We've Grown Accustomed to Disgrace

It sometimes seems like policymakers go out of their way these days to pick on people with mental illness.

According to a report released last week by the American Mental Health Counselors Association, 3.7 million people with mental illness will remain uninsured because of the decisions of states not to expand Medicaid. 

And if you believe some earlier data from the Kaiser Family Foundation about the total number of people who will be left uninsured because of states' failures to expand Medicaid, then you can only conclude people with mental illnesses account for nearly 80 percent of all those who are being denied insurance coverage in non-expanding states.

This includes 652,000 in Texas and 535,000 in Florida, and around 200,000 each in Pennsylvania, Indiana, Georgia, North Carolina, South Carolina, Tennessee, and Louisiana.

The association characterizes this as “dashed hopes” and “broken promises.”

You might also call it a national disgrace.

For those of us who live in one of the non-expanding states, we’ve grown accustomed to disgrace.  Our states are often held up as examples of what not to do.  We have poorer health status, and usually spend less on mental health services.   We also have the life expectancies of Libyans.

Our policymakers often blame Washington for all of our troubles.  But Washington isn’t to blame for this one. Washington’s recent decisions on health policy did not contribute to our current staggering debt.  Fighting two interminable wars on a credit card at the same time our banking industry nearly collapsed took care of that. 

No, these decisions reflect a lack of understanding and empathy on the part of elected officials.   Their decisions have consequences, and cannot always be blamed on someone else.

Perhaps those who live in more progressive states are feeling a little superior right now.  But they should not be.  Legislators in those states also didn’t clamor to expand Medicaid for all these people with mental illness before the federal government stepped in and offered to pay for it. 

So we are really all in this together.

We are all pushing nearly 4 million people even farther out on the fringes of our health care delivery system. 

These are people living with at least one serious, often life-threatening, illness.  They are living near or below the poverty line.   They cannot afford to pay for health care.  And to top it off they are often subjected to stigma and discrimination. 

This is a group of people who are frequently homeless or incarcerated. 

And when they do need medical care, this is what we say to their providers.  Treat them for free.

We ask hospitals to care for them in their emergency rooms for free.  We ask community mental health centers to provide inpatient and outpatient services for nothing.  And we ask clinicians to donate their care.

The solution for this is simple and involves us all.  If we want to do so, we can bypass those non-expanding states entirely.

All we need to do is to ask Congress to amend the Affordable Care Act to allow people living below the poverty level the option of purchasing insurance on the exchanges at the same price as those living at the poverty level. 

Right now, they cannot.  The reason is that the price of insurance for someone living below the poverty level isn’t subsidized.  But it is for everyone between the poverty level and 400 percent of poverty – over $90,000 per year for a family of four. 

There are plenty of people who think we treat people below the poverty level like millionaires with our entitlement programs.  Ironically, in this one instance they happen to be right. 

If Congress were to make this change, the immediate result would be that 3.7 million people living with mental illness could get decent basic health insurance for little or no cost. 

Of course, it would cost the rest of us something.  But Medicaid expansion costs all of us something, too – even those of us living in non-expanding states. 

And the money would be put to good use. It would reimburse providers of necessary health care, stimulating the sector of the economy that accounts for one-sixth of our GDP (and a similar percentage of our jobs).

So everyone would win if we did this.

Who could object to that?

My guess?  Many of the same politicians who don’t favor Medicaid expansion.  Because when you get right down to it, where people with mental illness are concerned, some of these politicians may in fact be our biggest national disgrace.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Five Fake "Facts" About Obamacare

Last week, I was talking with a new acquaintance about health and mental health policy.

He was a successful businessperson, smart, very well educated, and well-informed about public policy.  Like most of us, he follows the news about Obamacare closely.  And he has strong opinions about it. 

But I realized as we talked that there were things he thought he knew about Obamacare that were not actually true.  But we both had heard them many times before.

So here are five often-repeated “facts” about Obamacare that you, too, have probably heard, and happen to be wrong.

1.  The Affordable Care Act was supposed to reduce health care costs significantly. 

Untrue – when the Affordable Care Act was passed, the Congressional Budget Office projected that it would cost more than $1.2 trillion over ten years.  After the Supreme Court decision in 2012, CBO lowered its projection to under $1.2 trillion.  (When these numbers were updated in 2013, they did not change dramatically.)

The cost of doing nothing was greater – but not by much.  Repealing the Act would cost around $10 billion a year, or less than ten percent more.  So the Affordable Care Act “savings” were always pretty small.

But even those savings were optimistic.  They were based on an assumption that Medicare would cut doctors’ fees by 30 percent – something no one thought would happen.

So the truth is that while some healthcare system costs may be less under the Affordable Care Act, overall the law was intended to be cost neutral.

