Posts filed under ‘Public vs. Private Health Coverage’
Medicare Private Insurance Companies Are At It Again
Late last week Humana, one of the largest private insurance companies offering Medicare Advantage and prescription drug plans under Medicare, sent a letter to the Medicare beneficiaries enrolled in their HMOs and other Medicare Advantage plans. The outside envelope warned that the letter contained important information about their Medicare benefits. The letter itself said that Congress was considering cuts to Medicare in its health care reform legislation, these cuts would result in reduced benefits for Humana plan enrollees, and enrollees should contact their members of Congress to protest the cuts.
This is not the first time that private Medicare plans have written their enrollees with misinformation about alleged Medicare cuts. The Center for Medicare Advocacy and a number of other beneficiary organizations have been concerned for years about these kinds of mailings by private Medicare plans. We recently asked CMS to modify its guidance to private Medicare plans in order to specifically identify these communications as marketing materials, which are subject to CMS oversight and review. We said in our comments:
We are very concerned about plan sponsors soliciting their enrollees to join “grassroots” efforts to influence Medicare policy via member newsletters and other means. …We believe there should be a prohibition on plan sponsors soliciting members’ participation in political activities, particularly those that benefit the plan sponsor, and urge CMS to analyze whether such activity already violates current law.
CMS did not amend its guidance to plans per our suggestion, but it did take swift action against Humana. CMS sent a letter to Humana yesterday telling the organization to stop sending misleading and confusing communications, and that it believed such communications are potentially contrary to federal regulations and guidance. CMS further advised that the agency takes this matter very seriously and could pursue compliance and enforcement actions. CMS also sent a comparable memo to all private insurance companies telling them not to send similar communications.
We thank CMS for acting so swiftly to curb misleading and confusing communications to people in their Medicare plans. While we are pleased that the government is exercising its oversight and enforcement authority, we see this incident as another example of how reliance on private insurance companies can generate confusion and fear for Medicare beneficiaries. This happens because the interests of private Medicare plans are not always in accord with the interests of Medicare beneficiaries.
How Will We Know If Good Enough is Good Enough?
We now have four health care reform bills and a proposal from the Senate Finance Committeee, the last of the Congressional committees with jurisdiction over this topic. None of the bills are perfect and the Senate Finance Committee’s proposal, lacking both a public option and any Republican support, is the most disappointing. Still, as Paul Krugman writes in today’s New York Times, several countries, including Switzerland and the Netherlands, manage to provide health insurance for all largely through the private market.
So, how will we know if we should support what emerges as the final health care reform bill? Here are six key standards to determine whether the final bill is good enough to support – let us know if you have others:
- Will the bill make quality health care coverage available to all, especially to the uninsured, underinsured, and those who will fall into these categories in the future?
- Will the bill provide real competition in the market place, with or without, a true public plan, so that reform will be reasonably affordable?
- Will the bill provide adequate help for people of low and moderate incomes to purchase good quality health coverage ?
- Will the bill preserve and fairly enhance the Medicare program for future generations?
- Will the new coverage be adequately comprenhensive, understandable and easy to use?
- Will the new law provide a fair, accessible appeal system for people to contest denials?
I am often told not to let the perfect be the enemy of the good. We will not get “the perfect” health care plan. We may not even get “the good”. But – will we get “the good enough”? Too soon to tell.
Watch Robert Reich, Former Secretary of Labor, On Why We Need a Public Option (And what it is!)
In a new video, Robert Reich speaks about the necessity of a public option in health care reform. Secretary Reich wrote us today summarizing his thoughts:
“A true public option is necessary to pressure private insurers to compete on quality and price, and to pressure drug companies and other medical providers to offer better deals. It’s the only way to expand coverage while continuing to reduce overall costs. Every American should have the freedom to choose a public insurance plan if they wish. ”
Watch Robert Reich now, and spread the word.
They All Clapped
Okay, maybe not everybody, but most members of Congress, Democrats and Republicans, applauded last night when President Obama pledged to safeguard Medicare, calling it a “sacred trust” with older Americans.
What the President didn’t say, and what too many people forget, or try to, is that Medicare IS a public health insurance program. It was created and is broadly implemented by the federal government; claims are administered by private insurance companies. For everyone who applauds Medicare – and most people do – support a public option so we can pass the sacred trust of health care security on to younger generations!
Watch and See Why We Need A Public Health Plan
An animated cartoon is worth a thousand words:
Why the Public Option is Critical
Stephen M. Davidson
Professor of health policy and management at the Boston University School of Management
Originally posted on the Huffington Post, August 19, 2009 02:03 PM
The health reform proposals being considered by Congress depend on private insurance companies competing. Proponents of this strategy believe that to win subscribers from competitors, insurers will need to find innovative ways to keep costs down at the same time they provide good coverage. To keep them focused on providing good value to the public, some of the proposals, including the President’s original one, include a public plan to compete with the private firms. If retained in the bills, this contentious provision may sink the reform effort. So, how important is it to achieving reform’s goals?
