What If We End Up with a Health Care System Like the...

What If We End Up with a Health Care System Like the One they Have In New Jersey?

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What would individual health insurance cost if the court strikes the mandate down and still requires insurers to cover everyone?

With the Supreme Court justices sounding like they might strike the mandate down, this is a question I’ve been getting a lot lately.

I have pointed to New Jersey as a real life example of what can happen when insurance reforms take place but there is no incentive for consumers to buy it until the day they need it.

In 1992, New Jersey passed health insurance reform that required insurance carriers to either offer individual health insurance on a guaranteed issue basis or pay an assessment to carriers that did. Other elements of the legislation were:

  • Guaranteed coverage and renewability for all eligible people regardless of their health status. A pre-existing condition exclusion does allow insurers to limit coverage during the first 12 months (a limitation which is not contained in the Affordable Care Act).
  • Guaranteed renewal of policies, provided (1) the insured does not become eligible for coverage under a group plan; (2) premiums are paid in a timely fashion; and (3) no fraud is committed by the insured.
  • Community rating of the premiums, with variation allowed only for family status (single, adult plus child, husband and wife, and family). (The Affordable Care Act allows rate variations of up to three times from young to old.)
  • Standardized insurance plans, referred to as Plans A, B, C, and D (indemnity options) and a single HMO plan.

New Jersey does not have a individual mandate or any other means to encourage participation in the health insurance pool.

What does the health insurance market look like today in New Jersey?

First, there are relatively few insurance plans participating in the New Jersey insurance market. According to the New Jersey Department of Banking and Insurance, if you want to buy a two adult plan with a $2,500 deductible and 80% coinsurance for example, there are only three carriers offering it. Aetna at $4,913 per month, Celtic at $12,322 a month, and Horizon a $6,127.78 per month. These rates do not vary by age.

You can buy a $2,500 deductible, 80-20 coinsurance plan for a family. Only one health plan, Oxford, offers it and it is age rated. If you are age 25, it will cost $2,498.20 a month, at age 40 it will cost $2,978.75 per month, and at age 60 $4,054.97 per month.

The cheapest family plan I found on the state site is a Horizon plan with a $10,000 deductible that costs $1,434.72 a month–$17,217 a year. The cheapest HMO plan was a Horizon plan for $1,546.08 a month–$18,500 per year. Although, the state does also offer very limited and scheduled benefit plans that cost as little as about $600 per month.

You can see the complete chart of rates at the New Jersey state website by clicking on the icon: “See Monthly Rates for All Standard Plans.”

If anyone has Anthony Kennedy’s email address I’d appreciate your sending this over.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared.

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100 Comments on "What If We End Up with a Health Care System Like the One they Have In New Jersey?"


Guest
Mar 30, 2012

Gotta love the foreground placard.

“Goverment”

An obvious failure of the Goverment Edukashun System.

That said, we’ll let Nate take over from here to explain NJ’s great affordable plans.

Guest
Mar 30, 2012

After thinking more about the matter, I am coming to the conclusion that mandates, both federal and state, are nothing more than red meat for the insurance business. The law was carefully crafted to allow states to retain a significant measure of control by establishing exchanges, but even then there is no mechanism aimed at capping health care inflation.

The adverse selection argument is easy to grasp. Unless everyone is in the risk pool some will always game the system. If getting insurance is optional but sold with guaranteed acceptance, what’s to stop anyone from picking up a policy after they get sick or on the way to the emergency room?

A smoke and mirrors game is going on to distract both consumers and taxpayers that the real driver of medical costs is not how best to cover the uninsured but at what point to either stop or limit treatments and/or make providers quit putting such outrageous numbers on their bills.

I can hear the screaming already about tort reform and defensive medicine, but sooner or later the only way that real costs will get controlled is that an actual safety net, clearly defined AND LIMITED is going to have to come into existence in the US, same as in most of the rest of the world.

Some countries have a pitiful safety net because they are too poor to provide anything better. Others, like Canada, have a Medicare-like plan for all that only costs about eleven percent of GDP, is tax-supported and the object of well-known spitballs from US talk show hosts and Conservative pundits, and the UK and Germany have a hybrid of both. Private insurance is not allowed in Canada, but private alternatives in the UK flourish.

In all cases those at the bottom of the economic ladder are more or less cared for some kind of way, poor though it be. The best we have come up with in the US is Medicaid, and although states may negotiate rates with providers the national picture is a Duke’s mixture of plans ranging from excellent to embarrassingly poor, all of which are supported more with federal funds than from the respective states.

Even under this plan, states want to have the money with no strings attached. I can’t speak for others, but I have no confidence that in my state that money will be appropriated any better than the local option sales tax or highway tax money… all of which is tossed into the general fund (following the federal example of how our Social Security taxes have been “borrowed” for other purposes, replaced by that so-called “trust fund” that GW Bush called worthless IOUs in a file cabinet in West Virginia).

As the years pass I’m getting closer to the time in view of human mortality, when medical care will be a total waste. When I think about my children and grandchildren my only hope is that they will be blessed with good health and no serious accidents. because absent some serious changes which I have yet to see coming, they won’t be able to afford insurance anyway other than a very high deductible policy.

Why? Because I sure don’t see any evidence that providers are competing to treat sick or injured patients at lower prices. I hear the advertisements (some even disguised as PSAs) trolling for new customers, inviting the public to get screened for all kinds of medical problems of which they may not be aware. Paranoia is being marketed wholesale when demonstrable problems like substance abuse and all those “non-emergency” cases clogging the ED are multiplying in their face. TV ads invite Medicare beneficiaries to call for a “free” motorized chair or scooter, even to get a free something or other for taking that initiative.

