Funding health care uninsured

In New England, several states have turned to one-time sources of revenue to initially
fund coverage expansions. For example, Maine, Massachusetts, and Vermont have redistributed
federal funding obtained through Medicaid waivers to expand eligibility and coverage to certain segments of the population.
Maine, Rhode Island, and Vermont have used their tobacco settlement allocations to seed partial funding.
A problem with one-time sources of revenue
is that when they run out, states may need additional money to sustain expansions
in coverage. With this in mind, Rhode Island has created a trust out of its tobacco settlement to fund in perpetuity a program to reduce the health insurance premiums for small businesses. Other states have implemented
or are exploring excise taxes on tobacco
to fund coverage expansions.
One New England state—Massachusetts—
is using a unique source of revenue to fund its coverage expansion, gradually tapping
its $693 million uncompensated care pool. Massachusetts’ pool—the only one of its kind in the nation—is funded by assessments
levied on hospitals and insurers. The money in the pool was previously used to reimburse hospitals and health care clinics for services that were provided to uninsured individuals. In redirecting these funds from care to insurance coverage, it is unclear how much revenue individual hospitals and clinics
may lose and whether they will be able to continue to provide care in the face of such losses. “This issue,” said Nancy Turnbull, President of the Blue Cross Blue Shield of Massachusetts Foundation, “is so touchy that nobody wants to directly answer questions about it.”
Many reform plans are funded upon the belief that coverage expansion will induce more cost savings because hospitals will no longer have to incur large costs for bad debt and charity care and more of the uninsured will receive routine medical care, which will reduce their reliance on expensive emergency
room visits. Combined with a diversification
of the insurance risk pools through the addition of relatively young and healthy uninsured populations, states are hoping that these savings will curb the growth of private insurance premiums and allow for future coverage
expansions.
However, states will encounter significant
fiscal difficulty if such cost savings fail to materialize. In Maine, the DirigoChoice plan was designed to be partially funded by an assessment on the amount of cost savings the insurer saw as a result of providers reducing
their fees in response to less charity care and bad debt. But disagreement over the size of the cost savings and the subsequent size of the assessment ultimately ended up in court. Currently, Maine is searching for new sources of funding for its fledgling plan.
Employers are another source of potential
revenue for states. Health care legislation
passed in Massachusetts and Vermont in early 2006 requires annual fees of $295 and $365 per full-time employee, respectively, to be paid by employers that do not offer health benefits to their employees, subject to some exemptions. But these assessments are not large enough to cover the complete cost of expanding coverage to employees who are not offered insurance, especially as the cost of health insurance continues to rise. The current
political climate makes the possibility of higher taxes to pay for coverage unlikely.
Businesses may respond by encouraging eligible employees and their dependents to enroll in Medicaid and SCHIP. Commenting
during the second panel discussion at the conference, Trish Riley, Director of the Governor’s
Office for Health Policy and Finance in Maine, wondered whether increased coordination
between large employers and the state would address this contentious issue. For example, it might be more efficient if coverage for low-wage and part-time workers were administered through a Medicaid program,
with partial funding from employers.
As long as health care spending decelerates
and state revenue collections remain strong, state fiscal conditions for coverage expansions remain on steady ground. But over the long term, any sort of fiscal stress will affect a state’s implementation of reform and expansion of coverage, especially as aging
Baby Boomers place additional pressure on the health care system. Moreover, a significant
amount of funding for state coverage
Over the long term, any sort of
fiscal stress will affect a state’s
ability to expand coverage.

Cost of Health Care out of control

Health care costs are rising. The price of oil is at an all time high. Americans are struggling to save for the future. But when I turn on the TV or read a newspaper, the story too often seems to be the latest poll, gaffe, or controversy.

We need to hear less about the process, and more about the substance. We deserve serious, in-depth investigative reporting on plans to ensure all Americans have access to quality health care and long-term financial security.

When the next President of the United States takes office in January, what will he do for Americans who can't afford their health care bills? How will he guarantee that Americans who work hard are able to save for retirement, or plan for the unexpected?

More importantly: how will he cut through the partisan gridlock and work across the aisle to actually deliver for American families?

I sincerely hope you will dig into the substance and specifics of the plans of our elected leaders. I'm looking to the media for hard-charging investigative reporting - not sound bites and the horserace. And I'm sure I'm not the only one.

Small Business Health Care Comment

Their top concern, according to a survey conducted by the National Federation of Independent Business and Wells Fargo, was the expense of being in business, and the entrepreneurs singled out those factors “that are difficult to control, such as health insurance, energy and inflation.”

The survey is conducted every four years, and the high cost of health care has been the No. 1 in the last five surveys.

“For four years, the economy provided a good, stable foundation for Small Business

Health Care Insuance Reform

FOR IMMEDIATE RELEASE Contacts:
Aug. 11, 2008 David Himmelstein, M.D., (518) 794-8109, (617) 312-0970
(cell), Benjamin Day, (617) 777-3422, director@masscare.org , Mark Almberg, (312) 782-6006, mark@pnhp.org


Copy Massachusetts' health reform?