2.  The Affordable Care Act has failed because it has not lowered large employer-based group health insurance premiums this year.

Untrue – the Affordable Care Act was never intended to lower the sticker price of any insurance premium.  It was only intended to lower the net cost for individual and small group plans by giving tax credits to individuals who (1) earn between 100 percent and 400 percent of poverty and (2) buy their own insurance. 

What ACA did for everyone else was to make sure that they got more for their money by introducing a new set of consumer protections (including minimum loss ratios, coverage for pre-existing conditions, and no cancellations when people get sick) that were not previously guaranteed by federal law or all state regulators.

3.  Under the Affordable Care Act, many working middle-class individuals are still faced with unaffordable health insurance premiums.

My acquaintance talked about the huge burden faced by workers who are paid $35,000 per year – a decent wage, but not an easy one to live on.  He didn’t believe me when I told him that a family of three earning $35,000 could get a “silver” plan – probably comparable to what many large employers offer – for between $100 and $200 per month.

So here’s a link to prove it.  According to the Kaiser Family Foundation’s insurance subsidy calculator, a family of three earning $35,000 per year in my zip code will pay, on average, $156 per month (net) for a silver plan that costs $6641 on the open market.  And if they choose a bronze plan, it will cost them nothing. And in my county there are over one hundred approved plans from which to choose.

4.  The Affordable Care Act was supposed to prevent insurance companies from ever changing or dropping plans again.

Also untrue – but President Obama did famously declare that you could keep your plan if you liked it.  He apparently assumed that people understood that he was making two assumptions here – that the plan met the minimum standards set by the new law, and that the insurance company was still willing to offer it. 

And that leads to the fifth and final “fact” you’ve heard that isn’t true.

5. The Affordable Care Act is at least in part a government takeover of the health care financing and delivery system.

Untrue again – because if it had been, you probably would have been able to keep your existing plan, because the government could have forced your insurer to continue to offer it.

So what is the truth about the Affordable Care Act? 

It is simply this – Obamacare is a balanced approach to reducing the number of uninsured people through a combination of expanded public welfare programs, subsidies to lower and middle class individuals, and private insurance market regulatory reforms.

That’s all.  And that’s a fact.  And its success will be judged ultimately on how well it accomplishes this goal.

And if you want to know how that’s going, click herefor the January 2014 federal report or take a look at the chart accompanying this column.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

In 2014, the Gap Will Widen between the Health and Mental Health "Haves" and "Have Nots"

Let’s open 2014 with four health policy predictions.  Here are the first three:

• Obamacare enrollments will top 5 million.
• Uninsured rates will come down.
• Health inflation will tick up.

Here’s why you can count on these.  

First, 1.1 million people have already enrolled in Obamacare.  The Administration hopes for 7 million by March.  That may be optimistic, but there will be another burst of enrollments in a couple of months.  And there will be another open enrollment period toward the end of the year. 

So at least 5 million enrollments seems reasonable.  And here is a bonus prediction.  If that many sign up, the politics of Obamacare in the half of the states that have embraced it will probably shift during the 2014 election cycle.  Their people will, too.

Second, the number of people who are uninsured will go down.  A 1 or 2 percent decline will be attributable to Obamacare.  The improving economy will also help.  And this means that the numbers will be better even in the states that did not embrace Obamacare.

Third, because more people will be insured and getting care, health inflation will go up again.  Both the Congressional Budget Office and the Administration have been predicting this for 2014 ever since the passage of Obamacare. 

In fact, if it doesn’t happen, this will probably be the health policy news story of the year.

But the fourth prediction may be most significant of all.  The gap will widen between the states with better health and mental health care and those with worse. 

And this has everything to do with Medicaid money.

As of December, the states were literally divided down the middle between those that decided to expand Medicaid in 2014 and those that did not.  If you compare the 26 states (including the District of Columbia) that decided to expand Medicaid to the 25 states that did not, the expanding states already have a decided advantage in supporting health and mental health care.

And with hundreds of billions more dollars flowing into those states over the next few years, that gap will probably widen.

Consider how these Medicaid dollars could widen the gap in just two areas – the number of nationally-ranked hospital specialty programs in a state and mental health spending. 

First, think about the high-quality hospital specialty services we all want and sometimes need.  Hospitals rely on Medicaid dollars for a significant portion of their revenue.

Medicaid-expanding states already have significantly more nationally-ranked hospitals and specialty programs, according to the U.S. News and World Report 2013-2014 rankings, than states that do not.

Seven of the ten states with the greatest numbers of nationally-ranked specialty programs decided to expand Medicaid.  And consider the advantage already enjoyed by California (ranked #1 in number of nationally-ranked specialty programs) and New York (#3) over the two most-populated states that decided not to expand Medicaid – Texas (#6 in number of nationally-ranked specialty programs) and Florida (#11).