I see the private sector flush with success as literally millions of Americans are going without basic care. The system we have now is an economic and social train wreck and the arguments I’m hearing have more to do with how to limit care rather than figure out ways to make it more accessible to those who need it most, most of whom are the working poor and their children.

And all the while the insurance industry smiles in the corner like a cat watching a mouse, knowing that no matter which way the cookie crumbles they will still have a profitable piece of the action.

Guest
BobbyG
Mar 30, 2012

Excellent.

Guest
MD as HELL
Mar 31, 2012

i agree.

Guest
Nate Ogden
Mar 30, 2012

“Private insurance is not allowed in Canada”

Your 5 years behind or more.

“Approximately 70% of Canadian health expenditures come from public sources, with the rest paid privately (both through private insurance, and through out-of-pocket payments). ”

There has been private insurance in Canada for years, there is also a group health market. Private insurance came into existance because of failures in the single payor model. Court ruled people had the right to private insurance.

Do you wonder if you had the facts correct if your opinions might change?

Guest
Nate Ogden
Mar 30, 2012

Actually your 7 years behind

In Quebec, a recent legal change has allowed this reform to occur. In June 2005, the Supreme Court of Canada overturned a Quebec law preventing people from buying private health insurance to pay for medical services available through the publicly funded system and this ruling does not apply outside the province. See: Chaoulli v. Quebec (Attorney General).[47]

Guest
Peter1
Mar 31, 2012

How far behind are you Nate?

“More than two years after Quebec legalized private medical coverage for select surgeries, the insurance industry says it has not sold a single policy.”

http://www.cbc.ca/news/canada/montreal/story/2009/03/30/mtl-health-insurance-interest-0330.html

Guest
Peter1
Mar 31, 2012

Another view Nate:
http://www.cbc.ca/news/background/healthcare/public_vs_private.html

“By accessible, the CHA means “insured persons in a province or territory have reasonable access to insured hospital, medical and surgical-dental services on uniform terms and conditions, unprecluded or unimpeded, either directly or indirectly, by charges [user charges or extra-billing] or other means [e.g., discrimination on the basis of age, health status or financial circumstances].”
What is private health care?

Anything beyond what the public system will pay for. For instance, should you have to spend some time in the hospital, the public system will cover the cost of your bed in a ward, which usually has three other patients. If you want a private room, the extra charge will come out of your pocket, unless you have extended health coverage either through your employer or through a policy you have bought yourself.

Need an ambulance ride? Expect to receive a bill. If you have extended health care coverage, your insurance company will likely pick up the tab.

Dr. Albert Schumacher, former president of the Canadian Medical Association estimates that 75 per cent of health-care services are delivered privately, but funded publicly.”

Maybe you can give us an example (and specifics) of a “group” health insurance plan in Canada?

Guest
Nate Ogden
Mar 31, 2012

http://www.standardlife.ca/en/group/insurance/products/health_dental.html

you can do a yahoo search and see pages of results.

From other sites

The second largest cost as a percentage of all Group Health Insurance claims is paramedical practitioners usually accounting from 15% to 25% of claims within a Group Health Insurance plan.

Great West’s byline

Healthcare and dentalcare benefits are important features of any group benefits plan. These benefits help your plan members bridge the widening gap between provincial health insurance plans and the coverage your members and their families need.

Guest
lhf
Mar 31, 2012

Absolutely. This is the fraud behind the ACA – it was managed by Max Baucus, owned and operated by the insurance industry, and insurance stocks went UP when it passed.

I don’t know if a single payer is the answer or if we should return to the days when we paid out of pocket for our routine care, and carried catastrophic insurance. I don’t know that anyone has really looked at the latter option.

I do know that as a Medicare participant now it is difficult to find a GP who will take a new Medicare patient. We finally started going to one of those urgent care operations – not bad, but not optimal either. It’s hard to know if you can “develop a relationship” with a doctor in that setting, as all of the advice given old people states. If your doctor doesn’t know you you are not likely to receive the end of life care you want.

Some say that’s why we have pistols.

Guest
Mar 30, 2012

Thanks.

Barring unforeseen circumstances I see health care in the US becoming something like dental care, with those who can afford to pay getting the best of care, including cosmetic dentistry that can cost more than transportation. In the main, however, crooked teeth and dentures are still fairly common and even now I see some with rotten teeth or no teeth at all.

Unfortunately the results of little to no medical care is far more serious. I hate to think about that that means.

Guest
Mar 30, 2012

Bob L.–

You’re entirely right– and NJ is not the only state that has seen insurers leave
(and premiums climb) when they attempt to have community rating without
an individual mandate.

Moreover, the NJ rule that lets “insurers o limit coverage” of a preexisting condition ” during the first 12 months” is very important. If a patient is diangosed with cancer, he doesn’t want “limited coverage” during hte first 12 months, and most people couldn’t afford to pay for ful, comprehensivel treatment out of savings.

I would guess that most citizens of NJ are not willing to take the gamble, and so buy insurance of they possibly can.

As you point out, under the Affordable Care Act, insurers would have to
offer full coverage from the moment a sick person bought insurance.
I would think that many companies would just close up shop and get out of hte business, leaving patients with fewer choices and much high premiums.

A disaster.

