The Top Ten Health Policy Stories of 2010, Part 2

Last week, I reviewed five of my top ten health policy stories of the year.  Here are the other five, all of which involved matters that will have a major impact on our day-to-day lives in the coming years.

5.  The Enactment of CLASS.  Private long term care insurance has been on the policy agenda since the 1980s.  Seniors realized that the cost of long term care could bankrupt them, so they began protecting their assets by transferring them to their children.  The state and federal governments were left to pay the tab, and went looking for help.

Private long term care insurance products were developed as a solution.  However, not enough people bought them.  When they were young, people didn’t think they would need the insurance, but once they got into their 60s and 70s, the premiums were too high.  This year, the federal government took action. 

Tucked into the pages of the health reform legislation is a new government-sponsored long term care insurance program starting in 2012, called CLASS, aimed at making long term care insurance more common and more affordable.  It will probably take a generation or more before its benefits are fully realized, meaning that this was a vote for our children and grandchildren.  Passing it knowing they won’t be around to get the credit for it was a class act on the part of the members of Congress.

4. The Closing of the Medicare Donut Hole.  The Medicare Donut Hole was more like a black hole for the seniors who fell into it each year.  As of 2010, consumers paid the first $310 in drug costs, and were reimbursed for 75% of their drug costs between $310 and $2,830.  Then they entered the donut hole, where they were completely responsible for approximately the next $3,600 in costs.  Finally, once their out-of-pocket drug costs in a year hit $4,550, their prescription benefits kicked in again and paid 95% of whatever remained. 

This was confusing and expensive, and it came to embody the worst of our confusing system of insurance reimbursements for over two million people trapped in the donut hole each year.

Reform legislation is closing the Donut Hole over the next ten years.  When the first $250 rebate checks arrived this year, Medicare beneficiaries could see the light again. 

3.  The Enactment of Consumer Protections in Health Reform.  By now, we’re all familiar with the new consumer protections we have.  Insurers can’t deny coverage for pre-existing conditions, they can’t drop people who become sick, and they can’t cap annual and lifetime benefits.    Several are already in effect.  Others are on their way.

Some states are arguing that they don’t have the authority to enforce them, and that could present a problem for consumers in the short term.  However, these provisions are so popular that it is likely that if states don’t enforce them, Congress will probably take further steps to ensure they do.

2.  The Comeback of Government Regulation in the Private Health Insurance Market.  For the past thirty years, the mantras of government have been “protect the free marketplace” and “less regulation, not more.” 

First, opponents of health reform argued for a freer marketplace to bring down insurance costs.  Then proponents argued that if the federal government could provide insurance at a lower cost than the private sector, it should be allowed to compete in that market. 

When the public option died, however, the alternative was to establish a more regulated, less-free market.

When Congress set minimum loss ratios (of 80 for individual policies and 85 for most group policies, meaning that insurers must pay out 80 to 85 cents in benefits for every dollar they collect in premiums), this was a very traditional, back to the 1970s, regulatory response to a problem.  Private insurers won’t have to compete directly with the government, but they will have to meet standards the government sets.

And number 1, the Passage of Any Health Reform at All.  We forget how much in doubt this was after the election of Senator Scott Brown in Massachusetts.   When Brown won in an upset, it looked for several weeks like there would be no bill at all.  Finally, President Obama and Congressional Democratic leaders hammered out a compromise that could pass with simple majority votes using the budget reconciliation process, and the most significant health care legislation since Medicare and Medicaid was signed into law in late March.  In the true spirit of representative government, the final compromises left no one completely happy, setting the stage for more health policy debate in the future.

Happy New Year!  Thank you for helping me launch Our Health Policy Matters over the past two months.  I’ll kick off 2011 next week by making some predictions about some upcoming health policy debates.

The Top Ten Health Policy Stories of 2010, Part 1

2010 was the most significant year in health policy since the 1960s.  It dominated the policy agenda for the first few months of the year, and it stayed in the news throughout the election season.  As the year drew to a close, conflicting lower court decisions about the constitutionality of the individual mandate foreshadowed a continued policy debate into the foreseeable future. 

What makes a health policy story big in a time of change?  It’s not just the attention it commands in the media.  It’s the impact it has on our lives. 

This week and next, I’ll countdown ten.   Using the impact criterion, there were actually some that weren’t part of health reform!   

