New Health Incsurance

Understanding New Health Insurance

Week of August 26, 2013

Visit USA.gov's Health Insurance webpage to learn about the new Health Insurance Marketplace and other types of health coverage. Starting October 1, 2013, you can fill out an application for health insurance through the Health Insurance Marketplace. You will be able to compare your options side-by-side and enroll in a plan that fits your budget and meets your needs. Coverage takes effect as early as January 1, 2014.

Health Care understanding

Health Care: A Brief Glossary

Benefit package – The list of services and products that a health plan covers. Typically, the more expansive the benefit package is, the more expensive the health insurance coverage is.

Capitation – A system of paying doctors and health providers a set amount per patient per year regardless of how much health care that person uses. In theory, this creates incentives to keep people healthy and avoid using expensive services.

Cherry-picking – A process where an insurer tries to cover only the healthiest people with the lowest risk of using health services.

Community rating – This rule would require insurance companies to set premium rates based only on geography and not health status. Sometimes gender and age also are considered in rate setting.

Guaranteed issue – This rule would require insurance companies to offer health coverage to any one willing and able to pay regardless of health status or pre-existing conditions.

Comparative effectiveness research – Research that compares two or more drugs, treatments or medical interventions to see which is most effective for which type of patient. In theory, insurance providers, whether it is the government or a private company, would use this research to guide decisions on which medical treatments to cover.

Employer mandate – A requirement that businesses offer their employees health insurance. It may only pertain to businesses of a certain size. Massachusetts, for example, requires businesses with 10 or more employees to provide coverage or to pay a set amount on their behalf to purchase coverage.

Fee-for-service – The traditional and most widespread method of paying doctors and health care providers for each service provided.

Health insurance cooperative – A nonprofit health plan owned and operated by a collection of small businesses or individuals that group together to purchase health insurance so they have greater negotiating power.

Health insurance exchange – A marketplace where people can buy insurance. An exchange could be set up in many ways at the state, regional or national level. The government could regulate what plans are offered, how much insurers charge and set other rules insurers must follow. Sometimes called a “connector,” it often is compared to a menu of insurance options people can choose among similar to what is available to federal government employees. Its primary users likely would be small businesses and people buying individual insurance.

High-risk pool – Some states have insurance pools for people who insurance companies will not cover due to pre-existing conditions or poor health status.

Individual mandate – A requirement that all individuals purchase health insurance coverage. Proponents say an individual mandate is necessary to achieve universal coverage and to avoid a system where only the elderly and unhealthy purchase insurance. Opponents say it infringes on personal freedoms and is unenforceable.

Medicaid – The government health insurance program for the poor. The $333-billion program is paid for through a combination of federal and state funding, but administered by states. In 2007, about one in five people in the U.S. were enrolled in Medicaid.

Medicare – The government health insurance program for people who are 65 and older, blind or permanently disabled. In 2008, the $460-billion program provided health coverage to about 45 million people.

Medicare Advantage – This program allows Medicare beneficiaries to enroll in a private HMO or other health plan to receive their benefits.

Medical underwriting – An insurance process of evaluating an individual’s health status to decide if they should be offered insurance and how much they should pay in premiums. Underwriting is not used in the employer-sponsored insurance market only the individual market.

Pay for performance – A system that would pay doctors, hospitals and health care providers based on how well they take care of patients and not just on how much care they provide to patients.

Pre-existing condition – A prior health condition that may make people ineligible for health insurance coverage in the individual market.

Premium – The amount an insurance company charges to provide coverage. In 2008, the average annual premium for a family was $12,680 – more than twice the cost in 1999.

Public plan – The government could offer a public plan similar to Medicare as one of choice in the health insurance exchange to compete with private insurers. Republicans strongly oppose creating a public plan.

Purchasing pool – Health insurers lump the premiums people pay together to pay for health care services. In this pool, people who use few health services subsidize the costs of people who use many. This ability to “spread risk” gives large employers an advantage over small employers when buying health insurance.

SCHIP – The State Children’s Health Insurance Program was created in 1997 to provide health coverage to children not poor enough to qualify for Medicaid. The program is funded by the federal and state governments, but each state operates its program differently. In 2008, the $10-billion program provided health coverage to about 4.5 million children.

Single-payer system – A health care system in which all the funding comes from one source, usually the government. Private insurance, however, can and does exist in countries with a single-payer system, such as Canada and the United Kingdom.

Socialized medicine – A health system in which the government provides the health insurance coverage, owns the hospitals, and employs the doctors. The Veterans’ Administration health system is an example of socialized health care.

Uncompensated care – Care that doctors and hospitals provide to patients for which they never receive payment.

Underinsured – A term describing people who have insurance but are still considered financially vulnerable to high health expenses because of the limitations or cost-sharing of their plans.