The answer is no mystery: The competition strategy is so weak that the public option is essential. The fact is that competition is a good thing only when it produces innovation that leads to better, less expensive things for sale. The new computer we bought a year ago was faster, more powerful, and less expensive than the one it replaced — in part, at least, because of competition.
The U.S. already has the most competitive health insurance system in the world. Many insurers make lots of money. How do they do it? My colleague, Jim Post, who has studied the industry, reports insurers have only 3 factors to work with: who is covered (availability), what they are covered for (quality), and price. So, among other things, in the present, badly broken system, they refuse to cover people with pre-existing conditions or make coverage so expensive for such people that they cannot afford it. They provide coverage that excludes some of the services their subscribers need. They charge cost-sharing amounts that make doctor-recommended services unaffordable for many covered patients. They introduce administrative procedures that make it difficult for patients to receive and doctors to provide covered services. And with it all, instead of falling, premiums keep rising and lead increasing numbers of employers and employees to drop coverage.
So, given this history, how do policy makers arrange for a competition-based strategy that will cover everyone and keep costs under control? The president and his allies in Congress have proposed 2 main strategies. One is to impose regulations that prohibit the firms from using the tactics just described. Guaranteed issue and renewal, community-rated premiums, and limits to cost-sharing would be required.
But if private insurers can no longer engage in the tactics that got them to profitability, what methods are left to them? How will they keep spending under control at the same time they provide value to the public? That is a question they should be forced to answer.
To protect the public against the possibility that they will find ways to vary the 3 factors in their control in ways that undermine the reform goals, the second proposed strategy is to introduce a publicly operated plan to compete with the private firms. The primary mission of this government-run insurer would be to offer affordable coverage for people who could not find it from private firms. It would not need to earn a profit for shareholders, nor to engage in expensive marketing campaigns to win subscribers. In order to avoid losing too many subscribers to it, the idea is that private insurers would need to respond to its offerings. The coops that are suggested as a substitute pale in comparison.
The best hope insurers — and the public — have to achieve the goals of reform is to change the incentives on providers by ending fee-for-service payment and to promote the development of integrated group practices which would have the means to furnish better, more efficient care. This being the case, should we expect insurers to contract selectively with physicians and pay capitation rates? Will they encourage creation of integrated delivery systems which, being fewer in number and larger than most of today’s practices, would have more bargaining clout over rates and terms?
If we are stuck with a competition-based strategy, the public option is the last, best chance for private insurers to show us they can provide better value at lower cost. The public option is needed because the insurers have already demonstrated that they do not do that on their own.
Supporters of reform should demand that Senator Conrad and his like-minded colleagues who oppose the public option answer these questions: In the absence of the public option, what actions will insurers take to accomplish the goals of reform? And why they have not used them until now?
Advocates of the public option should not allow themselves to be put on the defensive. Instead, they should insist that opponents explain what innovations insurers will introduce to provide good value at affordable prices.
Stephen M. Davidson, a Boston University School of Management professor, is author of the forthcoming book, In Urgent Need of Reform: The U. S. Health Care System.
A Rabbi Writes About Health Care Reform – For All
“In an opinion piece recently printed [in my local paper], Newt Gingrich decried the possibility of rationing as a result of health care reform. What he fails to understand or admit is that there already is rationing in our current system. Tens of millions of Americans are rationed out of access to healthcare by their lack of income, by their employment status, or by “pre-existing conditions.” We also already have “death panels.” They’re the insurance company bureaucrats that decide to cut off cancer treatments because, for example, the patient neglected to report pre-existing acne. (That really happened!)
Our national fear and greed (and the health care system they’ve saddled us with) are literally killing us. According to Census Bureau and CIA data, the United States has the lowest life expectancy and highest infant mortality of any Western, industrialized country except Portugal. Let’s put that fear and greed aside and commit, as all our faith-traditions command, to care for each other. Let’s change the system so that every American has access to the preventive and curative care that our wealth and scientific achievement should make possible.”
Rabbi Jeremy Schwartz – Willimantic, CT
Wake Up, America!
In a column in the Washington Post on August 24th, Republican National Committee Chair Michael Steele purported to be worried about the damage health care reform will do to Medicare.
Really? Talk about raiding Medicare: Can you say “Medicare Advantage”? The last Administration privatized Medicare in 2003 with the Medicare Advantage system that lured private insurance into the program by paying huge subsidies of more than 14% on top of what the traditional, public Medicare program is paid for the same services.
Can you say “Part D”? The last Administration created the incomprehensible Part D prescription drug program that made Medicare drug coverage available ONLY through private plans and actually wrote into law a PROHIBITION against Medicare negotiating prices with drug companies. Talk about a boondoggle for Big Pharma!
The Bush Administration created a windfall for private insurance and pharmaceutical companies – all at the expense of the cost-effective public Medicare program, seniors, and taxpayers.
Come on, America, Wake Up! Don’t buy into using health care reform to create another welfare program for private insurance and pharmaceutical companies. Haven’t we given them enough by giving them Medicare?