Here are my choices for numbers ten through six.

10. The Election of Senator Scott Brown.  It is hard to remember that as we entered 2010, the Democrats seemed to be putting the finishing touches on a bill that could pick up 60 votes in the Senate.  Lincoln, Lieberman, and Nelson were among the ones to whom everyone was paying attention.  Then, Scott Brown was elected in Massachusetts, and everything changed.  The Democrats lost control of the issue and public opinion.  That one special election almost derailed the entire effort and ultimately changed the look of the final legislation.

9.  The Change in Tax Treatment of Dependent Health Insurance.  Until the IRS changed the rule in March, when you kept your child on your health insurance up to age 26, you paid taxes on the benefit.  Had this not been changed, then the health reform provision allowing parents to keep adult children on their insurance would have been a mixed blessing at best.  Many might have refused or been unable to do so when they factored what could have been hundreds of dollars of increased taxes.

8. The Death of the Public Option.  Even though it had majority support in both chambers, Congress put the public option to rest early in the year when leaders realized that they could not muster the 60 votes necessary to overcome a Senate filibuster against it.  Once it was gone, public sentiment tilted slightly against health reform.  Reform-minded Democrats were upset with their Congressional leadership, and a portion of the Democratic base disappeared along with it.  Proponents and opponents of reform seemed to agree on one thing – if a public option had been offered to people, many would have chosen it because it likely would have been less expensive than some or all of the private alternatives. 

7.  The Rebirth of the Public Option.   No one called it this, but when the final health reform bill included an expansion of Medicaid reaching 17 million new people in 2014, including nearly every family with income under $30,000, the public option was alive again – at least for people at lower income levels.  With Medicare also a public program, the only people left in the private insurance market were those under age 65 earning $30,000 and up.  And the reform law provided for subsidies for most of them.  We may not yet have the single payer system that progressives wanted, but we might still be headed in that direction. 

Public options are not going anywhere soon.  Mike Huckabee, who will likely be a significant early player in the Presidential campaign, favors repeal of the new law.  This fall he argued for a further expansion of the Medicaid program as an alternative to the mandate that insurers cover people with pre-existing conditions.  It’s pretty clear.  In the light of the day and out of the heat of the moment, so long as public options are called something else, they often generate support across the ideological spectrum.

6.  Mental Health Parity.  Mental health parity this year was an under-the-radar policy story with sweeping consequences. New mental health parity provisions, enacted in 2008, finally became law in 2010.  For the first time ever, mental illness must be given the same treatment in insurance as other chronic conditions. 

It became harder than ever for public officials not to do this as increasing numbers of people with mental illness advocated for fairness, and as other chronic conditions, like diabetes and hypertension, became more common and more costly.  Parity is a big deal, especially to the millions of people with serious mental illness, but when it happened at the beginning of the year it got little attention in media consumed by the fiery health reform debate.

Ironically, the mental health parity law also attracted little news attention when it was passed in late 2008.  Why was this?  It was tacked onto the first major financial bailout bill signed into law by former President Bush!

Next Wednesday, I’ll give you my top five health policy stories of the year. 

Healthy Reforms

In the 1990s, the Department of Health and Human Services looked at health spending versus the improvements in the health of our population in the 20^th century.  The results were startling.

97 percent of our spending was in health care, versus 3 percent in wellness and prevention – the activities of public health.  Despite the meager investment in public health, however, 50% of the improvement in our health status could be attributed to it.

Managing our health and preventing disease means a longer life. 

I admit that this lesson wasn’t lost on me. 

I run or take long walks at least three times a week, eat five portions of fruits or vegetables a day and no red meat, enjoy a glass of wine with dinner, and do my best to manage my stress.  My weight today is just a little higher than it was when I was in high school forty years ago.

Those are the things I can do by myself, but they’re not enough.

Without statins my cholesterol numbers would be a nightmare.  So I also go for my annual physical.  I review my blood work and have an EKG. I discuss with my physician the vitamins and medications I may need for the coming year.

Not everyone puts that much effort into being healthy.  This is because we expect to be healthy and take it for granted until we get sick.  Then we hope modern medicine can fix us.

In a nutshell, this probably explains why we spend so much for health care, and so little for prevention.  We literally leave well-enough alone. If there’s no crisis, we’re not motivated to act.