MEDICARE SAVINGS HEALTH CARE LAW

For Immediate Release:	Thursday, May 24, 2012
Contact:	CMS Office of Public Affairs 202-690-6145

HEALTH CARE LAW SAVED PEOPLE WITH MEDICARE OVER $3.5 BILLION ON PRESCRIPTION DRUGS
IN THE FIRST FOUR MONTHS OF 2012, MORE THAN 416,000 PEOPLE WITH MEDICARE SAVED AN AVERAGE OF $724 ON PRESCRIPTION DRUGS AND 12.1 MILLION USED A FREE PREVENTIVE SERVICE

Under the new health care law – the Affordable Care Act -- seniors and people with disabilities in Medicare have saved a total of $3.5 billion on prescription drugs in the Medicare drug benefit coverage gap or “donut hole” from the enactment of the law in March 2010 through April of 2012. The Centers for Medicare & Medicaid Services (CMS) released data today showing that, in the first four months of 2012 alone, more than 416,000 people saved an average of $724 on the prescription drugs they purchased after they hit the prescription drug coverage gap or “donut hole,” for a total of $301.5 million in savings. These savings build on the law’s success in 2010 and 2011, when more than 5.1 million people with Medicare saved over $3.2 billion on prescription drugs.

In addition, CMS announced that this year, from January through April, 12.1 million people in traditional Medicare received at least one preventive service at no cost to them – including over 856,000 who have taken advantage of the Annual Wellness Visit provided in the Affordable Care Act. In 2011, over 26 million people in traditional Medicare received one or more preventive benefits free of charge.

“Thanks to the health care law, millions of people with Medicare have paid less for health care and prescription drugs,” said CMS Acting Administrator Marilyn Tavenner. “The law is helping people with Medicare lower their medical costs, and giving them more resources to stay healthy.”

People with Medicare who hit the coverage gap “donut hole” in 2010 received a one-time $250 rebate. In 2011, people with Medicare began receiving a 50 percent discount on covered brand name drugs and 7 percent coverage of generic drugs in the “donut hole.” This year, Medicare coverage for generic drugs in the coverage gap has risen to 14 percent. Coverage for both brand name and generic drugs in the gap will continue to increase over time until 2020, when the coverage gap will no longer exist.

For more information on how the Affordable Care Act closes the Medicare drug benefit coverage gap “donut hole,” please visit: http://www.healthcare.gov/law/features/65-older/drug-discounts/index.html.

Prior to 2011, people with Medicare faced cost-sharing for many preventive benefits like cancer screenings and smoking cessation counseling. Now, many of these benefits are offered free of charge to beneficiaries, with no deductible or co-pay, so that cost is no longer a barrier for seniors who want to find and treat problems early.

For more information on Medicare-covered preventive services, many of which are now provided without charge to beneficiaries thanks to the Affordable Care Act, please visit: http://www.healthcare.gov/law/features/65-older/medicare-preventive-services/index.html.

To learn what screenings, vaccinations and other preventive services doctors recommend for you and those you care about, please visit the myhealthfinder tool at www.healthfinder.gov.

Thanks to the Affordable Care Act:

• Millions of uninsured Americans will gain access to quality,
•  affordable health coverage;
• No American will be denied health coverage simply
•  because they have a "pre-existing" condition;
• Insurers will no longer be able to drop an American
• from health coverage, simply because he or she got sick;
• Insurers will no longer have free rein to raise premiums without limits and accountability;
• Every insurance plan must be described in clear, factual, and transparent terms so consumers can understand
•  what they are getting for their premium dollars;
• Families can rest easy knowing young adults can stay on their family plan until age 26;
• All Americans will have no-cost access to vital preventive
• check-ups and care;
• Seniors stuck in the "doughnut hole" will get much-needed help affording their prescription drugs;
• Small businesses will get tax credits to help extend coverage to their employees; and
• Community health centers will be able to expand the number of patients they serve in states across the country.

These vital protections will make a difference for millions of American families. Don't take away our health care!

Health Care Reform Update

It's been three months since health care passed and insurance companies still aren't out of the doghouse.

President Obama issued a stern warning Tuesday that the providers shouldn't use the new law "as an opportunity to enact unjustifiable rate increases," Reuters reports. He added that states and the federal government would monitor industry activity to ensure that won't happen.

The meeting between the president and insurers was the first of its kind since the law passed.

The White House has had to toe a careful line with insurance companies, which the Wall Street Journal notes will determine how seamless the transition to the new law will be. At the same time, officials have continued to point to industry problems as proof that the pricey overhaul was necessary.

Obama followed up the meeting by unveiling a "patients' bill of rights" that highlights aspects of the bill that are being implemented soon, including expanding coverage to children with chronic illnesses and eliminating limits on lifetime or annual insurance coverage, AP reports.

The White House also unveiled a $250-million fund to boost primary care.

The U.S. has long faced a shortage of primary-care doctors as medical students opt for specialized fields that pay more. But primary care is the sector of medicine that can help bring about some of the biggest cost savings -- by focusing on preventative care long before chronic conditions surface.

The funds being spent to train primary-care doctors and subsidize nursing school would create about 1,700 new doctors and nurses to address the gap. But it'll take a lot more than that to solve the problem.

The Association of American Medical Colleges estimates that there will be a shortage of 47,000 primary-care doctors by 2025, according to the Washington Post .