John-

The Affordable Care Act really does put downward pressure on prices. First, the Secretary of Health & Human Services can reduce Medicare payments for ‘Overvalued services” at any time–just as she can lift payments for “undervalued services.” They have already lowered payments for many
diagnonstic imaging services and we know that there are more cuts to come.

Private insiurers have said they will follow Medicare’s lead.

Meanwhile, the Medicaure’s annual inflation adjustment in payments to hospitals and nursing homes is going to be automatically reduced by 1%
a year. Over time, that adds up. The goal is to put pressure on hospitals to become more efficient– to reduce preventable errors, etc. We know that when under financial pressure, hospitals Can in fact become more efficient and even turn a profit on Medicare payments. This will give them an incentive to do that.

Hospitals will suffer financial penalities if there are too many preventable readmissions. Peter Orszag, who is on the board of Mt. Sinai in Manhattan, has told me that they are working hard to do a better job of discharing patients and following up with them after they go home to make sure they understnad their meds, have follow up appt. with doctors, etc. And they’ve succeeded.

MOre and more providers are foroming “Accoutnable Care Organizations” that will be paid for quality of care, not volume. No more fee-for-service. No financial incentive to “do more”

It will take time for all of these finanical carrots and sticks to kick i n, but they will.

Hospitals know this– and are preparing by trying to figure out how to be more efficient, knowing that they will be receiving lower payments. Doctors also realize that fee-for-service payments will be lower, and a great many (particuarly younger doctors) are happy to go on salary–like docs at Mayo, Kaiser etc, who all report greater job satisfaction than the majority of docs in private practice who are paid piece-work.

Guest
Mar 30, 2012

Thanks, Maggie, and I know you’re right. I was just venting a bit trying to remain cool.

As you say, the new law applies downward pressure on prices. But think how that approach stands in sharp relief to the “competition results in better services at lower prices” arguments of those who worship at the altar of market economics, complaining to Heaven if they smell even a hint of “downward pressure” from government or other source.

I am so ready for someone prominent enough to be heard respond to those complaining about government telling us what we can or cannot have — by saying plainly, “You can have anything you want and can afford. Those in charge of spending your tax money are simply practicing good stewardship.”

Those TV ads for free motorized chairs drive me up the wall.

Guest
Paolo
Mar 30, 2012

“You can buy a $2,500 deductible, 80-20 coinsurance plan for a family. Only one health plan, Oxford, offers it and it is age rated. If you are age 25, it will cost $2,498.20 a month”

On the MA health connector, a similar plan ($2k deduct., 80/20 coins.) for the same age group is offered by 5 different companies starting at $721/mo. Definitely not cheap, but it’s less than 1/4 of the NJ price.

Guest
Mar 30, 2012

So, “starting at $721 / mo,” x 12 = $8,652 / yr, plus, you’re additionally on the hook for the first $2k (and your meds co-pays don’t count in that tally). Hmmm…

So, even if you’re a 99214 Chronic and you go to the doc 4x / yr, you’re effectively paying ~ $2,750 per visit (excluding labs etc).

And, the insuror is paying $ _________ per visit? what’s a 99214 in MA?

“Starting at”…

Guest
Paolo
Mar 30, 2012

In MA, all the insurers are not-for-profit and have pretty thin margins. The cost of insurance is pretty much the cost of health care, which is pretty high because some providers have strong market power and charge a lot. But that’s another story.

My point is that two states with very similar demographics and cost of health care end up with very different guaranteed-issue insurance premiums (4:1 ratio) because one of them didn’t know how or didn’t want to spread health care costs across both the healthy and the sick.

Guest
Peter
Mar 30, 2012

John,

Dental care is rather cheap. Every 6 months a cleaning costs 125.00. So all one has to do is save a bit of money every month and at the end of 6 months you will easily have 125.00 unless you can’t prioritize well.
People act is if dental exams are outrageously expensive when i think 125.00 out of pocket is cheap. Of course, every few years i have to have x-rays which is a bit more, but not bad.

Guest
Mar 30, 2012

Those of us reared with the right sense of responsibility are not the ones with problems. My comparison of dental care with medical care is meant to underscore the challenge of education, social values and the advancement of good habits. Periodic dental checkups and maintenance are, as you point out, both easy and comparatively cheap. But good habits, like good hygiene, has to be a part of one’s social fabric. Your phrase “unless you can’t prioritize well” is not to be overlooked.

I use the dental example not to argue for universal dental care, but to underscore the social consequences of not having a baseline of universal medical care. I’m willing to allow those who neglect their teeth be ugly or get by with cheap dentures from a low-end lab. But I’m less willing to feel okay with loads of expenses going for overpriced or unnecessary medical care, especially that which might be less with better preventive attention, the kind that people at the low end of the economy don’t receive, not because they don’t want it but because it is totally out of their imagination.

Uninsured people simply don’t seek medical attention until they are sick or injured. Period. If there is any advantage to having everyone insured it is nothing more than allowing them to actually darken the door of a clinic or doctors office for well visits. I’m not an expert, but from what I’ve read if just a portion of diabetics or those with hypertension could be put on a maintenance regimen sooner the overall savings would be tremendous.

Years ago one of my employees was complaining about how much it was going to cost him to have a tooth filled. I asked him how much it would cost to replace a tire on his car, compared with the cost of a filling. When he said it was about the same, I said to him, “Okay, ten or fifteen years from now, where is the tire? And where is the tooth?”

He looked surprised, then realized that the cost of the filling was not all that high when you think about it. The problem was not the cost of the filling, but the fact that he had never even thought about it.

