninsured and those in small businesses are allowed in. And the CBO says that the provisions of the bill actually reduce the deficit by $49 Billion over the next 10 years. So, as it is amended, holding the fiscal line (meaning balance spending with cuts or new revenue) can lead to a responsible way forward.
So, what we need to do if we are going to go this (market) way, is to let more people into these health insurance markets.
The status quo is unsustainable. We have got to shake things up.
Thursday, September 17, 2009
What about the Baucus bill?
Several thoughts about the Baucus bill. First, the fact that there was a bit of grumbling on both sides is the best signal yet that this bill may be the vehicle for a compromise. In general, I think the structure of the exchanges seem reasonable, but the bill may be underfunded (meaning the major question is whether insurance is affordable for persons between 133%-300% of poverty give the subsidy levels). At the same time, the tax on high value insurance plans both raises money to offset the expansions while also serving to add a cost control pressure into the system because some will likely be less overinsured due to the tax on high cost insurance plans.
Also, CBO says that the bill will reduce the deficit by $49 Billion over 10 years...and that the cost saving provisions of the bill ACCELERATE in the next 10 years. They are saying the cost of the subsidies will grow by about 7%, but that the money raised by the tax on high value insurance plans will go up around double that because the limit for the tax to apply ($21,000 family; $8,000 individual--about the 75th percentile) will be indexed for inflation, while health insurance premiums are likely to grow much faster. Hence, more policies will incur the tax over time....or the rate of cost inflation in health care will have slowed. Sort of a self correcting mechanism (note the same would be true for what I propose instead of this tax below).
The biggest problem is the lack of competition amongst private insurers that will likely exist in many places. As has been said, Blue Cross/Blue Shield of NC wrote 96.8% of individual market policies sold in NC last year (they have 72.5% of group sales). With no public option, who will enter? The co-ops are a waste of time.....if someone can convince me otherwise then fine.....but most successful co-ops (electricity, agriculture) serve as monopolies or distribution mechanisms for things like fuel. No way they will get up and running and competitive.
Here are 3 changes that would improve the Baucus bill.
1. Cap the tax exclusion of employer paid premiums instead of the tax on high value insurance plans. I would cap the exclusion at the mean value of plans nationally ($13,000 family; $5,000 indivdiual). This would reduce federal spending by about $500 Billion over 10 years, as compared to the high value tax which raises $215 Billion over 10. I would use the extra money saved to increase the subsidy amount available to persons between 133% of poverty and 400%.
These two taxes (cap tax exclusion and tax high cost plans) do the same thing in a slightly different way, but I would prefer to say we now have an unfair subsidy for private health insurance. The uninsured get none, and others get unlimited simply because of the employer they work for. This is unfair, and it leads to some persons being overinsured, not facing the true cost of their care, and therefore more likely to overuse care. Capping the tax exclusion at the mean national value should have a substantial impact on health care costs, and is the most certain means to slow the rate of health care cost growth in the non-elderly market. It is more straightforward that the high value tax and also places the cultural conversation on the fact that we have over-insured folks in addition to un- and under-insured people.
2. Get rid of the free rider provision that penalizes an employer who doesn't offer health insurance, and whose employee then ends up getting a federal subsidy to purchase health insurance. This incentivizes employers to NOT hire low income workers. Stick with the individual mandate, realizing that you will not get all people to comply. If you wnat to cover everyone, you have to cover everyone....and we are saying we don't want to do that, but to work within the current system. Also, this is said to be a pet issue of Sen. Snowe....definitely get rid of it if she won't come on board. Another option is to create an auto-enroll absolute bare bones policy for persons less than 30...that is more fruitful than these sorts of free rider penalties.
3. Pass the Wyden 'Free Choice' amendment. This amendment would open up the exchanges to persons with employer provided insurance if they didn't like the insurance options being provided by their employer. The general approach to reform being taken is that we need to give consumers options and to have insurance companies compete for their business...therefore bidding down premiums and costs. I don't think this is the easiest way to expand coverage or reduce costs...but it is the way we seem to be going. If we are going down the choice route, then lets do it--give more people access to the exchanges more quickly, and give more folks choice. This would have the possibility of a 'spillover' effect from the exchanges actually re-energizing the market for group insurance. The main reason the insurers are going along is that they are getting more customers in the individual sales market where they sell very little....while getting no change in group sales market. This should be changed to allow more folks access to the exchanges, sooner (Baucus envisions states being able to allow all employers/persons into the exchanges by 2022 already).
Also, CBO says that the bill will reduce the deficit by $49 Billion over 10 years...and that the cost saving provisions of the bill ACCELERATE in the next 10 years. They are saying the cost of the subsidies will grow by about 7%, but that the money raised by the tax on high value insurance plans will go up around double that because the limit for the tax to apply ($21,000 family; $8,000 individual--about the 75th percentile) will be indexed for inflation, while health insurance premiums are likely to grow much faster. Hence, more policies will incur the tax over time....or the rate of cost inflation in health care will have slowed. Sort of a self correcting mechanism (note the same would be true for what I propose instead of this tax below).
The biggest problem is the lack of competition amongst private insurers that will likely exist in many places. As has been said, Blue Cross/Blue Shield of NC wrote 96.8% of individual market policies sold in NC last year (they have 72.5% of group sales). With no public option, who will enter? The co-ops are a waste of time.....if someone can convince me otherwise then fine.....but most successful co-ops (electricity, agriculture) serve as monopolies or distribution mechanisms for things like fuel. No way they will get up and running and competitive.
Here are 3 changes that would improve the Baucus bill.
1. Cap the tax exclusion of employer paid premiums instead of the tax on high value insurance plans. I would cap the exclusion at the mean value of plans nationally ($13,000 family; $5,000 indivdiual). This would reduce federal spending by about $500 Billion over 10 years, as compared to the high value tax which raises $215 Billion over 10. I would use the extra money saved to increase the subsidy amount available to persons between 133% of poverty and 400%.
These two taxes (cap tax exclusion and tax high cost plans) do the same thing in a slightly different way, but I would prefer to say we now have an unfair subsidy for private health insurance. The uninsured get none, and others get unlimited simply because of the employer they work for. This is unfair, and it leads to some persons being overinsured, not facing the true cost of their care, and therefore more likely to overuse care. Capping the tax exclusion at the mean national value should have a substantial impact on health care costs, and is the most certain means to slow the rate of health care cost growth in the non-elderly market. It is more straightforward that the high value tax and also places the cultural conversation on the fact that we have over-insured folks in addition to un- and under-insured people.
