The Climate Change in Insurance Exchanges

A different kind of climate change was in the news this week, as Gallup reported that the percentage of people who are uninsured declined rapidly from 17.1 percent to 15.9 percent in just three months.

That is a pretty substantial drop, and one that began when people started signing up for Obamacare.

According to Gallup and others, it translates into an additional 3 million people who now have health insurance, consistent with the numbers of people signing up for Affordable Care Act coverage.

That’s good news for Obamacare – perhaps. 

One of the more interesting – and sometimes frustrating – things about health policy is that like climate change it unfolds slowly over time, and so it is often difficult to see the change in climate while it is happening.

For one thing, there are always other variables.  For example, the unemployment rate has also gone down during this period, from 7.2 percent last October to 6.7 percent today. It is possible that some of these 3 million newly-insured people obtained insurance through employment, and would have gotten it anyway.

And there’s always the glass-half-empty view to consider.  Both the unemployment rate and the uninsured rate are just about back to where they were in 2008, right around the time that the economy was collapsing.  So most of the progress we’ve made so far amounts to dragging ourselves out of a deep hole.  We’re still just back to where we were before we fell in.

But if we look too closely at this, we miss the bigger picture.

In spite of all of the initial problems with Obamacare exchanges, and despite the unpopularity of the Act itself (54 percent still disapprove of the law, according to the Real Clear Politics average of recent polls), and despite those who believe that they may have lost their insurance because of Obamacare, the trend today is clearly in one direction.

More people are becoming insured.  And that means something in the long run. 

For one thing, it means that health and mental health providers who have been holding out from participating in insurance plans until they are sure that there will be patients there will need to start signing up.  There will be patients there, and they will be looking for providers who accept their insurance.

For another, it means that individuals who can afford insurance but have been choosing not to buy it – betting that the law will go away before they ever have to pay a penalty – are probably not going to win that bet.  As more people pay up to become insured, there will be increasing pressure on everyone else to pay their fair share, too.  Insurance is becoming more of an individual's responsibility.

People may not like their health insurance very much, but once they have it, they never want to lose it again.

So in all probability the fates of the Affordable Care Act and private health insurance are intertwined now and for the foreseeable future.  The structure of our health insurance system is changing before our eyes because of the Affordable Care Act.  But it isn’t going to undermine the idea of insurance – just the way we pay for it. 

Here is a parallel example to explain what I mean.  When IRAs were created, they were like today’s exchanges.  They were a small thing.  Defined benefit plans – or pensions – were the norm for employees (as employer-based insurance is still the norm today).  But IRAs, 401(k)s, and other tax-deferred savings offered a retirement savings option that took a savings burden off of employers and transferred it to workers.   This changed – in a single generation – the nature of how we will pay for our retirement years. 

The same thing could be happening now with health insurance.  The exchanges may seem like a small and controversial thing today – perhaps 5 million or so will be insured through them at the end of the 2014 sign-up period.  But this number is growing every day, and will grow a great deal more in the future. 

And as a result new small employers – the creators of so many new jobs in our society – may increasingly decide not to offer health insurance as workers find deals that are just as good on the open exchange markets. 

Shifting from employer-based insurance to individual insurance does reflect a change in climate.  As we argue over the details, who really knows how significant this change will be?

Hypocrisy In Motion

The latest Obamacare navigator “compromise” may calm one small battle in Florida.  But it won’t end the war on Obamacare being waged by hypocritical public officials around the country.

A couple of weeks ago, I wrote about the Congressional effort to undermine the Obamacare navigation program in its entirety.  A House Committee has ordered nonprofits winning navigation grants to produce reams of material, and promises to punish those that have failed to comply. 

Source: US Census Bureau

Navigators will assist people in applying for public or private insurance to pay for their health care.  

Navigators are not a new concept, created by Obamacare.  They are as old as Marco Rubio, and Obamacare is not the first federal initiative ever to fund them.  In fact, I implemented the policy of the Nixon Administration as a VISTA paralegal 35 years ago, navigating underinsured elders to the Medicaid program.

So we know that navigators can be trusted to do their jobs.

But that hasn’t stopped some public officials from sudden “worries” that navigators hired by nonprofit agencies will disclose private information that clients voluntarily give to them.

Three weeks ago, Governor Rick Scott of Florida – apparently trying to re-establish his credentials as the nation’s leading gubernatorial opponent of Obamacare after openly flirting with it during the 2013 legislative session – joined this chorus, wondering “how the federal government will prevent personal information from being stolen” by these nonprofits.

This was quite a contrast to enrollment efforts already well underway in states like Connecticut that actually want to help people get insured.