A change of thinking is going to have to happen if medical costs are to be brought down. With complaints increasing about too many non-emergency problems coming to the ER, something constructive needs to happen to get those cases cared for elsewhere, preferably before they get to that point. That trend is symptomatic of a much bigger problem.

Guest
Peter1
Mar 31, 2012

“Dental care is rather cheap.”
“People act is if dental exams are outrageously expensive”

Might want to look at the condition of people’s teeth who know, not think, that dental care is not so cheap. You might want to say because the “exams” are cheap the rest is too, but give us some costs of the actual work.

My own dentist can tell you of what people do when they can’t afford to get their teeth fixed – they just pull them. Do you consider that care?

Car repair shops also offer “cheap” exams, maybe even free as loss leaders, but if you need some work you find out how cheap.

Guest
DeterminedMD
Mar 30, 2012

Maybe not the best place to give example of what mandates do, but here it is why I know that mandating people buy insurance is a bad idea before, during, and hopefully after this legislation is buried as currently written:

I worked part time for a hospital who was part of a big corporation system that included other hospitals, and then one day a few years ago, before this bs mandate crap of PPACA became apparent, the idiots of administration decided unilaterally to ‘mandate’ that ALL employees of their system HAVE to be inoculated for flu prevention. OK, well fine for those who work in the hospitals, but why enforce employees who do not work in the hospital, not even on the grounds mind you, have to get these shots? And what if someone signs a legitimate waiver that puts the employee at risk to not be offered reimburseable sick time if ill with flu? Or what if you had a reaction in the past and are legitimately exempt from another shot? Hell, what if you were a conscientious objector?

Yeah, no lie, the administration through their HR said no to these options. I was actually threatened to be fired if I did not get a flu shot. And, I did not work over 95% of my time in the hospital itself. Having worked for the system over 5 years with no negative issues to my employment had no bearing on my position I was not going to risk my physical, mental, or spiritual well being to get a shot. So, I quit. And didn’t look back.

When you let politicians or people who do not directly provide the health care options or interventions set policy without any regard to exceptions, you are approving tyranny and legitimizing harming people, and if per laws, allowing such disruptions and harm to be excusable.

The Democrats f—-d up in creating legislation that was not well thought out nor respecting honest and fair input from those working in the system that the legislation was going to control. Remember this opinion if it resonates at all in readers, because who in their right mind would blindly and passionately continue to demand this legislation continue as is without seeing the facts and problems resulting now that Pelosi et al either did not or would not want the public to know.

Some of these posters are frauds. Are the authors of this site aware of this, or just creating outrage for hits to validate their site be read?

Guest
Mar 30, 2012

“When you let politicians or people who do not directly provide the health care options or interventions set policy without any regard to exceptions, you are approving tyranny and legitimizing harming people”
__

Straw Man. You use your one anecdotal (non-govt, btw) episode to infer that ALL government health policy is set by [1] non-clinicians, and [2] set forth “without exception.”

Neither is true.

Guest
DeterminedMD
Mar 30, 2012

Yeah, from your point of view.

And quote us all the physician input into PPACA that the majority of practicing physicians are supportive of implementing.

I won’t be holding my breath waiting.

Guest
Mar 30, 2012

No, objectively.

Guest
Mar 30, 2012

@DeterminedMD
Help me understand how hospital HR policies is connected with insurance.

As I understand it, the proposed law doesn’t require that employers actually insure all their employees, only that they offer it under certain circumstances (companies with 50 or fewer employees being exempt). I may be wrong, but I think employees have the option of buying their insurance elsewhere if they choose.

In the case of mandatory fly shots, what that being required by an insurance TPA or the hospital?

Guest
DeterminedMD
Mar 30, 2012

Mandated policies are about intruding into everyone’s life, claiming everyone has the same endpoint. Do you really appreciate that kind of mentality?

Guest
Peter
Mar 30, 2012

John,

I don’t know what we can do to help people that aren’t reared to take care of themselves. That may be a lost cause. I guess i just don’t understand not thinking about or imaging taking care of oneself money or not.

Guest
Mar 30, 2012

First of all, nobody would be able to buy insurance in an ambulance or at the ER front desk. Here is the actual legislation text (it helps to actually read it even though it may be an infringement of the 8th amendment):

“‘‘SEC. 2702. GUARANTEED AVAILABILITY OF COVERAGE.
‘‘(a) GUARANTEED ISSUANCE OF COVERAGE IN THE INDIVIDUAL
AND GROUP MARKET.—Subject to subsections (b) through (e), each
health insurance issuer that offers health insurance coverage in
the individual or group market in a State must accept every
employer and individual in the State that applies for such coverage.
‘‘(b) ENROLLMENT.—
‘‘(1) RESTRICTION.—A health insurance issuer described in
subsection (a) may restrict enrollment in coverage described
in such subsection to open or special enrollment periods.
‘‘(2) ESTABLISHMENT.—A health insurance issuer described
in subsection (a) shall, in accordance with the regulations
promulgated under paragraph (3), establish special enrollment
periods for qualifying events (under section 603 of the Employee
Retirement Income Security Act of 1974).
‘‘(3) REGULATIONS.—The Secretary shall promulgate regulations
with respect to enrollment periods under paragraphs (1)
and (2).”

Second, I would suggest that everybody fretting over “death spirals” read and listen to Mr. Farr’s arguments at the Supreme Court on Wednesday, including the references.