California and New York, with 678 hospitals between them, are home to a total of 28 hospitals with at least one nationally-ranked specialty, with a total of 154 nationally-ranked specialties overall.

Texas and Florida, with 895 hospitals between them, are home to a total of 16 hospitals with at least one nationally-ranked specialty, with a total of 70 nationally-ranked specialties overall.

Texas and Florida are leaving as much as $100 billion on the table over the next ten years, much of which would have ended up on hospitals’ bottom lines.

The same point can be made regarding funding for care for people with mental illnesses – on whose behalf many of those Medicaid expansion dollars will be spent. 

The 26 states expanding Medicaid already spend much more on mental health services than those are not.  And the disparity is striking.  According to the Kaiser Family Foundation, the average state spends $120 per capita on mental health agency programs. 

But the states expanding Medicaid spend $139, on average, compared to $116 by states that refused.

And even these spending numbers look artificially close because of high per capita mental health spending in states like Alaska and Maine, which have small populations.  When population size is taken into consideration, as is clear from the pie chart above, the expanding states account for nearly twice as much of the nation’s per capita mental health spending as do the non-expanding states. 

And that gap – like the gap between the “haves” and “have nots” – will only widen in 2014.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

The Ten Best and Ten Worst States for Your Mental Health

Connecticut spends four times more per capita on state mental health services than Texas.  In Florida, 25 percent fewer people report having mental illnesses than in Washington.

Across the nation, there are significant differences in the amounts states spend on mental health services.  Connecticut spends $189 per capita, while Texas spends only $39.

But there are also significant differences in the reported prevalence of mental illnesses.  For example, fewer than 18 percent of Floridians report having a mental illness during the past year, but in Washington almost 24 percent do.

But what happens when you put spending and prevalence together?  Some new rankings emerge that give you a measure of each state’s real commitment to protecting mental health – and treating mental illness – in their population. 

This week, I have ranked all fifty states using both spending and prevalence data.      

I have taken per capita mental health spending from Kaiser Family Foundation’s State Health Facts data, and prevalence data from SAMHSA’s Summary of the National Survey on Drug Use and Health (NSDUH).  Both data sets are from the 2010-2011 time period.

It turns out that some states spend more than ten times as much as others on behalf of people with mental illness.

You can review the full list of the states along with the full set of the data I used here. 

But for now, if the commitment of state government is your measure, here are the ten best and ten worst states for your mental health.

The Best:

1. Maine.  Maine spends almost $1,900 per person with mental illness – 25 percent more than the next closest state.  It is tops in spending per capita, and but also 7^th best in percentage in percentage of people reporting mental illnesses.

2. Alaska.  Alaska is middle-of-the-pack in prevalence, but it is second in spending per capita.  The result?  Alaska spends just under $1,500 per person with mental illness.

3. Pennsylvania.  Pennsylvania is 3^rd overall in spending, but only 16^thbest in prevalence.  That still results in spending of over $1,400 per person with mental illness.

4. New York.  New York is 4^th in spending, and middle-of-the-pack in prevalence.  It spends over $1,200 per person with mental illness.

5. Vermont.  Like New York, Vermont is 23 places higher in spending than in prevalence.

6. New Jersey.  New Jersey is 3^rd best in prevalence, but still spends over $1,100 per person with mental illness.

7. Arizona.  Arizona is only 36^th best in prevalence, but it invests well in mental health services, spending $1,044 per person with mental illness.

8. Connecticut.  Connecticut is one of eight states that spend at least $1,000 per person with mental illness.  It pays off for a state that is tied with Georgia for 9^th best in prevalence.

9. North Carolina.  North Carolina’s high ranking is driven by a 4^th best ranking in prevalence, and top twelve spending per capita.

10. Hawaii.  Balance is the key to Hawaii’s ranking – 15^th in prevalence and 10^thin spending.

And the worst:

41. South Carolina. South Carolina ranks 23^rdbest in prevalence, but is 43^rd in spending.

42. Louisiana.  Louisiana is 35^th in prevalence, but it is not enough to nudge up its overall ranking.

43. Utah. Utah is 49^th in reported prevalence of mental illness – a surprise for a state that regularly ranks near the top in other health categories.  It spends only $263 per person with mental illness.

44. Kentucky.  Kentucky is middle-of-the-pack in prevalence, but spends only $259 per person with mental illness.

45. Georgia.  Georgia is tied with Connecticut for 9^th best in prevalence, but it by spends only one-quarter as much per person with mental illness.

46. Oklahoma.  Oklahoma earns its ranking by placing 40^th in prevalence and 45^th in spending.

47. Florida.  Florida ranks second in prevalence, but only 48^th position in spending per capita.  As a result, it spends just $222 per person with mental illness.