Fifty or a hundred years ago,  when doing nothing about our wellness meant that our drinking water was polluted, communicable diseases crippled or killed our children, and our air was thick with haze, our grandparents understood the consequences of doing nothing.  So they cleaned up our environment and invested in our health, and that’s why we live longer lives than they did. 

But spending on prevention for the past few decades has been more like rowing against the current.  It has been overwhelmed by the tide of spending on health care.

That’s about to change, however.  This is because our crisis meter is ticking upward along with our weight, the number of chronic conditions from which we suffer, and the huge amount of money we’re spending to try to get well again. 

Congress noticed this year, and took some major steps this year to get our minds off of sickness and back on wellness and health.  Note that none of these provisions are affected by any of the court battles over reform.

Here are several of the most significant, cutting across populations and strategies: 

·         Beginning in 2011, all Medicare recipients will have access to a free, annual check-up, other free preventive services, and free colorectal and cancer screening.

·         Private health insurance plans established after September, 2010, must cover preventive services, including immunizations, without charging deductibles, co-pays, or co-insurance.  These provisions also apply to Medicaid as of January 1, 2011.   “Grandfathered” private plans will not be required to do this immediately, but some may anyway.  Most others will be adding this coverage over the next three years. 

·         Employers will be allowed to offer employees a health insurance discount of up to 30% if they participate in wellness programs.

·         Employers with fewer than 100 employees will be eligible for grants totaling $200 million nationwide from 2011 through 2015 to create comprehensive workplace wellness programs for employees.  If successful, these could in turn lower the premiums these employers have to pay for health insurance.

·         Up to $1.5 billion from 2010 through 2014 are being granted to states and nonprofits for maternal, infant, and early childhood home visitation programs to improve infant health, child development, and school readiness.

·         A Public Health and Prevention Fund has been established with $6 billion through 2015, and $2 billion a year thereafter, to support investments in public health and prevention programs authorized under the Public Health Services Act. 

·         Community transformation grants will allow communities to attack and mitigate environmental factors, such as a lack of playgrounds and unsafe neighborhoods, which lead to poorer health among residents.

·         Restaurants with 20 or more locations must provide nutrition labeling on standard menu items.  Vending machine operators with twenty or more machines must provide calorie counts for all machine items.   The regulations implementing these programs will be issued in 2011.

These gifts to our health will go a long way toward improving both the length and quality of our lives.  Of course, we’ll have to work just as hard to keep our bodies running well.  It’s good to know that our elected representatives are alongside us in the effort.   

Extra: Read my Guest Blog in Health Affairs Grantwatch Blog on how foundations can invest to improve access to care.

The Brick Walls in the Battle Against Health Reform

States battling to repeal new health reform mandates have settled on two issues that may well turn out to be political brick walls. 

One issue is the requirement beginning in 2014 that individuals purchase insurance or pay an income tax surcharge, the so-called “individual mandate.”  The other is the federal expansion of the Medicaid program. 

The battle is being joined in the courts, the Congress, and state legislatures.

Most of the action so far has been in the courts. 

Florida has filed a suit challenging both the individual mandate and Medicaid expansion.  CNN calls it the “highest profile” lawsuit of many, and 19 other states have joined it.

Florida argues that the individual mandate is unconstitutional, contending that it’s unconstitutional for the federal government to require individuals to purchase health insurance by taxing them if they don’t.  As of last week, federal judges in both Michigan and Virginia have ruled against this position in other cases, but these decisions will be appealed. 

Florida’s argument against expanding the Medicaid program is more about public policy than the constitution. The Medicaid expansion will add 17 million uninsured people nationwide to Medicaid beginning in 2014.  This will cost a lot of money, and that’s the basis of the objection. 

However, for the first few years the federal government will pick up the entire cost of the expansion.  This means that states and localities initially will actually save millions of dollars they’ve been using to pay for care for the uninsured.

Also, the federal government doesn’t require states to participate in the Medicaid program.  Medicaid is not administered as one big federal program, but as fifty different state programs.

Why don’t states simply opt out?  When Governor Rick Perry of Texas floated the idea earlier this year, his own Health Commissioner quickly shot it down.  It’s because the Medicaid program draws down billions of federal dollars.  These pay not only for health care for poor people, but also for nursing home and home health care for seniors and intermediate care for people with disabilities.