2. Get rid of the free rider provision that penalizes an employer who doesn't offer health insurance, and whose employee then ends up getting a federal subsidy to purchase health insurance. This incentivizes employers to NOT hire low income workers. Stick with the individual mandate, realizing that you will not get all people to comply. If you wnat to cover everyone, you have to cover everyone....and we are saying we don't want to do that, but to work within the current system. Also, this is said to be a pet issue of Sen. Snowe....definitely get rid of it if she won't come on board. Another option is to create an auto-enroll absolute bare bones policy for persons less than 30...that is more fruitful than these sorts of free rider penalties.
3. Pass the Wyden 'Free Choice' amendment. This amendment would open up the exchanges to persons with employer provided insurance if they didn't like the insurance options being provided by their employer. The general approach to reform being taken is that we need to give consumers options and to have insurance companies compete for their business...therefore bidding down premiums and costs. I don't think this is the easiest way to expand coverage or reduce costs...but it is the way we seem to be going. If we are going down the choice route, then lets do it--give more people access to the exchanges more quickly, and give more folks choice. This would have the possibility of a 'spillover' effect from the exchanges actually re-energizing the market for group insurance. The main reason the insurers are going along is that they are getting more customers in the individual sales market where they sell very little....while getting no change in group sales market. This should be changed to allow more folks access to the exchanges, sooner (Baucus envisions states being able to allow all employers/persons into the exchanges by 2022 already).
Wisconsin Public Radio
I was intereviewed this morning on the Joy Cardin show, Wisconsin Public Radio about the Senate Finance Committee bill and health reform in general.
I like Wisconsin.
I went to a conference once in Madison, Wisconsin, and a guy told me we should duck out and go have lunch. We wandered into a place called State Street Brats. What a place. Free popcorn, great Brats and a beer called New Glamorgan (sp?) Spotted Cow. A few pitchers later it was officially the best conference I ever attended.....I have been searching for this beer in North Carolina ever since....no luck. Someone up there get a distributor down here!
I like Wisconsin.
I went to a conference once in Madison, Wisconsin, and a guy told me we should duck out and go have lunch. We wandered into a place called State Street Brats. What a place. Free popcorn, great Brats and a beer called New Glamorgan (sp?) Spotted Cow. A few pitchers later it was officially the best conference I ever attended.....I have been searching for this beer in North Carolina ever since....no luck. Someone up there get a distributor down here!
20 year v. 10 year scoring
What I say here about 20 year period making it harder to pass budget muster was wrong....it is the opposite. The tax on high value insurance plans (8k individual, 21k family) is indexed for inflation. But, health care costs are rising much faster than inflation. This provision will raise incresasingly more money in years 11-20.....or health care costs will have slowed. I would still favor straight cap of tax exclusion, which would have the same basic benefit over time....either raise more money or costs will have dropped. One of these two is more likely to slow cost growth than is competition.
Wednesday, September 16, 2009
Baucus Bill Chairman's Mark
full text is here. More later.
Update: Reading through the bill. Mostly similar to what leaked all last week. State based exchanges with substantial insurance reforms, allows employers with up to 100 employees to buy insurance via state based exchange, allows states to create cross-state compacts to sell policies across state lines (think that is new).
Update: Also, I think I have said this before, but the co-ops idea is a political compromise and not an actual reform. Given the attempt to expand coverage via private insurance in an individual purchase market, I would favor a public option. A gov't run health insurance plan that people who are eligible for the exchange (meaning uninsured, work for small businesses who are eligible) could buy if they wanted. But, the co-ops are not worth doing so far as I can tell. So, for me it is public option or not....and if no public option then we shall see whether private insurance companies end up competing in a way that lowers premiums....this is mostly theoretical. I agree that it works real well for ice cream cones, airline tickets and running shoes, but there is just not much evidence it works for health insurance. And in NC, Blue Cross/Blue Shield sold 98% of the individual market policies last year....so someone is going to have to enter if there is to be competition....and they sold about 8 in 10 group policies in the state. I don't have anything against BC/BS, it is just unlikely that NC is about to become a hot bed of competition sans a public option.
Still has financing provisions discussed last week....35% excise tax on the value of benefits above $8,000 for indivdiuals and $21,000 for families. I didn't realize until now that this included major medical premiums (paid by employer and employee), and dental premiums AND amounts put into flexible spending accounts. So, for me that is about $11,000 in major medical, $1,000 for dental and $4,000 into a flexible spending account (already gone this year!) for a total of $16,000 per this law. So, my health insurance company WOULD NOT pay a tax on my plan. And I think of myself as having pretty good insurance. Note that this plan does not exempt self insured companies from this. If self insured and hire an administrator, then tax levied on administrator. If self insured and administrate your self, then tax on the business that is self insured. So, point is not just to raise revenue, but to disincentivize high value health insurance plans....aka, reduce moral hazard in the system to try and slow cost growth.
I would prefer a straight cap of the tax exclusion of employer provided insurance. And I would put it down to the mean value of employer paid insurance premiums and use the extra for premium support for folks between 200-400% of poverty. It is simpler and it is simply closing a loop hole in the tax code. this approach is a bit convoluted, and while it may do the same thing in a round about way (raise money to offset spending in the bill and decrease incentives to have too much insurance that leads to overuse) a cap of the tax exclusion would do this simpler, and would more directly put the incentive to use less for overinsured folks where it belongs (the users of care). Not clear to me how much this raises, but I am thinking about $200-$300 Billion over 10 years or so. Update: Wall Street Journal says this raises $215 Billion over 10 years. Also says provisions below raise $93 Billion over 10....but I read it to say each tax levied each year for 10 which would be ~$130 Billion over 10....
Other major financing provisions inlcuded are several aggregate taxes levied on specific industries, with the tax liability divied up by market share.
*Drug companies $2.3 Billion/year
*Medical device makers (like pacemakers, artificial joints) $4 Billion/year
*Health Insurance companies $6 Billion/year
*Clinical labs $750 Million/year
Total $13 Billion/year, or $130 Billion over 10 years.
Here is a good post comparing what premiums would look like under Baucus bill, Baucus structure with total cost of House bill ($1.1T v. $880B over 10 years), and compared to Massachusetts reform approach. The writer is basically saying structure is ok, but underfunded.