48. Texas.  Texas – which has the lowest prevalence of mental illness – still spends only $221 for each person with mental illness.

49. Arkansas.  Arkansas is one of only two states spending less than $200 per person with mental illness.  It is among the worst in both spending and prevalence.

50. Idaho.  Idaho is far and away the worst state for your mental health.  It is worst in reported prevalence and worst in reported spending.  How bad is Idaho?  At $143 per person, it spends less than one-tenth as much per person with mental illness as do Maine, Alaska, and Pennsylvania.

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Secession Fever

There’s a new disease this year along with the winter flu.  It is called Secession Fever. 

Secession Fever has reached epidemic stage across the south.  As of Monday, there were more than 25,000 cases in each of eight southern states – North Carolina, South Carolina, Georgia, Florida, Alabama, Tennessee, Louisiana, and Texas.  A ninth, Arkansas, had over 23,500.  Collectively, these states had almost 402,000 cases, and the number was still growing.

Secession Fever is a self-reportable disease.  People who have it signed a petition on the White House website.  Secession Fever is characterized by the irrational belief that the federal government does more harm than good, and that states would be better off if they seceded from the Union.

So what if these nine states did secede and form a new Southern Confederacy?  Would their citizens be better off?  Some data from the Kaiser Family Foundation and the Central Intelligence Agency suggest not.

In forming the Southern Confederacy, approximately 86 million people would find themselves living in the 14^th most populous country in the world, just behind Vietnam.  (The rest of the United States would drop from 3^rd to 4^th in population, trading places with Indonesia.)

They would find themselves worse off than they think they are.

The percentage of people living in poverty in the Southern Confederacy would be 17 percent, comparable to that in Trinidad and Tobago, Jamaica, and Turkey.  Meanwhile, the percentage living in poverty in the remaining United States would drop to 14 percent, comparable to the rate in the United Kingdom.

Life expectancy in the Southern Confederacy would also take a hit.  It would decline immediately to 77.7 years, 61^st in the world and comparable to life expectancy in Libya.  In the remaining United States, it would be almost 79 years.

That’s not all.  The health status of Southern Confederacy citizens would decline, too.

One in five residents in the Southern Confederacy would be uninsured, versus only 14 percent in the remaining United States. 

Even that high percentage would grow dramatically without the federal Medicaid and Medicare programs.  Without the federal share of Medicaid dollars, the percentage of uninsured in the Southern Confederacy would grow by at least 9 percent more, to close to 30 percent.  And without Medicare providing insurance for 16 percent of its population, the Southern Confederacy’s uninsured rate would approach 50 percent, killing off nearly every hospital and long term care provider.

Infant mortality would go up, too. 

For every one million births, 1100 more babies would die in the Southern Confederacy than in the remaining United States.  The infant mortality rate in the Southern Confederacy would be 7.5 per thousand – comparable to that found in Chile.

Disease prevention would also take a hit. 

The percentage of overweight adults in the Southern Confederacy would be over 65 percent, pushing ever higher the prevalence of diseases like diabetes, hyperlipidemia, and hypertension.

Public health would suffer, too.  The AIDS rate would grow, and the proportion of people infected with HIV in the Southern Confederacy would be similar to that found in Somalia.

Mental health services would not be spared, either. 

Nationally, we currently spend around $120 per capita on mental health services.  But in the Southern Confederacy, state mental health spending would be half that – just $61 per year.

It isn’t that people in the Southern Confederacy have better mental health status and need fewer services.  Just over one-third report being in poor mental health, just as in the rest of the country.  They’re just more likely to be ignored, neglected, or maltreated.

If there were ever a compelling argument for why we need a strong federal government, life in the Southern Confederacy is it.

Aspiring to the health standards of Somalia, Chile, Libya, Trinidad and Tobago, Jamaica, and Turkey – all nations with much to offer, to be sure – is hardly the stuff of “American Exceptionalism.”  But these nations turn out to be the real role models for those with Secession Fever.

These harsh health conditions reflect the realities of life in these southern states today.  We can argue that we can do better than this, but not if we can’t accept this reality – people are worse off in these states than in the rest of the United States.

Those with Secession Fever – and the political leaders who have fanned the flames of anti-federal sentiment for years – must be living in an alternate universe.

If you would like to schedule Paul Gionfriddo to speak to your group or organization, please email gionfriddopaul@gmail.com.

Wait a Minute

An accurate but off-the-mark news headline this week proclaimed that health care costs for people insured in the private sector rose twice as fast as inflation in 2010.  But it didn’t mention that health insurance premium prices rose six times as fast.