Can We Afford a Private Health Plan Option?
Last week, Congressman Anthony Weiner (D. NY) asked TV commentator (and former Congressman) Joe Scarborough a series of questions about private insurance companies that form the lynchpin of our current health care system and around which health care reform may be based. Congressman Weiner asked: “Why are we paying profits for insurance companies? Why are we paying overhead for insurance companies? Why are we paying for their TV commercials? What is their value? What are they bringing to the deal?”
Here’s what we know about the role private health insurance companies play in our health care system – and might well play in healthcare “reform”:
1. Private insurance companies decide which doctors we see. Most Americans are in network plans that require them to use the doctors who allowed into their network. Some plans allow members to go to non-network providers, but only if the individual pays more out-of-pocket. Private insurance supporters argue that people are always free to go to a doctor who isn’t in their insurance plan’s network, but if they do so they have to pay the full cost themselves, something most Americans cannot afford.
2. Private insurance plans decide who gets insurance. They reject people who use too much health care, rescind contracts from high health-care users, and deny health insurance and/or coverage to people with pre-existing conditions. Plans also charge higher premiums for people based on what they determine to be a pre-existing condition or based on the individual’s gender, making health insurance unaffordable for many people.
3. Private insurance companies decide what health care will be provided and paid for. They decide what services will be covered in the insurance package they offer. They establish drug formularies and prior approval requirements for drugs and procedures. They set the standards for the documentation and proof they require to determine whether a prescribed treatment is medically necessary, and each plan has its own requirements. Private insurance plans are not bound by what your doctor thinks is best for you, and they may override your doctor’s recommendation, and refuse coverage.
4. Private insurance companies increase the administrative work load for doctors’ offices. Staff must submit different health claim forms for different insurance companies and comply with each plan’s own formularies and requirements for submitting medical records to justify claims. They must spend hours on the phone with insurance companies to verify coverage, cost sharing, and formulary rules.
5. Private insurance companies encourage people to ration health care. By developing products with high deductibles and cost-sharing, private health insurance companies encourage enrollees to think twice about getting the care their doctors prescribe. Unfortunately, such decisions are often based on cost rather than on medical necessity and/or quality of care. Someone who delays needed care because of a high deductible or high cost-sharing amount may leave a condition untreated, and may end up requiring more costly health care in the future.
6. Private insurance companies are highly profitable industries, for their investors. According to insurance industry filings with the federal Securities and Exchange Commission, profits for the 10 largest publically traded health insurance companies rose 428% from 2000 to 2007, from $2.4 billion to $12.9 billion. During the same time period, the number of uninsured continued to rise, although the economic downturn enabled some individuals to get insurance through state Medicaid programs, many lost their health insurance due to lay-offs.
What do we get from private insurance companies? A system that decides who gets insurance and who does not; that comes between patients and their doctors – and that makes profits for investors. Is this the right direction for our country to take in “reforming” the health care system? Can we afford this? And who stands to gain?
So, I was at a Town Hall meeting …
Congressman Joe Courtney hosted a Town Hall meeting on Thursday (August 6th) to discuss health care reform. This is the third such meeting I’ve been at since mid July. The first two were sparsely attended and extremely civil. People listened, had questions, and told their own stories about problems and concerns regarding health care coverage. Last week’s meeting was entirely different. How?
- The room was packed. Standing room only. Hundreds of people in attendance, in the most out of the way area in CT on a summer night!
- The atmosphere was heated, literally and figuratively.
- People in opposition to health care reform had signs and repeated points. Suddenly there was talk of forced euthanasia, the Constitution, and limits on care for “retarded children” and older people. None of this was mentioned at the earlier meetings just a few weeks ago.
- When one woman ( a veteran) spoke about the problems getting health care coverage for her special-needs child she was shouted down with the question: “Why don’t you move?” When she asked back, “where is your compassion, my husband and I both served this country and have done everything right,” she was greeted with hoots.
- When a local farmer spoke about the loss of her family farm and cows and her brother’s chronic illness, she was told to hurry up and sit down.
- When a woman with cancer told about not being able to get a needed study covered by her private insurance, someone yelled out, “Why don’t you just switch plans?” As she had explained, she said, “I can’t, I have a pre-existing condition!” “Awww,” said a group seated together in the crowd, feigning sympathy.
Now I am reading about these same points being made and attitudes reflected in similar atmoshpheres throughout the country.
While many people did come to listen and learn, too many did not. Of course this was organized. It’s the only explanation for the dramatic difference between the meetings before and after the Congressional Recess and for the repeated talking points and style. Unfortunately, it appears to be aimed at intimidating, not at community building, discourse, or learning. While Congressman Courtney was prepared, respectful and even-tempered throughout, few people could have heard and too many people left scared and sad. What a shame.
For the health of our country, we need to reform. We need to back away from this noise soon, before someone gets hurt.
Oh – and we need health care reform with a true public option. It’s the only way to get coverage for everyone at a price taxpayers can afford.
CMA Health Policy Blog 