Update: Reading through the bill. Mostly similar to what leaked all last week. State based exchanges with substantial insurance reforms, allows employers with up to 100 employees to buy insurance via state based exchange, allows states to create cross-state compacts to sell policies across state lines (think that is new).
Update: Also, I think I have said this before, but the co-ops idea is a political compromise and not an actual reform. Given the attempt to expand coverage via private insurance in an individual purchase market, I would favor a public option. A gov't run health insurance plan that people who are eligible for the exchange (meaning uninsured, work for small businesses who are eligible) could buy if they wanted. But, the co-ops are not worth doing so far as I can tell. So, for me it is public option or not....and if no public option then we shall see whether private insurance companies end up competing in a way that lowers premiums....this is mostly theoretical. I agree that it works real well for ice cream cones, airline tickets and running shoes, but there is just not much evidence it works for health insurance. And in NC, Blue Cross/Blue Shield sold 98% of the individual market policies last year....so someone is going to have to enter if there is to be competition....and they sold about 8 in 10 group policies in the state. I don't have anything against BC/BS, it is just unlikely that NC is about to become a hot bed of competition sans a public option.
Still has financing provisions discussed last week....35% excise tax on the value of benefits above $8,000 for indivdiuals and $21,000 for families. I didn't realize until now that this included major medical premiums (paid by employer and employee), and dental premiums AND amounts put into flexible spending accounts. So, for me that is about $11,000 in major medical, $1,000 for dental and $4,000 into a flexible spending account (already gone this year!) for a total of $16,000 per this law. So, my health insurance company WOULD NOT pay a tax on my plan. And I think of myself as having pretty good insurance. Note that this plan does not exempt self insured companies from this. If self insured and hire an administrator, then tax levied on administrator. If self insured and administrate your self, then tax on the business that is self insured. So, point is not just to raise revenue, but to disincentivize high value health insurance plans....aka, reduce moral hazard in the system to try and slow cost growth.
I would prefer a straight cap of the tax exclusion of employer provided insurance. And I would put it down to the mean value of employer paid insurance premiums and use the extra for premium support for folks between 200-400% of poverty. It is simpler and it is simply closing a loop hole in the tax code. this approach is a bit convoluted, and while it may do the same thing in a round about way (raise money to offset spending in the bill and decrease incentives to have too much insurance that leads to overuse) a cap of the tax exclusion would do this simpler, and would more directly put the incentive to use less for overinsured folks where it belongs (the users of care). Not clear to me how much this raises, but I am thinking about $200-$300 Billion over 10 years or so. Update: Wall Street Journal says this raises $215 Billion over 10 years. Also says provisions below raise $93 Billion over 10....but I read it to say each tax levied each year for 10 which would be ~$130 Billion over 10....
Other major financing provisions inlcuded are several aggregate taxes levied on specific industries, with the tax liability divied up by market share.
*Drug companies $2.3 Billion/year
*Medical device makers (like pacemakers, artificial joints) $4 Billion/year
*Health Insurance companies $6 Billion/year
*Clinical labs $750 Million/year
Total $13 Billion/year, or $130 Billion over 10 years.
Here is a good post comparing what premiums would look like under Baucus bill, Baucus structure with total cost of House bill ($1.1T v. $880B over 10 years), and compared to Massachusetts reform approach. The writer is basically saying structure is ok, but underfunded.
More on CBO scoring
Article noting that Kent Conrad, chairman of Senate Budget committee, asking CBO to score the emerging Senate Finance Committee bill over a 20 year period instead of the typical 10 year period. This will make it even harder to pass a deficit neutral test....particularly given CBO's conservative scoring of certain features designed to reduce expenditures.
I think most will see this as leading to the notion that reform will have to be pulled back and made more incremental and less sweeping to meet a harder deficit test....but, I think it is the opposite, mostly because of demographic realities. Given unwillingness of CBO to score savings from things like electronic medical records and uncertainty of what the polices of an Independent Medicare Advisory Commission would bring about, about the only way to get to deficit neutral over 20 years is to do something major to Medicare, like begin to slowly raise the age of eligibility and have a substantial cap of the tax exclusion of employer paid insurance premiums. The longer out you look vis-a-vis applying a test of deficit neutrality, the more profound the change has to be.....because the bigger the problem inherent with the status quo becomes. Put another way, the next 10 year period is the last such period in which you could piece together some insurance expansions with various reductions and make things balance out....because when the baby boomers hit Medicare, it is a whole new ballgame.
We really need to slow the rate of spending growth in the system, before this happens.
I think most will see this as leading to the notion that reform will have to be pulled back and made more incremental and less sweeping to meet a harder deficit test....but, I think it is the opposite, mostly because of demographic realities. Given unwillingness of CBO to score savings from things like electronic medical records and uncertainty of what the polices of an Independent Medicare Advisory Commission would bring about, about the only way to get to deficit neutral over 20 years is to do something major to Medicare, like begin to slowly raise the age of eligibility and have a substantial cap of the tax exclusion of employer paid insurance premiums. The longer out you look vis-a-vis applying a test of deficit neutrality, the more profound the change has to be.....because the bigger the problem inherent with the status quo becomes. Put another way, the next 10 year period is the last such period in which you could piece together some insurance expansions with various reductions and make things balance out....because when the baby boomers hit Medicare, it is a whole new ballgame.
We really need to slow the rate of spending growth in the system, before this happens.
Tuesday, September 15, 2009
Good explanation of exchange
Exchanges are the markets through which people will purchase health insuance under the reform options being considered by Congress. Here is a good explanation of how they would work.
More on the costs of doing nothing
Kaiser Family Foundation has a survey of the cost of employer provided insurance. The average premium in 1999 was $5,791 (employer portion $4247, employee $1543) while this year it is $13,375 (employer $9860, employee $3515). Wages over the same period have risen about 30%. In short, if we do nothing, most of your salary increases will go to health insurance over the next 10 years if we do nothing.....just like they have the last 10 years.