The Health Care Cost and Utilization Report, 2010 was released by the Health Care Cost Institute (HCCI).  It was based on claims data for 33 million people – one fifth of those with employer-based health insurance.

The bottom line: the consumer price index rose by only 1.6% in 2010, but health care spending was up by 3.3% for the same year.

The report summarized that “prices increased across all categories of service, with outpatient services experiencing the fastest growth.” 

This is bad news for Americans with private health insurance already fed up with low and flat salaries and the high price of health.  The cost of health care now absorbs over one-sixth of our entire gross domestic product, and just seems to grow every year.

But wait a minute.  There was a piece missing in the HCCI report.  It was related to an insured consumer’s most significant health care expensive – the cost of insurance premiums.

That would have been even more newsworthy.  The price of employer-based family insurance coverage increased by 9%, or almost six times the rate of inflation, for policies renewed in the same time frame.

You won’t find that number headlined in the HCCI report, but you will find it in an equally impressive study released by the Kaiser Family Foundation and Health Research and Educational Trust last August.

How was it possible for HCCI to overlook so significant a cost increase? 

It might have something to do with HCCI’s funding.  HCCIwas formed just last September, “with an aim” according to its website, “of becoming the nation’s leading source of information on health care costs.” An article appearing on May 21, 2012, in Kaiser Health News makes it clear that insurance companies are the sources of both HCCI data and funding.

This bias doesn’t make the data in the report bad.  But it does suggest that the actual aim of HCCI might be better re-stated as “becoming a leading source of information on health insurers’ payments.” 

Especially if HCCI plans to continue to leave out the information about health insurance premiums.

Because when you add that into the mix, here’s another headline. 

At a time when – according to insurance companies themselves – health care costs rose by just over 3%, private insurance companies increased consumer health insurance premiums by three times that amount.

Adding insult to this injury, consumers got hit not once, but twice.  HCCI noted that out-of-pocket health spending increased by 7.1%.  In other words, insurance companies also required consumers to pay twice their fair share of the increase in health care prices.

This begs the question: where did all this money go?

If the purpose of the HCCI report was to deflect our attention away from this, it won’t work. 

The public may not have all the facts at its fingertips, but a March, 2012, survey sponsored by NPR, the Robert Wood Johnson Foundation, and the Harvard School of Public Health was released this week.  It found that 77% of all respondents, and 75% of sick ones, said that insurers “charging too much money” is a major reason for rising health care costs.

Americans don’t buy it when insurers point fingers at providers, any more than they believe major providers who just point fingers at insurers.  In the survey, consumers blamed hospitals and drug manufacturers for the rise in health care costs just as much as they did insurance companies.

So here’s the real bottom line. 

When – in the private sector – health care costs increase twice as fast as CPI, out-of-pocket costs increase four times as fast as CPI, and the cost of insurance increases six times as fast, there’s plenty of blame to be spread around.

The one entity we can’t blame for the increase is the one at which everyone usually points a finger – our government.

This in no way lets the government off the hook.

Instead, the data make a compelling case that elected officials should do more, not less, to contain all health care costs – if for no other reason than to protect the interests of the people who elected them. 

Will they do this, or will they leave us at the mercy of the marketplace?

States and Rebates

If you run a small business in Florida, are self-employed in Texas, or work for a large corporation in New Jersey (see an update below), then your state insurance regulators probably haven't been working for you.

The news that 15.8 million people can expect $1.3 billion in rebates from insurers this year because of the Affordable Care Act (ACA) underscores how weak health insurance regulation has been in states across the country. 

It may come as no surprise that Florida and Texas, two leaders in the fight against ACA, have been exposed as anti-consumer.  But they are not the only states with an anti-consumer bias.

First, the good news: last week, the federal government announced that three-quarters of us will get letters beginning on July 1 telling us that our insurance plans paid out at least 80 to 85 cents in benefits for every premium dollar they collected.

This means that under ACA they met the minimum standard for a reasonable benefit payout (which is still ten or more percentage points worse than the Medicare payout). 

But there’s bad news as well.

According to new data released recently by the Kaiser Family Foundation, 31% of consumers who purchase health insurance in the individual market, 28% who get insurance in the small group market, and 19% who get insurance through the large group market were covered by plans that failed to meet the minimum standard.

Assuming the Supreme Court upholds this most important consumer protection in the Affordable Care Act, all of these people are entitled to rebates.

The amount of the rebates will vary widely.  For example, over 2,700 Alaskans in one small group plan will get over $500 each.  Over 325,000 Floridians in thirteen individual market plans will get an average of $152.  And 46,000 Connecticut residents in three individual market plans will average almost $137 in rebates.    But people insured through the individual market in Maine won’t get anything – because they weren’t overcharged in the first place.

Until the Affordable Care Act passed, this type of insurance regulation was handled by the states. 