Then Governor Scott raised the stakes last week.  He ordered that no navigators be allowed in any state health department offices.  The reason this mattered is because in Florida, county health departments are actually arms of the state government, and their employees are state, not county, employees. 

So in banning the navigators from state offices, he was in effect banning outside navigators from enrolling people in county safety net clinics, federally-qualified community health centers, and a host of other facilities staffed by state employees.

He came under immediate fire from shocked public health officials, one of whom called the edict “cruel and irresponsible,” and said that it would compromise access to healthcare for “a multitude of needy Floridians.” Florida has the second highest percentage of uninsured people in the nation – two and a half times the rate of Connecticut.

A day later, state officials backed away after having an Emily Litella moment.  They realized that the counties actually own and control the properties in which the health department clinics operate.  The state employees, like the navigators, are just outside guests in these county buildings.   

A compromise of sorts was struck.  The state acknowledged that it had no authority to keep navigators out of the county buildings so long as the counties had them work outside of the actual clinic space.

Now most thoughtful people with any knowledge of history would probably use a colorful term here to characterize the state’s position.  I’ll just call it hogwash.

Public officials like Rick Scott are not the least bit worried about navigators being able to protect the privacy of individuals. How do we know this? 

Because Rick Scott was CEO of Columbia/HCA until 1997.  Like every hospital chain in the country, HCA hospitals have worked with navigators for years to capture Medicare, Medicaid, and insurance reimbursements for uninsured patients.  The navigators are often employees of outside entities working under contract.  Many even take a percentage of the billings for every person they enroll.

I know this because I competed with these companies when I was overseeing navigation programs for community nonprofits in Texas and Florida in the 2000s.  And these outside companies had access to all the private information about which Governor Scott professes to be worried today.

But there is more. 

In Florida, my nonprofit placed navigators in state health department clinics almost a decade ago and helped capture reimbursements for the state, relieving taxpayers of the bill.  No one accused us of breaching confidentiality.  But Jeb Bush – who had some common sense – was Governor then, and George Bush was President.

Hypocrisy is always in motion, and tough to pin down.  But in this instance, certain public officials made it too easy for us to see the real reason they want to prevent uninsured people from getting help paying the bills that clinics and hospitals must, by law, present to them.

They know for a fact that this part of Obamacare will work, and they desperately don’t want that to happen.

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

States Refusing to Set Up Health Exchanges are Helping Their Children - But Not in the Way They Think

The reasons that 25 states chose not to participate in creating a new health exchange aren’t exactly the ones they’ve been claiming – that Obamacare is too complicated, too anti-consumer, or too politically unpopular. 

The truth is that they have never done a very good job of protecting the health and well-being of their people – especially their children – and they were not ready to start now.

Now that all fifty states have decided whether or not they will at least participate in running their own health insurance exchanges as allowed by the Affordable Care Act (you can see the updated information about what each state decided on my state rankings page), a clear picture is emerging of what distinguished the states choosing to participate from those refusing to do so.

On the whole, when compared to one another, the 25 states that have chosen to participate in running their exchanges (17 by themselves, 8 in partnership with the federal government)do a much better job of taking care of their people than do the 25 states that have deferred to the federal government.

So, just as we imagined a few months ago, residents in the states that refused are likely to be much better off with the federal government running their exchanges.

In many cases, the differences between the states choosing to participate and those refusing to participate are significant.

Let me illustrate why by showing you some updated numbers.  But first, let me explain briefly how I get to them. 

If you rank the states from best to worst, and assign the ranking of 1 to the best and the 50 to the worst, then two “averages” result.  The average ranking of all the states will be 25.5.  And if you divide the states into two equal groups of 25, with all the top-ranked states in one group and all the bottom-ranked states in the other, then the average ranking of the top group will be 13, and the average ranking bottom group will be 38. 

So keep in mind that 13 is the best possible average ranking for any group of 25 states to have, and 38 is the worst possible.

Now here are some average health-related rankings of the group of 25 states choosing to participate in establishing their own exchanges:

• Overall health (OHPM 2012 rankings):  21.5
• 2012 Kids Count ranking: 21.2
• Percentage of uninsured: 21.7
• Percentage with employer-based insurance: 22.4
• Ranking in spending on mental health: 24.7

And here are the average rankings of the group of 25 states refusing to participate in establishing their own exchanges:

• Overall health (2012 OHPM rankings): 29.5    
• 2012 Kids Count ranking: 29.8
• Percentage of uninsured: 29.3
• Percentage with employer-based insurance: 28.6
• Ranking in spending on mental health: 26.3

In every instance, states choosing to participate in setting up their own exchanges have a much better track record than states refusing to participate.   In only the mental health spending ranking is it even close. 