Monday, September 14, 2009
Catastrophic expenditures
I wrote this in the NY Times blog 'Room for Debate' last Thursday responding to the President's speech. A few people have sent me requests for more information on 'my plan.' It is an idea, not a plan per se. I have managed to get estimates of the percentage of persons under age 65 who have more than $10,000 in health expenditures in a given year. This data is as follows:
Percent of people with health expenditures greater than $10,000/Year
Age
0-19 2.2%
18-39 6.2%
40-49 8.7%
50-64 19.6%
The above numbers are very hard to come by....I spent most of Friday trying to find this and/or back of the envelope it. I found someone who has done it about as well as possible (and did so using multiple data sources/data sets). This has been adjusted to account for persons with 0 health expenditures in a give year, meaning such persons are included. The person who gave me this data did so on an 'off the record' basis so I am not able to identify them, but this is a reputable organization. Also, this is further evidence that if you could have one, and only one variable with which to risk adjust insurance premiums, you would pick age.
Percent of people with health expenditures greater than $10,000/Year
Age
0-19 2.2%
18-39 6.2%
40-49 8.7%
50-64 19.6%
The above numbers are very hard to come by....I spent most of Friday trying to find this and/or back of the envelope it. I found someone who has done it about as well as possible (and did so using multiple data sources/data sets). This has been adjusted to account for persons with 0 health expenditures in a give year, meaning such persons are included. The person who gave me this data did so on an 'off the record' basis so I am not able to identify them, but this is a reputable organization. Also, this is further evidence that if you could have one, and only one variable with which to risk adjust insurance premiums, you would pick age.
Friday, September 11, 2009
Senate Finance Committee Bill--Tuesday
Sounds like last major issue being negotiated is Medicaid expansions and malpractice reform, but that the work of the gang of 6 will be tied up Monday with a bill released Tuesday. There was nothing in the initial outline of the Finance Committee bill on malpractice, but sounds like there will be something in there now.
Triggers
Interesting interview with Judy Feder on the idea of savings triggers...meaning across the board cuts if projected savings don't materialize from reform options. This is all related to the CBO scoring of reform proposals with respect to their impact on the deficit over the next 10 years (the period into which they look). These seem to be a good idea....we really must do all we can to slow cost growth.
Today's Column in News and Observer
is here. It discusses some of the developing consensus, or the parts that folks agree about.
Here is a post I wrote a few weeks back that discusses an Independent Medicare Advisory Commission idea and discusses the fact that the Patients' Choice Act, the most comprehensive Republican alternative (Co-sponsored by Sen. Coburn and Burr; and Reps. Ryan and Nunes) has the most detailed discussion of *any* bill describing the use of a similar commission, and the development of a Quality Improvement Board that would apply cost effectiveness research.
As I wrote at the time, I give our Senator (if you live in N.C.) Richard Burr alot of credit for co-sponsoring this, and especially this important idea. When the President began discussing an IMAC in late July, this was an important example of him looking at Republican ideas (Patients' Choice Act was proposed in May, 2009). So, even though all amendments offered by Republicans to the bills reported out of committees have been voted down so far, Republican ideas have been and are making their way into what is likely to turn into the President's final plan. In large part, because at least in the Senate, the Republicans aren't that different from the 7 or 8 most conservative Democrats.
Update: I wrote 1% covered by VA in the column, and I should have included other military insurance programs like TRICare since I was trying to add up all government insurance. All Military insurance programs combined cover 3.8% of Americans according to this testimony per politico.com blog. [see table 1, page 2 in the link] Overall, 29% of Americans were covered by some government insurer in 2008, up from about 25% in 2000. And it will continue to rise over time even if we do nothing because the baby boomers will begin moving into Medicare age-eligibility.
Here is a post I wrote a few weeks back that discusses an Independent Medicare Advisory Commission idea and discusses the fact that the Patients' Choice Act, the most comprehensive Republican alternative (Co-sponsored by Sen. Coburn and Burr; and Reps. Ryan and Nunes) has the most detailed discussion of *any* bill describing the use of a similar commission, and the development of a Quality Improvement Board that would apply cost effectiveness research.
As I wrote at the time, I give our Senator (if you live in N.C.) Richard Burr alot of credit for co-sponsoring this, and especially this important idea. When the President began discussing an IMAC in late July, this was an important example of him looking at Republican ideas (Patients' Choice Act was proposed in May, 2009). So, even though all amendments offered by Republicans to the bills reported out of committees have been voted down so far, Republican ideas have been and are making their way into what is likely to turn into the President's final plan. In large part, because at least in the Senate, the Republicans aren't that different from the 7 or 8 most conservative Democrats.
Update: I wrote 1% covered by VA in the column, and I should have included other military insurance programs like TRICare since I was trying to add up all government insurance. All Military insurance programs combined cover 3.8% of Americans according to this testimony per politico.com blog. [see table 1, page 2 in the link] Overall, 29% of Americans were covered by some government insurer in 2008, up from about 25% in 2000. And it will continue to rise over time even if we do nothing because the baby boomers will begin moving into Medicare age-eligibility.
Thursday, September 10, 2009
Good speech, now the hard part
The President was effective last night at laying out the need for reform, especially how the current system harms people with insurance currently (we all pay for uncompensated care via higher premiums). I thought the public university v. private university analogy was very effective re public option.....someone should have been using that one for the last 6 months, but it doesn't really matter as public option will go by the wayside.
While the delay of the Senate Finance Committee has been viewed as a harm, this may now help the President as they have an outline but still time for negotiations amongst Democrats and perhaps with Republicans such as Snowe or even others....but mostly a chance to get more conservative Democrats on board.
Several thoughts about the next steps:
(1) any Republican Senator could get a lot on malpractice reform added to the Senate finance committee bill if they agreed to support it....heck the conservative Democrats may be able to get alot on that issue. AMA's wildest dream med mal proposal for public option trigger? Any takers on either side.....
(2) Similarities to 1993-94. The House could easily pass a bill then, just as now. But, the focus then (as it will now) turned to what will the Senate really do? Then the House insisted the Senate go first and the Senate never got to a floor vote and so neither did the House. I am sure there will be some moves in the Democratic House caucus to not want to vote on public option knowing it won't pass in the Senate. Maybe Pelosi should allow a House vote on Weiner's single payer bill soon, letting everyone (Dems and Repubs) blow off some hyperbolic steam, and then see what the Senate does.
(3) What is different from 1993-94, politically. Democrats didn't think it was possible to lose the House. They did the next election. So, in 15 years, we went from Democrats control all three branches to Republicans control all three branches and now back to Democrats control all three branches. If a reasonable bill can't be passed, then the Democrats really have trouble saying they can govern the country. So, the biggest difference from 1993-94 is that the congressional Democrats know they must deliver.