The new data give us a picture of which states have been looking out for consumers and which haven’t. 

Here’s a link to a tableI created from the data showing what percentage of individual, small group, and large group customers will get rebates in all fifty states (excepting California) and the District of Columbia.

The two states that have done the best job in protecting the interests of state consumers are Hawaii and Rhode Island.  These are the only two states in which every health insurance plan met the minimum standard last year.

At least one plan in every other state falls short.  But New Mexico, South Dakota, Vermont, New Hampshire, North Dakota, Alabama, Alaska, Maine, and Oregon all protect well over 90% of their health insurance consumers.

However, in Florida alone, two dozen plans don’t meet the minimum standard.  Twenty-one fall short in Texas.

By far the worst state overall is New Jersey, where 62% of people covered in the individual market, 79% of those covered in the small group market, and 67% of those covered the large group market have been overcharged for their health insurance. (See an update below.)

Several other states aspire to New Jersey’s low standard. 

South Carolina and the District of Columbia have even worse consumer protection records than New Jersey in two of three areas.  And in Oklahoma, Arizona, and Texas, more than eight out of every ten consumers were overcharged in at least one of the three areas.

Who specifically is paying the price for this?

In Texas – where over 90% of those insured in the individual market were overcharged for insurance – it is people who are either self-employed or have chronic conditions which disqualify them from group coverage.

In Florida and Missouri, it is small business owners and employees.   In Florida, 73% of those covered in the small group market were overcharged for health insurance, and in Missouri, 72%.

Florida’s numbers are worse than the nation’s across the board – in addition to 73% of those in the small group market, 38% of those covered by individual plans and 37% of those covered by large group plans have been overcharged.

And Connecticut – home to the insurance capital of America – was worse than the nation as a whole in both the individual market and the large group market, where 42% and 28% were overcharged, respectively.

So should ACA consumer protections trump states’ rights?  In this case, I can think of 1.3 billion reasons why they had to.

Click here to see the full list of the states in the Kaiser rankings.

Update:  HHS released its final list of the states in June (available at this link).  The final national rebate numbers were amended downward somewhat - to 12.8 million customers receiving $1.1 billion in rebates.  As was pointed out to me by a New Jersey reader, some of the individual states' information changed dramatically in the final analysis - New Jersey's among them. The final New Jersey numbers were significantly lower than the initial Kaiser Family Foundation numbers.  $7.5 million in rebates will be given there - none in the small group market - placing New Jersey in the upper tier of states. 

How We Really Hope the Supreme Court Will Rule on the Affordable Care Act

The Affordable Care Act has finally had its days in court this week.

And commentators who were certain on Monday that the Supreme Court would uphold the individual mandate were just as certain on Tuesday that it would not.  Perhaps they have some special insight into the thinking of the Justices. I don’t.  I’ll just wait for the decision. 

In the meantime, I’m wondering not how each of us thinks the Court will rule, but how we hope it will rule.

The answer isn’t so simple, because we divide into – and often move among – three competing minority camps about health reform in general:

• The Affordable Care Act represents the best compromise for insuring more people while preserving most of our current public/private payer system.
• Expanding reform to a single payer system like those favored by other developed nations would be better. 
• Replacing ACA with a private market-based system is at least worth a try.

If we’re as uncertain as polls cited by the Kaiser Family Foundation suggest, I suppose we all could just close our eyes, vote for Mitt Romney, and assume from his record and rhetoric that we’ll get all three.

But the Court will decide first, so let’s consider the rooting interests of several interested and sometimes overlapping groups.    

If you favor a single payer, “Medicare-for-all” program:

You want the Court to find the individual mandate unconstitutional, but severable from the rest of the bill. 

Why?  The individual mandate was originally the alternative to “single payer,” so you would like to get the individual mandate out of the way.  Then single payer becomes an option again, but only if the rest of the law, including the Medicaid expansion and the consumer protections, remain in effect.  This is because our private insurance market will become too expensive if people use those consumer protections to wait to buy insurance until they are sick.

If you want to reduce the size and scope of the state Medicaid programs:

You want the Court to rule the Medicaid expansion unconstitutional, but the individual mandate constitutional. 

Why?  This combination will most constrain Medicaid growth because lower income people will have to purchase health insurance in the private market.  They’ll qualify for a subsidy, but not for Medicaid.

If you want more universal coverage, but don’t care whether it’s private or public:

You want the Court to uphold the entire law.

Why?  Although philosophically impure, the combination of Medicaid expansions, Medicare cost containment strategies, Medicare tax increases for the wealthy, and subsidized private insurance for the middle class will lead to more coverage, and fewer uninsured.