Those of us living in one of the 25 states refusing to participate ought to be thankful that our state policymakers punted on the exchange, because it is more likely than not that we’ll be much healthier and better insured in the long run. 

Especially our children.  States choosing to participate rank an average of almost ten places better than the states refusing to participate.  Children may have literally won the health lottery when those states decided that the federal government could do a much better job of assuring access to health care in the future.

The differences among the states are not just political ones, either. 

Solid Republican states like Utah, Idaho, and Kentucky are all creating their own exchanges, and states like Arkansas, West Virginia, and South Dakota are partnering with the feds.  Meanwhile, Maine, Wisconsin, Ohio, and Pennsylvania are all letting the federal government create their exchanges.

And the decisions have turned the traditional north/south, “state’s rights” argument on its head.  States’ rights states, like Texas and Florida, are refusing to participate, while states like Connecticut, Massachusetts, and New York are choosing to do so.

States refusing to participate may have tried explaining their decision by claiming that the federal government created a program that was too complex, too controversial, or too anti-consumer.  But those clearly aren’t the reasons. 

No, the real reason is that they know that the federal government has already proven itself over time to be better equipped to protect our health than they are.

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

Confused and Confusing

President Reagan gave his first speech on the AIDS epidemic almost twenty-five years ago on May 31, 1987.  This was after 36,058 Americans had been diagnosed with AIDS, 20,849 had died, and over a quarter of a million had been infected with HIV.

For years, he had been criticized for ignoring and underfunding the worst public health crisis of the late 20^thcentury.  

So he began his speech with a joke:

“A charity committee approaches the wealthiest man in town for a contribution.  ‘Our book shows that you haven’t contributed any money this year,’ they tell him.  ‘Does your book also show that I have an infirm mother and a disabled brother?’ he replies.  ‘Why no,’ they say, ‘we didn’t know that.’ ‘Well, I don’t give them any money.  Why should I give any to you?’”

The bad joke was an inadvertent punctuation mark on a presidency too fondly remembered by both republicans and democrats today.

On matters of health, Reagan took us backwards.  He was neither in touch with the nation’s growing needs nor successful in addressing them.

His inattention to the AIDS catastrophe in particular and public health in general were just two examples.

He also helped create a new generation of chronically homeless people when he significantly cut federal mental health funding as part of the Omnibus Budget Reconciliation Act of 1981.  During his two terms as President, he also cut funding for safety net community health centers by over 25%.

Suggesting that Reagan would be too liberal by today’s GOP standards – as both some progressives and conservatives have done – is too liberal a stretch where health policy is concerned.

It was the Bushes who were progressives by today’s standards. 

Both delivered on campaign promises to expand the government’s role in health.

“Compassionate conservative” George W. Bush doubled funding to community health centers during his term and added a prescription drug benefit to Medicare.

And George H.W. Bush significantly expanded the federal Medicaid program.

Long before blogging, those of us who wished to express our opinions publicly used the “Letters to the Editor” forum in our local newspapers.  When I was in the Connecticut Legislature in the 1980s, I communicated regularly with my constituents through my local newspaper.

Here’s something I wrote about presidential health policy in October 1988: 

“When health insurance is necessary to pay for health care, how do we ensure that everyone has access to affordable insurance?  Both presidential candidates talk about this.  Governor Dukakis believes that the answer lies in the private sector, in all employers providing health insurance to their employees.  Vice President Bush believes that the answer lies in the public sector, in expanding the state and federal financed Medicaid program.  I know this looks like a classic role reversal, but solutions to health care dilemmas defy ideology.”

You can read the full text of what I wrote here.  If you do, you’ll be either fascinated or fatigued by how little health policy progress we have made in the last 25 years. 

Today, Mitt Romney, another former governor from Massachusetts, has a position on health care more similar to Michael Dukakis than to either Reagan or Bush.

Dukakis wasn’t very persuasive arguing for the private sector solution then, and Romney hasn’t been very persuasive arguing for it now – possibly because both headed a state with a long and solid reputation for making significant public investments in health.

At least President Barack Obama, the most vocal Democratic opponent of the individual mandate in 2008 who is now its leading proponent, recognized the importance of government funding for health when he said this past weekend:

“I refuse to pay for another millionaire’s tax cut by eliminating medical research projects into things like cancer and Alzheimer’s disease.  I refuse to pay for another tax cut by… eliminating health insurance for millions of poor and elderly and disabled Americans on Medicaid.”

But this hasn’t stopped President Obama from initiating or agreeing to multiple raids on public health funding.