Not so fast, researchers say

Citing the failure of seven state-based health reforms over the past two
decades - initiatives that bear a strong resemblance to the
Massachusetts health reform of 2006 - a group of Massachusetts-based
researchers cautions that early declarations of the latter's success may
be premature.

In an article titled "State Heath Reform Flatlines," published in the
most recent issue of the International Journal of Health Services, three
researchers, two of whom teach at Harvard Medical School, examine the
experiences of earlier reforms in Massachusetts, Oregon, Minnesota,
Tennessee, Vermont, Washington state and Maine. The plans were enacted
from 1988 through 2003.

All seven reforms, which when launched were widely trumpeted by
political leaders and leading newspapers as breakthroughs in providing
universal health care, were based on the expansion of private insurance
coverage, the authors say. But in each case the plan had little impact
on the state's number of uninsured persons and produced no sustained
improvements in delivering care.

Dr. David Himmelstein, a co-author of the study, said the 2006
Massachusetts reform appears poised to follow the pattern of the 1992
Tennessee plan, which featured a large expansion of coverage under a
Medicaid-like program. "In Tennessee, the number of uninsured dipped for
two years, then rose to levels higher than ever," he said. "And the plan
proved to be unaffordable in the long term.

"According to the latest figures on Massachusetts from the National
Health Interview Survey," he continued, "the uninsurance rate has fallen
by only 2 percent, from 7.7 percent to 5.8 percent, since the reform was
passed, while the plan is already $147 million over budget."

Himmelstein, who is an associate professor of medicine at Harvard and a
primary care physician in Cambridge, Mass., said the seven failed plans
incorporated virtually all of the reform elements being advanced today
by leading Democrats, including Sen. Barack Obama. The problem, he said,
is that such reforms leave the private health insurance industry in a
dominant position.

"Politicians like to claim they've passed bold health reforms, but
they're afraid to rock the private insurance boat," he said. "So they
keep pushing gussied-up versions of reforms that have failed time after
time. Our health care system is sick to death, and our politicians keep
prescribing placebos."

The authors note that all of the failed plans included expansions of
Medicaid or similar programs for the poor and near-poor. Three states'
reforms (Massachusetts in 1988, Oregon in 1989-1992 and Washington state
in 1993) included mandates requiring employers to cover their workers,
and the Massachusetts and Washington plans also included an individual
mandate on the self-employed.

The authors analyzed Census Bureau data on uninsurance rates in each of
the seven states. Massachusetts' uninsurance rate rose from 7.2 percent
to 9.7 percent in the three years after the passage of then-governor
Michael Dukakis' universal health care reform in 1988. Uninsurance went
from 14.1 percent to 14.7 percent in the three years after
implementation of Oregon's universal health care reform in 1993. The
percentage of residents lacking coverage in Washington state increased
from 10.7 percent to 11.6 percent in the three years after passage of
its universal health care initiative.

Similar patterns occurred in Vermont and Maine. Tennessee's program
(which included the largest Medicaid expansion) was probably the most
successful, dropping the share of uninsured in the state from 12 percent
to 9 percent in its first year, before a rebound to 14 percent by year
three. (See charts in links below.)

All of the plans eventually "flatlined," or died quiet deaths, the
authors said.

According to Benjamin Day, executive director of Mass-Care, a health
care advocacy coalition based in Boston, "It's easy to build political
consensus for expanded health coverage. But experience shows that you
can't achieve universal coverage at an affordable price unless you throw
out the insurance companies with their massive overhead and profit, and
replace them with a more efficient single-payer national health
insurance program.

"Senator Obama should learn this lesson," Day said. As for Sen. John
McCain's health care proposals, "they are so obviously unworkable that
it's hard to take them seriously."

*******

The text of the study is available in PDF to the press at
www.pnhp.org/states_flatline
http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=zNcwNfjJAnJf0TMLo94BkfXmr35TzF3j
Password: *himmelstein*

Additional charts in PowerPoint format are available at
www.pnhp.org/five_states
http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=YNqed33VWwZ3%2FwCWnJiiV%2B8pcMbyAF%2B6

"State Health Reform Flatlines," Steffie Woolhandler, MD, MPH; Benjamin
Day; and David U. Himmelstein, MD. International Journal of Health
Services, Vol. 38, No. 3.

Physicians for a National Health Program, a membership organization of
over 15,000 physicians, supports a single-payer national health
insurance program. To contact a physician-spokesperson in your area,
visit www.pnhp.org/stateactions
http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=W1SCD%2BJYJOe309bI23pT%2B%2B8pcMbyAF%2B6

or call (312) 782-6006.


*Physicians for a National Health Program*
29 E Madison Suite 602, Chicago, IL 60602
Phone (312) 782-6006 | Fax: (312) 782-6007
www.pnhp.org
http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=cGQcvuaDs3pWB3gv9jboUO8pcMbyAF%2B6

| info@pnhp.org mailto:info@pnhp.org
PNHP 2008



http://salsa.democracyinaction.org/dia/track.jsp?v=2&c=mgJJAv5YFLJ2XnjhLax%2Fe%2B8pcMbyAF%2B6








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