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?
The Opposition Will Vote No Anyway – So Stick With Good Health Care Reform!
Senator Charles Grassley (R-IA) has today given the proponents of strong health care reform a huge gift: he has admitted that it does not matter what the content of any bill is. Even if the final bill contains everything he wants, he will vote against it.
Senator Grassley has laid bare the strategy of opponents of health care reform: defeat the legislation regardless of its content. Since the Senator is one of the more powerful and moderate voices of the Republican party in Congress, it seems unlikely that further efforts at bipartisan negotiations will yield fruitful results.
This is a gift to proponents for a true public option – the only path to true health care reform. Nothing is to be gained by abandoning the President’s commitment to a strong public plan in health reform that would be available nationwide, would be entirely portable and would keep the private insurance market honest by providing innovation and competition where little competition exists today. (Most private insurance markets are dominated by two companies: Wellpoint and United Healthcare.)
We urge policy-makers to remember the truth amidst all the noise. We need health care reform. We need a true public option!
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.
Medicare, We Hardly Know Ya
44 years ago Medicare was enacted into law. All of today’s dire warnings about a public health option – socialism and government barring the doctor’s door – were made in opposition to Medicare. Despite such opposition from “conservative,” leaders, including Senator Bob Dole, Medicare passed.
Before Medicare, 50% of everyone 65 or older had NO health insurance. Now, as a result of Medicare, almost all older people are insured. Medicare, which is national, government-run health insurance, succeeded in insuring older people where private insurance failed. And, until the Bush Administration privatized Medicare with the extraordinarily subsidized private “Medicare Advantage” and Part D plans, Medicare was remarkably cost-effective too. It’s private Medicare, not the traditional, public program, that’s bleeding taxpayers of billions of dollars.
Medicare has been a success, fiscally and morally. It took on the job of insuring health coverage and care to people that private insurance had abandoned. Since 2003, on the other hand, private Medicare plans have cost us all tens of billions of dollars that went to support the private insurance industry, not to providing health care. In addition, private Medicare plans have too often engaged in marketing abuses and restrictive coverage practices.
As Paul Krugman recognizes in today’s New York Times, people with Medicare love it. They do not want government to fool around with the traditional program. Ironically, these are sometimes the same people who worry that a public health care option will cause long waits for health care and government invasions into their private medical decisions. They, and their family members, (which accounts for pretty much all of us), forget that the traditional Medicare program is a public health insurance option.
Hello, America, meet Medicare: Our 44 year-old public health insurance option that provides care to all its enrollees, anywhere in the country, and that has provided health and economic security for millions of older people, people with disabilities, and their families.
Happy anniversary, Medicare. Thank you for showing us what a true public insurance program can offer.
There’s a Way to Pay For Health Care Reform – If There’s The Will
Congress should heed a new report from the Urban Institue if it is truly concerned about cost containment and the best way to pay for health care reform. The Insitute recommends some adjustments to the way we deliver health care – increasing care coordination, improving chronic care and prevention, advancing electroninc medical records – and adjusting taxes.
Not surprisingly, the report also concludes that a public option must be part of the mix if cost is really a concern. In fact, the researchers found that including a public plan option in health reform would save between $224 to $400 billion.
Once again, an independent study concludes that there IS a way to afford to provide health care for all Americans – if there’s the will. Congress: Read the report – and find the will.
We need health care reform that is best for beneficiaries and most cost-effective for taxpayers. We need a public option!
The President on Health Care Reform: “It’s not about Me”
“This isn’t about me. I have great health insurance, and so does every Member of Congress. This debate is about the letters I read when I sit in the Oval Office every day, and the stories I hear at town hall meetings. This is about the woman in Colorado who paid $700 a month to her insurance company only to find out that they wouldn’t pay a dime for her cancer treatment ? who had to use up her retirement funds to save her own life. This is about the middle-class college graduate from Maryland whose health insurance expired when he changed jobs, and woke up from emergency surgery with $10,000 in debt. This is about every family, every business, and every taxpayer who continues to shoulder the burden of a problem that Washington has failed to solve for decades.”
– President Barack Obama, Press Conference, July 22, 2009
Health care reform is about the health of our country, both literally and figuratively. It’s about the health of the people, and it’s about fiscal health. It’s about providing for people, not the insurance or pharmaceutical industries. And it’s about care, not just insurance. People aren’t cars, which might possibly have an accident. People get sick. Period. Not “might” get sick. Will. People need real health care, not just an insurance plan. The President knows this. Most of Congress knows this. So why are some fighting so vehemently against the truth?
A Public Plan Will Work For You
Private insurers comprise a major for-profit industry. They serve their own interests and those of their stockholders before those of beneficiaries. First and foremost, insurers are in business to make a profit, not to take care of people. Their job is to calculate risks. Their goal is to maximize profits, which may conflict with providing health coverage. And they aren’t going to save the country money either, quite the contrary in fact. The cost of private Medicare has proven that.
Public coverage, on the other hand, saves taxpayers’ money. A recent study by the Commonwealth Fund, a non-partisan health policy research group, indicates that including a public health insurance option similar to Medicare in any proposed reform would save almost two TRILLION dollars more than any reform that does not include a public option.
We need real health care reform. With a public option and a standard set of benefits across all private and public plans, everyone will be better able to access coverage they can understand, at a price taxpayers can afford. It’s about our health and our quality of life. It’s about all of us.