Third, I find it bitterly ironic that AHIP and those it finances, are overly concerned with those not “reared with the right sense of responsibility” gaming the system, seeing how AHIP & Co. are currently gaming all of us out of billions of dollars that were supposed to pay for actual care.

Guest
Mar 30, 2012

John– thanks re: the ACA putting downward presure on prices.
.
Also, in defense of those with bad teeth. This is not always due to neglect.
My daughter religiously brushed her teeth from the time she was very young,. She was always pretty obseessive about personal hygeine.

Her brother always resisted brushing.: “I’ll do it later.”
I sent them for annual check-ups and professional cleaning from the time they were 5 or 6. (I always had bad teeth.)

Emily always had cavities. (She inherited my teeth.) Michael never did. (He inherited his Dad’s teeth. When my ex-husband was 45 or 50 he still had never had a cavity.)

By the time she was in high shcool, she was having root canals. VERY EXPENSIVE. Michael has never had a root canal, or a serious cavity.

But I agree that since few people die from tooth decay, when it comes to universal coverage, it’s a second priority .

Guest
DeterminedMD
Mar 30, 2012

My god, reading some of the comments by the usual suspects who just champion this legislation solely because Democrats forwarded it, is there any fault in this legislation you would honestly and candidly comment on to let us know you are invested in the public and not your party!?

Guest
Mar 30, 2012

…honestly and candidly comment on to let us know you are invested in the public and not your party,

Perhaps you missed what I said above…
http://thehealthcareblog.com/blog/2012/03/30/the-what-ifs/comment-page-1/#comment-196136

Uninsured people simply don’t seek medical attention until they are sick or injured. Period. If there is any advantage to having everyone insured it is nothing more than allowing them to actually darken the door of a clinic or doctors office for well visits. I’m not an expert, but from what I’ve read if just a portion of diabetics or those with hypertension could be put on a maintenance regimen sooner the overall savings would be tremendous.

That is not a partisan argument or statement. As an opinion with which you may disagree, but it is my opinion based not on any party identity but from personal experience in my life and those of others. I’m sure as a doctor you experience is far greater than mine and if you have found that uninsured people do, in fact, seek preventive care in significant numbers I will happily stand corrected. Until then, as much as I don’t like paying for insurance (which would be far more economical if we had a public option), that remains my opinion.

(Speaking of which, the opposite of “mandate” is “option.” And it was mainly the opposition of the insurance lobbies manifest in BOTH parties that killed the notion of a public option.)

Guest
DeterminedMD
Mar 30, 2012

I really wasn’t thinking of you JB, in the comment, but appreciate the reply.

The health care system needs fixed, no g-d doubt about that, but, this legislation needs to die for the phoenix to be resurrected. And this Democrap machine to just keep flagellating that it must stay as is, frankly, is not just disturbing, but disruptive and counterproductive to the process that is our Constitution.

Politics of convenience, just like faith of convenience, is shallow and non productive to the society it allegedly serves. We are reading first hand what the defenders and apologists want to scream down are lies and half truths at best.

Again, what is worse, an Iraq war, or health care law proposed by a minority of representation? Trick question, they both SUCK!!!

Guest
Mar 30, 2012

” the opposite of “mandate” is “option.” And it was mainly the opposition of the insurance lobbies manifest in BOTH parties that killed the notion of a public option.”
__

Spot on. I will be citing that.

Guest
Nate Ogden
Mar 30, 2012

15 million are eligibile for insurance now and don’t bother signing up. Millions more can get affordable insurance through work and wont take it. Just giving someone insurance doesn’t mean they will use it.

I also have big concerns about abuse of these plans, think of all the pill abusers who can now get free insurance to feed their pill habits. Rx is our biggest drug problem right now and free insurance is throwing gas on the fire.

Guest
Mar 31, 2012

Thanks, Nate for your input. And thanks even more for not phrasing it in condescending language. It makes me think these comments threads are not altogether a waste of time and energy.

Regarding Canadian private insurance, I’m now better informed thanks to your good research. But no, that is not persuasive for me that Canada’s single-payer system is a failed model, especially if it really delivers 70% of care.If anything, it illustrates either the expense and scarcity of private alternatives. It’s a glass half-full or empty analogy. One might argue that the scarcity of private insurance is due to either costs or restrictions.

But the larger discussion lately here at The HEALTH CARE Blog is about medical care, not insurance. And although insurance plans are a vital part of that subject, the real purpose of all plans (hopefully), both private and public, is the affordable delivery of good health care regardless of how it is funded.

Commenter Paolo (above) said something yesterday of which I was unaware, that health insurance plans in Massachusetts are all non-profit, which by a strict accounting definition in that state may actually mean non-profit (as opposed to the GAAP definitions which seem blind to the contradiction of “not-for-profit” and obscenely outsized compensation packages for high-performing sales people and executive types).

If his information is even close to being true regarding the four-fold difference in the cost to consumers in NJ vs MA that is a very important piece of data. His admission that Massachusetts costs are also high reflecting the high prices charged by some of the most expensive systems in the world (or as he says, they have “strong market power,” an understatement for certain) sounds right to me (Beth Israel Deaconess and Brigham & Women’s come to mind immediately) but even so, the arithmetic is breathtaking. I even told my wife last night that I learned something about Massachusetts that makes me feel better about Mitt Romney.

I share your concerns about substance abuse and the widespread availability of prescription drugs. I also share your fears about widening the insurance net for that reason alone, but an important component of ACA (underway even as we speak, btw) is the tedious and expensive advancement of better HIT programs and the creation of a portable, nationally accessible data base that can, among other things, coordinate care across specialty and state lines.

