The Health Insurers have already won

[ziggy29]

Why doesn't everyone want what Congress has for itself? Are there any downsides?

Cost would seem to be the obvious one. I have to believe that the plan Congress has would be too expensive to roll out to 300 million people.

 

[ferco]

Do you believe our Congresspersons actually pay FULL retail price............due to economies of scale and an even larger group of hundreds of millions of enrollees, costs would come way down. Imagine all the surgeons, and other specialists who would salivate over this massive group of enrollees.............competition is good.

 

[JOHNNIE36]

I think I would have tackled this health care "reform" in a different manner. Seems like Obama is trying to do too much too quick. I think he should have taken Medicare as a project model for a "single payer system" if you will, and reform it by streamlining the record keeping, putting pressure on the drug companies to reduce costs, shorten the time to allow generics, making a really last ditch effort to trim staff, etc, etc. and then see where that leads in two or three years. Tell the people what you are doing and that by the end of your term a decision will be made whether to go forward with a universal plan. Hire a guy from BCBS or Aetna to spearhead this project. Of course, what the hell do I know? Not much in this regard. I do know this, as the saying goes, if your going to eat an elephant, you've got to do a bite at a time. This is one really big elephant.

Forgot to add one thing: instead of spending trillions of dollars at the start of this, I would have taken $25B(?) and bought a policy for everyone that had no insurance or guaranteed their coverage. That way everyone would have some insurance of some kind like Medicade.

 

[Rustic23]

I think the dems know they will not hold the majority the hold now after the 2010 elections. This is not a comment on their policies one way or the other, just a fact of life for a mid term election. I think they thought with their outright control of both houses and the white house, the thought they could ram this through, and they still may. That is why there was such a since of urgency. I honestly believe it had to be pushed through before the people realised what was in it. That did'nt work, and now they are looking at a new game plan to see how much they can shove through.

I find it interesting the AARP is such a supporter. Well I did, until someone pointed out AARP was a huge in the health insurance business with huge investments with seniors. If you can curtail the cost of health care in the last year of life it means billions to their bottom line.

 

[donheff]

Let's face it, those in a position to REALLY change this thing don't REALLY give a flying hoot about those who are at the receiving end......they have theirs and the nail isn't stuck in their butt.

The answer is so simple a kindergarten child could answer it: Give the OPTION to ALL 310,000,000 Americans to have access to the SAME plan Congress has.......I didn't say give it free......pay what the lawmakers pay and lets move on to other pertinent pressing issues.............duh !

Why is everyone so concerned now about weather the insurers will go out of business or not or make a profit; they sure as hell don't give a damn about you.

A number of legislators on both sides of the aisle have proposed simply extending the Federal program nationally but it keeps getting shot down for a variety of reasons. But that concept is not that far from what the "exchanges" that are proposed in the House bill would be. Insurers would come in and offer plans that all comers could choose among. Much like the insurers come into OPM to offer plans under the Federal health insurance program. It is certainly not a panacea - the Federal plans are not cheap by any means. And nothing about it drives down cost. The "Public Option" is supposed to set up a government run non-profit insurer to introduce more competition into the exchanges -- but that concept is getting hit so hard as a Government camel nose under the tent that it seems to be dead on arrival.

 

[Gotadimple]

I don't often comment on threads like these, however, there is so much misunderstanding about how health insurance carriers operate and their relationship with the government (state and federal), that I'd like to set some facts out.

1. Insurance carriers will go out of business if the government manages a health plan. No they wont. Today, the insurance carriers sell Medicare Advantage plans against Traditional Medicare (managed by the government), and they are still in business. The government would prefer beneficiaries buy Medicare Advantage so the government doesn't have to foot the liability for end of life illnesses (except for organ transplants).

However, every state's department of insurance stands to lose filing fees, operating costs, and tax base, when/if individuals move to the government plan -- not to mention control over the benefit language, auditing operations, and the general political nonsense that goes with it.

2. AARP is huge in the healthcare business. Actually, AARP is huge in selling licensing rights to its name in return for promoting products. They don't own the insurance plans they sell, other insurance companies do. What they own is huge mailing lists that are worth a lot of $ to companies who want to market to seniors. When approached to sell the list, they are happy to collaborate as long as they are adequately compensated.

3. The Federal Employee plan (what Congress and the President get) is too expensive for $300 million people. Actually, it's not. That said, however, one needs to understand that the Government negotiates a specific rate with about 40 insurance carriers who agree to administer the benefits for the rate specified (with/without any profit). The Plan is a single payer plan. The insurance carriers that administer the benefits, draw on the Office of Personnel Management to pay the claims. Like Traditional Medicare, they get a fee for processing the claim/handling customer service. If they do a good job in meeting customer service and claims payment standards, they get a bonus which must be distributed to the employees involved in administrating the plan. Your tax dollars at work -- not many insurance carriers earn the bonus.