A state opting out of Medicaid would be between a rock and a hard place.  It would bankrupt and alienate seniors and people with disabilities, while killing off some hospitals, nursing homes, and home health agencies that rely on these payments.  Or it could pay the whole bill itself, and its political leaders would have to preside over the biggest tax increase in state history.

Still, today’s court cases are only the opening volleys in this battle.  Even though they raise issues that seem today to create losing scenarios for the states, at least one case – perhaps Florida’s – will eventually reach the Supreme Court.  Health reforms will have been in place for years by then, and no one can say what the Court will focus on, what it will decide, or what the political landscape will be.

How will the other two battlefronts play out for states this coming year?  They’ll be noisy at times, but little ground will be gained or lost.

First, some members of Congress will try to choke off some funding to slow down reform implementation while introducing bills aimed at paving the way for more state challenges to reform.

Senator Roger Wicker (R-Mississippi) is introducing one of these this week.  They’ll argue “states’ rights,” noting that states – not the federal government – should determine how best to protect the health and well-being of their citizens.  None of these measures will pass, but they will give some cover to politicians trying to appease angry voters.

Second, state legislators will introduce and pass legislation that will be carefully crafted not to do too much too soon. 

Florida’s legislature is already working on its plan.  As Jim Saunders reported in Health News Florida on November 23^rd, Florida legislators are reviving a proposed constitutional amendment giving Florida residents the right to opt out of purchasing health insurance.  Voters may eventually get the chance to air their frustration by voting for the amendment, but even if it passes, it won’t affect anyone until 2014. 

By then, many of the crusading legislators will be out of office, and the Courts will all have ruled.  If they find the individual mandate constitutional, will anyone refusing to buy insurance want be the first one who refuses to pay the federal income tax surcharge?   That fight will be a lonely battle against the IRS, and not one the individual is likely to win.

The Mental Illness Epidemic

There is an epidemic of mental illness in America.  It’s time policy leaders did something about it.

They could start by acknowledging just how widespread this epidemic is.  According to the National Institute on Mental Health, it affects one-fourth of our population – over 57 million adults and over 15 million children. 

Why are the numbers so staggering?

No one knows for sure, but the bad economy, wars, and abuse are all probable factors.

According to a Gallup Poll released last year, the bad economy led to an increase in emotional illness among all adults.  Especially hard hit were those between the ages of 30 and 55, the family breadwinners.

CNN reported in 2007 that one-third of all veterans returning from Iraq or Afghanistan were treated for mental illnesses.  Their children were also affected.  According to a survey of health records released this past month and reported in the New York Times, children between the ages of 3 and 8 with parents in the military had 10% more visits to mental health providers than their peers.

Also in 2007, 5.8 million child neglect or abuse allegations were reported to state child protection agencies.  Almost 800,000 of these were confirmed.

Simply blaming economic and environmental factors isn’t enough, however. 

Researchers have achieved some breakthroughs, but they still don’t know why 17 million adults have serious mental illnesses like schizophrenia, bipolar disorder, and major depression.  These are not caused by economic or environmental factors, and they have devastating consequences.

Homelessness and incarceration are two of them.  According to the National Coalition for the Homeless, 25% of homeless people have severe mental illness, and mental illness is a leading cause of homelessness in our country. 

County jails, where inmates usually stay for under six months either awaiting trial or serving time for minor offenses, are teeming with people affected by mental illness.  Some officials report that up to 85% of jail inmates have mental illness.  They are also three times more likely to have serious mental illness than someone not in jail, and a 2009 study found that nearly one in three female jail inmates had serious mental illness – five times the prevalence in the population as a whole. 

This isn’t acceptable.

Policy leaders need to take this epidemic seriously.

First, they need to do more to identify and treat serious mental illness in children.  The Mental Health Association of Palm Beach County (FL) has offered a creative idea.  It suggests adding periodic mental health screening to pediatric care for all children, to identify and treat mental illness in children at the earliest possible age.  All state legislatures, not just Florida’s, should look closely at this.

Second, they need to decriminalize mental illness.  Simply exhibiting symptoms of mental illness in public can sometimes be cause for arrest, wasting precious resources.  A few years ago, a schizophrenic homeless person was arrested for “sitting or lying on a public sidewalk.”  He missed his court hearing because he was in jail for violating his probation on an earlier offense by being arrested again.  When he finally got to court, no one except the homeless person could keep track of what time he was actually serving for which offense, so he was released. 