I have watched substance abuse up close and personal, both at work and in the family, and it is not a pretty picture. I doubt any family in the country is free of that problem. But that is not a compelling reason to restrict the delivery of good health care, whether it be via insurance or some public means. It does, however, underscore the importance of good coordination of care, close monitoring of drugs and the early identification and treatment of individuals with substance abuse problems.

(Related to this challenge is the swollen prison-industrial complex, but that is related more to yet another profit-driven species of corporate animals sucking up tax dollars and subsidies. I saw a statistic yesterday that California is spending more on prisons than education!)

Thanks again for your input. I enjoy a civil discussions far more than slinging insults and put-downs. (But I have to admit, I enjoy a good bon mot as much as anyone and sometimes I can’t pass up the chance to hurl one.)

Guest
Peter1
Mar 31, 2012

“Regarding Canadian private insurance, I’m now better informed thanks to your good research.”

John, you may want to dig deeper on that “research”. How much of “private” care is actually paid for by government. As well you might also want to know exactly what type of care Canadians are actually paying for privately. I do know that budgets in Canada are as tight as here and there has been a push for more private involvement in health care, but overall it’s still a very public system. Wait times are being addressed with more dollars being spent to reduce them for certain inflictions – usually for the increases in old age problems such as cataracts, hips, knees. Drugs can be expensive (private insurance available), but prices are regulated and dental is still not covered by Canadian Medicare unless required to be done in a hospital.

To think that Canadians have found the errors in their ways and see the light for a U.S. private system is just bunk.

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Paolo
Mar 31, 2012

“If his information is even close to being true regarding the four-fold difference in the cost to consumers in NJ vs MA that is a very important piece of data. ”

John, there is no need to take my word for it. All this information has been public for the last 6 years on the MA exchange: mahealthconnector.org . It’s quite easy to punch in the right numbers (just zip code, age, family type) and get the current rates.

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Nate Ogden
Mar 31, 2012

Paolo wouldn’t we need to compare the small group market as well to be accurate? MA keeps their individual market affordable by integrating it with the small group market, this is great for individual but had an affect on the small group market.

Great study on what could have been and what became and the ramificationas

http://www.heritage.org/research/reports/2010/09/massachusetts-health-care-reform-has-left-small-business-behind-a-warning-to-the-states

The strain on small businesses has been docu­mented in recent published accounts of small firms beginning to drop coverage.[3] While Common­wealth Care,[4] the state’s subsidized program, has seen annual premium rate hikes of around 5 per­cent, rates for small businesses have increased 15 percent per year over the past five years, according to a survey commissioned by the Retailers Associa­tion of Massachusetts.[5] State-collected data from 2007 and 2008 also show a small decrease in pre­mium contributions by small employers as costs continued to rise. [6] This trend could help to explain declining employee participation in employer-offered insurance at small companies.[7]

If you fix the individual market and cover 1 million more people but that fix strains the small group market and 4 years later 1.5 million lose coverage you haven’t fixed the problem just moved it.

Historically that has been the problem with our reforms, they don’t solve problems they just move them

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Nate Ogden
Mar 31, 2012

http://www.statehealthfacts.org/comparetable.jsp?typ=4&ind=270&cat=5&sub=67

Group
NJ Single $5,153
MA Single $5,413

Some others even higher.

Individual
NJ $364
MA $437

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Paolo
Mar 31, 2012

“Paolo wouldn’t we need to compare the small group market as well to be accurate?”

Well, the average insurance premium for MA and NJ across all insurance types is probably very similar since their demographics and costs of health care are pretty similar as well. Most people in both states have some form of insurance so average insurance premium reflects average health care costs.

However, the topic that is being discussed in this thread (started by Bob) is how the lack of an individual mandate or incentive to buy insurance affects the rates in the INDIVIDUAL market. That is the market that people are concerned about when talking about the individual mandate. It is also the only market available to anyone whether or not they have employer-based health-care. I don’t think anybody is arguing that the lack of an individual mandate will have much of an effect on the group market.

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Paolo
Mar 31, 2012

“If you fix the individual market and cover 1 million more people but that fix strains the small group market and 4 years later 1.5 million lose coverage you haven’t fixed the problem just moved it.”

Interesting hypothesis, but completely devoid of empirical evidence. In the real world, after 6 years (from 2005 to 2011) the percentage of employers offering health care in MA has actually grown from 70% to 77%.

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Nate Ogden
Mar 31, 2012

“However, the topic that is being discussed in this thread (started by Bob) is how the lack of an individual mandate or incentive to buy insurance affects the rates in the INDIVIDUAL market.”

That sort of sums up my point, there is no such thing as an individual market in MA. There is a combined Individual/Small Group market but no individual market.

http://www.mass.gov/eohhs/docs/dhcfp/cost-trend-docs/cost-trends-docs-2011/premium-report-executive-summary.pdf

Since the passage of the Commonwealth’s landmark health reform legislation in 2006, the Massachusetts health insurance market has undergone several key regulatory changes.
In addition to the expansion of subsidized coverage, the establishment of an individual mandate, and the creation of incentives for employers to offer coverage, the law also
combined the individual and small group markets into a single “merged market” to provide greater premium affordability, stability, and product offerings to individuals. The merged market allows individuals to purchase the same range of products available to small groups. Premium rates are based on the projected claims experience of the entire merged market, which consists of more small group members than individual purchasers.

