Today is Thursday, May 17, 2012

Uninsured

What the Republicans might propose at the health summit with President Obama

Republicans are trying to decide whether to take on President Obama in his proposed health summit. They have some good ideas for reforming health care and health insurance markets, but their talking points don’t deal with some of the most controversial issues in the House and Senate bills. Those issues are mandates that everyone buy health insurance or pay a fine or go to jail, what to do about the ways insurers deny insurance to people with pre-existing medical conditions and how to reduce the number of people who file for bankruptcy when they are hit by catastrophic medical bills that they haven’t insured or have under insured.

There are ways around individual mandated benefits, pre-existing conditions, medical bankruptcy that Republicans should like and should present to Obama and the Democrats:

1. Drop the unworkable and unconstitutional provisions that address these issues from the Senate and House bills.

2. Authorize but don’t require insurers to charge people who self-insure until they get sick 120% of what would have been their monthly premiums for the number of years needed to make the insurer whole on the cost of the type of illness involved. Means test it. Include provisions for 5- 30-year mortgage-type paybacks. If the uninsureds have assets, require them to sell those assets to pay their insurance bills, not file for bankruptcy. Come up with a win-win scheme for patient, insurer, providers.

3. Revise bankruptcy laws so freeriders can’t continue gaming the system. Make people who didn’t buy insurance or real insurance go on payment plans to pay their bills. Medical bankruptcy is the easy way out for bad decision making. While some medical bankruptcies are legitimate, I think a lot of them are filed by people who just don’t like buying health insurance or paying their medical bills. Somehow, Congress has to fix the laws so that only those who should file for bankruptcy because of medical bills can do so. Everyone else should be forced to pay their bills over time rather than shift their medical costs to people who buy health insurance.

4. States should revise health insurance laws to reduce expensive mandates, allow the sale of catastrophic medical insurance, not pre-paid preventive and wellness care plans, which don’t save money long-term as advertised. Stop making wellness and preventive services providers rich by mandating coverage of their services.

5. Individuals and small business owners who buy health insurance in the individual insurance markets should get the same income tax credits as employers that pay part or all of the health insurance premiums for their workers.

6. Delete the pork and bribes in the Senate and House bills and let a health reform bill stand on its merits.

P.S. Back in the early 1980s, I wrote editorials for Modern Healthcare advocating mandated benefits that would be enforced by the IRS. I now realize such mandates would be unconstitutional and virtually unworkable.

I posted a more tightly written and less-than-perfectly-edited version of those ideas in Politico’s “Arena” this morning. Guest contributors get a limited amount of space for their contributions. So I’ve fleshed this out a bit. Regular contributors to Arena almost never comment on what we guests have to say. But Steve Steckler, chairman and founder, Infrastructure Management Group (IMG), had some nice words to say about my contribution:

While I’m at it, let me commend guest contributor Donald Johnson today for his excellent ideas on alternatives to some challenging health care reform issues. Mr. Johnson, we need a lot more Americans thinking as constructively as you are today and a lot fewer shouting their public option or single-payer chant.

Thank you Mr. Steckler. I also think you offered some constructive ideas:

 

Gov. Bill Ritter demonizes health insurers for political gain; we’ll all be ‘uninsured’

Governor Bill Ritter knows that the health insurance bill approved by the U.S. Senate Finance Committee last week would destroy private insurers because it would give everyone strong financial incentives to become free riders like most of today’s so-called “uninsured” are.

Under the Baucus scheme,

How many uninsured? 8 million? 10 million? 18 million? 28 million? 45.7 million?

The New York Times finally responds to those of us who’ve been pointing out that the crisis of the uninsured is way over hyped.

Amazingly, the NYT is not allowing readers to comment on its editorial, which is a major sign that it knows its numbers and logic are widely disputed.

The NYT editorial shows that there aren’t 45.7 million uninsured, which is the number reported by the U.S. Census and widely hyped by the hospital industry, the Robert Wood Johnson Foundation and other advocates of major health care spending legislation otherwise known as ObamaCare.

The Times says that about 18.5 million are uninsured for

Health reform would cost ME, MT, NB, NM, PA and VA dearly

The Heritage Foundation commissioned The Lewin Group to quantify the financial impact of the health reform bill (HR 3200) on physicians and hospitals in states represented by Senate and House Democrats who are likely to vote on the bill to please their voters rather than President Obama, Speaker Pelosi and Senate Majority Leader Reid.

Lewin, a consulting firm owned by UnitedHealth Group (UNH) and frequently employed by federal, state and local governmental agencies to study health programs, also looked at how effectively the bill would reduce the number of uninsured in each state. The results don’t look promising.