(4) What is different from 1993-94 from a system perspective. I remember many saying in mid-1990s that there was no way we could spend more....there must be a ceiling somewhere? Haven't found it yet. Also, we are now only 10 years away from the looming Medicare financing train wreck that will result from the baby boomers aging into Medicare. The train wreck has three parts: (1) more retirees on Medicare; (2) fewer workers to pay payroll and income taxes to finance Medicare; and (3) rate of cost growth. The only one of these that can be changed is number 3....numbers 1 and 2 have been inevitable SINCE I WAS BORN IN 1967, simply because the baby boomers had fewer children than did their parents.
If we don't pop the bubble of cost growth now, 10 years from now there will be some very hard choices....and the options get tougher the longer you wait.
The President's proposal of an Independent Medicare commission followe the Senate finance committees outline of similar. And the Patients' Choice Act, the main republican alternative has such a commission, and has the most stringent applicaiton of cost effectiveness research of any bill I have read. This is the best chance for slowing cost growth in Medicare.....Congress isn't capable of addressing these detailed issues of payment rates, coverage decisions and the like reasonably.
To summarize, today we are 10 years from a Medicare train wreck and in 1994 we were 25 years from the same train wreck. So, there are political and actual reasons why there should be a better chance of getting something done this time as compared to 1993-94.
(5) Finally, I was in graduate school in 1994. I was a straight Medicare for all single payer guy then....you know, either my grandmother should be liberated from it, or it might be pretty good for me (well, that is still true, but I digress). So, I was constantly picking holes and bickering with all my friends about the President's sell out plan and the like....lets take this issue to the next election and come back and do it right next time. Oops.
I would now prefer Medicare for everyone with persons under age 65 having catastrophic insurance (say $10,000 deductible indivdiual; $15,000 family). Robust private insurance market for insurance covering the gap, and let everyone purchase private gap insurance in after tax dollars. Premium subsidies for gap insurance for low income persons. Heck, maybe the insurance companies could do just fine with that.....and Republicans are always saying they want catastrophic insurance and choices. Most persons won't spend into the government catastrophic insurance range in a given year. So, most care will be paid out of pocket and/or via private insurance purchased by an individual.
But, that ain't going to happen. So, for me, we have got to work a compromise that moves the ball down the field, and it has got to have some ways to address cost inflation in the system. If we could get the rate of uninsured approaching 5%, and have a strong IMAC and a cap on the tax exclusion of employer paid premiums which would slow cost growth in the non elderly part of the system, that would be pretty good.
While the delay of the Senate Finance Committee has been viewed as a harm, this may now help the President as they have an outline but still time for negotiations amongst Democrats and perhaps with Republicans such as Snowe or even others....but mostly a chance to get more conservative Democrats on board.
Several thoughts about the next steps:
(1) any Republican Senator could get a lot on malpractice reform added to the Senate finance committee bill if they agreed to support it....heck the conservative Democrats may be able to get alot on that issue. AMA's wildest dream med mal proposal for public option trigger? Any takers on either side.....
(2) Similarities to 1993-94. The House could easily pass a bill then, just as now. But, the focus then (as it will now) turned to what will the Senate really do? Then the House insisted the Senate go first and the Senate never got to a floor vote and so neither did the House. I am sure there will be some moves in the Democratic House caucus to not want to vote on public option knowing it won't pass in the Senate. Maybe Pelosi should allow a House vote on Weiner's single payer bill soon, letting everyone (Dems and Repubs) blow off some hyperbolic steam, and then see what the Senate does.
(3) What is different from 1993-94, politically. Democrats didn't think it was possible to lose the House. They did the next election. So, in 15 years, we went from Democrats control all three branches to Republicans control all three branches and now back to Democrats control all three branches. If a reasonable bill can't be passed, then the Democrats really have trouble saying they can govern the country. So, the biggest difference from 1993-94 is that the congressional Democrats know they must deliver.
(4) What is different from 1993-94 from a system perspective. I remember many saying in mid-1990s that there was no way we could spend more....there must be a ceiling somewhere? Haven't found it yet. Also, we are now only 10 years away from the looming Medicare financing train wreck that will result from the baby boomers aging into Medicare. The train wreck has three parts: (1) more retirees on Medicare; (2) fewer workers to pay payroll and income taxes to finance Medicare; and (3) rate of cost growth. The only one of these that can be changed is number 3....numbers 1 and 2 have been inevitable SINCE I WAS BORN IN 1967, simply because the baby boomers had fewer children than did their parents.
If we don't pop the bubble of cost growth now, 10 years from now there will be some very hard choices....and the options get tougher the longer you wait.
The President's proposal of an Independent Medicare commission followe the Senate finance committees outline of similar. And the Patients' Choice Act, the main republican alternative has such a commission, and has the most stringent applicaiton of cost effectiveness research of any bill I have read. This is the best chance for slowing cost growth in Medicare.....Congress isn't capable of addressing these detailed issues of payment rates, coverage decisions and the like reasonably.
To summarize, today we are 10 years from a Medicare train wreck and in 1994 we were 25 years from the same train wreck. So, there are political and actual reasons why there should be a better chance of getting something done this time as compared to 1993-94.
(5) Finally, I was in graduate school in 1994. I was a straight Medicare for all single payer guy then....you know, either my grandmother should be liberated from it, or it might be pretty good for me (well, that is still true, but I digress). So, I was constantly picking holes and bickering with all my friends about the President's sell out plan and the like....lets take this issue to the next election and come back and do it right next time. Oops.
I would now prefer Medicare for everyone with persons under age 65 having catastrophic insurance (say $10,000 deductible indivdiual; $15,000 family). Robust private insurance market for insurance covering the gap, and let everyone purchase private gap insurance in after tax dollars. Premium subsidies for gap insurance for low income persons. Heck, maybe the insurance companies could do just fine with that.....and Republicans are always saying they want catastrophic insurance and choices. Most persons won't spend into the government catastrophic insurance range in a given year. So, most care will be paid out of pocket and/or via private insurance purchased by an individual.
But, that ain't going to happen. So, for me, we have got to work a compromise that moves the ball down the field, and it has got to have some ways to address cost inflation in the system. If we could get the rate of uninsured approaching 5%, and have a strong IMAC and a cap on the tax exclusion of employer paid premiums which would slow cost growth in the non elderly part of the system, that would be pretty good.