*****
This whole uproar over insurance carriers is a lot of misdirection. The problems many have had with insurance carriers are a symptom of a problem, they are not the problem. The source of our health insurance problems reside in how much it costs to provide high quality health care. Health Insurers don't determine how much it costs, they only negotiate with doctors and hospitals to pay a pre-determined fee for every service performed.

Fee for service is the problem. It's piece work. And as anyone who has worked where they are paid by the piece, the more you do, the more you earn. It is unfortunate that our legislators are choosing to continue the status quo, without making a meaningful change to the way healthcare is delivered and financed.

-- Rita

 

[haha]

I don't often comment on threads like these, however, there is so much misunderstanding about how health insurance carriers operate and their relationship with the government (state and federal), that I'd like to set some facts out.
-- Rita

Thanks Rita. A very helpful and well informed post.

Ha

 

[ERD50]

Fee for service is the problem. It's piece work. And as anyone who has worked where they are paid by the piece, the more you do, the more you earn.
-- Rita

Thanks for the insights.

A question - I agree that "piece work" can be a source of problems, but what is the alternative? Now, if I'm sick I go to my doctor and he/she fixes it (hopefully). Sure, there is a financial (and CYA) incentive to run extra tests, make me come back for a consult, put me on a med that requires me to come back every 6 months, etc. Lots of room for abuse, or maybe a somewhat innocent jacking up of charges, with the doc convincing himself it's "just to be sure", that's how everyone does it, etc.

But how else would docs get paid? Just be assigned X number of people and given a salary? That doesn't make me feel very certain that I'm going to get the attention I might need. What's the motivation for the doc?

I have no idea if one of those options is better/worse than the other overall, or if there are other options. I'm just trying to learn.

TIA if you can add anything to this - ERD50

 

[haha]

But how else would docs get paid? Just be assigned X number of people and given a salary? That doesn't make me feel very certain that I'm going to get the attention I might need. What's the motivation for the doc?

I have no idea if one of those options is better/worse than the other overall, or if there are other options. I'm just trying to learn.

TIA if you can add anything to this - ERD50

The entire HMO concept is based on capitation, as are military systems and the UK public system.

My ex belongs to an HMO and seems to get excellent care from their salaried doctors. A lot of doctors like what they do, not just the money.

Also surgeons in these systems get their time and skills used very efficiently; and they get enough specialized work to stay on top of their games.

Ha

 

[harley]

My HMO is preventative based, and definitely not fee for service. This means sometimes you have to fight a little if you want something they would prefer not to give you (ie. special tests, services). This can be a bit of a pain, but I've never not gotten what I wanted with a little effort. On the other hand, the preventative aspect of their service kicks @ss! They'll make so much more money if you stay healthy that it's fully in their best interest to convince you to take care of yourself and get regular checkups. I know some people don't like the services, but I've been with them for over 25 years and think they've done a pretty decent job. I hope whatever comes out of all this debate keeps an option like this available.

 

[FIRE'd@51]

1. Insurance carriers will go out of business if the government manages a health plan. No they wont. Today, the insurance carriers sell Medicare Advantage plans against Traditional Medicare (managed by the government), and they are still in business. The government would prefer beneficiaries buy Medicare Advantage so the government doesn't have to foot the liability for end of life illnesses (except for organ transplants).

Something doesn't jive here. In his town hall meeting in NH yesterday, Obama singled out the Medicare Advantage plans as being subsidized to the tune of about $200 billion, and said the removal of this subsidy would be a source of cost savings. Obama said the Medicare Advantage plans cost the government more than traditional Medicare. Could you elaborate on this point?

 

[Gotadimple]

Something doesn't jive here. In his town hall meeting in NH yesterday, Obama singled out the Medicare Advantage plans as being subsidized to the tune of about $200 billion, and said the removal of this subsidy would be a source of cost savings. Obama said the Medicare Advantage plans cost the government more than traditional Medicare. Could you elaborate on this point?

It's a bit of a miscommunication, but not exactly off. You'd have to look at the details on the Medicare site about how they compensate plans specifically. But:

Medicare turns over a substantial part of the Part B premium to the insurer, AND, the beneficiary pays a premium -- you know that part. The insurer bears the risk, that is if the cost of care exceeds the premiums, the insurer makes up the difference.

It should be noted, that the benefit design of Medicare Advantage plans are richer (i.e., more benefits provided) than Traditional Medicare.