If you or a child of yours has a chronic condition, such as diabetes, mental illness, or cancer:

You may not care whether the individual mandate is constitutional or not, but if it isn’t, you want it to be severable from the pre-existing condition coverage and community rating portions of the law.

Why?  If the PCIP experience is any indication, you may not want to be forced to buy insurance.  But when you do try to buy it, you don’t want to be denied affordable coverage because of your pre-existing condition.

If you are an early retiree on your former employer’s health insurance:

You want any provisions found to be (1) unconstitutional and (2) not severable from the pre-existing condition and community rating portions of the law to be severable from the rest of the law.

Why?  This could gut much of the law, but not the provisions that subsidize your coverage.  You won’t have to worry that you could either lose your health insurance or be forced to pay a lot more for it.

If you are a Medicare recipient:

You want any provisions found to be unconstitutional to be severable from Medicare expansions.

Why? If they aren’t, you’ll need an immediate bipartisan agreement in Congress to keep your donut hole prescription drug coverage and your free annual check-up in place.

If you want insurance that will cover long term care needs:

You’re already out of luck. 

Why? That provision was axed from the law before it was ever implemented – and you don’t hear anyone talking about restoring it.

And, if you’re okay with denying or capping coverage for pre-existing conditions, allowing insurers to make as much profit on insurance as they can, having gaps in prescription drug coverage for elders, and paying for the sick and uninsured through increased premiums on people who have insurance:

You want the Court to find the whole law unconstitutional.

Why?  That’s where we were when all this began.

Note: Click here for simple explanations about some of the Supreme Court issues that are discussed in this week's column.

If you have questions about this column or wish to receive an email notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.

Mental Health Cuts Will Lead to Increased Health Costs

On December 8, 2010, Jack Dalrymple, a Republican Governor in the safely Republican state of North Dakota, sent a budget to the state Legislative Assembly calling for an $8 million increase in funding for mental health services.

His transmittal message accompanying his FY2011-2013 proposed budget was simple. “We… need to make investments that help take care of people.  We have all been alarmed recently about teen suicide rates, especially on our Native American reservations.  These highlight the need to make more resources available for critical mental health services for our citizens.”

So, in a $3.3 billion general fund budget, he proposed over $6 million for new inpatient services, community crisis stabilization, and drug dependency treatment.  He also proposed $1 million for suicide prevention, another million dollars for mental health services on college and high school campuses, and a rate increase for mental health providers. 

He summed up these requests by saying that “the physical and mental health of our citizens is always a top priority.”

The North Dakota Legislature apparently agrees.  According to a recent report of the National Alliance on Mental Illness, the state has made up for historically low spending on mental health services over the past three years by topping the nation in increasing spending for mental health. 

As overall state mental health spending in the nation declined by $1.6 billion, North Dakota increased spending for mental health by 48.1%.

In the same time frame, South Carolina, Alabama, Alaska, and Illinois all cut mental health spending by over 30%, and Nevada, the District of Columbia, and California all cut it by over 20%.  In fact, most of the rest of the country is clearly out of step with North Dakota.

A Bloomberg News article headline this past week made clear what cuts to mental health mean: “Mental Health Cuts by U.S. States Risk Boosting Health Costs.”  The reason, as one Illinois emergency room physician pointed out, is that sick patients don’t just disappear when they are denied one set of services.  They seek out another, often more costly, alternative.

In the case of people denied mental health care, it is usually the hospital.

According to the Centers for Disease Control and Prevention (CDC), there were 2.4 million primary diagnoses of mental illness in general hospitals in 2006. In the same year, state mental health spending totaled $104 per capita, according to Kaiser Family Foundation State Health Facts data. 

CDC recently released new data for 2009.  In that year, the number of primary mental illness diagnoses decreased to under 1.6 million.  But the State Health facts data reported that state mental health spending had increased by then to $123 per capita.

In other words, during a time frame when state mental health agency funding increased by 18%, mental health diagnoses in general hospitals decreasedby 35%.

These are the facts, and there is an association here, at least for the most recent three-year period for which we have data. When states spend more on mental health as they did in 2009, fewer people with mental illness need hospitals for care.  And when states spend less on mental health, as they did in 2006, hospital use goes up.

Now that they have the facts, what are states proposing this year?

• The Florida Senate has proposed to reduce adult mental health services funding by 34%.  The House saved Florida from such a spending disaster last year; it will have to do so again this year.
• Connecticut’s Governor has proposed a $12 million cut to the Department of Mental Health and Addiction Services from the state’s already-approved FY2013 budget.
• Alabama last week announced plans to close 4 psychiatric hospitals.
• Illinois has proposed cuttingtwo psychiatric hospitals and a host of community health centers throughout Chicago.
• Mississippi is proposing a 5% cut to mental health that could result in the closing of six mental health facilities throughout the state.
• The Pennsylvania Governor’s newly proposed budget will cut Philadelphia by $42 million in mostly mental health and addiction services funding, according to information provided by the Mental Health Association in Pennsylvania.