People with mental illness don’t belong in jail.  If policy leaders changed the laws that send them there, as a side benefit jail overcrowding would end overnight.

Third, they need to create an emergency mental health response system that looks more like the rest of our emergency response system.  In a health emergency, an ambulance responds.  In a mental health emergency, a law enforcement officer responds.

They should be sainted for taking on this role.  They have diverted many people in crisis away from jails.  But it is no more reasonable to ask law enforcement professionals to evaluate mental illnesses than it would be to ask them to evaluate diabetes, heart disease, or cancer emergencies.

Local and county emergency mental health services systems should be staffed by mental health professionals.  Policy makers should use the new federal insurance parity laws to assure that insurance covers the cost.

Fourth, they need to rebuild our safety net system of care for people with mental illness.  When we emptied our large state institutions beginning in the 1970s, we were supposed to replace them with community mental health centers. But we stopped building these new centers before we were finished. 

It’s time to start building them again, and to pass laws giving them preferred Medicare and Medicaid rates, discounted drug pricing, and access to ongoing federal grants like the ones supporting community health centers.  Then policy leaders should integrate safety net health and mental health care.

These are just four ways policy leaders could start dealing with the epidemic of mental illness.  There are more.  75 million Americans in crisis are waiting patiently.      

Mike Huckabee's Public Option

If you watched HBO’s Real Time with Bill Maher on November 12th, you heard Mike Huckabee propose a public option as part of a health reform fix.  With “repeal, revise, and replace” stories in the news every day, shouldn’t this be worth at least one national headline? 

Governor Huckabee didn’t just flirt with the public option; he married it to his opposition to requiring insurers to cover people with pre-existing conditions.    

Defending his position, Huckabee argued “when you buy insurance you’re buying something in the private sector.  Now maybe there’s a place to say if you’re really, really sick and you can’t access a traditional marketplace then should we have some form of safety net?  Yeah. I’ve said that; I did that when I was Governor.”  

He called for “a partnership between government and the private sector” to insure people with pre-existing conditions. So what did Mr. Huckabee propose? 

He cited the Arkansas TEFRA program he started for families of children with serious chronic conditions as the model safety net program he would favor for people with serious illnesses.  In that program, Arkansas allowed families earning between $25,000 and $200,000 per year the option of buying into the state’s Medicaid program by paying annual premiums of between $504 and $5,500.  After the family paid the premium, the state and federal government paid the cost of the care.

If you expand the Medicaid program and use means testing to include people with serious illnesses, this is about as public an option as you can get – even if you pass it off as just a “safety net.”

How Many People Have Serious Chronic Conditions?

How many people could this public option affect?  The answer is surprising – well over 100 million if he covered just those with serious medical conditions, and up to half of all Americans if he offered the option to all those with chronic conditions. 

I’m one of them.  Like 55 million other adults, I suffer from chronic back pain.  In the past twenty years, I’ve been to doctors, hospitals, and physical therapists for it, and taken prescriptions and over-the-counter pain medications.   

Back pain is inconvenient, but hardly life-threatening.  It could be different for me.  I could be one of the almost 75 million Americans with hypertension.  They may not have outward symptoms like I do.  But if they don’t manage their condition, it could lead to serious health consequences for them. 

Or things could be worse.  My condition could be serious and costly.  I could be one of the 100 million or so Americans with at least one serious and even life-threatening condition who need ongoing treatment.

I could be one of the 34 million with asthma, the 30 million with heart disease, the 24 million with diabetes, the 14 million with serious mental illness, or the 12 million with cancer. 

Death Sentences?

When insurance companies refuse to insure these people because of their conditions, they give some of them a death sentence. 

This isn’t an exaggeration.  Without insurance, many people can’t even afford the tests for their chronic conditions, much less the treatment. 

Consider this:  A member of my family had a bout with cancer a few years ago, and the treatment cost well over $100,000.  She now has annual diagnostic tests to make sure the cancer hasn’t returned.  The price of this year’s tests was exactly $3,171.20.

If she were uninsured, she would have had to find the money for the treatment and the tests.  If she couldn’t afford the treatment, why do the tests?  If she couldn’t even afford the tests, then she would be gambling with her life.   