It should also be noted that the benefit designs are dictated by the government with the insurer only able to control the premiums (competitive advantage), and certain freebies (i.e., health club membership discounts, hearing aid discounts, pharmacy discounts when the beneficiary hits the donut hole).

These freebies are generally the same discounts the insurer offers to their privately-funded members. In the case of pharmacy discounts, some insurers also offer these discounts to their Medicare Supplement members (who do not have ability to buy pharmacy coverage). So they aren't giving much away, but they are making access to health care more affordable -- a very big give, knowing what we know about the cost of health care. AND every carrier has a member web site with health information and other information that encourages taking better care of yourself.

So it costs the government more? I'm not sure I agree, the government hasn't made the effort to arrange for 'freebies,' for traditional medicare beneficiaries.


-- Rita

 

[Martha]

I agree strongly with Rita. For example, medical providers are rewarded for hospitalized patients, not well patients, even if the hospitalized patient gets an infection in the hospital. Yet providers are not sufficiently rewarded for helping chronically ill people manage their illness better so that they avoid the hospital.

There are a number of options to move away from fee for service, One alternative to fee-for-service is nonprofit health care cooperatives, proposed by the senate finance committe, where, for example, a doctor can earn a salary, rather than be paid by procedures/treatments. There is evidence that they are able keep the focus on outcomes, rather than this or that treatment. For example, mail and phone consultations are used more often, which can be efficient, but are about impossible to bill under traditional insurance. Apparently the physicians also end up working better with hospitals and specialists, which eat up a lot of money. I think of my elderly MIL who had a fair amount of disjointed care, with too many specialists doing too many discordant things, and her ending up with too much treatment yet not the best treatment. For example, is a significant dental procedure appropriate when you are dying of cancer? No one to coordinate the care as no one was paid to do so.

I understand that Massachusetts is also looking at ways to get away from expensive fee for service. I have heard about discussions where providers would be paid a fixed amount per patient, adjusted for age, health and other factors, with incentives for keeping a patient healthy as possible and happy. Some kind of bundling of payments for being responsible for a patient seems to make some sense.

We also may be able to use government incentives and disincentives to help encourage healthy behavior. We also could insure that procedures that are important and evidence based are encouraged.

I am with SamClem that education may not do much and healthy living is in large part a motivation issue. That is a tough nut to crack.

What I worry about all of this is it is so tough to get anywhere because we don't have a system to reform. We have a disjointed mess, with too many different interests. To please all those interests but try to have some protections we end up with 1000 page bills. And people tire of it, get distrustful and worried. I have tired of it because the debates are not on issues that I am interested in or concerned about, but are debates about the contest itself, rumor, and small hot button issues. I am so sick of it that I could spit. I am concerned that everyone will tire of it and nothing will be accomplished.

http://www.centerforpaymentreform.org/Here is some interesting comments by a physician, in an HuffPo article. I should clearly state that I am not a fan of Huffington Post, especially their medical articles, but this guy has some sensible things to say. I have not vetted his claim about tort reform in California. http://www.huffingtonpost.com/dr-paul-toffel/health-care-reform-an-ori_b_258388.html

 

[Rustic23]

Why not take one issue, say portability and solve that. Nothing else just that. Structure a bill that allows portability. It should not have to be 1000 pages, should not have any other type of reform, just solve portability. Vote on it sign it and then ask what is the next thing that needs to be solved. Lets say it is cut cost through streamlining of medical records. Once more one bill on only one issue.

While this may take longer, if the bills were short and clear, without all the hidden agendas, I think most Americans would go along with it. Sooner or later you are going to get down to an issue that just does not have public support. As some one said before, 'how do you eat an elephant', well they seem to be trying to gag it down in one bite, and Martha may be right, they may not get anything.

I would not like to see the current plans pass. Not because I am opposed to reform, but because I don't trust any bill that is between 600 and 1000 pages to implement. I don't care if it is Republican or Democrat, there is too much hidden in the tortured language of these mega bills.

 

[haha]

We also may be able to use government incentives and disincentives to help encourage healthy behavior. We also could insure that procedures that are important and evidence based are encouraged.

I do not believe that this is the only thing stopping getting to healthier behavior.

On so many issues, there is a lot of distance between what is supposed to be healthy, and what various groups are pushing, and actual scientific proof that these are accurate. The recent debate on this board about heart healthy diets, fats, and carbohydrates, and Rich's input which I believe has strongly changed over the last year or so might be enough to convince us that public health consensus on some important topics would not necessarily align with science.

Did a typical 60 year old man 80 years ago suffer from not having the government tell him how to live? Let's not forget that study funding, the media and government health panels are not really medical science, they are highly political operations.