The health care law included $1.5 billion to boost the sector, and this money represents a part of that fund. There is another $410 million set aside to help poor Americans get health training, the Los Angeles Times adds.

Insurance companies have started making changes ahead of new regulations in the law.

One unexpected outcome is that the companies are spending more money on customer service. As government officials prepare to create an open marketplace with health products by 2014, insurers are trying to boost their image to be competitive in that market.

That includes opening up retail storefronts to answer questions, offering wellness classes, improving customer service calls, and making insurance information more understandable.

"We see the stakes in terms of customer service going higher and higher," a Cigna rep told the Los Angeles Times .

Insurers add that the added customer service will limit confusion about how the new health law affects them.

Companies are also putting emphasis on preventative care to prevent costlier and more serious health conditions in the future, the New York Times reports.

Geisinger Health System in Pennsylvania pays the salaries of nurses in doctor's offices to ensure that patients with chronic conditions take care of themselves and avoid visits to the emergency room.

Meanwhile, lawmakers put off what to do about Medicare cuts for another six months.

Their last-minute fix to avoid a 21 percent cut in what doctors get paid for treating Medicare patients came barely in time.

Thousands of physicians will receive the reduced amounts of reimbursement as checks were mailed before lawmakers ended the debate. While the doctors can file paperwork to get paid in full, the situation highlights the funding problems Medicare faces, Forbes writes.

"Chances are seniors soon will be staring at higher premiums, and slimmer benefits, for Medicare Advantage," CQ reports. That program allows private health care plans in Medicare.

Millions of seniors could be affected if the program is eliminated, as industry analysts expect it eventually will be. They would have to find other insurance or switch back to regular Medicare with its higher premiums.

The Seattle Times highlights the frustration seniors feel over the confusing debate. But the article adds that seniors stand to have better care under the new health care overhaul.

The media may be to blame for some of the public's confusion on health care.

A Pew review of how journalists covered the health care debate found that Americans found it difficult to understand and got more confused, not less, over time.

While acknowledging that health care is a complex topic, the study concludes that "the debate centered more on politics than the workings of the health care system."

Health care opponents did a better job of getting their message out than those who supported it, partly because of the time conservative talk show hosts devoted to that perspective, Pew adds.

The report has prompted a flurry of comments on blogs like the Huffington Post , which highlighted a graph that shows how much time was devoted to descriptions of the plan versus the politics and strategy of the debate. The latter got double the attention.

The Washington Post's Ezra Klein blamed public confusion about health care on the media's bias towards timely news rather than explaining the nuts and bolts of what has already happened.

"The media cover those points of controversy, and people tune in, but they missed the beginning, and now everyone is talking about the bill's third CBO score, not about how the thing actually works," he wrote.

Indian outsourcers haven't had trouble seeing that the health care law presents new opportunities for them.

As the U.S. health care industry looks to trim costs and make health care more affordable, many administrative services could be outsourced to countries with cheaper labor costs.

"The new law is a potential gold mine for Indian outsourcers and medical service providers," Medical Tourism Magazine writes.

Ambreen Ali writes for Congress.org.

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Moratorium Against Medicare Cuts Extended to Nov 30, 2010
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Health Care Cost Increase Is Projected

By ROBERT PEAR
WASHINGTON — A government analysis of the new health care law says it will not slow the overall growth of health spending because the expansion of insurance and services to 34 million people will offset cost reductions in Medicare and other programs.

The study, by the chief Medicare actuary, Richard S. Foster, provides a detailed, rigorous analysis of the law.

In signing the measure last month, President Obama said it would “bring down health care costs for families and businesses and governments.”

But Mr. Foster said, “Overall national health expenditures under the health reform act would increase by a total of $311 billion,” or nine-tenths of 1 percent, compared with the amounts that would otherwise be spent from 2010 to 2019.

In his report, sent to Congress Thursday night, Mr. Foster said that some provisions of the law, including cutbacks in Medicare payments to health care providers and a tax on high-cost employer-sponsored coverage, would slow the growth of health costs. But he said the savings “would be more than offset through 2019 by the higher health expenditures resulting from the coverage expansions.”

The report says that 34 million uninsured people will gain coverage under the law, but that 23 million people, including 5 million illegal immigrants, will still be uninsured in 2019.

Republicans said the report vindicated their concerns about the law, which was approved without a single Republican vote. The White House pointed to bright spots in the report and insisted that the law would help bring down costs. In 2004, when Mr. Foster raised questions about cost estimates by the Bush administration, Democrats lionized him as a paragon of integrity.

Mr. Foster says the law will save Medicare more than $500 billion in the coming decade and will postpone exhaustion of the Medicare trust fund by 12 years, so it would run out of money in 2029, rather than 2017. In addition, he said, the reduction in the growth of Medicare will lead to lower premiums and co-payments for Medicare beneficiaries.

But, Mr. Foster said, these savings assume that the law will be carried out as written, and that may be an unrealistic assumption. The cuts, he said, “could become unsustainable” because they may drive some hospitals and nursing homes into the red, “possibly jeopardizing access to care for beneficiaries.”