States covered include Main, Montana, Nebraska, New Mexico, Pennsylvania and Virginia.

Link to http://www.fixhealthcarepolicy.com is here.

How Obama uses misleading uncompensated care statistics to promote health care reform

Is President Obama lying about ObamaCare or just being given bad information like President Bush got from the intelligence community when he warned about Iraq’s weapons of mass distruction?

This articleby Thomas P. Miller at the American Enterprise Institute shows how the argument that hospitals’ uncompensated care costs are shifted to the privately insured is inflated by a magnitude of about seven. Instead of costing the privately insured $57 billion a year, think about $8 billion.

Hospitals, of course have been misleading the public and policy makers about uncompensated care costs for decades. They’ve inflated their uncompensated care costs to show how they provided “community benefits” that justify their highly inflated list prices, or charges, and what they charge private insurers.

The actuary and health consulting firm, Milliman & Assoc.and its client, Family USA, come off looking terrible in this article because Milliman produced the hugely inflated number used by the president.

How Obama’s health care reforms would give you the same care as the uninsured

Betsey McCaughey is famous for reading the fine print in health care reform bills, and she has found some nasty stuff in the House health care reform bill:

It’s one thing to require that people getting government assistance tolerate managed care, but the legislation limits you to a managed-care plan even if you and your employer are footing the bill (Senate bill, p. 57-58). The goal is to reduce everyone’s consumption of health care and to ensure that people have the same health-care experience, regardless of ability to pay.

Nowhere does the legislation say how much health plans will cost, but a family of four is eligible for some government assistance until their household income reaches $88,000 (House bill, p. 137). If you earn more than that, you’ll have to pay the cost no matter how high it goes.

The price tag for this legislation is a whopping $1.04 trillion to $1.6 trillion (Congressional Budget Office estimates). Half of the tab comes from tax increases on individuals earning $280,000 or more, and these new taxes will double in 2012 unless savings exceed predicted costs (House bill, p. 199). The rest of the cost is paid for by cutting seniors’ health benefits under Medicare.

There’s plenty of waste in Medicare, but the Congressional Budget Office estimates only 1 percent of the savings under the legislation will be from curbing waste, fraud and abuse. That means the rest will likely come from reducing what patients get.

One troubling provision of the House bill compels seniors to submit to a counseling session every five years (and more often if they become sick or go into a nursing home) about alternatives for end-of-life care (House bill, p. 425-430). The sessions cover highly sensitive matters such as whether to receive antibiotics and “the use of artificially administered nutrition and hydration.”

This mandate invites abuse, and seniors could easily be pushed to refuse care. Do we really want government involved in such deeply personal issues?

Shockingly, only a portion of the money accumulated from slashing senior benefits and raising taxes goes to pay for covering the uninsured. The Senate bill allocates huge sums to “community transformation grants,” home visits for expectant families, services for migrant workers—and the creation of dozens of new government councils, programs and advisory boards slipped into the last 500 pages.

 

Employer mandated health benefits, Walmart blasted by retailers

One reason health insurance premiums are higher than they should be is that 55% of the country’s 1.6 million retail workers are free riders. They don’t buy health insurance, at least not through their employers, and they gamble that if they have accidents or get sick, the rest of us will pick up the tab.

Consumers, however, benefit from the retail workers’ free riding, however. If retailers provided health insurance to their low-paid workers, consumer prices would be a bit higher than they are today.

Walmart, Costco, Home Depot, Starbucks and Toys ‘R Us are among the large national retailers that offer to partially subsidize health insurance for their workers and their families. But only 52% of Walmart’s workers buy health insurance through the company.

Of course, many retail workers get their insurance through their spouse’s employers or in the individual insurance market. This means that it’s not clear how many retail workers are uninsured, but because they are low paid, it’s likely that many are.

Last month, Walmart tried to pull a fast one on its retail competitors that don’t offer health insurance to employes. The nation’s largest retailer wrote a letter to President Obama endorsing health insurance markets reforms that would include mandates that all employers subsidize their workers’ health insurance.

At the time, I predicted that other employers would oppose employer mandates and support the president’s public option health plan, or Goverment HMO.

They aren’t going that far, yet.

But the National Retail Federation has called on all retailers to oppose employer mandates. If most of the 1.6 million retailers and other small employers oppose employer mandates, Obama and Congress will focus on the public option health plan, which is strongly opposed by many voters.