Ha

 

[ERD50]

Why not take one issue, say portability and solve that. Nothing else just that. Structure a bill that allows portability. It should not have to be 1000 pages, should not have any other type of reform, just solve portability. Vote on it sign it and then ask what is the next thing that needs to be solved. Lets say it is cut cost through streamlining of medical records. Once more one bill on only one issue.

While this may take longer, if the bills were short and clear, without all the hidden agendas, I think most Americans would go along with it. Sooner or later you are going to get down to an issue that just does not have public support.

Amen.

I also believe that we could make real progress this way. Build up trust a step at a time. Start with issues with a clear benefit and that have good public support. It looks like that would actually go faster, because it sure looks like the current proposals are going nowhere.

I would not even label it as "compromise", it's just an alternate path.

-ERD50

 

[ziggy29]

Why not take one issue, say portability and solve that. Nothing else just that.

That would be a good start. In my opinion, one of the worst things about our health care system is the link between health insurance and employment. (And one of the worst things about the current proposal is that if anything, it strengthens the link between employer and health insurance.)

How many people still work for health insurance when they could otherwise retire, which eliminates potential job openings for people who still NEED the paycheck? How many people have great ideas and an entrepreneurial spirit but don't unleash them because leaving their j*b to pursue it means losing their health insurance?

Health insurance tied to employment puts shackles on many of us when our talents and energies might be put to better use elsewhere, and it prevents people from being able to leave their j*bs for someone who still badly needs one.

 

[Gotadimple]

That would be a good start. In my opinion, one of the worst things about our health care system is the link between health insurance and employment. (And one of the worst things about the current proposal is that if anything, it strengthens the link between employer and health insurance.)

How many people still work for health insurance when they could otherwise retire, which eliminates potential job openings for people who still NEED the paycheck? How many people have great ideas and an entrepreneurial spirit but don't unleash them because leaving their j*b to pursue it means losing their health insurance?

Health insurance tied to employment puts shackles on many of us when our talents and energies might be put to better use elsewhere, and it prevents people from being able to leave their j*bs for someone who still badly needs one.

OK, I'll play.

By portability, you mean that you take your insurance coverage with you? That means you get to pay the same premium even if you are no longer provide services to your old employer? And if they change coverage, you get what you get? Even if they chose to drop coverage?

How about NO employer provided insurance coverage at all? People have to buy their own, they can buy through their employer or directly from a carrier, or through a club or association (the 'group' plan). If they buy from their employer, they don't get to exempt the premium cost from income tax on their salary.

Those who itemize may be able to deduct the cost of premiums.

Oh, did I mention that without the upfront income tax exemption the cost would be a lot higher, because employers can't deduct the cost of insurance when they file their taxes. You wouldn't always get the employers contribution to the premium you get today. Today, most carriers require an employer to contribute 50% or more of the monthly premium before they will issue a group plan. For comparison: try COBRA.

Yikes!

Rita

 

[Martha]

Why not take one issue, say portability and solve that. Nothing else just that. Structure a bill that allows portability. It should not have to be 1000 pages, should not have any other type of reform, just solve portability. Vote on it sign it and then ask what is the next thing that needs to be solved. Lets say it is cut cost through streamlining of medical records. Once more one bill on only one issue.

I have thought that this should be the dems strategy. Not necessarily the portability issue, but attacking it bit by bit as agreement is reached.

 

[Martha]

I do not believe that this is the only thing stopping getting to healthier behavior.

On so many issues, there is a lot of distance between what is supposed to be healthy, and what various groups are pushing, and actual scientific proof that these are accurate. The recent debate on this board about heart healthy diets, fats, and carbohydrates, and Rich's input which I believe has strongly changed over the last year or so might be enough to convince us that public health consensus on some important topics would not necessarily align with science.

Did a typical 60 year old man 80 years ago suffer from not having the government tell him how to live? Let's not forget that study funding, the media and government health panels are not really medical science, they are highly political operations.

Ha

I didn't mean to imply that it was. I agree that there are complicated evidence issues. But then again, just about everyone knows that exercise is good for you and reducing calories is the way to lose weight. The rest is fine tuning.

 

[ziggy29]

I have thought that this should be the dems strategy.

Probably so. The simple truth is that most people are satisfied with their current health coverage, but the big fear is in losing it and then getting sick. Or getting sick to the point where you'd be screwed if you lost your current insurance, making job loss a double-whammy (there's that ornery link to employment again).