Why Sick People Need Insurance the Most

Insurance does two things for us when we’re sick, and this is why the sickest people need insurance.

It doesn’t just pay most of the cost; it also negotiates down the price for tests and treatment.  My family member’s insurer negotiated the price of this year’s tests down from over $3,100 to just over $1,400.

Taking on both roles costs insurers money.  That’s why requiring insurers to cover people with chronic conditions draws opposition from Mr. Huckabee.  He prefers a publicly-funded safety net.

This past summer, insurance commissioners in Florida, California, Michigan, Virginia, and Nebraska all said that they did not have the authority to enforce the consumer protection provisions of the health reform law. 

If they don’t enforce these protections, or if Mr. Huckabee were to convince Congress to repeal some of them, then what will people with pre-existing conditions do?  Their only alternative would be something like Mr. Huckabee’s public option.  As a credible conservative voice and leading Republican Presidential candidate, will he be willing to sell this public option to a broad national audience, or was this just a one-night stand for him? 

The Battle Over the Biggest Consumer Protection in Health Reform

Health insurance reform is being implemented now, and it's no surprise that there’s a big battle going on pitting consumers against insurers.  The surprise is that the state regulators charged with protecting consumers are siding with insurers on some key issues.

The Biggest Consumer Protection in Health Reform

If you ask 100 people what the biggest consumer protection in the health reform law is, I would guess that fewer than 10 of them would tell you it’s the loss ratio mandate.

The what, you say?   We know about lifetime caps and pre-existing conditions and minimum benefit packages.  Few of us know about “loss ratios.” As we’ll see, consumers have a lot at stake in the loss ratio battle, including – for some – hundreds of dollars of premium costs per month. 

What’s a loss ratio?

What’s a loss ratio, and why should you care?  Simply put, a loss ratio is the percentage of dollars taken in through premiums paid back out in benefits.  For example, if a plan pays out $75 in benefits for every hundred dollars in premiums, then the plan’s loss ratio is 75.

The reason we should care is because when loss ratios are higher, consumers receive more benefits.  Medicare’s loss ratio has been calculated to be as high as 97.  Paying out up to $97 in benefits for every hundred dollars in premiums is the gold standard for consumers. 

Private insurers can’t touch Medicare when it comes to expenses.  They have higher administrative costs and also need to make a profit.  To make sure they pay out enough, public officials establish a minimum loss ratio through regulation.  Insurers can only sell policies that meet this minimum standard.      

This is enough about loss ratios.  To prevent our eyes from glazing over, from now on I'll just call them “the biggest consumer protection in health reform.”  

 What Congress Decided about the Biggest Consumer Protection in Health Reform

 The 2010 Federal law created a national standard for the biggest consumer protection in health reform.  Advocates initially asked that the standard be set at 90, but Congress considered this too high, and ultimately agreed to 80 for individual plans and 85 for large group plans.  This means that Congress decided that giving private insurance companies a 15-20% allowance for administrative expenses and profits was fair.

These new standards are set to take effect in a few weeks, on January 1, 2011.

A Battle Rejoined

While the battle over the biggest consumer protection in health reform got little attention in the spring, it erupted into a full scale war over the summer.

Insurers amassed their forces to get at least some relief from the biggest consumer protection in health reform and found two allies, health insurance agents and state insurance commissioners. 

Agents thought that they would be squeezed out of their commissions by insurers when the new law took effect.  They were right.  Insurance companies began to cut agent commissions almost immediately.  In response, insurance agents argued that they were primarily consumer agents, not insurance company representatives.  They asked HHS to count their 3-4% commissions as benefits to consumers instead of as administrative expenses, and asked state regulators to support them. 

The other group sometimes siding with the insurers was politically more powerful – the state insurance commissioners charged with implementing the new standards. 

As reported in Health News Florida in late September, Florida Insurance Commissioner Kevin McCarty, President-elect of the National Association of Insurance Commissioners (NAIC), took the lead in making the case against the biggest consumer protection in health reform, arguing that he was “concerned about the ability of our individual carriers to meet that standard in a seamless, non-disruptive manner.”  Florida’s current standard is only 65 for traditional insurance plans, and 70 for HMOs, far less than the new federal mandate.

This means that traditional insurers in Florida can keep up to 35% of premiums for administrative costs and profits.  If your monthly premium in Florida is $1000, then up to $350 of that can be kept by the insurance company.