Another attack on inflated ‘uninsured’ numbers; most American citizens have health insurance

The Denver Post’s David Harsanyi exposes how politicians and providers are inflating the number of American citizens who don’t have health insurance. As I’ve blogged, the correct number is between 6 million and 8 million, not the hyped 46 to 50 million used by advocates for universal health insurance. George Will recentlly said 20 million are uninsured and the Congressional Budget Office recently said 31 million, but those still are inflated numbers.

Too bad Harsanyi didn’t come up with an estimate of how many are uninsured and write a hard lede that would tell the story for readers who never get beyond the third graph.

Harsanyi notes:

CBO says 45%, or 20.7 million of the Census Bureau’s inflated 46 million uninsured are uninsured for four months or less. That puts the number of uninsured at 25.3 million.

CBO estimates that 15%, or 6.9 million, of the 46 million uninsured chronically ill already are eligible for help. That puts the “uninsured” at 39.1 million.

National Bureau of Economic Research estimates 25%, or 11.5 million, to 75%, or 34 million, of the 46 million uninsured can afford health care insurance. That means 12 million to 34.5 million can’t afford health insurance, depending on assumptions about what is “affordable.”

Harsanyi notes that for many Americans, nothing we buy is “affordable.”

8.4 million uninsured Americans are making $50,000 to $74,999 a year.

9.1 million uninsured Americans are making more than $75,000 a year

Thus, 17.5 million “uninsured” Americans are making enough to afford at least basic, high deductible catastrophic health insurance, but they prefer to game the system. So that puts the number of the uninsured, including illegal immigrants, at about 28.5 million.

Links:

Number of uninsured is inflated, according to wsj.com.

From The Wall Street Journal (wsj.com):

Clouding future projections of uninsured are tricky methods of counting them today. Even though legislation won’t cover many of them, illegal immigrants are especially difficult to enumerate: Few raise their hands to be counted. Prof. Gruber estimates they make up about 13% of the uninsured today, or nearly six million people of that 45 million number.

I think this is a huge under estimate. Probably 12 million to 15 million illegal immigrants are counted as uninsured.

There are 6 million to 8 million uninsured American Citizens who can’t afford health insurance and aren’t eligible for existing programs.

Blue Cross estimates that there are 8.2 million Americans who cannot gain access to health insurance, according to Fox Business News. Watch the whole clip.

The Blue Cross report on the uninsured is here. The 8.2 million figure is several slides into the report.

With the rise in unemployment to 9.4% from 4.6% a couple of years ago, there is no question that more people are uninsured today. How many? Who knows?

 

 

The number of Americans without health insurance, the ‘uninsured,’ is inflated.

The Wall Street Journal finally looks into how many American citizens actually don’t have health insurance and are permanently uninsured..

There are far fewer uninsured than politicians say there are.

There are approximately 6 million to 8 million uninsured Americans, not 47.5 million.

President Obama and Congress are trying to fix health insurance markets for 6 to 8 million folks by further distorting health care and health insurance markets for people who pay taxes and their monthly health insurance premiums. It makes no sense.

Impact graphs from wsj.com:

Rasmussen poll: 80% oppose health coverage for illegal immigrants

Rasmussen says 80% of Americans oppose government health insurance for illegal immigrants.

10.12 million, or 22%, of the 46 million Americans identified by the Census Bureau are illegal immigrants.

Key graphs:

While most Americans support the idea of providing quality health care coverage for all Americans, they overwhelmingly oppose such a proposal if it also includes coverage for illegal immigrants. Only 20% favor a proposal for universal health care if illegal immigrants are included. Seventy percent (70%) are against such a proposal.
But, as is often the case, there’s a wide division between Mainstream America and the Political Class on this question. The Political Class is evenly divided on the question of a universal health care plan that includes coverage for illegal immigrants. Those with populist or Mainstream views are overwhelmingly opposed.
The U.S. Census Bureau estimates that up to 22% of the 46 million people in America without health insurance are illegal immigrants.

 

New York Times/CBS poll on healthcare reform is very biased

Before you get excited about Sunday NYT’s poll that shows that 72% of Americans want government-run health care, check out the demographics of the respondents.

48% voted for Obama and 25% for McCain. 46% make less than $50k and therefore probably don’t pay income taxes. 27% say they’re liberals and 29% conservatives (vs. 21% and, I think, 38% in the WSJ/NBC poll), but that’s not how they voted.

13% are Hispanic, but what percent of them are citizens? 19% of the total sample didn’t vote in the last election.

Cross tabs by age, income, demographics or political leanings aren’t provided. Then look at how the questions read. They are worded to show positive responses for Obamacare.

When NYT/CBS asked if insured people (82% of the sample) had been denied access to certain treatments or drugs, there is no breakout by type of plan in the cross tab. 77% of the insureds called basic medical care (undefined) affordable; 22% called it a hardship. In short, as always, the NYT/CBS poll on health reforms is strongly tilted to generate support for government-run health care.