Can Blue Dogs Learn New Tricks?
The Coalition of 52 conservative “Blue Dog” Democrats in the House of Representatives has emerged as a potential roadblock to passage of a health care reform bill in the House of Representatives. There are eight Blue Dogs on the Energy and Commerce Committee, the remaining House Committee with jurisdiction over health care to vote on the bill before it goes to the floor of the House for a vote. Concerns raised by seven of the eight Blue Dogs about the health care bill have caused the Committee to delay its consideration of the pending legislation. What makes the Blue Dogs’ resistance so fascinating is not their politics, but rather their constituents.
In the 111th Congress there are 48 Congressional districts that were won by John McCain in the election but that are represented by a Democrat in the House. Most of these districts are rural, blue collar areas. Blue Dog Democrats represent most of them. On July 10th 2009 Gallup released their study of every Congressional district on “Health and Well Being”. One of the questions asked in this survey was whether citizens had health insurance. The median uninsured population of all Congressional districts is 14.6%. Of the 48 Districts won by McCain, 31 (roughly two-thirds) have numbers of uninsured well above the national median.
Take for example the districts of four Blue Dogs who are on the Energy and Commerce Committee: Charlie Melancon D-LA (21.9% Uninsured), Mike Ross D-AR (21.8% Uninsured), Bart Gordon D-TN (17.3% Uninsured) and Zachary Space D-OH (16.8% Uninsured). The House and Senate proposals are meant to assist these rural poor districts by directing the Institute of Medicine to study geographic inequities in Medicare reimbursement rates, and instructing the Health and Human Services Secretary to revise payment rates based on the findings. The bill even ensures that rural doctors are paid the same rate for their work as urban doctors. Yet, Health reform’s biggest obstacle might just be the representatives of those who need, and will benefit from, reform the most.
Can’t anyone teach these Blue Dogs new tricks?
Yes, Virginia, A Public Health Insurance Option Will Save Money and Provide Access To Good Care
Once again, probing, independent minds have concluded that a public health option will save money and provide stable access to health care. A new Commonwealth Fund report finds “A public insurance plan can help drive new efficiencies in the system that will produce large cost reductions. Without a public plan, much of those potential savings will be lost,”
With a public option and a standard set of benefits across all private and public plans, everyone will be better able to access coverage they can understand, at a price taxpayers can afford.
We get it. We need health care reform. We need a public option. We don’t believe in fairy tales. Tell Congress!
From the Desk of Judith Stein
Health Care Reform: If It’s Good it Won’t Be Easy
I have represented Medicare beneficiaries throughout Connecticut and the country for over 30 years. While there are surely gaps in Medicare coverage, and recent privatization efforts have threatened Medicare’s stability, Medicare has provided basic health insurance coverage, peace of mind, and enhanced economic security to hundreds of millions of older and disabled people, and their families. Finally, as a result of Senator Dodd’s leadership and the Senate HELP Committee’s bill, there is hope that younger uninsured people and their families will be benefited as older and disabled people have been under Medicare. The Senate HELP Committee bill, like all legislation, is a compromise; it is not perfect, but it is well worth supporting. I do so enthusiastically from three vantage points:
- As an advocate for fair access to health care and Medicare, and something of a Medicare historian, I particularly praise the Senate bill’s inclusion of mandated core benefits and a public health insurance option. Medicare teaches that this is the only way to truly provide fair access to comprehensible, secure, affordable health insurance and care. Anyone who truly knows Medicare and who looks objectively at the value and costs of the traditional program versus the private Medicare plans knows this is true.
- As a cancer survivor, I applaud this bill as it will bring access to health insurance and coverage to many who now go without by finally prohibiting insurance discrimination based on pre-existing conditions.
- As a small business “owner” (founder and executive director of a non-profit organization with 30 employees), I am grateful for the relief that this bill promises to employers, like my organization, that provide employee health insurance coverage. The cost of our good, but not “Cadillac” coverage, is a terrible strain on our budget and limits our ability to hire.
Thanks to the President, Senator Dodd and those on the Senate HELP Committee for pushing forward to provide health care coverage, and with it, access to care. Please – keep it up. Bring your Senate Finance Committee and House colleagues along. This is not easy, but good things rarely are.
We need health care reform!
Beware of “Smoke and Mirrors” Savings
Hospitals Reach Deal with Administration, offering $155 billion in health savings. (Washington Post, July 7, 2009) http://www.washingtonpost.com/wp-dyn/content/article/2009/07/06/AR2009070604053.html?hpid=topnews.
The nation should be careful of healthcare savings that are more “smoke and mirrors” than actual savings through changed medical practices and efficiencies. As the Washington Post article points out, “most of the savings – about $100 billion – would come through lower-than-expected Medicare and Medicaid payments to hospitals” and “$40 billion would be saved by slowly reducing what hospitals get to care for the uninsured.” These savings, roughly $140 billion, represent on-going cost-containment efforts by the Centers for Medicare & Medicaid (CMS) and have little to do with any overall industry agreement to change its ways or to delve into a serious analysis of how its operations might be streamlined toward healthcare efficiencies. The true smoke and mirrors aspect of the hospital industry’s agreement lies in their anticipation of a higher rate structure, under the administration’s yet-to-be-announced public plan, than is currently provided through Medicare. It is hard to see what the public gets out of this “deal.”
CMA Health Policy Blog 