That’s a lot of money for companies to give up.

What’s Going to Happen?

In mid-October, NAIC submitted its draft recommendations to HHS, which is now finalizing them.  NAIC elected not to support the agents’ position, leaving agents to fend for themselves.

But NAIC did ask HHS for a phase-in of the biggest consumer protection in health reform, staking out an anti-consumer position.

Why do this when your job is to protect consumers?  President-elect McCarty argues that some plans will otherwise go out of business, reducing consumer choice.  But isn’t that the idea?  If the plan’s expenses or profits are too high, then it’s not a good choice for consumers.  That plan should go out of business.  It’s really just that simple, if protecting the American public is the goal.       

How Eric Cantor is Missing It

Discussing health reform over the weekend, House Republican leader Eric Cantor told the New York Times that “it is my intention to begin repealing it piece by piece, blocking funding for its implementation and blocking the issuance of the regulations necessary to implement it.”

Congressman Cantor’s Problem

To which “it” does Congressman Cantor refer?  The “it” creating a new long term care insurance program so that elders will be able to fund nursing or home care as they age?  Or the “it” creating a new catastrophic care insurance plan so that healthy young people will be able to afford some insurance coverage as they age out of their parents’ plans?  Perhaps it’s the “it” that provides new grants to community health centers, or the “it” providing new training for primary care physicians to recognize and treat chronic conditions, or the “it” creating thousands of needed new jobs in the health care workforce. 

Congressman Cantor’s problem is that there isn’t an “it” to be repealed piece by piece. 

He seems to confuse the health legislation itself with its substantive parts, as if it were like one giant private corporation that could be cut up into its constituent parts and sold off piece by piece until nothing remained.  The substantive components of the health reform bill, however, are more like dozens of small businesses, each independent of the other and every one of them providing a product that meets a consumer demand.

Consider the real implications of Mr. Cantor’s position:

·         Is he proposing to block the regulations that will reduce costs to the Medicare program over the next ten years, thereby raising the cost of federal government?  That’s hardly fiscal conservatism; it sounds like wasteful spending to me.

·         Or is he proposing to block the funding that will reimburse state governments for new costs to their Medicaid programs, thereby pushing a new unfunded mandate onto the states? 

·         Or does he hope to delay implementation of the provisions of the legislation that will add 30 million people to the insurance rolls, and replace these provisions with the proposal he backed that would insure only a small fraction of them?

Insured Consumers Pay for the Uninsured 

It’s most likely delay Mr. Cantor has in mind, but while it might be good politics to argue for “piece by piece” repeal as he had done, or “repeal and replace,” like his colleague, Rep. Paul Ryan, our health policy matters to us more than just as taxpayers or health care consumers.  This is because everyone’s cost of care is connected to everyone else’s.  None of us sits on a health care island. 

One of the biggest hidden prices we pay each year is the portion of our health insurance premium that pays for people who have no insurance.  Since someone has to pay for the care we all receive, it stands to reason that the smaller the number of people who are insured, the higher the costs will be for those of us who are – unless, of course, the government were to pay more than its fair share of health care costs.  But it doesn’t. 

Historically, Medicare has paid less for the same health care than private insurers do, Medicaid has paid even less than Medicare, and uninsured “self-pays” pay the least.  Who makes up the difference?  We do, to the tune of over $1,000 per year in excess premium costs on our insurance.

Protecting Deadbeats?

Governing by sound bite may strike a chord in the short term, but the fact is that when the guy next store who can afford health insurance decides not to buy it, those of us who do have it are the ones paying to help cover him. 

Remember this when you hear people talking about getting rid of the mandate, or covering fewer people.  The bottom line is that they care more about the deadbeat than they do about you.  And to add insult to injury, the deadbeat probably doesn’t even vote, either.

So “it” isn’t as simple as Mr. Cantor’s chorus and Mr. Ryan’s refrain. 

We need more than this from our new Congressional leaders.  We need them to remember that health care policy in this country has evolved considerably over the last hundred years, that we provide and pay for health care in a uniquely American way, and that what’s best in our system – the quality of our care – has come about because of partnerships between the public and private sectors, and not in spite of them.  There’s plenty of room for improvement, but only if they make a real effort.      

 Will they be up to the task?