There literally is no individual market in MA.

If we ignore this fact then we could really solve the problem by allowing individuals to buy into any large group plan at that groups rates. Short term it would work wonders for the individual market but would quickly destroy the large group market.

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Peter1
Mar 31, 2012

Yea, I think New Jersey is a good example of how private insurance can “innovate” an affordable solution.

Guest
Mar 31, 2012

Now Peter1, quit picking on Nate.
He and I are having a civil discussion this morning. In my experience that has never happened before.

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Peter1
Mar 31, 2012

John, it’s refreshing when Nate can engage in non-insult peppered comments, but that doesn’t mean that to keep his inner rage caged we need to not argue his points.

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Mar 31, 2012

To think that Canadians have found the errors in their ways and see the light for a U.S. private system is just bunk.

Yes, Peter1, I know, I know…I have done my own homework and also know a few Canadians.
I’m trying hard to be civil with Nate. Help me out here…

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Nate Ogden
Mar 31, 2012

Do they see the US system as a solution, probably not, do they know, by a vast majority, that their present system is unsustainable and will be changing, yes.

SASKATOON — The incoming president of the Canadian Medical Association says this country’s health-care system is sick and doctors need to develop a plan to cure it.

“We all agree that the system is imploding, we all agree that things are more precarious than perhaps Canadians realize,” Doing said in an interview with The Canadian Press…

His thoughts on the issue are already clear. Ouellet has been saying since his return that “a health-care revolution has passed us by,” that it’s possible to make wait lists disappear while maintaining universal coverage and “that competition should be welcomed, not feared.”

In other words, Ouellet believes there could be a role for private health-care delivery within the public system.

He has also said the Canadian system could be restructured to focus on patients if hospitals and other health-care institutions received funding based on the patients they treat, instead of an annual, lump-sum budget. This “activity-based funding” would be an incentive to provide more efficient care, he has said…

Doesn’t that sort of sound like they are saying they need to look at something more like FFS then global budgeting?

Guest
Mar 31, 2012

…the Canadian system could be restructured to focus on patients if hospitals and other health-care institutions received funding based on the patients they treat, instead of an annual, lump-sum budget.

Sounds more like capitation than FFS.
That’s the dynamic driving ACO models, a rather bureaucratic effort at replicating the economics of Mayo and others who get better outcomes at lower per patient rates.

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Peter1
Mar 31, 2012

Nate, doctors (for the most) have never been in favor of government control of health care, and as here have always fought that same fight in Canada. “doctors need to develop a plan to cure it.”, which is the same plan here, gut it and reap the financial rewards.

Rather than saying “the system is imploding”, from a doctors view, they should ask Canadians how much they want to pay to “save” it. The word “imploding” has been picked up by all the Fox News-a-likes and implies impending doom is just around the corner.

Canada isn’t going to economic ruin.
http://thenewamerican.com/economy/commentary-mainmenu-43/8801-canadas-remarkable-economic-recovery

Even though “The New American” touts government inaction as the solution, Canada was already heavily involved in government support systems, including health care.

Health care in Canada is changing, but so is every other system.

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Nate Ogden
Mar 31, 2012

“Canada isn’t going to economic ruin.”

Because they have strong conservative leaders fixing things.

Sorry you walked into that one.

They did just increase their retirement age.

They exploit their natural resources

They are enacting immigration reform

If we were governed by their conservatives we would be in much better shape as well

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steve
Apr 1, 2012

A canadian conservative is an American radical liberal. Besides, it was the liberal party that began the reforms to cut spending and taxes IIRC.

Steve

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Nate Ogden
Mar 31, 2012

NJ sitution was created by politicians, how can that be blamed on private insurance?

NJ politicians mandated community rating and other provisions private insurance must operate in, and your say by operating in those laws private insurance is a failure?

Guest
Mar 31, 2012

I have nothing intelligent to say about “rating.” The fine points of insurance are out of my depth. Nevertheless I still have opinions.

All I know is that insurance is a second cousin to the lottery, a way of splitting risks. In the case of life insurance you bet you’re gonna die and the company is betting you ain’t.

Health insurance is a safety net against unaffordable high costs. Unlike auto insurance, health insurance doesn’t have to option to “total it out” and settle for some fixed amount…. that end-of life stuff is almost a blank check for the patient and his family (not to mention the doctor) (and let’s don’t forget the attorney).

When I hear the terms “community rating” or “group rates” my first reaction is they sound a lot like “states rights” or “private schools,” select populations that enjoy not having to share in the risks/ costs of the larger one in which they live and work.

There are plenty of respectable ways that those with assets are able to protect them against the needs of others without. Offshore accounts, tax exemptions and a litany of trusts come to mind.

But sooner or later everyone within the boundary of one’s social group will need to participate, like it or not, in the health care of its population. Many will argue for Darwinian alternatives but those arguments tend to melt in the face of personal tragedies.

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Nate Ogden
Mar 31, 2012

“Unlike auto insurance, health insurance doesn’t have to option to “total it out” and settle for some fixed amount”

In a way it sort of did until PPACA. Policies had lifetime max’s of 1 million or some amount. That was your total it out payment. This protected the plan from doctors and patients spending money just to spend money.

It’s important to note if you survived that episode later you could buy a new policy with a fresh limit. Just like a car, you total it out get a new car then get a new policy.

My of my biggest fears from PPACA is now that we made it mandatory to have unlimited spending providers will find a way to spend it. We just blew up one of the few remaining cost controls.