Wednesday, September 9, 2009
Finance Committee
Baucus says he will move a comprehensive bill to a committee mark on Sept. 21, with or without Republican support. Gang of 6 still supposed to be meeting this afternoon. More with Sen. Baucus stating quite clearly no way public option passes Senate....but we have known that since June.
So, this means there is a virtual certainty of a floor vote in both the House and the Senate on a reform bill this Fall.
So, this means there is a virtual certainty of a floor vote in both the House and the Senate on a reform bill this Fall.
Prime Time
It is prime time indeed for reform. Sounds as though the President will push for public option in the speech, but clearly will dump it for a deal in the Senate. This makes sense, and apparently Olympia Snowe favors a triggered public option as does Ben Nelson, a skeptical Democrat in the Senate. Maybe it goes like this: Senate passes bill sans public option, House has one and in the conference bill you get triggered public option.
A big question is wheter the Senate Finance Committee will announce a more concrete deal before the President's speech tonight. Not sure. Supposedly gang of 6 to huddle at 2:30pm. Interestingly, the AMA released this letter in support of reform outlining several goals last night. This steps on the notion of doctors being opposed....so will probably affect the Republican response, to be given by a doc, Rep. Charles Boustany (R-LA).
The most interesting aspect of all of this to me is how quiet (as a church mouse) the Congressional Republicans are about malpractice reform. This issue has been a 30-40 year obsession for them. The AMA includes 'medical liability reforms to reduce the cost of defensive medicine' as one of its principles which you would expect. But, *none* of the elected Congressional Republicans are talking about it at all, and that issue is like mom, apple pie and the flag for them. Any Republican senator willing to support a compromise bill could most likely get quite a lot on this issue.....including any of the 3 members of the gang of 6....there is not one word on malpractice in the finance committee working draft. Sen. Enzi didn't want to chunk something on that issue in there? This says that the Republican governors will talk up the issue, but they can't cut a deal. If Rep. Boustany doesn't talk about malpractice reform tonight in his response and give at least some specifics of what Republicans want on this issue, I will fall out of my chair.
I think this just means the Republicans don't want a deal and really prefer no bill, and that their best hope of defeating the President is to play defense (not sure if he wants to kill your grandmother can keep working, but who knows) and hope the liberals in the House erupt and blow up the tracks without them having to resort to a filibuster in the Senate.
A big question is wheter the Senate Finance Committee will announce a more concrete deal before the President's speech tonight. Not sure. Supposedly gang of 6 to huddle at 2:30pm. Interestingly, the AMA released this letter in support of reform outlining several goals last night. This steps on the notion of doctors being opposed....so will probably affect the Republican response, to be given by a doc, Rep. Charles Boustany (R-LA).
The most interesting aspect of all of this to me is how quiet (as a church mouse) the Congressional Republicans are about malpractice reform. This issue has been a 30-40 year obsession for them. The AMA includes 'medical liability reforms to reduce the cost of defensive medicine' as one of its principles which you would expect. But, *none* of the elected Congressional Republicans are talking about it at all, and that issue is like mom, apple pie and the flag for them. Any Republican senator willing to support a compromise bill could most likely get quite a lot on this issue.....including any of the 3 members of the gang of 6....there is not one word on malpractice in the finance committee working draft. Sen. Enzi didn't want to chunk something on that issue in there? This says that the Republican governors will talk up the issue, but they can't cut a deal. If Rep. Boustany doesn't talk about malpractice reform tonight in his response and give at least some specifics of what Republicans want on this issue, I will fall out of my chair.
I think this just means the Republicans don't want a deal and really prefer no bill, and that their best hope of defeating the President is to play defense (not sure if he wants to kill your grandmother can keep working, but who knows) and hope the liberals in the House erupt and blow up the tracks without them having to resort to a filibuster in the Senate.
Tuesday, September 8, 2009
Outline of Senate Finance Committee Bill
This is the document circulating among the gang of 6 on the Senate finance committee per Politico.
Haven't digested yet, but here are some immdediate highlights.
*individual mandate to purchase or be covered via employer
*Insurance market reforms, but allowing much more premium variation than do HR 3200 or Senate HELP bill. Those plans (HR 3200, Senate HELP) allowed plans to range no more than 2:1 within geographic areas. Here are allowable varies (high to low):
Haven't digested yet, but here are some immdediate highlights.
*individual mandate to purchase or be covered via employer
*Insurance market reforms, but allowing much more premium variation than do HR 3200 or Senate HELP bill. Those plans (HR 3200, Senate HELP) allowed plans to range no more than 2:1 within geographic areas. Here are allowable varies (high to low):
- 1.5:1 tobacco
- 5:1 Age
- Family composition (Single 1:1; Adult w. child 1.8:1; Two adults 2:1; Family 3:1
- Can also vary by georaphy, with variation across areas capped at 7.5:1 (aka a lot)
*Set up state insurance markets to provide policies so folks can shop for policy
*people with no group coverage can keep what they have (grandfathered)
*Vauge notions of allowing use of risk adjustment, reinsurance and risk cooridors to help set up competition where there is not so much now....important idea, don't know what this means
*States can set up auto-enroll mechanisms....similar to republican bill, Patients' Choice Act
*Benefit Options....color scheme to aid shopping...similar to Medigap conceptually: Bronze level [65% of expenses covered by insurance]; Silver [73%]; Gold [81%]; Platinum [90%]. Creating of a 'young invincible' policy that is catastrophic and only for folks age 25 and lower.....and one annual visit first dollar.
*Make illegal selling plans at lower 'actuarial' levels than these....the bronze level is lowest acceptable that could be sold.
I believe HR 3200 is set at about 95%....so Finance committee providing 'less insurance' and folks facing more of the cost of their care. That is no surprise.
*Tax credits for those with income 133%-300% of poverty. Refundable and advanceable, again a la the main Republican bill, the Patients' Choice Act. Amount of credit received based on income....more credit to lower income.
*cost-sharing assistance (deductibles and the like for those covered) for those 100%-300% of poverty. Essentially bumps people up from one level of plan (bronze, gold, etc.) up a level or two depending on income....with poorer bumped to platinum and declining.
*tax credits to small businesses not providing insurance....small = fewer than 25 employees with average wage of $40,000
*No employer mandate "employers would not be required to offer..." (page 5). But, employers with 50 FT employees (30hrs+) would have to pay a fee for each employeed who used a tax credit to get insurance.....designed to prevent current employers from dropping coverage...if employee offered employer plan, not eligible for tax credit....unless plan is unaffordable with unaffordable defined as premium more than 13% of employees income.