Nancy-Ann DeParle, director of the White House Office of Health Reform, said that fear was unfounded.

Mr. Foster’s report, which analyzes the effect of the law on national health spending of all types, has a different focus from studies by the Congressional Budget Office, which concentrated on federal spending and revenues and concluded that the law would reduce budget deficits by a total of $143 billion over 10 years.

In his report, Mr. Foster made these points:

¶The government will spend $828 billion to expand insurance coverage over the next 10 years. Expansion of Medicaid accounts for about half of the cost. The number of Medicaid recipients will increase by 20 million, to a total of 84 million in 2019.

¶People who go without insurance and employers who do not provide coverage meeting federal standards will pay $120 billion in penalties from 2014 to 2019. Individuals will pay $33 billion of that amount, while employers pay $87 billion.

¶The law will reduce consumers’ out-of-pocket spending on health care by $237 billion over 10 years, to a total of $3.3 trillion.

Cuts in federal payments to private Medicare Advantage plans will “result in less generous benefit packages,” the report said. By 2017, it said, “enrollment in Medicare Advantage plans will be lower by about 50 percent, from its projected level of 14.8 million under the prior law to 7.4 million under the new law.”




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Health Coverage Legislation Small Business

Health Coverage Legislation Small Business
Health coverage legislation enacted this year includes a Small Business Health Care Tax Credit to help small businesses and small tax-exempt organizations afford the cost of covering their workers.
Eligibility Rules
Providing health care coverage. A qualifying employer must cover at least 50 percent of the cost of health care coverage for some of its workers based on the single rate.
Firm size. A qualifying employer must have less than the equivalent of 25 full-time workers (for example, an employer with fewer than 50 half-time workers may be eligible).
Average annual wage. A qualifying employer must pay average annual wages below $50,000.
Both taxable (for profit) and tax-exempt firms qualify.
Amount of Credit
Maximum Amount. The credit is worth up to 35 percent of a small business' premium costs in 2010. On Jan. 1, 2014, this rate increases to 50 percent (35 percent for tax-exempt employers).
Phase-out. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.
Three Simple Steps for Employers to Qualify
Posted by Malden Senior at 4:16 PM
Labels: AARP. MASS SENIOR ACTION, cost Heath care, healthcare.medicare.msac, heath Care Reform, Helath Care Reform. MSAC
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Medicare and the elderly

President Obama hopes to finance a health care overhaul in part by squeezing hundreds of billions of dollars in savings from Medicare through a crackdown on fraud and waste. An oft-cited example: Medicare Advantage, run by private insurers reimbursed by Medicare, costs the government 14 percent more per enrollee than traditional Medicare.

Republicans claim that Democrats will ultimately be forced to reduce Medicare benefits to seniors in order to finance health care for more citizens. Are the elderly being asked to shoulder the burden for universal coverage? Should Medicare, or something like it, be available to an even greater number of Americans?

Mass Health Care for all

What penalty will uninsured residents of Massacgusetts face if the don.t buy health Insurance after July 1, 2008?
They will lose your personal deduction for your state inme tax return

Group Health Insurance

The traditional system in which emloyers or unions offer subsidized provate insurance to employees or mambers and their dependents at discounted group rates

Kerry on Health Care

Health Care not only the great unfinished business of half a century bat a metter of fundamental moral values.
The Goal of health coverage by 2012
Could be financed by repealing the Bush Administration tax cuts for people earning more the 200,000 dollars a year.
What is his plan for enforcing the proposal to have all americans insured if his plan is not implemented by 2012?

Health Care Reform hold Insurance Companies Accountable

If Congress now creates new exchanges, as seems increasingly likely, it must prevent this phenomenon by setting two national rules: Insurers have to accept everyone and have to charge everyone the same rates regardless of health status.

Such rules would force insurers to spread risk. But enforcement would also be difficult. Every aspect of health insurance — from the rules for underwriting and setting premiums to the marketing of policies — would need to be monitored stringently to prevent companies from steering all bad risks to the exchanges.

It would be smarter for Congress to revisit the idea of creating a public plan that could provide an attractive choice for consumers and real competition for private insurers, to give them the incentive to offer good coverage at affordable prices.

But without a public plan, tough rules and restrictions on insurance companies will be essential. Otherwise, Americans will never be able to count on good, affordable health care.