Which was even more interesting becaues we all seem to agree that at some point care needs to be rationed. Why did we just eliminate the ration?

Life has a set amount in wrongful death, travel, dieing in war. Why does it not have a set amount in healthcare? Your entitled to $2,000,000 in healthcare, sorry as a society that is all we can afford.

I don’t think anyone would argue its poissible for everyone to spend $5 million on healthcare so why not set the limit so we all know what it is

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Mar 31, 2012

“My of my biggest fears from PPACA is now that we made it mandatory to have unlimited spending ”

That is documentably false.

Guest
Mar 31, 2012

“My of my biggest fears from PPACA is now that we made it mandatory to have unlimited spending ”

That is documentably false. I guess, you, like Scalia, didn’t bother to read the “2,700 pages.” (there are only 906, btw)

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Nate Ogden
Mar 31, 2012

typical bobby, then why don’t you document it? Your not exactly a bastion of intelligent thought, why would anyone believe you saying its documentably false without any proof.

I know I have been required to remove annual and lifetime caps from our benefit plans. There is some guidance for gradual phasing out but in short order all of my plans will have no spending limit.

Document where I am wrong.

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Nate Ogden
Mar 31, 2012

http://www.whitehouse.gov/healthreform/healthcare-overview

“End to Limits on Care: In the past, some people with cancer or other chronic illnesses ran out of insurance coverage because their health care expenses reached a dollar limit imposed by their insurance company. Under the health care law, insurers can no longer impose lifetime dollar limits on essential health benefits and annual limits are being phased out by 2014. More than 105 million Americans no longer have lifetime limits thanks to the new law.”

You and Maggie Mahar must get your information from the same sources.

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Nate Ogden
Mar 31, 2012

“That is documentably false. I guess, you, like Scalia, didn’t bother to read the “2,700 pages.” (there are only 906, btw)”

In oral arguments in the Supreme Court on Wednesday, Justice Stephen Breyer “promised” he had not read the entirety of the 2,700-page health-care legislation the court was examining.

He also suggested it would be unreasonable for the lawyers arguing over the constitutionality of the law to expect the justices to “spend a year reading all this”

Why don’t you Maggie and the other uninformed liberal propaganda cabal ever mention Breyer? Or is it ok for a liberal justice to literally say he doesn’t want to read 2700 pages but a conservative justice can’t joke about the 8th amendment?

“Also on Wednesday, Justice Antonin Scalia jokingly invoked the Eighth Amendment—which prohibits cruel and unusual punishments—when discussing the “severability” issue with Deputy Solicitor General Ed Kneedler. Scalia’s remarks elicited laughter from the audience in the court chamber.”

I think its time for your to shut up and go away again.

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Peter1
Mar 31, 2012

Would have a government to buy mandate done something positive in that “market”?

Guest
Mar 31, 2012

The subsidies envisioned under the ACA were projected to cost at least $90 billion a year, and that is just in 2014. The subsidies were going to increase by some inflation factor, and will probably increase far more because of corporate dumping of employees. (Douglas Holtz-Eakins has some powerful writing on this.)

Just noodling with the numbers……………..

for less than half of $90 billion, you could have a very respectable network of public urgent care clinics, public dental clinics, and mental health clinics.
Whether they were free, or charged very low subsidized rates, is important but could be worked out in practice.

For another $30 billion or so, you could fund EMTALA, i.e. actually pay hospitals at the time of care when they stabilize the uninsured.

Steps like these would move America to what I think is fiscal honesty about health care………where we say to the public “Your taxes can create a public health system, which will treat you to the best of its ability. We cannot afford to give everyone free access to any private doctor or hospital, or cure every disease that appears.”

Rather like the public library, which gives you temporary access to a great variety of books. You have to return the books and you may have to wait for the one you want, so it is a step down from private bookstores.

I know that is a crude analogy, but I was a public librarian and the concept is worth keeping.

My model does require an admission that taxes are needed. There are communities which do not fund their public libraries, shame on them, and Paul Ryan’s latest budget proposal took money away from Community Health Clinics, shame on him.

But my loose proposal for a public health service still seems like a way out
of logjam that the mandates have created.

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Nate Ogden
Mar 31, 2012

“For another $30 billion or so, you could fund EMTALA, i.e. actually pay hospitals at the time of care when they stabilize the uninsured.”

This would be a HUGE first step. When groups ask how they fix their insurance plan the first thing I always tell them is you have to have the data. If you don’t know what is going on yiour just guessing at solutions.

Hospitals claims they provide $x of charity care. They have to charge private insurance more to cover it etc. But if you look at most of the hospitals in the country if employers could pay cost plus 12% they could pay for all of the supposed charity care a few times over.

It would also help to get a better picture of who is using free care. or in many cases stealing it. If someone truly needs assistance then Medicaid should be paying for it, thats why it is there, those that don’t need it either need cut off or forced to start paying.

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Paolo
Mar 31, 2012

I agree (it’s nice to agree sometimes). If there is a law that forces hospitals to give treatment, there should be a law that funds that treatment and provides some data and accountability.

Before 2006, MA actually used to pay hospitals for the treatment of the uninsured. But then came Mitt Romney and argued that instead of paying hospitals to treat the uninsured, it would be better to divert that money to finance everyone’s insurance.

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Nate Ogden
Mar 31, 2012

“If there is a law that forces hospitals to give treatment, there should be a law that funds that treatment”

I would make that a constitutional amendment, not only specific to healthcare but anything.