*Creates co-ops....I think this is mostly a waste of time....not a deal killer for me.
*Medicaid expansion roughly to 133% of poverty....with individuals also able to purchase private plan via exchange....I think. Lingo in this part confusing to me.....
*No big benefit changes to Medicare or Medicaid...some expanded preventive stuff.
*Some boosting of GME payments via Medicare for primary care
*Big thing: repeal scheduled cut in Medicare payment rates (21%, 2010) and add 0.5% increase.
*Create a panel to look at doc payment rates in Medicare
*Create a Medicare Commission aka IMAC. The mandate says it would "submit proposals to congress to extend Medicare solvency and improve quality of care in Medicare." This one isn't insulated enough from Congress for me....but of course, it is Congress writing it.....but this is good that this is in here.
*Increased funding for cost effectiveness research. Both this item and one just above is also reminiscent of Patients' choice Act (main republican bill)
*High cost insuranc fee....so this is not a cap of tax exclusion, but after same idea...for plan with premiums of $8,000 individual, $21,000 family tax of 35% of the premium above these amounts levied on insurance company. To put in perspective, total premium for Duke's family coverage best plan is about $13,000....so this must be 75percentile or higher.
*employer must report amount paid in premiums on W-2 so individual knows how much tax free income they got
*Health Insurance provider fee....this is $6 billion per year, not over 10...so raises $60 billion over 10. Fee allocated by market share. It is essentially just saying you have to hand over some of your profit in return for us forcing people to purchase insurance.
OK Corral tomorrow night....not a word on malpractice in here....the republicans should be able to get alot on this issue....but not a word?????? I think the lawyer is going to offer this one up...
(A little) more detail
on the Senate Finance committee proposal.....doesn't sound like a straight cap of the tax exclusion of employer paid premiums....which would be removing a benefit (tax free income) from people like me who get large amounts of premiums paid by my employer. Sounds like an attempt to say the tax/fee is on the insurance company....but the bottom line effect should be the same....getting rid of people with very expansive insurance coverage, with definition of very expansive not yet clear (and least to me). I think capping this tax free nature of how private insurance now works is best approach, since it should have some cost control effect over time...basically people who are over-insured (and therefore overuse) will be less so. I would prefer to keep it explicit and describe it as such....but still need to read it all.
Mean family premiums are around $12,5000 and individual around $5,000 and a joint committee on taxation late last year said capping tax exclusion at mean value (meaning employer could pay premium for more expansive policy, but contributions by employer over the mean value of a policy would be taxable as income) would save $450 Billion over 10, and this article says entire plan is $800 Billion over 10, totally offset, meaning cuts identified to balance new spending. So, probably something along these lines. Most likely the fuller details will be emerging later today. The fees on insurance companies based on market share I think are mostly symbolic....raising $6 Billion over 10 years is like whizzing off the end of the pier into the ocean....Sorry so cryptic....off to teach my class....
Mean family premiums are around $12,5000 and individual around $5,000 and a joint committee on taxation late last year said capping tax exclusion at mean value (meaning employer could pay premium for more expansive policy, but contributions by employer over the mean value of a policy would be taxable as income) would save $450 Billion over 10, and this article says entire plan is $800 Billion over 10, totally offset, meaning cuts identified to balance new spending. So, probably something along these lines. Most likely the fuller details will be emerging later today. The fees on insurance companies based on market share I think are mostly symbolic....raising $6 Billion over 10 years is like whizzing off the end of the pier into the ocean....Sorry so cryptic....off to teach my class....
Monday, September 7, 2009
A difficult question
So I was a guest on a radio talk show in Jamaica tonight....they wanted to talk about health reform. I was prepped to describe the structure of Congress, how it could be hard to pass a bill even if one party controls the Presidency, the House and the Senate. The different approaches, CBO scoring, the gang of six, public option etc etc etc. But, the interviewer started with this question:
Ths USA tells the rest of the world that it is a Christian nation. You are also the richest and most powerful nation in the world. How is it that you haven't found a way to provide health insurance to all persons?
I don't remember what I said.....I have no good answer.
Ths USA tells the rest of the world that it is a Christian nation. You are also the richest and most powerful nation in the world. How is it that you haven't found a way to provide health insurance to all persons?
I don't remember what I said.....I have no good answer.
Senate Finance Committee Outline
A glimpse of what the Senate finance committee is thinking. No public option, capping tax exclusion of employer paid premiums and some sort of tax on insurance companies based on market share. This appears to be driven by the notion that the number of customers will go up for insurance companies, so they will in turn pay a tax of sorts. However, in the first year of the plan, this raises $6 Billion, so appears to be mostly symbolic. The subsidies provided to purchase insurance would go up to 300% of poverty, less generous than the house bills. And this version does not have a 'trigger' that many say Sen. Olympia Snowe favors...whereby a public option would become available if 95% of the people in a given state couldn't find an insurance option available than cost less than 13% of their gross income.
The most surprising thing to me is that Republicans are not talking about malpractice reform. I think they are scared that if they talk about it, Obama will take them up on it.
The 'gang of six' of the Senate finance committee meets tomorrow.
The President today talked about reform in Cincinnati, and his press spokesman said that Wed. night he will 'draw some lines in the sand' which is clearest signal that Pres. Obama will be clear about what he wants on Wednesday night. It is time for that.
Update: I am actually not totally sure what this proposal does re the current tax exclusion of employer paid premiums. There is clearly a new type of tax on insurance companies based on market share....more covered then pay more. But, what I was calling a capping of tax exclusion, is being described as a tax on insurance companies that offer high deductible plans. Maybe semantics but:
*cap the tax exclusion would mean that consumers with very generous plans would pay taxes on premiums paid by employers over a certain amount;
*this seems to say if insurance companies write a policy that is more generous than say the national average, then the tax is levied on the insurance company....presumably making them less likely to sell such coverage.
So, I am not sure what the details are.....and I can't find that the text has leaked out anywhere.....lots of the usual sources are taking the day off. Oh yea, it is a holiday, but Duke has classes.
The most surprising thing to me is that Republicans are not talking about malpractice reform. I think they are scared that if they talk about it, Obama will take them up on it.
The 'gang of six' of the Senate finance committee meets tomorrow.