Tort Refom 0n Health Insurance Reform

If a so-called "reform" bill comes up with these elements - no employer mandate, strong individual mandate, market rates for everything, no real insurance reform - there is no reason to vote for it. It is worse than no bill at all.
I reviewed your comments closely and what I have not seen or heard is anything that includes tort reform. We know that this bilks out billions of dollars that could be used toward delivery of care. Among the issues are costs for repetitive tests, astronomical premiums for malpractice insurance to all providers, not just doctors. All nurses, therapists, hospitals,outpatient service entities must pay these premiums BEFORE the FIRST patient receives any services. In the mix of all those to be paid in the health care delivery/provider cycle is the amount of money that is frittered away to cover litigation costs for this very sophisticated system we call health care. YES, DEFINITELY, we NEED a way to protect patients from unscrupulous practices. BUT, let us LOOK how this present system of "protection" is SUCKING the life out of the costs reduction efforts. A better approach is to put before PEER review entities outside local care to look at complaints, rather than to allow juries that are not knowledgeable about health care practices to make decisions that are just. It could require practitioners to participate on a fair rotation so that no one gains too much power over this entity. And it also has the benefit of being a continuing educational tool for those serving on it. I can tell you that I learn as much from my journals in the review of cases as I do in reading dry research projects. It puts a human face on the case at hand. This takes litigation OUT of the third parties with the possibility of great financial gain! Claims looked at for Buffalo, NY could be reviewed by a PEER Panel in Omaha. Omaha's claims could be reviewed by PEER review panel in Miami. Miami could be reviewed by PEERS in Denver. If all these claims were done ANONYMOUSLY and without monetary gain by the reviewers, but the insurer would have to pay for the costs of helping the patient pay for his health care that was required for "fixing" the error and an award for pain and suffering that could be reasonable for both, we would see very few of these "jackpot" awards going to attorneys and little to the clients. Frivolous suits would be kept to a minimum, especially if appeals were allowed a LIMIT in terms of restitution. This is a huge part of costs and it could be a substantial reduction in pay outs by insurance companies, dollars that would go to payments of real services. Third party rewards for health care that they do not deliver is like a leach sucking the blood out of the host. It did take a while for health care to document this, my God George Washington even used leeches in times of illness, but we have come a long way since then! It is time for the health care system to document this for the health of patients, the delivery system and the economy so that we can use those dollars to deliver health care to the people, who need it and not dollars to those who stand by watch to see if a mistake is made. That is a diagnosis we can make and we can cure it. Other suggestions we have been hearing are not conclusive. Let us get STARTED on the problem we know we can help.
There are needs that require insurance reform, those have a whole host of problems that ARE being talked about, but the tort reform issue seems totally neglected. A neglected patient can not get well, nay the patient who is neglected, has no hope of surviving.
When a very sick patient comes to the hospital with many illnesses, the most manageable problems are tackled first, so that the others CAN be addressed. Let us NOT obfuscate the whole system, when there are AREAS to BEGIN the process. This is a journey, this not parking lot.

Posted by: Lauragail

SEE THE CONECTION WITH AARP HEALTH CARE PLAN

The truth: Daschle is cashing in mightily on his role as "the architect of President Obama's health care plan" in the private sector — and evading lobbyist disclosure by reinventing himself as a highly paid "senior adviser" to D.C.-based law firm/influence-peddling shop Alston & Bird.

Daschle represents mega-insurer UnitedHealth, which opposes the pure public option, and Alston & Bird represents a total of 31 clients from the health care sector. According to D.C. watchdog OpenSecrets.org, "Of the $2,730,000 reported income received from clients, nearly 50 percent of that, $1,070,000, comes from these 31 health care clients."

For information on Cost of health Care

December 28, 2008
Op-Ed Contributors | Transitions
Health Care With a Few Bucks Left Over
By ALAIN ENTHOVEN
Stanford, Calif.

HEALTH care drained the federal budget of more than $1 trillion this year. That includes direct health care programs like Medicare, plus insurance for federal employees and the cost of excluding employer health-care contributions from workers’ taxable incomes. If present trends continue, in 10 years the number will almost double.

President-elect Barack Obama has proposed some good ideas for cutting health care costs, but his proposals will not create the savings we need.

He has suggested, for example, that electronic medical records could save Americans nearly $80 billion per year. But information technology cannot bring meaningful savings if it is used in a health care system that regularly rewards waste and punishes efficiency, as ours does.

Similarly, Mr. Obama proposes to save more than $80 billion per year by better management of chronic conditions like high blood pressure, heart disease, diabetes and asthma, and by preventing more diseases in the first place. It is true that most American doctors are weak on prevention and chronic disease management. But they will not improve until they are given economic incentives to buy the equipment and hire the personnel they need to actually deliver these services.

The only truly promising way to save money is to change the way health care is organized and delivered. In the United States, 85 percent of doctors work in small, fee-for-service practices. Many of these doctors are very good and hard-working. But they are autonomous, not members of teams. They do not systematically share information with one another. They are unable and unwilling to be held accountable for the quality and cost of the care they deliver.

The employment-based health insurance system has created this situation by not encouraging people to consider the value for their money when they choose doctors.

Some American medical practices do emphasize economy. They are very large, multispecialty group practices in which doctors work together to improve quality and keep costs low. Their doctors share values and cultures of teamwork. They keep comprehensive electronic medical records, they share information, and they emphasize disease prevention and chronic disease management as a matter of course.

These doctors are usually paid salaries, not fees for services. Research and experience suggests that these practices — which exist in all regions of the country, including both rural and urban communities — can reduce costs by 30 percent.

And a few employers — some universities and companies, the federal government, the state governments in Wisconsin and California — allow their workers to choose such practices, and then keep the money saved by that choice. At least 70 percent of employees offered this option choose it, even when it involves restrictions on doctor selection.