Also, the NYT story is biased in that it doesn’t report that 68% of those surveyed are very concerned or somewhat concerned that under government-run health care their access to care would become more limited (Q 65). The story just says Americans are concerned about what would happen to their access to care if they were insured by the government.

Read the questionnaire with the story.

How Colorado’s health insurance cooperative for small businesses died; lessons for today

Health insurance buying cooperatives for employers still are under consideration even though it is clear that such cooperatives won’t work, as I blogged Monday.

This debate prompted me to search for my previous blog on health care cooperatives.

One of my first posts, if not the first, was Susan J. Alt’s testimony before the Colorado legislature in her futile attempt to save the Alliance, which was the state-sanction cooperative for small employers. She was chair woman of the Alliance. The link is here.

I also blogged on testimony against HB03-1013 by Tim Jackson, the then executive director of the Colorado chapter of the National Federation of Independent Businesse (NFIB) here.

The bottom line is that after years of nit picking away at the Alliance, lobbyists for health insurers succeeded in killing the Alliance. I sat on the Colorado Assn. of Commerce and Industry’s health insurance committee for several years. We met weekly and I learned a lot about how lobbyists and legislators work.

The work is tedious, the lobbyists are smart and have the institutional memories and the legislators barely have a clue.

In a related blog posted at the end of 2003, I noted that our firm’s experiences with health insurance were profiled by http://www.bloomberg.com. The link no longer is available. I’m glad we don’t have employes today.

This bill killed the Alliance.

Co-ops gain backing as alternative to government insurer. wsj.com.

Health care reforms will cost baby boomers, seniors and the poorly educated and uninsured

We don’t even have Obamacare yet, and Congress already is talking about cutting Medicare in ways that will cost physicians and patients. Congress is talking about cutting Medicare expenditures by a disastrous 1.5% a year and taxing employers that don’t provide health insurance to their workers, according to wsj.com.

Physicians will be paid less by Medicare, and patients will find it harder to get docs to take them as patients. In other words, Medicare patients will have less access to care.

And, just to sweeten the pot, Congress wants to penalize employers who grow or fail to automate their workers out of jobs. Talk about Europeanizing the private sector. Under the plan to tax employers that don’t provide insurance, employers will hire fewer people and pay them over time. Unemployment will soar to 15%.

In their efforts to provide health insurance to the uninsured, Democrats risk making sure that the uninsured will be permanently unemployed.

Seniors and baby boomers. Obama and the Democrats want to cut your access to doctors to make Obamacare “affordable.”

Young people: Obama and the Democrats want to put you into permanent unemployment so that they can say they know how to pay for Obamacare.

Do the Democrats have a death wish for Obamacare?

Health markets are not working because the Feds have been distorting them since World War II

Let’s recap the wonderful history of how the feds have distorted the health insurance, health care services and supplies markets.

During WW II, FDR offered employers tax incentives to help pay for their employees’ health insurance premiums. This made both the feds and employers the most conflicted and often dishonest brokers in the markets, and Obama promises to continue and expand this distortion.

In 1965, LBJ passed Medicare/Medicaid, which allowed physicians and hospitals to quickly use “usual and customary” and cost-based reimbursement regs to greatly expand their fees and incomes until Congress said “no more.” By then it was too late.

In the 70s Congress imposed the ineffectual Health Systems Agencies on institutional providers, but they gamed the system so well that the planning agencies died of their own weight. My first editorial for Modern Healthcare (Aug. 1976) blasted HSAs, and I editorialized against them until they disappeared.

In the 70s, Nixon facilitated the growth of HMOs, which so angered consumers that by the 90s they were traditional insurance companies living off their slim profit margins and happily passing cost increases on to premium payers. Not only did Nixon’s and Paul Ellwood’s HMOs fail to contain health care costs and expenditures, they also served as the leading example of how price controls and systematic, highly visible rationing of services will not be tolerated by Americans. Today, we have relatively hidden rationing that ticks people off and doesn’t contain costs or expenditures. Under Obamacare, we’ll have very visible rationing, which will allow voters to focus their anger on Obama and Congress, which eventually will relent and roll back their price and access rules.

In ‘76, Carter promised that if he were elected president, he’d reform health care. He tried, but the AHA and AMA beat him with the doomed to fail “Voluntary Effort” price controls, which I predicted in Modern Healthcare would fail as all price controls do. They did. Like the providers, supplies producers and unions who have promised President Obama that they will cut spending by $2 trillion over the next 10 years, the providers of 1979 promised what they couldn’t and wouldn’t deliver. Today, several commentators around the web are agreeing with my posts here and elsewhere yesterday that big business and big unions are promising cuts that they can’t and won’t deliver.