Do you detect a pattern here?

Proponents argue that these cuts are being made in the name of fiscal responsibility, but they don't have the vision to see the forest beyond the trees.  Every one of them will make people sicker, state costs higher, and an already bad situation worse.

If you have questions about this column or wish to receive an email notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.

America's Health Insurance Myth

The recent heavy-handed action by Blue Cross and Blue Shield of Florida (BCBSFL) to terminate and amend all of its contracts with mental health providers brings to light a well-kept national health care financing secret.

It is an American myth that we rely on private insurance companies to finance our healthcare delivery system. 

America’s privately-financed private health insurance companies pay so small a share of the nation’s healthcare bill today that they could vanish tomorrow and we would barely notice anything but the cheering.

Insurance companies have been marginalizing themselves by years of short-sighted actions against both providers and patients. They are well on the way to becoming little more than bundles of administrative costs and profits. And it may already be too late for them to do anything about it. 

According to the Centers for Medicare and Medicaid Services (CMS), our total U.S. health care expenditures in 2009 were just under $2.5 trillion.   Privately-financed private insurance pays a stunningly small percentage of that – far, far less than most people believe and far less than the sky-high health insurance premiums they often charge would suggest.

Like it or not, it is the government that pays most of the bill. 

Medicare and Medicaid pay over one-third.  According to the Office of Management and Budget, Medicare paid $517 billion in 2009-2010 – 21% of the total.  CMS calculated that the combined federal and state Medicaid share was $374 billion in 2009, which accounts for 15%.

Other direct governmental health care expenditures account for another 20%, or $510 billion.   These include mental health and substance abuse spending, workers compensation, Indian Health Services, vocational rehabilitation, maternal and child health, CHIP, Department of Defense, Veterans Affairs, and other federal, state, and local expenditures.

As a result, the government’s direct share of health care expenditures comes to approximately 56% of the nation’s total healthcare bill.

But there’s more.  Government workers account for around one-sixth of our national labor force.  Their private health insurance is paid for by governments.   The Federal Employee Health Benefits Program costs $40 billion.  And according to a source at the Manhattan Institute, state and local benefit programs cost an additional $132 billion in 2008. Government-fundedprivate insurance therefore accounts for another7% of total health care spending.

But we’re not finished yet.

The government also subsidizes private insurance through tax deductions for premiums.  The Kaiser Family Foundation estimatedthat the value of this tax expenditure was around $200 billion in 2007.

When you add that in, too, it brings the government’s share to around 71% of the total.

According to CMS, private insurance paid $801 billion, or 32%, of our total health care bill in 2009.  But when you remove the $372 billion of government contributions to this share, the privately-funded private insurance share of health care costs goes down to $429 billion, or to around 17% of the nation’s health care bill.

CMS reported that in 2009 the remaining 12%, or almost $300 billion, was paid out-of-pocket for health care, through co-pays, deductibles, and other direct payments by or on behalf of individuals.  

But here’s the thing about the 17% paid by private insurance companies using private dollars.  It costs us all at least one-third of that to pay for their profits and administrative expenses. 

Private insurers regularly keep at least 15-20% of every public or private premium dollar they collect for profit and expenses.  This means that we have to pay insurance companies something like 6% on top of the 32% they pay toward health costs for their profits and administration.  If we didn’t have to cough up that 6% in fees, we could spend it all on healthcare.

 This means that the net value of the privately-funded private insurance share of the nation’s health bill is something like 11% of the total, just about what we already pay out-of-pocket.

It is maddening that private insurers pay out so little for the privilege of treating providers and patients so shabbily.  According to one Florida mental health provider, BCBSFL is also adding new paperwork requirements, random and aggressive auditing, other intrusive requirements, and even “legibility reviews” to the mental health treatment manual it will release to its new provider network in December.    

We need our government to be more aggressive by enforcing mental health parity laws and the consumer protections in the Affordable Care Act.  It must improve its regulation of an industry where the administrative bloat is already at least half as big as the benefit, and the benefit is no bigger than what we already pay in co-pays and deductibles. 

But the most telling anti-consumer position was staked out in an August 17, 2011 letter from the Deputy Insurance Commissioner of Florida to a representative of a coalition of mental health parity advocates: "I would note that the Office of Insurance Regulation has no jurisdiction with respect to enforcement of federal law."  Since Florida also denies the authority of the federal government to enforce insurance mandates, who's left to advocate for consumers? 

Where private insurance is concerned, it seems that we have laws with teeth, but regulators with no bite.  I wonder why.

 

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