Unless all Americans are given this choice — along with the right to keep the savings — we will not be able to get health care costs under control. But making this change won’t be easy. Employers and insurance companies are likely to resist it. Doctors and consumers will have to change. It will take time.

Right now, most employers offer workers no choice of insurance companies. They say it would be too expensive to administer more than one. And insurance companies offer employers better deals when they can be the sole supplier.

Even at companies where employees have choices, many employers pay 80 percent to 100 percent of the premiums of an employee’s chosen plan, so there is little opportunity for the employee to realize savings. This market does not reward cost-conscious behavior. The tax code makes this problem worse by exempting employer contributions to health insurance from taxes, no matter how large they are.

Efficient, organized medical systems need to be able to compete with — and ultimately replace — the fee-for-service model. Working with Congress, the next president should establish a national health-insurance exchange, through which people can choose among several competing health plans, including those affiliated with organized systems of care. Individuals could then select which plan they judge best to meet their needs, and save money by choosing less expensive options. The insurers in the exchange would agree to accept all who want to enroll, and to charge their same price to all individuals, no matter the state of their health.

Then, to ensure that enough people participate in the health-insurance exchange, Mr. Obama and Congress should phase in a requirement that the tax-free status of employer contributions to health care be dependent on employers buying health care for their workers through the exchange — and making fixed-dollar contributions, so workers can reap the savings when they choose less expensive plans. All employees would have a wide range of choices, with an incentive to be cost-conscious. (Eventually, the government should help everyone buy insurance through the exchange, regardless of employment.)

Right now, Mr. Obama’s plan is to create an exchange through which people who have difficulty buying affordable health insurance could buy coverage. Unfortunately, participation in exchanges cannot be voluntary. Voluntary exchanges have been tried and failed. The first people to join are the sickest, which drives up the premiums.

To make exchanges work, a broad sample of people, healthy and sick, must be included so that health risks can be spread widely. Large exchanges would also lower the administrative costs for insurers.

By combining organized systems of medical care with the competition created by a health insurance exchange, Mr. Obama could achieve large savings. In 10 years, costs could be reduced by 30 percent, saving more than $700 billion a year — all driven by incentives and voluntary actions.

Alain Enthoven is a professor of management at Stanford.



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Commonwealth Care

Boston - The state’s subsidized health insurance program for low-income residents, Commonwealth Care, an exclusive network of four insurers since its inception, is preparing to throw open its doors to new bidders in an effort to cut costs, stabilize premiums and pay fair rates to carriers.

“It’s really about achieving those three things,” said Jon Kingsdale, executive director of the state’s Connector Authority, which oversees Commonwealth Care. “We don’t want the premiums going all over the place and people having to switch plans.”

With a three-year deal of exclusivity for BMC HealthNet Plan, Fallon Community Health Plan, Neighborhood Health Plan and Network Health expiring in July 2009, the Connector board on Thursday explored ways to bring new insurers into the fold and to provide incentives to bring costs down for taxpayers and program enrollees.

Under the upcoming round of bidding, carriers would be limited to offering plans with maximum $404 monthly premiums, a 2 percent increase from this fiscal year and a figure that includes $35 per month in administrative costs, according to a plan proposed by Connector staff at a board meeting at One Ashburton Place. Rates would vary based on the health of the covered population, and plans would be rewarded financially if their enrollees more regularly receive primary care.

The premiums envisioned contrast sharply with actual increases in health care premiums over the years. Last year, Commonwealth Care premiums rose more than 9 percent, a lesser increase than in previous years but far above the 2 percent cap proposed by Connector staff.

A spokesman for the Connector said the trend of double-digit increases in the rate of health care costs “appears to have certainly slowed down in Massachusetts.” The spokesman, Dick Powers, added that under the proposal, the state would share half the burden with carriers whose costs exceed the cap set by the Connector.

Powers said that if trends continue, the $869 million budgeted for Commonwealth Care this fiscal year would be sufficient, despite warnings from lawmakers during budget debate that the account was underfunded.

Dr. Marylou Buyse, president of the Massachusetts Association of Health Plans, said health care costs continue to outstrip inflation, even though the explosion in costs has somewhat slowed. She said she hadn’t reviewed the Connector board’s proposal but that “we don’t want this to adversely affect any of the health plans.”

Kingsdale said increasing the pool of insurers, or managed care organizations (MCOs), would loosen a rigid system that failed to fully account for the sickness of the populations covered and could not protect against drastic shifts in premiums.

Under the proposal, insurers bidding 2 percent below the maximum premium would be eligible to win a share of enrollees who are auto-assigned to carriers in their region. Enrollees are auto-assigned when they sign up for Commonwealth Care but fail to select a specific carrier.

Patrick Holland, chief financial officer of the Connector Authority, estimated that 7,500 new enrollees sign up each month, including 1,800 who are auto-assigned. Despite the stream of new enrollees, program enrollment remained flat this month at 162,726 members as departing members offset the gains.

Board members weighed incentives for enrollees to choose the lowest-cost plans but worried that longtime patient-doctor relationships could be disrupted, which would undercut the fiscal benefits.