If we did nothing this year but create a way to guarantee portability without creating higher costs through adverse selection, that would be a huge first step. And real portability would also go a long way to weaken the link to employer, because someone could leave their job and keep their current plan (or transfer to another plan with no underwriting).

 

[Martha]

OK, I'll play.

By portability, you mean that you take your insurance coverage with you? That means you get to pay the same premium even if you are no longer provide services to your old employer? And if they change coverage, you get what you get? Even if they chose to drop coverage?

How about NO employer provided insurance coverage at all? People have to buy their own, they can buy through their employer or directly from a carrier, or through a club or association (the 'group' plan). If they buy from their employer, they don't get to exempt the premium cost from income tax on their salary.

Those who itemize may be able to deduct the cost of premiums.

Oh, did I mention that without the upfront income tax exemption the cost would be a lot higher, because employers can't deduct the cost of insurance when they file their taxes. You wouldn't always get the employers contribution to the premium you get today. Today, most carriers require an employer to contribute 50% or more of the monthly premium before they will issue a group plan. For comparison: try COBRA.

Yikes!

Rita

Yeah, there is the cost problem, with many not being able to afford COBRA. Big companies and government get a better insurance deal because of bargaining power so their policies can at a reasonable cost. But smaller business policies are much more expensive. Frankly, I saved money going from COBRA to a risk pool, which is a higher cost plan than average.

Some employers self insure with stop loss policies. That doesn't port well

****, it is complicated. Again, it is because we don't have a health care system.

Some ideas on piece by piece fixes:

If you made underwriting illegal, the problem is adverse selection unless you require all to have insurance. So cost goes up. Requiring all to have insurance leads to all sorts of other issues, like cost barriers, that congress is having a hard time sorting through. In the long run I think everyone needs to be required to be insured to make the health care sector work. As they work on that I suggest immediately provide that:

(1)If you are insured and have been for at least a certain period of time (maybe a year), whether or not it is a group plan, you should be able to get into another plan without a preexisting condition waiting period and no underwriting. This may help address the adverse selection issue as people cannot just wait until they are sick to buy insurance. This would be an expansion of current HIPAA rules. THis is a twist on the portability suggestion that doesn't quite work.

(2) Create a subsidized federal risk pool for those who are uninsured currently and cannot be insured due to underwriting. After a year or two or three, move them to category number one. There may have to be a preexisting condition waiting period to avoid adverse selection.

(3) Regulate insurance company profits and admin costs that can be passed on to customers. Treat them like a utility. This would be harder. The alternative, price regulation, may be even more difficult.

(4) It gets harder when talking about what to do with people who can't afford insurance. Maybe while we work on reform we have a temporary recession increase in medicaid funding (states are being killed on this) and broaden who are eligible for medicaid. Right now states are narrowing who are eligible because of shortage of funds. Maybe, like earned income credit, also have a cash money credit for lower income people who can only buy insurance with a bit of extra money.

This is just thinking off the top of my head while watching HGTV, so don't bite my head off for the weaknesses.
-

 

[haha]

I didn't mean to imply that it was. I agree that there are complicated evidence issues. But then again, just about everyone knows that exercise is good for you and reducing calories is the way to lose weight. The rest is fine tuning.

With respect to exercise, likely yes. Best way to lose weight? IMO, the "experts" are still driving well beyond their headlights. Read Taubes.

Ha

 

[FIRE'd@51]

(1)If you are insured and have been for at least a certain period of time (maybe a year), whether or not it is a group plan, you should be able to get into another plan without a preexisting condition waiting period and no underwriting. This may help address the adverse selection issue as people cannot just wait until they are sick to buy insurance. This would be an expansion of current HIPAA rules. THis is a twist on the portability suggestion that doesn't quite work.

This is a good idea, and to work properly it needs to be coupled with very large (and stable) risk pools, the fewer the better. One of the problems, especially in the individual insurance market, is that the insurance companies actually create adverse selection by constantly coming out with new (and usually cheaper) policies which require underwriting. Those who can pass underwriting switch to the new policies, which have a new risk pool, thereby leaving their old (and now sicker) risk pool behind. Those who can't switch face higher than average premium increases due to the fact that they are now in a more unhealthy risk pool. This game repeats itself, and leaves a bunch of unhealthy risk pools in its wake. In the extreme, this can result in the insurance company eventually deciding to cancel all the policies that were originally issued for a given risk pool, leaving those folks without insurance, thereby forcing them into a state risk pool (or its equivalent).

 

[Rustic23]

Martha,
I just picked portability as first. The point is just pick one and only one. Then write as simple a bill as possible. Something everyone can understand. However, I will confess I have little faith that politicians of either party are capable of doing this, and I have even less faith that the voters will do anything to correct this.