Are you confused by all this?  You should be.  Presidents and presidential candidates have long taken confused and confusing positions on health policy with dire consequences for the public’s health.

Need some evidence?  Connecticut had over 250,000 uninsured people when I wrote my letter back in 1988.  Today, it is one of the states with the lowest percentage of uninsured people.  It has 384,000 uninsured.  Mental illness prevalence is up, autism is epidemic, obesity and its related effects have skyrocketed, and HIV still infects over a million Americans.

And our children, we all know by now, could be the first generation to live shorter lives than their parents.

An additional note on three sources:  I took the Reagan speech anecdote from the book And the Band Played On by Randy Shilts (1988 Penguin edition). My constituent letter was published in the Middletown (CT) Press on October 7, 2008. Kaiser Health News provided the Obama quotation on May 7, 2012.  

Uninsured Numbers a Compelling Case Against States' Rights

“States’ rights” is as popular a rallying cry as ever as we enter the early stages of the 2012 election campaign. 

To advocates of states’ rights, they are code words for state innovation and initiative, unhampered by the demands of a federal government.   In their minds, we are a United States of America. 

To skeptics, we are a United States of America, and states’ rights are the code words of political leaders who want to run their states as fiefdoms and answer to no higher authority. 

The new 2010 uninsured numbers released by the U.S. Census Bureau last week make a compelling case against the states’ rights position.

In the South, where the drum roll for states’ rights beats most loudly, 19% of all people were uninsured 2010 for the entire year.  This was more than in the West, where 18% were uninsured, the Midwest, where 13% were uninsured, and the Northeast, where only 12% were uninsured.

Place clearly matters where health insurance is concerned, and innovation and initiative in providing coverage for health care take a back seat in the Mecca of states’ rights.

Geography is an important factor in determining insurance status, but it isn’t the only one.  Others include:

·         Race and ethnicity – 31% of Hispanics were uninsured for the entire year, as were 21% of blacks;

·         Immigrant status – 34% of all foreign-born U.S. residents were uninsured, including 45% of those who are not citizens and 20% of those who are;

·         Income – 27% of people in households with less than $25,000 per year were uninsured.

But as bad as these numbers look, what’s behind them in the more detailed tables that accompanied the Census Bureau release is worth examining. 

It isn’t race, immigrant status, or income driving the health insurance numbers.  It’s geography.

Consider this fact.  The news headlines reported that 16.3% of the population of the United States as a whole was uninsured.  But when you remove people over the age of 65 – who are almost universally insured through the federal Medicare program – the percentage rises to 18.4%.

But in the two biggest southern states of Florida and Texas – where the new leaders of the states’ rights movement sit in Governor’s chairs – the numbers are far worse. 

In Florida, 24.6% of all people under the age of 65 were uninsured in 2010 for the entire year.

In Texas, 26.9% of all people under the age of 65 were uninsured in 2010 for the entire year.

Florida has earned its states’ rights badge through Governor Rick Scott’s attack on the Affordable Care Act.  His administration has refused to implement its consumer protections.  He has famously refused to accept public funding for many needed services because the funds were associated with the Act.  And he has turned down dollars to set up a health insurance exchange that would make more privately-funded insurance available in the state, too. 

Texas has earned its badge through Governor Rick Perry’s attack on Medicaid.  He has advocated repealing the Medicaid program in its entirety, making Medicaid a block grant so that Texas can do whatever it wants with it.  He once suggested seceding from the union if he didn’t get his way.

The one thing that neither Rick Perry nor Rick Scott can do is blame the federal government for the failures of their states to insure their populations properly.  Nor can they blame racial, ethnic, immigration, and income factors.

Mississippi, South Carolina, Maryland, and Georgia all have higher percentages of African Americans than Texas and Florida, but lower percentages of uninsured people.  New Mexico has a higher percentage of Hispanics than Texas, but a lower uninsured percentage.  And California has more undocumented immigrants than Texas and Florida combined, but a lower uninsured percentage, too.

Florida and Texas are also by no means the poorest states in the union. 

Florida and Texas have reached the bottom of the uninsured barrel through their own policy actions and despite their considerable assets.

When their governors talk about states’ rights in the area of healthcare, they seem to be arguing that every state should aspire to their level of failure.

Meanwhile, the one thing everyone seems to agree on is that more people in Texas and Florida will become insured when the Affordable Care Act is implemented by the federal government in a little over two years.

This has been characterized in recent Presidential debates as a federal takeover of health insurance.  But does anyone seriously believe that we would ever have needed an Affordable Care Act – or that it would have passed – if every state, including Texas and Florida, had taken care of its own problem like Massachusetts did?  

In Massachusetts, only 6% of the population was uninsured in 2010.

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