“They’re not just commodities that we can, kind of, move around,” said board member Nancy Turnbull.

Health Care for All officials agreed.

“We absolutely oppose disrupting people’s relationships with their providers,” said Lindsey Tucker, reform policy manager for the consumer advocacy organization.

“There’s a lot of questions that still have to be answered,” she said. “Until there’s a sort of next draft, I don’t feel like I have any idea of what the plan will be.”

Tucker said the Connector should avoid plans that result in an increase in redeterminations because confusing paperwork required to enroll in Commonwealth Care could lead to unnecessary loss of coverage or plan changes.

Among options staff recommended included inducing patients with $10 or $15 cards for certain health care services or to designate a two-month period in 2009 to require enrollees to actively choose a carrier. Those who don’t would be auto-assigned to the cheapest available plan.

Dolores Mitchell, a board member and executive director of the state Group Insurance Commission, described herself as “lukewarm” to using cards to sway people to switch plans.

“Something about it doesn’t feel comfortable to me,” she said, calling it “an inappropriate use of financial incentive for people making an important personal decision.”

The proposal also included increasing from $1 to $2 the co-pay for most generic medicine for non-premium paying enrollees, a change mandated to comport with Medicaid rules.

The board will meet next week to finalize a procurement plan for new carriers. If an existing insurer fails to win the state’s blessing, its members would have the opportunity to pick a new plan or be auto-assigned.

Medicare Advantage Plans

Beneficiaries choose from an average of 35 private Medicare Advantage plans in each county, Mr. Zarabozo and Mr. Harrison report. But they say, “Payment increases have been so large that plans no longer need to be efficient to offer extra benefits.”

Payments to health maintenance organizations are, on average, 12 percent higher than what the government would spend for beneficiaries in traditional Medicare, they write, while payments to private fee-for-service plans were 17 percent higher.

Insurance company executives and Bush administration officials defend the role of private plans.

“Medicare Advantage plans are offering an average of over $1,100 in additional annual value to enrollees in terms of cost savings and added benefits,” said Kerry N. Weems, the acting administrator of the Centers for Medicare and Medicaid Services.

Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, said two types of plans — H.M.O.’s and preferred provider organizations — had produced tangible benefits by coordinating care. As a result, she said, disease is detected earlier and people have fewer visits to hospital emergency rooms.

But, Ms. Gold said, “these are not the types of plans that have been growing most rapidly.” Instead, the private fee-for-service plans are growing fastest, and they, she said, “are not set up to coordinate care.”

The Medicare Payment Advisory Commission has said the payments to private plans should gradually be reduced to the level of traditional Medicare.

In a campaign statement, Mr. Obama declared, “We need to eliminate the excessive subsidies to Medicare Advantage plans and pay them the same amount it would cost to treat the same patients under regular Medicare.” In a debate on Oct. 15, Mr. Obama described the subsidies as “just a giveaway” to private insurers.

Similar views have been expressed

SINGLE PAYER HEALTH INSURANCE

Leaving the bloated insurance industry in place perpetuates the pain and cost of the current health care system.

Massachusetts pays the most in the nation for its health care, and yet it’s plagued by an ongoing crisis of access, affordability, and quality. Although our experiment in health care reform already has deep problems, policy wonks influencing the country’s health care debate tout Massachusetts as the model for universal health care nationwide.

If Massachusetts is a model, it’s a model of what not to do.

When the legislature passed “shared responsibility” legislation two years ago, nearly every suit in the state’s health care industry celebrated. The concept grew from an October 2005 assembly convened by the Blue Cross-Blue Shield Foundation of Massachusetts that made a bald assertion: there was no way to achieve universal coverage in Massachusetts without an “individual mandate,” the enforceable legal requirement that everyone have health insurance.

OFF THE TABLE

The problem was that the assembly was not allowed to consider Canadian-style single-payer health care—which would eliminate private insurance companies—as an option. It was off the table.

So a new bureaucracy was established, the Commonwealth Health Insurance Connector Board, with broad powers to set rates, approve cut-rate private policies, and define affordability.

Subsidies are offered on a sliding scale for those earning up to 300 percent of the federal poverty line (about $63,000 for a family of four). Those earning below the line are covered free.

The tangle of private insurance companies, with their expensive bureaucracies and profits, remains in place.

The only new source of revenue for these subsidies is the $295 per employee fee paid anually by employers of 11 or more workers who fail to show that they are making a “fair and reasonable” contribution to their employees’ coverage.

The tangle of private insurance companies, with their expensive bureaucracies and profits, remains in place.

Given these constraints, how does the system measure up?

Access. The ability to get care has expanded for some, with an increase in Medicaid enrollment for some of the poorest. But this comes at the expense of many, particularly undocumented workers and their families, who in the past had depended on the uncompensated care pool, or free-care pool, through community health centers and safety-net hospitals.

The pressure is now on to deny free care to low-income immigrants who would be eligible for subsidized programs if their papers were in order.

Out of a population of six million, a quarter of a million residents remain uninsured. About 60,000 have been granted waivers as unable to afford even the subsidized plans.