The President today talked about reform in Cincinnati, and his press spokesman said that Wed. night he will 'draw some lines in the sand' which is clearest signal that Pres. Obama will be clear about what he wants on Wednesday night. It is time for that.
Update: I am actually not totally sure what this proposal does re the current tax exclusion of employer paid premiums. There is clearly a new type of tax on insurance companies based on market share....more covered then pay more. But, what I was calling a capping of tax exclusion, is being described as a tax on insurance companies that offer high deductible plans. Maybe semantics but:
*cap the tax exclusion would mean that consumers with very generous plans would pay taxes on premiums paid by employers over a certain amount;
*this seems to say if insurance companies write a policy that is more generous than say the national average, then the tax is levied on the insurance company....presumably making them less likely to sell such coverage.
So, I am not sure what the details are.....and I can't find that the text has leaked out anywhere.....lots of the usual sources are taking the day off. Oh yea, it is a holiday, but Duke has classes.
Demand v. supply side changes
Jon Gruber, from MIT, makes a clear argument that a cap of the tax exclusion of employer paid insurance premiums ALONG WITH insurance market reforms has the best chance of expanding non-elderly insurance coverage while adding cost reducing pressure. Doing just one or the other is an incomplete fix.
It seems to me that a cap of the tax exclusion of employer paid premiums has to be a part of any compromise legislation....it will make patients/consumers more aware of the true costs of their insurance choices and likely their care choices as well, and it amounts to redirecting money already in the health care portion of the economy. I would think the income tax surcharge in the House bills has just about zero chance of passing the senate, and I think that is good.
This still doesn't really address cost inflation in Medicare, which I think can only be done via an Independent Commission looking at payment rates and coverage decisions.
It seems to me that a cap of the tax exclusion of employer paid premiums has to be a part of any compromise legislation....it will make patients/consumers more aware of the true costs of their insurance choices and likely their care choices as well, and it amounts to redirecting money already in the health care portion of the economy. I would think the income tax surcharge in the House bills has just about zero chance of passing the senate, and I think that is good.
This still doesn't really address cost inflation in Medicare, which I think can only be done via an Independent Commission looking at payment rates and coverage decisions.
Friday, September 4, 2009
This Makes Sense
David Brooks makes great sense to me in this piece. Here is the article in the Atlantic to which he refers. Here is the Brookings Institute report to which he refers. Web site. Executive summary. Full report.
I think the savings potential of the electronic records is oversold. But, altering payment incentives and discussions of using cost effectiveness research are needed. And doing at least something about the tax exclusion for employer provided insurance is a must if we are going to do anything to control health care costs.
We also need an Independent Medicare Advisory Commission to start looking comprehensively at payment rates and coverage decisions. Start with this group on such a commission (Dems and Repubs represented). The last thing we need is Congress mucking the details. They need to say what rate of spending increase can we afford given other priorities. And then let the experts make it work.
I think the savings potential of the electronic records is oversold. But, altering payment incentives and discussions of using cost effectiveness research are needed. And doing at least something about the tax exclusion for employer provided insurance is a must if we are going to do anything to control health care costs.
We also need an Independent Medicare Advisory Commission to start looking comprehensively at payment rates and coverage decisions. Start with this group on such a commission (Dems and Repubs represented). The last thing we need is Congress mucking the details. They need to say what rate of spending increase can we afford given other priorities. And then let the experts make it work.
More on what if we do nothing & long term care
Howard Gleckman from the Urban Institute on what if we do nothing. Not good. Dr. Gleckman is an expert in long term care, one of my main research areas, and one that hasn't been much discussed in health reform. Also, Urban Institute is a good source of info....left and right get mad with them. They claim to be non-partisan. Here are some links to their work on long term care.
Here is something I wrote about long term care about 15 months ago. Glad I didn't launch a political career on private accounts for anything last fall....
Here is something I wrote about long term care about 15 months ago. Glad I didn't launch a political career on private accounts for anything last fall....
Thursday, September 3, 2009
Amen
Article quoting conservative health policy experts like Gail Wilensky saying we need an actual debate and not hyperbole. I am not sure, but once you have said 'they want to kill your grandma' and then later say 'well, not really, but you know what I mean' you actually start to lose some credibility. I am thinking there is a reasonable chance for a reasonable, S.1, the Snowe/Kennedy Act of 2009.....
Wednesday, September 2, 2009
President to address joint session of Congress
President Obama will address a joint session of Congress next week about health care reform. The last joint session of Congress to which a President spoke was Sept. 20, 2001, when President Bush discussed the 9/11 attacks. The one before that was President Clinton, 16 Septembers ago, talking about health care reform. The President has laid back and let Congress 'lead the way' (quotes indeed) but he will now have to lay out what he wants. There may actually be an "Obamacare" for the Republicans to oppose a week from now! Exactly what will be in the bill is being debated within the White House, apparently.
Grassley and Enzi are gone (may never been there), but Olympia Snowe will essentially write the bill along with Barack Obama if she wants to do so.
Good article on malpractice, describing the fact that cost savings from defensive medicine are likley to be modest. I agree, but think that politically, and to get the docs to come along, malpractice reform is important. I have a hunch the President will surprise folks and offer a serious reform next week.
Grassley and Enzi are gone (may never been there), but Olympia Snowe will essentially write the bill along with Barack Obama if she wants to do so.
Good article on malpractice, describing the fact that cost savings from defensive medicine are likley to be modest. I agree, but think that politically, and to get the docs to come along, malpractice reform is important. I have a hunch the President will surprise folks and offer a serious reform next week.
Tuesday, September 1, 2009
Can we afford reform? afford not to reform?
The 'we can't afford to do it, I wish we could' message seems to be increasing as an argument against any sort of reform. This is a fairly clear argument that it is the opposite; we can't afford not to do so.
Here is a familiar picture showing that deficits are increasingly driven by Medicare and Medicaid...this one with about 25 years of past data. It helps illustrate the effect of the baby boomers retiring, and how much more profound the effect is on Medicare and Medicaid than it is on Social Security (because Soc Security doesn't have a 'runaway inflation problem'). This picture should keep you awake at night if you are younger than 50.
Here is a familiar picture showing that deficits are increasingly driven by Medicare and Medicaid...this one with about 25 years of past data. It helps illustrate the effect of the baby boomers retiring, and how much more profound the effect is on Medicare and Medicaid than it is on Social Security (because Soc Security doesn't have a 'runaway inflation problem'). This picture should keep you awake at night if you are younger than 50.
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