So in ‘83, our great free market President Reagan signed the prospective payment system that has set Medicare payment rates for providers by diagnosis rates of illnesses (DRGs). This complicated and ineffectual scheme has been great for consultants and trade associations. The latter have large Washington staffs busily lobbying Congress and the government for more money, and they love having a regulatory mess to fight. But DRG price controls have been a disastrous distortion of both M/M and private markets, limiting access to care, driving costs up for the privately insured and forcing providers to pour resources into complying with the very complicated regulations Just as Nixon’s price controls of the mid 1970s failed and cause a surge in inflation after they were dropped, Reagan’s price setting scheme has failed and made health care more expensive for all.

The Newt Gingrich/Bill Clinton Balanced Budget Act of ‘97 cut Medicare budgets, but most of the provisions that cut payments to hospitals and physicians have been greatly softened or repealed under great political pressure from providers and consumers. Just last year, Congress had to repeal cuts in reimbursement for physicians who serve Medicare beneficiaries because growing numbers of for-profit docs (all docs are for profit) were refusing to take new Medicare beneficiaries.

Even with the giveback on doctors’ fees, Medicare/Medicaid are failing because doctors still refuse to serve their beneficiaries. M/M are underfunded as all government health programs eventually are, and most docs refuse to work for virtually nothing. They’d rather not deliver care than to provide the poor care Medicare demands.

In another distortion of the markets the fiscally tragic Medicare Modernization Act of ‘03, which I opposed in hundreds of blogs here because of the costly earmarks in the bill, gave drug benefits to seniors who never have and never will pay for them. As a Medicare beneficiary, I thank you for the gift, but I still think the bill was one of the most irresponsible things the GOP congress and President Bush did.

Now Obama has another great health insurance solution that like its predecessors will distort the health care and insurance markets, deny access to care and anger voters. How many seats will this new distortion of the health markets cost Obama? More important, how many lives will Obamacare destroy by denying access to treatments that today extend our functional lives regardless of how old and infirm we are?

This is an expanded and edited version of my post this morning on Politico.com’s Arena.

Link: America’s 6 to 8 million uninsured need help with health care bills. BusinessWord.com. We’re distorting the health care markets to fix this small problem?

Search this blog for “uninsured” and you’ll get 182 posts.

Promised voluntary limits on increases in health care cost increases won’t work

Whenever politicians threaten to impose new price controls and onerous changes on the health care and health insurance industries, providers try to head them off by promising what they and politicians know neither they nor the politicians can deliver—smaller cost increases.

The latest act in the health care cost containment follies has been announced by President Obama and groups of providers, suppliers and insurers.

While I’ve written hundreds of posts on this blog since early 2003 about the health markets and attempts to reform them, I haven’t wasted a lot of time on the current Congressional drive to put all Americans in Medicaid HMOs because the Democrats in charge are not interested in listening to conservatives’ ideas about health insurance reforms or anything else.

Obama and Congressional Democrats are using the rapid increases in health care expenditures and the fact that only about 6 million people are uninsured as excuses to make the first big steps towards nationalizing the health insurance markets and assuming totalitarian control of providers. I’m predicting that the legislation will be enacted by late this year or early next year.

And I’m expecting that by 2012, consumers will be so angry about the new efforts to limit their access to care that extends functional and comfortable lives that most of the new HMO-type restrictions on access to care will have been repealed or will be well on their ways to being repealed.

Price controls fail. This is true whether they are voluntary as they were under the “Voluntary Effort” in 1979 or are statutory as under President Reagan’s disastrous prospective payments and DRGs of 1983. In the 1990s, HMOs and the Balanced Budget Act of 1997 temporarily cooled the rate of increase in health care expenditures and health insurance premium inflation. But by 1998, both health care cost inflation and expenditures were taking off again, as they always do after price controls and access controls fail.

What’s ironic is that when Obama’s health care price and access controls become laws and regulations, patients and their families and friends will see what’s going on. Rationing, which exists almost invisibly in today’s markets will suddenly become so visible that they will infuriate voters as never before. And the loyal opposition will make the government’s new Medicaid HMOs, or whatever they call them, the issue of the day.

So just as President Bush failed to win any votes with his fiscally irresponsible Medicare Modernization Act of 2003, which gave drug benefits to Medicare beneficiaries, President Obama and Democrats will pay a huge political price for killing people with their rationing schemes.

That’s the political reality of America.