Others fall through the cracks of a complex bureaucracy, and an unknown number simply defy the system and refuse to fill out the additional pages of questions about their insurance status with their state income tax form.

Affordability. For many, paying for health care without the threat of bankruptcy or giving up other necessities of life remains impossible. Governments and many employers are staggering, too.

Rising costs for public employees’ and retirees’ health insurance has led to round after round of service cutbacks, affecting every resident who uses public services. Attempts at cost-shifting have provoked strikes by teachers and turnovers in city halls.

Employers successfully pressure the Connector Board to keep copays and deductibles high in the subsidized health plans. This keeps those covered by commercial plans from switching to the public ones.

But ironically, those high deductibles and copays are not counted when calculating who qualifies for taxpayer subsidies.

A diabetic stay-at-home mom on the subsidized plan, for example, pays $110 a month for insurance. But the array of drugs and procedures she requires and the limits on her coverage leave her with copayments of about $165 a month.

Quality. The new system doesn’t seem to have improved patient outcomes. A recent study showed that 45,000 patients are injured and 2,000 patients die in Massachusetts each year from hospital-acquired infections and accidents. That’s six patients dying each day.

And hospital executives fiercely resist steps to improve quality. In July they blocked a bill—again—to establish minimum nurse-to-patient ratios. Such ratios have made California hospitals much safer.

STILL NEED SINGLE PAYER

In July Massachusetts Senator Ted Kennedy announced a bipartisan initiative to achieve “universal health care” quickly, in the first days of a new administration. And then came Health Care for America Now, a new 80-member coalition that includes the AFL-CIO, SEIU, and AFSCME. HCAN champions a system—similar to Massachusetts’s—that would leave the insurance companies at their troughs.

During the Great Depression, FDR was elected with a mandate for change, but the specifics were vague and the direction of the new administration nebulous. Like today, an upsurge of grassroots action was needed to set a progressive agenda.

It took 3,000 locals, for example, ignoring AFL President Bill Green’s aversion to “the dole,” as he called it, to establish unemployment insurance.

This may well prove to be just as fluid a moment in history. Nothing of consequence—like universal, single-payer health insurance—will succeed without solid grassroots organizing that sets the agenda for the next administration.

Sandy Eaton is Region 5 president of the Massachusetts Nurses Association and vice chair of the Massachusetts Campaign for Single Payer Health Care.

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Health Care Adenda

Democrats Pick Up House, Senate Seats; Newspapers Examine Implications For Health Care, Other Issues
06 Nov 2008

KaiserDemocrats on Tuesday increased their majorities in the Senate and the House and next year likely will seek to pass legislation to expand health insurance to more U.S. residents, among other bills, the Wall Street Journal reports (Hitt/Mullins, Wall Street Journal, 11/5). In the Senate, Democrats and two independents who caucus with them will increase their majority from 51 seats to at least 56 seats, with four races still undecided as of Wednesday morning. Republicans will hold at least 40 seats. In the House, Democrats will increase their majority from 236 seats to at least 252 seats, with 10 races undecided. Republicans will hold at least 173 seats (CNN.com, 11/5).

According to the Boston Globe's "Political Intelligence" blog, Democrats next year first will "address the low growth, high unemployment and economic strain on American workers," and in the "longer term," they are "hopeful they can complete a health care plan." The larger majorities might allow Democrats to pass a "slew of legislation that was blocked by the Bush administration" or that "failed to pass by small margins in the House or Senate," such as bills to expand SCHIP and allow expanded federal funding for embryonic stem cell research, the Globe's "Political Intelligence" blog reports (Milligan, "Political Intelligence," Boston Globe, 11/4).

However, as a result of the record federal budget deficit, the recently enacted $700 billion bailout for Wall Street firms and the "threat of a deep recession, Democrats will have to limit or postpone any big new spending programs, such as ones to expand health care," Reuters reports (Ferraro/Cowan, Reuters, 11/5).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2008 Advisory Board Company and Kaiser Family Foundation. All rights reserved.
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IMPROVING HEALTH CARE

November 6, 2008
Letter
Improving Health Care
To the Editor:

Re “Don’t Blame the Uninsured” (editorial, Oct. 30):

I agree with your clarion call to action for universal health coverage. But expanded coverage needs to be coupled with comprehensive change in how health care is provided and how it is reimbursed. Simply insuring the 45 million uninsured under the current system is economically unsustainable and doesn’t cure what really ails the system.

To improve care, reduce the burden of illness and be cost-effective, access to primary care emphasizing prevention, wellness and disease management must be financed adequately, and all health records must be made electronic and universally portable. Our technological infrastructure allows us to withdraw money at any A.T.M. in the world, yet two physicians practicing in the same neighborhood have no way to gain access to or share crucial patient information.

Let’s hope that the next administration will see the wisdom of acting — not just talking — so Americans get the care they deserve, at the right place and time.

Steven M. Safyer
Bronx, Oct. 31, 2008

The writer, a medical doctor, is president and chief executive of Montefiore Medical Center.